Exhibit 10.46
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▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
CREDIT AGREEMENT
Dated as of February 24, 2003
with
THE PARTIES LISTED ON
SCHEDULE 1 HERETO
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TABLE OF CONTENTS
Page
1. Definitions; Certain Rules of Construction ................................ 1
2. Revolving Credit Facility ................................................. 5
2.1. Revolving Loan ....................................................... 5
2.2. Maximum Amount of Credit ............................................. 5
2.3. Borrowing Requests ................................................... 5
2.4. Notes ................................................................ 5
2.5. Use of Proceeds ...................................................... 5
3. Interest; Commitment Fees, etc. ........................................... 6
3.1. Interest ............................................................. 6
3.2. Unused Line Fee ...................................................... 6
3.3. Default Rate ......................................................... 6
3.4. Computations of Interest ............................................. 6
3.5. Warrants ............................................................. 6
4. Payment ................................................................... 7
4.1. Payment at Maturity .................................................. 7
4.2. Mandatory Prepayments ................................................ 7
4.3. Voluntary Prepayments of Loan ........................................ 7
4.4. Reborrowing .......................................................... 7
4.5. Cash Collection System ............................................... 7
5. Conditions to Extending Credit ............................................ 7
5.1. Officer's Certificate ................................................ 7
5.2. Notes ................................................................ 7
5.3. Security Agreement ................................................... 8
5.4. Perfection of Security ............................................... 8
5.5. Lenders' Expenses .................................................... 8
5.6. Insurance ............................................................ 8
5.7. Compliance ........................................................... 8
5.8. Proper Proceedings ................................................... 8
5.9. Legality, etc. ....................................................... 8
5.10. General ............................................................. 9
6. General Covenants ......................................................... 9
6.1. Conduct of Business .................................................. 9
6.2. Payment of Taxes and Other Amounts ................................... 9
6.3. Compliance with Laws ................................................. 9
6.4. Insurance ............................................................ 9
6.4.1. Property Insurance ....................................... 9
6.4.2. Liability Insurance ...................................... 9
6.5. Financial Statements and Reports ..................................... 9
6.5.1. Annual Reports ........................................... 10
6.5.2. Quarterly Reports ........................................ 10
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6.5.3. Monthly Calculations ..................................... 10
6.5.4. Notice of Litigation, Defaults, etc. ..................... 10
6.5.5. Other Information ........................................ 11
6.6. Current Ratio ........................................................ 11
6.7. Quick Ratio .......................................................... 11
6.8. EBIT ................................................................. 12
6.9. Capital Expenditures ................................................. 12
6.10. Indebtedness and Liens ............................................... 12
6.11. Distributions ........................................................ 13
6.12. Investments and Acquisitions ......................................... 13
6.13. Merger; Sale of Assets; Share Issuance ............................... 13
6.14. Sales and Leasebacks ................................................. 13
6.15. Transactions with Affiliates ......................................... 13
6.16. Management Fees ...................................................... 14
7. Representations and Warranties ............................................ 14
7.1. Organization and Business ............................................ 14
7.2. Financial Statements and Other Information ........................... 14
7.3. Litigation ........................................................... 14
7.4. No Legal Obstacle to Agreements ...................................... 14
7.5. Taxes ................................................................ 15
8. Defaults .................................................................. 15
8.1. Events of Default .................................................... 15
8.1.1. Payment .................................................. 15
8.1.2. Covenant Compliance ...................................... 15
8.1.3. Representations and Warranties ........................... 15
8.1.4. Cross-Default ............................................ 16
8.1.5. Judgments ................................................ 16
8.1.6. Material Adverse Change .................................. 16
8.1.7. Change in Control ........................................ 16
8.1.8. Bankruptcy ............................................... 16
8.2. Certain Actions Following an Event of Default ........................ 17
8.2.1. No Obligation to Extend Credit; Acceleration ............. 17
8.2.2. Exercise of Rights ....................................... 17
8.2.3. Bankruptcy Default ....................................... 17
8.2.4. Setoff ................................................... 17
8.2.5. Cumulative Remedies ...................................... 17
8.3. Waivers .............................................................. 17
9. Expense Indemnity ......................................................... 18
9.1. Expenses ............................................................. 18
9.2. General Indemnity .................................................... 18
10. Successors and Assigns .................................................... 18
11. Notices ................................................................... 19
12. Course of Dealing, Amendments and Waivers ................................. 20
13. Venue; Service of Process; Certain Waivers ................................ 20
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14. WAIVER OF JURY TRIAL ...................................................... 20
15. General ................................................................... 21
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SCHEDULES
1. Commitment Amounts
2. Tranche I Percentages
3. Tranche II Percentages
4. Fee Percentages
5. Warrants
EXHIBITS
2.4 - Form of Note
5.1 - Officer's Certificate and Borrowing Request
5.3 - Security Agreement
6.10 - Existing Indebtedness and Liens
7.1 - Subsidiaries
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▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
CREDIT AGREEMENT
This Agreement, dated as of February 24, 2003, is among ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
Inc., a Massachusetts corporation (the "Company"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇ (each a
"Lender", and collectively the "Lenders"). The parties agree as follows:
1. Definitions; Certain Rules of Construction. Except as the context otherwise
explicitly requires, (a) the capitalized term "Section" refers to sections of
this Agreement, (b) the capitalized term "Exhibit" refers to exhibits to this
Agreement, (c) references to "$" and "Dollars" are to United States dollars, (d)
the word "including" shall be construed as "including without limitation", (e)
accounting terms not otherwise defined herein have the meaning provided under
GAAP, (f) references to a particular statute or regulation include all rules and
regulations thereunder and any successor statute, regulation or rules, in each
case as from time to time in effect, and (g) references to a particular Person
include such Person's successors and assigns to the extent not prohibited by
this Agreement and the other Credit Documents. References to "the date hereof"
mean the date first set forth above.
"Affiliate" means as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (a)
vote 10% or more of the securities having ordinary voting power for the election
of directors (or persons performing similar functions) of such Person or (b)
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise: provided, that with respect to any Person, the
term "Affiliate" shall include each officer, director, employee and general
partner of such Person, the Members of the Immediate Family of each such
officer, director, employee and general partner and each Affiliate of each of
the foregoing.
"Banking Day" means any day (other than Saturday or Sunday) on which banks
are open to conduct business in Boston, Massachusetts.
"Bankruptcy Code" means Title 11 of the United States Code (or any
successor statute) and the rules and regulations thereunder, all as from time to
time in effect.
"Base Rate" means, on any date, the greater of (a) the rate of interest
announced by Citibank, N.A. as its prime rate plus three percent (3.0%) or (b)
six percent (6.00%).
"Borrowing Request" is defined in Section 2.3.
"Capital Expenditures" means, for any fiscal quarter, the sum (without
duplication) of all expenditures (whether paid in cash or accrued as
liabilities) during such fiscal quarter that are or should be treated as capital
expenditures under GAAP.
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"Change of Control" means (a) a majority of the board of directors of the
Company shall be neither (i) directors of the Company as of the date hereof nor
(ii) nominated, appointed or approved by directors of the Company as of the date
hereof nor (iii) nominated, appointed or approved by directors described in
clause (ii) above; (b) any Person, together with "affiliates" and "associates"
of such Person within the meaning of Rule 12b-2 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or any "group" including such Person
under sections 13(d) and 14(d) of the Exchange Act shall acquire after the date
hereof (i) beneficial ownership within the meaning of Rule 13d-3 of the Exchange
Act of 33% or more of either the voting stock or total equity capital of the
Company or (ii) direct or indirect control of the Company through a shareholder,
voting or similar agreement or arrangement; or (c) the Company shall initiate
any action to dissolve, liquidate or otherwise terminate its existence.
"Closing Date" means the date on which any extension of credit is made
pursuant to Section 2.
"Closing Price" means the closing price of the Company's common stock, par
value $.01 per share, as quoted on the Nasdaq SmallCap Market on the Initial
Closing Date.
"Common Stock" means the Company's common stock, par value $.01 per share.
"▇▇▇▇▇▇▇" means ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., a Lender hereunder.
"Company" is defined in the Preamble.
"Credit Documents" means:
(a) this Agreement, the Security Agreement and the Notes,
each as from time to time in effect; and
(b) any other present or future agreement or instrument from
time to time entered into by the Lenders, on one hand, and the
Company on the other hand, relating to, amending or modifying
this Agreement or any other Credit Document referred to above or
which is stated to be a Credit Document, each as from time to
time in effect.
"Credit Obligations" means all present and future liabilities, obligations
and indebtedness of the Company under or in connection with this Agreement, the
Notes or any other Credit Document, including obligations in respect of
principal, interest, amounts provided for in Section 3.2 and other fees,
charges, indemnities and expenses from time to time owing hereunder or under any
other Credit Document.
"Curvey" means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a Lender hereunder.
"Default" means any Event of Default and any event or condition which with
the passage of time or giving of notice, or both, would become an Event of
Default.
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"EBIT" means, for any period, the total of:
(a) Net Income;
plus (b) all amounts deducted in computing such Net Income in respect
of:
(i) interest expense, and
(ii) taxes based upon or measured by net income;
minus (c) all amounts included in such Net Income in respect of non-cash
income.
"End Date" is defined in Section 3.2.
"Event of Default" is defined in Section 8.1.
"Final Maturity Date" means March 31, 2004.
"GAAP" means generally accepted accounting principles as from time to time
in effect, including the statements and interpretations of the United States
Financial Accounting Standards Board, consistently followed.
"Indemnified Party" is defined in Section 9.2.
"Initial Closing Date" means February 24, 2003.
"Lender" and "Lenders" are defined in the Preamble, and for the avoidance
of doubt includes both the Tranche I Only Lenders and the Tranche II Lenders.
"Loan" is defined in Section 2.4.
"Majority of Lenders" means, as of any date of determination, the Lenders
holding an aggregate of 51% or more of all amounts outstanding under the Loan.
"Margin Stock" means "margin stock" within the meaning of Regulations T, U
or X of the Board of Governors of the Federal Reserve System.
"Material Adverse Change" means a material adverse change in the business,
operations, assets, financial condition, income or prospects of the Company.
"Maximum Amount of Credit" is defined in Section 2.2.
"Members of the Immediate Family" means, with respect to any individual,
each spouse, sibling or child of such individual, each trust created solely for
the benefit of one or more of the aforementioned Persons and each custodian or
guardian of any property of one or more of the aforementioned Persons in his
capacity as such custodian or guardian.
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"Net Income" means, for any period, the net income (or loss) of the
Company, determined in accordance with GAAP on a consolidated basis; provided,
however, that Net Income shall not include extraordinary and non-recurring gains
and losses as determined in accordance with GAAP.
"Notes" is defined in Section 2.4.
"Payment Date" means the last Banking Day in each March, June, September
and December.
"Person" means any present or future natural person or any corporation,
association, partnership, joint venture, limited liability company, business
trust, trust, organization, business, individual or government or any
governmental agency or political subdivision thereof.
"▇▇▇▇▇▇▇" means ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a Lender hereunder.
"▇▇▇▇▇" means ▇▇▇▇▇▇ ▇▇▇▇▇, a Lender hereunder.
"SEC" is defined in Section 6.5.1.
"Security Agreement" is defined in Section 5.3.
"Subsidiary" means any Person of which the Company (or other specified
Person) shall at the time, directly or indirectly through one or more of its
Subsidiaries, (a) own more than 50% of the outstanding capital stock (or other
shares of beneficial interest) entitled to vote generally, (b) hold more than
50% of the partnership, joint venture or similar interests or (c) be a general
partner or joint venturer.
"Tranche I" is defined in Section 2.1.
"Tranche II" is defined in Section 2.1.
"Tranche I Only Lenders" means ▇▇▇▇▇▇▇ and ▇▇▇▇▇.
"Tranche II Lenders" means Curvey, Remondi and ▇▇▇▇.
"Unused Line" is defined in Section 3.2.
"Unused Line Fee" is defined in Section 3.2.
"Warrant Agreement" means the Warrant Agreement dated as of the Initial
Closing Date by and among the Company and the Lenders.
"Warrants" means the warrants issued to the Lenders pursuant to the Warrant
Agreement.
"▇▇▇▇" means ▇▇▇▇▇▇ ▇. ▇▇▇▇, a Lender hereunder.
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2. Revolving Credit Facility.
2.1. Revolving Loan. Subject to all the terms and conditions of this
Agreement and so long as no Default exists, from time to time on and after the
Initial Closing Date and prior to the Final Maturity Date, each Tranche I Only
Lender and each Tranche II Lender will make loans to the Company up to the
amount set forth opposite his name on Schedule 1 hereto and in such amounts as
may be requested by the Company in accordance with Section 2.3; provided,
however, that the Lenders agree, and the Company acknowledges, that (a) for any
portion of the Loan up to or equal to $500,000 of the Maximum Amount of Credit
("Tranche I"), the Lenders shall make loans to the Company, on a pro rata basis
as set forth on Schedule 2 hereto, upon the Company's request in accordance with
Section 2.3 and (b) for any amount of the Loan in excess of $500,000 ("Tranche
II"), the Tranche II Lenders shall make loans to the Company, on a pro rata
basis as set forth on Schedule 3 hereto, upon the Company's request in
accordance with Section 2.3. The Company acknowledges and agrees that each
Lender's obligation hereunder to loan such amounts to the Company is several and
not joint. The sum of the aggregate principal amount of loans made under this
Section 2.1 at any one time outstanding shall in no event exceed the Maximum
Amount of Credit.
2.2. Maximum Amount of Credit. The term "Maximum Amount of Credit" means,
on any date, the lesser of (a) $800,000 or (b) the amount (in an integral
multiple of $10,000) to which the then applicable amount set forth in clause (a)
above shall have been irrevocably reduced from time to time by notice from the
Company to the Lenders.
2.3. Borrowing Requests. The Company may from time to time request a loan
under Section 2.1 by providing to each applicable Lender a written notice at
least five (5) Banking Days prior to the requested Closing Date. Such notice
must specify the aggregate amount of the requested revolving loan (which shall
be not less than $100,000 and an integral multiple of $10,000), set forth each
applicable Lender's pro rata share of the requested revolving loan determined in
accordance with Schedule 2 or Schedule 3 hereto, as applicable, and be in
substantially the form of Exhibit 5.1 (a "Borrowing Request"). Each such loan
will be made by depositing the amount thereof to the general account of the
Company at Citizens Bank, or such other account at any bank of which the Company
has provided notice to each Lender.
2.4. Notes. The aggregate principal amount of the loans outstanding from
time to time under this Section 2 is referred to as the "Loan". The Company
shall keep a record of the Loan and shall include a copy of such record in each
Borrowing Request delivered to the applicable Lenders pursuant to Section 2.3.
The Company's obligations to pay the Loan shall be evidenced by the Company's
notes in substantially the form of Exhibit 2.4 (the "Notes"), payable to the
Lenders.
2.5. Use of Proceeds. The proceeds of the sale by the Company of the
Notes hereunder shall be used for general corporate purposes and to pay closing
costs.
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3. Interest; Commitment Fees, etc.
3.1. Interest. The Loan shall accrue and bear interest at a rate per
annum which shall at all times equal the Base Rate. The Company will pay the
accrued and unpaid interest on the Loan on each Payment Date and on any stated
or accelerated maturity of the Loan to each Lender on the basis of the principal
amount owing to such Lender as of such date.
3.2. Unused Line Fee. Until the full performance and irrevocable payment
in full of the Loan and the termination date of this Agreement (the "End Date"),
the Company shall pay to the Lenders, on a pro rata basis as set forth on
Schedule 4 hereto, an unused line fee (the "Unused Line Fee") in an amount equal
to 1.5% of the difference derived by subtracting (a) the daily average amount of
the balances under the Loan outstanding during the preceding month, from (b) the
Maximum Amount of Credit (the "Unused Line"); provided; however; that if the
Unused Line is equal to or less than $300,000 for a given month, only the
Tranche II Lenders shall be entitled to receive the Unused Line Fee, and in such
event the Company shall pay to the Tranche II Lenders the Unused Line Fee on a
pro rata basis as set forth on Schedule 3 hereto. The Unused Line Fee shall be
payable monthly in arrears on the first day of each successive calendar month
(starting with the month in which the Initial Closing Date occurs). The Unused
Line Fee shall be prorated for the month in which the Initial Closing Date
occurs and the month in which the End Date occurs.
3.3. Default Rate. Notwithstanding any provision contained in this
Agreement or any other Credit Document to the contrary, for each day during any
period that there shall have occurred and be continuing any Event of Default,
the interest rate on the unpaid principal amount of the Loan shall be increased
to a rate per annum (the "Default Rate") which is equal to the Base Rate plus
two percent (2.00%).
3.4. Computations of Interest. For purposes of this Agreement, interest
(and any amount expressed as interest) shall be computed on the basis of the
actual number of days elapsed in a 360-day year.
3.5. Warrants. As additional consideration for the extensions of credit
hereunder and as more fully described in the Warrant Agreement, the Company
shall issue and deliver to the Lenders, on a pro rata basis as set forth on
Schedule 5 hereto, on the Initial Closing Date, Warrants to purchase an
aggregate amount of shares of Common Stock equal to (a) the Maximum Amount of
Credit multiplied by ten percent (10%) and (b) divided by the Closing Price. The
Warrants shall be exercisable at a price per share equal to 1.25 multiplied by
the Closing Price and shall bear an expiration date of ten (10) years from the
Initial Closing Date. The Warrants shall be subject to various rights in favor
of the holders thereof as set forth in the Warrant Agreement.
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4. Payment.
4.1. Payment at Maturity. On the Final Maturity Date, the Company will pay
to the Lenders an amount equal to the Loan, together with all accrued and unpaid
interest thereon and all other Credit Obligations then outstanding.
4.2. Mandatory Prepayments. If the Company or any of its Subsidiaries (a)
sells any of its material assets or other properties (other than in the ordinary
course of business and other than sales of assets that are promptly replaced),
(b) receives any property damage insurance award which is not used to repair or
replace the property covered thereby, (c) receives any cash proceeds in
connection with any issuance after the Initial Closing Date of any shares of its
capital stock, other equity interests or options, warrants or other purchase
rights to acquire such capital stock or (d) receives any cash proceeds from the
incurrence by the Company or any of its Subsidiaries after the Initial Closing
Date of indebtedness other than indebtedness permitted under Section 6.10(a) and
indebtedness between the Company and any of its Subsidiaries, then not later
than ten (10) calendar days following such sale, award, issuance or incurrence,
as applicable, the Company shall apply 100% of the proceeds of any such sale,
award, issuance or incurrence, net of expenses incurred in relation thereto, to
the prepayment of the Notes on a pro rata basis.
4.3. Voluntary Prepayments of Loan. The Company may from time to time
prepay all or any portion of the Loan (in a minimum amount of $50,000 and an
integral multiple of $5,000), without premium; provided, however, that the
Company may not prepay any portion of any Note that has been outstanding for
less than three months as of the proposed prepayment date.
4.4. Reborrowing. The amounts of the Loan prepaid may be reborrowed in
accordance with Section 2, subject to the limitations thereof.
4.5. Cash Collection System. If requested by a Majority of Lenders, the
Company will put into place a cash collection system reasonably satisfactory to
such Lenders.
5. Conditions to Extending Credit. The obligation of the Lenders to make any
extension of credit pursuant to Section 2 shall be subject to the satisfaction,
on or before the Closing Date therefor, of the following conditions:
5.1. Officer's Certificate. The representations and warranties contained in
Section 7 shall be true and correct on and as of the Closing Date with the same
force and effect as though originally made on and as of such date; no Default
shall exist on the Closing Date prior to or immediately after giving effect to
the requested extension of credit; as of the Closing Date, no Material Adverse
Change shall have occurred; and the Company shall have furnished to the Lender
on the Closing Date a certificate to these effects, in substantially the form of
Exhibit 5.1.
5.2. Notes. On the Initial Closing Date, the Company shall have executed
the Notes and delivered each Note to the Lender in whose name it has been
executed.
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5.3. Security Agreement. The Company shall have duly authorized, executed
and delivered to the Lenders a Security Agreement substantially in the form of
Exhibit 5.3 (the "Security Agreement").
5.4. Perfection of Security. The Company shall have duly authorized,
executed, acknowledged, delivered, filed, registered and recorded such security
agreements, notices, financing statements and other instruments as the Lenders
may have reasonably requested in order to perfect the liens purported or
required to be created pursuant to the Credit Documents and shall have paid all
filing or recording fees or taxes required to be paid in connection therewith,
including any recording, mortgage, documentary, transfer or intangible taxes.
5.5. Lenders' Expenses. On the Initial Closing Date, the Company shall have
paid the reasonable expenses and legal fees of the Lenders, not to exceed
$15,000 in the aggregate, incurred in connection with the negotiation of this
Agreement and the other Credit Documents and the transactions contemplated
hereby and thereby.
5.6. Insurance. The Company shall have provided to the Lenders copies of
all insurance policies, and original certificates therefor confirming that such
policies are in effect and that the premiums due and owing with respect thereto
have been paid in full, evidencing that the Company has adequately insured its
and its Subsidiaries' properties, business and assets in all material respects
against losses, damages and hazards as are customarily insured against by
businesses engaging in activities similar to those of the Company and its
Subsidiaries or owning assets or properties similar to those of the Company and
its Subsidiaries; maintains general public liability insurance at all times
against liability on account of damage to persons and property having such
limits, deductibles, exclusions and co-insurance and other provisions as are
customary for a business engaged in activities similar to those of the Company
and its Subsidiaries; and maintains insurance under all applicable workers'
compensation laws.
5.7. Compliance. The Company and its Subsidiaries shall each (a) be in
compliance in all material respects, with all, and not in violation in any
material respect of any, applicable federal, state, foreign and local laws,
statutes and regulations and (b) not be the subject of any governmental
investigation, evaluation or any remedial action which could reasonably be
expected to have or result in a Material Adverse Change.
5.8. Proper Proceedings. This Agreement, each other Credit Document and the
Warrant Agreement and the transactions contemplated hereby and thereby shall
have been authorized by all necessary proceedings of the Company. All necessary
consents, approvals and authorizations of any governmental or administrative
agency or any other Person of any of the transactions contemplated hereby, by
the Warrant Agreement or by any Credit Document shall have been obtained and
shall be in full force and effect.
5.9. Legality, etc. The making of the requested extension of credit shall
not (a) subject the Lenders to any penalty or special tax or (b) be prohibited
by any law or governmental order or regulation applicable to the Lenders.
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5.10. General. All instruments and legal and corporate proceedings, in
connection with the transactions contemplated by this Agreement, the Warrant
Agreement and each Credit Document shall be satisfactory in form and substance
to the Lenders, and the Lenders shall have received copies of all documents,
including records of corporate proceedings, which the Lenders may have
reasonably requested in connection therewith, such documents where appropriate
to be certified by proper corporate or governmental authorities.
6. General Covenants. The Company covenants that, until all of the Credit
Obligations shall have been paid in full and until each Lender's commitment to
extend credit under this Agreement and any other Credit Document shall have been
terminated, the Company will comply with the following provisions:
6.1. Conduct of Business. The Company shall engage only in the business
of retail sales of wine and wine-related merchandise and activities reasonably
related thereto.
6.2. Payment of Taxes and Other Amounts. The Company will pay (a) all
taxes, assessments and governmental charges imposed upon it or upon its property
and (b) all accounts payable in conformity with customary trade terms, in each
case unless the validity or amount thereof is being contested in good faith by
appropriate proceedings, and the Company has established adequate reserves in
accordance with GAAP.
6.3. Compliance with Laws. The Company will comply with all applicable
laws, rules, regulations and orders, and duly observe all valid requirements of
governmental authorities, except where failure so to comply would not result,
and would not create a material risk of resulting, in a Material Adverse Change.
The Company will not own any Margin Stock.
6.4. Insurance.
6.4.1. Property Insurance. The Company shall keep its, and its
Subsidiaries', properties, business and assets which are of an insurable
character insured by financially sound and reputable insurers against
losses, damages and hazards insured against by extended coverage to the
extent, in amounts and with deductibles at least as favorable as those
generally maintained by businesses of similar size engaged in similar
activities.
6.4.2. Liability Insurance. The Company shall maintain with
financially sound and reputable insurers insurance against liability for
hazards, risks and liability to persons and property to the extent, in
amounts and with deductibles at least as favorable as those generally
maintained by businesses of similar size engaged in similar activities;
provided, however, that it may effect workers' compensation insurance or
similar coverage with respect to operations in any particular state or
other jurisdiction through an insurance fund operated by such state or
jurisdiction or by meeting the self-insurance requirements of such state or
jurisdiction.
6.5. Financial Statements and Reports.
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6.5.1. Annual Reports. The Company shall furnish to each Lender,
within three (3) Banking Days after its filing with the Securities and
Exchange Commission (the "SEC"), its Annual Report on Form 10-K for each
fiscal year of the Company containing the consolidated balance sheet of the
Company as of the end of such fiscal year, the consolidated statements of
income, of changes in shareholders' equity and of cash flows of the Company
for such fiscal year and comparative figures for the immediately preceding
fiscal year, accompanied by a certificate of the Company to the effect that
the Company has no knowledge of any Default as of the date of such
certificate, or if the Company has such knowledge, specifying such Default
and the nature thereof, and what action the Company has taken, is taking or
proposes to take with respect thereto.
6.5.2. Quarterly Reports. The Company shall furnish to each Lender,
within three (3) Banking Days after its filing with the SEC, its Quarterly
Report on Form 10-Q for each fiscal quarter of the Company (except for the
fourth fiscal quarter) containing the internally prepared consolidated
balance sheet of the Company as of the end of such fiscal quarter, the
consolidated statements of income, of changes in shareholders' equity and
of cash flows of the Company for such fiscal quarter and for the portion of
the fiscal year then ended and comparative figures for the same period in
the preceding fiscal year, accompanied by:
(a) A certificate of the Company to the effect that such
financial statements have been prepared in accordance with GAAP and
present fairly, in all material respects, the financial position of
the Company at the dates thereof and the results of its operations
for the periods covered thereby, subject only to normal year-end
audit adjustments and the addition of footnotes, and
(b) A certificate of the Company to the effect that the
Company has no knowledge of any Default as of the date of such
certificate, or if the Company has such knowledge, specifying such
Default and the nature thereof and what action the Company has
taken, is taking or proposes to take with respect thereto.
6.5.3. Monthly Calculations. The Company shall furnish to each
Lender, within twenty-eight (28) calendar days after the last calendar day
of each month, calculations showing, as of the last day of such month
ended, the Company's compliance with Sections 6.6, 6.7 and 6.8.
6.5.4. Notice of Litigation, Defaults, etc. The Company shall
promptly furnish to each Lender notice of any litigation or any
administrative or arbitration proceeding (a) which creates a reasonable
risk of resulting, after giving effect to any applicable insurance, in the
payment by the Company of more than $100,000 or (b) which results, or
creates a reasonable risk of resulting, in a Material Adverse Change.
Promptly upon acquiring knowledge thereof, the Company shall notify each
Lender of the existence of any Default or Material Adverse Change,
specifying the nature thereof and what action the Company has taken, is
taking or proposes to take with respect thereto.
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6.5.5. Other Information. From time to time at reasonable intervals
upon written request of any Lender, the Company shall furnish to each
Lender such other information regarding the business, assets, financial
condition, income or prospects of the Company as such Lender may reasonably
request, including copies of all tax returns, licenses, agreements, leases
and instruments to which the Company is party. Each Lender and its
authorized representatives shall have the right during normal business
hours upon reasonable notice and at reasonable intervals (a) to examine the
books and records of the Company for the purpose of ascertaining compliance
with or obtaining enforcement of this Agreement or any other Credit
Document and (b) to inspect the inventory of the Company and its
Subsidiaries and perform any valuation thereupon.
6.6. Current Ratio. The Company's current ratio (current assets over
current liabilities), calculated in accordance with GAAP, shall not be less than
the following amounts at the following monthly intervals:
Month Ending Ratio
------------ -----
February 28, 2003 2.29
March 31, 2003 2.29
April 30, 2003 2.30
May 31, 2003 2.31
June 30, 2003 2.36
July 31, 2003 2.38
August 31, 2003 2.38
September 30, 2003 2.38
October 31, 2003 2.34
November 30, 2003 2.49
December 31, 2003 2.60
January 31, 2004 2.74
February 29, 2004 2.83
6.7. Quick Ratio. The Company's quick ratio (current assets less inventory
over current liabilities), calculated in accordance with GAAP, shall not be less
than the following amounts at the following monthly intervals:
Month Ending Ratio
------------ -----
February 28, 2003 0.94
March 31, 2003 0.94
April 30, 2003 1.18
May 31, 2003 1.18
June 30, 2003 1.18
July 31, 2003 0.95
August 31, 2003 0.95
September 30, 2003 0.95
October 31, 2003 0.96
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November 30, 2003 1.07
December 31, 2003 1.18
January 31, 2004 1.33
February 29, 2004 1.33
6.8. EBIT. The Company's EBIT, calculated in accordance with GAAP, shall
not be less than the following amounts at the following intervals measured
monthly on a trailing three-month basis:
Period Ending Amount
------------- ------
February 28, 2003 ($115,376)
March 31, 2003 ($450,000)
April 30, 2003 ($289,697)
May 31, 2003 ($ 47,569)
June 30, 2003 ($200,000)
July 31, 2003 ($73,937)
August 31, 2003 $ 72,054
September 30, 2003 $ 200,000
October 31, 2003 ($33,085)
November 30, 2003 $ 41,535
December 31, 2003 $ 400,000
January 31, 2004 $ 436,981
February 29, 2004 $ 317,403
6.9. Capital Expenditures. The aggregate amount of Capital Expenditures
for any fiscal quarter of the Company ending on or after December 31, 2002 shall
not exceed $100,000.
6.10. Indebtedness and Liens. Neither the Company nor any of its
Subsidiaries will:
(a) create, incur or otherwise become or remain liable with
respect to, any indebtedness for borrowed money, evidenced by notes or
other instruments or for the deferred purchase price of goods or services,
other than (i) the Credit Obligations, (ii) the Company's presently
existing indebtedness (including committed lease facilities) listed on
Exhibit 6.10, (iii) purchase money indebtedness and capitalized leases
incurred in the ordinary course of business not exceeding $20,000 in the
aggregate at any one time outstanding, (iv) unsecured indebtedness incurred
in the ordinary course of business not exceeding $5,000 in the aggregate
and (v) trade accounts payable in the ordinary course of business.
(b) create or incur or permit to exist any consensual lien,
charge, mortgage, pledge or other security interest of any kind upon any of
its property or assets of any character, whether now owned or hereafter
acquired, other than (i) liens securing the Credit Obligations, (ii)
purchase money liens and capitalized leases incurred in the ordinary course
of business not exceeding $20,000, (iii) deposits or pledges made in
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connection with, or to secure payment of, indemnity, performance or similar
bonds in the ordinary course of business, and (iv) presently existing liens
listed on Exhibit 6.10; provided, however, that the Company shall undertake
to terminate all security interests listed on Exhibit 6.10 granted in favor
of Citizens Bank in the Company's property as soon as reasonably
practicable following the Initial Closing Date.
6.11. Distributions. Neither the Company nor any of its Subsidiaries shall
pay any direct or indirect dividend or other distribution of any kind in respect
of, or purchase or redeem, any of its shares of capital stock (other than
distributions to the Company from any of its Subsidiaries).
6.12. Investments and Acquisitions. Neither the Company nor any of its
Subsidiaries shall make any investments in capital stock, partnership interests
or loans, or purchase or otherwise acquire any business or material assets
unrelated to the business of selling wine at retail in the United States.
6.13. Merger; Sale of Assets; Share Issuance. Neither the Company nor any
of its Subsidiaries shall become a party to any merger or consolidation, or in a
single transaction or series of related transactions sell, lease or otherwise
dispose of a material amount of its assets (except that wholly owned
Subsidiaries of the Company may be merged or liquidated into the Company or one
or more of its wholly owned Subsidiaries), or in the case of the Company's
Subsidiaries, issue any capital stock or rights to acquire capital stock.
6.14. Sales and Leasebacks. The Company shall not, and shall not permit
any of its Subsidiaries to, enter into any arrangement with any Person providing
for the leasing by the Company or any Subsidiary of real or personal property
which has been or is to be sold or transferred by the Company or such Subsidiary
to such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or rental obligations
of the Company or such Subsidiary.
6.15. Transactions with Affiliates. The Company shall not, and shall not
permit any of its Subsidiaries to, enter into any transaction (including,
without limitation, any purchase, sale, lease or exchange of property or the
rendering of any service) with any Affiliate unless such transaction is (a)
otherwise permitted under this Agreement; (b) in the ordinary course of the
Company's or such Subsidiary's business; and (c) upon fair and reasonable terms
no less favorable to the Company or such Subsidiary, as the case may be, than it
would obtain in a comparable arm's length transaction with a Person which is not
an Affiliate; provided, however, that the foregoing restriction shall not
prohibit (i) transactions pursuant to this Agreement; (ii) any employment
agreement entered into by the Company or any of its Subsidiaries in the ordinary
course of business; (iii) any issuance of securities in connection with (x) the
Warrant Agreement or (y) employment arrangements, stock options and stock
ownership plans of the Company entered into in the ordinary course of business;
and (iv) transactions between the Company and its Subsidiaries.
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6.16. Management Fees. The Company shall not, and shall not permit any of
its Subsidiaries to, pay any management fee.
7. Representations and Warranties. In order to induce the Lenders to extend
credit to the Company hereunder, the Company represents and warrants that:
7.1. Organization and Business. The Company is a duly organized and
validly existing corporation, in good standing under the laws of The
Commonwealth of Massachusetts, with all power and authority necessary (a) to
enter into and perform this Agreement and each other Credit Document to which it
is party, and (b) to own its properties and carry on the business now conducted
or proposed to be conducted by it. The Company has taken all corporate action
required to execute, deliver and perform this Agreement and each other Credit
Document to which it is party. Copies of the restated articles of organization
and the amended and restated by-laws of the Company have been previously
delivered to the Lenders and are correct and complete. The Company has no
Subsidiaries, except as set forth in Exhibit 7.1, which Subsidiaries are each
duly organized, validly existing and in good standing under the laws of the
jurisdiction of their respective incorporation.
7.2. Financial Statements and Other Information. The Company has
previously furnished to the Lenders copies of the consolidated balance sheet of
the Company as of December 31, 2002, and the related consolidated statement of
earnings, stockholders' equity and cash flows for the fiscal year of the Company
then ended, accompanied by the preliminary review of the Company's accountants.
The financial statements (including the notes thereto) referred to in the
preceding sentence have been prepared in accordance with GAAP and fairly present
in all material respects the financial condition of the Persons covered thereby
at the dates thereof and the results of their operations for the periods covered
thereby, subject to the case of interim statements only to normal year-end audit
adjustments and the addition of footnotes.
7.3. Litigation. No litigation, at law or in equity, or any proceeding
before any federal, state, provincial or municipal court, board or other
governmental or administrative agency or any arbitrator is pending or to the
knowledge of the Company threatened which may reasonably involve any material
risk of any final judgment or liability not adequately covered by insurance or
which is otherwise reasonably likely to result in any Material Adverse Change.
Other than as disclosed in the financial statements, no judgment, decree, or
order of any federal, state, provincial or municipal court, board or other
governmental or administrative agency or arbitrator has been issued against the
Company which has resulted, or creates a material risk of resulting, in any
Material Adverse Change.
7.4. No Legal Obstacle to Agreements. Neither the execution and delivery
of this Agreement or any other Credit Document, nor the making of any borrowings
hereunder, nor the consummation of any transaction referred to in or
contemplated by this Agreement or any other Credit Document, nor the fulfillment
of the terms hereof or thereof or of any other agreement, instrument, deed or
lease referred to in this Agreement or any other Credit Document, has
constituted or resulted in or will constitute or result in:
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(a) any breach or termination of the provisions of any
agreement, instrument, deed or lease to which the Company is a party
or by which it is bound, or of the charter or by-laws of the
Company;
(b) the violation of any law, statute, judgment, decree or
governmental order, rule or regulation applicable to the Company;
(c) the creation under any agreement, instrument, deed or lease
of any lien upon any of the assets of the Company; or
(d) any redemption, retirement or other repurchase obligation
of the Company under any charter, bylaw, agreement, instrument, deed
or lease.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person is required to
be obtained or made by the Company in connection with the execution, delivery
and performance of this Agreement or any other Credit Document, the transactions
contemplated hereby or thereby or the making of any borrowing by the Company
hereunder.
7.5. Taxes. The Company has filed (or obtained extensions to file)
required tax returns and paid taxes due except such taxes as are being contested
in good faith and as to which adequate reserves have been set aside in
conformity with GAAP.
8. Defaults.
8.1. Events of Default. The following events are herein referred to as
"Events of Default":
8.1.1. Payment. The Company shall fail to make any payment in
respect of: (a) interest or any fee on or in respect of any of the Credit
Obligations owed by it as the same shall become due and payable, and such
failure shall continue for a period of three (3) Banking Days, or (b)
principal of any of the Credit Obligations owed by it as the same shall
become due, whether at maturity or by acceleration or otherwise.
8.1.2. Covenant Compliance. The Company shall fail to perform or
observe any of the other provisions of the Credit Documents required to be
performed or complied with by it and such failure continues for a period of
ten (10) calendar days after written notice thereof is given by any Lender
to the Company.
8.1.3. Representations and Warranties. Any representation or
warranty of or with respect to the Company in, pursuant to or in connection
with this Agreement or any other Credit Document, or in any certificate,
notice, financial statement or other report furnished to any Lender in
connection therewith, shall be materially false on the date as of which it
was made.
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8.1.4. Cross-Default. A default shall exist under any instrument or
agreement of the Company under which indebtedness of $100,000 or more is
outstanding and, by reason of such default, the holder or holders of such
indebtedness would be permitted under the terms of such instrument or agreement
to accelerate the maturity of such indebtedness.
8.1.5. Judgments. A final judgment (a) which, with other outstanding
final judgments against the Company, exceeds an aggregate of $100,000 in excess
of applicable insurance coverage shall be rendered against the Company, or (b)
which grants injunctive relief that results, or creates a material risk of
resulting, in a Material Adverse Change and in either case if (i) within sixty
(60) calendar days after entry thereof, such judgment shall not have been
discharged or execution thereof stayed pending appeal or (ii) within sixty (60)
calendar days after the expiration of any such stay, such judgment shall not
have been discharged.
8.1.6. Material Adverse Change. A Material Adverse Change occurs or
threatens to occur that jeopardizes the Company's ability to discharge its
obligations to any Lender under this Agreement, the Notes or any other Credit
Document.
8.1.7. Change in Control. There shall have occurred a Change of Control.
8.1.8. Bankruptcy. The Company shall:
(a) commence a voluntary case under the Bankruptcy Code or
authorize, by appropriate proceedings of its board of directors or other
governing body, the commencement of such a voluntary case;
(b) have filed against it a petition commencing an involuntary
case under the Bankruptcy Code which shall not have been dismissed within
sixty (60) calendar days after the date on which such petition is filed;
or file an answer or other pleading within such 60-day period admitting
or failing to deny the material allegations of such a petition or
seeking, consenting to or acquiescing in the relief therein provided;
(c) have entered against it an order for relief in any involuntary
case commenced under the Bankruptcy Code;
(d) seek relief as a debtor under any applicable law, other than
the Bankruptcy Code, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the
rights of creditors, or consent to or acquiesce in such relief;
(e) have entered against it an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering or
approving its liquidation, reorganization or any modification or
alteration of the rights of its creditors or
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(iii) assuming custody of, or appointing a receiver or other
custodian for, all or a substantial portion of its property; or
(f) make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint, or consent to the
appointment of, or suffer to exist a receiver or other custodian
for, all or a substantial portion of its property.
8.2. Certain Actions Following an Event of Default. If any one or more
Events of Default shall occur and be continuing, then in each and every such
case:
8.2.1. No Obligation to Extend Credit; Acceleration. Upon notice
by a Majority of Lenders to the Company, the obligations of the Lenders
to make any extension of credit hereunder shall automatically terminate
and the Credit Obligations shall become immediately due and payable.
8.2.2. Exercise of Rights. Any of the Lenders may proceed to
protect and enforce their rights by suit in equity, action at law and/or
other appropriate proceeding, either for specific performance of any
covenant or condition contained in this Agreement or any other Credit
Document.
8.2.3. Bankruptcy Default. Upon the occurrence of an Event of
Default under Section 8.1.8, the unpaid balance of the Credit Obligations
shall automatically become immediately due and payable.
8.2.4. Setoff. Each Lender may offset and apply toward the payment
of such balance or part thereof (and/or toward the curing of any Event of
Default) any indebtedness from such Lender to the Company, regardless of
the adequacy of any security for the Credit Obligations, and the Lenders
shall have no duty to determine the adequacy of any such security in
connection with any such offset.
8.2.5. Cumulative Remedies. To the extent not prohibited by
applicable law that cannot be waived, all of the Lenders' rights
hereunder and under each other Credit Document shall be cumulative.
8.3. Waivers. The Company hereby waives to the extent not prohibited by
applicable law:
(a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by the provisions of
this Agreement or any other Credit Document), protests, notices of
protest and notices of dishonor;
(b) any requirement of diligence or promptness on the part
of any Lender in the enforcement of its rights under this
Agreement, the Notes or any other Credit Document; and
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(c) any and all notices of every kind and description which
may be required to be given by any statute or rule of law.
9. Expense Indemnity.
9.1. Expenses. The Company will pay: (a) all transfer and documentary
stamp and similar taxes at any time payable in respect of this Agreement or the
Loan and (b) all other reasonable expenses incurred by the Lenders in connection
with the enforcement of any rights hereunder or under any other Credit Document
upon the occurrence and during the continuance of a Default, including costs of
collection and reasonable attorneys' fees and expenses.
9.2. General Indemnity. The Company shall indemnify each Lender and
each such Lender's employees, agents, attorneys, accountants and consultants
(each Lender and each of such employees, agents, attorneys, accountants and
consultants is referred to as an "Indemnified Party") and hold each of them
harmless from and against any and all claims, damages, liabilities and
reasonable expenses (including reasonable fees and disbursements of counsel with
whom any Indemnified Party may consult in connection therewith and all
reasonable expenses of litigation or preparation therefor) which any Indemnified
Party may incur or which may be asserted against any Indemnified Party in
connection with (a) the Indemnified Party's compliance with or contest of any
subpoena or other process issued against it in any proceeding involving the
Company or any of its Subsidiaries or their affiliates, (b) any litigation or
investigation involving the Company, any of its Subsidiaries or their
affiliates, or any officer, director or employee thereof, (c) the existence or
exercise of any security rights with respect to the collateral under the Credit
Documents, or (d) this Agreement, any other Credit Document or any transaction
contemplated hereby or thereby; provided, however, that the foregoing indemnity
shall not apply to litigation commenced by the Company against a Lender that
seeks enforcement of any of the rights of the Company hereunder or under any
other Credit Document and is determined adversely to such Lender in a final
nonappealable judgment or to the extent such claims, damages, liabilities and
expenses result from the Indemnified Party's own gross negligence or willful
misconduct.
10. Successors and Assigns. Any reference in this Agreement to any of the
parties hereto shall be deemed to include the successors and assigns of such
party, and all covenants and agreements by or on behalf of the Company or each
Lender that are contained in this Agreement shall bind and inure to the benefit
of their respective successors and assigns; provided, however, that the Company
may not assign its rights or obligations under this Agreement under any
circumstances and each Lender may assign its rights or obligations under this
Agreement only as follows: each Lender may from time to time grant
participations in its pro rata share of the Loan and its Note, or assign all or
part of its pro rata share of the Loan and its Note, upon such terms as such
Lender may determine, to affiliates of such Lender, to any other Lender or, with
the consent of the Company which shall not be unreasonably withheld, to banks or
financial institutions.
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11. Notices. Except as otherwise specified in this Agreement, any notice
required to be given pursuant to this Agreement shall be given in writing. Any
notice, demand or other communication in connection with this Agreement shall be
deemed to be given if given in writing (including telex, telecopy (confirmed by
telephone or writing) or similar teletransmission) addressed as provided below
(or to the addressee at such other address as the addressee shall have specified
by notice actually received by the addressor), and if either (a) actually
delivered in fully legible form to such address (evidenced in the case of a
telex by receipt of the correct answer back) or (b) in the case of a letter,
five (5) calendar days shall have elapsed after the same shall have been
deposited in the United States mails, with first-class postage prepaid and
registered or certified.
If to the Company, to it at the following address:
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
T: ▇▇▇-▇▇▇-▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇
If to the Lenders, to each Lender at its respective address:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Le Jardin, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇
12. Course of Dealing, Amendments and Waivers. No course of dealing between
the Lenders and the Company or any affiliate of the Company shall operate as a
waiver of any of the Lenders' rights under this Agreement or any other Credit
Document or with respect to the Credit Obligations. No delay or omission on the
part of any Lender in exercising any right under this Agreement or any other
Credit Document or with respect to the Credit Obligations shall operate as a
waiver of such right or any other right hereunder or thereunder. A waiver on any
one occasion shall not be construed as a bar to or waiver of any right or remedy
on any future occasion. No waiver, consent or amendment with respect to this
Agreement or any other Credit Document shall be binding unless it is in writing
and signed by at least a Majority of the Lenders.
13. Venue; Service of Process; Certain Waivers. Each of the Company and each
Lender:
(a) Irrevocably submits to the nonexclusive jurisdiction of
the state courts of The Commonwealth of Massachusetts and to the
nonexclusive jurisdiction of the United States District Court for
the District of Massachusetts for the purpose of any suit, action
or other proceeding arising out of or based upon this Agreement or
any other Credit Document or the subject matter hereof or thereof;
(b) Waives to the extent not prohibited by applicable law
that cannot be waived, and agrees not to assert, by way of motion,
as a defense or otherwise, in any such proceeding brought in any
of the above-named courts, any claim that it is not subject
personally to the jurisdiction of such court, that its property is
exempt or immune from attachment or execution, that such
proceeding is brought in an inconvenient forum, that the venue of
such proceeding is improper, or that this Agreement or any other
Credit Document, or the subject matter hereof or thereof, may not
be enforced in or by such court;
(c) Consents to service of process in any such proceeding
in any manner at the time permitted by Chapter 223A of the General
Laws of The Commonwealth of Massachusetts and agrees that service
of process by registered or certified mail, return receipt
requested, at its address specified in or pursuant to Section 11
is reasonably calculated to give actual notice; and
(d) Waives to the extent not prohibited by applicable law
that cannot be waived any right it may have to claim or recover in
any such proceeding any special, exemplary, punitive or
consequential damages.
14. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, EACH OF THE COMPANY AND
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EACH LENDER WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY CREDIT OBLIGATION OR IN
ANY WAY CONNECTED WITH THE DEALINGS OF THE LENDERS OR THE COMPANY IN CONNECTION
WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING
AND WHETHER IN CONTRACT, TORT OR OTHERWISE. Any of the Lenders or the Company
may file an original counterpart or a copy of this Agreement with any court as
written evidence of the consent of the Company and the Lenders to the waiver of
their rights to trial by jury.
15. General. All covenants, agreements, representations and warranties made
in this Agreement or any other Credit Document or in certificates delivered
pursuant hereto or thereto shall be deemed to have been material and relied on
by the Lenders, notwithstanding any investigation made by the Lenders, and shall
survive the execution and delivery to the Lenders hereof and thereof. The
invalidity or unenforceability of any provision hereof shall not affect the
validity or enforceability of any other provision hereof, and any invalid or
unenforceable provision shall be modified so as to be enforced to the maximum
extent of its validity or enforceability. The headings in this Agreement are for
convenience of reference only and shall not limit, alter or otherwise affect the
meaning hereof. This Agreement and the other Credit Documents constitute the
entire understanding of the parties with respect to the subject matter hereof
and thereof and supersede all prior and current understandings and agreements,
whether written or oral. This Agreement may be executed in any number of
counterparts which together shall constitute one instrument. This Agreement
shall be governed by and construed in accordance with the laws (other than the
conflict of laws rules) of The Commonwealth of Massachusetts.
[The Remainder Of This Page Is Intentionally Blank]
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Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
THE COMPANY:
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
THE LENDERS:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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SCHEDULE 1-Commitment Amounts
Tranche I Only Lenders Commitment Amount
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. $100,000
▇▇▇▇▇▇ ▇▇▇▇▇ $100,000
Tranche II Lenders Commitment Amount
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $200,000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $200,000
▇▇▇▇▇▇ ▇. ▇▇▇▇ $200,000
SCHEDULE 2-Tranche I Percentages
Lenders Tranche I Commitment Percentage
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 20%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 20%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 20%
▇▇▇▇▇▇ ▇▇▇▇▇ 20%
▇▇▇▇▇▇ ▇. ▇▇▇▇ 20%
SCHEDULE 3-Tranche II Percentages
Tranche II Lenders Tranche II Commitment Percentage
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 33.33%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 33.33%
▇▇▇▇▇▇ ▇. ▇▇▇▇ 33.33%
SCHEDULE 4-Fee Percentages
Lenders Percentage
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 12.5%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 25.0%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 25.0%
▇▇▇▇▇▇ ▇▇▇▇▇ 12.5%
▇▇▇▇▇▇ ▇. ▇▇▇▇ 25.0%
SCHEDULE 5-Warrants
Lender Name Warrants Number
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 5,263 W-1
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 10,526 W-2
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,526 W-3
▇▇▇▇▇▇ ▇▇▇▇▇ 5,263 W-4
▇▇▇▇▇▇ ▇. ▇▇▇▇ 10,526 W-5