-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JusKjzGsd/20z6rwDBvdtj/Er2/oIRk7T8GxXutkP3XGHxhlAJVvDRiSm0uP6zPl TajHMetqj0mO9d9Ia2ERVg== /in/edgar/work/20000710/0000950131-00-004308/0000950131-00-004308.txt : 20000712 0000950131-00-004308.hdr.sgml : 20000712 ACCESSION NUMBER: 0000950131-00-004308 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20000710 GROUP MEMBERS: WYNNCHURCH CAPITAL PARTNERS CANADA, L.P. GROUP MEMBERS: WYNNCHURCH CAPITAL PARTNERS LP GROUP MEMBERS: WYNNCHURCH CAPITAL PARTNERS, L.P. GROUP MEMBERS: WYNNCHURCH GP CANADA, INC. GROUP MEMBERS: WYNNCHURCH MANAGEMENT, INC. GROUP MEMBERS: WYNNCHURCH PARTNERS CANADA, L.P. GROUP MEMBERS: WYNNCHURCH PARTNERS, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WEIDER NUTRITION INTERNATIONAL INC CENTRAL INDEX KEY: 0001022368 STANDARD INDUSTRIAL CLASSIFICATION: [5140 ] IRS NUMBER: 870563574 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-51083 FILM NUMBER: 670384 BUSINESS ADDRESS: STREET 1: 2002 SOUTH 5070 WEST CITY: SALT LAKE CITY STATE: UT ZIP: 84104-4726 BUSINESS PHONE: 8019755000 MAIL ADDRESS: STREET 1: 2002 SOUTH 5070 WEST CITY: SALT LAKE CITY STATE: UT ZIP: 84104-4726 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WYNNCHURCH CAPITAL PARTNERS LP CENTRAL INDEX KEY: 0001104678 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 364323597 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 150 FIELD DR STREET 2: STE 165 CITY: LAKE FOREST STATE: IL ZIP: 60045 BUSINESS PHONE: 8476046100 MAIL ADDRESS: STREET 1: 150 FIELD DR STREET 2: STE 165 CITY: LAKE FORSET STATE: IL ZIP: 60045 SC 13D 1 0001.txt SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. )* Weider Nutrition International, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Class A Common Stock, $0.01 par value - -------------------------------------------------------------------------------- (Title of Class of Securities) - -------------------------------------------------------------------------------- (CUSIP Number) Wynnchurch Capital, Ltd. 150 Field Drive, Suite 165 Lake Forest, Illinois 60045 (847) 604-6100 Attention: John Tomes with a copy to: Laurence R. Bronska, Esq. Altheimer & Gray 10 South Wacker Drive Chicago, Illinois 60606 (312) 715-4028 ------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 30, 2000 ------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this Schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. [_] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended ("Act"), or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). - ------------------------------------------------------------------------------ CUSIP NO. 13D Page 2 of 14 Pages - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON IRS IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Wynnchurch Capital Partners, L.P. - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a): (b) [_] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS: WC - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): [_] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION: Delaware ----------------------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER: -0- BENEFICIALLY ----------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER: 1,174,955 (1)(2) EACH REPORTING ----------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER: -0- WITH ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER: 1,174,955 (1)(2) - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,174,955 (1) - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 11.2% (3) - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON: PN - ------------------------------------------------------------------------------ (1) Based on Warrant to purchase 563,508 shares of Class A Common Stock issued to Wynnchurch Capital Partners, L.P. and Warrant to purchase 611,447 shares of Class A Common Stock issued to Wynnchurch Capital Partners Canada, L.P. (2) Power is exercised through Wynnchurch Management, Inc., the sole general partner of the sole general partner of Wynnchurch Capital Partners, L.P. and Wynnchurch GP Canada, Inc., the sole general partner of the sole general partner of Wynnchurch Capital Partners Canada, Inc. (3) Based on 9,354,641 shares of Class A Common Stock outstanding as of February 29, 2000, as disclosed on Issuer's 10Q. - ------------------------------------------------------------------------------ CUSIP NO. 13D Page 3 of 14 Pages - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON IRS IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Wynnchurch Partners, L.P. - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) : - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS: Not applicable - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): [_] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION: Delaware ----------------------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER: -0- BENEFICIALLY ----------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER: 1,174,955 (1) EACH REPORTING ----------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER: -0- WITH ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER: 1,174,955 (1)(2) - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,174,955 (1) - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 11.2% (2) - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON: PN - ------------------------------------------------------------------------------ (1) Solely in its capacity as the sole general partner of Wynnchurch Capital Partners, L.P. (2) Based on 9,354,641 shares of Common Stock outstanding as of February 29, 2000, as disclosed on Issuer's 10Q. - ------------------------------------------------------------------------------ CUSIP NO. 13D Page 4 of 14 Pages - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON IRS IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Wynnchurch Management, Inc. - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) : - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS: Not applicable - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): [_] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION: Delaware ----------------------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER: -0- BENEFICIALLY ----------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER: 1,174,955 (1) EACH REPORTING ----------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER: -0- WITH ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER: 1,174,955 (1)(2) - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,174,955 (1) - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 11.2% (2) - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON: CO - ------------------------------------------------------------------------------ (1) Solely in its capacity as the sole general partner of Wynnchurch Capital Partners, L.P. (2) Based on 9,354,641 shares of Common Stock outstanding as of February 29, 2000, as disclosed on Issuer's 10Q. - ------------------------------------------------------------------------------ CUSIP No. 13D Page 5 of 14 Pages - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON IRS IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): Wynnchurch Capital Partners Canada, L.P. - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a): (b) [_] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS: WC - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): [_] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION: Delaware ----------------------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER: -0- BENEFICIALLY ----------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER: 1,174,955 (1) EACH REPORTING ----------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER: -0- WITH ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER: 1,174,955 (1) - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,174,955 (1) - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 11.2% (2) - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON: PN - ------------------------------------------------------------------------------ (1) Based on Warrant to purchase 563,508 shares of Class A Common Stock issued to Wynnchurch Capital Partners, L.P. and Warrant to purchase 611,447 shares of Class A Common Stock issued to Wynnchurch Capital Partners Canada, L.P. (2) Power is exercised through Wynnchurch Management, Inc., the sole general partner of the sole general partner of Wynnchurch Capital Partners, L.P. and Wynnchurch GP Canada, Inc., the sole general partner of the sole general partner of Wynnchurch Capital Partners Canada, Inc. (3) Based on 9,354,641 shares of Class A Common Stock outstanding as of February 29, 2000, as disclosed on Issuer's 10Q. - ------------------------------------------------------------------------------ CUSIP NO. 13D Page 6 of 14 Pages - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON IRS IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Wynnchurch Partners Canada, L.P. - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) : - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS: Not applicable - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): [_] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION: Alberta, Canada ----------------------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER: -0- BENEFICIALLY ----------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER: 1,174,955 (1) EACH REPORTING ----------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER: -0- WITH ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER: 1,174,955 (1)(2) - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,174,955 (1) - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 11.2% (2) - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON: PN - ------------------------------------------------------------------------------ (1) Solely in its capacity as the sole general partner of Wynnchurch Capital Partners, L.P. (2) Based on 9,354,641 shares of Common Stock outstanding as of February 29, 2000, as disclosed on Issuer's 10Q. - ------------------------------------------------------------------------------ CUSIP NO. 13D Page 7 of 14 Pages - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON IRS IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Wynnchurch GP Canada, Inc. - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) : - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS: Not applicable - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e): [_] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION: Delaware ----------------------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER: -0- BENEFICIALLY ----------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER: 1,174,955 (1) EACH REPORTING ----------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER: -0- WITH ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER: 1,174,955 (1) - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,174,955 (1) - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 11.2% (2) - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON: CO - ------------------------------------------------------------------------------ (1) Solely in its capacity as the sole general partner of Wynnchurch Capital Partners, L.P. (2) Based on 9,354,641 shares of Common Stock outstanding as of February 29, 2000, as disclosed on Issuer's 10Q. Item 1. Security and Issuer. -------------------- This Schedule 13D relates to the shares of Class A common stock, $0.01 par value (the "Shares") of Weider Nutrition International, Inc., a Delaware corporation ("Issuer"). The principal executive offices of Issuer are located at 2002 South 5070 West, Salt Lake City, Utah 84104-4726. Item 2. Identity and Background. ----------------------- Pursuant to Rule 13d-1(k)(1) of Regulation 13D-G under the Securities Exchange Act of 1934, as amended (the "Act"), the undersigned hereby files this on behalf of Wynnchurch Capital Partners, L.P., a Delaware limited partnership ("Wynnchurch US"), Wynnchurch Capital, L.P., a Delaware limited partnership ("US GP"), Wynnchurch Management, Inc., a Delaware corporation ("US Management"), Wynnchurch Capital Partners Canada, L.P., an Alberta limited partnership ("Wynnchurch Canada"), Wynnchurch Partners Canada, L.P., an Alberta limited partnership ("Canada GP"), and Wynnchurch GP Canada, Inc., a Delaware corporation ("Canada Management"), Wynnchurch US, US GP, US Management, Wynnchurch Canada, Canada GP, and Canada Management, are sometimes hereinafter referred to collectively as the "Reporting Persons." The Reporting Persons may be deemed to constitute a group within the meaning of Section 13(d)(3) of the Act. Neither the present filing nor anything contained herein shall be construed as (i) an admission that the Reporting Persons constitute a "person" or "group" for any purpose or (ii) an admission that the Reporting Persons are, for the purposes of Section 13(d) or 13(g) of the Act, beneficial owners of any of the securities owned by any of Management or the Trust. Pursuant to Rule 13d-1(k)(2) under the Act, the Reporting Persons are filing this Schedule 13D on their own behalf and not on behalf of any other person. Attached hereto as Exhibit 1 is the statement made pursuant to Rule 13d-1(k)(1)(iii) of Regulation 13D-G of the General Rules and Regulations under the Act. (a) - (c) Wynnchurch US ------------- Wynnchurch US is a Delaware limited partnership, the principal business of which is a private investment partnership. The principal business and office address of Wynnchurch US is 150 Field Drive, Suite 165, Chicago, Illinois 60045. Pursuant to Instruction C to Schedule 13D of the Act, certain information with respect to US GP, the general partner of Wynnchurch US, is set forth below. US GP ----- US GP is a Delaware limited partnership, the principal business of which is serving as the sole general partner of Wynnchurch US. The principal business and office address of US GP is 150 Field Drive, Suite 165, Chicago, Illinois 60045. Pursuant to Instruction C to Schedule 13D of the Act, certain information with respect to US Management, the general partner of US GP, is set forth below. US Management ------------- US Management is a Delaware corporation, the principal business of which is to serve as the sole general partner of US GP. The principal business and office address of US Management is 150 Field Drive, Suite 165, Chicago, Illinois 60045. Pursuant to Instruction C to Schedule 13D of the Act, certain information with respect to the three directors (who are also officers) of US Management, is set forth below. Wynnchurch Canada ----------------- Wynnchurch Canada is an Alberta limited partnership, the principal business of which is a private investment partnership. The principal business and office address of Wynnchurch Canada is Suite 1500, 855, 2nd Street West, Calgary Alberto T2P4J7. Pursuant to Instruction C to Schedule 13D of the Act, certain information with respect to Canada GP, the general partner of Wynnchurch Canada, is set forth below. Canada GP --------- Canada GP is an Alberta limited partnership, the principal business of which is to serve as the sole general partner of Wynnchurch Canada. The principal business and office address of Canada GP is Suite 1500, 855, 2nd Street West, Calgary Alberto T2P4J7. Pursuant to Instruction C to Schedule 13D of the Act, certain information with respect to Canada Management, the general partner of Canada GP, is set forth below. Canada Management ----------------- Canada Management is a Delaware corporation, the principal business of which is to serve as the sole general partner of Canada GP. The principal business and office address of Canada Management is 150 Field Drive, Suite 165, Chicago, Illinois 60045. Pursuant to Instruction C to Schedule 13D of the Act, certain information with respect to the three directors (who are also officers) of Canada Management is set forth below. Mr. Tomes --------- The following disclosure is being made pursuant to Instruction C to Schedule 13D of the Act. John W. Tomes ("Mr. Tomes") is a director, the Vice President and Secretary of both US Management and Canada Management. His principal business and office address is c/o Wynnchurch Capital, 150 Field Drive, Suite 165, Chicago, Illinois 60045. Mr. Hatherly ------------ The following disclosure is being made pursuant to Instruction C to Schedule 13D of the Act. John A. Hatherly ("Mr. Hatherly") is a director, the President and Treasurer of both US Management and Canada Management. His principal business and office address is c/o Wynnchurch Capital, 150 Field Drive, Suite 165, Chicago, Illinois 60045. Mr. Renaud ---------- The following disclosure is being made pursuant to Instruction C to Schedule 13D of the Act. Richard Renaud ("Mr. Renaud") is a director and Chairman of the Board of both US Management and Canada Management. His principal business and office address is c/o TNG Corporation, One Place Ville-Marie, Suite 3303 Montreal, Quebec H3B3N2. (d) None of the Reporting Persons have during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Persons have during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Tomes is a citizen of the United States. Messrs. Hatherly and Renaud are citizens of Canada. Item 3. Source and Amount of Funds or Other Consideration. ------------------------------------------------- The source and amount of funds or other consideration used by the Reporting Persons to purchase the Notes (as defined below) and the Warrants (as defined below) consisted of $10,000,000 (of which $3,524,865 was allocated to the Warrants) of working capital invested by the partners of Wynnchurch US and Wynnchurch Canada. The "Notes" means (1) the Senior Subordinated Note dated June 30, 2000 in the principal amount of $4,795,534 to the order of Wynnchurch US and (2) the Senior Subordinated Note dated June 30, 2000 in the principal amount of $5,204,466 to the order of Wynnchurch Canada. The "Warrants" means (1) the Warrant to purchase 563,508 Shares issued to Wynnchurch US and (2) the Warrant to purchase 611,447 Shares issued to Wynnchurch Canada. The Notes and the Warrants are attached as exhibits hereto and are incorporated herein by reference. Item 4. Purpose of Transaction. ---------------------- The Reporting Persons acquired the Warrants to purchase the Shares in connection with the purchase of the Notes pursuant to a Senior Subordinated Loan Agreement dated June 30, 2000, between Weider Nutrition Group, Inc. and Wynnchurch US and Wynnchurch Canada (the "Loan Agreement") attached as an exhibit hereto and incorporated herein by reference. Under the terms of the Loan Agreement, the Issuer is bound by affirmative and negative covenants and will remain bound by certain of the covenants as long as the Reporting Persons own 50% of the Warrants or the Shares into which the Warrants are exercisable. In addition, Wynnchurch US and Wynnchurch Canada received certain visitation and board observer rights under the Warrants. Consistent with such reporting requirements and rights, the Reporting Persons have had, and may have in the future, discussions with management of the Issuer concerning the Issuer's recent operating history as well as the Issuer's general business outlook and prospects. The Reporting Persons acquired the Warrants reported herein, in connection with the Loan Agreement, for investment purposes. Depending on market conditions and other factors that each may deem material to its investment decision, each of the Reporting Persons may purchase additional Shares in the open market or in private transactions or may dispose of all or a portion of the Shares that such Reporting Person now owns or hereafter may acquire, subject to transfer restrictions contained in the Loan Agreement or imposed by law. Except as set forth in this Item 4, the Reporting Persons have no present plans or proposals that relate to or that would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D of the Act. Item 5. Interest in Securities of the Issuer. ------------------------------------ Each of the calculations in this Item 5 is based on 9,354,641 Shares outstanding as of February 29, 2000, as reported in the Issuer's most recent 10Q and assumes the exercise of the Warrants held by Wynnchurch US and Wynnchurch Canada into 1,174,955 Shares (which Warrants are currently exercisable or exercisable within sixty days of the date hereof). Statements regarding power to vote and dispose of the Shares assume that the Warrants have been exercised. (a) Wynnchurch US and Wynnchurch Canada ----------------------------------- The aggregate number of Shares that Wynnchurch US and Wynnchurch Canada may be deemed to beneficially own, pursuant to Rule 13d-3 of the Act, is 1,174,955 which constitutes approximately 11.2% of the outstanding Shares. US GP ----- As the sole general partner of Wynnchurch US, US GP may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of 1,174,955 Shares, which constitutes approximately 11.2% of the outstanding Shares. US GP disclaims beneficial ownership of all such Shares. US Management ------------- As the sole general partner of US GP, US Management may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of 1,174,955 Shares, which constitutes approximately 11.2% of the outstanding Shares. US Management disclaims beneficial ownership of all such Shares. Canada GP --------- As the sole general partner of Wynnchurch Canada, Canada GP may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of 1,174,955 Shares, which constitutes approximately 11.2% of the outstanding Shares. Canada GP disclaims beneficial ownership of all such Shares. Canada Management ----------------- As the sole general partner of Canada GP, Canada Management may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of 1,174,955 Shares, which constitutes approximately 11.2% of the outstanding Shares. Canada Management disclaims beneficial ownership of all such Shares. (b) Wynnchurch US and Wynnchurch Canada ----------------------------------- Acting through its sole general partner, Wynnchurch US has the sole power to vote or to direct the vote and to dispose or direct the disposition of 563,508 Shares. Acting through its sole general partner, Wynnchurch Canada has the sole power to vote or to direct the vote and to dispose or direct the disposition of 611,447 Shares. US GP ----- Acting through its sole general partner and in its capacity as the sole general partner of Wynnchurch US, US GP has the sole power to vote or to direct the vote and to dispose or direct the disposition of 563,508 Shares. US Management ------------- As the general partner of US GP, which is the general partner of Wynnchurch US, US Management has the sole power to vote or to direct the vote and to dispose or direct the disposition of 563,508 Shares. Canada GP --------- Acting through its sole general partner and in its capacity as the sole general partner of Wynnchurch Canada, Canada GP has the sole power to vote or to direct the vote and to dispose or direct the disposition of 611,447 Shares. Canada Management ----------------- As the general partner of Canada GP, which is the general partner of Wynnchurch Canada, Canada Management has the sole power to vote or to direct the vote and to dispose or direct the disposition of 611,447 Shares. (c) To the best of the knowledge of each of the Reporting Persons, none of the persons named in response to paragraph (a) has effected any transaction in Shares during the past sixty (60) days. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect --------------------------------------------------------------------- to Securities of the Issuer. - ---------------------------- Except as set forth herein or in the Exhibits filed herewith and incorporated herein by reference, the Reporting Persons do not have any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the Shares of the Issuer, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, or a pledge or power over the Shares of the Issuer. Item 7. Materials to be Filed as Exhibits. ---------------------------------- Exhibit A Statement made pursuant to Rule 13d-1(k)(1)(iii) of Regulation 13D-G of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended. Exhibit B Senior Subordinated Loan Agreement dated June 30, 2000, between Weider Nutrition Group, Inc., Wynnchurch US and Wynnchurch Canada. Exhibit C Senior Subordinated Note dated June 30, 2000, in the principal amount of $4,795,534 to the order of Wynnchurch US. Exhibit D Senior Subordinated Note dated June 30, 2000, in the principal amount of $5,204,466 to the order of Wynnchurch Canada. Exhibit E Warrant to purchase 563,508 Shares issued to Wynnchurch US. Exhibit F Warrant to purchase 611,447 Shares issued to Wynnchurch Canada. Exhibit G Registration Rights Agreement dated June 30, 2000 by and among Issuer, Wynnchurch US and Wynnchurch Canada. Exhibit H Power of Attorney After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: July 10, 2000 WYNNCHURCH CAPITAL PARTNERS, L.P. By: Wynnchurch Partners, L.P., its general partner By: Wynnchurch Management, Inc., its general partner By: /s/ John Tomes* ---------------- Name: John Tomes Its: Vice President WYNNCHURCH CAPITAL PARTNERS CANADA, L.P. By: Wynnchurch Partners Canada, L.P., its general partner By: Wynnchurch GP Canada, Inc., its general partner By: /s/ John Tomes* --------------- Name: John Tomes Its: Vice President WYNNCHURCH PARTNERS, L.P. By: Wynnchurch Management, Inc., its general partner By: /s/ John Tomes* --------------- Name: John Tomes Its: Vice President WYNNCHURCH MANAGEMENT, INC. By: /s/ John Tomes* --------------- Name: John Tomes Its: Vice President WYNNCHURCH PARTNERS CANADA, L.P. By: Wynnchurch GP Canada, Inc., its general partner By: /s/ John Tomes* --------------- Name: John Tomes Its: Vice President WYNNCHURCH GP CANADA, INC. By: /s/ John Tomes* --------------- Name: John Tomes Its: Vice President *By: /s/ Alisa B. Hoy ---------------- Alisa B. Hoy Attorney-in-Fact EX-99.(A) 2 0002.txt STATEMENT MADE PURSUANT TO RULE 13D-1 (K) (L) (III) EXHIBIT A EXHIBIT A --------- Pursuant to Rule 13d-1(k)(1)(iii) of Regulation 13D-G of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, the undersigned agree that the statement to which this Exhibit is attached is filed on behalf of each of them in the capacities set forth below. Dated: July 10, 2000 WYNNCHURCH CAPITAL PARTNERS, L.P. By: Wynnchurch Partners, L.P., its general partner By: Wynnchurch Management, Inc., its general partner By: /s/ John Tomes* ---------------- Name: John Tomes Its: Vice President WYNNCHURCH CAPITAL PARTNERS CANADA, L.P. By: Wynnchurch Partners Canada, L.P., its general partner By: Wynnchurch GP Canada, Inc., its general partner By: /s/ John Tomes* --------------- Name: John Tomes Its: Vice President WYNNCHURCH PARTNERS, L.P. By: Wynnchurch Management, Inc., its general partner By: /s/ John Tomes* --------------- Name: John Tomes Its: Vice President WYNNCHURCH MANAGEMENT, INC. By: /s/ John Tomes* --------------- Name: John Tomes Its: Vice President WYNNCHURCH PARTNERS CANADA, L.P. By: Wynnchurch GP Canada, Inc., its general partner By: /s/ John Tomes* --------------- Name: John Tomes Its: Vice President WYNNCHURCH GP CANADA, INC. By: /s/ John Tomes* --------------- Name: John Tomes Its: Vice President *By: /s/ Alisa B. Hoy ---------------- Alisa B. Hoy Attorney-in-Fact EX-99.(B) 3 0003.txt SENIOR SUBORDINATED LOAN AGREEMENT WYNNCHURCH CAPITAL PARTNERS, L.P. WYNNCHURCH CAPITAL PARTNERS CANADA, L.P. SENIOR SUBORDINATED LOAN AGREEMENT $10,000,000 SENIOR SUBORDINATED TERM NOTES DUE JUNE 30, 2006 WEIDER NUTRITION GROUP, INC. TABLE OF CONTENTS
Page ARTICLE 1 DEFINITIONS......................................................................................... 1 ----------- 1.1 Certain Definitions........................................................................ 1 ------------------- 1.2 Accounting Principles...................................................................... 10 --------------------- ARTICLE 2 CREDIT TERMS........................................................................................ 11 ------------ 2.1 Purchase and Sale of the Senior Subordinated Note.......................................... 11 ------------------------------------------------- 2.2 Repayment of Principal..................................................................... 11 ---------------------- 2.3 Interest................................................................................... 11 -------- 2.4 Prepayments................................................................................ 12 ----------- 2.5 Payments................................................................................... 12 -------- 2.6 Pro Rata Payment........................................................................... 13 ---------------- 2.7 Investment Fee............................................................................. 13 -------------- ARTICLE 3 CLOSING DELIVERIES.................................................................................. 13 ------------------ ARTICLE 4 REPRESENTATIONS AND WARRANTIES...................................................................... 14 ------------------------------ 4.1 Organization and Qualification............................................................. 15 ------------------------------ 4.2 Authorization, Validity and Enforceability................................................. 15 ------------------------------------------ 4.3 Capitalization............................................................................. 15 -------------- 4.4 No Event of Default; Compliance with Instruments........................................... 16 ------------------------------------------------ 4.5 Compliance with Laws; Certain Operations................................................... 16 ---------------------------------------- 4.6 Solvency................................................................................... 16 -------- 4.7 Litigation................................................................................. 16 ---------- 4.8 Regulations U and X........................................................................ 17 ------------------- 4.9 ERISA...................................................................................... 17 ----- 4.10 Subsidiaries............................................................................... 17 ------------ 4.11 Financials................................................................................. 17 ---------- 4.12 Absence of Undisclosed Liabilities......................................................... 18 ---------------------------------- 4.13 Assets..................................................................................... 18 ------ 4.14 Tax Matters................................................................................ 18 ----------- 4.15 Contracts.................................................................................. 19 --------- 4.16 Absence of Changes......................................................................... 19 ------------------ 4.17 Intellectual Property...................................................................... 19 --------------------- 4.18 Insurance.................................................................................. 20 --------- 4.19 Environmental and Safety Matters........................................................... 20 -------------------------------- 4.20 Investment Company......................................................................... 20 ------------------
i 4.21 Affiliate Transactions.................................................................... 21 ---------------------- 4.22 Employee Matters.......................................................................... 21 ---------------- 4.23 Tangible Property......................................................................... 21 ----------------- 4.24 Disclosure................................................................................ 21 ---------- 4.25 Public Utility Company.................................................................... 22 ---------------------- 4.26 Fiscal Year............................................................................... 22 ----------- 4.27 Fictitious Business Names................................................................. 22 ------------------------- 4.28 Licenses and Permits...................................................................... 22 -------------------- 4.29 Notice from Self-Regulated Organization................................................... 22 --------------------------------------- ARTICLE 5 AFFIRMATIVE COVENANTS.............................................................................. 22 --------------------- 5.1 Payment of Obligations.................................................................... 22 ---------------------- 5.2 Preservation of Corporate Existence....................................................... 23 ----------------------------------- 5.3 Payment of Taxes and Claims............................................................... 23 --------------------------- 5.4 Reporting Requirements.................................................................... 23 ---------------------- 5.5 Notices to Lenders........................................................................ 24 ------------------ 5.6 Maintenance of Insurance.................................................................. 25 ------------------------ 5.7 Maintenance of Properties................................................................. 26 ------------------------- 5.8 Keeping of Records and Books of Account................................................... 26 --------------------------------------- 5.9 Visitation Rights......................................................................... 26 ----------------- 5.10 Compliance with Laws...................................................................... 26 -------------------- 5.11 [Intentionally Omitted.].................................................................. 26 5.12 Use of Proceeds........................................................................... 26 --------------- 5.13 Further Assurances........................................................................ 27 ------------------ ARTICLE 6 NEGATIVE COVENANTS................................................................................. 27 ------------------ 6.1 Indebtedness.............................................................................. 27 ------------ 6.2 Liens..................................................................................... 27 ----- 6.3 Merger or Sale............................................................................ 28 -------------- 6.4 Payments of Subordinated Indebtedness..................................................... 28 ------------------------------------- 6.5 Investments............................................................................... 28 ----------- 6.6 Distributions............................................................................. 29 ------------- 6.7 Amendments or Changes in Agreements....................................................... 30 ----------------------------------- 6.8 Transactions with Affiliates.............................................................. 30 ---------------------------- 6.9 Fiscal Year............................................................................... 30 ----------- 6.10 Investment Banking, Broker's and Finder's Fees............................................ 30 ---------------------------------------------- 6.11 Capital Expenditures...................................................................... 30 -------------------- 6.12 Allocation of Consideration............................................................... 30 --------------------------- 6.13 Financial Covenants....................................................................... 30 ------------------- 6.14 Limitation on Creation of Subsidiaries.................................................... 33 -------------------------------------- 6.15 Parent Limitations........................................................................ 34 ------------------ 6.16 Unconditional Purchase Obligations........................................................ 34 ---------------------------------- 6.17 Limitation on Derivative Transactions..................................................... 34 ------------------------------------- 6.18 No Guaranties............................................................................. 34 -------------
ii 6.19 Limitation on Transactions Under ERISA................................................ 34 -------------------------------------- 6.20 Additional Restrictive Covenants...................................................... 34 -------------------------------- 6.21 Certain Structural Changes............................................................ 34 -------------------------- ARTICLE 7 DEFAULT........................................................................................ 35 ------- 7.1 Events of Default..................................................................... 35 ----------------- 7.2 Consequences of Event of Default...................................................... 36 -------------------------------- 7.3 Other Rights.......................................................................... 36 ------------ ARTICLE 8 MISCELLANEOUS.................................................................................. 37 ------------- 8.1 Successors and Assigns in General..................................................... 37 --------------------------------- 8.2 Modifications, Amendments or Waivers.................................................. 38 ------------------------------------ 8.3 No Implied Waivers; Cumulative Remedies; Writing Required............................. 38 --------------------------------------------------------- 8.4 Reimbursement of Expenses; Taxes...................................................... 38 -------------------------------- 8.5 Notices............................................................................... 38 ------- 8.6 Survival.............................................................................. 39 -------- 8.7 Governing Law; Consent to Jurisdiction and Service of Process; Waiver of Jury Trial... 39 ----------------------------------------------------------------------------------- 8.8 Severability.......................................................................... 40 ------------ 8.9 Headings.............................................................................. 40 -------- 8.10 Counterparts.......................................................................... 40 ------------ 8.11 Indemnification....................................................................... 40 --------------- 8.12 Payment Set Aside..................................................................... 42 ----------------- 8.13 Interpretation........................................................................ 42 -------------- 8.14 Approval of Lenders................................................................... 42 -------------------
iii Exhibit A Form of Registration Rights Agreement Exhibit B Form of Senior Subordinated Note Exhibit C Form of Warrant Schedule 2.1 Purchase and Sale of the Senior Subordinated Note Schedule 2.5 Payments Schedule 4.3 Capitalization Schedule 4.5 Compliance with Laws; Certain Operations Schedule 4.7 Litigation Schedule 4.9 ERISA Schedule 4.10 Subsidiaries Schedule 4.14 Tax Matters Schedule 4.15 Contracts Schedule 4.16 Absence of Changes Schedule 4.17 Intellectual Property Schedule 4.19 Environmental and Safety Matters Schedule 4.21 Affiliate Transactions Schedule 4.22 Employee Matters Schedule 6.1 Indebtedness Schedule 6.2 Liens Schedule 6.5 Investments Schedule 6.10 Investment Banking, Broker's and Finder's Fees iv SENIOR SUBORDINATED LOAN AGREEMENT ---------------------------------- This SENIOR SUBORDINATED LOAN AGREEMENT is made and entered into as of June ___, 2000 between WEIDER NUTRITION GROUP, INC., a Utah corporation (the "Borrower"), as the borrower; and WYNNCHURCH CAPITAL PARTNERS, L.P., a Delaware - --------- limited partnership ("Wynnchurch"), and WYNNCHURCH CAPITAL PARTNERS CANADA, ---------- L.P., an Alberta limited partnership ("Wynnchurch Canada"), as the lenders. ---------- ------ In consideration of the mutual covenants and agreements contained herein, the parties agree as follows: ARTICLE 1 DEFINITIONS ----------- 1.1 Certain Definitions. In addition to other terms defined elsewhere ------------------- in this Agreement, the following terms shall have the meanings set forth below: "Affiliate" of any Person shall mean any other Person which, directly or --------- indirectly, controls, or is controlled by or is under common control with such Person including, in the case of any Person who is an individual, his or her spouse or any of his or her descendants (lineal or adopted) or ancestors or any of their spouses. For purposes hereof, "control" shall mean the possession, ------- directly or indirectly, of the power to direct or cause the direction of management or policies of a Person whether through ownership of securities, by contract or otherwise; provided, however, that any Person which owns directly or -------- ------- indirectly 5% or more of the securities of any other Person having ordinary voting power for the election of directors shall be deemed to control such other Person. Under no circumstances shall either Lender be deemed to be an Affiliate of Parent, Borrower or Borrower's Subsidiaries. "Agent" shall mean Bankers Trust Company, a New York banking corporation, ----- in its individual capacity and in its capacity as agent under the Senior Loan Agreement, or any Person acting as agent for the holders of the Senior Indebtedness. "Agreement" shall mean this Senior Subordinated Loan Agreement, as it may --------- be amended, modified or supplemented from time to time. "Bankruptcy Code" shall mean the Federal Bankruptcy Reform Act of 1978 (11 --------------- U.S.C. (S)101, et seq.), as amended and in effect from time to time and the ------- regulations issued from time to time thereunder. "Borrower Consolidated Entity" shall mean Borrower and each of its Domestic ---------------------------- Subsidiaries which are such by virtue of clause (a) of the definition of the term "Subsidiary" hereunder. "Business" shall mean the business engaged in by the Borrower involving the -------- development, manufacture, marketing, distribution and sale of branded and private label vitamins, nutritional supplements, sports nutrition and similar products. "Business Day" shall mean any day other than a Saturday, Sunday or public ------------ holiday under the laws of the State of Illinois or other day on which banking institutions are authorized or obligated to close in the State of Illinois. "Capital Expenditures" shall mean, of any Person for any period, all -------------------- expenditures capitalized by such Person for financial statement purposes in accordance with GAAP. For purposes of Section 6.11 only, insurance proceeds and any other payments received on account of any Casualty Loss applied to the repair or replacements of the property affected by such Casualty Loss shall not constitute Capital Expenditures. "Capital Lease" shall mean a lease under which the obligations of the ------------- lessee would, in accordance with GAAP, be included in determining total liabilities as shown on the liability side of a balance sheet of the lessee. "Capital Lease Obligations" shall mean the amount of the liability ------------------------- reflecting the aggregate discounted amount of future payments under all Capital Leases calculated in accordance with GAAP and Statement of Financial Accounting Standards No. 13. "Capital Security" shall mean, with respect to any Person, (a) any share of ---------------- capital stock of or other unit of ownership interest in such Person and (b) any security convertible into, or any option, warrant or other right to acquire, any share of capital stock of or other unit of ownership interest in such Person. "Cash" shall mean money, currency or a credit balance in a general deposit ---- account with a financial institution. "Cash Equivalents" shall mean (a) securities issued or directly and fully ---------------- guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than one year from the date of acquisition, (b) marketable direct obligations issued by any State of the United States of America or any local government or other political subdivision thereof rated (at the time of acquisition of such security) at least AA by Standard & Poor's Ratings Group ("S&P") or the --- equivalent thereof by Moody's Investors Service, Inc. ("Moody's") having ------- maturities of not more than one year from the date of acquisition, (c) U.S. dollar denominated time deposits, certificates of deposit and bankers' acceptances of any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000, (d) any bank whose short-term commercial paper rating (at the time of acquisition of such security) by S&P is at least A-1 or the equivalent thereof or by Moody's is at least P-1 or the equivalent thereof (any such bank, an "Approved Bank"), in each case with ------------- maturities of not more than six months from the date of acquisition, (e) commercial paper and variable or fixed rate notes issued by Approved Bank or by the parent company of any Approved Bank and commercial paper and variable rate notes issued by, or guaranteed by, any industrial or financial company with a short-term commercial paper rating (at the time of acquisition of such security) of at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's, or guaranteed by any industrial company with a long-term unsecured debt rating (at the time of acquisition of such security) of at least AA or the equivalent thereof by S&P or the equivalent thereof by Moody's and in each case maturing within one year after the date of acquisition and (f) repurchase agreements with any Approved Bank maturing within one year from the date of acquisition that are fully collateralized by investment instruments that would otherwise be Cash Equivalents. 2 "Change of Control" shall mean one or more of the following events: ----------------- (a) less than a majority of the members of Parent's Board of Directors shall be persons who either (i) were serving as directors on the date hereof or (ii) were nominated as directors and approved by the vote of the majority of the directors who are directors referred to in clause (i) above or this clause (ii); or (b) the stockholders or Parent shall approve any plan or proposal for the liquidation or dissolution of Parent; or (c) a Person or group of Persons acting in concert (other than the direct or indirect beneficial owners of the Capital Securities of Parent as of the Closing Date) shall, as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise, have become the direct or indirect beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended from time to time) of Capital Securities of Parent representing more than thirty-five percent (35%) of the combined voting power of the outstanding voting Capital Securities or other ownership interest for the election of directors or shall have the right to elect a majority of the Board of Directors of Parent; or (d) Parent shall cease for any reason to own beneficially and of record one hundred percent of the issued and outstanding Capital Securities of Borrower; or (e) Borrower shall cease for any reason to own beneficially and of record one hundred percent of the issued and outstanding Capital Securities of Subsidiary Guarantor. "Class A Common Stock" shall mean the Class A common stock, par value $0.01 -------------------- per share, of Parent. "Class B Common Stock" shall mean the Class B common stock, par value $0.01 -------------------- per share, of Parent. "Code" shall mean the Internal Revenue Code of 1986, as amended from time ---- to time, and any successor statute, together with the rules and regulations thereunder, in each case as in effect from time to time. "Common Stock" shall mean the Class A Common Stock and the Class B Common ------------ Stock. "Consolidated" or "Consolidating" shall mean, when used with reference to ------------ ------------- any financial term in this Agreement, the aggregate for two or more Persons of the amounts signified by such term for all such Persons determined on a consolidated basis in accordance with GAAP. "Consolidated Net Income" shall mean for any period the consolidated net ----------------------- income of the Borrower Consolidated Entity for such period. "Derivative Transaction" shall mean (a) an interest-rate transaction, ---------------------- including an interest-rate swap, basis swap, forward rate agreement, interest rate option (including a cap, collar, and floor), and any other instrument linked to interest rates that gives rise to similar credit risks (including when-issued securities and forward deposits accepted), (b) an exchange-rate transaction, including a cross-currency 3 interest-rate swap, a forward foreign-exchange contract, a currency option, and any other instrument linked to exchange rates that gives rise to similar credit risks, (c) an equity derivative transaction, including an equity-linked swap, an equity-linked option, a forward equity-linked contract, and any other instrument linked to equities that gives rise to similar credit risk and (d) a commodity (including precious metal) derivative transaction, including a commodity-linked swap, a commodity-linked option, a forward commodity-linked contract, and any other instrument linked to commodities that gives rise to similar credit risks. "Domestic Subsidiary" shall mean each Subsidiary of Borrower which is ------------------- incorporated under the laws of the states constituting the United State of America. "EBITDA" shall mean, for any fiscal period, (a) Consolidated Net Income ------ (other than extraordinary items) of the Consolidated Entity for such period, plus (b) the amount of all Interest Expense, income tax expense, depreciation - ---- and amortization, including amortization of any goodwill or other intangibles, for such period, to the extent deducted in calculating Consolidated Net Income for such period, and plus or minus (as the case may be) (c)(i) any other non- ---- ----- cash charges and (ii) any gains and losses attributable to any fixed asset sales and (iii) certain specific "add-backs" with respect to Consolidated Net Income for the fiscal year of Borrower ending as of May 31, 2000 not exceeding the respective amounts thereof disclosed in writing to Lenders prior to the date hereof which have been, in the case of either clause (i) or (ii), subtracted or added, as the case may be, in calculating Consolidated Net Income for such period, all determined in accordance with GAAP. "Environmental and Safety Requirements" shall mean all present and future ------------------------------------- federal, state, local and foreign laws, statutes, rules, regulations, ordinances and other requirements, including, without limitation, permits issued thereunder, judicial and administrative orders and determinations, contractual obligations and common law concerning public health and safety, nuisance, worker health and safety, protection of the environment, pollution or contamination of any type whatsoever, including, without limitation, all standards of conduct and bases of obligations relating to the presence, use, production, generation, handling, transport, treatment, storage, disposal, sale, distribution, labeling, testing, processing, discharge, release, threatened release, control or cleanup of any hazardous, toxic or otherwise dangerous chemical, material, substance or waste, or mixture, pesticide, petroleum product or byproduct, asbestos, polychlorinated biphenyls, noise or radiation. "Equipment" shall mean, with respect to any Person, all of such Person's --------- equipment, including machinery, equipment, office equipment and supplies, computers and related equipment, furniture, furnishings, tools, tooling, jigs, dies, fixtures, manufacturing implements, fork lifts, trucks, trailers, motor vehicles, and other equipment. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as ----- amended from time to time, and any successor statute, together with the rules and regulations thereunder, in each case as in effect from time to time. "ERISA Affiliate", as applied to any Person, shall mean any trade or --------------- business, (whether or not incorporated) which is a member of a group of which that Person is a member and which is under common control or otherwise affiliated within the meaning of Section 414 of the Code or Section 4001 of ERISA and the regulations promulgated and rulings issued thereunder. Notwithstanding the foregoing, neither the Lenders nor any of their Affiliates shall be deemed an ERISA Affiliate. 4 "Event of Default" shall mean any of the Events of Default described in ---------------- Section 7.1 hereof. "Fixed Charge Coverage Ratio" shall mean, as determined as of any date for --------------------------- any period ending on such date, the ratio of (a) EBITDA for such period to (b) the sum of the following, in each case of the Borrower Consolidated Entity as determined in accordance with GAAP for such period, (i) cash income tax expense, (ii) cash Interest Expense, (iii) Capital Expenditures of the Borrower Consolidated Entity (except for such Capital Expenditures financed with the proceeds of Indebtedness other than the Senior Indebtedness), (iv) distributions to Parent in respect of dividend payments on or mandatory redemptions of Capital Securities of Parent, (v) Required Earn-Out Payments and (vi) regularly scheduled principal payments on the Senior Indebtedness and the Loans. "Foreign Subsidiary" shall mean a subsidiary of Borrower that is not a ------------------ Domestic Subsidiary. "GAAP" shall mean United States generally accepted accounting principles, ---- as in effect from time to time, consistently applied. "Guaranty" of any Person shall mean any Liability, contingent or otherwise, -------- of such Person (other than an endorsement for collection or deposit in the ordinary course of business) (a) to pay any Liability of any other Person or to otherwise protect, or having the practical effect of protecting, the holder of any such Liability against loss (whether such obligation arises by virtue of such Person being a partner of a partnership or participant in a joint venture or by agreement to pay, to keep well, to maintain solvency, assets, level of income or other financial condition, to purchase assets, goods, securities or services or to take or pay, or otherwise) or (b) incurred in connection with the issuance by a third Person of a Guaranty of any Liability of any other Person (whether such obligation arises by agreement to reimburse or indemnify such third Person or otherwise). The word "Guarantee" when used as a verb has the --------- correlative meaning. "Indebtedness" of any Person shall mean, without duplication: (a) all ------------ indebtedness for borrowed money, including, without limitation, indebtedness constituting all or any part of the deferred purchase price of property or services excluding trade accounts payable incurred in the ordinary course of business and payable on customary trade terms; (b) Capital Lease Obligations; (c) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money; (d) obligations under interest rate swap agreements, interest rate cap agreements, interest rate collar agreements or other similar agreements or arrangements designed to protect against fluctuations in interest rates; and (e) all indebtedness secured by any Lien on any property or asset owned or held by such Person regardless of whether the indebtedness secured thereby shall have been assumed by such Person or is nonrecourse to the credit of such Person, provided, that if such Person -------- has not assumed or otherwise become liable in respect of such Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the lesser of (A) the amount of such Indebtedness or (B) the fair market value of the assets subject to such Lien, as determined in good faith by such Person. "Interest Coverage Ratio" shall mean, as determined as of any date for any ----------------------- period ending on such date, the ratio of (a) EBITDA to (b) cash Interest Expense, in each case for such period. "Interest Expense" shall mean with respect to any period, the aggregate ---------------- consolidated interest expense of the Borrower Consolidated Entity in respect of Indebtedness determined on a consolidated basis in accordance with GAAP, including amortization of original issue discount on any Indebtedness and of all fees payable in connection with the incurrence of such Indebtedness (to the extent included in 5 interest expense), the interest portion of any deferred payment obligation and the interest component of any Capital Lease obligations. "Investment" shall mean, with respect to any Person, (a) any direct or ---------- indirect purchase or other acquisition by such Person of any beneficial interest in, including stock, partnership interest, notes or other securities of, any other Person and (b) any direct or indirect loan, advance or capital contribution by such Person to any other Person, including all Indebtedness to such Person arising from a sale of property by such Person other than in the ordinary course of business. "Latest Balance Sheet" shall mean the audited balance sheet of the Parent -------------------- dated as of May 31, 1999. "Lenders" shall mean Wynnchurch, Wynnchurch Canada and their Affiliates, ------- participants, transferees, successors and assigns. "Liability" of any Person shall mean (in each case, whether with full or --------- limited recourse) any indebtedness, liability, obligation, covenant or duty of or binding upon, or any term or condition to be observed by or binding upon, such Person or any of its assets, of any kind, nature or description, direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, whether arising under contract, requirement of law, or otherwise, whether now existing or hereafter arising, and whether for the payment of money or the performance or non-performance of any act. "Lien(s)" shall mean any lien, mortgage, pledge, security interest, charge ------- or encumbrance of any kind, whether voluntary or involuntary, including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest. "Loans" shall have the meaning set forth in Section 2.1 hereof. ----- "Management Notes" shall mean those certain promissory notes set forth in ---------------- Schedule 6.5, in the respective original principal amounts and payable to - ------------ Borrower by the respective payors, in each case indicated therein. "Mandatorily Redeemable Obligation" shall mean a Liability of Borrower or --------------------------------- any Subsidiary of Borrower, or a Liability of another Person guaranteed by Borrower or any Subsidiary of Borrower, to the extent that, in either case, it is redeemable, payable or required to be purchased or otherwise retired or extinguished (a) at a fixed or determinable date, whether by operation of sinking fund or otherwise, (b) at the option of any Person other than Borrower or such Subsidiary or (c) upon the occurrence of a condition not solely within the control of Borrower or such Subsidiary, such as a redemption required to be made out of future earnings. "Material Adverse Effect" shall mean a material adverse change in, or a ----------------------- material adverse effect upon, the (a) business, operations, properties, condition (financial or otherwise) or operating results of Parent, Borrower or Borrower's Subsidiaries taken as a whole, as a result of the occurrence or existence of any single event or condition or series of events or conditions in the aggregate, or (b) the ability of Parent, Borrower or any of Borrower's Subsidiaries to perform their respective obligations under any of the Senior Loan Documents or any of the Senior Subordinated Loan Documents to which they are a party, or (c) the validity or enforceability of any of the Senior Subordinated Loan Documents or the rights, powers and remedies of Lenders to enforce or collect the Obligations. In determining whether any 6 individual event could result in a Material Adverse Effect, notwithstanding that such event does not of itself have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event and all other then existing events results or is reasonably likely to result in a Material Adverse Effect. "Material Contract" shall mean any contract or other arrangement (other ----------------- than the Related Transaction Documents), whether written or oral, to which Parent, Borrower or any subsidiary of Borrower is a party with respect to which breaches, nonperformances, cancellations or failures to renew by any party thereto singly or in the aggregate could reasonably be expected to have a Material Adverse Effect. "Multiple Employer Plan" shall mean a single employer plan as defined in ---------------------- Section 4001(a)(15) of ERISA, that (a) is maintained for employees of Borrower or any of its ERISA Affiliates and at least one Person other than Borrower or its ERISA Affiliates, or (b) was so maintained and with respect to which Borrower or any of its ERISA Affiliates could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated. "Multiemployer Plan" shall mean any Plan which is a "multiemployer plan" as ------------------ defined in Section 3(37) of ERISA. "Obligations" shall mean all obligations of every nature of Borrower from ----------- time to time owed to Lenders under any of the Senior Subordinated Loan Documents (including, without limitation, interest accrued and other amounts payable thereunder). "Owned Premises" shall mean all real property owned by the Parent, -------------- Borrower, or any of Borrower's Subsidiaries. "Parent" shall mean Weider Nutrition International, Inc., a Delaware ------ corporation. "PBGC" shall mean the Pension Benefit Guaranty Corporation established ---- pursuant to Subtitle A of Title IV of ERISA. "Pension Plan" shall mean any employee pension benefit plan as defined in ------------ Section 3(2) of ERISA, which is subject to Title IV of ERISA or Section 412 of the Code or a money purchase pension plan. "Permitted Liens" shall have the meaning set forth in Section 6.2. --------------- "Permitted Restrictive Covenant" shall mean (a) any covenant or restriction ------------------------------ contained in any Senior Subordinated Loan Document or Senior Loan Document, (b) any covenant or restriction binding upon any Person at the time such Person becomes a Subsidiary of Borrower if the same is not created in contemplation thereof, (c) any covenant or restriction of the type contained in Section 6.2 that is contained in any contract evidencing or providing for the creation of or concerning Indebtedness secured by any Purchase Money Lien so long as such covenant or restriction is limited to the property purchased therewith, the contracts related thereto and the proceeds thereof, or (d) any covenant or restriction that (i) is not more burdensome than an existing Permitted Restrictive Covenant that is such by virtue of clause (b) or (c); (ii) is contained in a contract constituting a renewal, extension or replacement of the contract 7 in which such existing Permitted Restrictive Covenant is contained; and (iii) is binding only on the Person or Persons bound by such existing Permitted Restrictive Covenant. "Person" shall mean any individual, corporation, partnership, company, ------ joint venture, association, bank, trust company or trust, whether or not legal entities, or any governmental entity or agency or political subdivision thereof. "Plan" shall mean any employee benefit plan as defined in Section 3(3) of ---- ERISA, whether or not terminated, to which Borrower or any of its ERISA Affiliates maintains, contributes or has any actual or potential liability and any other employee benefit or compensatory plan, program, policy or arrangement with respect to which Borrower or any of its ERISA Affiliates has an actual or potential liability. "Potential Event of Default" shall mean any occurrence, condition, act or -------------------------- omission which, with the passage of time or the giving of notice or both, is reasonably likely to result in an Event of Default hereunder. "Principal" shall mean the unpaid principal amount of the Loans. --------- "Property " shall mean any interest in any kind of property or asset, -------- whether real, personal or mixed, and whether tangible or intangible. "Purchase Money Liens" shall mean Liens on any item of Equipment acquired -------------------- by Borrower securing the purchase price thereof, provided that each such Lien shall attach only to the Equipment so acquired and to proceeds thereof. "Quarterly Payment Date" shall mean the last day of March, June, September ---------------------- and December of each year. "Refinanced Indebtedness" shall mean all Indebtedness of Borrower and the ----------------------- other Credit Parties under that certain Third Amended and Restated Credit Agreement dated as of May 6, 1997, as amended, among Borrower, Parent, Subsidiary Guarantor and certain of their Affiliates, General Electric Capital Corporation, as Agent, and the financial institutions parties thereto as lenders. "Registration Rights Agreement" shall mean that certain Registration Rights ----------------------------- Agreement, dated as of even date herewith, among Parent and Lenders, in the form of Exhibit A attached hereto, as the same may be amended or otherwise modified --------- from time to time in accordance with the terms hereof. "Related Transaction Documents" shall mean the Senior Subordinated Loan ----------------------------- Documents and the Senior Loan Documents. "Related Transactions" shall mean the execution and delivery of the Related -------------------- Transaction Documents, the funding of the Loans, the refinancing of the Refinanced Indebtedness, the issuance of the Warrants by Parent to Lenders and the payment of all fees, costs and expenses associated with all of the foregoing. "Required Earn-Out Payment" shall mean payments by Borrower required ------------------------- pursuant to Section 2 of that certain Stock Purchase Agreement dated July 9, 1998, among Borrower and Wolfgang Brandt and Eberhardt Schlurter, each an individual, without giving effect to any amendments or supplements to such 8 Stock Purchase Agreement, or restatements or other modifications thereof, except for any of the foregoing previously consented to in writing by Agent. "Restricted Payment" shall mean, with respect to any Person, (a) any ------------------ payment with respect to or on account of any of the Capital Securities of such Person, including any dividend or other distribution on, any payment of interest on or principal of, and any payment on account of any purchase, redemption, retirement, exchange, defeasance or conversion of, or on account of any claim relating to or arising out of the offer, sale or purchase of, any such Capital Securities and (b) any optional payment or prepayment on or redemption retirement, (including by making payments to a sinking or analogous fund), repurchase, defeasance or other acquisition of, any Indebtedness (other than Indebtedness pursuant to this Agreement and the Senior Loan Agreement). For the purpose of this definition, a "payment" shall include the transfer of any asset or the incurrence of any Indebtedness or other Liability (the amount of any such payment to be the fair market value of such asset or the amount of such obligation, respectively) but shall not include the issuance by such Person to the holders of a class or series of a class of its Capital Securities of the same class, and if applicable, series, other than, in the case of Borrower or any Subsidiary of Borrower, Mandatorily Redeemable Obligations. "Reynolds Agreement" shall mean that certain Separation Agreement dated ------------------ July 15, 1999 among Parent and Robert Reynolds, an individual, without giving effect to any amendments or supplements thereto or restatements or other modifications thereof, except for any of the foregoing previously consent to in writing by Lenders. "Sale" shall mean the sale, transfer or disposition of all or substantially ---- all of the assets of Parent or Borrower and Borrower's Subsidiaries. "SEC" shall mean the United States Securities and Exchange Commission. --- "Senior Indebtedness" shall mean any and all amounts constituting Senior ------------------- Indebtedness (as defined in the Subordination Agreement (as in effect on the date hereof)). "Senior Lenders" shall mean the financial institutions that are or may -------------- from time to time become parties to the Senior Loan Agreement and Bankers Trust Company and their participants, assignees and other transferees or successors in interest. "Senior Leverage Ratio" shall mean, as of any date of determination --------------------- thereof, the ratio of (a) all Indebtedness of the Borrower Consolidated Entity (other than the Loans and any other unsecured Indebtedness) as of such date, to (b) EBITDA as determined as of such date for the twelve-month period ending on such date. "Senior Loan Agreement" shall mean that certain Credit Agreement of even --------------------- date herewith between Borrower and Senior Lenders, as the same may be supplemented, amended, modified or replaced from time to time in compliance herewith. "Senior Loan Documents" shall mean the Senior Loan Agreement and all other --------------------- documents, agreements, certificates and instruments attached thereto, referred to therein or delivered in connection therewith, as any or all of the foregoing may be supplemented, amended, modified or replaced from time to time in compliance with the Subordination Agreement. 9 "Senior Subordinated Loan Documents" shall mean this Agreement, the Senior ---------------------------------- Subordinated Notes, the Subordination Agreement, the Warrants, the Registration Rights Agreement, and any and all other documents, agreements, certificates and instruments executed or delivered in connection herewith or therewith (including, without limitation, those referred to in Article 3 hereof), as any or all of the foregoing may be supplemented, amended or modified from time to time. "Senior Subordinated Notes" shall have the meaning set forth in Section 2.1 ------------------------- hereof. "Solvent" shall mean, as to any Person at any time, that (a) the fair value ------- of the Property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities), (b) the present fair saleable value of the Property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its Property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business, (d) such Person does not intend to incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital. "Subordination Agreement" shall mean that certain Subordination Agreement ----------------------- of even date herewith by and between Lenders and Agent (in its individual capacity and as agent for itself and Senior Lender as the same may be supplemented, amended, modified or replaced from time to time in compliance therewith. "Subsidiary" shall mean, with respect to any Person at any time (a) any ---------- other Person the accounts of which would be consolidated with those of such first Person in its consolidated financial statements as of such time, and (b) any other Persons (i) that is, at such time, controlled by, or (ii) securities of which having ordinary voting power to elect a majority of the board of directors (or other persons having similar functions), or other ownership interests of which ordinarily constituting a majority voting interest, are at such time, directly or indirectly, owned or controlled by such first Person, or by one or more of its Subsidiaries, or by such first Person and one or more of its Subsidiaries; provided, that, for purposes of determining compliance with --------- Article VI, the defined term "Subsidiary" shall mean and include only Domestic Subsidiaries. "Subsidiary Guarantor" shall mean WNG Holdings (International) Ltd., a -------------------- Nevada corporation. "Total Leverage Ratio" shall mean, as of any date of determination thereof, -------------------- the ratio of (a) all Indebtedness of the Borrower Consolidated Entity as of such date, to (b) EBITDA as determined as of such date for the twelve-month period ending on such date. "Warrants" shall mean the warrants exercisable into 1,174,955 shares of -------- Class A Common Stock issued to Lenders by Parent in form and substance substantially identical to Exhibit C attached hereto. --------- Other terms are defined elsewhere in this Agreement. 1.2 Accounting Principles. Any accounting term used in this Agreement --------------------- shall have, unless otherwise specifically provided herein, the meaning customarily given in accordance with GAAP and all financial computations hereunder shall be computed, unless otherwise specifically provided herein, in 10 accordance with GAAP as consistently applied as to Borrower. If any changes in GAAP are hereafter required or permitted and are adopted by Borrower with the agreement of their certified public accountants and such changes result in a change in the method of calculation of any of the financial covenants, restrictions or standards herein or in the related definitions or terms used therein, the parties hereto agree to enter into negotiations to amend such provisions so as to reflect equitably such changes with the desired result that the criteria for evaluating the financial condition of Borrower shall be the same after such changes as if such changes had not been made; provided, however, -------- ------- that no change in GAAP that would affect the method of calculation of any of the financial covenants, restrictions or standards or definitions of terms used therein shall be given effect in such calculations until such provisions are amended in a manner reasonably satisfactory to Lenders. ARTICLE 2 CREDIT TERMS ------------ 2.1 Purchase and Sale of the Senior Subordinated Note. Subject to the ------------------------------------------------- terms hereof, on the date hereof, Lenders shall purchase from Borrower and Borrower shall issue and sell to each Lender a senior subordinated note (each a "Senior Subordinated Note" and collectively, the "Senior Subordinated Notes") ------------------------ ------------------------- evidencing a term Loan in the principal amount set forth opposite such Lender's name on Schedule 2.1 attached hereto, and for the purchase price set forth ------------ opposite such Lender's name on Schedule 2.1 attached hereto (each a "Loan" and ------------ ---- collectively, the "Loans"). Each of the Senior Subordinated Notes shall be ----- dated as of the date hereof, subject to the terms and conditions of this Agreement and in the form attached hereto as Exhibit B. --------- 2.2 Repayment of Principal. Unless otherwise required or permitted to ---------------------- be sooner paid pursuant to the provisions hereof and of the Senior Subordinated Notes, Borrower shall repay the Principal in full on June 30, 2006. 2.3 Interest. -------- (a) Interest. So long as no Event of Default has occurred and is -------- continuing, the Principal shall bear interest from the date hereof until paid, computed on the basis of a 360-day year for the actual number of days elapsed, at a fixed annual rate of 13.00%. (b) Periodic Interest Payments. Accrued interest shall be due and -------------------------- payable quarterly in arrears on each Quarterly Payment Date commencing on September 30, 2000. In addition, all accrued and unpaid interest shall be paid upon the payment in full of the Principal and, if payment in full is not paid when due, thereafter on demand. (c) Default Interest Rate. After the occurrence and during the --------------------- continuance of any Event of Default, the Borrower's Obligations shall bear interest, payable on demand, at the rate of 16.00% per annum. (d) Savings Clause. In no contingency or event shall the interest -------------- rate charged pursuant to the terms of this Agreement exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that such a court determines that Lenders have received interest hereunder in excess of the 11 highest applicable rate, the amount of such excess interest shall be applied against the Principal then outstanding, and any excess interest remaining after such application shall be refunded to Borrower. 2.4 Prepayments. ----------- (a) Optional Prepayments. Borrower may, at its option, prepay -------------------- Principal, together with accrued interest thereon: (i) prior to the first anniversary hereof, if and only if Borrower repays the Principal in full and pays to Lenders a prepayment premium of Two Hundred Thousand Dollars ($200,000) (the "Prepayment ---------- Premium"); and ------- (ii) at any time on or after the first anniversary hereof, without any Prepayment Premium, provided that such prepayment of Principal shall be in increments of $500,000. (b) Prepayment Notice. Borrower shall give notice (a "Prepayment ----------------- ---------- Notice") to Lenders of any optional prepayment under this Section 2.4 not ------ later than 12:00 p.m., Chicago, Illinois time, on the twentieth (20th) Business Day preceding the date of prepayment, specifying the prepayment date and the Principal to be prepaid ("Prepayment Principal Amount"). Once --------------------------- a Prepayment Notice has been given, the Prepayment Principal Amount specified therein, together with all accrued interest to the date of payment, shall become due and payable on the date specified in the Prepayment Notice. (c) Mandatory Prepayment on Sale or Change of Control. Borrower shall ------------------------------------------------- give written notice (a "Change Notice") to Lenders upon the earlier of (i) ------------- thirty (30) days prior to the consummation of, and (ii) two (2) Business Days after the date of execution of a definitive agreement providing for a Change of Control or a Sale (it being understood that, in connection with a Change of Control not involving a transaction to which Borrower is a party, Borrower shall deliver the relevant Change Notice to Lenders promptly after it obtains knowledge thereof). Upon receipt of a Change Notice, Lenders shall have the right, exercisable at any time within thirty (30) days after receipt of a Change Notice, to require that the Principal be repaid in full, together with all accrued interest thereon and the Prepayment Premium, as applicable, and, if Lenders so elect, Borrower shall prepay the outstanding balance of the Principal owed to Lenders in full, together with all accrued interest thereon and the Prepayment Premium, as applicable, on the date of consummation of the Change of Control or Sale. 2.5 Payments. All payments hereunder and under the Senior Subordinated -------- Notes shall be made to Lenders prior to 12:00 p.m., Chicago, Illinois time, on the date due, to Lenders in the accounts set forth on Schedule 2.5 attached ------------ hereto, in lawful money of the United States of America, by wire transfer in funds immediately available at such payment office. All payments hereunder and under the Senior Subordinated Notes shall, except as required by applicable law, be made without setoff, deduction or counterclaim, free and clear of all taxes (other than taxes imposed on the net income of Lenders or franchise taxes), levies, imports, duties, fees and charges, and without any withholding, restriction or conditions imposed by any governmental authority. If Borrower is required by law to deduct any such amounts from or in respect of any sum payable hereunder to Lenders, then the sum payable hereunder shall be increased as may be necessary so that, after making all required deductions, Lenders receive an 12 amount equal to the sum they would have received had no such deductions been made. Whenever any payment to be made hereunder or under the Senior Subordinated Notes shall be stated to be due on a date other than a Business Day, such payment shall be made on the immediately preceding Business Day. 2.6 Pro Rata Payment. All payments hereunder and under the Senior ---------------- Subordinated Notes shall, at all times during which there is more than a single Lender and/or holders of the Senior Subordinated Notes (or notes issued in replacement thereof), be made pro rata among such Lenders and/or holders based upon the aggregate unpaid principal amount of the Senior Subordinated Note respectively held by each such Lender and/or holder, as reflected in the register maintained by Borrower pursuant to Section 8.1 hereof. 2.7 Investment Fee. An aggregate fee of Three Hundred Thousand Dollars -------------- ($300,000) (the "Investment Fee") shall be payable to Lenders or their designees -------------- on the first Business Day after the date hereof. ARTICLE 3 CLOSING DELIVERIES ------------------ The obligation of Lenders to purchase the Senior Subordinated Notes on the date hereof is subject to, among other things, Borrower delivering or causing to be delivered to Lenders on or prior to the date hereof each of the following (the form and substance of which is satisfactory to Lenders and their counsel): (a) this Agreement, duly executed by Borrower; (b) the Senior Subordinated Notes, duly executed by Borrower; (c) the Warrants, duly executed by Parent; (d) the Registration Rights Agreement, duly executed by Borrower; (e) the Subordination Agreement, duly executed by Borrower and Senior Lenders; (f) Guarantee duly executed by Subsidiary Guarantor; (g) the written opinion of Latham & Watkins, counsel to Borrower, dated as of the date hereof, in the form and substance reasonably acceptable to Lenders; (h) certified copies of all documents evidencing corporate action taken by Borrower, Parent and each of Borrower's Subsidiaries with respect to the Senior Subordinated Loan Documents including but not limited to resolutions of the Board of Directors of each of Borrower, Parent and Borrower's Subsidiaries authorizing the execution, delivery and performance by such entity of this Agreement, the Senior Subordinated Notes and other Senior Subordinated Loan Documents to which it is a party; 13 (i) a certificate of Borrower, signed by its chief executive officer or chief financial officer, to the effect that: (i) all of the representations and warranties of Borrower contained in this Agreement are true and correct as of the date hereof; (ii) Borrower has complied with and performed all of the terms, covenants and agreements contained in the Senior Subordinated Loan Documents which are to be complied with or performed by Borrower on or before the date hereof (unless waived by Lenders in writing); and (iii) no Event of Default or Potential Event of Default has occurred and is continuing; (j) an incumbency certificate of Borrower signed by its secretary or assistant secretary, certifying the names of the officers of Parent, Borrower and the Subsidiary Guarantor authorized to sign the Senior Subordinated Loan Documents to be signed by such party, together with specimens of the true signatures of the officers executing the Senior Subordinated Loan Documents; (k) a financial condition certificate of Borrower, signed by its chief executive officer or chief financial officer, acknowledging that, after giving effect to the Related Transactions, (i) each of Parent, Borrower and Borrower's Domestic Subsidiaries is Solvent and (ii) at least $10,000,000 is available for borrowing under Borrower's revolving credit facility with the Senior Lenders; (l) a copy of the articles or certificate of incorporation of each of Borrower, Parent and each Domestic Subsidiary, as amended, certified by the Secretary of State of the applicable jurisdiction, and a copy of each such party's By-Laws, certified by such party's secretary to be true and correct and in full force and effect; (m) a good standing certificate with respect to each of Borrower, Parent and each Domestic Subsidiary from the Secretary of State of its state of incorporation, and from the Secretary of State of each other jurisdiction where such party is qualified to do business; (n) a copy of all of the Related Transaction Documents (other than the Senior Subordinated Loan Documents) certified by the Borrower's secretary to be true and correct and in full force and effect as of the date hereof; (o) an unaudited Consolidated balance sheet of Borrower reflecting the pro forma financial position of Borrower and its Domestic Subsidiaries as of the date hereof and after giving effect to the consummation of the Related Transactions (the "Pro Forma Balance Sheet"); and ----------------------- (p) such other documents, agreements, certificates, instruments and conditions as Lenders may reasonably request. ARTICLE 4 REPRESENTATIONS AND WARRANTIES ------------------------------ Borrower represents and warrants to Lenders that the following statements are true, correct and complete as of the date hereof (after giving effect to the consummation of the Related Transactions 14 taking place on or prior to the date hereof) and such representations and warranties shall survive the execution and delivery of this Agreement and the issuance of the Senior Subordinated Notes, notwithstanding any investigation made by Lenders. 4.1 Organization and Qualification. Parent, Borrower and each Domestic ------------------------------ Subsidiary of Borrower is a corporation validly existing and in good standing under the laws of its jurisdiction of incorporation. Parent, Borrower and each Domestic Subsidiary of Borrower is duly qualified to do business as a foreign corporation in each jurisdiction where, because of the nature of its activities or properties such qualification is required, except where the failure to so qualify would not have a Material Adverse Effect. Each of Parent, Borrower and the Domestic Subsidiaries has delivered to Lenders a true, complete and correct copy of its Certificate or Articles of Incorporation and By-laws. Each of Parent, Borrower and the Domestic Subsidiaries has all requisite corporate power and authority to own and operate its properties and to carry on its business as now conducted and proposed to be conducted. 4.2 Authorization, Validity and Enforceability. Each of Parent, ------------------------------------------ Borrower and Borrower's Domestic Subsidiaries is duly authorized to execute, deliver and perform each of the Senior Subordinated Loan Documents and other Related Transaction Documents to which it is a party and to incur the borrowings or other obligations contemplated by the provisions thereof. Each of Parent, Borrower and Borrower's Domestic Subsidiaries has taken all necessary corporate action (including, without limitation, obtaining approval of its shareholders) to authorize the execution, delivery and performance of each of the Senior Subordinated Loan Documents and other Related Transaction Documents to which it is a party. No consent, approval or authorization of, or declaration or filing with, any governmental authority, and no consent of any other Person (which has not been obtained), is required in connection with the execution, delivery and performance by each of Parent, Borrower and Borrower's Domestic Subsidiaries of the Senior Subordinated Loan Documents to which it is a party. No consent or authorization of, filing with or other act by or in respect of any governmental authority or any other Person is required in connection with the continuing operations of Borrower or any of Borrower's Domestic Subsidiaries, except for any of the foregoing which failures to obtain and maintain in full force and effect singly or in the aggregate could not reasonably be expected to have a Material Adverse Effect. Each Related Transaction Document to which each of Parent, Borrower and Borrower's Domestic Subsidiaries is a party has been duly executed and delivered by such party and constitutes the legal, valid and binding obligation of such party, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors' rights or by general principles of equity limiting the availability of equitable remedies. Each of Parent, Borrower and Borrower's Domestic Subsidiaries execution, delivery and performance of each Senior Subordinated Loan Document and Related Transaction Document to which it is a party does not and will not conflict with, or constitute a violation or breach of, or constitute a default under, or result in the creation or imposition of any Lien, other than Permitted Liens, upon its property by reason of the terms of (a) any contract, mortgage, lease, agreement, indenture or instrument to which it is a party or which is binding upon it, (b) any judgment, law, statute, rule or governmental regulation applicable to it or (c) its Articles or Certificate of Incorporation or By-laws. 4.3 Capitalization. -------------- (a) The authorized and outstanding capital stock of each of Parent, Borrower and Borrower's Subsidiaries, after giving effect to the Senior Subordinated Loan Transactions, is as set forth on Schedule 4.3 attached ------------ hereto. All of the outstanding shares of capital stock of each of Borrower and Borrower's Domestic Subsidiaries is validly issued, fully paid and 15 nonassessable and all of the outstanding capital stock of Borrower and Borrower's Domestic Subsidiaries is free and clear of any and all Liens, other than Liens created under the Senior Loan Documents. (b) Except as set forth on Schedule 4.3 or as contemplated by the ------------ Warrants, there are not outstanding any shares of stock, securities, rights or options convertible or exchangeable into or exercisable for any shares of capital stock, stock appreciation rights or phantom stock of Parent, Borrower or Borrower's Domestic Subsidiaries. Except as set forth on Schedule 4.3, none of Parent, Borrower or any of Borrower's Domestic ------------ Subsidiaries is under any obligation, contingent or otherwise, to redeem or otherwise acquire any shares of its capital stock or any securities, rights or options to acquire such capital stock, stock appreciation rights or phantom stock. To Borrower's knowledge, there are no agreements between any of Parent's directors or their respective Affiliates with respect to the voting or transfer of the Common Stock owned by such parties or with respect to any other aspect of their affairs concerning the Business. (c) There are no statutory or contractual shareholders' preemptive rights with respect to the Common Stock or any other shares of capital stock of Parent, Borrower and Borrower's Domestic Subsidiaries. To the best of Borrower's knowledge, none of Parent, Borrower or Borrower's Domestic Subsidiaries has violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock. There are no agreements granting registration rights to any person with respect to any shares of stock of Parent, Borrower or Borrower's Domestic Subsidiaries except for the Registration Rights Agreement. 4.4 No Event of Default; Compliance with Instruments. No event has ------------------------------------------------ occurred and no condition exists which would constitute an Event of Default or Potential Event of Default. None of Parent, Borrower or Borrower's Domestic Subsidiaries is in violation of any term of (i) its Certificate of Incorporation or By-laws, or (ii) Material Contract to which it is a party or by which it may be bound. 4.5 Compliance with Laws; Certain Operations. Each of Parent, Borrower ---------------------------------------- and Domestic Borrower's Subsidiaries has complied in all material respects with all applicable laws and regulations of foreign, federal, state and local governments and all agencies thereof and all requirements of any applicable self-regulatory organization except as set forth on Schedule 4.5 hereto. With ------------ the exception of the items listed on Schedule 4.5 attached hereto, no material ------------ claims are pending against Parent, Borrower or Borrower's Domestic Subsidiaries alleging a violation of, or liability or responsibility under, any such law, regulation or requirement which have not been heretofore settled. 4.6 Solvency. Each of Parent, Borrower and Borrower's Domestic -------- Subsidiaries is Solvent prior to, and after giving effect to, the transactions contemplated hereby. No transfer of property is being made and no obligation is being incurred in connection with such transactions with actual intent to hinder, delay or defraud either present or future creditors. 4.7 Litigation. Except (a) for those matters set forth on Schedule 4.7 ---------- ------------ (which matters, singly or in the aggregate could not reasonably be expected to have a Material Adverse Effect) or (b) with respect to any other matters not set forth on Schedule 4.7 that singly or in the aggregate could not be reasonably ------------ expected to have a Material Adverse Effect, there are no actions, suits or proceedings pending or, to Borrower's knowledge, threatened against or affecting Parent, Borrower or Borrower's Domestic Subsidiaries or their business or assets, before any court or governmental department, agency or instrumentality, domestic or foreign. No injunction, writ, temporary restraining order or any order of any 16 nature has been issued by any court or governmental department, agency or instrumentality, domestic or foreign purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Related Transaction Document, or directing that any of the Related Transactions not be consummated as provided herein or therein. 4.8 Regulations U and X. Borrower is not engaged in the business of ------------------- extending credit for the purpose of purchasing or carrying "margin stock", as defined in Regulation U of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), and no part of the proceeds of the Obligations --------------------- shall 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 violation of Regulations U and X of the Federal Reserve Board. 4.9 ERISA. ----- (a) Except as set forth on Schedule 4.9 attached hereto, none of ------------ Parent, Borrower or any of their ERISA Affiliates maintains, contributes to, or has any obligation to contribute to or has maintained or contributed to at any time prior to the date hereof any Multiemployer Plan, Multiple Employer Plan or Pension Plan. (b) Each Plan complies in all material respects with ERISA, the Code, and all applicable statutes and governmental rules and regulations and no condition exists or event or transaction has occurred in connection with any Plan which could result in, individually or in the aggregate, the incurrence by Borrower or any of its ERISA Affiliates of any material liability, fine or penalty. (c) None of Parent, Borrower or any of their ERISA Affiliates has any material contingent liability with respect to any post-retirement benefit under any Plan, other than liability for continuation coverage described in Part 6 of Subtitle B of Title I of ERISA. (d) Parent, Borrower and each of their ERISA Affiliates have made all contributions and payments to or under each Plan as required by law, the terms of the Plan, or any contract or agreement except for those which alone or in the aggregate do not represent a material liability to Borrower. (e) No material liability has been asserted or, to Borrower's knowledge, threatened against Parent, Borrower or any of their ERISA Affiliates for any violation of ERISA or the Code in connection with any Plan, including, without limitation, the administration thereof. 4.10 Subsidiaries. Schedule 4.10 attached hereto sets forth the name ------------ ------------- and jurisdiction of formation of each Subsidiary of Borrower. Borrower or a wholly-owned Subsidiary of Borrower is the record and beneficial owner of all of the listed and outstanding capital stock (or securities convertible into or exchangeable for such capital stock) of each of the Domestic Subsidiaries listed on Schedule 4.10 attached hereto. ------------- 4.11 Financials. Borrower has delivered to Lenders the following ---------- financial statements with respect to the Parent and its consolidated Subsidiaries: (i) a balance sheet and related statements of operations and cash flows for the fiscal years ended May 31, 1999, audited by independent certified public accountants and accompanied by an unqualified opinion thereof, and (ii) an unaudited balance 17 sheet and related statements of operations and shareholders' equity and cash flows for the period ending May 31, 2000. Borrower has delivered to Lenders with respect to the Borrower Consolidated Entity the following financial statements: (i) an unaudited balance sheet as of, and unaudited statements of operations, shareholders' equity and cash flows for the fiscal year ended May 31, 1999 and (ii) an unaudited balance sheet as of, and unaudited statements of operations, shareholders' equity and cash flows for the period ending May 31, 2000. The foregoing financial statements were prepared in accordance with GAAP (subject, in the case of such unaudited statements, to the absence of footnotes and to normal year-end adjustments) and present fairly in all material respects the financial position of the applicable entity as at the dates thereof and the results of their operations for the periods then ended. Borrower has also delivered to Lenders the projections of the Borrower Consolidated Entity's Consolidated profit and loss statement for the annual periods ending on May 31, 2000 through May 31, 2006 (the "Projections"). The Projections represent the ----------- Borrower Consolidated Entity's projected future financial performance for the period set forth therein, subject to assumptions, which Borrower believes are fair and reasonable in light of the current and reasonably foreseeable future conditions. 4.12 Absence of Undisclosed Liabilities. None of Parent, Borrower or ---------------------------------- Borrower's Domestic Subsidiaries has any material Liability arising out of transactions entered into, on or prior to the date hereof, or any action or inaction on or prior to the date hereof, or any state of facts existing on or prior to the date hereof which are, under GAAP, ordinarily required to be set forth on a balance sheet or the footnotes thereto, other than liabilities set forth on the Pro Forma Balance Sheet or as set forth on the Schedules. 4.13 Assets. Each of Parent, Borrower and Borrower's Domestic Subsidiaries ------ have good and indefeasible title to, or a valid leasehold interest in, or a valid license to use, all material properties and assets used in the conduct of its business as presently conducted and as presently proposed to be conducted by it, located on its premises, shown on the Pro Forma Balance Sheet or shown on the Latest Balance Sheet or acquired thereafter, except for properties and assets disposed of in the ordinary course of business since the date of the Latest Balance Sheet, free and clear of all Liens, except for Liens permitted under Section 6.2 hereof. Borrower's and Borrower's Domestic Subsidiaries' buildings, equipment and other tangible assets, taken as a whole, are in good operating condition, ordinary wear and tear excepted. 4.14 Tax Matters. Each of Parent, Borrower and Borrower's Domestic ----------- Subsidiaries has timely filed, or obtained valid extensions of time for filing (which extensions have not expired), all federal, state, local and other tax returns and reports required to be filed by it. All such tax returns, if any, are true and correct in all material respects. No claim has been made by any taxing authority in any jurisdiction where each of Parent, Borrower and Borrower's Domestic Subsidiaries did not file tax returns that it is or may be subject to taxation by that jurisdiction. Except as disclosed in Schedule 4.14 ------------- attached hereto: (a) each of Parent, Borrower and Borrower's Domestic Subsidiaries has paid all taxes (including all deficiency assessments, additions to taxes, penalties and interest, of which notice has been received) to the extent that such amounts have become due or are claimed to be due from any federal, state, local or foreign taxing authorities or a reserve therefor has been established; 18 (b) adequate provisions have been made in the Latest Balance Sheet for the payment of all accrued and unpaid federal, state, local and other taxes, whether or not now due and payable and whether or not disputed; (c) there are no tax liens (other than liens for taxes which are not yet due and payable) on any property of each of Parent, Borrower and Borrower's Domestic Subsidiaries; (d) there are no pending or threatened tax return examinations against either Parent, Borrower or Borrower's Domestic Subsidiaries; (e) there are no tax deficiencies asserted by any jurisdiction against Parent, Borrower or any of the Domestic Subsidiaries; (f) none of Parent, Borrower or any of Borrower's Domestic Subsidiaries has granted any extensions of limitation periods applicable to tax claims; and (g) none of Parent, Borrower or any of Borrower's Domestic Subsidiaries has any obligation under any written tax sharing agreement or agreement regarding payments in lieu of Borrower's taxes. 4.15 Contracts. (a) Each of Parent, Borrower and Borrower's Domestic --------- Subsidiaries have performed all the obligations required to be performed by it to the date of this Agreement, and is not in receipt of any written claim of default, under any Material Contract to which it is a party; (b) to the best of Borrower's knowledge, no event has occurred which, with the passage of time or the giving of notice or both, would result in a breach or default under any Material Contract to which Parent, Borrower or Borrower's Domestic Subsidiaries is a party or are bound; (c) no Material Contract to which Parent, Borrower or any of Borrower's Domestic Subsidiaries is a party has been breached in any material respect or canceled by the other party since the date of the Latest Balance Sheet; and (d) none of Parent, Borrower or any of Borrower's Domestic Subsidiaries is a party to any lease, contract, commitment or other agreement which is reasonably likely to have a Material Adverse Effect. Schedule 4.15 ------------- attached hereto contains a true, correct and complete list of all Material Contracts currently in effect on the date hereof. None of the Material Contracts contains any burdensome restrictions on Parent, Borrower or any of Borrower's Domestic Subsidiaries or any of their respective properties which would have a Material Adverse Effect. 4.16 Absence of Changes. Except as disclosed in Schedule 4.16, since ------------------ ------------- May 31, 1999, the Business has been operated in the ordinary course thereof in all material respects consistent with past practices, and there has been no occurrence of any event having or reasonably likely to have a Material Adverse Effect. 4.17 Intellectual Property. Each of Parent, Borrower and Borrower's --------------------- Domestic Subsidiaries own and possess all right, title and interest in and to, or has a valid and enforceable license to use, all patents, trade names, trademarks, copyrights, inventions, processes, designs, custom or proprietary computer software, works of authorship, franchises, formulas, trade secrets, know-how and other intangible property and proprietary rights which are material, either individually or in the aggregate, to or for use in the conduct of its business (collectively, "Intellectual Property"). To the best of their --------------------- knowledge, each of Parent, Borrower and its Domestic Subsidiaries may use all of its material Intellectual Property in the conduct of its business with no conflict with or infringement of the rights of 19 others. Except as set forth in Schedule 4.17 attached hereto, Borrower has no ------------- knowledge of any infringement by any third party on any of its material Intellectual Property owned or used by it and has not taken or omitted to take any action which would have the effect of waiving any of its rights thereunder. 4.18 Insurance. Each of Parent, Borrower and Borrower's Domestic --------- Subsidiaries maintains insurance in such amounts and covering such risks as is customarily carried by companies of similar size engaged in similar lines of business. All such policies are in full force and effect, and none of Parent, Borrower or Borrower's Domestic Subsidiaries is in default in any material respect in its obligations under any such policy. 4.19 Environmental and Safety Matters. -------------------------------- (a) Except as disclosed in Schedule 4.19, the on-going operations of ------------- Parent, Borrower and each of Borrower's Domestic Subsidiaries comply in all material respects with all Environmental and Safety Requirements. (b) Except as disclosed in Scheduled 4.19, Parent, Borrower and each -------------- of Borrower's Domestic Subsidiaries have obtained all licenses, permits, authorizations and registrations required under any Environmental and Safety Requirements ("Environmental Permits") and necessary for their --------------------- respective ordinary course operations, all such Environmental Permits are in good standing, and each of Parent, Borrower and Borrower's Domestic Subsidiaries are in compliance with all material terms and conditions of such Environmental Permits, except where the failure to obtain or comply with Environmental Permits would not have a Material Adverse Effect. (c) Except as disclosed in Scheduled 4.19, none of Parent, Borrower -------------- or any of Borrower's Domestic Subsidiaries is, or has Property or operations which are subject to any outstanding written order from or agreement with any governmental authority, nor subject to any judicial or docketed administrative proceeding, respecting any Environmental and Safety Requirements. (d) To the knowledge of Borrower, no Liens exist under any Environmental and Safety Laws on any property or facility now or previously owned, operated or otherwise used by Parent, Borrower or Borrower's Domestic Subsidiaries and, to the best of the knowledge of Borrower, no government or other third party actions have been taken, threatened or are reasonably likely to subject any such property or facility to such Liens, and none of Parent, Borrower, Borrower's Domestic Subsidiaries or any Environmental Affiliate have been or are required pursuant to any Environmental and Safety Requirements to place any notice or restriction in any deed to such property or facility. 4.20 Investment Company. None of Parent, Borrower or Borrower's ------------------ Subsidiaries is (a) an "investment company" or a company controlled by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or (b) subject to any other law which purports to regulate or restrict its ability to borrow money or to consummate the Related Transactions or to perform its obligations hereunder or thereunder. 20 4.21 Affiliate Transactions. Except as disclosed on Schedule 4.21 and ---------------------- ------------- except (1) in the ordinary course of and pursuant to the reasonable requirements of Parent's, Borrower's or the relevant Subsidiary's business and (2) upon fair and reasonable terms no less favorable to Parent, Borrower and such Subsidiary than it could obtain in a comparable arm's-length transaction with an unaffiliated Person: (a) no Affiliate nor any officer, employee, director or stockholder of Parent, Borrower or Borrower's Subsidiaries or is a party to any agreement, contract, commitment or transaction with Parent, Borrower or Borrower's Domestic Subsidiaries (employment related, consulting or otherwise). 4.22 Employee Matters. Except as set forth on Schedule 4.22 attached ---------------- ------------- hereto and except for any of the following which singly or in the aggregate could not reasonably be expected to have a Material Adverse Effect: (a) no employees of Parent, Borrower or Borrower's Domestic Subsidiaries are currently represented by any labor union, none of Parent, Borrower or Borrower's Subsidiaries is a party to any collective bargaining agreement, and to the best of Borrower's knowledge, there is no organizational effort presently being made or threatened by or on behalf of any labor unions with respect to employees of Parent, Borrower or Borrower's Domestic Subsidiaries; (b) there is no unfair labor practice complaint against Parent, Borrower or Borrower's Domestic Subsidiaries pending before the National Labor Relations Board; (c) there is no labor strike, dispute, slowdown, representation campaign or work stoppage actually pending or, to the best of Borrower's knowledge, threatened against Parent, Borrower or Borrower's Domestic Subsidiaries; and (d) to the best of Borrower's knowledge, no officer or employee of Parent, Borrower or Borrower's Subsidiaries have entered into any agreement which is now in effect with any person, corporation, partnership or business organization other than Parent, Borrower or Borrower's Subsidiaries requiring such person to assign any interest in any invention or trade secrets or to keep confidential any trade secrets or other proprietary information or containing any prohibition or restriction on competition or solicitation of customers. 4.23 Tangible Property. The tangible property owned or leased by Parent, ----------------- Borrower or Borrower's Domestic Subsidiaries, taken as a whole, is sufficient to conduct the operations of Parent, Borrower or Borrower's Domestic Subsidiaries as presently conducted and as contemplated. No modifications or additions to such property which are material, either individually or in the aggregate, are needed or planned, except as described in the Projections. Each of Parent, Borrower and Borrower's Domestic Subsidiaries has not received notice of, nor have there occurred, any pending or to the best of Borrower's knowledge, threatened condemnation proceedings or any other matter materially and adversely affecting the value of any owned or leased real property of Parent, Borrower or Borrower's Domestic Subsidiaries. 4.24 Disclosure. All statements contained in any exhibit, certificate or ---------- other instrument attached hereto or required to be delivered to Lenders pursuant to this Agreement shall constitute representations and warranties by Borrower hereunder. The Agreement and the schedules, attachments, written statements, documents, certificates or other items required hereby or filed with the SEC, taken as a whole, do not contain any untrue statement of a material fact or omit a material fact necessary to make each such statement contained herein or therein not misleading. To the best of Borrower's knowledge, 21 there is no material fact pertaining to the Business which Borrower has not disclosed to Lenders in writing and which, as of the date hereof, has had or could reasonably be expected to have a Material Adverse Effect. All originals or copies of documents provided by Borrower to Lenders in connection with this Agreement and the Related Transactions are true, correct and complete in all material respects. 4.25 Public Utility Company. Borrower is not a "holding company," or a ---------------------- "Subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "Subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended. 4.26 Fiscal Year. The Borrower's fiscal year ends May 31. ----------- 4.27 Fictitious Business Names. Except as set forth in Schedule 6.9 of ------------------------- the Senior Loan Agreement as in effect on the date hereof, neither Borrower or any of Borrower's Domestic Subsidiaries has used any corporate or fictitious name (including d/b/a's or the like) during the five (5) years preceding the date hereof, other than the corporate name under which it has executed this Agreement. 4.28 Licenses and Permits. Parent, Borrower and each of Borrower's -------------------- Domestic Subsidiaries has obtained and holds in full force and effect, all franchises, licenses, leases, permits, certificates, authorizations, qualifications, easements, rights of way and other rights and approvals which are necessary for the operation of its respective businesses as presently conducted and as proposed to be conducted except where the failure to obtain the same would not have a Material Adverse Effect. None of Parent, Borrower or any of Borrower's Domestic Subsidiaries is in violation of the terms of any such franchise, license, lease, permit, certificate, authorization, qualification, easement, right of way, right or approval, which violation would have a Material Adverse Effect. 4.29 Notice from Self-Regulated Organization. Neither Parent nor Borrower --------------------------------------- has received a notice from the New York Stock Exchange, the SEC or other self- regulatory organization indicating that Parent has or will be delisted or that trading of Parent's Common Stock has or will be halted. 4.30 Parent's Business. As of the date hereof, Parent is not engaged in ----------------- any business or activity and is not incurring any liabilities other than with respect to the ownership all of the capital stock of Borrower, activities, expenses, liabilities incident to its organization and to the carrying out of the transactions contemplated hereby or by the Related Transaction Documents and other activities related to the Business that, as a whole, are not material. ARTICLE 5 AFFIRMATIVE COVENANTS --------------------- Borrower covenants that, except with the prior written consent of Lenders, so long as any of the Obligations remain outstanding and, in the case of Sections 5.4(f), and 5.8, so long as Lenders collectively own, in the aggregate, at least a fifty percent (50%) interest in the Warrants or the shares of Common Stock into which the Warrants are exercisable: 5.1 Payment of Obligations. Borrower shall pay all of the Obligations, ---------------------- as the same become due and payable. 22 5.2 Preservation of Corporate Existence. Each of Parent, Borrower and ----------------------------------- Borrower's Domestic Subsidiaries shall(a) maintain its corporate existence (except that Subsidiaries of Borrower may merge with Borrower or wholly-owned Subsidiaries of Borrower upon providing Lenders with ten (10) days prior written notice) and maintain in full force and effect all licenses, bonds, franchises, leases, trademarks and qualifications to do business, patents, contracts and other rights material to the profitable conduct of their businesses, and (b) continue in, and limit their operations to, the same general lines of business as presently conducted by it. 5.3 Payment of Taxes and Claims. Each of Parent, Borrower and --------------------------- Borrower's Domestic Subsidiaries shall pay and discharge all federal and material state and local taxes, assessments and other governmental charges imposed upon it or upon its income or properties, prior to the date on which penalties attach thereto, and shall pay all claims which, if unpaid, would become a Lien upon any of its properties, except for any such tax, assessment, charge, levy or claim which is being contested by or on behalf of such entity in good faith and by proper proceedings and for which such reserves or other provisions as may be required by GAAP shall have been made and recorded. 5.4 Reporting Requirements. Borrower shall promptly furnish to Lenders ---------------------- all such financial information respecting it as Lenders shall reasonably request and shall notify its auditors and accountants that Lenders are authorized to obtain such information directly from them if the Borrower fails to furnish such information to Lenders. Without limiting the foregoing, Borrower shall furnish to Lenders, in such reasonable detail as Lenders shall request, the following: (a) Monthly Financial Statements. As soon as available and in any ---------------------------- event within thirty (30) days after the end of each month, excluding months ending on the last day of a fiscal quarter or Fiscal Year, an unaudited balance sheet, statement of income and expense and statement of cash flow for the Borrower Consolidated Entity on a consolidated basis for such monthly period and for the then current fiscal year to date, all in reasonable detail, and setting forth in comparative form, figures for the corresponding period of (i) the previous fiscal year and (ii) the budget. Such statements shall be certified by the Chief Executive Officer or Chief Financial Officer of Borrower as fairly presenting in all material respects the consolidated financial position of the Borrower Consolidated Entity as of the dates indicated and the results of operations and cash flow for the calendar month indicated in accordance with GAAP (subject to year-end audit adjustments and the absence of footnotes). (b) Quarterly Financial Statements. As soon as available and in any ------------------------------ event within forty-five (45) days after the end of each fiscal quarter of Borrower (except the last fiscal quarter of any year), an unaudited quarterly report of the Borrower Consolidated Entity containing a Consolidated (i) balance sheet, (ii) statement of income and expense, (iii) statement of shareholders' equity and (iv) statement of cash flow for such year, and setting forth in each case, in comparative form, figures for the previous fiscal year and the budget, all in reasonable detail, fairly presenting in all material respects the financial position and the results of operations of the Borrower Consolidated Entity. Such statements shall be certified by the Chief Executive Officer or Chief Financial Officer of Borrower as fairly presenting in all material respects the consolidated financial position of the Borrower Consolidated Entity as of the dates indicated and the results of operations and cash flow for the quarter indicated in accordance with GAAP (subject to year-end audit adjustments and the absence of footnotes). 23 (c) Annual Financial Statements. As soon as available and in any --------------------------- event within ninety (90) days after the end of each fiscal year of Borrower, an audited annual report of the Parent (and if requested by Lenders, Borrower) containing a Consolidated (i) balance sheet, (ii) statement of income and expense, (iii) statement of shareholders' equity and (iv) statement of cash flow for such year, and setting forth in each case, in comparative form, figures for the previous fiscal year, all in reasonable detail, fairly presenting in all material respects the financial position and the results of operations of the Parent (and Borrower, if requested by Lenders) as of the close of such previous year and for the year then ended, prepared in accordance with GAAP, and, (1) in the case of audited Financial Statements of Parent, accompanied by an unqualified opinion of an independent certified public accountant satisfactory to Lenders and a report of the independent certified public accountant with respect to the consolidating financial statements of Parent for such fiscal year in scope and substance reasonably acceptable to Lenders and (2) in the case of audited financial statements of Borrower, a report of the independent certified public account with respect thereto in form and substance satisfactory to Lenders. (d) Certificates. With each of the audited annual reports delivered ------------ pursuant to Section 5.4(c) above, and with each quarterly unaudited financial statement delivered pursuant to Section 5.4(b) above, a certificate of the Borrower's Chief Executive Officer or Chief Financial Officer stating that, except as explained in reasonable detail in such certificate, (A) the Parent, Borrower and Borrower's Domestic Subsidiaries are, at the date of such certificate, in compliance with all of the covenants and agreements in this Agreement, and (B) no Event of Default or Potential Event of Default then exists. If such certificate discloses that a covenant has not been complied with or that an Event of Default or Potential Event of Default exists, such certificate shall set forth what action the Borrower has taken or proposes to take with respect thereto. (e) Accountants' Reports. Promptly upon receipt thereof, copies of -------------------- all significant reports submitted to Borrower by independent public accountants in connection with each annual, interim or special audit of its financial statements made by such accountants, including the management letter submitted by such accountants to management in connection with its annual audit. (f) Reports to the SEC and to Shareholders. Promptly upon the filing -------------------------------------- or sending thereof, copies of all other regular, periodic or special reports of Borrower filed with the SEC (including, without limitation, copies of the Form 10-K annual report, Form 10-Q quarterly reports, Form 8- K current report or comparable successor reports); copies of all registration statements of the Borrower filed with the SEC (other than on Form S-8); and copies of all proxy statements or other communications made to security holders generally. (g) Reports to Senior Lenders. Together with any compliance ------------------------- certificate, financial statement, or other report furnished to Senior Lenders pursuant to the Senior Loan Documents, a copy of the same setting forth in reasonable detail all calculations for all amounts contained therein (including, without limitation, the financial covenant calculations) and, together with all other notices or certificates furnished to Senior Lenders pursuant to the Senior Loan Documents, Borrower shall also deliver to Lenders a copy of the same. 5.5 Notices to Lenders. Borrower shall notify Lenders in writing of the ------------------ following matters at the following times: 24 (a) Promptly (and in any event within five (5) days) after becoming aware thereof, any Event of Default or Potential Event of Default. (b) Promptly (and in any event within five (5) days) after becoming aware thereof, the assertion by the holder of any material Indebtedness, including Senior Lenders, that a default exists with respect thereto or that Borrower or any Domestic Subsidiary is not in compliance with the terms thereof, or the threat or commencement by such holder of any enforcement action because of such asserted default or non-compliance. (c) Promptly (and in any event within five (5) days) after becoming aware thereof, any notice or indication that any Significant Customer (as defined below) intends to terminate, significantly reduce or otherwise alter in a materially adverse manner its relationship with the Business. For purposes of this Agreement "Significant Customer" shall mean any of the -------------------- five (5) largest customers of the Business, measured in terms of sales volume in dollars for the most recent fiscal year then ended. (d) Promptly (and in any event within five (5) days) after becoming aware thereof, any event, occurrence or condition that has or is reasonably likely to have a Material Adverse Effect including, without limitation, any pending or threatened material action, suit, proceeding or counterclaim by any Person, or any pending or threatened investigation by or notice from any governmental authorities, of any violation in any material respect of any law, statute, regulation or ordinance of any governmental authority. (e) (A) Promptly and in any event within thirty (30) days after receipt thereof by Borrower or any of its ERISA Affiliates, copies of each notice from the IRS relating to the disqualification of any Plan that is intended to be qualified under Section 401(a) of the Code; (B) promptly and in any event within thirty (30) Business Days of the occurrence of the event, written notice of any event with respect to any Plan which could result in the incurrence by Borrower or any of its ERISA Affiliates of any material liabilities, fine or penalty; (C) together with each copy of such notice received by Borrower or any of its ERISA Affiliates, a written statement of Borrower's senior financial officer setting forth details as to all events referred to therein and the action taken with respect thereto, or proposed to be taken, by Borrower or its ERISA Affiliates, as applicable, and a copy of any notice, filing or correspondence to or required by the IRS, the Department of Labor, or any government agency or adverse party as may be applicable. (f) Promptly, the entry of any order, judgment or decree in excess of $1,000,000 against Borrower or its Subsidiaries or any of their respective properties or assets. (g) Promptly (and in any event within five (5) Business Days) after becoming aware thereof, any notice or indication from the New York Stock Exchange, the SEC or other self-regulatory organization that the trading of Parent is going to be or has been halted or that Parent is going to be or has been delisted. 5.6 Maintenance of Insurance. Each of Parent, Borrower and Borrower's ------------------------ Domestic Subsidiaries shall maintain insurance on its properties and businesses with reputable insurance companies in such amounts, of such types and covering such casualties, risks and contingencies as is 25 ordinarily carried by companies engaged in similar businesses and owning similar properties in the same general areas in which they operate. 5.7 Maintenance of Properties. Each of Parent, Borrower and Borrower's ------------------------- Domestic Subsidiaries shall maintain and preserve all of its properties which are reasonably necessary for the proper conduct of its businesses in good working order and condition, ordinary wear and tear excepted. 5.8 Keeping of Records and Books of Account. Each of Parent, Borrower --------------------------------------- and Borrower's Domestic Subsidiaries shall keep complete and accurate records and books of account, in which full and correct entries in accordance with GAAP shall be made of all of its financial transactions. 5.9 Visitation Rights. Each of Parent, Borrower and Borrower's ----------------- Subsidiaries shall, at any time and from time to time during normal business hours, permit Lenders or any agents or representatives of Lenders to examine and make copies of and abstracts from the records and books of account of, and to visit their properties and to discuss their affairs, finances and accounts with any officer or director their independent accountants, provided that such -------- examinations and visits will be conducted in a manner that minimizes disruption of the parties' business. 5.10 Compliance with Laws. -------------------- (a) Each of Parent, Borrower and Borrower's Domestic Subsidiaries shall to comply with the applicable requirements of all laws, rules, regulations and orders of any governmental authority, except for any failures to so comply which singly or in the aggregate could not reasonably be expected to have a Material Adverse Effect. (b) Within fifteen (15) days after Borrower learns of the enactment or promulgation of any requirement of law which could reasonably be expected to have a Material Adverse Effect, Borrower shall provide Lenders with notice thereof. (c) At the reasonable request of Lenders, if a material environmental claim has been asserted by a governmental authority, and at the sole cost and expense of Borrower, Borrower shall retain an environmental consulting firm, satisfactory to Lenders in their commercially reasonable judgment, to conduct an environmental review, audit or investigation of the specific items as requested by Lenders relating to the properties of Borrower and its Domestic Subsidiaries and provide to Lenders a copy of any reports delivered in connection therewith, provided if any of the holders of the -------- Senior Indebtedness have initiated such an audit, Lenders will accept copies of reports accepted by the holders of the Senior Indebtedness. At the reasonable request of Lenders, Borrower shall provide Lenders with any additional information relating to environmental matters and any potential related liability resulting therefrom as Lenders may reasonably request. 5.11 [Intentionally Omitted.] 5.12 Use of Proceeds. Borrower shall use the initial proceeds hereunder --------------- solely to repay the Refinanced Indebtedness and to pay the fees and expenses arising in connection with the Related Transactions or the Related Transactions. 26 5.13 Further Assurances. Parent, Borrower and each of Borrower's ------------------ Subsidiaries shall take all such further actions and execute all such further documents and instruments as Lenders may at any time reasonably determine to be necessary or desirable to further carry out and consummate the transactions contemplated by the Senior Subordinated Loan Documents and to cause the execution, delivery and performance of the Senior Subordinated Loan Documents to be duly authorized. ARTICLE 6 NEGATIVE COVENANTS ------------------ Borrower covenants that, except with the prior written consent of Lenders, so long as any of the Obligations remain outstanding and in the case of Sections 6.7, 6.8, 6.12 and 6.21, so long as Lenders collectively own in the aggregate at least a fifty percent (50%) interest in the Warrants or the shares of Common Stock into which the Warrants are exercisable: 6.1 Indebtedness. None of Parent, Borrower or Borrower's Domestic ------------ Subsidiaries shall create, incur, assume, guarantee or be or remain liable for, contingently or otherwise, or suffer to exist, any Indebtedness, except: (a) the Obligations; (b) the Senior Indebtedness; (c) Indebtedness secured by Purchase Money Liens not to exceed, in the aggregate for Borrower and its Domestic Subsidiaries combined, $1,000,000 outstanding at any one time; (d) Indebtedness described on Schedule 6.1 and any extension, renewal ------------ or refinancing thereof so long as the principal amount thereof is not increased and such refinancing is on terms and conditions that are no more restrictive than the terms and conditions of the Indebtedness being refinanced; (e) Indebtedness consisting of regularly scheduled rental payments under Capital Leases not to exceed, in the aggregate for Borrower and its Domestic Subsidiaries combined, $250,000 in any fiscal year of the Borrower, provided, that the aggregate face amount of all Indebtedness of -------- the Borrower and its Domestic Subsidiaries combined in respect of Capital Leases shall not exceed $2,000,000 at any time; (f) Indebtedness under Derivative Contracts permitted pursuant to Section 6.17; and (g) unsecured Indebtedness (in addition to the Indebtedness permitted pursuant to the foregoing clauses (a) through (f)) in an aggregate outstanding principal amount not to exceed at any time, in the aggregate for Borrower and its Domestic Subsidiaries combined, $1,000,000. 6.2 Liens. None of Parent, Borrower or Borrower's Domestic Subsidiaries ----- shall create, assume, incur or suffer to be created, assumed, incurred or to exist, any Lien on any of its now owned or hereafter acquired property except for the following ("Permitted Liens") (a) Liens for taxes not yet due or for --------------- taxes being contested in good faith by appropriate proceedings, (b) Liens of landlords, carriers, 27 warehousemen, mechanics and material men incurred in the ordinary course of business for sums not yet due or which are being contested in good faith and by appropriate proceedings, (c) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security or to secure the performance of bids, tenders, sales, contracts (other than for the repayment of borrowed money), surety, appeal and performance bonds, (d) zoning restrictions, easements, licenses, reservations, covenants, rights of way, utility easements, building restrictions and other similar charges or encumbrances on the use of real property which do not interfere with the ordinary conduct of the business of Parent, Borrower or Borrower's Subsidiaries, (e) rights of lessors with respect to leases of machinery, equipment or real property of Parent, Borrower or Borrower's Subsidiaries; (f) any judgment lien the existence or continuance of which does not constitute an Event of Default under Section 7.1; (g) Purchase Money Liens; (h) Liens upon any Equipment of Borrower or any Domestic Subsidiary of Borrower subject to a Capital Lease, to the extent such Capital Lease is permitted by Section 6.1(e), provided, that such Liens (A) secure only the -------- payment of Indebtedness arising under such Capital Lease and (B) extend only to such Equipment and proceeds thereof; (i) Liens securing Senior Indebtedness; (j) the existing Liens described on Schedule 6.2 attached hereto; (k) Liens ------------ consisting of interests of Equipment lessors under operating leases; and (l) extensions and renewals of the foregoing Permitted Liens; provided that the -------- aggregate amount of such extended or renewed Liens is not increased and such extended or renewed Liens are on terms and conditions no more restrictive than the terms and conditions of the Liens being extended or renewed; 6.3 Merger or Sale. Parent, Borrower and Borrower's Domestic Subsidiaries -------------- shall not (a) be a party to any merger, liquidation or consolidation (except for a merger or consolidation of a Subsidiary of Borrower with and into Parent, Borrower or another Subsidiary of Borrower), (b) sell, transfer, convey, lease or otherwise dispose of any part of its assets, except for (A) the sale of inventory in the ordinary course of business, (B) the sale of the owned real property of Borrower located at #6 Sawgrass Court, Rogers, Arkansas, (C) the owned real property and related assets of Borrower located at 1960 South 4250 West, Salt Lake City, Utah (D) obsolete or worn out properly disposed of in the ordinary course of business, (E) Capital Securities of any subsidiary of Subsidiary Guarantor incorporated or otherwise organized outside of United States or any state or territory thereof or (E) other dispositions of assets, provided that (1) such other dispositions of assets are for fair value, (2) the - -------- total consideration received in connection with such disposition is in cash and (3) the total consideration for such dispositions does not exceed $1,000,000 in any fiscal year of Borrower or (c) sell with recourse, or discount or otherwise sell for less than the face thereof, any of its accounts or notes receivable. 6.4 Payments of Subordinated Indebtedness. None of Parent, Borrower or ------------------------------------- Borrower's Subsidiaries shall make any voluntary or optional prepayment of any Indebtedness in excess of $100,000 other than the Obligations and Senior Indebtedness. 6.5 Investments. None of Parent, Borrower or Borrower's Domestic ----------- Subsidiaries shall make or permit to exist any Investment in any Person, except for: (a) advances to employees of Parent, Borrower or Borrower's Subsidiaries for travel or other ordinary business expenses in the ordinary course of, and pursuant to the reasonable requirements of the such entity's business; (b) extensions of credit by Parent, Borrower or Borrower's Subsidiaries in the nature of accounts or notes receivable arising from the sale of goods and services in the ordinary course of business; (c) shares of stock, obligations or other securities received by the Parent, Borrower or Borrower's Subsidiaries in settlement of claims arising in the ordinary course of business; (d) investments in Cash Equivalents; (e) Guaranties permitted under Section 6.18; (f) Indebtedness permitted under Section 6.1; (g) Investments listed on Schedule 6.5 ------------ attached hereto; (h) so long as before and after giving effect thereto no Default or Event of Default shall 28 have occurred or be continuing, Investments in any wholly-owned subsidiary of Subsidiary Guarantor incorporated or otherwise organized outside of the United States or any state or territory thereof, in an aggregate amount not exceeding $1,000,000; (i) Investments in Subsidiary Guarantor to permit Subsidiary Guarantor (contemporaneously with, and in the same amount of, such distributions) to pay state and local franchise and similar tax obligations actually due and payable in cash by Subsidiary Guarantor; and (j) such other Investments as Lenders approve in writing. 6.6 Distributions. None of Parent, Borrower, or Borrower's Domestic ------------- Subsidiaries shall directly or indirectly make any Restricted Payment; provided, that any of Borrower's Domestic Subsidiaries may declare and pay dividends to Borrower and Borrower may make: (a) interest payments under the Senior Note; (b) distributions to Parent to permit Parent and its Subsidiaries (contemporaneously with, and in the same amount of, such distributions) to pay Federal, state and local income tax obligations actually due and payable in cash by Parent, to the extent such obligations are the direct result of the net income or loss of Borrower and its Subsidiaries being attributed to Parent for tax purposes; (c) distributions to Parent to permit Parent (contemporaneously with, and in the same amount of, such distributions) to pay fees and expenses necessary to maintain Parent's corporate existence and good standing; (d) so long as immediately before and after giving effect thereto no Default or Event of Default shall have occurred and be continuing, a distribution to Parent to permit Parent (contemporaneously with, and in the same amount of, such payments) to pay quarterly cash dividends in an amount not exceeding 15 cents per share per fiscal year in respect of its common stock, provided that (A) only one such distribution may be made during any fiscal quarter of the Borrower, (B) each such distribution made during any fiscal quarter of the Borrower shall be made during the fifteenth (15th) through the twentieth (20th) consecutive day immediately following the end of the immediately preceding such fiscal quarter and (C) at least five (5) days prior to such distribution, Lenders shall have received preliminary versions of the financial statements to be delivered to Lenders pursuant to Section 5.4(b) for the immediately preceding such fiscal quarter, together with an attached certificate of the Chief Financial Officer of Parent (on behalf of itself and Borrower) to the effect that (1) the final financial statements to be delivered to Lenders for such immediately preceding fiscal quarter will not differ in any material respect from such preliminary financial statements and (2) no Default or Event of Default had occurred or been continuing as of the end of the period covered by such financial statements, has occurred or is continuing as of the date of such certificate or would result from the making of such distribution; (e) Borrower may forgive Indebtedness evidenced by the Management Notes at the respective times and in the respective amounts required pursuant to the terms thereof; and (f) Borrower may make distributions to Parent to permit Parent (contemporaneously wiht, and in the same amount of, such distributions, to repurchase shares of its common stock in the amount and at the time and price per share, respectively, in each case required pursuant to the Reynolds Agreement. 29 6.7 Amendments or Changes in Agreements. None of Parent, Borrower or ----------------------------------- Borrower's Domestic Subsidiaries shall modify, alter, supplement, extend, amend or waive any rights under its Certificate of Incorporation, By-Laws or any Senior Subordinated Transaction Document in a manner that (i) is adverse to Lenders without the prior written consent of Lenders; (ii) which affects or diminishes the rights of Lenders as stockholder of Parent in any manner different from the rights of other holders of the Class A Common Stock of the Borrower without obtaining the prior written consent of Lenders; or (iii) that otherwise violates the terms of this Agreement. 6.8 Transactions with Affiliates. Except to the extent expressly ---------------------------- permitted pursuant to Sections 6.5 and 6.6, Borrower shall not and shall not permit any of its Domestic Subsidiaries to, directly or indirectly, enter into any transaction with, including the purchase, sale or exchange of property or the rendering of any service to any Subsidiary of Borrower or other Affiliate of Borrower and whether or not such transaction would otherwise be permitted under any of the other provisions of the Senior Subordinated Loan Documents, except in the ordinary course of and pursuant to the reasonable requirements of Borrower's or such Domestic Subsidiary's business, as the case may be, and upon fair and reasonable terms no less favorable to Borrower or such Domestic Subsidiary than could be obtained in a comparable arms-length transaction with an unaffiliated Person. 6.9 Fiscal Year. None of Parent, Borrower or Borrower's Domestic ----------- Subsidiaries shall change their fiscal year. 6.10 Investment Banking, Broker's and Finder's Fees. Except as set forth ---------------------------------------------- on Schedule 6.10 attached hereto, none of Parent, Borrower or Borrower's ------------- Subsidiaries shall pay or agree to pay, or reimburse any other Person with respect to, any investment banking or similar or related fee, underwriter's fee, finder's fee or broker's fee to any Person in connection with the consummation of the Senior Subordinated Loan Transactions. Each of Parent, Borrower and Borrower's Subsidiaries shall defend and indemnify Lenders against and hold Lenders harmless from all claims of any Person for any such fees and all costs and expenses, including, without limitation, attorneys' fees, incurred by Lenders in connection therewith, except for claims arising from agreements, commitments or actions of Lenders. 6.11 Capital Expenditures. Parent, Borrower and Borrower's Domestic -------------------- Subsidiaries shall not make or incur any Capital Expenditures if, after giving effect thereto, the aggregate amount of all Capital Expenditures made by the Parent, Borrower and Borrower's Subsidiaries would exceed $6,000,000 in any fiscal year of Borrower plus a carry-over amount equal to 50% of the amount permitted in each year and not expended during that fiscal year. None of Borrower, Parent or Borrower's Subsidiaries shall, directly or indirectly, make any Capital Expenditures that are not directly related to the business conducted on the date hereof by such entity. 6.12 Allocation of Consideration. None of Parent, Borrower or --------------------------- Borrower's Subsidiaries shall take any action in preparation of tax returns or financial statements that is inconsistent with the allocation of the consideration paid by Lenders for the Senior Subordinated Notes and the Warrants. 30 6.13 Financial Covenants. ------------------- (a) Fixed Charge Coverage Ratio. --------------------------- (i) Borrower shall not permit the Fixed Charge Coverage Ratio, as determined as of August 31, 2000, for the three-month period ending on such date, to be less than 0.53 to 1.00; (ii) Borrower shall not permit the Fixed Charge Coverage Ratio, as determined as of November 30, 2000, for the six-month period ending on such date, to be less than 0.61 to 1.00; (iii) Borrower shall not permit the Fixed Charge Coverage Ratio, as determined as of February 28, 2001, for the nine-month period ending on such date, to be less than 0.67 to 1.00; and (iv) Borrower shall not permit the Fixed Charge Coverage Ratio, as determined as of each date set forth below for the twelve-month period ending on such date, to be less than the ratio set forth below opposite date:
Date Minimum Ratio ---- ------------- May 31, 2001 0.70 to 1.00 August 31, 2001 0.70 to 1.00 November 30, 2001 0.72 to 1.00 February 28, 2002 0.73 to 1.00 May 31, 2002 0.74 to 1.00 August 31, 2002 0.76 to 1.00 November 30, 2002 0.77 to 1.00 February 28, 2003 0.78 to 1.00 May 31, 2003 0.78 to 1.00 August 31, 2003 0.79 to 1.00 November 30, 2003 and the last day of each fiscal quarter of Borrower ending thereafter 0.80 to 1.00
(b) Leverage Ratios. --------------- (i) Borrower shall not permit the Total Leverage Ratio, as determined as of each date set forth below, for the twelve-month period ending on such date, to be greater than the ratio set forth below opposite date:
Date Maximum Ratio ---- ------------- August 31, 2000 5.00 to 1.00 November 30, 2000 5.00 to 1.00 February 28, 2001 5.00 to 1.00 May 31, 2001 4.25 to 1.00 August 31, 2001 4.25 to 1.00
31 November 30, 2001 4.25 to 1.00 February 28, 2002 4.00 to 1.00 May 31, 2002 4.00 to 1.00 August 31, 2002 3.75 to 1.00 November 30, 2002 3.50 to 1.00 February 28, 2003 3.50 to 1.00 May 31, 2003 3.25 to 1.00 August 31, 2003 3.25 to 1.00 November 30, 2003 3.25 to 1.00 February 29, 2004 and the last day of each fiscal quarter of the Borrower ending thereafter 3.13 to 1.00
(ii) Borrower shall not permit the Senior Leverage Ratio, as determined as of each date set forth below, to be greater than the ratio set forth below opposite date:
Date Maximum Ratio ---- ------------- August 31, 2000 4.38 to 1.00 November 30, 2000 4.38 to 1.00 February 28, 2001 4.38 to 1.00 May 31, 2001 3.75 to 1.00 August 31, 2001 3.75 to 1.00 November 30, 2001 3.75 to 1.00 February 28, 2002 3.50 to 1.00 May 31, 2002 3.50 to 1.00 August 31, 2002 3.50 to 1.00 November 30, 2002 3.00 to 1.00 February 28, 2003 3.00 to 1.00 May 31, 2003 2.75 to 1.00 August 31, 2003 2.75 to 1.00 November 30, 2003 2.75 to 1.00 February 29, 2004 and the last day of each fiscal quarter of the Borrower ending thereafter 2.50 to 1.00
(c) Interest Coverage Ratio. ----------------------- (i) Borrower shall not permit the Interest Coverage Ratio, as determined as of August 31, 2000, for the three-month period ending on such date, to be less than 1.60 to 1.00; (ii) Borrower shall not permit the Interest Coverage Ratio, as determined as of November 30, 2000, for the six-month period ending on such date, to be less than 1.76 to 1.00; 32 (iii) Borrower shall not permit the Interest Coverage Ratio, as determined as of February 28, 2001, for the nine-month period ending on such date, to be less than 1.84 to 1.00; and (iv) Borrower shall not permit the Interest Coverage Ratio, as determined as of each date set forth below for the twelve-month period ending on such date to be the less than the ratio set forth below opposite such date:
Date Minimum Ratio ---- ------------- May 31, 2001 2.00 to 1.00 August 31, 2001 2.24 to 1.00 November 30, 2001 2.24 to 1.00 February 28, 2002 2.32 to 1.00 May 31, 2002 2.40 to 1.00 August 31, 2002 2.48 to 1l00 November 30, 2002 2.64 to 1.00 February 28, 2003 2.88 to 1.00 May 31, 2003 2.96 to 1.00 August 31, 2003 3.28 to 1.00 November 30, 2003 3.28 to 1.00 February 28, 2004 3.60 to 1.00 May 31, 2004 3.60 to 1l00 August 31, 2004 3.60 to 1.00 November 30, 2004 and the last day of each fiscal quarter of Borrower ending thereafter 4.00 to 1.00
6.14 Limitation on Creation of Subsidiaries. None of Parent, Borrower or -------------------------------------- Borrower's Domestic Subsidiaries shall establish or create any Subsidiary, provided that the Parent, Borrower and Borrower's Domestic Subsidiaries shall be permitted to establish or create Subsidiaries only so long as such entity provides notice to Lenders promptly (and in any event within ten (10) business days) after the formation, or any other act which results in a Person becoming a Subsidiary of such entity and, at Lenders' request, cause a Person becoming a Subsidiary of such entity to execute in form and substance satisfactory to Lenders, a guaranty sufficient to obligate such Subsidiary for repayment of all or a portion of the Obligations. 33 6.15 Parent Limitations. Parent shall not engage in any business or ------------------ activities other than its present activities and the ownership of all of the capital stock of Borrower, the performance of its obligations under this Agreement and the other Related Transaction Documents to which it is a party, the performance of its obligation to its shareholders and the administrative and reporting activities in each case incidental thereto. 6.16 Unconditional Purchase Obligations. None of Parent, Borrower, or ---------------------------------- Borrower's Domestic Subsidiaries shall enter into or be a party to any contract for the purchase of materials, supplies or other property or services if such contract requires that payment be made by it regardless of whether delivery is ever made of such materials, supplies or other property or services. 6.17 Limitation on Derivative Transactions. None of Parent, Borrower or ------------------------------------- Borrower's Domestic Subsidiaries shall enter into any Derivative Transactions, except as required or permitted under the Senior Loan Documents. 6.18 No Guaranties. None of Parent, Borrower, or Borrower's Domestic ------------- Subsidiaries shall directly or indirectly, issue or assume any Guaranty with respect to the Liabilities of any other Person, including any Subsidiary or Affiliate of Borrower, except (a) by the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (b) by the giving of customary indemnities in connection with the sale of Inventory or other asset dispositions permitted hereunder and (c) Indebtedness permitted to be incurred pursuant to Section 6.1. 6.19 Limitation on Transactions Under ERISA. None of Parent, Borrower -------------------------------------- or Borrower's Domestic Subsidiaries shall directly or indirectly: (a) amend, or permit any ERISA Affiliate to amend, a Benefit Plan resulting in an increase in current liability for the plan year such that Borrower, any Subsidiary of Borrower or any ERISA Affiliate is required to provide security to such a Benefit Plan under Section 401(a)(29) of the Code; or (b) allow the representation made in Section 4.9 to be untrue at any time. 6.20 Additional Restrictive Covenants. Except for Permitted Restrictive -------------------------------- Covenants, none of Parent, Borrower or Borrower's Domestic Subsidiaries shall directly of indirectly, create or otherwise cause or suffer to exist or become effective (a) any consensual restriction limiting the ability (whether by covenant, event of default, subordination or otherwise and including any such the effect of which is to require the providing of equal and ratable security to any other Person in the event a Lien is granted to or for the benefit of Agent and the Lenders) to (i) pay dividends or make any other distributions on shares of its Capital Securities held by Borrower or any other Subsidiary of Borrower; (ii) pay any Liability owed to Borrower or any other Subsidiary; (iii) make any loans or advances to other Investments in Borrower or in any other Subsidiary of Borrower; or (iv) create or permit to exist any Lien upon the assets of Borrower or any Subsidiary of Borrower, other than Liens permitted under Section 6.2. 6.21 Certain Structural Changes. Parent shall not convert its -------------------------- organizational structure to any form of "pass-through" entity, whether general or limited partnership, limited liability company or otherwise. 34 ARTICLE 7 DEFAULT ------- 7.1 Events of Default. The occurrence and continuation of any of the ----------------- following events shall constitute an Event of Default hereunder: (a) Borrower shall fail to pay when due (i) any interest owing on the Obligations, (ii) any Principal or (iii) any other amounts due to Lenders under any of the terms of this Agreement, including, without limitation, amounts required to paid pursuant to Section 2.7; or (b) dissolution, liquidation, winding up or cessation of the business of Parent, Borrower or Subsidiary Guarantor, or the failure of Parent, Borrower or Subsidiary Guarantor to meet its debts as they mature, or the calling of one or more meetings of Parent's, Borrower's or Subsidiary Guarantor's major creditors for purposes of obtaining a moratorium on payment or compromise of such entity's debts; or (c) (i) an Event of Default (as defined in the Senior Loan Documents) shall occur and be continuing and the Senior Lender shall have accelerated the Senior Indebtedness as a result of such Event of Default or (ii) the occurrence of a default or event of default (in each case which shall continue beyond the expiration of any applicable grace periods) which permits, the acceleration of the maturity of, any note, agreement or instrument evidencing any other Indebtedness of Borrower or any of its Subsidiaries (other than the Senior Indebtedness), and the aggregate principal amount of all such Indebtedness with respect to which a default or an event of default has occurred, or the maturity of which is permitted to be accelerated, exceeds $1,000,000; or (d) any representation or warranty made herein by Borrower, or in any certificate or financial statement furnished by Borrower pursuant to the provisions hereof, shall prove to have been false or misleading in any material respect as of the time made or furnished; or (e) Borrower shall default in the performance of or compliance with any of the covenants set forth in Sections 5.1, 5.2, 5.5, 5.9, 5.11 and 5.12 or in Article 6 hereof and in the case of Section 5.4, which default in performance or failure to comply is not cured within five (5) days of its occurrence; (f) Borrower shall default in the performance of or compliance with any other covenant, condition or provision of this Agreement or any other Senior Subordinated Loan Document to which it is a party (and not constituting an Event of Default under any of the other subsections of this Section 7.1) and such default shall not be remedied for a period of fifteen (15) Business Days of its occurrence; or (g) a proceeding shall have been instituted in a court having jurisdiction seeking a decree or order for relief in respect of Parent, Borrower or Subsidiary Guarantor in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Parent, Borrower or Subsidiary Guarantor, as the case may be, or for any substantial part of its property, or for the winding-up or liquidation of its affairs, 35 and such proceeding shall remain undismissed or unstayed and in effect for a period of sixty (60) consecutive days or such court shall enter a decree or order granting the relief sought in such proceeding; or (h) Parent, Borrower or Subsidiary Guarantor shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Parent, Borrower or Subsidiary Guarantor, as the case may be, or for any substantial part of its property, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay, or admits in writing its inability or refusal to pay, its debts as they become due, or shall take any corporate action in furtherance of any of the foregoing; or (i) any guaranty delivered pursuant to Section 3(f) or 6.14 hereof shall cease to be in full force and effect with respect to any guarantor thereof; or any guarantor (or any Person by, through or on behalf of such guarantor) under a guaranty delivered pursuant to Section 3(f) or 6.14 hereof shall contest in any manner the validity, binding nature or enforceability of any guaranty with respect to such guarantor; or (j) if Borrower has not provided evidence reasonably satisfactory to the Lenders of action taken by Parent to file a NYSE supplemental listing for the shares of Common Stock into which the Warrants are exercisable within thirty (30) days after the date hereof; or (k) (A) payment by Borrower after the date hereof of Required Earn- Out Payments in an aggregate amount exceeding 9,150,000 Deutsche Marks, or (B) payment by Borrower after the date hereof of any Required Earn-Out Payment if, immediately before or after giving effect thereto, a Default or an Event of Default shall have occurred and be continuing. 7.2 Consequences of Event of Default. -------------------------------- (a) Bankruptcy. If an Event of Default specified in Sections 7.1(g) ---------- or (h) hereof shall occur, the unpaid balance of the Senior Subordinated Notes and interest accrued thereon and all other liabilities of Borrower hereunder and thereunder shall be immediately due and payable, without presentment, demand notice, protest or any other demand or notice in connection with the delivery, acceptance, performance, default or enforcement of the Senior Subordinated Notes, all of which are hereby expressly waived. (b) Other Defaults. If any other Event of Default shall occur, -------------- Lenders may, at their option declare the unpaid balance of the Senior Subordinated Notes and interest accrued thereon and all other liabilities of Borrower thereunder and hereunder shall be immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived. 7.3 Other Rights. The rights and remedies of Lenders upon the occurrence ------------ of an Event of Default set forth in Section 7.2 hereof are in addition to and not in limitation of any other rights it may have under applicable law and other agreements. 36 ARTICLE 8 MISCELLANEOUS ------------- 8.1 Successors and Assigns in General. --------------------------------- (a) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that Borrower may not assign or transfer its rights hereunder or any interest herein or delegate its duties hereunder without the prior written consent of Lenders. Lenders or any assignees of Lenders may assign all or any portion of its interest in and rights under this Agreement and the Senior Subordinated Notes to any other Person (an "Assignee"), or grant a -------- participating or beneficial interest in this Agreement and the Obligations to any lending institution (a "Participant"). Lenders shall give Borrower ----------- prompt written notice of any assignment of or participation in the Obligations. Borrower shall maintain a register (the "Register"), which -------- shall include, without limitation, a record of ownership that identifies each owner of any interest in the Obligations, for registration as to the rights to principal and interest on the Senior Subordinated Notes and shall promptly register any such assignment or participation in the Obligations upon receipt of such notice. The Register shall be available for inspection by any Lender at any reasonable time and from time to time upon reasonable prior notice. To facilitate any assignment or participation, Borrower shall, from time to time at the request of Lenders, execute and deliver to Lenders or to such party or parties as Lenders may designate, any and all further instruments as may in the reasonable opinion of Lenders be necessary or advisable to give full force and effect to any transfer contemplated by this Section. (b) Notwithstanding anything to the contrary contained in Section ------- 8.1(a), the Loans (including the Senior Subordinated Notes evidencing such ------ Loans) are registered obligations and the right, title, and interest of the Lenders and their assignees in and to such Loans or any interest therein shall be transferrable only upon recordation of such transfer and of the transferee and its interest in and to the loans in the Register. No transfer by a Lender or an assignee of any interest in any of the Loans shall be permitted or effective unless and until the transfer and the transferee's interest in the Loans is recorded in the Register. No sale of a participation shall be permitted or effective unless and until such sale of a participating interest in the Loans and any other amounts owing under this Agreement is recorded in the Register. In the case of a participation, the Register shall record the participant's interest in the Loans and any other amounts owing under this Agreement that such participant has purchased. All recordations of transfer and of the transferee's interest shall be conclusive, absent manifest error, as to beneficial ownership of interests in the Loans. A Note shall only evidence the Lenders' or an assignees right, title and interest in and to the related Loans, and in no event is any such Note to be considered a bearer instrument or obligation. This Section 8.1 shall be construed so that the Loans are at all times ----------- maintained in "registered form" within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related regulations (or any successor provisions of the Code or such regulations). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and Borrower and the Lenders may treat each Person whose name is recorded in the Register (other than a participant) as a Lender hereunder for all purposes hereof. 37 8.2 Modifications, Amendments or Waivers. The provisions of this ------------------------------------ Agreement may be modified, amended or waived, but only by a written instrument signed by Lenders and Borrower. 8.3 No Implied Waivers; Cumulative Remedies; Writing Required. No delay --------------------------------------------------------- or failure of Lenders in exercising any right, power or remedy hereunder shall affect or operate as a waiver thereof, nor shall any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power or remedy preclude any further exercise thereof or of any other right, power or remedy. The rights and remedies hereunder of Lenders are cumulative and not exclusive of any rights or remedies which they would otherwise have. Any waiver, permit, consent or approval of any kind or character on the part of Lenders of any breach or default under this Agreement or any such waiver of any provision or condition of this Agreement must be in writing and shall be effective only to the extent in such writing specifically set forth. 8.4 Reimbursement of Expenses; Taxes. Borrower agrees upon demand to -------------------------------- pay or reimburse Lenders for all of their reasonable out-of-pocket expenses, including, without limitation, all travel expenses and all reasonable legal, consulting, accounting and independent analyst, audit, and appraisal fees and expenses, from time to time (a) arising in connection with the Related Transactions or Related Transaction Documents or the Senior Subordinated Loan Transactions; (b) relating to any amendments, waivers or consents pursuant to the provisions hereof or thereof; and (c) arising in connection with the enforcement of the Related Transaction Documents, collection of the Obligations or actions for declaratory relief in any way related thereto or the protection or preservation of any rights of Lenders hereunder. Borrower also agrees to pay and save Lenders harmless from all liability for any stamp or other similar documentary or recording taxes which may be payable in connection with this Agreement and the other Related Transaction Documents or the performance of any transactions contemplated hereby or thereby. Upon Lenders' exercise of the Warrants, Borrower agrees to pay $11,750 to Lenders as consideration for Lenders' financial review of Borrower undertaken by Lenders in connection with such exercise. 8.5 Notices. All notices and other communications given to or made upon ------- any party hereto in connection with this Agreement shall, except as otherwise expressly herein provided, be in writing (including telexed or telecopied communication) and mailed, telexed, telecopied or delivered by hand or by reputable overnight courier service to the respective parties, as follows: Borrower: Weider Nutrition Group, Inc. 2002 South 5070 West Salt Lake City, UT 84104 Attn: Dan Thomson Telecopy: (801) 975-1924 With a copy to: Latham & Watkins 5800 Sears Tower Chicago, IL 60606 Attn: Jeffrey G. Moran, Esq. Telecopy: (312) 993-9767 Lenders: c/o Wynnchurch Capital 150 Field Drive Lake Forest, IL 60046 38 Attn: John Hatherly Telecopy: (847) 604-6105 With a copy to: Altheimer & Gray 10 South Wacker Drive Suite 4000 Chicago, IL 60606 Attn: Laurence R. Bronska, Esq. Telecopy: (312) 715-4800 or in accordance with any subsequent written direction from the recipient party to the sending party. All such notices and other communications shall, except as otherwise expressly herein provided, be effective upon delivery if delivered by hand; when deposited with a reputable courier service, delivery charges prepaid; when deposited in the mail, postage prepaid; or in the case of telex or telecopy, when received. 8.6 Survival. All representations, warranties, covenants, -------- indemnifications, consents and agreements of Borrower contained herein or made in writing in connection herewith shall survive the execution and delivery of this Agreement, the making of the term loan hereunder and the issuance of the Senior Subordinated Notes and, except as set forth otherwise herein, shall remain in effect through the date that all amounts due hereunder are paid to Lenders. 8.7 Governing Law; Consent to Jurisdiction and Service of Process; Waiver --------------------------------------------------------------------- of Jury Trial. - ------------- (a) Governing Law. THIS AGREEMENT, THE SENIOR SUBORDINATED NOTES AND ------------- THE OTHER SENIOR SUBORDINATED LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DEEMED TO BE CONTRACTS UNDER THE LAWS OF THE STATE OF ILLINOIS AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF ILLINOIS. (b) Consent to Jurisdiction and Service of Process. BORROWER AND ---------------------------------------------- LENDERS HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND AGREE THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE SENIOR SUBORDINATED NOTES OR ANY OF THE OTHER SENIOR SUBORDINATED LOAN DOCUMENTS MAY BE LITIGATED IN SUCH COURTS. BORROWER ACCEPTS THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND WAIVES ANY DEFENSE OF FORUM ----- NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED --- ---------- THEREBY. BORROWER DESIGNATES AND APPOINTS THE CORPORATION SERVICE COMPANY, AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY BORROWER WHICH IRREVOCABLY AGREE IN WRITING PURSUANT TO AN APPOINTMENT OF AGENT AGREEMENT TO SO SERVE AS THEIR AGENT TO RECEIVE ON THEIR BEHALF SERVICE OF ALL PROCESS IN 39 ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY BORROWER TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO BORROWER AT THE ADDRESS STATED IN SECTION 8.5; PROVIDED, -------- HOWEVER, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY FAILURE TO MAIL ------- SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY BORROWER REFUSES TO ACCEPT SERVICE, BORROWER AGREES THAT SERVICE UPON THEM BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF LENDERS TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. (c) Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY -------------------- WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER SENIOR SUBORDINATED LOAN DOCUMENT. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF TRIAL BY JURY. 8.8 Severability. Whenever possible, each provision of this Agreement ------------ shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law in any jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating any other provision of this Agreement. 8.9 Headings. Section and subsection headings in this Agreement are -------- included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 8.10 Counterparts. This Agreement may be executed in any number of ------------ counterparts and by any of the parties hereto on separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute one and the same instrument. 8.11 Indemnification. --------------- (a) General. (i) In addition to Borrower's other obligations under ------- this Agreement and the other Senior Subordinated Loan Documents, Borrower agrees to defend, protect, indemnify and hold harmless Lenders, their Assignees and Participants, and all of their respective officers, directors, shareholders, partners, employees, attorneys, consultants and agents (including, without limitation, those retained in connection with the satisfaction or attempted satisfaction of any of the conditions set forth in this Agreement) (collectively, the 40 "Indemnitees") from and against any and all losses, damages, liabilities, ----------- obligations, penalties, fees, costs and expenses (including, without limitation, reasonable attorneys' and paralegals' fees, costs and expenses) incurred by such Indemnitees, whether prior to or from and after the date of this Agreement, whether direct or indirect,, as a result of or arising from or relating to any suit, investigation, action or proceeding by any Person, either threatened or initiated, asserting a claim for any legal or equitable remedy against any Person under any law or regulation (other than suits or other actions by Borrower against an Indemnitee where Borrower is successful on the merits), regardless of whether the Indemnitee seeking indemnification is a party to the action or proceeding for which indemnification is sought, including, without limitation, any federal or state securities or labor laws, or under any Environmental and Safety Requirements or common law principles arising from or in connection with any of the following: (A) Borrower's negotiation, preparation, execution or performance of the Senior Subordinated Loan Documents, or any other documents, agreements, certificates or instruments executed or delivered in connection with the Related Transactions, including, without limitation, the Related Transaction Documents, (B) Lenders' furnishing of funds to Borrower under this Agreement or under the Senior Subordinated Notes or (C) any matter relating to the financing transactions contemplated by this Agreement, the other Senior Subordinated Loan Documents or by any document, agreement, certificate or instrument executed or delivered in connection with the transactions contemplated hereby or thereby (including, without limitation, any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the Obligations) (collectively, "Indemnified Matters"). Notwithstanding the foregoing, ------------------- Indemnified Matters shall not include losses, damages, liabilities, obligations, penalties, fees, costs and expenses incurred by any Indemnitee in connection with any violations of law or governmental regulations by such Indemnitee or to the extent that it is finally judicially determined to have resulted from such Indemnitee's own gross negligence or willful misconduct. To the extent that this undertaking to indemnify, pay and hold harmless set forth in this Section 8.11 may be unenforceable for any reason, Borrower shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law, to the payment and satisfaction of all Indemnified Matters incurred by Indemnitees. (b) Environmental Liabilities. Without limiting the generality of ------------------------- the indemnity set forth in Section 8.11(a) hereof, Borrower hereby further agrees to indemnify and to hold harmless Lenders and all Indemnitees from and against any and all losses, liabilities, damages, obligations, penalties, injuries, costs, fees (including, without limitation, reasonable attorneys', paralegals' and expert witnesses' fees, costs and expenses), expenses and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against, Lenders or any Indemnitee for, with respect to, or as a direct or indirect result of, the past, present or future events, activities or operations on, or the past, present or future condition of, any property owned, operated or otherwise used by Borrower, Parent or Borrower's Subsidiaries, any Environmental Affiliate, or its predecessors or successors, or any off-site hazardous, toxic or otherwise dangerous material, substance or waste treatment, storage or disposal facility associated therewith (the "Properties"), including, without ---------- limitation, the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, release, or threatened release into, onto or from the Properties of any toxic, hazardous or otherwise dangerous substance, material or waste, including, without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under any Environmental and Safety Requirement regardless of whether caused by, or within the control of, Borrower, Parent or Borrower's Subsidiaries. 41 8.12 Payment Set Aside. To the extent that Borrower make a payment or ----------------- payments to Lenders, or Lenders exercise their rights of setoff, and such payment or payments or the proceeds of such setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to Borrower, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 8.13 Interpretation. In this Agreement and each other Senior Subordinated -------------- Loan Document, unless a clear, contrary intention appears, (a) the singular number includes the plural number and vice versa; and (b) reference to any ---- ----- gender includes each other gender (including the neuter gender). Unless otherwise indicated herein, all section references contained herein are to Sections of this Agreement, whether or not the words "hereof", "herein", "above" or "below" or words of like import are utilized in connection with such section references. All uses of the word "including" shall be deemed to mean "including, but not limited," whether or not such qualifying words are specifically set forth. 8.14 Approval of Lenders. Whenever this Agreement contemplates, permits ------------------- or requires an approval, consent, or other action by Lenders or any Lender, such approval, consent or other action shall only be given or taken if Lenders holding more than two-thirds of the Principal on the Senior Subordinated Notes so agree in writing; except in the case of an exercise of Lender's right under Section 2.4(c) above, in which case any individual Lender may exercise such right as to such Lender. [signature page follows] 42 IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Agreement as of the day and year first above written. LENDERS: ------- WYNNCHURCH CAPITAL PARTNERS, L.P. By: Wynnchurch Partners, L.P., its general partner By: Wynnchurch Management, Inc., its general partner By: /s/ John Tomes ----------------------------------- Name: John Tomes Its: Vice President WYNNCHURCH CAPITAL PARTNERS CANADA, L.P. By: Wynnchurch Partners Canada, L.P., its general partner By: Wynnchurch Canada GP, Inc., its general partner By: /s/ John Tomes ------------------------------------ Name: John Tomes Its: Vice President BORROWER: -------- WEIDER NUTRITION GROUP, INC. By: /s/ Joseph W. Baty ---------------------------------------- Name: Joseph W. Baty --------------------------------------- Its: CFO --------------------------------------- Signature page to Senior Subordinated Loan Agreement 43 Schedule 2.1 Purchase and Sale of the Senior Subordinated Notes Lender Principal Amount Purchase Price - ------ ---------------- -------------- Wynnchurch Capital $4,795,534 $3,105,010 Partners, L.P. Wynnchurch Capital $5,204,466 $3,370,125 Partners Canada, L.P. Schedule 2.5 ------------ Payments Name Investment Fee - -------------- Wynnchurch Capital Ltd. LaSalle Bank National Association Account Number: 5800232646 ABA Number: 071000505 All Other Payments - ------------------ Wynnchurch Capital Partners, L.P. LaSalle Bank National Association Account Number: 5800232661 ABA Number: 071000505 Wynnchurch Capital Partners Canada, L.P. LaSalle Bank National Association Account Number: 5800232695 ABA Number: 071000505 Schedule 4.3 Capitalization (a)
- ---------------------------------------------------------------------------------------------------------------------- Entity Shareholders/Parent Corp. Issued Shares Authorized Shares Ownership % - ---------------------------------------------------------------------------------------------------------------------- Weider Nutrition Weider Health & 15,687,432 Class B 85 million 62.79% International, Fitness (50 million Class Inc. A, 25 million General Public/Etc. 9,334,036 Class A Class B and 10 37.30% million preferred) - ---------------------------------------------------------------------------------------------------------------------- Weider Nutrition Weider Nutrition 179.24 Class B 100,000 100% in Aggr. Group, Inc. International, Inc. 1,015.93 Class A (50 thousand Class A and 50 thousand Class B) - ---------------------------------------------------------------------------------------------------------------------- WNG Holdings Weider Nutrition 100 2 million 100% (International) Group, Inc. (1 million common Ltd. and 1 million preferred) - ----------------------------------------------------------------------------------------------------------------------
(b) Weider Nutrition International, Inc. 1997 Equity Participation Plan, as amended- 3,500,000 shares reserved for issuance thereunder Steve Young has 18,271 unvested shares of Weider Nutrition International, Inc. Class A Common Stock granted to him under a Phantom Stock Agreement Robert Reynolds and Richard Bizzaro have rights under their separation agreements with Weider Nutrition International, Inc./Weider Nutrition Group or Weider Health & Fitness if the stock does not achieve certain price levels Schedule 4.10 Subsidiaries
- -------------------------------------------------------------------------------------------------- Entity Name State of Shareholders/ Issued Shares Ownership % Incorp. Parent Corp. - -------------------------------------------------------------------------------------------------- WNG Holdings Nevada Weider Nutrition Group, 100 100% (International) Inc. Ltd. - --------------------------------------------------------------------------------------------------
Schedule 4.5 Compliance with Laws, Certain Operations
- -------------------------------------------------------------------------------------------------- Attorney Work Product - Confidential - -------------------------------------------------------------------------------------------------- MATTER VENUE STATUS - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- Michael Morelli and Supreme Court of New York, Lawsuit filed in New York in March Stuart Zuckerman, et. New York County 1999 on behalf of an alleged class al. v. Weider Nutrition (Latham - NY) alleging false advertising and unfair Group competition claims with respect to the Company's manufacture and sale of its Steel Bar products in New York. The lawsuit is similar to litigation previously filed in California (the California plaintiff's attorney is involved in this matter). The Company filed a motion to dismiss the matter, which was denied by the court in December 1999. The Company is contesting the application for the California attorneys to be admitted pro hoc vice in New York. Limited discovery is proceeding. - -------------------------------------------------------------------------------------------------- Lisa Fasig, et. al. v. Circuit Court of Lee Lawsuit filed in Florida in May 1999 Weider Nutrition County, Florida is similar to the New York Steel Bar International litigation described above (the (Latham - NY California plaintiff's attorney is Local Counsel - Florida) involved in this matter). The Company has filed a motion to dismiss the matter, which is currently pending before the court. The Company is contesting the application for the California attorneys to be admitted pro hoc vice in Florida. - -------------------------------------------------------------------------------------------------- Shane A. Garrett, et. al. 18/th/ Judicial District In late March 2000, Mr. Garrett's v. WNI and Genesis Court, Sedgwick County, family initiated a lawsuit in state Health Club, Inc. Kansas court in Kansas alleging personal Case No. 00 C0910 injuries from a cardiac arrest while working out leading to brain hypoxia, (Insurance counsel) which occurred in 1998. Mr. Garret (Latham & Watkins NY) alleges that the personal injuries were caused by a purported interaction between ephedrine alkaloids and caffeine in the Company's ABB Ripped Force drink - --------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------- Attorney Work Product - Confidential - -------------------------------------------------------------------------------------------------- MATTER VENUE STATUS - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- and Mr. Garret's asthma medication. medication. The Company tendered the matter to its insurance carriers, and believes that any potential adverse outcome of the matter will be covered by insurance policies. The Company is reviewing the complaint and preparing an answer to the allegations. - -------------------------------------------------------------------------------------------------- Koberstein v. Weider Superior Court of Arizona, In October 1999, Koberstein filed a Nutrition International, Maricopa County lawsuit in Arizona state court Inc., GNC, Hi-Health, CV99-12548 alleging that she has suffered et. al. personal injury as a result of taking (Insurance counsel) the Company's Excel Energy product (Latham NY) over a period of several years. GNC, a co-defendant, tendered the defense of this matter to the Company. The Company has tendered the defense of this to its insurance carrier, which has accepted defense of the matter under a reservation of rights. The insurance carrier has agreed to also accept the defense of GNC. Limited discovery is proceeding. - -------------------------------------------------------------------------------------------------- Joseph Long Claim Delaware In June 2000, the Company received letters from attorneys representing the estate of Mr. Long. The attorneys allege that Mr. Long passed away as a result of an adverse interaction caused by one of the Company's drinks containing ephedrine. The Company disputes the allegations and is investigating the matter. The Company will tender the matter to its insurance carriers. - -------------------------------------------------------------------------------------------------- Weider Nutrition Group, United States District Weider brought an action against James Inc. and Weider Court for the District of Horn and certain related parties for Nutrition International, Utah, Central Division, various breaches of a settlement Inc. v. Horn Case No. 2:97-CV-0326B agreement as well as trade dress infringement. Horn counter-claimed (Stoel Rives alleging unlawful termination of the D. Gerber) distributorship and breach of a - --------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------- Attorney Work Product - Confidential - -------------------------------------------------------------------------------------------------- MATTER VENUE STATUS - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- settlement agreement and also brought a defamation action against Weider and Messrs. Bizzaro and Reynolds. In April 1998, Weider was granted an injunction against Van Horn Technologies (VHT) and Nature's Best requiring them to repackage and reformulate certain drink products infringing upon Weider products. In April 1999, the portion of the action regarding VHT and Nature's Best was settled. The parties are conducting discovery with respect to the remaining claims and are preparing for trial. The parties have recently agreed to use non-binding mediation to try to resolve the matter and are discussing tentative dates for the mediation. - -------------------------------------------------------------------------------------------------- Coastal Healthcare (Stoel Rives) The Company terminated its agreement Contract with Coastal Healthcare regarding the purchase of certain functional food beverages. Coastal alleged that Weider failed to perform certain obligations under the contract and has claimed damages as a result of the alleged failure. After various settlement discussions between the parties, Coastal sent a demand letter to the Company in July 1999 alleging damages in the amount of $10 million. In August 1999, the Company proposed another settlement offer which included, among other items, a payment of $500,000 to Coastal. The Company has not received any correspondence from Coastal since proposing the last settlement offer. - -------------------------------------------------------------------------------------------------- FTC Inquiry Re: PhenCal (Patton Boggs-Denver) In late 1997, the Company received an access letter from the Federal Trade - --------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------- Attorney Work Product - Confidential - -------------------------------------------------------------------------------------------------- MATTER VENUE STATUS - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- Commission ("FTC") regarding the Company's advertising with respect to the Company's PhenCal products. After discussions between the Company and the FTC concerning the Company's scientific substantiation supporting the advertising claims, the FTC forwarded a proposed consent order to the Company in June 1998. The initial proposed consent order provided for, among other items, the payment of an unspecified amount to the FTC, broad injunctive relief prohibiting the Company from making claims for its products and more specific injunctive relief prohibiting the Company from making certain diet and weight loss claims for its products without adequate scientific substantiation. The Company contested the FTC allegations, and the FTC removed the payment provisions and broad injunctive relief provisions from the proposed consent order. In January 1999, the FTC raised concerns about general advertising by the Company, in particular with respect to alleged implicit cancer prevention claims in the Company's advertisements for its "Breast Health" products. The Company informed the FTC that it was working with the NAD regarding these claims. The Company subsequently resolved the matter with the NAD. In June 1999, the Company signed the Agreement with the FTC containing the proposed Consent Decree. In October 1999, the Company was informed that the Commissioners of the FTC rejected the proposed Consent Decree. In November 1999 and at - --------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------- Attorney Work Product - Confidential - -------------------------------------------------------------------------------------------------- MATTER VENUE STATUS - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- times thereafter, the Company received Civil Investigative Demands from the FTC for information regarding its Phen Cal and Breast Health products. The Company has been responding to the Demands. After preliminary discussions between the Company and the FTC, in March 2000 the FTC forwarded a revised proposed consent decree to the Company. The revised proposed consent decree included broad injunctive relief and payment ($500,000) provisions. In June 2000, senior management met with the FTC to resolve outstanding issues. After discussions between the parties, the Company believes it will enter into a proposed consent decree providing for, among other items, specific injunctive relief prohibiting the Company from making certain diet and weight loss claims, disease and safety claims and comparative health claims without adequate scientific substantiation. The proposed decree will also contain payment provisions in the amount of $400,000. - --------------------------------------------------------------------------------------------------
Schedule 4.9 ERISA WNG 401(k) Plan. Medical, Dental and Life Insurance plans for employees. Long-term disability insurance. Schedule 4.14 Tax Matters Weider Nutrition International, Inc. ("WNI") and all of its domestic subsidiaries file a consolidated Federal income tax return with the Internal Revenue Service and either combined or separate company state income tax returns with the appropriate state agencies. In some states, WNI and its subsidiaries (either domestic or worldwide, depending on the state) are required to be included in the tax filings of Weider Health and Fitness ("WHF"). WHF prepares and files these particular state tax returns and pays the tax liabilities reflected thereon, and, in such capacity, acts as an agent for WNI. There is a written Tax Sharing Agreement (revised prior to the consummation of the IPO) between WNI and WHF that stipulates WNI and its subsidiaries are liable to WHF for the state tax liabilities as determined if WNI had filed separate state returns. At this time, WNI and its subsidiaries have satisfied all state tax liabilities due to WHF. All foreign subsidiaries of WNI file and pay tax in accordance with the laws and rules of their respective countries. No significant tax issues or unsatisfied liabilities exist at this time. Prior to the IPO of WNI, Weider Nutrition Group, Inc. ("WNG") was a direct subsidiary of WHF and was included in all of WHF's federal and state income tax returns. The Internal Revenue Service has examined the consolidated federal return for WHF and all subsidiaries for the fiscal year ended May 31, 1995 and 1996. No adjustments have been assessed or proposed that would impact WNG (a direct subsidiary of WNI after the IPO). In addition, Weider Nutrition Group, Inc. is undergoing a Utah sales and use tax audit from April 1, 1997 to March 31, 2000 and a Utah personal property audit for all property as of January 1, 2000. All of these audits are still in the information-gathering phase. No adjustments or assessments have been proposed at this time. Schedule 4.15 Contracts Lease with SCI Development Services Incorporated for property located at 2002 South 5070 West, Salt Lake City, UT 84104 Mariz licensing agreement Senior Loan Agreement Schedule 4.16 Absence of Changes None. Schedule 4.17 Intellectual Property None. Schedule 4.19 Environmental and Safety Matters None. Schedule 4.21 Affiliate Transactions Officer Notes:
- ----------------------------------------------------------------------------------------------------------------------------------- Principal - ---------------------------------------------------------------------------------------------------------------------------------- Original Original Interest Balance Amount Balance Current - -------------------------------------- Payer/Description Date Amount Rate 05/31/99 Additions Received 05/31/00 Portion - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RICHARD BIZZARO - ---------------------------------------------------------------------------------------------------------------------------------- Loan, secured by stock. Due on 06/02/97 - 8.00% 2,044,536 - - 2,044,536 - various dates, 5 years from date of draw. - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- ROBERT REYNOLDS - ---------------------------------------------------------------------------------------------------------------------------------- Loan, secured by stock. Due 06/02/97 - 8.00% 1,362,419 - - 1,362,419 - on various dated, 5 years from date of draw. - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RICK BLAIR - ---------------------------------------------------------------------------------------------------------------------------------- Loan, secured by stock. Due 06/02/97 - 8.00% 249,626 40,842 - 290,468 - on various dates, 5 years from date of draw. - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- STEVE YOUNG - ---------------------------------------------------------------------------------------------------------------------------------- Loan, secured by stock. Due 06/02/97 - 8.00% 121,767 - - 121,767 - on various dates, 5 years from date of draw. - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- DAVE MASTROIANNI - ---------------------------------------------------------------------------------------------------------------------------------- Loan, secured by stock. Due 06/02/97 - 8.00% 181,744 - 6,744 175,000 - on various dates, 5 years from date of draw. - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- STEVE KRZESKI - ---------------------------------------------------------------------------------------------------------------------------------- Loan, secured by stock. Due 06/02/97 - 8.00% 193,673 - - 193,673 - on various dates, 5 years from date of draw. - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------ ACCRUED INTEREST - ------------------------------------------------------------------------------------------------------------------ Long-term Balance Interest Amount Balance - -------------------------------------- Payer/Description Portion 05/31/99 Income Received 05/31/00 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ RICHARD BIZZARO - ------------------------------------------------------------------------------------------------------------------ Loan, secured by stock. Due on 2,044,536 302,743 165,283 - 468,026 various dates, 5 years from date of draw. - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ ROBERT REYNOLDS - ------------------------------------------------------------------------------------------------------------------ Loan, secured by stock. Due 1,362,419 192,385 110,083 - 302,468 on various dates, 5 years from date of draw. - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ RICK BLAIR - ------------------------------------------------------------------------------------------------------------------ Loan, secured by stock. Due 290,468 28,115 20,758 - 48,873 on various dates, 5 years from date of draw. - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ STEVE YOUNG - ------------------------------------------------------------------------------------------------------------------ Loan, secured by stock. Due 121,767 12,062 9,832 - 21,894 on various dates, 5 years from date of draw. - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ DAVE MASTROIANNI - ------------------------------------------------------------------------------------------------------------------ Loan, secured by stock. Due 175,000 22,006 14,280 - 36,286 on various dates, 5 years from date of draw. - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ STEVE KRZESKI - ------------------------------------------------------------------------------------------------------------------ Loan, secured by stock. Due 193,673 18,926 15,565 - 34,491 on various dates, 5 years from date of draw. - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------
Schedule 4.21 Affiliate Transactions (Continued) Management Agreement between Holdings and Weider Nutrition Ltd. (UK) Management Agreement between Holdings and Weider Nutrition GmbH (Germany) Management Agreement between Holdings and Weider Fitness SARL (France) Management Agreement between Holdings and Weider Nutrition Italia SrL (Italy) Management Agreement between Holdings and Weider Nutrition SL (Spain) Advertising Agreement with Weider Publications Mariz Licensing Agreement Joe Weider Licensing Agreement Separation Agreements with Richard Bizzaro and Robert Reynolds IFBB Sponsorship Agreement Body builder sponsorships with Weider Health & Fitness Schedule 6.1 Indebtedness
- ------------------------------------------------------------------------------------------------------------------------- Payee/Description Original Original Amount Interest Balance Additions Currency Date Rate 5/31/99 Payments Transaction - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- HEINKE'S - ------------------------------------------------------------------------------------------------------------------------- Retirement Obligation 2/1/97 225,000 10.00% 313,664 0 118,364 0 - ------------------------------------------------------------------------------------------------------------------------- ZIONS FIRST NATIONAL BANK - ------------------------------------------------------------------------------------------------------------------------- Note payable in monthly 10/1/93 3,280,000 7.63% 2,755,313 0 124,517 0 installments of $27,827 including interest. Secured by building. - ------------------------------------------------------------------------------------------------------------------------- W.C. PADGETT - ------------------------------------------------------------------------------------------------------------------------- Capital lease payable in monthly 6/1/95 404,860 7.00% 327,103 0 23,693 0 installments of $3,820 including interest. - ------------------------------------------------------------------------------------------------------------------------- U.S. BANCORP - ------------------------------------------------------------------------------------------------------------------------- Capital lease payable in monthly 1/1/97 136,284 8.96% 63,457 0 35,044 0 installments of $3,276 including interest. Secured by mfg. equipment - ------------------------------------------------------------------------------------------------------------------------- AFCO - ------------------------------------------------------------------------------------------------------------------------- Note payable in monthly 9/1/99 188,484 6.76% 0 188,484 167,067 0 installments of $21,537 including interest. For insurance - ------------------------------------------------------------------------------------------------------------------------- AFCO - ------------------------------------------------------------------------------------------------------------------------- Note payable in monthly 5/1/00 219,802 7.559% 0 219,802 23,814 0 installments of $25,198 including interest. For insurance. - ------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- Payee/Description Balance Current Long-term ACCRUED INTEREST 5/31/00 Portion Portion - -------------------------------------------------------------------------------------------------------------------- Balance Interest Amount 5/31/99 Expense Paid - -------------------------------------------------------------------------------------------------------------------- HEINKE'S - -------------------------------------------------------------------------------------------------------------------- Retirement Obligation 195,300 122,600 72,700 21,636 21,636 - -------------------------------------------------------------------------------------------------------------------- ZIONS FIRST NATIONAL BANK - -------------------------------------------------------------------------------------------------------------------- Note payable in monthly 2,630,796 135,071 2,495,725 - 209,410 209,410 installments of $27,827 including interest. Secured by building. - -------------------------------------------------------------------------------------------------------------------- W.C. PADGETT - -------------------------------------------------------------------------------------------------------------------- Capital lease payable in monthly 303,410 25,406 278,004 22,156 22,156 installments of $3,820 including interest. - -------------------------------------------------------------------------------------------------------------------- U.S. BANCORP - -------------------------------------------------------------------------------------------------------------------- Capital lease payable in monthly 28,413 28,413 0 4,270 4,270 installments of $3,276 including interest. Secured by mfg. equipment - -------------------------------------------------------------------------------------------------------------------- AFCO - -------------------------------------------------------------------------------------------------------------------- Note payable in monthly 21,417 21,417 0 - 5,983 5,983 installments of $21,537 including interest. For insurance - -------------------------------------------------------------------------------------------------------------------- AFCO - -------------------------------------------------------------------------------------------------------------------- Note payable in monthly 195,988 195,988 0 - 1,385 1,385 installments of $25,198 including interest. For insurance. - --------------------------------------------------------------------------------------------------------------------
Schedule 6.2 Liens ZIONS FIRST NATIONAL BANK Land and Building located at 1960 South 4250 West, Salt Lake City, Utah W. C. PADGETT Land and Building located at 1756 Industrial Road, Walterboro, South Carolina U.S. BANCORP One new process system, including: 1 processor 3 tanks 1 agitator 2 pumps 2 divert panels 25 valves, fittings and materials water filtration material labor and controls Equipment located at 3905 W. Diablo Dr., Las Vegas, Nevada, including: Batch Tanks Product Pumps Product Meters Carbon Filter or U.V. Prefilters and Microfilters Platforms CIP System Sanitary Installation Boiler/Steam Lines Electrical Panels CITICORP Operating Lease - Equipment SOUTHERN PACKAGING MACHINERY, INC. Operating Lease - Equipment IBM CREDIT CORP. Operating Lease - Equipment (computers) MELLON FIRST UNITED Operating Lease - Equipment (sweeper/scrubber) REVCO Operating Lease - Equipment (copy machines) PITNEY BOWES CREDIT CORPORATION Operating Lease - Equipment (mailing system) Schedule 6.10 Investment Banking, Broker's and Finder's Fees None. Schedule 4.22 Employee Matters None. Section 4.7 Litigation See Schedule 4.5. Section 6.5 Investments See Schedule 4.21. 512,845 Shares of Nutraceutical Corporation (Nasdaq: "NUTR") EX-99.(C) 4 0004.txt SENIOR SUBORDINATED NOTE EXHIBIT C THIS DEBT INSTRUMENT IS ISSUED WITH OID THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE "SECURITIES ACTS"), AND IS NOT TRANSFERABLE, EXCEPT PURSUANT TO AN EFFECTIVE --------------- REGISTRATION STATEMENT UNDER THE SECURITIES ACTS, OR EXEMPTIONS FROM REGISTRATION THEREUNDER. Furthermore, the security represented hereby is only transferable pursuant to the provisions of Article VIII of that certain Senior Subordinated Loan Agreement of even date herewith among Weider Nutrition Group, Inc., Wynnchurch Capital Partners, L.P and Wynnchurch Capital Partners Canada, L.P A copy of such Article of the Senior Subordinated Loan Agreement will be furnished by the issuer to the holder hereof upon written request therefor by holder. THIS PROMISSORY NOTE (THIS "INSTRUMENT") IS SUBJECT TO A SUBORDINATION AGREEMENT, DATED AS OF JUNE 30, 2000, AMONG BANKERS TRUST COMPANY, A NEW YORK BANKING CORPORATION, ACTING IN ITS CAPACITY AS AGENT, WYNNCHURCH CAPITAL PARTNERS, L.P., A DELAWARE LIMITED PARTNERSHIP AND WYNNCHURCH CAPITAL PARTNERS CANADA, L.P., AN ALBERTA LIMITED PARTNERSHIP. THIS PROMISSORY NOTE IS SUBORDINATED IN RIGHT TO AND TIME OF PAYMENT TO THE PRIOR PAYMENT IN FULL IN CASH OF ALL SENIOR OBLIGATIONS (AS DEFINED IN SUCH SUBORDINATION AGREEMENT) IN ACCORDANCE WITH THE TERMS OF SUCH SUBORDINATION AGREEMENT AND EACH HOLDER OF THIS PROMISSORY NOTE, BY SUCH HOLDER'S ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE TERMS AND PROVISIONS OF SUCH SUBORDINATION AGREEMENT. WEIDER NUTRITION GROUP, INC. SENIOR SUBORDINATED NOTE $4,795,534 June 30, 2000 Chicago, Illinois FOR VALUE RECEIVED, the undersigned, WEIDER NUTRITION GROUP, INC., a Utah corporation (the "Company"), (together with its successors and assigns, the ------- "Borrower"), hereby promises to pay to the order of WYNNCHURCH CAPITAL PARTNERS, -------- L.P. ("Lender"), the principal sum of Four Million Seven Hundred Ninety Five ------ Thousand Five Hundred Thirty Four Dollars ($4,795,534), together with interest thereon, which shall be due and payable as provided herein. This promissory note is one of the "Senior Subordinated Notes" referred to ------------------------- in, and Lender is entitled to the benefits of, that certain Senior Subordinated Loan Agreement of even date herewith (the "Loan Agreement") among the Borrower, -------------- Lender and Wynnchurch Capital Partners Canada, L.P. The terms and provisions of the Loan Agreement are deemed incorporated herein by this reference and this Senior Subordinated Note shall be subject in all respects to the terms and provisions of the Loan Agreement, as the same may be hereafter amended from time to time. Unless otherwise defined herein, all capitalized terms used herein shall have the meanings set forth in the Loan Agreement. 1. Payment of Interest. ------------------- (a) So long as no Event of Default has occurred and is continuing, interest shall accrue from the date hereof on the unpaid principal amount of this Senior Subordinated Note from time to time outstanding until paid, computed on the basis of a 360-day year for the actual number of days elapsed, at a fixed annual rate of 13.00%. (b) Interest shall be due and payable quarterly in arrears on each Quarterly Payment Date commencing on September 30, 2000. In addition, all accrued and unpaid interest shall be paid upon the payment in full of the outstanding principal amount of this Senior Subordinated Note and, if payment in full is not paid when due, thereafter on demand. 2. Additional Interest. After the occurrence and during the continuance ------------------- of any Event of Default, Obligations of the Borrower shall bear interest from the date of the occurrence of the Event of Default, payable on demand, at the rate of 16.00% per annum. 3. Payment of Principal. The aggregate principal of this Senior -------------------- Subordinated Note shall be paid in full on June 30, 2006, subject to the provisions of the Loan Agreement concerning mandatory and optional prepayments. 4. Payment Instructions. All payments of principal, interest, and any -------------------- other amounts due and payable hereunder shall be made prior to 12:00 p.m., Chicago, Illinois, time, on the due date, by wire transfer of immediately available funds to Lender's account as specified in Schedule 2.5 of the Loan Agreement (or at any other payment office in the United States previously designated to the Borrower by Lender in writing), in lawful money of the United States of America. 5. Events of Default; Acceleration of Payments. Under certain ------------------------------------------- circumstances described in Article 7 of the Loan Agreement, the occurrence of an Event of Default may result in the acceleration of any and all Obligations of the Borrower hereunder and the same may thereupon become immediately due and payable. 6. Taxes. All payments made by Borrower pursuant to this Note shall be ----- made free and clear of, and without deduction or withholding for or on account of, any Withholding Taxes. If Borrower, Lender or any other Person is required by any law or regulation (or by the interpretation or administration thereof) to make any deduction or withholding from any such payment with respect to Withholding Taxes, Borrower shall (i) pay an increased amount as will result (after deduction of such Withholding Taxes) in the payment to Lender of the amount that would have been payable had no such withholding or deduction been required and (ii) pay the full amount withheld or deducted to the appropriate governmental body in accordance with applicable law. 7. Miscellaneous. ------------- (a) Pursuant to 26 C.F.R. (S)1.1275-3, the Company states that its President or Chief Executive Officer, as representative of the Borrower, located at 2002 South 5070 West, Salt Lake City, Utah, will make available on request to the holder of this debt instrument, the following information: issue price, amount of original issue discount, issue date and yield to maturity. 2 (b) Except as otherwise expressly provided in the Loan Agreement, the Borrower whether as maker, endorser or otherwise, waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Senior Subordinated Note. (c) The Borrower agrees to pay all reasonable costs and expenses, including, without limitation, reasonable attorneys' fees and expenses, expended or incurred by Lender in connection with the enforcement of this Senior Subordinated Note, the collection of any sums due hereunder, any actions for declaratory relief in any way related to this Senior Subordinated Note or the protection or preservation of any rights of Lender hereunder. (d) Any and all notices, elections, demands, requests and responses thereto permitted or required to be given by or under this Senior Subordinated Note shall be given as provided in Section 8.5 of the Loan Agreement. (e) This Senior Subordinated Note shall be deemed to be a contract under the laws of the State of Illinois and for all purposes shall be governed by and construed and enforced in accordance with the laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Illinois. (f) The covenants of the Borrower set forth herein shall be binding upon the Borrower and its successors and assigns and shall inure to the benefit of Lender and its successors and assigns. (g) Notwithstanding anything contained in this Senior Subordinated Note to the contrary, principal payments under this Senior Subordinated Note shall not be deferred beyond the last day of the twenty-first, twenty- second or twenty-third accrual periods, respectively, if any deferral beyond such date would result in this Senior Subordinated Note being treated as an "applicable high yield discount obligation" under sections 163(e)(5) and (i) of the Code (it being understood that the provisions of this Section 7(g) shall apply only to the extent necessary to achieve the objective herein described and shall apply only to amounts treated as interest or original issue discount under the Code). Such payments of principal are unconditionally payable. * * * * 3 IN WITNESS WHEREOF, the undersigned have duly executed this Senior Subordinated Note as of the date first written above. WEIDER NUTRITION GROUP, INC. By: /s/ Joseph W. Baty -------------------------- Name: Joseph W. Baty ------------------------ Its: CFO ------------------------- 4 EX-99.(D) 5 0005.txt SENIOR SUBORDINATED NOTE EXHIBIT D THIS DEBT INSTRUMENT IS ISSUED WITH OID THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE "SECURITIES ACTS"), AND IS NOT TRANSFERABLE, EXCEPT PURSUANT TO AN EFFECTIVE --------------- REGISTRATION STATEMENT UNDER THE SECURITIES ACTS, OR EXEMPTIONS FROM REGISTRATION THEREUNDER. Furthermore, the security represented hereby is only transferable pursuant to the provisions of Article VIII of that certain Senior Subordinated Loan Agreement of even date herewith among Weider Nutrition Group, Inc., Wynnchurch Capital Partners, L.P and Wynnchurch Capital Partners Canada, L.P A copy of such Article of the Senior Subordinated Loan Agreement will be furnished by the issuer to the holder hereof upon written request therefor by holder. THIS PROMISSORY NOTE (THIS "INSTRUMENT") IS SUBJECT TO A SUBORDINATION AGREEMENT, DATED AS OF JUNE __, 2000, AMONG BANKERS TRUST COMPANY, A NEW YORK BANKING CORPORATION, ACTING IN ITS CAPACITY AS AGENT, WYNNCHURCH CAPITAL PARTNERS, L.P., A DELAWARE LIMITED PARTNERSHIP AND WYNNCHURCH CAPITAL PARTNERS CANADA, L.P., AN ALBERTA LIMITED PARTNERSHIP. THIS PROMISSORY NOTE IS SUBORDINATED IN RIGHT TO AND TIME OF PAYMENT TO THE PRIOR PAYMENT IN FULL IN CASH OF ALL SENIOR OBLIGATIONS (AS DEFINED IN SUCH SUBORDINATION AGREEMENT) IN ACCORDANCE WITH THE TERMS OF SUCH SUBORDINATION AGREEMENT AND EACH HOLDER OF THIS PROMISSORY NOTE, BY SUCH HOLDER'S ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE TERMS AND PROVISIONS OF SUCH SUBORDINATION AGREEMENT. WEIDER NUTRITION GROUP, INC. SENIOR SUBORDINATED NOTE $5,204,466 June 30, 2000 Chicago, Illinois FOR VALUE RECEIVED, the undersigned, WEIDER NUTRITION GROUP, INC., a Utah corporation (the "Company"), (together with its successors and assigns, the ------- "Borrower"), hereby promises to pay to the order of WYNNCHURCH CAPITAL PARTNERS - --------- CANADA, L.P. ("Lender"), the principal sum of Five Million Two Hundred Four ------ Thousand Four Hundred Sixty Six Dollars ($5,204,466), together with interest thereon, which shall be due and payable as provided herein. This promissory note is one of the "Senior Subordinated Notes" referred to ------------------------- in, and Lender is entitled to the benefits of, that certain Senior Subordinated Loan Agreement of even date herewith (the "Loan Agreement") among the Borrower, -------------- Lender and Wynnchurch Capital Partners, L.P. The terms and provisions of the Loan Agreement are deemed incorporated herein by this reference and this Senior Subordinated Note shall be subject in all respects to the terms and provisions of the Loan Agreement, as the same may be hereafter amended from time to time. Unless otherwise defined herein, all capitalized terms used herein shall have the meanings set forth in the Loan Agreement. 1. Payment of Interest. ------------------- (a) So long as no Event of Default has occurred and is continuing, interest shall accrue from the date hereof on the unpaid principal amount of this Senior Subordinated Note from time to time outstanding until paid, computed on the basis of a 360-day year for the actual number of days elapsed, at a fixed annual rate of 13.00%. (b) Interest shall be due and payable quarterly in arrears on each Quarterly Payment Date commencing on September 30, 2000. In addition, all accrued and unpaid interest shall be paid upon the payment in full of the outstanding principal amount of this Senior Subordinated Note and, if payment in full is not paid when due, thereafter on demand. 2. Additional Interest. After the occurrence and during the continuance ------------------- of any Event of Default, Obligations of the Borrower shall bear interest from the date of the occurrence of the Event of Default, payable on demand, at the rate of 16.00% per annum. 3. Payment of Principal. The aggregate principal of this Senior -------------------- Subordinated Note shall be paid in full on June 30, 2006, subject to the provisions of the Loan Agreement concerning mandatory and optional prepayments. 4. Payment Instructions. All payments of principal, interest, and any -------------------- other amounts due and payable hereunder shall be made prior to 12:00 p.m., Chicago, Illinois, time, on the due date, by wire transfer of immediately available funds to Lender's account as specified in Schedule 2.5 of the Loan Agreement (or at any other payment office in the United States previously designated to the Borrower by Lender in writing), in lawful money of the United States of America. 5. Events of Default; Acceleration of Payments. Under certain ------------------------------------------- circumstances described in Article 7 of the Loan Agreement, the occurrence of an Event of Default may result in the acceleration of any and all Obligations of the Borrower hereunder and the same may thereupon become immediately due and payable. 6. Taxes. All payments made by Borrower pursuant to this Note shall be ----- made free and clear of, and without deduction or withholding for or on account of, any Withholding Taxes. If Borrower, Lender or any other Person is required by any law or regulation (or by the interpretation or administration thereof) to make any deduction or withholding from any such payment with respect to Withholding Taxes, Borrower shall (i) pay an increased amount as will result (after deduction of such Withholding Taxes) in the payment to Lender of the amount that would have been payable had no such withholding or deduction been required and (ii) pay the full amount withheld or deducted to the appropriate governmental body in accordance with applicable law. 7. Miscellaneous. ------------- (a) Pursuant to 26 C.F.R. (S)1.1275-3, the Company states that its President or Chief Executive Officer, as representative of the Borrower, located at 2002 South 5070 West, Salt Lake City, Utah, will make available on request to the holder of this debt instrument, the following information: issue price, amount of original issue discount, issue date and yield to maturity. 2 (b) Except as otherwise expressly provided in the Loan Agreement, the Borrower whether as maker, endorser or otherwise, waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Senior Subordinated Note. (c) The Borrower agrees to pay all reasonable costs and expenses, including, without limitation, reasonable attorneys' fees and expenses, expended or incurred by Lender in connection with the enforcement of this Senior Subordinated Note, the collection of any sums due hereunder, any actions for declaratory relief in any way related to this Senior Subordinated Note or the protection or preservation of any rights of Lender hereunder. (d) Any and all notices, elections, demands, requests and responses thereto permitted or required to be given by or under this Senior Subordinated Note shall be given as provided in Section 8.5 of the Loan Agreement. (e) This Senior Subordinated Note shall be deemed to be a contract under the laws of the State of Illinois and for all purposes shall be governed by and construed and enforced in accordance with the laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Illinois. (f) The covenants of the Borrower set forth herein shall be binding upon the Borrower and its successors and assigns and shall inure to the benefit of Lender and its successors and assigns. (g) Notwithstanding anything contained in this Senior Subordinated Note to the contrary, principal payments under this Senior Subordinated Note shall not be deferred beyond the last day of the twenty-first, twenty- second or twenty-third accrual periods, respectively, if any deferral beyond such date would result in this Senior Subordinated Note being treated as an "applicable high yield discount obligation" under sections 163(e)(5) and (i) of the Code (it being understood that the provisions of this Section 7(g) shall apply only to the extent necessary to achieve the objective herein described and shall apply only to amounts treated as interest or original issue discount under the Code). Such payments of principal are unconditionally payable. * * * * 3 IN WITNESS WHEREOF, the undersigned have duly executed this Senior Subordinated Note as of the date first written above. WEIDER NUTRITION GROUP, INC. By: /s/ Joseph Baty ---------------------------------- Name: Joseph Baty -------------------------------- Its: CFO --------------------------------- 4 EX-99.(E) 6 0006.txt WARRANT TO PURCHASE 563,508 SHARES EXHIBIT E THIS WARRANT AND THE CLASS A COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY SUCH APPLICABLE STATE LAWS. No. 001 WARRANT TO PURCHASE SHARES OF CLASS A COMMON STOCK OF WEIDER NUTRITION INTERNATIONAL, INC. THIS IS TO CERTIFY that, for value received, WYNNCHURCH CAPITAL PARTNERS, L.P., a Delaware limited partnership ("Wynnchurch"), or its registered assigns, ---------- is entitled to purchase from WEIDER NUTRITION INTERNATIONAL, INC., a Delaware corporation (together with any successor thereto, the "Company"), at any time, ------- 563,508 shares of Class A Common Stock, par value of $0.01 per share, of the Company (the "Class A Common Stock"), at a price of $0.01 per share (the -------------------- "Exercise Price"), subject to adjustment as hereinafter set forth, and to -------------- exercise the other rights, powers and privileges hereinafter provided, all on the terms and subject to the conditions and hereinafter set forth. This Warrant has been issued by the Company pursuant to that certain Senior Subordinated Loan Agreement of even date herewith between the Company, Wynnchurch and Wynnchurch Capital Partners Canada, L.P. (as the same may be amended, supplemented, restated or otherwise modified from time to time, in compliance with the terms thereof, the "Loan Agreement") in consideration of the -------------- loan to the Company by Wynnchurch provided for in such Loan Agreement. Capitalized terms used herein without definition shall have the meanings set forth in Section 13 hereof, or if not therein defined, as ascribed to them in the Loan Agreement. If the Loan Agreement is terminated prior to the termination of this Warrant, such terms shall have the definitions given to them in the Loan Agreement as in effect immediately prior to its termination. The Company and Holder agree that the value of this Warrant for tax purposes is $1,690,524 on the date of issue. 1. Exercise of Warrant. ------------------- (a) Subject to the terms and conditions set forth herein, Holder shall have the right, at its option, to exercise this Warrant in whole or, if in part, in increments of at least 100,000 shares of Class A Common Stock (as adjusted for any stock splits, subdivisions or similar events), at any time and from time to time. To exercise this Warrant, Holder shall deliver to the Company (i) a Notice of Exercise in the form attached hereto duly completed and executed, (ii) an amount equal to the Exercise Price or, in the case of a partial exercise of this Warrant, the portion thereof payable upon such exercise, and (iii) this Warrant. At the option of Holder, payment of the Exercise Price shall be made: (A) by wire transfer of funds to an account in a bank located in the United States designated by the Company for such purpose, (B) by certified or official bank check payable to the order of the Company, (C) by deduction from the number of shares of Common Stock otherwise to be delivered upon exercise of the Warrant that number of shares of Common Stock which has an aggregate Fair Market Value equal to the aggregate Exercise Price for all shares of Common Stock to be purchased, or (D) by any combination of the foregoing methods. (b) Upon receipt of the required deliveries, the Company shall, as promptly as practicable, cause to be issued and delivered to Holder or, subject to Section 11 hereof, the Person designated in the Notice of Exercise, a certificate or certificates representing shares of Class A Common Stock equal in the aggregate to the number of shares of Class A Common Stock specified in the Notice of Exercise (less any shares of Common Stock in payment of a cashless exercise pursuant to Section 1(a) above). The Company shall pay all reasonable expenses and other charges payable in connection with the preparation, execution and delivery of stock certificates pursuant to this Section 1. 2. Reservation. The Company shall at all times prior to the Expiration ----------- Date reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, a number of authorized shares of Class A Common Stock equal to the number of shares issuable upon exercise of this Warrant and no such shares shall at any time have a par value which is in excess of the then effective Exercise Price. All such shares of Common Stock shall be duly authorized and, when issued upon exercise of this Warrant, shall be validly issued and fully paid and non-assessable with no liability on the part of the holders thereof. 3. Adjustments. The Exercise Price and the number of shares of Class A ----------- Common Stock issuable upon the exercise of this Warrant shall be subject to adjustment as hereafter set forth: (a) In the event that at any time the Company shall: (i) pay a dividend or make any other distribution with respect to its Common Stock in shares of its Common Stock, or (ii) subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then the Exercise Price shall be adjusted to that price determined by multiplying the Exercise Price in effect immediately prior to such event by a fraction (A) the numerator of which shall be the total number of shares of Common Stock immediately prior to such event, and (B) the denominator of which shall be the total number of shares of Common Stock, of the Company immediately after such event. (b) In the event that at any time the Company shall issue or sell any shares of Common Stock (except shares of Common Stock issued upon exercise of this Warrant) for a consideration per share less than the Fair Market Value thereof, then upon each such issuance the Exercise Price shall be adjusted to that price determined by multiplying the Exercise Price in effect immediately prior to the time of such issue or sale by a fraction (A) the numerator of which shall be the number of shares of Common Stock immediately prior to such issuance or sale plus the number of shares of Common Stock which the aggregate consideration for the total number of such additional shares of Common Stock so issued or sold would purchase at the Fair Market Value thereof (if such shares had been sold at Fair Market Value) on the date of such issuance or sale, and (B) the denominator of which shall be the number of shares of Common Stock immediately prior to such issuance or sale plus the number of such additional shares of Common Stock so issued or sold. The provisions of this subsection (b) shall not apply to any additional shares of Common Stock which are distributed to holders of Common Stock as a stock dividend or subdivision for which an adjustment is provided for under subsection (a) of this Section 3. 2 (c) In the event any shares of Common Stock shall be issued or sold for cash, the consideration received by the Company therefor shall be deemed to be the amount of the cash received by the Company therefor or, if such shares of Common Stock are offered by the Company for subscription, the subscription price or, if such shares of Common Stock are sold to underwriters or dealers for public offering without a subscription offer, the initial public offering price, in each case excluding any amount paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts or expenses paid or incurred by the Company in connection with such issuance or sale. (d) In the event any shares of Common Stock shall be issued or sold for a consideration other than cash, the amount of such consideration shall be deemed to be the Fair Market Value of such consideration at the time of such issuance as determined by the Board of Directors of the Company in the good faith exercise of their business judgment. (e) Upon any adjustment of the Exercise Price as provided in this Section 3, the holder hereof shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares of Common Stock obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock purchasable hereunder immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. (f) Whenever the Exercise Price or the number of shares of Common Stock issuable upon exercise of this Warrant is adjusted pursuant to this Section 3, the Company shall promptly deliver a notice to the holder of this Warrant setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment and the method by which such adjustment was calculated. (g) Notwithstanding anything herein to the contrary, an adjustment as provided in Section 3(b) above shall not be made if the Company issues securities (i) to employees, officers or directors of the Company to the extent approved by the Board of Directors or the compensation committee of the Board of Directors of the Company, (ii) as payment of all or any part of the purchase price of any business or assets thereof acquired by the Company or any of its Subsidiaries, (iii) to any lender in connection with the incurrence of Indebtedness by the Company or any of its Subsidiaries, or (iv) upon the exercise of any option or other right described in any of clauses (i) through (iii). 4. Mergers, Consolidations, Etc. In the case of any consolidation or ----------------------------- merger of the Company with another entity or any reorganization or reclassification of the Common Stock or other equity securities of the Company, then, as a condition of such consolidation, merger, reorganization or reclassification, lawful and adequate provision shall be made whereby Holder shall thereafter have the right to receive upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Class A Common Stock immediately theretofore purchasable hereunder, such shares of stock, securities, cash or assets as may be (by virtue of such consolidation, merger, reorganization or reclassification) issued or payable with respect to or in exchange for a number of outstanding shares of Class A Common Stock equal to the number of shares of Class A Common Stock immediately theretofore so purchasable hereunder had such consolidation, merger, reorganization or reclassification not taken place, and in any such case appropriate provisions shall be made with respect to the rights and interests of Holder to the end that the provisions hereof shall thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities, cash or assets thereafter deliverable upon exercise of this 3 Warrant. The Company shall not effect any such consolidation or merger, unless prior to or simultaneously with the consummation thereof, the successor entity (if other than the Company) resulting from such consolidation or merger shall assume by written instrument executed and delivered to Holder, the obligation to deliver to Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, Holder may be entitled to receive. 5. Dividends; Redemption. If the Board of Directors of the Company shall --------------------- (a) declare any dividend or other distribution on the shares of the Common Stock, except by way of a stock dividend payable on all of the Common Stock, or (b) authorize the redemption or repurchase of any shares of the Common Stock, the Company shall deliver notice thereof to Holder not less than twenty (20) days prior to the record date fixed for determining shareholders entitled to participate in such dividend, distribution, redemption or repurchase, and Holder shall have the right to participate in such dividend, distribution, redemption or repurchase to the same extent Holder would have participated if it had previously fully exercised this Warrant prior to such record date. The provisions of this Section 5 shall not apply to distributions made in connection with transactions covered by Section 3. 6. Preemptive Rights. [Intentionally omitted.] ----------------- 7. Dissolution or Liquidation. In the event of (a) any proposed -------------------------- distribution of the assets of the Company in dissolution or liquidation, (b) a Change of Control or (c) a Sale, the Company shall mail notice thereof to Holder upon the earlier of (x) thirty (30) days prior to the consummation or completion of, and, as applicable, (y) the date within two (2) business days after the execution of a definitive agreement providing for, any of the events described in (a), (b) and (c), and shall make no dividend or distribution to shareholders until the expiration of thirty (30) days from the date of mailing of such notice. 8. Fully Paid Stock; Taxes. The Company covenants that the shares of ----------------------- capital stock represented by each and every certificate for the Class A Common Stock to be delivered on the exercise of the purchase rights herein shall, at the time of such delivery, be duly authorized, validly issued and outstanding and fully paid and nonassessable. The Company further covenants that it shall pay all expenses in connection with, and all federal and state taxes (other than income taxes) which may be imposed in respect of this Warrant, the Issued Warrant Shares and the Issuable Warrant Shares. 9. Registration Rights Agreement. This Warrant and the Warrant Shares ----------------------------- are subject to, and entitled to the benefits, rights and options set forth in, the Registration Rights Agreement. 10. Partial Exercise and Assignment. If this Warrant is exercised in part ------------------------------- only, Holder shall be entitled to receive a new Warrant, registered in the name of Holder or its designee evidencing the right to purchase the aggregate amount of Issuable Warrant Shares for which this Warrant was not exercised. This Warrant may be assigned, in whole or in part, by surrender of this Warrant to the Company with the assignment or partial assignment, as the case may be, attached to this Warrant duly executed. If this Warrant is partially assigned, a new Warrant shall be issued to Holder, registered in the name of Holder or its designee, evidencing the right to purchase the aggregate amount of Issuable Warrant Shares for which this Warrant was not so assigned. The assignee shall receive a new Warrant, registered in the name of such assignee or its designee and evidencing the right to purchase the aggregate number of Issuable Warrant Shares for which this Warrant was so assigned. 4 11. Restrictions on Transferability. ------------------------------- (a) Neither this Warrant nor the Issued Warrant Shares shall be transferable to the extent any transfer of the Warrant, the Issued Warrant Shares or any portion thereof would be prohibited by the Securities Act and any applicable state securities laws. (b) Each Warrant shall bear on the face thereof a legend substantially in the form of the notice endorsed on the first page of this Warrant. Each certificate representing Issued Warrant Shares initially issued upon the exercise of any Warrant and each certificate issued to a subsequent transferee of such certificate shall bear all legends and be subject to the conditions set forth in this Warrant. (c) The Company covenants that it will file all reports required to be filed by it with the Securities and Exchange Commission, and that it will take such further action as the Holder may reasonably request, all to the extent required from time to time to enable the Holder to sell this Warrant or any Warrant Shares without registration under the Securities Act pursuant to Rule 144 ("Rule 144") or Rule 144A ("Rule 144A") (or any similar rule then in effect -------- --------- promulgated by the Commission under the Securities Act). Upon the request of the Holder, the Company will deliver to the Holder a notice stating whether it has complied with such requirements. The Company covenants that it will provide to each holder or any prospective purchaser of this Warrant or Warrant Shares the information required to be delivered under paragraph (d)(4) of Rule 144A (or any similar provision then in effect) promulgated by the Securities and Exchange Commission under the Securities Act in respect of a transaction qualifying for an exemption under Rule 144A and it will take such further action as a Holder may reasonably request, all to the extent required from time to time, to enable such Holder to sell its Warrant or Warrant Shares without registration under the Securities Act pursuant to Rule 144A. (e) The Company understands from the initial Holder hereof that the initial Holder is purchasing this Warrant solely by and for its own account, for investment, and not for subdivision, fractionalization, resale or distribution, that the initial Holder has no contract, undertaking, agreement or arrangement with any person to sell, transfer or pledge to such person or anyone else this Warrant, or any part hereof; and that the initial Holder has no present plans or intentions to enter into any such contract, undertaking, agreement or arrangement. 12. Certain Covenants. ----------------- (a) Requisite Approvals. The Company shall use its best efforts to ------------------- obtain all necessary or desirable approvals for the performance by the Company of this Agreement (including without limitation the adjustments set forth in Section 3) from whatsoever source required, including, but not limited to (i) at the request of Holder, the Company's shareholders at the next meeting thereof, whether annual or special, (ii) any governmental authority or regulatory body of the United States or of any state required in connection with the lawful issuance of the Warrant Shares. (b) No Impairment or Amendment. The Company shall not by any action, -------------------------- including, without limitation, amendment of its articles or certificate of formation or by-laws, any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant or impair the ability of the Holder to realize upon the intended economic value hereof, but will 5 at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate to protect the rights of the Holder hereof against impairment. Without limiting the generality of the foregoing, the Company will (i) not establish a par value of any shares of Class A Common Stock issuable upon the exercise of this Warrant above the amount payable therefor, (ii) take all such action as may be necessary or appropriate in order that the Company may validly issue fully paid and nonassessable shares of Class A Common Stock upon the exercise of this Warrant, (iii) obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant and (iv) not grant any preemptive rights with respect to any of its shares of Class A Common Stock without the prior written consent of the Holder. (c) Board of Directors. So long as a majority of the Issued Warrant ------------------ Shares and Issuable Warrant Shares are owned by the initial Holder and its direct transferees, the Company shall permit any of John Hatherly, John Tomes, Bob Vedra or another representative of Holder designated by Holder from time to time and reasonably satisfactory to the Company (the "Holder Representative") to attend meetings of the Board of Directors of the Company as a non-voting observer at each such meeting. The Holder Representative shall be entitled to written notice of each meeting of the Board of Directors of the Company no later than the date notice is provided to directors of the Board of Directors of the Company with respect to such meeting and to receive all written materials and other information (including all materials distributed to the Board of Directors of the Company and copies of meeting minutes) given to directors at the same time such materials and information are given to the directors. The Holder Representative shall not have any voting rights but shall be entitled to participate in discussions at such Board meetings and consult with and offer advice to the officers of the Company and the Board of Directors of the Company. The Company shall pay all costs as are reasonably incurred by such Holder Representative in connection with attendance of such Holder Representative at any meeting of the Board of Directors of the Company. Notwithstanding the foregoing, the Holder Representative may be excluded from part or all of any meeting of the Board of Directors at the request of the Chairman of the Board of Directors, acting in a reasonable manner, if the Chairman of the Board of Directors determines that the matters to be discussed in that meeting or portion of a meeting may affect the Warrant Shares or the subordinated loans outstanding under the Loan Agreement. (d) Listing on Securities Exchange. So long as shares are qualified ------------------------------ for listing, the Company shall, at its expense, list on its securities exchange, maintain and increase when necessary such listing of, all Issued Warrant Shares and, to the extent permissible under the applicable securities exchange rules, all Issuable Warrant Shares, so long as any shares of Common Stock shall be so listed. So long as shares are qualified for listing, the Company will also so list on each securities exchange, and will maintain such listing of, any other securities which Holder shall be entitled to receive upon the exercise hereof if at the time any securities of the same class shall be listed on such securities exchange by the Company. The Company shall not intentionally take any action or otherwise take any action which is reasonably intended to result in the Company being delisted from their securities exchange. 13. Definitions. ----------- In addition to the terms defined elsewhere in this Warrant, the following terms shall have the meanings set forth below: 6 "Common Stock" shall mean any common stock of any class or series of ------------ the Company currently or hereafter authorized having the right to share in distributions either of earnings or assets of the Company without limit as to amount or percentage. For purposes of determining the number of shares of Class A Common Stock issuable upon the exercise of this Warrant and other purposes herein, the term "Common Stock" shall be computed on Fully-Diluted Basis. "Exercise Date" shall mean the date on which this Warrant is ------------- exercised. "Fair Market Value" per share of Common Stock shall mean, at any date ----------------- of determination thereof: (a) if shares of Common Stock are listed or admitted to trading on any national securities exchange or traded on any national market system, the average of the daily closing prices for the thirty (30) trading days immediately preceding such date. The closing price for each day shall be the last sale price on such date or, if no such sale takes place on such date, the average of the closing bid and asked prices on such date, in each case as officially reported on the principal national securities exchange or national market system on which shares of Common Stock are then listed, admitted to trading or traded; (b) if shares of Common Stock are not listed or admitted to trading on any national securities exchange or traded on any national market system, the average of the reported closing bid and asked prices thereof on such date in the over-the-counter market as shown by the National Association of Securities Dealers automated quotation system or, if shares of Common Stock are not then quoted in such system, as published by the National Quotation Bureau, Incorporated or any similar successor organization; or (c) if shares of Common Stock are not listed or admitted to trading on any national exchange or traded on any national market system and if no closing bid and asked prices are then quoted or published in the over-the-counter market, the price as determined in good faith by the agreement of Holder and the Board of Directors of the Company; provided, however, that if Holder and the -------- ------- Board of Directors of the Company cannot agree on a price within fifteen (15) days after (as applicable) issuance of for which the Fair Market Value is being determined pursuant to Sections 3(b) or 3(d), Holder and the Board of Directors of the Company shall jointly retain a nationally recognized investment banking firm or other firm providing similar valuation services (a "Valuation Firm") -------------- experienced in the appraisal of companies which are engaged in the business of the Company and which is not an Affiliate of the Company or any shareholder thereof within seven (7) days after the expiration of such fifteen (15) day period. If the Company and Holder are unable to agree on the selection of a Valuation Firm within such seven (7) day period, the Company and Holder, within seven (7) days after expiration of such seven (7) day period, shall each select a Valuation Firm and the two Valuation Firms so selected shall jointly select a third Valuation Firm which shall make the determination of the Fair Market Value of the Common Stock. The Valuation Firm selected in accordance with the foregoing procedure shall be instructed to determine such value within fifteen (15) days after selection and any such determination shall be final and binding upon the parties. The fees and expenses for such determination made by any Valuation Firm shall be borne by the Company. Fair Market Value of a share of Common Stock shall be determined under clause (c) by dividing the fair market value of the Company by the number of shares of Common Stock outstanding as of the date of 7 determination, determined on a Fully-Diluted Basis. In such determination of Fair Market Value, the following specific principles shall be applied by the Valuation Firm: (i) the Valuation Firm shall assume that all of the assets and properties of the Company are sold as a going concern, on an orderly basis (and not on a liquidation basis), at their fair market values based on an enterprise value as of the Valuation Date; (ii) the Valuation Firm shall assume that all indebtedness and other liabilities of the Company is prepaid in full as of the Valuation Date (and, in doing so, disregard the amount of any prepayment penalties, yield enhancement premiums or the like) and that the Company has paid the holders of preferred stock or similar securities, if any, amounts payable thereon, the aggregate amount of which shall be taken into account in arriving at the Fair Market Value; and (iii) the Valuation Firm shall assume that the remaining proceeds of such a sale are distributed pro rata on a Fully-Diluted Basis to the shareholders of the Company. "Fully-Diluted Basis" shall mean that number of shares of Common Stock ------------------- which would be outstanding, as of the date of computation, if (i) this Warrant, (ii) all other warrants, options or other rights to subscribe for, purchase or otherwise acquire Common Stock or (iii) securities (including debt securities) convertible or exchangeable for Common Stock had been converted or fully exercised. "Holder" shall mean Wynnchurch or such other Person in whose name this ------ Warrant is registered on the books of the Company maintained for such purpose. "Issuable Warrant Shares" shall mean the number of shares of Class A ----------------------- Common Stock issuable from time to time upon exercise of this Warrant. "Issued Warrant Shares" shall mean the cumulative total of the shares --------------------- of Class A Common Stock issued from time to time as a result of all prior exercises of this Warrant. "Person" shall mean any individual, sole proprietorship, partnership, ------ limited liability company, joint venture, unincorporated organization, association, corporation, trust, institution, entity or government. "Registration Rights Agreement" shall mean that certain Registration ----------------------------- Rights Agreement, of even date herewith by and between the Company and Wynnchurch, as amended, supplemented, restated or otherwise modified from time to time, in compliance with the terms thereto. "Securities Act" shall mean the Securities Act of 1933, as amended, or -------------- any successor federal statute, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder, all as in effect from time to time. "Warrant" means this Warrant and all warrants hereafter issued in ------- exchange or substitution for this Warrant. "Warrant Shares" shall mean the Issued Warrant Shares and the Issuable -------------- Warrant Shares. 8 14. Replacement Warrants. If this Warrant shall be mutilated, lost, -------------------- stolen or destroyed, the Company may issue a new Warrant of like date, tenor and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of the mutilated Warrant, or in lieu of the Warrant lost, stolen or destroyed, upon receipt of evidence satisfactory to the Company of the loss, theft or destruction of such Warrant. 15. Warrant Holder Not a Shareholder. This Warrant does not confer upon -------------------------------- Holder any right to vote or to consent or to receive notice as a shareholder of the Company, as such, in respect of any matters whatsoever, or any other rights or liabilities as a shareholder, prior to the exercise hereof as hereinbefore provided. 16. Notices. Except as otherwise expressly provided herein, all notices ------- referred to in this Warrant shall be in writing and shall be delivered pursuant to the notice provisions of the Loan Agreement. 17. Severability. Whenever possible, each provision of this Warrant shall ------------ be interpreted in such manner as to be effective under applicable law, but if any provision of this Warrant is held to be prohibited by or invalid under applicable law in any jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating any other provision of this Agreement. 18. Survival. Notwithstanding anything to the contrary contained herein, -------- the provisions of Sections 12 hereof shall survive the exercise of this Warrant in full by Holder and shall continue to be in full force and effect so long as the initial holder and its direct transferees own a majority of the Warrant Shares. 19. Captions: Governing Law. The descriptive headings of the various ------------------------ sections of this Warrant are for convenience only and shall not affect the meaning or construction of the provisions hereof. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by the internal law of the State of Illinois without giving effect to any choice of law or conflict of law provision or rule. 20. Action by Holder. Unless otherwise expressly provided for herein, any ---------------- action entitled to be taken by Holder owning the Issued Warrant Shares shall require the consent of the holders of at least a majority of the shares of Common Stock issued or issuable to Holder's Affiliates on the date hereof at the time such action is taken. [SIGNATURE PAGE FOLLOWS] 9 IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by a duly authorized officer and to be dated this ____ day of June, 2000. WEIDER NUTRITION INTERNATIONAL, INC. By: /s/ Joseph Baty --------------------------- Its: CFO --------------------------- 10 EXERCISE -------- WEIDER NUTRITION GROUP, INC. The undersigned, __________________________________, pursuant to the provisions of the within Warrant, hereby elects to purchase _____________ shares of Class A Common Stock of Weider Nutrition International, Inc. covered by the Warrant described herein. Dated: __________________ Signature:_________________________ Address:___________________________ ___________________________ ___________________________ 11 ASSIGNMENT ---------- FOR VALUE RECEIVED ____________________________________ hereby sells, assigns and transfers unto ____________________________________ the Warrant described herein and all rights evidenced thereby and does irrevocably constitute and appoint _____________________, attorney, to transfer such Warrant on the books of the within named corporation. Dated: _______________ Signature:_________________________ Address:___________________________ ___________________________ ___________________________ 12 PARTIAL ASSIGNMENT ------------------ FOR VALUE RECEIVED ____________________________________ hereby sells, assigns and transfers unto ____________________________________ that portion of the Warrant described herein and the rights evidenced thereby which will on the date hereof entitle the holder to purchase ________ shares of Class A Common Stock of Weider Nutrition International, Inc., a Delaware corporation, and irrevocably constitutes and appoints ___________________________________, attorney, to transfer that part of such Warrant on the books of the within named corporation. Dated: ______________ Signature:_________________________ Address:___________________________ ___________________________ ___________________________ 13 EX-99.(F) 7 0007.txt WARRANT TO PURCHASE 611,447 SHARES EXHIBIT F THIS WARRANT AND THE CLASS A COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY SUCH APPLICABLE STATE LAWS. No. 002 WARRANT TO PURCHASE SHARES OF CLASS A COMMON STOCK OF WEIDER NUTRITION INTERNATIONAL, INC. THIS IS TO CERTIFY that, for value received, WYNNCHURCH CAPITAL PARTNERS CANADA, L.P., an Alberta limited partnership ("Wynnchurch"), or its registered ---------- assigns, is entitled to purchase from WEIDER NUTRITION INTERNATIONAL, INC., a Delaware corporation (together with any successor thereto, the "Company"), at ------- any time, 611,447 shares of Class A Common Stock, par value of $0.01 per share, of the Company (the "Class A Common Stock"), at a price of $0.01 per share (the -------------------- "Exercise Price"), subject to adjustment as hereinafter set forth, and to -------------- exercise the other rights, powers and privileges hereinafter provided, all on the terms and subject to the conditions and hereinafter set forth. This Warrant has been issued by the Company pursuant to that certain Senior Subordinated Loan Agreement of even date herewith between the Company, Wynnchurch and Wynnchurch Capital Partners, L.P. (as the same may be amended, supplemented, restated or otherwise modified from time to time, in compliance with the terms thereof, the "Loan Agreement") in consideration of the loan to -------------- the Company by Wynnchurch provided for in such Loan Agreement. Capitalized terms used herein without definition shall have the meanings set forth in Section 13 hereof, or if not therein defined, as ascribed to them in the Loan Agreement. If the Loan Agreement is terminated prior to the termination of this Warrant, such terms shall have the definitions given to them in the Loan Agreement as in effect immediately prior to its termination. The Company and Holder agree that the value of this Warrant for tax purposes is $1,834,341 on the date of issue. 1. Exercise of Warrant. ------------------- (a) Subject to the terms and conditions set forth herein, Holder shall have the right, at its option, to exercise this Warrant in whole or, if in part, in increments of at least 100,000 shares of Class A Common Stock (as adjusted for any stock splits, subdivisions or similar events), at any time and from time to time. To exercise this Warrant, Holder shall deliver to the Company (i) a Notice of Exercise in the form attached hereto duly completed and executed, (ii) an amount equal to the Exercise Price or, in the case of a partial exercise of this Warrant, the portion thereof payable upon such exercise, and (iii) this Warrant. At the option of Holder, payment of the Exercise Price shall be made: (A) by wire transfer of funds to an account in a bank located in the United States designated by the Company for such purpose, (B) by certified or official bank check payable to the order of the Company, (C) by deduction from the number of shares of Common Stock otherwise to be delivered upon exercise of the Warrant that number of shares of Common Stock which has an aggregate Fair Market Value equal to the aggregate Exercise Price for all shares of Common Stock to be purchased, or (D) by any combination of the foregoing methods. (b) Upon receipt of the required deliveries, the Company shall, as promptly as practicable, cause to be issued and delivered to Holder or, subject to Section 11 hereof, the Person designated in the Notice of Exercise, a certificate or certificates representing shares of Class A Common Stock equal in the aggregate to the number of shares of Class A Common Stock specified in the Notice of Exercise (less any shares of Common Stock in payment of a cashless exercise pursuant to Section 1(a) above). The Company shall pay all reasonable expenses and other charges payable in connection with the preparation, execution and delivery of stock certificates pursuant to this Section 1. 2. Reservation. The Company shall at all times prior to the Expiration ----------- Date reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, a number of authorized shares of Class A Common Stock equal to the number of shares issuable upon exercise of this Warrant and no such shares shall at any time have a par value which is in excess of the then effective Exercise Price. All such shares of Common Stock shall be duly authorized and, when issued upon exercise of this Warrant, shall be validly issued and fully paid and non-assessable with no liability on the part of the holders thereof. 3. Adjustments. The Exercise Price and the number of shares of Class A ----------- Common Stock issuable upon the exercise of this Warrant shall be subject to adjustment as hereafter set forth: (a) In the event that at any time the Company shall: (i) pay a dividend or make any other distribution with respect to its Common Stock in shares of its Common Stock, or (ii) subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then the Exercise Price shall be adjusted to that price determined by multiplying the Exercise Price in effect immediately prior to such event by a fraction (A) the numerator of which shall be the total number of shares of Common Stock immediately prior to such event, and (B) the denominator of which shall be the total number of shares of Common Stock, of the Company immediately after such event. (b) In the event that at any time the Company shall issue or sell any shares of Common Stock (except shares of Common Stock issued upon exercise of this Warrant) for a consideration per share less than the Fair Market Value thereof, then upon each such issuance the Exercise Price shall be adjusted to that price determined by multiplying the Exercise Price in effect immediately prior to the time of such issue or sale by a fraction (A) the numerator of which shall be the number of shares of Common Stock immediately prior to such issuance or sale plus the number of shares of Common Stock which the aggregate consideration for the total number of such additional shares of Common Stock so issued or sold would purchase at the Fair Market Value thereof (if such shares had been sold at Fair Market Value) on the date of such issuance or sale, and (B) the denominator of which shall be the number of shares of Common Stock immediately prior to such issuance or sale plus the number of such additional shares of Common Stock so issued or sold. The provisions of this subsection (b) shall not apply to any additional shares of Common Stock which are distributed to holders of 2 Common Stock as a stock dividend or subdivision for which an adjustment is provided for under subsection (a) of this Section 3. (c) In the event any shares of Common Stock shall be issued or sold for cash, the consideration received by the Company therefor shall be deemed to be the amount of the cash received by the Company therefor or, if such shares of Common Stock are offered by the Company for subscription, the subscription price or, if such shares of Common Stock are sold to underwriters or dealers for public offering without a subscription offer, the initial public offering price, in each case excluding any amount paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts or expenses paid or incurred by the Company in connection with such issuance or sale. (d) In the event any shares of Common Stock shall be issued or sold for a consideration other than cash, the amount of such consideration shall be deemed to be the Fair Market Value of such consideration at the time of such issuance as determined by the Board of Directors of the Company in the good faith exercise of their business judgment. (e) Upon any adjustment of the Exercise Price as provided in this Section 3, the holder hereof shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares of Common Stock obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock purchasable hereunder immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. (f) Whenever the Exercise Price or the number of shares of Common Stock issuable upon exercise of this Warrant is adjusted pursuant to this Section 3, the Company shall promptly deliver a notice to the holder of this Warrant setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment and the method by which such adjustment was calculated. (g) Notwithstanding anything herein to the contrary, an adjustment as provided in Section 3(b) above shall not be made if the Company issues securities (i) to employees, officers or directors of the Company to the extent approved by the Board of Directors or the compensation committee of the Board of Directors of the Company, (ii) as payment of all or any part of the purchase price of any business or assets thereof acquired by the Company or any of its Subsidiaries, (iii) to any lender in connection with the incurrence of Indebtedness by the Company or any of its Subsidiaries, or (iv) upon the exercise of any option or other right described in any of clauses (i) through (iii). 4. Mergers, Consolidations, Etc. In the case of any consolidation or ----------------------------- merger of the Company with another entity or any reorganization or reclassification of the Common Stock or other equity securities of the Company, then, as a condition of such consolidation, merger, reorganization or reclassification, lawful and adequate provision shall be made whereby Holder shall thereafter have the right to receive upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Class A Common Stock immediately theretofore purchasable hereunder, such shares of stock, securities, cash or assets as may be (by virtue of such consolidation, merger, reorganization or reclassification) issued or payable with respect to or in exchange for a number of outstanding shares of Class A Common Stock equal to the number of shares of Class A Common Stock immediately theretofore so purchasable hereunder had such consolidation, merger, reorganization or reclassification 3 not taken place, and in any such case appropriate provisions shall be made with respect to the rights and interests of Holder to the end that the provisions hereof shall thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities, cash or assets thereafter deliverable upon exercise of this Warrant. The Company shall not effect any such consolidation or merger, unless prior to or simultaneously with the consummation thereof, the successor entity (if other than the Company) resulting from such consolidation or merger shall assume by written instrument executed and delivered to Holder, the obligation to deliver to Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, Holder may be entitled to receive. 5. Dividends; Redemption. If the Board of Directors of the Company shall --------------------- (a) declare any dividend or other distribution on the shares of the Common Stock, except by way of a stock dividend payable on all of the Common Stock, or (b) authorize the redemption or repurchase of any shares of the Common Stock, the Company shall deliver notice thereof to Holder not less than twenty (20) days prior to the record date fixed for determining shareholders entitled to participate in such dividend, distribution, redemption or repurchase, and Holder shall have the right to participate in such dividend, distribution, redemption or repurchase to the same extent Holder would have participated if it had previously fully exercised this Warrant prior to such record date. The provisions of this Section 5 shall not apply to distributions made in connection with transactions covered by Section 3. 6. Preemptive Rights. [Intentionally omitted.] ----------------- 7. Dissolution or Liquidation. In the event of (a) any proposed -------------------------- distribution of the assets of the Company in dissolution or liquidation, (b) a Change of Control or (c) a Sale, the Company shall mail notice thereof to Holder upon the earlier of (x) thirty (30) days prior to the consummation or completion of, and, as applicable, (y) the date within two (2) business days after the execution of a definitive agreement providing for, any of the events described in (a), (b) and (c), and shall make no dividend or distribution to shareholders until the expiration of thirty (30) days from the date of mailing of such notice. 8. Fully Paid Stock; Taxes. The Company covenants that the shares of ----------------------- capital stock represented by each and every certificate for the Class A Common Stock to be delivered on the exercise of the purchase rights herein shall, at the time of such delivery, be duly authorized, validly issued and outstanding and fully paid and nonassessable. The Company further covenants that it shall pay all expenses in connection with, and all federal and state taxes (other than income taxes) which may be imposed in respect of this Warrant, the Issued Warrant Shares and the Issuable Warrant Shares. 9. Registration Rights Agreement. This Warrant and the Warrant Shares ----------------------------- are subject to, and entitled to the benefits, rights and options set forth in, the Registration Rights Agreement. 10. Partial Exercise and Assignment. If this Warrant is exercised in part ------------------------------- only, Holder shall be entitled to receive a new Warrant, registered in the name of Holder or its designee evidencing the right to purchase the aggregate amount of Issuable Warrant Shares for which this Warrant was not exercised. This Warrant may be assigned, in whole or in part, by surrender of this Warrant to the Company with the assignment or partial assignment, as the case may be, attached to this Warrant duly executed. If this Warrant is partially assigned, a new Warrant shall be issued to Holder, registered in the name of Holder or its designee, evidencing the right to purchase the aggregate amount of Issuable Warrant Shares for which this Warrant was not so assigned. The assignee shall receive a new Warrant, 4 registered in the name of such assignee or its designee and evidencing the right to purchase the aggregate number of Issuable Warrant Shares for which this Warrant was so assigned. 11. Restrictions on Transferability. ------------------------------- (a) Neither this Warrant nor the Issued Warrant Shares shall be transferable to the extent any transfer of the Warrant, the Issued Warrant Shares or any portion thereof would be prohibited by the Securities Act and any applicable state securities laws. (b) Each Warrant shall bear on the face thereof a legend substantially in the form of the notice endorsed on the first page of this Warrant. Each certificate representing Issued Warrant Shares initially issued upon the exercise of any Warrant and each certificate issued to a subsequent transferee of such certificate shall bear all legends and be subject to the conditions set forth in this Warrant. (c) The Company covenants that it will file all reports required to be filed by it with the Securities and Exchange Commission, and that it will take such further action as the Holder may reasonably request, all to the extent required from time to time to enable the Holder to sell this Warrant or any Warrant Shares without registration under the Securities Act pursuant to Rule 144 ("Rule 144") or Rule 144A ("Rule 144A") (or any similar rule then in effect -------- --------- promulgated by the Commission under the Securities Act). Upon the request of the Holder, the Company will deliver to the Holder a notice stating whether it has complied with such requirements. The Company covenants that it will provide to each holder or any prospective purchaser of this Warrant or Warrant Shares the information required to be delivered under paragraph (d)(4) of Rule 144A (or any similar provision then in effect) promulgated by the Securities and Exchange Commission under the Securities Act in respect of a transaction qualifying for an exemption under Rule 144A and it will take such further action as a Holder may reasonably request, all to the extent required from time to time, to enable such Holder to sell its Warrant or Warrant Shares without registration under the Securities Act pursuant to Rule 144A. (e) The Company understands from the initial Holder hereof that the initial Holder is purchasing this Warrant solely by and for its own account, for investment, and not for subdivision, fractionalization, resale or distribution, that the initial Holder has no contract, undertaking, agreement or arrangement with any person to sell, transfer or pledge to such person or anyone else this Warrant, or any part hereof; and that the initial Holder has no present plans or intentions to enter into any such contract, undertaking, agreement or arrangement. 12. Certain Covenants. ----------------- (a) Requisite Approvals. The Company shall use its best efforts to ------------------- obtain all necessary or desirable approvals for the performance by the Company of this Agreement (including without limitation the adjustments set forth in Section 3) from whatsoever source required, including, but not limited to (i) at the request of Holder, the Company's shareholders at the next meeting thereof, whether annual or special, (ii) any governmental authority or regulatory body of the United States or of any state required in connection with the lawful issuance of the Warrant Shares. (b) No Impairment or Amendment. The Company shall not by any action, -------------------------- including, without limitation, amendment of its articles or certificate of formation or by-laws, any 5 reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant or impair the ability of the Holder to realize upon the intended economic value hereof, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate to protect the rights of the Holder hereof against impairment. Without limiting the generality of the foregoing, the Company will (i) not establish a par value of any shares of Class A Common Stock issuable upon the exercise of this Warrant above the amount payable therefor, (ii) take all such action as may be necessary or appropriate in order that the Company may validly issue fully paid and nonassessable shares of Class A Common Stock upon the exercise of this Warrant, (iii) obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant and (iv) not grant any preemptive rights with respect to any of its shares of Class A Common Stock without the prior written consent of the Holder. (c) Board of Directors. So long as a majority of the Issued Warrant ------------------ Shares and Issuable Warrant Shares are owned by the initial Holder and its direct transferees, the Company shall permit any of John Hatherly, John Tomes, Bob Vedra or another representative of Holder designated by Holder from time to time and reasonably satisfactory to the Company (the "Holder Representative") to attend meetings of the Board of Directors of the Company as a non-voting observer at each such meeting. The Holder Representative shall be entitled to written notice of each meeting of the Board of Directors of the Company no later than the date notice is provided to directors of the Board of Directors of the Company with respect to such meeting and to receive all written materials and other information (including all materials distributed to the Board of Directors of the Company and copies of meeting minutes) given to directors at the same time such materials and information are given to the directors. The Holder Representative shall not have any voting rights but shall be entitled to participate in discussions at such Board meetings and consult with and offer advice to the officers of the Company and the Board of Directors of the Company. The Company shall pay all costs as are reasonably incurred by such Holder Representative in connection with attendance of such Holder Representative at any meeting of the Board of Directors of the Company. Notwithstanding the foregoing, the Holder Representative may be excluded from part or all of any meeting of the Board of Directors at the request of the Chairman of the Board of Directors, acting in a reasonable manner, if the Chairman of the Board of Directors determines that the matters to be discussed in that meeting or portion of a meeting may affect the Warrant Shares or the subordinated loans outstanding under the Loan Agreement. (d) Listing on Securities Exchange. So long as shares are qualified ------------------------------ for listing, the Company shall, at its expense, list on its securities exchange, maintain and increase when necessary such listing of, all Issued Warrant Shares and, to the extent permissible under the applicable securities exchange rules, all Issuable Warrant Shares, so long as any shares of Common Stock shall be so listed. So long as shares are qualified for listing, the Company will also so list on each securities exchange, and will maintain such listing of, any other securities which Holder shall be entitled to receive upon the exercise hereof if at the time any securities of the same class shall be listed on such securities exchange by the Company. The Company shall not intentionally take any action or otherwise take any action which is reasonably intended to result in the Company being delisted from their securities exchange. 13. Definitions. ----------- 6 In addition to the terms defined elsewhere in this Warrant, the following terms shall have the meanings set forth below: "Common Stock" shall mean any common stock of any class or series of ------------ the Company currently or hereafter authorized having the right to share in distributions either of earnings or assets of the Company without limit as to amount or percentage. For purposes of determining the number of shares of Class A Common Stock issuable upon the exercise of this Warrant and other purposes herein, the term "Common Stock" shall be computed on Fully-Diluted Basis. "Exercise Date" shall mean the date on which this Warrant is ------------- exercised. "Fair Market Value" per share of Common Stock shall mean, at any date ----------------- of determination thereof: (a) if shares of Common Stock are listed or admitted to trading on any national securities exchange or traded on any national market system, the average of the daily closing prices for the thirty (30) trading days immediately preceding such date. The closing price for each day shall be the last sale price on such date or, if no such sale takes place on such date, the average of the closing bid and asked prices on such date, in each case as officially reported on the principal national securities exchange or national market system on which shares of Common Stock are then listed, admitted to trading or traded; (b) if shares of Common Stock are not listed or admitted to trading on any national securities exchange or traded on any national market system, the average of the reported closing bid and asked prices thereof on such date in the over-the-counter market as shown by the National Association of Securities Dealers automated quotation system or, if shares of Common Stock are not then quoted in such system, as published by the National Quotation Bureau, Incorporated or any similar successor organization; or (c) if shares of Common Stock are not listed or admitted to trading on any national exchange or traded on any national market system and if no closing bid and asked prices are then quoted or published in the over-the-counter market, the price as determined in good faith by the agreement of Holder and the Board of Directors of the Company; provided, however, that if Holder and the -------- ------- Board of Directors of the Company cannot agree on a price within fifteen (15) days after (as applicable) issuance of for which the Fair Market Value is being determined pursuant to Sections 3(b) or 3(d), Holder and the Board of Directors of the Company shall jointly retain a nationally recognized investment banking firm or other firm providing similar valuation services (a "Valuation Firm") -------------- experienced in the appraisal of companies which are engaged in the business of the Company and which is not an Affiliate of the Company or any shareholder thereof within seven (7) days after the expiration of such fifteen (15) day period. If the Company and Holder are unable to agree on the selection of a Valuation Firm within such seven (7) day period, the Company and Holder, within seven (7) days after expiration of such seven (7) day period, shall each select a Valuation Firm and the two Valuation Firms so selected shall jointly select a third Valuation Firm which shall make the determination of the Fair Market Value of the Common Stock. The Valuation Firm selected in accordance with the foregoing procedure shall be instructed to determine such value within fifteen (15) days after selection and any such determination shall be final and binding upon the parties. The fees and expenses for such determination made by any Valuation Firm shall be borne by the Company. 7 Fair Market Value of a share of Common Stock shall be determined under clause (c) by dividing the fair market value of the Company by the number of shares of Common Stock outstanding as of the date of determination, determined on a Fully- Diluted Basis. In such determination of Fair Market Value, the following specific principles shall be applied by the Valuation Firm: (i) the Valuation Firm shall assume that all of the assets and properties of the Company are sold as a going concern, on an orderly basis (and not on a liquidation basis), at their fair market values based on an enterprise value as of the Valuation Date; (ii) the Valuation Firm shall assume that all indebtedness and other liabilities of the Company is prepaid in full as of the Valuation Date (and, in doing so, disregard the amount of any prepayment penalties, yield enhancement premiums or the like) and that the Company has paid the holders of preferred stock or similar securities, if any, amounts payable thereon, the aggregate amount of which shall be taken into account in arriving at the Fair Market Value; and (iii) the Valuation Firm shall assume that the remaining proceeds of such a sale are distributed pro rata on a Fully-Diluted Basis to the shareholders of the Company. "Fully-Diluted Basis" shall mean that number of shares of Common Stock ------------------- which would be outstanding, as of the date of computation, if (i) this Warrant, (ii) all other warrants, options or other rights to subscribe for, purchase or otherwise acquire Common Stock or (iii) securities (including debt securities) convertible or exchangeable for Common Stock had been converted or fully exercised. "Holder" shall mean Wynnchurch or such other Person in whose name this ------ Warrant is registered on the books of the Company maintained for such purpose. "Issuable Warrant Shares" shall mean the number of shares of Class A ----------------------- Common Stock issuable from time to time upon exercise of this Warrant. "Issued Warrant Shares" shall mean the cumulative total of the shares --------------------- of Class A Common Stock issued from time to time as a result of all prior exercises of this Warrant. "Person" shall mean any individual, sole proprietorship, partnership, ------ limited liability company, joint venture, unincorporated organization, association, corporation, trust, institution, entity or government. "Registration Rights Agreement" shall mean that certain Registration ----------------------------- Rights Agreement, of even date herewith by and between the Company and Wynnchurch, as amended, supplemented, restated or otherwise modified from time to time, in compliance with the terms thereto. "Securities Act" shall mean the Securities Act of 1933, as amended, or -------------- any successor federal statute, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder, all as in effect from time to time. "Warrant" means this Warrant and all warrants hereafter issued in ------- exchange or substitution for this Warrant. 8 "Warrant Shares" shall mean the Issued Warrant Shares and the Issuable -------------- Warrant Shares. 14. Replacement Warrants. If this Warrant shall be mutilated, lost, -------------------- stolen or destroyed, the Company may issue a new Warrant of like date, tenor and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of the mutilated Warrant, or in lieu of the Warrant lost, stolen or destroyed, upon receipt of evidence satisfactory to the Company of the loss, theft or destruction of such Warrant. 15. Warrant Holder Not a Shareholder. This Warrant does not confer upon -------------------------------- Holder any right to vote or to consent or to receive notice as a shareholder of the Company, as such, in respect of any matters whatsoever, or any other rights or liabilities as a shareholder, prior to the exercise hereof as hereinbefore provided. 16. Notices. Except as otherwise expressly provided herein, all notices ------- referred to in this Warrant shall be in writing and shall be delivered pursuant to the notice provisions of the Loan Agreement. 17. Severability. Whenever possible, each provision of this Warrant shall ------------ be interpreted in such manner as to be effective under applicable law, but if any provision of this Warrant is held to be prohibited by or invalid under applicable law in any jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating any other provision of this Agreement. 18. Survival. Notwithstanding anything to the contrary contained herein, -------- the provisions of Sections 12 hereof shall survive the exercise of this Warrant in full by Holder and shall continue to be in full force and effect so long as the initial holder and its direct transferees owns a majority of the Warrant Shares. 19. Captions: Governing Law. The descriptive headings of the various ----------------------- sections of this Warrant are for convenience only and shall not affect the meaning or construction of the provisions hereof. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by the internal law of the State of Illinois without giving effect to any choice of law or conflict of law provision or rule. 20. Action by Holder. Unless otherwise expressly provided for herein, any ---------------- action entitled to be taken by Holder owning the Issued Warrant Shares shall require the consent of the holders of at least a majority of the shares of Common Stock issued or issuable to Holder's Affiliates on the date hereof at the time such action is taken. [SIGNATURE PAGE FOLLOWS] 9 IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by a duly authorized officer and to be dated this ____ day of June, 2000. WEIDER NUTRITION INTERNATIONAL, INC. By: /s/ Joseph Baty -------------------------- Its: CFO ------------------------- 10 EXERCISE -------- WEIDER NUTRITION GROUP, INC. The undersigned, __________________________________, pursuant to the provisions of the within Warrant, hereby elects to purchase _____________ shares of Class A Common Stock of Weider Nutrition International, Inc. covered by the Warrant described herein. Dated: ______________ Signature:___________________________ Address:_____________________________ _____________________________ _____________________________ 11 ASSIGNMENT ---------- FOR VALUE RECEIVED ____________________________________ hereby sells, assigns and transfers unto ____________________________________ the Warrant described herein and all rights evidenced thereby and does irrevocably constitute and appoint _____________________, attorney, to transfer such Warrant on the books of the within named corporation. Dated: ________________ Signature:___________________________ Address:_____________________________ _____________________________ _____________________________ 12 PARTIAL ASSIGNMENT ------------------ FOR VALUE RECEIVED ____________________________________ hereby sells, assigns and transfers unto ____________________________________ that portion of the Warrant described herein and the rights evidenced thereby which will on the date hereof entitle the holder to purchase ________ shares of Class A Common Stock of Weider Nutrition International, Inc., a Delaware corporation, and irrevocably constitutes and appoints ___________________________________, attorney, to transfer that part of such Warrant on the books of the within named corporation. Dated: ____________ Signature:___________________________ Address:_____________________________ _____________________________ _____________________________ 13 EX-99.(G) 8 0008.txt REGISTRATION RIGHTS AGREEMENT EXHIBIT G REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT ("Agreement") is made as of June __, --------- 2000 by and between WEIDER NUTRITION INTERNATIONAL, INC., a Delaware corporation (the "Company"), WYNNCHURCH CAPITAL PARTNERS, L.P., a Delaware limited ------- partnership, and WYNNCHURCH CAPITAL PARTNERS CANADA, L.P., an Alberta limited partnership (collectively "Wynnchurch"). ---------- R E C I T A L S - - - - - - - - A. This Agreement has been entered into by the Company pursuant to that certain Senior Subordinated Loan Agreement of even date herewith among the Company and Wynnchurch (as the same may be amended, supplemented, restated or otherwise modified from time to time in compliance with the terms thereof, the "Loan Agreement"). In connection with the Loan Agreement, the Company has -------------- agreed, upon the terms and subject to the conditions contained therein, to issue and sell to Wynnchurch warrants (collectively, the "Warrants") entitling the -------- holders thereof to purchase the number of shares (the "Warrant Shares") of Class -------------- A common stock, $0.01 par value, of the Company (collectively, the "Common ------ Stock"), as set forth therein. The Warrants and the Warrant Shares are - ----- collectively referred to herein as the "Securities". ---------- B. To induce Wynnchurch to execute and deliver the Loan Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "Securities Act"), and applicable -------------- state securities laws. A G R E E M E N T S - - - - - - - - - - NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: ARTICLE I DEFINITIONS ----------- 1.1 Definitions. As used in this Agreement, the following terms shall ----------- have the following meanings: (a) The term "Exchange Act" shall mean the Securities Exchange Act of ------------ 1934, as amended. (b) The term "Holder" means Wynnchurch and any transferees or ------ assignees who agree to become bound by the provisions of this Agreement in accordance with Article IX hereof. (c) The terms "register," "registered," and "registration" refer to a -------- ---------- ------------ registration effected by preparing and filing a Registration Statement or Statements in compliance with the Securities Act and the declaration or ordering of effectiveness of such Registration Statement by the SEC. (d) The term "Registrable Securities" means the Warrant Shares issued ---------------------- or issuable with respect to the Warrants (without regard to any limitations on conversion or exercise) and any shares of capital stock or other securities issued or issuable, from time to time (with any adjustments), on or in exchange for or otherwise with respect to the Common Stock or any other Registrable Securities. (e) The term "Registration Statement" means a registration statement ---------------------- of the Company under the Securities Act pursuant to the provisions of this Agreement. (f) The term "SEC" means the Securities and Exchange Commission. --- (g) The term "Rule 144" means Rule 144 (including Rule 144(k)) of the -------- SEC under the Securities Act or any similar provision promulgated thereunder. 1.2 Capitalized Terms. Capitalized terms used herein and not otherwise ----------------- defined herein shall have the respective meanings set forth in the Loan Agreement. ARTICLE II REGISTRATION ------------ 2.1 Demand Registration Rights. -------------------------- (a) At any time after the first anniversary of the date hereof, Holder may request the registration under the Securities Act on Form S-3 (or any replacement form) of all or any portion of its Registrable Securities (a "Demand ------ Registration"). Not more than one (1) Demand Registration may be requested - ------------ pursuant to this Section 2.1(a); provided, however, that a registration shall be -------- ------- counted for such purposes only if it becomes effective under the Securities Act and at least eighty percent (80%) of the Registrable Securities requested to be included thereunder are, after giving effect to Section 2.1(e), included in the applicable Registration Statement. (b) The Company shall also prepare and file such amendments to Registration Statements and such additional Registration Statements as may from time to time be required by this Agreement. (c) All offerings of Registrable Securities pursuant to a Demand Registration shall be made, at the option of Holder, pursuant to (i) an underwritten offering through underwriters selected by 2 Holder, and reasonably satisfactory to the Company, or (ii) a prescribed plan of distribution reasonably satisfactory to the Company and Holder. The Demand Registration may be deferred for up to 120 days (i) at the request of the Company or (ii) following the registration by the Company of shares issued by it or (iii) upon the advice of the Company's lead underwriter. (d) If any offering pursuant to a Registration Statement pursuant to this Section 2.1 involves an underwritten offering, Holder shall have the right to select legal counsel to represent it. (e) If in any Demand Registration, the managing underwriter or underwriters thereof (or in the case of a Demand Registration not being underwritten, an independent underwriter, of nationally recognized standing selected by the Company whose fees and expenses shall be borne by the Company), shall advise the Company in writing that in its or their reasonable opinion the number of Registrable Securities proposed to be sold in such Demand Registration exceeds the number that can be sold in such offering without having a material adverse effect on the success of the offering of securities to be sold in such Demand Registration, the Company will include in such Demand Registration the maximum number of Registrable Securities requested to be registered which, in the opinion of such underwriter or underwriters can be sold without having such a material adverse effect (provided, however, that in such event: (A) no securities other than Registrable Securities shall be included in such registration unless all Registrable Securities requested to be included therein are so included; and (B) if less than all of the Registrable Securities are included in such registration, then the Registrable Securities shall be included in such registration in the following order of priority (1) first, securities to be registered on account of the Holders pro rata among such Holders based on the number of securities requested by such Holders to be included in such registration; and (B) second, securities to be registered on account of Persons other than the Holders, pro rata among such Persons based on the number of securities requested by such Persons to be included in such registration.) 2.2 Piggy-Back Registrations. Holder shall have the following piggyback ------------------------ registration rights: (a) Whenever the Company proposes to register any of its equity securities under the Securities Act (other than any registrations on Form S-4 or S-8 or any form substituting therefore relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), the Company will give written notice to Holder, at least twenty (20) days prior to the anticipated filing date, of its intention to effect such a registration, which notice shall specify the proposed offering price (if known or, if not known, an estimate thereof), the kind and number of securities proposed to be registered, the distribution arrangements and such other information that at the time would be appropriate to include in such notice. Subject to paragraph (b) below, the Company shall include in such registration all Registrable Securities held by Holder with respect to which written requests for inclusion therein have been delivered by Holder to the Company within fifteen (15) business days after the date of delivery of the Company's notice (a "Piggyback Registration"). Except as may otherwise be provided in this Article ---------------------- II, Registrable Securities with respect to which such requests for registration have been received will be registered by the Company in a Piggyback Registration pursuant to this Article II on the same terms and subject to the same conditions as are applicable to any similar securities of the Company included therein. (b) Notwithstanding anything to the contrary contained in this Section 2.2: (i) the Company shall not be obligated to include any Registrable Securities in any registration statement filed by the Company if counsel to the Company and reasonably acceptable to Holder shall render an opinion to 3 Holder to the effect that (A) registration is not required for the proposed transfer of such Registrable Securities or (B) a post-effective amendment to an existing registration statement filed simultaneously with the proposed transfer would be sufficient for such proposed transfer, and (ii) the Company may (subsequent to the security holders' approval or the Company's requirement to effect a public offering pursuant to this Article II) determine not to proceed with the Registration Statement which is the subject of such notice, provided that it has determined, in its reasonable discretion, that a change in circumstances has occurred (since the date of the security holders' approval or the date from which the Company is required to effect a public offering) to the material detriment of the Company or the proposed offering of securities. No right to registration of Registrable Securities under this Section 2.2 shall be construed to limit any registration required under Sections 2.1 or paragraph (b) of Article III hereof. (c) If in any Piggyback Registration, the managing underwriter or underwriters thereof (or in the case of a Piggyback Registration not being underwritten, an independent underwriter, of nationally recognized standing selected by the Company whose fees and expenses shall be borne by the Company), shall advise the Company in writing that in its or their reasonable opinion the number of Registrable Securities proposed to be sold in such Piggyback Registration exceeds the number that can be sold in such offering without having a material adverse effect on the success of the offering of securities to be sold in such Piggyback Registration, the Company will include in such Piggyback Registration the maximum number of Registrable Securities requested to be registered which, in the opinion of such underwriter or underwriters can be sold without having such a material adverse effect (it being understood that any reduction in Registrable Securities shall be made pro rata in proportion to the Registrable Securities sought to be registered by Holder and other security holders of the Company, but no such reduction shall be made in relation to shares to be registered by the Company). 2.3 Eligibility for Form S-3. The Company represents and warrants that it ------------------------ is currently eligible to register the resale of the Warrant Shares and all Registrable Securities by Holder on a Registration Statement on Form S-3 under the Securities Act for the account of Holder (and not for or on behalf of Company). The Company shall file all reports required to be filed by the Company with the SEC in a timely manner and take all other actions which may be required so as to maintain such eligibility for the use of Form S-3. ARTICLE III OBLIGATIONS OF THE COMPANY -------------------------- With respect to any Piggyback Registration or Demand Registration (collectively, a "Registration"), the Company shall: ------------ (a) prepare and file with the Commission as soon as practicable a Registration Statement or Registration Statements relating to the applicable Registration on any appropriate form under the Securities Act which shall be available for use in connection with the sale of the Registrable Securities in accordance with the intended method or methods of distribution thereof, and if required the Company shall undergo and pay the cost of a special audit to effect such Registration. The Company will use its best efforts to cause such Registration Statement to become effective. The Company shall not be deemed to have breached such "best efforts" undertaking if it shall take any action which is required under applicable law, 4 or shall take any action in good faith and for valid business reasons, including without limitation the acquisition or divestiture of assets or the withdrawal of the Registration Statement; (b) prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement as may be necessary to keep each Registration Statement effective for a period of not more than ninety (90) days after the date of its effectiveness, or such shorter period as will terminate when all Registrable Securities covered by such Registration Statement have been sold. The Company shall cause each prospectus required in connection therewith (a "Prospectus") to be supplemented by any required Prospectus supplement, and ---------- as so supplemented to be filed pursuant to Rule 424 under the Securities Act. Furthermore, the Company shall comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period, in accordance with the intended method or methods of distribution by the sellers thereof as set forth in the Registration Statement or supplement to the Prospectus; (c) promptly notify Holder of: (i) the date on which the Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement has been filed, and, with respect to the Registration Statement or any post-effective amendment, the date on which the same has become effective; (ii) any written request by the SEC for amendments or supplements to the Registration Statement or the Prospectus or for additional information; (iii) the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iv) the receipt by the Company of any written request by any state securities authority for additional information or written notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (v) the happening of any event which makes any material statement made in the Registration Statement, the Prospectus or any document incorporated therein by reference untrue in any material respect or which requires the making of any changes in the Registration Statement, the Prospectus or any document incorporated therein by reference in order to make the statements therein not misleading in the light of the circumstances under which they were made; (d) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest possible moment; (e) furnish to Holder, without charge, at least one signed copy of the Registration Statement and any amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and, to the extent reasonable, all exhibits (including those incorporated by reference); (f) deliver to Holder, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as Holder may reasonably request; the 5 Company consents to the use, in accordance with the Securities Act, of each Prospectus or any amendment or supplement thereto by Holder, in connection with the offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto; (g) in connection with any Registration of Registrable Securities and if required by law, use its best efforts to register or qualify or cooperate with Holder in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or "blue sky" laws of such jurisdictions the managing underwriter reasonably requests in writing and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to taxation in any such jurisdiction or to submit to the general service of process in any such jurisdiction; (h) cooperate with Holder to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold free from any restrictive legends; and cause such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two business days prior to any sale of Registrable Securities to the underwriters; (i) subject to paragraphs (a) and (j) of this Article III, cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriters, if any, to consummate the disposition of such Registrable Securities in the jurisdictions contemplated by paragraph (g) of this Article III; (j) upon the occurrence of any event contemplated by subparagraph (ii), (iv) or (v) of paragraph (c) of this Article III, prepare any required supplement or post-effective amendment to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (k) not later than the effective date of the applicable Registration Statement, provide a CUSIP number for all Registrable Securities; (l) enter into such agreements (including, as applicable, an underwriting agreement) and take all such other actions in connection therewith which are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities, and, in such connection, whether or not an underwriting agreement is entered into and whether or not the Registration is an underwritten Registration: (i) obtain "cold comfort" letters and updates thereof from the Company's accountants addressed to Holder, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters received by underwriters in connection with primary underwritten offerings; and 6 (ii) deliver such documents and certificates as may reasonably be requested by Holder to evidence compliance with subparagraph (l) (i) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done at each closing under such underwriting or similar agreement as and to the extent required thereunder; (m) make available for inspection by a representative of Holder at reasonable times and upon reasonable prior notice, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers and employees to supply all information reasonably requested by Holder in connection with such Registration Statement; (n) cause (i) all the Registrable Securities covered by such registration to be listed on the principal securities exchange on which similar securities issued by the Company are then listed (if any), if the listing of such Registrable Securities is then permitted under the rules of such exchange, (ii) if no similar securities are then so listed or if the listing of such Registrable Securities is then not permitted under the rules of such exchange, to either cause all such Registrable Securities to be listed on the New York Stock Exchange, Inc. ("NYSE"), or secure designation of each such Registrable ---- Security on NASDAQ within the meaning of Rule 11Aa 2-1 under the Exchange Act or, (iii) failing that, secure NASDAQ authorization for quotation of such shares and, without limiting the generality of the foregoing, take all actions that may be required by the Company as issuer of such Registrable Securities in order to facilitate the managing underwriter's arranging for the designation of at least two market makers as such with respect to such shares with the NASD; and (o) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by each Registration Statement not later than the effective date thereof, and if Holder shall so request, within one (1) business day after such Registration Statement becomes effective, the Company shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies to the Holder of such Registrable Securities) an opinion of such counsel in the form attached hereto as Exhibit l. --------- The Company may require Holder to furnish to the Company in writing or orally as the Company may request in writing, such information regarding Holder and the proposed distribution of such securities by Holder as the Company or any underwriter may from time to time reasonably require or is otherwise required by law. Holder agrees that upon receipt of notice from the Company of the happening of any event of the kind described in subparagraph (c)(ii), (iii) (iv) or (v) of this Article III, Holder will forthwith discontinue disposition of Registrable Securities (but in the case of subparagraph (c)(iv) of this Article III, only in the applicable jurisdiction or jurisdictions, as the case may be) pursuant to the Registration Statement until Holder has received copies of the supplemented or amended Prospectus as contemplated by paragraph (j) of this Article III, or until it has been advised in writing (the "Advice") by the ------ Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, Holder will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such holder of Registrable Securities's possession), of the Prospectus covering such Registrable Securities which is current at the time of receipt of such notice. In the event the Company shall give any notice of the happening of any event of the kind described in subparagraph (c)(ii), (iii) or (v) of this Article III, the ninety (90)-day period referred to in paragraph (b) of this Article III shall be extended by the number of days during the period from the date of the giving of such notice to the date when Holder shall have received either the copies of the 7 supplemented or amended Prospectus contemplated by paragraph (j) of this Article III or the Advice (as the case may be), both dates inclusive. ARTICLE IV OTHER REGISTRATION RIGHTS ------------------------- The Company has not entered, nor will the Company enter, into any Agreement with respect to Registration of its securities which (a) is inconsistent with this Agreement or (b) grants to any Person registration rights which have a priority greater than those granted to Holder pursuant to this Agreement. ARTICLE V EXPENSES OF REGISTRATION ------------------------ All expenses incident to the Company's performance of or compliance with this Agreement ("Registration Expenses") and the reasonable fees and expenses of --------------------- one law firm for Holder (and all of its assignees who are holders of any portions of the Warrants) will be borne by the Company. Registration Expenses shall include, without limitation, all registration and filing fees, the fees and expenses of the counsel and accountants for the Company (including the expenses of any "cold comfort" letters), all other costs and expenses of the Company incident to the preparation, printing and filing under the Securities Act of the Registration Statement (and all amendments and supplements thereto) and furnishing copies thereof and of the Prospectus included therein, the costs and expenses incurred by the Company in connection with the qualification of the Registrable Securities under the state securities or "blue sky" laws of various jurisdictions (if any), the costs and expenses associated with filings required to be made with the National Association of Securities Dealers, Inc., the costs and expenses of listing the Registrable Securities for trading on a national securities exchange or authorizing them for trading on NASDAQ, and all other costs and expenses incurred by the Company in connection with any Registration hereunder. Notwithstanding the preceding sentence, Registration Expenses shall not include the costs and expenses of Holder for underwriters' commissions and discounts, brokerage fees and income taxes with respect to Holder to be transferred pursuant to the Registration, all of which shall be paid by Holder. ARTICLE VI INDEMNIFICATION AND CONTRIBUTION -------------------------------- In the event any Registrable Securities are included in a Registration Statement under this Agreement, the parties shall be entitled to indemnity and contribution in connection with Registrations, as follows: (a) the Company agrees to indemnify Holder, its directors, officers, employees and its agents and each Person who (within the meaning of the Securities Act) controls Holder and hold them harmless against, all losses, claims, damages, liabilities and expenses (which, subject to the limitations herein contained, shall include reasonable attorneys' fees) resulting from (i) any untrue or alleged untrue statement 8 of a material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment or supplement thereto or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except insofar as the same are caused by any such untrue statement or alleged untrue statement or omission or alleged omission being based upon or contained in any information relating to Holder furnished in writing to the Company by Holder or its representatives expressly for use therein or by Holder or Holder's agent's failure to deliver a copy of the Registration Statement or Prospectus or any amendments or supplements thereto after the Company has furnished such holder of Registrable Securities with a sufficient number of copies of the same), or (ii) the Company's failure to perform its obligations under this Article VI. The Company will also indemnify underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their officers, directors and members and each Person who (within the meaning of the Securities Act) controls such Persons, to the same extent as provided above with respect to the indemnification of the owners of Registrable Securities; (b) in connection with any Registration in which Holder is participating, Holder will furnish to the Company in writing such information with respect to Holder as the Company reasonably requires for use in connection with any Registration Statement or Prospectus or any amendment or supplement thereto, and Holder shall indemnify the Company, its security holders, directors and officers, each underwriter and each Person who (within the meaning of the Securities Act) controls the Company or any such underwriter, and hold them harmless, against any losses, claims, damages, liabilities and expenses (which, subject to the limitations herein contained, shall include reasonable attorneys' fees) resulting from (i) a breach by Holder of the provisions of the last paragraph of Article III, (ii) any untrue statement or alleged untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements in the Registration Statement or Prospectus or preliminary Prospectus or any amendment or supplement thereto, in light of the circumstances under which they were made, not misleading, to the extent (but only to the extent) that such untrue statement or omission is contained in any information relating to Holder so furnished in writing by Holder or its representative specifically for inclusion therein, or (iii) Holder's failure to perform its obligations under this Article VI; provided, -------- however, that the liability of Holder under this Article VI shall be limited to - ------- the amount of net proceeds received by such holder in the offering giving rise to such liability. The Company and Holder shall be entitled to receive customary indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, with respect to information with respect to such Persons so furnished in writing by such Persons or their representatives specifically for inclusion in any Prospectus or Registration Statement; (c) any Person entitled to indemnification hereunder will: (i) give prompt written notice to the indemnifying party after the receipt by the indemnified party of a written notice of the commencement of any action, suit, proceeding or investigation or any threat thereof made in writing for which such indemnified party will claim rights of indemnification or contribution pursuant to this Article VI; provided, however, that the failure of -------- ------- any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under paragraphs (a) and (b) next above, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice; and 9 (ii) unless in such indemnified party's reasonable judgment a conflict of interest may exist between such indemnified and indemnifying parties with respect to such claim, permit such indemnifying party to unconditionally (but subject to the exceptions herein contained) assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If the defense is so assumed by the indemnifying party, the indemnifying party shall lose its right to defend and settle the claim if it fails to proceed diligently and in good faith with the defense of the claim. If the defense of the claim is not so assumed by the indemnifying party, or if the indemnifying party shall lose its right to defend and settle the third party claim as provided in the previous sentence, the indemnified party shall have the right to defend and settle the claim provided that the indemnified party gives the indemnifying party not less than ten (10) days prior written notice of any proposed settlement. If the defense is assumed by the indemnifying party and is not lost as provided above, subject to the provisions of the following sentence, the indemnifying party shall have the right to defend and settle the claim. Notwithstanding the preceding sentence, (A) in connection with any settlement negotiated by a party pursuant to this Article VI(c) (a "Settling Party"), the -------------- other party (the "Other Party") shall not be required by a Settling Party (x) to ----------- enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Other Party and the Company of a release from all liability in respect of such claim or litigation, (y) to enter into any settlement that attributes by its terms liability to the Other Party and the Company, or (z) to consent to the entry of any judgment that does not include as a term thereof a full dismissal of the litigation or proceeding with prejudice and (B) the Company shall be required to consent to the terms of any such settlement (which consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel in any one jurisdiction for all parties indemnified by such indemnifying party with respect to such claim; (d) if for any reason the rights of indemnification provided for in paragraphs (a) and (b) of this Article VI are unavailable to an indemnified party as contemplated by such paragraphs (a) and (b), then the indemnifying party in lieu of indemnification shall contribute to the amount paid or payable by the indemnified party (which, subject to the limitation provided in paragraph (c) next above, shall include legal fees and expenses paid) as a result of such loss, claim, damage, liability or expense (i) in such proportion as is appropriate to reflect the relative fault of and relative benefit received by, the indemnified party and the indemnifying party as well as other equitable considerations, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations; provided, however, that the liability of Holder under this Article VI(d) shall - -------- ------- be limited to the amount of net proceeds received by Holder in the offering giving rise to such liability; and (e) the Company and Holder agree that it would not be just and equitable if contribution pursuant to paragraph (d) next above were determined by pro rata allocation or other method of allocation which does not take account of equitable considerations. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person not guilty of such misrepresentation. 10 ARTICLE VII REPORTS UNDER THE EXCHANGE ACT ------------------------------ With a view to making available to Holder the benefits of Rule 144, the Company agrees to use its best efforts to: (a) file with the SEC in a timely manner and make and keep available all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall limit the Company's obligations under the Loan Agreement) and the filing and availability of such reports and other documents is required for the applicable provisions of Rule 144; and (b) furnish to Holder so long as Holder holds the Warrants or Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act and (ii) such other information as may be reasonably requested to permit the Purchasers to sell such securities pursuant to Rule 144 without registration. ARTICLE VIII ASSIGNMENT OF REGISTRATION RIGHTS --------------------------------- The rights of Holder hereunder, including the right to have the Company register Registrable Securities pursuant to this Agreement, shall be automatically assigned by Holder to any transferee of all or any portion of the Warrants, the Warrant Shares or the Registrable Securities representing in excess of 200,000 shares of Registrable Securities and expressly excluding shares sold under Rule 144, if: (a) Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (b) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (i) the name and address of such transferee or assignee, and (ii) the securities with respect to which such registration rights are being transferred or assigned, (c) following such transfer or assignment, the further disposition of such securities by the transferee or assignee is restricted under the Securities Act or applicable state securities laws, and (d) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing for the benefit of the Company to be bound by all of the provisions contained herein. The rights of Holder hereunder with respect to any Registrable Securities not transferred shall not be assigned by virtue of the transfer of other Registrable Securities. Any such transferee who succeeds to rights hereunder shall be deemed to have a separate agreement with the Company independent of this Agreement. 11 ARTICLE IX AMENDMENT OF REGISTRATION RIGHTS -------------------------------- Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with written consent of the Company and the holders of a majority of the Registrable Securities. In the event of the assignment of rights hereunder pursuant to Article VIII, the Company shall not take any action pursuant to such assignment rights that would adversely affect any Holder's rights hereunder without such Holder's consent. In addition, should the Company take any action or refrain from any action with respect thereto, such Holder shall be entitled to, at its option, have the Company take such action or refrain from such action with respect to such Holder hereunder. ARTICLE X MISCELLANEOUS ------------- 10.1 A person or entity is deemed to be a holder (or a holder in interest) of Registrable Securities whenever such person or entity owns of record such Registrable Securities (or the Warrants which may be exercised for Registrable Securities). If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities (or the Warrants, as the case may be). 10.2 All notices and other communications given to or made upon any party hereto in connection with this Agreement shall, except as otherwise expressly herein provided, be in writing (including telexed or telecopied communication) and mailed, telexed, telecopied or delivered by hand or by reputable overnight courier service to the respective parties, as follows: If to the Company: Weider Nutrition Group, Inc. c/o Weider Nutrition International, Inc. 2002 South 5070 West Salt Lake City, UT 84104 Attn: Dan Thomson, Esq. Telecopy: (801) 975-1924 With a copy to: Latham & Watkins 5800 Sears Tower Chicago, IL 60606 Attn: Jeffrey G. Moran, Esq. Telecopy: (312) 993-9767 Wynnchurch: c/o Wynnchurch Capital, Ltd. 150 Field Drive Lake Forest, IL 60046 Attn: John Hatherly 12 Telecopy: (847) 604-6105 With a copy to: Altheimer & Gray 10 South Wacker Drive Suite 4000 Chicago, IL 60606 Attn: Laurence R. Bronska, Esq. Telecopy: (312) 715-4800 or in accordance with any subsequent written direction from the recipient party to the sending party or, if to a Holder other than Wynnchurch, at such address as such Holder shall have provided in writing to the Company. All such notices and other communications shall, except as otherwise expressly herein provided, be effective upon delivery if delivered by hand; when deposited with a reputable courier service, delivery charges prepaid; when deposited in the mail, postage prepaid; or in the case of telex or telecopy, when received. 10.3 Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof. 10.4 THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DEEMED TO BE CONTRACTS UNDER THE LAWS OF THE STATE OF ILLINOIS AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF ILLINOIS. THE HOLDERS OF REGISTRABLE SECURITIES AND THE COMPANY HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND AGREES THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE LITIGATED IN SUCH COURTS. THE COMPANY ACCEPTS THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND WAIVES ANY DEFENSE OF FORUM NON ----- --- CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY. - ---------- THE COMPANY DESIGNATES AND APPOINTS THE CORPORATION SERVICE COMPANY, AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY THE COMPANY WHICH IRREVOCABLY AGREES IN WRITING PURSUANT TO AN APPOINTMENT OF AGENT AGREEMENT TO SO SERVE AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY THE COMPANY TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO THE COMPANY AT THE ADDRESS STATED IN SECTION 10.2; PROVIDED, HOWEVER, TO THE EXTENT PERMITTED BY -------- ------- APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY THE COMPANY REFUSES TO ACCEPT SERVICE, THE COMPANY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE 13 SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF Wynnchurch OR A SUBSEQUENT HOLDER HEREOF TO BRING PROCEEDINGS AGAINST THE LOAN PARTIES IN THE COURTS OF ANY OTHER JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER SENIOR SUBORDINATED LOAN DOCUMENT. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF TRIAL BY JURY. 10.5 This Agreement, the Warrants, the Senior Subordinated Loan Agreement and the other Senior Subordinated Loan Documents (including all schedules and exhibits thereto and all certificates and opinions required thereby) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the Warrants, the Senior Subordinated Loan Agreement and the other Senior Subordinated Loan Documents supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof. 10.6 This Agreement, subject to the requirements of Article VIII hereof, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto. Notwithstanding anything to the contrary contained herein, including, without limitation, Article VIII, the rights of a Holder hereunder shall be assignable to and exercisable by a bona fide pledgee of the Registrable Securities in connection with a Holder's margin or brokerage accounts. 10.7 The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 10.8 This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto, by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. 10.9 Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 10.10 In the event Holder shall sell or otherwise transfer any of such Holder's Registrable Securities, each transferee shall be allocated a pro rata portion of the number of Registrable Securities included on a Registration Statement for such transferor. Any shares of Common Stock included on a Registration Statement and which remain allocated to any person or entity which does not hold any 14 Registrable Securities shall be allocated to the remaining participant, in such Registration Statement, pro rata based on the number of shares of Registrable Securities then held by such participant. Without implication that the contrary would otherwise be true, for purposes of this paragraph, the Warrants if then outstanding shall be assumed exercised for Registrable Securities (without giving effect to any limitations on exercise). 10.11 Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law in any jurisdiction, such provision shall be ineffective only to the extent such prohibition or invalidity, without invalidating any other provision of this Agreement. 10.12 Unless otherwise expressly provided for herein, any action entitled to be taken by Holder shall require the consent of Persons with at least two- thirds interest in and rights under this Agreement at the time such action is taken. * * * 15 IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Agreement as of the day and year first above written. WYNNCHURCH: ---------- WYNNCHURCH CAPITAL PARTNERS, L.P. By: Wynnchurch Partners, L.P., its general partner By: Wynnchurch Management, Inc., its general partner By: /s/ John Tomes ---------------------------------- Name: John Tomes Its: Vice President WYNNCHURCH CAPITAL PARTNERS CANADA, L.P. By: Wynnchurch Partners Canada, L.P., its general partner By: Wynnchurch Canada GP, Inc., its, general partner By: /s/ John Tomes ---------------------------------- Name: John Tomes Its: Vice President THE COMPANY: ----------- WEIDER NUTRITION GROUP, INC. By: /s/ Joseph W Baty --------------------------------------- Name: Joseph W Baty ------------------------------------- Its: CFO -------------------------------------- Signature page to the Registration Rights Agreement 16 EXHIBIT 1 to Registration Rights Agreement [Date] [Name and address of transfer agent] RE: WEIDER NUTRITION INTERNATIONAL, INC. Ladies and Gentlemen: We are counsel to Weider Nutrition International, Inc., a Delaware corporation (the "Company"), and we understand that [Name of Holder] (the ------- "Holder") has purchased from the Company a warrant (the "Warrant") exercisable - ------- ------- into an amount of shares of the Company's common stock, par value $0.001 per share (the "Common Stock"). The Warrant was purchased by the Holder pursuant to ------------ a Senior Subordinated Loan Agreement, dated as of June ___, 2000, by and among the Company and the signatories thereto (the "Agreement"). Pursuant to a --------- Registration Rights Agreement, dated as of June __, 2000, by and among the Company and the signatories thereto (the "Registration Rights Agreement"), the ----------------------------- Company agreed with the Holder, among other things, to register the Registrable Securities (as that term is defined in the Registration Rights Agreement) under the Securities Act of 1933, as amended (the "Securities Act"), upon the terms -------------- provided in the Registration Rights Agreement. In connection with the Company's obligations under the Registration Rights Agreement, on ________ __, 20__, the Company filed a Registration Statement on Form S-_____ (File No. 333- __________) (the "Registration Statement") with the Securities and Exchange ---------------------- Commission (the "SEC") relating to the Registrable Securities, which names the --- Holder as a selling stockholder thereunder. [Other customary introductory and scope of examination language to be inserted] Based on the foregoing, we are of the opinion that the Registrable Securities have been registered under the Securities Act. [Other appropriate customary language reasonably acceptable to holder to be included.] Very truly yours, cc: [Name of Holder] 17 EX-99.(H) 9 0009.txt POWER OF ATTORNEY EXHIBIT H POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned, John Tomes, as Vice President of Wynnchurch Management, Inc., the general partner of Wynnchurch Partners, L.P., being the general partner of Wynnchurch Capital Partners, L.P,, has made, constituted and appointed, and by these presents does make, constitute and appoint, Alisa Burns Hoy, its true and lawful attorney-in-fact and agent, for Wynnchurch Capital Partners, L.P. and in its name, place and stead to execute, acknowledge, deliver and file any and all filings required by Section 13 and Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, including, but not limited to, Schedules 13D and 13G, Forms 3, Forms 4 and Forms 5, hereby ratifying and confirming all that said attorney-in-fact and agent may do or cause to be done by virtue hereof. The validity of this Power of Attorney shall not be affected in any manner by reason of the execution, at any time, of other powers of attorney by the undersigned in favor of persons other than the attorney-in-fact named herein. WITNESS THE EXECUTION HEREOF this 10th day of July, 2000 by John Tomes, on behalf and as Vice President of Wynnchurch Management, Inc., the general partner of Wynnchurch Partners, L.P., being the general partner of Wynnchurch Capital Partners, L.P. WYNNCHURCH CAPITAL PARTNERS, L.P. By: Wynnchurch Partners, L.P. Its: General Partner By: Wynnchurch Management, Inc. Its: General Partner By: /s/ John Tomes --------------------------- John Tomes Its: Vice President STATE OF ILLINOIS) COUNTY OF COOK ) /s/ Jamie Jedrus - ----------------- Notary Public POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned, John Tomes, as Vice President of Wynnchurch GP Canada, Inc., the general partner of Wynnchurch Partners Canada, L.P., being the general partner of Wynnchurch Capital Partners Canada, L.P., has made, constituted and appointed, and by these presents does make, constitute and appoint, Alisa Burns Hoy, its true and lawful attorney-in- fact and agent, for Wynnchurch Capital Partners Canada, L.P. and in its name, place and stead to execute, acknowledge, deliver and file any and all filings required by Section 13 and Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, including, but not limited to, Schedules 13D and 13G, Forms 3, Forms 4 and Forms 5, hereby ratifying and confirming all that said attorney-in-fact and agent may do or cause to be done by virtue hereof. The validity of this Power of Attorney shall not be affected in any manner by reason of the execution, at any time, of other powers of attorney by the undersigned in favor of persons other than the attorney-in-fact named herein. WITNESS THE EXECUTION HEREOF this 10th day of July, 2000 by John Tomes, on behalf and as Vice President of Wynnchurch GP Canada, Inc., the general partner of Wynnchurch Partners Canada, L.P., being the general partner of Wynnchurch Capital Partners Canada, L.P. WYNNCHURCH CAPITAL PARTNERS CANADA, L.P. By: Wynnchurch Partners Canada, L.P. Its: General Partner By: Wynnchurch GP Canada, Inc. Its: General Partner By: /s/ John Tomes ------------------------------------ John Tomes Its: Vice President STATE OF ILLINOIS) COUNTY OF COOK ) /s/ Jamie Jedrus - ---------------- Notary Public -----END PRIVACY-ENHANCED MESSAGE-----