EXHIBIT 10.1

EXECUTION COPY

€5,300,000,000

BRIDGE LOAN AGREEMENT

Dated as of October 12, 2007

Among

KRAFT FOODS INC.

and

THE INITIAL LENDERS NAMED HEREIN

and

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

and

GOLDMAN SACHS CREDIT PARTNERS L.P.

as Syndication Agent

and

CREDIT SUISSE, CAYMAN ISLANDS BRANCH,

HSBC BANK USA, NATIONAL ASSOCIATION,

UBS SECURITIES LLC,

SOCIÉTÉ GÉNÉRALE

as Documentation Agents

* * * * * * * * * *

GOLDMAN SACHS CREDIT PARTNERS L.P., JPMORGAN CHASE BANK, N.A., CREDIT

SUISSE, CAYMAN ISLANDS BRANCH, HSBC BANK USA, NATIONAL ASSOCIATION,

UBS SECURITIES LLC and SOCIÉTÉ GÉNÉRALE

as Joint Lead Arrangers and Joint Bookrunners

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Table of Contents

 

				Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS				1
Section 1.01.		Certain Defined Terms		1
Section 1.02.		Computation of Time Periods		12
Section 1.03.		Accounting Terms		12
Section 1.04.		Currency Equivalents Generally		12
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES				12
Section 2.01.		The Advances		12
Section 2.02.		Making the Advances		12
Section 2.03.		Repayment of Advances		13
Section 2.04.		Interest on Advances		13
Section 2.05.		Additional Interest on LIBOR Advances		14
Section 2.06.		Conversion of Advances		15
Section 2.07.		Eurocurrency Rate Determination		16
Section 2.08.		Optional Termination or Reduction of the Commitments; Mandatory Reduction of the Commitments		18
Section 2.09.		Optional and Mandatory Prepayments of Advances		18
Section 2.10.		Increased Costs		19
Section 2.11.		Illegality		20
Section 2.12.		Payments and Computations		21
Section 2.13.		Taxes		22
Section 2.14.		Sharing of Payments, Etc.		24
Section 2.15.		Evidence of Debt		24
Section 2.16.		Use of Proceeds		25
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING				25
Section 3.01.		Conditions Precedent to Effectiveness		25
Section 3.02.		Condition Precedent to Borrowings		27
Section 3.03.		Conditions Precedent to Advances to each Designated Subsidiary		27
ARTICLE IV REPRESENTATIONS AND WARRANTIES				28
Section 4.01.		Representations and Warranties of Kraft		28
ARTICLE V		COVENANTS OF KRAFT		29
Section 5.01.		Affirmative Covenants		29
Section 5.02.		Negative Covenants		31
ARTICLE VI EVENTS OF DEFAULT				32
Section 6.01.		Events of Default		32
Section 6.02.		Lenders’ Rights upon Event of Default		33
ARTICLE VII THE ADMINISTRATIVE AGENT				34
Section 7.01.		Authorization and Action		34
Section 7.02.		Administrative Agent’s Reliance, Etc.		34

 

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Table of Contents

(continued)

 

				Page
Section 7.03.		The Administrative Agent and Affiliates		35
Section 7.04.		Lender Credit Decision		35
Section 7.05.		Indemnification		35
Section 7.06.		Successor Administrative Agent		36
Section 7.07.		Syndication Agent and Documentation Agents		36
ARTICLE VIII GUARANTY				37
Section 8.01.		Guaranty		37
Section 8.02.		Guaranty Absolute		37
Section 8.03.		Waivers		37
Section 8.04.		Continuing Guaranty		38
ARTICLE IX MISCELLANEOUS				38
Section 9.01.		Amendments, Etc.		38
Section 9.02.		Notices, Etc.		39
Section 9.03.		No Waiver; Remedies		40
Section 9.04.		Costs and Expenses		41
Section 9.05.		Right of Set-Off		42
Section 9.06.		Binding Effect		42
Section 9.07.		Assignments and Participations		42
Section 9.08.		Designated Subsidiaries		45
Section 9.09.		Governing Law		46
Section 9.10.		Execution in Counterparts		46
Section 9.11.		Jurisdiction, Etc.		46
Section 9.12.		Confidentiality		48
Section 9.13.		Integration		48
Section 9.14.		USA Patriot Act Notice		49
Section 9.15.		No Fiduciary Duty		49

 

SCHEDULES
Schedule I		-		List of Lenders and Commitments
Schedule II		-		List of Applicable Lending Offices
Schedule III		-		Mandatory Cost Formula
EXHIBITS
Exhibit A		-		Form of Note
Exhibit B		-		Form of Notice of Borrowing
Exhibit C		-		Form of Assignment and Acceptance
Exhibit D-1		-		Form of Opinion of Special Counsel for Kraft
Exhibit D-2		-		Form of Opinion of Special Local Counsel for Kraft

 

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Table of Contents

(continued)

 

						Page
Exhibit D-3		-		Form of Opinion of Internal Counsel for Kraft
Exhibit D-4		-		Form of Opinion of Counsel for Designated Subsidiary
Exhibit E		-		Form of Designation Agreement

 

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BRIDGE LOAN AGREEMENT

Dated as of October 12, 2007

KRAFT FOODS INC., a Virginia corporation (“Kraft”), the banks, financial institutions and other institutional lenders listed on the signature pages hereof (the “Initial Lenders”), the other Lenders (as hereinafter defined) party hereto from time to time, JPMORGAN CHASE BANK, N.A. (“JPMorgan Chase”), as administrative agent (in such capacity, the “Administrative Agent”), GOLDMAN SACHS CREDIT PARTNERS L.P., as syndication agent (in such capacity, the “Syndication Agent”), and CREDIT SUISSE, CAYMAN ISLANDS BRANCH, HSBC BANK USA, NATIONAL ASSOCIATION, UBS SECURITIES LLC and SOCIÉTÉ GÉNÉRALE as documentation agents (each, in such capacity, a “Documentation Agent”) for the Lenders, agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

Section 1.01. Certain Defined Terms. As used in this bridge loan agreement (as the same may be amended, restated, waived, supplemented or otherwise modified from time to time, this “Agreement”), the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Acquisition” means the acquisition by Kraft and/or one or more of its Subsidiaries of the biscuit business of Groupe Danone S.A. from Groupe Danone S.A., pursuant to the terms of the Acquisition Agreement.

“Acquisition Agreement” means that certain acquisition agreement (or similar agreement) to be entered into between Kraft (and/or any of its wholly-owned Subsidiaries), as buyer, and Groupe Danone S.A. (and/or any of its affiliates), as seller, providing for the acquisition of the biscuit business of Groupe Danone S.A., as the same may be amended, restated, waived, supplemented or otherwise modified from time to time.

“Administrative Agent Account” means (a) in the case of LIBOR Advances, the account of the Administrative Agent, maintained by the Administrative Agent, at its office at 1111 Fannin Street, Floor 10, Houston, Texas 77002, Attention: Katie Rose, or (b) in the case of EURIBOR Advances, the account of the Administrative Agent, maintained by the Administrative Agent, at its office at 125 London Wall, Floor 9, EC2Y 5AJ London, Attention: Maxine Graves/Stephen Clarke, or (c) such other account of the Administrative Agent, as is designated in writing from time to time by the Administrative Agent, to Kraft and the Lenders for such purpose.

“Advance” means an advance by a Lender to a Borrower as part of a Borrowing and refers either (a) in the case of an Advance denominated in Euros, to a EURIBOR Advance or (b) in the case of an Advance denominated in Dollars, to a Base Rate Advance or a LIBOR Advance (each of which shall be a “Type” of an Advance).

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“Agents” means, collectively, the Administrative Agent, the Syndication Agent and the Documentation Agents.

“Applicable Interest Rate Margin” means, for any Interest Period, a percentage per annum equal to 0.25%.

“Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic Lending Office or Eurocurrency Lending Office, as the case may be.

“Asset Sale” means the sale, transfer, license, lease or other disposition of any property by any Person (including any sale and leaseback transaction and any sale of capital stock, but excluding any issuance by such Person of its own capital stock), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

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

“Base Rate” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the higher of:

(i) the rate of interest announced publicly by JPMorgan Chase in New York, New York, from time to time, as JPMorgan Chase’s prime rate; and

(ii)  ¹/2 of 1% per annum above the Federal Funds Effective Rate.

“Base Rate Advance” means an Advance that bears interest as provided in Section 2.04(a)(ii)(x).

“Board” means the Board of Governors of the Federal Reserve System of the United States of America (or any successor).

“Borrowers” means, collectively, Kraft and each Designated Subsidiary that shall become a party to this Agreement pursuant to Section 9.08.

“Borrowing” means a borrowing consisting of simultaneous Advances of the same Type made, Converted or continued on the same date and, in the case of Eurocurrency Rate Advances, as to which a single Interest Period is in effect.

“Business Day” means a day of the year on which banks are not required or authorized by law to close in New York City and, if the applicable Business Day relates to (a) any LIBOR Advance, on which dealings are carried on in the London interbank market and banks are open for business in London and (b) any EURIBOR Advance, on any TARGET Day that is also a day on which banks are open for business in London.

“Casualty” means any casualty, damage, destruction or other similar loss with respect to real or personal property or improvements.

 

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“Closing Date” means the date on which the conditions in Section 3.02 are satisfied (or waived in accordance with Section 9.01).

“Commitment” means, as to any Lender, (a) the Euro amount set forth opposite such Lender’s name on Schedule I hereto, or (b) if such Lender has entered into an Assignment and Acceptance, the Euro amount set forth for such Lender in the Register by the Administrative Agent pursuant to Section 9.07(d), in each case as such amount may be reduced pursuant to Section 2.10.

“Condemnation” means any taking by a governmental authority of property or assets, or any part thereof or interest therein, for public or quasi-public use under the power of eminent domain, by reason of any public improvement or condemnation or in any other manner.

“Consolidated Tangible Assets” means the total assets appearing on a consolidated balance sheet of Kraft and its Subsidiaries, less goodwill and other intangible assets and the minority interests of other Persons in such Subsidiaries, all as determined in accordance with GAAP.

“Convert,” “Conversion” and “Converted” each refers to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.06, Section 2.07 or Section 2.11.

“Credit Documents” means any of this Agreement, the Notes (if any) and the Designation Agreements (if any).

“Debt” means (i) indebtedness for borrowed money or for the deferred purchase price of property or services, whether or not evidenced by bonds, debentures, notes or similar instruments, (ii) obligations as lessee under leases that, in accordance with accounting principles generally accepted in the United States of America, are recorded as capital leases, and (iii) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of any other Person of the kinds referred to in clause (i) or (ii) above.

“Debt Issuance” means the issuance or incurrence by Kraft or any of its wholly-owned Subsidiaries of any Debt, or any convertible or hybrid securities, in each case in excess of $100,000,000 per issuance or incurrence or related or series of issuances or incurrences as part of the same transaction (and in the case of any such issuance or incurrence comprising a revolving working capital credit facility, only to the extent any such related or series of incurrences or issuances as part of the same transaction results in outstanding Debt under such revolving working capital credit facility in excess of $100,000,000), other than Debt or convertible or hybrid securities (a) incurred under the Existing 5-Year Credit Agreement in an aggregate principal amount (together with accrued interest thereon) not to exceed $4,500,000,000, (b) incurred under other credit facilities in effect prior to July 2, 2007, without giving effect to any increases in the aggregate principal amount thereof as of such date, (c) issued or incurred under the

 

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commercial paper program of Kraft, or (d) issued or incurred by Kraft in an aggregate principal amount not to exceed $1,000,000,000, the proceeds of which shall be used by Kraft to refinance Debt of Kraft or its Subsidiaries.

“Default” means any event specified in Section 6.01 that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.

“Designated Subsidiary” means any wholly-owned Subsidiary of Kraft designated for borrowing privileges under this Agreement pursuant to Section 9.08.

“Designation Agreement” means, with respect to any Designated Subsidiary, an agreement in the form of Exhibit E hereto signed by such Designated Subsidiary and Kraft.

“Dollars” and “$” each means lawful currency of the United States of America.

“Domestic Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Domestic Lending Office” opposite its name on Schedule II hereto or in the Assignment and Acceptance pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to Kraft and the Administrative Agent.

“Effective Date” has the meaning specified in Section 3.01.

“Eligible Assignee” means (a) a commercial bank organized under the laws of the United States of America, or any State thereof, and having total assets in excess of $5,000,000,000; (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (or any successor) (“OECD”), or a political subdivision of any such country, and having total assets in excess of $5,000,000,000, provided that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD or the Cayman Islands; (c) the central bank of any country which is a member of the OECD; (d) a commercial finance company or finance Subsidiary of a corporation organized under the laws of the United States of America, or any State thereof, and having total assets in excess of $3,000,000,000; (e) an insurance company organized under the laws of the United States of America, or any State thereof, and having total assets in excess of $5,000,000,000; (f) any Lender; (g) an affiliate of any Lender; and (h) any other bank, commercial finance company, insurance company or other Person approved in writing by Kraft, which approval shall be notified to the Administrative Agent.

“EMU Legislation” means the legislative measures of the European Council for the introduction of, or changeover to, an operation of a single or unified European currency.

“Equity Capital Markets Transaction” means the issuance or sale in a registered public offering, Rule 144A/Regulation S transaction or private placement of capital stock (excluding any convertible or hybrid securities, but including any other equity-linked securities) of Kraft, other than issuances pursuant to employee stock plans of Kraft.

 

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

“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a member of any Borrower’s controlled group, or under common control with any Borrower, within the meaning of Section 414 of the Internal Revenue Code.

“ERISA Event” means (a) (i) the occurrence with respect to a Plan of a reportable event, within the meaning of Section 4043 of ERISA, unless the 30-day notice requirement with respect thereto has been waived by the Pension Benefit Guaranty Corporation (or any successor) (“PBGC”), or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA (without regard to subsection (2) of such section) are met with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such Plan within the following 30 days; (b) the application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any Borrower or Kraft or any of their ERISA Affiliates in the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by any Borrower or Kraft or any of their ERISA Affiliates from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions set forth in Section 302(f)(1)(A) and (B) of ERISA to the creation of a lien upon property or rights to property of any Borrower or Kraft or any of their ERISA Affiliates for failure to make a required payment to a Plan are satisfied; (g) the adoption of an amendment to a Plan requiring the provision of security to such Plan, pursuant to Section 307 of ERISA; or (h) the termination of a Plan by the PBGC pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Plan.

“EU Treaty” means the Treaty of Rome signed on March 25, 1957 as amended by the Single European Act 1986 and the Maastricht Treaty signed on February 7, 1992.

“EURIBOR” means, with respect to any Interest Period, an interest rate per annum equal to either:

(a) the offered rate per annum at which deposits in Euros appear on Reuters Screen EURIBOR01 (or any successor page) as of 11:00 A.M. (Brussels time) two Business Days before the first day of such Interest Period for a period equal to such Interest Period as determined by the Banking Federation of the European Union; or

 

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(b) if EURIBOR does not appear on Reuters Screen EURIBOR01 (or any successor page), then EURIBOR will be determined by taking the average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum, if such average is not such a multiple) of the rates per annum at which deposits in Euros are offered by the principal office of each of the Reference Banks to prime banks in the European interbank market as of 11:00 A.M. (Brussels time) two Business Days before the first day of such Interest Period for an amount substantially equal to the amount that would be the Reference Banks’ respective ratable shares of such Borrowing outstanding during such Interest Period and for a period equal to such Interest Period, as determined by the Administrative Agent, in each case, subject, however, to the provisions of Section 2.07.

“EURIBOR Advance” means an Advance that bears interest as provided in Section 2.04(a)(i).

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

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of the Board, as in effect from time to time.

“Eurocurrency Rate Advance” means a LIBOR Advance or a EURIBOR Advance.

“Eurocurrency Rate” means (a) with respect to an Interest Period for a LIBOR Advance, LIBOR for the applicable Interest Period, and (b) with respect to an Interest Period for a EURIBOR Advance, EURIBOR for the applicable Interest Period.

“Eurocurrency Rate Reserve Percentage” for any Interest Period, for all LIBOR Advances or EURIBOR Advances, as the case may be, owing to a Lender which is a member of the Federal Reserve System, means the reserve percentage applicable for such Lender two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on such LIBOR Advances or EURIBOR Advances, as the case may be, is determined) having a term equal to such Interest Period.

“Euros” and “€” each means the single currency of the Participating Member States of the European Union introduced in accordance with the procedures of Article 109(i)(4) of the EU Treaty.

 

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“Event of Default” has the meaning specified in Section 6.01.

“Exempted Asset Sale” means an Asset Sale (a) comprising a sale, transfer, license, lease or other disposition of inventory, plants, equipment and other property (including cash and cash equivalents) in the ordinary course of business, (b) comprising a substantially simultaneous transfer of properties or assets by Kraft or any of its Major Subsidiaries in which the consideration received by the transferor consists of properties or assets (other than cash or credit) of equivalent fair market value that will be used in a line of business similar to the business of Kraft or any of such Major Subsidiaries engaged in on the Effective Date or reasonably related, ancillary or complementary thereto, (c) of a Foreign Subsidiary (other than a Designated Subsidiary that is a Foreign Subsidiary) pursuant to which a dividend or distribution of the Net Cash Proceeds thereof to Kraft would result in adverse tax consequences for Kraft or its Subsidiaries, or (d) for which the Net Proceeds thereof do not exceed $50,000,000 per Asset Sale or related or series of Asset Sales.

“Existing 5-Year Credit Agreement” means Kraft’s existing U.S. $4,500,000,000 5-Year revolving credit agreement, dated as of April 15, 2005, as the same may be amended, restated, replaced, waived, supplemented or otherwise modified from time to time.

“Federal Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended from time to time.

“Federal Funds Effective Rate” means, for any period, a fluctuating interest rate per annum equal, for each day during such period, to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) on Telerate Page 120 (or any successor page), or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent, from three Federal funds brokers of recognized standing selected by it.

“Foreign Subsidiary” means, with respect to any Person, each Subsidiary of such Person that is not organized under the laws of the United States of America or any political subdivision or any territory thereof.

“GAAP” has the meaning set forth in Section 1.03.

“Home Jurisdiction Non-U.S. Withholding Taxes” means in the case of a Designated Subsidiary that is not a “United States person” within the meaning of Section 7701(a)(30) of the Internal Revenue Code, withholding taxes imposed by the jurisdiction under the laws of which such Designated Subsidiary is organized or any political subdivision thereof.

 

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“Home Jurisdiction U.S. Withholding Taxes” means in the case of Kraft and a Designated Subsidiary that is a “United States person” within the meaning of Section 7701(a)(30) of the Internal Revenue Code, withholding for United States income taxes, United States back-up withholding taxes and United States withholding taxes.

“Interest Period” means, for each Eurocurrency Rate Advance, the period commencing on the date of such Eurocurrency Rate Advance or the date of Conversion of any Base Rate Advance into a LIBOR Advance and ending on the last day of the period selected by the Borrower requesting such Eurocurrency Rate Advance pursuant to the provisions below. Subject to any requirement for a seven day Interest Period set forth in Sections 2.06(a)(ii) or (b)(ii), the duration of each such Interest Period shall be one, two, three or six months, as such Borrower may select upon notice received by the Administrative Agent, not later than (x) 11:00 A.M. (New York City time) in the case of LIBOR Advances or (y) 11:00 A.M. (London time) in the case of EURIBOR Advances, in each case, on the third Business Day prior to the first day of such Interest Period; provided, however, that:

(a) such Borrower may not select any Interest Period that ends after the Maturity Date;

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

(c) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and the rulings issued thereunder.

“Lead Arrangers” means each of Goldman Sachs Credit Partners L.P., JPMorgan Chase, Credit Suisse, Cayman Islands Branch, HSBC Bank USA, National Association, UBS Securities LLC and Société Générale.

“Lenders” means the Initial Lenders and their respective successors and permitted assignees.

“LIBOR” means, with respect to any Interest Period, an interest rate per annum equal to either:

(a) the offered rate per annum at which deposits in Dollars appear on Reuters Screen LIBOR01 Page (or any successor page) as of 11:00 A.M. (London time) two Business Days before the first day of such Interest Period for a period equal to such Interest Period; or

 

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(b) if LIBOR does not appear on Reuters Screen LIBOR01 Page (or any successor page), then LIBOR will be determined by taking the average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum, if such average is not such a multiple) of the rates per annum at which deposits in Dollars are offered by the principal office of each of the Reference Banks in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period for an amount substantially equal to the amount that would be the Reference Banks’ respective ratable shares of such Borrowing outstanding during such Interest Period and for a period equal to such Interest Period, as determined by the Administrative Agent, subject, however, to the provisions of Section 2.07.

“LIBOR Advance” means an Advance that bears interest as provided in Section 2.04(a)(ii)(y).

“Lien” has the meaning specified in Section 5.02(a).

“Major Subsidiary” means any Subsidiary (a) more than 50% of the voting securities of which is owned directly or indirectly by Kraft, (b) which is organized and existing under, or has its principal place of business in, the United States of America or any political subdivision thereof, Canada or any political subdivision thereof, any country which is a member of the European Union on the date hereof (other than Greece, Portugal or Spain) or any political subdivision thereof, or Switzerland, Norway or Australia or any of their respective political subdivisions, and (c) which has at any time total assets (after intercompany eliminations) exceeding $1,000,000,000.

“Mandatory Cost” means the percentage rate per annum calculated in accordance with Schedule III.

“Margin Stock” means margin stock, as such term is defined in Regulation U.

“Maturity Date” means the date occurring 364 days after the Closing Date.

“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions, such plan being maintained pursuant to one or more collective bargaining agreements.

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

 

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“Net Cash Proceeds” means:

(a) with respect to any Asset Sale (i) the gross amount of all cash proceeds actually paid to or actually received by Kraft or one or more of its Major Subsidiaries in respect of such Asset Sale (including any cash proceeds received as income or other proceeds of any non-cash proceeds of any Asset Sale as and when received), less (ii) the sum of (w) the amount, if any, of all taxes (other than income taxes) and all income taxes (as estimated in good faith by a senior financial or senior accounting officer of Kraft giving effect to the overall tax position of Kraft and its Subsidiaries) (to the extent that the amount of such taxes shall have been set aside for the purpose of paying such taxes when due), and customary fees, brokerage fees, commissions, costs and other expenses (other than those payable to Kraft or one or more of its Major Subsidiaries) that are incurred in connection with such Asset Sale and are payable by Kraft or one or more of its Major Subsidiaries, but only to the extent not already deducted in arriving at the amount referred to in clause (i) above, (x) appropriate amounts that must be set aside as a reserve in accordance with GAAP against any liabilities associated with such Asset Sale, (y) if applicable, the principal amount, prepayment premium or penalty, if any, and accrued but unpaid interest on any Debt secured by a Lien permitted under this Agreement that has been repaid or refinanced in accordance with its terms with the proceeds of such Asset Sale, and (z) any payments to be made by Kraft or one or more of its Major Subsidiaries as agreed between Kraft or such Major Subsidiaries, as applicable, and the purchaser of any assets subject to an Asset Sale in connection therewith; and

(b) with respect to any Equity Capital Markets Transaction or Debt Issuance, the gross amount of cash proceeds paid to or received by a Borrower in respect of such Equity Capital Markets Transaction or by any Borrower or one or more of its wholly-owned Subsidiaries in respect of such Debt Issuance, as the case may be (including cash proceeds as and when subsequently received at any time in respect of such Equity Capital Markets Transaction or Debt Issuance from non-cash consideration initially received or otherwise), net of underwriting discounts and commissions or placement fees, investment banking fees, legal fees, consulting fees, accounting fees and other customary fees and expenses directly incurred by the applicable Borrower or one or more of its wholly-owned Subsidiaries, as applicable, in connection therewith (other than those payable to a Borrower or one or more of its wholly-owned Subsidiaries).

“Note” means a promissory note of a Borrower payable to the order of any Lender, delivered pursuant to a request made under Section 2.15 in substantially the form of Exhibit A hereto, evidencing the aggregate indebtedness of such Borrower to such Lender resulting from the Advances made by such Lender to such Borrower.

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

“Obligations” has the meaning specified in Section 8.01.

“Other Taxes” has the meaning specified in Section 2.13(b).

 

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“Participating Member State” means each state so described in any EMU Legislation.

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

“Plan” means a Single Employer Plan or a Multiple Employer Plan.

“Reference Banks” means JPMorgan Chase, Goldman Sachs Credit Partners L.P., Credit Suisse, Cayman Islands Branch, HSBC Bank USA, National Association, UBS AG, Stamford Branch and Société Générale.

“Register” has the meaning specified in Section 9.07(d).

“Regulation A” means Regulation A of the Board, as in effect from time to time.

“Regulation U” means Regulation U of the Board, as in effect from time to time.

“Required Lenders” means at any time Lenders owed at least 50.1% of the then aggregate unpaid principal amount of the Advances owing to Lenders, or, if no such principal amount is then outstanding, Lenders having at least 50.1% of the Commitments.

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

“Spot Rate” has the meaning specified in Section 1.04.

“Subsidiary” of any Person means any corporation of which (or in which) more than 50% of the outstanding capital stock having voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.

“TARGET Day” means any day or which the Trans-European Automated Realtime Gross Settlement Express Transfer payment system is open for settlement of payments in Euros.

“Taxes” has the meaning specified in Section 2.13(a).

 

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

Section 1.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with accounting principles generally accepted in the United States of America (subject to the exceptions set forth in this Section 1.03, “GAAP”), except that if there has been a material change in an accounting principle affecting the definition of an accounting term as compared to that applied in the preparation of the financial statements of Kraft as of and for the year ended December 31, 2006, then such new accounting principle shall not be used in the determination of the amount associated with that accounting term. A material change in an accounting principle is one that, in the year of its adoption, changes the amount associated with the relevant accounting term for any quarter in such year by more than 10%.

Section 1.04. Currency Equivalents Generally. Any amount specified herein (other than in Sections 2.01 and 9.07(a)(ii)) or any of the other Credit Documents to be in Dollars shall also include the equivalent of such amount in Euros and such other currency other than Dollars, such equivalent amount thereof in the applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For purposes of this Section 1.04, the “Spot Rate” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 A.M. (New York City time) on the date two Business Days prior to the date of such determination; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

Section 2.01. The Advances. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make one or more Advances to any Borrower in Euros and/or Dollars (any such Advance in Dollars to be made as the Dollar equivalent of the applicable portion of such Lender’s Commitment calculated on the basis of the Spot Rate for Euros on the Closing Date) on the Closing Date in an aggregate principal amount not to exceed such Lender’s Commitment.

Section 2.02. Making the Advances.

(a) Notice of Borrowing. To request a Borrowing on the Closing Date, each Borrower requesting a Borrowing (or Kraft on behalf of any other Borrower) shall give the Administrative Agent irrevocable notice in the form of Exhibit B hereto (the “Notice of Borrowing”), which notice shall have been received not later than (x) 11:00 A.M. (New York City time) on the third Business Day prior to the Closing Date, in the case of a Borrowing

 

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consisting of Eurocurrency Rate Advances, or (y) 9:00 A.M. (New York City time) on the Business Day immediately preceding the Closing Date, in the case of a Borrowing consisting of Base Rate Advances, and the Administrative Agent shall give to each Lender prompt notice thereof by telecopier. The Notice of Borrowing may be delivered to the Administrative Agent by telecopier, email or registered mail.

(b) Funding Advances. Each Lender shall, (x) before 11:00 A.M. (New York City time) in the case of Advances denominated in Dollars and (y) before 2:00 P.M. (London time) in the case of Advances denominated in Euros, on the Closing Date make available for the account of its Applicable Lending Office to the Administrative Agent for the account of the applicable Borrower, at the office of the Administrative Agent, in immediately available funds and in Euros in the case of Advances denominated in Euros and in Dollars in the case of Advances denominated in Dollars, such Lender’s ratable portion of the Borrowing. After receipt of such funds by the Administrative Agent, and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the applicable Borrower at the office of the Administrative Agent, referred to in Section 9.02.

(c) Independent Lender Obligations. The failure of any Lender to make the Advance to be made by it as part of a Borrowing on the Closing Date shall not relieve any other Lender of its obligation hereunder to make its respective Advance on the Closing Date, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the Closing Date.

(d) Irrevocable Notice. Each Notice of Borrowing of any Borrower shall be irrevocable and binding on such Borrower. In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of LIBOR Advances or EURIBOR Advances, the Borrower requesting such Borrowing shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.

Section 2.03. Repayment of Advances. Each Borrower shall repay to the Administrative Agent, for the ratable account of each Lender, on the Maturity Date the unpaid principal amount of the Advances of such Lender then outstanding, such repayment to be made in Euros in the case of Advances denominated in Euros and in Dollars in the case of Advances denominated in Dollars.

Section 2.04. Interest on Advances.

(a) Scheduled Interest. Each Borrower shall pay interest on the unpaid principal amount of each Advance owing by such Borrower to each Lender from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:

 

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(i) in the case of Advances denominated in Euros, at a rate per annum equal at all times during each Interest Period for such Advance to the sum of (x) the Eurocurrency Rate for such Interest Period for such Advance plus (y) in the case such Advance is made by a Lender from its Eurocurrency Lending Office located in the United Kingdom or a Participating Member State, Mandatory Costs plus (z) the Applicable Interest Rate Margin in effect from time to time, payable in arrears on the last day of such Interest Period and if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period, and on the date such Eurocurrency Rate Advance shall be paid in full either prior to or on the Maturity Date; and

(ii) in the case of an Advance denominated in Dollars:

 

(x)

during such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to the Base Rate in effect from time to time, payable in arrears quarterly on the last Business Day of each of March, June, September and December and on the date such Base Rate Advance shall be Converted or paid in full either prior to or on the Maturity Date; or

 

(y)

during such periods as such Advance is a Eurocurrency Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (x) the Eurocurrency Rate for such Interest Period for such Advance plus (y) the Applicable Interest Rate Margin in effect from time to time, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period, and on the date such Eurocurrency Rate Advance shall be Converted or paid in full either prior to or on the Maturity Date.

(b) Default Interest. Upon the occurrence and during the continuance of an Event of Default, each of the Borrowers shall pay interest on the unpaid principal amount of each Advance owing by such Borrower to each Lender, payable in arrears on the dates referred to in Section 2.04(a)(i) or Section 2.04(a)(ii), at a rate per annum equal at all times to 1% per annum above the rate per annum required to be paid on such Advance.

Section 2.05. Additional Interest on LIBOR Advances and EURIBOR Advances. Each Borrower shall pay to each Lender, so long as such Lender shall be required under regulations of the Board to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each LIBOR Advance or EURIBOR Advance, as the case may be, of such Lender made to such Borrower, from the date of such Advance until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (i) LIBOR or EURIBOR, as the case may be, for the Interest Period for such Advance from (ii) the rate

 

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obtained by dividing such LIBOR or EURIBOR, as the case may be, by a percentage equal to 100% minus the Eurocurrency Rate Reserve Percentage of such Lender for such Interest Period, payable on each date on which interest is payable on such Advance. Such additional interest shall be determined by such Lender and notified to Kraft through the Administrative Agent.

Section 2.06. Conversion of Advances.

(a) Conversion Upon Absence of Interest Period. If any Borrower (or Kraft on behalf of any other Borrower) shall fail to select the duration of any Interest Period for any Eurocurrency Rate Advances in accordance with the provisions contained in the definition of the term “Interest Period,” the Administrative Agent will forthwith so notify such Borrower, Kraft and the Lenders and such Advances will automatically, on the Closing Date or the last day of the then existing Interest Period therefor, as applicable, (i) in the case of a LIBOR Advance, be made as or Convert to a Base Rate Advance and (ii) in the case of a EURIBOR Advance, Convert to a EURIBOR Advance with an Interest Period of seven days.

(b) Conversion Upon Event of Default. Upon the occurrence and during the continuance of any Event of Default under Section 6.01(a), the Administrative Agent, or the Required Lenders may elect that (i) each LIBOR Advance be, on the last day of the then existing Interest Period therefor, Converted into a Base Rate Advance, (ii) each EURIBOR Advance be, on the last day of the then existing Interest Period therefor, Converted into a EURIBOR Advance with an Interest Period of seven days, and (iii) the obligation of the Lenders to Convert Base Rate Advances into LIBOR Advances be suspended.

(c) Voluntary Conversion. Subject to the provisions of Section 2.07(c) and Section 2.11, any Borrower may Convert all of such Borrower’s Base Advances constituting the same Borrowing into LIBOR Advances on any Business Day or all of such Borrower’s LIBOR Advances constituting the same Borrowing into Base Rate Advances on any Business Day, in each case, upon notice given to the Administrative Agent, not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion; provided, however, that the Conversion of a LIBOR Advance into a Base Rate Advance may be made on, and only on, the last day of an Interest Period for such LIBOR Advance. No EURIBOR Advances may be Converted into an Advance of any other Type. There shall be no more than five Interest Periods outstanding at any one time. Each such notice of a Conversion shall, within the restrictions specified above, specify:

(i) the date of such Conversion;

(ii) the Advances to be Converted; and

(iii) if such Conversion is into a LIBOR Advance, the duration of the Interest Period for each such Advance.

(d) Continuation of Interest Periods. Subject to the provisions of Section 2.07(c) and Section 2.11, any Borrower may upon the expiration of an Interest Period, elect to continue the applicable Eurocurrency Rate Advance for an additional Interest Period, upon notice to the Administrative Agent in accordance with the definition of “Interest Period”.

 

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Section 2.07. Eurocurrency Rate Determination.

(a) Methods to Determine Eurocurrency Rate. The Administrative Agent, shall determine the applicable Eurocurrency Rate by using the methods described in the definition of the term “EURIBOR” or “LIBOR”, as applicable, and shall give prompt notice to Kraft and the Lenders of each such Eurocurrency Rate.

(b) Role of Reference Banks. In the event that EURIBOR or LIBOR cannot be determined by the method described in clause (a) of the definition of “EURIBOR” or “LIBOR”, respectively, each Reference Bank agrees to furnish to the Administrative Agent timely information for the purpose of determining EURIBOR or LIBOR, as applicable, in accordance with the method described in clause (b) of the applicable definition thereof. If any one or more of the Reference Banks shall not furnish such timely information to the Administrative Agent, for the purpose of determining EURIBOR or LIBOR, the Administrative Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks. If fewer than two Reference Banks furnish timely information to the Administrative Agent for determining EURIBOR or LIBOR for any applicable Eurocurrency Rate Advance, then:

(i) the Administrative Agent shall f