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Senior Term Loan Credit Agreement

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Sectors: Food, Beverages and Tobacco
Governing Law: New York, View New York State Laws
Effective Date: November 18, 2008
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Exhibit 10.42


SENIOR TERM LOAN CREDIT AGREEMENT

by and among

BUMBLE BEE FOODS, LLC,

as Borrower,

3231021 NOVA SCOTIA COMPANY,

as Canadian Opco,

THE LENDERS THAT ARE SIGNATORIES HERETO

as the Lenders,

and

WELLS FARGO FOOTHILL, LLC

as the Arranger and Administrative Agent

Dated as of November 18, 2008


TABLE OF CONTENTS


1.

DEFINITIONS AND CONSTRUCTION. 1

1.1.

Definitions. 1

1.2.

Accounting Terms. 1

1.3.

Code 1

1.4.

Construction. 2

1.5.

Schedules and Exhibits. 2

1.6.

Exchange Rates. 2

2.

LOAN AND TERMS OF PAYMENT. 2

2.1.

[Intentionally Omitted] 2

2.2.

Term Loan. 2

2.3.

Borrowing Procedures 4

2.4.

Payments; Reductions of Commitments; Prepayments. 4

2.5.

[Intentionally omitted]. 10

2.6.

Interest Rates: Rates, Payments, and Calculations. 10

2.7.

Crediting Payments 11

2.8.

Designated Account. 11

2.9.

Maintenance of Loan Account; Statements of Obligations. 11

2.10.

Fees. 11

2.11.

[Intentionally omitted]. 12

2.12.

LIBOR Option. 12

2.13.

Capital Requirements. 14

3.

CONDITIONS; TERM OF AGREEMENT. 15

3.1.

Conditions Precedent to the Initial Extension of Credit. 15

3.2.

[Intentionally Omitted.] 15

3.3.

Term. 15

3.4.

Effect of Termination. 15

3.5.

Early Termination by Borrower. 15

4.

REPRESENTATIONS AND WARRANTIES. 16

4.1.

Due Organization and Qualification; Subsidiaries. 16

4.2.

Due Authorization; No Conflict. 17

4.3.

Governmental Consents. 17


i 4.4. Binding Obligations; Perfected Liens.

17

4.5.

Title to Assets; No Encumbrances. 18

4.6. Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number; Commercial Tort Claims. 18

4.7.

Litigation. 18

4.8.

Compliance with Laws. 19

4.9.

No Material Adverse Change. 19

4.10.

Fraudulent Transfer. 19

4.11.

Employee Benefits. 19

4.12.

Environmental Condition. 23

4.13.

Intellectual Property. 23

4.14.

Leases. 23

4.15.

Deposit Accounts and Securities Accounts. 24

4.16.

Complete Disclosure. 24

4.17.

Material Contracts. 24

4.18.

Patriot Act. 24

4.19.

Indebtedness. 24

4.20.

Payment of Taxes. 25

4.21.

Margin Stock. 25

4.22.

Governmental Regulation. 25

4.23.

OFAC. 25

4.24.

Holding Companies. 26

4.25.

Required Equity Documents. 26

4.26.

Other Documents. 27

4.27.

[Intentionally omitted]. 28

4.28.

[Intentionally omitted]. 28

4.29.

Location of Inventory and Equipment. 28

4.30.

Inventory Records. 28

4.31.

Withholdings and Remittances. 28

4.32.

Packers and Stockyards Act. 28

4.33.

Senior Debt, Etc. 28

4.34.

Equipment. 29


ii

5.

AFFIRMATIVE COVENANTS. 29

5.1.

Financial Statements, Reports, Certificates. 29

5.2.

Collateral Reporting. 29

5.3.

Existence. 29

5.4.

Maintenance of Properties. 29

5.5.

Taxes. 30

5.6.

Insurance. 30

5.7.

Inspection. 31

5.8.

Compliance with Laws 31

5.9.

Environmental. 31

5.10.

Disclosure Updates. 32

5.11.

Formation of Subsidiaries. 32

5.12.

Further Assurances. 32

5.13.

Lender Meetings. 33

5.14.

Material Contracts. 33

5.15.

Location of Inventory and Equipment. 33

5.16.

Compliance with ERISA and the IRC. 34

5.18.

Post-Closing Covenants. 35

6.

NEGATIVE COVENANTS. 35

6.1.

Indebtedness. 35

6.2.

Liens. 36

6.3.

Restrictions on Fundamental Changes. 36

6.4.

Disposal of Assets. 36

6.5.

Change Name. 36

6.6.

Nature of Business. 37

6.7.

Prepayments and Amendments. 37

6.8.

Change of Control. 37

6.9.

Distributions. 38

6.10.

Accounting Methods. 39

6.11.

Investments. 39

6.12.

Transactions with Affiliates. 40

6.13.

Use of Proceeds. 41

6.14.

Holding Companies. 41

6.15.

Consignments. 42


iii 6.16. Inventory and Equipment with Bailees.

42

6.17.

PSA. 42

7.

FINANCIAL COVENANTS. 43

8.

EVENTS OF DEFAULT. 45

9.

RIGHTS AND REMEDIES. 48

9.1.

Rights and Remedies. 48

9.2.

Remedies Cumulative. 48

10.

WAIVERS; INDEMNIFICATION. 49

10.1.

Demand; Protest; etc. 49

10.2.

The Lender Group' s Liability for Collateral. 49

10.3.

Indemnification. 49

10.4.

Waiver of Consequential Damages, Etc. 50

11.

NOTICES. 50

12.

CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. 51

13.

ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS. 52

13.1.

Assignments and Participations. 52

13.2.

Successors. 56

14.

AMENDMENTS; WAIVERS. 56

14.1.

Amendments and Waivers. 56

14.2.

Replacement of Holdout Lender. 57

14.3.

No Waivers; Cumulative Remedies. 58

15.

AGENT; THE LENDER GROUP. 58

15.1.

Appointment and Authorization of Agent. 58

15.2.

Delegation of Duties. 59

15.3.

Liability of Agent. 59

15.4.

Reliance by Agent. 59

15.5.

Notice of Default or Event of Default. 60

15.6.

Credit Decision. 60

15.7.

Costs and Expenses; Indemnification. 61

15.8.

Agent in Individual Capacity 61

15.9.

Successor Agent. 62

15.10.

Lender in Individual Capacity. 62

15.11.

Collateral Matters. 62


iv 15.12. Restrictions on Actions by Lenders; Sharing of Payments.

63

15.13.

Agency for Perfection. 64

15.14.

Payments by Agent to the Lenders. 64

15.15.

Concerning the Collateral and Related Loan Documents. 64

15.16.

Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information. 64

15.17.

Several Obligations; No Liability. 65

16.

WITHHOLDING TAXES. 66

17.

GENERAL PROVISIONS. 70

17.1.

Effectiveness. 70

17.2.

Section Headings. 70

17.3.

Interpretation. 70

17.4.

Severability of Provisions. 70

17.5.

[Intentionally omitted]. 70

17.6.

Debtor-Creditor Relationship. 70

17.7.

Counterparts; Electronic Execution. 70

17.8.

Revival and Reinstatement of Obligations. 70

17.9.

Confidentiality. 71

17.10.

Lender Group Expenses. 72

17.11.

USA PATRIOT Act. 72

17.12.

Applicable Currency. 72

17.13.

Integration. 72

17.14.

Canadian Fishing Licenses. 72

17.15.

Clam Quotas. 73

17.16.

Mexican Subsidiaries. 73


v

EXHIBITS AND SCHEDULES


Exhibit A-1 Form of Assignment and Acceptance

Exhibit C-1 Form of Compliance Certificate

Exhibit I-1 Form of Intercreditor Agreement

Exhibit L-1 Form of LIBOR Notice

Exhibit S-1 Form of Subordination Agreement

Schedule A-1 Agent' s Account

Schedule A-2 Authorized Persons

Schedule C-1 Commitments

Schedule D-1 Designated Account

Schedule P-1 Permitted Holders

Schedule P-2 Permitted Investments

Schedule P-3 Permitted Liens

Schedule P-4 Permitted Dispositions

Schedule P-5 Permitted Joint Ventures

Schedule R-1 Real Property Collateral

Schedule U-1 Agent' s Account

Schedule 1.1 Definitions

Schedule 3.1 Conditions Precedent

Schedule 4.1(b) Capitalization of Borrower

Schedule 4.1(c) Capitalization of Loan Parties' Subsidiaries

Schedule 4.1(d) Subscriptions, Options, Warrants and Calls

Schedule 4.6(a) Jurisdictions of Organization

Schedule 4.6(b) Chief Executive Offices

Schedule 4.6(c) Organizational Identification Numbers

Schedule 4.6(d) Commercial Tort Claims

Schedule 4.7 Litigation

Schedule 4.11(a) U.S. Employee Benefits

Schedule 4.11(b) Canadian Employee Benefits

Schedule 4.12 Environmental Matters

Schedule 4.13 Intellectual Property

Schedule 4.15 Deposit Accounts and Securities Accounts

Schedule 4.17 Material Contracts

Schedule 4.19 Permitted Indebtedness

Schedule 4.20 Existing Tax Liabilities

Schedule 4.24 BB Holdings

Schedule 4.29 Locations of Inventory and Equipment

Schedule 5.1 Financial Statements, Reports, Certificates

Schedule 5.2 Collateral Reporting

Schedule 5.5 Taxes

Schedule 5.15 Immaterial Locations of Inventory and Equipment

Schedule 6.6 Nature of Business


vi

SENIOR TERM LOAN CREDIT AGREEMENT

THIS SENIOR TERM LOAN CREDIT AGREEMENT (this " Agreement" ), is entered into as of November 18, 2008, by and among the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a " Lender" and collectively as the " Lenders" ), WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as the arranger and administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, " Agent" ), BUMBLE BEE FOODS, LLC, a Delaware limited liability company (" Borrower" ) and 3231021 NOVA SCOTIA COMPANY, a Nova Scotia unlimited company (" 3231021" ).

The parties agree as follows:

1. DEFINITIONS AND CONSTRUCTION.

1.1. Definitions . Capitalized terms used in this Agreement shall have the meanings specified therefor on Schedule 1.1 .

1.2. Accounting Terms . All accounting terms not specifically defined herein shall be construed in accordance with GAAP. When used herein, the term " financial statements" shall include the notes and schedules thereto. Whenever the term " Company" is used in respect of a financial covenant or a related definition, it shall be understood to mean Stinson and its Subsidiaries (on a consolidated basis) and Canadian Holdco and its Subsidiaries (on a consolidated basis), on a combined basis, unless the context clearly requires otherwise.

1.3. Code . Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein; provided, however , that to the extent that the Code is used to define any term herein and such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern. Notwithstanding the foregoing, and where the context so requires, (i) any term defined in this Agreement by reference to the " Code" , the " UCC" or the " Uniform Commercial Code" shall also have any extended, alternative or analogous meaning given to such term in applicable Canadian personal property security and other laws (including, without limitation, the Personal Property Security Act of each applicable province of Canada, the Civil Code of Quebec, the Bills of Exchange Act (Canada) and the Depository Bills and Notes Act (Canada)), in all cases for the extension, preservation or betterment of the security and rights of Agent, (ii) all references in this Agreement to " Article 8" shall be deemed to refer also to applicable Canadian securities transfer laws (including, without limitation, the Securities Transfer Act, 2006 (Ontario)), (iii) all references in this Agreement to a financing statement, continuation statement, amendment or termination statement shall be deemed to refer also to the analogous documents used under applicable Canadian personal property security laws, (v) all references to the United States of America, or to any subdivision, department, agency or instrumentality thereof shall be deemed to refer also to Canada, or to any subdivision, department, agency or instrumentality thereof, and (vi) all references to federal or state securities law of the United States shall be deemed to refer also to analogous federal and provincial securities laws in Canada.


1

1.4. Construction . Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms " includes" and " including" are not limiting, and the term " or" has, except where otherwise indicated, the inclusive meaning represented by the phrase " and/or." The words " hereof," " herein," " hereby," " hereunder," and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in any other Loan Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). The words " asset" and " property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Any reference herein or in any other Loan Document to the satisfaction or repayment in full of the Obligations shall mean the repayment in full in cash of all Obligations other than unasserted contingent indemnification Obligations that are not required by the provisions of this Agreement to be repaid. Any reference herein to any Person shall be construed to include such Person' s successors and assigns. Any requirement of a writing contained herein or in any other Loan Document shall be satisfied by the transmission of a Record. With respect to real or tangible personal property located in the Province of Quebec, (a) the terms " real property" , " personal property" and " real and personal property" and words of similar import shall be deemed to also refer to " immovable property" , " movable property" and " immovable and movable property" , and (b) the terms " tangible" and " intangible" and words of similar import shall be deemed to also refer to " corporeal" and " incorporeal" .

1.5. Schedules and Exhibits . All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

1.6. Exchange Rates . For purposes of determining compliance at any time under Sections 6.4, 6.9, 6.11 (other than, in each case, with respect to determining the amount of any Indebtedness) and 7 with respect to any amount in a Foreign Currency, such amount shall be deemed to equal the Dollar Equivalent thereof based on the Exchange Rate for such Foreign Currency at such time. For purposes of determining compliance with Sections 6.1, 6.2 and 6.11 (but only, in each case, with respect to any amount of Indebtedness in a Foreign Currency), compliance will be determined at the time of incurrence or advancing thereof using the Dollar Equivalent thereof at the Exchange Rate in effect at the time of such incurrence or advancement.

2. LOAN AND TERMS OF PAYMENT.

2.1. [Intentionally Omitted]

2.2. Term Loan . Subject to the terms and conditions of this Agreement, on the Closing Date, each Lender with a Term Loan Commitment agrees (severally, not jointly or jointly and severally) to make term loans (collectively, the " Term Loan" ) to Borrower in an


2

amount equal to such Lender' s Pro Rata Share of the Term Loan Amount. Subject to the terms and conditions of this Agreement, the principal of the Term Loan shall be repaid on the following dates and in the following amounts:


Date Installment Amount

March 31, 2009 $ 3,325,000

June 30, 2009 $ 3,325,000

September 30, 2009 $ 3,325,000

December 31, 2009 $ 3,325,000

March 31, 2010 $ 6,650,000

June 30, 2010 $ 6,650,000

September 30, 2010 $ 6,650,000

December 31, 2010 $ 6,650,000

March 31, 2011 $ 6,650,000

June 30, 2011 $ 6,650,000

September 30, 2011 $ 6,650,000

December 31, 2011 $ 6,650,000

March 31, 2012 $ 8,312,500

June 30, 2012 $ 8,312,500

September 30, 2012 $ 8,312,500

December 31, 2012 $ 8,312,500

March 31, 2013 $ 8,312,500

June 30, 2013 $ 8,312,500

September 30, 2013 $ 8,312,500

The outstanding unpaid principal balance and all accrued and unpaid interest on the Term Loan shall be due and payable on the earlier of (i) the Maturity Date, and (ii) the date of the acceleration of the Term Loan in accordance with the terms hereof. All principal of, interest on, and other amounts payable in respect of the Term Loan shall constitute Obligations. Any principal amount of the Term Loan that is repaid or prepaid may not be reborrowed.


3

2.3. Borrowing Procedures

(a) Procedure for Borrowing . The Term Loan shall be made by an irrevocable written request by an Authorized Person delivered to Agent not later than 9:00 a.m. (California time) on the Closing Date. Each Lender shall make the amount of such Lender' s Pro Rata Share of the Term Loan Amount available to Agent in immediately available funds, to Agent' s Account, not later than 10:00 a.m. (California time) on the Closing Date. After Agent' s receipt of the proceeds of the Term Loan, Agent shall make the proceeds thereof available to Borrower on the Closing Date by transferring immediately available funds equal to such proceeds received by Agent in accordance with the terms of the Funds Flow Agreement; provided, however , that Agent shall not request any Lender to make, and no Lender shall have the obligation to make, any Term Loan if Agent shall have actual knowledge that (1) one or more of the applicable conditions precedent set forth in Section 3.1 will not be satisfied on the Closing Date unless such condition has been waived. Agent shall record on its books the principal amount of the portion of the Term Loan owing to each Lender from time to time and such records shall, absent manifest error, conclusively be presumed to be correct and accurate.

(b) Protective Advances .

(i) Agent hereby is authorized by Borrower and the Lenders, from time to time in Agent' s sole discretion, after the occurrence and during the continuance of a Default or an Event of Default, to make advances to Borrower on behalf of the Lenders that Agent, in its Permitted Discretion deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations (any of the advances described in this Section 2.3(b)(i) shall be referred to as " Protective Advances" ).

(ii) Each Protective Advance by Agent shall be deemed to be Obligations hereunder, except that no Protective Advance shall be eligible to be a LIBOR Rate Loan and all Protective Advances shall be payable to Agent solely for its own account. The Protective Advances shall be repayable on demand, secured by the Agent' s Liens, constitute Obligations hereunder, and in the case of Protective Advances by Agent, bear interest at the rate applicable to Base Rate Loans. The provisions of this Section 2.3(b) are for the exclusive benefit of Agent and the Lenders and are not intended to benefit Borrower in any way.

2.4. Payments; Reductions of Commitments; Prepayments .

(a) Payments by Borrower .

(i) Except as otherwise expressly provided herein, all payments by Borrower shall be made to Agent' s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 11:00 a.m. (California time) on the date specified herein. Any payment received by Agent later than 11:00 a.m. (California time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.


4

(ii) Unless Agent receives notice from Borrower prior to the date on which any payment is due to the Lenders that Borrower will not make such payment in full as and when required, Agent may assume that Borrower has made (or will make) such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent Borrower does not make such payment in full to Agent on the date when due, each Lender severally shall repay to Agent on demand such amount distributed to such Lender, together with interest thereon at the Defaulting Lender Rate for each day from the date such amount is distributed to such Lender until the date repaid.

(b) Apportionment and Application.

(i) So long as no Application Event has occurred and is continuing and except as otherwise provided (A) with respect to Defaulting Lenders and (B) in any agreements among Agent and the Lenders, all principal and interest payments shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and all payments of fees and expenses (other than fees or expenses that are for Agent' s separate account (after giving effect to any agreements among Agent and the Lenders) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee or expense relates. All payments to be made hereunder by Borrower shall be remitted to Agent and all (subject to Section 2.4(b)(iv) ) such payments, and all proceeds of Collateral received by Agent, shall be applied, so long as no Application Event has occurred and is continuing, to reduce the balance of the Term Loan and the Protective Advances, thereafter, to Borrower (to be wired to the applicable Designated Account) or such other Person entitled thereto under applicable law.

(ii) At any time that an Application Event has occurred and is continuing and except as otherwise provided (x) with respect to Defaulting Lenders or (y) in any agreements among Agent and the Lenders, all payments remitted to Agent and all proceeds of Collateral received by Agent shall be applied as follows (and, in each case, without duplication under this clause (ii)):

(A) first , to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents until paid in full,

(B) second , to pay any fees or premiums then due to Agent under the Loan Documents until paid in full,

(C) third , ratably to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents until paid in full,

(D) fourth , ratably to pay any fees or premiums then due to any of the Lenders under the Loan Documents until paid in full,


5

(E) fifth , to pay interest due in respect of all Protective Advances made by Agent until paid in full,

(F) sixth , to pay the principal of all Protective Advances made by Agent until paid in full,

(G) seventh , ratably to pay interest due in respect of the Term Loan until paid in full,

(H) eighth , ratably to pay the outstanding principal of the Term Loan (in inverse order of maturity of the installments due thereunder) until the Term Loan is paid in full,

(I) ninth , to pay any other Obligations, and

(J) tenth , to Borrower (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.

(iii) Agent promptly shall distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive.

(iv) In each instance, so long as no Application Event has occurred and is continuing, Section 2.4(b)(i) or (ii) shall not apply to any payment made by Borrower to Agent and specified by Borrower to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement or any other Loan Document.

(v) For purposes of (A) Section 2.4(b)(ii) (other than clause (I)), " paid in full" means payment in cash of all Obligations owing under the Loan Documents according to the terms thereof (other than unasserted contingent indemnification Obligations that are not required by the provisions of this Agreement to be repaid), including loan fees, service fees, reasonable and documented, out of pocket professional fees (excluding allocation costs of internal counsel), interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on inter
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