Prepared by MERRILL CORPORATION




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REVOLVING CREDIT AGREEMENT  


Dated as of October 25, 2001 


Among



HORMEL FOODS CORPORATION  


as Borrower  


and 


THE BANKS NAMED HEREIN  


as Lenders  


and 


CITICORP USA, INC.  


as Administrative Agent  


and 


U.S. BANK NATIONAL ASSOCIATION  


as Documentation Agent  


and 


SUNTRUST BANK  


as Syndication Agent  








  



 
 

TABLE OF CONTENTS    
  



	 
	 	 
	 	Page

	

 	
 	
ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS	
 	

 
	

Section 1.01	
 	

Certain Defined Terms	
 	

1
	Section 1.02	 	Computation of Time Periods	 	8
	Section 1.03	 	Accounting Terms	 	8
	

 	
 	
ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES	
 	

 
	

Section 2.01	
 	

The Advances.	
 	

9
	Section 2.02	 	Making the Advances	 	9
	Section 2.03	 	Fees	 	11
	Section 2.04	 	Optional Termination and Reduction of the Commitments	 	11
	Section 2.05	 	Repayment and Prepayment of Advances	 	12
	Section 2.06	 	Interest on Advances	 	12
	Section 2.07	 	Interest Rate Determination	 	13
	Section 2.08	 	Voluntary Conversion or Continuation of Advances	 	13
	Section 2.09	 	Increased Costs	 	13
	Section 2.10	 	Payments and Computations	 	14
	Section 2.11	 	Taxes	 	15
	Section 2.12	 	Sharing of Payments, Etc	 	16
	Section 2.13	 	Evidence of Debt	 	17
	Section 2.14	 	Use of Proceeds	 	17
	Section 2.15	 	Substitution of Lenders	 	17
	

 	
 	
ARTICLE III

CONDITIONS OF EFFECTIVENESS AND LENDING	
 	

 
	

Section 3.01	
 	

Conditions Precedent to Effectiveness.	
 	

18
	Section 3.02	 	Conditions Precedent to Each Borrowing.	 	19
	

 	
 	
ARTICLE IV

REPRESENTATIONS AND WARRANTIES	
 	

 
	

Section 4.01	
 	

Representations and Warranties of the Borrower	
 	

19
	

 	
 	
ARTICLE V

COVENANTS OF THE BORROWER	
 	

 
	

Section 5.01	
 	

Affirmative Covenants	
 	

22
	Section 5.02	 	Negative Covenants	 	25
	

 	
 	
ARTICLE VI

EVENTS OF DEFAULT	
 	

 
	

Section 6.01	
 	

Events of Default	
 	

26
	

 	
 	
ARTICLE VII

ADMINISTRATIVE AGENT	
 	

 
	

Section 7.01	
 	

Authorization and Action	
 	

28
	Section 7.02	 	Agents' Reliance, Etc.	 	28
	Section 7.03	 	CUSA and Affiliates	 	29
	Section 7.04	 	Lender Credit Decision	 	29
	Section 7.05	 	Indemnification	 	29
	Section 7.06	 	Successor Administrative Agent	 	30



i





 

	Section 7.07	 	Other Agents	 	30
	

 	
 	
ARTICLE VIII

MISCELLANEOUS	
 	

 
	

Section 8.01	
 	

Amendments, Etc.	
 	

30
	Section 8.02	 	Notices, Etc.	 	31
	Section 8.03	 	No Waiver; Remedies	 	31
	Section 8.04	 	Costs, Expenses and Indemnification	 	31
	Section 8.05	 	Right of Set-off	 	32
	Section 8.06	 	Binding Effect; Entire Agreement	 	32
	Section 8.07	 	Assignments and Participations	 	33
	Section 8.08	 	Confidentiality	 	36
	Section 8.09	 	Governing Law	 	36
	Section 8.10	 	Execution in Counterparts	 	36
	Section 8.11	 	Consent to Jurisdiction; Waiver of Immunities	 	36
	Section 8.12	 	Waiver of Trial by Jury	 	36




ii





 


	SCHEDULES	 	 
	
Schedule I	
 	

Applicable Lending Offices
	
Schedule II	
 	

Banks' Commitments
	
Schedule 4.01(a)	
 	

Material Subsidiaries
	
Schedule 4.01(c)	
 	

Government Consents
	
EXHIBITS	
 	

 
	
Exhibit A	
 	

Form of Assignment and Acceptance
	
Exhibit B	
 	

Form of Compliance Certificate
	
Exhibit C	
 	

Form of Notice of Conversion/Continuation
	
Exhibit D	
 	

Form of Notice of Borrowing
	
Exhibit E	
 	

Form of Promissory Note
	
Exhibit F	
 	

Form of Opinion of Counsel to Borrower
	
Exhibit G	
 	

Form of Opinion of O'Melveny & Myers LLP
	

 	
 	

 




iii







 
 

U.S. $150,000,000
  REVOLVING CREDIT AGREEMENT
  
    Dated as of October 25, 2001    
  


    HORMEL FOODS CORPORATION, a Delaware corporation (the
"Borrower"), the Banks listed on the signature pages (the "Banks," together with each bank which becomes
a lender hereunder pursuant to Section 8.07, collectively the "Lenders"), SUNTRUST BANK, as
Syndication Agent for the Lenders, U.S. BANK NATIONAL ASSOCIATION, as Documentation Agent for the Lenders, and CITICORP
USA, INC. ("CUSA"), as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"), agree as follows: 


 
 

ARTICLE I
  
    DEFINITIONS AND ACCOUNTING TERMS    
  


    Section 1.01  Certain Defined Terms.  As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): 



    "Adjusted Eurodollar Rate" shall mean, for any Interest Period for a Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate obtained by dividing (a) the rate per annum (rounded upward, if necessary, to the nearest whole multiple of 1/16 of 1%) that appears on
the Dow Jones Markets (Telerate) page 3750 (or such other comparable page as may, in the opinion of the Administrative Agent, replace such page for the purpose of displaying such rate) as the
interbank offered rate for deposits in Dollars with maturities comparable to such Interest Period at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage, subject, however, to the provisions of Section 2.02(b). 


    "Administrative Agent" means CUSA, in its capacity as administrative agent for the Lenders, or any Person serving as its successor. 


    "Advance" means an advance by a Lender to the Borrower as part of a Borrowing pursuant to Section 2.01, and refers to a Base
Rate Advance or a Eurodollar Rate Advance, each of which shall be a "Type" of Advance. 



    "Affiliate" means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common
control with such Person. 


    "Agent" or "Agents" means the Administrative Agent; provided, that, solely for purposes
of Sections 7.02, 7.04, 7.05, 8.04, 8.07(b)(iv), 8.08 and 8.12 of this Agreement the term "Agent" or "Agents", as the case may be, shall include the Syndication Agent, the Documentation Agent and the
Arranger. 


    "Agreement" means this Revolving Credit Agreement as it may be amended, supplemented or otherwise modified from time to time. 



    "Applicable Lending Office" means, with respect to each Lender, such Lender's Domestic Lending Office in the case of a Base Rate
Advance, and such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance. 


    "Applicable Margin" means, for any period for which any interest payment is to be made with respect to any Advance, the interest rate
per annum derived by dividing (i) the sum of Daily Margins for each of the days included in such period by (ii) the number of days
included in such period. 


    "Arranger" means SSBI as sole lead arranger and book runner. 


    "Assignment and Acceptance" means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit A hereto. 





 


    "Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy" as now and hereafter in effect, or any successor
statute. 


    "Base Rate" means, for any period, a fluctuating interest rate per annum as shall be in effect from time to time which rate per annum
shall at all times be equal to the highest of: 



    (a) the
rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank's base rate (which is a rate set by Citibank based upon
various factors including Citibank's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or
below such announced rate); 


    (b) the
sum of (A) 1/2 of one percent per annum, plus (B) the rate obtained by  dividing (x) the latest three-week moving
average of secondary market morning offering rates in the United States for three-month
certificates of deposit of major United States money market banks (such three-week moving average being determined weekly by Citibank on the basis of such rates reported by certificate of
deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank, in
either case adjusted to the nearest 1/16 of one percent or, if there is no nearest 1/16 of one percent, to the next higher 1/16 of one percent),  by
(y) a percentage equal to 100% minus the average of the daily percentages specified during such three-week period by the Board of
Governors of the Federal Reserve System for determining the maximum reserve requirement (including, but not limited to, any marginal reserve requirements for Citibank in respect of liabilities
consisting of or including (among other liabilities) three-month nonpersonal time deposits of at least $100,000), plus (C) the average during
such three-week period of the daily net annual assessment rates estimated by Citibank for determining the current annual assessment payable by Citibank to the Federal Deposit Insurance
Corporation for insuring three-month deposits in the United States; or 


    (c) 1/2
of one percent per annum above the Federal Funds Rate. 




    "Base Rate Advance" means an Advance which bears interest at a rate per annum determined on the basis of the Base Rate, as provided in
Section 2.06(a). 


    "Borrower" means Hormel Foods Corporation, a Delaware corporation. 



    "Borrowing" means a borrowing consisting of simultaneous Advances of the same Type made on the same day pursuant to the same Notice of
Borrowing by each of the Lenders pursuant to Section 2.02(a). 


    "Business Day" means a day of the year other than a Saturday or a Sunday on which banks are not required or authorized to close in New
York City or Los Angeles and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market. 



    "Capital Lease" means, with respect to any Person, any lease of any property by that Person as lessee which would, in conformity with
GAAP, be required to be accounted for as a capital lease on the balance sheet of that Person. 


    "Cash" means money, currency or a credit balance in a deposit account. 


    "Cash Equivalents" means (a) marketable direct obligations issued or unconditionally guaranteed by the United States government
or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof, (b) marketable direct
obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the 


2





 


date of acquisition thereof and, at the time of acquisition, having the highest rating generally obtainable from either S&P or Moody's, (c) commercial paper maturing no more than one year from
the date of creation thereof and, at the time of acquisition, having a rating of A-2 or higher from S&P or P-2 or higher from Moody's, (d) certificates of deposit or
bankers' acceptances maturing within one year from the date of acquisition thereof issued by any lender, (e) investments in money market funds having total portfolio asset value in excess of
$100,000,000, (f) investments in industrial revenue bonds supported by a standby letter of credit provided that the securities have a short-term rating of A-1 or higher
from S&P or P-1 or higher from Moody's or a long-term rating of A or higher from S&P or from Moody's, and (g) money market preferred stock (auction preferred stock) with
a rating of A-2 or higher from S&P or A or higher from Moody's. 


    "Citibank" means Citibank, N.A. 



    "Code" means the Internal Revenue Code of 1986, as amended. 


    "Commitment" has the meaning specified in Section 2.01. 


    "Commitment Termination Date" means October 25, 2004 or such earlier date as the Commitments may be terminated pursuant to
Section 2.04 or Section 6.01. 


    "Compliance Certificate" means a certificate substantially in the form of Exhibit B  hereto, delivered to the Lenders by the Borrower pursuant to Section 5.01(b)
(iii). 



    "Convert," "Conversion" and "Converted"
each refers to a conversion of Advances of one Type into Advances of another Type pursuant to Section 2.08. 


    "CUSA" means Citicorp USA, Inc. 


    "Daily Margin" means, for any date of determination, for the designated Level, Utilization Ratio applicable to such date of
determination and Type of Advance, the following interest rates per annum: 



	 
	 	Daily Margin when

Utilization Ratio

is equal to or

less than 0.50:1.00
	 	Daily Margin when

Utilization Ratio

is greater than

0.50:1.00
	 
	 
	 	TYPE OF ADVANCE
	 	TYPE OF ADVANCE
	 
	 
	 	Base Rate

Advance
	 	EURO Rate

Advance
	 	Base Rate

Advance
	 	EURO Rate

Advance
	 
	Level 1	 	0	%	0.1800	%	0.10	%	0.2800	%
	Level 2	 	0	%	0.2150	%	0.10	%	0.3150	%
	Level 3	 	0	%	0.2500	%	0.125	%	0.3750	%
	Level 4	 	0	%	0.4000	%	0.175	%	0.5750	%
	Level 5	 	0	%	0.5500	%	0.25	%	0.8000	%





For
purposes of this definition, (a) "Utilization Ratio" means, as of any date of determination, the ratio of (1) the Total Utilization of
Commitments to (2) the aggregate outstanding amount of all Commitments (whether used or unused) in effect as of such date, (b) if any change in the rating established by S&P or Moody's
with respect to Long-Term Debt shall result in a change in the Level, the change in the Daily Margin shall be effective as of the date on which such rating change is publicly announced,
and (c) if the ratings established by both of S&P and Moody's with respect to Long-Term Debt are unavailable for any reason for any day, then the applicable level for such day shall
be deemed to be Level 5 (or, if the Requisite Lenders consent in writing, such other Level as may be reasonably
determined by the Requisite Lenders from a rating with respect to Long-Term Debt for such day established by another rating agency reasonably acceptable to the Requisite Lenders). 


    "Debt" means (i) indebtedness for borrowed money or for the deferred purchase price of property or services,
(ii) obligations as lessee under Capital Leases, or (iii) obligations under guarantees in 


3





 


respect of indebtedness or in respect of obligations of others of the kinds referred to in clause (i) or (ii) above. 


    "Designating Lender" has the meaning specified in Section 8.07(g). 


    "Documentation Agent" means U.S. Bank National Association, in its capacity as documentation agent for the Lenders, or any Person
serving as its successor. 


    "Dollars" and the sign "$" each means lawful money of the United States of America. 


    "Domestic Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which an Eligible Assignee became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Agents. 


    "EBITDA" means, for any period, consolidated net income (excluding extraordinary, unusual, or nonrecurring gains or losses), plus
provision for income taxes of the Borrower and its Subsidiaries, plus interest expense of the Borrower and its Subsidiaries, plus depreciation expense of the Borrower and its Subsidiaries, plus
amortization of intangibles of the Borrower and its Subsidiaries, as determined on a consolidated basis in conformity with GAAP. 


    "Effective Date" means the date on which all of the conditions in Section 3.01 were satisfied or waived, which date was
October 25, 2001. 


    "Eligible Assignee" means (i) a commercial bank organized under the laws of the United States, or any state thereof, and having
a combined capital and surplus of at least $100,000,000; (ii) a commercial bank organized under the laws of any other country which is a member of the Organization for Economical
Cooperation and Development (the "OECD"), or a political subdivision of any such country and having a combined capital and surplus of at least $100,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another country which is also a member of the OECD; and (iii) any Person engaged in the business of lending and that is an
Affiliate of a Lender or of a Person of which a Lender is a Subsidiary. 


    "Environmental Law" means any and all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental restrictions of any federal, state or local governmental authority within the United States or any State or territory thereof and which
relate to the environment or the release of any materials into the environment. 


    "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. 


    "ERISA Affiliate" means any Person who for purposes of Title IV of ERISA is a member of the Borrower's controlled group, or under
common control with the Borrower, within the meaning of Section 414 of the Code and the regulations promulgated and rulings issued thereunder. 



    "ERISA Event" means (i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, unless the
30-day notice requirement with respect thereto has been waived by the PBGC; (ii) the provision by the administrator of any Pension Plan of a notice of intent to terminate such
Pension Plan pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of
operations at a facility by the Borrower or an ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (iv) the withdrawal by the Borrower or an ERISA Affiliate from
a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (v) the failure by the Borrower or any ERISA Affiliate to
make a payment to a Pension Plan required under Section 302(f)(1) of ERISA, which Section imposes a lien for failure to make required payments; 


4





 


(vi) the adoption of an amendment to a Pension Plan requiring the provision of security to such Pension Plan, pursuant to Section 307 of ERISA; or (vii) the institution by the
PBGC of proceedings to terminate a Pension Plan, pursuant to Section 4042 of ERISA, or the occurrence of any event or condition which, in the reasonable judgment of the Borrower, might
constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, a Pension Plan. 


    "Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time. 


    "Eurodollar Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender (or, if no such office is
specified, its Domestic Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Administrative Agent. 


    "Eurodollar Rate Advance" means an Advance that bears interest as provided in Section 2.06(b). 


    "Eurodollar Rate Reserve Percentage" for any Interest Period for any Eurodollar Rate Advance means the reserve percentage applicable
during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage
shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirements
(including, without limitation, any emergency, supplemental or other marginal reserve requirement) for member banks in the Federal Reserve System with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities having a term equal to such Interest Period. 


    "Events of Default" has the meaning specified in Section 6.01. 


    "Existing Credit Agreement" means that certain Credit Agreement (Short Term Facility) dated as of October 31, 2000, by and among
the Borrower, the Administrative Agent, the banks named therein and the other parties thereto. 


    "Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. 



    "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination. 


    "Hormel Foundation" is a Minnesota non-profit corporation organized for religious, charitable, scientific, literary or
educational purposes. The Hormel Foundation is a public foundation. The Hormel Foundation is the beneficial owner of 46.20% of common stock of The Hormel Foods Corporation as of October 17,
2001. 


    "Hostile Acquisition" means the acquisition of the capital stock or other equity interests of a Person (the "Target") through a tender
offer or similar solicitation of the owners of such capital stock or other equity interests which has not been approved (prior to such acquisition) by resolutions of the 


5





 


Board of Directors of the Target or by similar action if the Target is not a corporation or as to which such approval has been withdrawn. 


    "Insufficiency" means, with respect to any Pension Plan, the amount, if any, of its unfunded benefit liabilities, as defined in
Section 4001(a)(18) of ERISA. 


    "Interest Period" means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of
such Eurodollar Rate Advance, or on the date of continuation of such Advance as a Eurodollar Rate Advance upon expiration of successive Interest Periods applicable thereto, or on the date of
Conversion of a Base Rate Advance into a Eurodollar Rate Advance, and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be one, two, three or six months, as the Borrower may select in the Notice of Borrowing or the Notice of Conversion/Continuation for such Advance; provided,
however, that: 




     (i) the
Borrower may not select any Interest Period in respect of Advances that ends after the Commitment Termination Date; 


    (ii) Interest
Periods commencing on the same date for Advances comprising part of the same Borrowing shall be of the same duration; and 


    (iii) whenever
the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to
occur on the next succeeding Business Day, provided, that if such extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day. 





    "Lenders" means the Lenders listed on Schedule I hereof and each Eligible Assignee that shall become a party hereto pursuant to
Section 8.07. 


    "Level" means Level 1, Level 2, Level 3, Level 4 or Level 5, as the case may be. 


    "Level 1" means that, as of any date of determination, the Long-Term Debt carries either of the following ratings: 





"A+"
from S&P

"A1" from Moody's 






    "Level 2" means that, as of any date of determination, the criteria of Level 1 are not satisfied and the Long-Term Debt
carries either of the following ratings: 





"A"
from S&P

"A2" from Moody's 






    "Level 3" means that, as of any date of determination, the criteria of neither Level 1 nor Level 2 are satisfied and the
Long-Term Debt carries either of the following ratings: 





"A-"
from S&P

"A3" from Moody's 






    "Level 4" means that, as of any date of determination, the criteria of neither Level 1, Level 2 nor Level 3 are satisfied and the
Long-Term Debt carries either of the following ratings: 





"BBB+"
from S&P

"Baa1" from Moody's 






    "Level 5" means that, as of any date of determination, the criteria of neither Level 1, Level 2, Level 3 nor Level 4 are satisfied. 


6





 


    "Lien" means any lien, mortgage, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other
title retention agreement and any lease in the nature thereof). 


    "Loan Documents" means this Agreement and the related documents. 


    "Long-Term Debt" means senior, unsecured, long term debt securities of the Borrower. 


    "Margin Stock" has the meaning assigned to that term in Regulation U promulgated by the Board of Governors of the Federal
Reserve System, as in effect from time to time. 


    "Material Subsidiary" means any Subsidiary of the Borrower having total assets in excess of $20,000,000. 


    "Moody's" means Moody's Investors Service, Inc. 


    "Multiemployer Plan" means a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate of the Borrower is making, or is obligated to make, contributions or has Withdrawal Liability. 


    "Multiple Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, which (i) is
maintained for employees of the Borrower or an ERISA Affiliate and at least one Person other than the Borrower and its ERISA Affiliates or (ii) was so maintained and in respect of which the
Borrower or an ERISA Affiliate could have liability under Section 4063, 4064 or 4069 of ERISA in the event such plan has been or were to be terminated. 


    "Net Debt" means amounts incurred by the Borrower and its subsidiaries and classified as Debt pursuant to clauses (i) and
(ii) of the definition thereof minus the sum of Cash and Cash Equivalents. 


    "Net Income" means net income in accordance with GAAP. 


    "Net Worth" means minority interests, preferred stock and common stock and other equity, as shown on the consolidated balance sheet of
the Borrower and its Subsidiaries; provided that there shall be excluded from the calculation of Net Worth any unrealized gains or losses (net of taxes)
on securities available for sale. 


    "Notice of Borrowing" has the meaning specified in Section 2.02(a). 


    "Notice of Conversion/Continuation" means a notice substantially in the form of Exhibit C  hereto, delivered to the Administrative Agent by the Borrower pursuant to
Section 2.08. 


    "Payment Office" means the principal office of CUSA, located on the date hereof at 2 Penns Way, Suite 200, New Castle, Delaware 19720
(or such other place as the Administrative Agent may designate by notice to the Borrower and the Lenders from time to time). 


    "PBGC" means the U.S. Pension Benefit Guaranty Corporation. 


    "Pension Plan" means a Single Employer Plan or a Multiple Employer Plan or both. 


    "Person" means an individual, partnership, limited liability company, corporation, business trust, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. 


    "Potential Event of Default" means a condition or event which, after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within any applicable grace or cure period. 


    "Register" has the meaning specified in Section 8.07(d). 


    "Requisite Lenders" means at any time Lenders holding greater than 51% of the then aggregate unpaid principal amount of the Advances
held by Lenders, or, if no such principal amount is then 


7





 


outstanding, Lenders having greater than 51% of the Commitments (provided that, for purposes hereof, neither the Borrower, nor any of its Affiliates, if
a Lender, shall be included in (i) the Lenders holding such amount of the Advances or having such amount of the Commitments or (ii) determining the aggregate unpaid principal amount of
the Advances or the total Commitments). 


    "S&P" means Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies. 


    "SEC" means the Securities and Exchange Commission and any successor agency. 


    "Single Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, which (i) is maintained
for employees of the Borrower or any ERISA Affiliate and no Person other than the Borrower and its ERISA Affiliates or (ii) was so maintained and in respect of which the Borrower or an ERISA
Affiliate could have liability under Section 4062 or 4069 of ERISA in the event such plan has been or were to be terminated. 


    "SPV" has the meaning specified in Section 8.07(g). 


    "SSBI" means Salomon Smith Barney Inc. 


    "Subsidiary" of any Person means, as of any time of determination, any corporation, association, partnership, limited liability company
or other business entity of which more than 50% of the total voting power of shares of stock or other securities entitled to vote in the election of directors, managers or trustees thereof is at such
time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof. 


    "Syndication Agent" means SunTrust Bank, in its capacity as syndication agent for the Lenders, or any Person serving as its successor. 


    "Total Utilization of Commitments" means at any date of determination the aggregate principal amount of all Advances outstanding at
such date. 


    "Type" means, with reference to an Advance, a Base Rate Advance or a Eurodollar Rate Advance. 


    "Withdrawal Liability" has the meaning given such term under Part I of Subtitle E of Title IV of ERISA. 


    Section 1.02  Computation of Time Periods.  In this Agreement in the
computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding". 



    Section 1.03  Accounting Terms.  All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All computations determining compliance with financial covenants or terms, including definitions used therein, shall be prepared in
accordance with generally accepted accounting principles in effect at the time of the preparation of, and in conformity with those used to prepare, the historical financial statements delivered to the
Lenders pursuant to Section 4.01(e). If at any time the computations for determining compliance with financial covenants or provisions relating thereto utilize generally accepted accounting
principles different than those then being utilized in the financial statements being delivered to the Lenders, such financial statements shall be accompanied by a reconciliation statement. 


8






  



 
 

ARTICLE II
  
    AMOUNTS AND TERMS OF THE ADVANCES    
  


    Section 2.01  The Advances.  



    (a) Each
Lender severally agrees, on the terms and conditions hereinafter set forth, to make Advances to the Borrower from time to time on any Business Day during the
period from the Effective Date until the Commitment Termination Date in an aggregate amount not to exceed at any time outstanding the amount set opposite such Lender's name on  Schedule II hereof or,
 if such Lender has entered into any Assignment and Acceptance, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.07(c), as such amount may be reduced pursuant to Section 2.04 (such Lender's "Commitment");  provided that (i) in no event shall the aggregate principal amount of Advances from any Lender outstanding at any time exceed its Commitment then
in effect and (ii) the Total Utilization of Commitments shall not exceed the aggregate Commitments then in effect. 


    (b) Each
Borrowing shall be in an aggregate amount not less than $5,000,000 or a multiple of $1,000,000 in excess thereof and shall consist of Advances of the same Type
made on the same day by the Lenders ratably according to their respective Commitments. Within the limits of each Lender's Commitment, the Borrower may from time to time borrow, prepay pursuant to
Section 2.05(b) and reborrow under this Section 2.01. 




    Section 2.02  Making the Advances.  



    (a) Each
Borrowing shall be made on notice, given not later than (x) 11:00 A.M. (New York City time) on the date of a proposed Borrowing consisting of
Base Rate Advances and (y) 11:00 A.M. (New York City time) on the third Business Day prior to the date of a proposed Borrowing consisting of Eurodollar Rate Advances, by the Borrower to
the Administrative Agent, which shall give to each Lender prompt notice thereof by telecopier. Each such notice of a Borrowing (a "Notice of Borrowing")
shall be sent by telecopier, confirmed immediately in writing, in substantially the form of Exhibit D hereto, specifying therein the requested
(i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in the case of a Borrowing comprised
of Eurodollar Rate Advances, the initial Interest Period for each such Advance. The Borrower may, subject to the conditions herein provided, borrow more than one Borrowing on any Business Day. Each
Lender shall, before 2:00 P.M. (New York City time) in the case of a Borrowing consisting of Base Rate Advances and before 11:00 A.M. (New York City time) in the case of a Borrowing
consisting of Eurodollar Rate Advances, in each case on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at its address referred
to in Section 8.02, in same day funds, such Lender's ratable portion of such Borrowing. After the Administrative Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent will make such funds available to the Borrower at the Administrative Agent's aforesaid address. 


    (b) Anything
in subsection (a) above to the contrary notwithstanding, 



     (i) the
Borrower may not select Eurodollar Rate Advances for any Borrowing or with respect to the Conversion or continuance of any Borrowing if the aggregate amount of
such Committed Borrowing or such Conversion or continuance is less than $10,000,000; 


    (ii) there
shall be no more than five Interest Periods relating to Committed Borrowings consisting of Eurodollar Rate Advances outstanding at any time; 




9





 



    (iii) if any Lender shall, at least one Business Day before the date of any requested Borrowing, notify the Administrative Agent that the introduction of or any change
in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other governmental authority asserts that it is unlawful, for such Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, the Commitment of such Lender to make Eurodollar Rate Advances
or to Convert all or any portion of Base Rate Advances shall forthwith be suspended until the Administrative Agent shall notify the Borrower that such Lender has determined that the circumstances
causing such suspension no longer exist and such Lender's then outstanding Eurodollar Rate Advances, if any, shall be converted to Base Rate Advances as of the end of any applicable Interest Period or
at such earlier time as may be legally required; to the extent that such affected Eurodollar Rate Advances become Base Rate Advances, all payments of principal that would have been otherwise applied
to such Eurodollar Rate Advances shall be applied instead to such Lender's Base Rate Advances; provided that if Requisite Lenders are subject to the
same illegality or assertion of illegality, then the right of the Borrower to select Eurodollar Rate Advances for such Borrowing or any subsequent Borrowing or to Convert all or any portion of Base
Rate Advances shall forthwith be suspended until the Administrative Agent shall notify the Borrower that the circumstances causing such suspension no longer exist, and each Advance comprising such
Borrowing shall be a Base Rate Advance; and 


    (iv) if
the Requisite Lenders shall, at least one Business Day before the date of any requested Borrowing, notify the Administrative Agent that the Adjusted Eurodollar
Rate for Eurodollar Rate Advances comprising such Borrowing will not adequately reflect the cost to such Requisite Lenders of making, funding or maintaining their respective Eurodollar Rate Advances
for such Borrowing, the right of the Borrower to select Eurodollar Rate Advances for such Borrowing or any subsequent Borrowing shall be suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no longer exist, and each Advance comprising such Borrowing shall be made as a Base Rate Advance. 




    (c) Each
Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of any Borrowing which the related Notice of Borrowing specifies is to be
comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing or by reason of the termination of hedging or other similar arrangements, in each case when
such Advance is not made on such date (other than by reason of (i) a breach of a Lender's obligations hereunder or (ii) a suspension of Eurodollar Rate Advances under clauses (iii),
(iv) or (v) of paragraph (b) of this Section 2.02), including without limitation, as a result of any failure to fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set forth in Article III. 


    (d) Unless
the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of
such Borrowing in accordance with subsection (a) of this Section 2.02 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion available to the Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together with 



10





 


interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower,
the interest rate applicable at the time to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute such Lender's Advance as part of such Borrowing for purposes of this Agreement. 


    (e) The
failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to
make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing. 




    Section 2.03  Fees.  



    (a)  Facility Fees.  The Borrower agrees to pay to the Administrative Agent for the account of each
Lender a facility fee on such Lender's daily average Commitment, whether used or unused, from the Effective Date in the case of each Lender and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other Lender until the Commitment Termination Date, payable quarterly in arrears on the last day of each March, June, September and
December during the term of such Lender's Commitment, commencing December 31, 2001, and on the Commitment Termination Date, in an amount equal to the product of (i) such Lender's daily
average Commitment, whether used or unused, in effect during the period for which such payment that is to be made times (ii) the weighted average
rate per annum that is derived from the rates determined pursuant to the table set forth below based upon ratings on the Long-Term Debt: 



	Level
 
	 	Facility Fee Rate
	 
	1	 	0.07	%
	2	 	0.085	%
	3	 	0.125	%
	4	 	0.15	%
	5	 	0.20	%






If
any change in the rating established by S&P or Moody's with respect to Long-Term Debt shall result in a change in the Level, the change in the facility fee shall be effective as of the
date on which such rating change is publicly announced. If the ratings established by both S&P and Moody's with respect to Long-Term Debt are unavailable for any reason for any day, then
the applicable Level for purposes of calculating the facility fee for such day shall be deemed to be Level 5 (or, if the Requisite Lenders consent in writing, such other Level as may be reasonably
determined by the Requisite Lenders from a rating with respect to Long-Term Debt for such day established by another rating agency reasonably acceptable to the Requisite Lenders). 



    (b)  Agents' Fees.  The Borrower agrees to pay to the Administrative Agent and the Arranger the fees
payable to each such Agent pursuant to the fee letter dated as of September 21, 2001, among the Borrower, CUSA and SSBI, in the amounts and at the times specified in such letter. 




    Section 2.04  Optional Termination and Reduction of the Commitments.  The
Borrower shall have the right, upon at least three (3) Business Days' notice to the Administrative Agent, to terminate in whole or reduce ratably in part the unused portions of the respective
Commitments of the Lenders; provided that (i) each partial reduction shall be in the aggregate amount of $10,000,000 or a multiple of $1,000,000
in excess thereof, and (ii) the aggregate of the Commitments of the Lenders shall not be reduced to an amount which is less than the Total Utilization of Commitments. Once so reduced or
terminated pursuant to this Section 2.04, Commitments of the Lenders shall not be reinstated. 


11





 


    Section 2.05  Repayment and Prepayment of Advances.  



    (a)  Mandatory Repayment on Certain Date.  The Borrower shall repay the outstanding principal amount of
each Advance on the Commitment Termination Date. 


    (b)  Voluntary Prepayments of Borrowings.  



     (i) The
Borrower shall have no right to prepay any principal amount of any Advances other than as provided in this subsection (b). 


    (ii) The
Borrower may, upon notice to the Administrative Agent no later than 11:00 A.M. (New York time) (A) on the date the Borrower proposes to prepay,
in the case of Base Rate Advances and (B) at least five (5) Business Days' notice to the Administrative Agent in the case of Eurodollar Rate Advances, stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding principal amounts of the Advances comprising part of the same Borrowing in whole or
ratably in part; provided, however, that (x) each partial prepayment shall be in an aggregate principal amount not less than $2,000,000 and
multiples of $1,000,000 in excess thereof, and (y) in the case of any such prepayment of any Eurodollar Rate Advance, the Borrower shall pay all accrued interest to the date of such prepayment
on the portion of such Eurodollar Rate Advance being prepaid and shall be obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(b). 





    Section 2.06  Interest on Advances.  The Borrower shall pay to each Lender
interest accrued on the principal amount of each Advance outstanding from time to time from the date of such Advance until such principal amount shall be paid in full, at the following rates per
annum: 



    (a)  Base Rate Advances.  If such Advance is a Base Rate Advance, a rate per annum equal at all times to
(i) the Base Rate in effect from time to time plus (ii) the Applicable Margin, if any, payable quarterly in arrears on the last day of each March, June, September and December during the
term of this Agreement, commencing December 31, 2001, and on the Commitment Termination Date; provided that any amount of principal, interest,
fees and other amounts payable under this Agreement (including, without limitation, the principal amount of Base Rate Advances, but excluding the principal amount of Eurodollar Rate Advances) which is
not paid when due (whether at stated maturity, by acceleration or otherwise) shall bear interest from the date on which such amount is due until such amount is paid in full, payable on demand, at a
rate per annum equal at all times to 2% per annum above the Base Rate in effect from time to time. 


    (b)  Eurodollar Rate Advances.  If such Advance is a Eurodollar Rate Advance, a rate per annum equal at
all times during the Interest Period for such Advance to the sum of (i) the Adjusted Eurodollar Rate for such Interest Period plus  (ii) the Applicable Margin, payable in arrears on the last
day of such Interest Period and, if such Interest Period has a duration of more than three months, on the day
which occurs during such Interest Period three months from the first day of such Interest Period; provided that any principal amount of any Eurodollar
Rate Advance which is not paid when due (whether at stated maturity, by acceleration or otherwise) shall bear interest from the date on which such amount is due until such amount is paid in full,
payable on demand, at a rate per annum equal at all times to (A) during the Interest Period applicable to such Eurodollar Rate Advance, the greater of (x) 2% per annum above the Base
Rate in effect from time to time and (y) 2% per annum above the rate per annum required to be paid on such amount immediately prior to the date on which such amount became due and
(B) after the expiration of such Interest Period, 2% per annum above the Base Rate in effect from time to time. 



12





 

    Section 2.07  Interest Rate Determination.  The Administrative Agent shall
give prompt notice to the Borrower and the Lenders of the applicable interest rate determined by the Administrative Agent for purposes of Section 2.06(a) or 2.06(b). 



    Section 2.08  Voluntary Conversion or Continuation of Advances.  



    (a) The
Borrower may on any Business Day, upon delivery of a Notice of Conversion/Continuation to the Administrative Agent not later than 12:00 noon (New York City
time) on the third Business Day prior to the date of such Notice of Conversion/Continuation, and subject to the provisions of Section 2.02(b), (1) Convert all Advances of one Type
comprising the same Borrowing into Advances of another Type and (2) upon the expiration of any Interest Period applicable to Advances which are Eurodollar Rate Advances, continue all (or,
subject to Section 2.02(b), any portion of) such Advances as Eurodollar Rate Advances and the succeeding Interest Period(s) of such continued Advances shall commence on the last day of the
Interest Period of the Advances to be continued; provided, however, that any Conversion of any Eurodollar Rate Advances into Base Rate Advances shall be
made on, and only on, the last day of an Interest Period for such Eurodollar Rate Advances. Each such Notice of
Conversion/Continuation shall, within the restrictions specified above, specify (i) the date of such continuation or Conversion, (ii) the Advances (or, subject to Section 2.02(b),
any portion thereof) to be continued or Converted, (iii) if such continuation is of, or such Conversion is into, Eurodollar Rate Advances, the duration of the Interest Period for each such
Advance, and (iv) in the case of a continuation of or a Conversion into a Eurodollar Rate Advance, that no Potential Event of Default or Event of Default has occurred and is continuing. 


    (b) If,
upon the expiration of the then existing Interest Period applicable to any Advance which is a Eurodollar Rate Advance, the Borrower shall not have delivered a
Notice of Conversion/Continuation in accordance with this Section 2.08, then such Advance shall upon such expiration automatically be Converted to a Base Rate Advance. 


    (c) After
the occurrence of and during the continuance of a Potential Event of Default or an Event of Default, the Borrower may not elect to have an Advance be made or
continued as, or Converted into, a Eurodollar Rate Advance after the expiration of any Interest Period then in effect for that Advance. 




    Section 2.09  Increased Costs.  



    (a) If,
due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements in the case of
Eurodollar Rate Advances included in the Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force of law), there shall be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand by such Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender additional amounts sufficient to compensate such Lender for such increased cost; provided that Borrower shall have no obligation
to pay an additional amount in respect of any increased cost attributable to the period before 90 days prior to the date of such demand. A certificate as to the amount and manner of calculation
of such increased cost, submitted to the Borrower and the Administrative Agent by such Lender, shall be conclusive and binding for all purposes, absent manifest error. 



    (b) If
any Lender determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or
not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such 



13





 


Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender's commitment to lend hereunder and other commitments of
this type, then, upon demand by such Lender (with a copy of such demand to the Administrative
Agent), the Borrower shall immediately pay to the Administrative Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such
Lender or such corporation in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender's
commitment to lend hereunder; provided that Borrower shall have no obligation to pay an additional amount in respect of any additional amount
attributable to the period before 90 days prior to the date of such demand. A certificate as to such amounts and the manner of calculation thereof submitted to the Borrower and the
Administrative Agent by such Lender shall be conclusive and binding for all purposes, absent manifest error. 


    (c) If
a Lender shall change its Applicable Lending Office, such Lender shall not be entitled to receive any greater payment under Section 2.09 or 2.11 than the
amount such Lender would have been entitled to receive if it had not changed its Applicable Lending Office, unless such change was made at the request of the Borrower or at a time when the
circumstances giving rise to such greater payment did not exist. 




    Section 2.10  Payments and Computations.  



    (a) The
Borrower shall make each payment hereunder not later than 1:00 P.M. (New York City time) on the day when due in Dollars to the Administrative Agent at
its address referred to in Section 8.02 in same day funds. Subject to the immediately succeeding sentence, the Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or facility fees ratably (other than amounts payable pursuant to Section 2.09 or 2.11) to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied
in accordance with the terms of this Agreement. Upon receipt of principal or interest paid after an Event of Default and an acceleration or a deemed acceleration of amounts due hereunder, the
Administrative Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest ratably in accordance with each Lender's outstanding Advances (other
than amounts payable pursuant to Section 2.09 or 2.11) to the Lenders for the account of their respective Applicable Lending Offices. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to Section 8.07(c), from and after the effective date specified in such Assignment and Acceptance, the Administrative
Agent shall make all payments hereunder in respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly between themselves. 


    (b) All
computations of interest based on the Base Rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be,
and all computations of interest based on the Adjusted Eurodollar Rate or the Federal Funds Rate and of facility fees shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or such fees are payable. Each
determination by the Administrative Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error. 


    (c) Whenever
any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of payment of interest or 



14





 


facility fee, as the case may be; provided, however, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be
made in the next following calendar month, such payment shall be made on the next preceding Business Day. 


    (d) Unless
the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that the Borrower shall not have
so made such payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate. 




    Section 2.11  Taxes.  



    (a) Any
and all payments by the Borrower hereunder shall be made, in accordance with Section 2.10, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding (i) in the
case of each Lender and each Agent, taxes imposed on its income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Lender or such Agent (as the case may be) is
organized or any political subdivision thereof or in which its principal office is located, (ii) in the case of each Lender taxes imposed on its net income, and franchise taxes imposed on it,
by the jurisdiction of such Lender's Applicable Lending Office or any political subdivision thereof and (iii) in the case of each Lender and each Agent, taxes imposed by the United States by
means of withholding at the source if and to the extent that such taxes shall be in effect and shall be applicable on the date hereof in the case of each Bank and on the effective date of the
Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender, on payments to be made to the Agents or such Lender's Applicable Lending Office (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender or either Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.11) such Lender or such Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. 


    (b) In
addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which
arise from the execution, delivery or registration of, or otherwise with respect to, this Agreement (hereinafter referred to as "Other Taxes"). 


    (c) The
Borrower will indemnify each Lender and each Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 2.11) paid by such Lender or such Agent (as the case may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Lender or
such Agent (as the case may be) makes written demand therefor. 



15







  




    (d) Within
30 days after the date of any payment of Taxes, the Borrower will furnish to the Administrative Agent, at its address referred to in
Section 8.02, the original or a certified copy of a receipt evidencing payment thereof. 


    (e) Each
Lender organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement, in the
case of each Bank, and on the date of the Assignment and Acceptance pursuant to which it becomes a Lender, in the case of each other Lender, and from time to time thereafter if requested in writing by
the Borrower (but only so long as such Lender remains lawfully able to do so), shall provide the Borrower with (i) Internal Revenue Service Form W-8BEN or W-8EC1,
as appropriate, or any successor form prescribed by the Internal Revenue Service, to establish that such Lender is not subject to United States withholding tax with respect to any payments to such
Lender of interest payable under this Agreement and (ii) to the extent it does not act or ceases to act for its own account with respect to any sums paid or payable to such Lender hereunder
(for example, in the case of a typical participation by such Lender), Internal Revenue Service Form W-8IMY or any successor form prescribed by the Internal Revenue Service to
establish that the Lender is not acting for its own account with respect to a portion of any such sums paid or payable to such Lender. If the form provided by a Lender at the time such Lender first
becomes a party to this Agreement indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from "Taxes" as defined in
Section 2.11(a). 


    (f)  For
any period with respect to which a Lender has failed to provide the Borrower with the appropriate form described in Section 2.11(e) (other than if such
failure is due to a change in law occurring subsequent to the date on which a form originally was required to be provided, or if such form otherwise is not required under the first sentence of
subsection (e) above), such Lender shall not be entitled to indemnification under Section 2.11(a) with respect to Taxes imposed by the United States; provided,
however, that should a Lender become subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall, at the expense of such Lender, take such
steps as the Lender shall reasonably request to assist the Lender to recover such Taxes. 


    (g) Without
prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this
Section 2.11 shall survive the payment in full of principal and interest hereunder. 




    Section 2.12  Sharing of Payments, Etc.  If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Advances made by it (other than pursuant to Section 2.09 or
2.11) in excess of its ratable share of payments on account of the Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the Advances
made by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all
or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.12 may, to the fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. 


16





 


    Section 2.13  Evidence of Debt.  



    (a) Each
Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from
each Advance owing to such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder. 



    (b) The
Register maintained by the Administrative Agent pursuant to Section 8.07(c) shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date, amount and tenor, as applicable, of each Borrowing, the Type of Advances comprising such Borrowing and the Interest Period
applicable thereto, (ii) the terms of each Assignment and Acceptance delivered to and accepted by it, (iii) the amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder, and (iv) the amount of any sum received by the Administrative Agent from the Borrower hereunder and each Lender's share thereof. 


    (c) The
entries made in the Register shall be conclusive and binding for all purposes, absent manifest error. 


    (d) If,
in the opinion of any Lender, a promissory note or other evidence of debt is required, appropriate or desirable to reflect or enforce the indebtedness of the
Borrower resulting from the Advances made, or to be made, by such Lender to the Borrower, then, upon request of such Lender, the Borrower shall promptly execute and deliver to such Lender a promissory
note substantially in the form of Exhibit E, payable to the order of such Lender in an amount up to the maximum amount of Advances payable or to
be payable by the Borrower to the Lender from time to time hereunder. 




    Section 2.14  Use of Proceeds.  



    (a) Advances
shall be used by the Borrower for commercial paper backup and for general corporate purposes, including acquisition financing; provided that proceeds of
Advances and proceeds of commercial paper as to which this Agreement provides backup shall not be used for any Hostile Acquisition. 


    (b) No
portion of the proceeds of any Advances under this Agreement shall be used by the Borrower or any of its Subsidiaries in any manner which might cause the
Advances or the application of such proceeds to violate, or require any Lender to make any filing or take any other action under, Regulation U, Regulation T, or Regulation X of
the Board of Governors of the Federal Reserve System or any other regulation of such Board or to violate the Securities Exchange Act of 1934, in each case as in effect on the date or dates of such
Advances and such use of proceeds. 




    Section 2.15  Substitution of Lenders.  If any Lender requests
compensation from the Borrower under Section 2.09(a) or (b) or Section 2.11, the Borrower shall have the right, with the assistance of the Agents, to seek one or more Eligible
Assignees (which may be one or more of the Lenders) reasonably satisfactory to the Administrative Agent and the Borrower to purchase the Advances and assume the Commitments of such Lender, and the
Borrower, the Administrative Agent, such Lender, and such Eligible Assignees shall execute and deliver an appropriately completed Assignment and Acceptance pursuant to Section 8.07(a) hereof to
effect the assignment of rights to and the assumption of obligations by such Eligible Assignees; provided that (i) such requesting Lender shall
be entitled to compensation under Section 2.09 and 2.11 for any costs incurred by it prior to its replacement, (ii) no Event of Default, or Potential Event of Default, has occurred and
is continuing, (iii) the Borrower has satisfied all of its obligations under the Loan Documents relating to such Lender, including without limitation obligations, if any, under
Section 8.04(b) and (iv) the Borrower shall have paid the Administrative Agent a $3,500 administrative fee if such replacement Lender is not an existing Lender. 


17





 
 
 

ARTICLE III
  
    CONDITIONS OF EFFECTIVENESS AND LENDING    
  


     Section
3.01  Conditions Precedent to Effectiveness.  



    (a) The
effectiveness of the Agreement is subject to the prior or concurrent satisfaction of the following conditions and the Administrative Agent shall receive for the
account of each Lender party to the Agreement the following, each, unless otherwise noted, dated the Effective Date, and in form and substance satisfactory to the Administrative Agent and the
Arranger: 



     (i) Copies
of resolutions of the Board of Directors of the Borrower (or its Executive Committee, together with evidence of the authority of the Executive Committee)
approving this Agreement, and of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement, certified as of a recent date prior to
the Effective Date; 


    (ii) A
certificate of the Secretary or an Assistant Secretary of the Borrower certifying the names and true signatures of the officers of the Borrower authorized to
sign this Agreement and the other documents to be delivered by the Borrower hereunder; 


    (iii) Certified
copies of the Borrower's Certificate of Incorporation, together with good standing certificates from the state of Delaware and the State of Minnesota,
each to be dated a recent date prior to the Effective Date; 


    (iv) Copies
of the Borrower's Bylaws, certified as of the Effective Date by their respective Secretary or an Assistant Secretary; 


    (v) Executed
originals of this Agreement and the other documents to be delivered by the Borrower hereunder; 



    (vi) A
favorable opinion of Mahlon C. Schneider, Senior Vice President and General Counsel to the Borrower, substantially in the form of  Exhibit F hereto; 


   (vii) A
favorable opinion of O'Melveny & Myers LLP, counsel for the Agents, substantially in the form of  Exhibit G hereto; 


   (viii) A
certificate of an authorized officer of the Borrower to the effect that since October 28, 2000, there has been no material adverse change in the
business, condition (financial or otherwise), results of operations or prospects of the Borrower and its Subsidiaries, taken as a whole; 



    (ix) A
certificate of an authorized officer of the Borrower, in form and substance satisfactory to the Administrative Agent, to the effect that (i) the
representations and warranties in Section 4.01 are correct
on and as of the Effective Date, to the same extent as though made on and as of the Effective Date, except to the extent that any such representation or warranty expressly relates only to an earlier
date, in which case they were correct as of such earlier date; (b) such Borrower has performed in all material respects all agreements and satisfied all conditions which this Agreement provides
shall be performed and satisfied by it on or before the Effective Date; and (c) no event has occurred and is continuing, or would result from the Borrowings made on and as of the Effective Date
or from the application of the proceeds from such Borrowings, which constitutes an Event of Default or a Potential Event of Default; 


    (x) Payment
of up front fees to the Lenders, as agreed by and among the Arranger, Lenders and the Borrower; 




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    (xi) Evidence of (i) the contemporaneous repayment of any indebtedness of the Borrower under the Existing Credit Agreement (including borrowings and accrued
interest), (ii) the contemporaneous payment of fees payable, if any, by the Borrower under the Existing Credit Agreement and (iii) the contemporaneous termination of the Existing Credit
Agreement on the Effective Date. 




    (b) The
Administrative Agent shall have received such other approvals, opinions or documents as the Requisite Lenders through the Administrative Agent may reasonably
request (which request shall be made in sufficient time to allow the Borrower to comply therewith). 




    Section 3.02  Conditions Precedent to Each Borrowing.  The obligation of
each Lender to make an Advance on the occasion of a Borrowing (including the initial Borrowing) shall be subject to the further conditions precedent that (x) the Administrative Agent shall have
received a Notice of Borrowing with respect thereto in accordance with Section 2.02 and (y) on the date of such Borrowing the following statements shall be true (and each of the giving
of the applicable Notice of Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by the Borrower that on the date of such
Borrowing such statements are true): 




     (i) The
representations and warranties of the Borrower contained in Section 4.01 (other than in Section 4.01(e)(ii)) are correct on and as of the date of
such Borrowing, before and after giving effect to such Borrowing and to the application of the proceeds therefrom, as though made on and as of such date, except to the extent that any such
representation or warranty expressly relates only to an earlier date, in which case they were correct as of such earlier date; 


    (ii) No
event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, which constitutes an Event of
Default or a Potential Event of Default. 




 
 

ARTICLE IV
  
    REPRESENTATIONS AND WARRANTIES    
  


    Section 4.01  Representations and Warranties of the Borrower.  The
Borrower represents and warrants as follows: 



    (a)  Due Organization, etc.  The Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each Material Subsidiary is listed in Schedule 4.01(a) and is a corporation
duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation in which failure to be so duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation would have a material adverse effect on the business, condition (financial or otherwise), results of operations or prospects of the Borrower and its
Subsidiaries, taken as a whole. The Borrower and each of its Material Subsidiaries are qualified to do business in and are in good standing under the laws of each jurisdiction in which failure to be
so qualified would have a material adverse effect on the business, condition (financial or otherwise), results of operations or prospects of the Borrower and its Subsidiaries, taken as a whole. 


    (b)  Due Authorization, etc.  The execution, delivery and performance by the Borrower of this Agreement
and the other Loan Documents are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) the Borrower's Certificate of
Incorporation or (ii) applicable law or any material contractual restriction binding on or affecting the Borrower or any of its Material Subsidiaries. 



19





 


    (c)  Governmental Consent.  No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents, other than those that
have been obtained, all of which are listed on Schedule 4.01(c). 


    (d)  Validity.  This Agreement is the legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms subject to the effect of applicable bankruptcy, insolvency, arrangement, moratorium and other similar laws affecting creditors' rights generally and
to the application of general principles of equity. 


    (e)  Condition of the Borrower.  (i) The consolidated balance sheet of the Borrower and its
Subsidiaries as at October 28, 2000, and the related consolidated statements of income and retained earnings of the Borrower and its Subsidiaries for the fiscal year then ended, copies of which
have been previously furnished to each Bank, fairly present the consolidated financial condition of the Borrower and its Subsidiaries as at such date and the results of the operations of the Borrower
and its Subsidiaries for the periods ended on such dates, all in accordance with GAAP consistently applied, and (ii) since October 28, 2000, there has been no material adverse change in
the business, condition (financial or otherwise), results of operations or prospects of the Borrower and its Subsidiaries, taken as a whole. 


    (f)  Litigation.  (i) There is no pending action, investigation or proceeding against the Borrower
or any of its Subsidiaries before any court, governmental agency or arbitrator, and (ii) to the knowledge of the Borrower, there is no pending or threatened action, investigation or proceeding
affecting the Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator, which, in either case, in the reasonable judgement of the Borrower could reasonably be expected
to materially adversely affect the financial condition or operations of the Borrower and its Subsidiaries, taken as a whole, or with respect to actions of third parties, which purports to affect the
legality, validity or enforceability of this Agreement or the other Loan Documents. 


    (g)  Margin Regulations.  The Borrower is not engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System), and no proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock in any manner that violates, or would cause a violation of
Regulation T, Regulation U or Regulation X. Less than 10 percent of the fair market value of the assets of (i) the Borrower or (ii) the Borrower and its
Subsidiaries consists of Margin Stock. 


    (h)  Payment of Taxes.  The Borrower and each of its Subsidiaries have filed or caused to be filed all
material tax returns (federal, state, local and foreign) required to be filed and paid all material amounts of taxes shown thereon to be due, including interest and penalties, except for such taxes as
are being contested in good faith and by proper proceedings and with respect to which appropriate reserves are being maintained by the Borrower or any such Subsidiary, as the case may be. 



    (i)  Governmental Regulation.  The Borrower is not subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or the Investment Company Act of 1940, each as amended, or to any Federal or state statute or regulation limiting its ability to
incur indebtedness for money borrowed. No Subsidiary of the Borrower is subject to any regulation that would limit the ability of the Borrower to enter into or perform its obligations under this
Agreement. 


    (j)  ERISA.  



     (i) No
ERISA Event which might result in liability of the Borrower or any of its ERISA Affiliates in excess of $10,000,000 (or, in the case of an event described in
clause (v) of the 




20





 



definition of ERISA Event, $750,000) (other than for premiums payable under Title IV of ERISA) has occurred or is reasonably expected to occur with respect to any Pension Plan. 



    (ii) Schedule B
(Actuarial Information) to the most recently completed annual report prior to the Effective Date (Form 5500 Series) for each Pension Plan,
which report has been filed with the Internal Revenue Service by the Borrower or an ERISA Affiliate, copies of which have been furnished to the Agents, is complete and, to the best knowledge of the
Borrower, accurate, and since the date of such Schedule B there has been no material adverse change in the funding status of any such Pension Plan. 


    (iii) Neither
the Borrower nor any ERISA Affiliate has incurred, or, to the best knowledge of the Borrower, is reasonably expected to incur, any Withdrawal Liability to
any Multiemployer Plan which has not been satisfied or which is or might be in excess of $10,000,000. 


    (iv) Neither
the Borrower nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and, to the best knowledge of the Borrower, no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated within the
meaning of Title IV of ERISA. 




    (k)  Compliance With Law; Environmental Matters.  (i) The Borrower and each of its Subsidiaries
are in compliance in all material respects with all statutes, regulations, rules and orders of any court or other governmental authority applicable to them (including all Environmental Laws) the
non-compliance with which could reasonably be expected to have a material adverse effect on the business, condition (financial or otherwise), results of operations or prospects of the
Borrower and its Subsidiaries, taken as a whole, and (ii) there has been no "release or threatened release of a hazardous substance" (as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq.) or any other release, emission or discharge into the
environment of any hazardous or toxic substance, pollutant or other materials from the Borrower's or its Subsidiaries' property other than as permitted under applicable Environmental Law and other
than those which would not have a material adverse effect on the business, condition (financial or otherwise), results of operations or prospects of the Borrower and its Subsidiaries, taken as a
whole. Other than disposals (A) for which the Borrower has been indemnified in full or (B) which would not have a material adverse effect on the business, condition (financial or
otherwise), results of operations or prospects of the Borrower and its Subsidiaries, taken as a whole, all "hazardous waste" (as defined by the Resource Conservation and Recovery Act, 42 U.S.C.
§6901 et seq. (1976) and the regulations thereunder, 40 CFR Part 261 ("RCRA")) generated at the Borrower's or any Subsidiaries'
properties have in the past been and shall continue to be disposed of at sites which maintain valid permits under RCRA and any applicable state or local Environmental Law. 



    (l)  Disclosure.  As of the Effective Date, to the best of the Borrower's knowledge, no representation or
warranty of the Borrower or any of its Subsidiaries contained in this Agreement or any other Loan Document or in any other document, certificate or written statement furnished to the Banks by or on
behalf of the Borrower or any of its Subsidiaries contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such
agreements, documents, certificates and statements not misleading in light of the circumstances in which the same were made. 



21





 
 
 

ARTICLE V
  
    COVENANTS OF THE BORROWER    
  


    Section 5.01  Affirmative Covenants.  So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will, unless the Requisite Lenders shall otherwise consent in writing: 



    (a)  Compliance with Laws, Etc.; Taxes.  Comply, and cause each of its Subsidiaries to comply, with all
applicable laws, rules, regulations and orders, such compliance to include, without limitation, (i) complying with all Environmental Laws and (ii) paying before the same become
delinquent (x) all taxes, assessments, governmental charges and levies imposed upon it or upon its property and (y) all lawful claims that, if unpaid, might by law become a lien upon
their property; provided, however, that neither the Borrower nor any such Subsidiary shall be required to pay or discharge any such tax, assessment,
charge, levy or claim (A) that is being contested in good faith and by proper proceedings and for which appropriate reserves are being maintained, or (B) the failure to pay or discharge
which would not have a material adverse effect on the business, condition (financial or otherwise), results of operations or prospects of the Borrower and its Subsidiaries, taken as a whole. 


    (b)  Reporting Requirements.  Furnish to the Administrative Agent (in sufficient quantity for delivery to
each Lender) for prompt distribution by the Administrative Agent to the Lenders: 



     (i) as
soon as available and in any event within 55 days after the end of each of the first three quarters of each fiscal year of the Borrower, consolidated
balance sheets as of the end of such quarter and consolidated statements of source and application of funds of the Borrower and its Subsidiaries and
consolidated statements of income and retained earnings of the Borrower and its Subsidiaries for such quarter and the period commencing at the end of the previous fiscal year and ending with the end
of such quarter and certified by the chief financial officer or chief accounting officer of the Borrower; 


    (ii) as
soon as available and in any event within 100 days after the end of each fiscal year of the Borrower, a copy of the annual audit report for such year for
the Borrower and its Subsidiaries, containing financial statements (including a consolidated balance sheet and consolidated statement of income and cash flows of the Borrower and its Subsidiaries) for
such year, certified by and accompanied by an opinion of Ernst & Young LLP or other nationally recognized independent public accountants. The opinion shall be unqualified (as to going concern,
scope of audit and disagreements over the accounting or other treatment of offsets) and shall state that such consolidated financial statements present fairly in all material respects the financial
position of the Borrower and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in conformity with GAAP and that the examination by
such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards; 



    (iii) together
with each delivery of the report of the Borrower and its Subsidiaries pursuant to subsections (i) and (ii) above, a Compliance Certificate
for the relevant accounting period executed by the chief financial officer, treasurer or assistant treasurer of the Borrower demonstrating in reasonable detail compliance during and at the end of such
accounting periods with the restriction contained in Section 5.02(d) (and setting forth the arithmetical computation required to show such compliance) and stating that the signer has reviewed
the terms of this Agreement and has made, or caused to be made under his or her supervision, a review in reasonable detail of the transactions and condition of the Borrower and its Subsidiaries during
the accounting period covered by such financial statements and that such review has not disclosed the existence at the end of such accounting period, and that 




22





 



the signer does not have knowledge of the existence as at the date of the compliance certificate, of any condition or event that constitutes an Event of Default or Potential Event of Default or, if
any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Borrower has taken, is taking and proposes to take with respect thereto; 



    (iv) as
soon as possible and in any event within five days after the occurrence of each Event of Default and each Potential Event of Default, continuing on the date of
such statement, a statement of an authorized financial officer of the Borrower setting forth details of such Event of Default or event and the action which the Borrower has taken and proposes to take
with respect thereto; 


    (v) promptly
after any material change in accounting policies or reporting practices, notice and a description in reasonable detail of such change; 


    (vi) promptly
and in any event within 30 days after the Borrower or any ERISA Affiliate knows or has reason to know that any ERISA Event referred to in
clause (i) of the definition of ERISA Event with respect to any Pension Plan has occurred which might result in liability to the PBGC in excess of $500,000 a statement of the chief accounting
officer of the Borrower describing such ERISA Event and the action, if any, that the Borrower or such ERISA Affiliate has taken or proposes to take with respect thereto; 


   (vii) promptly
and in any event within 15 days after the Borrower or any ERISA Affiliate knows or has reason to know that any ERISA Event (other than an ERISA
Event referred to in (vi) above) with respect to any Pension Plan has occurred which might result in liability to the PBGC in excess of $500,000, a statement of the chief accounting officer of
the Borrower describing such ERISA Event and the action, if any, that the Borrower or such ERISA Affiliate has taken or proposes to take with respect thereto; 



   (viii) promptly
and in any event within five Business Days after receipt thereof by the Borrower or any ERISA Affiliate from the PBGC, copies of each notice from the
PBGC of its intention to terminate any Pension Plan or to have a trustee appointed to administer any Pension Plan; 


    (ix) promptly
and in any event within 15 days after receipt thereof by the Borrower or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy of
each notice received by the Borrower or any ERISA Affiliate concerning (w) the imposition of Withdrawal Liability by a Multiemployer Plan in excess of $500,000, (x) the determination
that a Multiemployer Plan is, or is expected to be, in reorganization within the meaning of Title IV of ERISA, (y) the termination of a Multiemployer Plan within the meaning of Title IV of
ERISA or (z) the amount of liability incurred, or expected to be incurred, by the Borrower or any ERISA Affiliate in connection with any event described in clause (w), (x) or
(y) above; 


    (x) promptly
after the commencement thereof, notice of all material actions, suits and proceedings before any court or government department, commission, board, bureau,
agency or instrumentality, domestic or foreign, affecting the Borrower or any of its Subsidiaries, of the type described in Section 4.01(f); 


    (xi) promptly
after the occurrence thereof, notice of (A) any event which makes any of the representations contained in Section 4.01(k) inaccurate in any
material respect or (B) the receipt by the Borrower of any notice, order, directive or other communication from a governmental authority alleging violations of or noncompliance with any
Environmental Law which could reasonably be expected to have a material adverse effect on the business, condition (financial or otherwise), results of operations or prospects of the Borrower and its
Subsidiaries, taken as a whole; 




23





 



   (xii) promptly after any change in the rating established by S&P or Moody's, as applicable, with respect to Long-Term Debt, a notice of such change, which
notice shall specify the new rating, the date on which such change was publicly announced, and such other information with respect to such change as any Lender through either Agent may reasonably
request; 


   (xiii) promptly
after the sending or filing thereof, copies of all reports which the Borrower sends to any of its public security holders, and copies of all reports and
registration statements which the Borrower files with the SEC or any national security exchange; 


   (xiv) promptly
after the Borrower or any ERISA Affiliate creates any employee benefit plan to provide health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of the Borrower or any of its ERISA Affiliates (except as provided in Section 4980B of the Code and except as provided under the terms of any
employee welfare benefit plans provided pursuant to the terms of collective bargaining agreements) under the terms of which the Borrower and/or any of its ERISA Affiliates are not permitted to
terminate such benefits, a notice detailing such plan; and 


   (xv) such
other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the
Administrative Agent may from time to time reasonably request. 




    (c)  Corporate Existence, Etc.  Preserve and maintain, and cause each of its Material Subsidiaries to
preserve and maintain, at all times its fundamental business and preserve and keep in full force and effect its corporate existence (except as permitted under Section 5.02(b) hereof) and all
rights, franchises and licenses necessary or desirable in the normal conduct of its business; provided, however, that this paragraph (c) shall not apply in any case when, in the good faith
business judgment of the Borrower, such preservation or maintenance is neither necessary nor appropriate for the prudent management of the business of the Borrower. 


    (d)  Inspection.  Permit, and cause each of its Material Subsidiaries to permit, any authorized
representative designated by the Administrative Agent or any Lender; at the expense of the Administrative Agent or such Lender, to visit and inspect any of the properties of the Borrower or any of its
Material Subsidiaries, including its and their financial and accounting records, and to take copies and to take extracts therefrom, and discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants, all during normal hours, upon reasonable notice and as often as may be reasonably requested. 


    (e)  Insurance.  Maintain, and cause each of its Material Subsidiaries to maintain, insurance to such
extent and covering such risks as is usual for companies engaged in the same or similar business and on request will advise the Lenders of all insurance so carried. 


    (f)  Maintenance of Properties.  Keep, and cause each of its Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition, ordinary wear and tear or damage from casualty excepted, all material properties used or useful in the business of such Borrower and its
Subsidiaries and from time to time will make or use its reasonable efforts to cause to be made all appropriate repairs, renewals and replacements thereof. 



24







  




    (g)  Maintenance of Books, Etc.  Keep, and cause each of its Subsidiaries to keep, proper books of
records and accounts, in which full and correct entries shall be made of all financial transactions and the assets and business of the Borrower and each of its domestic Subsidiaries in accordance with
GAAP and with respect to foreign Subsidiaries in accordance with customary accounting standards in the applicable jurisdiction, in each case consistently applied and consistent with prudent business
practices. 




    Section 5.02  Negative Covenants.  So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, without the written consent of the Requisite Lenders: 



    (a)  Liens, Etc.  The Borrower will not create or suffer to exist, or permit any of its Subsidiaries to
create or suffer to exist, any Lien, upon or with respect to any of its properties, whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any right to
receive income, in each case to secure or provide for the payment of any Debt of any Person, unless the Borrower's obligations hereunder shall be secured equally and ratably with, or prior to, any
such Debt; provided however that the foregoing restriction shall not apply to the following Liens which are permitted: 



     (i) Liens
on assets of any Subsidiary of the Borrower existing at the time such Person becomes a Subsidiary (other than any such Lien created in contemplation of
becoming a Subsidiary); 


    (ii) purchase
money Liens upon or in any property acquired or held by the Borrower or any Subsidiary in the ordinary course of business to secure the purchase price of
such property or to secure Debt incurred solely for the purpose of financing the acquisition of such property (provided that the amount of Debt secured by such Lien does not exceed 100% of the
purchase price of such property and transaction costs relating to such acquisition) and Liens existing on such property at the time of its acquisition (other than any such Lien created in
contemplation of such acquisition); and the interest of the lessor thereof in any property that is subject to a Capital Lease; 


    (iii) any
Lien securing Debt that was incurred prior to or during construction or improvement of property for the purpose of financing all or part of the cost of such
construction or improvement, provided that the amount of Debt secured by such Lien does not exceed 100% of the fair market value of such property after giving effect to such construction or
improvement; 


    (iv) any
Lien securing Debt of a Subsidiary owing to the Borrower; 


    (v) Liens
resulting from any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Debt secured by any
Lien referred to in clauses (i), (ii) and (iii) above so long as (x) the aggregate principal amount of such Debt shall not increase as a result of such extension, renewal or
replacement and (y) Liens resulting from any such extension, renewal or replacement shall cover only such property which secured the Debt that is being extended, renewed or replaced; 


    (vi) Liens
on accounts receivable resulting from the sale of such accounts receivable by the Borrower or a Subsidiary of the Borrower, so long as, at any time, the
aggregate outstanding amount of such accounts receivable does not, together with the amount of Debt secured by Liens permitted by clause (vii), exceed 10% of the consolidated stockholder's
equity of the Borrower and its consolidated Subsidiaries; and 


   (vii) Liens
other than Liens described in clauses (i) through (vi) hereof, whether now existing or hereafter arising, securing Debt in an aggregate amount
that does not, together 




25





 



with the amount of accounts receivable subject to Liens permitted by clause (vi), exceed 10% of the consolidated stockholder's equity of the Borrower and its consolidated Subsidiaries. 




    (b)  Restrictions on Fundamental Changes.  The Borrower will not, and will not permit any of its Material
Subsidiaries to, merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or a substantial portion of its
assets (whether now owned or hereafter acquired) to any Person, or enter into any partnership, joint venture, syndicate, pool or other combination, unless no Event of Default or Potential Event of
Default has occurred and is continuing or would result therefrom and, in the case of a merger or consolidation of the Borrower, (i) the Borrower is the surviving entity or (ii) the
surviving entity assumes all of the Borrower's obligations under this Agreement in a manner satisfactory to the Requisite Lenders. 



    (c)  Plan Terminations.  The Borrower will not, and will not permit any ERISA Affiliate to, terminate any
Pension Plan so as to result in liability of the Borrower or any ERISA Affiliate to the PBGC in excess of $25,000,000, or permit to exist any occurrence of an event or condition which reasonably
presents a material risk of a termination by the PBGC of any Pension Plan with respect to which the Borrower or any ERISA Affiliate would, in the event of such termination, incur liability to the PBGC
in excess of $25,000,000. 


    (d)  Maximum Debt Ratio.  The Borrower will not permit the ratio of (i) Net Debt as of the end of
any fiscal quarter to (ii) EBITDA, for each period consisting of the four consecutive fiscal quarters then ended, to exceed 2.50 to 1.00. 



 
 

ARTICLE VI
  
    EVENTS OF DEFAULT    
  


    Section 6.01  Events of Default.  If any of the following events ("Events
of Default") shall occur and be continuing: 



    (a) The
Borrower shall fail to pay any principal of any Advance when the same becomes due and payable or the Borrower shall fail to pay any interest on any Advance or
any fees or other amounts payable hereunder within five Business Days of the date due; or 


    (b) Any
representation or warranty made or deemed made by the Borrower herein or by the Borrower pursuant to this Agreement (including any notice, certificate or other
document delivered hereunder) shall prove to have been incorrect in any material respect when made; or 


    (c) The
Borrower shall fail to perform or observe (i) any term, covenant or agreement contained in this Agreement (other than any term, covenant or agreement
contained in Section 5.01(b)(iv), 5.01(c) or 5.02) on its part to be performed or observed and the failure to perform or observe such other term, covenant or agreement shall remain unremedied
for 30 days after the Borrower obtains knowledge of such breach or (ii) any term, covenant or agreement contained in Section 5.01(b)(iv), 5.01(c) or 5.02; or 


    (d) The
Borrower or any of its Subsidiaries shall fail to pay any principal of or premium or interest on any Debt that is outstanding in a principal amount at least
equal to 2% of consolidated net worth of the Borrower and its consolidated Subsidiaries in the aggregate (but excluding Debt arising under this Agreement) of the Borrower or such Subsidiary (as the
case may be), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such Debt; or the Borrower or any of its Subsidiaries shall fail to perform or observe any other agreement, term or condition
contained in any agreement or instrument relating to any such Debt (or if any other event or 



26





 


condition of default under any such agreement or instrument shall exist) and such failure, event or condition shall continue after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such failure, event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable as
a result of such failure, event or condition; or 


    (e) The
Borrower or any of its Material Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower or any of its Material Subsidiaries seeking to
adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for
a substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of
60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its property) shall occur; or the Borrower or any of its Material Subsidiaries shall take any corporate action to authorize any of the actions
set forth above in this subsection (e); or 


    (f)  Any
judgment or order for the payment of money in excess of 2% of consolidated net worth of the Borrower and its consolidated Subsidiaries, individually or in the
aggregate, shall be rendered against the Borrower or any of its Material Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon a final or
nonappealable judgment or order or (ii) there shall be any period of 10 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or 


    (g) 



     (i) Any
ERISA Event with respect to a Pension Plan shall have occurred and, 30 days after notice thereof shall have been given to the Borrower by the
Administrative Agent, (x) such ERISA Event shall still exist and (y) the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Pension Plan and
the Insufficiency of any and all other Pension Plans with respect to which an ERISA Event shall have occurred and then exist (or in the case of a Pension Plan with respect to which an ERISA Event
described in clause (iii) through (vi) of the definition of ERISA Event shall have occurred and then exist, the liability related thereto) is equal to or greater than $25,000,000; or 



    (ii) The
Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred an aggregate Withdrawal Liability for all
years to such Multiemployer Plan in an amount that, when aggregated with all other amounts then required to be paid to Multiemployer Plans by the Borrower and its ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds $25,000,000 and it is reasonably likely that all amounts then required to be paid to Multiemployer Plans by the Borrower and its
ERISA Affiliates as Withdrawal Liability will exceed $25,000,000; or 


    (iii) The
Borrower or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and it is reasonably likely that as a result of such reorganization or termination the aggregate annual contributions of the Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or being 




27





 



terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan year of such Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $25,000,000; or 




    (h) 



     (i) any
Person or two or more Persons (other than the Hormel Foundation) acting in concert shall have acquired beneficial ownership or the right to acquire beneficial
ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934), directly or indirectly, of securities of the Borrower (or other securities
convertible into such securities) representing 35% or more of the combined voting power of all securities of the Borrower entitled to vote in the election of directors, other than securities having
such power only by reason of the happening of a contingency ("Share Acquisition"); or 


    (ii) individuals
who either (1) have been directors of the Borrower for the prior 24-month period or (2) were nominated or elected by
directors in office during such period (but prior to any Share Acquisition) shall cease for any reason to constitute a majority of the board of directors of the Borrower; 





then,
and in any such event, the Administrative Agent (i) shall at the request, or may with the consent, of the Requisite Lenders, by notice to the Borrower, declare the obligation of each
Lender to make Advances to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Requisite Lenders, by notice to the
Borrower, declare the Advances, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Advances, all such interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower;  provided, however, that in
the event of an actual or deemed entry of an order for relief with respect to the Borrower or any of its Subsidiaries under
the Bankruptcy Code or the expiration of the 60-day grace period provided in Section 6.01(e), (A) the obligation of each Lender to make Advances shall automatically be
terminated and (B) the Advances, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower. 


 
 

ARTICLE VII
  
    ADMINISTRATIVE AGENT    
  


    Section 7.01  Authorization and Action.  Each Lender hereby appoints and
authorizes CUSA to act as the Administrative Agent under this Agreement and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the Advances and other amounts owing hereunder), the Administrative Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Requisite Lenders, and such
instructions shall be binding upon all Lenders; provided, however, that the Administrative Agent shall not be required to take any action which exposes
the Administrative Agent to personal liability or which is contrary to any of the Loan Documents or applicable law. The Administrative Agent agrees to give to each Lender prompt notice of each notice
given to it by the Borrower pursuant to the terms of the Loan Documents. 


    Section 7.02  Agents' Reliance, Etc.  Neither the Agents nor any of their
respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them 


28





 


under or in connection with any of the Loan Documents, except for their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, the Agents: (i) may
treat the Lender that made any Advance as the payee thereof until the Administrative Agent receives and accepts an Assignment and Acceptance entered into by such Lender, as assignor, and an Eligible
Assignee, as assignee, as provided in Section 8.07; (ii) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) make no warranty or
representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with any of the Loan
Documents; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any of the Loan Documents on the part of
the Borrower or to inspect the property (including the books and records) of the Borrower; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any of the Loan Documents or any other instrument or document furnished pursuant hereto; and (vi) shall incur no liability under or in respect of any of the
Loan Documents by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier) believed by it to be genuine and signed or sent by the proper party or
parties. 


    Section 7.03  CUSA and Affiliates.  With respect to its respective
Commitment and the respective Advances made by it, CUSA shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not an Agent; and the
term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include CUSA respectively in its individual capacity. CUSA and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, acquire equity interests in and generally engage in any kind of commercial banking, investment banking, trust, financial advisory, underwriting or other business with, the
Borrower, any of its Subsidiaries and other Affiliates and any Person who may do business with or own securities of the Borrower or any such Subsidiary or Affiliate, all as if CUSA was not an Agent
and without any duty to account therefor or provide notice thereof, to the Lenders. The Lenders acknowledge that, pursuant to such activities, CUSA and its Affiliates may receive information regarding
the Borrower or its Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower or an Affiliate) and acknowledge that the Administrative Agent shall
not be under any obligation to provide such information to them. 


    Section 7.04  Lender Credit Decision.  Each Lender acknowledges that it
has, independently and without reliance upon any Agent or any other Lender and based on the financial statements referred to, and the representations and warranties contained, in Section 4.01
and such other 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 Agents or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement. 


    Section 7.05  Indemnification.  The Lenders agree to indemnify the Agents
(to the extent not reimbursed by the Borrower), ratably according to the respective principal amounts of the Advances then held by each of them (or if no such Advances are at the time outstanding or
if any such Advances are held by Persons which are not Lenders, ratably according to the respective amounts of their Commitments), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against any such Agent in any way
relating to or arising out of any of the Loan Documents or any action taken or omited by such Agent under any of the Loan Documents, provided that no
Lender shall be liable for any portion of such liabilities, obligations, 


29





 


losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse such Agent promptly upon demand for its ratable share of any reasonable out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration, syndication, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, the Loan Documents, to the extent that such Agent is not reimbursed for such expenses by the Borrower. 


    Section 7.06  Successor Administrative Agent.  The Administrative Agent
may resign at any time by giving written notice thereof to the Lenders and the Borrower and may be removed at any time with or without cause by the Requisite Lenders. Upon any such resignation or
removal, the Requisite Lenders shall have the right to appoint a successor Administrative Agent (such Administrative Agent, so long as no Event of Default has occurred and is continuing, being
reasonably acceptable to the Borrower). If no successor Administrative Agent shall have been so appointed by the Requisite Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving of notice of resignation or the Requisite Lenders' removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf
of the Lenders, appoint a successor Administrative Agent which shall be a commercial bank organized under the laws of the United States of America or of any State thereof or any Bank and, in each case
having a combined capital and surplus of at least $100,000,000 (and so long as no Event of Default has occurred and is continuing, that is reasonably acceptable to the Borrower). Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon 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 under the Loan Documents. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent under the Loan Documents. 


    Section 7.07  Other Agents  None of the Lenders identified on the facing
page of this Agreement or elsewhere herein as a "Syndication Agent", a "Documentation Agent", or an "Arranger" shall have any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of the Lenders so identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders so identified in deciding to enter into this Agreement or in taking or not taking action hereunder. 


 
 

ARTICLE VIII
  
    MISCELLANEOUS    
  


    Section 8.01  Amendments, Etc.  No amendment or waiver of any provision of
this Agreement, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower and the Requisite Lenders, and
then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all the Lenders, do any of the following: (a) waive any of the conditions specified in Section 3.01,
(b) increase the Commitments of the Lenders or subject the Lenders to any additional obligations, (c) reduce the principal of, or interest on, the Advances or any fees or other amounts
payable hereunder, (d) postpone any date fixed for any payment of principal of, or interest on, the Advances or any fees or other amounts payable hereunder, (e) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the Advances, or the number of Lenders, which shall be required for the 


30





 


Lenders or any of them to take any action hereunder or (f) amend Section 2.14 or this Section 8.01; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by an Agent in addition to the Lenders required above to take such action, affect the rights or duties of such Agent under this
Agreement. 


    Section 8.02  Notices, Etc.  All notices and other communications provided
for hereunder shall be in writing (including telecopier communication) and mailed, telecopied or delivered, if to the Borrower, at its address at 1 Hormel Place, Austin, Minnesota
55912-3690, Attn: Treasurer, Telecopier (507) 434-6731, Telephone (507) 437-5922; if to any Bank, at its Domestic Lending Office specified opposite
its name on Schedule I hereto; if to any other Lender, at its Domestic Lending Office specified in the Assignment and Acceptance pursuant to which it became a Lender; if to the Administrative
Agent at its address at Citicorp USA, Inc., Global Loans Operations, 2 Penns Way, Suite 200, New Castle, Delaware 19720; Attention: Brian Maxwell, Telecopier (302) 894-6120,
Telephone (302) 894-6023 (with copy of notices, other than those given pursuant to Sections 2.1 through 2.13 hereof, to Citicorp USA, Inc., 500 W. Madison Street,
7th Floor, Chicago, Illinois; Attention: Shafique Janmohamed), Telecopier (312) 876-3288, Telephone (312) 876-3272, or, as to the Borrower or the
Administrative Agent, at such other address as shall be designated by such party in a written notice to the Borrower and the Administrative Agent. All such notices and communications shall, when
personally delivered, mailed or telecopied, be effective when personally delivered, after five (5) days after being deposited in the mails, or when confirmed by telecopy response, respectively,
except that notices and communications to the Administrative Agent pursuant to Article II or VII shall not be effective until received by the Administrative Agent. 


    Section 8.03  No Waiver; Remedies.  No failure on the part of any Lender
or the Administrative Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. 



    Section 8.04  Costs, Expenses and Indemnification.  



    (a) The
Borrower agrees, regardless of whether the Effective Date occurs, to pay promptly on demand all reasonable costs and out-of-pocket
expenses of the Administrative Agent in connection with the preparation, execution, delivery, administration, syndication, modification and amendment of this Agreement, and the other documents to be
delivered hereunder or thereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent (including the
allocated time charges of the Administrative Agent's legal departments, as their respective internal counsel) with respect thereto and with respect to advising the Administrative Agent as to its
rights and responsibilities under this Agreement. The Borrower further agrees to pay promptly on demand all costs and expenses of the Agents and of each Lender, if any (including, without limitation,
reasonable counsel fees and out-of-pocket expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this Agreement and the other documents to be delivered hereunder or thereunder, including, without limitation, reasonable counsel fees
and out-of-pocket expenses in connection with the enforcement of rights under this Section 8.04(a). 


    (b) If
any payment of principal of any Eurodollar Rate Advance is made or any Eurodollar Rate Advance is assigned pursuant to Section 2.15 other than on the last
day of the interest period for such Advance, as a result of a payment pursuant to Section 2.05 or acceleration of the maturity of the Advances pursuant to Section 6.01 or for any other
reason, the Borrower shall, upon demand by any Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses which it may reasonably incur as a result of 



31





 


such payment, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such
Advance; provided that conversion of a Eurodollar Rate Advance to a Base Rate Advance in accordance with the provisions of
Section 2.02(b)(iii) shall not be considered a payment for purposes of this Section 8.04(b). 


    (c) The
Borrower agrees to indemnify and hold harmless each Agent, each Lender and each director, officer, employee, agent, attorney and affiliate of each Agent and
each Lender (each an "indemnified person") in connection with any expenses, losses, claims, damages or liabilities to which an Agent, a Lender or such indemnified persons may become subject, insofar
as such expenses, losses, claims, damages or liabilities (or actions or other proceedings commenced or threatened in respect thereof) arise out of the transactions referred to in this Agreement or
arise from any use or intended use of the proceeds of the Advances, or in any way arise out of activities of the Borrower that violate Environmental Laws, and to reimburse each Agent, each Lender and
each indemnified person, upon their demand, for any reasonable legal or other out-of-pocket expenses incurred in connection with investigating, defending or participating in
any such loss, claim, damage, liability, or action or other proceeding, whether commenced or threatened (whether or not such Agent, such Lender or any such person is a party to any action or
proceeding out of which any such expense arises). Notwithstanding the foregoing, the Borrower shall have no obligation hereunder to an indemnified person with respect to indemnified liabilities which
have resulted from the gross negligence, bad faith or willful misconduct of such indemnified person. 


    (d) To
the extent permitted by law, the Borrower shall not assert, and hereby waives, any claim against any indemnified person, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with or as a result of this Agreement, any other Loan Document, any transaction
contemplated by the Loan Documents, any Advance or the use of proceeds thereof. 




    Section 8.05  Right of Set-off.  Upon (i) the
occurrence and during the continuance of any Event of Default and (ii) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Administrative
Agent to declare the Advances due and payable pursuant to the provisions of Section 6.01, 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 (time or demand, provisional or final, or general, but not special) at any time held and other indebtedness at any time owing by such Lender to or for
the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement that are then due and payable, whether or not such
Lender shall have made any demand under this Agreement. Each Lender agrees promptly to notify the Borrower after any such set-off and application made by such Lender;  provided that the failure to give
such notice shall not affect the validity of such set-off and application. The rights of each Lender under
this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Lender may have. 


    Section 8.06  Binding Effect; Entire Agreement.  



    (a) This
Agreement shall be deemed to have been executed and delivered when it shall have been executed by the Borrower and the Administrative Agent and when the
Administrative Agent shall have been notified by each Bank that such Bank has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Administrative Agent and
each Lender and their respective successors and permitted assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written
consent of all Lenders. 


    (b) This
Agreement (including the Schedules and Exhibits attached hereto) shall constitute the entire agreement among the parties hereto with respect to the subject
matter hereof and 



32





 


supersede all prior agreements, understandings and negotiations, both written and oral, among the parties with respect to such subject matter. 




    Section 8.07  Assignments and Participations.  



    (a) Each
Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including, without limitation, all or
a portion of its Commitment and the Advances owing to it); provided, however, that (i) each such assignment shall be of a constant, and not a
varying, percentage of all of the assigning Lender's rights and obligations under this Agreement, (ii) after giving effect to any such assignment, (1) the assigning Lender shall no
longer have any Commitment or (2) the amount of the Commitment of both the assigning Lender and the Eligible Assignee party to such assignment (in each case determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall not be less than $5,000,000 and assigned amounts
must be in increments of $1,000,000, (iii) each such assignment shall be to an Eligible Assignee, (iv) the parties to each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, and a processing and recordation fee of $3,500 to the Administrative Agent, and (v) the Borrower (unless
an Event of Default shall exist and be continuing) and the Administrative Agent shall have consented to such assignment, which consent shall not be unreasonably withheld, unless such assignment is to
an Affiliate of a Lender, in which case no such consent shall be necessary (but such Lender shall notify the Borrower and the Administrative Agent of any such assignment to an Affiliate of an
Assigning Lender). Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and
(y) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto); provided that with respect to any amounts payable as of the date of such assignment pursuant
to Sections 2.09, 2.11 or 8.04, the Borrower shall have no greater obligation to the assignee than it had to the assignor. Any Lender may at any time pledge or assign all or any portion of its rights
hereunder to a Federal Reserve Bank; provided, that no such pledge or assignment shall release such Lender from any of its obligations hereunder. 



33







  



    (b) By
executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in connection with any of the Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value
of any of the Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under any of the Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (iii) such assignee confirms that it has received a copy of the Loan Documents, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the Agents, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents; (v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Administrative Agent
by the terms hereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations
which by the terms of the Loan Documents are required to be performed by it as a Lender. 


    (c) Within
five (5) days of its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee representing that it is an Eligible
Assignee (together with a processing and recordation fee of $3,500 with respect thereto) and upon evidence of consent of the Borrower (if no Event of Default has occurred and is continuing) and the
Administrative Agent thereto, which consent shall not be unreasonably withheld, the Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of  Exhibit A
hereto, (1) accept such Assignment and Acceptance and (2) record the information contained therein in the Register. All
communications with the Borrower with respect to such consent of the Borrower shall be sent pursuant to Section 8.02. 


    (d) The
Administrative Agent shall maintain at its address referred to in Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and the Commitment of, the Commitment Termination Date of, and principal amount of the Advances owing to, each such Lender
from time to time (the "Register"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of the Loan Documents. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. 


    (e) Each
Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and the Advances owing to it; provided, however, that (i) such Lender's obligations under
this Agreement (including, without limitation, its Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the holder of any such Advance for all purposes of this Agreement, (iv) the Borrower, the Administrative Agent 



34





 


and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under the Loan Documents, (v) no Lender shall grant any
participation under which the participant shall have rights to require such Lender to take or omit to take any action hereunder or under the other Loan Documents or approve any amendment to or waiver
of this Agreement or the other Loan Documents, except to the extent such amendment or waiver would: (A) extend the Commitment Termination Date; or (B) reduce the interest rate or the
amount of principal or fees applicable to Advances or the Commitment in which such participant is participating or change the date on which interest, principal or fees applicable to Advances or the
Commitment in which such participant is participating are payable, and (vi) the Person purchasing such participation shall agree to customary provisions relating to the confidentiality of
non-public information received by such Person in connection with its purchase of the participation. 


    (f)  Any
Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 8.07, disclose to the
assignee or participant or proposed assignee or participant, any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided  that, prior to any such
disclosure, the assignee or Participant or proposed assignee or participant shall agree to preserve the confidentiality of any confidential information
relating to the Borrower received by it from such Lender. 


    (g) 



     (i) Notwithstanding
anything to the contrary contained herein, any Lender (a "Designating Lender") may grant to one or
more special purpose funding vehicles (each, an "SPV"), identified as such in writing from time to time by the Designating Lender to the Administrative
Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Designating Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (1) nothing herein shall constitute a commitment by any SPV to make any Loan, (2) if an SPV elects not to exercise such option or otherwise fails to provide all or any part
of such Loan, the Designating Lender shall be obligated to make such Loan pursuant to the terms hereof and (3) the Designating Lender shall remain liable for any indemnity or other payment
obligation with respect to its Commitment hereunder. The making of a Loan by an SPV hereunder shall utilize the Commitment of the Designating Lender to the same extent, and as if, such Loan were made
by such Designating Lender; 


    (ii) As
to any Loans or portion thereof made by it, each SPV shall have all the rights that a Lender making such Loans or portion thereof would have had under this
Agreement; provided, however, that each SPV shall have granted to its Designating Lender an irrevocable power of attorney to deliver and receive all communications and notices under this Agreement
(and any related documents) and to exercise on such SPV's behalf, all of such SPV's voting rights under this Agreement. No additional Note shall be required to evidence the Loans or portion thereof
made by an SPV; and the related Designating Lender shall be deemed to hold its Note (if any) as agent for such SPV to the extent of the Loans or portion thereof funded by such SPV. In addition, any
payments for the account of any SPV shall be paid to its Designating Lender as agent for such SPV; 


    (iii) Each
party hereto hereby agrees that no SPV shall be liable for any indemnity or payment under this Agreement for which a Lender would otherwise be liable; if an
SPV, but for the operation of this sentence, would have liability for any such indemnity or payment, the Designating Lender shall be liable; 



    (iv) In
addition, notwithstanding anything to the contrary contained in this Section 8.07(g) or otherwise in this Agreement, any SPV may (1) at any time
and without 




35





 



paying any processing fee therefore, assign or participate all or a portion of its interest in any Loans to the Designating Lender or to any financial institutions providing liquidity and/or credit
support to or for the account of such SPV to support the funding or maintenance of Loans; provided that the Designating Lender in the event of an assignment or participation to any other financial
institution shall remain liable for any indemnity or other payment obligation with respect to its Commitment, and shall be obligated to make such Loan pursuant to the terms hereof and of its
Commitment and (2) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancements to such SPV. 





    Section 8.08  Confidentiality.  Each Agent and each Lender agrees, insofar
as is legally possible, to use its reasonable best efforts to keep in confidence all financial data and other information relative to the affairs of the Borrower heretofore furnished or which may
hereafter be furnished to it pursuant to the provisions of this Agreement; provided, however, that this Section 8.08 shall not be applicable to
information which is or becomes available to a Lender from a source other than the Borrower; and provided further that such obligation of each Agent and
each Lender shall be subject to each Agent's and each Lender's (a) obligation to disclose such information pursuant to a request or order under applicable laws and regulations or pursuant to a
subpoena or other legal process, (b) right to disclose any such information to bank examiners, its affiliates, bank, auditors, accountants and its counsel and other Agents and Lenders, and
(c) right to disclose any such information, (i) in connection with the transactions set forth herein including assignments and sales of participation interests pursuant to
Section 8.07 hereof or (ii) in or in connection with any litigation or dispute involving the Agents, the Lenders and the Borrower or any transfer or other disposition by such Lender of
any of its Advances or other extensions of credit by such Lender to the Borrower or any of its Subsidiaries, provided that
information disclosed pursuant to this proviso shall be so disclosed subject to such procedures as are reasonably calculated to maintain the confidentiality thereof. 


    Section 8.09  Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York. 


    Section 8.10  Execution in Counterparts.  This Agreement may be executed
in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. 


    Section 8.11  Consent to Jurisdiction; Waiver of Immunities.  The Borrower
hereby irrevocably submits to the jurisdiction of any New York state or Federal court sitting in New York, New York in any action or proceeding arising out of or relating to this Agreement, and the
Borrower hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York state or Federal court. The Borrower hereby irrevocably waives,
to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The Borrower 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 Section 8.11 shall affect the right of
any Lender or Agent to serve legal process in any other manner permitted by law or affect the right of any Lender or Agent to bring any action or proceeding against the Borrower or its property in the
courts of any other jurisdiction. 


    Section 8.12  Waiver of Trial by Jury.  THE BORROWER, THE BANKS, THE
AGENTS AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, OTHER LENDERS EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, 


36





 


tort claims, breach of duty claims and all other common law and statutory claims. The Borrower, the Banks, the Agents and, by its acceptance of the benefits hereof, other Lenders each
(i) acknowledges that this waiver is a material inducement for the Borrower, the Lenders and the Agents to enter into a business relationship, that the Borrower, the Lenders and the Agents have
already relied on this waiver in entering into this Agreement or accepting the benefits thereof, as the case may be, and that each will continue to rely on this waiver in their related future dealings
and (ii) further warrants and represents that each has reviewed this waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court. 


[Remainder
of page intentionally left blank] 


37







 
    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written. 



	 	 	HORMEL FOODS CORPORATION
	

 	
 	
By	

/s/ JOEL W. JOHNSON   

	 	 	Name: Joel W. Johnson

Title: Chairman, President & CEO
	

 	
 	

Notice Address:

Attn: Treasurer

1 Hormel Place

Austin, Minnesota 55912-3680






S–1





 


	 	 	CITICORP USA, INC., as Administrative

Agent and a Lender
	

 	
 	

By	

/s/ SHAFIQUE JANMOHAMED   

	 	 	Name: Shafique Janmohamed

Title: Managing Director
	

 	
 	

Notice Address:

Global Loans Operations

Attn: Brian Maxwell

2 Penns Way, Suite 200

New Castle, Delaware 19702






S–2





 


	 	 	SUNTRUST BANK
 (As a Lender)
	

 	
 	

By	

/s/ HUGH E. BROWN   

	 	 	Name: Hugh E. Brown

Title: Vice President
	

 	
 	

Notice Address:

Attn: Hugh Brown

303 Peachtree Street

Third Floor

Atlanta, Georgia 30308






S–3





 


	 	 	U.S. BANK NATIONAL ASSOCIATION
	

 	
 	
By	

/s/ NOEL AUSTIN   

	 	 	Name: Noel Austin

Title: President, Austin Minnesota Branch
	

 	
 	

Notice Address:

Attn: Noel Austin

         301 North Main Street

         Austin, MN 55912






S–4





 


	 	 	THE FUJI BANK, LIMITED
	

 	
 	
By	

/s/ PETER L. CHINNICI   

	 	 	Name: Peter L. Chinnici

Title: Senior Vice President & Group Head
	

 	
 	

Notice Address:

Corporate Banking Division

Attn: James S. Bell

225 W. Wacker Drive, Suite 2000

Chicago, Illinois 60606






S–5





 


	 	 	BANK ONE, NA (Main Office Chicago)
 (As a Lender)
	

 	
 	

By	

/s/ JENNIFER A. GILPIN   

	 	 	Name: Jennifer A. Gilpin

Title: Director
	

 	
 	

Notice Address:

1 Bank One Plaza-14th Fl

Suite IL1-0088

Chicago, IL 60670-0088






S–6






  



 
 

SCHEDULE I
  APPLICABLE LENDING OFFICES    
  



	Bank
 
	 	Domestic Lending Office
	 	Eurodollar Lending Office

	Citicorp USA, Inc.	 	Citicorp USA, Inc.

Citibank Agency Services

2 Penns Way, Suite 200

New Castle, DE 19720

Telephone: (302) 894-6023

Facsimile: (302) 894-6120	 	Citicorp USA, Inc.

Citibank Agency Services

2 Penns Way, Suite 200

New Castle, DE 19720

Telephone: (302) 894-6023

Facsimile: (302) 894-6120
	

SunTrust Bank	
 	

SunTrust Bank

25 Park Place

MC 1941, 21st Floor

Attention: Barbara Thomas

Atlanta, GA 30302

Telephone: (404) 658-4237

Facsimile: (404) 230-1940	
 	

SunTrust Bank

25 Park Place

MC 1941, 21st Floor

Attention: Barbara Thomas

Atlanta, GA 30302

Telephone: (404) 658-4237

Facsimile: (404) 230-1940
	

US Bank National Association	
 	

U.S. Bank National Association

301 North Main Street

Austin, MN 55912

Attention: Noel Austin

Telephone: (507) 433-0210

Facsimile: (507) 433-0214	
 	

U.S. Bank National Association

301 North Main Street

Austin, MN 55912

Attention: Noel Austin

Telephone: (507) 433-0210

Facsimile: (507) 433-0214
	

Bank One, NA

(Main Office Chicago)	
 	

Bank One, NA

One Bank One Plaza

Chicago, IL 60670

Attention: Karan Hannusch

Telephone: (312) 732-8968

Facsimile: (312) 732-2715	
 	

Bank One, NA

One Bank One Plaza

Chicago, IL 60670

Attention: Karan Hannusch

Telephone: (312) 732-8968

Facsimile: (312) 732-2715
	

The Fuji Bank, Limited

(New York Branch)	
 	

The Fuji Bank, Limited

95 Christopher Columbus Drive

Jersey City, NJ 07302

Attention: Tina Catapano

Telephone: (201) 432-1980

Facsimile: (201) 432-6805	
 	

The Fuji Bank, Limited

95 Christopher Columbus Drive

Jersey City, NJ 07302

Attention: Tina Catapano

Telephone: (201) 432-1980

Facsimile: (201) 432-6805




Schedule I–1






  



 
 

SCHEDULE II    
  


BANKS' COMMITMENTS

Hormel Foods Corporation

$150,000,000 Revolving Credit Agreement  



	BANK
 
	 	COMMITMENT

	Citicorp USA, Inc.	 	$	40,000,000
	

SunTrust Bank	
 	
$	

30,000,000
	

US Bank National Association	
 	
$	

30,000,000
	

Bank One, NA (Main Office Chicago)	
 	
$	

25,000,000
	

The Fuji Bank, Limited (New York Branch)	
 	
$	

25,000,000




Schedule II–1







 
 

SCHEDULE 4.01(a)
  MATERIAL SUBSIDIARIES    
  


	1.
	Hormel Financial Services Corporation, a Minnesota corporation



	2.
	Hormel Foods, LLC, a Minnesota Limited Liability Company



	3.
	Jennie-O Turkey Store, Inc., a Minnesota corporation



	4.
	Hormel Foods International Corporation, a Delaware corporation



	5.
	Vista International Packaging Company, a Wisconsin corporation



	6.
	Dan's Prize, a Minnesota corporation



	7.
	Mountain Prairie, LLC a Colorado Limited Liability Company 


Schedule
4.01(a) 










 
 

SCHEDULE 4.01(c)
  GOVERNMENT CONSENTS    
  


None. 


Schedule
4.01(c) 







  




 
 

EXHIBIT A    
  


[FORM OF ASSIGNMENT AND ACCEPTANCE]  


 Dated as of            ,      


    Reference is made to that certain Revolving Credit Agreement, dated as of October 25, 2001 (the "Credit Agreement"), among HORMEL FOODS CORPORATION (the
"Borrower"), the Lenders party thereto, Citicorp USA, Inc., as Administrative Agent (the "Administrative Agent"), and the other Agents party thereto. Terms defined in the Credit Agreement are
used herein with same meaning. 


    [            ]
(the "Assignor") and [            ] (the "Assignee") agree as follows: 


    1.  The
Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, without recourse, that interest in and to
all of the Assignor's rights and obligations under the Credit Agreement as of the date hereof which represents the percentage interest specified in Section 1 of Schedule 1 of the
outstanding rights and obligations of all Lenders under the Credit Agreement, including, without limitation, such interest in the Assignor's Commitment and in all outstanding Advances (if any) owing
to the Assignor. After giving effect to such sale and assignment, the Assignee's Commitment and the aggregate principal amount of Advances outstanding on the date hereof and owing to the Assignee will
be as set forth in Section 2 of Schedule 1. 


    2.  The
Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; (ii) makes no representation or warranty (except as provided in clause (i) above) and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement or any other instrument or document furnished pursuant thereto or with respect to the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Borrower, any guarantor or any other person or the performance or observance by the Borrower, any guarantor or
any other party of any of its obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto. 


    3.  (a)
The Assignee (i) confirms and agrees that it has received a copy of the Credit Agreement, any amendments or waivers thereto and any other documents
furnished pursuant thereto, which in each case have been requested by it, together with copies of any financial statements requested by it, and that it has, independently and without reliance on the
Assignor, the Administrative Agent or any other Agent or Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this
Assignment and Acceptance and agrees that it shall have no recourse against the Assignor with respect to any matters relating thereto; (ii) agrees that it will, independently and without
reliance upon the Assignor, any Administrative Agent or any other Agent or Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement and any other documents or instruments furnished pursuant thereto; (iii) appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the Credit Agreement as are delegated to the Administrative Agent, by the terms thereof, together with such powers as are
reasonably incidental thereto; (iv) confirms that it is an Eligible Assignee; (v) agrees that it will perform in accordance with their terms all of the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender; [and] (vi) specifies as its Domestic Lending Office and Eurodollar Lending Office and address for
notices the respective offices previously notified to the Administrative Agent pursuant to the Credit Agreement[; and (vii) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying 


Exhibit A–1





 


as to the Assignee's status for the purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Credit Agreement or such
other documents as are necessary to indicate that all such payments are subject to withholding taxes at a rate reduced by any applicable tax treaty]. 



    (b) If
the Assignee is a person subject to ERISA, the Assignee represents and warrants that the execution, delivery and performance of this Assignment and Acceptance,
and the purchase of the interest being assigned to it hereby, will not involve any prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code, other
than a prohibited transaction which is covered by a currently effective class exemption granted by the U.S. Department of Labor pursuant to Section 408(a) of ERISA and Section 4975(C)(2)
of the Code. 




    4.  Following
the execution of this Assignment and Acceptance by the Assignor and the Assignee, the Assignor will deliver this Assignment and Acceptance to the
Administrative Agent for acceptance and recording. The effective date for this Assignment and Acceptance shall be the date of acceptance hereof by the Administrative Agent unless otherwise specified
on Schedule 1 hereto (the "Assignment Effective Date"). 


    5.  Upon
such acceptance and recording by the Administrative Agent, as of the Assignment Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in the Credit Agreement and in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in the Credit Agreement and in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement and the other instruments and
documents furnished pursuant thereto. The Assignee hereby acknowledges that the other parties to the Credit Agreement are intended third-party beneficiaries of this Assignment and Acceptance insofar
as, after giving effect to this Assignment and Acceptance, the Assignee shall have the obligations of a Lender thereunder. 


    6.  Upon
such acceptance and recording by the Administrative Agent, from and after the Assignment Effective Date, the Administrative Agent shall make all payments under
the Credit Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Assignment Effective Date directly between themselves. 


    7.  This
Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York. 


    8.  This
Assignment and Acceptance may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute but one and the same instrument. 



    IN
WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed by their respective officers thereunto duly authorized, as of the date first above
written, such execution being made on Schedule 1 hereto. 


[Remainder
of page intentionally left blank] 


Exhibit A–2






  



 
 

SCHEDULE 1
  TO
  ASSIGNMENT AND ACCEPTANCE
  Dated as of            , 20        
  


Section 1  



	 	Percentage interest	 	%
	 	 	

	 	(as percentage of total	 	 
	 	 	Credit Agreement Advances/

Commitments of all Lenders)	 	 





Section 2  



	 	Assignee's Commitment	 	$
	 	 	

	 	Aggregate Outstanding Principal	 	 
	 	 	Amount of Advances Owing to Assignee	 	$
	 	 	






Section 3  



	 	Assignment Effective Date:	 	 	 	, 20	 	 
	 	 	
	 	 	 	






	 	 	
[                                      ],
	 	 	as Assignor
	

 	
 	

By	
 	

 
	 	 	 	 	

	 	 	  Title:	 	 
	 	 	 	 	

	

 	
 	

[                                      ],
	 	 	as Assignee
	

 	
 	

By	
 	

 
	 	 	 	 	

	 	 	  Title:	 	 
	 	 	 	 	





[Remainder
of page intentionally left blank] 


Exhibit A–3





 


Accepted this      day of            ,      


Citicorp
USA, Inc., as Administrative Agent 



	By	 	 	 	 
	 	 	
	 	 
	Name:	 	 	 	 
	Title:	 	 	 	 





Accepted
this      day of            ,      


Hormel
Foods Corporation, as Borrower 



	By	 	 	 	 
	 	 	
	 	 
	Name:	 	 	 	 
	Title:	 	 	 	 




Exhibit A–4







  





EXHIBIT B  


 
 

[FORM OF COMPLIANCE CERTIFICATE]    
    
    COMPLIANCE CERTIFICATE    
  


THE
UNDERSIGNED HEREBY CERTIFY THAT: 


    (1) I
am the duly elected [Title] of HORMEL FOODS CORPORATION, a Delaware corporation
("Company"); 


    (2) I
have reviewed the terms of that certain Revolving Credit Agreement, dated as of October 25, 2001, as amended, supplemented or otherwise modified to the
date hereof (said Credit Agreement, as so amended, supplemented or otherwise modified, being the "Credit Agreement", the terms defined therein and not
otherwise defined in this Certificate (including Attachment No. 1 annexed hereto and made a part hereof) being used in this Certificate as therein defined), by and among the Company, the
financial institutions listed therein as Lenders, Citicorp USA, Inc., as Administrative Agent, and the other Agents party thereto and the terms of the other Loan Documents, and I have made, or
have caused to be made under my supervision, a review in reasonable detail of the transactions and condition of the Company and its Subsidiaries during the accounting period covered by the attached
financial statements; and 


    (3) The
examination described in paragraph (2) above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an
Event of Default or Potential Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate[, except as
set forth below]. 


    [Set
forth [below] [in a separate attachment to this Certificate] are all exceptions to paragraph (3) above listing,
in detail, the nature of the condition or event, the period during which it has existed and the action which the Company has taken, is taking, or proposes to take with respect to each such condition
or event: 



	
	 	]





    The foregoing certifications, together with the computations set forth in Attachment No. 1 annexed hereto and made a part hereof and the financial
statements delivered with this Certificate in support hereof, are made and delivered this            day of            ,
      pursuant to subsection 5.01(b)(iii) of
the Credit Agreement. 



	 	 	Hormel Foods Corporation
	

 	
 	

By:	
 	


	 	 	Title:	 	





Exhibit B–1






  



 
 

ATTACHMENT NO. 1
  TO COMPLIANCE CERTIFICATE    
  



    This Attachment No. 1 is attached to and made a part of a Compliance Certificate dated as of            ,      and
pertains to the
period from            ,      to            ,      . Subsection
references herein relate to subsections of the Credit Agreement. 


Ratio of Net Debt to EBITDA, Section 5.02(d)  



	a.	 	Indebtedness for borrowed money or for the deferred purchase price of property or services.	 	$      
	

b.	
 	

Obligations under Capital Leases	
 	

$      
	

c.	
 	

Outstanding Debt at end of period (a plus b)	
 	

$      
	

d.	
 	

Cash and Cash Equivalents	
 	

$      
	

e.	
 	

Net Debt (c minus d)	
 	

$      
	

f.	
 	

Consolidated Net Income	
 	

$      
	

g.	
 	

Provision for taxes	
 	

$      
	

h.	
 	

Interest expense	
 	

$      
	

i.	
 	

Depreciation and amortization	
 	

$      
	

j.	
 	

Extraordinary losses	
 	

$      
	

k.	
 	

Extraordinary gains	
 	

$      
	

l.	
 	

EBITDA for four fiscal quarter period (f plus g plus h plus i plus j minus k)	
 	

$      
	

m.	
 	

Ratio of Net Debt to EBITDA (ratio of e to l)	
 	

    : 1.00
	

n.	
 	

Maximum permitted Net Debt ratio	
 	

2.5:1.00




Exhibit B–2







  




 
 

EXHIBIT C    
  


[FORM OF NOTICE OF CONVERSION/CONTINUATION]  


 NOTICE OF CONVERSION/CONTINUATION  


    Pursuant to that certain Revolving Credit Agreement, dated as of October 25, 2001, as amended, supplemented or otherwise modified to the date hereof
(said Credit Agreement, as so amended, supplemented or otherwise modified, being the "Credit Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among HORMEL FOODS CORPORATION, a Delaware corporation, as Borrower, the financial institutions listed therein as Lenders, Citicorp
USA, Inc., as Administrative Agent, and the other Agents party thereto, this represents Company's request to convert or continue Loans as follows: 



	1.
	Date of conversion/continuation:                    ,
         



	2.
	Amount of Loans being converted/continued:
$                   



	3.
	Nature of conversion/continuation:



	[
	]  a.  Conversion
of Base Rate Loans to Eurodollar Rate Loans



	[
	]  b.  Conversion
of Eurodollar Rate Loans to Base Rate Loans



	[
	]  c.  Continuation
of Eurodollar Rate Loans as such 









	4.
	If
Loans are being continued as or converted to Eurodollar Rate Loans, the duration of the new Interest Period that commences on the conversion/ continuation date:
            month(s) 




    In
the case of a conversion to or continuation of Eurodollar Rate Loans, the undersigned officer, to the best of his or her knowledge, and the Borrower certifies that no Event of
Default or Potential Event of Default has occurred and is continuing under the Credit Agreement. 



	DATED:	 	 	 	Hormel Foods Corporation
	 	 	
	 	 	 	 
	

 	
 	

 	
 	

By:	
 	

 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	





Exhibit C–1







  




 
 

EXHIBIT D    
  


[FORM OF NOTICE OF BORROWING]  


    [Date] 


Citicorp
USA., Inc., as Administrative Agent

for the Lenders parties to the Credit Agreement

referred to below 


Ladies
and Gentlemen: 


    The
undersigned Hormel Foods Corporation (the "Borrower") refers to the Revolving Credit Agreement, dated as of October 25, 2001 (the "Credit Agreement"), the terms defined
therein being used herein as therein defined, among the Borrower, the Lenders party thereto, Citicorp USA, Inc., as Administrative Agent, and the other Agents party thereto, and hereby gives
you notice pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby requests a Borrowing under the Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section 2.02(a) of the Credit Agreement: 



     (i) The
Business Day of the Proposed Borrowing is            20  . 


    (ii) The
Type of Advances comprising the Proposed Borrowing is a [Base Rate Advance][Eurodollar Advance]. 


    (iii) The
aggregate amount of the Proposed Borrowing is $            . 


    (iv) The
Interest Period for each Advance made as part of the Proposed Borrowing is      [months] [days]. 




    In
accordance with Section 3.02 of the Credit Agreement, the undersigned hereby certifies, on behalf of the Borrower, that as of the date hereof and the date of the Advance
hereby requested: 



    1.  The
representations and warranties contained in Section 4.01 of the Credit Agreement (excluding those contained in paragraph (e)(ii) thereof)
are true and accurate as though made on and as of such dates; 


    2.  No
event has occurred and is continuing or would result from such Borrowing which constitutes an Event of Default under the Credit Agreement or which would
constitute such an Event of Default but for the requirement that notice be given or time elapse or both. 



	 	 	Very truly yours,
	

 	
 	

Hormel Foods Corporation
	 	 	By	 	 
	 	 	 	 	

	 	 	Name:	 	 
	 	 	Title:	 	 




Exhibit D–1







  




 
 

EXHIBIT E    
  


[FORM OF PROMISSORY NOTE]

HORMEL FOODS CORPORATION

PROMISSORY NOTE  


                ,      


    For
value received, Hormel Foods Corporation (the "Borrower"), hereby promises to pay to the order of            (the "Lender"), for the account of its Applicable Lending
Office, the unpaid principal amount of each Advance made by the Lender to the Borrower pursuant to the Credit Agreement referred to below on the last day of the Interest Period relating to such
Advance. The Borrower promises to pay interest on the unpaid principal amount of each such Advance on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in United States dollars in same day funds at the Administrative Agent's office, as specified in the Credit Agreement. 


    All
Advances made by the Lender, the respective maturities thereof and all repayments of principal thereof shall be recorded by the Lender and, prior to any transfer hereof,
appropriate notations to evidence the foregoing information with respect to each such Advance then outstanding shall be endorsed by the Lender on the schedule attached hereto, or on a continuation of
such schedule attached to and made a part hereof, or in the records of such Lender in accordance with its usual practice; provided that the failure of the Lender to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. 


    This
promissory note is one of the promissory notes referred to in Section 2.13 of the Revolving Credit Agreement, dated as of October 25, 2001, among Hormel Foods
Corporation, the Lenders named therein, Citicorp USA, Inc., as Administrative Agent, and the other Agents party thereto (said Credit
Agreement, as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used herein with the same meanings. 


[Remainder
of page intentionally left blank] 


Exhibit E–1





 


    Reference is hereby made to the Credit Agreement for provisions relating to this promissory note, including, without limitation, the mandatory and optional prepayment hereof and the
acceleration of the maturity hereof. 



	 	 	Hormel Foods Corporation
	 	 	By	 	 
	 	 	 	 	

	 	 	Name:	 	 
	 	 	Title:	 	 
	

 	
 	

By	
 	

 
	 	 	 	 	

	 	 	Name:	 	 
	 	 	Title:	 	 




Exhibit E–2







  




Schedule
to Promissory Note 


 
 

ADVANCES AND PAYMENTS OF PRINCIPAL    
  



	Date
 
	 	Amount of

Advance
	 	Type of

Advance
	 	Amount of

Principal

Repaid
	 	Maturity

Date
	 	Notation

By

	


	


	


	


	


	


	


	


	


	


	


	


	


	


	


	


	






Exhibit E–3






  



 
 

EXHIBIT F    
  


 
 

[FORM OF OPINION OF COUNSEL TO BORROWER]    
    
    [FORM OF OPINION OF COUNSEL OF COMPANY]    
    
    [Date]    
  


Citicorp
USA, Inc., as

Administrative Agent 









    and 


The
Lenders

and Arranger Listed

on Schedule I Hereto 



	Re:
	Hormel
Foods Corporation Revolving Credit Agreement dated as of October 25, 2001 




Ladies
and Gentlemen: 


    As
General Counsel of Hormel Foods Corporation, a Delaware corporation (the "Company"), I am familiar with the Revolving Credit Agreement dated as of October 25, 2001, among
the Company, the Lenders named therein, Citicorp USA, Inc., as Administrative Agent and the other Agents party thereto (the "Credit Agreement"). All terms used herein that are defined in the
Credit Agreement have the meanings specified in the Credit Agreement. This letter is being delivered to you in satisfaction of the condition set forth in Section 3.1(a)(vi) of the Credit
Agreement and with the understanding that you are entering into the Credit Agreement in reliance on the opinions expressed herein. 


    In
this connection, I have examined such certificates of public officials, certificates of officers of the Company and its Subsidiaries and copies certified to my satisfaction of
corporate documents, records and of other papers of the Company and its Subsidiaries, and have made such other investigations, as I have deemed relevant and necessary as a basis for my opinion
hereinafter set forth. 


    Based
on the foregoing and subject to the qualifications, limitations and assumptions contained herein, it is my opinion that: 


    1.  The
Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware and has qualified to do business as a
foreign corporation and is in good standing under the laws of the State of Minnesota. The Company has all requisite corporate power and corporate authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted and to execute, deliver and perform the Credit Agreement and any Notes issued pursuant thereto. 



    2.  The
execution, delivery and performance of the Credit Agreement and any Notes issued pursuant thereto have been duly authorized by all requisite corporate action on
the part of the Company. The Credit Agreement has been duly executed and delivered by an authorized officer of the Company and, assuming proper authorization and execution by the other parties
thereto, constitutes the legally valid and binding obligation of the Company, enforceable against it in accordance with its terms, except as enforceability may be limited by (a) bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and (b) general principles of equity 


Exhibit F–1





 


and commercial reasonableness (regardless of whether such enforceability is considered in a proceeding in equity or at law). 


    3.  The
Company is not an "investment company" nor a company "controlled" by an "investment company" as such terms are defined in the Investment Company Act of 1940, as
amended. 


    4.  The
extension, arranging and obtaining of the credit represented by the Credit Agreement do not result in any violation of Regulation T, U and X of the Board
of Governors of the Federal Reserve System. 


    5.  None
of the execution and delivery of the Credit Agreement, the making of any Advances thereunder or compliance with the provisions thereof (A) conflicts
with, or results in a breach or violation of the certificate of incorporation or bylaws of the Company, (B) results in a material breach or violation of, or constitutes a material default
under, the terms, conditions or provisions of (i) any material loan agreement or other contract to which the Company or any of its Subsidiaries is a party, (ii) any order, writ judgment
or decree that the Company or any of its Subsidiaries is a party to or by which any of the Company's or any of its Subsidiaries' assets or properties are bound and which is material to the Company and
its Subsidiaries, taken as a whole, or (iii) any present United States federal, Delaware corporate or Minnesota statute, rule or regulation, known to me to be applicable to or binding on the
Company and of a type commonly applicable to transactions of the type contemplated by the Credit Agreement or (C) results in the creation of any Lien upon any of the assets or properties of
either the Company or any of its Subsidiaries under any agreement or contract referred to in clause (B)(i) above. 


    6.  No
governmental consents, approvals, registrations, declarations or filings are required to be obtained or made by the Company in connection with the execution and
delivery of the Credit Agreement or any Notes issued pursuant thereto. 


    7.  To
the best of my knowledge, after due inquiry, there are no actions, suits or proceedings (administrative, judicial or otherwise) pending or threatened against the
Company or any of its Subsidiaries that have a significant likelihood of materially and adversely affecting (a) the business, operations, prospects or condition (financial or otherwise) of the
Company or any of its Subsidiaries, taken as a whole, or (b) the ability of the Company to perform its obligations under the Credit Agreement or any Notes issued pursuant thereto. 


    My
opinion as to the enforceability of the Credit Agreement is subject to: 


     (i) public
policy considerations, statutes or court decisions that may limit the rights of a party to obtain indemnification against its own negligence or willful
misconduct; and 


    (ii) the
unenforceability under certain circumstances of broadly or vaguely stated waivers or waivers of rights granted by law where the waivers are against public
policy or prohibited by law. 


    In
addition, I express no opinion as to the effect of non-compliance by any party (other than the Company) with any state or federal laws or regulations applicable to the
transactions contemplated by the Credit Agreement because of the nature of such party's business. 



    The
law covered by this opinion is limited to present federal law, present corporate law of the State of Delaware and present law of the State of Minnesota. I express no opinion as to
the laws of the any other jurisdiction and no opinion regarding the statutes, administrative decisions, rules, regulation or requirements or any country, municipality, subdivision or local authority
or any jurisdiction. 


    I
note that the Credit Agreement provides that it shall be governed by, and construed in accordance with, the laws of the State of New York, and that I express no opinion herein under
the laws of the State of New York. With your permission, for purposes of my opinion set forth in 


Exhibit F–2





 


paragraph 3, I have assumed that the laws of the State of Minnesota are identical to the laws of the State of New York. 


    This
opinion is being delivered upon the express instructions of the Company to Citicorp USA, Inc., as Administrative Agent, and the Lenders under the Credit Agreement and is
solely for their benefit in connection with the transactions contemplated thereby. This opinion may not be relied upon by, filed with, disclosed to, quoted in any manner to, referenced in any written
report, financial statement or other document to, or delivered to any other person, firm or corporation for any purpose, without my prior written consent, except that the Administrative Agent and each
Lender may use this opinion (i) in connection with a review of the Credit Agreement and transactions related thereto by a regulatory agency having supervisory authority over any such Person for
the purpose of confirming the existence of this opinion, (ii) in connection with the assertion of a defense as to which this opinion is relevant and necessary, (iii) in response to a
court order or (iv) in connection with any assignment of any Advances or Commitment in accordance with the provisions of the Credit Agreement, and any Eligible Assignee may rely on this opinion
as if it were addressed and had been delivered to such assignee on the date hereof. 



	 	 	Very truly yours,




Exhibit F–3







  





 
 

EXHIBIT G    
  


[FORM OF OPINION OF O'MELVENY & MYERS LLP]  




    155,076-033



Citicorp
USA, Inc., 



	Re:
	Revolving
Credit Agreement dated as of October 25, 2001 among Hormel Foods Corporation, the Banks named therein, and Citicorp USA, Inc. as Administrative Agent 




Ladies
and Gentlemen: 


    We
have acted as counsel to Citicorp USA, Inc., as Administrative Agent, in connection with the preparation and delivery of a Revolving Credit Agreement, dated as of
October 25, 2001 (the "Credit Agreement"), among Hormel Foods Corporation, a Delaware corporation (the "Company"), the Banks named therein, Citicorp USA, Inc., as Administrative Agent,
and the other Agents party thereto. Unless otherwise indicated, capitalized terms used herein but not otherwise defined herein have the respective meanings set forth in the Credit Agreement. 


    We
have participated in various conferences with representatives of the Company and the Administrative Agent during which the Credit Agreement and related matters have been discussed.
We have reviewed the forms of the Credit Agreement and the exhibits thereto, including the form of the promissory notes annexed thereto (the "Notes") and the opinion of Mahlon C. Schneider, Senior
Vice President and General Counsel to the Company (the "Opinion") and the officer's certificates and other documents delivered on the date hereof. We have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals or copies and the due authority of all persons executing the same, and we have relied as to factual matters on the documents that we have
reviewed. 


    On
the basis of the foregoing, we are of the opinion that the Credit Agreement constitutes the legally valid and binding obligation of the Company and each Note when issued in
accordance with the terms of the Credit Agreement constitutes the legally valid and binding obligation of the Company, enforceable in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally (including, without limitation, fraudulent conveyance laws) and by general
principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law. 


    In
giving the foregoing opinion, we have assumed, without independent investigation, that the Credit Agreement and the Notes have been duly authorized by all necessary corporate
action on the part of the Company and have been duly executed and delivered by the Company and that it is a corporation duly organized, validly existing and in good standing under the jurisdiction of
its incorporation. We understand that you are relying on the Opinion with respect to such matters. 


    Our
opinion as to the enforceability of the Credit Agreement is subject to: 


     (i) public
policy considerations, statutes or court decisions that may limit the rights of a party to obtain indemnification against its own negligence of willful
misconduct; and 


    (ii) the
unenforceability under certain circumstances of broadly or vaguely stated waivers or waivers of rights granted by law where the waivers are against public
policy or prohibited by law. 


    In
addition, we express no opinion as to the effect of non-compliance by you with any state or federal laws or regulations applicable to the transactions contemplated by
the Credit Agreement because of the nature of your business. 


Exhibit G–1





 


    The law covered by this opinion is limited to present federal law and the present law of the State of New York. We express no opinion as to the laws of the any other jurisdiction and
no opinion regarding the statutes, administrative decisions, rules, regulation or requirements or any country, municipality, subdivision or local authority or any jurisdiction. 


    This
opinion is furnished by us as special counsel for the Administrative Agent and may be relied upon by you only in connection with the Credit Agreement. It may not be used or
relied upon by you for any other purpose or by any other person, nor may copies be delivered to any other person, without in each instance our prior written consent other than to attorneys for and
auditors of the Lenders and the Administrative Agent, to governmental officials with regulatory authority with respect to the business of the Lenders, the Administrative Agent, Arranger and to bona
fide prospective purchasers of assignments of or participations in the debt arising under the Loan Documents. 



	 	 	Respectfully submitted,




Exhibit G–2









QuickLinks


TABLE OF CONTENTS


U.S. $150,000,000 REVOLVING CREDIT AGREEMENT Dated as of October 25, 2001

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS


ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES


ARTICLE III CONDITIONS OF EFFECTIVENESS AND LENDING

ARTICLE IV REPRESENTATIONS AND WARRANTIES

ARTICLE V COVENANTS OF THE BORROWER


ARTICLE VI EVENTS OF DEFAULT

ARTICLE VII ADMINISTRATIVE AGENT

ARTICLE VIII MISCELLANEOUS


SCHEDULE I APPLICABLE LENDING OFFICES


SCHEDULE II


SCHEDULE 4.01(a) MATERIAL SUBSIDIARIES


SCHEDULE 4.01(c) GOVERNMENT CONSENTS



EXHIBIT A



SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE Dated as of , 20


[FORM OF COMPLIANCE CERTIFICATE] COMPLIANCE CERTIFICATE


ATTACHMENT NO. 1 TO COMPLIANCE CERTIFICATE



EXHIBIT C




EXHIBIT D




EXHIBIT E



ADVANCES AND PAYMENTS OF PRINCIPAL


EXHIBIT F

[FORM OF OPINION OF COUNSEL TO BORROWER] [FORM OF OPINION OF COUNSEL OF COMPANY] [Date]



EXHIBIT G