Exhibit 10-c
$130,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 6, 2002
Among
▇▇▇▇▇▇▇▇ BRANDS, INC.
as Borrower,
EACH OF THE LENDERS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 14.6 HEREOF,
as Lenders,
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
as Lead Arranger and Syndication Agent
and
FOOTHILL CAPITAL CORPORATION,
as Administrative Agent
CONFORMED TO INCORPORATE CHANGES MADE IN FIRST
AMENDMENT AND LIMITED WAIVER NO. 2 TO AMENDED AND
RESTATED CREDIT AGREEMENT, DATED AS OF AUGUST 13, 2002
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS........................................................................................ 1
1.1 General Definitions......................................................................... 1
1.2 Accounting Terms and Determinations......................................................... 32
1.3 Other Definitional Terms.................................................................... 32
ARTICLE II. LOANS............................................................................................. 33
2.1 Revolving Loans............................................................................. 33
2.2 Term Loans.................................................................................. 38
2.3 Optional and Mandatory Prepayments.......................................................... 39
2.4 Payments and Computations................................................................... 41
2.5 Maintenance of Account; Register............................................................ 42
2.6 Statement of Account........................................................................ 43
2.7 Taxes....................................................................................... 43
2.8 Sharing of Payments......................................................................... 45
2.9 Pro Rata Treatment.......................................................................... 45
2.10 Securitization.............................................................................. 45
ARTICLE III. LETTERS OF CREDIT................................................................................ 46
3.1 Issuance.................................................................................... 46
3.2 Notice and Reports.......................................................................... 47
3.3 Participation............................................................................... 47
3.4 Payment..................................................................................... 47
3.5 Repayment with Revolving Loans.............................................................. 48
3.6 Renewal, Extension.......................................................................... 49
3.7 Uniform Customs and Practices............................................................... 49
3.8 Indemnification; Nature of Issuing Bank's Duties............................................ 49
3.9 Responsibility of Issuing Bank.............................................................. 50
3.10 Conflict with Letter of Credit Documents.................................................... 51
ARTICLE IV. INTEREST AND FEES................................................................................. 51
4.1 Interest on Loans........................................................................... 51
4.2 Interest After Event of Default............................................................. 51
4.3 [Intentionally Deleted]..................................................................... 51
4.4 Agent's Fees................................................................................ 51
4.5 Letter of Credit Fees....................................................................... 52
4.6 Authorization to Charge Loan Account........................................................ 52
4.7 Indemnification in Certain Events........................................................... 52
4.8 LIBOR Option................................................................................ 53
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ARTICLE V. CONDITIONS PRECEDENT............................................................................... 55
5.1 Original Closing Date Conditions............................................................ 55
5.2 Closing Conditions.......................................................................... 61
5.3 Conditions to all Loans and Letters of Credit............................................... 62
ARTICLE VI. REPRESENTATIONS AND WARRANTIES.................................................................... 63
6.1 Organization and Qualification.............................................................. 63
6.2 Solvency.................................................................................... 63
6.3 Liens; Inventory............................................................................ 64
6.4 No Conflict................................................................................. 64
6.5 Enforceability.............................................................................. 64
6.6 Financial Data.............................................................................. 65
6.7 Locations of Offices, Records and Inventory................................................. 65
6.8 Fictitious Business Names................................................................... 66
6.9 Subsidiaries................................................................................ 66
6.10 No Judgments or Litigation.................................................................. 66
6.11 No Defaults................................................................................. 66
6.12 No Employee Disputes........................................................................ 66
6.13 Compliance with Law......................................................................... 67
6.14 PACA........................................................................................ 67
6.15 ERISA....................................................................................... 67
6.16 Compliance with Environmental Laws.......................................................... 68
6.17 Use of Proceeds............................................................................. 68
6.18 Intellectual Property....................................................................... 69
6.19 Licenses and Permits........................................................................ 70
6.20 Title to Property........................................................................... 70
6.21 Labor Matters............................................................................... 70
6.22 Investment Company.......................................................................... 70
6.23 Margin Security............................................................................. 71
6.24 No Event of Default......................................................................... 71
6.25 Taxes and Tax Returns....................................................................... 71
6.26 Indebtedness; CBII Obligations.............................................................. 71
6.27 Status of Accounts.......................................................................... 71
6.28 Representations and Warranties.............................................................. 72
6.29 Material Contracts.......................................................................... 72
6.30 Survival of Representations................................................................. 72
6.31 Affiliate Transactions...................................................................... 72
6.32 Insurance................................................................................... 72
6.33 Accuracy and Completeness of Information.................................................... 72
ARTICLE VII. AFFIRMATIVE COVENANTS............................................................................ 73
7.1 Information................................................................................. 73
7.2 [Intentionally Deleted]..................................................................... 76
7.3 Corporate Existence......................................................................... 76
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7.4 ERISA....................................................................................... 76
7.5 Proceedings or Adverse Changes.............................................................. 78
7.6 Environmental Matters....................................................................... 79
7.7 Books and Records; Inspection............................................................... 79
7.8 Collateral Records.......................................................................... 80
7.9 Security Interests.......................................................................... 80
7.10 Insurance; Asset Loss....................................................................... 81
7.11 Taxes....................................................................................... 82
7.12 Compliance With Laws........................................................................ 83
7.13 Use of Proceeds............................................................................. 83
7.14 Fiscal Year................................................................................. 83
7.15 Notification of Certain Events.............................................................. 83
7.16 Additional Subsidiaries; Inactive Subsidiaries.............................................. 84
7.17 Schedules of Accounts and Purchase Orders................................................... 84
7.18 Collection of Accounts...................................................................... 84
7.19 Notice; Credit Memoranda; and Returned Goods................................................ 85
7.20 Acknowledgment Agreements................................................................... 85
7.21 Trademarks etc.............................................................................. 86
7.22 Maintenance of Property..................................................................... 86
7.23 [Intentionally Deleted]..................................................................... 86
7.24 Revisions or Updates to Schedules........................................................... 86
7.25 [Intentionally Deleted]..................................................................... 86
7.26 Compliance with PACA........................................................................ 86
7.27 Covenants Relating to Food Security Act..................................................... 87
7.28 Payment for Perishable Goods................................................................ 87
ARTICLE VIII. FINANCIAL COVENANTS............................................................................. 88
8.1 Leverage Ratio.............................................................................. 88
8.2 Fixed Charge Coverage Ratio................................................................. 88
8.3 Capital Expenditures........................................................................ 88
8.4 EBITDA...................................................................................... 89
8.5 ▇▇▇▇▇▇▇▇ Fresh Latin American Group......................................................... 89
ARTICLE IX. NEGATIVE COVENANTS................................................................................ 89
9.1 Restrictions on Liens....................................................................... 89
9.2 Restrictions on Indebtedness................................................................ 89
9.3 Restrictions on Transfer of Assets.......................................................... 90
9.4 No Corporate Changes........................................................................ 92
9.5 No Guarantees............................................................................... 93
9.6 No Restricted Payments...................................................................... 93
9.7 No Investments.............................................................................. 94
9.8 No Affiliate Transactions................................................................... 94
9.9 No Prohibited Transactions Under ERISA...................................................... 94
9.10 No Additional Bank Accounts................................................................. 95
9.11 Amendments of Material Contracts............................................................ 96
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9.12 Additional Negative Pledges................................................................. 96
9.13 Sale and Leaseback.......................................................................... 96
9.14 Licenses, Etc............................................................................... 97
9.15 Limitations................................................................................. 97
9.16 Transfer Pricing............................................................................ 97
9.17 Sales....................................................................................... 97
9.18 Excluded Entities........................................................................... 98
9.19 Hedging and Interest Rate Protection........................................................ 98
9.20 Payments on Certain Intercompany Obligations................................................ 98
ARTICLE ▇. ▇▇▇▇▇▇............................................................................................. 98
10.1 Appointment as Attorney-in-Fact............................................................. 98
10.2 Limitation on Exercise of Power............................................................. 99
ARTICLE XI. EVENTS OF DEFAULT AND REMEDIES.................................................................... 99
11.1 Events of Default........................................................................... 99
11.2 Acceleration................................................................................ 101
ARTICLE XII. TERMINATION...................................................................................... 102
ARTICLE XIII. THE AGENT....................................................................................... 102
13.1 Appointment of Agent........................................................................ 102
13.2 Nature of Duties of Agent................................................................... 103
13.3 Lack of Reliance on Agent................................................................... 103
13.4 Certain Rights of the Agent................................................................. 103
13.5 Reliance by Agent........................................................................... 104
13.6 Indemnification of Agent.................................................................... 104
13.7 The Agent in its Individual Capacity........................................................ 104
13.8 Holders of Notes............................................................................ 104
13.9 Successor Agent............................................................................. 105
13.10 Collateral Matters.......................................................................... 105
13.11 Actions with Respect to Defaults............................................................ 107
13.12 Delivery of Information..................................................................... 107
13.13 ▇▇▇▇▇ Fargo as Lead Arranger and Syndication Agent.......................................... 107
ARTICLE XIV. MISCELLANEOUS.................................................................................... 107
14.1 Waivers..................................................................................... 107
14.2 JURY TRIAL.................................................................................. 108
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE............................................ 108
14.4 [Intentionally Deleted]..................................................................... 108
14.5 Notices..................................................................................... 108
14.6 Assignability............................................................................... 109
14.7 Information................................................................................. 112
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14.8 Payment of Expenses; Indemnification........................................................ 113
14.9 Entire Agreement, Successors and Assigns.................................................... 114
14.10 Amendments, Etc............................................................................. 114
14.11 Nonliability of Agent and Lenders........................................................... 115
14.12 Independent Nature of Lenders' Rights....................................................... 115
14.13 Counterparts................................................................................ 115
14.14 Effectiveness............................................................................... 115
14.15 Severability................................................................................ 116
14.16 Headings Descriptive........................................................................ 116
14.17 Maximum Rate................................................................................ 116
14.18 Right of Setoff............................................................................. 117
14.19 Power of Attorney........................................................................... 117
14.20 Restatement of Original Credit Agreement.................................................... 117
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Acknowledgment Agreement
Exhibit B Form of Assignment and Acceptance
Exhibit C-1 Form of Revolving Note
Exhibit C-2 Form of Term Loan Note
Exhibit D Form of Notice of Borrowing
Exhibit D-1 Form of LIBOR Notice
Exhibit E-1 Form of Lockbox Agreement
Exhibit E-2 Form of Lockbox Letter
Exhibit F Form of Compliance Certificate
Exhibit F-1 Form of Monthly Compliance Certificate
Exhibit G Form of Revolving Credit Borrowing Base Certificate
Exhibit H Form of Solvency Certificate
Exhibit I Form of Account Designation Letter
Exhibit J Form of Joinder Agreement
Exhibit K Closing Checklist
SCHEDULES
Schedule 1.1A Lenders and Commitments
Schedule 1.1B Existing Letters of Credit
Schedule 1.1C Liens
Schedule 1.1D Indebtedness
Schedule 1.1E Investments
Schedule 3.1 Issuance of Letters of Credit
Schedule 6.1 Jurisdictions of Organization
Schedule 6.7 Collateral Locations
Schedule 6.8 Fictitious Business Names
Schedule 6.9 Borrower and Subsidiaries
Schedule 6.10 Litigation
Schedule 6.15 ERISA
Schedule 6.16 Environmental Disclosures
Schedule 6.18 Intellectual Property
Schedule 6.26 CBII Obligations
Schedule 6.29 Material Contracts
Schedule 6.31 Affiliate Transactions
Schedule 6.32 Insurance
Schedule 9.3 Permitted Asset Sales
Schedule 9.3A Additional Permitted Investments
Schedule 9.6 Tax Sharing Arrangements
Schedule 9.10 Bank Accounts
Schedule 9.12 Negative Pledges
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of
March 6, 2002 among ▇▇▇▇▇▇▇▇ BRANDS, INC., a Delaware corporation (the
"Borrower"), each of the lenders identified as Lenders on Schedule 1.1A hereto
(together with each of their successors and assigns, referred to individually as
a "Lender" and, collectively, as the "Lenders"), ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION ("▇▇▇▇▇ Fargo"), acting as lead arranger and syndication agent, and
FOOTHILL CAPITAL CORPORATION ("Foothill"), acting administrative agent in the
manner and to the extent described in Article XIII hereof (in such capacity, the
"Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders (as defined therein) and the
Agent entered into that certain Credit Agreement dated as of March 7, 2001 (as
amended or otherwise modified to date, the "Original Credit Agreement") whereby
(i) the Lenders made a term loan facility to the Borrower in the aggregate
principal amount of $75,000,000 maturing on March 7, 2004 and (ii) the Lenders
provided a revolving credit facility (including letter of credit subfacility) to
the Borrower in an aggregate principal amount not to exceed $120,000,000 at any
time outstanding and maturing on March 7, 2004;
WHEREAS, the Borrower desires that the Lenders increase the
principal amount of credit available to the Borrower under the Original Credit
Agreement to One Hundred Thirty Million Dollars ($130,000,000) and adjust the
principal amount of the term loans under the Original Credit Agreement to
Seventy Million Dollars ($70,000,000), and the Lenders are willing to provide
Borrower with Loans in such amounts upon the terms and conditions set forth
herein;
WHEREAS, the Borrower and each Secured Credit Party desire to secure
all of the obligations under the Credit Documents by continuing the prior grant
of a security interest in and lien upon all of Borrower's and each Secured
Credit Party's existing and after-acquired personal property to Agent, for the
benefit of Agent and the Lenders; and
WHEREAS, the Borrower, the Lenders and the Agent now desire to amend
and restate the Original Credit Agreement to, among other things, accomplish the
matters set forth above and to permit ▇▇▇▇▇ Fargo to join this Amended and
Restated Credit Agreement, in each case, on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree
as follows:
ARTICLE I.
DEFINITIONS
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified:
"Ableco" shall mean Ableco Finance LLC.
"Accounts" shall mean all of the Borrower's "accounts" (as defined
in the Code), whether now existing or existing in the future, including, without
limitation, all (i) accounts receivable (whether or not specifically listed on
schedules furnished to the Agent), including, without limitation, all accounts
created by or arising from all of the Borrower's sales of goods or rendition of
services made under any of the Borrower's trade names or styles, or through any
of the Borrower's divisions; (ii) unpaid seller's rights (including rescission,
replevin, reclamation and stopping in transit) relating to the foregoing or
arising therefrom, (iii) rights to any goods represented by any of the
foregoing, including returned or repossessed goods; (iv) reserves and credit
balances held by the Borrower with respect to any such accounts receivable or
account debtors; (v) guarantees or collateral for any of the foregoing; and (vi)
insurance policies or rights relating to any of the foregoing.
"Acknowledgement Agreements" shall mean the Acknowledgment
Agreements, substantially in the form of Exhibit A hereto, between the
Borrower's warehousemen, fillers, packers and processors and the Agent, in each
case acknowledging and agreeing, among other things, (A) that such warehousemen,
fillers, packers and processors do not have any Liens on any of the property of
the Borrower or any Subsidiary and (B) to the collateral assignment by the
Borrower to the Agent of its interest in the contracts with each of such
warehousemen, fillers, packers and processors.
"Acquired Company" shall mean the Person (or the assets or business
thereof) which is acquired pursuant to an Acquisition.
"Acquisition" shall mean (i) the purchase of the Capital Stock of a
Person, (ii) the purchase of all or a substantial portion of the assets or
business of any Person or (iii) the merger or consolidation with a Person in
which the Borrower or a Subsidiary shall be the surviving or resulting
corporation.
"Acquisition Documents" shall mean any agreement pursuant to which
an Acquisition is made in accordance with the terms hereof, including the
exhibits and schedules thereto, and all agreements, documents and instruments
executed and delivered pursuant thereto or in connection therewith.
"Affiliate" shall mean any entity which directly or indirectly
controls, is controlled by, or is under common control with, the Borrower or any
Subsidiary of the Borrower. For purposes of this definition, "control" shall
mean the possession, directly or indirectly, of the power to (i) vote ten
percent (10%) or more of the securities having ordinary voting power for the
election of directors of such Person, or (ii) direct or cause the direction of
management and policies of a business, whether through the ownership of voting
securities, by contract or otherwise and either alone or in conjunction with
others or any group.
"Agent" shall mean Foothill as Agent under the Original Credit
Agreement and as provided in the preamble to this Credit Agreement or any
successor to Foothill.
"Agent Bank Account" shall have the meaning set forth in Section
7.18(a).
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"Agent's Fees" shall mean the fees payable by the Borrower to the
Agent as described in the Fee Letter.
"Aggregate Commitment" means the sum of the Commitments.
"Allocated CBII Overhead" shall mean the following overhead and
disbursements of CBII, but only to the extent that they are allocated to the
Borrower or any of its consolidated Subsidiaries: salaries, pension and benefit
expenses, taxes (other than taxes on income or revenue), insurance costs, legal
expenses, communication and maintenance fees, travel expenses, outside
accounting fees, headquarter office expenses, deferred compensation and
non-contractual severance expenses, but excluding Permitted Restructuring
Expenses, and principal, interest and other fees related to any Indebtedness.
"Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to one-tenth of one percent (.1%) of the Maximum
Credit Line as of the Closing Date for each full or partial month remaining from
the date of payment until the Maturity Date. In the event of an early
termination of this Credit Agreement and a prepayment in full of all of the
Obligations from a Qualified Refinancing, the amount of the Applicable
Prepayment Premium determined hereunder shall be reduced by a percentage equal
to the amount of the Commitment which is held by those Lenders that participate
in the Qualified Refinancing divided by the total of all the Commitments and the
amount of such Applicable Prepayment Premium (as so reduced) shall be allocated
to the Lenders not participating in such replacement credit facility.
"Appraisal" shall mean (i) that certain Trademarks and Tradenames
Valuation dated December 5, 2000 performed by ▇▇▇▇▇-▇▇▇▇▇▇ Appraisal Corporation
relating to ▇▇▇▇▇▇▇▇ Brands International, Inc., a copy of which was delivered
to the Lenders on or prior to January 26, 2001 or (ii) after the receipt by the
Lenders of a new or updated valuation appraisal, such new or updated appraisal.
"Asset Disposition" shall mean the disposition (other than (i) a
disposition described in clauses (a), (b), (c), (g) or (i) of Section 9.3, (ii)
a disposition described in clause (d) of Section 9.3, to the extent that any
Asset Sale Block put in place or any cash proceeds held by the Agent, in either
case in connection therewith pursuant to Section 9.3 hereof, are released by the
Agent as provided in Section 9.3 within one hundred and twenty (120) days of
such disposition, (iii) Specified Asset Dispositions, (iv) the sales of one or
more Tropical Farms (and equity interests in Persons which own only Tropical
Farms) to the extent that any Farm Sale Block put in place or any cash proceeds
held by the Agent, in either case in connection therewith pursuant to Section
9.3, are released by the Agent as provided in Section 9.3 within one hundred and
twenty (120) days of such sale and (v) any disposition of intellectual property
rights pursuant to the Trademark License Agreement) of any or all of the assets
(including, without limitation, the Capital Stock of the Borrower or its
Subsidiaries) of the Borrower or its Subsidiaries, whether by sale, lease,
transfer or otherwise, in a single transaction, or in a series of related
transactions in any consecutive twelve (12) month period beginning on or after
the Original Closing Date (a) that have a fair market value in the aggregate in
excess of $1,000,000 or (b) for Net Cash Proceeds in the aggregate in excess of
$1,000,000.
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"Asset Loss" shall have the meaning given to such term in Section
7.10.
"Asset Sale Block" shall have the meaning set forth in Section 9.3.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by an assigning Lender and an assignee Lender, accepted by the
Agent, in accordance with Section 14.6(f), in the form attached hereto as
Exhibit B.
"Availability" shall mean an amount equal to the excess of (i) the
Revolving Credit Borrowing Base over (ii) the sum of (a) the outstanding amount
of Revolving Loans and Letter of Credit Obligations plus (b) the aggregate
amount, if any, of all trade payables of the Borrower and the other Credit
Parties aged in excess of historical levels with respect thereto and all book
overdrafts in excess of historical practices with respect thereto, in each case
as determined in good faith by the Agent.
"Back-to-Back Loan" shall mean a loan made to a Subsidiary by a
financial institution in which the Borrower or another Subsidiary (other than an
Excluded Entity) owns a one hundred percent (100%) participation interest.
"Base LIBOR Rate" means the rate per annum, determined by Agent in
accordance with its customary procedures, and utilizing such electronic or other
quotation sources as it considers appropriate (rounded upwards, if necessary, to
the next 1/16%), based on the rates at which Dollar deposits are offered to
major banks in the London interbank market on or about 11:00 a.m. (California
time) two (2) Business Days prior to the commencement of the applicable Interest
Period, for a term and in amounts comparable to the Interest Period and amount
of the LIBOR Rate Loan requested by Borrower in accordance with this Credit
Agreement, which determination shall be conclusive in the absence of manifest
error.
"Benefit Plan" shall mean a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate is, or within
the immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
"Borrower" shall have the meaning given to such term in the preamble
of this Credit Agreement.
"Borrower Entities" shall mean the Borrower, each Guarantor and each
Subsidiary which is party to one or more Credit Documents.
"Business Day" shall mean any day other than a Saturday, a Sunday, a
legal holiday or a day on which national banks are authorized or required by law
or other governmental action to close, except that, if a determination of a
Business Day shall relate to a LIBOR Rate Loan, the term "Business Day" also
shall exclude any day on which banks are closed for dealings in Dollar deposits
in the London interbank market.
"Capital Expenditures" shall mean expenditures for the acquisition
(including the acquisition by capitalized lease) or improvement of capital
assets, as determined in accordance with GAAP.
4
"Capital Lease" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other equity interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person.
"Cash Equivalents" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one (1) year from the date of acquisition, (ii) time deposits or
certificates of deposit of any commercial bank incorporated under the laws of
the United States or any state thereof, of recognized standing having capital
and unimpaired surplus in excess of $1,000,000,000 and whose short-term
commercial paper rating at the time of acquisition is at least A-1 or the
equivalent thereof by Standard & Poor's Corporation or at least P-1 or the
equivalent thereof by ▇▇▇▇▇'▇ Investors Services, Inc. (any such bank, an
"Approved Bank"), with such deposits or certificates having maturities of not
more than one (1) year from the date of acquisition, (iii) repurchase
obligations with a term of not more than seven (7) days for underlying
securities of the types described in clauses (i) and (ii) above entered into
with any Approved Bank, (iv) commercial paper or finance company paper issued by
any Person incorporated under the laws of the United States or any state thereof
and rated at least A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors
Service, Inc., and in each case maturing not more than one year after the date
of acquisition, and (v) investments in money market funds that are registered
under the Investment Company Act of 1940, as amended, which have net assets of
at least $1,000,000,000 and at least eighty-five percent (85%) of whose assets
consist of securities and other obligations of the type described in clauses (i)
through (iv) above. All such Cash Equivalents must be denominated solely for
payment in Dollars.
"CBCNA" shall mean ▇▇▇▇▇▇▇▇ Brands Company, North America, a
Delaware corporation.
"CBII" shall mean ▇▇▇▇▇▇▇▇ Brands International, Inc., a New Jersey
corporation.
"CBII Reorganization Consummation" shall have the meaning given to
such term in Section 9.6.
"Change of Control" shall mean the occurrence of any of the
following: (i) any Person or group of Persons acting collectively, owns more
than thirty percent (30%) of the equity shares of CBII entitled to vote for the
election of the Board of Directors of CBII (the "Voting Shares"), (ii) at any
time a majority of CBII's directors then in office consists of individuals who
meet none of the following criteria: (A) such individuals are members of CBII's
board of
5
directors seated in connection with the CBII Reorganization Consummation; (B)
such individuals were members of CBII's board of directors as of the date twelve
months earlier than the date of determination; (C) such individuals are CBII
directors appointed to replace any CBII directors who died, became disabled, or
voluntarily resigned; (D) such individuals are CBII directors who were approved
by a vote of a majority of CBII directors who meet any of the criteria in (A),
(B), (C), or (E) or who were previously appointed or elected in accordance with
(D) or (E); or (E) such individuals are CBII directors whose nomination for
election by CBII shareholders was approved by a vote of a majority of CBII
directors who meet any of the criteria in (A), (B), (C), or (D) or who were
previously appointed or elected in accordance with (D) or (E), (iii) CBII ceases
to own, directly or indirectly, one hundred percent (100%) of the issued and
outstanding Capital Stock of the Borrower, or (iv) the Borrower ceases to own
directly or indirectly one hundred percent (100%) of the issued and outstanding
Capital Stock of any Secured Credit Party (other than the Borrower) or ▇▇▇▇▇▇▇▇
Banana Company B.V., a Netherlands company.
"▇▇▇▇▇▇▇▇ Fresh Latin American Group" shall mean the following
Persons and their Subsidiaries:
- Blue Fish Holdings Establishment/CILPAC Establishment and
their Subsidiaries (excluding ▇▇▇▇▇▇ Holdings, Ltd. and its
Subsidiaries)
- Valk Deelnemingen Establishment, Zwaan Deelnemingen
Establishment, Buizerd Deelnemingen Establishment, Mus
Deelnemingen Establishment, Kaketoe Deelnemingen
Establishment, Struisvogel Deelnemingen Establishment, SZS
Sargasso Zeeblelangen B.V. Establishment, Occidentalis
Atlantis Establishment, Zonnekoning Overzee B.V. Establishment
and their Subsidiaries
- Conexpro Inc. Establishment and its Subsidiaries
- Antioquia Establishment/Bijzondere Benedenwindse Beleggingen
Establishment/Uraba Establishment/Tairona
Establishment/Quindio Establishment and their Subsidiaries
- Banacorp, S.A./Compania Bananera Guatemalteca Independiente,
S.A. and their Subsidiaries
- Catellia Ltd./Tropical Traders Ltd./Compania
- Agricola San Nicolas, S.A. and their Subsidiaries
- Financiera Agro-Exportaciones Limitada
- Financiera ▇▇▇▇▇▇▇▇ Limited
- Financiera Agricola Limited
- ▇▇▇▇▇▇▇▇ International Services Group N.V./Banexpro
Ltd./Brundicorpi S.A. and their Subsidiaries
- Compania Mundimar, S.A.
- Bello Puerto S.A.
- Rimsa Inc. S.A.
- Compania ▇▇ ▇▇▇▇, ▇.▇.
6
"▇▇▇▇▇▇▇▇ Fresh European Group" shall mean the following Persons and
their Subsidiaries:
- ▇▇▇▇▇▇▇▇ Banana Company, B.V.
- ▇▇▇▇▇▇▇▇ Ceroz, s.r.o.
- ▇▇▇▇▇▇▇▇ Compagnie des Bananes
- ▇▇▇▇▇▇▇▇ CR, S.r.o.
- ▇▇▇▇▇▇▇▇ Far East Holdings B.V.
- ▇▇▇▇▇▇▇▇ Finland Oy
- ▇▇▇▇▇▇▇▇ Fresh B.V.B.A.
- ▇▇▇▇▇▇▇▇ Frupac B.V.
- ▇▇▇▇▇▇▇▇ International Services Group N.V.
- ▇▇▇▇▇▇▇▇ Italia, S.p.A.
- ▇▇▇▇▇▇▇▇ Packaged Goods Distributing S.r.l.
- ▇▇▇▇▇▇▇▇ Tropical Fruit Company B.V.
- B.V. v/h Bruigom en ▇▇▇▇▇▇
- Banafruta-Comercio de Bananas, LDA
- E.C. van Eeuwijk Banaanen B.V.
- International Banana Ripening Company N.V.
- Processed Fruit Ingredients B.V.
- ▇▇▇▇▇▇ N.V.
- Ter Wal Bananen B.V.
"CIL" shall mean ▇▇▇▇▇▇▇▇ International Limited, a Bermuda company.
"Citrus" shall mean ▇▇▇▇▇▇▇▇ Gulf Citrus, Inc., a Delaware
corporation.
"Closing" shall mean the date on which the conditions set forth in
Section 5.2 of this Credit Agreement have been satisfied or waived.
"Closing Date" shall mean the time at which the Closing occurs,
which time shall occur not later than March 7, 2002.
"Code" shall have the meaning set forth in Section 1.3.
"Collateral" shall mean any and all assets and rights and interests
in or to property pledged from time to time as security for the Obligations
pursuant to the Security Documents whether now owned or hereafter acquired,
including, without limitation, all of the Accounts, Chattel Paper, Deposit
Accounts, Documents, Equipment, Fixtures, General Intangibles (including all
intellectual property), Inventory, Instruments, Investment Property and Proceeds
(each as defined in the Security Agreements).
"Commitment" of any Lender means the amount set forth opposite such
Lender's name on Schedule 1.1A hereto, as such amounts may be modified as a
result of an assignment hereunder, or as a result of a reduction pursuant to
Section 2.3.
7
"Consolidated" or "consolidated" with reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and all
of its consolidated Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Capital Expenditures" shall mean, for any applicable
period of computation, an amount equal to the consolidated aggregate
expenditures of the Borrower and its consolidated Subsidiaries (other than CPF
and its Subsidiaries) during such fiscal period for the acquisition (including
the acquisition by capitalized lease) or improvement of capital assets, as
determined in accordance with GAAP.
"Consolidated Cash Taxes" shall mean, for any applicable period of
computation, the aggregate of all taxes of the Borrower and its consolidated
Subsidiaries (other than CPF and its Subsidiaries) on a consolidated basis
determined in accordance with applicable law and GAAP applied on a consistent
basis, to the extent the same are paid in cash during such period and the
aggregate amount of all tax distributions made in cash as described in Schedule
9.6(b) during such period.
"Consolidated EBITDA" shall mean, for any applicable period of
computation, the sum of (i) Consolidated Net Income for such period, but
excluding therefrom all extraordinary items of income and all extraordinary
non-cash items of loss, plus (ii) the aggregate amount of depreciation and
amortization charges made in calculating Consolidated Net Income for such
period, plus (iii) aggregate Consolidated Interest Expense for such period, plus
(iv) the aggregate amount of all income taxes reflected on the consolidated
statements of income of the Borrower and its Subsidiaries (other than CPF and
its Subsidiaries) for such period plus (v) the amount of all non-cash
adjustments resulting from fresh start accounting to the extent such amounts
were deducted in determining Consolidated Net Income.
"Consolidated Fixed Charges" shall mean, for any applicable period
of computation, without duplication, the sum of (i) all Consolidated Interest
Expense for the applicable period, plus (ii) Consolidated Scheduled Funded Debt
Payments due during the applicable period, plus (iii) Consolidated Cash Taxes
for the applicable period, plus (iv) Unallocated CBII Overhead for the
applicable period, plus (iv) amounts advanced or distributed by the Borrower or
any Subsidiary to CBII to enable it to pay interest on CBII's Indebtedness.
"Consolidated Funded Debt" shall mean, as of the date of
determination, all Funded Indebtedness of the Borrower and its consolidated
Subsidiaries (other than CPF and its Subsidiaries), determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any applicable
period of computation, interest expense, net of interest income, of the Borrower
and its consolidated Subsidiaries (other than CPF and its Subsidiaries) for such
period, as determined in accordance with GAAP.
"Consolidated Net Income" shall mean, for any applicable period of
computation, the consolidated net income (or net deficit) of the Borrower and
its consolidated Subsidiaries (other than CPF and its Subsidiaries) for such
period, after deduction of all expenses, taxes and other proper charges, all as
determined in accordance with GAAP.
8
"Consolidated Scheduled Funded Debt Payments" shall mean, for any
applicable period of computation, the sum of all scheduled payments of principal
on Consolidated Funded Debt for such period (including the principal component
of payments due on Capital Leases or under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product (but excluding true leases) during the applicable period ending on such
date); it being understood that Consolidated Scheduled Funded Debt Payments
shall not include (i) voluntary prepayments or the mandatory prepayments
required pursuant to Section 2.3; or (ii) the repayment of up to $55,000,000 of
Indebtedness owing on the Original Closing Date by thirteen Costa Rican
Subsidiaries to Fleet National Bank, or (iii) principal payments with respect to
Indebtedness of Indian River so long as such Indebtedness is not GAAP
Indebtedness of the Borrower and its consolidated Subsidiaries.
"Contractual Obligations" shall mean, with respect to any Person,
any term or provision of any securities issued by such Person, or any indenture,
mortgage, deed of trust, contract, undertaking, document, instrument or other
agreement to which such Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"Controlled ERISA Affiliate" shall mean an ERISA Affiliate owned or
controlled by CBII.
"Covenant Compliance Agreement" means each agreement pursuant to
which one or more Subsidiaries has, among other things, agreed that it shall not
take, or omit to take any action which would cause the Borrower to be in
violation or breach of this Agreement.
"CPF" shall mean ▇▇▇▇▇▇▇▇ Processed Foods, L.L.C., a Delaware
limited liability company.
"Credit Agreement" shall mean this amended and restated credit
agreement, dated as of the date hereof, as the same may be modified, amended,
extended, restated or supplemented from time to time.
"Credit Documents" shall mean, collectively, this Credit Agreement,
the Revolving Notes, the Term Loan Notes, the Letters of Credit, the Security
Documents, the Guarantees, the Covenant Compliance Agreement and all other
documents, agreements, instruments, opinions and certificates executed and
delivered in connection herewith or therewith, as the same may be modified,
amended, extended, restated or supplemented from time to time.
"Credit Parties" shall mean the Borrower and the Guarantors.
"CTP" shall mean ▇▇▇▇▇▇▇▇ Tropical Products Company, a Delaware
corporation.
"Default" shall mean an event, condition or default which, with the
giving of notice, the passage of time or both would be an Event of Default.
"Default Rate" shall have the meaning given to such term in Section
4.2.
9
"Defaulting Lender" shall have the meaning given to such term in
Section 2.1(d)(iii).
"DOL" shall mean the U.S. Department of Labor and any successor
department or agency.
"Dollars" and "$" shall mean dollars in lawful currency of the
United States of America.
"Eligible Accounts Receivable" shall mean the aggregate face amount
of the Borrower's Accounts that conform to the warranties contained herein, less
the aggregate amount of all customer deposits, returns, discounts, claims,
credits, charges (including warehousemen's charges) and allowances of any nature
(whether issued, owing, granted or outstanding), and less the aggregate amount
of all reserves for slow paying accounts, foreign sales, and ▇▇▇▇ and hold (or
deferred shipment) transactions. Unless otherwise approved in writing by the
Agent, no Account shall be deemed to be an Eligible Account Receivable if:
(i) it arises out of a sale made by the Borrower to an
Affiliate; or
(ii) the Account (a) does not require full payment of the amount
thereof within thirty (30) days of the applicable sale or (b) is unpaid more
than ninety (90) days after the original due date; or
(iii) fifty percent (50%) or more, in face amount, of other
Accounts from such account debtor (or any Affiliate thereof) are due or unpaid
more than ninety (90) days after the original due date; or
(iv) the amount of the Account, when aggregated with all other
Accounts of such account debtor, exceeds fifteen percent (15%) in face value of
all Accounts of the Borrower then outstanding, to the extent of such excess; or
(v) (A) the account debtor is also a creditor of the Borrower,
to the extent of the amount owed by the Borrower to the account debtor, (B) the
account debtor has disputed its liability on, or the account debtor has made any
claim with respect to, such Account or any other Account due from such account
debtor to the Borrower, which has not been resolved or (C) the Account otherwise
is or may become subject to any right of setoff by the account debtor, to the
extent of the amount of such setoff; or
(vi) the Account is owing by an account debtor that has
commenced a voluntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or made an assignment for the benefit of creditors, or if
a decree or order for relief has been entered by a court having jurisdiction in
the premises in respect to such account debtor in an involuntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or if any
other petition or other application for relief under the federal bankruptcy laws
has been filed by or against the account debtor, or if such account debtor has
failed, suspended business, ceased to be solvent, or consented to or suffered a
receiver, trustee, liquidator or custodian to be appointed for it or for all or
a significant portion of its assets or affairs; or
10
(vii) the sale is to an account debtor outside the continental
United States or Canada, unless the sale is (A) on letter of credit, guaranty or
acceptance terms, or subject to credit insurance, in each case acceptable to the
Agent in its sole discretion, or (B) otherwise approved by and acceptable to the
Agent in its sole discretion; or
(viii) the sale to the account debtor is on a ▇▇▇▇-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment basis or made
pursuant to any other written agreement providing for repurchase or return; or
(ix) the goods giving rise to such Account have not been
shipped and delivered to and accepted by the account debtor or its designee or
the services giving rise to such Account have not been performed by or on behalf
of the Borrower and accepted by the account debtor or its designee or the
Account otherwise does not represent a final sale; or
(x) the Accounts owing by a particular account debtor exceed
a credit limit as to that account debtor determined by the Agent, in its
reasonable discretion, to the extent such Accounts owing by the particular
account debtor exceed such limit; or
(xi) the Account is subject to a Lien which has priority over
the Lien of the Agent in such Account other than Liens arising from claims under
PACA; provided however, the Agent shall establish a reserve against Eligible
Accounts Receivable to the extent of such PACA claims;
(xii) the Account was acquired by the Borrower from CBII or
any Affiliate of the Borrower;
(xiii) the Account did not arise from the sale of bananas or
plantains for which ▇▇▇▇▇▇▇▇ Brands Company, North America or ▇▇▇▇▇▇▇▇ (Canada)
Inc. acted as the Borrower's sales agent pursuant to a contract approved by the
Agent;
(xiv) the account debtor with respect to such Account is
either (i) the United States or any department, agency, or instrumentality of
the United States (exclusive, however, of Accounts with respect to which
Borrower has complied, to the reasonable satisfaction of Agent, with the
Assignment of Claims Act, 31 USC Section 3727), or (ii) any state of the United
States (exclusive, however, of (y) Accounts owed by any state that does not have
a statutory counterpart to the Assignment of Claims Act, or (z) Accounts owed by
any state that does have a statutory counterpart to the Assignment of Claims Act
as to which Borrower has complied to Agent's satisfaction); or
(xv) the account debtor with respect to such Account is a
trucking company.
In addition to the foregoing, Eligible Accounts Receivable shall
include such Accounts as the Borrower shall request and that the Agent approves
in advance, in writing and in its reasonable judgment.
"Equity Issuance" shall mean any issuance by the Borrower or any of
its Subsidiaries to any Person other than to the Borrower or any of its
Subsidiaries or any direct or indirect parent of the Borrower of (a) shares of
its Capital Stock, (b) any shares of its Capital
11
Stock pursuant to the exercise of options or warrants or (c) any shares of its
Capital Stock pursuant to the conversion of any debt securities to equity. The
term "Equity Issuance" shall not include any Asset Disposition.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is or was at
any time a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Internal Revenue Code) as the Borrower or any
Subsidiary of the Borrower; (ii) partnership or other trade or business (whether
or not incorporated) at any time under common control (within the meaning of
Section 414(c) of the Internal Revenue Code) with the Borrower or any Subsidiary
of the Borrower; and (iii) member of the same affiliated service group (within
the meaning of Section 414(m) of the Internal Revenue Code) as the Borrower or
any Subsidiary of the Borrower, any corporation described in clause (i) above,
or any partnership or trade or business described in clause (ii) above.
"Event(s) of Default" shall have the meaning provided for in Article
XI.
"Excluded Entities" shall mean CPF and its Subsidiaries, Frupac and
its Subsidiaries, PV and its Subsidiaries, GWF and its Subsidiaries and Citrus.
"Excluded Taxes" shall have the meaning given to such term in
Section 2.7.
"Existing Letters of Credit" shall mean those letters of credit
listed on Schedule 1.1(b) hereto.
"Farm Sale Block" shall have the meaning set forth in Section 9.3.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by it.
"Fee Letter" shall mean the amended and restated letter agreement,
dated as of the date hereof, by and between the Agent and the Borrower regarding
the fees to be paid by the Borrower to the Agent, as amended, restated,
supplemented or otherwise modified from time to time.
"Fees" shall mean, collectively, the Agent's Fees, the Letter of
Credit Fee and the Issuing Bank Fees payable hereunder.
"Financials" shall have the meaning given to such term in Section
6.6.
12
"Fixed Charge Coverage Ratio" shall mean, for any period, the ratio
of (i) Consolidated EBITDA for such period to (ii) Consolidated Fixed Charges
for such period.
"Food Security Act" shall mean the Food Security Act of 1985, as
amended, and any successor statute thereto, including all rules and regulations
thereunder, all as the same may be in effect from time to time.
"Foothill" has the meaning set forth in the preamble hereto.
"Foreign Lender" shall have the meaning given to such term in
Section 2.7(a).
"Frupac" shall mean ▇▇▇▇▇▇▇▇ Frupac, Inc., a Delaware corporation.
"Funded Indebtedness" shall mean, with respect to any Person,
without duplication, (a) all Indebtedness of such Person other than Indebtedness
of the types referred to in clause (e), (f), (g), (i), (k), (l) and (m) of the
definition of "Indebtedness" set forth in this Section 1.1, (b) all Indebtedness
of another Person of the type referred to in clause (a) above secured by (or for
which the holder of such Funded Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (c) all guaranties of such Person
with respect to Indebtedness of the type referred to in clause (a) above of
another Person and (d) Indebtedness of the type referred to in clause (a) above
of any partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable with respect
thereto.
"Funding Bank" shall have the meaning given to such term in Section
4.7.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, in effect from time to time.
"GAAP Indebtedness" shall mean debt for borrowed money which is or
is required to be reflected as a liability on the balance sheet of the
respective obligor in accordance with GAAP.
"Governmental Authority" shall mean any federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantees" shall mean that certain Guarantee dated as of the
Original Closing Date made by certain of the Guarantors in favor of the Agent
(for itself and the Lenders) and each other agreement pursuant to which any
Person unconditionally guarantees the Obligations.
"Guarantors" shall mean those Persons listed on Schedule 6.9 hereto
as a Guarantor, and each other Person which unconditionally guarantees the
Obligations.
"GWF" shall mean Great White Fleet Ltd., a Bermuda company.
13
"Hedging Agreements" shall mean any Interest Rate Protection
Agreement or other interest rate protection agreement, foreign currency exchange
agreement, commodity purchase or option agreement or other interest or exchange
rate or commodity price hedging agreements.
"Highest Lawful Rate" shall mean, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness under this Credit
Agreement, under the laws of the State of New York (or the law of any other
jurisdiction whose laws may be mandatorily applicable notwithstanding other
provisions of this Credit Agreement and the other Credit Documents), or under
applicable federal laws which may presently or hereafter be in effect and which
allow a higher maximum nonusurious interest rate than under New York or such
other jurisdiction's law, in any case after taking into account, to the extent
permitted by applicable law, any and all relevant payments or charges under this
Credit Agreement and any other Credit Documents executed in connection herewith,
and any available exemptions, exceptions and exclusions.
"Inactive Subsidiary" shall mean each Subsidiary (other than a
Guarantor, a Pledgor Entity or a Pledged Party) which (a) owns assets with a
book value of less than $1,000,000 as of the last day of the past fiscal year or
(b) had sales for the past fiscal year of less than $1,000,000 (as of the
Closing Date, the Inactive Subsidiaries are identified as such on Schedule 6.9
hereto as Inactive Subsidiaries).
"Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and either due within six months of the incurrence thereof or incurred on longer
payment terms for the purchase of cans and related packaging products) which
would appear as liabilities on a balance sheet of such Person, (e) all
obligations of such Person under take-or-pay or similar arrangements or under
commodities agreements, (f) all Indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of production
from, property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all guaranties of such Person with
respect to Indebtedness of the type referred to in this definition of another
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Hedging Agreements
(with the amount thereof, for the purposes of this Credit Agreement, being the
net amount thereof in accordance with GAAP), (j) the maximum amount of all
standby letters of credit issued or bankers' acceptances facilities created for
the account of such Person and, without duplication, all drafts drawn thereunder
(to the extent unreimbursed), (k) all preferred Capital Stock issued by such
Person and required by the terms thereof to be redeemed, or for which mandatory
sinking fund payments are due, by a fixed date, (l) the principal portion of all
obligations of such Person under
14
synthetic leases, tax retention operating leases and other similar off-balance
sheet financing arrangements (but excluding true leases) and (m) the
Indebtedness of any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer and for which such Person is
legally obligated.
"Independent Accountant" shall mean a firm of independent public
accountants of nationally recognized standing selected by the Borrower, which is
"independent" as that term is defined in Rule 2-01 of Regulation S-X promulgated
by the Securities and Exchange Commission.
"Indian River" shall mean The Packers of Indian River, Ltd., a
limited partnership formed under the laws of the state of Florida.
"Initial Lender" shall mean Foothill or Ableco.
"Insurance Premium Block" shall mean a block on Availability
pursuant to Section 2.1 hereof that is instituted at any time when the sum of
(i) Availability (without giving effect to the Resolution Block) plus (ii) the
Borrower's and its Subsidiaries' (other than any Excluded Entity's) unrestricted
cash and Cash Equivalents, is less than $20,000,000. Such Insurance Premium
Block shall, as of any date of determination, be in an amount equal to the
lesser of (i) the Indebtedness then outstanding and permitted pursuant to clause
(d)(xiv) of the defined term "Permitted Indebtedness," or (ii) the amount of the
insurance premium that would be payable for 90 days of the insurance policy for
which the premium was financed as permitted pursuant to clause (d)(xiv) of the
defined term "Permitted Indebtedness."
"Interest Period" means, with respect to each LIBOR Rate Loan, a
period commencing on the date of the making of such LIBOR Rate Loan and ending
1, 2, or 3 months thereafter; provided, however, that (a) if any Interest Period
would end on a day that is not a Business Day, such Interest Period shall be
extended (subject to clauses (c)-(e) below) to the next succeeding Business Day,
(b) interest shall accrue at the applicable rate based upon the LIBOR Rate from
and including the first day of each Interest Period to, but excluding, the day
on which any Interest Period expires, (c) any Interest Period that would end on
a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (d) with
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 2, or 3 months
after the date on which the Interest Period began, as applicable, and (e)
Borrower may not elect an Interest Period which will end after the Maturity
Date.
"Interest Rate" shall have the meaning given to such term in Section
4.1.
"Interest Rate Protection Agreement" shall mean any interest rate
protection agreement, foreign currency exchange agreement, commodity purchase or
option agreement or other interest or exchange rate or commodity price hedging
agreements between the Borrower and any Lender, or any affiliate of a Lender.
15
"Internal Revenue" shall mean the Internal Revenue Service and any
successor agency.
"Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended from time to time, and any successor statute thereto and all
rules and regulations promulgated thereunder.
"Inventory" shall mean all of the Borrower's inventory, including
without limitation, (i) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in the Borrower's business;
(ii) all goods, wares and merchandise, finished or unfinished, held for sale or
lease or leased or furnished or to be furnished under contracts of service; and
(iii) all goods returned to or repossessed by the Borrower.
"Investment" in any Person shall mean (i) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities or
otherwise, but exclusive of the acquisition of inventory, supplies, equipment
and other property or assets used or consumed in the ordinary course of business
of the Borrower or its Subsidiaries and Consolidated Capital Expenditures not
otherwise prohibited hereunder) of assets, shares of Capital Stock, bonds,
notes, debentures, partnership, joint ventures or other ownership interests or
other securities of such Person, (ii) any deposit (other than deposits
constituting a Permitted Lien) with, or advance, loan or other extension of
credit (other than sales of inventory or services on credit in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms and sales on credit of the type described in clauses (c) or (d) of
Section 9.3) to, such Person or (iii) any other capital contribution to or
investment in such Person, including, without limitation, any obligation
incurred for the benefit of such Person. In determining the aggregate amount of
Investments outstanding at any particular time, (a) the amount of any Investment
represented by a guaranty shall be taken at not less than the maximum principal
amount of the obligations guaranteed and still outstanding; (b) there shall be
deducted in respect of each such Investment any amount received as a return of
capital (but only by repurchase, redemption, retirement, repayment, liquidating
dividend or liquidating distribution); (c) there shall not be deducted in
respect of any Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise; and (d) there shall not be deducted
from the aggregate amount of Investments any decrease in the market value
thereof.
"Issuing Bank" shall mean Foothill or any Person that is acceptable
to the Agent which shall issue an L/C Undertaking for the account of the
Borrower.
"Issuing Bank Fees" shall have the meaning given to such term in
Section 4.5(b).
"Joinder Agreement" shall mean an agreement in the form of Exhibit J
attached hereto.
"L/C Undertaking" shall mean a participation in, or a reimbursement
or indemnification undertaking with respect to, a Letter of Credit.
"Lender" shall have the meaning given to such term in the preamble
of this Credit Agreement.
16
"Lending Party" shall have the meaning given to such term in Section
14.7.
"Letter of Credit Committed Amount" shall have the meaning given to
such term in Section 3.1.
"Letter of Credit Documents" shall mean, with respect to any Letter
of Credit, such Letter of Credit, any amendments thereto, any documents
delivered in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (i) the
rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"Letter of Credit Fee" shall have the meaning given to such term in
Section 4.5(a).
"Letter of Credit Obligations" shall mean, at any time, the sum of
(i) the aggregate undrawn amount of all Letters of Credit outstanding at such
time, plus (ii) the aggregate amount of all drawings under Letters of Credit for
which the Issuing Bank has not at such time been reimbursed, paid or repaid,
plus (iii) without duplication, the aggregate amount of all payments made by
each Lender to the Issuing Bank with respect to such Lender's participation in
L/C Undertakings as provided in Section 3.3 for which the Borrower has not at
such time reimbursed the Lenders, whether by way of a Revolving Loan or
otherwise.
"Letters of Credit" shall mean the stand-by letters of credit issued
by an Underlying Issuer for the account of the Borrower for which an L/C
Undertaking has been provided or undertaken by the Issuing Lender, and all
amendments, renewals, extensions or replacements thereof.
"Leverage Ratio" shall mean, for any date of determination, the
ratio of (i) GAAP Indebtedness of Borrower and its Subsidiaries (other than CPF
and its Subsidiaries) on that date to (ii) Consolidated EBITDA for the four
quarters ending on such date.
"LIBOR Deadline" has the meaning set forth in Section 4.8(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit D-1.
"LIBOR Option" has the meaning set forth in Section 4.8(a).
"LIBOR Rate" means, for each Interest Period for each LIBOR Rate
Loan, the rate per annum determined by Agent (rounded upwards, if necessary, to
the next 1/16%) by dividing (a) the Base LIBOR Rate for such Interest Period, by
(b) 100% minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and
as of the effective day of any change in the Reserve Percentage.
"LIBOR Rate Loan" means each portion of a Revolving Loan or the Term
Loan that bears interest at a rate determined by reference to the LIBOR Rate.
17
"Lien(s)" shall mean any lien, license, claim, charge, pledge,
security interest, deed of trust, mortgage, or other encumbrance.
"Loan" or "Loans" shall mean the Revolving Loans and/or the Term
Loans (or a portion of any Revolving Loan or Term Loan), individually or
collectively, as appropriate.
"Loan Account" shall have the meaning set forth in Section 2.5.
"Material Adverse Change" shall mean (a) a change in the business,
operations, assets, liabilities or condition (financial or otherwise) of the
Borrower and its Subsidiaries, taken as a whole, or the Collateral, which in
either case would materially and adversely affect the ability of the Borrower
Entities, taken as a whole, to perform their obligations under the Credit
Documents, or (b) a material adverse change in the rights and remedies of the
Agent or any Lender thereunder.
"Material Adverse Effect" shall mean (a) an effect on the business,
operations, assets, liabilities or condition (financial or otherwise) of the
Borrower and its Subsidiaries, taken as a whole, or the Collateral, which in
either case would materially and adversely affect the ability of the Borrower
Entities, taken as a whole, to perform their obligations under the Credit
Documents, or (b) a material adverse effect on the rights and remedies of the
Agent or any Lender thereunder.
"Material Contract" shall mean any contract (other than any of the
Credit Documents), whether written or oral, to which the Borrower or any of its
Subsidiaries is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could reasonably be expected to have a
Material Adverse Effect.
"Maturity Date" shall mean June 7, 2004.
"Maximum Credit Line" means $130,000,000, as such amount may be
reduced from time to time pursuant to and in accordance with Section 2.3.
"Mortgages" shall mean each mortgage, security agreement and fixture
filing, deed of trust or other real estate security document executed in favor
of or for the benefit of the Agent and/or the Lenders to secure any or all of
the Obligations.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA and (i) which is, or within the immediately
preceding six (6) years was, contributed to by the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate or (ii) with respect to which the Borrower
or any Subsidiary of the Borrower may incur any liability.
"Net Cash Proceeds" shall mean the aggregate cash proceeds and Cash
Equivalents received by the Borrower or the applicable Subsidiary in respect of
any Asset Disposition, Specified Asset Disposition or Equity Issuance, net of
(a) direct costs (including, without limitation, legal, accounting and
investment banking fees, and sales commissions) and (b) taxes paid or payable as
a result thereof; it being understood that "Net Cash Proceeds" shall include,
without limitation, any cash received upon the sale or other disposition of any
non-cash
18
consideration received by the Borrower in any Asset Disposition, Specified Asset
Disposition or Equity Issuance.
"Net Liquidation Value" shall mean the value of the Borrower's
trademarks and related rights, as set forth in the Appraisal.
"Note" or "Notes" shall mean the Revolving Notes and/or the Term
Loan Notes, individually or collectively, as appropriate.
"Notice of Borrowing" shall have the meaning given to such term in
Section 2.1(d)(i).
"Obligations" shall mean the Loans, any other loans and advances or
extensions of credit made or to be made by any Lender to the Borrower, or to
others for the Borrower's account in each case pursuant to the terms and
provisions of this Credit Agreement, together with interest thereon (including
interest which would be payable as post-petition interest in connection with any
bankruptcy or similar proceeding) and, including, without limitation, any
reimbursement obligation or indemnity of the Borrower or its Subsidiaries on
account of Letters of Credit and all other Letter of Credit Obligations, and all
indebtedness, fees, liabilities and obligations which may at any time be owing
to the Agent or any Lender pursuant to this Credit Agreement or any other Credit
Document, whether now in existence or incurred from time to time hereafter,
whether unsecured or secured by pledge, Lien upon or security interest in any of
the Borrower's assets or property or the assets or property of any other Person,
whether such indebtedness is absolute or contingent, joint or several, matured
or unmatured, direct or indirect and whether the Borrower or any Subsidiary is
liable to the Agent or any Lender for such indebtedness as principal, surety,
endorser, guarantor or otherwise. Obligations shall also include any other
indebtedness owing to the Agent or any Lender under this Credit Agreement and
the other Credit Documents, the Borrower's liability to any Lender pursuant to
this Credit Agreement as maker or endorser of any promissory note or other
instrument for the payment of money, any liability to the Agent or any Lender
pursuant to this Credit Agreement or any other Credit Document under any
instrument of guaranty or indemnity, or arising under any guaranty, endorsement
or undertaking which the Agent or any Lender may make or issue to others for the
Borrower's account pursuant to this Credit Agreement, including any
accommodation extended with respect to applications for Letters of Credit, and
all liabilities and obligations owing from the Borrower to the Agent or any
Lender, or any affiliate of the Agent or a Lender, arising under Interest Rate
Protection Agreements entered into for the purpose of hedging interest rate risk
under this Credit Agreement.
"Operative Documents" shall mean the Credit Documents and the
Security Documents.
"Original Closing Date" shall mean March 7, 2001.
"Original Credit Agreement" shall have the meaning given to such
term in the recitals to this Credit Agreement.
"Original Obligations" shall mean "Obligations" as defined in the
Original Credit Agreement.
19
"Original Term Loans" shall mean "Term Loans" as defined in the
Original Credit Agreement.
"Other Taxes" shall have the meaning given to such term in Section
2.7(c).
"PACA" shall mean the Perishable Agricultural Commodities Act, 7
U.S.C. Section 499.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Permitted Acquisitions" shall mean an Acquisition by any Borrower
Entity of an Acquired Company which Acquisition complies with the following
requirements (in each case to the satisfaction of the Agent): (i) the Acquired
Company shall be an operating company that engages in a line of business
substantially similar to the business that one or more Borrower Entities engaged
in on the Original Closing Date, (ii) the Agent shall have received, if
available, a review of the financial condition of the Acquired Company conducted
by a firm of independent certified public accountants of nationally recognized
standing reasonably acceptable to the Agent and such other reports and analyses
in connection with the Acquisition as the Agent may reasonably request and an
internal summary of the results of the Borrower Entity's due diligence and/or
its economic justification for such Acquisition and the bases therefor
(excluding any information in any such report, analyses or summary to which the
attorney client privilege applies), (iii) the Agent shall have completed a field
examination relating to the applicable Acquired Company and the results thereof
are satisfactory to the Agent, (iv) the Agent shall have received all items
required by Sections 7.9, 7.10 and 7.16 in connection with the Acquired Company,
(v) in the case of an Acquisition of the Capital Stock of another Person, the
board of directors (or other comparable governing body) of such other Person
shall have duly approved such Acquisition, (vi) the Borrower shall have
delivered to the Agent a pro forma compliance certificate demonstrating that,
upon giving effect to such Acquisition on a pro forma basis, the Borrower and
its Subsidiaries shall be in compliance with all of the covenants set forth in
Article VIII and no Default or Event of Default shall exist immediately prior to
or immediately after the consummation of the Acquisition, and (viii) the
Borrower shall have delivered to the Agent all Acquisition Documents in
connection with such Permitted Acquisition which documents shall be reasonably
satisfactory to the Agent.
"Permitted Indebtedness" shall mean Indebtedness which meets all of
the following tests at the time it is incurred: (a) if such Indebtedness is
incurred after the Original Closing Date, the Borrower, on a pro forma basis and
assuming such Indebtedness is incurred, would be in compliance with the
financial covenants set forth herein, (b) after giving effect to the incurrence
of such Indebtedness, the aggregate principal amount of all GAAP Indebtedness of
the Borrower and its Subsidiaries (including without duplication, GAAP
Indebtedness owing under the Credit Documents and GAAP Indebtedness of Excluded
Entities, but excluding Indebtedness owing by the Borrower to CBII and evidenced
by that certain Subordinated Promissory Note dated December 31, 2000 in an
original principal amount equal to $40,000,000) at such time (i) does not exceed
$540,000,000 at any time on a consolidated basis, or (ii) does not, when added,
without duplication, to all Indebtedness of such Persons of the types described
in clauses (f), (g), (j), (l) or (m) of the definition of Indebtedness (but, in
the case of clause (m), excluding Indebtedness of CTP arising solely by virtue
of its role as general partner of Indian
20
River), exceed $565,000,000 at all times, (c) after giving effect to the
incurrence of such Indebtedness, the aggregate principal amount of all GAAP
Indebtedness of the Borrower and its Subsidiaries (including without
duplication, GAAP Indebtedness owing under the Credit Documents and GAAP
Indebtedness of Excluded Entities (other than CPF and its Subsidiaries) but
excluding Indebtedness owing by the Borrower to CBII and evidenced by that
certain Subordinated Promissory Note dated December 31, 2000 in an original
principal amount equal to $40,000,000) at such time (i) does not exceed
$360,000,000 at any time, on a consolidated basis, or (ii) does not, when added,
without duplication, to all Indebtedness of such Persons of the types described
in clauses (f), (g), (j), (l) or (m) of the definition of Indebtedness (but, in
the case of clause (m), excluding Indebtedness of CTP arising solely by virtue
of its role as general partner of Indian River), exceed $385,000,000 at all
times and (d) Indebtedness which consists of:
(i) Indebtedness owing to the Agent and the Lenders with
respect to the Revolving Loans, the Term Loans, the Letters of Credit or
otherwise, pursuant to the Credit Documents;
(ii) trade payables incurred in the ordinary course of the
business and other payment obligations under grower contracts entered into in
the ordinary course of business;
(iii) purchase money Indebtedness (including Capital Leases)
hereafter incurred by the Borrower or any of its Subsidiaries not otherwise
constituting Permitted Indebtedness and incurred to finance the purchase of
fixed assets provided that (A) the total of all such Indebtedness for all such
Persons taken together shall not exceed an aggregate principal amount of
$10,000,000 at any one time outstanding (excluding any such Indebtedness
referred to in clause (v) immediately below); (B) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s) financed; and (C)
no such Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing;
(iv) obligations of the Borrower or any of its Subsidiaries
in respect of Hedging Agreements entered into in order to manage existing or
anticipated interest rate or exchange rate risks or commodity price fluctuations
and not for speculative purposes;
(v) Indebtedness described on Schedule 1.1D attached hereto
and any refinancings or replacements of such Indebtedness; provided that the
aggregate principal amount of such Indebtedness is not increased, the scheduled
maturity dates of such Indebtedness are not shortened and such refinancing is on
terms and conditions no more restrictive than the terms and conditions of the
Indebtedness being refinanced;
(vi) unsecured Indebtedness owing to the Borrower or a
Subsidiary by the Borrower or a Subsidiary, as long as the related Investment is
permitted hereunder;
(vii) Indebtedness of Persons who are members of the ▇▇▇▇▇▇▇▇
Fresh European Group as long as (i) such Indebtedness is non-recourse to the
Borrower and each of its Subsidiaries which is not a member of the ▇▇▇▇▇▇▇▇
Fresh European Group, and (ii) such Indebtedness, when added to the aggregate
principal amount of all other Indebtedness of the members of the ▇▇▇▇▇▇▇▇ Fresh
European Group (other than Indebtedness described in clause (vi)
21
above), is in an aggregate outstanding principal amount not to exceed
$30,000,000 at any time and is otherwise not prohibited by any document or
instrument to which one or more members of the ▇▇▇▇▇▇▇▇ Fresh European Group is
a party;
(viii) Indebtedness of Persons who are members of the ▇▇▇▇▇▇▇▇
Fresh Latin American Group as long as (i) such Indebtedness is non-recourse to
the Borrower and each of its Subsidiaries which is not a member of the ▇▇▇▇▇▇▇▇
Fresh Latin American Group and such Indebtedness is otherwise not prohibited by
any document or instrument to which one or more members of the ▇▇▇▇▇▇▇▇ Fresh
Latin American Group is a party, and (ii) such Indebtedness, when added to the
aggregate principal amount of all other Indebtedness of the members of the
▇▇▇▇▇▇▇▇ Fresh Latin American Group (but excluding Back-to-Back Loans and other
Indebtedness described in clause (vi) above), is in an aggregate outstanding
principal amount not to exceed $35,000,000 at any time;
(ix) Indebtedness of GWF and its Subsidiaries as long as (i)
such Indebtedness is non-recourse to the Borrower and each of its Subsidiaries
(other than GWF) which is not a Subsidiary of GWF and such Indebtedness is
otherwise not prohibited by any document or instrument to which GWF or one or
more of its Subsidiaries is a party and (ii) the aggregate outstanding principal
amount of all such Indebtedness of GWF and its Subsidiaries, when added to the
aggregate principal amount of all other Indebtedness of GWF and its Subsidiaries
(other than Indebtedness described in clause (vi) above), does not exceed
$225,000,000 at any time;
(x) Indebtedness of CPF and its Subsidiaries as long as (i)
such Indebtedness is non-recourse to the Borrower and each of its Subsidiaries
(other than CPF) which is not a Subsidiary of CPF and is otherwise not
prohibited by any document or instrument to which CPF or one or more of its
Subsidiaries is a party and (ii) the aggregate outstanding principal amount of
all such Indebtedness of CPF and its Subsidiaries when added to the aggregate
principal amount of all other Indebtedness of CPF and its Subsidiaries (other
than Indebtedness described in clause (vi) above), does not exceed $200,000,000
at any time;
(xi) Indebtedness of Frupac or its Subsidiaries as long as
(i) such Indebtedness is non-recourse to the Borrower or any of its Subsidiaries
(other than Frupac) which is not a Subsidiary of Frupac and is otherwise not
prohibited by any document or instrument to which Frupac or one or more of its
Subsidiaries is a party and (ii) the aggregate outstanding principal amount of
all such Indebtedness of Frupac and its Subsidiaries when added to the aggregate
principal amount of all other Indebtedness of Frupac and its Subsidiaries (other
than Indebtedness described in clause (vi) above), does not exceed $25,000,000
at any time;
(xii) Indebtedness of PV and its Subsidiaries as long as (i)
such Indebtedness is non-recourse to the Borrower or any of its Subsidiaries
(other than PV) which is not a Subsidiary of PV and is otherwise not prohibited
by any document or instrument to which PV or one or more of its Subsidiaries is
a party and (ii) the aggregate outstanding principal amount of all Indebtedness
of PV and its Subsidiaries, when added to the aggregate principal amount of all
other Indebtedness of PV and its Subsidiaries (other than Indebtedness described
in clause (vi) above) does not exceed $35,000,000 at any time;
22
(xiii) Indebtedness of CTP arising solely from its status as a
general partner of Indian River;
(xiv) Indebtedness in an amount not to exceed $15,000,000
outstanding at any time incurred by Borrower to finance the payment of insurance
premiums; and
(xv) such other Indebtedness as the Required Lenders in their
sole and absolute discretion approve in writing.
"Permitted Investments" shall mean:
(i) Cash Equivalents;
(ii) interest-bearing demand or time deposits (including
certificates of deposit) which are insured by the Federal Deposit Insurance
Corporation ("FDIC") or a similar federal insurance program; provided, however,
that the Borrower may, in the ordinary course of business, maintain in its
operating accounts from time to time amounts in excess of then applicable FDIC
or other program insurance limits;
(iii) Investments existing on the Original Closing Date and
set forth on Schedule 1.1E attached hereto (including capitalization of any
intercompany advances shown thereon);
(iv) advances to officers, directors and employees of CBII,
the Borrower or any of its Subsidiaries for expenses incurred or anticipated to
be incurred in the ordinary course as long as (a) no advances to any one Person
are in excess of $250,000 in the aggregate at any time outstanding (except for a
one-time $750,000 advance to one employee) and (b) all such advances do not
exceed $5,000,000 in the aggregate at any time outstanding;
(v) Qualified Investments made in or to a Secured Credit
Party;
(vi) Qualified Investments made by Persons other than members
of the ▇▇▇▇▇▇▇▇ Fresh European Group in or to one or more Persons who are, as of
the Closing Date, members of the ▇▇▇▇▇▇▇▇ Fresh Latin American Group (or Persons
which are Wholly-Owned Subsidiaries of such members of the ▇▇▇▇▇▇▇▇ Fresh Latin
America Group) (it being agreed that a Back-to-Back Loan to any member of the
▇▇▇▇▇▇▇▇ Fresh Latin American Group shall, solely for the purposes of this
clause, constitute an Investment in or to such member of the ▇▇▇▇▇▇▇▇ Fresh
Latin American Group and not an Investment in or to the applicable lender);
(vii) Qualified Investments made by Persons other than members
of the ▇▇▇▇▇▇▇▇ Fresh Latin American Group in or to one or more Persons who are,
as of the Closing Date, members of the ▇▇▇▇▇▇▇▇ Fresh European Group (or Persons
which are Wholly-Owned Subsidiaries of such members of the ▇▇▇▇▇▇▇▇ Fresh
European Group), as long as the aggregate amount thereof made after the Original
Closing Date does not exceed $10,000,000 in any given fiscal year;
(viii) Qualified Investments made by Persons who are members of
the ▇▇▇▇▇▇▇▇ Fresh European Group in or to one or more Persons who are, as of
the Closing Date, members of
23
the ▇▇▇▇▇▇▇▇ Fresh European Group (or Persons which are Wholly-Owned
Subsidiaries of such members of the ▇▇▇▇▇▇▇▇ Fresh European Group);
(ix) Qualified Investments (other than those permitted
pursuant to clause (vi) above) made by Persons who are members of the ▇▇▇▇▇▇▇▇
Fresh Latin American Group as long as the aggregate outstanding amount thereof
made after the Original Closing Date does not exceed $15,000,000 at any one
time;
(x) Qualified Investments (other than those permitted
pursuant to clause (vii) or (viii) above) made by Persons who are members of the
▇▇▇▇▇▇▇▇ Fresh European Group as long as the aggregate outstanding amount
thereof made after the Original Closing Date does not exceed $15,000,000 at any
one time;
(xi) Qualified Investments made by the Secured Credit Parties
(other than Investments made in or to a member of the ▇▇▇▇▇▇▇▇ Fresh Latin
American Group, members of the ▇▇▇▇▇▇▇▇ Fresh European Group, an Excluded Entity
or an Inactive Subsidiary) as long as the aggregate outstanding amount thereof
made after the Original Closing Date does not exceed $15,000,000 at any time;
(xii) Investments made at a time when no Event of Default has
occurred and is continuing (other than by Excluded Entities) in independent
growers in the ordinary course of business as long as the aggregate outstanding
balance permitted under this clause (xii) do not exceed $10,000,000 at any time;
(xiii) Investments made by one or more Excluded Entities;
(xiv) Loans made by the Borrower to Frupac which do not exceed
$25,000,000 outstanding at any time during the months of September to June and
which do not exceed $7,000,000 outstanding at any time during the months of July
and August;
(xv) Loans made by ▇▇▇▇▇▇▇▇ Banana Company B.V., a
Netherlands company, to CIL;
(xvi) Investments made by the Borrower in Citrus to the extent
required to service existing debt of Citrus but not to exceed $1,100,000 in any
fiscal year;
(xvii) Investments consisting of securities or debt instruments
which are proceeds of Specified Asset Dispositions or Asset Dispositions (to the
extent permitted by Section 9.3);
(xviii) Investments described on Schedule 9.3A;
(xix) A loan to CBII for Permitted Restructuring Expenses or
any transfer of funds as permitted by Section 9.6;
(xx) such other Investments as the Required Lenders may
approve in their sole discretion;
24
(xxi) advances to CTP solely to the extent necessary to permit
CTP to make capital expenditures;
(xxii) advances consisting of the payment of insurance premiums
by the Borrower on insurance policies that insure the Borrower and one or more
Subsidiaries, Excluded Entities or CBII, as long as each such advance is repaid
to the Borrower by the applicable Subsidiary (other than Secured Credit
Parties), Excluded Entity or CBII within 90 days after the date on which such
advance was made;
(xxiii) advances consisting of payment of insurance claim
deductibles and self-insured retentions by the Borrower on liability insurance
policies that insure the Borrower and one or more Subsidiaries, Excluded
Entities or CBII, provided (a) each such advance is repaid to the Borrower by
the applicable Subsidiary (other than Secured Credit Parties), Excluded Entity
or CBII within 90 days after the date on which such advance was made; and (b)
the aggregate amount of such advances outstanding at any given time, excluding
those made on behalf of the Secured Credit Parties, does not exceed $1,000,000;
and
(xxiv) indemnity obligations incurred by the Borrower to secure
the payment of insurance claim deductibles and self-insured retentions and to
support operational bonding obligations of one or more Subsidiaries, Excluded
Entities or CBII, provided that (a) any payment made by the Borrower in
compliance with such indemnity obligation is repaid to the Borrower by the
applicable Subsidiary (other than Secured Credit Parties), Excluded Entity or
CBII within 90 days after the date on which such payment was made, (b) any
letters of credit issued for the account of the Borrower shall be Letters of
Credit; and (c) the aggregate amount of the indemnity obligation of the Borrower
shall not exceed $3,000,000 for Subsidiaries (other than Secured Credit
Parties), Excluded Entities or CBII for any given annual policy year;
Notwithstanding the foregoing, Permitted Investments shall not
include (i) Investments made in or to an Inactive Subsidiary (other than
Investments permitted pursuant to clauses (iii), (xxii), (xxiii) or (xxiv)
above), (ii) Investments made in or to an Excluded Entity (other than
Investments permitted pursuant to clause (iii), (xiv) or (xvi) or (xxii),
(xxiii) and (xxiv) above and Investments made by an Excluded Entity); (iii)
Investments (other than as described in clause (xix), (xxii), (xxiii) or (xxiv)
above) made in or to CBII or any Subsidiary of CBII which is not the Borrower or
a Subsidiary of the Borrower; and (iv) investments in or to CTP other than those
permitted pursuant to clause (xxi) above.
"Permitted Liens" shall mean
(i) Liens granted to the Agent or the Lenders or any
Affiliate of a Lender pursuant to any Credit Document;
(ii) Liens listed on Schedule 1.1C attached hereto;
(iii) Liens on fixed assets securing purchase money
Indebtedness (including Capital Leases) to the extent permitted under Section
9.2, provided that (A) any such Lien attaches to such assets concurrently with
or within thirty (30) days after the acquisition thereof and only to the assets
to be acquired and (B) a description of the assets so acquired is furnished to
the Agent;
25
(iv) Liens of warehousemen, mechanics, materialmen, workers,
repairmen, fillers, packagers, processors, common carriers, landlords and other
similar Liens arising by operation of law or otherwise, not waived in connection
herewith, for amounts that are not yet due and payable or which are being
diligently contested in good faith by the Borrower by appropriate proceedings,
provided that in any such case an adequate reserve is being maintained by the
Borrower for the payment of same;
(v) attachment or judgment Liens individually or in the aggregate
not in excess of $250,000 (exclusive of (a) any amounts that are duly bonded to
the satisfaction of the Agent in its reasonable judgment or (b) any amount
adequately covered by insurance as to which the insurance company has
acknowledged in writing its obligations for coverage);
(vi) Liens for taxes, assessments or other governmental charges not
yet due and payable or which are being diligently contested in good faith by the
Borrower by appropriate proceedings, provided that in any such case an adequate
reserve is being maintained by the Borrower for the payment of same in
accordance with GAAP;
(vii) deposits or pledges to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment insurance;
(viii) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, regulatory or statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business;
(ix) Liens arising from claims under PACA;
(x) Liens on assets of GWF, CPF, PV or Frupac or their respective
Subsidiaries to secure Indebtedness of one or more of such Persons as long as
the owner of the assets which are the subject of such Liens is the primary
obligor on such Indebtedness (or is a Subsidiary or parent of such primary
obligor, provided that, in the case of a parent, such parent is an Excluded
Entity), as long as the applicable Indebtedness is permitted pursuant to clause
(ix), (x), (xi) or (xii) of the definition of Permitted Indebtedness herein;
(xi) Liens on assets of a Person (other than on Collateral or assets
intended to constitute Collateral) to secure Indebtedness of such Person
permitted hereunder;
(xii) Liens on insurance proceeds and unearned insurance premiums
which secure the Permitted Indebtedness described in clause (d)(xiv) of the
defined term "Permitted Indebtedness"; and
(xiii) such other Liens as the Required Lenders, in their sole and
absolute discretion, approve in writing.
"Permitted Restructuring Expenses" shall mean payments made on or
before March 31, 2002 to or for the benefit of CBII for legal, investment
banking and other professional fees and related expenses (including court costs)
incurred in connection with the proposed restructuring of CBII's Indebtedness
and which are made at a time when all of the following conditions are satisfied:
(i) no Event of Default has occurred and is continuing (or would be
26
caused thereby); (ii) the average Availability (without giving effect to the
Resolution Block) plus Borrower's and its Subsidiaries' (other than any Excluded
Entity's) unrestricted cash and Cash Equivalents for the thirty (30) day period
ending ten (10) days prior to the date of such payment was at least $20,000,000;
(iii) the amount of such payment, when added to all other payments made during
such fiscal quarter, other than any payment of the "Restructuring Fee" to The
Blackstone Group as contemplated by clause (iv) below and other than any payment
of the fee payable to Houlihan, Lokey, ▇▇▇▇▇▇ & ▇▇▇▇▇ as contemplated by clause
(vi) below, does not exceed $3,000,000; provided that if the total of all such
payments made under this clause (iii) in any fiscal quarter shall be less than
$3,000,000, the unutilized portion of such $3,000,000 permitted payment may be
carried forward into subsequent fiscal quarters so long as aggregate payments,
other than any payment of the "Restructuring Fee", of more than $6,000,000 are
not made in any fiscal quarter; (iv) if the payment is to fund payment of the
"Restructuring Fee" owing to The Blackstone Group pursuant to that certain
engagement letter between The Blackstone Group and CBII dated November 6, 2000,
the amount of such payment shall not exceed the lesser of the maximum amount
owing for that fee and $7,600,000; (v) if the payment is made after the
commencement of any bankruptcy, insolvency, arrangement, reorganization,
receivership or similar proceeding by or against CBII, the payment shall be made
by way of a loan from Borrower to CBII which is protected by an appropriate
court order which is acceptable to the Agent and the Required Lenders and
specifically assigned to the Agent as Collateral; and (vi) if the payment is to
CBII to permit CBII to pay the success fee of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇,
such success fee shall not exceed $5,000,000 and prior to the payment of such
success fee the Agent shall have received evidence of the CBII Reorganization
Consummation.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, limited liability company, trust, unincorporated
organization, association, corporation, institution, entity, party or government
(including any division, agency or department thereof), and, as applicable, the
successors, heirs and assigns of each.
"Plan" shall mean any employee benefit plan, program or arrangement,
whether oral or written, maintained or contributed to by the Borrower or any
Subsidiary, or with respect to which the Borrower or any such Subsidiary may
incur liability.
"Pledge Agreements" shall mean (i) that certain Stock Pledge
Agreement dated as of the Original Closing Date between the pledgors named
therein and the Agent, (ii) that certain LLC Pledge Agreement dated as of the
Original Closing Date between the pledgors named therein and the Agent and (iii)
each other agreement (other than a Security Agreement) pursuant to which the
equity of any Person is pledged to the Agent to secure the Obligations.
"Pledged Party" shall mean each Person (other than a Credit Party)
whose equity, in whole or in part, is pledged to the Agent to secure the
Obligations.
"Pledgor Entity" means each Person which has pledged equity in a
Pledged Party to the Agent to secure the Obligations.
"Prime Rate" shall mean the rate which ▇▇▇▇▇ Fargo announces from
time to time as its prime lending rate, as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. ▇▇▇▇▇
27
Fargo (and its affiliates) may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"Prime Rate Loan" means each portion of a Revolving Loan or the Term
Loan that bears interest at a rate determined by reference to the Prime Rate.
"Pro Rata Share" of any Lender means a fraction, the numerator of
which is such Lender's Commitment and the denominator of which is the Aggregate
Commitment; provided, however, in the event all Commitments have been terminated
or reduced to zero, Pro Rata Share shall be determined according to the
Commitments in effect immediately prior to such termination.
"Proprietary Rights" shall have the meaning given to such term in
Section 6.18.
"PV" shall mean Produce Ventures, L.L.C., a Delaware limited
liability company.
"Qualified Investment" means an Investment which meets all of the
following tests: (i) it is made when no Default or Event of Default has occurred
and is continuing (or would be caused thereby), (ii) it is made to a Person
which is Solvent after giving effect to such Investment but ignoring
intercompany liabilities to the Borrower and its Subsidiaries, (iii) if it is a
loan, it is made to a Person which is not subject to any restriction,
contractual or otherwise, that would prohibit or restrain it from returning or
repaying such Investment, (iv) if it is an Investment described in clauses (ix),
(x) and (xi) of the definition of Permitted Investments, it is made when the
Borrower, immediately after giving effect thereto, has Availability of at least
$10,000,000 and (v) if such Investment is an Acquisition, it constitutes a
Permitted Acquisition.
"Qualified Refinancing" shall mean a refinancing of this Credit
Agreement in which all of the Obligations are paid in full in cash and for which
Ableco or Foothill or an Affiliate thereof is agent.
"Reportable Event" shall mean any of the events described in Section
4043 of ERISA and the regulations thereunder.
"Required Lenders" shall mean, at any time, Lenders which are then
in compliance with their obligations hereunder (as determined by the Agent) and
holding in the aggregate at least sixty-six and two-thirds percent (66 2/3%) of
(i) the aggregate Commitments or (ii) if the Commitments have been terminated,
the outstanding Loans and participation interests (including the participation
interests of the Issuing Bank in any Letters of Credit).
"Reserve Percentage" means, on any day, for any Lender, the maximum
percentage prescribed by the Board of Governors of the Federal Reserve System
(or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
28
"Resolution Block" means $10,000,000; provided, however, that such
amount shall be reduced to $0 upon the last to occur of (i) the time at which
the Borrower provides the Agent the documents required to be provided by each
Secured Credit Party pursuant to Section 5.2(b) for each Credit Party (other
than the Secured Credit Parties), (ii) the time at which a plan of
reorganization for CBII (which has been confirmed by an order of the applicable
bankruptcy court) becomes effective, (iii) the time at which the Agent is
satisfied that the Composite Guarantee and Charge dated March 6, 2002 between
the Companies (as defined therein) and the Agent has been filed or registered
with all appropriate Bermuda Governmental Authorities or (iv) the time at which
the Agent has received confirmation (in form and substance satisfactory to the
Agent) from each foreign counsel that has previously provided a legal opinion
regarding one or more Credit Documents, that no additional documents should be
executed or delivered and no additional actions, registrations or filings should
be taken or made under the applicable foreign law or practice to perfect or
protect the Agent and the Lenders or to otherwise afford the Agent and the
Lenders the full benefits intended to be afforded to the Agent and the Lenders
pursuant to this Agreement and the other Credit Documents.
"Restricted Payment" shall mean (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of the Borrower or any of its Subsidiaries, as the case may be,
now or hereafter outstanding, (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of Capital Stock of the Borrower or any of its
Subsidiaries now or hereafter outstanding by the Borrower or any of its
Subsidiaries, as the case may be, except for any redemption, retirement, sinking
funds or similar payment payable solely in such shares of that class of stock or
in any class of stock junior to that class, (iii) any cash payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire any shares of any class
of Capital Stock of the Borrower or any of its Subsidiaries now or hereafter
outstanding, or (iv) any payment to any Affiliate of the Borrower except to the
extent expressly permitted in this Credit Agreement.
"Retiree Health Plan" shall mean an "employee welfare benefit plan"
within the meaning of Section 3(1) of ERISA that provides benefits to persons
after termination of employment, other than as required by Section 601 of ERISA.
"Revolving Credit Borrowing Base" shall have the meaning given to
such term in Section 2.1(b)(i).
"Revolving Credit Borrowing Base Certificate" shall have the meaning
given to such term in Section 7.1(e)(i).
"Revolving Credit Committed Amount" shall mean, at any time, the
Maximum Credit Line less the principal balance of then outstanding Term Loans.
"Revolving Loans" shall have the meaning given to such term in
Section 2.1(b).
"Revolving Notes" shall have the meaning given to such term in
Section 2.1(c).
"Secured Credit Parties" shall mean each Credit Party which is also
a party to a Security Agreement.
29
"Securitization" has the meaning specified therefor in Section 2.10.
"Securitization Party" the meaning specified therefor in Section
2.10.
"Security Agreements" shall mean (i) the Security Agreement dated as
of the Original Closing Date between the Agent, the Borrower and the obligors
named therein, (ii) the Security Agreement dated as of the Original Closing Date
between the Agent and ▇▇▇▇▇▇▇▇ (Canada) Inc., (iii) composite Guarantee and
Charge dated as of the Original Closing Date, as amended, by and among the Agent
and CIL, Banexpro Ltd., Catellia Ltd., Tela Railroad Company Ltd., Financiera
Agricola, Ltd., Financiera ▇▇▇▇▇▇▇▇ Ltd., and M.M. Holding Ltd. and (iv) each
other agreement (other than a Pledge Agreement) pursuant to which one or more
Persons ▇▇▇▇▇ ▇ ▇▇▇▇ on any or all of their assets to the Agent to secure the
Obligations.
"Security Documents" shall mean, collectively, the Security
Agreements, the Pledge Agreements, the Mortgages, any Acknowledgment Agreements
and any lockbox agreement or any other tri-party arrangement with respect to the
bank accounts of the Borrower.
"Settlement Period" shall have the meaning given to such term in
Section 2.1(d)(ii).
"Solvent" shall mean, with respect to any Person, that (i) the fair
saleable value of such Person's assets exceeds all of its probable liabilities,
(ii) such Person does not have unreasonably small capital in relation to the
business in which it is or proposes to be engaged and (iii) such Person has not
incurred, and does not believe that it will incur, debts beyond its ability to
pay such debts as they become due.
"Specified Asset Disposition" means each disposition of one or more
of the assets described on Schedule 9.3.
"Subsidiary" shall mean, as to any Person, (a) any corporation more
than fifty percent (50%) of whose Capital Stock of any class or classes having
by the terms thereof ordinary voting power to elect a majority of the directors
of such corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries, (b) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries has more than a fifty percent (50%) interest in the total capital,
total income and/or total ownership interests of such entity at any time and (c)
any partnership in which such Person is a general partner (it being agreed that
unless otherwise designated, "Subsidiary" shall mean any direct or indirect
"Subsidiary" of the Borrower); provided however, that neither Indian River nor
▇▇▇▇▇▇ Holdings Ltd., a Cayman Islands company, shall constitute a Subsidiary of
the Borrower or any of its Subsidiaries, unless such entity is consolidated with
the Borrower or any of its Subsidiaries in accordance with GAAP.
"Taxes" shall mean any federal, state, local or foreign income,
sales, use, transfer, payroll, personal, property, occupancy, franchise or other
tax, levy, impost, fee, imposition, assessment or similar charge, together with
any interest or penalties thereon.
30
"Term Loans" shall have the meaning given to such term in Section
2.2(a).
"Term Loan Committed Amount" shall mean the aggregate term loan
facility extended by the Lenders to the Borrower for Term Loans pursuant to and
in accordance with the terms of this Credit Agreement, in an amount up to
$70,000,000, as such term loan facility shall be reduced in accordance with
Section 2.3(c).
"Term Loan Notes" shall have the meaning given to such term in
Section 2.2(e) hereof.
"Termination Event" shall mean (i) a Reportable Event with respect
to any Benefit Plan or Multiemployer Plan; (ii) the withdrawal of the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate from a Benefit Plan during
a plan year in which such entity was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to
terminate a Benefit Plan pursuant to Section 4041 of ERISA; (iv) the institution
by the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan;
(v) any event or condition (a) which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Benefit Plan or Multiemployer Plan, or (b) that may result in termination of
a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or
complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of
the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate from a
Multiemployer Plan.
"Trademark License Agreement" shall mean that certain Trademark
License Agreement dated November 1, 2001, by and between the Borrower and CIL.
"Trademark Note" shall mean that certain Promissory Note executed by
CIL in favor of the Borrower dated November 1, 2001."
"Tropical Farms" means farms (and related assets, including farm
land held in reserve but not currently planted) located in Guatemala, Chile,
Colombia, Panama, Honduras, Costa Rica, Guadeloupe, Martinique or Ivory Coast on
which bananas, plantains and similar produce is grown.
"Unallocated CBII Overhead" shall mean the following overhead and
disbursements of CBII, but only to the extent that they are not otherwise
allocated to the Borrower and its consolidated Subsidiaries: salaries, pension
and benefit expenses, taxes (other than taxes on income or revenue), insurance
costs, legal expenses, communication and maintenance fees, travel expenses,
outside accounting fees, headquarter office expenses, deferred compensation and
non-contractual severance expenses, but excluding Permitted Restructuring
Expenses and principal, interest and other fees related to any Indebtedness.
"Underlying Issuer" means a third Person which is the beneficiary of
an L/C Undertaking and which has issued a Letter of Credit at the request of the
Issuing Bank for the benefit of the Borrower.
"Voting Stock" shall mean, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote
31
for the election of directors (or persons performing similar functions) of such
Person, even though the right so to vote has been suspended by the happening of
such a contingency.
"▇▇▇▇▇ Fargo" has the meaning set forth in the preamble hereto.
"Wholly-Owned Subsidiary" of a Person means each entity in which
(other than directors' qualifying shares or the equivalent thereof required by
law) one hundred percent (100%) of the outstanding equity interests are directly
owned, beneficially and of record, by such Person or by one or more of such
Person's Wholly-Owned Subsidiaries.
1.2 ACCOUNTING TERMS AND DETERMINATIONS
Unless otherwise defined or specified herein, all accounting terms
shall be construed herein and all accounting determinations for purposes of
determining compliance with Sections 8.1 through 8.5 hereof and otherwise to be
made under this Credit Agreement shall be made in accordance with GAAP applied
on a basis consistent in all material respects with the Financials. All
financial statements required to be delivered hereunder from and after the
Original Closing Date and all financial records shall be maintained in
accordance with GAAP as in effect as of the date of such financial statements.
If GAAP shall change from the basis used in preparing the Financials, the
certificates required to be delivered pursuant to Section 7.1 demonstrating
compliance with the covenants contained herein shall include calculations
setting forth the adjustments necessary to demonstrate how the Borrower is in
compliance with the financial covenants based upon GAAP as in effect as of the
date of the Financials. If the Borrower shall change its method of inventory
accounting, all calculations necessary to determine compliance with the
covenants contained herein shall be made as if such method of inventory
accounting had not been so changed. If the Borrower's financial statements or
the calculation of the covenants contained herein are impacted by "fresh start"
accounting as a result of or pursuant to the reorganization or restructuring of
CBII, the Borrower, the Agent and the Lenders agree to amend the provisions
hereof so that the criteria for evaluating the Borrower's financial condition
and performance will be the same as if such impact had not occurred.
1.3 OTHER DEFINITIONAL TERMS.
Terms not otherwise defined herein which are defined in the Uniform
Commercial Code as in effect in the State of New York from time to time (the
"Code") shall have the meanings given them in the Code. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Credit
Agreement shall refer to the Credit Agreement as a whole and not to any
particular provision of this Credit Agreement, unless otherwise specifically
provided. References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided. Any of
the terms defined in Section 1.1 may, unless the context otherwise requires, be
used in the singular or plural depending on the reference. "Include", "includes"
and "including" shall be deemed to be followed by "without limitation" whether
or not they are in fact followed by such words or words of like import.
"Writing", "written" and comparable terms refer to printing, typing, computer
disk, e-mail and other means of reproducing words in a visible form. References
to any agreement or contract are to such agreement or contract as amended,
modified or supplemented from time to time in
32
accordance with the terms hereof and thereof. References to any Person include
the successors and permitted assigns of such Person. References "from" or
"through" any date mean, unless otherwise specified, "from and including" or
"through and including", respectively. References to any times herein shall
refer to Eastern Standard time or Eastern Daylight time, as then in effect.
ARTICLE II.
LOANS
2.1 REVOLVING LOANS.
(a) Commitment. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each of the
Lenders severally agrees to lend to the Borrower at any time or from time to
time on or after the Closing Date and before the Maturity Date, such Lender's
Pro Rata Share of the Revolving Loans as may be requested or deemed requested by
the Borrower.
(b) Determination of Revolving Credit Borrowing Base.
(i) The Lenders agree, subject to the terms and conditions
of this Credit Agreement, from time to time, to make loans and advances to
the Borrower hereunder on a revolving basis. Such loans and advances to
the Borrower (each, a "Revolving Loan"; and collectively, the "Revolving
Loans") together with the Letter of Credit Obligations outstanding with
respect to the Letters of Credit shall not in the aggregate exceed the
least of ( the "Revolving Credit Borrowing Base"):
(A) the Revolving Credit Committed Amount at such time
minus the aggregate amount of all Asset Sale Blocks, the
Insurance Premium Block, the Resolution Block and all Farm
Sale Blocks then in place;
(B) twenty-five percent (25%) of the Net Liquidation
Value minus the aggregate amount of all Asset Sale Blocks, the
Insurance Premium Block, the Resolution Block and all Farm
Sale Blocks then in place;
(C) the following amount:
(1) an amount up to eighty-five percent
(85%) of Eligible Accounts Receivable; plus
(2) twenty percent (20%) of the Net
Liquidation Value, minus
(3) the aggregate amount of reserves
established by the Agent from time to time in its sole
discretion, exercised in a commercially reasonable
manner and in good faith, including,
33
without limitation, reserves for claims under PACA
(including, without limitation, a reserve in an amount
equal to all amounts then owed to Persons other than CIL
for the purchase of bananas and plantains) and reserves
for accruals to be paid to customers, minus
(4) the aggregate amount of all Asset
Sale Blocks, the Insurance Premium Block, the Resolution
Block and all Farm Sale Blocks then in place; or
(D) the amount equal to Consolidated EBITDA of the
Borrower and its Subsidiaries (other than CPF and its
Subsidiaries) as of the most recently completed twelve fiscal
month period for which information is available (exclusive of
unusual items as determined in accordance with GAAP and
non-cash items to the extent not already excluded in
determining Consolidated EBITDA) minus the sum of (1) the
outstanding principal balance of the Term Loan and (2) the
aggregate amount of all Asset Sale Blocks, the Insurance
Premium Block, the Resolution Block and all Farm Sale Blocks
then in place.
Subject to the relevant terms and provisions set forth herein, the Agent at all
times shall have the right to reduce or increase the advance rates (but not in
excess of the advance rates set forth in the definition of Revolving Credit
Borrowing Base) and standards of eligibility under this Credit Agreement, in
each case in its sole discretion, exercised in a commercially reasonable manner
and in good faith, if the Agent shall determine in its reasonable credit
judgment that there is a risk that the Obligations may be undersecured as a
result of a change in the condition or valuation of the Collateral. Such
reduction or increase shall become effective after one (1) Business Day's prior
notice from the Agent to the Borrower and the Lenders. Each Lender expressly
authorizes the Agent to determine, subject to the terms of this Credit
Agreement, on behalf of such Lender whether or not Accounts shall be deemed to
constitute Eligible Accounts Receivable.
(ii) No Lender shall be obligated at any time to make
available to the Borrower its Pro Rata Share of any requested Revolving
Loan if such amount plus its Pro Rata Share of all Revolving Loans,
Letter of Credit Obligations and Term Loans then outstanding would
exceed such Lender's Commitment at such time. No Lender shall be
obligated to make available, nor shall the Agent make available, any
Revolving Loans to the Borrower to the extent such Revolving Loan when
added to the then outstanding Revolving Loans and all Letter of Credit
Obligations would cause the aggregate outstanding Revolving Loans and
all Letter of Credit Obligations to exceed the Revolving Credit
Borrowing Base. The Borrower shall promptly repay to the Agent for the
account of the Lenders from time to time the full amount of the excess,
if any of (A) the amount of all Revolving Loans and Letter of Credit
Obligations outstanding over (B) the lesser of (1) the Revolving Credit
Committed Amount at such time and (2) the Revolving Credit Borrowing
Base.
34
(c) Revolving Notes. The obligations to repay the Revolving Loans
and to pay interest thereon shall be evidenced by separate promissory notes of
the Borrower to each Lender in substantially the form of Exhibit C-1 attached
hereto (the "Revolving Notes"), with appropriate insertions, one Revolving Note
being payable to the order of each Lender in a principal amount equal to such
Lender's Revolving Credit Committed Amount and representing the obligations of
the Borrower to pay such Lender the amount of such Lender's Revolving Credit
Committed Amount or, if less, the aggregate unpaid principal amount of all
Revolving Loans made by such Lender hereunder, plus interest accrued thereon, as
set forth herein. The Borrower irrevocably authorizes each Lender to make or
cause to be made appropriate notations on its Revolving Note, or on a record
pertaining thereto, reflecting Revolving Loans and repayments thereof. The
outstanding amount of the Revolving Loans set forth on such Lender's Revolving
Note or record shall be prima facie evidence of the principal amount thereof
owing and unpaid to such Lender, but the failure to make such notation or
record, or any error in such notation or record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Revolving Note to
make payments of principal of or interest on any Revolving Note when due.
(d) Borrowings under Revolving Notes.
(i) Subject to Section 4.8(b)(i), each request for
borrowings hereunder shall be made by a notice in the form attached hereto
as Exhibit D from the Borrower to the Agent (a "Notice of Borrowing"),
given not later than 11:00 a.m. on the Business Day on which the proposed
borrowing is requested to be made for Revolving Loans. Each Notice of
Borrowing shall be given by either telephone or telecopy, and, if
requested by the Agent, confirmed in writing if by telephone, setting
forth (1) the requested date of such borrowing, (2) the aggregate amount
of such requested borrowing, (3) certification by the Borrower that it has
complied in all respects with Article 5, all of which shall be specified
in such manner as is necessary to comply with all limitations on Revolving
Loans outstanding hereunder (including, without limitation, availability
under the Revolving Credit Borrowing Base) and (4) the account at which
such requested funds should be made available. Each Notice of Borrowing
shall be irrevocable by and binding on the Borrower. The Borrower shall be
entitled to borrow Revolving Loans in a minimum principal amount of
$1,000,000 and integral multiples of $500,000 in excess thereof (or the
remaining amount of the Revolving Credit Committed Amount at such time, if
less). Revolving Loans may be repaid and reborrowed in accordance with the
provisions hereof.
The Agent shall give to each Lender prompt notice (but in no event
later than 2:00 p.m. on the date of the Agent's receipt of notice from the
Borrower) of each Notice of Borrowing by telecopy, telex or cable (other
than any Notice of Borrowing which will be funded by the Agent in
accordance with subsection (d)(ii) below). No later than 3:00 p.m. on the
date on which a borrowing is requested to be made pursuant to the
applicable Notice of Borrowing, each Lender will make available to the
Agent at the address of the Agent set forth on the signature pages hereto,
in immediately available funds, its Pro Rata Share of such borrowing
requested to be made. Unless the Agent shall have been notified by any
Lender prior to the date of borrowing that such Lender does not intend to
make available to the Agent its portion of the borrowing to be made on
such
35
date, the Agent may assume that such Lender will make such amount
available to the Agent as required above and the Agent may, in reliance
upon such assumption, make available the amount of the borrowing to be
provided by such Lender. Upon fulfillment of the conditions set forth in
Article V for such borrowing, the Agent will make such funds available to
the Borrower at the account specified by the Borrower in such Notice of
Borrowing.
(ii) Because the Borrower anticipates requesting borrowings
of Revolving Loans on a daily basis and repaying Revolving Loans on a
daily basis through the collection of Accounts and the proceeds of other
Collateral, resulting in the amount of outstanding Revolving Loans
fluctuating from day to day, in order to administer the Revolving Loans in
an efficient manner and to minimize the transfer of funds between the
Agent and the Lenders, the Lenders hereby instruct the Agent, and the
Agent may (but is not obligated to) (A) make available, on behalf of the
Lenders, the full amount of all Revolving Loans requested by the Borrower
not to exceed $20,000,000 in the aggregate at any one time outstanding
without requiring that the Borrower give the Agent a Notice of Borrowing
with respect to such borrowing and without giving each Lender prior notice
of the proposed borrowing, of such Lender's Pro Rata Share thereof and the
other matters covered by the Notice of Borrowing and (B) if the Agent has
made any such amounts available as provided in clause (A), upon repayment
of Revolving Loans by the Borrower, apply such amounts repaid directly to
the amounts made available by the Agent in accordance with clause (A) and
not yet settled as described below; provided that the Agent shall not
advance funds as described in clause (A) above if the Agent has actually
received prior to such borrowing (1) an officer's certificate from the
Borrower pursuant to and in accordance with Section 7.1(j) that a Default
or Event of Default is in existence or (2) a Notice of Borrowing from the
Borrower wherein the certification provided therein states that the
conditions to the making of the requested Revolving Loans have not been
satisfied or (3) a written notice from any Lender that the conditions to
such borrowing have not been satisfied, which officer's certificate,
Notice of Borrowing or notice, in each case, shall not have been
rescinded. If the Agent advances Revolving Loans on behalf of the Lenders,
as provided in the immediately preceding sentence, the amount of
outstanding Revolving Loans and each Lender's Pro Rata Share thereof shall
be computed weekly rather than daily and shall be adjusted upward or
downward on the basis of the amount of outstanding Revolving Loans as of
5:00 p.m. on the Business Day immediately preceding the date of each
computation; provided, however, that the Agent retains the absolute right
at any time or from time to time to make the aforedescribed adjustments at
intervals more frequent than weekly. The Agent shall deliver to each of
the Lenders after the end of each week, or such lesser period or periods
as the Agent shall determine, a summary statement of the amount of
outstanding Revolving Loans for such period (such week or lesser period or
periods being hereafter referred to as a "Settlement Period"). If the
summary statement is sent by the Agent and received by the Lenders prior
to 12:00 Noon on any Business Day each Lender shall make the transfers
described in the next succeeding sentence no later than 3:00 p.m. on the
day such summary statement was sent; and if such summary statement is sent
by the Agent and received by the Lenders after 12:00 Noon on any Business
Day, each Lender shall make such transfers no later than 3:00 p.m. on the
next succeeding Business Day. If in any Settlement Period, the amount of a
Lender's Pro Rata Share of the Revolving
36
Loans is in excess of the amount of Revolving Loans actually funded by
such Lender, such Lender shall forthwith (but in no event later than the
time set forth in the next preceding sentence) transfer to the Agent by
wire transfer in immediately available funds the amount of such excess;
and, on the other hand, if the amount of a Lender's Pro Rata Share of the
Revolving Loans in any Settlement Period is less than the amount of
Revolving Loans actually funded by such Lender, the Agent shall forthwith
transfer to such Lender by wire transfer in immediately available funds
the amount of such difference. The obligation of each of the Lenders to
transfer such funds shall be irrevocable and unconditional and without
recourse to or warranty by the Agent. Each of the Agent and the Lenders
agree to ▇▇▇▇ their respective books and records at the end of each
Settlement Period to show at all times the dollar amount of their
respective Pro Rata Shares of the outstanding Revolving Loans. Because the
Agent on behalf of the Lenders may be advancing and/or may be repaid
Revolving Loans prior to the time when the Lenders will actually advance
and/or be repaid Revolving Loans, interest with respect to Revolving Loans
shall be allocated by the Agent to each Lender (including the Agent) in
accordance with the amount of Revolving Loans actually advanced by and
repaid to each Lender (including the Agent) during each Settlement Period
and shall accrue from and including the date such Revolving Loans are
advanced by the Agent to but excluding the date such Revolving Loans are
repaid by the Borrower in accordance with Section 2.4 or actually settled
by the applicable Lender as described in this Section 2.1(d)(ii).
(iii) If the amounts described in subsection (d)(i) or (d)(ii)
of this Section 2.1 are not in fact made available to the Agent by a
Lender (such Lender being hereinafter referred to as a "Defaulting
Lender") and the Agent has made such amount available to the Borrower, the
Agent shall be entitled to recover such corresponding amount on demand
from such Defaulting Lender. If such Defaulting Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify the Borrower and the Borrower shall immediately (but
in no event later than five (5) Business Days after such demand) pay such
corresponding amount to the Agent. The Agent shall also be entitled to
recover from such Defaulting Lender and the Borrower, (A) interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to
the date such corresponding amount is recovered by the Agent, at a rate
per annum equal to either (1) if paid by such Defaulting Lender, the
overnight Federal Funds Rate or (2) if paid by the Borrower, the then
applicable rate of interest, calculated in accordance with Section 4.1,
plus (B) in each case, an amount equal to any costs (including legal
expenses) and losses incurred as a result of the failure of such
Defaulting Lender to provide such amount as provided in this Credit
Agreement. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Lender as a result of any default
by such Lender hereunder, including, without limitation, the right of the
Borrower to seek reimbursement from any Defaulting Lender for any amounts
paid by the Borrower under clause (B) above on account of such Defaulting
Lender's default.
(iv) The failure of any Lender to make the Revolving Loan to
be made by it as part of any borrowing shall not relieve any other Lender
of its obligation, if any, hereunder to make its Revolving Loan on the
date of such borrowing, but no Lender shall
37
be responsible for the failure of any other Lender to make the Revolving
Loan to be made by such other Lender on the date of any borrowing.
(v) Each Lender shall be entitled to earn interest at the
then applicable rate of interest, calculated in accordance with Article
IV, on outstanding Revolving Loans which it has funded to the Agent from
the date such Lender funded such Revolving Loan to, but excluding, the
date on which such Lender is repaid with respect to such Revolving Loan.
(vi) Notwithstanding the obligation of the Borrower to send
written confirmation of a Notice of Borrowing made by telephone if and
when requested by the Agent, in the event that the Agent agrees to accept
a Notice of Borrowing made by telephone, such telephonic Notice of
Borrowing shall be binding on the Borrower whether or not written
confirmation is sent by the Borrower or requested by the Agent. The Agent
may act prior to the receipt of any requested written confirmation,
without any liability whatsoever, based upon telephonic notice believed by
the Agent in good faith to be from the Borrower or its agents. The Agent's
records of the terms of any telephonic Notices of Borrowing shall be
conclusive on the Borrower in the absence of gross negligence or willful
misconduct on the part of the Agent in connection therewith.
2.2 TERM LOANS.
(a) Term Loan Commitments. Immediately prior to the date hereof,
the aggregate outstanding principal amount of the Original Term Loans was
$69,800,000. Subject to the terms and conditions hereof and in reliance upon the
representations and warranties set forth herein, on the date hereof the Original
Term Loans shall be increased by an amount equal to $200,000 and the resulting
balance of the Original Term Loans equal to $70,000,000 shall be converted to
and restated as Term Loans outstanding hereunder effective on the Closing Date.
Once Term Loans are paid or prepaid, they may not be reborrowed. The Term Loan
Committed Amount shall be automatically and permanently reduced by the amount of
Term Loans made.
(b) [INTENTIONALLY DELETED]
(c) [INTENTIONALLY DELETED]
(d) Repayment of Term Loans. The principal amount of the Term
Loans shall be repaid in consecutive monthly payments on the first day of each
calendar month commencing with the first day of October, 2002 and continuing
thereafter until the Term Loans are repaid in full. The amount of each such
payment (other than the final payment) shall equal $1,250,000. The amount of the
final payment shall be an amount equal to the then outstanding principal balance
of the Term Loans.
(e) Term Notes. The obligations to repay the Term Loans and to pay
interest thereon shall be evidenced by separate promissory notes of the Borrower
to each Lender in substantially the form of Exhibit C-2 attached hereto (the
"Term Loan Notes"), with appropriate insertions, one Term Loan Note being
payable to the order of each Lender in a principal amount equal to such Lender's
Pro Rata Share of the Term Loans and representing the obligations of the
Borrower to pay such Lender the amount of such Lender's Pro Rata Share of the
Term Loans or,
38
if less, the aggregate unpaid principal amount of the Term Loans made by such
Lender hereunder, plus interest accrued thereon, as set forth herein. The
Borrower irrevocably authorizes each Lender to make or cause to be made
appropriate notations on its Term Loan Note, or on a record pertaining thereon,
reflecting Term Loans and repayments thereof. The outstanding amount of the Term
Loans set forth on such Lender's Term Loan Note or record shall be prima facie
evidence of the principal amount thereof owing and unpaid to such Lender, but
the failure to make such notation or record, or any error in such notation or
record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Term Loan Note to make payments of principal of or
interest on any Term Loan Note when due.
2.3 OPTIONAL AND MANDATORY PREPAYMENTS.
(a) Voluntary Prepayments. Except as set forth below, the Borrower
shall have the right to prepay Loans in whole or in part from time to time,
without premium or penalty; provided, however, that each such partial prepayment
of Loans shall be in a minimum principal amount of $1,000,000 and integral
multiples of $500,000 in excess thereof. Subject to the foregoing terms, amounts
prepaid under this Section 2.3(a) shall be applied first to Revolving Loans and
then to the Term Loans. Voluntary prepayments on Term Loans shall not be
permitted unless, immediately prior to such prepayment, the aggregate
Commitments are equal to the then outstanding principal amount of the Term
Loans. All voluntary prepayments of the Term Loans shall be applied to the
remaining principal installments thereof in the inverse order of maturity
thereof. The Borrower has the option, at any time upon ninety (90) days prior
written notice to Agent, to terminate this Credit Agreement by paying to Agent,
in cash, the Obligations (including either (i) providing cash collateral to be
held by Agent in an amount equal to one hundred five percent (105%) of the then
extant Letter of Credit Obligations, or (ii) causing the original Letters of
Credit to be returned to the Issuing Bank), in full, together with the
Applicable Prepayment Premium (which may be allocated based upon letter
agreements between Agent and individual Lenders). If the Borrower has sent a
notice of termination pursuant to the provisions of this section, then the
Commitments shall terminate and the Borrower shall be obligated to repay the
Obligations (including either (i) providing cash collateral to be held by Agent
in an amount equal to one hundred five percent (105%) of the then extant Letter
of Credit Obligations, or (ii) causing the original Letters of Credit to be
returned to the Issuing Bank (with an applicable authorization to cancel such
Letters of Credit), in full, together with the Applicable Prepayment Premium, on
the date set forth as the date of termination of this Credit Agreement in such
notice. In the event of the termination of this Credit Agreement and repayment
of the Obligations at any time prior to the Maturity Date, for any other reason,
including (a) termination after the occurrence of an Event of Default, (b)
foreclosure and sale of Collateral, (c) sale of the Collateral in any insolvency
or bankruptcy related proceeding, or (iv) restructure, reorganization or
compromise of any or all of the Obligations by the confirmation of a plan of
reorganization or any other plan of compromise, restructuring, or arrangement in
any insolvency or bankruptcy related proceeding, then, in view of the
impracticability and extreme difficulty of ascertaining the actual amount of
damages to the Agent and the Lenders or profits lost by the Agent and the
Lenders as a result of such early termination, and by mutual agreement of the
parties as to a reasonable estimation and calculation of the lost profits or
damages of the Agent and the Lenders, Borrower shall pay the Applicable
Prepayment Premium to Agent (which may be allocated based upon letter agreements
between Agent and individual Lenders).
39
(b) Mandatory Prepayments.
(i) Revolving Credit Committed Amount. If at any time, the
sum of the aggregate principal amount of outstanding Revolving Loans plus
Letter of Credit Obligations outstanding shall exceed the amount of the
Revolving Credit Borrowing Base, the Borrower immediately shall prepay,
subject to Section 4.8(c), the Revolving Loans, and (after all Revolving
Loans have been repaid) cash collateralize the Letter of Credit
Obligations, in an amount sufficient to eliminate such excess.
(ii) Asset Loss. To the extent of Net Cash Proceeds received
in connection with an Asset Loss, the Borrower shall prepay the Loans in
an amount equal to one hundred percent (100%) of such Net Cash Proceeds
unless the Agent shall have elected not to apply the proceeds realized
from such Asset Loss to the prepayment of the Loans (any such prepayment
under this Section 2.3(b)(ii) to be applied, subject to Section 4.8(c), as
set forth in clause (v) below).
(iii) Asset Transfers. Promptly and in any event within one
(1) day following the occurrence of any Asset Disposition, the Borrower
shall prepay the Loans in an aggregate amount equal to one hundred percent
(100%) of the Net Cash Proceeds of the such Asset Disposition (any such
prepayment under this Section 2.3(b)(iii) to be applied, subject to
Section 4.8(c), as set forth in clause (v) below); unless the Net Cash
Proceeds of an Asset Disposition do not exceed $1,000,000, in which case,
the Borrower shall prepay the Loans within thirty (30) days of the end of
the fiscal month in which such Asset Disposition took place. Promptly and
in any event within one (1) day following the occurrence of any Specified
Asset Disposition, the Borrower shall prepay the Loans in an aggregate
amount equal to the greater of (a) seventy-five percent (75%) of the Net
Cash Proceeds of such Specified Asset Disposition or (b) the amount set
forth opposite the description of the applicable assets on Schedule 9.3
(any such prepayment under this Section 2.3(b)(iii) to be applied, subject
to Section 4.8(c), as set forth in clause (v) below).
(iv) Issuances of Equity. Promptly and in any event within
five (5) days following the receipt by the Borrower of Net Cash Proceeds
from any Equity Issuance occurring after the Original Closing Date, the
Borrower shall prepay the Loans in an aggregate amount equal to one
hundred percent (100%) of the Net Cash Proceeds of such Equity Issuance
(any such prepayment under this Section 2.3(b)(iv) to be applied, subject
to Section 4.8(c), as set forth in clause (v) below). Promptly and in any
event within one (1) day following the receipt of any payment under or
pursuant to the Trademark License Agreement or Trademark Note, the
Borrower shall prepay the Loans in an aggregate amount equal to one
hundred percent (100%) of the Net Cash Proceeds received (any such payment
under this Section 2.3(b)(iv) to be applied, subject to Section 4.8(c), as
set forth in clause (v) below); provided however, if, at the time of such
receipt no Default or Event of Default has occurred and is continuing, no
such prepayment shall be required pursuant to this sentence.
(v) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 2.3(b) shall be applied,
subject to Section 4.8(c), as
40
follows: (A) with respect to all amounts prepaid pursuant to Section
2.3(b)(i), to Revolving Loans and (after all Revolving Loans have been
repaid) to a cash collateral account in respect of Letter of Credit
Obligations, (B) with respect to all amounts prepaid pursuant to Section
2.3(b)(ii) in connection with an Asset Loss, (1) first to the Term Loans,
to be applied to the remaining principal installments thereof in the
inverse order of maturity and (2) second to the Revolving Loans and (after
all Revolving Loans have been repaid) to a cash collateral account in
respect of Letter of Credit Obligations, (C) with respect to all amounts
prepaid pursuant to Section 2.3(b)(iii), (1) first to the Term Loans, to
be applied to the remaining principal installments thereof in the inverse
order of maturity, and (2) second to the Revolving Loans and (after all
Revolving Loans have been repaid) to a cash collateral account in respect
of Letter of Credit Obligations and (D) with respect to all amounts
prepaid pursuant to Section 2.3(b)(iv), unless the Borrower shall
otherwise elect a different application in its discretion (1) first to the
Revolving Loans and (after all Revolving Loans have been repaid) to a cash
collateral account in respect of Letter of Credit Obligations and (2)
second to the Term Loans, to be applied pro rata to the remaining
principal installments thereof. So long as no Event of Default shall have
occurred and be continuing, amounts on deposit in any cash collateral
account in respect of Letter of Credit Obligations shall be remitted
promptly to the Borrower upon satisfaction of such Letter of Credit
Obligations. Upon and during the continuance of an Event of Default,
amounts on deposit in any cash collateral account in respect of Letter of
Credit Obligations shall be applied in accordance with the Security
Agreement. Upon each application of funds pursuant to this Section
2.3(b)(v) (other than pursuant to clause 2.3(b)(v)(A)) to the Term Loans,
Revolving Loans or to a cash collateral account in respect of Letter of
Credit Obligations, (i) the Maximum Credit Line shall be reduced by the
amount so applied and (ii) each Lender's Commitment shall be reduced by
its Pro Rata Share of the amount so applied.
(c) Voluntary Reductions. The Borrower may from time to time
permanently reduce or terminate the Maximum Credit Line in whole or in part (in
minimum aggregate amounts of $5,000,000 or in integral multiples of $5,000,000
in excess thereof (or, if less, the full remaining amount of the then applicable
Commitments)) upon three (3) Business Days' prior written notice to the Agent;
provided, however, that no such termination or reduction shall be made which
would cause the aggregate principal amount of (i) Term Loans to exceed the
Maximum Credit Line or (ii) Revolving Loans plus Letter of Credit Obligations
outstanding to exceed the Revolving Credit Borrowing Base, unless, concurrently
with such termination or reduction, Loans are repaid to the extent necessary to
eliminate such excess. The Agent shall promptly notify each affected Lender of
receipt by the Agent of any notice from the Borrower pursuant to this Section
2.3(c). Upon each reduction in the Maximum Credit Line, each Lender's Commitment
shall be reduced by its Pro Rata Share of the amount of such reduction.
(d) Maturity Date. The Commitments of the Lenders and the Letter
of Credit Commitment of the Issuing Bank shall automatically terminate on the
Maturity Date.
2.4 PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder and under the
Notes not later than 2:00 p.m. on the day when due. Payments made by the
Borrower shall be in
41
Dollars to the Agent at its address referred to in Section 14.5 hereof in
immediately available funds without deduction, withholding, setoff or
counterclaim. As soon as practicable after the Agent receives payment from the
Borrower, but in no event later than one (1) Business Day after such payment has
been made, subject to Section 2.1(d)(ii), the Agent will cause to be distributed
like funds relating to the payment of principal, interest, or Fees (other than
amounts payable to the Agent to reimburse the Agent and the Issuing Bank for
fees and expenses payable solely to them pursuant to Article IV hereof) or
expenses payable to the Agent and the Lenders in accordance with Section 14.8
hereof ratably to the Lenders, and like funds relating to the payment of any
other amounts payable to such Lender. The Borrower's obligations to the Lenders
with respect to such payments shall be discharged by making such payments to the
Agent pursuant to this Section 2.4(a) or if not timely paid or any Event of
Default then exists, may be added to the principal amount of the Revolving Loans
outstanding.
(b) The Borrower hereby authorizes each Lender to charge from time
to time against any or all of the Borrower's accounts with such Lender any of
the Obligations which are then due and payable. Each Lender receiving any
payment as a result of charging any such account shall promptly notify the Agent
thereof and make such arrangements as the Agent shall request to share the
benefit thereof in accordance with Section 2.8.
(c) Any payments falling due under this Credit Agreement on a day
other than a Business Day shall be due and payable on the next succeeding
Business Day and shall accrue interest at the applicable interest rate provided
for in this Credit Agreement to but excluding such Business Day. Computation of
interest and fees hereunder shall be made on the basis of actual number of days
elapsed over a 360 day year.
2.5 MAINTENANCE OF ACCOUNT; REGISTER.
(a) The Agent shall maintain an account (the "Loan Account") on its
books in the name of the Borrower in which the Borrower will be charged with all
loans and other extensions of credit made by Agent and the Lenders (including,
without limitation, the Issuing Bank) to the Borrower or for the Borrower's
account, including the Revolving Loans, the Term Loans, the Letter of Credit
Obligations and any other Obligations, including any and all costs, expenses and
attorney's fees which the Agent may incur, including, without limitation, in
connection with the exercise by or for the Lenders of any of the rights or
powers herein conferred upon the Agent (other than in connection with any
assignments or participations by any Lender) or in the prosecution or defense of
any action or proceeding by or against the Borrower or the Lenders concerning
any matter arising out of, connected with, or relating to this Credit Agreement
or the Accounts, or any Obligations owing to the Lenders by the Borrower. In no
event shall prior recourse to any Accounts or other Collateral be a prerequisite
to the Agent's right to demand payment of any Obligation upon its maturity.
Further, it is understood that the Agent shall have no obligation whatsoever to
perform in any respect any of the Borrower's contracts or obligations relating
to the Accounts.
(b) The Borrower agrees to record the amount of each Revolving Loan and
each Term Loan on the Register referred to in Section 14.6. Each Revolving Loan
and each Term Loan recorded on the Register (the "Registered Loan") may not be
evidenced by promissory notes other than a Registered Note (as defined below).
Upon the registration of any
42
Revolving Loan or a Term Loan, any promissory note (other than a Registered
Note) evidencing the same shall be null and void and shall be returned to the
Borrower. The Borrower agrees, at the request of any Lender, to execute and
deliver to such Lender a promissory note in registered form to evidence such
Registered Loan (i.e. containing registered note language) and registered as
provided in Section 14.6 (a "Registered Note"), payable to the order of such
Lender and otherwise duly completed. Once recorded on the Register, the
Obligations evidenced by such Note may not be removed from the Register so long
as it remains outstanding, and a Registered Note may not be exchanged for a
promissory note that is not a Registered Note.
2.6 STATEMENT OF ACCOUNT
After the end of each month the Agent shall send the Borrower a
statement showing the accounting for the charges, loans, advances and other
transactions occurring between the Lenders and the Borrower during that month.
The monthly statements shall be deemed correct and binding upon the Borrower and
shall constitute an account stated between the Borrower and the Lenders unless
the Agent receives a written statement of the Borrower's exceptions within
thirty (30) days after same is mailed to the Borrower.
2.7 TAXES.
(a) Any and all payments by the Borrower hereunder or under the
Notes to or for the benefit of any Lender shall be made, in accordance with
Section 2.4, free and clear of and without deduction for any and all present or
future Taxes, deductions, charges or withholdings and all liabilities with
respect thereto, excluding, in the case of each such Lender and the Agent, Taxes
imposed on or measured by the Agent's or any Lender's net income or receipts or
franchise taxes or taxes measured by the Agent's or such Lender's, as
applicable, net worth by the jurisdiction under the laws of which such Lender or
the Agent, as applicable, is organized or maintains a lending office (any such
excluded Taxes, collectively, "Excluded Taxes"). If the Borrower shall be
required by law to deduct any Taxes (other than Excluded Taxes) from or in
respect of any sum payable hereunder or under any Note to or for the benefit of
any Lender or the Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions of Taxes (including
deductions of Taxes applicable to additional sums payable under this Section
2.7) such Lender or the Agent, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount so deducted to the relevant taxation authority or other authority in
accordance with applicable law; provided, however, that the Borrower shall be
under no obligation to increase the sum payable to any Lender not organized
under the laws of the United States or a state thereof (a "Foreign Lender") by
an amount equal to the amount of the U.S. Tax required to be withheld under
United States law from the sums paid to such Foreign Lender, if such withholding
is caused by the failure of such Foreign Lender to be engaged in the active
conduct of a trade or business in the United States or all amounts of interest
and fees to be paid to such Foreign Lender hereunder are not effectively
connected with such trade or business within the meaning of U.S. Treasury
Regulation 1.1441-4(a).
(b) Each Foreign Lender agrees that it will deliver to the
Borrower and the Agent (i) two duly completed copies of United States Internal
Revenue Service Form W-8BEN
43
or W-8ECI or successor applicable form(s), as the case may be, and (ii) an
Internal Revenue Service Form W-8 or W-9 or successor applicable form, together
with any other certificate or statement of exemption required under the Internal
Revenue Code or regulations issued thereunder. Each such Lender also agrees to
deliver to the Borrower and the Agent two (2) further copies of the said Form
W-8BEN or W-8ECI and Form W-8 or W-9, or successor applicable forms or other
manner of certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the Borrower, and
such extensions or renewals thereof as may reasonably be requested by the
Borrower or the Agent, unless in any such case an event (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender so advises the
Borrower and the Agent. Such Lender shall certify (A) in the case of a Form
W-8BEN or W-8ECI, that it is entitled to receive payments under this Credit
Agreement without deduction or withholding of any U.S. federal income taxes and
(B) in the case of a Form W-8 or W-9, that it is entitled to an exemption from
U.S. backup withholding tax.
(c) In addition, the Borrower agrees to pay any present or future
stamp, documentary, privilege, intangible or similar Taxes or any other excise
or property Taxes, charges or similar levies that arise at any time or from time
to time (other than Excluded Taxes) (i) from any payment made under any and all
Credit Documents, (ii) from the transfer of the rights of any Lender under any
Credit Documents to any other Lender or Lenders or (iii) from the execution or
delivery by the Borrower of, or from the filing or recording or maintenance of,
or otherwise with respect to, any and all Credit Documents (hereinafter referred
to as "Other Taxes").
(d) The Borrower will indemnify each Lender and the Agent for the
full amount of Taxes (including, without limitation and without duplication, any
Taxes imposed by any jurisdiction on amounts payable under this Section 2.7),
subject to (i) the exclusion set out in the first sentence of Section 2.7(a),
(ii) the provisions of Section 2.7(b), and (iii) the provisions of the proviso
set forth in Section 2.7(a), and will indemnify each Lender and the Agent for
the full amount of Other Taxes (including, without limitation and without
duplication, any Taxes imposed by any jurisdiction on amounts payable under this
Section 2.7) paid by such Lender or the Agent (on its own behalf or on behalf of
any Lender), as the case may be, in respect of payments made or to be made
hereunder, and any liability (including penalties, interest and expenses)
arising solely therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly or legally asserted. Payment of this indemnification
shall be made within thirty (30) days from the date such Lender or the Agent, as
the case may be, makes written demand therefor.
(e) Within thirty (30) days after the date of any payment of Taxes
or Other Taxes, the Borrower shall furnish to the Agent, at its address referred
to in Section 14.5, the original or certified copy of a receipt evidencing
payment thereof.
44
(f) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 2.7 shall survive the payment in full of all Obligations
hereunder and under the Revolving Notes.
2.8 SHARING OF PAYMENTS.
If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of setoff or otherwise) on
account of the Loans made by it or its participation in Letters of Credit in
excess of its pro rata share of such payment as provided for in this Credit
Agreement, such Lender shall forthwith purchase from the other Lenders such
participations in the Loans made by them or in their participation in Letters of
Credit as shall be necessary to cause such purchasing Lender to share the excess
payment accruing to all Lenders in accordance with their respective ratable
shares as provided for in this Credit Agreement; provided, however, that if all
or any portion of such excess is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and each such Lender
shall repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's ratable share (according
to the proportion of (i) the amount of such Lender's required repayment to (ii)
the total amount so recovered from the purchasing Lender) or any interest or
other amount paid or payable by the purchasing Lender in respect to the total
amount so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.8 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
2.9 PRO RATA TREATMENT.
Each Loan, each payment or prepayment of principal of any Loan or
reimbursement obligations arising from drawings under Letters of Credit, each
payment of interest on the Loans, each payment of the Letter of Credit Fee, each
reduction of the Commitments and each conversion or extension of any Loan, shall
be allocated pro rata among the Lenders in accordance with the respective
principal amounts of their outstanding Loans and their participation interests
in the Letters of Credit; provided, however, that the foregoing fees payable
hereunder to the Lenders shall be allocated to each Lender based on such
Lender's Pro Rata Share.
2.10 SECURITIZATION.
The Borrower hereby acknowledges that the Lenders and any of their
Affiliates may sell or securitize the Obligations (a "Securitization") through
the pledge of the Obligations as collateral security for loans to such Lenders
or their Affiliates or through the sale of the Obligations or the issuance of
direct or indirect interests in the Obligations, which loans to such Lenders or
their Affiliates or direct or indirect interests will be rated by ▇▇▇▇▇'▇,
Standard & Poor's or one or more other rating agencies (the "Rating Agencies").
The Borrower shall cooperate reasonably with such Lenders and their Affiliates
to effect the Securitization including, without limitation, by (a) amending this
Agreement and the other Loan Documents, and executing such additional documents,
as reasonably requested by such Lenders, in connection
45
with the Securitization, provided that (i) any such amendment or additional
documentation does not impose material additional costs on the Borrower, (ii)
any such amendment or additional documentation does not materially adversely
affect the rights, or materially increase the obligations (including
administrative duties or reporting obligations), of the Borrower under the
Credit Documents or change or affect in a manner adverse to the Borrower the
financial terms of the Obligations, and (b) providing such information as may be
reasonably requested by such Lenders, in connection with the rating of the
Obligations or the Securitization, (c) providing in connection with any rating
of the Obligations, a certificate (i) agreeing to indemnify such Lenders and any
of their Affiliates, any of the Rating Agencies, or any party providing credit
support or otherwise participating in the Securitization (collectively, the
"Securitization Parties") for any losses, claims, damages or liabilities (the
"Liabilities") to which such Lenders, their Affiliates or such Securitization
Parties may become subject insofar as the Liabilities arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Credit Document or in any writing delivered by or on behalf of
the Borrower and its respective Affiliates to the Agent or one or more Lenders
in connection with any Credit Document or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading and such indemnity
shall survive any transfer by such Lenders or their successors or assigns of the
Obligations, and (ii) agreeing to reimburse such Lenders and any of their
Affiliates and other Securitization Parties for any legal or other expenses
reasonably incurred by such Persons in connection with defending the
Liabilities; and (d) providing such information regarding the Borrower, the
Guarantors, the Collateral and other property, assets and business of the
Borrower and the Guarantors (including appraisals and valuations) as may be
reasonably requested by such Lenders or their successors or assignees.
ARTICLE III.
LETTERS OF CREDIT
3.1 ISSUANCE.
Subject to the terms and conditions hereof and of the Letter of
Credit Documents, if any, and any other terms and conditions which the Issuing
Bank may reasonably require, the Lenders will participate in the issuance by the
Issuing Bank to the Underlying Issuer from time to time of one or more L/C
Undertakings with respect to Letters of Credit issued from time to time by the
Underlying Issuer in Dollars from the Original Closing Date until the Maturity
Date as the Borrower may request, in each case in a form acceptable to the
Issuing Bank; provided, however, that (a) the Letter of Credit Obligations
outstanding shall not at any time exceed THIRTY MILLION DOLLARS ($30,000,000)
(the "Letter of Credit Committed Amount") and (b) the sum of the aggregate
principal amount of outstanding Revolving Loans plus Letter of Credit
Obligations outstanding shall not at any time exceed the Revolving Credit
Borrowing Base. No Letter of Credit shall (x) have an original expiry date more
than one year from the date of issuance or (y) as originally issued or as
extended, have an expiry date extending beyond the Maturity Date. Each Letter of
Credit shall comply with the related Letter of Credit Documents. The issuance
and expiry date of each Letter of Credit shall comply with the related Letter of
Credit Documents. The issuance and expiry date of each Letter of Credit shall be
a Business
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Day. Notwithstanding anything to the contrary herein or otherwise, no Letter of
Credit shall be issued to or for the benefit of CBII (or any Person in its
capacity as a creditor of CBII) or to support, replace or supplement any
obligation of CBII, except for those Letters of Credit set forth in Schedule 3.1
hereto.
3.2 NOTICE AND REPORTS.
The request for the issuance of a Letter of Credit shall be
submitted by the Borrower to the Issuing Bank at least three (3) Business Days
prior to the requested date of issuance. The Issuing Bank will, upon request,
disseminate to each of the Lenders a detailed report specifying the Letters of
Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of the prior report, and
including therein, among other things, the beneficiary, the face amount and the
expiry date as well as any payment or expirations which may have occurred.
3.3 PARTICIPATION.
Each Lender, upon issuance of a Letter of Credit, shall be deemed to
have purchased without recourse a risk participation from the Issuing Bank in
the applicable L/C Undertaking and the Issuing Bank's rights with respect to
such Letter of Credit and the obligations arising thereunder, in each case in an
amount equal to its Pro Rata Share of such Letter of Credit, and shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to the Issuing Bank therefor and discharge
when due, its Pro Rata Share of the obligations arising under such L/C
Undertaking. Without limiting the scope and nature of each Lender's
participation in any L/C Undertaking, to the extent that the Issuing Bank has
not been reimbursed as required hereunder, each such Lender shall pay to the
Issuing Bank its Pro Rata Share of such unreimbursed drawing pursuant to the
provisions of Section 3.4. The obligation of each Lender to so reimburse the
Issuing Bank shall be absolute and unconditional and shall not be affected by
the occurrence of a Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to make a payment to the Issuing Bank as a result of
drawings under any Letter of Credit, together with interest as hereinafter
provided.
3.4 PAYMENT.
In the event of any drawing under any Letter of Credit, the Issuing
Bank will, promptly upon receiving actual knowledge thereof, notify the
Borrower. Unless the Borrower shall immediately notify the Issuing Bank that the
Borrower intends to otherwise make a payment to the Issuing Bank in the amount
of such drawing as a result of such drawing, the Borrower shall be deemed to
have requested that the Lenders make a Revolving Loan in the amount of the
drawing as provided in Section 3.5 on the related Letter of Credit, the proceeds
of which will be used to satisfy the related obligations to the Issuing Bank.
The Borrower promises to make a payment to the Issuing Bank in an amount equal
to the amount of each drawing on a Letter of Credit on the day of drawing under
any Letter of Credit (either with the proceeds of a Revolving Loan obtained
hereunder or otherwise) in same day funds. If the Borrower shall fail to pay the
Issuing Bank as provided hereinabove, the amount of such payment which has not
been made to the Issuing Bank shall bear interest at a per annum rate equal to
the interest rate
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applicable to Revolving Loans that are Prime Rate Loans. The Borrower's payment
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of any rights of setoff, counterclaim or defense to
payment the Borrower may claim or have against the Underlying Issuer, the
Issuing Bank, the Agent, the Lenders, the beneficiary of the Letter of Credit
drawn upon or any other Person, including without limitation any defense based
on any failure of the Borrower to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit. The Issuing
Bank will promptly notify the other Lenders of the amount of any payment owing
to the Issuing Bank as a result of a draw on a Letter of Credit that has not
been paid by the Borrower as provided above, and each Lender shall promptly pay
to the Agent for the account of the Issuing Bank in Dollars and in immediately
available funds, the amount of such Lender's Pro Rata Share of such amount. Such
payment shall be made on the Business Day such notice is received by such Lender
from the Issuing Bank if such notice is received at or before 2:00 p.m.
otherwise such payment shall be made at or before 12:00 Noon on the Business Day
next succeeding the day such notice is received. If such Lender does not pay
such amount to the Issuing Bank in full upon such request, such Lender shall, on
demand, pay to the Agent for the account of the Issuing Bank interest on the
unpaid amount during the period from the date of such drawing until such Lender
pays such amount to the Issuing Bank in full at a rate per annum equal to, if
paid within two (2) Business Days of the date that such Lender is required to
make payments of such amount pursuant to the preceding sentence, the Federal
Funds Rate and thereafter at a rate equal to the Prime Rate. Each Lender's
obligation to make such payment to the Issuing Bank, and the right of the
Issuing Bank to receive the same, shall be absolute and unconditional, shall not
be affected by any circumstance whatsoever and without regard to the termination
of this Credit Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the obligations of the
Borrower hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever. Simultaneously with the making of each such payment by
a Lender to the Issuing Bank, such Lender shall, automatically and without any
further action on the part of the Issuing Bank or such Lender, acquire a
participation in an amount equal to such payment (excluding the portion of such
payment constituting interest owing to the Issuing Bank) in the related
unreimbursed drawing portion of the Letter of Credit Obligation and in the
interest thereon and in the related Letter of Credit Documents, and shall have a
claim against the Borrower with respect thereto.
3.5 REPAYMENT WITH REVOLVING LOANS.
On any day on which the Borrower shall have requested, or been
deemed to have requested, a Revolving Loan advance to make a payment as a result
of a drawing under a Letter of Credit, the Agent shall give notice to the
Lenders that a Revolving Loan has been requested or deemed requested by the
Borrower to be made in connection with a drawing under a Letter of Credit, in
which case a Revolving Loan advance shall be immediately made to the Borrower by
all Lenders (notwithstanding any termination of the Commitments pursuant to
Section 11.2) pro rata based on the respective Pro Rata Shares of the Lenders
(determined before giving effect to any termination of the Commitments pursuant
to Section 11.2) and the proceeds thereof shall be paid directly by the Agent to
the Issuing Bank for application to the respective Letter of Credit Obligations.
Each such Lender hereby irrevocably agrees to make its Pro Rata Share of each
such Revolving Loan immediately upon any such request or deemed request in the
amount, in the manner and on the date specified in the preceding sentence
notwithstanding (i) the amount of
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such borrowing may not comply with the minimum amount for advances of Revolving
Loans otherwise required hereunder, (ii) whether any conditions specified in
Article V are then satisfied, (iii) whether a Default or an Event of Default
then exists, (iv) failure for any such request or deemed request for Revolving
Loan to be made by the time otherwise required hereunder, (v) whether the date
of such borrowing is a date on which Revolving Loans are otherwise permitted to
be made hereunder or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the event that
any Revolving Loan cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
bankruptcy or insolvency proceeding with respect to the Borrower), then each
such Lender hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) from the
Issuing Bank such participation in the outstanding Letter of Credit Obligations
as shall be necessary to cause each such Lender to share in such Letter of
Credit Obligations ratably (based upon the respective Pro Rata Shares of the
Lenders (determined before giving effect to any termination of the Commitments
pursuant to Section 11.2)), provided that at the time any purchase of
participation pursuant to this sentence is actually made, the purchasing Lender
shall be required to pay to the Issuing Bank, to the extent not paid to the
Issuing Bank by the Borrower in accordance with the terms of Section 3.4,
interest on the principal amount of participation purchased for each day from
and including the day upon which such borrowing would otherwise have occurred to
but excluding the date of payment for such participation, at the rate equal to,
if paid within two (2) Business Days of the date of the Revolving Loan advance,
the Federal Funds Rate, and thereafter at a rate equal to the Prime Rate.
3.6 RENEWAL, EXTENSION.
The renewal or extension of any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of
Credit hereunder.
3.7 UNIFORM CUSTOMS AND PRACTICES.
The Issuing Bank or the Underlying Issuer may provide that the
Letters of Credit shall be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the International
Chamber of Commerce (the "UCP"), in which case the UCP may be incorporated by
reference therein and deemed in all respects to be a part thereof.
3.8 INDEMNIFICATION; NATURE OF ISSUING BANK'S DUTIES.
(a) In addition to their other obligations under this Article III,
the Borrower agrees to protect, indemnify, pay and save the Issuing Bank
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees) that
the Issuing Bank may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or any L/C Undertaking or
(B) the failure of the Underlying Issuer or the Issuing Bank to honor a drawing
under a Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein called "Government
Acts").
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(b) As between the Borrower and the Issuing Bank, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter of Credit
or any L/C Undertaking by the beneficiary thereof. The Issuing Bank shall not be
responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (ii) for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (iii) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (iv) for
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the proceeds thereof; and
(v) for any consequences arising from causes beyond the control of the Issuing
Bank, including, without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of the Issuing Bank's rights or
powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Bank, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put such Issuing Bank
under any resulting liability to the Borrower. It is the intention of the
parties that this Credit Agreement shall be construed and applied to protect and
indemnify the Issuing Bank against any and all risks involved in the issuance of
the Letters of Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all Government Acts. The Issuing Bank
shall not, in any way, be liable for any failure by the Issuing Bank or anyone
else to pay any drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Bank.
(d) Nothing in this Section 3.8 is intended to limit the
reimbursement obligations of the Borrower contained in Section 3.4 above. The
obligations of the Borrower under this Section 3.8 shall survive the termination
of this Credit Agreement. No act or omission of any current or prior beneficiary
of a Letter of Credit shall in any way affect or impair the rights of the
Issuing Bank to enforce any right, power or benefit under this Credit Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 3.8, the Borrower shall have no obligation to indemnify the Issuing Bank
in respect of any liability incurred by the Issuing Bank arising solely out of
the gross negligence or willful misconduct of the Issuing Bank, as determined by
a court of competent jurisdiction.
3.9 RESPONSIBILITY OF ISSUING BANK.
It is expressly understood and agreed that the obligations of the
Issuing Bank hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Bank shall be entitled to assume that the
conditions precedent set forth in Article III or V have been satisfied unless it
shall have acquired actual knowledge that any such condition precedent has not
been satisfied; provided, however, that nothing set forth in this Article III
shall be deemed to prejudice the right of any Lender to recover from the Issuing
Bank any amounts made available by such Lender to the Issuing Bank pursuant to
this Article III in the event that it
50
is determined by a court of competent jurisdiction that the payment with respect
to a Letter of Credit constituted gross negligence or willful misconduct on the
part of the Issuing Bank.
3.10 CONFLICT WITH LETTER OF CREDIT DOCUMENTS.
In the event of any conflict between this Credit Agreement and any
Letter of Credit Document (including any letter of credit application), this
Credit Agreement shall control.
ARTICLE IV.
INTEREST AND FEES
4.1 INTEREST ON LOANS.
Subject to Section 4.8(a), interest on the Loans and other amounts
charged to the Loan Account shall accrue each day on the balance thereof, and
shall be payable monthly in arrears on the first day of each calendar month (for
the preceding month). Subject to the provisions of Section 4.2, the interest
rate (the "Interest Rate") with respect to (i) a LIBOR Rate Loan shall be equal
to the LIBOR Rate plus three and three-quarters percent (3.75%) and (ii) a Prime
Rate Loan shall be equal to a per annum rate equal to the Prime Rate plus one
percent (1%). The interest rate hereunder shall be calculated based on a 360 day
year for the actual number of days elapsed.
The foregoing notwithstanding, at no time shall any portion of the
Obligations bear interest on any day on the daily balance thereof at a per annum
rate less than 6% (the "Minimum Rate"). To the extent that interest accrued
hereunder at the rate otherwise set forth herein would be less than the
foregoing minimum daily rate, the interest rate chargeable hereunder for such
day shall automatically be deemed increased to the Minimum Rate.
4.2 INTEREST AFTER EVENT OF DEFAULT.
Interest on the Loans and other amounts charged to the Loan Account,
as of the date an Event of Default occurs, and at all times thereafter until the
earlier of the date upon which (a) all Obligations have been paid and satisfied
in full in cash or (b) such Event of Default shall have been cured or waived,
shall be payable on demand at a rate equal to the Interest Rate plus two percent
(2%) per annum (the "Default Rate"). Interest shall be payable on any other
amount due hereunder and shall accrue at the Default Rate from the date due and
payable until paid in full. The rates hereunder shall be calculated based on a
360-day year for the actual number of days elapsed.
4.3 [INTENTIONALLY DELETED]
4.4 AGENT'S FEES.
The Borrower shall pay all fees required to be paid to the Agent
under the Fee Letter at the times and in the amounts set forth therein.
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4.5 LETTER OF CREDIT FEES.
(a) Letter of Credit Fee. In consideration of the issuance of
Letters of Credit hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Letter of Credit Fee") on such Lender's Pro
Rata Share of the average daily maximum amount available to be drawn under each
such Letter of Credit computed at a per annum rate for each day from the date of
issuance to the date of expiration equal to three percent (3%) per annum. The
Letter of Credit Fee will be payable in arrears on a monthly basis.
(b) Issuing Bank Fees. In addition to the Letter of Credit Fee
payable pursuant to clause (a) above, the Borrower promises to pay to the
Issuing Bank for its own account without sharing by the other Lenders the letter
of credit fronting and negotiation fees agreed to by the Borrower and the
Issuing Bank from time to time and the customary charges from time to time of
the Issuing Bank with respect to the issuance, amendment, transfer,
administration, cancellation and conversion of, and drawings under, such Letters
of Credit (collectively, the "Issuing Bank Fees") and all fees or other amounts
charged to the Issuing Bank by the Underlying Issuer.
4.6 AUTHORIZATION TO CHARGE LOAN ACCOUNT.
The Borrower hereby authorizes the Agent to charge the Loan Account
with the amount of all payments, fees and other amounts due hereunder or under
the Fee Letter to the Lenders, the Agent and the Issuing Bank as and when such
payments become due. The Borrower confirms that any charges which the Agent may
so make to the Borrower's accounts as herein provided will be made as an
accommodation to the Borrower and solely at the Agent's discretion.
4.7 INDEMNIFICATION IN CERTAIN EVENTS.
If after the Original Closing Date, either (a) any change in or in
the interpretation of any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to Foothill or any
other banking or financial institution from whom any of the Lenders borrow funds
or obtain credit (a "Funding Bank") or any of the Lenders, or (b) a Funding Bank
or any of the Lenders complies with any future guideline or request from any
central bank or other Governmental Authority or (c) a Funding Bank or any of the
Lenders determines that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof has or would have the effect described below, or a Funding Bank or any
of the Lenders complies with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, and in the case of any event set forth in this clause (c),
such adoption, change or compliance has or would have the direct or indirect
effect of reducing the rate of return on any of the Lenders' capital as a
consequence of its obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change or compliance (taking into
consideration the Funding Bank's or Lenders' policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, and the result of
any of the foregoing events described in clauses (a), (b)
52
or (c) is or results in an increase in the cost to any of the Lenders of funding
or maintaining any Commitment, the Revolving Loans, the Term Loans or the
Letters of Credit, then the Borrower shall from time to time upon demand by the
Agent, pay to the Agent additional amounts sufficient to indemnify the Lenders
against such increased cost. A certificate as to the amount of such increased
cost shall be submitted to the Borrower by the Agent and shall be conclusive and
binding absent manifest error.
4.8 LIBOR OPTION.
(a) Interest and Interest Payment Dates. In lieu of having
interest charged at the rate based upon the Prime Rate, Borrower shall have the
option (the "LIBOR Option") to have interest on all or a portion of the
Revolving Loans or the Term Loan be charged at a rate of interest based upon the
LIBOR Rate. Interest on LIBOR Rate Loans shall be payable on the earliest of (i)
the last day of the Interest Period applicable thereto, (ii) the occurrence of
an Event of Default in consequence of which the Required Lenders or Agent on
behalf thereof elect to accelerate the maturity of all or any portion of the
Obligations, or (iii) termination of this Agreement pursuant to the terms
hereof. On the last day of each applicable Interest Period, unless Borrower
properly has exercised the LIBOR Option with respect thereto, the interest rate
applicable to such LIBOR Rate Loan automatically shall convert to the rate of
interest then applicable to Prime Rate Loans of the same type hereunder. At any
time that an Event of Default has occurred and is continuing, Borrower no longer
shall have the option to request that Revolving Loans or the Term Loan bear
interest at the LIBOR Rate and Agent shall have the right to convert the
interest rate on all outstanding LIBOR Rate Loans to the rate then applicable to
Prime Rate Loans hereunder.
(b) LIBOR Election.
(i) Borrower may, at any time and from time to time, so long
as no Event of Default has occurred and is continuing, elect to exercise
the LIBOR Option by notifying Agent prior to 11:00 a.m. (California time)
at least 3 Business Days prior to the commencement of the proposed
Interest Period (the "LIBOR Deadline"). Notice of Borrower's election of
the LIBOR Option for a permitted portion of the Revolving Loans or the
Term Loan and an Interest Period pursuant to this Section shall be made by
delivery to Agent of a LIBOR Notice received by Agent before the LIBOR
Deadline, or by telephonic notice received by Agent before the LIBOR
Deadline (to be confirmed by delivery to Agent of a LIBOR Notice received
by Agent prior to 5:00 p.m. (California time) on the same day. Promptly
upon its receipt of each such LIBOR Notice, Agent shall provide a copy
thereof to each of the Lenders having a Revolving Credit Committed Amount.
(ii) Each LIBOR Notice shall be irrevocable and binding on
Borrower. In connection with each LIBOR Rate Loan, Borrower shall
indemnify, defend, and hold Agent and the Lenders harmless against any
loss, cost, or expense incurred by Agent or any Lender as a result of (a)
the payment of any principal of any LIBOR Rate Loan other than on the last
day of an Interest Period applicable thereto (including as a result of an
Event of Default), (b) the conversion of any LIBOR Rate Loan other than on
the last day of the Interest Period applicable thereto, or (c) the failure
to borrow, convert, continue or
53
prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice
delivered pursuant hereto (such losses, costs, and expenses, collectively,
"Funding Losses"). Funding Losses shall, with respect to Agent or any
Lender, be deemed to equal the amount determined by Agent or such Lender
to be the excess, if any, of (i) the amount of interest that would have
accrued on the principal amount of such LIBOR Rate Loan had such event not
occurred, at the LIBOR Rate that would have been applicable thereto, for
the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert,
or continue, for the period that would have been the Interest Period
therefor), minus (ii) the amount of interest that would accrue on such
principal amount for such period at the interest rate which Agent or such
Lender would be offered were it to be offered, at the commencement of such
period, for Dollar deposits of a comparable amount and period in the
London interbank market. A certificate of Agent or a Lender delivered to
Borrower setting forth any amount or amounts that Agent or such Lender is
entitled to receive pursuant to this Section shall be conclusive absent
manifest error.
(iii) Borrower shall have not more than five (5) LIBOR Rate
Loans in effect at any given time. Borrower only may exercise the LIBOR
Option for LIBOR Rate Loans of at least $1,000,000 and integral multiples
of $500,000 in excess thereof.
(c) Prepayments. Borrower may prepay LIBOR Rate Loans at any time;
provided, however, that in the event that LIBOR Rate Loans are prepaid on any
date that is not the last day of the Interest Period applicable thereto,
including as a result of any mandatory prepayment in accordance with Section
2.3(b) or for any other reason, including early termination of the term of this
Credit Agreement or acceleration of all or any portion of the Obligations
pursuant to the terms hereof, Borrower shall indemnify, defend, and hold Agent
and the Lenders and their Participants harmless against any and all Funding
Losses in accordance with clause (b)(ii) above; provided, however that if any
prepayment would prepay a LIBOR Rate Loan, the Borrower may elect to either
prepay such Loan at such time or have the Agent hold any such prepayment amount
as cash collateral until the end of the Interest Period applicable to such LIBOR
Rate Loan. All amounts held by the Agent as cash collateral pursuant to this
Section 4.8(c) and not yet applied to prepay Loans shall bear interest for the
account of the Borrower at a rate equal to the Federal Funds Rate. All such
interest shall be treated as a portion of the original amount held as cash
collateral by the Agent and shall be applied to prepay LIBOR Rate Loans, if
applicable, in accordance with this Section 4.8(c).
(d) Special Provisions Applicable to LIBOR Rate.
(i) The LIBOR Rate may be adjusted by Agent with respect to
any Lender on a prospective basis to take into account any additional or
increased costs to such Lender of maintaining or obtaining any eurodollar
deposits or increased costs due to changes in applicable law occurring
subsequent to the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general applicability in
corporate income tax laws) and changes in the reserve requirements imposed
by the Board of Governors of the Federal Reserve System (or any
successor), excluding the Reserve Percentage, which additional or
increased costs would increase the cost of funding loans bearing interest
at the LIBOR Rate. In any such event, the affected
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Lender shall give Borrower and Agent notice of such a determination and
adjustment and Agent promptly shall transmit the notice to each other
Lender and, upon its receipt of the notice from the affected Lender,
Borrower may, by notice to such affected Lender (y) require such Lender to
furnish to Borrower a statement setting forth the basis for adjusting such
LIBOR Rate and the method for determining the amount of such adjustment,
or (z) repay the LIBOR Rate Loans with respect to which such adjustment is
made (together with any amounts due under clause (b)(ii) above).
(ii) In the event that any change in market conditions or any
law, regulation, treaty, or directive, or any change therein or in the
interpretation or application thereof, shall at any time after the date
hereof, in the reasonable opinion of any Lender, make it unlawful or
impractical for such Lender to fund or maintain LIBOR Rate Loans or to
continue such funding or maintaining, or to determine or charge interest
rates at the LIBOR Rate, such Lender shall give notice of such changed
circumstances to Agent and Borrower and Agent promptly shall transmit the
notice to each other Lender and (y) in the case of any LIBOR Rate Loans of
such Lender that are outstanding, the date specified in such Lender's
notice shall be deemed to be the last day of the Interest Period of such
LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such Lender
thereafter shall accrue interest at the rate then applicable to Prime Rate
Loans, and (z) Borrower shall not be entitled to elect the LIBOR Option
until such Lender determines that it would no longer be unlawful or
impractical to do so.
(e) No Requirement of Matched Funding. Anything to the contrary
contained herein notwithstanding, neither Agent, nor any Lender, nor any of
their participants, is required actually to acquire eurodollar deposits to fund
or otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate. The provisions of this Section shall apply as if each Lender or its
participants had match funded any Obligation as to which interest is accruing at
the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the
amount of the LIBOR Rate Loans.
ARTICLE V.
CONDITIONS PRECEDENT
The obligation of the Lenders to make the Term Loans or any
Revolving Loan or of the Issuing Bank to issue any Letter of Credit hereunder is
subject to the satisfaction of, or waiver of, immediately prior to or
concurrently with the making of such Term Loans or any Revolving Loan or
issuance of such Letter of Credit the following conditions precedent:
5.1 ORIGINAL CLOSING DATE CONDITIONS.
The obligation of each Lender to make Loans and/or of the Issuing
Bank to issue Letters of Credit under the Original Credit Agreement was subject
to the satisfaction, on or prior to the Original Closing Date, of the following
conditions precedent (all of which were either satisfied or waived):
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(a) Executed Credit Documents. Receipt by the Agent of duly executed
copies of: the Original Credit Agreement; the Notes issued pursuant to the
Original Credit Agreement; the Security Documents and the Guarantees; and all
other Credit Documents, and each other agreement, document, certificate or
instrument described on the Closing Checklist attached to the Original Credit
Agreement as Exhibit K, each in form and substance acceptable to the Agent and
the Lenders in their sole discretion.
(b) Corporate Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or certificates
of incorporation or formation or other charter documents of each Credit
Party certified, to the extent available, to be true and complete as of a
recent date by the appropriate Governmental Authority of the state or
other jurisdiction of its incorporation or formation and certified by a
secretary or assistant secretary of such Credit Party to be true and
correct as of the Original Closing Date.
(ii) Bylaws. A copy of the bylaws or limited liability company
agreement or similar agreement of each Credit Party certified by a
secretary or assistant secretary of such Credit Party to be true and
correct as of the Original Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors or similar managing body of each Credit Party approving and
adopting the Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery thereof,
certified by a secretary or assistant secretary of such Credit Party to be
true and correct and in force and effect as of the Original Closing Date.
(iv) Good Standing. Copies of (i) certificates of good
standing, existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental Authorities
of the state or other jurisdiction of incorporation and each other
jurisdiction in which the failure to so qualify and be in good standing
could reasonably be expected to have a Material Adverse Effect and (ii) to
the extent available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate taxing
Governmental Authorities.
(v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and correct as
of the Original Closing Date.
(c) Financial Statements. Receipt by the Agent and the Lenders of
the unaudited balance sheet of the Borrower as of, and a statement of income for
the period ending, September 30, 2000 prepared by the chief accounting officer
of the Borrower and such other information relating to the Borrower Entities as
the Agent may reasonably require in connection with the structuring and
syndication of credit facilities of the type described herein.
(d) Opinions of Counsel. Receipt by the Agent of an opinion, or
opinions (which covered, among other things, authority, legality, validity,
binding effect, enforceability and attachment and perfection of liens)
satisfactory to the Agent, addressed to the Agent and the
56
Lenders and dated the Original Closing Date, from legal counsel to the Borrower
and the relevant Subsidiaries.
(e) Collateral. The Agent shall have received:
(i) searches of Uniform Commercial Code, PPSA or other similar
filings in the jurisdiction of the chief executive office of each Secured
Credit Party and each jurisdiction where any Collateral is located or
where a filing would need to be made in order to perfect the Agent's
security interest in the Collateral, copies of the financing statements on
file in such jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) duly executed UCC, PPSA or other similar financing
statements for each appropriate jurisdiction as is necessary, in the
Agent's sole discretion, to perfect the Agent's security interest in the
Collateral;
(iii) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Agent in order to perfect the Agent's security
interest in the Collateral;
(iv) all instruments and chattel paper in the possession of
the Borrower, together with allonges or assignments as may be necessary or
appropriate to perfect the Agent's security interest in the Collateral to
the extent required under the Security Agreement;
(v) duly executed consents as are necessary, in the Agent's
sole discretion, to perfect the Agent's security interest in the
Collateral, including, without limitation, such Acknowledgment Agreements
as the Agent may require;
(vi) duly executed tri-party agreements in form and substance
acceptable to the Agent with respect to each bank account of the Borrower
(other than payroll and ▇▇▇▇▇ cash bank accounts maintained as zero
balance accounts and other similar bank accounts having limited or no
activity and balances of not more than $10,000 and disbursement accounts
and investment accounts acceptable to the Agent); and
(vii) duly executed mortgages on the real property which is
owned by CBCNA.
(f) Priority of Liens. The Agent shall have received satisfactory
evidence that the Agent, on behalf of the Lenders, holds a perfected, first
priority Lien on all Collateral (subject only to Permitted Liens).
(g) Opening Revolving Credit Borrowing Base Certificate. The Agent
and the Borrower shall have agreed upon Revolving Credit Borrowing Base
calculation and reporting procedures and the Agent shall have received a
Revolving Credit Borrowing Base Certificate as of March 7, 2001, substantially
in the form of Exhibit G and certified by the chief accounting
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officer or treasurer of the Borrower on the Original Closing Date to be true and
correct as of February 24, 2001.
(h) [INTENTIONALLY DELETED]
(i) [INTENTIONALLY DELETED]
(j) Evidence of Insurance. Receipt by the Agent of copies of
insurance policies or certificates of insurance of the Borrower and it
Subsidiaries evidencing liability and casualty insurance meeting the
requirements set forth in the Credit Documents, including, without limitation,
naming the Agent as loss payee on behalf of the Lenders and as additional
insured to the extent required by Section 7.10.
(k) Corporate Structure. The corporate capital and ownership
structure of the Borrower and its Subsidiaries shall be as described in Schedule
6.9.
(l) Consents. Receipt by the Agent of evidence that all
governmental, shareholder and third party consents and approvals required in
connection with the transactions and the related financings contemplated hereby
and expiration of all applicable waiting periods without any action being taken
by any authority that could restrain, prevent or impose any material adverse
conditions on such transactions or that could seek or threaten any of the
foregoing, and no law or regulation shall be applicable which in the judgment of
the Agent could have such effect.
(m) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against the Borrower or any of its
Subsidiaries or its assets that could reasonably be expected to have a Material
Adverse Effect.
(n) Other Indebtedness. Receipt by the Agent of evidence that, after
giving effect to the making of the Loans made on the Original Closing Date, the
Borrower and its Subsidiaries shall have no Funded Indebtedness other than the
Indebtedness under the Credit Documents and as disclosed on Schedule 1.1D.
(o) Solvency Certificate. Receipt by the Agent of an officer's
certificate for the Borrower prepared by its chief accounting officer or
treasurer as to the financial condition, solvency and related matters of the
Borrower, in each case after giving effect to the initial borrowings under the
Credit Documents, in substantially the form of Exhibit H hereto.
(p) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by the president or chief accounting
officer or treasurer of the Borrower as of the Original Closing Date stating
that (i) after giving effect to the making of the Loans and application of the
proceeds thereof, the Borrower is in compliance with all existing financial
obligations, (ii) all governmental, shareholder and third party consents and
approvals, if any, with respect to the Credit Documents and the transactions
contemplated thereby have been obtained, (iii) no action, suit, investigation or
proceeding is pending or threatened in any court or before any arbitrator or
governmental instrumentality that purports to affect the Borrower or any
transaction contemplated by the Credit Documents, if such action, suit,
investigation or proceeding could reasonably be expected to have a Material
Adverse Effect and (iv) immediately
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after giving effect to this Credit Agreement, the other Credit Documents and all
the transactions contemplated therein to occur on such date, (A) the Borrower is
Solvent, (B) no Default or Event of Default exists, (C) all representations and
warranties contained herein and in the other Credit Documents are true and
correct in all material respects, and (D) the Borrower is in compliance with
each of the financial covenants set forth in Article VIII.
(q) Fees and Expenses. Payment by the Borrower of all fees and
expenses owed by it to the Lenders and the Agent, including, without limitation,
payment to the Agent of the fees set forth in the Fee Letter.
(r) Sources and Uses; Payment Instructions. Receipt by the Agent of
(a) a statement of sources and uses of funds covering all payments reasonably
expected to be made by the Borrower in connection with the transactions
contemplated by the Credit Documents to be consummated on the Original Closing
Date, including an itemized estimate of all fees, expenses and other closing
costs and (b) payment instructions with respect to each wire transfer to be made
by the Agent on behalf of the Lenders or the Borrower on the Original Closing
Date setting forth the amount of such transfer, the purpose of such transfer,
the name and number of the account to which such transfer is to be made, the
name and ABA number of the bank or other financial institution where such
account is located and the name and telephone number of an individual that can
be contacted to confirm receipt of such transfer.
(s) Account Designation Letter. Receipt by the Agent of an Account
Designation Letter substantially in the form of Exhibit I hereto.
(t) Material Adverse Change. (i) No material adverse change in the
business, operations, profits or prospects of the Borrower and its Subsidiaries,
taken as a whole, shall have occurred since September 30, 2000 and (ii) on or
prior to the Original Closing Date, there shall not have occurred a substantial
impairment of the financial markets generally which, in the opinion of the
Lenders, has materially and adversely affected the transactions contemplated
hereby.
(u) Availability. The Lenders shall be satisfied that, after
reserving for amounts to bring the current liabilities of the Borrower within
their terms (and after giving effect to payments made to comply with item (r)
above), the sum of (a) Availability plus (ii) the unrestricted cash and Cash
Equivalents then held or owned directly by the Borrower, shall be equal to at
least $40,000,000.
(v) PACA. The Agent shall have received evidence satisfactory to the
Agent that all contracts between the Borrower and any of its Subsidiaries that
are subject to the benefits of PACA have payment terms of at least thirty-one
(31) days and include language necessary to exclude the underlying sales
transactions from the benefits of PACA.
(w) Subordination. The Agent shall have received evidence
satisfactory to the Agent that (i) either (A) all obligations (other than
obligations in an aggregate principal amount not to exceed $40,000,000, which
are evidenced by a note in form and substance acceptable to the Agent, and other
than amounts accruing after January 1, 2001 relating to amounts owing with
respect to overhead or tax sharing agreements) of the Borrower or any of its
Subsidiaries owing
59
to CBII have been converted into equity or (B) all claims of and amounts, now or
in the future, owing by the Borrower or any of its Subsidiaries to the Borrower
or any of its Subsidiaries are subordinated to the Obligations, and (ii) all
claims of, and amounts now or in the future owing by the Borrower by any of its
Subsidiaries to CBII are subordinated to the Obligations.
(x) Sales Agent. The Agent shall have received evidence satisfactory
to the Agent that (i) CBCNA is the agent of the Borrower for the sale of
bananas, plantains and other items in the United States and that all money
received by CBCNA in connection with such sales is received for the benefit of,
and is the property of, the Borrower, (ii) CBCNA is no longer the agent of, and
no longer collects any funds for or on behalf of, CBII, (iii) ▇▇▇▇▇▇▇▇ (Canada)
Inc. is the agent of the Borrower for the sale of bananas, plantains and other
items in Canada and that all money received by ▇▇▇▇▇▇▇▇ (Canada) Inc. in
connection with such sales is received for the benefit of, and is the property
of, the Borrower and (iv) ▇▇▇▇▇▇▇▇ (Canada) Inc. is no longer the agent of, and
no longer collects any funds for or on behalf of, CBII.
(y) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any Lender,
including, without limitation, information regarding litigation, tax,
accounting, labor, insurance, pension liabilities (actual or contingent), real
estate leases, material contracts, debt agreements, property ownership and
contingent liabilities of the Borrower.
(z) The Agent shall have received copies, certified by an officer of
the Borrower as being true, correct, complete and in full force and effect and
not modified, of each of the following documents:
(i) that certain License Agreement dated as of December 31,
2000 by and between the Borrower and CBII;
(ii) that certain Banana Supply Agreement made effective as of
December 31, 2000 by and between CIL and the Borrower;
(iii) that certain Business Assignment Agreement made
effective as of December 31, 2000 by and between CBII and the Borrower;
(iv) that certain U.S. Sale of Fruit Commission Sales
Agreement dated effective as of December 31, 2000 by and between the
Borrower and CBCNA;
(v) that certain Canadian Sale of Fruit Commission Sales
Agreement dated effective as of December 31, 2000 by and between the
Borrower and ▇▇▇▇▇▇▇▇ (Canada) Inc.;
(vi) that certain Waiver dated as of December 31, 2000 by and
between CIL and the Borrower; and
(vii) that certain Subordinated Promissory Note dated December
31, 2000 made by the Borrower in favor of CBII in an original principal
amount equal to $40,000,000.
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5.2 CLOSING CONDITIONS.
The obligation of each Lender to make Loans and/or of the Issuing
Bank to issue Letters of Credit under this Credit Agreement is subject to the
satisfaction, on or prior to the Closing Date, of the following conditions
precedent:
(a) Executed Credit Documents. Receipt by the Agent of duly executed
copies of this Credit Agreement, the Notes, all other Credit Documents amended
or otherwise modified or executed in connection with the transactions
contemplated by this Credit Agreement, and each other agreement, document,
certificate or instrument described on the Closing Checklist attached hereto as
Exhibit K, each in form and substance acceptable to the Agent and the Lenders in
their reasonable judgment.
(b) Corporate Documents. Receipt by the Agent of a certificate of a
secretary or assistance secretary of each Secured Credit Party certifying that
as of the Closing Date the following statements are true and correct or
attaching the following, as applicable.
(i) Charter Documents. The articles or certificates of
incorporation or formation or other charter documents of each Secured
Credit Party have not been amended after the Original Closing Date.
(ii) Bylaws. The bylaws or limited liability company agreement
or similar agreement of each Secured Credit Party has not been amended
after the Original Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors or similar managing body of each Credit Party approving, in the
case of the Borrower, the Credit Agreement and, in the case of the other
Credit Parties, the transactions contemplated by the Credit Agreement and,
in the case of the Borrower, authorizing execution and delivery thereof,
and in the case of the other Credit Parties, acknowledging and reaffirming
the Credit Documents to which such other Credit Party is a party.
(c) Opinions of Counsel. Receipt by the Agent of an opinion, or
opinions (which shall cover, among other things, authority, legality, validity,
binding effect, enforceability) satisfactory to the Agent, addressed to the
Agent and the Lenders and dated the Closing Date, from legal counsel to the
Borrower.
(d) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by the president or chief accounting
officer or treasurer of the Borrower as of the Closing Date stating that (i)
after giving effect to the making of the Loans and application of the proceeds
thereof, the Borrower is in compliance with all existing financial obligations,
(ii) all governmental, shareholder and third party consents and approvals, if
any, with respect to the Credit Documents and the transactions contemplated
thereby have been obtained, (iii) except as disclosed to the Agent in writing by
the Borrower, no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental instrumentality
that purports to affect the Borrower or any transaction contemplated by the
Credit Documents, if such action, suit, investigation or proceeding could
reasonably be expected to have a Material Adverse Effect and (iv) immediately
after giving effect to this Credit Agreement, the other Credit
61
Documents and all the transactions contemplated herein or therein to occur on
such date, (A) the Borrower is Solvent, (B) no Default or Event of Default
exists, (C) all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and (D) the
Borrower is in compliance with each of the financial covenants set forth in
Article VIII.
(e) Fees and Expenses. Payment by the Borrower of all fees and
expenses owed by it to the Lenders and the Agent, including, without limitation,
payment to the Agent of the fees set forth in the Fee Letter.
(f) Material Adverse Change. (i) No material adverse change in the
business, operations, profits or prospects of the Borrower and its Subsidiaries,
taken as a whole, shall have occurred since September 30, 2001 and (ii) on or
prior to the Closing Date, there shall not have occurred a substantial
impairment of the financial markets generally which, in the opinion of the
Lenders, has materially and adversely affected the transactions contemplated
hereby.
(g) Availability. The Lenders shall be satisfied that, after
reserving for amounts to bring the current liabilities of the Borrower within
their terms, the sum of (i) Availability (without giving effect to the
Resolution Block), plus (ii) the Borrower's and its Subsidiaries' (other than
any Excluded Entity's) unrestricted cash and Cash Equivalents shall be equal to
at least $65,000,000.
(h) Updated Appraisal. Receipt and approval by the Lenders of an
updated appraisal by ▇▇▇▇▇-▇▇▇▇▇▇ Appraisal Corporation confirming that the
assessment of values contained in the Appraisal is not less than the levels
stated in the Appraisal.
(i) Fee Side Letter. The Lenders and the Borrower shall have agreed
to and executed a mutually agreeable letter outlining the expectations regarding
additional fees for future amendments and waivers.
(j) Review of Books and Records. Satisfactory review by the Lenders
of Borrower's books, records and operating projections performed by a third
party.
(k) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any Lender,
including, without limitation, information regarding litigation, tax,
accounting, labor, insurance, pension liabilities (actual or contingent), real
estate leases, material contracts, debt agreements, property ownership and
contingent liabilities of the Borrower.
5.3 CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT.
(a) On the date of the making of any Term Loan, Revolving Loan or
the issuance of any Letter of Credit, both before and after giving effect
thereto and to the application of the proceeds therefrom, the following
statements shall be true in the reasonable judgment of the Agent (and each
request for a Term Loan, a Revolving Loan and request for a Letter of Credit,
and the acceptance by the Borrower of the proceeds of such Term Loan, Revolving
Loan or issuance of such Letter of Credit, shall constitute a representation and
warranty by the Borrower that on the date of such Term Loan, Revolving Loan or
issuance of such Letter of
62
Credit before and after giving effect thereto and to the application of the
proceeds therefrom, such statements are true):
(i) the representations and warranties contained in the Credit
Documents are true and correct in all material respects on and as of the
date of such Term Loan, Revolving Loan or issuance of such Letter of
Credit as though made on and as of such date, except to the extent that
such representations and warranties expressly relate solely to an earlier
date (in which case such representations and warranties shall have been
true and complete on and as of such earlier date);
(ii) no event has occurred and is continuing, or would result
from such Term Loan, Revolving Loan or issuance of such Letter of Credit
or the application of the proceeds thereof, which would constitute a
Default or an Event of Default under this Credit Agreement; and
(iii) No material adverse change in the business, operations,
profits or prospects of the Borrower and its Subsidiaries, taken as a
whole, shall have occurred since September 30, 2001.
(b) In connection with the making of any Revolving Loan or Term
Loan, the Agent shall have received a Notice of Borrowing to the extent such
Notice of Borrowing is required to be given with respect to the making of such
Revolving Loan or Term Loan.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Credit Agreement
and the Issuing Bank to issue the Letters of Credit, and to make available the
credit facilities contemplated hereby, the Borrower hereby represents and
warrants to the Lenders and the Issuing Bank as of the Closing Date and on the
date of each extension of credit hereunder, as follows:
6.1 ORGANIZATION AND QUALIFICATION.
The Borrower and each of its Subsidiaries (i) is a limited liability
company, corporation or entity duly organized, validly existing and in good
standing under the laws of the state of its jurisdiction or organization, (ii)
has the power and authority to own its properties and assets and to transact the
businesses in which it is presently, or proposes to be, engaged, and (iii) is
duly qualified and is authorized to do business and is in good standing in every
jurisdiction in which the failure to be so qualified could reasonably be
expected to have a Material Adverse Effect. Schedule 6.1 contains a true,
correct and complete list of all jurisdictions in which each Secured Credit
Party is qualified to do business as a foreign corporation or foreign limited
liability company as of the Closing Date.
6.2 SOLVENCY.
The Borrower is Solvent.
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6.3 LIENS; INVENTORY.
There are no Liens in favor of third parties with respect to any of
the Collateral, other than Permitted Liens. Upon the proper filing of financing
statements and the proper recordation of other applicable documents with the
appropriate filing or recordation offices in each of the necessary
jurisdictions, the security interests granted pursuant to the Credit Documents
constitute and shall at all times constitute valid and enforceable and, with
respect to assets in which a security interest can be perfected by filing,
first, prior and perfected Liens on the Collateral (other than Permitted Liens).
The Borrower or the relevant Subsidiary, as applicable, is or will be at the
time additional Collateral is acquired by it, the absolute owner of the
Collateral with full right to pledge, sell, consign, transfer and create a Lien
therein, free and clear of any and all Liens in favor of third parties, except
Permitted Liens. The Borrower and each of its Subsidiaries which is a party to a
Security Document will at its expense warrant, until payment in full of the
Obligations and termination of the Commitments, and, at the Agent's request,
defend the Collateral from any and all Liens (other than Permitted Liens) of any
third party.
6.4 NO CONFLICT.
The execution and delivery by each of the Borrower Entities of this
Credit Agreement and each of the other Credit Documents executed and delivered
in connection herewith by one or more of the Borrower Entities (other than the
documents required to be delivered in order to reduce the amount of the
Resolution Block; provided, that from and after the date of receipt of all such
documents, the representation and warranty contained in this Section shall
apply) and the performance of the obligations of such Borrower Entities
hereunder and thereunder and the consummation by such Borrower Entities of the
transactions contemplated hereby and thereby: (i) are within the corporate or
limited liability company powers of such Borrower Entity; (ii) are duly
authorized by the Board of Directors or similar managing body of such Borrower
Entity; (iii) are not in contravention of the terms of the organizational
documents of such Borrower Entity or of any indenture, contract, lease,
agreement, instrument or other commitment to which such Borrower Entity is a
party or by which such Borrower Entity or any of its properties are bound; (iv)
do not require the consent, registration or approval of any Governmental
Authority or any other Person (except such as have been duly obtained, made or
given, and are in full force and effect); (v) do not contravene any statute,
law, ordinance, regulation, rule, order or other governmental restriction
applicable to or binding upon such Borrower Entity; and (vi) will not, except as
contemplated herein for the benefit of the Agent on behalf of the Lenders,
result in the imposition of any Liens upon any property of such Borrower Entity
under any existing indenture, mortgage, deed of trust, loan or credit agreement
or other material agreement or instrument to which such Borrower Entity is a
party or by which it or any of its property may be bound or affected.
6.5 ENFORCEABILITY.
The Credit Agreement and all of the other Credit Documents executed
and delivered by the Borrower are the legal, valid and binding obligations of
the Borrower, and with respect to those Credit Documents executed and delivered
by any of its Subsidiaries, of each such Subsidiary, and are enforceable against
the Borrower and such Subsidiaries, as the case may
64
be, in accordance with their terms except as such enforceability may be limited
by (i) the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, (ii) general
principles of equity and (iii) the effect of foreign laws which may limit the
enforcement of certain provisions of a Credit Document executed by a non-United
States entity provided that the effect thereof does not materially impair the
rights and remedies of the Agent and the Lenders under such Credit Document.
6.6 FINANCIAL DATA.
The Borrower has furnished to the Lenders the following financial
statements (the "Financials"): (i) the unaudited consolidated balance sheet of
the Borrower as of, and consolidated statements of income for the fiscal year
ended, December 31, 2000 and (ii) the unaudited consolidated balance sheet of
the Borrower as of, and consolidated statement of income for the nine (9) months
ended, September 30, 2001 prepared by the chief accounting officer of the
Borrower. The Financials are and the historical financial statements to be
furnished to the Lenders in accordance with Section 7.1 below will be in
accordance with the books and records of the Borrower, except as provided in
Section 7.1, and fairly present the financial condition of the Borrower at the
dates thereof and the results of operations for the periods indicated (subject,
to normal year-end and audit adjustments and the absence of statements of cash
flows, shareholder's equity and footnotes). Such financial statements have been
and will be prepared in conformity with GAAP consistently applied throughout the
periods involved, except as provided in Section 7.1 or as otherwise disclosed in
such financial statements. Since September 30, 2001, there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
6.7 LOCATIONS OF OFFICES, RECORDS AND INVENTORY.
The Secured Credit Parties' principal places of business and chief
executive offices are set forth in Schedule 6.7 hereto, and the books and
records of the Secured Credit Parties and all chattel paper and all records of
accounts are located at the principal places of business and chief executive
offices of such Secured Credit Party. There is no jurisdiction in the United
States in which any Secured Credit Party or any of its Subsidiaries has any
Collateral (except for vehicles, intermodal equipment consisting of containers,
mobile refrigeration units and mobile generator sets, Inventory held for
shipment by third Persons, Inventory in transit, Inventory held for processing
by third Persons, or immaterial quantities of assets, equipment or Inventory)
other than those jurisdictions listed on Schedule 6.7. Schedule 6.7 is a true,
correct and complete list of (i) the legal names and addresses of each
warehouseman, filler, processor and packer at which Inventory is stored, (ii)
the address of the chief executive offices of the Secured Credit Parties and
(iii) the address of all offices where records and books of account of the
Secured Credit Parties are kept. None of the receipts received by any of the
Secured Credit Parties from any warehouseman, filler, processor or packer states
that the goods covered thereby are to be delivered to bearer or to the order of
a named person or to a named person and such named person's assigns.
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6.8 FICTITIOUS BUSINESS NAMES.
No Secured Credit Party has used any corporate or fictitious name
during the five (5) years preceding the date hereof, other than the name shown
on its or such Subsidiary's articles or certificate of incorporation or
certification of formation and as set forth on Schedule 6.8.
6.9 SUBSIDIARIES.
The only Subsidiaries of the Borrower are those listed on Schedule
6.9 attached hereto. The record and beneficial owner of all of the shares of
Capital Stock of each of the Subsidiaries listed on Schedule 6.9 is as set forth
on Schedule 6.9, there are no proxies, irrevocable or otherwise, with respect to
such shares, and no equity securities of any of the Subsidiaries are or may
become required to be issued by reason of any options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into or exchangeable for, shares of any
Capital Stock of any Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any Subsidiary is or may become bound to
issue additional shares of its Capital Stock or securities convertible into or
exchangeable for such shares. All of such shares so owned by the Borrower are
owned by it free and clear of any Liens other than Permitted Liens. Each of the
Persons identified on Schedule 6.9 as an Inactive Subsidiary is an Inactive
Subsidiary.
6.10 NO JUDGMENTS OR LITIGATION.
Except as set forth on Schedule 6.10, no judgments, orders, writs or
decrees are outstanding against the Borrower or any of its Subsidiaries nor is
there now pending or, to the best of the Borrower's knowledge after diligent
inquiry, threatened any litigation, contested claim, investigation, arbitration,
or governmental proceeding by or against the Borrower or any of its Subsidiaries
except judgments and pending or threatened litigation, contested claims,
investigations, arbitrations and governmental proceedings which could not
reasonably be expected to have a Material Adverse Effect.
6.11 NO DEFAULTS.
Neither the Borrower nor any of its Subsidiaries is in default under
any term of any indenture, contract, lease, agreement, instrument or other
commitment to which any of them is a party or by which any of them is bound
which default has had or could be reasonably expected to have a Material Adverse
Effect.
6.12 NO EMPLOYEE DISPUTES.
There are no controversies pending or, to the best of the Borrower's
knowledge after diligent inquiry, threatened between the Borrower or any of its
Subsidiaries and any of their respective employees, other than those arising in
the ordinary course of business which could not, in the aggregate, have a
Material Adverse Effect.
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6.13 COMPLIANCE WITH LAW.
Neither the Borrower nor any of its Subsidiaries has violated or
failed to comply with any statute, law, ordinance, regulation, rule or order of
any foreign, federal, state or local government, or any other Governmental
Authority or any self regulatory organization, or any judgment, decree or order
of any court, applicable to its business or operations except where the
aggregate of all such violations or failures to comply would not have a Material
Adverse Effect. The conduct of the business of the Borrower and each of its
Subsidiaries is in conformity with all securities, commodities, energy, public
utility, zoning, building code, health, OSHA and environmental requirements and
all other foreign, federal, state and local governmental and regulatory
requirements and requirements of any self regulatory organizations, except where
such non-conformities could not reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any of its Subsidiaries has received
any notice to the effect that, or otherwise been advised that, it is not in
compliance with, and neither the Borrower nor any of its Subsidiaries has any
reason to anticipate that any currently existing circumstances are likely to
result in the violation of any such statute, law, ordinance, regulation, rule,
judgment, decree or order which failure or violation could reasonably be
expected to have a Material Adverse Effect.
6.14 PACA.
Neither the Borrower nor any of its Subsidiaries has violated or
failed to comply with PACA, except for any violation or failure which could not
reasonably be expected to have a Material Adverse Effect. Neither the purchases
by CIL of bananas nor the purchases by CIL of plantains give rise to the
formation of a trust under PACA. Neither the purchases by the Borrower of
bananas from CIL nor the purchases from CIL of plantains give rise to the
formation of a trust under PACA. Neither the bananas nor the plantains, the
sales of which in each case give rise to Accounts, nor the Accounts, are subject
to a trust under PACA.
6.15 ERISA.
Neither the Borrower, any of its Subsidiaries nor any Controlled
ERISA Affiliate maintains or contributes to any Benefit Plan or Retiree Health
Plan other than those listed on Schedule 6.15. Each such Benefit Plan has been
and is being maintained and funded in accordance with its terms and in
compliance in all material respects with all provisions of ERISA and the
Internal Revenue Code applicable thereto. The Borrower, each of its Subsidiaries
and each Controlled ERISA Affiliate has fulfilled all obligations related to the
minimum funding standards of ERISA and the Internal Revenue Code for each
Benefit Plan, is in compliance in all material respects with the currently
applicable provisions of ERISA and of the Internal Revenue Code and has not
incurred any liability (other than routine liability for premiums) under Title
IV of ERISA. Except as previously reported to the Agent, no Termination Event
has occurred nor has any other event occurred that may result in such a
Termination Event which could reasonably be expected to have a Material Adverse
Effect. No event or events have occurred in connection with which the Borrower,
any of its Subsidiaries, any Controlled ERISA Affiliate, any fiduciary of a
Benefit Plan or any Benefit Plan, directly or indirectly, would be subject to
any liability, individually or in the aggregate, under ERISA, the Internal
Revenue Code or any other law, regulation or governmental order or under any
agreement, instrument, statute, rule of law or regulation pursuant to or under
which any such entity has agreed to indemnify or is
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required to indemnify any person against liability incurred under, or for a
violation or failure to satisfy the requirements of, any such statute,
regulation or order which could reasonably be expected to have a Material
Adverse Effect. No ERISA Affiliate (excluding for purposes hereof any ERISA
Affiliate which is a Controlled ERISA Affiliate) has incurred or to the best
knowledge of the Borrower and its Subsidiaries, could reasonably be expected to
incur, any liability under ERISA, the Internal Revenue Code, or any other
applicable law that has had or could reasonably be expected to have a Material
Adverse Effect.
6.16 COMPLIANCE WITH ENVIRONMENTAL LAWS.
Except as disclosed on Schedule 6.16 attached hereto, (a) the
operations of the Borrower and each of its Subsidiaries comply with all
applicable federal, state or local environmental, health and safety statutes,
regulations, directions, ordinances, criteria or guidelines except where such
failure to comply could not reasonably be expected to have a Material Adverse
Effect and (b) to the Borrower's knowledge, none of the operations of the
Borrower or any of its Subsidiaries is the subject of any judicial or
administrative proceeding alleging the violation of any federal, state or local
environmental, health or safety statute, regulation, direction, ordinance,
criteria or guidelines except where such proceeding could not reasonably be
expected to have a Material Adverse Effect. Except as disclosed on Schedule
6.16, to the Borrower's knowledge, none of the operations of the Borrower or any
of its Subsidiaries is the subject of any federal or state investigation
evaluating whether the Borrower or any of its Subsidiaries disposed any
hazardous or toxic waste, substance or constituent or other substance at any
site that may require remedial action, or any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of any
hazardous or toxic waste, substance or constituent, or other substance into the
environment where it is reasonably likely that the Borrower's share of the cost
of remediation or clean-up would exceed $250,000. Except as disclosed on
Schedule 6.16, neither the Borrower nor any of its Subsidiaries has filed any
notice under CERCLA Section 103(c), 42 U.S.C. Section 9603(c) or its equivalent
order, or any other federal or state law indicating past or present treatment,
storage or disposal of a hazardous waste or reporting an unpermitted spill or
release of a hazardous or toxic waste, substance or constituent that remains
uncorrected where it is reasonably likely that the Borrower's share of the cost
of remediation or clean-up would exceed $250,000. Except as disclosed on
Schedule 6.16, neither the Borrower nor any of its Subsidiaries has any
contingent liability of which the Borrower has knowledge or reasonably should
have knowledge in connection with any release of any hazardous or toxic waste,
substance or constituent, nor has the Borrower or any of its Subsidiaries
received any notice, letter or other indication of potential liability arising
from the disposal of any hazardous or toxic waste, substance or constituent,
except where such potential liability could not reasonably be expected to have a
Material Adverse Effect.
6.17 USE OF PROCEEDS.
All proceeds of the Loans will be used only in accordance with
Section 7.13.
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6.18 INTELLECTUAL PROPERTY.
The Borrower and each of its Subsidiaries possess adequate assets,
licenses, patents, patent applications, copyrights, service marks, trademarks
and trade names to continue to conduct its business as heretofore conducted by
it. Schedule 6.18 attached hereto sets forth (a) all of the federal, state and
foreign registrations of trademarks, service marks and trade names of the
Borrower and its Subsidiaries, and all pending applications for any such
registrations, (b) all of the patents and registered copyrights of the Borrower
and its Subsidiaries and all pending applications therefor and (c) all other
trademarks, service marks and trade names owned by or licensed to and used by
the Borrower or any of its Subsidiaries in connection with their businesses and
the loss of which would have a Material Adverse Effect (collectively, clauses
(a), (b) and (c), the "Proprietary Rights"). The Borrower or one of its
Subsidiaries is the owner of each of the trademarks listed on Schedule 6.18 as
indicated on such schedule, and except as set forth on Schedule 6.18, no other
Person has the right to use any of such marks in commerce either in the
identical form or, to the knowledge of the Borrower and its Subsidiaries, in
such near resemblance thereto as may be likely to cause confusion or to cause
mistake or to deceive. Each of the trademarks listed on Schedule 6.18 and
identified as a "U.S." registered trademark is a federally registered trademark
of the Borrower or one of its Subsidiaries having the registration number and
issue date set forth on Schedule 6.18. The Proprietary Rights listed on Schedule
6.18 are all those used in the businesses of the Borrower and its Subsidiaries,
the loss of which would have a Material Adverse Effect. Except as disclosed on
Schedule 6.18, no person has a right to receive any royalty or similar payment
in respect of any Proprietary Rights pursuant to any contractual arrangements
entered into by the Borrower, or any of its Subsidiaries, and, to the knowledge
of the Borrower and its Subsidiaries, no person otherwise has a right to receive
any royalty or similar payment in respect of any such Proprietary Rights except
as disclosed on Schedule 6.18. Except as disclosed on Schedule 6.18 or as
permitted by Section 9.14, neither the Borrower nor any of its Subsidiaries has
granted any license or sold or otherwise transferred any interest in any of the
Proprietary Rights to any other person. To the knowledge of the Borrower and its
Subsidiaries, the use of each of the Proprietary Rights by the Borrower and its
Subsidiaries is not infringing upon or otherwise violating the rights of any
third party in or to such Proprietary Rights, and no proceeding has been
instituted against or written notice received by the Borrower or any of its
Subsidiaries that are presently outstanding alleging that the use of any of the
Proprietary Rights infringes upon or otherwise violates the rights of any third
party in or to any of the Proprietary Rights, except such alleged infringement
that is not reasonably likely to have a Material Adverse Effect. Neither the
Borrower nor any of its Subsidiaries has given notice to any Person that it is
infringing on any of the Proprietary Rights and to the best of the Borrower's
knowledge, no Person is infringing on any of the Proprietary Rights, unless such
alleged infringement could not reasonably be expected to have a Material Adverse
Effect. All of the Proprietary Rights of the Borrower and its Subsidiaries are
valid and enforceable rights of the Borrower and its Subsidiaries and will not
cease to be valid and in full force and effect by reason of the execution and
delivery of this Credit Agreement or the Credit Documents or the consummation of
the transactions contemplated hereby or thereby. The Borrower is the owner of
the Proprietary Rights which are the subject of the Appraisal and CBII does not
own any of such Proprietary Rights.
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6.19 LICENSES AND PERMITS.
The Borrower and each of its Subsidiaries has obtained and holds in
full force and effect, all material franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights of way and other
rights and approvals which are necessary to the operation of its business as
presently conducted. Neither the Borrower nor any of its Subsidiaries is in
violation of the terms of any such franchise, license, lease, permit,
certificate, authorization, qualification, easement, right of way, right or
approval in any such case which could not reasonably be expected to have a
Material Adverse Effect.
6.20 TITLE TO PROPERTY.
Each Borrower Entity has good and marketable title to all of its
owned property (including without limitation, all real and other property in
each case as reflected in the Financial Statements delivered to the Agent
hereunder), other than properties disposed of in the ordinary course of business
or in any manner otherwise permitted under this Credit Agreement since the date
of the most recent audited consolidated balance sheet of the Borrower, and in
each case subject to no Liens other than Permitted Liens.
6.21 LABOR MATTERS.
There is (a) no material unfair labor practice complaint pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower, threatened against any of them, before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under
collective bargaining agreements that has or could reasonably be expected to
have a Material Adverse Effect is so pending against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower, threatened against any
of them, (b) no strike, labor dispute, slowdown or stoppage pending against the
Borrower or any of its Subsidiaries or, to the best knowledge of the Borrower,
threatened against any of them that has or could reasonably be expected to have
a Material Adverse Effect, and (c) no union representation question with respect
to the employees of the Borrower or any Subsidiaries and no union organizing
activity that has or could reasonably be expected to have a Material Adverse
Effect.
6.22 INVESTMENT COMPANY.
Neither the Borrower nor any of its 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, (b) 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, or
(c) subject to any other law which purports to regulate or restrict its ability
to borrow money or to consummate the transactions contemplated by this Credit
Agreement or the other Credit Documents or to perform its obligations hereunder
or thereunder.
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6.23 MARGIN SECURITY.
Neither the Borrower nor any of its Subsidiaries owns any margin
stock and no portion of the proceeds of any Loans or Letters of Credit shall be
used by the Borrower for the purpose of purchasing or carrying any "margin
stock" (as defined in Regulation U of the Board of Governors of the Federal
Reserve System) or for any other purpose, in either case, which violates the
provisions or Regulation T, U or X of said Board of Governors or for any other
purpose in violation of any applicable statute or regulation, or of the terms
and conditions of this Credit Agreement.
6.24 NO EVENT OF DEFAULT.
No Default or Event of Default has occurred and is continuing.
6.25 TAXES AND TAX RETURNS.
Each Borrower Entity has filed, or caused to be filed, all material
tax returns (federal, state, local and foreign) required to be filed and paid
all amounts of taxes shown thereon to be due (including interest and penalties)
and has paid all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (a) that are not yet
delinquent or (b) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. Except as covered by (a) and (b) of the immediately
preceding sentence, with respect to those arising after the date hereof, the
Borrower is not aware of any proposed material tax assessments against it or any
other Borrower Entity.
6.26 INDEBTEDNESS; CBII OBLIGATIONS.
Neither the Borrower nor any of its Subsidiaries has Indebtedness
that is senior, pari passu or subordinated in right of payment to their
Indebtedness to the Lenders hereunder, except for Permitted Indebtedness. Except
as set forth on Schedule 6.26, neither the Borrower nor any of its Subsidiaries
has guaranteed (in whole or in part) or is otherwise directly or indirectly
responsible or liable for any or all of the obligations of CBII.
6.27 STATUS OF ACCOUNTS.
Each Account is based on an actual and bona fide sale and delivery
of goods or rendition of services to customers, made by the Borrower in the
ordinary course of its business; the goods and inventory being sold and the
Accounts created are its exclusive property and are not and shall not be subject
to any Lien, consignment arrangement, encumbrance, security interest or
financing statement whatsoever, other than the Permitted Liens; and the
Borrower's customers have accepted the goods or services, owe and are obligated
to pay the full amounts stated in the invoices according to their terms, without
any dispute, offset, defense, counterclaim or contra (including, but not limited
to, claims arising under PACA) that could reasonably be expected to have, when
aggregated with any such other disputes, offsets, defenses, counterclaims or
contras, a Material Adverse Effect. The Borrower confirms to the Lenders that
any and all taxes or fees relating to its business, its sales, the Accounts or
the goods relating thereto, are its
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sole responsibility and that same will be paid by the Borrower when due (unless
duly contested and adequately reserved for) and that none of said taxes or fees
is or will become a lien on or claim against the Accounts.
6.28 REPRESENTATIONS AND WARRANTIES.
Each of the representations and warranties made in the Operative
Documents by the Borrower and its Subsidiaries and, to the knowledge of the
Borrower and its Subsidiaries, the other parties thereto, was or will be true
and correct in all material respects as of when made.
6.29 MATERIAL CONTRACTS.
Schedule 6.29 sets forth a true, correct and complete list of all
the Material Contracts currently in effect. None of the Material Contracts
contains provisions the performance or nonperformance of which have or could
reasonably be expected to have a Material Adverse Effect. All of the Material
Contracts are in full force and effect, and no material defaults currently exist
thereunder.
6.30 SURVIVAL OF REPRESENTATIONS.
All representations made by the Borrower in this Credit Agreement
and in any other Credit Document shall survive the execution and delivery hereof
and thereof.
6.31 AFFILIATE TRANSACTIONS.
Except as set forth on Schedule 6.31 (and transactions permitted by
Section 9.2, Section 9.7 or Section 9.8), neither the Borrower nor any of its
Subsidiaries is a party to or bound by any agreement or arrangement (whether
oral or written) to which any Affiliate of the Borrower or Subsidiary is a party
except (a) in the ordinary course of and pursuant to the reasonable requirements
of the Borrower's or such Subsidiary's business and (b) upon fair and reasonable
terms no less favorable to the Borrower and such Subsidiary than it could obtain
in a comparable arm's-length transaction with an unaffiliated Person.
6.32 INSURANCE.
As of the Original Closing Date, Schedule 6.32 accurately describes
the insurance coverage maintained by the Borrower and its Subsidiaries.
6.33 ACCURACY AND COMPLETENESS OF INFORMATION.
Except for projections, all factual information heretofore,
contemporaneously or hereafter furnished by or on behalf of the Borrower or any
of their respective Subsidiaries in writing to the Agent, any Lender, or the
Independent Accountant for purposes of or in connection with this Credit
Agreement or any Credit Documents, or any transaction contemplated hereby or
thereby is or will be true and accurate in all material respects on the date as
of which such information is dated or certified and not incomplete by omitting
to state any material fact necessary to make such information not misleading at
such time. All projections from time to time delivered to the Agent or one or
more Lenders have been prepared based upon
72
assumptions which the Borrower believes in good faith are reasonable at the time
such projections are delivered to the Agent or such Lenders.
ARTICLE VII.
AFFIRMATIVE COVENANTS
Until termination of this Credit Agreement and the Commitments
hereunder and payment and satisfaction of all Obligations due or to become due
hereunder, the Borrower agrees that it shall, and, with respect to covenants
which apply to its Subsidiaries or to Credit Parties, it shall cause its
Subsidiaries or the Credit Parties, as applicable, to, unless the Required
Lenders shall have otherwise consented in writing:
7.1 INFORMATION.
The Borrower will furnish to the Lenders the following information
within the following time periods:
(a) within one hundred and twenty (120) days after the close of each
fiscal year of the Borrower both (i) the audited consolidated balance sheet and
consolidated statements of income, shareholder's equity and cash flow of the
Borrower and its consolidated Subsidiaries and (ii) an unaudited consolidating
balance sheet and consolidating statements of income, cash flows and
shareholder's equity which shall present separately the financial condition and
results of operations of the Borrower and its Subsidiaries (other than CPF and
its Subsidiaries) and the financial condition and results of operations of CPF
and its Subsidiaries, in each case, for such year, each in reasonable detail,
each setting forth in comparative form the corresponding figures for the
preceding year, prepared in accordance with GAAP, and accompanied by a report
and unqualified audit opinion (such report and opinion not to include any going
concern qualification) (in the case of the reports under clause (i) above) or an
"other financial information report" (in the case of the reports under clause
(ii) above) of Ernst & Young LLP or other Independent Accountant selected by the
Borrower and approved by the Required Lenders;
(b) within sixty (60) days after the end of each of the first three
(3) fiscal quarters of the Borrower, both (i) the unaudited consolidated balance
sheet, consolidated statement of income and consolidated statement of cash flow,
of the Borrower and its consolidated Subsidiaries and (ii) an unaudited
consolidating balance sheet and consolidating statements of income and cash
flows which shall present separately the financial condition and results of
operations of the Borrower and its Subsidiaries (other than CPF and its
Subsidiaries) and the financial condition and results of operations of CPF and
its Subsidiaries, in the form regularly prepared by the Borrower and consistent
with the Financials, together with a certificate of the chief accounting officer
or treasurer of the Borrower stating that such financial statements fairly
present the financial condition of the Borrower and its consolidated
Subsidiaries or the Borrower and its consolidated Subsidiaries (other than CPF
and its Subsidiaries) at the dates thereof and the results of their operations
for the periods indicated (subject to normal year-end and audit adjustments and
the absence of statements of shareholders' equity and footnotes) and that such
financial statements have been prepared in conformity with GAAP consistently
applied throughout the periods involved except as otherwise disclosed in such
financial statements;
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(c) within thirty (30) days after the end of each fiscal month of
the Borrower (other than January, March, June, September and December), a copy
of the internal operating income analysis for such month and for the period from
the beginning of the current fiscal year to the end of such month, in reasonable
detail setting forth in comparative form the corresponding analysis for the same
month and same year-to-date period in the preceding fiscal year, in the form
regularly prepared by the Borrower, certified by the chief accounting officer or
treasurer of the Borrower as being a true and correct copy;
(d) at the time of delivery of the quarterly financial statements of
the Borrower pursuant to paragraph (b) above and the annual financial statements
pursuant to paragraph (a) above, a certificate, executed by the chief accounting
officer or treasurer of the Borrower, in substantially the form of Exhibit F
attached hereto (the "Compliance Certificate"), and stating that such officer
has caused this Credit Agreement to be reviewed and has no knowledge of any
default by the Borrower in the performance or observance of any of the
provisions of this Credit Agreement, during such quarter or at the end of such
year, or, if such officer has such knowledge, specifying each default and the
nature thereof, and compliance by the Borrower as of the date of such statement
with the financial covenants set forth in Article VIII hereof and the other
applicable covenants set forth in Exhibit F;
(e) within thirty (30) days after the end of each fiscal month of
the Borrower (provided, that if Availability (without giving effect to the
Resolution Block), plus the amount of the Borrower's and its Subsidiaries'
(other than any Excluded Entity's) unrestricted cash and Cash Equivalents is
less than $20,000,000, such reporting shall be done weekly), a Revolving Credit
Borrowing Base Certificate (the "Revolving Credit Borrowing Base Certificate")
in substantially the form of Exhibit G hereto, duly completed and certified by
the Borrower's chief accounting officer or treasurer, detailing, among other
things, the Borrower's Eligible Accounts Receivable as of the end of the
immediately preceding month end and the then outstanding amount of all amounts
owing by the Borrower to Persons (other than CIL) for the purchase of bananas
and plantains. In addition, within thirty (30) days after the end of each fiscal
month of the Borrower (or if such day is not a Business Day, then on the next
succeeding Business Day), the Borrower shall furnish a written report to the
Lenders setting forth (i) the accounts receivable aged trial balance at the
immediately preceding month end (along with a report reconciling accounts
receivable to the prior month's receivables aging) for each account debtor, aged
by due date; such aging reports shall indicate which Accounts are current, up to
thirty (30), thirty (30) to sixty (60) and over sixty (60) days past due and
shall list the names of all applicable account debtors and (ii) a monthly
accounts payable listing or open item listing including a report as to all
claims (which have given rise or could give rise to a trust under PACA) arising
under PACA owing by the Borrower or its Subsidiaries and a report as to all
banana and plantain supplier accruals owing by the Borrower (which report shall
include a schedule of amounts owing to CIL by the Borrower and a schedule of
amounts owed by CIL to its banana and plantain suppliers), with such listings
and reports to be in form satisfactory to the Agent. The Agent may, but shall
not be required to, rely on each Revolving Credit Borrowing Base Certificate
delivered hereunder as accurately setting forth the available Revolving Credit
Borrowing Base for all purposes of this Credit Agreement until such time as a
new Revolving Credit Borrowing Base Certificate is delivered to the Agent in
accordance herewith; Revolving Credit Borrowing Base Certificates may be
prepared and submitted to the Lenders on a more frequent basis, provided that
such certificate complies with the requirements set forth elsewhere herein;
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(f) within thirty (30) days after the end of each fiscal month of
the Borrower (it being agreed that no report shall be required for each fiscal
January and the applicable report for each fiscal February shall include
year-to-date information), a certificate executed by the person preparing such
report, in substantially the form of Exhibit F-1 attached hereto (the "Monthly
Compliance Certificate") including a report setting forth (i) the aggregate
amounts paid to CBII during such month by the Borrower and its Subsidiaries (and
the reasons therefor, including detailed information regarding payments during
such month and for the year to date) of (A) Allocated CBII Overhead, (B)
Unallocated CBII Overhead and (C) Permitted Restructuring Expenses; (ii) the
aggregate amount owing to CBII by the Borrower and its Subsidiaries as of the
last day of such month (and the reasons therefor); (iii) a detailed list of the
amounts, as of the last day of such month, of the Permitted Investments
permitted pursuant to each of clauses (iv), (vii), (ix), (x), (xi), (xii),
(xiv), (xvi) and (xvii) of the definition of Permitted Investments; (iv) a
detailed list of the amounts, as of the last day of such month, of the Permitted
Indebtedness permitted pursuant to each of clauses (b), (c), (d)(iii), (d)(vii),
(d)(viii), (d)(ix), (d)(x), (d)(xi) and (d)(xii) of the definition of Permitted
Indebtedness; (v) a list of all sales of Tropical Farms or Asset Dispositions
consummated during such month (which list shall include the names of the
applicable Subsidiaries and the purchase price received in connection
therewith), the amount of the aggregate Asset Sale Blocks and the amount of the
aggregate Farm Sale Blocks as of the last day of such month and the amount, as
of the last day of such month, of all proceeds of sales of Tropical Farms after
the Original Closing Date that have been used to make Capital Expenditures; (vi)
a report detailing all Assets Dispositions with a value not exceeding
$1,000,000, which have occurred during the prior fiscal month; (vii) a report
detailing cash receipts and related transfers through the tri-party accounts;
and (viii) a list of any sale-leaseback transactions which were completed in
such month;
(g) promptly upon receipt thereof, copies of the portions relevant
to the Borrower of all management letters and other material reports which are
prepared by its Independent Accountants in connection with any audit of the
Borrower's financial statements by such Accountants;
(h) as soon as practicable but, in any event, within ten (10)
Business Days after the issuance thereof, copies of all regular and periodic
reports which CBII or the Borrower may be required to file with the Securities
and Exchange Commission or any similar or corresponding governmental commission,
department or agency substituted therefor, or any similar or corresponding
Governmental Authority;
(i) no later than thirty (30) days after the end of the Borrower's
fiscal year during each year when this Credit Agreement is in effect, a forecast
for the current fiscal year of (i) the Borrower and its Subsidiaries which
includes projected consolidated statement of income for such fiscal year and a
projected consolidated statement of cash flows for such fiscal year and
projected consolidated balance sheets, statements of income and statements of
cash flows on a quarterly basis for such fiscal year; (ii) the Borrower and its
Subsidiaries (other than CPF and its Subsidiaries) which includes projected
consolidating statements of income for such fiscal year and a projected
consolidating statement of cash flows for such fiscal year and projected
consolidating balance sheets, statements of income and statements of cash flows
on a quarterly basis for such fiscal year; and (iii) Availability under the
Revolving Credit Borrowing Base for such fiscal year; provided that the parties
acknowledge that the information in such forecasts is
75
not compiled or presented in accordance with GAAP and may not necessarily be
presented on a basis consistent with the Borrower's financial statements to be
delivered pursuant to paragraphs (a) and (b) above;
(j) promptly and in any event within three (3) Business Days after
becoming aware of the occurrence of a Default or Event of Default, a certificate
of the chief executive officer, chief accounting officer or treasurer of the
Borrower specifying the nature thereof and the Borrower's proposed response
thereto, each in reasonable detail;
(k) promptly upon a responsible officer of Borrower obtaining
knowledge thereof, copies of all claims (which have given rise or could give
rise to a trust under PACA) filed with respect to any Credit Party under or
pursuant to PACA (or any similar statute, law, rule or regulation); and
(l) with reasonable promptness, such other data, reports or
information as the Agent or any of the Lenders may reasonably request.
7.2 [INTENTIONALLY DELETED]
7.3 CORPORATE EXISTENCE.
The Borrower and each of its Subsidiaries (other than Inactive
Subsidiaries) (a) subject to Section 9.4 hereof, will maintain their corporate
or limited liability company existence, will maintain in full force and effect
all material licenses, bonds, franchise, leases, trademarks and qualifications
to do business (provided, that an entity may cease to maintain its franchises
and qualifications to do business if it ceases to exist as a result of a
transaction permitted by Section 9.4 hereof), (b) will obtain or maintain
patents, contracts and other rights necessary to the profitable conduct of their
businesses, (c) will continue in, and limit their operations to, the same
general lines of business as that presently conducted by them and (d) will
comply with all applicable laws and regulations of any federal, state or local
Governmental Authority, except where noncompliance could not reasonably be
expected to have a Material Adverse Effect.
7.4 ERISA.
The Borrower will deliver to the Agent, at the Borrower's expense,
the following information at the times specified below:
(a) within ten (10) Business Days after the Borrower, any of its
Subsidiaries or any Controlled ERISA Affiliate knows or has reason to know that
a material Termination Event has occurred, a written statement of the chief
accounting officer of the Borrower describing such Termination Event and the
action, if any, which the Borrower or other such entities have taken, are taking
or propose to take with respect thereto, and when known, any action taken or
threatened by the Internal Revenue, DOL or PBGC with respect thereto;
(b) within ten (10) Business Days after the Borrower, any of its
Subsidiaries or any Controlled ERISA Affiliate knows or has reason to know that
a prohibited transaction (as defined in Section 406 of ERISA and Section 4975 of
the Internal Revenue Code) has occurred, a statement of the chief accounting
officer of the Borrower describing such transaction and the
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action which the Borrower or other such entities have taken, are taking or
propose to take with respect thereto;
(c) within thirty (30) Business Days after the filing thereof with
the DOL, Internal Revenue or PBGC, copies of each annual report (form 5500
series), including all schedules and attachments thereto, filed with respect to
each Benefit Plan of the Borrower, its Subsidiaries or any Controlled ERISA
Affiliate;
(d) within thirty (30) Business Days after receipt by the Borrower,
any of its Subsidiaries or any Controlled ERISA Affiliate of each actuarial
report for any Benefit Plan or Multiemployer Plan of the Borrower, its
Subsidiaries or any Controlled ERISA Affiliate and each annual report for any
such Multiemployer Plan, copies of each such report;
(e) within ten (10) Business Days prior to the filing thereof with
the Internal Revenue, a copy of any funding waiver request with respect to any
Benefit Plan of the Borrower, its Subsidiaries or any Controlled ERISA Affiliate
and within three (3) Business Days after receipt of any communications received
by the Borrower, any of its Subsidiaries or any Controlled ERISA Affiliate with
respect to such request;
(f) within ten (10) Business Days upon the occurrence thereof,
notification of any increase in the benefits of any existing Benefit Plan of the
Borrower, its Subsidiaries or any Controlled ERISA Affiliate or the
establishment of any new Benefit Plan of the Borrower, its Subsidiaries or any
Controlled ERISA Affiliate or the commencement of contributions to any Benefit
Plan to which the Borrower, any of its Subsidiaries or any Controlled ERISA
Affiliate was not previously contributing;
(g) within ten (10) Business Days after receipt by the Borrower, any
of its Subsidiaries or any Controlled ERISA Affiliate of the PBGC's intention to
terminate a Benefit Plan or to have a trustee appointed to administer a Benefit
Plan, copies of each such notice;
(h) within ten (10) Business Days after receipt by the Borrower, any
of its Subsidiaries or any Controlled ERISA Affiliate of any favorable or
unfavorable determination letter from the Internal Revenue Service regarding the
qualification of a Benefit Plan or other employee pension benefit plan intending
to qualify under section 401(a) of the Internal Revenue Code of the Borrower,
its Subsidiaries or any Controlled ERISA Affiliate under Section 401(a) of the
Internal Revenue Code, copies of each such letter;
(i) within ten (10) Business Days after receipt by the Borrower, any
of its Subsidiaries or any Controlled ERISA Affiliate of a notice regarding the
imposition of withdrawal liability under any Multiemployer Plan, copies of each
such notice;
(j) within ten (10) Business Days prior to the date the Borrower,
any of its Subsidiaries or any Controlled ERISA Affiliate intends to fail to
make a required installment or any other required payment under Section 412 of
the Internal Revenue Code on or before the due date for such installment or
payment, a notification of such failure;
(k) within ten (10) Business Days after the Borrower, any of its
Subsidiaries or any Controlled ERISA Affiliate knows (a) a Multiemployer Plan of
the Borrower, its
77
Subsidiaries or any Controlled ERISA Affiliate has been terminated, (b) the
administrator or plan sponsor of a Multiemployer Plan of the Borrower, its
Subsidiaries or any Controlled ERISA Affiliate intends to terminate any such
Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan of the Borrower,
its Subsidiaries or any Controlled ERISA Affiliate, a written statement setting
forth any such event or information;
(l) within ten (10) Business Days after the Borrower, any of its
Subsidiaries or any Controlled ERISA Affiliate knows that an ERISA Affiliate
(excluding for purposes hereof any ERISA Affiliate which is a Controlled ERISA
Affiliate) has incurred or to the best knowledge of the Borrower and its
Subsidiaries, could reasonably be expected to incur, any liability under ERISA,
the Internal Revenue Code, or any other law applicable to Benefit Plans that has
had or could reasonably be expected to have a Material Adverse Effect, a
statement of the chief accounting officer of the Borrower describing such
transaction and the action which the Borrower or other such entities have taken,
are taking or propose to take with respect thereto; and
(m) within thirty (30) days after receipt by the Borrower or any of
its Subsidiaries of each actuarial report for any Retiree Health Plan of
Borrower or any of its Subsidiaries, copies of each such report.
For purposes of this Section 7.4, the Borrower, any of its
Subsidiaries and any Controlled ERISA Affiliate shall be deemed to know all
facts known by the administrator of any Benefit Plan of which such entity is
then the plan sponsor.
The Borrowers will establish, maintain and operate all Benefit Plans
of the Borrower, of its Subsidiaries or any Controlled ERISA Affiliate to comply
in all material respects with the provisions of ERISA, the Internal Revenue
Code, and all other applicable laws, and the regulations and interpretations
thereunder other than to the extent that the Borrower is in good faith
contesting by appropriate proceedings the validity or implication of any such
provision, law, rule, regulation or interpretation.
7.5 PROCEEDINGS OR ADVERSE CHANGES.
The Borrower will as soon as practicable, and in any event within
thirty (30) Business Days after the Borrower learns of the following, give
written notice to the Agent of any proceeding(s) being instituted or threatened
in writing to be instituted by or against the Borrower or any of its
Subsidiaries in any federal, state, local or foreign court or before any
commission or other regulatory body (federal, state, local or foreign) that is
reasonably likely to expose Borrower or any of its Subsidiaries to liability in
excess of $2,500,000 (without regard to whether any or all of such amount is
covered by insurance). The Borrower will as soon as possible, and in any event
within five (5) Business Days after the Borrower learns of the following, give
written notice to the Agent of any Material Adverse Change. Provision of any
such notice by the Borrower will not constitute a waiver or excuse of any
Default or Event of Default occurring as a result of such changes or events.
78
7.6 ENVIRONMENTAL MATTERS.
The Borrower will conduct its business and the businesses of each of
its Subsidiaries so as to comply in all material respects with all environmental
laws, regulations, directions and ordinances in all applicable jurisdictions
including, without limitation, environmental land use, occupational safety or
health laws, regulations, directions, ordinances, requirements or permits in all
applicable jurisdictions, except to the extent that the Borrower or any of its
Subsidiaries is contesting, in good faith by appropriate legal proceedings, any
such law, regulation, direction, ordinance or interpretation thereof or
application thereof; provided, further, that the Borrower and each of its
Subsidiaries will comply with the order of any court or other governmental body
of the applicable jurisdiction relating to such laws unless the Borrower or its
Subsidiaries shall currently be prosecuting an appeal or proceedings for review
and shall have secured a stay of enforcement or execution or other arrangement
postponing enforcement or execution pending such appeal or proceedings for
review. If the Borrower or any of its Subsidiaries shall (a) receive notice that
any violation of any federal, state or local environmental law, regulation,
direction or ordinance may have been committed or is about to be committed by
the Borrower or any of its Subsidiaries except where such violation could not
reasonably be expected to have a Material Adverse Effect, (b) receive notice
that any administrative or judicial complaint or order has been filed or is
about to be filed against the Borrower or any of its Subsidiaries alleging
violations of any federal, state or local environmental law, regulation,
direction or ordinance requiring the Borrower or any of its Subsidiaries to take
any action in connection with the release of toxic or hazardous substances into
the environment where the cost of taking any such action is reasonably likely to
exceed $500,000 or (c) receive any notice from a federal, state, or local
governmental agency or private party alleging that the Borrower or any of its
Subsidiaries may be liable or responsible for costs associated with a response
to or cleanup of a release of a toxic or hazardous substance into the
environment or any damages caused thereby except where such liability could not
reasonably be expected to have a Material Adverse Effect, the Borrower will
provide the Agent with a copy of such notice within forty-five (45) days after
the receipt thereof by the Borrower or any of its Subsidiaries. Within
forty-five (45) days after the Borrower learns of the enactment or promulgation
of any federal, state or local environmental law, regulation, direction,
ordinance, criteria or guideline which could reasonably have a Material Adverse
Effect, the Borrower will provide the Agent with notice thereof. The Borrower
will promptly take all actions necessary to prevent the imposition of any Liens
on any of its properties arising out of or related to any environmental matters.
At the time that the Agent learns of any environmental condition or occurrence
at any property of the Borrower, which environmental condition or occurrence has
or could reasonably be expected to have a Material Adverse Effect, the Agent may
request, and at the sole cost and expense of the Borrower, the Borrower will
retain, an environmental consulting firm, satisfactory to the Agent in its
commercially reasonable judgment, to conduct an environmental review and audit
of such affected property and promptly provide to the Agent and each Lender a
copy of any reports delivered in connection therewith.
7.7 BOOKS AND RECORDS; INSPECTION.
(a) The Borrower will, and will cause each of its Subsidiaries to,
maintain books and records pertaining to their property and assets in such
detail, form and scope as is consistent with good business practice.
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(b) The Borrower agrees that the Agent or its agents may enter upon
the premises of the Borrower or any of its Subsidiaries at any time and from
time to time, during normal business hours, and at any time at all on and after
the occurrence of an Event of Default which continues beyond the expiration of
any grace or cure period applicable thereto, and which has not otherwise been
waived by the Agent, for the purpose of (a) enabling the Agent's internal
auditors to conduct quarterly field examinations at the Borrower's expense (such
expense to include amounts specified in Section 14.8), (b) inspecting the
Collateral, (c) inspecting and/or copying (at Borrowers' expense) any and all
records pertaining thereto, (d) discussing the affairs, finances and business of
the Borrower with any officers and employees of the Borrower, (e) discussing the
affairs, finances and business of the Borrower with the Independent Accountant,
but only so long as the Agent has provided prior notice to the Borrower and the
discussions with the Independent Accountant are reasonable in scope and
frequency and (f) verifying Eligible Accounts Receivable. The Lenders, in the
reasonable discretion of the Agent, may accompany the Agent at their sole
expense in connection with the foregoing inspections. The Borrower agrees to
afford the Agent thirty (30) days prior written notice of any change in the
location of any Collateral (other than Inventory held for shipment by third
Persons, Inventory and equipment in transit, Inventory held for processing by
third Persons or immaterial quantities of assets, equipment or Inventory) or in
the location of its chief executive office or place of business from the
locations specified in Schedule 6.7, and to execute in advance of such change,
cause to be filed and/or delivered to the Agent any financing statements or
other documents required by the Agent, all in form and substance satisfactory to
the Agent. The Borrower agrees to furnish any Lender with such other information
regarding its business affairs and financial condition as such Lender may
reasonably request from time to time.
7.8 COLLATERAL RECORDS.
The Borrower will, and will cause each Borrower Entity to, execute
and deliver to the Agent, from time to time, solely for the Agent's convenience
in maintaining a record of the Collateral, such written statements and schedules
as the Agent may reasonably require, including without limitation those
described in Section 7.1 of this Credit Agreement, designating, identifying or
describing the Collateral. The Borrower's or any Borrower Entity's failure,
however, to promptly give the Agent such statements or schedules shall not
affect, diminish, modify or otherwise limit the Lenders' security interests in
the Collateral. The Borrower agrees to maintain such books and records regarding
Accounts and the other Collateral as the Agent may reasonably require, and
agrees that such books and records will reflect the Lenders' interest in the
Accounts and such other Collateral.
7.9 SECURITY INTERESTS.
The Borrower will, and will cause each Borrower Entity to, defend
the Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein. The Borrower agrees to, and will
cause each Borrower Entity to, comply with the requirements of all state and
federal laws in order to grant to the Lenders valid and perfected first security
interest in the Collateral subject only to Permitted Liens. The Agent is hereby
authorized by each Borrower Entity to file any financing statements covering the
Collateral whether or not any Borrower Entity's signature appears thereon. The
Borrower agrees to, and will cause each Borrower Entity to, do whatever the
Agent may reasonably request, from time to
80
time, by way of: filing notices of liens, financing statements, fixture filings
and amendments, renewals and continuations thereof; cooperating with the Agent's
custodians; keeping stock records; obtaining waivers from landlords and
mortgagees and from warehousemen, fillers, processors and packers and their
respective landlords and mortgagees; paying claims, which might if unpaid,
become a Lien (other than a Permitted Lien) on the Collateral; assigning its
rights to the payment of Accounts pursuant to the Assignment of Claims Act of
1940, as amended (31 U.S.C. Section 3727 et. seq.) (the failure of which to so
assign will permit the Agent to exclude such accounts from the Revolving Credit
Borrowing Base); and performing such further acts as the Agent may reasonably
require in order to effect the purposes of this Credit Agreement and the other
Credit Documents. Any and all fees, costs and expenses of whatever kind and
nature (including any Taxes, reasonable attorneys' fees or costs for insurance
of any kind), which the Agent may incur with respect to the Collateral or the
Obligations: in filing public notices; in preparing or filing documents; making
title examinations or rendering opinions; in protecting, maintaining, or
preserving the Collateral or its interest therein; in enforcing or foreclosing
the Liens hereunder, whether through judicial procedures or otherwise; or in
defending or prosecuting any actions or proceedings arising out of or relating
to its transactions with any Borrower Entity under this Credit Agreement or any
other Credit Document, will be borne and paid by the Borrower. If the same are
not promptly paid by the Borrower, the Agent may pay the same on the Borrower's
behalf, and the amount thereof shall be an Obligation secured hereby and due to
the Agent on demand.
7.10 INSURANCE; ASSET LOSS.
The Borrower will, and will cause each of its Subsidiaries to,
maintain third party liability insurance and replacement value property
insurance on their assets under such policies of insurance, with such insurance
companies, in such amounts and covering such risks as are consistent with
industry practices and consistent with the insurance described on Schedule 6.32.
All such policies (other than to the extent they relate solely to one or more
Excluded Entities) are to name the Borrower, the Agent and the Lenders as
additional insureds on liability policies and the Agent and the Borrower as loss
payees in case of property loss, as their interests may appear, and are to
contain such other provisions as the Agent may reasonably require to fully
protect the Agent's interest in the assets of the Borrower and its Subsidiaries
and to any payments to be made under such policies. True copies of all original
insurance policies or certificates of insurance evidencing such insurance
covering the assets of the Borrower and its Subsidiaries are to be delivered to
the Agent, to the extent such policies or certificates have not been previously
delivered to the Agent, on or prior to the Closing Date, premium prepaid, with
(other than to the extent they relate solely to one or more Excluded Entities)
the loss payable endorsement in the Agent's favor, and shall provide for not
less than ten (10) days prior written notice to the Agent, of the exercise of
any right of cancellation. In the event the Borrower or any of its Subsidiaries
fail to respond in a timely and appropriate manner with respect to collecting
under any insurance policies required to be maintained under this Section 7.10,
the Agent shall have the right, in the name of the Agent, the Borrower or any of
its Subsidiaries, to file claims under such insurance policies, to receive and
give acquittance for any payments that may be payable thereunder, and to execute
any and all endorsements, receipts, releases, assignments, reassignments or
other documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies. The Borrower will,
and will cause each Subsidiary to, provide written notice to the Lenders of the
occurrence of any of the following events within
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fifteen (15) Business Days after the end of any quarter in which the Borrower's
risk management department learns (or should reasonably have learned) of the
occurrence of such event: any asset or property owned or used by the Borrower or
any of its Subsidiaries that has an estimated replacement value equal to or
greater than $500,000 is (i) materially damaged or destroyed, or suffers any
other loss or (ii) is condemned, confiscated or otherwise taken, in whole or in
part, or the use thereof is otherwise diminished so as to render impracticable
or unreasonable the use of such asset or property for the purpose to which such
asset or property were used immediately prior to such condemnation, confiscation
or taking, by exercise of the powers of condemnation or eminent domain or
otherwise, and in either case amount of the damage, destruction, loss or
diminution in value of the assets of the Borrower and its Subsidiaries is in
excess of, in the aggregate for the Borrower and all of its Subsidiaries,
$2,000,000 in any fiscal year of the Borrower (any such damage, destruction,
loss or diminution in value of the Collateral is referred to herein as an "Asset
Loss"). The Borrower will, and will cause each Subsidiary to, diligently file
and prosecute its claim or claims for any award or payment in connection with an
Asset Loss. In the event of an Asset Loss, the Borrower will, and will cause
each Subsidiary (other than an Excluded Entity) to, pay to the Agent, promptly
upon receipt thereof, any and all insurance proceeds and payments received by a
Subsidiary on account of damage, destruction or loss of all or any portion of
the assets of the Borrower or its Subsidiaries (other than an Excluded Entity)
to which the Agent is entitled. The Agent's right to retain such insurance
proceeds is subject to (i) the limitations set forth in the definition of Asset
Loss, and until there is an Asset Loss and unless an Event of Default shall have
occurred and be continuing, the Agent shall pay to Borrower (or as directed by
Borrower) any such insurance proceeds to which Borrower is entitled and (ii) the
rights of any lessor or secured creditor senior to Agent, if the underlying
obligation is permitted by this Credit Agreement. The Agent may, with the
consent of the Required Lenders, either (a) apply the proceeds realized from
Asset Losses, as set forth in Section 2.3(b) or (b) pay such proceeds to the
Borrower or the applicable Subsidiary to be used to repair, replace or rebuild
the asset or property or portion thereof that was the subject of the Asset Loss.
After the occurrence and during the continuance of an Event of Default, (i) no
settlement on account of any such Asset Loss (other than those of an Excluded
Entity) shall be made without the consent of the Lenders and (ii) the Agent may
participate in any such proceedings and the Borrower will, and will cause each
applicable Subsidiary to, deliver to the Agent such documents as may be
requested by the Agent to permit such participation and will consult with the
Agent, its attorneys and agents in the making and prosecution of such claim or
claims. The Borrower and each Subsidiary (other than an Excluded Entity) hereby
irrevocably authorizes and appoints the Agent its attorney-in-fact, after the
occurrence and continuance of an Event of Default, to collect and receive for
any such award or payment and to file and prosecute such claim or claims, which
power of attorney shall be irrevocable and shall be deemed to be coupled with an
interest, and the Borrower shall, and will cause each such Subsidiary to, upon
demand of the Agent, make, execute and deliver any and all assignments and other
instruments sufficient for the purpose of assigning any such award or payment to
the Agent for the benefit of the Lenders, free and clear of any encumbrances of
any kind or nature whatsoever.
7.11 TAXES.
The Borrower will, and will cause each of the Subsidiaries to, pay,
when due and in any event prior to delinquency, all Taxes lawfully levied or
assessed against the Borrower, any of its Subsidiaries or any of the Collateral;
provided, however, that unless such Taxes have
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become a federal tax Lien or ERISA Lien on any of the assets of the Borrower or
any Subsidiary, no such Tax need be paid if the same is being contested in good
faith, by appropriate proceedings promptly instituted and diligently conducted
and if an adequate reserve or other appropriate provision shall have been made
therefor as required in order to be in conformity with GAAP.
7.12 COMPLIANCE WITH LAWS.
The Borrower will, and will cause each of its Subsidiaries to,
comply with all acts, rules, regulations, orders, and ordinances of any
legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof, or to the operation of its business, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
7.13 USE OF PROCEEDS.
Subject to the terms and conditions hereof, the proceeds of any
Loans made hereunder shall be used by the Borrower solely for the financing of
working capital and the financing of capital expenditures for food-related
businesses (other than the fresh or processed meat business); provided, however,
that in any event, no portion of the proceeds of any such advances shall be used
by the Borrower for the purpose of purchasing or carrying any "margin stock" (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
or for any other purpose which violates the provisions or Regulation T, U or X
of said Board of Governors or for any other purpose in violation of any
applicable statute or regulation, or of the terms and conditions of this Credit
Agreement.
7.14 FISCAL YEAR.
The Borrower agrees that it will give the Agent at least forty-five
(45) days' prior written notice of any change in its fiscal year from a year
ending December 31.
7.15 NOTIFICATION OF CERTAIN EVENTS.
The Borrower agrees that it will promptly notify the Agent of the
occurrence of any of the following events:
(a) any Material Contract of the Borrower or any of its Subsidiaries
is terminated or amended in any material adverse respect or any new Material
Contract is entered into (in which event the Borrower shall provide the Agent
with a copy of such Material Contract); or
(b) any of the terms upon which suppliers to the Borrower or any of
its Subsidiaries do business with the Borrower or any of its Subsidiaries are
changed or amended in any respect which has or could reasonably be expected to
have a Material Adverse Effect; or
(c) any order, judgment or decree in excess of $2,500,000 shall have
been entered against the Borrower or any of its Subsidiaries or any of their
respective properties or assets, or
83
(d) any written notification of violation of any law or regulation
or any inquiry with respect thereto shall have been received by the Borrower or
any of its Subsidiaries from any local, state, federal or foreign Governmental
Authority or agency which violation could reasonably be expected to have a
Material Adverse Effect.
7.16 ADDITIONAL SUBSIDIARIES; INACTIVE SUBSIDIARIES.
Promptly, and in any event within two (2) Business Days, upon any
Person becoming a direct or indirect Subsidiary of the Borrower or upon any
Subsidiary which was an Inactive Subsidiary ceasing to be an Inactive
Subsidiary, the Borrower will provide the Agent with written notice thereof
setting forth information in reasonable detail describing all of the assets of
such Person and shall, to the extent consistent with the documentation requested
or required prior to such time, (a) cause such Person to execute a Joinder
Agreement in substantially the same form as Exhibit J hereto, (b) cause such
Person to pledge all of its assets of the type included in the Collateral to the
Agent pursuant to a security agreement in substantially the form of the Security
Agreement and otherwise in a form acceptable to the Agent, (c) cause such Person
to execute and deliver such other documents as the Agent reasonably requests and
(d) execute and deliver such other documentation as the Agent may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, Acknowledgment Agreements, certified
resolutions and other organizational and authorizing documents of such Person
and favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to above), all in form, content and scope reasonably
satisfactory to the Agent.
7.17 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.
In furtherance of the continuing assignment and security interest in
the Accounts of the Borrower granted pursuant to the Security Agreement, upon
the creation of Accounts, the Borrower will execute and deliver to the Agent in
such form and manner as the Agent may require, solely for its convenience in
maintaining records of collateral, such confirmatory schedules of Accounts, and
other appropriate reports designating, identifying and describing the Accounts
as the Agent may require. In addition, upon the Agent's reasonable request, the
Borrower will provide the Agent with copies of agreements with, or purchase
orders from, the customers of the Borrower and CBCNA and copies of invoices to
customers, proof of shipment or delivery and such other documentation and
information relating to said Accounts and other collateral as the Agent may
require. Failure to provide the Agent with any of the foregoing shall in no way
affect, diminish, modify or otherwise limit the security interests granted
herein. The Borrower hereby authorizes the Agent to regard the Borrower's or any
of its Subsidiaries' printed name or rubber stamp signature on assignment
schedules or invoices as the equivalent of a manual signature by the Borrower's
or such Subsidiaries' authorized officers or agents.
7.18 COLLECTION OF ACCOUNTS.
(a) Other than amounts received in the cafeteria and from the sale
of promotional items to employees at the Borrower's corporate headquarters and
other similar de minimus amounts which are deposited in an account at Firstar
Bank, N.A. in Cincinnati, Ohio,
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all proceeds of Collateral in the United States and Canada and all proceeds of
Accounts shall be directed to one or more lockboxes which are subject to
tri-party agreements between the Agent, the applicable Credit Party and
applicable bank or to an Agent Bank Account. All amounts received in such
lockboxes shall be deposited into a bank account in the Agent's name (or with
respect to accounts at Bank of America, N.A., in the Borrower's name for the
benefit of the Agent) (each an "Agent Bank Account") and the Borrower shall, and
shall cause each of its domestic Subsidiaries to, cause all amounts that it
receives from any source to be deposited into an Agent Bank Account. The Agent
agrees that, unless Availability (without giving effect to the Resolution Block)
(plus the amount of unrestricted cash and Cash Equivalents of the Borrower and
its Subsidiaries' (other than any Excluded Entity) shall fall below $20,000,000
or a Default or an Event of Default has occurred, the Agent shall not deliver a
notice to cause funds in any of the applicable accounts to be sent to any
account of the Agent or any of its Affiliates.
(b) Any checks, cash, notes or other instruments or property
received by the Borrower or any of its Subsidiaries with respect to any Accounts
shall be held by the Borrower or any of its Subsidiaries in trust for the
benefit of the Lenders, separate from the Borrower's or Subsidiary's own
property and funds, and immediately turned over to the Agent or deposited in
lockbox accounts under the dominion and control of the Agent, with proper
assignments or endorsements. No checks, drafts or other instruments received by
the Agent shall constitute final payment unless and until such instruments have
actually been collected. The Agent on behalf of the Lenders shall have sole
dominion and control over the domestic bank accounts of the Credit Parties
subject to the limited rights of deposit and withdrawal granted to the Credit
Parties pursuant to the lockbox letters delivered to the lockbox banks.
7.19 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.
In addition to the reports required pursuant to Section 7.1, the
Borrower will notify the Agent promptly of any matters materially affecting the
value, enforceability or collectability of any Account, and of all material
customer disputes, offsets, defenses, counterclaims, returns and rejections, and
all reclaimed or repossessed merchandise or goods, provided, however, that such
notice shall only be required as to any such matter that affects Accounts
outstanding at any one time from any account debtor, which affected Accounts
have a value greater than $500,000. The Borrower will issue credit memoranda
promptly (with duplicates to the Agent upon its request for same) upon accepting
returns or granting allowances, and may continue to do so until the occurrence
of an Event of Default which continues beyond the expiration of the applicable
grace or cure period, or which has not otherwise been waived by the Required
Lenders. After the occurrence and during the continuance of an Event of Default,
the Borrower agrees that all returned, reclaimed or repossessed merchandise or
goods shall be set aside by the Borrower, marked with the Lenders' name and held
by the Borrower for the Lenders' account as owner and assignee.
7.20 ACKNOWLEDGMENT AGREEMENTS.
The Borrower will assist the Agent in obtaining executed
Acknowledgment Agreements from each of the warehousemen, processors, packers,
fillers, landlords and mortgagees with whom the Borrower conducts business from
time to time.
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7.21 TRADEMARKS ETC.
The Borrower will do and cause to be done all things necessary to
preserve and keep in full force and effect all registrations of trademarks,
service marks and other marks, trade names or other trade rights which
registrations are of value to the Borrower or any of its Subsidiaries (other
than those which are, individually and in the aggregate, of de minimus value).
7.22 MAINTENANCE OF PROPERTY.
The Borrower will, and will cause each of its Subsidiaries to, keep
all property necessary to its respective business in good working order and
condition (ordinary wear and tear excepted) in accordance with their past
operating practices and not to commit or suffer any waste with respect to any of
its properties, except for properties which either individually or in the
aggregate are not material.
7.23 [INTENTIONALLY DELETED]
7.24 REVISIONS OR UPDATES TO SCHEDULES.
If any of the information or disclosures provided on any of
Schedules 6.7, 6.8, 6.9, 6.15, 6.18 or 6.29, originally attached hereto become
outdated or incorrect in any material respect, the Borrower shall deliver to the
Agent and the Lenders as part of the compliance certificate required pursuant to
Section 7.1(d) (or earlier if the Borrower so elects) such revision or updates
to such Schedule(s) as may be necessary or appropriate to update or correct such
Schedule(s) which revisions shall be effective from the date accepted in writing
by the Agent, such acceptance not to be unreasonably withheld or delayed;
provided, that no such revisions or updates to any such Schedule(s) shall be
deemed to have cured any breach of warranty or misrepresentation occurring prior
to the delivery of such revision or update by reason of the inaccuracy or
incompleteness of any such Schedule(s) at the time such warranty or
representation previously was made or deemed to be made.
7.25 [INTENTIONALLY DELETED]
7.26 COMPLIANCE WITH PACA.
The Borrower shall, and shall cause each Borrower Entity to:
(a) Comply with all applicable provisions of PACA, including,
without limitation, those governing trust formation and prompt repayment.
(b) Maintain written records pertaining to perishable agricultural
commodities and by-products in its possession to which a constructive trust
under PACA is applicable.
All terms used in this Section 7.26 and defined in PACA shall have the meanings
ascribed to such terms therein.
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7.27 COVENANTS RELATING TO FOOD SECURITY ACT.
The Borrower shall, and shall cause each Borrower Entity to:
(a) Promptly provide the Agent with a copy of any notice received by
the Borrower with respect to a security interest created by a seller of farm
products.
(b) With respect to any farm products produced in a state with a
central filing system, register with the secretary of state of such state prior
to the purchase of such farm products.
All terms used in this Section 7.27 and defined in the Food Security Act shall
have the meanings ascribed to such terms therein.
7.28 PAYMENT FOR PERISHABLE GOODS.
(a) The Borrower shall pay, not later than one (1) Business Day
prior to the date required for payment therein, any outstanding invoices for
perishable agricultural commodities purchased from any vendor other than an
Affiliate; provided, however, that in the event that any such invoice requires
payment upon delivery, payment shall be made on such date of delivery, provided,
further, however, that any such invoices which require payment upon delivery may
be paid at a later date up to thirty (30) days after delivery of such
commodities so long as the Borrower has provided evidence satisfactory to the
Agent of prior course of dealing with any existing or current vendor and for all
vendors carried out in accordance with standard industry practices or the
Borrower has obtained a waiver of the vendors' rights under PACA.
Notwithstanding anything to the contrary contained in this Section 7.28(a),
neither Borrower nor any Subsidiary shall be obligated to pay amounts on any
invoice with respect to which Borrower or such Subsidiary has a bona fide
dispute concerning payment for any reason, including, without limitation,
quality of the perishable commodities received, quantity of the perishable
commodities received, or compliance of the perishable commodities received with
applicable rules and regulations.
(b) The Borrower shall pay, in the event that written notification
other than on an invoice is received from any vendor of perishable agricultural
commodities of its intent to enforce its rights under Section 5 of PACA, or to
establish a federal statutory lien or trust under the Food Security Act, the
related invoice within one (1) Business Day of receipt and promptly notify the
Agent of such receipt; provided, however, that such invoice may remain unpaid
if, and only so long as, (i) appropriate legal or administrative action has been
commenced and is being diligently pursued or defended by the Borrower, (ii) the
ability of the vendor to pursue any rights or enforce any liens or trusts
provided under PACA has been stayed or is otherwise legally prohibited during
the pendency of such action or the benefits of Section 5 of PACA are not
available to such vendor and (iii) the Agent shall have established a reserve
against the Revolving Credit Borrowing Base in an amount at least equal to the
amount claimed to be due by such vendor under the relevant invoice.
Notwithstanding anything to the contrary contained in this Section 7.28(b),
neither Borrower nor any Subsidiary shall be obligated to pay the full amount of
any invoice which is subject to offset by Borrower or such Subsidiary pursuant
to Section 46.46(e)(4) of the regulations promulgated under PACA. This Section
7.28 should not
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be construed to impose a responsibility on Borrower or any of its Subsidiaries
to pay to the vendor or report to the Agent any informal or formal complaints
received by Borrower or any such Subsidiary under PACA; instead, this Section
7.28 should be construed to impose such responsibilities only in the event a
formal claim under a statutory trust under Section 5 of PACA is made by a
vendor.
ARTICLE VIII.
FINANCIAL COVENANTS
Until termination of this Credit Agreement and the Commitments
hereunder and payment and satisfaction of all Obligations due or to become due
hereunder, the Borrower agrees that, unless the Required Lenders shall have
otherwise consented in writing:
8.1 LEVERAGE RATIO.
The Borrower and its consolidated Subsidiaries (other than CPF and
its Subsidiaries) shall have a Leverage Ratio, as of the end of each fiscal
quarter of the Borrower of no greater than 2.65:1.00.
8.2 FIXED CHARGE COVERAGE RATIO.
The Borrower and its consolidated Subsidiaries (other than CPF and
its Subsidiaries) shall have a Fixed Charge Coverage Ratio (tested quarterly),
of at least 1.00:1.00 for the four (4) fiscal quarter period then ended.
8.3 CAPITAL EXPENDITURES.
The Borrower shall not, and shall not permit its Subsidiaries (other
than CPF and its Subsidiaries) to, make or commit to make Consolidated Capital
Expenditures in an aggregate amount in excess of the amounts set forth below,
for the following fiscal years:
Fiscal Year Capital Expenditures Limit
----------- --------------------------
2002 $50,000,000
2003 - and each fiscal $55,000,000
year thereafter
provided, however, that (a) the amount expended in any fiscal year for any
Permitted Acquisition shall not reduce the Capital Expenditure limit for such
fiscal year and (b) the proceeds of any property loss under any insurance policy
applied to replace or rebuild any such affected property shall not be included
in the calculation of Consolidated Capital Expenditures for the purpose of
determining compliance with this Section 8.3.
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8.4 EBITDA.
The Borrower and its consolidated Subsidiaries (other than CPF and
its Subsidiaries) shall have Consolidated EBITDA of at least (i) $126,000,000
for the four (4) fiscal quarter period ending March 31, 2002; (ii) $130,000,000
for the four (4) fiscal quarter period ending June 30, 2002; (iii) $135,000,000
for the four (4) fiscal quarter period ending September 30, 2002; (iv)
$140,000,000 for the four (4) fiscal quarter period ending December 31, 2002;
and (v) $150,000,000 for the four (4) fiscal quarter period ending on each
fiscal quarter thereafter.
8.5 ▇▇▇▇▇▇▇▇ FRESH LATIN AMERICAN GROUP.
(a) The Borrower shall not permit the aggregate amount of cash and
Cash Equivalents owned or maintained by Persons which are members of the
▇▇▇▇▇▇▇▇ Fresh Latin American Group to exceed $10,000,000 at any time, provided
that such members may own or maintain up to $20,000,000 of cash and Cash
Equivalents from time to time for a period not to exceed two (2) Business Days.
(b) The Borrower shall not permit Persons which are members of the
▇▇▇▇▇▇▇▇ Fresh Latin American Group to make or commit to make Capital
Expenditures in an aggregate amount for all of the Persons which are members of
the ▇▇▇▇▇▇▇▇ Fresh Latin American Group in excess of (i) $25,000,000 during
fiscal year 2002; (ii) $30,000,000 during fiscal year 2003; and (iii)
$30,000,000 during fiscal year 2004; provided, however, that the proceeds of any
property loss under any insurance policy applied to replace or rebuild any such
affected property shall not be included in the calculation of Capital
Expenditures for the purpose of determining compliance with this Section 8.5.
ARTICLE IX.
NEGATIVE COVENANTS
Until termination of the Credit Agreement and the Commitments
hereunder and payment and satisfaction of all Obligations due or to become due
hereunder, the Borrower agrees that, unless the Required Lenders shall have
otherwise consented in writing, it will not, and will not permit any of the
Subsidiaries to:
9.1 RESTRICTIONS ON LIENS.
Mortgage, assign, pledge or otherwise permit any Lien (whether as a
result of a purchase money or title retention transaction, or other security
interest, or otherwise) to exist on any of its assets or properties, whether
real, personal or mixed, whether now owned or hereafter acquired, except for
Permitted Liens; provided, that this covenant shall not apply to an Excluded
Entity to the extent complying with this covenant would cause a breach or
default of any agreement relating to borrowed money to which such Excluded
Entity is a party.
9.2 RESTRICTIONS ON INDEBTEDNESS.
Incur, create or suffer to exist any Indebtedness other than
Permitted Indebtedness.
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9.3 RESTRICTIONS ON TRANSFER OF ASSETS.
Sell, lease, assign, transfer or otherwise dispose of any assets
(including Intellectual Property and the Capital Stock of any Subsidiary of the
Borrower) other than:
(a) sales of Inventory in the ordinary course of business,
(b) sale-leaseback transactions (involving assets other than
Proprietary Rights), when the applicable selling entity receives fair market
value for the sale and which are permitted by Section 9.13,
(c) transfers (other than of Proprietary Rights) to a Secured Credit
Party,
(d) sales in the ordinary course of business, when the applicable
selling entity receives fair market value for the sale of (i) assets or
properties (other than Inventory, Proprietary Rights or Capital Stock of any
Subsidiary of the Borrower) used in the Borrower's or a Subsidiary's business
that are worn out or (ii) the Capital Stock of a Subsidiary, if such Subsidiary
owns only assets which are worn out, (it being agreed that (x) the Net Cash
Proceeds of each such sale of worn out assets or Subsidiary shall be paid to the
Agent and (A) applied to repay outstanding Revolving Loans (and if such Net Cash
Proceeds are so applied, a block against Revolving Loans and Letters of Credit
(an "Asset Sale Block") in the amount so applied shall be put in place) and (B)
to the extent there are not sufficient outstanding Revolving Loans then
outstanding, held by the Agent as Collateral (provided, however, that if the
applicable sale was made by a Subsidiary which is not a Person organized under
the laws of the United States of America (or a political subdivision thereof)
and the Borrower in good faith believes that paying such Net Cash Proceeds to
the Agent would expose the Borrower to tax liabilities that the Borrower would
not otherwise have, as long as Availability is, at the time of the receipt of
such Net Cash Proceeds by the Borrower or the applicable Subsidiary, at least
equal to the amount of such Net Cash Proceeds (and the Borrower delivers a
written statement representing and warranting to the Agent and the Lenders that
each of such conditions then exist), the Borrower does not need to pay such Net
Cash Proceeds to the Agent (and an Asset Sale Block will then be put in place in
the amount of such Net Cash Proceeds)) and (y) as long as no Event of Default
then exists or would be caused thereby, the Agent shall release the applicable
Asset Sale Block or the applicable funds it then holds as Collateral pursuant to
this clause (d) to the Borrower or the applicable Subsidiary upon a written
request (received by the Agent within one hundred twenty (120) days of the
applicable sale) from the Borrower requesting that such Asset Sale Block or
funds be promptly released by the Agent and representing and warranting to the
Agent and the Lenders that the applicable funds are going to be used promptly
upon such release or receipt thereof by the Borrower or the applicable
Subsidiary to purchase assets to replace the applicable worn out assets),
(e) sales, made while no Default or Event of Default has occurred
and is continuing and as long as no Default or Event of Default would result
therefrom, of (i) assets (other than Accounts, Proprietary Rights, general
intangibles or Tropical Farms (or equity interests in Persons which own only
Tropical Farms)) that are no longer needed or useful in such Person's operations
or (ii) the Capital Stock of a Subsidiary, if such Subsidiary is, or owns only
assets which are, no longer needed or useful in such Person's operations, as
long as (i) at least
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seventy-five percent (75%) of the consideration received by the Borrower and its
Subsidiaries is in the form of cash and Cash Equivalents, (ii) the aggregate
consideration (including assumed debt) for all such sales after the Original
Closing Date does not exceed $20,000,000, (iii) the assets or Subsidiary so sold
after the Original Closing Date will not have contributed Consolidated EBITDA,
over the four fiscal quarter period ending prior to the date of such sale,
exceeding five percent (5%) of the Consolidated EBITDA as of December 31, 2000,
(iv) the Borrower can demonstrate that had such sale occurred immediately prior
to the then most recently completed four fiscal quarter period, the Borrower
would have been in compliance with the financial covenants set forth herein, and
(v) the Borrower delivers a certificate executed by an authorized officer of the
Borrower representing and warranting to the Agent and the Lenders that the
conditions set forth in clauses (i) through (iv) of this clause (e) have been
satisfied or complied with and that the applicable transferring entity received
fair market value for the applicable assets,
(f) sales, made while no Default or Event of Default has occurred
and is continuing and as long as no Default or Event of Default would result
therefrom, of the assets set forth on Schedule 9.3 (which schedule shall also
indicate the minimum amount of the Loans that shall be repaid upon the sale of
such assets) and which are made on a basis where the selling entity receives
fair market value for the sale,
(g) dispositions by Excluded Entities,
(h) sales, made while no Default or Event of Default has occurred
and is continuing and as long as no Default or Event of Default would result
therefrom, of Tropical Farms (and equity interests in Persons which own only
Tropical Farms) in the ordinary course of business as long as (i) no single sale
(or series of related sales) is of property with a fair market value of greater
than $5,000,000, (ii) all of such sales made after the Original Closing Date do
not involve sales of property which produced bananas and plantains in an amount
in excess of ten percent (10%) of the bananas and plantains sold by the Borrower
and its Subsidiaries (to Persons other than the Borrower or a Subsidiary) during
the then most recently completed fiscal year of the Borrower (it being agreed
that if a particular sale is permitted at the time it was made, it shall be
permitted at all times thereafter) and (iii) the Borrower delivers a certificate
executed by an authorized officer of the Borrower representing and warranting to
the Agent and the Lenders that the conditions set forth in clauses (i) and (ii)
of this clause (h) have been satisfied or complied with and that the applicable
selling entity received fair market value for the applicable Tropical Farm (it
being agreed that (x) the Net Cash Proceeds of each such sale of a Tropical Farm
shall be paid to the Agent and (A) applied to repay outstanding Revolving Loans
(and if such Net Cash Proceeds are so applied, a block against Revolving Loans
and Letters of Credit (a "Farm Sale Block") in the amount so applied shall be
put in place) and (B) to the extent there are not sufficient outstanding
Revolving Loans then outstanding, held by the Agent as Collateral (provided,
however, that if the Borrower in good faith believes that paying such Net Cash
Proceeds to the Agent would expose the Borrower to tax liabilities that the
Borrower would not otherwise have, as long as Availability is, at the time of
the receipt of such Net Cash Proceeds by the Borrower or the applicable
Subsidiary, at least equal to the amount of such Net Cash Proceeds (and the
Borrower delivers a written statement representing and warranting to the Agent
and the Lenders that each of such conditions then exists), the Borrower does not
need to pay such Net Cash Proceeds to the Agent (and a Farm Sale Block will then
be put in place in the
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amount of such Net Cash Proceeds)) and (y) as long as no Event of Default then
exists or would be caused thereby, the Agent shall release the applicable Farm
Sale Block or the applicable funds it then holds as Collateral pursuant to this
clause (h) to the Borrower or the applicable Subsidiary upon a written request
(received by the Agent within one hundred twenty (120) days of the applicable
sale) from the Borrower requesting that such Farm Sale Block or funds be
promptly released by the Agent and representing and warranting to the Agent and
the Lenders that the applicable funds are going to be used promptly upon such
release or receipt thereof by the Borrower or the applicable Subsidiary) to (1)
acquire one or more Tropical Farms (or all of the equity in one or more entities
that own only Tropical Farms) or (2) make a Capital Expenditure in an existing
Tropical Farm owned by a Subsidiary in an amount (when added to the amount of
all proceeds of the sales of Tropical Farms used to make Capital Expenditures
after the Original Closing Date) not to exceed $2,500,000, and
(i) the transactions set forth in Schedule 9.3A hereto.
Notwithstanding the foregoing, Borrower shall not be required to pay to Agent
any asset proceeds obtained from a sale or disposition made pursuant to the
terms of clause (d) or (h) above if the sum of (i) the aggregate amount of such
proceeds plus (ii) the aggregate amount of all proceeds previously received as
consideration for a sale or disposition permitted pursuant to clause (d) or (h)
above that have not already been paid to Agent is less than $100,000; provided
however, that once the sum of all proceeds received pursuant to sales permitted
pursuant to clauses (d) and/or (h) above which have not been paid to the Agent
equals or exceeds $100,000, all such proceeds which have not been paid to the
Agent must be immediately paid to Agent and applied and/or held as Collateral as
provided in clauses (d) and (h) above. All amounts held by the Agent as
Collateral pursuant to this Section 9.3 and not yet applied to prepay Loans
shall bear interest for the account of the Borrower at a rate equal to the
Federal Funds Rate. All such interest shall be treated as a portion of the
original amount held as Collateral by the Agent and shall be released by the
Agent or applied to prepay Loans, as applicable, in accordance with this Section
9.3. Any Asset Sale Block, Farm Sale Block or amounts held by the Agent as
Collateral pursuant to this Section 9.3 not released by the Agent as described
in clause (d) or (h) above within one hundred twenty (120) days of the
applicable sale shall constitute Net Cash Proceeds from an Asset Disposition and
shall, in accordance with Section 2.3, be applied to prepay Loans (and to the
extent such prepayment relates to any amount of an Asset Sale Block or Farm Sale
Block not so released (a) the Borrower shall be deemed to have requested a
Revolving Loan in the amount of the applicable Asset Sale Block or Farm Sale
Block, (b) such applicable Asset Sale Block or Farm Sale Block shall be released
to permit Revolving Loans to be made, and (c) the requested Revolving Loans
shall be made and the proceeds thereof shall be applied to prepay Loans in
accordance with Section 2.3).
9.4 NO CORPORATE CHANGES.
(i) Merge or consolidate with any Person, provided, however, that
(a) the Credit Parties may merge or consolidate with and into each other (as
long as) if such merger or consolidation involves (x) the Borrower, the Borrower
is the surviving entity, (y) a Secured Credit Party (but not the Borrower), a
Secured Credit Party is the surviving entity or (z) a Guarantor but not a
Secured Credit Party, such Guarantor is the surviving entity), (b) any
Subsidiary of the Borrower may merge or consolidate with and into a Credit Party
(as long as (x)
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if either of such Persons is the Borrower, the surviving entity is the Borrower,
(y) if neither of such Persons is the Borrower, but one of such Persons is a
Secured Credit Party, the surviving entity is a Secured Credit Party), or (z) if
neither of such Persons is a Secured Credit Party, the surviving entity is a
Guarantor, and (c) any Subsidiary of the Borrower which is not a Credit Party
may merge or consolidate with any Subsidiary of the Borrower which is not a
Credit Party (as long as (x) unless each Person is an Excluded Entity, the
surviving entity is not an Excluded Entity and (y) if either of such
Subsidiaries is a Pledged Entity, the surviving entity is a Pledged Entity) or
(ii) alter or modify the Borrower's or any of its Subsidiaries' Articles or
Certificate of Incorporation or other equivalent organizational document or form
of organization (other than in connection with an Equity Issuance permitted
hereunder) or (iii) alter or modify any legal names, mailing addresses,
principal places of business, structure, status or existence of any Credit Party
unless the same shall have been notified to the Agent in writing at least ten
(10) Business Days prior to such alteration or modification or enter into or
engage in any business, operation or activity materially different from that
presently being conducted by the Borrower; provided, however, that upon ten (10)
days' notice to the Agent (and subject to the prior perfection of the Agent in
the resulting limited liability company interest), any corporation may be
converted to a limited liability company.
9.5 NO GUARANTEES.
Assume, guarantee, endorse, or otherwise become liable upon the
obligations of any other Person, including, without limitation, any Subsidiary
or Affiliate of the Borrower, except (a) by the endorsement of negotiable
instruments in the ordinary course of business, (b) by the giving of indemnities
in connection with the sale of Inventory or other asset dispositions permitted
hereunder, (c) a guaranty of Indebtedness if the Indebtedness so guaranteed
would itself constitute Permitted Indebtedness of the incurring guarantor, and
(d) a guaranty of a real property lease by the Borrower or one of its
Subsidiaries for real property leases entered into by (i) the Borrower or (ii)
one of its Subsidiaries that is not an Excluded Entity or Inactive Subsidiary;
provided, that (i) any Subsidiary of any Person may guarantee the direct
obligations of such Person as long as such direct obligations are otherwise
permitted hereby (provided, however, that the foregoing shall not permit the
guarantee of any obligation of CBII by the Borrower or any Subsidiary), (ii) GWF
may guarantee the obligations of its Subsidiaries or Subsidiaries of the
Borrower, (iii) any Secured Credit Party may guarantee the obligations (other
than Indebtedness) of any other Secured Credit Party, (iv) any member of the
▇▇▇▇▇▇▇▇ Fresh Latin American Group may guarantee the obligations (other than
Indebtedness) of any other member of the ▇▇▇▇▇▇▇▇ Fresh Latin American Group,
(v) any member of the ▇▇▇▇▇▇▇▇ Fresh European Group may guarantee the
obligations (other than Indebtedness) of any other member of the ▇▇▇▇▇▇▇▇ Fresh
European Group, and (vi) any Excluded Entity may guarantee the obligations of
its Subsidiaries.
9.6 NO RESTRICTED PAYMENTS.
Make any payment to or for the benefit of CBII (including, without
limitation, a payment to CBII to permit CBII to pay its obligations, a payment
to any holders of obligations of CBII or to any trustee or agent for holders of
obligations of CBII or a payment on or with respect to any obligation which is
subordinated to any or all of the Obligations) or any Restricted Payment, other
than (a) a payment to the Borrower or any Subsidiary of the Borrower, (b) cash
93
dividends, distributions or payments to make tax sharing payments in accordance
with the CBII tax sharing arrangements as described in Schedule 9.6 hereto in an
amount which is not in excess of the amount which the Person making such payment
would have been liable to pay the applicable taxing authorities had it not been
filing a consolidated tax return with CBII or a party to such tax sharing
arrangement, (c) payments of Unallocated CBII Overhead in any fiscal year in a
maximum amount of $49,000,000, (d) payments of Allocated CBII Overhead in any
fiscal year in a maximum amount of the difference of (i) $46,000,000 less (ii)
the payments made by Borrower in respect of certain contractual obligations to
vendors and service providers relating to normal operations that the Borrower
has assumed from CBII with the consent of the Required Lenders, (e) Permitted
Restructuring Expenses, and (f) after the effective date of the plan of
reorganization for CBII relating to CBII's current bankruptcy proceeding ("CBII
Reorganization Consummation"), payments to CBII which CBII, promptly upon
receipt thereof, uses to pay interest on Indebtedness of CBII which exists as of
such effective date of the CBII Reorganization Consummation as long as (i) at
the time of such payment and immediately after giving effect to such payment no
Event of Default shall have occurred and be continuing and the sum of
Availability (without giving effect to the Resolution Block) plus the Borrower's
and its Subsidiaries' (other than any Excluded Entity's) unrestricted cash and
Cash Equivalents shall be equal to at least $65,000,000 and (ii) immediately
prior to each such payment to CBII, a duly authorized officer of the Borrower
executes and delivers an officer's certificate to the Agent certifying that the
conditions set forth in subclause (i) of this clause (f) have been satisfied
with respect to such payment.
9.7 NO INVESTMENTS.
Make any Investment other than Permitted Investments.
9.8 NO AFFILIATE TRANSACTIONS.
Enter into any transaction with, including, without limitation, the
purchase, sale or exchange of property or the rendering of any service to any
Subsidiary or Affiliate of the Borrower except (a) in the ordinary course of and
pursuant to the reasonable requirements of the Borrower's business and upon fair
and reasonable terms no less favorable to the Borrower than could be obtained in
a comparable arm's-length transaction with an unaffiliated Person, (b) as
permitted under Section 9.6 or as described on Schedule 6.31 and (c)
transactions (other than transfers of Accounts, Proprietary Rights and general
intangibles) among and between Secured Credit Parties.
9.9 NO PROHIBITED TRANSACTIONS UNDER ERISA.
(a) Except as set forth on Schedule 9.9, engage, or permit any
Controlled ERISA Affiliate to engage, in any prohibited transaction which could
result in a civil penalty or excise tax described in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption has not been previously
obtained from the DOL;
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(b) permit to exist with respect to any Benefit Plan of the
Borrower, its Subsidiaries or any Controlled ERISA Affiliate any accumulated
funding deficiency (as defined in Sections 302 of ERISA and 412 of the Internal
Revenue Code), whether or not waived;
(c) fail, or permit any Controlled ERISA Affiliate to fail, to pay
timely required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Controlled ERISA Affiliate to
terminate, any Benefit Plan where such event would result in any material
liability of the Borrower, any Subsidiary of the Borrower or any Controlled
ERISA Affiliate under Title IV of ERISA;
(e) fail, or permit any Controlled ERISA Affiliate to fail to make
any required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Controlled ERISA Affiliate to fail, to pay
any required installment or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or other
payment;
(g) amend, or permit any Controlled ERISA Affiliate to amend, a
Benefit Plan resulting in an increase in current liability for the plan year
such that either of the Borrower, any Subsidiary of the Borrower or any
Controlled ERISA Affiliate is required to provide security to such Benefit Plan
under Section 401(a)(29) of the Internal Revenue Code;
(h) withdraw, or permit any Controlled ERISA Affiliate to withdraw,
from any Multiemployer Plan where such withdrawal may result in any material
liability of any such entity under Title IV of ERISA;
(i) allow any representation made in Section 6.15 to be untrue at
any time during the term of this Credit Agreement; or
(j) amend, or adopt any new Retiree Health Plan which would result
in any material increase in liability to Borrower or any its Subsidiaries.
9.10 NO ADDITIONAL BANK ACCOUNTS.
Permit (i) any Secured Credit Party (other than CIL) to open,
maintain or otherwise have any checking, savings or other accounts at any bank
or other financial institution, or any other account where money is or may be
deposited or maintained with any Person, other than the accounts set forth on
Schedule 9.10 hereto and, after the Closing Date, such other accounts so long as
each such account (other than payroll and ▇▇▇▇▇ cash accounts maintained as zero
balance accounts and other similar bank accounts with limited or no activity and
balances not exceeding $10,000) is subject to a tri-party lockbox or other
blocked account agreement satisfactory to the Agent nor (ii) CIL to keep any
account as its primary account or as a "concentration" account other than those
currently maintained at Bank of America, N.A. in London. All such checking,
savings or other accounts of the Borrower shall, subject to the terms hereof, be
under the sole dominion and control of the Agent in accordance with the Security
Agreement. All payroll and ▇▇▇▇▇ cash accounts shall be maintained as zero
balance accounts.
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9.11 AMENDMENTS OF MATERIAL CONTRACTS.
Without the prior written consent of the Agent, amend, modify,
cancel or terminate or permit the amendment, modification, cancellation or
termination of any of the Material Contracts if such amendment, modification,
cancellation or termination has or could reasonably be expected to have a
Material Adverse Effect.
9.12 ADDITIONAL NEGATIVE PLEDGES.
(a) Create or otherwise cause to exist or become effective, or
permit any of the Subsidiaries to create or otherwise cause to exist or become
effective, directly or indirectly, (i) other than (x) restrictions set forth in
agreements relating to debt for borrowed money of an Excluded Entity, as long as
such restrictions are binding only on the applicable Excluded Entity and its
Subsidiaries, (y) restrictions set forth in documents relating to Permitted
Indebtedness, as long as such restrictions are binding only on the primary
obligor on such Indebtedness (and its Subsidiaries) or (z) as described on
Schedule 9.12, any prohibition or restriction (including any agreement to
provide equal and ratable security to any other Person in the event a Lien is
granted to or for the benefit of the Agent and the Lenders) on the creation or
existence of any Lien upon the assets of the Borrower or any of its
Subsidiaries, other than Permitted Liens or (ii) any Contractual Obligation,
except as described on Schedule 9.12, which may restrict or inhibit the Agent's
rights or ability to sell or otherwise dispose of the Collateral or any part
thereof after the occurrence of an Event of Default, or
(b) Suffer to exist or permit any of the Subsidiaries to suffer to
exist, directly or indirectly, (i) other than (x) restrictions set forth in
agreements relating to debt for borrowed money of an Excluded Entity, as long as
such restrictions are binding only on the applicable Excluded Entity, (y)
restrictions set forth in documents relating to Permitted Indebtedness, as long
as such restrictions are binding only on the primary obligor on such
Indebtedness (and its Subsidiaries) and (z) as described on Schedule 9.12, any
prohibition or restriction (including any agreement to provide equal and ratable
security to any other Person in the event a Lien is granted to or for the
benefit of the Agent and the Lenders) on the creation or existence of any Lien
upon the assets of the Borrower or any of its Subsidiaries, other than Permitted
Liens or (ii) any Contractual Obligation which may restrict or inhibit the
Agent's rights or ability to sell or otherwise dispose of the Collateral or any
part thereof after the occurrence of an Event of Default, which prohibition,
restriction or Contractual Obligation is more restrictive than those in effect
on the Original Closing Date.
9.13 SALE AND LEASEBACK.
Enter into any arrangement, directly or indirectly, whereby the
Borrower or any of its Subsidiaries shall sell or transfer any property owned by
it to a Person (other than the Borrower or any of its Subsidiaries) in order
then or thereafter to lease such property or lease other property which the
Borrower or any of its Subsidiaries intends to use for substantially the same
purpose as the property being sold or transferred (collectively, a "Sale
Leaseback Transaction"); provided, however, the Borrower and its Subsidiaries
may enter into Sale Leaseback Transactions involving assets other than Accounts,
general intangibles and Proprietary Rights as long as (i) the current market
value of all assets subject to such transactions
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after the Original Closing Date (determined at the time of the applicable
transfer) does not exceed $25,000,000, (ii) the applicable assets are containers
and similar equipment and assets initially acquired by the Borrower or one of
its Subsidiaries (from a Person other than the Borrower or one of its
Subsidiaries) after the Original Closing Date and (iii) such Sale Leaseback
Transactions are consummated within one hundred twenty (120) days of the initial
acquisition of such assets by the Borrower or one of its Subsidiaries from a
Person other than the Borrower or one of its Subsidiaries; provided, further,
this Section 9.13 shall not apply to Excluded Entities.
9.14 LICENSES, ETC.
Other than in the ordinary course of business and on terms and
conditions consistent with the Borrower's historical practices as of the
Original Closing Date, enter into licenses of, or otherwise restrict the use of,
any patents, trademarks or copyrights or other Proprietary Rights. Additionally,
neither Borrower nor CIL will allow any party other than Agent or Lenders to
obtain an interest, including without limitation, any lien, security interest or
charge, in the trademark or license rights granted under the Trademark License
Agreement; provided, however, that this limitation does not prohibit any
sublicensing of these trademark or license rights as contemplated by the
Trademark License Agreement.
9.15 LIMITATIONS.
Create, nor will it permit any of its Subsidiaries (other than an
Excluded Subsidiary) to, directly or indirectly, create or otherwise cause,
incur, assume, suffer or permit to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Person to (a)
pay dividends or make any other distribution on any of such Person's Capital
Stock, (b) pay any Indebtedness owed to the Borrower, (c) make loans or advances
to the Borrower or (d) transfer any of its property to the Borrower, except for
encumbrances or restrictions existing under or by reason of (i) customary
non-assignment provisions in any lease governing a leasehold interest, (ii) any
agreement or other instrument of a Person existing at the time it becomes a
Subsidiary of the Borrower; provided that such encumbrance or restriction is not
applicable to any other Person, or any property of any other Person, other than
such Person becoming a Subsidiary of the Borrower and was not entered into in
contemplation of such Person becoming a Subsidiary of the Borrower and (iii)
this Credit Agreement and the other Credit Documents.
9.16 TRANSFER PRICING.
(i) Other than as required by applicable law, modify, or permit any
Subsidiary to modify, its transfer pricing policies in a manner that has, or is
reasonably likely to have, a material adverse effect on the Borrower or any
Guarantor or (ii) make any material modification to the fees or other amounts
paid to GWF or any of its Subsidiaries for the transportation of products and
related services, excluding adjustments reflecting changes in GWF cost
structure.
9.17 SALES.
Permit or cause (i) the Borrower to purchase or otherwise acquire
bananas or plantains from any Person other than CIL (provided, however, that in
any consecutive twelve month period the Borrower may purchase or acquire five
percent (5%) of the aggregate amount
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of the bananas and plantains which it purchases and acquires during such period
from Persons other than CIL), (ii) CIL to sell bananas or plantains to any
Person (other than the Borrower) for sales or consumption in North America or
(iii) bananas or plantains to be sold in North America or Europe by any
Subsidiary of the Borrower if such bananas or plantains were not sold by CIL
directly or through CBCBV to such Subsidiary of the Borrower (provided, however,
that (a) up to five percent (5%) of the bananas and plantains sold in North
America by the Borrower during any consecutive twelve-month period may be
purchased from Persons other than CIL and (b) the bananas and plantains sold in
Europe by members of the ▇▇▇▇▇▇▇▇ Fresh European Group may be purchased from a
Person other than CIL.
9.18 EXCLUDED ENTITIES.
Knowingly take or omit to take any action if the effect of such
action or omission could reasonably be expected to materially decrease the value
of the equity interests in one or more Excluded Entities.
9.19 HEDGING AND INTEREST RATE PROTECTION.
Enter into any Hedging Agreements other than Hedging Agreements
which constitute Permitted Indebtedness and which are agreements that constitute
hedging and which are not speculative in nature.
9.20 PAYMENTS ON CERTAIN INTERCOMPANY OBLIGATIONS.
Make any payment on or distribution with respect to any of the
intercompany receivables identified on Schedule 1.1E(3)(B) hereto, whether
directly or indirectly (and regardless of whether such payment or distribution
might otherwise be permitted under other provisions of this Agreement), except
for (a) capitalization of intercompany advances that is permitted under the
definition of Permitted Investments, (b) payments or distributions (i) among or
to Secured Credit Parties, (ii) by members of the ▇▇▇▇▇▇▇▇ Fresh European Group
to any Person other than an Excluded Entity, or (iii) by members of the ▇▇▇▇▇▇▇▇
Fresh Latin American Group to other members of that Group or to Secured Credit
Parties, (c) payments with respect to current obligations for goods or services
in accordance with ordinary practice, and (d) any other payments or distribution
to the extent that within five (5) Business Days thereafter there is at least an
equivalent payment to one or more Secured Credit Parties.
ARTICLE ▇.
▇▇▇▇▇▇
10.1 APPOINTMENT AS ATTORNEY-IN-FACT.
The Borrower hereby irrevocably authorizes and appoints the Agent,
or any Person or agent the Agent may designate, as the Borrower's
attorney-in-fact, at the Borrower's cost and expense, to exercise, subject to
the limitations set forth in Section 10.2, all of the following powers, which
being coupled with an interest, shall be irrevocable until all of the
Obligations to the Lenders have been paid and satisfied in full and all of the
Commitments have been terminated:
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(a) To receive, take, endorse, sign, assign and deliver, all in the
name of the Agent, the Lenders or the Borrower, as the case may be, any and all
checks, notes, drafts, and other documents or instruments relating to the
Collateral;
(b) To receive, open and dispose of all mail addressed to the
Borrower and to notify postal authorities to change the address for delivery
thereof to such address as the Agent may designate;
(c) To request at any time from customers indebted on Accounts, in
the name of the Borrower or a third party designee of the Agent, information
concerning the Accounts and the amounts owing thereon;
(d) To give customers indebted on Accounts notice of the Lenders'
interest therein, and/or to instruct such customers to make payment directly to
the Agent for the Borrower's account;
(e) To take or bring, in the name of the Agent, the Lenders or the
Borrower, all steps, actions, suits or proceedings deemed by the Agent necessary
or desirable to enforce or effect collection of the Accounts; and
(f) To file, record and register any or all of the Lenders' security
interest in intellectual property of the Borrower with the United States Patent
and Trademark Office.
10.2 LIMITATION ON EXERCISE OF POWER.
Notwithstanding anything hereinabove to the contrary, the powers set
forth in subparagraphs (b), (d) and (e) above may only be exercised by the Agent
on and after the occurrence of an Event of Default which has not otherwise been
waived by the Agent. The powers set forth in subparagraphs (a), (c) and (f)
above may be exercised by the Agent at any time.
ARTICLE XI.
EVENTS OF DEFAULT AND REMEDIES
11.1 EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an
"Event of Default" hereunder:
(a) failure of the Borrower to pay (i) any interest or Fees or other
amounts hereunder within one (1) Business Day of when due hereunder, in each
case whether at stated maturity, by acceleration, or otherwise, or (ii) any
principal of the Loans or the Letter of Credit Obligations hereunder within one
(1) Business Day of when due hereunder, whether at stated maturity, by
acceleration or otherwise;
(b) any representation or warranty of a Borrower Entity, contained
in this Credit Agreement, the other Credit Documents or any other agreement,
document, instrument or
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certificate among the Borrower, the Agent and the Lenders or executed by the
Borrower in favor of the Agent or the Lenders shall prove untrue in any material
respect on or as of the date it was made or was deemed to have been made;
(c) failure of the Borrower to perform, comply with or observe any
term, covenant or agreement applicable to it contained in Section 7.1, Section
7.5, Section 7.7(b), Section 7.10, Section 7.18, Article VIII or Article IX;
(d) failure of the Borrower to perform, comply with or observe any
term, covenant or agreement applicable to it contained in Section 7.7(a) and
such failure is not cured within two (2) Business Days after the Borrower shall
have received notice thereof from the Agent or any Lender;
(e) failure to comply with any other covenant contained in this
Credit Agreement, the other Credit Documents or any other agreement, document,
instrument or certificate among the Borrower, the Agent and the Lenders or
executed by the Borrower in favor of the Agent or the Lenders and, in the event
such breach or failure to comply is capable of cure, such breach or failure to
comply is not cured within thirty (30) days after the Borrower becomes aware of
its occurrence;
(f) except as permitted in Section 9.4, dissolution, liquidation,
winding up or cessation of the business of the Borrower or any Subsidiary (other
than an Inactive Subsidiary) or the failure of the Borrower or any Subsidiary to
meet its debts generally as they mature, or the calling of a meeting by the
Borrower of the Borrower's or any of its Subsidiaries' creditors for purposes of
compromising the Borrower's or any of its Subsidiaries' debts, or the admission
by the Borrower of its inability to pay its debts as they become due;
(g) the commencement by or against the Borrower or any of its
Subsidiaries of any bankruptcy, insolvency, arrangement, reorganization,
receivership or similar proceedings with respect to it under any federal or
state law and, in the event any such proceeding is commenced against the
Borrower or any Subsidiary, such proceeding is not dismissed within sixty (60)
days;
(h) the occurrence of a Change in Control;
(i) the occurrence of a default or event of default (in each case
which shall continue beyond the expiration of any applicable grace periods)
under, or the occurrence of any event that results in or would permit the
acceleration of the maturity of any note, agreement or instrument evidencing any
other Indebtedness of the Borrower or any of its Subsidiaries and the aggregate
principal amount of all such other Indebtedness with respect to which a default
or an event of default has occurred, or the maturity of which is accelerated or
permitted to be accelerated, exceeds $2,500,000.
(j) any covenant, agreement or obligation of the Borrower contained
in or evidenced by any of the Credit Documents shall cease to be enforceable in
accordance with its terms, or any party (other than the Agent or the Lenders) to
any Credit Document shall deny or disaffirm its obligations under any of the
Credit Documents, or any Credit Document shall be canceled, terminated, revoked
or rescinded without the express prior written consent of the
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Agent, or any action or proceeding shall have been commenced by any Person
(other than the Agent or any Lender) seeking to cancel, revoke, rescind or
disaffirm the obligations of the Borrower under any Credit Document, or any
court or other Governmental Authority shall issue a judgment, order, decree or
ruling to the effect that any of the obligations of the Borrower to any Credit
Document are illegal, invalid or unenforceable;
(k) [INTENTIONALLY DELETED];
(l) one or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries in the amount of $2,500,000 or more in the
aggregate (to the extent not paid or covered by insurance (i) provided by a
carrier who has acknowledged coverage and has the ability to perform or (ii) as
determined by the Agent in its reasonable discretion) and any such judgments or
decrees shall not have been vacated, discharged or stayed or bonded pending
appeal within thirty (30) days from the entry thereof; or
(m) any Termination Event with respect to a Benefit Plan shall have
occurred and be continuing thirty (30) days after notice thereof shall have been
given to the Borrower by the Agent or any Lender, and the current value of such
Benefit Plan's benefits guaranteed under Title IV of ERISA as of the end of that
thirty (30) day period exceeds the then current value of such Benefit Plan's
assets allocable to such benefits by more than $2,500,000 (or in the case of a
Termination Event involving the withdrawal of a substantial employer, the
withdrawing employer's proportionate share of such excess exceeds such amount).
11.2 ACCELERATION.
After the occurrence and during the continuance of an Event of
Default, and at any time thereafter, at the direction of the Required Lenders,
the Agent shall, upon the written or telecopied request of the Required Lenders,
and by delivery of written notice to the Borrower from the Agent, take any or
all of the following actions, without prejudice to the rights of the Agent, any
Lender or the holder of any Note to enforce its claims against the Borrower: (a)
declare all Obligations to be immediately due and payable (except with respect
to any Event of Default set forth in Section 11.1(g) in which case all
Commitments shall terminate and all Obligations shall automatically become
immediately due and payable without the necessity of any notice or other demand)
without presentment, demand, protest or any other action or obligation of the
Agent or any Lender, (b) immediately terminate this Credit Agreement and the
Commitments hereunder; and (c) enforce any and all rights and interests created
and existing under the Credit Documents or arising under applicable law,
including, without limitation, all rights and remedies existing under the
Security Documents and all rights of setoff. The enumeration of the foregoing
rights is not intended to be exhaustive and the exercise of any right shall not
preclude the exercise of any other rights, all of which shall be cumulative.
In addition, upon demand by the Agent or the Required Lenders upon
the occurrence of any Event of Default, and at any time thereafter unless and
until such Event of Default has been waived by the requisite Lenders (in
accordance with the voting requirements of Section 14.10), the Borrower shall
deposit with the Agent for the benefit of the Lenders with respect to each
Letter of Credit then outstanding, promptly upon such demand, cash or Cash
Equivalents in an amount equal to one hundred five percent (105%) of the
greatest amount for
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which such Letter of Credit may be drawn. Such deposit shall be held by the
Agent for the benefit of the Issuing Bank and the other Lenders as security for,
and to provide for the payment of, outstanding Letters of Credit.
ARTICLE XII.
TERMINATION
Except as otherwise provided in Article XI of this Credit Agreement,
the Commitments made hereunder shall terminate on the Maturity Date and all then
outstanding Loans shall be immediately due and payable in full and all
outstanding Letters of Credit shall immediately terminate. Unless sooner
demanded, all Obligations shall become due and payable as of any termination
hereunder or under Article XI and, pending a final accounting, the Agent may
withhold any amounts it then holds, in an amount sufficient, in the Agent's sole
discretion, to cover all of the Obligations, whether absolute or contingent,
unless supplied with a satisfactory indemnity to cover all of such Obligations.
All of the Agent's and the Lenders' rights, liens and security interests shall
continue after any termination until all Obligations have been paid and
satisfied in full.
ARTICLE XIII.
THE AGENT
13.1 APPOINTMENT OF AGENT.
(a) Each Lender hereby designates Foothill as Agent to act as herein
specified. Each Lender hereby irrevocably authorizes, and each holder of any
Note or participation in any Letter of Credit by the acceptance of a Note or
participation shall be deemed irrevocably to authorize, the Agent to take such
action on its behalf under the provisions of this Credit Agreement and the Notes
and any other instruments and agreements referred to herein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Agent shall hold all
Collateral and all payments of principal, interest, Fees, charges and expenses
received pursuant to this Credit Agreement or any other Credit Document for the
ratable benefit of the Lenders. The Agent may perform any of its duties
hereunder by or through its agents or employees.
(b) The provisions of this Article XIII are solely for the benefit
of the Agent and the Lenders, and the Borrower shall not have any rights as a
third party beneficiary of any of the provisions hereof (other than Section
13.9). In performing its functions and duties under this Credit Agreement, the
Agent shall act solely as agent of the Lenders and does not assume and shall not
be deemed to have assumed any obligation toward or relationship of agency or
trust with or for the Borrower.
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13.2 NATURE OF DUTIES OF AGENT.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Credit Agreement. Neither the Agent nor any of its
officers, directors, employees or agents shall be liable for any action taken or
omitted by it as such hereunder or in connection herewith, unless caused by its
or their gross negligence or willful misconduct. The duties of the Agent shall
be mechanical and administrative in nature; the Agent shall not have by reason
of this Credit Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Credit Agreement, expressed or implied, is intended to or shall
be so construed as to impose upon the Agent any obligations in respect of this
Credit Agreement except as expressly set forth herein.
13.3 LACK OF RELIANCE ON AGENT.
(a) Independently and without reliance upon the Agent, each Lender,
to the extent it deems appropriate, has made and shall continue to make (i) its
own independent investigation of the financial or other condition and affairs of
the Borrower in connection with the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrower, and, except as expressly provided in this Credit Agreement, the Agent
shall have no duty or responsibility, either initially or on a continuing basis,
to provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Revolving Loans or
at any time or times thereafter.
(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectability, priority or sufficiency of this Credit Agreement or the Notes or
the financial or other condition of the Borrower. The Agent shall not be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Credit Agreement or the
Notes, or the financial condition of the Borrower, or the existence or possible
existence of any Default or Event of Default, unless specifically requested to
do so in writing by any Lender.
13.4 CERTAIN RIGHTS OF THE AGENT.
The Agent shall have the right to request instructions from the
Required Lenders or, as required, each of the Lenders. If the Agent shall
request instructions from the Required Lenders or each of the Lenders, as the
case may be, with respect to any act or action (including the failure to act) in
connection with this Credit Agreement, the Agent shall be entitled to refrain
from such act or taking such action unless and until the Agent shall have
received instructions from the Required Lenders or each of the Lenders, as the
case may be, and the Agent shall not incur liability to any Person by reason of
so refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders or each of the Lenders, as the case may be.
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13.5 RELIANCE BY AGENT.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex teletype or telecopier message, cablegram, radiogram, order or other
documentary, teletransmission or telephone message believed by it to be genuine
and correct and to have been signed, sent or made by the proper person. The
Agent may consult with legal counsel (including counsel for the Borrower with
respect to matters concerning the Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
13.6 INDEMNIFICATION OF AGENT.
To the extent the Agent is not reimbursed and indemnified by the
Borrower, each Lender will reimburse and indemnify the Agent, in proportion to
its respective Commitment, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in performing its duties hereunder, in any way relating to or arising out
of this Credit Agreement, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct.
13.7 THE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to lend under this Credit Agreement,
the Loans made by it and the Notes issued to it, its participation in Letters of
Credit issued hereunder, and all of its rights and obligations as a Lender
hereunder and under the other Credit Documents, the Agent shall have the same
rights and powers hereunder as any other Lender or holder of a Note or
participation interests and may exercise the same as though it was not
performing the duties specified herein; and the terms "Lenders", "Required
Lenders", "holders of Notes", or any similar terms shall, unless the context
clearly otherwise indicates, include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, acquire equity interests in, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower or any Affiliate of the Borrower as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrower for services in connection with this Credit
Agreement and otherwise without having to account for the same with the Lenders.
13.8 HOLDERS OF NOTES.
The Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
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13.9 SUCCESSOR AGENT.
(a) The Agent may, upon five (5) Business Days' notice to the
Lenders and the Borrower, resign at any time (effective upon the appointment of
a successor Agent pursuant to the provisions of this Section 13.9(a)) by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, upon five (5) days'
notice, to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then, upon five (5) days' notice, the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, which shall be a bank or a trust
company or other financial institution which maintains an office in the United
States, or a commercial bank organized under the laws of the United States of
America or of any State thereof, or any affiliate of such bank or trust company
or other financial institution which is engaged in the banking business, having
a combined capital and surplus of at least $500,000,000. Notwithstanding
anything herein to the contrary, so long as no Event of Default shall have
occurred and be continuing, any successor Agent (whether appointed by the
Required Lenders or the Agent) shall have been approved in writing by the
Borrower (such approval not to be unreasonably withheld).
(b) Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Credit Agreement. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article XIII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this Credit
Agreement.
13.10 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs the Agent to enter into the
Security Documents for the benefit of the Lenders. Each Lender authorizes and
directs the Agent to make such changes to the form Acknowledgment Agreement
attached hereto as Exhibit A as the Agent deems necessary in order to obtain any
Acknowledgment Agreement from any landlord, warehouseman, filler, packer or
processor of the Borrower. Each Lender also authorizes and directs the Agent to
review and approve all agreements regarding lockboxes and lockbox accounts and
blocked accounts (including the related lockbox or blocked account agreements)
on such terms as the Agent deems necessary. Each Lender hereby agrees, and each
holder of any Note by the acceptance thereof will be deemed to agree, that,
except as otherwise set forth herein, any action taken by the Required Lenders
or each of the Lenders, as applicable, in accordance with the provisions of this
Credit Agreement or the Security Documents, and the exercise by the Required
Lenders or each of the Lenders, as applicable, of the powers set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders. The Agent is hereby
authorized on behalf of all of the Lenders, without the necessity of any notice
to or further consent from any Lender, from time to time prior to an Event of
Default, to take any action with respect to any Collateral or Security Document
which may be necessary or appropriate to perfect and maintain perfected the
security interest in and liens upon the Collateral granted pursuant to the
Security Documents.
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(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment in cash and
satisfaction of all of the Obligations (including the Letter of Credit
Obligations) at any time arising under or in respect of this Credit Agreement or
the Credit Documents or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or disposed of upon receipt of the proceeds of
such sale by the Agent if the Borrower certifies to the Agent that the sale or
disposition is made in compliance with Section 9.3 (and the Agent may rely
conclusively on any such certificate, without further inquiry) or (iii) if
approved, authorized or ratified in writing by the Required Lenders, unless such
release is required to be approved by all of the Lenders hereunder. Upon request
by the Agent at any time, the Lenders will confirm in writing the Agent's
authority to release particular types or items of Collateral pursuant to this
Section 13.10(b).
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to in
writing by the Required Lenders or all of the Lenders, as applicable, and upon
at least five (5) Business Days' prior written request by the Borrower, the
Agent shall (and is hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the Liens granted
to the Agent for the benefit of the Lenders herein or pursuant hereto upon the
Collateral that was sold or transferred; provided that (i) the Agent shall not
be required to execute any such document on terms which, in the Agent's opinion,
would expose the Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of the Borrower or any of its
Subsidiaries in respect of) all interests retained by the Borrower or any of its
Subsidiaries, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral. In the event of any
sale or transfer of Collateral, or any foreclosure with respect to any of the
Collateral, the Agent shall be authorized to deduct all of the expenses
reasonably incurred by the Agent from the proceeds of any such sale, transfer or
foreclosure.
(d) The Agent shall have no obligation whatsoever to the Lenders or
to any other Person to assure that the Collateral exists or is owned by the
Borrower or any of its Subsidiaries or is cared for, protected or insured or
that the liens granted to the Agent herein or pursuant hereto have been properly
or sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising at
all or in any manner or under any duty of care, disclosure or fidelity any of
the rights, authorities and powers granted or available to the Agent in this
Section 13.10 or in any of the Security Documents, it being understood and
agreed that in respect of the Collateral, or any act, omission or event related
thereto, the Agent may act in any manner it may deem appropriate, in its sole
discretion, given the Agent's own interest in the Collateral as one of the
Lenders and that the Agent shall have no duty or liability whatsoever to the
Lenders, except for its gross negligence or willful misconduct.
(e) The Lenders acknowledge that Foothill has entered into the
Pledge Agreements governed by the law of the Netherlands and Belgium in its
individual capacity. The Lenders agree that if any amounts are received by
Foothill pursuant to such Pledge Agreements, the total amount of the Obligations
then owing shall be decreased by such amounts as if such
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amounts were received by the Agent. Foothill agrees that Foothill shall transfer
any such amounts to the Agent. To the extent that it is required to accomplish
the allocation of payment intended hereby, each Lender shall purchase and
Foothill shall sell, without representation or warranty of any kind,
participations in the rights under such Pledge Agreements.
13.11 ACTIONS WITH RESPECT TO DEFAULTS.
In addition to the Agent's right to take actions on its own accord
as permitted under this Credit Agreement, the Agent shall take such action with
respect to a Default or Event of Default as shall be directed by the Required
Lenders or all of the Lenders, as the case may be; provided that, until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable and in the best
interests of the Lenders.
13.12 DELIVERY OF INFORMATION.
The Agent shall not be required to deliver to any Lender originals
or copies of any documents, instruments, notices, communications or other
information received by the Agent from the Borrower, any Subsidiary, the
Required Lenders, any Lender or any other Person under or in connection with
this Credit Agreement or any other Credit Document except (a) as specifically
provided in this Credit Agreement or any other Credit Document and (b) as
specifically requested from time to time in writing by any Lender with respect
to a specific document, instrument, notice or other written communication
received by and in the possession of the Agent at the time of receipt of such
request and then only in accordance with such specific request.
13.13 ▇▇▇▇▇ FARGO AS LEAD ARRANGER AND SYNDICATION AGENT. ▇▇▇▇▇ Fargo
shall not have any rights, powers, duties or responsibilities hereunder or any
other Credit Document in its capacity as Lead Arranger and Syndication Agent and
no implied rights, powers, duties or responsibilities shall be read into this
Credit Agreement or any other Credit Document or otherwise exist on behalf of or
against ▇▇▇▇▇ Fargo in its capacity as Lead Arranger and Syndication Agent.
ARTICLE XIV.
MISCELLANEOUS
14.1 WAIVERS.
The Borrower hereby waives due diligence, demand, presentment and
protest and any notices thereof as well as notice of nonpayment. No delay or
omission of the Agent or the Lenders to exercise any right or remedy hereunder,
whether before or after the happening of any Event of Default, shall impair any
such right or shall operate as a waiver thereof or as a waiver of any such Event
of Default. No single or partial exercise by the Agent or the Lenders of any
right or remedy shall preclude any other or further exercise thereof, or
preclude any other right or remedy.
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14.2 JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER, THE AGENT
AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE CREDIT DOCUMENTS OR ANY
OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. Any legal action or proceeding with respect to this Credit Agreement or
any other Credit Document shall be brought in the courts of the State of New
York in New York County or of the United States for the Southern District of New
York, and, by execution and delivery of this Credit Agreement, the Borrower
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the nonexclusive jurisdiction of such courts. The Borrower
hereby agrees that service of all writs, process and summonses in any suit,
action or proceeding brought in the State of New York may be made upon CT
Corporation, presently located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇.▇.▇. (the "Process Agent"), and the Borrower hereby confirms and agrees that
the Process Agent has been duly and irrevocably appointed as its agent and true
and lawful attorney-in-fact in its name, place and stead to accept such service
of any and all such writs, process and summonses, and agrees that the failure of
the Process Agent to give any notice of any such service of process to such
Obligor shall not impair or affect the validity of such service or of any
judgment based thereon. The Borrower further irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at the address set out for notices pursuant to Section
14.5, such service to become effective three (3) days after such mailing.
Nothing herein shall affect the right of the Agent or any Lender to serve
process in any other manner permitted by law or to commence legal proceedings or
to otherwise proceed against the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Credit Agreement or any
other Credit Document brought in the courts referred to in subsection (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
14.4 [INTENTIONALLY DELETED].
14.5 NOTICES.
Except as otherwise provided herein, all notices and correspondences
hereunder shall be in writing and sent by certified or registered mail return
receipt requested, or by
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overnight delivery service, with all charges prepaid, if to the Agent, then to
Foothill Capital Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Loan Portfolio Manager, with a copy to
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., if to the Borrower, then to Borrower at ▇▇▇▇▇▇▇▇ Brands,
Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention to each of: Chief
Financial Officer and General Counsel, if to a Lender at the address set forth
on Schedule 1.1A hereto, or by facsimile transmission, promptly confirmed in
writing sent by first class mail, if to the Agent, at (▇▇▇) ▇▇▇-▇▇▇▇, with a
copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇ and if to the Borrower at (513)
784-6690 and (▇▇▇) ▇▇▇-▇▇▇▇ and if to any Lender at the facsimile number set
forth on Schedule 1.1A hereto. All such notices and correspondence shall be
deemed given (i) if sent by certified or registered mail, three (3) Business
Days after being postmarked, (ii) if sent by overnight delivery service, when
received at the above stated addresses or when delivery is refused and (iii) if
sent by facsimile transmission, when receipt of such transmission is
acknowledged; provided that notices to the Agent shall not be effective until
received.
14.6 ASSIGNABILITY.
(a) The Borrower shall not have the right to assign this Credit
Agreement or any interest therein except with the prior written consent of the
Lenders.
(b) Notwithstanding subsection (c) of this Section 14.6, nothing
herein shall restrict, prevent or prohibit any Lender from (i) pledging its
Loans hereunder to a Federal Reserve Bank in support of borrowings made by such
Lender from such Federal Reserve Bank or (ii) granting assignments or
participations in such Lender's Loans and/or Commitments hereunder to its parent
company and/or to any affiliate of such Lender or to any existing Lender or
affiliate thereof. Any Lender may make, carry or transfer Loans at, to or for
the account of, any of its branch offices or the office of an affiliate of such
Lender except to the extent such transfer would result in increased costs to the
Borrower.
(c) Each Lender may, with the consent of the Agent (such consent not
to be unreasonably withheld, conditioned or delayed and such consent shall not
be required in connection with any assignment by a Lender to its Affiliates or
managed funds or managed accounts (an "Exempt Assignment") or in connection with
a sale of all or a material portion of the loan portfolio of such Lender (a
"Portfolio Sale")), but without the consent of any other Lender or other Person,
assign to one or more Persons all or a portion of its rights and obligations
under this Credit Agreement and the Notes; provided that (i) for each such
assignment, the parties thereto shall execute and deliver to the Agent, for its
acceptance and recording in the Register (as defined below), an Assignment and
Acceptance, together with any Note or Notes subject to such assignment and a
processing and recordation fee of $3,500 to be paid by the assignee (such fee
being waived in the case of an Exempt Assignment), (ii) no such assignment shall
be for less than $5,000,000 or, if less, the entire remaining Commitments of
such Lender, (iii) if such assignee is a Foreign Lender, all of the requirements
of Section 2.7(b) shall have been satisfied as a condition to such assignment
and (iv) other than in connection with an Exempt Assignment, each such
assignment shall be of a uniform, and not a varying, percentage of all rights
and obligations under and in respect of the Commitments and all Loans of such
Lender; provided, additionally, that, other than pursuant to a Portfolio Sale,
no Initial Lender shall have the right to make any such assignment and
delegation if, immediately after
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giving effect thereto, such Lender's Pro Rata Share (plus the Pro Rata Share of
such Lender's Affiliates and the funds and accounts managed by such Lender or
one or more of its Affiliates) of the sum of the principal amount of the then
outstanding Term Loans plus the Revolving Credit Committed Amount at such time
would be less than the lesser of (i) $20,000,000 or (ii) one-sixth of the
principal amount of the then outstanding Term Loans plus the Revolving Credit
Committed Amount at such time; provided, additionally, that, as long as no
Default or Event of Default has occurred and is continuing, and other than to an
Affiliate of such Lender (or a fund or amount managed by such Lender or one or
more of its Affiliates), no Lender shall have the right to make any such
assignment and delegation to any entity which is not a financial institution or
other entity which is not generally engaged in the business of buying, selling
or funding transactions of the type contemplated hereby. Upon such execution and
delivery of the Assignment and Acceptance to the Agent, from and after the date
specified as the effective date in the Assignment and Acceptance (the
"Acceptance Date"), (x) the assignee thereunder shall be a party hereto, and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, such assignee shall have the rights
and obligations of a Lender hereunder and (y) the assignor thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights (other than
any rights it may have pursuant to Section 14.8 which will survive) and be
released from its obligations under this Credit Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Credit Agreement, such
Lender shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the
assignee thereunder confirms and agrees as follows: (i) other than as provided
in such Assignment and Acceptance, the assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Credit
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the Notes or any other instrument
or document furnished pursuant hereto, (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under this Credit Agreement or any other
instrument or document furnished pursuant hereto, (iii) such assignee confirms
that it has received a copy of this Credit Agreement, together with copies of
the financial statements referred to in Section 7.1 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance, (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Credit Agreement, (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Credit Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto and
(vi) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Credit Agreement are required
to be performed by it as a Lender.
(e) The Agent shall maintain at its address referred to in Section
14.5 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the
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recordation of the names and addresses of the Lenders and the Commitments of,
and principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Credit Agreement. The Register and copies of each
Assignment and Acceptance shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, together with the Note or Notes subject to such assignment,
the Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit B hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five (5) Business Days
after its receipt of such notice, the Borrower shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes (which the assigning Lender
agrees to promptly deliver to the Borrower) a new Note or Notes to the order of
the assignee in an amount equal to the Commitment or Commitments assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment or Commitments hereunder, a new Note or Notes to the order
of the assigning Lender in an amount equal to the Commitment or Commitments
retained by it hereunder. Such new Note or Notes shall re-evidence the
indebtedness outstanding under the old Notes or Notes and shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the Closing Date and shall otherwise
be in substantially the form of the Note or Notes subject to such assignments.
(g) Each Lender may sell participations (without the consent of the
Agent, the Borrower or any other Lender) to one or more parties in or to any
portion of its rights and obligations under this Credit Agreement (including,
without limitation, any portion of its Commitments, the Loans owing to it and
the Note or Notes held by it); provided that (i) such Lender's obligations under
this Credit Agreement (including, without limitation, its Commitments to the
Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Credit Agreement, (iv) the Borrower, the Agent, and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Credit Agreement and (v) such Lender
shall not transfer, grant, assign or sell any participation under which the
participant shall have rights to approve any amendment or waiver of this Credit
Agreement except to the extent such amendment or waiver would (A) extend the
final maturity date or the date for the payments of any installment of fees or
principal or interest of any Loans or Letter of Credit reimbursement obligations
in which such participant is participating, (B) reduce the amount of any
installment of principal of the Loans or Letter of Credit reimbursement
obligations in which such participant is participating, (C) except as otherwise
expressly provided in this Credit Agreement, reduce the interest rate applicable
to the Loans or Letter of Credit reimbursement obligations in which such
participant is participating, or (D) except as otherwise expressly provided in
this Credit Agreement, reduce any Fees payable hereunder.
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(h) Each Lender agrees that, without the prior written consent of
the Borrower and the Agent, it will not make any assignment or sell a
participation hereunder in any manner or under any circumstances that would
require registration or qualification of, or filings in respect of, any Loan,
Note or other Obligation under the securities laws of the United States of
America or of any jurisdiction.
(i) In connection with the efforts of any Lender to assign its
rights or obligations or to participate interests, such Lender may disclose any
information in its possession regarding the Borrower.
(j) Borrower shall maintain, or cause to be maintained, a register
(the "Register") on which it enters the name of each Lender as the registered
owner of the Loans held by such Lender. A Registered Loan (and the Registered
Note, if any, evidencing the same) may be assigned or sold in whole or in part
only by registration of such assignment or sale on the Register (and each
Registered Note shall expressly so provide). Any assignment or sale of all or
part of such Registered Loan (and the Registered Note, if any, evidencing the
same) may be effected only by registration of such assignment or sale on the
Register, together with the surrender of the Registered Note, if any, evidencing
the same duly endorsed by (or accompanied by a written instrument of assignment
or sale duly executed by) the holder of such Registered Note, whereupon, at the
request of the designated assignee(s) or transferee(s), one or more new
Registered Notes in the same aggregate principal amount shall be issued to the
designated assignee(s) or transferee(s). Prior to the registration of assignment
or sale of any Registered Loan (and the Registered Note, if any evidencing the
same), Borrower shall treat the Person in whose name such Loan (and the
Registered Note, if any, evidencing the same) is registered as the owner thereof
for the purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary.
(k) In the event that any Lender sells participations in the
Registered Loan, such Lender shall maintain a register on which it enters the
name of all participants in the Registered Loans held by it (the "Participant
Register"). A Registered Loan (and the Registered Note, if any, evidencing the
same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each Registered Note shall
expressly so provide). Any participation of such Registered Loan (and the
Registered Note, if any, evidencing the same) may be effected only by the
registration of such participation on the Participant Register.
14.7 INFORMATION.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential any information furnished or made available to it by the Borrower
pursuant to this Credit Agreement that is marked confidential; provided that
nothing herein shall prevent any Lending Party from disclosing such information
(a) to any other Lending Party or any affiliate of any Lending Party, or any
officer, director, employee, agent, or advisor of any Lending Party or affiliate
of any Lending Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required by any
law, rule, or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority;
provided, however, that, to the extent permitted
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by law, the affected Lending Party shall provide prior written notice to the
Borrower of any such request or demand, (f) that is or becomes available to the
public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Credit Agreement,
(g) in connection with any litigation to which such Lending Party or any of its
affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Credit Agreement or any other Credit Document,
(i) subject to provisions substantially similar to those contained in this
Section 14.7, to any actual or proposed participant or assignee and (j) to Gold
Sheets and other similar bank trade publications; such information to consist of
deal terms and other information approved by the Borrower and customarily found
in such publications.
14.8 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Borrower agrees to pay, upon demand, all reasonable
out-of-pocket costs and expenses of (a) the Agent and each Lender in connection
with (i) the negotiation, preparation, execution and delivery of this Credit
Agreement and the other Credit Documents and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
expenses of special external counsel to the Agent and special external counsel
to the Lenders and the fees and expenses of special external counsel for the
Agent in connection with collateral issues but excluding any amounts for
services rendered by internal counsel) and (ii) any amendment, waiver or consent
relating hereto and thereto including, without limitation, any such amendments,
waivers or consents resulting from or related to any work-out, re-negotiation or
restructure relating to the performance by the Borrower under this Credit
Agreement and (b) the Agent and each Lender in connection with enforcement of
the Credit Documents and the documents and instruments referred to therein,
including but not limited to, any work-out, re-negotiation or restructure
relating to the performance by the Borrower under this Credit Agreement,
including, without limitation, in connection with any such enforcement, the
reasonable fees and disbursements of counsel for the Agent and each of the
Lenders (including the allocated costs of internal counsel). In addition, the
Borrower agrees to pay, upon demand, for the separate account of Agent, audit,
appraisal, and valuation fees and charges as follows: (i) a fee of $750 per day,
per auditor, plus out-of-pocket expenses for each financial audit performed by
personnel employed by Agent, (ii) if implemented, a one time charge of $3,000
plus out-of-pocket expenses for expenses for the establishment of electronic
collateral reporting systems, (iii) a fee of $1,500 per day per appraiser, plus
out-of-pocket expenses, for each appraisal of the Collateral performed by
personnel employed by Agent, and (iv) the actual charges paid or incurred by
Agent if it elects to employ the services of one or more third Persons to
perform financial audits, to appraise the Collateral, or any portion thereof, or
to assess the Borrower's (or any of its Subsidiaries') business valuation. The
Borrower shall indemnify, defend and hold harmless the Agent, the Issuing Bank
and each of the Lenders and their respective directors, officers, agents,
employees and counsel from and against (x) any and all losses, claims, damages,
liabilities, deficiencies, judgments or expenses incurred by any of them (except
to the extent that it is finally judicially determined to have resulted from
their own gross negligence or willful misconduct) arising out of or by reason of
any litigation, investigation, claim or proceeding which arises out of or is in
any way related to (i) this Credit Agreement, any Letter of Credit or the
transactions contemplated thereby, (ii) any actual or proposed use by the
Borrower of the proceeds of the Loans or (iii) the Agent's, the Issuing Bank's
or the Lenders' entering into this Credit Agreement, the other Credit Documents
or any other agreements and
113
documents relating hereto, including, without limitation, amounts paid in
settlement, court costs and the fees and disbursements of counsel incurred in
connection with any such litigation, investigation, claim or proceeding or any
advice rendered in connection with any of the foregoing and (y) any such losses,
claims, damages, liabilities, deficiencies, judgments or expenses incurred in
connection with any remedial or other action taken by the Borrower or any of the
Lenders in connection with compliance by the Borrower or any of its
Subsidiaries, or any of their respective properties, with any federal, state or
local environmental laws, acts, rules, regulations, orders, directions,
ordinances, criteria or guidelines. If and to the extent that the obligations of
the Borrower hereunder are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. The Borrower's
obligations under this Section 14.8 shall survive any termination of this Credit
Agreement and the other Credit Documents and the payment in full of the
Obligations, and are in addition to, and not in substitution of, any other of
their Obligations set forth in this Credit Agreement. In addition, the Borrower
shall, upon demand, pay to the Agent and any Lender all costs and expenses
(including the reasonable fees and disbursements of counsel and other
professionals) paid or incurred by the Agent, the Issuing Bank or such Lender in
(A) enforcing or defending its rights under or in respect of this Credit
Agreement, the other Credit Documents or any other document or instrument now or
hereafter executed and delivered in connection herewith against the Borrower
(or, in the case of the Agent, against any Lender, except to the extent that the
claim or liability giving rise to such enforcement or defense is finally
judicially determined to have resulted from the Agent's own gross negligence or
willful misconduct), (B) in collecting the Loans, (C) in foreclosing or
otherwise collecting upon the Collateral or any part thereof and (D) obtaining
any legal, accounting or other advice in connection with any of the foregoing.
14.9 ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS.
This Credit Agreement along with the other Credit Documents and the
Fee Letter constitutes the entire agreement among the Borrower, the Agent and
the Lenders, supersedes any prior agreements among them, and shall bind and
benefit the Borrower and the Lenders and their respective successors and
permitted assigns, provided, however, that the foregoing shall not affect the
continuing effectiveness of any waiver of any provision of the Original Credit
Agreement heretofore granted to the Borrower.
14.10 AMENDMENTS, ETC.
Neither the amendment or waiver of any provision of this Credit
Agreement or any other Credit Document, nor the consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, or if the Lenders shall not be
parties thereto, by the parties thereto and consented to by the Required
Lenders, and each such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided
that no amendment, waiver or consent shall unless in writing and signed by all
the Lenders, do any of the following: (a) increase the Commitments of the
Lenders or subject the Lenders to any additional obligations, (b) except as
otherwise expressly provided in this Credit Agreement, reduce the principal of,
or interest on, any Note or any Letter of Credit reimbursement obligations or
any fees hereunder, (c) postpone any date fixed for any payment or mandatory
prepayment in respect of principal of,
114
or interest on, any Note or any Letter of Credit reimbursement obligations or
any fees hereunder, (d) change the percentage of the Commitments, or any minimum
requirement necessary for the Lenders or the Required Lenders to take any action
hereunder, (e) amend or waive Section 2.8, Section 2.9, Section 13.6 or this
Section 14.10, or change the definition of Required Lenders, (f) except as
otherwise expressly provided in this Credit Agreement, and other than in
connection with the financing, refinancing, sale or other disposition of any
asset of the Borrower permitted under this Credit Agreement, release any Liens
in favor of the Lenders on any material portion of the Collateral, (g) except as
expressly permitted hereunder, increase the advance rates used to calculate the
Revolving Credit Borrowing Base or the terms used in the calculation thereof, or
(h) terminate, waive or modify any indemnification obligations of the Borrower
under the Credit Agreement or any other Credit Document and, provided, further,
that no amendment, waiver or consent affecting the rights or duties of the Agent
or the Issuing Bank under any Credit Document shall in any event be effective,
unless in writing and signed by the Agent and/or the Issuing Bank, as
applicable, in addition to the Lenders required hereinabove to take such action.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article XIII (other than the provisions of Section 13.9). In
addition, the Borrower and the Lenders hereby authorize the Agent to modify this
Credit Agreement by unilaterally amending or supplementing Schedule 1.1A from
time to time in the manner requested by the Borrower, the Agent or any Lender in
order to reflect any assignments or transfers of the Loans as provided for
hereunder; provided, however, that the Agent shall promptly deliver a copy of
any such modification to the Borrower and each Lender.
14.11 NONLIABILITY OF AGENT AND LENDERS.
The relationship between the Borrower on the one hand and the
Lenders and the Agent on the other hand shall be solely that of borrower and
lender. Neither the Agent nor any Lender shall have any fiduciary
responsibilities to the Borrower. Neither the Agent nor any Lender undertakes
any responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower's business or operations.
14.12 INDEPENDENT NATURE OF LENDERS' RIGHTS.
The amounts payable at any time hereunder to each Lender under such
Lender's Note or Notes shall be a separate and independent debt.
14.13 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
14.14 EFFECTIVENESS.
This Credit Agreement shall become effective on the date on which
all of the parties have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Agent pursuant to Section 14.5
or, in the case of the Lenders, shall have given to
115
the Agent written, telecopied or telex notice (actually received) at such office
that the same has been signed and mailed to it.
14.15 SEVERABILITY.
In case any provision in or obligation under this Credit Agreement
or the Notes or the other Credit Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
14.16 HEADINGS DESCRIPTIVE.
The headings of the several sections and subsections of this Credit
Agreement, and the Table of Contents, are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Credit Agreement.
14.17 MAXIMUM RATE.
Notwithstanding anything to the contrary contained elsewhere in this
Credit Agreement or in any other Credit Document, the Borrower, the Agent and
the Lenders hereby agree that all agreements among them under this Credit
Agreement and the other Credit Documents, whether now existing or hereafter
arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to
the Agent or any Lender for the use, forbearance, or detention of the money
loaned to the Borrower and evidenced hereby or thereby or for the performance or
payment of any covenant or obligation contained herein or therein, exceed the
Highest Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents at the
time performance of such provision shall be due shall exceed the Highest Lawful
Rate, then, automatically, the obligation to be fulfilled shall be modified or
reduced to the extent necessary to limit such interest to the Highest Lawful
Rate, and if from any such circumstance any Lender should ever receive anything
of value deemed interest by applicable law which would exceed the Highest Lawful
Rate, such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to the Borrower. All
sums paid or agreed to be paid to the Agent or any Lender for the use,
forbearance, or detention of the Obligations and other indebtedness of the
Borrower to the Agent or any Lender shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the actual rate of interest on
account of all such indebtedness does not exceed the Highest Lawful Rate
throughout the entire term of such indebtedness. The terms and provisions of
this Section shall control every other provision of this Credit Agreement and
all agreements among the Borrower, the Agent and the Lenders.
116
14.18 RIGHT OF SETOFF.
In addition to and not in limitation of all rights of offset that
any Lender or other holder of a Note may have under applicable law, each Lender
or other holder of a Note shall, if any Event of Default has occurred and is
continuing and whether or not such Lender or such holder has made any demand or
the Obligations of the Borrower have matured, have the right to appropriate and
apply to the payment of the Obligations of the Borrower all deposits (general or
special, time or demand, provisional or final) then or thereafter held by and
other indebtedness or property then or thereafter owing by such Lender or other
holder. Any amount received as a result of the exercise of such rights shall be
reallocated among the Lenders as set forth in Section 3.8.
14.19 POWER OF ATTORNEY.
Each Subsidiary of the Borrower appoints the chief accounting
officer and any vice president of the Borrower, (each of whom is a senior
officer of the Borrower) to be its attorneys ("its Attorneys") and in its name
and on its behalf and as its act and deed or otherwise to sign all documents and
carry out all such acts as are necessary or appropriate in connection with
executing any Notice of Borrowing, any Revolving Credit Borrowing Base
Certificate or any security documents (the "Documents") in connection with this
Credit Agreement, provided that such Documents are in substantially the form
provided therefor in the applicable exhibits thereto. This Power of Attorney
shall be valid for the duration of the term of this Credit Agreement. Each
Subsidiary of the Borrower hereby undertakes to ratify everything which either
of its Attorneys shall do in order to execute the Documents mentioned herein.
14.20 RESTATEMENT OF ORIGINAL CREDIT AGREEMENT
The parties hereto agree that, on the Closing Date, the following
transactions shall be deemed to occur automatically, without further action by
any party hereto:
(a) the Original Credit Agreement shall be deemed to be amended and
restated in its entirety in the form of this Agreement (provided that the
foregoing shall not be deemed or otherwise construed to constitute a waiver of
any Default or Event of Default under this Credit Agreement or the Original
Credit Agreement to the extent not previously waived);
(b) all Original Obligations outstanding on the Closing Date
(including without limitation all accrued and unpaid principal, interest and
fees) shall, to the extent not paid on the Closing Date, be deemed to be
Obligations outstanding hereunder;
(c) the Guaranties and Security Documents, including the Liens
created thereunder, and securing payment of the Original Obligations, shall
remain in full force and effect with respect to the Obligations and are hereby
reaffirmed; and
(d) all references in the other Credit Documents to the Original
Credit Agreement shall be deemed for all time periods after the date hereof to
refer without further amendment to this Credit Agreement as the same may be
amended, restated, supplemented, renewed or otherwise modified from time to
time.
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The parties acknowledge and agree that this Credit Agreement and the other
Credit Documents do not constitute a novation, payment and reborrowing or
termination of the Original Obligations and that all such Original Obligations
are in all respects continued and outstanding as Obligations under this Credit
Agreement and the Notes with only the terms being modified from and after the
effective date of this Agreement as provided in this Agreement, the Notes and
the other Credit Documents.
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IN WITNESS WHEREOF the parties hereto have caused this Credit
Agreement to be executed and delivered by their proper and duly authorized
officers as of the date set forth above.
BORROWER ▇▇▇▇▇▇▇▇ BRANDS, INC.
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and Chief
Financial Officer
AGENTS AND LENDERS FOOTHILL CAPITAL CORPORATION,
as Agent and as a Lender
By:
-------------------------------------
Name:
------------------------------------
Title: Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Lead Arranger, Syndication Agent and as
a Lender
By:
-------------------------------------
Name:
------------------------------------
Title: Vice President
LENDERS ABLECO FINANCE LLC, for itself and its affiliated
assignees, as a Lender
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Credit Officer
PNC BANK, National Association,
as a Lender
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Schedule 1.1A
LENDERS AND COMMITMENTS
LENDER COMMITMENT
------ ----------
Foothill Capital Corporation $43,500,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Wiring Instructions:
-----------------
▇▇▇▇▇ Fargo Bank, National Association $6,500,000
--------------------------------------
--------------------------------------
Facsimile Number:
--------------------
Wiring Instructions:
-----------------
Ableco Finance LLC, $50,000,000
for itself and its affiliated assignees
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Wiring Instructions:
------------------
Oak Hill Securities Fund, L.P. $12,500,000
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Wiring Instructions:
------------------
(Purchased through Assignment)
Oak Hill Securities Fund II, L.P. $12,500,000
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Wiring Instructions:
------------------
(Purchased through Assignment)
PNC Bank, N.A. $5,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Wiring Instructions:
PNC Bank N.A.
ABA #: ▇▇▇▇▇▇▇▇▇
Benefit Name: Commercial Loan Operations
Benefit Acct: #130762016803
Ref: ▇▇▇▇▇▇▇▇