EXHIBIT 99.1
CREDIT AGREEMENT
DATED AS OF NOVEMBER 20, 2002
AMONG
ATLANTIC PREMIUM BRANDS, LTD.,
CARLTON FOODS CORP.,
PREFCO CORP.,
▇▇▇▇▇▇▇▇ CAJUN FOODS CORP., AND
POTTER SAUSAGE CO.,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL,
A DIVISION OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL SERVICES INC.,
AS AGENT AND AS A LENDER
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
[▇▇▇▇▇▇▇ ▇▇▇▇▇ LOGO]
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS .........................................................1
Section 1.1 Certain Defined Terms......................................1
Section 1.2 Accounting Terms and Determinations.......................18
Section 1.3 Other Definitional Provisions.............................19
ARTICLE 2 LOANS AND LETTERS OF CREDIT.........................................19
Section 2.1 Term Loans................................................19
Section 2.2 Revolving Loans...........................................22
Section 2.3 Interest, Interest Calculations and Certain Fees..........24
Section 2.4 Notes.....................................................27
Section 2.5 Letters of Credit and Letter of Credit Fees...............27
Section 2.6 General Provisions Regarding Payment; Loan Account........30
Section 2.7 Maximum Interest..........................................31
Section 2.8 Taxes.....................................................31
Section 2.9 Ancillary Services........................................33
Section 2.10 Appointment of Borrower Representative....................33
Section 2.11 Joint and Several Liability...............................34
Section 2.12 Replacement of Lenders....................................35
ARTICLE 3 REPRESENTATION AND WARRANTIES.......................................36
Section 3.1 Existence and Power.......................................36
Section 3.2 Organization and Governmental Authorization;
No Contravention..........................................36
Section 3.3 Binding Effect............................................37
Section 3.4 Capitalization............................................37
Section 3.5 Financial Information.....................................37
Section 3.6 Litigation................................................38
Section 3.7 Ownership of Property.....................................38
Section 3.8 No Default................................................38
Section 3.9 Labor Matters.............................................39
Section 3.10 Regulated Entities........................................39
Section 3.11 Margin Regulations........................................39
Section 3.12 Compliance With Laws......................................39
Section 3.13 Taxes.....................................................39
Section 3.14 Compliance with ERISA.....................................40
Section 3.15 Brokers...................................................40
Section 3.16 Related Transactions......................................41
Section 3.17 Employment, Equityholders and Subscription Agreements.....41
Section 3.18 Compliance with Environmental Requirements;
No Hazardous Materials....................................41
Section 3.19 Intellectual Property.....................................42
Section 3.20 Real Property Interests...................................42
Section 3.21 Solvency..................................................42
Section 3.22 Full Disclosure...........................................43
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Section 3.23 Texas Traditions..........................................43
ARTICLE 4 AFFIRMATIVE COVENANTS...............................................43
Section 4.1 Financial Statements and Other Reports....................43
Section 4.2 Payment and Performance of Obligations....................48
Section 4.3 Conduct of Business and Maintenance of Existence..........48
Section 4.4 Maintenance of Property; Insurance........................48
Section 4.5 Compliance with Laws......................................49
Section 4.6 Inspection of Property, Books and Records.................50
Section 4.7 Use of Proceeds...........................................50
Section 4.8 Lenders' Meetings.........................................50
Section 4.9 Hazardous Materials; Remediation..........................50
Section 4.10 Further Assurances........................................51
Section 4.11 PASA Matters..............................................51
Section 4.12 Texas Traditions..........................................51
ARTICLE 5 NEGATIVE COVENANTS..................................................51
Section 5.1 Debt......................................................51
Section 5.2 Liens.....................................................52
Section 5.3 Restricted Distributions..................................53
Section 5.4 Restrictive Agreements....................................53
Section 5.5 Payments and Modifications of Subordinated Debt...........54
Section 5.6 Consolidations, Mergers and Sales of Assets...............54
Section 5.7 Purchase of Assets, Investments...........................54
Section 5.8 Transactions with Affiliates..............................55
Section 5.9 Modification of Organizational Documents..................55
Section 5.10 Fiscal Year...............................................55
Section 5.11 Conduct of Business.......................................55
Section 5.12 Investor Fees.............................................55
Section 5.13 Lease Payments............................................56
Section 5.14 Bank Accounts.............................................56
Section 5.15 Environmental Matters.....................................56
ARTICLE 6 ACCOUNTS AND INVENTORY REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS......................................................56
Section 6.1 Accounts and Account Collections..........................57
Section 6.2 Inventory.................................................59
ARTICLE 7 FINANCIAL COVENANTS.................................................59
Section 7.1 Capital Expenditures......................................59
Section 7.2 Fixed Charge Coverage Ratio...............................60
Section 7.3 Senior Leverage Ratio.....................................60
ARTICLE 8 CONDITIONS .........................................................61
Section 8.1 Conditions to Closing.....................................61
Section 8.2 Conditions to Each Loan and Support Agreement.............62
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ARTICLE 9 EVENTS OF DEFAULT...................................................62
Section 9.1 Events of Default.........................................62
Section 9.2 Acceleration and Suspension or Termination of
Revolving Loan Commitment.................................65
Section 9.3 Cash Collateral...........................................65
Section 9.4 Default Rate of Interest and Suspension of
LIBOR Rate Options........................................65
Section 9.5 Setoff Rights.............................................66
Section 9.6 Application of Proceeds...................................66
ARTICLE 10 EXPENSES, INDEMNITY, TAXES AND RIGHT TO PERFORM....................67
Section 10.1 Expenses..................................................67
Section 10.2 Indemnity.................................................67
Section 10.3 Taxes.....................................................68
Section 10.4 Right to Perform..........................................68
ARTICLE 11 AGENT .............................................................68
Section 11.1 Appointment and Authorization.............................68
Section 11.2 Agent and Affiliates......................................69
Section 11.3 Action by Agent...........................................69
Section 11.4 Consultation with Experts.................................69
Section 11.5 Liability of Agent........................................69
Section 11.6 Indemnification...........................................70
Section 11.7 Right to Request and Act on Instructions..................70
Section 11.8 Credit Decision...........................................70
Section 11.9 Collateral Matters........................................71
Section 11.10 Agency for Perfection.....................................71
Section 11.11 Notice of Default.........................................71
Section 11.12 Successor Agent...........................................72
Section 11.13 Disbursements of Revolving Loans; Payment.................72
ARTICLE 12 MISCELLANEOUS......................................................74
Section 12.1 Survival..................................................74
Section 12.2 No Waivers................................................74
Section 12.3 Notices...................................................75
Section 12.4 Severability..............................................75
Section 12.5 Amendments and Waivers....................................75
Section 12.6 Assignments; Participations...............................76
Section 12.7 Headings..................................................77
Section 12.8 Confidentiality...........................................77
Section 12.9 GOVERNING LAW; SUBMISSION TO JURISDICTION.................78
Section 12.10 WAIVER OF JURY TRIAL......................................78
Section 12.11 Publication; Advertisement................................79
Section 12.12 Counterparts; Integration.................................79
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ANNEXES AND EXHIBITS
ANNEXES
Annex A - Commitment Annex
Annex B - Closing Checklist
EXHIBITS
Exhibit A - Assignment Agreement
Exhibit B - Excess Cash Flow Certificate
Exhibit C - Compliance Certificate
Exhibit D - Borrowing Base Certificate
Exhibit E - Notice of Borrowing
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of November 20, 2002 among Atlantic
Premium Brands, Ltd. ("ATLANTIC"), a Delaware corporation, Carlton Foods Corp.
("CARLTON"), a Delaware corporation, Prefco Corp. ("PREFCO"), a Delaware
corporation, ▇▇▇▇▇▇▇▇ Cajun Food Corp. ("▇▇▇▇▇▇▇▇"), a Delaware corporation and
Potter Sausage Co. ("POTTER"), a Delaware corporation (Atlantic, Carlton,
Prefco, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ each as a Borrower), the financial institutions from
time to time parties hereto, each as a Lender, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, a
division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc., individually as a
Lender and as Agent.
RECITALS:
WHEREAS, Borrowers desire that Lenders extend certain term credit
and working capital facilities to provide working capital financing for each
Borrower and to provide funds for other general business purposes of each
Borrower; and
WHEREAS, each Borrower desires to secure all of its Obligations
under the Financing Documents by granting to Agent, for the benefit of Agent and
Lenders, a security interest in and lien upon all of its personal and real
property, including without limitation all of the outstanding capital stock or
other equity securities, as applicable, of each Subsidiary; and
WHEREAS, each Subsidiary of each Borrower is willing to guaranty all
of the Obligations of each Borrower to Lenders under the Financing Documents,
and to grant to Agent, for the benefit of Agent and Lenders, a security interest
in and lien upon all of its personal and real property;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Lenders and Agent agree as
follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Certain Defined Terms.
The following terms have the following meanings:
"ACCOUNTS" means "accounts" (as defined in Article 9 of the UCC) of
each Borrower and the Subsidiaries, including without limitation any and all
rights to payment for the sale or lease of goods or rendition of services,
whether or not they have been earned by performance, in each case, for purposes
of calculating the Borrowing Base, net of any credits, rebates or offsets owed
by such Borrower or Subsidiary to the respective customer.
"ACCOUNT DEBTOR" means "account debtor", as defined in Article 9 of
the UCC.
"AFFILIATE" means with respect to any Person (i) any Person that
directly or indirectly controls such Person, (ii) any Person which is controlled
by or is under common control with such controlling Person and (iii) in the case
of an individual, the parents, descendants, siblings and spouse of such
individual. As used in this definition, the term "CONTROL" of a Person means the
possession, directly or indirectly, of the power to vote ten percent (10%) or
more of any class of voting securities of such Person or to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGENT" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ in its capacity as agent for Lenders
hereunder, as such capacity is established and subject to the provisions of
Article 11 and the successors of ▇▇▇▇▇▇▇ ▇▇▇▇▇ in such capacity.
"AGENT ADVANCES" has the meaning set forth in Section 2.2(a)(ii).
"AGREEMENT" means this Credit Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"ANCILLARY SERVICES" means any service or facility (other than any
Debt and/or Letter of Credit facility) extended to any Borrower or any
Subsidiary on a consensual basis by any Designated Lender Affiliate in reliance
on the agreement of a Lender to indemnify such Designated Lender Affiliate in
respect of such service or facility.
"ASSET DISPOSITION" means any sale, lease, license or other
consensual disposition by any Credit Party of any asset, but excluding (i)
dispositions of Inventory in the ordinary course of business, and (ii)
dispositions of Cash Equivalents.
"ASSIGNEE" has the meaning set forth in Section 12.6(a).
"ASSIGNMENT AGREEMENT" means an agreement substantially in the form
of Exhibit A hereto.
"BLOCKED ACCOUNT" has the meaning set forth in Section 6.1(d).
"BORROWERS" mean collectively, Atlantic, Carlton, Prefco, ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇.
"BORROWER REPRESENTATIVE" means Atlantic in its capacity as Borrower
Representative pursuant to the provisions of Section 2.11, or any successor
Borrower Representative selected by Borrowers and approved by Agent.
"BORROWER'S ACCOUNT" means the account specified on the signature
pages hereof below each Borrower's name into which Loans (other than Agent
Advances, which shall be disbursed by Agent in a manner permitted by Section
2.2(a)(ii)) shall, absent other written instructions, be made, or such other
account as such Borrower may specify by written notice to Agent.
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"BORROWING BASE" means, as of any date of calculation, a dollar
amount calculated pursuant to the Borrowing Base Certificate most recently
delivered to Agent in accordance with the terms hereof, equal to the sum of 85%
of Eligible Accounts plus the lesser of (i) $4,250,000 and (ii) 65% of Eligible
Inventory and minus Reserves then established by Agent.
"BORROWING BASE CERTIFICATE" means a certificate, duly executed by a
Responsible Officer of Borrower Representative, appropriately completed and
substantially in the form of Exhibit D hereto.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day
on which either the New York Stock Exchange is closed, or on which commercial
banks in Chicago are authorized by law to close and, in the case of a Business
Day which relates to a LIBOR Loan, a day on which dealings are carried on in the
London interbank eurodollar market.
"CAPITAL EXPENDITURES" has the meaning provided in the Compliance
Certificate.
"CAPITAL LEASE" of any Person means any lease of any property by
such Person as lessee that would, in accordance with GAAP, be required to be
accounted for as a capital lease on the balance sheet of such Person.
"CASH EQUIVALENTS" means any Investment in (i) direct obligations of
the United States or any agency thereof, or obligations guaranteed by the United
States or any agency thereof, (ii) commercial paper rated at least A-1 by
Standard & Poor's Ratings Service and P-1 by ▇▇▇▇▇'▇ Investors Services, Inc.,
(iii) time deposits with, including certificates of deposit issued by, any
office located in the United States of any bank or trust company which is
organized under the laws of the United States or any State thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000 and
which issues (or the parent of which issues) certificates of deposit or
commercial paper with a rating described in clause (ii) above, (iv) repurchase
agreements with respect to securities described in clause (i) above entered into
with an office of a bank or trust company meeting the criteria specified in
clause (iii) above, provided in each case that such Investment matures within
one year from the date of acquisition thereof by any Credit Party, or (v) any
money market or mutual fund of which at least 95% of its investments are in the
foregoing types of investments and the liquidity of which is reasonably
satisfactory to Agent.
"CLOSING CHECKLIST" means Annex B to this Agreement.
"CLOSING DATE" means the date of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
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"COLLATERAL" means all property, now existing or hereafter acquired,
mortgaged or pledged to, or purported to be subjected to a Lien in favor of,
Agent, for the benefit of Agent and Lenders, pursuant to the Security Documents.
"COMMITMENT ANNEX" means Annex A to this Agreement.
"COMMITMENT EXPIRY DATE" means November 20, 2007.
"COMPLIANCE CERTIFICATE" means a certificate, duly executed by a
Responsible Officer of Borrower Representative, appropriately completed and
substantially in the form of Exhibit C hereto.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
Person the accounts of which would be consolidated with those of Atlantic in its
consolidated financial statements if such statements were prepared as of such
date.
"CONSULTING AGREEMENT" means the Consulting Agreement of even date
herewith between Atlantic and Sterling Advisors, L.P.
"CONTINUING DIRECTOR" means a director who either is a member of
Atlantic's board of directors on the date hereof or who became a director
subsequent to such date and whose election was duly approved by a majority of
the Continuing Directors then on the board of directors of Atlantic.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control that, together with any
Borrower, are treated as a single employer under Section 414 of the Code or
Section 4001 of ERISA.
"CREDIT EXPOSURE" means any period of time during which the
Revolving Loan Commitment is outstanding or any Loan, Reimbursement Obligation
or other monetary Obligation remains unpaid or any Letter of Credit or Support
Agreement remains outstanding; provided, that no Credit Exposure shall be deemed
to exist solely due to the existence of contingent indemnification liability,
absent the assertion of a claim with respect thereto.
"CREDIT PARTY" means each Borrower and each Subsidiary (other than
Atlantic's Subsidiary, Texas Traditions, Inc., a Delaware corporation).
"DEBT" of a Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising and paid in the ordinary course
of business, (iv) all Capital Leases of such Person, (v) all non-contingent
obligations of such Person to reimburse any bank or other Person in respect of
amounts paid under a letter of credit or similar instrument, (vi) all equity
securities of such Person subject to repurchase or redemption otherwise than at
the sole option of such Person,
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(vii) all obligations secured by a Lien on any asset of such Person, whether or
not such obligation is otherwise an obligation of such Person, (viii) "earnouts"
and similar payment obligations and (ix) all Debt of others Guaranteed by such
Person in the amount of such Guarantees.
"DEFAULT" means any condition or event which with the giving of
notice or lapse of time or both would, unless cured or waived, become an Event
of Default.
"DEFAULTED LENDER" means, so long as such failure shall remain in
existence and uncured, any Lender which shall have failed to make any Loan or
other credit accommodation, disbursement or reimbursement required pursuant to
the terms of any Financing Documents.
"DEPOSIT ACCOUNT" means a "deposit account" (as defined in Article 9
of the UCC) of any Borrower or any of its Subsidiaries.
"DEPOSIT ACCOUNT CONTROL AGREEMENT" means an agreement, in form and
substance reasonably satisfactory to Agent, among Agent, any Borrower or a
Subsidiary of any Borrower maintaining a Deposit Account at any bank, and such
bank, which agreement provides that (x) such bank shall comply with instructions
originated by Agent directing disposition of the funds in such Deposit Account
without further consent by such Borrower or such Subsidiary (as applicable), and
(y) such bank shall agree that it shall have no Lien on, or right of setoff
against, such Deposit Account or the contents thereof, other than in respect of
commercially reasonable fees and other items expressly consented to by Agent,
and containing such other terms and conditions as Agent may reasonably require,
including as to any such agreement pertaining to any Blocked Account, providing
that all items received or deposited in such Blocked Account are the property of
Agent, and that such bank shall wire, or otherwise transfer, in immediately
available funds, on a daily basis to the Payment Account all funds received or
deposited into such Blocked Account.
"DESIGNATED LENDER AFFILIATES" means any Affiliate of Agent or any
Lender that (i) from time to time makes Ancillary Services available to any
Borrower or any Subsidiary and (ii) in the case of an Affiliate of a Lender
other ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, is expressly identified in writing by Agent, in its
sole discretion, as a Designated Lender Affiliate.
"EBITDA" has the meaning provided in the Compliance Certificate.
"ELIGIBLE ACCOUNTS" has the meaning provided in the Borrowing Base
Certificate; provided, that Agent may, from time to time, in the exercise of its
reasonable credit judgment, change the criteria for Eligible Accounts set forth
in the Borrowing Base Certificate, effective following written notice thereof by
Agent to Borrower Representative (except that during the existence of an Event
of Default, such changes shall be effective upon Agent's determination, which
will be promptly communicated to Borrower Representative in writing) based on
either: (i) an event, condition or other circumstance arising after the Closing
Date, or (ii) an event, condition or other circumstance existing on the Closing
Date
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to the extent Agent has no written notice thereof from a Credit Party prior
to the Closing Date, in either case under clause (i) or (ii) which adversely
affects or, in the judgment of Agent, could reasonably be expected to adversely
affect the Accounts as determined by Agent in the exercise of its reasonable
credit judgment. For purposes of this Agreement, the net amount of Eligible
Accounts at any time shall be the face amount of such Eligible Accounts less any
and all returns, rebates, discounts (which may, at Agent's option, be calculated
on shortest terms), credits, allowances or excise taxes of any nature at any
time issued, owing, claimed by Account Debtors, granted, outstanding or payable
in connection with such Accounts at such time. Any Accounts which are not
Eligible Accounts shall nevertheless be part of the Collateral.
"ELIGIBLE INVENTORY" has the meaning provided in the Borrowing Base
Certificate; provided, that Agent may, from time to time, in the exercise of its
reasonable credit judgment, change the criteria for Eligible Inventory set forth
in the Borrowing Base Certificate, effective following written notice thereof by
Agent to Borrower Representative (except that during the existence of an Event
of Default, such changes shall be effective upon Agent's determination, which
will be promptly communicated to Borrower Representative in writing), based on
either: (i) an event, condition or other circumstance arising after the Closing
Date, or (ii) an event, condition or other circumstance existing on the Closing
Date to the extent Agent has no written notice thereof from a Credit Party prior
to the Closing Date, in either case under clause (i) or (ii) which adversely
affects or, in the judgment of Agent, could reasonably be expected to adversely
affect the Inventory as determined by Agent in the exercise of its reasonable
credit judgment. For purposes of this Agreement, the amount of Eligible
Inventory shall be determined on a first-in, first-out, lower of cost or market
basis in accordance with GAAP. Any Inventory which is not Eligible Inventory
shall nevertheless be part of the Collateral.
"ENVIRONMENTAL LAWS" means any and all federal, state and local
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, codes, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and governmental restrictions relating to the
environment or the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Materials or
wastes into the environment, including ambient air, surface water, ground water
or land, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants, Hazardous Materials or wastes or the clean-up or other remediation
thereof.
"EQUIPMENT" means, collectively, "equipment" and "fixtures" (as each
term is defined in Article 9 of the UCC) of each Borrower and the Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the regulations promulgated thereunder.
"EVENT OF DEFAULT" has the meaning set forth in Section 9.1.
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"EXCESS CASH FLOW" has the meaning provided in the Excess Cash Flow
Certificate.
"EXCESS CASH FLOW CERTIFICATE" means a certificate, duly executed by
a Responsible Officer of Borrower Representative, appropriately completed and
substantially in the form of Exhibit B hereto.
"FEDERAL FUNDS RATE" means, for any day, the rate of interest
per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100
of 1%) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (i) if such day is
not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day and (ii) if no such rate is
so published on such next preceding Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to Agent on such day on such
transactions as determined by Agent.
"FINANCING DOCUMENTS" means this Agreement, the Notes, the Security
Documents, the Information Certificate, any fee letter among ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
any of the Borrowers relating to the transactions contemplated hereby and all
other documents, instruments and agreements contemplated herein or thereby and
executed concurrently herewith or at any time and from time to time hereafter,
as any or all of the same may be amended, supplemented, restated or otherwise
modified from time to time.
"FISCAL YEAR" means a fiscal year of Borrowers, ending on December
31 of each calendar year.
"FIXED CHARGE COVERAGE RATIO" has the meaning provided in the
Compliance Certificate.
"FOREIGN LENDER" means a Lender that is organized under the laws of
a jurisdiction other than the United States of America.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"▇▇▇▇▇▇ SUBORDINATED DEBT DOCUMENTS" means the Subordinated
Non-Negotiable Promissory Note due February 15, 2008 issued on the date hereof
by ▇▇▇▇▇▇'▇ to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, each other agreement,
instrument and document evidencing or relating to the foregoing, and the
Subordination Agreement of even date herewith among ▇▇▇▇▇▇'▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Sterling and Agent.
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"▇▇▇▇▇▇-▇▇▇▇▇ SUBORDINATED DEBT DOCUMENTS" means the Subordinated
Non-Negotiable Promissory Note due December 31, 2003 issued on November 15, 1996
by ▇▇▇▇▇▇'▇ to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, each other agreement, instrument
and document evidencing or relating to the foregoing, and the Subordination
Agreement of even date herewith among ▇▇▇▇▇▇'▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Sterling and Agent.
"▇▇▇▇▇▇'▇" means ▇▇▇▇▇▇'▇ Farm, Inc., a Delaware corporation.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, by agreement to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"HAZARDOUS MATERIALS" means (i) any "hazardous substance" as defined
in the Comprehensive Environmental Response, Compensation and Liability Act of
1980, (ii) asbestos, (iii) polychlorinated biphenyls, (iv) petroleum, its
derivatives, by-products and other hydrocarbons, and (v) any other toxic,
radioactive, caustic or otherwise hazardous substance regulated under
Environmental Laws.
"HAZARDOUS MATERIALS CONTAMINATION" means contamination of the
improvements, buildings, facilities, personality, soil, groundwater, air or
other elements on or of the relevant property by Hazardous Materials, or any
derivatives thereof, or on or of any other property as a result of Hazardous
Materials, or any derivatives thereof, generated on, emanating from or disposed
of in connection with the relevant property.
"INDEMNITEES" has the meaning set forth in Section 10.2.
"INFORMATION CERTIFICATE" means that certain Information Certificate
of even date herewith executed by Borrowers and delivered to Agent.
"INTELLECTUAL PROPERTY" means, with respect to any Person, all
patents, trademarks, trade names, copyrights, technology, know-how and
processes, and all applications therefor, used in or necessary for the conduct
of business by such Person.
"INTERCOMPANY LOANS" has the meaning set forth in Section 2.10.
"INTEREST PERIOD" means, as to any LIBOR Loan, the period commencing
on the date such Loan is borrowed or continued as, or converted into, a LIBOR
Loan and ending on the date one (1), two (2), three (3) or six (6) months
thereafter, as selected by a Borrower
-8-
pursuant to Section 2.3(e); provided, that: (a) if any Interest Period would
otherwise end on a day that is not a Business Day, such Interest Period shall be
extended to the following Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day; (b) any Interest
Period that begins on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period shall end on the last
Business Day of the calendar month at the end of such Interest Period; (c) no
Borrower may select any Interest Period for a Revolving Loan which would extend
beyond the Commitment Expiry Date; and (d) no Borrower may select any Interest
Period for a Term Loan if, after giving effect to such selection, the aggregate
principal amount of such Term Loan having Interest Periods ending after any date
on which an installment of such Term Loan is scheduled to be repaid would exceed
the aggregate principal amount of such Term Loan scheduled to be outstanding
after giving effect to such repayment.
"INVENTORY" means "inventory" (as defined in Article 9 of the UCC)
of each Borrower and the Subsidiaries.
"INVESTMENT" means any investment in any Person, whether by means of
acquiring or holding securities, capital contribution, loan, time deposit,
advance, Guarantee or otherwise.
"INVESTOR" means, collectively, the Persons identified as such on
the Information Certificate.
"LC ISSUER" means a bank or trust company acceptable to ▇▇▇▇▇▇▇
▇▇▇▇▇, as issuer of one or more Letters of Credit outstanding at any time.
"LENDER" means each of (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇, (ii) each other financial
institution party hereto, (iii) each other Person that becomes a holder of a
Note pursuant to Section 12.6, (iv) Agent, to the extent of any Agent Advances
and other Revolving Loans made by Agent which have not been settled among
Lenders pursuant to Section 11.13, and (v) the respective successors of all of
the foregoing, and Lenders means all of the foregoing. In addition to the
foregoing, for the purpose of identifying the Persons entitled to share in the
Collateral and the proceeds thereof under, and in accordance with the provisions
of, this Agreement and the Security Documents, the term "Lender" shall include
Designated Lender Affiliates.
"LETTER OF CREDIT" means a standby or commercial letter of credit
issued for the account of any Borrower by an LC Issuer which expires by its
terms within one year after the date of issuance and in any event at least
thirty (30) days prior to the Commitment Expiry Date. Notwithstanding the
foregoing, a Letter of Credit may provide for automatic extensions of its expiry
date for one or more successive one (1) year periods provided that the LC Issuer
that issued such Letter of Credit has the right to terminate such Letter of
Credit on each such annual expiration date and no renewal term may extend the
term of the Letter of Credit to a date that is later than the thirtieth (30th)
day prior to the Commitment Expiry Date.
-9-
"LETTER OF CREDIT LIABILITIES" means, at any time of calculation,
the sum of (i) the amount then available for drawing under all outstanding
Letters of Credit (without regard to whether any conditions to drawing
thereunder can then be met), to the extent subject to a Support Agreement plus
(ii) the aggregate unpaid amount of all reimbursement obligations in respect of
previous drawings made under such Letters of Credit, to the extent subject to a
Support Agreement.
"LIBOR" means, with respect to any LIBOR Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) equal to (i) the rate of interest which is identified and normally published
by Bloomberg Professional Service Page BBAM 1 as the offered rate for loans in
U.S. dollars for the applicable Interest Period under the caption British
Bankers Association LIBOR Rates as of 11:00 a.m. (London time), on the second
full Business Day next preceding the first day of such Interest Period (unless
such date is not a Business Day, in which event the next succeeding Business Day
will be used); divided by (ii) the sum of one minus the daily average during
such Interest Period of the aggregate maximum reserve requirement (expressed as
a decimal) then imposed under Regulation D of the Board of Governors of the
Federal Reserve System (or any successor thereto) for "Eurocurrency Liabilities"
(as defined therein). If Bloomberg Professional Service no longer reports the
LIBOR or Agent determines in good faith that the rate so reported no longer
accurately reflects the rate available to Agent in the London Interbank Market
or if such index no longer exists or if Page BBAM 1 no longer exists or
accurately reflects the rate available to Agent in the London Interbank Market,
Agent may select a reasonably comparable replacement index or replacement page,
as the case may be.
"LIBOR LOANS" means any Loans, which accrue interest by reference to
the LIBOR, in accordance with the terms of this Agreement.
"LIBOR MARGIN" means 3.00% per annum with respect to the Revolving
Loans and other Obligations (other than Term Loan A and Term Loan B), 3.25% per
annum with respect to Term Loan A and 3.75% per annum with respect to Term Loan
B.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement and the
other Financing Documents, any Borrower or any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, Capital
Lease or other title retention agreement relating to such asset.
"LOAN ACCOUNT" has the meaning set forth in Section 2.6(b).
"LOANS" means Term Loan A, Term Loan B and the Revolving Loans, or
any combination of the foregoing, as the context may require.
"MAJOR CASUALTY PROCEEDS" means (i) the aggregate insurance proceeds
received in connection with one or more related events under any Property
Insurance Policy
-10-
or (ii) any award or other compensation with respect to any condemnation of
property (or any transfer or disposition of property in lieu of condemnation),
in each case less (a) any out-of-pocket expenses reasonably incurred by the
applicable Credit Party in connection therewith, including fees and expenses of
any outside claims consultant or advocate hired by a Credit Party in connection
with the evaluation, filing and settlement of any related insurance claim, (b)
the amount of any Debt secured by a Lien on the related asset and discharged
from the proceeds of such event and (c) any taxes paid or payable by the
applicable Credit Party in respect of such event.
"MARGIN STOCK" has the meaning assigned thereto in Regulation U of
the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (i) the
financial condition, operations, business, properties or prospects of the Credit
Parties, taken as a whole, (ii) the rights and remedies of Agent or Lenders
under any Financing Document, or the ability of any Credit Party to perform any
of its obligations under any Financing Document to which it is a party, (iii)
the legality, validity or enforceability of any Financing Document, or (iv) the
existence, perfection or priority of any security interest granted in any
Financing Document, or the value of, any material Collateral.
"MAXIMUM LAWFUL RATE" has the meaning set forth in Section 2.7(b).
"▇▇▇▇▇▇▇ ▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital, a division of ▇▇▇▇▇▇▇
▇▇▇▇▇ Business Financial Services Inc., and its successors.
"MULTIEMPLOYER PENSION PLAN" means a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA, to which any Borrower or any member of the
Controlled Group may have any liability.
"NET BORROWING AVAILABILITY" has the meaning provided in the
Borrowing Base Certificate.
"NET CASH PROCEEDS" means, with respect to any transaction or event,
an amount equal to the cash proceeds received by the Credit Party from or in
respect of such transaction or event (including proceeds of any non-cash
proceeds of such transaction), less (i) any out-of-pocket expenses reasonably
incurred by such Person in connection therewith and (ii) in the case of an Asset
Disposition, the amount of any Debt secured by a Lien on the related asset and
discharged from the proceeds of such Asset Disposition and any taxes paid or
payable by such Person in respect of such Asset Disposition.
"NOTES" means the Term Notes A, the Term Notes B and the Revolving
Loan Notes, or any combination of the foregoing, as the context may require.
-11-
"NOTICE OF BORROWING" means a written notice of a Responsible
Officer of Borrower Representative, appropriately completed and substantially in
the form of Exhibit E hereto.
"NOTICE OF LC CREDIT EVENT" means a written notice from a
Responsible Officer of Borrower Representative to Agent with respect to any
issuance, increase or extension of a Letter of Credit specifying: (i) the date
of issuance or increase of a Letter of Credit; (ii) the expiry date of such
Letter of Credit; (iii) the proposed terms of such Letter of Credit, including
the face amount; and (iv) the transactions or additional transaction or
transactions that are to be supported or financed with such Letter of Credit or
increase thereof.
"OBLIGATIONS" means all obligations, liabilities and indebtedness
(including post-petition interest, whether or not allowed) of each Credit Party
under this Agreement or any other Financing Document, in each case howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due. The Obligations
shall include, without limitation, all obligations, liabilities and indebtedness
arising from or in connection with all Support Agreements and all Ancillary
Services.
"OPERATIVE DOCUMENTS" means the Financing Documents and the
Subordinated Debt Documents.
"ORGANIZATIONAL DOCUMENTS" means, with respect to any Person other
than a natural person, the documents by which such Person was organized (such as
a certificate of incorporation, certificate of limited partnership or articles
of organization, and including, without limitation, any certificates of
designation for preferred stock or other forms of preferred equity) and which
relate to the internal governance of such Person (such as by-laws, a partnership
agreement or an operating, limited liability or members agreement).
"OTHER OFFICER" means any financial officer, division president or
chief operating officer of the applicable Borrower or other Credit Party.
"PARTICIPANT" has the meaning set forth in Section 12.6(b).
"PASA" means the Packers and Stockyards Act of 1921, as amended from
time to time, and any successor statute.
"PASA LIEN" means a Lien securing the liabilities of any Borrower to
unpaid cash sellers of livestock.
"PASA RESERVE" means a reserve equal to the amount, if any, by which
the aggregate unpaid amount of the liabilities of Borrowers to unpaid cash
sellers of livestock at such time exceeds the sum of (i) the aggregate available
or undrawn amount of any PASA Security and (ii) the aggregate amount drawn in
respect of PASA Security and not yet paid to cash sellers of livestock.
-12-
"PASA SECURITY" means collectively, (i) cash collateral posted by
Borrower to the issuer of any letters of credit from time to time as security
for a Borrower's obligations under PASA, (ii) any Support Agreements issued
hereunder from time to time as security for surety bonds issued to secure a
Borrower's obligations under PASA and (iii) Support Agreements issued hereunder
from time to time as security for a Borrower's obligations under PASA.
"PAYMENT ACCOUNT" means the account specified on the signature pages
hereof into which all payments by or on behalf of each Borrower to Agent under
the Financing Documents shall be made, or such other account or accounts as
Agent shall from time to time specify by notice to Borrowers.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PENSION PLAN" means any "employee benefit pension plan", as such
term is defined in Section 3(1) of ERISA, and any "employee welfare benefit
plan", as such term is defined in Section 3(2) of ERISA, in each case which is
subject to Title IV of ERISA (other than a Multiemployer Pension Plan), and to
which any Borrower or any member of the Controlled Group may have any liability,
including any liability by reason of having been a substantial employer within
the meaning of Section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under Section
4069 of ERISA.
"PERMITTED CONTEST" means a contest maintained in good faith by
appropriate proceedings promptly instituted and diligently conducted and with
respect to which such reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made; provided that
compliance with the obligation that is the subject of such contest is
effectively stayed during such challenge.
"PERMITTED LIENS" means Liens permitted pursuant to Section 5.2.
"PERSON" means any natural person, corporation, limited liability
company, professional association, limited partnership, general partnership,
joint stock company, joint venture, association, company, trust, bank, trust
company, land trust, business trust or other organization, whether or not a
legal entity, and any government or agency or political subdivision thereof.
"PREFCO SUBORDINATED DEBT DOCUMENTS" means the two Subordinated
Non-Negotiable Promissory Notes due February 15, 2008 issued on the date hereof
by Prefco and Atlantic to ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇, respectively, each
other agreement, instrument and document evidencing or relating to the
foregoing, and the Subordination Agreement of even date herewith by Atlantic,
Prefco, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, Sterling and Agent.
"PRIME RATE" means a variable per annum rate, as of any date of
determination, equal to the greater of (i) the Federal Funds Rate plus one-half
of one percent
-13-
(0.50%) per annum and (ii) the rate from time to time published in the "Money
Rates" section of The Wall Street Journal as being the "Prime Rate" (or, if more
than one rate is published as the Prime Rate, then the highest of such rates).
The Prime Rate will change as of the date of publication in The Wall Street
Journal of a Prime Rate that is different from that published on the preceding
Business Day. In the event that The Wall Street Journal shall, for any reason,
fail or cease to publish the Prime Rate, Agent shall choose a reasonably
comparable index or source to use as the basis for the Prime Rate.
"PRIME RATE LOANS" means Loans, which accrue interest by reference
to the Prime Rate, in accordance with the terms of this Agreement.
"PRIME RATE MARGIN" means 1.25% per annum with respect to the
Revolving Loans and other Obligations (other than Term Loan A and Term Loan B),
1.50% per annum with respect to Term Loan A and 2.00% per annum with respect to
Term Loan B.
"PROPERTY INSURANCE POLICY" means any insurance policy maintained by
any Credit Party covering losses with respect to tangible real or personal
property or improvements or losses from business interruption.
"PRO RATA SHARE" means (i) with respect to a Lender's right to
receive payments of principal and interest with respect to Term Loan A, the Term
Loan A Commitment Percentage of such Lender, (ii) with respect to a Lender's
right to receive payments of principal and interest with respect to Term Loan B,
the Term Loan B Commitment Percentage of such Lender, (iii) with respect to a
Lender's obligation to make Revolving Loans, such Lender's right to receive
payments of principal and interest with respect thereto, such Lender's right to
receive the unused line fee described in Section 2.3(b), and such Lender's
obligation to share in Letter of Credit Liability and to receive the related
Letter of Credit fee described in Section 2.5(b), the Revolving Loan Commitment
Percentage of such Lender and (iv) for all other purposes (including without
limitation the indemnification obligations arising under Section 11.6) with
respect to any Lender, the percentage obtained by dividing (x) the sum of the
Revolving Loan Commitment Amount of such Lender (or, in the event the Revolving
Loan Commitment shall have been terminated, such Lender's then existing
Revolving Loan Outstandings), plus such Lender's then outstanding principal
amount of Term Loan A, plus such Lender's then outstanding principal amount of
Term Loan B, by (y) the sum of the Revolving Loan Commitment (or, in the event
the Revolving Loan Commitment shall have been terminated, the then existing
Revolving Loan Outstandings of all Lenders), plus the then outstanding principal
amount of Term Loan A, plus the then outstanding principal amount of Term Loan
B.
"REAL PROPERTY" means real property of any Borrower or any of the
Subsidiaries, together with all buildings, structures and other improvements
thereon, and all licenses, easements and appurtenances related thereto.
"REIMBURSEMENT OBLIGATIONS" means, at any date, the obligations of
each Borrower then outstanding to reimburse ▇▇▇▇▇▇▇ ▇▇▇▇▇ for payments made by
▇▇▇▇▇▇▇ ▇▇▇▇▇ under a Support Agreement.
-14-
"REINVESTMENT RESERVE" has the meaning set forth in Section 2.1(d).
"REQUIRED LENDERS" means at any time Lenders holding (i) sixty-six
and two thirds percent (66 2/3%) or more of the sum of the Revolving Loan
Commitment and the outstanding principal balance of the Term Loans (taken as a
whole) or (ii) if the Revolving Loan Commitment has been terminated, sixty-six
and two thirds percent (66 2/3%) or more of the sum of (x) the aggregate
outstanding principal balance of the Loans plus (y) the aggregate amount of
Reimbursement Obligations.
"RESERVES" means such amounts as Agent may from time to time
establish and revise, effective following written notice thereof by Agent to
Borrower Representative (except that during the existence of an Event of
Default, any changes shall be effective upon Agent's determination, which will
be promptly communicated to Borrower Representative in writing), in each case in
the exercise of its reasonable credit judgment, reducing the amount of Revolving
Loans and Support Agreements which would otherwise be available to Borrowers
under the lending formula(s) provided for herein: (a) to reflect events,
conditions, contingencies or risks which, as determined by Agent in the exercise
of its reasonable credit judgment, adversely affect, or could reasonably be
expected to adversely affect, any of: (i) the Collateral or any other property
which is security for the Obligations or its value, (ii) the assets, business or
prospects of any Credit Party or (iii) the Liens and other rights of Agent or
any Lender in the Collateral (including the enforceability, perfection and
priority thereof), (b) to reflect Agent's good faith belief that any collateral
report or financial information furnished by or on behalf of any Credit Party to
Agent is or may have been incomplete, inaccurate or misleading in any material
respect, (c) to reflect accrued and unpaid interest and fees to the extent due
and unpaid or to the extent Agent has a reasonable basis to believe that such
Reserve is necessary to ensure payment of such amounts when due, (d) in an
amount equal to 2 months' rent in respect of the leased locations in each of
Northbrook, Illinois and ▇▇▇▇▇▇▇, ▇▇▇▇▇ (▇▇▇▇ Portwest, Suite #160) and (e) in
an amount equal to 3 months' charges in respect of each third party warehouse as
to which the warehouseman has not waived or subordinated its lien on each
Borrower's inventory located at such warehouse. To the extent Agent may, in
accordance with any other terms hereof, establish new criteria or revise
existing criteria for Eligible Accounts or Eligible Inventory, Agent shall not
also establish a Reserve for the same purpose. The amount of any Reserve
established by Agent shall have a reasonable relationship to the event,
condition or other matter, which is the basis for such Reserve as determined by
Agent in good faith. Without limitation of the foregoing, Agent (I) hereby
establishes the PASA Reserve and (II) shall have the right to establish a
Reserve for the amount by which the total dilution of Accounts exceeds five
percent (5%), with dilution referring to all actual and potential offsets to an
Account.
"RESPONSIBLE OFFICER" means any of the Chairman of the Board, Chief
Executive Officer or Chief Financial Officer of the applicable Borrower or other
Credit Party.
"RESTRICTED DISTRIBUTION" means as to any Person (i) any dividend or
other distribution on any equity interest in such Person (except those payable
solely in its equity
-15-
interests of the same class) or (ii) any payment in the form of cash or Debt on
account of (a) the purchase, redemption, retirement, defeasance, surrender or
acquisition of any equity interests in such Person or any claim respecting the
purchase of sale of any equity interest in such Person or (b) any option,
warrant or other right to acquire any equity interests in such Person.
"REVOLVING LOAN BORROWING" means a borrowing of a Revolving Loan.
"REVOLVING LOAN COMMITMENT" means the sum of each Lender's Revolving
Loan Commitment Amount, which is an amount equal to $8,500,000 (as the same may
be reduced from time to time pursuant to this Agreement).
"REVOLVING LOAN COMMITMENT AMOUNT" means, as to any Lender, the
dollar amount set forth opposite such Lender's name on the Commitment Annex
under the column "Revolving Loan Commitment Amount", or, if different, in the
most recent Assignment Agreement to which such Lender is a party.
"REVOLVING LOAN COMMITMENT PERCENTAGE" means, as to any Lender, the
percentage set forth opposite such Lender's name on the Commitment Annex under
the column "Revolving Loan Commitment Percentage", or, if different, in the most
recent Assignment Agreement to which such Lender is a party.
"REVOLVING LOAN LIMIT" means, at any time, the lesser of (i) the
Borrowing Base, plus any Agent Advances and (ii) the Revolving Loan Commitment.
"REVOLVING LOAN NOTE" has the meaning set forth in Section
2.4.
"REVOLVING LOAN OUTSTANDINGS" means at any time of calculation the
sum of the then existing aggregate outstanding principal amount of Revolving
Loans and the then existing Letter of Credit Liabilities.
"REVOLVING LOANS" has the meaning set forth in Section 2.2(a), and
includes all Agent Advances.
"▇▇▇▇▇▇▇▇ SUBORDINATED DEBT DOCUMENTS" means the Subordinated
Non-Negotiable Promissory Note due February 15, 2008 issued on the date hereof
by ▇▇▇▇▇▇▇▇ and Atlantic to ▇.▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, each
other agreement, instrument and document evidencing or relating to the foregoing
and the Subordination Agreement of even date herewith among Atlantic, ▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Sterling and Agent.
"SECURITY DOCUMENTS" means any agreement, document or instrument
executed concurrently herewith or at any time hereafter pursuant to which one or
more Credit Parties or any other Person either (i) Guarantees payment or
performance of all or any portion of the Obligations and/or (ii) provides, as
security for all or any portion of the Obligations, a Lien on any of its assets
in favor of Agent for its own benefit and the benefit
-16-
of Lenders, as any or all of the same may be amended, supplemented, restated or
otherwise modified from time to time.
"SENIOR LEVERAGE RATIO" has the meaning provided in the
Compliance Certificate.
"SETTLEMENT DATE" has the meaning set forth in Section 11.13(b).
"STATED RATE" has the meaning set forth in Section 2.7(b).
"STERLING" means BOCP ABR Mezz, LLC, formerly known as Sterling
BOCP, LLC.
"STERLING SUBORDINATED DEBT DOCUMENTS" means the certain Amended and
Substituted Senior Subordinated Note due December 31, 2007 issued on the date
hereof by Borrowers in favor of Sterling, the certain Amended and Restated
Security Agreement of even date herewith executed by each Borrower in favor of
Sterling and each other agreement evidencing, securing or relating to the
foregoing and the Subordination Agreement of even date herewith among Sterling,
Borrowers and Agent.
"SUBORDINATED DEBT" means, collectively, (i) Debt of ▇▇▇▇▇▇'▇ owing
to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in an original principal amount of
$190,000 evidenced by the ▇▇▇▇▇▇ Subordinated Debt Documents, (ii) Debt of
▇▇▇▇▇▇'▇ owing to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ in an original principal
amount of $219,593 evidenced by the ▇▇▇▇▇▇-▇▇▇▇▇ Subordinated Debt Documents,
(iii) Debt of Atlantic and Prefco owing to ▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ in an
aggregate original principal amount of $1,400,000 evidenced by the Prefco
Subordinated Debt Documents, (iv) Debt of Atlantic and ▇▇▇▇▇▇▇▇ owing to ▇.▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in an original principal amount of
$874,186.35 evidenced by the ▇▇▇▇▇▇▇▇ Subordinated Debt Documents and (v) Debt
of Borrowers owing to Sterling in an original principal amount of $709,048.89
evidenced by the Sterling Subordinated Debt Documents (in each case together
with capitalized interest, fees, costs and other amounts, if any, payable
thereunder).
"SUBORDINATED DEBT DOCUMENTS" means, collectively, (i) the ▇▇▇▇▇▇
Subordinated Documents, (ii) the ▇▇▇▇▇▇-▇▇▇▇▇ Subordinated Debt Documents, (iii)
the Prefco Subordinated Documents, (iv) the ▇▇▇▇▇▇▇▇ Subordinated Debt Documents
and (v) the Sterling Subordinated Debt Documents.
"SUBSIDIARY" means, with respect to any Person, any corporation,
limited liability company, limited partnership or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person. Unless otherwise
specified, the term Subsidiary shall refer to a Subsidiary of a Borrower.
"SUPPORT AGREEMENT" has the meaning set forth in Section 2.5(a).
-17-
"TAXES" has the meaning set forth in Section 2.8.
"TERM LOAN A" has the meaning set forth in Section 2.1.
"TERM LOAN A COMMITMENT PERCENTAGE" means, as to any Lender, the
percentage set forth opposite such Lender's name on the Commitment Annex under
the column "Term Loan A Commitment Percentage", or, if different, in the most
recent Assignment Agreement to which such Lender is a party.
"TERM LOAN B" has the meaning set forth in Section 2.1.
"TERM LOAN B COMMITMENT PERCENTAGE" means, as to any Lender, the
percentage set forth opposite such Lender's name on the Commitment Annex under
the column "Term Loan B Commitment Percentage", or, if different, in the most
recent Assignment Agreement to which such Lender is a party.
"TERM LOANS" means each of Term Loan A and Term Loan B.
"TERM NOTE A" has the meaning set forth in Section 2.4.
"TERM NOTE B" has the meaning set forth in Section 2.4.
"TERMINATION DATE" has the meaning set forth in Section 2.2(c).
"UCC" means the Uniform Commercial Code of the State of Illinois or
of any other state the laws of which are required to be applied in connection
with the perfection of security interests in any Collateral.
Section 1.2 Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder (including without
limitation determinations made pursuant to the exhibits hereto) shall be made,
and all financial statements required to be delivered hereunder shall be
prepared on a consolidated basis in accordance with GAAP applied on a basis
consistent (except for changes concurred with by Borrowers' independent public
accountants) with the most recent audited consolidated financial statements of
Atlantic and the applicable Consolidated Subsidiaries delivered to Agent and
each Lender; provided that if (a) any Borrower shall object to determining
compliance with the provisions of this Agreement on such basis by written notice
delivered to Agent and Lenders at the time of delivery of required financial
statements due to any change in GAAP or the rules promulgated with respect
thereto or the application thereof or (b) Agent or the Required Lenders shall so
object in writing by written notice delivered to Borrowers within sixty (60)
days after delivery of such financial statements, then such calculations shall
be made on a basis consistent with the most recent financial statements
delivered by Borrowers to Lenders as to which no such objection shall have been
made. All amounts used for purposes of financial calculations required to be
made herein shall be without duplication.
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Section 1.3 Other Definitional Provisions.
References in this Agreement to "Articles", "Sections", "Annexes" or
"Exhibits" shall be to Articles, Sections, Annexes or Exhibits of or to this
Agreement unless otherwise specifically provided. Any term defined herein may be
used in the singular or plural. "Include", "includes" and "including" shall be
deemed to be followed by "without limitation". Except as otherwise specified
herein, references to any Person include the successors and 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 statute or act shall include all related current regulations
and all amendments and any successor statutes, acts and regulations.
ARTICLE 2
LOANS AND LETTERS OF CREDIT
Section 2.1 Term Loans.
(a) Term Loan Amounts. On the terms and subject to the conditions
set forth herein, each Lender severally agrees to make the following Loans to
Borrowers:
(i) on the Closing Date, a term loan in an original principal
amount equal to $5,660,000 ("TERM LOAN A"); and
(ii) on the Closing Date, a term loan in an original principal
amount equal to $2,500,000 ("TERM LOAN B").
Each Term Loan shall be advanced by Lenders to Borrower Representative and
allocated by Borrower Representative to Borrower Representative and the other
Borrowers as Borrower Representative shall determine. Each Lender's obligation
to fund the Term Loans shall be limited to such Lender's Term Loan A Commitment
Percentage of Term Loan A, and such Lender's Term Loan B Commitment Percentage
of Term Loan B, and no Lender shall have any obligation to fund any portion of
any Term Loan required to be funded by any other Lender, but not so funded. No
Borrower shall have any right to reborrow any portion of the Term Loans which
are repaid or prepaid from time to time.
(b) Intentionally omitted.
(c) Scheduled Repayments. There shall become due and payable, and
Borrowers shall repay the Term Loans through, scheduled payments on each date
set forth below, each equal to the applicable installment amount set forth below
(or, if less, the outstanding amount of the applicable Loan):
Term Loan A
Date Installment Amount
---- ------------------
February 1, 2003 $283,000.00
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May 1, 2003 $283,000.00
August 1, 2003 $283,000.00
November 1, 2003 $283,000.00
February 1, 2004 $283,000.00
May 1, 2004 $283,000.00
August 1, 2004 $283,000.00
November 1, 2004 $283,000.00
February 1, 2005 $283,000.00
May 1, 2005 $283,000.00
August 1, 2005 $283,000.00
November 1, 2005 $283,000.00
February 1, 2006 $283,000.00
May 1, 2006 $283,000.00
August 1, 2006 $283,000.00
November 1, 2006 $283,000.00
February 1, 2007 $283,000.00
May 1, 2007 $283,000.00
August 1, 2007 $283,000.00
November 1, 2007 Outstanding principal balance of Term
Loan A
Term Loan B
Date Installment Amount
---- ------------------
November 1, 2007 $2,500,000
Notwithstanding the payment schedules set forth above, the outstanding principal
amount of Term Loan A and Term Loan B shall become immediately due and payable
in full on the Termination Date.
(d) Mandatory Prepayments. There shall become due and payable and
Borrowers shall prepay the Term Loans (and the Revolving Loans, to the extent
required by Section 2.1(f)(i) or (ii)) in the following amounts and at the
following times:
(i) on the one hundred fifth (105th) day following the last
day of each Fiscal Year, beginning with the Fiscal Year ending December 31,
2003, an amount equal to fifty percent (50%) of Excess Cash Flow for such Fiscal
Year;
(ii) on the date on which any Credit Party (or Agent as loss
payee or assignee) receives any payment which constitutes Major Casualty
Proceeds, an amount equal to the amount of such payment; provided, that the
recipient (other than Agent) of any payment which constitutes Major Casualty
Proceeds may reinvest such payment within three hundred sixty (360) days, in
replacement assets comparable to the assets giving rise to such payment;
provided, that the aggregate amount which may be reinvested by the applicable
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Borrower and its Subsidiaries pursuant to the preceding proviso may not exceed
$500,000 in any Fiscal Year; provided, further, that if the applicable Credit
Party does not intend to reinvest such payment, or if the time period set forth
in this sentence expires without such Credit Party having reinvested such
payment, Borrowers shall prepay the Loans in an amount equal to such payment;
(iii) promptly upon receipt by any Credit Party of the
proceeds from the issuance and sale of any Debt or equity securities (other than
(1) proceeds of Debt securities expressly permitted pursuant to Section 5.1, (2)
proceeds of the issuance of equity securities by any Borrower received on or
before the Closing Date, (3) proceeds from the issuance of equity securities to
members of the management of any Credit Party and (4) proceeds of the issuance
of equity securities to any Borrower or any Subsidiary), an amount equal to one
hundred percent (100%) of the Net Cash Proceeds of such issuance and sale;
(iv) promptly upon receipt by any Credit Party of the proceeds
of any Asset Disposition, an amount equal to one hundred percent (100%) of the
Net Cash Proceeds of such Asset Disposition; provided, that no prepayment shall
be required pursuant to this Section 2.1(d)(iv) unless and until the aggregate
Net Cash Proceeds received during any Fiscal Year from Asset Dispositions,
exceeds $250,000 (in which case all Net Cash Proceeds in excess of such amount
shall be used to make prepayments pursuant to this Section 2.1(d)(iv)), and
provided, that the recipient of such Net Cash Proceeds may reinvest such Net
Cash Proceeds, within three hundred sixty (360) days, in replacement fixed
assets of a kind then used or usable in the business of such Credit Party. If
the applicable Credit Party does not intend to so reinvest such Net Cash
Proceeds, or if the period set forth in the immediately preceding sentence
expires without such Credit Party having reinvested such Net Cash Proceeds,
Borrowers shall prepay the Loans in an amount equal to such Net Cash Proceeds;
and
Any amounts permitted to be reinvested pursuant to the preceding clauses (ii) or
(iv) shall be immediately applied by the applicable Borrower as a prepayment
against then outstanding Revolving Loans, and Agent shall establish a Reserve
(the "REINVESTMENT RESERVE") against the Revolving Loan Limit in an amount equal
to such permitted reinvestment amount. So long as no Event of Default then
exists, Agent shall permit Revolving Loan Borrowings to finance the making of
reinvestments permitted pursuant to the preceding clauses (ii) and (iv), and
shall concurrently reduce the Reinvestment Reserve by an equivalent amount. Any
remaining portion of the Reinvestment Reserve shall be reduced to zero (0) upon
the expiration of the applicable reinvestment periods pursuant to the preceding
clauses (ii) and (iv).
(e) Optional Prepayments. Borrowers may from time to time, on at
least one (1) Business Day's prior written notice to Agent specifying the date
and amount of such prepayment, prepay any Term Loan in whole or in part;
provided that any such partial prepayment shall be in an amount equal to
$100,000 or a higher integral multiple of $25,000. No payment pursuant to this
Section 2.1(e) shall (except as reflected in any determination of Excess Cash
Flow), reduce the amount of any payment required by Section 2.1(d).
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(f) All Prepayments.
(i) Any prepayment of a LIBOR Loan on a day other than the
last day of an Interest Period therefor shall include interest on the principal
amount being repaid and shall be subject to Section 2.3(e)(iv). All prepayments
of a Loan shall be applied first to that portion of such Loan comprised of Prime
Rate Loans and then to that portion of such Loan comprised of LIBOR Loans, in
direct order of Interest Period maturities. Subject to the provisions of the
immediately following clause (ii), all prepayments of Term Loans shall be
applied first against Term Loan A, until paid in full, and thereafter against
Term Loan B, in each case ratably to the remaining installments thereof.
Following the payment in full of the Term Loans, any remaining amounts required
by Section 2.1(d) to be used to prepay the Term Loans shall instead be applied
as a repayment of the outstanding Revolving Loans pro rata among all Lenders
having a Revolving Loan Commitment Percentage (without reducing the Revolving
Loan Commitment).
(ii) Notwithstanding anything to the contrary in the
immediately preceding clause (i), (A) Major Casualty Proceeds relating to the
2000 fire at ▇▇▇▇▇▇'▇ plant and consisting of proceeds of property insurance
relating to Inventory and proceeds of business interruption insurance, shall be
applied as a repayment of the outstanding Revolving Loans pro rata among all
Lenders having a Revolving Loan Commitment Percentage (without reducing the
Revolving Loan Commitment), and (B) all other Major Casualty Proceeds shall be
allocated between outstanding Revolving Loans and the Term Loans in the same
proportion as (1) the current market value of the Collateral consisting of cash
and Inventory lost or damaged and giving rise to such Major Casualty Proceeds
bears to (2) the current market value of all Collateral (other than cash and
Inventory) lost or destroyed and giving rise to such Major Casualty Proceeds.
Application of Major Casualty Proceeds allocated pursuant to the immediately
preceding sentence shall otherwise be made in accordance with the provisions of
Section 2.1(f)(i).
(iii) Borrower Representative shall give prior written notice
to Agent at least one (1) Business Day prior to each mandatory prepayment
pursuant to Section 2.1(d) and each voluntary prepayment pursuant to Section
2.1(e) and Agent shall promptly notify each Lender of such notice.
Section 2.2 Revolving Loans.
(a) Revolving Loans and Borrowings.
(i) On the terms and subject to the conditions set forth
herein, each Lender severally agrees to make Loans to each Borrower from time to
time as set forth herein equal to such Lender's Revolving Loan Commitment
Percentage of revolving loans ("REVOLVING LOANS") requested by such Borrower
hereunder, provided that after giving effect thereto, the Revolving Loan
Outstandings shall not exceed the Revolving Loan Limit. Within the foregoing
limits, each Borrower may borrow under this Section 2.2(a)(i), prepay or repay
Revolving Loans as required or permitted under this Section 2.2 and reborrow
Revolving Loans pursuant to this Section 2.2(a)(i).
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(ii) Subject to the limitations set forth in this Section
2.2(a)(ii), Agent is hereby authorized by Borrowers and Lenders, from time to
time in Agent's sole discretion, (A) after the occurrence of a Default or an
Event of Default, or (B) at any time that any of the other applicable conditions
precedent set forth in Section 8.2 have not been satisfied (including without
limitation the condition precedent that the Revolving Loan Outstandings not
exceed the Borrowing Base plus any other then outstanding Agent Advances), to
make Revolving Loans to each Borrower on behalf of Lenders which Agent, in its
reasonable business judgment, deems necessary or desirable (1) to preserve or
protect the business conducted by each Borrower, the Collateral, or any portion
thereof, (2) to enhance the likelihood of, or maximize the amount of, repayment
of the Loans and other Obligations, (3) to pay any amount chargeable to any
Borrower pursuant to the terms of this Agreement, including required principal
payments on Term Loans, interest payments and costs, fees and expenses as
described in Section 10.1 and/or Section 10.4 or (4) to satisfy payment
obligations under Support Agreements (any of the advances described in this
Section 2.2(a)(ii) being hereafter referred to as "AGENT ADVANCES"); provided,
that (i) Required Lenders may at any time revoke Agent's authorization to make
Agent Advances, except Agent Advances applied in the manner described in the
preceding clauses (3) and (4), any such revocation to be in writing and to
become effective prospectively upon the Agent's receipt thereof, (ii) Agent
Advances shall be made solely as Prime Rate Loans, (iii) the aggregate amount of
Agent Advances outstanding at any time, exclusive of those made pursuant to the
preceding clauses (3) and (4), shall not exceed $850,000 and (iv) Agent shall be
prohibited from making Agent Advances to the extent the making thereof would
cause the Revolving Loan Outstandings (inclusive of Agent Advances) to exceed
the Revolving Loan Commitment.
(b) Advancing Revolving Loans.
(i) A Borrower shall deliver to Agent a Notice of Borrowing
with respect to each proposed Revolving Loan Borrowing (other than Agent
Advances), such Notice of Borrowing to be delivered no later than noon (Chicago
time) (i) on the day of such proposed borrowing, in the case of Prime Rate Loans
in an aggregate principal amount equal to or less than $5,000,000, (ii) on the
Business Day prior to such proposed borrowing, in the case of Prime Rate Loans
in an aggregate principal amount greater than $5,000,000 and (iii) on the third
(3rd) Business Day prior to such proposed borrowing, in the case of all LIBOR
Loans. Once given, except as provided in Section 2.3(e)(ii), a Notice of
Borrowing shall be irrevocable and each Borrower shall be bound thereby. Each
Revolving Loan Borrowing shall be advanced to the applicable Borrower's Account
or as otherwise directed by such Borrower.
(ii) Each Borrower hereby authorizes Lenders and Agent to make
Revolving Loans (other than LIBOR Loans) based on telephonic notices made by any
Person which Agent, in good faith, believes to be acting on behalf of such
Borrower. Each Borrower agrees to deliver to Agent a Notice of Borrowing in
respect of each Revolving Loan requested by such Borrower by telephone no later
than one Business Day following such request. If such Notice of Borrowing
differs in any respect from the action taken by Agent and Lenders, the records
of Agent and Lenders shall govern absent manifest error.
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Each Borrower further hereby authorizes Lenders and Agent to make Revolving
Loans based on electronic notices made by any Person which Agent, in good faith,
believes to be acting on behalf of such Borrower, but only after Agent shall
have established procedures acceptable to Agent for accepting electronic Notices
of Borrowing, as indicated by Agent's written confirmation thereof.
(c) Mandatory Revolving Loan Repayments and Prepayments.
(i) The Revolving Loan Commitment shall terminate upon the
earlier to occur of (i) the Commitment Expiry Date and (ii) the date on which
Agent or Required Lenders elect to terminate the Revolving Loan Commitment
pursuant to Section 9.2 (such earlier date being the "TERMINATION DATE"), and
there shall become due and Borrowers shall pay on the Termination Date, the
entire outstanding principal amount of each Revolving Loan, together with
accrued and unpaid interest thereon to but excluding the Termination Date.
(ii) If at any time the Revolving Loan Outstandings exceed the
Revolving Loan Limit, then, on the next succeeding Business Day, Borrowers shall
repay the Revolving Loans or cash collateralize Letter of Credit Liabilities in
the manner specified in Section 2.5(e) or cancel outstanding Letters of Credit,
or any combination of the foregoing, in an aggregate amount equal to such
excess.
Section 2.3 Interest, Interest Calculations and Certain Fees.
(a) Interest. From and following the Closing Date, depending upon
the applicable Borrower's election from time to time, subject to the terms
hereof, to have portions of the Loans accrue interest determined by reference to
the Prime Rate or the LIBOR, the Loans then outstanding and any other
Obligations then due and payable shall bear interest at the applicable rates set
forth below:
(i) If a Prime Rate Loan, or any other Obligation other than a
LIBOR Loan, then at the sum of the Prime Rate plus the applicable Prime Rate
Margin.
(ii) If a LIBOR Loan, then at the sum of the LIBOR plus the
applicable LIBOR Margin.
(b) Unused Line Fee. From and following the Closing Date, Borrowers
shall pay Agent, for the benefit of all Lenders committed to make Revolving
Loans, in accordance with their respective Pro Rata Shares, a fee in an amount
equal to (1) (a) the Revolving Loan Commitment less (b) the average daily
balance of the Revolving Loan Outstandings during the preceding month,
multiplied by (2) one-half of one percent (0.50%) per annum. Such fee is to be
paid monthly in arrears on the first day of each month.
(c) Collateral Management Fee. On the Closing Date, and on each
anniversary thereof, Borrowers shall pay Agent a fully earned and non-refundable
collateral management fee in the amount of $16,000.
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(d) Computation of Interest and Related Fees. All interest and fees under
each Financing Document shall be calculated on the basis of a 360-day year for
the actual number of days elapsed. The date of funding of a Prime Rate Loan and
the first day of an Interest Period with respect to a LIBOR Loan shall be
included in the calculation of interest. The date of payment of a Prime Rate
Loan and the last day of an Interest Period with respect to a LIBOR Loan shall
be excluded from the calculation of interest. If a Loan is repaid on the same
day that it is made, one (1) days' interest shall be charged. Interest on all
Prime Rate Loans is payable in arrears on the first day of each month and on the
maturity of such Loans, whether by acceleration or otherwise. Interest on LIBOR
Loans shall be payable on the last day of the applicable Interest Period, unless
the Interest Period is greater than three (3) months, in which case interest
will be payable on the last day of each three (3) month interval. In addition,
interest on LIBOR Loans is due on the maturity of such Loans, whether by
acceleration or otherwise.
(e) LIBOR Provisions.
(i) LIBOR Election. All Loans made on the Closing Date shall be
Prime Rate Loans and shall remain so until three (3) Business Days after the
Closing Date. Thereafter, the applicable Borrower may request that Revolving
Loans to be made be LIBOR Loans, that outstanding portions of Revolving Loans
and outstanding portions of each Term Loan be converted to LIBOR Loans and that
all or any portion of a LIBOR Loan be continued as a LIBOR Loan upon expiration
of the applicable Interest Period. Any such request will be made by submitting a
Notice of Borrowing to Agent. Once given, and except as provided in clause (ii)
below, a Notice of Borrowing shall be irrevocable and Borrowers shall be bound
thereby. Upon the expiration of an Interest Period, in the absence of a new
Notice of Borrowing submitted to Agent not less than three (3) Business Days
prior to the end of such Interest Period, the LIBOR Loan then maturing shall be
automatically converted to a Prime Rate Loan. There may be no more than six (6)
LIBOR Loans outstanding at any one time. Loans that are not requested as LIBOR
Loans in accordance with this Section 2.3(e)(i) shall be Prime Rate Loans. Agent
will notify Lenders, by telephonic or facsimile notice, of each Notice of
Borrowing received by Agent not less than two (2) Business Days prior to the
first day of the Interest Period of the LIBOR Loan requested thereby.
(ii) Inability to Determine LIBOR. In the event, prior to
commencement of any Interest Period relating to a LIBOR Loan, Agent shall
determine or be notified in writing by Required Lenders that adequate and
reasonable methods do not exist for ascertaining LIBOR, Agent shall promptly
provide notice of such determination to Borrowers and Lenders (which shall be
conclusive and binding on Borrowers and Lenders). In such event (1) any request
for a LIBOR Loan or for a conversion to or continuation of a LIBOR Loan shall be
automatically withdrawn and shall be deemed a request for a Prime Rate Loan, (2)
each LIBOR Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Prime Rate Loan and (3) the obligations of
Lenders to make LIBOR Loans shall be suspended until Agent or Required Lenders
determine that the circumstances giving rise to such suspension no longer exist,
in which event Agent shall so notify Borrowers and Lenders.
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(iii) Illegality. Notwithstanding any other provisions hereof, if
any law, rule, regulation, treaty or directive or interpretation or application
thereof shall make it unlawful for any Lender to make, fund or maintain LIBOR
Loans, such Lender shall promptly give notice of such circumstances to Agent,
Borrowers and the other Lenders. In such an event, (1) the commitment of such
Lender to make LIBOR Loans or convert Prime Rate Loans to LIBOR Loans shall be
immediately suspended and (2) such Lender's outstanding LIBOR Loans shall be
converted automatically to Prime Rate Loans on the last day of the Interest
Period thereof or at such earlier time as may be required by law.
(iv) LIBOR Breakage Fee. Upon (i) any default by any Borrower in
making any borrowing of, conversion into or continuation of any LIBOR Loan
following any Borrower's delivery to Agent of any applicable Notice of Borrowing
or (ii) any payment of a LIBOR Loan on any day that is not the last day of the
Interest Period applicable thereto (regardless of the source of such prepayment
and whether voluntary, by acceleration or otherwise), Borrowers shall pay Agent,
for the benefit of all Lenders that funded or were prepared to fund any such
LIBOR Loan, an amount equal to the amount of any losses, expenses and
liabilities (including, without limitation, any loss (including interest paid)
in connection with the re-employment of such funds) that any Lender may sustain
as a result of such default or such payment. For purposes of calculating amounts
payable to a Lender under this paragraph, each Lender shall be deemed to have
actually funded its relevant LIBOR Loan through the purchase of a deposit
bearing interest at LIBOR in an amount equal to the amount of that LIBOR Loan
and having a maturity and repricing characteristics comparable to the relevant
Interest Period; provided, however, that each Lender may fund each of its LIBOR
Loans in any manner it sees fit, and the foregoing assumption shall be utilized
only for the calculation of amounts payable under this subsection.
(v) Increased Costs. If, after the Closing Date, the adoption of, or
any change in, any applicable law, rule or regulation, or any change in the
interpretation or administration of any applicable law, rule or regulation by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency issued within 90 days prior to the
Closing Date or after the Closing Date: (i) shall impose, modify or deem
applicable any reserve (including any reserve imposed by the Board of Governors
of the Federal Reserve System, or any successor thereto, but excluding any
reserve included in the determination of the LIBOR pursuant to the provisions of
this Agreement), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by any Lender; or (ii)
shall impose on any Lender any other condition affecting its LIBOR Loans, its
Notes or its obligation to make LIBOR Loans; and the result of anything
described in clauses (i) above and (ii) is to increase the cost to (or to impose
a cost on) such Lender of making or maintaining any LIBOR Loan, or to reduce the
amount of any sum received or receivable by such Lender under this Agreement or
under its Notes with respect thereto, then upon demand by such Lender (which
demand shall be accompanied by a statement setting forth the basis for such
demand and a calculation of the amount thereof in reasonable detail, a copy of
which shall be furnished to Agent), Borrowers shall pay directly to such Lender
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such additional amount as will compensate such Lender for such increased cost or
such reduction, so long as such amounts have accrued on or after the day which
is one hundred eighty (180) days prior to the date on which such Lender first
made demand therefor.
(f) Capital Adequacy. If any Lender shall reasonably determine that any
change in, or the adoption or phase-in of, any applicable law, rule or
regulation regarding capital adequacy, 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, or the
compliance by any Lender or any Person controlling such Lender 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, has or would have the
effect of reducing the rate of return on such Lender's or such controlling
Person's capital as a consequence of such Lender's obligations hereunder or
under any Support Agreement to a level below that which such Lender or such
controlling Person could have achieved but for such change, adoption, phase-in
or compliance (taking into consideration such Lender's or such controlling
Person's policies with respect to capital adequacy) by an amount deemed by such
Lender or such controlling Person to be material, then from time to time, upon
demand by such Lender (which demand shall be accompanied by a statement setting
forth the basis for such demand and a calculation of the amount thereof in
reasonable detail, a copy of which shall be furnished to Agent), Borrowers shall
pay to such Lender such additional amount as will compensate such Lender or such
controlling Person for such reduction, so long as such amounts have accrued on
or after the day which is one hundred eighty (180) days prior to the date on
which such Lender first made demand therefor.
Section 2.4 Notes.
The portion of Term Loan A made by each Lender shall be evidenced by a
promissory note executed by Borrowers on a joint and several basis (a "TERM NOTE
A"), the portion of Term Loan B made by each Lender shall be evidenced by a
promissory note executed by Borrowers on a joint and several basis (a "TERM NOTE
B") and the portion of the Revolving Loans made by each Lender shall be
evidenced by a promissory note executed by Borrowers on a joint and several
basis (a "REVOLVING LOAN NOTE") in an original principal amount equal to such
Lender's Pro Rata Share of Term Loan A, Term Loan B and the Revolving Loan
Commitment, respectively.
Section 2.5 Letters of Credit and Letter of Credit Fees.
(a) Letter of Credit. On the terms and subject to the conditions set forth
herein, Agent will prior to the Termination Date issue letters of credit or
guarantees (each, a "SUPPORT AGREEMENT") to induce an LC Issuer to issue or
increase the amount of, or extend the expiry date of, a Letter of Credit so long
as:
(i) Agent shall have received a Notice of LC Credit Event at least
two (2) Business days before the relevant date of issuance or increase; and
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(ii) After giving effect to such issuance or increase (x) the
aggregate Letter of Credit Liabilities under all Letters of Credit do not exceed
$750,000 and (y) the Revolving Loan Outstandings do not exceed the Revolving
Loan Limit.
(b) Letter of Credit Fee. Borrowers shall pay to Agent, for the benefit of
Lenders which have committed to make Revolving Loans, a letter of credit fee
with respect to the Letter of Credit Liabilities for each Letter of Credit,
computed for each day from the date of issuance of such Letter of Credit to the
date that is the last day a drawing is available under such Letter of Credit, at
a rate per annum equal to the LIBOR Margin then applicable to Revolving Loans.
Such fee shall be payable in arrears on the first Business Day of each calendar
month prior to the Termination Date and on such date. In addition, Borrowers
agree to pay promptly to the LC Issuer any fronting or other fees that it may
charge in connection with any Letter of Credit.
(c) Reimbursement Obligations of Borrowers. If Agent shall make a payment
to an LC Issuer pursuant to a Support Agreement, the applicable Borrower shall
promptly reimburse Agent for the amount of such payment and, to the extent that
so doing would not, to Agent's knowledge, cause the Revolving Loan Outstandings
to exceed the Revolving Loan Limit, such Borrower shall be deemed to have
requested a Revolving Loan, the proceeds of which will be used to satisfy such
Reimbursement Obligations. The applicable Borrower shall pay interest, on
demand, on all amounts so paid by Agent for each day until Borrowers reimburse
Agent therefor (including pursuant to a Revolving Loan Borrowing) at a rate per
annum equal to the sum of two percent (2%) plus the interest rate applicable to
Revolving Loans (which are Prime Rate Loans) for such day.
(d) Reimbursement and Other Payments by Borrowers. The obligations of each
Borrower to reimburse Agent pursuant to Section 2.5(c) shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under all circumstances whatsoever, absent
gross negligence or willful misconduct by Agent or any Lender, including the
following:
(i) any lack of validity or enforceability of, or any amendment or
waiver of or any consent to departure from, any Letter of Credit or any related
document;
(ii) the existence of any claim, set-off, defense or other right
which any Borrower may have at any time against the beneficiary of any Letter of
Credit, the LC Issuer (including any claim for improper payment), Agent, any
Lender or any other Person, whether in connection with any Financing Document or
any unrelated transaction, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
(iii) any statement or any other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever;
(iv) any affiliation between the LC Issuer and Agent; or
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(v) to the extent permitted under applicable law, any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing.
(e) Deposit Obligations of Borrowers. In the event any Letters of Credit
are outstanding at the time that Borrowers prepay or are required to repay the
Obligations in full or the Revolving Loan Commitment is terminated, Borrowers
shall (1) deposit with Agent for the benefit of all Lenders with a portion of
the Revolving Loan Commitment cash in an amount equal to one hundred and five
percent (105%) of the aggregate outstanding Letter of Credit Liability to be
available to Agent to reimburse payments of drafts drawn under such Letters of
Credit and pay any fees and expenses related thereto and (2) prepay the fee
payable under Section 2.5(b) with respect to such Letters of Credit for the full
remaining current terms (exclusive of optional renewal terms) of such Letters of
Credit. Upon termination of any such Letter of Credit, the unearned portion of
such prepaid fee attributable to such Letter of Credit shall be refunded to
Borrowers, together with the deposit described in the preceding clause (1) to
the extent not previously applied by Agent in the manner described herein.
(f) Participations in Support Agreements.
(i) Concurrently with the issuance of each Letter of Credit, Agent
shall be deemed to have sold and transferred to each Lender, and each Lender
shall be deemed irrevocably and unconditionally to have purchased and received
from Agent, without recourse or warranty, an undivided interest and
participation in, to the extent of such Lender's Pro Rata Share of the Revolving
Loan Commitment, Agent's Support Agreement liabilities and obligations in
respect of such Letters of Credit and Borrowers' Reimbursement Obligations with
respect thereto. If Borrowers do not pay any Reimbursement Obligation when due,
then the applicable Borrower shall be deemed to have immediately requested that
Lenders make a Revolving Loan which is a Prime Rate Loan in a principal amount
equal to such Reimbursement Obligation. Agent shall promptly notify Lenders of
such deemed request and each Lender shall make available to Agent its Pro Rata
Share of such Loan. The proceeds of such Loan shall be paid over by Agent to the
LC Issuer for the account of Borrowers in satisfaction of reimbursement
obligations then owing by Borrowers to such LC Issuer in respect of outstanding
Letters of Credit.
(ii) If Agent makes any payment or disbursement under any Support
Agreement and (x) Borrowers have not reimbursed Agent in full for such payment
or disbursement in accordance with Section 2.5(c), (y) a Revolving Loan may not
be made pursuant to the immediately preceding clause (i) or (z) any
reimbursement received by Agent from any Borrower is or must be returned or
rescinded upon or during any bankruptcy or reorganization of any Credit Party or
otherwise, each Lender shall be irrevocably and unconditionally obligated to pay
to Agent its Pro Rata Share of such payment or disbursement (but no such payment
shall diminish the Obligations of each Borrower under Section 2.5(c)). To the
extent any Lender shall not have made such amount available to Agent by noon
(Chicago time) on the Business Day on which such Lender receives notice from
Agent of such payment or disbursement, such Lender agrees to pay interest on
such amount to Agent forthwith on demand accruing daily at the Federal Funds
Rate, for the first
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three (3) days following such Lender's receipt of such notice, and thereafter at
the Prime Rate plus the Prime Rate Margin in respect of Revolving Loans. Any
Lender's failure to make available to Agent its Pro Rata Share of any such
payment or disbursement shall not relieve any other Lender of its obligation
hereunder to make available to Agent such other Lender's Pro Rata Share of such
payment, but no Lender shall be responsible for the failure of any other Lender
to make available to Agent such other Lender's Pro Rata Share of any such
payment or disbursement.
Section 2.6 General Provisions Regarding Payment; Loan Account.
(a) All payments to be made by each Borrower under any Financing Document,
including payments of principal and interest on the Notes, and all fees,
expenses, indemnities and reimbursements, shall be made without set-off or
counterclaim, in lawful money of the United States of America and in immediately
available funds. If any payment hereunder becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension. Borrowers shall
make all payments in immediately available funds to the Payment Account before
noon (Chicago time) on the date when due. Borrowers hereby authorize Agent, and
Agent hereby agrees, subject to the limitations set forth in Section 2.2(a) and
so long as all conditions set forth in Section 8.2 have been met, Agent will
make Revolving Loans from time to time without request by any Borrower to permit
Borrowers to make timely payments of interest, principal in respect of the Term
Loans, fees and other amounts payable under this Agreement. Agent agrees to
provide Atlantic with copies of all invoices for third party fees and expenses
described in the preceding sentence at least 5 days prior to making the
applicable Revolving Loans described in the preceding sentence. In addition, and
notwithstanding anything to the contrary set forth in this Section 2.6(a), Agent
shall be permitted, in its sole discretion, but subject to the limitations set
forth in Section 2.2(a)(ii), to satisfy any of the payment obligations described
in this Section 2.6(a) through the making of Agent Advances.
(b) Agent shall maintain a loan account (the "LOAN ACCOUNT") on its books
to record Loans and other extensions of credit made by Lenders hereunder or
under any other Financing Document, and all payments thereon made by each
Borrower. All entries in the Loan Account shall be made in accordance with
Agent's customary accounting practices as in effect from time to time. The
balance in the Loan Account, as recorded on Agent's most recent printout or
other written statement, shall be conclusive and binding evidence of the amounts
due and owing to Agent by each Borrower absent clear and convincing evidence to
the contrary; provided that any failure to so record or any error in so
recording shall not limit or otherwise affect any Borrower's duty to pay all
amounts owing hereunder or under any other Financing Document. Unless any
Borrower notifies Agent in writing of any objection to any such printout or
statement (specifically describing the basis for such objection) within thirty
(30) days after the date of receipt thereof, it shall be presumed final, binding
and conclusive upon such Borrower in all respects as to all matters reflected
therein absent manifest error.
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Section 2.7 Maximum Interest.
(a) In no event shall the interest charged with respect to the Notes or
any other obligations of any Borrower under any Financing Document exceed the
maximum amount permitted under the laws of the State of Illinois or of any other
applicable jurisdiction.
(b) Notwithstanding anything to the contrary herein or elsewhere, if at
any time the rate of interest payable hereunder or under any Note or other
Financing Document (the "STATED RATE") would exceed the highest rate of interest
permitted under any applicable law to be charged (the "MAXIMUM LAWFUL RATE"),
then for so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest payable shall be equal to the Maximum Lawful Rate; provided, that if at
any time thereafter the Stated Rate is less than the Maximum Lawful Rate, each
Borrower shall, to the extent permitted by law, continue to pay interest at the
Maximum Lawful Rate until such time as the total interest received is equal to
the total interest which would have received had the Stated Rate been (but for
the operation of this provision) the interest rate payable. Thereafter, the
interest rate payable shall be the Stated Rate unless and until the Stated Rate
again would exceed the Maximum Lawful Rate, in which event this provision shall
again apply.
(c) In no event shall the total interest received by any Lender exceed the
amount which it could lawfully have received had the interest been calculated
for the full term hereof at the Maximum Lawful Rate. If, notwithstanding the
prior sentence, any Lender has received interest hereunder in excess of the
Maximum Lawful Rate, such excess amount shall be applied to the reduction of the
principal balance of the Loans or to other amounts (other than interest) payable
hereunder, and if no such principal or other amounts are then outstanding, such
excess or part thereof remaining shall be paid to Borrowers.
(d) In computing interest payable with reference to the Maximum Lawful
Rate applicable to any Lender, such interest shall be calculated at a daily rate
equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made.
Section 2.8 Taxes.
(a) All payments of principal and interest on the Loans and all other
amounts payable hereunder shall be made free and clear of and without deduction
for any present or future income, excise, stamp, documentary, excise, property
or franchise taxes and other taxes, fees, duties, levies, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, excluding
income, franchise or similar taxes levied on Agent or any Lender by any
jurisdiction under which Agent or such Lender is organized or conducts business
(all non-excluded items being called "TAXES"). If any withholding or deduction
from any payment to be made by any Borrower hereunder is required in respect of
any Taxes pursuant to any applicable law, rule or regulation, then Borrowers
will: (a) pay directly to the relevant authority the full amount required to be
so withheld or deducted; (b) promptly forward to Agent an official receipt or
other documentation satisfactory to
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Agent evidencing such payment to such authority; and (c) pay to Agent for the
account of Agent and Lenders such additional amount or amounts as is necessary
to ensure that the net amount actually received by Agent and each Lender will
equal the full amount Agent and such Lender would have received had no such
withholding or deduction been required. If any Taxes are directly asserted
against Agent or any Lender with respect to any payment received by Agent or
such Lender hereunder, Agent or such Lender may pay such Taxes and Borrowers
will promptly pay such additional amounts (including any penalty, interest or
expense) as is necessary in order that the net amount received by such Person
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such Person would have received had such Taxes not been
asserted so long as such amounts have accrued on or after the day which is one
hundred twenty (120) days prior to the date on which Agent or such Lender first
made demand therefor. In no event shall any Borrower be obligated to make
payment to Agent or any Lender under this Section 2.8(c) to the extent that the
applicable penalties, interest or other liabilities are attributable to the
gross negligence or willful misconduct of Agent or such Lender, as applicable.
(b) If Borrowers fail to pay any Taxes when due to the appropriate taxing
authority or fails to remit to Agent, for the account of Agent and the
respective Lenders, the required receipts or other required documentary
evidence, Borrowers shall indemnify Agent and Lenders for any incremental Taxes,
interest or penalties that may become payable by Agent or any Lender as a result
of any such failure.
(c) Each Foreign Lender that (i) is a party hereto on the Closing Date or
(ii) becomes an assignee of an interest under this Agreement under Section
12.6(a) after the Closing Date (unless such Foreign Lender was already a Lender
hereunder immediately prior to such assignment) shall execute and deliver to
Borrowers and Agent one or more (as Borrowers or Agent may reasonably request)
Forms W-8ECI, W-8BEN, W-8IMY (as applicable) or other applicable or successor
form, certificate or document prescribed by the United States Internal Revenue
Service certifying as to such Lender's entitlement to exemption from withholding
or deduction of Taxes. Further, each Foreign Lender agrees to deliver to
Borrowers and Agents one or more duly executed copies of the above referenced
forms, or successor and related applicable forms, on or before the date that any
such form expires or becomes obsolete and promptly after the occurrence of any
event requiring a change from the most recent form(s) previously delivered by it
in accordance with applicable U.S. laws and regulations and to deliver promptly
to Borrowers and Agent such additional statements and forms as shall be
reasonably requested by Borrowers from time to time. Borrowers shall not be
required to pay additional amounts to any Foreign Lender pursuant to this
Section 2.8 to the extent that the obligation to pay such additional amounts
would not have arisen but for the failure of such Foreign Lender to comply with
this paragraph.
(d) If Borrowers pay any additional amount pursuant to this Section 2.8
with respect to Agent or any Lender, such Person shall use reasonable efforts to
obtain a refund of tax or credit against its tax liabilities on account of such
payment. In the event that such Person receives such a refund or credit, such
Person shall pay to Borrowers an amount that such Person reasonably determines
is equal to the net tax benefit obtained by such Person as a result of such
payment by Borrowers.
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Section 2.9 Ancillary Services.
A Borrower may from time to time request, and Agent or any Lender that is
an Affiliate of a Designated Lender Affiliate may, in its sole discretion, from
time to time arrange for such Borrower to obtain from Agent or any Designated
Lender Affiliate, Ancillary Services although no Borrower is required to do so.
To the extent Ancillary Services are provided upon a Borrower's request or with
a Borrower's agreement or consent, Borrowers agree to indemnify and hold Agent
and Lenders harmless from any and all costs and obligations now or hereafter
incurred by Agent or any Lenders which arise from the indemnity given by Agent
or any Lender to any Designated Lender Affiliates related to such Ancillary
Services. The agreements contained in this Section 2.9 shall survive termination
of this Agreement. Each Borrower acknowledges and agrees that the obtaining of
Ancillary Services (a) is in the sole and absolute discretion of Agent and each
Designated Lender Affiliate, and (b) is subject to all rules and regulations of
Agent and each applicable Designated Lender Affiliate.
Section 2.10 Appointment of Borrower Representative.
Each Borrower hereby designates Atlantic as its representative and agent
on its behalf for the purposes of issuing Notices of Borrowing and Notices of LC
Credit Events, giving instructions with respect to the disbursement of the
proceeds of the Loans, selecting interest rate options, requesting Letters of
Credit, giving and receiving all other notices and consents hereunder or under
any of the other Financing Documents and taking all other actions (including in
respect of compliance with covenants) on behalf of any Borrower or Borrowers
under the Financing Documents. Borrower Representative hereby accepts such
appointment. Notwithstanding anything to the contrary contained in this
Agreement, no Borrower other than Borrower Representative shall be entitled to
take any of the foregoing actions. The proceeds of each Loan made hereunder
shall be advanced to or at the direction of Borrower Representative and if not
used by Borrower Representative in its business (for the purposes provided in
this Agreement) shall be deemed to be immediately advanced by Borrower
Representative to the appropriate other Borrower hereunder as an intercompany
loan (collectively, "INTERCOMPANY LOANS"). All Letters of Credit and Support
Agreements issued hereunder shall be issued at Borrower Representative's request
therefor and shall be allocated to the appropriate Borrower's Intercompany Loan
account by Borrower Representative. All collections of each Borrower in respect
of Accounts and other proceeds of Collateral of such Borrower received by Agent
and applied to the Obligations shall also be deemed to be repayments of the
Intercompany Loans owing by such Borrower to Borrower Representative. Borrowers
shall maintain accurate books and records with respect to all Intercompany Loans
and all repayments thereof. Agent and each Lender may regard any notice or other
communication pursuant to any Financing Document from Borrower Representative as
a notice or communication from all Borrowers, and may give any notice or
communication required or permitted to be given to any Borrower or all Borrowers
hereunder to Borrower Representative on behalf of such Borrower or all
Borrowers. Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable
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against such Borrower to the same extent as if the same had been made directly
by such Borrower.
Section 2.11 Joint and Several Liability.
Each Borrower acknowledges that it is jointly and severally liable for all
of the Obligations and as a result hereby unconditionally guaranties the full
and prompt payment when due, whether at maturity or earlier, by reason of
acceleration or otherwise, and at all times thereafter, of all indebtedness,
liabilities and obligations of every kind and nature of each other Borrower to
Agent and Lenders and, howsoever created, arising or evidenced, whether direct
or indirect, absolute or contingent, joint or several, now or hereafter
existing, or due or to become due, and howsoever owned, held or acquired by
Agent or any Lender. Each Borrower agrees that if this guaranty, or any Liens
securing this guaranty, would, but for the application of this sentence, be
unenforceable under applicable law, this guaranty and each such Lien shall be
valid and enforceable to the maximum extent that would not cause this guaranty
or such Lien to be unenforceable under applicable law, and this guaranty shall
automatically be deemed to have been amended accordingly at all relevant times.
Each Borrower hereby agrees that its obligations under this guaranty shall
be unconditional, irrespective of (a) the validity or enforceability of the
Obligations or any part thereof, or of any promissory note or other document
evidencing all or any part of the Obligations, (b) the absence of any attempt to
collect the Obligations from any other Borrower or any Guarantor or other action
to enforce the same, (c) the waiver or consent by Agent or any Lender with
respect to any provision of any agreement, instrument or document evidencing or
securing all or any part of the Obligations, or any other agreement, instrument
or document now or hereafter executed by any other Borrower and delivered to
Agent or any Lender (other than a waiver, forgiveness or consent by Agent and
Lenders that reduces the amount of any of the Obligations), (d) the failure by
Agent or any Lender to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or Collateral for the
Obligations, for its benefit, (e) Agent's or any Lender's election, in any
proceeding instituted under the United States Bankruptcy Code or any other
similar bankruptcy or insolvency legislation, of the application of Section
1111(b)(2) of the United States Bankruptcy Code or any other similar bankruptcy
or insolvency legislation, (f) any borrowing or grant of a security interest by
any Borrower as debtor-in-possession, under Section 364 of the United States
Bankruptcy Code or any other similar bankruptcy or insolvency legislation, (g)
the disallowance, under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code or any
other similar bankruptcy or insolvency legislation, of all or any portion of
Agent's or any Lender's claim(s) for repayment of the Obligations or (h) any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a borrower or a guarantor.
Each Borrower hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of receivership or bankruptcy of any
Borrower, protest or notice with respect to the Obligations and all demands
whatsoever, and covenants that this guaranty will not be discharged, except by
complete and irrevocable payment and performance of the Obligations. No notice
to any Borrower or any other party shall be
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required for Agent or any Lender to make demand hereunder. Such demand shall
constitute a mature and liquidated claim against the applicable Borrower. Upon
the occurrence of any Event of Default, Agent or any Lender may, in its sole
election, proceed directly and at once, without notice, against all or any
Borrower to collect and recover the full amount or any portion of the
Obligations, without first proceeding against any other Borrower or any other
Person, or any security or collateral for the Obligations. During any period in
which an Event of Default exists, each Borrower irrevocably waives the right to
direct the application of any and all payments and collections at any time or
times hereafter received by Agent from or on behalf of such Borrower, and each
Borrower does hereby irrevocably agree that Agent shall have the continuing
exclusive right to apply and reapply any and all such payments and collections
received at any time or times hereafter by Agent or its agent against the
Obligations, in such manner as Agent may deem advisable, notwithstanding any
entry by Agent or any Lender upon any of its books and records.
At any time after and during the continuance of an Event of Default, Agent
and each Lender may, in its sole discretion, with subsequent notice to any
Borrower and regardless of the acceptance of any collateral for the payment
hereof, appropriate and apply toward payment of the Obligations (i) any
indebtedness due or to become due from Agent or any Lender to such Borrower and
(ii) any moneys, credits or other property belonging to such Borrower at any
time held by or coming into the possession of Agent or any Lender or any
Affiliates thereof, whether for deposit or otherwise.
Notwithstanding anything to the contrary set forth in this Section 2.11,
it is the intent of the parties hereto that the liability incurred by each
Borrower in respect of the Obligations of the other Borrowers (and any Lien
granted by each Borrower to secure such Obligations), not constitute a
fraudulent conveyance under Section 548 of the United States Bankruptcy Code or
a fraudulent conveyance or fraudulent transfer under the provisions of any
applicable law of any state or other governmental unit ("FRAUDULENT
CONVEYANCE"). Consequently, each Borrower, Agent and each Lender hereby agree
that if a court of competent jurisdiction determines that the incurrence of
liability by any Borrower in respect of the Obligations of any other Borrower
(or any Liens granted by such Borrower to secure such Obligations) would, but
for the application of this sentence, constitute a Fraudulent Conveyance, such
liability (and such Liens) shall be valid and enforceable only to the maximum
extent that would not cause the same to constitute a Fraudulent Conveyance, and
this Agreement and the other Financing Documents shall automatically be deemed
to have been amended accordingly.
Section 2.12 Replacement of Lenders.
Within fifteen (15) days after receipt by Borrowers of notice from any
Lender (an "AFFECTED LENDER") under Section 2.3(e)(iii), Section 2.3(e)(v),
Section 2.3(f) or Section 2.8(c), Borrowers may, at their option, notify Agent
and such Affected Lender (a "REPLACEMENT NOTICE") of their intention to obtain,
at Borrower's expense, a replacement Lender (a "REPLACEMENT LENDER") for such
Affected Lender, which Replacement Lender shall be reasonably satisfactory to
Agent. If Borrowers obtain a Replacement Lender reasonably satisfactory to Agent
that is prepared to purchase all outstanding Obligations
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owed to such Affected Lender and assume its Revolving Loan Commitment hereunder
within ninety (90) days following the giving of such Replacement Notice,
Affected Lender shall sell and assign all of its rights and obligations under
this Agreement to such Replacement Lender in accordance with the provisions of
Section 12.6(a), provided, that Borrowers have reimbursed such Affected Lender
for any processing fee payable under Section 12.6(a) and, in any case when such
replacement occurs as the result of a demand for payment pursuant to Section
2.3(e)(v), Section 2.3(f) or Section 2.8(c), the applicable payment through the
date of such sale and assignment.
ARTICLE 3
REPRESENTATION AND WARRANTIES
To induce Agent and Lenders to enter into this Agreement and to make the
Loans and other credit accommodations contemplated hereby, each Borrower hereby
represents and warrants to Agent and each Lender that:
Section 3.1 Existence and Power.
Each Credit Party is an entity as specified on the Information
Certificate, duly organized, validly existing and in good standing under the
laws of the jurisdiction specified on the Information Certificate, has an
organizational identification number (if any) as specified on the Information
Certificate, and has all powers and all governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted,
except where the failure to have such licenses, authorizations, consents and
approvals could not reasonably be expected to have a Material Adverse Effect.
Each Credit Party is qualified to do business as a foreign entity in each
jurisdiction in which it is required to be so qualified, which jurisdictions as
of the Closing Date are specified on the Information Certificate, except where
the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect.
Section 3.2 Organization and Governmental Authorization; No
Contravention.
The execution, delivery and performance by each Credit Party of the
Operative Documents to which it is a party are within its powers, have been duly
authorized by all necessary action pursuant to its Organizational Documents,
require no further action by or in respect of, or filing with, any governmental
body, agency or official and do not violate, conflict with or cause a breach or
a default under any provision of applicable law or regulation or of the
Organizational Documents of any Credit Party or of any agreement, judgment,
injunction, order, decree or other instrument binding upon it, except for such
violations, conflicts, breaches or defaults as could not reasonably be expected
to have a Material Adverse Effect.
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Section 3.3 Binding Effect.
Each of the Operative Documents to which any Credit Party is a party
constitutes a valid and binding agreement or instrument of such Credit Party,
enforceable against such Credit Party in accordance with its respective terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency or
other similar laws relating to the enforcement of creditors' rights generally
and by general equitable principles.
Section 3.4 Capitalization.
The authorized equity securities of each of the Credit Parties as of the
Closing Date is as set forth on the Information Certificate. All issued and
outstanding equity securities of each of the Credit Parties are duly authorized
and validly issued, fully paid, nonassessable, free and clear of all Liens other
than those in favor of Agent for the benefit of Agent and Lenders (in the case
of equity securities issued by Atlantic's Subsidiaries), and such equity
securities were issued in compliance with all applicable state, federal and
foreign laws concerning the issuance of securities. Except as set forth on the
Information Certificate, as of the Closing Date there are no preemptive or other
outstanding rights, options, warrants, conversion rights or similar agreements
or understandings for the purchase or acquisition from any Credit Party of any
equity securities of any such entity.
Section 3.5 Financial Information.
(a) The consolidated balance sheet of Atlantic and its Consolidated
Subsidiaries as of December 31, 2001 and the related consolidated statements of
operations, stockholders' equity (or comparable calculation, if such Person is
not a corporation) and cash flows for the fiscal year then ended, reported on by
KPMG LLP, copies of which have been delivered to Agent, fairly present in all
material respects, in conformity with GAAP, the consolidated financial position
of Atlantic and its Consolidated Subsidiaries as of such date and their
consolidated results of operations, changes in stockholders' equity (or
comparable calculation) and cash flows for such period.
(b) The unaudited consolidated and consolidating balance sheet of Atlantic
and its Consolidated Subsidiaries as of September 30, 2002 and the related
unaudited consolidated and consolidating statements of operations and cash flows
for the 9 months then ended, copies of which have been delivered to Agent,
fairly present in all material respects, in conformity with GAAP applied on a
basis consistent with the financial statements referred to in Section 3.5(a),
the consolidated and consolidating financial position of Atlantic and its
Consolidated Subsidiaries as of such date and their consolidated and
consolidating results of operations and cash flows for the 9 months then ended
(subject to audit and other normal year-end adjustments and the absence of
footnote disclosures).
(c) The pro forma balance sheet of Atlantic and its Consolidated
Subsidiaries as of October 31, 2002, copies of which have been delivered to
Agent, fairly presents in all material respects, in conformity with GAAP applied
on a basis consistent with the financial statements referred to in Section
3.5(a), the consolidated and consolidating
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financial position of Atlantic and its Consolidated Subsidiaries as of such
date, adjusted to give effect (as if such events had occurred on such date) to
(i) the transactions contemplated by the Operative Documents, (ii) the making of
the Loans, (iii) the application of the proceeds therefrom as contemplated by
the Operative Documents and (iv) the payment of all legal, accounting and other
fees related thereto to the extent known at the time of the preparation of such
balance sheet. As of the date of such balance sheet and the date hereof, no
Credit Party had or has any material liabilities, contingent or otherwise,
including liabilities for taxes, long-term leases or forward or long-term
commitments, which are not properly reflected on such balance sheet in
accordance with GAAP.
(d) The information contained in the most recently delivered Borrowing
Base Certificate is complete and correct in all material respects, as of the
date stated therein, and the amounts shown therein as "Eligible Receivables" and
"Eligible Inventory" have been determined as provided in the Financing
Documents.
(e) Since December 31, 2001, there has been no material adverse change in
the business, operations, properties, prospects or condition (financial or
otherwise) of Atlantic and its Consolidated Subsidiaries, taken as a whole.
Section 3.6 Litigation.
Except as set forth in the Information Certificate, as of the Closing Date
there is no action, suit or proceeding pending against, or to such Borrower's
knowledge threatened against or affecting, any Credit Party or, to such
Borrower's knowledge, any party to any Operative Document other than a Credit
Party, before any court or arbitrator or any governmental body, agency or
official in which an adverse decision could reasonably be expected to have a
Material Adverse Effect or which in any manner draws into question the validity
of any of the Operative Documents.
Section 3.7 Ownership of Property.
Each Borrower and each of its Subsidiaries is the lawful owner of, has
good and marketable title to and is in lawful possession of, or has valid
leasehold interests in, all properties and other assets (real or personal,
tangible, intangible or mixed) purported to be owned or leased (as the case may
be) by such Person on the pro forma balance sheet referred to in Section 3.5(c),
except as disposed of in the ordinary course of business, subject to Permitted
Liens.
Section 3.8 No Default.
No Default or Event of Default has occurred and is continuing and no
Credit Party is in breach or default under or with respect to any contract,
agreement, lease or other instrument to which it is a party or by which its
property is bound or affected, which breach or default could reasonably be
expected to have a Material Adverse Effect.
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Section 3.9 Labor Matters.
As of the Closing Date, there are no strikes or other labor disputes
pending or, to such Borrower's knowledge, threatened against any Credit Party.
Hours worked and payments made to the employees of the Credit Parties have not
been in violation of the Fair Labor Standards Act or any other applicable law
dealing with such matters. All payments due from the Credit Parties, or for
which any claim may be made against any of them, on account of wages and
employee and retiree health and welfare insurance and other benefits have been
paid or accrued as a liability on their books in conformity with GAAP, as the
case may be. The consummation of the transactions contemplated by the Financing
Documents and the other Operative Documents will not give rise to a right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which it is a party or by which it is bound.
Section 3.10 Regulated Entities.
No Credit Party is an "investment company" or a company "controlled" by an
"investment company" or a "subsidiary" of an "investment company," all within
the meaning of the Investment Company Act of 1940. No Credit Party is 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.
Section 3.11 Margin Regulations.
None of the proceeds from the Loans have been or will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase or carry any Margin Stock or for any other purpose which might cause
any of the Loans to be considered a "purpose credit" within the meaning of
Regulation T, U or X of the Federal Reserve Board.
Section 3.12 Compliance With Laws
As of the Closing Date, each Borrower and each Subsidiary is in compliance
with the requirements of all applicable laws, ordinances, rules, regulations and
requests of governmental authorities, except for such laws, ordinances, rules,
regulations and requirements the noncompliance with which could not reasonably
be expected to have a Material Adverse Effect.
Section 3.13 Taxes.
Except to the extent subject to a Permitted Contest, all Federal, state
and local tax returns, reports and statements required to be filed by or on
behalf of each Credit Party have been filed with the appropriate governmental
agencies in all jurisdictions in which such returns, reports and statements are
required to be filed, other than any such returns, reports and statements that
relate to Texas of less than $50,000 in the aggregate, and all Taxes (including
real property Taxes) and other charges shown thereon to be due and payable have
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been timely paid prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for nonpayment thereof, other than Taxes and
charges of less than $50,000 in the aggregate. Except to the extent subject to a
Permitted Contest and all state and local sales and use Taxes required to be
paid by each Credit Party have been paid, other than such Taxes of less than
$50,000 in the aggregate. Except to the extent subject to a Permitted Contest,
all Federal and state returns have been filed by each Credit Party for all
periods for which returns were due with respect to employee income tax
withholding, social security and unemployment taxes, and the amounts shown
thereon to be due and payable have been paid in full or adequate provisions
therefor have been made, other than returns and payments relating to such taxes
of less than $50,000 in the aggregate.
Section 3.14 Compliance with ERISA.
(a) All required reports and documents with respect to any Pension Plan
have been properly filed with the appropriate governmental agencies. All Pension
Plans (and related trusts and insurance contracts) comply in form and in
operation in all material respects with the current applications of ERISA and
the Code. With respect to each Pension Plan, there have been no prohibited
transactions as defined in Section 406 of ERISA or Section 4975 of the Code that
have not been reported and corrected.
(b) During the twelve (12) month period prior to the Closing Date or the
making of any Loan or the issuance of any Letter of Credit, (i) no steps have
been taken to terminate any Pension Plan and (ii) no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA or Regulation 2510.3 - 102(b)(1) of ERISA. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which could result in the incurrence by any Credit Party of any
material liability, fine or penalty. No Credit Party has incurred liability to
the PBGC (other than for current premiums) with respect to any employee Pension
Plan. All contributions (if any) have been made to any Multiemployer Pension
Plan that are required to be made by any Credit Party or any other member of the
Controlled Group under the terms of the plan or of any collective bargaining
agreement or by applicable law; no Credit Party nor any member of the Controlled
Group has withdrawn or partially withdrawn from any Multiemployer Pension Plan,
incurred any withdrawal liability with respect to any such plan or received
notice of any claim or demand for withdrawal liability or partial withdrawal
liability from any such plan, and no condition has occurred which, if continued,
could result in a withdrawal or partial withdrawal from any such plan, and no
Credit Party nor any member of the Controlled Group has received any notice that
any Multiemployer Pension Plan is in reorganization, that increased
contributions may be required to avoid a reduction in plan benefits or the
imposition of any excise tax, that any such plan is or has been funded at a rate
less than that required under Section 412 of the Code, that any such plan is or
may be terminated, or that any such plan is or may become insolvent.
Section 3.15 Brokers.
Except as set forth in the Information Certificate, no broker, finder or
other intermediary has brought about the obtaining, making or closing of the
transactions
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contemplated by the Operative Documents, and no Credit Party has or will have
any obligation to any Person in respect of any finder's or brokerage fees in
connection herewith or therewith.
Section 3.16 Related Transactions.
The transactions contemplated by the Subordinated Debt Documents to be
consummated on or prior to the date hereof have been so consummated (including
without limitation the disbursement and transfer of all funds in connection
therewith) in all material respects pursuant to the provisions of the applicable
Operative Documents, true and complete copies of which have been delivered to
Agent, and in compliance with all applicable provisions of law.
Section 3.17 Employment, Equityholders and Subscription Agreements.
Except for the Operative Documents and the other agreements set forth in
the Information Certificate, as of the Closing Date there are (i) no employment
agreements covering the management of any Credit Party, (ii) no collective
bargaining agreements or other labor agreements covering any employees of any
Credit Party, (iii) no agreements for managerial, consulting or similar services
to which any Credit Party is a party or by which it is bound or (iv) to the
knowledge of each Credit Party, no agreements regarding any Credit Party, its
assets or operations or any investment therein to which any of its equityholders
is a party or by which it is bound.
Section 3.18 Compliance with Environmental Requirements; No Hazardous
Materials.
Except in each case as set forth on the Information Certificate:
(a) As of the Closing Date, no Hazardous Materials are located on any
properties now or previously owned, leased or operated by any Credit Party or
have been released into the environment, or deposited, discharged, placed or
disposed of at, on, under or near any of such properties in a manner that would
require the taking of any action under any Environmental Law or which could
reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, no portion of any such property is being used, or has been used at any
previous time, for the disposal, storage, treatment, processing or other
handling of Hazardous Materials in violation of any Environmental Law nor is any
such property affected by any Hazardous Materials Contamination.
(b) As of the Closing Date, no underground storage tanks are located on
any properties now or previously owned, leased or operated by any Credit Party,
or were located on any such property and subsequently removed or filled.
(c) As of the Closing Date, no notice, notification, demand, request for
information, complaint, citation, summons, investigation, administrative order,
consent order and agreement, litigation or settlement with respect to Hazardous
Materials or Hazardous Materials Contamination is in existence or, to such
Borrower's knowledge, proposed,
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threatened or anticipated with respect to or in connection with the operation of
any properties now or previously owned, leased or operated by any Credit Party.
As of the Closing Date, all such properties and their existing and prior uses,
and any disposal of Hazardous Materials from any thereof, comply and at all
times have complied with all Environmental Laws. As of the Closing Date, there
is no condition on any of such properties which is in violation of any
Environmental Laws and no Credit Party has received any communication from or on
behalf of any governmental authority that any such condition exists.
(d) As of the Closing Date, there has been no environmental investigation,
study, audit, test, review or other analysis conducted of which such Borrower
has knowledge in relation to the current or prior business of any Borrower or
any property or facility now or previously owned, leased or operated by any
Credit Party which has not been delivered to Agent.
(e) For purposes of this Section 3.18, each Credit Party shall be deemed
to include any business or business entity (including a corporation) that is, in
whole or in part, a predecessor of such Credit Party.
Section 3.19 Intellectual Property.
Each Credit Party owns, is licensed to use or otherwise has the right to
use, all Intellectual Property that is material to the condition (financial or
other), business or operations of such Credit Party and all such Intellectual
Property existing as of the Closing Date and registered with the U.S.
government, any foreign government or any agency or department thereof is set
forth on the Information Certificate. All such Intellectual Property of each
Credit Party is fully protected and/or duly and properly registered, filed or
issued in the appropriate office and jurisdictions for such registrations,
filings or issuances, except where the failure to do so could not reasonably be
expected to result in a Material Adverse Effect. To such Borrower's knowledge,
each Credit Party conducts its business without infringement or claim of
infringement of any Intellectual Property rights of others and there is no
infringement or claim of infringement by others of any Intellectual Property
rights of any Credit Party, which infringement or claim of infringement could
reasonably be expected to have a Material Adverse Effect.
Section 3.20 Real Property Interests.
Except for the ownership, leasehold or other interests set forth in the
Information Certificate, no Credit Party has, as of the Closing Date, any
ownership, leasehold or other interest in real property.
Section 3.21 Solvency.
Each Borrower and each Subsidiary: (a) owns and will own assets (including
rights of contribution and indemnification against the other Credit Parties) the
fair saleable value of which are (i) greater than the total amount of its
liabilities (including contingent liabilities) and (ii) greater than the amount
that will be required to pay the probable liabilities
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of its then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to it; (b)
has capital that is not unreasonably small in relation to its business as
presently conducted or after giving effect to any contemplated transaction; and
(c) does not intend to incur and does not believe that it will incur debts
beyond its ability to pay such debts as they become due.
Section 3.22 Full Disclosure.
None of the written information (financial or otherwise) furnished by or
on behalf of any Credit Party to Agent or any Lender in connection with the
consummation of the transactions contemplated by the Operative Documents,
including without limitation the information set forth in the Information
Certificate taken as a whole, contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements contained
herein or therein not misleading in the light of the circumstances under which
such statements were made. All financial projections delivered to Agent and
Lenders have been prepared on the basis of the assumptions stated therein. Such
projections represent each Borrower's good faith estimate of such Borrower's
future financial performance and such assumptions are believed by such Borrower
to be fair in light of current business conditions; provided that Borrowers can
give no assurance that such projections will be attained.
Section 3.23 Texas Traditions.
As of the Closing Date, Atlantic's Subsidiary, Texas Traditions, Inc., a
Delaware corporation, has no material assets, operations or liabilities.
ARTICLE 4
AFFIRMATIVE COVENANTS
Each Borrower agrees that, so long as any Credit Exposure exists:
Section 4.1 Financial Statements and Other Reports.
Each Borrower will maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in accordance with GAAP and to provide the information
required to be delivered to Lenders hereunder, and Atlantic will deliver to
Agent, and, in the case of the deliveries required by paragraphs (a) through (f)
and (l) through (s), each Lender:
(a) as soon as practicable and in any event within thirty (30) days after
the end of each month other than the last month of a fiscal quarter, and within
forty-five (45) days after the end of each month that is the last month of a
fiscal quarter (including the last month of Borrowers' Fiscal Year), a
consolidated and consolidating balance sheet of Atlantic and its Consolidated
Subsidiaries as at the end of such month and the related consolidated statements
of operations and cash flows for such month, and for the portion of the Fiscal
Year ended at the end of such month setting forth in each case in comparative
form the figures for the corresponding periods of the previous Fiscal Year and
the figures for such month and for such portion of the Fiscal Year ended at the
end of such month set forth in the
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annual operating and capital expenditure budgets and cash flow forecast
delivered pursuant to Section 4.1(l), all in reasonable detail and certified by
a Responsible Officer of Borrower Representative as fairly presenting in all
material respects the financial condition and results of operations of Atlantic
and its Consolidated Subsidiaries and as having been prepared in accordance with
GAAP applied on a basis consistent with the audited financial statements of
Atlantic, subject to changes resulting from audit and other normal year-end
adjustments and the absence of footnote disclosures;
(b) as soon as available and in any event within ninety (90) days after
the end of each Fiscal Year, a consolidated and consolidating balance sheet of
Atlantic and its Consolidated Subsidiaries as of the end of such Fiscal Year and
the related consolidated and consolidating statements of operations,
stockholders' equity (or the comparable item, if any Borrower is not a
corporation) and cash flows for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year and, only to the
extent that such financial statements reflect material changes from the monthly
financial statements delivered pursuant to Section 4.1(a) for the last month of
such Fiscal Year, the figures for such Fiscal Year set forth in the annual
operating and capital expenditure budgets and cash flow forecast delivered
pursuant to Section 4.1(l), certified by a Responsible Officer of Borrower
Representative and (solely with respect to such consolidated statements) without
qualification by KPMG LLP or other independent public accountants reasonably
acceptable to Agent of nationally recognized standing (except for qualifications
relating to changes in applicable accounting principles with which such
accountants concur);
(c) together with each delivery of financial statements pursuant to
Sections 4.1(a) and 4.1(b), a Compliance Certificate, and together with each
delivery of financial statements pursuant to Section 4.1(b), an Excess Cash Flow
Certificate;
(d) intentionally omitted;
(e) promptly upon receipt thereof, copies of all reports submitted to any
Credit Party by independent public accountants in connection with each annual,
interim or special audit of the financial statements of any Credit Party made by
such accountants, including the comment letter submitted by such accountants to
management in connection with their annual audit;
(f) promptly upon their becoming available, copies of (i) all financial
statements, reports, notices and proxy statements sent or made available
generally by Atlantic to its security holders, (ii) all regular and periodic
reports and all registration statements and prospectuses filed by any Credit
Party with any securities exchange or with the Securities and Exchange
Commission or any successor and (iii) all press releases and other statements
made available generally by any Credit Party concerning material developments in
the business of any Credit Party;
(g) promptly upon any Responsible Officer or Other Officer of any Credit
Party obtaining knowledge (i) of the existence of any Event of Default or
Default, or becoming aware that the holder of any Debt of any Credit Party in
excess of $100,000 has
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given any notice or taken any other action with respect to a claimed default
thereunder, (ii) of any change in any Credit Party's certified accountant or any
resignation, or decision not to stand for re-election, by any member of any
Credit Party's board of directors (or comparable body), (iii) that any Person
has given any notice to any Credit Party or taken any other action with respect
to a claimed default under any material agreement or instrument (other than the
Financing Documents or any agreement evidencing Debt of such Credit Party) to
which any Credit Party is a party or by which any of its assets is bound or (iv)
of the institution of any litigation or arbitration involving an alleged
liability of any Credit Party equal to or greater than $100,000 or any adverse
determination in any litigation or arbitration involving a potential liability
of any Credit Party equal to or greater than $100,000, a certificate of a
Responsible Officer of Borrower Representative specifying the nature and period
of existence of any such condition or event, or specifying the notice given or
action taken by such holder or Person and the nature of such claimed default
(including any Event of Default or Default), event or condition, and what action
the applicable Credit Party has taken, is taking or proposes to take with
respect thereto;
(h) promptly upon any Responsible Officer or Other Officer of any Credit
Party obtaining knowledge of (i) the institution of any steps by any member of
the Controlled Group or any other Person to terminate any Pension Plan, (ii) the
failure of any member of the Controlled Group to make a required contribution to
any Pension Plan (if such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan, (iii) the taking
of any action with respect to a Pension Plan which could result in the
requirement that any Borrower or any Subsidiary furnish a bond or other security
to the PBGC or such Pension Plan, (iv) the occurrence of any event with respect
to any Pension Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the Controlled Group of any material liability, fine
or penalty (including any claim or demand for withdrawal liability or partial
withdrawal from any Multiemployer Pension Plan), (v) any material increase in
the contingent liability of any Borrower or any Subsidiary with respect to any
post-retirement welfare plan benefit or (vi) any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be required
to avoid a reduction in plan benefits or the imposition of an excise tax, that
any such plan is or has been funded at a rate less than that required under
Section 412 of the Code, that any such plan is or may be terminated, or that any
such plan is or may become insolvent, a certificate of a Responsible Officer of
such Credit Party specifying the nature and period of existence of any such
condition or event, or specifying the notice given or action taken by such
holder or Person, and what action the applicable Credit Party has taken, is
taking or proposed to take with respect thereto;
(i) promptly upon any Responsible Officer or Other Officer of any Credit
Party obtaining knowledge of any complaint, order, citation, notice or other
written communication from any Person delivered to any Credit Party with respect
to, or if any Responsible Officer or Other Officer of any Credit Party becomes
aware of (x) the existence or alleged existence of a violation of any
Environmental Law or the incurrence of any liability, obligation, loss, damage,
fine, penalty or sanction or the requirement to commence any remedial action
resulting from or in connection with any air emission, water discharge,
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noise emission, Hazardous Material or any other environmental, health or safety
matter at, upon, under or within any of the properties now or previously owned,
leased or operated by any Credit Party, or due to the operations or activities
of any Credit Party or any other Person on or in connection with any such
property or any part thereof, in any case that either involves claims or
liabilities in excess of $100,000 or could reasonably be expected to have a
Material Adverse Effect, or (y) any release on any of such properties of
Hazardous Materials in a quantity that is reportable under any applicable
Environmental Law and that either involves claims or liabilities in excess of
$100,000 or could reasonably be expected to have a Material Adverse Effect, a
certificate of a Responsible Officer of such Credit Party specifying the nature
and period of existence of any such condition or event, or specifying the notice
given or action taken by such holder or Person, and what action the applicable
Credit Party has taken, is taking or proposes to take with respect thereto;
(j) promptly upon any Responsible Officer or Other Officer of any Credit
Party obtaining knowledge that any Credit Party has either (x) registered or
applied to register any Intellectual Property with the U.S. government, any
foreign government or any agency or department thereof, or (y) acquired any
interest in Real Property (including leasehold interests in Real Property), a
certificate of a Responsible Officer of such Credit Party describing such
Intellectual Property and/or such real property in such detail as Agent shall
reasonably require;
(k) copies of any reports or notices related to any taxes in excess of
$50,000 and any other reports or notices received by any Credit Party from, or
filed by any Credit Party with, any Federal, state or local governmental agency
or body involving claims or liabilities in excess of $50,000 or which could
reasonably be expected to have a Material Adverse Effect;
(l) within fifteen (15) days prior to the conclusion of each Fiscal Year,
Atlantic's annual consolidated and consolidating operating plans, operating and
capital expenditure budgets, and financial forecasts, including cash flow
projections covering proposed fundings, repayments, additional advances,
investments and other cash receipts and disbursements, each for the following
three (3) Fiscal Years presented on a monthly basis for the next Fiscal Year and
annually for the two (2) subsequent Fiscal Years, all of which shall be in a
format reasonably consistent with projections, budgets and forecasts theretofore
provided to Lenders, and promptly following the preparation thereof, updates to
any of the foregoing from time to time prepared by management of Atlantic;
(m) as soon as available and in any event no later than noon (Chicago
Time) on a day each week as designated from time to time by Agent, and from time
to time upon the request of Agent, in the exercise of its reasonable credit
judgment, (which request may be made as frequently as daily), a Borrowing Base
Certificate as of the last day of the week most recently ended (or, in the case
of Borrowing Base Certificates requested more frequently than weekly, as of the
third preceding Business Day);
(n) intentionally omitted;
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(o) as soon as available after the end of each month (but in any event
within twenty-five (25) Business Days after the end thereof), on a monthly basis
or more frequently as Agent may reasonably request, (i) perpetual Inventory
reports (provided, that perpetual Inventory reports will not be required with
respect to Potter for periods ending prior to January 31, 2003), (ii) Inventory
reports by location and category (and including the amounts of Inventory and the
value thereof at, any leased locations and at premises of warehouses,
consignees, processors or other third parties), (iii) agings of Accounts, (iv)
agings of accounts payable (and including information indicating the amounts
owing to owners and lessors of leased premises, warehouses, consignees,
processors and other third parties from time to time in possession of any
Collateral) and (v) such reconciliation reports from time to time reasonably
requested by Agent with respect to the Borrowing Base Certificate most recently
delivered to Agent, the financial statements of each Borrower delivered to
Agent, each Borrower's general ledger and/or the reports required pursuant to
this paragraph, each in form and substance, and with such supporting detail and
documentation, as may be reasonably requested by Agent;
(p) with reasonable promptness following Agent's reasonable written
request, (i) copies of customer statements and credit memos, remittance advices
and reports and copies of deposit slips and bank statements, (ii) copies of
shipping and delivery documents, and (iii) copies of purchase orders, invoices
and delivery documents for Inventory and Equipment acquired by any Credit Party;
(q) within two (2) Business Days after any request therefor, such
additional information in such detail concerning the amount, composition and
manner of calculation of the Borrowing Base as Agent or any Lender may
reasonably request;
(r) upon the request of Agent, in the exercise of its reasonable credit
judgment, which may be made not more than four times each year prior to an Event
of Default and at any time while and so long as an Event of Default shall be
continuing, a report of an independent collateral auditor satisfactory to Agent
(which may be, or be affiliated with, a Lender) with respect to the components
of the Borrowing Base, which report shall indicate whether or not the
information set forth in the Borrowing Base Certificate most recently delivered
is accurate and complete in all material respects based upon a review by such
auditors of the Accounts (including verification with respect to the amount,
aging, identity and credit of the respective Account Debtors and the billing
practices of each Borrower) and Inventory (including verification as to the
value, location and respective types);
(s) from time to time, if Agent or any Lender determines that obtaining
appraisals is necessary in order for Agent or such Lender to comply with
applicable laws or regulations, appraisal reports in form and substance and from
appraisers reasonably satisfactory to Agent stating the then current fair market
values of all or any portion of the real estate owned by any Borrower or any
Subsidiaries. In addition to the foregoing, from time to time, but in the
absence of a Default or Event of Default not more than once during each calendar
year, Agent in the exercise of its reasonable credit judgment may require
Borrowers to obtain and deliver to Agent appraisal reports in form and substance
and from
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appraisers satisfactory to Agent stating the then current market values of all
or any portion of the real estate and personal property owned by any Borrower or
any Subsidiaries; and
(t) with reasonable promptness, such other information and data with
respect to any Credit Party as from time to time may be reasonably requested by
Agent or any Lender.
Section 4.2 Payment and Performance of Obligations.
Each Borrower (i) will pay and discharge, and cause each Subsidiary to pay
and discharge, at or before maturity, all of their respective obligations and
liabilities, including tax liabilities, except (x) where the same may be the
subject of a Permitted Contest and (y) for such obligations and/or liabilities
the nonpayment or nondischarge of which could not reasonably be expected to have
a Material Adverse Effect, (ii) will maintain, and cause each Subsidiary to
maintain, in accordance with GAAP, appropriate reserves for the accrual of all
of their respective obligations and liabilities and (iii) will not breach or
permit any Subsidiary to breach, or permit to exist any default under, the terms
of any lease, commitment, contract, instrument or obligation to which it is a
party, or by which its properties or assets are bound, except for such breaches
or defaults which could not reasonably be expected to have a Material Adverse
Effect.
Section 4.3 Conduct of Business and Maintenance of Existence.
Each Borrower will continue, and will cause each Subsidiary to continue,
to engage in business of the same general type as they now conduct and will
preserve, renew and keep in full force and effect, and will cause each
Subsidiary to preserve, renew and keep in full force and effect their respective
existence and their respective rights, privileges and franchises necessary or
desirable in the normal conduct of business. Notwithstanding the foregoing,
Borrowers may, upon five (5) days prior written notice to Agent, dissolve or
liquidate any Subsidiary that has no material assets, operations or liabilities.
Section 4.4 Maintenance of Property; Insurance.
(a) Each Borrower will keep, and will cause each Subsidiary to keep, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
(b) Each Borrower will maintain, and will cause each Subsidiary to
maintain, (i) physical damage insurance on all real and personal property on an
all risks basis (including the perils of flood and quake), covering the repair
and replacement cost of all such property and consequential loss coverage for
business interruption and public liability insurance (including
products/completed operations liability coverage) in each case of the kinds
customarily carried or maintained by Persons of established reputation engaged
in similar businesses and in amounts reasonably acceptable to Agent and (ii)
such other insurance coverage in such amounts and with respect to such risks as
Agent may reasonably
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request. All such insurance shall be provided by insurers having an A.M. Best
policyholders rating reasonably acceptable to Agent.
(c) On or prior to the Closing Date, each Borrower will cause Agent to be
named as an additional insured, assignee and loss payee, as applicable, on each
insurance policy required to be maintained pursuant to this Section 4.4 pursuant
to endorsements in form and content reasonably acceptable to Agent. Borrowers
will deliver to Agent and Lenders (i) on the Closing Date, a certificate from
each Borrower's insurance broker dated such date showing the amount of coverage
as of such date, and that such policies will include effective waivers (whether
under the terms of any such policy or otherwise) by the insurer of all claims
for insurance premiums against all loss payees and additional insureds and all
rights of subrogation against all loss payees and additional insureds, and that
if all or any part of such policy is canceled, terminated or expires, the
insurer will forthwith give notice thereof to each additional insured and loss
payee and that no cancellation, reduction in amount or material change in
coverage thereof shall be effective until at least thirty (30) days after
receipt by each additional insured and loss payee of written notice thereof,
(ii) on an annual basis, and upon the request of any Lender through Agent from
time to time, full information as to the insurance carried, (iii) within five
(5) days of receipt of notice from any insurer, a copy of any notice of
cancellation, nonrenewal or material change in coverage from that existing on
the date of this Agreement and (iv) promptly, notice of any cancellation or
nonrenewal of coverage by any Borrower.
(d) In the event any Borrower fails to provide Agent with evidence of the
insurance coverage required by this Agreement, Agent may purchase insurance at
Borrowers' expense to protect Agent's interests in the Collateral. This
insurance may, but need not, protect any Borrower's interests. The coverage
purchased by Agent may not pay any claim made by any Borrower or any claim that
is made against any Borrower in connection with the Collateral. The applicable
Borrower may later cancel any insurance purchased by Agent, but only after
providing Agent with evidence that such Borrower has obtained insurance as
required by this Agreement. If Agent purchases insurance for the Collateral,
Borrowers will be responsible for the costs of that insurance, including
interest and other charges imposed by Agent in connection with the placement of
the insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to the Obligations. The costs
of the insurance may be more than the cost of insurance each Borrower is able to
obtain on its own.
Section 4.5 Compliance with Laws.
Each Borrower will comply, and cause each Subsidiary to comply, with the
requirements of all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including Environmental Laws and ERISA
and the rules and regulations thereunder), except for such laws, ordinances,
rules, regulations and requirements the noncompliance with which could not
reasonably be expected to have a Material Adverse Effect.
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Section 4.6 Inspection of Property, Books and Records.
Each Borrower will keep, and will cause each Subsidiary to keep, proper
books of record and account in accordance with GAAP in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities; and will permit, and will cause each Subsidiary to
permit, at the sole cost of the applicable Borrower or any applicable
Subsidiary, representatives of Agent and of any Lender (but at such Lender's
expense unless such visit or inspection is made concurrently with Agent) to
visit and inspect any of their respective properties, to examine and make
abstracts or copies from any of their respective books and records, to conduct a
collateral audit and analysis of their respective Inventory and Accounts and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants as often as may
reasonably be desired. In the absence of an Event of Default, Agent or any
Lender exercising any rights pursuant to this Section 4.6 shall give the
applicable Borrower or any applicable Subsidiary commercially reasonable prior
written notice of such exercise. No notice shall be required during the
existence and continuance of any Event of Default.
Section 4.7 Use of Proceeds.
Borrowers will use the proceeds of the Term Loans solely for payment of
transaction fees and expenses incurred in connection with the Operative
Documents and the refinancing on the Closing Date of Debt owing to the parties
listed on the Information Certificate and for working capital needs and other
general corporate purposes of each Borrower. The proceeds of Revolving Loans
shall be used by Borrowers solely for the purposes set forth in the preceding
sentence.
Section 4.8 Lenders' Meetings.
Within forty-five (45) days after the end of each fiscal quarter,
Borrowers will conduct a meeting of Agent and Lenders to discuss such fiscal
quarter's results and the financial condition of Borrowers and the Subsidiaries
at which shall be present a Responsible Officer of Atlantic and such officers of
the Credit Parties as may be reasonably requested to attend by Agent or any
Lender, such request or requests to be made within a reasonable time prior to
the scheduled date of such meeting. Such meetings shall be held at a time and
place convenient to Lenders and to Borrowers.
Section 4.9 Hazardous Materials; Remediation.
Borrowers will provide Agent within forty-five (45) days after demand
therefor with a bond, letter of credit (including a Letter of Credit) or similar
financial assurance evidencing to the satisfaction of Agent, which statement of
satisfaction shall not unreasonably be withheld, that sufficient funds are
available to pay the cost of removing, treating and disposing of any Hazardous
Materials or Hazardous Materials Contamination and discharging any assessment
which may be established on any property as a result thereof, such demand to be
made, if at all, upon Agent's reasonable business determination that the failure
to remove, treat or dispose of any Hazardous Materials or Hazardous
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Materials Contamination, or the failure to discharge any such assessment could
reasonably be expected to have a Material Adverse Effect.
Section 4.10 Further Assurances.
Each Borrower will, and will cause each Subsidiary to, at its own cost and
expense, cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances as may from time to
time be necessary or as Agent or the Required Lenders may from time to time
reasonably request in order to carry out the intent and purposes of the
Financing Documents and the transactions contemplated thereby, including all
such actions to establish, preserve, protect and perfect a first priority Lien
(subject only to Permitted Liens) in favor of Agent for the benefit of Lenders
on the Collateral (including Collateral acquired after the date hereof),
including on any and all assets of each Credit Party, whether now owned or
hereafter acquired.
Section 4.11 PASA Matters.
Each Borrower will, and will cause each Subsidiary to, at all times (a)
comply with all applicable provisions of PASA, including those pertaining to
bonding and payment requirements, (b) maintain written records relating to
livestock and livestock byproducts in its possession for which payment has not
been made and (c) at Agent's request, notify Agent of any contract arrangements
for the purchase of livestock on credit.
Section 4.12 Texas Traditions.
If at any time Texas Traditions, Inc. has any material assets, operations
or liabilities, Atlantic will, upon the request of Agent, cause Texas
Traditions, Inc. to deliver to Agent a Guarantee of the Obligations, together
with a security agreement pursuant to which it grants Agent a lien on all of its
assets in order to secure such Guarantee.
ARTICLE 5
NEGATIVE COVENANTS
Each Borrower agrees that, so long as any Credit Exposure exists:
Section 5.1 Debt.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, create, incur, assume, guarantee or otherwise become or remain
directly or indirectly liable with respect to, any Debt, or any contingent
obligations which would be Debt hereunder if they were non-contingent, except
for:
(a) Debt and Letter of Credit Liabilities under the Financing Documents;
(b) Debt or such contingent obligations outstanding on the date of this
Agreement as set forth in the Information Certificate and refinancings thereof
that do not increase the principal amounts thereof;
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(c) Subordinated Debt;
(d) Debt incurred or assumed for the purpose of financing all or any part
of the cost of acquiring any fixed asset (including through Capital Leases), in
an aggregate principal amount at any time outstanding not greater than
$1,000,000;
(e) Intercompany Loans and intercompany Debt arising from loans made by
any Borrower to its Subsidiaries or to any Borrower; provided, however, that
upon the request of Agent at any time, such Debt shall be evidenced by
promissory notes having terms reasonably satisfactory to Agent, the sole
originally executed counterparts of which shall be pledged and delivered to
Agent, for the benefit of Agent and Lenders, as security for the Obligations;
and
(f) unsecured Debt in addition to the Debt described in clauses (a)-(e)
above, in an aggregate amount outstanding not in excess of $250,000.
Section 5.2 Liens.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) Liens created by the Security Documents;
(b) Liens existing on the date of this Agreement as set forth in the
Information Certificate, together with replacement Liens on the property
currently subject thereto;
(c) any Lien on any asset securing Debt permitted under Section 5.1(d)
incurred or assumed for the purpose of financing all or any part of the cost of
acquiring such asset, provided that such Lien attaches to such asset
concurrently with or within ninety (90) days after the acquisition thereof,
together with replacement Liens on the property subject thereto;
(d) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or the subject of a Permitted
Contest or which are in an aggregate amount not in excess of $25,000;
(e) Liens arising in the ordinary course of business and (i) in favor of
carriers, landlords, warehousemen, mechanics and materialmen, and other similar
Liens imposed by law and (ii) in connection with worker's compensation,
unemployment compensation and other types of social security (excluding Liens
arising under ERISA) or in connection with surety bonds, bids, performance bonds
and similar obligations for sums not overdue or the subject of a Permitted
Contest and not involving any advances or borrowed money or the deferred
purchase price of property or services and, in each case, for which it maintains
adequate reserves or which are in an aggregate amount not in excess of $25,000;
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(f) attachments, appeal bonds, judgments and other similar Liens, for sums
not exceeding $250,000 arising in connection with court proceedings; provided
that the execution or other enforcement of such Liens is effectively stayed and
the claims secured thereby are the subject of a Permitted Contest;
(g) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any material
respect with the ordinary conduct of the business of any Borrower or any
Subsidiary;
(h) PASA Liens to secure obligations owing to the applicable cash sellers
of livestock;
(i) precautionary UCC filings by lessors; and
(j) Liens to secure the Sterling Subordinated Debt.
Section 5.3 Restricted Distributions.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted
Distribution; provided that the foregoing shall not restrict or prohibit
wholly-owned Subsidiaries from making dividends or distributions and shall not
restrict or prohibit dividends or distributions by Atlantic at such times and in
such amounts as are necessary to permit purchases of shares of (or options or
warrants to purchase shares of) equity interests in Atlantic or options or
warrants therefor from employees of any Credit Party upon their death,
termination or retirement, so long as (x) before and after giving effect to any
such dividend or distribution for such purpose, (i) no Event of Default shall
have occurred and be continuing and (ii) Borrowers are in compliance on a pro
forma basis with the covenants set forth in Article 7 recomputed for the most
recently ended quarter for which information is available and is in compliance
with all other terms and conditions of this Agreement and (y) such purchases or
payments after the date hereof do not exceed $50,000 in any Fiscal Year and do
not exceed $150,000 in the aggregate.
Section 5.4 Restrictive Agreements.
No Borrower will, or will permit any Subsidiary to, directly or indirectly
(i) enter into or assume any agreement (other than the Financing Documents)
prohibiting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired or (ii) create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Subsidiary to: (1) pay or make
Restricted Distributions to any Borrower or any other Subsidiary; (2) pay any
Debt owed to any Borrower or any other Subsidiary; (3) make loans or advances to
any Borrower or any other Subsidiary; or (4) transfer any of its property or
assets to any Borrower or any other Subsidiary. Notwithstanding the foregoing,
the agreements evidencing Debt permitted under Section 5.1(d) may include
restrictions on the creation of Liens on, or the transfer of, the assets subject
to Liens securing such Debt.
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Section 5.5 Payments and Modifications of Subordinated Debt.
No Borrower will, or will permit any Subsidiary to, directly or indirectly
(i) declare, pay, make or set aside any amount for payment in respect of
Subordinated Debt, except for regularly scheduled payments of interest (but no
prepayments of interest or payments or prepayments of principal) in respect of
such Subordinated Debt made in full compliance with any and all subordination
provisions applicable to such Subordinated Debt and (ii) amend or otherwise
modify the terms of any Subordinated Debt if the effect of such amendment or
modification is to (a) increase the interest rate or fees on such Debt; (b)
advance the dates upon which payments of principal or interest are due on, or
the principal amount of, such Indebtedness; (c) make more restrictive any event
of default or add or make more restrictive any covenant with respect to such
Debt; (d) change the prepayment provisions of such Debt, other than to defer or
reduce such prepayments; (e) change the subordination provisions thereof (or the
subordination terms of any guaranty thereof); or (f) change or amend any other
term if such change or amendment would materially increase the obligations of
the obligor or confer additional material rights on the holder of such Debt in a
manner adverse to any Borrower, any Subsidiaries or Lenders.
Section 5.6 Consolidations, Mergers and Sales of Assets.
No Borrower will, or will permit any Subsidiary to, directly or indirectly
(i) consolidate or merge with or into any other Person or (ii) sell, lease,
license or otherwise transfer, directly or indirectly, any of its or their
assets, other than (a) sales of Inventory in the ordinary course of their
respective businesses, (b) dispositions of Cash Equivalents, (c) dispositions of
Equipment for cash and fair value that a Responsible Officer of the applicable
Borrower determines in good faith is no longer used or useful in the business of
the such Borrower and its Subsidiaries if all of the following conditions are
met: (1) the market value of assets sold or otherwise disposed of in any single
transaction or series of related transactions does not exceed $50,000 and the
aggregate market value of assets sold or otherwise disposed of in any Fiscal
Year of the applicable Borrower (exclusive of assets sold or disposed of prior
to the Closing Date) does not exceed $100,000; (2) the Net Cash Proceeds of such
Asset Disposition are applied as required by 2.1(d); (3) after giving effect to
the Asset Disposition and the repayment of Debt with the proceeds thereof,
Borrowers are in compliance on a pro forma basis with the covenants set forth in
Article 7 recomputed for the most recently ended quarter for which information
is available and is in compliance with all other terms and conditions of this
Agreement; and (4) no Default or Event of Default then exists or would result
from such Asset Disposition; (d) transfers of assets among Borrowers for fair
market value; and (e) dispositions of fixed assets that are being replaced by
assets of the same type; provided, that such replacement fixed assets are
acquired prior to or concurrently with any such disposition.
Section 5.7 Purchase of Assets, Investments.
No Borrower will, or will permit any Subsidiary to, directly or indirectly
acquire any assets other than in the ordinary course of business. No Borrower
will, or will permit any Subsidiary to, directly or indirectly make, acquire or
own any Investment in any
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Person other than (a) Investments set forth on the Information Certificate; (b)
Cash Equivalents; (c) Investments in Subsidiaries, so long as (i) the applicable
Borrower has pledged to Agent all of the outstanding capital stock or other
equity interests of any such Subsidiary and (ii) any such Subsidiary has
Guaranteed the Obligations and secured such Guarantee by granting in favor of
Agent, for its benefit and the benefit of Lenders, a Lien on all or
substantially all of the assets; (d) bank deposits established in accordance
with Section 5.14; (e) Investments in securities of Account Debtors received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such Account Debtors; and (f) loans to officers and
employees in an aggregate principal amount not to exceed $50,000 at any time
outstanding. Without limiting the generality of the foregoing, no Borrower will,
or will permit any Subsidiary to, (i) acquire or create any Subsidiary or (ii)
except as disclosed in the Information Certificate, engage in any joint venture
or partnership with any other Person.
Section 5.8 Transactions with Affiliates.
Except (i) as permitted by Section 5.12, (ii) as otherwise disclosed
in the Information Certificate, and (iii) for transactions that are disclosed to
Agent in writing in advance of being entered into and which contain terms that
are no less favorable to the applicable Borrower or any Subsidiary, as the case
may be, than those which might be obtained from a third party, no Borrower will,
or will permit any Subsidiary to, directly or indirectly, enter into or permit
to exist any transaction (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate of any Borrower,
other than any other Borrower or any Subsidiary.
Section 5.9 Modification of Organizational Documents.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly amend or otherwise modify any Organizational Documents of such Person
in any respect adverse to Agent or Lenders, except for such amendments or other
modifications required by law and fully disclosed to Agent.
Section 5.10 Fiscal Year.
No Borrower will, or will permit any Subsidiary to, change its
Fiscal Year.
Section 5.11 Conduct of Business.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, engage in any line of business other than those businesses engaged
in on the Closing Date and businesses reasonably related thereto.
Section 5.12 Investor Fees.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, pay or become obligated to pay any management, consulting or similar
advisory fees or other amounts to or for the account of Investor or any
Affiliate of Investor, except that so long as
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no Event of Default is then continuing or would result therefrom, Atlantic may
make payments to Sterling Advisors, L.P. (i) of a $150,000 investment banking
fee on the Closing Date, (ii) monthly base fees and expenses not in excess of
the amounts set forth in the Consulting Agreement, as it exists on the date
hereof and (iii) in respect of legal fees of ▇▇▇ ▇▇▇▇▇▇▇ for legal services
rendered to Borrowers (a) prior to the Closing Date and (b) in an amount of up
to $15,000 per fiscal year, for periods after the Closing Date.
Section 5.13 Lease Payments.
No Borrower will, or will permit any Subsidiary to, directly or
indirectly, incur or assume (whether pursuant to a Guarantee or otherwise) any
liability for rental payments under a lease with a lease term of one year or
more if, after giving effect thereto, the aggregate amount of minimum lease
payments that Borrowers and their Consolidated Subsidiaries have so incurred or
assumed will exceed, on a consolidated basis, $2,000,000 for any calendar year
under all such leases (excluding Capital Leases).
Section 5.14 Bank Accounts.
Without limiting the provisions of Section 6.1(d), no Borrower will,
or will permit any Subsidiary to, directly or indirectly, establish any new bank
account without prior written notice to Agent and unless Agent, the applicable
Borrower or such Subsidiary and the bank at which the account is to be opened
enter into a control agreement regarding such bank account pursuant to which
such bank acknowledges the security interest of Agent in such bank account,
agrees to comply with instructions originated by Agent directing disposition of
the funds in the bank account without further consent from the applicable
Borrower, and agrees to subordinate and limit any security interest the bank may
have in the bank account on terms satisfactory to Agent.
Section 5.15 Environmental Matters.
No Credit Party will permit any Hazardous Materials to be located on
any properties now or hereafter owned, leased or operated by such Credit Party
or to be released into the environment, or deposited, discharged, placed or
disposed of at, on, under or near any of such properties in a manner that would
violate any Environmental Law in any material respect or which could reasonably
be expected to have a Material Adverse Effect. No Credit Party will permit any
portion of any such property to be used for the disposal, storage, treatment,
processing or other handling of Hazardous Materials in violation of any
Environmental Law nor to be affected by any Hazardous Materials Contamination,
in either case if the same could reasonably be expected to have a Material
Adverse Effect.
ARTICLE 6
ACCOUNTS AND INVENTORY REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS
To induce Agent and Lenders to enter into this Agreement and to make
the Loans and other credit accommodations contemplated hereby, each Borrower
hereby
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represents and warrants to Agent and each Lender, and further agrees with Agent
and each Lender, that:
Section 6.1 Accounts and Account Collections.
(a) Each Borrower shall notify Agent promptly of: (i) any material
delay in the performance by such Borrower or any of its Subsidiaries of any of
their material obligations to any Account Debtor in excess of $50,000 or the
assertion of any claims, offsets, defenses or counterclaims by any such Account
Debtor in excess of $50,000, or any disputes with any such Account Debtors
regarding amounts in excess of $50,000, or any settlement, adjustment or
compromise, in each case of any Account in an amount in excess of $50,000, (ii)
all material adverse information known to any Credit Party relating to the
financial condition of any Account Debtor that has outstanding Accounts in
excess of $50,000 and (iii) any event or circumstance which, to any Credit
Party's knowledge, would result in any Account in excess of $50,000 no longer
constituting an Eligible Account. Each Borrower hereby agrees not to grant to
any Account Debtor, and to cause each of its Subsidiaries not to grant to any
Account Debtor, any credit, discount, allowance or extension, or to enter into
any agreement for any of the foregoing, without Agent's consent, except in the
ordinary course of business in accordance with past practices and policies. So
long as no Event of Default exists or has occurred and is continuing, each
Borrower may settle, adjust or compromise, and may permit each of its
Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or
dispute with any Account Debtor. At any time that an Event of Default exists or
has occurred and is continuing, Agent shall, at its option, have the exclusive
right to settle, adjust or compromise any claim, offset, counterclaim or dispute
with Account Debtors of any Credit Party or grant any credits, discounts or
allowances.
(b) With respect to each Account: (i) the amounts shown on any
invoice delivered to Agent or schedule thereof delivered to Agent shall be true
and complete in all material respects, (ii) no payments shall be made thereon
except payments immediately delivered to Agent pursuant to the terms of this
Agreement or any applicable Security Document (to the extent so required), (iii)
there shall be no setoffs, deductions, contras, defenses, counterclaims or
disputes existing or asserted with respect thereto except as reported to Agent
in accordance with the terms of this Agreement, and (iv) none of the
transactions giving rise thereto will violate any applicable laws or
regulations, all documentation relating thereto will be legally sufficient under
such laws and regulations and all such documentation will be legally enforceable
in accordance with its terms.
(c) Agent shall have the right at any time or times, in the name of
a nominee of Agent, to verify the validity, amount or any other matter relating
to any Account or other Collateral, by mail, telephone, e-mail, facsimile
transmission or otherwise. To facilitate the exercise of the right described in
the immediately preceding sentence, each Borrower hereby agrees to provide Agent
upon request the name and address of each Account Debtor of such Borrower or any
of its Subsidiaries.
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(d) Each Borrower shall establish and maintain, at its sole expense,
and shall cause each Subsidiary to establish and maintain, at its sole expense
blocked accounts or lockboxes and related blocked accounts (in either case,
"BLOCKED ACCOUNTS"), as Agent may specify, with such banks as are reasonably
acceptable to Agent into which such Borrower and its Subsidiaries shall promptly
deposit and direct their respective Account Debtors to directly remit all
payments on Accounts and all payments constituting proceeds of Inventory or
other Collateral in the identical form in which such payments are made, whether
by cash, check or other manner. Each Borrower shall deliver, or cause to be
delivered, to Agent a Deposit Account Control Agreement duly authorized,
executed and delivered by each bank where a Blocked Account for the benefit of
the applicable Borrower or any of its Subsidiaries is maintained, and by each
bank where any other Deposit Account is from time to time maintained. Each
Borrower shall further execute and deliver, and shall cause each of its
Subsidiaries to execute and deliver, such agreements and documents as Agent may
reasonably require in connection with such Blocked Accounts, Deposit Accounts
and such Deposit Account Control Agreements. Without limiting the provisions of
Section 5.14, no Borrower shall establish, or shall permit any of its
Subsidiaries to establish, any Deposit Accounts not existing as of the Closing
Date, unless such Borrower or its Subsidiaries (as applicable) has complied in
full with the provisions of this Section 6.1 with respect to such Deposit
Accounts. As of the Closing Date, each of Carlton and Prefco has established a
Blocked Account arrangement with ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank. Each of Carlton and
Prefco hereby agrees that on or before January 31, 2003, it shall terminate its
Blocked Account arrangement with ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank and replace it with a
Blocked Account arrangement with another bank reasonably acceptable to Agent,
pursuant to agreements and documents reasonably acceptable to Agent. Each
Borrower agrees that all payments made to such Blocked Accounts or other funds
received and collected by Agent or any Lender, whether in respect of the
Accounts, as proceeds of Inventory or other Collateral or otherwise shall be
treated as payments to Agent and Lenders in respect of the Obligations and
therefore shall constitute the property of Agent and Lenders to the extent of
the then outstanding Obligations.
(e) For purposes of calculating the amount of the Loans available to
Borrowers, payments made to a Blocked Account will be applied (conditional upon
final collection) to the Obligations on the Business Day of receipt by Agent of
immediately available funds in the Payment Account provided such payments and
notice thereof are received in accordance with Agent's usual and customary
practices as in effect from time to time and with sufficient time to credit the
Loan Account on such day, and if not, then on the next Business Day. For the
purposes of calculating interest on the Obligations, such payments or other
funds received shall be deemed applied (conditional upon final collection) to
the Obligations one (1) Business Day following the date of receipt of
immediately available funds by Agent in the Payment Account provided such
payments or other funds and notice thereof are received in accordance with
Agent's usual and customary practices as in effect from time to time and with
sufficient time to credit the Loan Account on such day, and if not, then on the
next Business Day.
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(f) Each Borrower and its directors, employees, agents, Subsidiaries
and other Affiliates shall, acting as trustee for Agent, receive, as the
property of Agent, any monies, checks, notes, drafts or any other payment
relating to and/or proceeds of Accounts, Inventory or other Collateral which
come into their possession or under their control and immediately upon receipt
thereof, shall deposit or cause the same to be deposited in the Blocked
Accounts, or remit the same or cause the same to be remitted, in kind, to Agent.
In no event shall the same be commingled with any Borrower's own funds. Each
Borrower agrees to reimburse Agent on demand for any amounts owed or paid to any
bank at which a Blocked Account is established or any other bank or Person
involved in the transfer of funds to or from the Blocked Accounts arising out of
Agent's payments to or indemnification of such bank or Person.
Section 6.2 Inventory.
With respect to the Inventory: (i) each Borrower shall at all times
maintain, and cause each of its Subsidiaries to maintain, records of Inventory
reasonably satisfactory to Agent, keeping correct and accurate records itemizing
and describing the kind, type, quality and quantity of Inventory, the cost
therefor and daily withdrawals therefrom and additions thereto; (ii) each
Borrower shall conduct, and cause each of its Subsidiaries to conduct, a
physical count of the Inventory at least once each year but at any time or times
as Agent may request on or after an Event of Default, and promptly following
such physical inventory shall supply Agent with a report in the form and with
such specificity as may be reasonably satisfactory to Agent concerning such
physical count; (iii) except in the ordinary course of business, no Borrower
shall sell, or shall permit any of its Subsidiaries to sell, Inventory to any
customer on approval, or any other basis which entitles the customer to return
or may obligate any Credit Party to repurchase such Inventory; (iv) each
Borrower shall keep, and shall cause each of its Subsidiaries to keep, the
Inventory in good and marketable condition; and (v) no Borrower shall acquire or
accept, or shall permit any of its Subsidiaries to acquire or accept, without
prior written notice to Agent, any Inventory on consignment or approval.
ARTICLE 7
FINANCIAL COVENANTS
Each Borrower agrees that, so long as any Credit Exposure exists:
Section 7.1 Capital Expenditures.
Borrowers will not permit the aggregate amount of Capital
Expenditures for any period set forth below to exceed the amount set forth below
for such period:
Period Amount
------ ------
2002 Fiscal Year $2,000,000
2003 Fiscal Year $1,400,000
2004 Fiscal Year $1,600,000
2005 Fiscal Year $1,600,000
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2006 Fiscal Year $1,600,000
2007 Fiscal Year $1,600,000
If Borrowers do not utilize the entire amount of Capital Expenditures permitted
in any Fiscal Year set forth above, Borrowers may carry forward to the
immediately succeeding period up to 75% of such unutilized amount (with Capital
Expenditures made by Borrowers in such succeeding period applied first to such
carried forward amount); provided that all such carried forward amounts must be
used during the first 3 months of the subsequent Fiscal Year.
Section 7.2 Fixed Charge Coverage Ratio.
Borrowers on a consolidated basis will not permit the Fixed Charge
Coverage Ratio for the twelve (12) month period ending on any date set forth
below to be less than the ratio set forth below for such date.
Date Ratio
---- -----
December 31, 2002 1.1:1.0
March 31, 2003 1.1:1.0
June 30, 2003 1.1:1.0
September 30, 2003 1.1:1.0
December 31, 2003 1.1:1.0
March 31, 2004 1.1:1.0
June 30, 2004 1.1:1.0
September 30, 2004 1.1:1.0
December 31, 2004 1.1:1.0
March 31, 2005 1.1:1.0
June 30, 2005 1.1:1.0
September 30, 2005 1.1:1.0
December 31, 2005 1.1:1.0
March 31, 2006 1.1:1.0
June 30, 2006 1.1:1.0
September 30, 2006 1.1:1.0
December 31, 2006 1.1:1.0
March 31, 2007 1.1:1.0
June 30, 2007 1.1:1.0
Section 7.3 Senior Leverage Ratio.
Borrowers will not permit the Senior Leverage Ratio for the twelve
(12) month period ending on any date set forth below to be greater than the
amount set forth below for such date:
Date Ratio
---- -----
December 31, 2002 2.40:1.0
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March 31, 2003 2.25:1.0
June 30, 2003 2.25:1.0
September 30, 2003 2.25:1.0
December 31, 2003 2.25:1.0
March 31, 2004 2.00:1.0
June 30, 2004 2.00:1.0
September 30, 2004 2.00:1.0
December 31, 2004 2.00:1.0
March 31, 2005 1.75:1.0
June 30, 2005 1.75:1.0
September 30, 2005 1.75:1.0
December 31, 2005 1.75:1.0
March 31, 2006 1.75:1.0
June 30, 2006 1.75:1.0
September 30, 2006 1.75:1.0
December 31, 2006 1.75:1.0
March 31, 2007 1.50:1.0
June 30, 2007 1.50:1.0
September 30, 2007 1.50:1.0
ARTICLE 8
CONDITIONS
Section 8.1 Conditions to Closing.
The obligation of each Lender to make the initial Loans and of Agent
to issue any Support Agreements on the Closing Date shall be subject to the
receipt by Agent of each agreement, document and instrument set forth on the
Closing Checklist, each in form and substance satisfactory to Agent, and to the
consummation of the following conditions precedent, each to the satisfaction of
Agent and Lenders in their sole discretion:
(a) evidence of the consummation of the transactions (other than the
funding of the Loans) contemplated by the Operative Documents, including without
limitation the exchange of subordinated notes contemplated by the Subordinated
Debt Documents and the execution of appropriate subordination agreements
relating thereto.
(b) the payment of all fees, expenses and other amounts due and
payable under each Financing Document;
(c) the satisfaction of Agent as to the absence, since December 31,
2001, of any material adverse change in any aspect of the business, operations,
properties, prospects or condition (financial or otherwise) of any Credit Party,
or any event or condition which could reasonably be expected to result in such a
material adverse change;
(d) the receipt of the initial Borrowing Base Certificate, prepared
as of a date within seven (7) days of the Closing Date, which certificate shall
evidence immediately
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available excess borrowing capacity of Revolving Loans of not less than
$1,000,000 after giving effect to the initial funding of Loans on the Closing
Date and the consummation of the transactions contemplated by the Operative
Documents;
(e) receipt by Agent of FIRREA appraisals and flood zone
certificates with respect to each parcel of Real Property included in the
Collateral; and
(f) receipt by Agent of such other documents, instruments and/or
agreements as Agent may reasonably request.
Section 8.2 Conditions to Each Loan and Support Agreement.
The obligation of Lenders to make a Loan or of Agent to issue any
Support Agreement (including on the Closing Date) is subject to the satisfaction
of the following additional conditions:
(a) in the case of a Revolving Loan Borrowing or the borrowing of
Term Loan B, receipt by Agent of a Notice of Borrowing as set forth hereinabove;
(b) the fact that, immediately after each such Revolving Loan
Borrowing and after application of the proceeds thereof or after such issuance,
the Revolving Loan Outstandings will not exceed the Revolving Loan Limit;
(c) the fact that, immediately before and after such borrowing or
issuance, no Default or Event of Default shall have occurred and be continuing;
and
(d) the fact that the representations and warranties of each Credit
Party contained in the Financing Documents shall be true and correct in all
material respects on and as of the date of such borrowing or issuance, except to
the extent that any such representation or warranty relates to a specific date
in which case such representation or warranty shall be true and correct in all
material respects as of such earlier date.
Each borrowing, each giving of a Notice of LC Credit Event hereunder
and each giving of a Notice of Borrowing hereunder shall be deemed to be a
representation and warranty by each Borrower on the date of such borrowing or
notice as to the facts specified in Sections 8.2(b), 8.2(c) and 8.2(d).
ARTICLE 9
EVENTS OF DEFAULT
Section 9.1 Events of Default.
For purposes of the Financing Documents, the occurrence of any of
the following conditions and/or events, whether voluntary or involuntary, by
operation of law or otherwise, shall constitute an "EVENT OF DEFAULT":
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(a) Any Borrower shall fail to pay when due any principal, interest,
premium or fee under any Financing Document or any other amount payable under
any Financing Document;
(b) Any Borrower shall fail to observe or perform any covenant
contained in Section 4.1(a), (b), (c), (e), (g), (h), (i), (j)(i), (k), (l),
(m), (o), (p), (q), (r) or (t), Section 4.4(a), 4.4(b), 4.4(c)(ii), 4.4(c)(iii),
4.4(c)(iv), Section 4.7, Section 4.9, Article 5, Article 6 or Article 7;
(c) any Credit Party defaults in the performance of or compliance
with any term contained in this Agreement, in any other Financing Document or in
any document, agreement or instrument entered into in connection with Ancillary
Services (other than occurrences described in other provisions of this Section
9.1 for which a different grace or cure period is specified or which constitute
immediate Events of Default) and such default is not remedied or waived within
twenty (20) days after the earlier of (1) receipt by Borrower Representative of
notice from Agent or Required Lenders of such default or (2) actual knowledge of
any Responsible Officer of any Borrower or any other Credit Party of such
default;
(d) any representation, warranty, certification or statement made by
any Credit Party or any other Person in any Financing Document or in any
certificate, financial statement or other document delivered pursuant to any
Financing Document is incorrect in any respect (or in any material respect if
such representation, warranty, certification or statement is not by its terms
already qualified as to materiality) when made (or deemed made);
(e) failure of any Credit Party to pay when due or within any
applicable grace or cure period any principal, interest or other amount on Debt
(other than the Loans), or the occurrence of any breach, default, condition or
event with respect to any Debt (other than the Loans), that remains in existence
beyond any applicable grace or cure period, if the effect of such failure or
occurrence is to cause or to permit the holder or holders thereof to cause, Debt
having an aggregate principal amount in excess of $100,000 to become or be
declared due prior to its stated maturity, unless waived by the holder or
holders thereof;
(f) any Credit Party shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against any Credit Party seeking liquidation, reorganization or other relief
with respect to it or its
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debts under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and unstayed
for a period of sixty (60) days; or an order for relief shall be entered against
any Credit Party under the federal bankruptcy laws as now or hereafter in
effect;
(h) (1) institution of any steps by any Person to terminate a
Pension Plan if as a result of such termination any Credit Party or any member
of the Controlled Group could be required to make a contribution to such Pension
Plan, or could incur a liability or obligation to such Pension Plan, in excess
of $100,000, (2) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA, or (3) there
shall occur any withdrawal or partial withdrawal from a Multiemployer Pension
Plan and the withdrawal liability (without unaccrued interest) to Multiemployer
Pension Plans as a result of such withdrawal (including any outstanding
withdrawal liability that any Credit Party or any member of the Controlled Group
have incurred on the date of such withdrawal) exceeds $100,000;
(i) one or more judgments or orders for the payment of money
aggregating in excess of $100,000 in excess of any available insurance shall be
rendered against any or all Credit Parties and such judgments or orders shall
continue unsatisfied and unstayed for a period of thirty (30) days;
(j) (1) Investor shall collectively cease to, directly or
indirectly, own and control at least 51% of the outstanding equity interests of
Atlantic owned by them on the Closing Date (after giving effect to the
consummation of the transactions contemplated by the Operative Documents), (2)
Continuing Directors shall cease to constitute at least a majority of the board
of directors (or similar governing body) of Atlantic, (3) any Person other than
Investor shall, directly or indirectly, own and control either a greater
percentage of the outstanding equity interests of Atlantic directly or
indirectly owned and controlled by Investor or more than 51% of the outstanding
equity interests of Atlantic, (4) Atlantic shall cease to directly own and
control one hundred percent (100%) of each class of the outstanding equity
interests of each other Borrower, (5) a Borrower shall cease to, directly or
indirectly, own and control one hundred percent (100%) of each class of the
outstanding equity interests of each Subsidiary or (6) any "Change of Control",
"Change in Control", or terms of similar import occurs under any Subordinated
Debt Document;
(k) the accountant's report or reports on the audited statements
delivered pursuant to Section 4.1(b) shall include any material qualification
(including with respect to the scope of audit) or exception, other than as
permitted in Section 4.1(b);
(l) any Lien created by any of the Security Documents shall at any
time fail to constitute a valid and perfected Lien on all of the Collateral
purported to be secured thereby (except to the extent that Agent chooses not to
take action to perfect its Lien on any Collateral), subject to no prior or equal
Lien except Permitted Liens, or any Credit Party shall so assert in writing;
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(m) any Credit Party shall be prohibited or otherwise materially
restrained from conducting all or a substantial portion of the business
theretofore conducted by it by virtue of any casualty, any labor strike, any
determination, ruling, decision, decree or order of any court or regulatory
authority of competent jurisdiction or any other event and such casualty, labor
strike, determination, ruling, decision, decree, order or other event remains
unstayed and in effect for a period that could reasonably be expected to have a
Material Adverse Effect; or
(n) any of the Operative Documents shall for any reason fail to
constitute the valid and binding agreement of any party thereto, or any such
party shall so assert in writing.
Section 9.2 Acceleration and Suspension or Termination of Revolving
Loan Commitment.
Upon the occurrence and during the continuance of an Event of
Default, Agent may, and shall if requested by Required Lenders, (i) by notice to
Borrower Representative suspend or terminate the Revolving Loan Commitment, in
whole or in part (and, if in part, such reduction shall be pro rata among
Lenders having a Revolving Loan Commitment Percentage) and/or (ii) by notice to
Borrower Representative declare the Obligations to be, and the Obligations shall
thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Borrower and Borrowers will pay the same; provided that in the case of any of
the Events of Default specified in Section 9.1(f) or 9.1(g) above, without any
notice to any Borrower or any other act by Agent or Lenders, the Revolving Loan
Commitment shall thereupon terminate and all of the Obligations shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by each Borrower and Borrowers will
pay the same.
Section 9.3 Cash Collateral.
If (i) any Event of Default specified in Section 9.1(f) or 9.1(g)
shall occur, (ii) the Obligations shall have otherwise been accelerated pursuant
to Section 9.2 or (iii) the Revolving Loan Commitment shall have been terminated
pursuant to Section 9.2, then without any request or the taking of any other
action by Agent or Lenders, Borrowers shall immediately comply with the
provisions of Section 2.5(e) with respect to the deposit of cash collateral to
secure the existing Letter of Credit Liability and future payment of related
fees.
Section 9.4 Default Rate of Interest and Suspension of LIBOR Rate
Options.
At the election of Agent or Required Lenders and upon written notice
to Borrower Representative, after the occurrence of an Event of Default and for
so long as it continues, the Loans then outstanding and any other Obligations
then due and payable shall bear interest at rates that are two percent (2.0%) in
excess of the rates otherwise payable under this Agreement. Furthermore, at the
election of Agent or Required Lenders during any
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period in which any Event of Default is continuing (x) as the Interest Periods
for LIBOR Loans then in effect expire, such Loans shall be converted into Prime
Rate Loans and (y) the LIBOR election will not be available to any Borrower.
Section 9.5 Setoff Rights.
During the continuance of any Event of Default, each Lender is
hereby authorized by each Borrower at any time or from time to time, with
reasonably prompt subsequent notice to such Borrower (any prior or
contemporaneous notice being hereby expressly waived) to set off and to
appropriate and to apply any and all (A) balances held by such Lender at any of
its offices for the account of such Borrower or any of its Subsidiaries
(regardless of whether such balances are then due to such Borrower or its
Subsidiaries), and (B) other property at any time held or owing by such Lender
to or for the credit or for the account of such Borrower or any of its
Subsidiaries, against and on account of any of the Obligations; except that no
Lender shall exercise any such right without the prior written consent of Agent.
Any Lender exercising a right to set off shall purchase for cash (and the other
Lenders shall sell) interests in each of such other Lender's Pro Rata Share of
the Obligations as would be necessary to cause all Lenders to share the amount
so set off with each other Lender in accordance with their respective Pro Rata
Share of the Obligations. Each Borrower agrees, to the fullest extent permitted
by law, that any Lender may exercise its right to set off with respect to the
Obligations as provided in this Section 9.5.
Section 9.6 Application of Proceeds.
Notwithstanding anything to the contrary contained in this
Agreement, upon the occurrence and during the continuance of an Event of
Default, (a) each Borrower irrevocably waives the right to direct the
application of any and all payments at any time or times thereafter received by
Agent from or on behalf of such Borrower or any guarantor of all or any part of
the Obligations, and Agent shall have the continuing and exclusive right to
apply and to reapply any and all payments received at any time or times after
the occurrence and during the continuance of an Event of Default against the
Obligations in such manner as Agent may deem advisable notwithstanding any
previous application by Agent and (b) in the absence of a specific determination
by Agent with respect thereto, the proceeds of any sale of, or other realization
upon, all or any part of the Collateral shall be applied: first, to all fees,
costs, indemnities and expenses incurred by or owing to Agent and any Designated
Lender Affiliate that is an Affiliate of Agent, with respect to this Agreement,
the other Financing Documents, any Ancillary Services or the Collateral; second,
to all fees, costs, indemnities and expenses incurred by or owing to any Lender
and any Designated Lender Affiliate that is an Affiliate of any Lender, with
respect to this Agreement, the other Financing Documents, any Ancillary Services
or the Collateral; third, to accrued and unpaid interest on the Obligations
(including any interest which but for the provisions of the U.S. Bankruptcy
Code, would have accrued on such amounts); fourth, to the principal amount of
the Obligations outstanding; and fifth to any other indebtedness or obligations
of each Borrower owing to Agent, any Lender or any Designated Lender Affiliate
under the Financing Documents or with respect to Ancillary Services. Any balance
remaining shall be
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delivered to Borrowers or to whoever may be lawfully entitled to receive such
balance or as a court of competent jurisdiction may direct.
ARTICLE 10
EXPENSES, INDEMNITY, TAXES AND RIGHT TO PERFORM
Section 10.1 Expenses.
Each Borrower hereby agrees to promptly pay (i) all costs and
expenses of Agent (including without limitation the reasonable fees, costs and
expenses of counsel to, and independent appraisers and consultants retained by
Agent) in connection with the examination, review, due diligence investigation,
documentation, negotiation, closing and syndication of the transactions
contemplated by the Financing Documents, in connection with the performance by
Agent of its rights and remedies under the Financing Documents and in connection
with the continued administration of the Financing Documents including any
amendments, modifications, consents and waivers to and/or under any and all
Financing Documents, (ii) without limitation of the preceding clause (i), all
costs and expenses of Agent in connection with the creation, perfection and
maintenance of Liens pursuant to the Financing Documents, including title
investigations, (iii) without limitation of the preceding clause (i), expenses
of Agent in connection with protecting, storing, insuring, handling, maintaining
or selling any Collateral and in connection with any workout, collection,
bankruptcy, insolvency and other enforcement proceedings under any and all of
the Financing Documents, and (iv) all costs and expenses incurred by Lenders in
connection with any workout, collection, bankruptcy, insolvency and other
enforcement proceedings under any and all Financing Documents, provided, that to
the extent that the costs and expenses referred to in this clause (iv) consist
of fees, costs and expenses of counsel, Borrowers shall be obligated to pay such
reasonable fees, costs and expenses for only one counsel acting for all Lenders
(other than Agent).
Section 10.2 Indemnity.
Each Borrower hereby agrees to indemnify, pay and hold harmless
Agent and Lenders and the officers, directors, employees and counsel of Agent
and Lenders (collectively called the "INDEMNITEES") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including the fees and disbursements of counsel for such Indemnitee) in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitee shall be designated a party thereto and including
any such proceeding initiated by or on behalf of a Credit Party, and the
reasonable expenses of investigation by engineers, environmental consultants and
similar technical personnel and any commission, fee or compensation claimed by
any broker (other than any broker retained by Agent or Lenders) asserting any
right to payment for the transactions contemplated hereby, which may be imposed
on, incurred by or asserted against such Indemnitee as a result of or in
connection with the transactions contemplated hereby or by the other Operative
Documents (including (i)(A) as a direct or indirect result of the presence on or
under, or escape, seepage, leakage, spillage, discharge, emission or release
from, any
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property now or previously owned, leased or operated by any Borrower, any
Subsidiary or any other Person of any Hazardous Materials or any Hazardous
Materials Contamination, (B) arising out of or relating to the offsite disposal
of any materials generated or present on any such property or (C) arising out of
or resulting from the environmental condition of any such property or the
applicability of any governmental requirements relating to Hazardous Materials,
whether or not occasioned wholly or in part by any condition, accident or event
caused by any act or omission of any Borrower or any Subsidiary, and (ii)
proposed and actual extensions of credit under this Agreement) and the use or
intended use of the proceeds of the Notes and Letters of Credit, except that no
Borrower shall have any obligation hereunder to an Indemnitee with respect to
any liability resulting from the gross negligence or willful misconduct of such
Indemnitee, as determined by a court of competent jurisdiction. To the extent
that the undertaking set forth in the immediately preceding sentence may be
unenforceable, each Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all such indemnified liabilities incurred by the Indemnitees or
any of them.
Section 10.3 Taxes.
Each Borrower agrees to pay all governmental assessments, charges or
taxes (except income, franchise or other similar taxes imposed on Agent or
Lenders), including any interest or penalties thereon, at any time payable or
ruled to be payable in respect of the existence, execution or delivery of this
Agreement or the other Financing Documents or the issuance of the Notes or
Letters of Credit and to indemnify and hold Agent and Lenders harmless against
liability in connection with any such assessments, charges or taxes.
Section 10.4 Right to Perform.
If any Credit Party fails to perform any obligation hereunder or
under any other Financing Document, Agent itself may, but shall not be obligated
to, cause such obligation to be performed at Borrowers' expense and each
Borrower agrees to reimburse Agent therefor on demand. All amounts owing
hereunder or under any other Financing Document may be satisfied in full,
subject to the provisions of Section 2.2(a)(ii), through the making of Agent
Advances.
ARTICLE 11
AGENT
Section 11.1 Appointment and Authorization.
Each Lender hereby irrevocably appoints and authorizes Agent to
enter into each of the Security Documents on its behalf and to take such actions
as Agent on its behalf and to exercise such powers under the Financing Documents
as are delegated to Agent by the terms thereof, together with all such powers as
are reasonably incidental thereto. Except as otherwise expressly provided in
Section 12.5 or by the terms of the Financing Documents, Agent is authorized and
empowered to amend, modify, or waive any provisions of this Agreement or the
other Financing Documents on behalf of Lenders. The provisions of this
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Article 11 are solely for the benefit of Agent and Lenders and neither any
Borrower nor any other Credit Party shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement, Agent shall act solely as agent of 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 any Borrower or any other Credit
Party. Agent may perform any of its duties hereunder, or under the Financing
Documents, by or through its agents or employees.
Section 11.2 Agent and Affiliates.
Agent shall have the same rights and powers under the Financing
Documents as any other Lender and may exercise or refrain from exercising the
same as though it were not Agent, and Agent and its Affiliates may lend money
to, invest in and generally engage in any kind of business with each Credit
Party or Affiliate of any Credit Party as if it were not Agent hereunder.
Section 11.3 Action by Agent.
The duties of Agent shall be mechanical and administrative in
nature. Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Lender. Nothing in this Agreement or any of the
Financing Documents, express or implied, is intended to or shall be construed to
impose upon Agent any obligations in respect of this Agreement or any of the
Financing Documents except as expressly set forth herein or therein.
Section 11.4 Consultation with Experts.
Agent may consult with legal counsel, 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.
Section 11.5 Liability of Agent.
Neither Agent nor any of its directors, officers, agents or
employees shall be liable to any Lender for any action taken or not taken by it
in connection with the Financing Documents, except that Agent shall be liable to
the extent of its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction. Neither Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation
made in connection with any Financing Document or any borrowing hereunder; (ii)
the performance or observance of any of the covenants or agreements specified in
any Financing Agreement; (iii) the satisfaction of any condition specified in
any Financing Document, except receipt of items required to be delivered to
Agent; (iv) the validity, effectiveness, sufficiency or genuineness of any
Financing Document, any Lien purported to be created or perfected thereby or any
other instrument or writing furnished in connection therewith; (v) the existence
or non-existence of any Default or Event of Default; or (vi) the financial
condition
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of any Credit Party. Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other writing (which may be
a bank wire, telex, facsimile or electronic transmission or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
Agent shall not be liable for any apportionment or distribution of payments made
by it in good faith and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Lender to whom payment was due but not made, shall be to recover from other
Lenders any payment in excess of the amount to which they are determined to be
entitled (and such other Lenders hereby agree to return to such Lender any such
erroneous payments received by them).
Section 11.6 Indemnification.
Each Lender shall, in accordance with its Pro Rata Share, indemnify
Agent (to the extent not reimbursed by Borrowers) against any cost, expense
(including counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from Agent's gross negligence or willful
misconduct as determined by a court of competent jurisdiction) that Agent may
suffer or incur in connection with the Financing Documents or any action taken
or omitted by Agent hereunder or thereunder. If any indemnity furnished to Agent
for any purpose shall, in the opinion of Agent, be insufficient or become
impaired, Agent may call for additional indemnity and cease, or not commence, to
do the acts indemnified against even if so directed by Required Lenders until
such additional indemnity is furnished. The obligations of Lenders under this
Section 11.6 shall survive the payment in full of the Obligations and the
termination of this Agreement.
Section 11.7 Right to Request and Act on Instructions.
Agent may at any time request instructions from Lenders with respect
to any actions or approvals which by the terms of this Agreement or of any of
the Financing Documents Agent is permitted or desires to take or to grant, and
if such instructions are promptly requested, Agent shall be absolutely entitled
to refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Financing Documents until it shall
have received such instructions from Required Lenders or all or such other
portion of Lenders as shall be prescribed by this Agreement. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against Agent
as a result of Agent acting or refraining from acting under this Agreement or
any of the other Financing Documents in accordance with the instructions of
Required Lenders and, notwithstanding the instructions of Required Lenders,
Agent shall have no obligation to take any action if it believes, in good faith,
that such action exposes Agent to any liability for which it has not received
satisfactory indemnification in accordance with the provisions of Section 11.6.
Section 11.8 Credit Decision.
Each Lender acknowledges that it has, independently and without
reliance upon Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.
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Each Lender also acknowledges that it will, independently and without reliance
upon Agent 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 any action under the Financing Documents.
Section 11.9 Collateral Matters.
Lenders irrevocably authorize Agent, at its option and in its
discretion, to release any Lien granted to or held by Agent under any Security
Document (i) upon termination of the Revolving Loan Commitment and payment in
full of all Obligations and the expiration, termination or cash
collateralization (to the satisfaction of Agent) of all Letters of Credit; or
(ii) constituting property sold or to be sold or disposed of as part of or in
connection with any disposition permitted under any Financing Document (it being
understood and agreed that Agent may conclusively rely without further inquiry
on a certificate of a Responsible Officer of Borrower Representative as to the
sale or other disposition of property being made in full compliance with the
provisions of the Financing Documents). Upon request by Agent at any time,
Lenders will confirm in writing Agent's authority to release particular types or
items of Collateral pursuant to this Section 11.9.
Section 11.10 Agency for Perfection.
Agent and each Lender hereby appoint each other Lender as agent for
the purpose of perfecting Agent's security interest in assets which, in
accordance with the Uniform Commercial Code in any applicable jurisdiction, can
be perfected by possession or control. Should any Lender (other than Agent)
obtain possession or control of any such assets, such Lender shall notify Agent
thereof, and, promptly upon Agent's request therefore, shall deliver such assets
to Agent or in accordance with Agent's instructions or transfer control to Agent
in accordance with Agent's instructions. Each Lender agrees that it will not
have any right individually to enforce or seek to enforce any Security Document
or to realize upon any Collateral for the Loans unless instructed to do so by
Agent, it being understood and agreed that such rights and remedies may be
exercised only by Agent.
Section 11.11 Notice of Default.
Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default except with respect to defaults in
the payment of principal, interest and fees required to be paid to Agent for the
account of Lenders, unless Agent shall have received written notice from a
Lender or a Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". Agent
will notify each Lender of its receipt of any such notice. Agent shall take such
action with respect to such Default or Event of Default as may be requested by
Required Lenders in accordance with the terms hereof. Unless and until Agent has
received any such request, 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 or in the best interests of Lenders.
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Section 11.12 Successor Agent.
Agent may resign at any time by giving written notice thereof to
Lenders and Borrowers. Upon any such resignation, Required Lenders shall have
the right to appoint a successor Agent. If no successor Agent shall have been so
appointed by Required Lenders, and shall have accepted such appointment, within
thirty (30) days after the retiring Agent gives notice of resignation, then the
retiring Agent may, on behalf of Lenders, appoint a successor Agent, which shall
be an institution organized or licensed under the laws of the United States of
America or of any State thereof. Upon the acceptance of its appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent.
Section 11.13 Disbursements of Revolving Loans; Payment.
(a) Revolving Loan Advances, Payments and Settlements; Interest and
Fee Payments.
(i) Agent shall have the right, on behalf of Lenders, to
disburse funds to each Borrower for all Revolving Loans requested by such
Borrower pursuant to the terms of this Agreement. Absent the prior receipt by
Agent of a written notice from any Lender pursuant to which such Lender notifies
Agent that such Lender shall cease making Revolving Loans (whether due to the
existence of a Default or Event of Default or otherwise), Agent shall be
conclusively entitled to assume, for purposes of the preceding sentence, that
each Lender will fund its Pro Rata Share of all Revolving Loans requested by
each Borrower. Each Lender shall reimburse Agent on demand, in accordance with
the provisions of the immediately following paragraph, for all funds disbursed
on its behalf by Agent pursuant to the preceding sentence, or if Agent so
requests, each Lender will remit to Agent its Pro Rata Share of any Revolving
Loan before Agent disburses the same to a Borrower. If Agent elects to require
that each Lender make funds available to Agent, prior to a disbursement by Agent
to a Borrower, Agent shall advise each Lender by telephone, facsimile or e-mail
of the amount of such Lender's Pro Rata Share of the Revolving Loan requested by
any Borrower no later than noon (Chicago time) on the date of funding of such
Revolving Loan, and each such Lender shall pay Agent on such date such Lender's
Pro Rata Share of such requested Revolving Loan, in same day funds, by wire
transfer to the Payment Account, or such other account as may be identified in
writing by Agent to Lenders from time to time. If any Lender fails to pay the
amount of its Pro Rata Share within one (1) Business Day after Agent's demand,
Agent shall promptly notify Borrower Representative, and Borrowers shall
immediately repay such amount to Agent. Any repayment required pursuant to this
Section 11.13 shall be without premium or penalty. Nothing in this Section 11.13
or elsewhere in this Agreement or the other Financing Documents shall be deemed
to require Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its commitments hereunder or to prejudice
any rights that Agent or any Borrower may have against any Lender as a result of
any default by such Lender hereunder.
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(ii) On a Business Day of each week as selected from time to
time by Agent, or more frequently (including daily), if Agent so elects (each
such day being a "SETTLEMENT DATE"), Agent will advise each Lender by telephone,
facsimile or e-mail of the amount of each such Lender's Pro Rata Share of the
Revolving Loan balance (including any Agent Advances) as of the close of
business of the Business Day immediately preceding the Settlement Date. In the
event that payments are necessary to adjust the amount of such Lender's actual
Pro Rata Share of the Revolving Loan balance to such Lender's required Pro Rata
Share of the Revolving Loan balance as of any Settlement Date, the party from
which such payment is due (i) shall be deemed, irrevocably and unconditionally,
to have purchased, without recourse or warranty, an undivided interest and
participation in the Revolving Loans sufficient to equate such Lender's actual
Pro Rata Share of the Revolving Loan balance as of such Settlement Date with
such Lender's required Pro Rata Share of the Revolving Loans as of such date and
(ii) shall pay Agent, without setoff or discount, in same day funds, by wire
transfer to the Payment Account not later than noon (Chicago time) on the
Business Day following the Settlement Date the full purchase price for such
interest and participation, equal to one hundred percent (100%) of the principal
amount of the Revolving Loans being purchased and sold. In the event settlement
shall not have occurred by the date and time specified in the immediately
preceding sentence, interest shall accrue on the unsettled amount at the Federal
Funds Rate, for the first three (3) days following the scheduled date of
settlement, and thereafter at the Prime Rate plus the Prime Rate Margin.
(iii) On each Settlement Date, Agent shall advise each Lender
by telephone, facsimile or e-mail of the amount of such Lender's Pro Rata Share
of principal, interest and fees paid for the benefit of Lenders with respect to
each applicable Loan, to the extent of such Lender's credit exposure with
respect thereto, and shall make payment to such Lender not later than noon
(Chicago time) on the Business Day following the Settlement Date of such amounts
in accordance with wire instructions delivered by such Lender to Agent, as the
same may be modified from time to time by written notice to Agent; provided,
that, in the case such Lender is a Defaulted Lender, Agent shall be entitled to
set off the funding short-fall against that Defaulted Lender's respective share
of all payments received from any Borrower.
(iv) The provisions of this Section 11.13(a) shall be deemed
to be binding upon Agent and Lenders notwithstanding the occurrence of any
Default or Event of Default, or any insolvency or bankruptcy proceeding
pertaining to any Borrower or any other Credit Party.
(b) Term Loan Principal Payments. Payments of principal of the Term
Loans will be settled on the date of receipt if received by Agent on the first
Business Day of a month or on the Business Day immediately following the date of
receipt if received on any day other than the first Business Day of a month.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement
in the belief or expectation that a related payment has been or will be received
by Agent from a
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Borrower and such related payment is not received by Agent, then Agent will be
entitled to recover such amount from such Lender on demand without setoff,
counterclaim or deduction of any kind, together with interest accruing on a
daily basis at the Federal Funds Rate.
(ii) If Agent determines at any time that any amount received
by Agent under this Agreement must be returned to any Borrower or paid to any
other Person pursuant to any insolvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement or any other Financing Document,
Agent will not be required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to Agent on demand any portion of such amount
that Agent has distributed to such Lender, together with interest at such rate,
if any, as Agent is required to pay to any Borrower or such other Person,
without setoff, counterclaim or deduction of any kind.
(d) Defaulted Lenders. The failure of any Defaulted Lender to make
any Revolving Loan or any payment required by it hereunder shall not relieve any
other Lender of its obligations to make such Revolving Loan or payment, but
neither any Lender nor Agent shall be responsible for the failure of any
Defaulted Lender to make a Revolving Loan or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary, a
Defaulted Lender shall not have any voting or consent rights under or with
respect to any Financing Document or constitute a "Lender" (or be included in
the calculation of "Required Lenders" hereunder) for any voting or consent
rights under or with respect to any Financing Document. At Borrower
Representative's request, Agent or a Person reasonably acceptable to Agent shall
have the right with Agent's consent and in Agent's sole discretion (but shall
have no obligation) to purchase from any Defaulted Lender, and each Defaulted
Lender agrees that it shall, at Agent's request, sell and assign to Agent or
such Person, all of the lending commitments and commitment interests of that
Defaulted Lender for an amount equal to the principal balance of all Loans held
by such Defaulted Lender and all accrued interest and fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.
ARTICLE 12
MISCELLANEOUS
Section 12.1 Survival.
All agreements, representations and warranties made herein and in
every other Financing Document shall survive the execution and delivery of this
Agreement and the other Financing Documents and the other Operative Documents
and the execution, sale and delivery of the Notes. The indemnities and
agreements set forth in Article 6 and Article 10 shall survive the payment of
the Obligations and any termination of this Agreement.
Section 12.2 No Waivers.
No failure or delay by Agent or any Lender in exercising any right,
power or privilege under any Financing Document shall operate as a waiver
thereof nor shall any
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single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein and therein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
Section 12.3 Notices.
All notices, requests and other communications to any party
hereunder shall be in writing (including prepaid overnight courier, facsimile
transmission or similar writing) and shall be given to such party at its
address, facsimile number or e-mail address set forth on the signature pages
hereof (or, in the case of any such Lender who becomes a Lender after the date
hereof, in an Assignment Agreement or in a notice delivered to Borrower
Representative and Agent by the assignee Lender forthwith upon such assignment)
or at such other address, facsimile number or e-mail address as such party may
hereafter specify for the purpose by notice to Agent and Borrower
Representative; provided, that notices, requests or other communications shall
be permitted by e-mail only where expressly provided in the Financing Documents.
Each such notice, request or other communication shall be effective (i) if given
by facsimile or e-mail, when such notice is transmitted to the facsimile number
or e-mail address specified by this Section or (ii) if given by mail, prepaid
overnight courier or any other means, when received at the applicable address
specified by this Section.
Section 12.4 Severability.
In case any provision of or obligation under this Agreement or the
Notes or any other Financing Document 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.
Section 12.5 Amendments and Waivers.
Any provision of this Agreement or the Notes may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
Borrowers and the Required Lenders (and, if (x) any amendment would increase
such Lender's Revolving Loan Commitment Amount, or increase such Lender's
funding obligations in respect of any Term Loan, by such Lender and (y) the
rights or duties of Agent or LC Issuer are affected thereby, by Agent or the LC
Issuer, as the case may be); provided that no such amendment or waiver shall,
unless signed by all Lenders; (i) reduce the principal of, rate of interest on
or any fees with respect to any Loan or Reimbursement Obligation; (ii) postpone
the date fixed for any payment (other than a payment pursuant to Section 2.1(d))
of principal of any Loan, or of any Reimbursement Obligation or of interest on
any Loan or any Reimbursement Obligation or any fees hereunder or for any
termination of any commitment; (iii) change the definition of the term Required
Lenders or the percentage of Lenders which shall be required for Lenders to take
any action hereunder; (iv) increase any of the dollar limitations set forth in
Section 5.6 by more than 25% each in the aggregate; (v) amend or waive this
Section 11.5 or the definitions of the terms used in this Section 11.5 insofar
as the definitions affect the substance of this Section 11.5; (vi) consent to
the assignment, delegation or other transfer by
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any Credit Party of any of its rights and obligations under any Financing
Document; or (vii) increase any of the advance rates by more than five (5)
percentage points each in the aggregate set forth in the Borrowing Base
Certificate.
Section 12.6 Assignments; Participations.
(a) Assignments.
(i) Any Lender may at any time assign to one or more Persons
(any such Person, an "ASSIGNEE") all or any portion of such Lender's Loans and
interest in the Revolving Loan Commitment with the prior written consent of
Agent and, so long as no Event of Default exists, Borrowers (which consent shall
not be unreasonably withheld or delayed and shall not be required for an
assignment by a Lender to a Lender or to an Affiliate of a Lender). Except as
Agent may otherwise agree, any such assignment shall be in a minimum aggregate
amount equal to $5,000,000 or, if less, the assignor's entire interests in the
Revolving Loan Commitment and outstanding Loans. Borrowers and Agent shall be
entitled to continue to deal solely and directly with such Lender in connection
with the interests so assigned to an Assignee until Agent shall have received
and accepted an effective Assignment Agreement executed, delivered and fully
completed by the applicable parties thereto and a processing fee of $3,500. Any
attempted assignment not made in accordance with this Section 12.6(a) shall be
treated as the sale of a participation under Section 12.6(b). Each Borrower
shall be deemed to have granted its consent to any assignment requiring its
consent hereunder unless such Borrower has expressly objected to such assignment
within five (5) Business Days after written notice thereof.
(ii) From and after the date on which the conditions described
above have been met, (i) such Assignee shall be deemed automatically to have
become a party hereto and, to the extent that rights and obligations hereunder
have been assigned to such Assignee pursuant to such Assignment Agreement, shall
have the rights and obligations of a Lender hereunder and (ii) the assigning
Lender, to the extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment Agreement, shall be released from its rights
(other than its indemnification rights) and obligations hereunder. Upon the
request of the Assignee (and, as applicable, the assigning Lender) pursuant to
an effective Assignment Agreement, each Borrower shall execute and deliver to
Agent for delivery to the Assignee (and, as applicable, the assigning Lender)
Notes in the aggregate principal amount of the Assignee's percentage interest in
the Revolving Loan Commitment, plus the principal amount of the Assignee's Term
Loans (and, as applicable, Notes in the principal amount of that portion of the
Revolving Loan Commitment retained by the assigning Lender plus the principal
amount of the Term Loans retained by the assigning Lender). Upon receipt by the
assigning Lender of such Note, the assigning Lender shall return to Borrower
Representative any prior Note held by it.
(iii) Agent shall maintain at one of its offices a copy of
each Assignment Agreement delivered to it and a register for the recordation of
the names and addresses of each Lender, and the commitments of, and principal
amount of the Loans owing to, such Lender pursuant to the terms hereof. The
entries in such register shall be conclusive,
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and Borrowers, Agent and Lenders may treat each Person whose name is recorded
therein pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. Such register shall be
available for inspection by any Borrower and any Lender, at any reasonable time
upon reasonable prior notice to Agent.
(iv) Notwithstanding the foregoing provisions of this Section
12.6(a) or any other provision of this Agreement, any Lender may at any time
assign all or any portion of its Loans and its Note as collateral security to a
Federal Reserve Bank or, as applicable, to such Lender's trustee for the benefit
of its investors (but no such assignment shall release any Lender from any of
its obligations hereunder).
(b) Participations.
Any Lender may at any time sell to one or more Persons participating
interests in its Loans, commitments or other interests hereunder (any such
Person, a "PARTICIPANT"). In the event of a sale by a Lender of a participating
interest to a Participant, (a) such Lender's obligations hereunder shall remain
unchanged for all purposes, (b) Borrowers and Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations hereunder and (c) all amounts payable by each Borrower shall be
determined as if such Lender had not sold such participation and shall be paid
directly to such Lender. No Participant shall have any direct or indirect voting
rights hereunder except with respect to any event described in Section 12.5
expressly requiring the unanimous vote of all Lenders or, as applicable, all
affected Lenders. Each Lender agrees to incorporate the requirements of the
preceding sentence into each participation agreement that such Lender enters
into with any Participant. Each Borrower agrees that if amounts outstanding
under this Agreement are due and payable (as a result of acceleration or
otherwise), each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement and
with respect to any Letter of Credit to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement; provided that such right of set-off shall be subject to the
obligation of each Participant to share with Lenders, and Lenders agree to share
with each Participant, as provided in Section 9.5.
Section 12.7 Headings.
Headings and captions used in the Financing Documents (including the
Exhibits, Schedules and Annexes hereto and thereto) are included for convenience
of reference only and shall not be given any substantive effect.
Section 12.8 Confidentiality.
In handling any confidential information of any Credit Party, Agent
and each Lender shall exercise the same degree of care that it exercises with
respect to its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received or received
pursuant to this Agreement, except that disclosure of such information may be
made (i) to agents, employees, Subsidiaries, Affiliates, attorneys
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and advisors of such Person in connection with its present or prospective
business relations with the Credit Parties arising out of the Financing
Documents and who are bound by a duty of confidentiality to Agent or such
Lender, (ii) to prospective transferees or purchasers of any interest in the
Loans, provided that they have agreed to be bound by the provision of this
Section 12.8, (iii) as required by law, regulation, rule, request or order,
subpoena, judicial order or similar order and in connection with any litigation
and (iv) to any regulatory authority or examiner regulating or having
jurisdiction over such Person, as may be required in connection with the
examination, audit or similar investigation of such Person. Confidential
information shall not include information that either: (i) is in the public
domain, or becomes part of the public domain after disclosure to such Person
through no fault of such Person, or (ii) is disclosed to such Person by a third
party, provided Agent does not have actual knowledge that such third party is
prohibited from disclosing such information.
Section 12.9 GOVERNING LAW; SUBMISSION TO JURISDICTION.
THIS AGREEMENT, EACH NOTE AND EACH OTHER FINANCING DOCUMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. EACH
BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE COUNTY OF ▇▇▇▇, STATE OF ILLINOIS AND IRREVOCABLY AGREES
THAT, SUBJECT TO AGENT'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE LITIGATED
IN SUCH COURTS. EACH BORROWER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION
OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH
BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT
ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH BORROWER BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH BORROWER AT THE
APPLICABLE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE
COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
Section 12.10 WAIVER OF JURY TRIAL.
EACH OF EACH BORROWER, AGENT AND EACH LENDER HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
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Section 12.11 Publication; Advertisement.
(a) Publication. No Credit Party will directly or indirectly
publish, publicly disclose or otherwise use in any public disclosure,
advertising material, promotional material, press release or interview, any
reference to the name, logo or any trademark of ▇▇▇▇▇▇▇ ▇▇▇▇▇ or any of its
Affiliates or any reference to this Agreement or the financing evidenced hereby,
in any case without ▇▇▇▇▇▇▇ ▇▇▇▇▇'▇ prior written consent, except as required by
law, regulation, rule, order, subpoena, judicial order or similar order in
connection with any litigation or regulatory proceeding.
(b) Advertisement. Each Credit Party hereby authorizes ▇▇▇▇▇▇▇ ▇▇▇▇▇
to publish the name of such Credit Party and the amount of the financing
evidenced hereby in any "tombstone" or comparable advertisement which ▇▇▇▇▇▇▇
▇▇▇▇▇ elects to publish. In addition, each Credit Party agrees that ▇▇▇▇▇▇▇
▇▇▇▇▇ may provide lending industry trade organizations with information
necessary and customary for inclusion in league table measurements after the
Closing Date. With respect to any of the foregoing, ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall provide
Borrowers with an opportunity to review and confer with ▇▇▇▇▇▇▇ ▇▇▇▇▇ regarding
the contents of any such tombstone, advertisement or information, as applicable,
prior to its publication.
Section 12.12 Counterparts; Integration.
This Agreement and the other Financing Documents may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement and the other Financing Documents constitute the entire agreement
and understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
ATLANTIC PREMIUM BRANDS, LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer and Chief
Operating Officer
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
ATLANTIC'S ACCOUNT DESIGNATION:
Fleet Bank
Hartford, Connecticut
ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: 9415803199
Account Name: Atlantic Premium Brands,
Ltd. Master Operating
Account
Reference: Funding from (list date
of funding)
CARLTON FOODS CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
CARLTON'S ACCOUNT DESIGNATION:
Fleet Bank
Hartford, Connecticut
ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: 9415803199
Account Name: Atlantic Premium Brands,
Ltd. Master Operating
Account
Reference: Funding from (list date
of funding)
PREFCO CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
PREFCO'S ACCOUNT DESIGNATION:
Fleet Bank
Hartford, Connecticut
ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: 9415803199
Account Name: Atlantic Premium Brands,
Ltd. Master Operating
Account
Reference: Funding from (list date
of funding)
▇▇▇▇▇▇▇▇ CAJUN FOODS CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇' ACCOUNT DESIGNATION:
Fleet Bank
Hartford, Connecticut
ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: 9415803199
Account Name: Atlantic Premium Brands,
Ltd. Master Operating
Account
Reference: Funding from (list date
of funding)
POTTER SAUSAGE CO.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
POTTER'S ACCOUNT DESIGNATION:
Fleet Bank
Hartford, Connecticut
ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: 9415803199
Account Name: Atlantic Premium Brands,
Ltd. Master Operating
Account
Reference: Funding from (list date
of funding)
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, a division of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services
Inc., as Agent and a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Account Manager,
Atlantic Premium Brands
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
PAYMENT ACCOUNT DESIGNATION:
LaSalle Bank
Chicago, Illinois
ABA No.: ▇▇▇▇-▇▇▇▇-▇
Account No.: 5800393182
Account Name: MLBFS Corporate Finance
Attention: Atlantic Premium Brands, Ltd.
Contact: ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX A
COMMITMENT ANNEX
Revolving Loan Term Loan A Term Loan B Term Loan B
Revolving Loan Commitment Term Loan A Commitment Commitment Commitment
Lender Commitment Amount Percentage Commitment Amount Percentage Amount Percentage
------ ----------------- ---------- ----------------- ---------- ------ ----------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Capital $8,500,000 100% $5,660,000 100% $2,500,000 100%
TOTALS $,8500,000 100% $5,660,000 100% $2,500,000 100%
ANNEX B
CLOSING CHECKLIST
Attached.
[▇▇▇▇▇▇▇ ▇▇▇▇▇ Logo]
Exhibit A to Credit Agreement (Assignment Agreement)
This Assignment Agreement (this "ASSIGNMENT AGREEMENT") is entered into
as of __________ by and between the Assignor named on the signature page hereto
("ASSIGNOR") and the Assignee named on the signature page hereto ("ASSIGNEE").
Reference is made to the Credit Agreement dated as of November 20, 2002 (as
amended or otherwise modified from time to time, the "CREDIT AGREEMENT") among
Atlantic Premium Brands, Ltd., Carlton Foods Corp., Prefco Corp., ▇▇▇▇▇▇▇▇ Cajun
Food Corp. and Potter Sausage Co. ("BORROWERS"), the financial institutions
party thereto from time to time, as Lenders, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital, a
division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc., as Agent.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Credit Agreement.
Assignor and Assignee hereby agree as follows:
1. Assignor hereby sells and assigns to Assignee, and Assignee hereby
purchases and assumes from Assignor the interests set forth on the schedule
attached hereto (the "SCHEDULE"), in and to Assignor's rights and obligations
under the Credit Agreement as of the effective date set forth on the Schedule
(the "EFFECTIVE Date"). Such purchase and sale is made without recourse,
representation or warranty except as expressly set forth herein. On the
Effective Date, Assignee shall pay to Assignor an amount equal to the aggregate
amounts assigned pursuant to the Schedule (exclusive of unfunded portions of the
Revolving Loan Commitment) and Assignor shall pay to Assignee a closing fee in
respect of the transactions contemplated hereby in the amount specified on the
Schedule.
2. Assignor (i) represents that as of the Effective Date, that it is
the legal and beneficial owner of the interests assigned hereunder free and
clear of any adverse claim, (ii) makes no other representation or warranty and
assumes no responsibility with respect to any statement, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Financing Documents or any other instrument
or document furnished pursuant thereto; and (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any other Credit Party or any other Person or the performance or observance
by any Credit Party of its Obligations under the Credit Agreement or any other
Financing Documents or any other instrument or document furnished pursuant
thereto.
3. Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Financing Documents, together with copies of the most
recent financial statements delivered pursuant thereto and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (ii) agrees that it will,
independently and without reliance upon Agent, Assignor or any other Lender and
based on such documents and information as it
Exhibit A - Page 1
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) appoints and
authorizes Agent to take such action as agent on its behalf and to exercise such
powers under the Credit Agreement and the other Financing Documents as are
delegated to Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (iv) agrees that it will perform in accordance
with their terms all obligations which by the terms of the Credit Agreement are
required to be performed by it as a Lender; (v) represents that on the date of
this Assignment Agreement it is not presently aware of any facts that would
cause it to make a claim under the Credit Agreement; (vi) represents and
warrants that Assignee is not a foreign person (i.e., a person other than a
United States person for United States Federal income tax purposes) or, if it is
a foreign person, that it has delivered to Agent the documentation required to
be delivered to Agent by Section 13 below; and (vii) represents and warrants
that it has experience and expertise in the making or the purchasing of loans
such as the Loans, and that it has acquired the interests described herein for
its own account and without any present intention of selling all or any portion
of such interests.
4. Each of Assignor and Assignee represents and warrants to the other
party hereto that it has full power and authority to enter into this Assignment
Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Assignment Agreement has been duly authorized,
executed and delivered by such party and that this Assignment Agreement
constitutes a legal, valid and binding obligation of such party, enforceable
against such party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and by general
principles of equity.
5. Upon the effectiveness of this Assignment Agreement pursuant to
Section 13 below, (i) Agent shall register Assignee as a Lender, pursuant to the
terms of the Credit Agreement, (ii) Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment Agreement, have the
rights and obligations of a Lender thereunder, (iii) Assignor shall, to the
extent provided in this Assignment Agreement, relinquish its rights and be
released from its obligations under the Credit Agreement and (iv) Agent shall
thereafter make all payments in respect of the interest assigned hereby
(including payments of principal, interest, fees and other amounts) to Assignee.
Assignor and Assignee shall make all appropriate adjustments in payments for
periods prior to the Effective Date by Agent or with respect to the making of
this assignment directly between themselves.
6. Each of Assignor and Assignee hereby agrees from time to time, upon
request of the other such party hereto, to take such additional actions and to
execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Assignment Agreement.
7. Neither this Assignment Agreement nor any term hereof may be
changed, waived, discharged or terminated, except by an instrument in writing
signed by the party (including, if applicable, any party required to evidence
its consent to or acceptance of
Exhibit A - Page 2
this Assignment Agreement) against whom enforcement of such change, waiver,
discharge or termination is sought.
8. For the purposes hereof and for purposes of the Credit Agreement,
the notice address of Assignee shall be as set forth on the Schedule. Any notice
or other communication herein required or permitted to be given shall be in
writing and delivered in accordance with the notice provisions of the Credit
Agreement.
9. In case any provision in or obligation under this Assignment
Agreement 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.
10. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
11. This Assignment Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective successors and assigns.
12. This Assignment Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures hereto were upon the same agreement.
13. This Assignment Agreement shall become effective as of the
Effective Date upon the satisfaction of each of the following conditions: (i)
the execution of a counterpart hereof by each of Assignor and Assignee, (ii) the
execution of a counterpart hereof by Agent and each Borrower as evidence of its
consent hereto to the extent required pursuant to Section 12.6(a) of the Credit
Agreement, (iii) the receipt by Agent of the administrative fee referred to in
Section 12.6(a) of the Credit Agreement, (iv) in the event Assignee is a foreign
person (i.e., a person other than a United States person for United States
Federal income tax purposes), the receipt by Agent of Internal Revenue Service
Form W-8BEN or Form W-8ECI or such other forms, certificates or other evidence
with respect to United States Federal income tax withholding matters that are
required under the Internal Revenue Code to establish that Assignee shall be
entitled to receive payments of principal, interest and fees under the Credit
Agreement free from or at a reduced rate of withholding of United States Federal
income tax properly completed and executed by Assignee, and (v) the receipt by
Agent of originals or telecopies of the counterparts described above.
Exhibit A - Page 3
The parties hereto have caused this Assignment Agreement to be executed
and delivered as of the date first written above.
ASSIGNOR:
---------------------------
By:
-----------------------------------------
Title:
--------------------------------------
ASSIGNEE:
By:
-----------------------------------------
Title:
--------------------------------------
Consented to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, a division of ▇▇▇▇▇▇▇
▇▇▇▇▇ Business Financial Services Inc., as Agent
By:
-----------------------------------------
Title:
--------------------------------------
[ATLANTIC PREMIUM BRANDS, LTD.]
By:
-----------------------------------------
Title:
--------------------------------------
[CARLTON FOODS CORP.]
By:
-----------------------------------------
Title:
--------------------------------------
Exhibit A - Page 4
[PREFCO CORP.]
By:
-----------------------------------------
Title:
-----------------------------------------
[▇▇▇▇▇▇▇▇ CAJUN FOOD CORP.]
By:
-----------------------------------------
Title:
--------------------------------------
[POTTER SAUSAGE CO.]
By:
-----------------------------------------
Title:
--------------------------------------
Exhibit A - Page 5
Schedule to Assignment Agreement
Assignor:
-----------------------
Assignee:
-----------------------
Effective Date:
-----------------------
Credit Agreement dated as of November 20, 2002 among Atlantic Premium
Brands, Ltd., Carlton Foods Corp., Prefco Corp., ▇▇▇▇▇▇▇▇ Cajun Food
Corp. and Potter Sausage Co., as Borrowers, the financial institutions
party thereto from time to time, as Lenders, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital,
a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc., as Agent
Interests Assigned:
Commitment/Loan Revolving Loan Commitment Term Loan A Term Loan B
--------------- ------------------------- ----------- -----------
Assignor Amounts $ $ $
------------- ------------- ----------
Amounts Assigned $ $ $
------------- ------------- ----------
Assignor Amounts
(post-assignment) $ $ $
------------- ------------- ----------
Closing Fee: $
-------------
Assignee Information:
Address for Notices: Address for Payments:
---------------------------
--------------------------- Bank:
----------------------
Attention: ABA #:
----------------- ----------------------
Telephone: Account #:
----------------- ----------------------
Facsimile: Reference:
----------------- ----------------------
Exhibit A - Page 6
[▇▇▇▇▇▇▇ ▇▇▇▇▇ LOGO}
Exhibit B to Credit Agreement (Excess Cash Flow Certificate)
[BORROWER REPRESENTATIVE]
DATE: __________, ____
This certificate is given by _________________, a Responsible Officer
of ___________ ("BORROWER REPRESENTATIVE"), on behalf of Borrower
Representative, pursuant to Section 4.1(c) of that certain Credit Agreement
dated as of November 20, 2002 among Atlantic Premium Brands, Ltd., Carlton Foods
Corp., Prefco Corp., ▇▇▇▇▇▇▇▇ Cajun Food Corp. and Potter Sausage Co.
("BORROWERS"), Lenders from time to time party thereto and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Capital, a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc., as Agent
for Lenders (as such agreement may have been amended, restated, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"). Capitalized terms
used herein without definition shall have the meanings set forth in the Credit
Agreement.
The undersigned Responsible Officer of Borrower Representative, on
behalf of Borrower Representative, hereby certifies to Agent and Lenders that:
(a) set forth below is a schedule of Excess Cash Flow for the year
ended _______________, _____ and the calculation of the
required prepayment of $________________; and
(b) the schedule set forth below is based on the audited financial
statements which have been delivered to Agent in accordance
with Section 4.1(b) of the Credit Agreement.
IN WITNESS WHEREOF, the undersigned officer, on behalf of Borrower
Representative, has executed and delivered this certificate this ____ day of
___________, _____.
By
-------------------------------------------------
Name
-------------------------------------------------
Title of Borrower Representative
---------------------
Exhibit B - Page 1
Excess Cash Flow is defined as follows:
Operating Cash Flow (as calculated on the Compliance Certificate) $
------------
Less:
Cash payments in respect of income or franchise taxes
------------
Principal payments with respect to Debt actually paid
(including the portion of scheduled payments under Capital
Leases allocable to principal but excluding repayments of
Revolving Loans and other Debt subject to reborrowing to the
extent not accompanied by a concurrent and permanent reduction
of the Revolving Loan Commitment (or equivalent loan
commitment), and excluding the amortization of debt discount
or premium) ------------
Total Interest Expense (as calculated on the Compliance
Certificate)
------------
Restricted Distributions made in cash by any Borrower and
permitted under Section 5.3 of the Credit Agreement
------------
Increase (or plus the decrease) in Working Capital (defined
below) ------------
Excess Cash Flow $
============
Required prepayment percentage 50%
Required prepayment
amount $
============
Exhibit B - Page 2
Decrease (increase) in Working Capital, for the purposes of the calculation of
Excess Cash Flow, means the following:
Beg. of Period End of Period
Current assets: $ $
------------ ------------
Less: Cash
------------ ------------
Cash Equivalents
------------ ------------
Amounts due from Affiliates
------------ ------------
Adjusted current assets: $ $
============ ============
Current liabilities: $ $
------------ ------------
Less: Revolving Loans
------------ ------------
Current portion of Debt
------------ ------------
Amounts due to Affiliates
------------ ------------
Adjusted current liabilities: $ $
============ ============
Working Capital: $ $
============ ============
Decrease (Increase) in Working Capital (calculated as
the beginning of period Working Capital minus end of
period Working Capital) $
============
Exhibit B - Page 3
[▇▇▇▇▇▇▇ ▇▇▇▇▇ LOGO]
Exhibit C to Credit Agreement (Compliance Certificate)
COMPLIANCE CERTIFICATE
[BORROWER REPRESENTATIVE]
DATE: __________, _____
This certificate is given by _____________________, a Responsible
Officer of ___________________________ ("BORROWER REPRESENTATIVE"), on behalf of
Borrower Representative, pursuant to Section 4.1(c) of that certain Credit
Agreement dated as of November 20, 2002 among Atlantic Premium Brands, Ltd.,
Carlton Foods Corp., Prefco Corp., ▇▇▇▇▇▇▇▇ Cajun Food Corp. and Potter Sausage
Co. ("BORROWERS"), Lenders from time to time party thereto and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Capital, a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc., as Agent
for Lenders (as such agreement may have been amended, restated, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"). Capitalized terms
used herein without definition shall have the meanings set forth in the Credit
Agreement.
The undersigned Responsible Officer, on behalf of Borrower
Representative, hereby certifies to Agent and Lenders that:
(a) the financial statements delivered with this certificate in
accordance with Section 4.1(a) and/or 4.1(b) of the Credit Agreement fairly
present in all material respects the results of operations and financial
condition of Atlantic and the Subsidiaries as of the dates of such financial
statements (subject, in the case of unaudited financial statements, to audit and
other normal year-end adjustments and the absence of footnotes);
(b) I have reviewed the terms of the Credit Agreement and have made, or
caused to be made under my supervision, a review in reasonable detail of the
transactions and conditions of each Borrower and the Subsidiaries during the
accounting period covered by such financial statements; [AND]
(c) such review has not disclosed the existence during or at the end of
such accounting period, and I have no knowledge of the existence as of the date
hereof, of any condition or event that constitutes a Default or an Event of
Default, except as set forth in Schedule 1 hereto, which includes a description
of the nature and period of existence of such Default or an Event of Default and
what action Borrowers have taken, is undertaking and proposes to take with
respect thereto[; AND].
[(D) [FOR LAST MONTH OF EACH FISCAL QUARTER ONLY] BORROWERS ARE IN
COMPLIANCE WITH THE COVENANTS CONTAINED IN ARTICLE 7 OF THE CREDIT AGREEMENT, AS
DEMONSTRATED BY THE CALCULATION OF SUCH COVENANTS BELOW, EXCEPT AS SET FORTH IN
SCHEDULE 1 HERETO.]
Exhibit C - Page 1
IN WITNESS WHEREOF, the undersigned officer, on behalf of Borrower
Representative, has executed and delivered this certificate this ____ day of
___________, ____.
By
-------------------------------------------
Name ------------------------------------------
Title of Borrower Representative
--------------
Exhibit C - Page 2
CAPITAL EXPENDITURES
(SECTION 7.1)
Capital Expenditures for the applicable measurement period
(the "DEFINED PERIOD") are defined as follows:
Amount capitalized during the Defined Period by Atlantic and
its Consolidated Subsidiaries as capital expenditures for
property, plant, and equipment or similar fixed asset
accounts, including any such expenditures by way of
acquisition of a Person or by way of assumption of Debt or
other obligations, to the extent reflected as plant, property
and equipment $
----------
Plus: deposits made in the Defined Period in connection with
property, plant, and equipment; less deposits of a prior
period included above
----------
Less: Net Cash Proceeds of Asset Dispositions and Major
Casualty Proceeds received during the Defined Period which (i)
a Borrower or a Subsidiary is permitted to reinvest pursuant
to the terms of the Credit Agreement and (ii) are included in
capital expenditures above
----------
Less: Up to $900,000 of the proceeds of the sale of the
brandnames of ▇▇▇▇▇▇'▇ received during the Defined Period
which are reinvested and are included in capital expenditures
above
----------
Capital Expenditures $
==========
Less: Portion of Capital Expenditures financed during the
Defined Period under Capital Leases or other Debt (Debt, for
this purpose, does not include drawings under the Revolving
Loan Commitment)
----------
Unfinanced Capital Expenditures (used in calculation of
Operating Cash Flow (defined in Section 7.2 of the Compliance
Certificate)) $
==========
Capital Expenditures (from above) $
==========
Permitted Capital Expenditures
Base Amount
----------
Carry over amount, if any
----------
Total Permitted Capital Expenditures
$
==========
Exhibit C - Page 3
In Compliance Yes/No
Exhibit C - Page 4
FIXED CHARGE COVERAGE RATIO
(SECTION 7.2)
Fixed Charge Coverage Ratio for the applicable measurement
period (the "DEFINED PERIOD") is defined as follows:
Fixed Charges:
Interest expense ($______), net of interest income ($______),
interest paid in kind ($______) and amortization of
capitalized fees and expenses and debt discount incurred in
relation to debt financings and included in interest expense
($______), included in the determination of net income of
Atlantic and its Consolidated Subsidiaries for the Defined
Period, but excluding up to $50,000 of the pay-in-kind portion
of accrued interest in respect of Subordinated Debt that is
paid on the Closing Date ("TOTAL INTEREST EXPENSE") $
----------
Plus: Cash taxes during the Defined Period
----------
Scheduled payments of principal for the Defined
Period with respect to all Debt (including the
portion of scheduled payments under Capital Leases
allocable to principal but excluding mandatory
prepayments required by Section 2.1(d) and excluding
scheduled repayments of Revolving Loans and other
Debt subject to reborrowing to the extent not
accompanied by a concurrent and permanent reduction
of the Revolving Loan Commitment (or equivalent loan
commitment); provided that the amount of such
payments in respect of senior bank debt for any 2002
fiscal quarter included within any Defined Period
shall be deemed to be $283,000
----------
Restricted Distributions made by any applicable
Borrower in cash during the Defined Period
----------
Fixed Charges $
==========
Operating Cash Flow:
EBITDA for the Defined Period: $
----------
Exhibit C - Page 5
EBITDA:
Consolidated net income (or loss) for the Defined Period of
Atlantic and its Consolidated Subsidiaries, but excluding: (a)
the income (or loss) of any Person (other than Subsidiaries of
Atlantic) in which Atlantic or any of its Subsidiaries has an
ownership interest unless received by Atlantic or its
Subsidiary in a cash distribution; and (b) the income (or
loss) of any Person accrued prior to the date it became a
Subsidiary of Atlantic or is merged into or consolidated with
a Borrower $
----------
Plus: Any provision for (or less any benefit from) income
and franchise taxes included in the determination of
net income for the Defined Period ----------
Interest expense, net of interest income, deducted in
the determination of net income for the Defined
Period ----------
Amortization and depreciation deducted in the
determination of net income for the Defined Period
----------
Losses (or less gains) from Asset Dispositions
included in the determination of net income for the
Defined Period (excluding sales, expenses or losses
related to current assets and excluding up to
$200,000 in each Defined Period of gains from the
sale of obsolete Equipment) ----------
Other non-cash losses (or less gains) included in the
determination of net income for the Defined Period
and for which no cash outlay (or cash receipt) is
foreseeable ----------
Expenses and fees included in the determination of
net income and incurred during the Defined Period to
consummate the transactions contemplated by the
Operative Documents, but solely to the extent
disclosed in writing to Agent on or prior to the
Closing Date ----------
Extraordinary losses (or less gains), as defined
under GAAP, included in the determination of net
income during the Defined Period, net of related tax
effects ----------
Exhibit C - Page 6
Any collateral management fees paid pursuant to
Section 2.3(c), and any amounts paid to obtain
collateral auditor reports pursuant to Section 4.1(r)
or appraisal reports pursuant to Section 4.1(s)
----------
Less: Expenditures made after the Closing Date, but during
the Defined Period, in connection with the
consummation of the transactions contemplated by the
Operative Documents, but not reflected in the pro
forma balance sheet referenced in Section 3.5(c) and
not deducted in the determination of net income
----------
EBITDA for the Defined Period
$
==========
Less: Unfinanced Capital Expenditures for the Defined
Period (calculated in the manner required by Section
7.1 of the Compliance Certificate), provided that
Unfinanced Capital Expenditures for any 2002 fiscal
quarter included within any Defined Period shall be
equal to the quotient of total Capital Expenditures
during the 2002 fiscal year divided by 4
----------
To the extent not already reflected in the
calculation of EBITDA, other capitalized costs (other
than capitalized costs relating to the Operative
Documents), defined as the gross amount capitalized
during the Defined Period, as long term assets, other
than Capital Expenditures
----------
Operating Cash Flow $
----------
Fixed Charge Coverage Ratio (Ratio of Operating Cash Flow to
Fixed Charges) ___ to 1.0
Minimum Fixed Charge Coverage 1.1 to 1.0
In Compliance Yes/No
Exhibit C - Page 7
SENIOR LEVERAGE RATIO
(SECTION 7.3)
Debt (exclusive of Subordinated Debt) $
----------
EBITDA for the Defined Period (defined in Section 7.2
of the Compliance Certificate) $
----------
Senior Leverage Ratio (Senior Debt to EBITDA) :1.0
-------
Maximum Senior Leverage Ratio :1.0
-------
Yes/No
In Compliance
Exhibit C - Page 8
[▇▇▇▇▇▇▇ ▇▇▇▇▇ Logo]
Exhibit D to Credit Agreement (Borrowing Base Certificate)
[BORROWER REPRESENTATIVE]
DATE: ___________, ______
This certificate is given by ____________________, a Responsible
Officer of ___________________________ ("BORROWER REPRESENTATIVE"), on behalf of
Borrower Representative, pursuant to Section 4.1(m) of that certain Credit
Agreement dated as of November 20, 2002 among Atlantic Premium Brands, Ltd.,
Carlton Foods Corp., Prefco Corp., ▇▇▇▇▇▇▇▇ Cajun Food Corp. and Potter Sausage
Co. ("BORROWERS"), Lenders from time to time party thereto and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Capital, a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc., as Agent
for Lenders (as such agreement may have been amended, restated, supplemented or
otherwise modified from time to time the "CREDIT AGREEMENT"). Capitalized terms
used herein without definition shall have the meanings set forth in the Credit
Agreement.
The undersigned Responsible Officer, on behalf of Borrower
Representative, hereby certifies to Agent and Lenders that:
(a) Attached hereto as Schedule 1 is a calculation of the
Borrowing Base for Borrowers as of the above date;
(b) based on such schedule, the Borrowing Base as the
above date is:
$
------------------
(c) based on such schedule, Net Borrowing Availability as
of the above date is:
$
------------------
IN WITNESS WHEREOF, the undersigned officer, on behalf of Borrower
Representative, has executed and delivered this certificate this ____ day of
___________, ____.
By
----------------------------------------------
Name
--------------------------------------------
Title of Borrower Representative
-----------------
Exhibit D - Page 1
BORROWING BASE CALCULATION
[BORROWER REPRESENTATIVE]
1. ACCOUNTS OF BORROWERS AND SUBSIDIARIES
2. LESS ANY ACCOUNT: $
---------
a. that does not arise from the actual and bona fide sale and
delivery of goods or the performance of services by the
applicable Borrower or the applicable Subsidiary in the
ordinary course of its business, which transactions are
completed in accordance with the terms and provisions
contained in any documents related thereto
---------
b. upon which (i) the applicable Borrower's or the applicable
Subsidiary's right to receive payment is not absolute or
is contingent upon the fulfillment of any condition
whatsoever (including any Account that arises from a sale
on consignment, guaranteed sale, sale and return, sale on
approval or other terms under which payment by the Account
Debtor may be conditioned or contingent), other than
allowances and return rights granted by the applicable
Borrower in the ordinary course of its business, or (ii)
the applicable Borrower or the applicable Subsidiary is
not able to bring suit or otherwise enforce its remedies
against the Account Debtor through judicial process
---------
c. with respect to which an invoice, reasonably acceptable to
Agent in form, has not been sent to the applicable Account
Debtor
---------
Exhibit D - Page 2
d. that is unpaid more than forty-five (45) days after the
date of the original invoice therefor in the case of (i)
up to $150,000 in the aggregate of Accounts with respect
to which the Account Debtor is Kroger Company or any of
its Affiliates, (ii) up to $50,000 in the aggregate of
Accounts with respect to which the Account Debtor is Sam's
Club, Wal-Mart or any of their Affiliates, (iii) up to
$25,000 in the aggregate of Accounts with respect to which
the Account Debtor is HEB Grocery Stores or any of its
Affiliates and (iv) up to $25,000 in the aggregate of
Accounts with respect to which the Account Debtor is
Safeway or any of its Affiliates, or that is unpaid for
more than twenty-eight (28) days after the date of the
original invoice in the case of all other Accounts
---------
e. owed by an Account Debtor obligated in respect of Accounts
constituting more than twenty percent (20%) of the aggregate
amount of all Accounts (but the portion of the Accounts not in
excess of the applicable percentages shall no be deemed not to
be Eligible Accounts under the criteria set forth in this
clause (e))
---------
f. that is the obligation of an Account Debtor if fifty
percent (50%) or more of the dollar amount of all Accounts
owing by that Account Debtor are ineligible under the
other criteria set forth herein
---------
g. that consists of progress ▇▇▇▇▇▇▇▇ (such that the
obligation of the Account Debtors with respect to such
Account is conditioned upon the applicable Borrower's or
any Subsidiary's satisfactory completion of any further
performance under the agreement giving rise thereto), ▇▇▇▇
and hold invoices or retainage invoices, except as to ▇▇▇▇
and hold invoices, if Agent shall have received an
agreement in writing from the Account Debtor, in form and
substance satisfactory to Agent, confirming the
unconditional obligation of the Account Debtor to take the
goods related thereto and pay such invoice
---------
h. that arises from a sale to any director, officer, other
employee or Affiliate of any Credit Party, or to any
entity which has any common officer or director with any
Credit Party
---------
i. to the extent such Account exceeds any credit limit
established by Agent, in its reasonable discretion, but
only to the extent of the excess
---------
j. that is payable in any currency other than U.S. dollars
---------
Exhibit D - Page 3
k. to the extent any Credit Party is liable for goods sold or
services rendered by the applicable Account Debtor to such
Credit Party, but only to the extent of the potential
offset
---------
l. to the extent any defense, counterclaim, setoff or dispute
is asserted as to such Account, but only to the extent of
such defense, counterclaim, setoff or dispute
---------
m. that (i) is not owned by the applicable Borrower or the
applicable Subsidiary or (ii) is subject to any right,
claim, security interest or other interest of any other
Person, other than Liens in favor of Agent, on behalf of
itself and Lenders and other than PASA Liens
---------
n. that is the obligation of an Account Debtor that is the
United States government or a political subdivision
thereof, or any state or municipality or department,
agency or instrumentality thereof unless Agent, in its
sole discretion, has agreed to the contrary in writing and
the applicable Borrower or the applicable Subsidiary, if
necessary or required by Agent, has complied in a manner
acceptable to Agent with the Federal Assignment of Claims
Act of 1940 or any applicable state statute or municipal
ordinance of similar purpose and effect, with respect to
such obligation
---------
Exhibit D - Page 4
o. that is the obligation of an Account Debtor located in a
foreign country other than Canada (but, in the case of
Canada, limited to Account Debtors located in Ontario or
any other province of Canada in which the Personal
Property Security Act has been adopted in substantially
the same form as currently in effect in Ontario) unless
(i) the Account Debtor has delivered to the applicable
Borrower or the applicable Subsidiary an irrevocable
letter of credit issued or confirmed by a bank
satisfactory to Agent and payable only in the United
States of America and in U.S. dollars, sufficient to cover
such Account, in form and substance reasonably
satisfactory to Agent and, if required by Agent, the
original of such letter of credit has been delivered to
Agent or Agent's agent, and the applicable Borrower or
such Subsidiary has assigned the proceeds of such letter
of credit to Agent pursuant to documentation in form and
substance reasonably acceptable to Agent or otherwise
named Agent as transferee beneficiary thereunder, as Agent
may specify, (ii) such Account is subject to credit
insurance payable to Agent issued by an insurer and on
terms and in an amount reasonably acceptable to Agent, or
(iii) such Account is otherwise reasonably acceptable in
all respects to Agent (subject to such limits or lending
formulae with respect thereto as Agent may determine)
---------
p. as to which any proceedings or actions known to any Credit
Party (or to Agent) are threatened or pending against the
Account Debtor with respect to such Account which could
reasonably be expected to have a material adverse change
in any such Account Debtor's financial condition
(including, without limitation, any bankruptcy,
dissolution, liquidation, reorganization or similar
proceeding), other than post-petition Accounts owing by
K-Mart Corporation in an aggregate amount not in excess of
$30,000
---------
q. as to which Agent's Lien therein, on behalf of itself and
Lenders, is not a first priority perfected Lien (other than
with respect to PASA Liens), or as to which the goods giving
rise thereto are not, and were not at the time of the
applicable sale, subject to any Lien in favor of Agent, of
behalf of itself and Lenders
---------
r. as to which any of the representations or warranties
pertaining to such Account set forth in any Financing
Document is untrue
---------
Exhibit D - Page 5
s. to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper
---------
t. that is otherwise unacceptable to Agent in its reasonable
credit judgment
---------
3. TOTAL INELIGIBLE ACCOUNTS ( )
---------
4. ELIGIBLE ACCOUNTS
---------
5. EIGHTY-FIVE PERCENT (85%) OF LINE 4
---------
6. ELIGIBLE ACCOUNTS PORTION OF BORROWING BASE, PRIOR TO APPLICATION
OF EXCLUSIONS AND RESERVES ESTABLISHED BY AGENT PURSUANT TO THE
CREDIT AGREEMENT
---------
7. INVENTORY OF BORROWERS AND SUBSIDIARIES $
---------
8. LESS ANY INVENTORY:
a. that is not owned by the applicable Borrower or any
Subsidiary free and clear of all Liens and rights of any
other Person (including the rights of a purchaser that has
made progress payments and the rights of a surety that has
issued a bond to assure performance with respect to that
Inventory), except the Liens in favor of Agent, on behalf
of itself and Lenders and except for PASA Liens
---------
b. that is not of a type held for sale in the ordinary course
of the applicable Borrower's or the applicable
Subsidiary's business
---------
c. that consists of work-in-process
---------
d. that is placed on consignment or is in transit (other than
Inventory in-transit for one week or less in a Borrower's
vehicles to a Borrower's customers for delivery in the
ordinary course of business)
---------
e. that in Agent's reasonable determination or in the
determination of the applicable Borrower's management is
excess, obsolete, unsaleable, shopworn, seconds, damaged
or unfit for sale
---------
f. that consists of display items, samples or packing or
shipping materials, manufacturing supplies (other than
casings) or replacement or spare parts or fuel
---------
g. that consists of goods which have been returned by the
buyer
---------
h. that is not covered by casualty insurance in compliance
with the Credit Agreement
---------
i. that is ▇▇▇▇ and hold Inventory
---------
Exhibit D - Page 6
j. that is (a) not located on premises owned by the
applicable Borrower or any applicable Subsidiary (other than
Inventory in-transit for one week or less in a Borrower's
vehicles to a Borrower's customers for delivery in the
ordinary course of business) or (b) is located on premises
leased by the applicable Borrower or any Subsidiary, or store
with a bailee, warehouseman, processor or similar Person and
unless (i) a Lien waiver and collateral access agreement, in
form and substance reasonably satisfactory to Agent has been
delivered to Agent, together with any and all duly authorized
UCC financing statements reasonably required by Agent naming
such Person as debtor, the applicable Borrower or the
applicable Subsidiary as secured creditor and Agent as
assignee or (ii) Reserves satisfactory to Agent have been
established with respect thereto
---------
k. as to which Agent's Lien therein, on behalf of itself and
Lenders, is not a first priority perfected Lien (other
than with respect to PASA Liens)
---------
l. as to which any of the representations or warranties
pertaining to such Inventory set forth in any Financing
Document is untrue in any material respect
---------
m. that consists of Hazardous Materials or goods that can be
transported or sold only with licenses that are not
readily available
---------
n. that is covered by a negotiable document of title, unless
such document has been delivered to Agent
---------
o. that is otherwise unacceptable to Agent in its reasonable
credit judgment
---------
9. TOTAL ELIGIBLE INVENTORY ( )
---------
10. ELIGIBLE INVENTORY
---------
11. SIXTY-FIVE PERCENT (65%) OF LINE 10
---------
12. ELIGIBLE INVENTORY PORTION OF BORROWING BASE, PRIOR TO APPLICATION
OF EXCLUSIONS AND RESERVES ESTABLISHED BY AGENT PURSUANT TO THE
CREDIT AGREEMENT
---------
13. INVENTORY SUBLIMIT ($4,250,000)
---------
14. LOWER OF LINES 12 OR 13
---------
15. RESERVES
---------
16. BORROWING BASE (LINE 6 PLUS LINE 14, LESS LINE 15)
---------
Exhibit D - Page 7
17. REVOLVING LOAN COMMITMENT
---------
18. OUTSTANDING REVOLVING LOANS
---------
19. OUTSTANDING LETTER OF CREDIT LIABILITIES
---------
20. REVOLVING LOAN OUTSTANDINGS (sum of lines 18 and 19)
---------
21. NET BORROWING AVAILABILITY (the lesser of (a) line 16 less line 20,
or (b) line 17 less line 20 $
---------
Exhibit D - Page 8
[▇▇▇▇▇▇▇ ▇▇▇▇▇ Logo]
Exhibit E to Credit Agreement (Notice of Borrowing)
[BORROWER REPRESENTATIVE]
DATE: ___________, ______
This certificate is given by ____________________, a Responsible
Officer of ___________ ("BORROWER REPRESENTATIVE"), on behalf of Borrower
Representative, pursuant to Section [2.2(B)/2.3(E)] of that certain Credit
Agreement dated as of November 20, 2002 among Atlantic Premium Brands, Ltd.,
Carlton Foods Corp., Prefco Corp., ▇▇▇▇▇▇▇▇ Cajun Food Corp. and Potter Sausage
Co. ("BORROWERS"), Lenders from time to time party thereto and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Capital, a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc., as Agent
for Lenders (as such agreement may have been amended, restated, supplemented or
otherwise modified from time to time the "CREDIT AGREEMENT"). Capitalized terms
used herein without definition shall have the meanings set forth in the Credit
Agreement.
The undersigned Responsible Officer, on behalf of Borrower
Representative, hereby gives notice to Agent of Borrower Representative's
request to: [COMPLETE AS APPROPRIATE]
(a) on [ DATE ] borrow $[__________] of Revolving Loans, which
Revolving Loans shall be [PRIME RATE LOANS/LIBOR
LOANS HAVING AN INTEREST PERIOD OF ______ MONTH(S)];
(b) on [ DATE ] convert $[________]of the aggregate outstanding
principal amount of the [_______] Loan, bearing interest at
the [________] Rate, into a(n) [________] Loan [AND, IN THE
CASE OF A LIBOR LOAN, HAVING AN INTEREST PERIOD OF [_____]
MONTH(S)];
(c) on [ DATE ] continue $[________]of the aggregate outstanding
principal amount of the [_______] Loan, bearing interest at
the LIBOR, as a LIBOR Loan having an Interest Period of
[_____] month(s).
The undersigned officer, on behalf of Borrower Representative, hereby
certifies that, both before and after giving effect to the request above (i)
each of the conditions precedent set forth in Section 8.2(b), 8.2(c) and 8.2(d)
have been satisfied, (ii) all of the representations and warranties contained in
the Credit Agreement and the other Financing Documents are true, correct and
complete in all material respects as of the date hereof, and (iii) no Default or
Event of Default has occurred and is continuing on the date hereof.
Exhibit E - Page 1
IN WITNESS WHEREOF, the undersigned officer on behalf of Borrower
Representative, has executed and delivered this certificate this ____ day of
___________, ____.
By
------------------------------------------------
Name
----------------------------------------------
Title of Borrower Representative
-------------------
Exhibit E - Page 2