EXHIBIT 10.9
------------
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
March 7, 2002
for Credit Agreement originally executed as of
November 25, 1997
among
CADIZ INC.,
The Lenders Party Hereto
and
ING BARING (U.S.) CAPITAL LLC,
as Administrative Agent
TABLE OF CONTENTS
Page
SECTION 1.01 Defined terms. . . . . . . . . . . . . . . . . . . . . . . . ..2
SECTION 1.02 [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . .18
SECTION 1.03 Terms Generally. . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 1.04 Accounting Terms; GAAP. . . . . . . . . . . . . . . . . . . . 18
SECTION 2.01 Commitments. . . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 2.02 Loans and Borrowings. . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.03 Requests for Borrowings. . . . . . . . . . . . . . . . . . . .20
SECTION 2.04 Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.05 [Intentionally Omitted] . . . . . . . . . . . . . . .. . . . .20
SECTION 2.06 Funding of Borrowings. . . . . . . . . . . . . . . . . . . . .20
SECTION 2.07 Conversion of Rights for Holders of Tranche B Loans. . . . . .21
SECTION 2.08 Security. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.09 Termination and Reduction of Commitments. . . . . . . . . . . 28
SECTION 2.10 Repayment of Loans; Evidence of Debt. . . . . . . . . . . . . 29
SECTION 2.11 Prepayment of Loans; Reborrowings. . . . . . . . . . . . . . .30
SECTION 2.12 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.13 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.14 Stock Payment Election. . . . . . . . . . . . . . . . . . . . 31
SECTION 2.15 Increased Costs. . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 2.16 Increased Costs; Problems Ascertaining
Applicable Interest Rate. . . . . . . . . . . . . . .. . . . .33
SECTION 2.17 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 2.18 Payments Generally; Pro Rata Treatment;
Sharing of Set-offs. . . . . . . . . . . . . . . . . . . . . .34
SECTION 2.19 Mitigation Obligations; Replacement of Lenders. . . . . . . . 35
SECTION 2.20 Break Funding Payments. . . . . . . . . . . . . . . . . . . . 36
SECTION 2.21 Certain Mandatory Prepayments . . . . . . . . . . . . . . . . 37
SECTION 2.22 Registration Rights . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.01 Organization Powers . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.02 Authorization; Enforceability . . . . . . . . . . . . . . . . 39
SECTION 3.03 Governmental Approvals; No Conflicts . . . . . . . . . . . . .39
SECTION 3.04 Financial Condition; No Material Adverse Change . . . . . . . 39
SECTION 3.05 Properties . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 3.06 Litigation and Environmental Matters . . . . . . . . . . . . .40
SECTION 3.07 Compliance with Laws and Agreements . . . . . . . . . . . . . 40
SECTION 3.08 Investment and Holding Company Status . . . . . . . . . . . . 41
SECTION 3.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.10 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.11 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 3.12 Security Interests . . . . . . . . . . . . . . . . . . . . . .41
SECTION 3.13 Participating Subsidiaries . . . . . . . . . . . . . . . . . .42
SECTION 3.14 Inactive Subsidiaries . . . . . . . . . . . . . . . . . . . . 42
SECTION 3.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 3.16 Excluded Items . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 3.17 Equity Acquisition Assets . . . . . . . . . . . . . . . . . . 42
Page i
SECTION 3.18 Rolling Stock. . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 3.19 Certain Acknowledgements . . . . . . . . . . . . . . . . . . .43
SECTION 3.20 No Satisfaction. . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 4.01 Effective Date . .. . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.02 Each Credit Event . . .. . . . . . . . . . . . . . . . . . . .48
SECTION 5.01 Financial Statements and Other Information. . . . . . . . . . 48
SECTION 5.02 Notices of Material Events. . . . . . . . . . . . . . . . . . 49
SECTION 5.03 Existence; Conduct of Business. . . . . . . . . . . . . . . . 50
SECTION 5.04 Payment of Obligations. . . . . . . . . . . . . . . . . . . . 50
SECTION 5.05 Maintenance of Properites; Insurance. . . . . . . . . . . . . 50
SECTION 5.06 Books and Records; Inspection Rights. . . . . . . . . . . . . 50
SECTION 5.07 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.08 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 5.09 New Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.10 Acquisition by Borrower. . . . . . . . . . . . . . . . . . . .51
SECTION 5.11 Acquisitions with Proceeds of Loans . . . . . . . . . . . . . 52
SECTION 5.12 Revolving Credit Agreement Warrants . . . . . . . . . . . . . 52
SECTION 5.13 Stock Payment Common Stock. . . . . . . . . . . . . . . . . . 53
SECTION 5.14 Conversion Shares. . . . . . . . . . . . . . . . . . . . . . .53
SECTION 6.01 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.02 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
SECTION 6.04 Fundamental Changes. . . . . . . . . . . . . . . . . . . . . .55
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions . . 56
SECTION 6.05 Hedging Agreements. . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.06 Restricted Payments. . . . . . . . . . . . . . . . . . . . . .56
SECTION 6.07 Transactions with Affiliates. . . . . . . . . . . . . . . . . 56
SECTION 6.08 Restrictive Agreements. . . . . . . . . . . . . . . . . . . . 57
SECTION 6.09 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . .57
SECTION 6.10 Management Fees from Sun World. . . . . . . . . . . . . . . . 57
SECTION 8.01 Appointment, Powers and Immunities . . . . . . . . . . . . . .61
SECTION 8.02 Administrative Agent in its Individual Capacity. . . . . . . .61
SECTION 8.03 Nature of Duties of Administrative Agent. . . . . . . . . . . 62
SECTION 8.04 Certain Rights of Administrative Agent. . . . . . . . . . . . 62
SECTION 8.05 Reliance by Administrative Agent. . . . . . . . . . . . . . . 62
SECTION 8.06 Sub-Agents. . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.07 Resignation by Administrative Agent. . . . . . . . . . . . . .63
SECTION 8.08 Non-Reliance on Administrative Agent and Other Lenders. . . . 63
SECTION 8.09 Security Documents. . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.01 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . .64
SECTION 9.02 Waivers; Amendments. . . . . . . . . . . . . . . . . . . . . .66
SECTION 9.03 Expenses; Indemnity; Damage Waiver. . . . . . . . . . . . . . 67
SECTION 9.04 Successors and Assigns. . . . . . . . . . . . . . . . . . . . 68
SECTION 9.05 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 9.06 Counterparts; Integration, Effectiveness . . . . . . . . . . .70
SECTION 9.07 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 9.08 Right of Setoff. . . . . . . . . . . . . . . . . . . . . . . .70
Page ii
SECTION 9.09 Governing Law; Jurisdiction;
Consent to Service of Process. . . . . . . . . . . . . . . . .71
SECTION 9.10 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . 71
SECTION 9.11 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 9.12 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 9.13 Foreclosure of Cadiz/Sun World Lease. . . . . . . . . . . . . 72
SECTION 9.14 Waiver of Anti-Deficiency Protection. . . . . . . . . . . . . 73
SECTION 9.15 Costs Borne by Non-Prevailing Party . . . . . . . . . . . . . 73
SECTION 9.16 Interest Rate Limitation. . . . . . . . . . . . . . . . . . . 73
SECTION 9.17 Status of ING . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.18 Amendments to Sun World Indenture . . . . . . . . . . . . . . 73
SECTION 9.19 General Release . . . . . . . . . . . . . . . . . . . . . . . 74
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 2.04 -- Borrower's Wire Instructions for Initial Borrowing
Schedule 3.13 -- Borrower's Participating Subsidiaries
Schedule 3.14 -- Borrower's Inactive Subsidiaries
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.08 -- Existing Restrictions
EXHIBITS:
Exhibit A - Additional Stock Letter Agreement
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Cadiz Reaffirmation Agreement
Exhibit D - Fee Warrant Certificate
Exhibit E - Tranche A Note, with Amendments thereto (previously executed)
Exhibit F - Tranche B Note
Exhibit G - Purchaser Certificate
Exhibit H - Registration Rights Addendum
Exhibit I - Fourth Amendment to Revolving Credit Note
Exhibit J - Fourth Modification of Pledge and Security Agreement
Exhibit K - Fourth Modification of Revolver Deed of Trust
Exhibit L - Fourth Modification of Revolver SWFG Deed of Trust
Exhibit M - Fourth Modification of Revolver Piute Deed of Trust
Exhibit N - Form of Opinion of Borrower's Counsel
Page iii
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of
March 7, 2002, among CADIZ INC. (f/k/a Cadiz Land Company, Inc.),
the LENDERS party hereto, and ING BARING (U.S.) CAPITAL LLC.
(f/k/a ING Baring (U.S.) Capital Corporation), as Administrative
Agent.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Revolving CrediL
Agreement, dated as of November 25, 1997 (the "1997 Revolving
Credit Agreement"), among Borrower, the Lenders party thereto and
the Administrative Agent, as agent for such Lenders, such Lenders
agreed to provide a revolving credit facility to Borrower;
WHEREAS, pursuant to that certain First Amendment to
Credit Agreement, dated as of September 28, 1999, by and between
Borrower, Lenders and the Administrative Agent (the "First
Amendment Agreement"), the parties agreed to amend certain terms
of the 1997 Revolving Credit Agreement;
WHEREAS, pursuant to that certain Second Amendment to
Credit Agreement, dated as of December 22, 1999, by and between
Borrower, Lenders and the Administrative Agent (the "Second
Amendment Agreement"), and the other Second Amendment Documents,
as defined in the Second Amendment Agreement (collectively, the
"Second Amendment Documents"), the parties agreed to amend
certain terms of the 1997 Revolving Credit Agreement, as amended
and in effect at that time;
WHEREAS, pursuant to that certain Third Amendment to
Credit Agreement, dated as of December 22, 2000, by and between
Borrower, Lenders and the Administrative Agent (the "Third
Amendment Agreement"), as amended by that certain First Amendment
to Third Amendment to Credit Agreement dated as of October 22,
2001 between Borrower, Lenders and the Administrative Agent, and
the other Third Amendment Documents, as defined in the Third
Amendment Agreement (collectively, the "Third Amendment
Documents"), the parties agreed to amend certain terms of the
1997 Revolving Credit Agreement, as amended and in effect at that
time;
WHEREAS, pursuant to that certain Fourth Amendment to
Credit Agreement, dated as of January 31, 2002, by and between
Borrower, Lenders and the Administrative Agent (the "Fourth
Amendment Agreement"), and the other Fourth Amendment Documents,
as defined in the Fourth Amendment Agreement (collectively, the
"Fourth Amendment Documents"), the parties agreed to amend
certain terms of the 1997 Revolving Credit Agreement, as amended
and in effect at that time;
WHEREAS, the Borrower has requested that the 1997
Revolving Credit Agreement, as amended and in effect at this
time, be amended and restated in its entirety and that
Page 1
an additional new $10 million convertible revolving
facility be added to the existing credit facility;
WHEREAS, the Lenders and the Administrative Agent are
willing to amend and restate the 1997 Revolving Credit Agreement,
as amended and in effect at this time, in its entirety on the
terms and subject to the conditions and requirements set forth in
this Agreement.
NOW THEREFORE, in consideration of the premises and
mutual covenants contained herein, the parties to this Agreement
hereby agree to amend and restate the 1997 Revolving Credit
Agreement, as amended and in effect at this time, in its entirety
as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.01. DEFINED TERMS. As used in this
Agreement, the following terms have the meanings specified below:
"ADDITIONAL STOCK LETTER AGREEMENT" means that certain
letter agreement between Borrower and Administrative Agent in the
form as attached hereto in Exhibit A that provides that Borrower
shall issue 25,000 shares of Borrower's common stock to the
Administrative Agent if at least the principal amount of
$10,000,000 of Term Loan Obligations and/or Tranche A Loans are
not prepaid (and, to the extent that Tranche A Loans are prepaid,
with the termination and permanent reduction of Tranche A
Commitments in such amount) between the Effective Date and on or
prior to July 31, 2002.
"ADMINISTRATIVE AGENT" means ING Baring (U.S.) Capital
LLC, in its capacity as administrative agent for the Lenders
hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person,
another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.
"AGREEMENT" means this Fifth Amended and Restated
Credit Agreement, dated as of the date set forth above, among
Borrower, the Lenders party hereto, and the Administrative Agent.
"APPLICABLE INTEREST RATE" means, with respect to any
Borrowing for any Interest Period, either (a) if the Borrower
does not elect the Stock Payment Election, the Cash Payment Rate,
or (b) if the Borrower elects the Stock Payment Election, the
Stock Payment Rate.
"APPLICABLE PERCENTAGE" means, with respect to any
Lender, the percentage of the total Commitments represented by
such Lender's Commitment. If the Commitments have
Page 2
terminated or expired, the Applicable Percentages shall
be determined based upon the Commitments most recently in effect,
giving effect to any assignments.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and
acceptance entered into by a Lender and an assignee (with the
consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, in the form of
Exhibit B or any other form approved by the Administrative Agent.
"AVAILABILITY PERIOD" means the period from and
including the Effective Date to but excluding the earlier of the
Maturity Date and the date of termination of the Commitments.
"BOARD" means the Board of Governors of the Federal
Reserve System of the United States of America.
"BORROWER" means Cadiz Inc., a Delaware corporation.
"BORROWING" means Loans of a Lender made, converted or
continued on the same date.
"BORROWING REQUEST" means a request by the Borrower for
a Borrowing in accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday,
Sunday or other day on which commercial banks in New York City
are authorized or required by law to remain closed.
"CADIZ REAFFIRMATION AGREEMENT" means the agreement
evidencing Borrower's assumption and reaffirmation of all
liabilities and obligations of Cadiz Valley Development
Corporation in the form as attached hereto in Exhibit C.
"CADIZ/SUN WORLD LEASE" means that certain Agricultural
Lease by and between Southwest Fruit Growers, L.P. and the
Borrower (both in its own capacity and as successor by merger to
Cadiz Valley Development Corporation), the lessors, and Sun
World, as lessee, dated as of September 13, 1996, as amended by
that certain Amendment to Lease with Lender Cure Rights between
Southwest Fruit Growers, L.P., Cadiz, Sun World and Credit
Agricole, dated as of September 13, 1996, as further amended by
that certain Amendment to Agricultural Lease, dated as of April
16, 1997, as further amended from time to time.
"CADIZ/SUN WORLD SERVICES AGREEMENT" means that certain
Services Agreement between Borrower and Sun World, dated
September 13, 1996, as amended by that certain Amendment dated as
of April 16, 1997, as further amended from time to time.
"CAPITAL LEASE OBLIGATIONS" of any Person means the
obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations
are required to be classified and accounted for as capital leases
on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
PAGE 3
"CASH EQUIVALENT" has the meaning assigned to such term
in the Sun World Indenture.
"CASH PAYMENT RATE" means the sum of (a) the LIBO Rate,
computed in accordance with Section 2.13, plus (b) 3.0%.
"CHANGE IN CONTROL" means (a) the acquisition of
ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Commission thereunder
as in effect on the date hereof), of shares representing more
than 35% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Borrower;
(b) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons who
were neither (i) nominated by the board of directors of the
Borrower nor (ii) appointed by directors so nominated; or (c) the
acquisition of direct or indirect Control of the Borrower by any
Person or group.
"CHANGE IN LAW" means (a) the adoption of any law, rule
or regulation after the date of this Agreement, (b) any change in
any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date
of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender's holding company, if any) with any request,
guideline or directive (whether or not having the force of law)
of any Governmental Authority made or issued after the date of
this Agreement.
"CHARGES" has the meaning ascribed to such term in
Section 9.16 hereof.
"CLOSING PRICE" means the last sale price per share of
Common Stock regular way or, in the case no such reported sale
takes place on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal
national securities exchange on which the Common Stock is
admitted to trading on such exchange, the average of the last
reported bid and asked prices as reported by Nasdaq, or other
similar organization if Nasdaq is no longer reporting such
information, or if not so available, the fair market price, as
determined in good faith by the Administrative Agent.
"CODE" means the Internal Revenue Code of 1986, as
amended from time to time.
"COMMISSION" means the Securities and Exchange
Commission.
"COMMITMENT" means, with respect to each Lender, the
sum of such Lenders' Tranche A Commitments and Tranche B
Commitments, as such commitments may be (a) reduced from time to
time pursuant to Section 2.09 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The aggregate amount of all of the
Lenders' Commitments on the Effective Date will be $25,000,000.
"COMMON STOCK" means authorized common stock, $0.01 par
value, of the Borrower.
Page 4
"CONTROL" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management
or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. "CONTROLLING" and
"CONTROLLED" have meanings correlative thereto.
"CONVERSION LOAN AMOUNT" shall have the meaning
ascribed to such term in Section 2.07(a) hereof.
"CONVERSION PRICE" shall have the meaning ascribed to
such term in Section 2.07(a) hereof.
"CONVERSION SHARES" shall have the meaning ascribed to
such term in Section 2.07(b) hereof.
"DEFAULT" means any event or condition which
constitutes an Event of Default or which upon notice, lapse of
time or both would, unless cured or waived, become an Event of
Default.
"DISCLOSED MATTERS" means the actions, suits and
proceedings and the environmental matters disclosed in any
periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Commission that
are publicly available.
"Dollars" or "$" refers to lawful money of the United
States of America.
"EFFECTIVE DATE" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance
with Section 9.02).
"EIGHTH WARRANT CERTIFICATE" means the Eight Warrant
Certificate issued in connection with the Fourth Amendment
Agreement.
"ELEVENTH WARRANT CERTIFICATE" means the Eleventh
Warrant Certificate issued in connection with the Fourth
Amendment Agreement.
"ENVIRONMENTAL LAWS" means all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability,
contingent or otherwise (including any liability for damages,
costs of environmental remediation, fines, penalties or
indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
Page 5
"EQUITY ACQUISITION ASSET" has the meaning set forth in
Section 5.10(c) hereof.
"EQUITY ACQUISITION THRESHOLD" has the meaning set
forth in Section 5.10(c) hereof.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether
or not incorporated) that, together with the Borrower, is treated
as a single employer under Section 414(b) or (c) of the Code or,
solely for purposes of Section 302 of ERISA and Section 412 of
the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA EVENT" means (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for which
the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d)
of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan;
(d) the incurrence by the Borrower or any of its ERISA Affiliates
of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any
ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or
to appoint a trustee to administer any Plan; (f) the incurrence
by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (g) the receipt by the Borrower or
any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to
be, insolvent or in reorganization, within the meaning of Title
IV of ERISA.
"EVENT OF DEFAULT" has the meaning assigned to such
term in Article VII.
"EXCHANGE ACT" has the meaning set forth in
Section 9.17 hereof.
"EXCLUDED ITEM" has the meaning set forth in
Section 5.10(b) hereof.
"EXCLUDED ITEMS/ROLLING STOCK THRESHOLD" has the
meaning set forth in Section 5.10(b) hereof.
"EXCLUDED TAXES" means, with respect to the
Administrative Agent, any Lender, any other recipient of any
payment to be made by or on account of any obligation of the
Borrower hereunder, (a) income or franchise taxes imposed on (or
measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United
States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request
by the Borrower under Section 2.19(b)), any withholding tax that
is imposed on amounts payable to
Page 6
such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender's failure to comply with
Section 2.17(e), except to the extent that such Foreign Lender
(or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 2.17(a).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the
weighted average (rounded upwards, if necessary, to the next
1/100 of 1%) of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"FEE WARRANT CERTIFICATE" means the three-year warrants
that will vest and become exercisable commencing on August 1,
2002 if at least the principal amount of $10,000,000 of Term Loan
Obligations and/or Tranche A Loans are not prepaid (and, to the
extent that Tranche A Loans are prepaid, with the termination and
permanent reduction of Tranche A Commitments in such amount)
between the Effective Date and on or prior to July 31, 2002, for
the purchase up to 100,000 shares of Cadiz's common stock with an
exercise price equal to the average closing price for all trading
days in July 2002, that entitles the holder thereof to purchase
up to 100,000 shares based upon the terms and conditions set
forth therein, in the form as attached hereto in Exhibit D.
"FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or controller of the
Borrower.
"FIRST AMENDMENT AGREEMENT" has the meaning ascribed to
such term in the recitals hereto.
"FIXED RATE" means, with respect to any Borrowing for
any Interest Period, either (a) if the Borrower does not elect
the Stock Payment Election, the Cash Payment Rate or (b) if the
Borrower elects the Stock Payment Election, the Stock Payment
Rate.
"FOREIGN LENDER" means any Lender that is organized
under the laws of a jurisdiction other than that in which the
Borrower is located. For purposes of this definition, the United
States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.
"FOURTH AMENDMENT AGREEMENT" has the meaning ascribed
to such term in the recitals hereto.
"FOURTH AMENDMENT DOCUMENTS" has the meaning ascribed
to such term in the recitals hereto.
"GAAP" means generally accepted accounting principles
in the United States of America.
Page 7
"GOVERNMENTAL AUTHORITY" means the government of the
United States of America, any other nation or any political
subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or
pertaining to government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means
any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
and including any obligation of the guarantor, direct or
indirect, (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation
or to purchase (or to advance or supply funds for the purchase
of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of
the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued
to support such Indebtedness or obligation; provided, that the
term Guarantee shall not include endorsements for collection or
deposit in the ordinary course of business.
"HAZARDOUS MATERIALS" means all explosive or
radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical
wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price
protection agreement or other interest or currency exchange rate
or commodity price hedging arrangement.
"INACTIVE SUBSIDIARIES" means all Subsidiaries of the
Borrower, excluding Sun World Entities, that (a) do not conduct
any business activities and (b) hold no assets or properties
(either tangible or intangible).
"INDEBTEDNESS" of any Person means, without
duplication, (a) all obligations of such Person for borrowed
money or with respect to deposits or advances of any kind,
(b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of
such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by
such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such
Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an
Page 8
account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Indebtedness
of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness
provide that such Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded
Taxes.
"INDEMNITEE" has the meaning ascribed to such term in
Section 9.03(b) hereof.
"ING" means ING Baring (U.S.) Capital LLC, a Delaware
company.
"ING COLLATERAL" means the collateral security granted,
pledged or hypothecated to the Administrative Agent or the
Lenders under the Security Documents to secure the payment and
satisfaction of the obligations hereunder and under the other
Loan Documents, including the Revolving Loan Obligations.
"INTEREST PAYMENT DATE" means the last day of the
Interest Period applicable to the Borrowing of which such Loan is
a part.
"INTEREST PERIOD" means each period commencing on the
date of such Borrowing or the last day of the next preceding
Interest Period for such Borrowing and ending thereafter on the
first to occur of March 15, June 15, September 15 and December 15
in each year, provided, that (i) except as provided in clauses
(ii) and (iii) below, if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day, (ii) any Interest Period
that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in
the last calendar month of such Interest Period) shall end on the
last Business Day of the last calendar month of such Interest
Period, and (iii) if any Interest Period would end after the
Maturity Date, such Interest Period shall end on the Maturity
Date. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made.
"LENDERS" means the Person or Persons, as the case may
be, listed on Schedule 2.01 and any other Person that shall have
become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Acceptance.
"LIBO RATE" means, with respect to any Borrowing for
any Interest Period, the rate per annum at which the
Administrative Agent is offered dollar deposits in the London
interbank market at approximately 11:30 a.m. (London time) of the
first day of the relevant Interest Period, for the number of
months comprised therein and in an amount equal to the amount of
the indebtedness to be outstanding hereunder for such Borrowing
during such Interest Period.
"LIEN" means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, hypothecation,
encumbrance, charge or security interest in, on or of such asset,
(b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title
Page 10
retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to
such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to
such securities.
"LOAN DOCUMENTS" means this Agreement, each Security
Document, each Note, the First Amendment Agreement, the Second
Amendment Documents, the Third Amendment Documents, the Fourth
Amendment Documents, and any other document, instrument or
agreement delivered, executed or to be executed under or in
connection with any of the foregoing.
"LOAN OBLIGATIONS" means collectively, the Revolving
Loan Obligations and the Term Loan Obligations.
"LOANS" OR "REVOLVING LOANS" means, collectively, the
Tranche A Loans and the Tranche B Loans, each as made pursuant to
Section 2.03 or 2.04 hereof.
"MATERIAL ADVERSE EFFECT" means a material adverse
effect on (a) the business, assets, operations, prospects or
condition, financial or otherwise, of the Borrower and the
Subsidiaries taken as a whole, (b) the ability of the Borrower to
perform any of its obligations under this Agreement or any other
Loan Document, (c) the rights of or benefits available to the
Lenders under this Agreement or any other Loan Document, or
(d) the Transactions.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than
the Loans), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and its
Subsidiaries, but excluding SWFG and PSWRI, in an aggregate
principal amount exceeding $500,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations
of the Borrower or any Subsidiary in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Hedging
Agreement were terminated at such time.
"MATURITY DATE" means January 31, 2003.
"MAXIMUM RATE" has the meaning ascribed to such term in
Section 9.16 hereof.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MORTGAGES" means, collectively, (a) any mortgage
agreement or deed of trust dated as of the Effective Date for the
benefit of Mortgagee pursuant to Section 2.08 and (b) each other
mortgage granted to Mortgagee pursuant to Sections 2.08, 5.10 and
5.11, each substantially in the form as annexed to the 1997
Revolving Credit Agreement.
"MORTGAGEE" means, with respect to any Mortgage, the
Administrative Agent as mortgagee or beneficiary thereof, for
itself and on behalf of the Lenders, under such Mortgage.
"MULTIEMPLOYER PLAN" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
Page 10
"1997 REVOLVING CREDIT AGREEMENT" has the meaning
ascribed to such term in the recitals hereto.
"NINTH WARRANT CERTIFICATE" means the Ninth Warrant
Certificate issued in connection with the Fourth Amendment
Agreement.
"NON-ADVERSE AMENDMENT" has the meaning set forth in
Section 9.19 hereof.
"NOTES" means, collectively, the Tranche A Notes and
the Tranche B Notes.
"OBLIGORS" has the meaning assigned to such term in
the Pledge and Security Agreement.
"OTHER TAXES" means any and all present or future stamp
or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise
with respect to, this Agreement.
"PARTICIPANTS" has the meaning ascribed to such term in
Section 9.04(e) hereof.
"PARTICIPATING SUBSIDIARIES" means the Subsidiaries
excluding (a)the Inactive Subsidiaries, (b) the Sun World
Entities, and (c) SWFG.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity
performing similar functions.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes that are not yet
due or are being contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's and other like Liens imposed by
law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are
being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course
of business in compliance with workers' compensation,
unemployment insurance and other social security laws or
regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like
nature, in each case in the ordinary course of business;
(e) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not
secure any monetary obligations and do not materially
detract from the value of the
Page 11
affected property or interfere with the ordinary conduct of
business of the Borrower or any Participating Subsidiary;
(f) Liens arising out of any judgment awarded against
the Borrower which have been discharged, vacated, reversed
or execution thereof stayed pending appeal;
(g) any other Lien with respect to which the Borrower
or related lessee shall have provided a bond or other
security in an amount and under terms reasonably
satisfactory to the Required Lenders and which does not
involve any material risk of the sale, forfeiture or loss of
any interest in Borrower's real or personal property; and
(h) the Liens of the Security Documents;
provided that the term "Permitted Encumbrances" shall not
include any Lien securing Indebtedness.
"PERMITTED INVESTMENTS" means:
(a) Cash Equivalents; and
(b) transactions permitted pursuant to the provisions
of Sections 5.10 and 5.11 hereof.
"PERSON" means any natural person, corporation, limited
liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.
"PLAN" means any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV
of ERISA or Section 412 of the Code or Section 302 of ERISA, and
in respect of which the Borrower or any ERISA Affiliate is (or,
if such plan were terminated, would under Section 4069 of ERISA
be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PLEDGE AND SECURITY AGREEMENTS" means, collectively,
(a) any security agreement dated as of the Effective Date for the
benefit of the Administrative Agent, for itself and on behalf of
the Lenders, pursuant to Section 2.08, (b) any stock pledge
agreement pursuant to which the shares of capital stock of each
Participating Subsidiary are pledged to the Administrative Agent,
and (c) each other security agreement executed pursuant to
Sections 2.08, 5.10 and 5.11, each substantially (to the extent
applicable) in the form as annexed to the 1997 Revolving Credit
Agreement, as amended from time to time thereafter.
"PREPAYMENT DATE" has the meaning set forth in
Section 2.11 hereof.
"PSWRI" means P.S.W.R.I. Limited, a Guernsey
corporation.
"PURCHASER CERTIFICATE" means the Purchaser Certificate
in the form as attached hereto in Exhibit G.
"REGISTER" has the meaning set forth in Section 9.04.
Page 12
"REGISTRABLE COMMON STOCK" means (a) Stock Payment
Common Stock and (b) any additional shares of Common Stock issued
or distributed by way of dividend, stock split or other
distribution in respect of the Stock Payment Common Stock, or
acquired by way of any rights offering or similar offering made
in respect of the Stock Payment Common Stock or any of the
foregoing.
REGISTRATION RIGHTS ADDENDUM means the Registration
Rights Addendum agreed to by Borrower in favor of ING in the form
attached hereto as Exhibit H.
"RELATED PARTIES" means, with respect to any specified
Person, such Person's Affiliates and the respective directors,
officers, employees, agents and advisors of such Person and such
Person's Affiliates.
"RELEASED PARTIES" has the meaning ascribed to such
term in Section 9.19 hereof.
"REQUIRED LENDERS" means, at any time, Lenders having
Revolving Credit Exposures and unused Commitments representing at
least 66 2/3% of the sum of the total Revolving Credit Exposures
and unused Commitments at such time.
"RESTRICTED PAYMENT" means any dividend or other
distribution (whether in cash, securities or other property) with
respect to any shares of any class of capital stock of the
Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such
shares of capital stock of the Borrower or any option, warrant or
other right to acquire any such shares of capital stock of the
Borrower.
"REVISED AND RESTATED ADDITIONAL DRAW WARRANT
CERTIFICATE" means the Revised and Restated Additional Draw
Certificate issued in connection with the Fourth Amendment
Agreement.
"REVISED AND RESTATED INITIAL DRAW CERTIFICATE" means
the Revised and Restated Initial Draw Certificate issued in
connection with the Fourth Amendment Agreement.
"REVOLVER DEED OF TRUST" means that certain Deed of
Trust, Assignment of Rents, Security Agreement, Financing
Statement and Fixture Filing, dated November 25, 1997, as amended
from time to time, executed by Borrower in favor of the
Administrative Agent for the benefit of itself and the Lenders,
which was recorded on November 26, 1997, as Instrument No.
19970434910 in the Official Records of San Bernardino County
California.
"REVOLVER (PIUTE) DEED OF TRUST" means that certain
Deed of Trust, Assignment of Rents, Security Agreement, Financing
Statement and Fixture Filing, dated as of July 1, 1999, as
amended from time to time, executed by Borrower in favor of the
Administrative Agent for the benefit of itself and the Lenders,
which was recorded on December 23, 1999, as Instrument No. 524213
in the Official Records of San Bernardino County California.
"REVOLVER (SWFG) DEED OF TRUST" means that certain
Deed of Trust, Assignment of Rents, Security Agreement, Financing
Statement and Fixture Filing, dated October 30, 1998,
Page 13
as amended from time to time, executed by Borrower in favor of
the Administrative Agent for the benefit of itself and the
Lenders, which was recorded on November 4, 1998, as Instrument
No. 19980473321 in the Official Records of San Bernardino County
California.
"REVOLVER DEEDS OF TRUST" means, collectively, the
Revolver Deed of Trust, the Revolver (Piute) Deed of Trust, the
Revolver (SWFG) Deed of Trust and any and all mortgages and deeds
of trust delivered pursuant to Sections 5.10 and 5.11 hereof.
"REVOLVING CREDIT EXPOSURE" means, with respect to any
Lender at any time, the sum of the outstanding principal amount
of such Lender's Tranche A Loans and Tranche B Loans.
"REVOLVING CREDIT AGREEMENT WARRANTS" collectively, the
Revised and Restated Initial Draw Warrant Certificate, the
Revised and Restated Additional Draw Warrant Certificate, the
Eighth Warrant Certificate, the Ninth Warrant Certificate, the
Tenth Warrant Certificate, the Eleventh Warrant Certificate and
the Fee Warrant Certificate, each as revised, restated and in
effect from time to time.
"REVOLVING LOAN OBLIGATIONS" means the obligations of
Borrower to the Administrative Agent and/or the Lenders under the
Loan Documents, as amended and in effect from time to time.
"ROLLING STOCK": has the meaning assigned to such term
in the Pledge and Security Agreement.
"S&P" means Standard & Poor's.
"SECOND AMENDMENT AGREEMENT" has the meaning ascribed
to such term in the recitals hereto.
"SECOND AMENDMENT DOCUMENTS" has the meaning ascribed
to such term in the recitals hereto.
"SECURITIES ACT" has the meaning set forth in
Section 9.17 hereof.
"SECURITY DOCUMENTS" means, collectively, the Mortgages
and the Pledge and Security Agreement.
"STOCK PAYMENT" has the meaning set forth in
Section 2.14 hereof.
"STOCK PAYMENT COMMON STOCK" has the meaning set forth
in Section 5.13 hereof.
"STOCK PAYMENT ELECTION" has the meaning set forth in
Section 2.14 hereof.
Page 14
"STOCK PAYMENT ELECTION DEADLINE" has the meaning set
forth in Section 2.14 hereof.
"STOCK PAYMENT ELECTION REQUEST" means a request by
Borrower to make a payment of accrued interest for a Borrowing
through the remittance of the Stock Payment in accordance with
Section 2.14.
"STOCK PAYMENT RATE" means the sum of (a) the LIBO
Rate, computed in accordance with Section 2.13, plus (b) 7.0%.
"SUBSIDIARY" means, with respect to any Person (the
"parent") at any date, any corporation, limited liability
company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the
parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date,
as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities
or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or
(b) that is, as of such date, otherwise Controlled, by the parent
or one or more subsidiaries of the parent or by the parent and
one or more subsidiaries of the parent.
"SUBSIDIARY" means any subsidiary of the Borrower.
"SUN WORLD" means Sun World International, Inc., a
Subsidiary of the Borrower.
"SUN WORLD DOCUMENTS" has the meaning assigned to such
term in the Term Fifth Global Amendment Agreement.
"SUN WORLD ENTITIES" means Sun World and its
subsidiaries.
"SUN WORLD INDENTURE" means that certain Indenture,
dated as of April 16, 1997, among Sun World, Borrower, the
Subsidiary Guarantors thereto, and the Sun World Trustee, as
amended by that certain Amendment to Indenture, dated as of
October 9, 1997, as further amended by any Non-Adverse
Amendments.
"SUN WORLD NOTES" means the $115,000,000 of 11 1/4%
First Mortgage Notes due April 15, 2004 issued pursuant to the
Sun World Indenture.
"SUN WORLD TRUSTEE" means IBJ ▇▇▇▇▇▇▇▇ Bank & Trust
Company in its capacity as the trustee under the Sun World
Indenture.
"SWFG" means Southwest Fruit Growers, L.P., a Delaware
limited partnership.
"TAXES" means any and all present or future taxes,
levies, imposts, duties, deductions, charges or withholdings
imposed by any Governmental Authority.
"TENTH WARRANT CERTIFICATE" means the Tenth Warrant
Certificate issued in connection with the Fourth Amendment
Agreement.
"TERM LOAN OBLIGATIONS" means the obligations of
Borrower to ING under the Term Loan Documents.
Page 15
"TERM LOAN DOCUMENTS" means collectively, the Credit
Documents (as defined in the Term Fifth Global Amendment
Agreement), each as amended and modified from time to time.
"TERM FIFTH GLOBAL AMENDMENT AGREEMENT" means that
certain Fifth Global Amendment Agreement, dated as of January 31,
2002, between Cadiz, as borrower, and ING, as lender, as amended
and modified from time to time.
"THRESHOLD" has the meaning assigned to such term in
Section 2.11(c).
"THIRD AMENDMENT AGREEMENT" has the meaning ascribed to
such term in the recitals hereto.
"THIRD AMENDMENT DOCUMENTS" has the meaning ascribed to
such term in the recitals hereto.
"TITLE POLICIES" has the meaning ascribed to such term
in Section 4.01(r) hereof.
"TRANCHE A COMMITMENT" means, with respect to each
Lender, the commitment of such Lender to make Tranche A Loans,
expressed as an amount representing the maximum aggregate amount
of such Lender's Tranche A Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant
to Section 2.09 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender's Tranche A
Commitment is set forth on Schedule 2.01, or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed
its Tranche A Commitment, as applicable. The aggregate amount of
the Tranche A Commitments on the Effective Date will be
$15,000,000, which amount has been fully drawn and is
outstanding.
"TRANCHE A LENDERS" means the Lenders listed on
Schedule 2.01 who have a Tranche A Commitment greater than zero
set forth under their names, subject to the provisions of
Section 9.04 hereof pertaining to Persons becoming or ceasing to
be Lenders; "Tranche A Lender" shall mean any one of them.
"TRANCHE A LOANS" shall have the meaning ascribed to
such term in Section 2.01(a) hereof.
"TRANCHE A NOTES" means the Notes issued by Borrower
and payable to the order of the Lenders, as evidence of the
Tranche A Loans, each in the form of Exhibit E hereto, and any
extensions, renewals, modifications or replacements thereof or
therefor.
"TRANCHE A REVOLVING CREDIT EXPOSURE" means, with
respect to any Tranche A Lender at any time, the sum of the
outstanding principal amount of such Lender's Tranche A Loans.
"TRANCHE B COMMITMENT" means, with respect to each
Lender, the commitment of such Lender to make Tranche B Loans,
expressed as an amount representing the maximum aggregate amount
of such Lender's Tranche B Revolving Credit Exposure hereunder,
as such
Page 16
commitment may be (a) reduced from time to time pursuant to
Section 2.09 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender's Tranche B
Commitment is set forth on Schedule 2.01, or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed
its Tranche B Commitment, as applicable. The aggregate amount of
the Tranche B Commitments on the Effective Date will be
$10,000,000.
"TRANCHE B LENDERS" means the Lenders listed on
Schedule 2.01 who have a Tranche B Commitment greater than zero
set forth opposite their names, subject to the provisions of
Section 9.04 hereof pertaining to Persons becoming or ceasing to
be Lenders; "Tranche B Lender" shall mean any one of them.
"TRANCHE B LOANS" shall have the meaning ascribed to
such term in Section 2.01(b) hereof.
"TRANCHE B NOTES" means the Notes issued by Borrower
and payable to the order of the Lenders, as evidence of the
Tranche B Loans, each in the form of Exhibit F hereto, and any
extensions, renewals, modifications or replacements thereof or
therefor.
"TRANCHE B REVOLVING CREDIT EXPOSURE" means, with
respect to any Tranche B Lender at any time, the sum of the
outstanding principal amount of such Lender's Tranche B Loans.
"TRANSACTIONS" means the execution, delivery and
performance by the Borrower of this Agreement, the other Loan
Documents, the transactions contemplated herein and therein, the
borrowing of Loans, and the use of the proceeds thereof.
"WITHDRAWAL LIABILITY" means liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any
Person, any corporation, partnership, or other entity of which
all of the equity securities or other ownership interests (other
than, in the case of a corporation, directors' qualifying shares)
are directly or indirectly owned or controlled by such Person or
one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02 [Intentionally Omitted]
SECTION 1.03 TERMS GENERALLY. The definitions of
terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by
the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word
"shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to
such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or
Page 17
modifications set forth herein), (b) any reference herein to
any Person shall be construed to include such Person's
successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed
to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset"
and "property" shall be construed to have the same meaning
and effect and to refer to any and all tangible and
intangible assets and properties, including cash,
securities, accounts and contract rights.
SECTION 1.04 ACCOUNTING TERMS; GAAP. Except as
otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time;
provided that, if the Borrower notifies the Administrative
Agent that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or
if the Administrative Agent notifies the Borrower that the
Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in
the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied
immediately before such change shall have become effective
until such notice shall have been withdrawn or such
provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01 COMMITMENTS.
(a) TRANCHE A LOANS. Subject to the terms and
conditions set forth herein, each Lender severally agrees,
upon Borrower's request, to make loans (the "Tranche A
Loans") to the Borrower from time to time during the
Availability Period in an aggregate principal amount that
will not result in such Lender's Tranche A Revolving Credit
Exposure exceeding such Lender's Tranche A Commitment.
Within the foregoing limits and subject to the terms and
conditions set forth herein, and only if the full
$10,000,000 in principal amount of the Tranche B Loans is
outstanding and/or has been converted into Conversion Shares
in accordance with Section 2.07 hereof, the Borrower may
borrow, prepay and reborrow Tranche A Loans.
(b) TRANCHE B LOANS. Subject to the terms and
conditions set forth herein, each Lender severally agrees,
upon Borrower's request, to make loans (the "Tranche B
Loans") to the Borrower from time to time during the
Availability Period in an aggregate principal amount that
will not result in such Lender's Tranche B Revolving Credit
Exposure exceeding such Lender's Tranche B Commitment.
Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay
and reborrow Tranche B Loans.
SECTION 2.02 LOANS AND BORROWINGS.
(a) Each Tranche A Loan shall be made as part of a
Borrowing consisting of Tranche A Loans made by the Lenders
ratably in accordance with their respective Tranche A
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Commitments. The failure of any Lender to make any Tranche
A Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the
Tranche A Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure
to make Tranche A Loans as required.
(b) Each Tranche B Loan shall be made as part of a
Borrowing consisting of Tranche B Loans made by the Lenders
ratably in accordance with their respective Tranche B
Commitments. The failure of any Lender to make any Tranche
B Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the
Tranche B Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure
to make Tranche B Loans as required.
(c) Each Borrowing shall be comprised entirely of
Applicable Interest Rate Loans as the Borrower may request
in accordance herewith. Each Borrowing shall be in an
aggregate amount equal to $2,500,000 or a larger multiple of
$100,000 (provided that a Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the
total Commitments).
(d) The Borrower shall not be entitled to request, or
to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03 REQUESTS FOR BORROWINGS. Except for the
Tranche B Loan Borrowing described in Section 2.04, the
Borrower shall notify the Administrative Agent of such
request by telephone not later than 1 p.m., New York City
time, three Business Days before the date of the proposed
Borrowing. Any such notices received after 1 p.m., New York
time, shall be deemed received on the next Business Day,
Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy
to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in
compliance with Section 2.02:
(i) the aggregate amount of the requested
Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is a Tranche A Loan or a
Tranche B Loan; and
(iv) the location and number of the Borrower's account
to which funds are to be disbursed.
Promptly following receipt of a Borrowing Request in accordance
with this Section 2.03, the Administrative Agent shall (a) advise
each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing and
(b) as applicable, advise the Borrower of the number of shares of
the Borrower's Common Stock that may be purchased as a result of
the requested Borrowing through the exercise of the Revolving
Credit Agreement Warrants.
Page 19
SECTION 2.04 BORROWING. As of the Effective Date,
the Borrower shall be deemed to have requested a Tranche B Loan
Borrowing in the aggregate amount of $10,000,000, with the
Effective Date being the date of such Borrowing. The location
and number of the Borrower's account to which these funds are to
be disbursed are set forth in Schedule 2.04 hereto.
SECTION 2.05 [INTENTIONALLY OMITTED]
SECTION 2.06 FUNDING OF BORROWINGS.
(a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of
immediately available funds by 1 p.m., New York City time,
to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to
the Borrower by promptly crediting the amounts so received,
in like funds, to an account maintained and designated by
the Borrower in the applicable Borrowing Request (or in the
case of the Borrowing on the Effective Date, as set forth in
Schedule 2.04 hereof).
(b) Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of
any Borrowing that such Lender will not make available to
the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in
accordance with paragraph (a) of this Section 2.06 and may,
in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender
has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable
Lender hereby agrees to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding
the date of payment to the Administrative Agent, at the
interest rate applicable to that Loan. If such Lender pays
such amount to the Administrative Agent, then such amount
shall constitute such Lender's Loan included in such
Borrowing.
SECTION 2.07 CONVERSION RIGHTS FOR HOLDERS OF TRANCHE
B LOANS.
(a) CONVERSION RIGHTS. Each Tranche B Lender shall at
any time have the right (at its sole option) to convert the
unpaid principal and interest thereof, up to a maximum of
(x) such Tranche B Lender's pro rata share of the Tranche B
Loans plus (y) all accrued and unpaid interest thereon that
is in arrears and delinquent at the time of such conversion
(collectively, such amount a Tranche B Lender's "Conversion
Loan Amount"), into the common stock of Borrower pursuant to
the terms hereof. The number of shares of Common Stock to
be issued to such Tranche B Lender upon such conversion
shall equal (x) such Tranche B Lender's Conversion Loan
Amount as of such conversion date, divided by (y) a price
per share initially equal to $8.00 (the "Conversion Price").
The Conversion Price is subject to certain anti-dilution
adjustments provided for below. Within seven (7) Business
Days of its receipt of a written notice from a Tranche B
Lender that sets forth the Conversion Loan Amount that the
Tranche B Loans is electing to be converted in accordance
with the terms of this Section 2.07, Borrower shall issue
the Conversion Shares relating to such election to such
Tranche B Lender, provided
Page 20
that Borrower shall make good faith efforts to issue and
deliver such certificate prior to the expiration of such
seven Business Day Period.
(b) ANTI-DILUTION PROVISIONS. The Conversion Price
and the number and kind of securities purchasable upon the
exercise of the conversion rights set forth above (the
"Conversion Shares") shall be subject to adjustment from
time to time upon the happening of certain events as
hereinafter provided in this Section 2.07. The Conversion
Price in effect at any time and the Conversion Shares shall
be subject to adjustment as follows:
(1) In case the Borrower shall (i) pay a dividend or
make a distribution on its shares of Common Stock in shares
of Common Stock, (ii) subdivide or reclassify its
outstanding Common Stock in shares of Common Stock into a
greater number of shares, or (iii) combine or reclassify its
outstanding Common Stock into a smaller number of shares,
then the Conversion Price in effect at the time of the
record date (and thereafter) for such dividend or
distribution or of the effective date of such subdivision,
combination or reclassification shall be adjusted so that
such Conversion Price shall equal the price determined by
multiplying the Conversion Price in effect immediately prior
to such record date or effective date by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding on such record date or effective date, and the
denominator of which is the number of shares of Common stock
outstanding immediately after such dividend, distribution,
subdivision, combination or reclassification. For example,
if the Borrower declares a 2 for 1 stock dividend or stock
split and the Conversion Price immediately prior to such
event was $8.00 per share, the adjusted Conversion Price
immediately after such event would be $4.00 per share.
Such adjustment shall be made successively whenever any
event listed in this Subsection (1) shall occur.
(2) In case the Borrower shall hereafter issue rights
or warrants to all holders of its Common Stock entitling
them to subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at a price (or
having a conversion price or exercise price per share) less
than the current market price of the Common Stock (as
defined below) on the record date mentioned below, then the
Conversion Price shall be adjusted so that the Conversion
Price shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the record
date mentioned below by a fraction, the numerator of which
shall be the sum of the number of shares of Common Stock
outstanding on the record date mentioned below and the
number of additional shares of Common Stock which the
aggregate offering price of the total number of shares of
Common Stock so offered (or the aggregate conversion or
exercise price of the securities so offered) would purchase
at such current market price per share of the Common Stock,
and the denominator of which shall be the sum of the number
of shares of Common Stock outstanding on such record date
and the number of additional shares of Common Stock offered
for subscription or purchase (or into which the convertible
securities so offered are convertible). Such adjustment
shall be made successively whenever such rights or warrants
are issued and shall become effective immediately after the
record date for the determination of shareholders entitled
to receive such rights or warrants; and to the extent that
shares of Common Stock are not delivered
Page 21
(or securities convertible or exercisable into Common Stock
are not delivered) after the expiration of such rights or
warrants the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the
adjustments made upon the issuance of such rights or
warrants been made upon the basis of delivery of only the
number of shares of Common Stock (or securities convertible
into or exercisable for Common Stock) actually delivered.
(3) In case the Borrower shall hereafter distribute to
all holders of its Common Stock evidences of its
indebtedness or assets (excluding regular cash dividends or
distributions and dividends or distributions referred to in
Subsection (1) above) or subscription rights or warrants
(excluding those referred to in Subsection (2) above), then
in each such case the Conversion Price in effect thereafter
shall be determined by multiplying the Conversion Price in
effect immediately prior thereto by a fraction, the
numerator of which shall be the total number of shares of
Common Stock outstanding multiplied by the current market
price per share of Common Stock (as defined in
Subsection (8) below), less the aggregate fair market value
(as determined in good faith by the Borrower's Board of
Directors and reasonably acceptable to the Administrative
Agent on behalf of the Tranche B Lenders) of said assets or
evidences of indebtedness so distributed or of such rights
or warrants, and the denominator of which shall be the total
number of shares of Common Stock outstanding multiplied by
such current market price per share of Common Stock.
Such adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately
after the record date for the determination of shareholders
entitled to receive such distribution.
(4) In case the Borrower shall issue shares of its
Common Stock (excluding shares issued (a) in any of the
transactions described in Subsection (1) above, (b) upon
exercise of options granted to the Borrower's employees
under a plan or plans adopted by the Borrower's Board of
Directors and approved by its shareholders, if such shares
would otherwise be included in this Subsection (4), (but
only to the extent that the aggregate number of shares
excluded hereby and issued after the date hereof, shall not
exceed 5% of the Borrower's Common Stock outstanding at the
time of any issuance), (c) upon exercise of options and
warrants outstanding at the date hereof, and conversion of
the loan amounts provided for herein, (d) upon the exercise
or conversion of any security as to which the Conversion
Price has already been adjusted pursuant to Subsection (5)
below, and (e) to shareholders of any corporation which
merges into the Borrower in proportion to their stock
holdings of such corporation immediately prior to such
merger, upon such merger, or issued in a bona fide public
offering pursuant to a firm commitment underwriting, but
only if no adjustment is required pursuant to any other
provision of this Section 2.07(b) (without regard to
Subsection (9) below) with respect to the transaction giving
rise to such rights) for a consideration per share less than
the current market price per share defined in Subsection (8)
below, then on the date the Borrower fixes the offering
price of such additional shares, the Conversion Price shall
be adjusted immediately thereafter so that it shall equal
the price determined by multiplying the Conversion Price in
effect immediately prior thereto by a fraction, the
numerator of which shall be the sum of the number of shares
of Common Stock outstanding
Page 22
immediately prior to the issuance of such additional shares
and the number of shares of Common Stock which the aggregate
consideration received (determined as provided in
Subsection (7) below) for the issuance of such additional
shares would purchase at such current market price per share
of Common Stock, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately
after the issuance of such additional shares.
Such adjustment shall be made successively whenever such an
issuance is made; provided, however, that no such adjustment
shall be made unless, in such issuance, the Borrower issues
shares of Common Stock in an amount which, when combined
with all other issuances of Common Stock after the date
hereof and all other issuances of securities convertible
into or exchangeable for its Common Stock after the date
hereof, which securities are excluded from Subsections (4)
or (5) by operation of this proviso or the proviso in the
last Section of Subsection (5), would exceed 20% of the
Borrower's Common Stock outstanding immediately prior to the
time of such issuance.
(5) In case the Borrower shall issue any securities
convertible into or exercisable or exchangeable for its
Common Stock (excluding securities issued in transactions
described in Subsections (2) and (3) above) for a
consideration per share of Common Stock initially
deliverable upon conversion, exercise or exchange of such
securities (determined as provided in Subsection (7) below)
less than the current market price per share (as defined in
Subsection (8) below) in effect immediately prior to the
issuance of such securities, then the Conversion Price shall
be adjusted immediately thereafter so that it shall equal
the price determined by multiplying the Conversion Price in
effect immediately prior thereto by a fraction, the
numerator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to the
issuance of such securities and the number of shares of
Common Stock which the aggregate consideration received
(determined as provided in Subsection (7) below) for such
securities would purchase at such current market price per
share of Common Stock, and the denominator of which shall be
the sum of the number of shares of Common Stock outstanding
immediately prior to such issuance and the maximum number of
shares of Common Stock of the Borrower deliverable upon
conversion or exercise of, or in exchange for, such
securities at the initial conversion or exchange price or
rate.
Such adjustment shall be made successively whenever such an
issuance is made; provided, however, that no such adjustment
shall be made unless, in such issuance, the Borrower issues
securities convertible into or exercisable or exchangeable
for a number of shares of its Common Stock in an amount
which, when combined with all other issuances of Common
Stock after the date hereof and all other issuances of
securities convertible into or exercisable or exchangeable
for its Common Stock after the date hereof, which securities
are excluded from Subsections (4) or (5) by operation of
this proviso or the proviso in the last Section of
Subsection (4), would exceed 20% of the Borrower's Common
Stock outstanding immediately prior to the time of such
issuance.
(6) Whenever the Conversion Price is adjusted pursuant
to Subsections (1), (2), (3), (4) and (5) above, the number
of Conversion Shares purchasable pursuant to the terms
hereof shall simultaneously be adjusted by multiplying the
number of
Page 23
Conversion Shares issuable upon conversion pursuant to the
terms hereof immediately prior to such adjustment by the
Conversion Price in effect immediately prior to such
adjustment and dividing the product so obtained by the
Conversion Price, as adjusted.
(7) For purposes of any computation respecting
consideration received pursuant to Subsections (4) and (5)
above, the following shall apply:
(A) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of
such cash, provided that in no case shall any deduction be
made for any commissions, discounts or other expenses
incurred by the Borrower for any underwriting of the issue
or otherwise in connection therewith:
(B) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than
cash, the consideration other than cash shall be deemed to
be the fair market value thereof as determined in good faith
by the Board of Directors of the Borrower (irrespective of
the accounting treatment thereof) and reasonably acceptable
to the Administrative Agent on behalf of the Tranche B
Lenders; and
(C) in the case of the issuance of securities
convertible into or exchangeable or exercisable for shares
of Common Stock, the aggregate consideration received
therefor shall be deemed to be the consideration received by
the Borrower for the issuance of such securities plus the
additional minimum consideration, if any, to be received by
the Borrower upon the conversion, exercise or exchange
thereof (the consideration in each case to be determined in
the same manner as provided in clauses (A) and (B) of this
Subsection (7)).
(8) For the purpose of any computation under
Subsections (2), (3), (4) and (5) above, the current market price
per share of Common Stock at any date shall be deemed to be the
average of the daily closing prices for 30 consecutive business
days before such date. The closing price for each day shall be
the last sale price regular way or, in case no such reported sale
takes place on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal
national securities exchange on which the Common Stock is
admitted to trading or listed, or if not listed or admitted to
trading on such exchange, the average of the last reported bid
and asked prices as reported by NASDAQ, or other similar
organization if NASDAQ is no longer reporting such information,
of if not so available, the fair market price as determined in
good faith by the Board of Directors and reasonably acceptable to
the Administrative Agent on behalf of the Tranche B Lenders.
(9) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or
decrease of at least five cents ($0.05) in such price; provided,
however, that any adjustments which by reason of this
Subsection (9) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment
required to be made hereunder. All calculations pursuant to the
terms hereof shall be made to the nearest cent or to the nearest
one-
Page 24
hundredth of a share, as the case may be. Anything herein to the
contrary notwithstanding, the Borrower shall be entitled, but
shall not be required, to reduce the Conversion Price, in
addition to those changes required by the terms and provisions
hereof, as it, in its sole discretion, shall determine to be
advisable in order that any dividend or distribution in shares of
Common Stock, subdivision, reclassification or combination of
Common Stock, issuance of warrants to purchase Common Stock or
distribution or evidences of indebtedness or other assets
(excluding cash dividends) referred to hereinabove in the terms
and provisions hereof hereafter made by the Borrower to the
holders of its Common Stock shall not result in any tax to such
holders of its Common Stock or securities convertible into or
exercisable or exchangeable Common Stock.
(10) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (1) above, a Tranche B
Lender shall become entitled to receive any shares of the
Borrower, other than Common Stock, thereafter the number of such
other shares so receivable upon conversion pursuant to the terms
hereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in
Subsections (1) to (9), inclusive above. The Borrower may retain
a firm of independent certified public accountants selected by
the Board of Directors (who may be the regular accountants
employed by the Borrower) to make any computation required
pursuant to the terms hereof, and a certificate signed by such
firm shall be conclusive evidence of the correctness of such
adjustment absent manifest error or negligence.
(c) OFFICER'S CERTIFICATE. Whenever the Conversion
Price or number of Conversion Shares shall be adjusted as
required by the provisions of this Section 2.07, the
Borrower shall forthwith file in the custody of its
Secretary or an Assistant Secretary at its principal office
and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Conversion Price or number
of Conversion Shares determined as herein provided, setting
forth in reasonable detail the facts requiring such
adjustment, including a statement of the number of
additional shares of Common Stock, if any, and such other
facts as shall be necessary to show the reason for and the
manner of computing such adjustment. Each such officer's
certificate shall be made available at all reasonable times
for inspection by any Tranche B Lender and the Borrower
shall, forthwith after each such adjustment, mail a copy by
certified mail of such certificate to such Tranche B Lender.
(d) NOTICES TO TRANCHE B LENDERS. So long any Tranche
B Lender shall have the conversion rights set forth herein,
(i) if the Borrower shall pay any dividend or make any
distribution upon the Common Stock or (ii) if the Borrower
shall offer to the holders of Common Stock for subscription
or purchase by them any share of or class of its capital
stock or any other rights or (iii) if any capital
reorganization of the Borrower, reclassification of the
capital stock of the Borrower, consolidation or merger of
the Borrower with or into another entity, sale, lease, or
transfer of all or substantially all of the property and
assets of the Borrower to another entity, or voluntary or
involuntary dissolution, liquidation or winding up of the
Borrower shall be effected, then in any such case, the
Borrower shall cause to be mailed by certified mail to such
Tranche B Lender, at least fifteen days prior the record
date specified in (x) or (y) below, as the case may be, a
notice containing a brief description of the proposed action
and stating the date on which
Page 25
(x) a record is to be taken for the purpose of such
dividend, distribution or offer of rights, or (y) such
reclassification, reorganization, consolidation, merger,
conveyance, lease, transfer, sale dissolution, liquidation
or winding up is to take place and the date, if any is to be
fixed, as of which the holders of Common Stock or other
securities shall be entitled to receive cash or other
property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, lease,
transfer, sale, dissolution, liquidation or winding up.
(e) RECLASSIFICATION, REORGANIZATION OR MERGER. In
case of any reclassification, capital reorganization or
other change of outstanding shares of Common Stock of the
Borrower, or in case of any consolidation or merger of the
Borrower with or into another entity (other than a merger
with a subsidiary in which merger the Borrower is the
continuing corporation and which does not result in any
reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable
upon conversion of Conversion Loan Amounts pursuant to the
terms hereof) or in case of any sale, lease, or conveyance
to another entity of all or substantially all of the
property and assets of the Borrower, the Borrower shall, as
a condition precedent to such transaction, cause effective
provisions to be made so that each Tranche B Lender shall
have the right thereafter by conversion of Conversion Loan
Amounts pursuant to the terms hereof, to purchase the kind
and amount of shares of stock and other securities and
property receivable upon such reclassification, capital
reorganization and other change, consolidation, merger,
sale, lease or conveyance by a holder of the number of
shares of Common Stock which might have been purchased upon
conversion of Conversion Loan Amounts pursuant to the terms
hereof immediately prior to such reclassification, change,
consolidation, merger, sale, lease or conveyance. Any such
provision shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the
adjustments provided for herein. The Borrower shall not
effect any such reorganization, consolidation, merger, sale
or conveyance unless prior to or simultaneously with the
consummation thereof the survivor or successor corporation
(if other than the Borrower) resulting from such
reorganization, consolidation or merger or the corporation
purchasing such assets shall assume by written instrument
executed and sent to each Tranche B Lender of the obligation
to deliver to such Tranche B Lender such shares of stock,
securities or assets as, in accordance with the foregoing
provisions, such Tranche B Lender may be entitled to
receive, and containing the express assumption by such
successor corporation of the due and punctual performance
and observance of every provision herein to be performed and
observed by the Borrower and of all liabilities and
obligations of the Borrower hereunder. The foregoing
provisions of this Section 2.07(e) shall similarly apply to
successive reclassifications, capital reorganizations, and
changes of shares of Common Stock and to successive
consolidations, mergers, sales, leases or conveyances. In
the event that in connection with any such capital
reorganization or reclassification, consolidation, merger,
sale, lease or conveyance, additional shares of Common Stock
shall be issued in exchange, conversion, substitution, or
payment, in whole or in part, for a security of the Borrower
other than Common Stock, any such issue shall be treated as
an issue of Common Stock covered by the provisions of
Subsection 2.07(b)(1) hereof.
SECTION 2.08 SECURITY. The Borrower's obligations
under this Agreement shall be secured in accordance with
and/or have the benefit of the Pledge and Security
Agreement, the Mortgages, any other Security Document, and
each other mortgage, security interest, pledge agreement or
other document granted pursuant to Sections 5.09, 5.10 and
5.11.
Page 26
SECTION 2.09 TERMINATION AND REDUCTION OF
COMMITMENTS.
(a) Unless previously terminated, the Commitments
shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from
time to time reduce, the Tranche A Commitments; provided
that (i) each reduction of the Tranche A Commitments shall
be in an amount that is an integral multiple of $500,000 and
not less than $2,500,000 and (ii) the Borrower shall not
terminate or reduce the Tranche A Commitments if, after
giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.11, the sum of the Tranche A
Revolving Credit Exposures would exceed the total Tranche A
Commitments.
(c) Subject to the Tranche B Lenders right to exercise
its conversion rights under Section 2.07 hereof, the
Borrower may at any time terminate, or from time to time
reduce, the Tranche B Commitments; provided that (i) each
reduction of the Tranche B Commitments shall be in an amount
that is an integral multiple of $500,000 and not less than
$2,500,000, (ii) the Borrower shall not terminate or reduce
the Tranche B Commitments unless the Tranche A Commitments
have been reduced to zero and all other Loan Obligations
(excluding the principal of the Tranche B Loans) have been
repaid in full, and (iii) the Borrower shall not terminate
or reduce the Tranche B Commitments if, after giving effect
to any concurrent prepayment of the Loans in accordance with
Section 2.11, the sum of the Tranche B Revolving Credit
Exposures would exceed the total Tranche B Commitments.
(d) The Borrower shall notify the Administrative Agent
of any election to terminate or reduce the Tranche A
Commitments under paragraph (b) of this Section at least six
(6) Business Days prior to the effective date of such
termination or reduction, specifying such election and the
effective date thereof. The Borrower shall notify the
Administrative Agent of any election to terminate or reduce
the Tranche B Commitments under paragraph (c) of this
Section at least ten (10) Business Days prior to the
effective date of such termination or reduction, specifying
such election and the effective date thereof, which
termination or reduction shall be subject to the Tranche B
Lenders rights to exercise the conversion rights under
Section 2.07 hereof at any time prior to the expiration of
such ten (10) Business Day period. Promptly following
receipt of any notice, the Administrative Agent shall advise
the Lenders of the contents thereof. Each notice delivered
by the Borrower pursuant to this Section 2.09 shall be
irrevocable; provided that a notice of termination of the
Tranche A Commitments or Tranche B Commitments delivered by
the Borrower may state that such notice is conditioned upon
the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective
date) if such condition is not satisfied. Any termination
or reduction of the Tranche A Commitments or Tranche B
Commitments shall be permanent. Each reduction of the
Tranche A Commitments or Tranche B Commitments shall be made
ratably among the Lenders in accordance with their
respective Tranche A Commitments or Tranche B Commitments.
(e) If at any time the aggregate outstanding principal
amount of all of the Loans made by any Lender shall exceed
the amount of the Commitment of such Lender, the Borrower
shall immediately upon receipt of notice thereof from the
Administrative Agent or
Page 27
such Lender, or immediately upon the Borrower's acquiring
actual knowledge thereof, prepay the Loans of such Lender to
the extent necessary to eliminate such excess.
(f) Notwithstanding anything herein to the contrary,
the sum of the aggregate outstanding principal balance of
all Loans made by all Lenders at any one time shall not
exceed the aggregate amount of all Commitments as then in
effect. If at any time the aggregate outstanding principal
balance of the Loans exceeds the applicable limit stated in
the immediately preceding sentence, the Borrower shall
immediately upon receipt of notice thereof from the
Administrative Agent or such Lender, or immediately upon the
Borrower's acquiring actual knowledge thereof, prepay the
Loans to the extent necessary to eliminate such excess.
(g) Any reduction of the Commitments under this
Section 2.09 shall apply as a proportional and permanent
reduction of the Commitments of each of the Lenders. If the
aggregate outstanding principal balance of the Loans exceeds
any applicable limit specified hereunder after giving effect
to any such reduction of the Commitments, Borrower shall
immediately prepay such Loans to the extent necessary to
eliminate such excess.
(h) In the event any reduction in the Commitments is
made in accordance with this Section 2.09, the
Administrative Agent will issue to the Borrower and each
Lender a revised Schedule 2.01 to this Agreement reflecting
such reduction, which revised Schedule 2.01 shall supersede
and replace the prior version thereof and shall be
substituted by each party in lieu thereof.
SECTION 2.10 REPAYMENT OF LOANS; EVIDENCE OF DEBT.
(a) The Borrower hereby unconditionally promises to
pay to the Administrative Agent for the account of each
Lender the then unpaid principal amount of each Loan on the
Maturity Date.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from
each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from
time to time hereunder.
(c) The Administrative Agent shall maintain accounts
in which it shall record (i) the amount of each Loan made
hereunder and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the
Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained
pursuant to paragraph (b) or (c) of this Section shall be
prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of
any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
(e) To further evidence the existence and amounts of
the Borrower's obligations to pay principal and interest on
each Loan made by a Lender hereunder, (i) with
Page 28
respect to each Tranche A Loan, the Borrower shall execute
and deliver to that Lender a Tranche A Note payable to the
Lender, with all blanks therein appropriately filled, with
the face amount equal to the principal amount of such
Lender's Tranche A Commitment, and (ii) with respect to each
Tranche B Loan, the Borrower shall execute and deliver to
that Lender a Tranche B Note payable to the Lender, with all
blanks therein appropriately filled, with the face amount
equal to the principal amount of such Lender's Tranche B
Commitment. The Borrower shall prepare, execute and deliver
each such Note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered
assigns). Thereafter, the Loans evidenced by such Note and
interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one
or more Notes payable to the order of the payee named
therein (or, if such Note is a registered note, to such
payee and its registered assigns).
SECTION 2.11 PREPAYMENT OF LOANS; REBORROWINGS.
(a) Subject to Section 2.11(d) hereof, the Borrower
shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, subject to prior
notice in accordance with paragraph (b) of this Section;
provided that unless all outstanding amounts are being
repaid, each prepayment of Borrowing shall be in an amount
that is an integral multiple of $100,000 and not less than
$2,500,000.00.
(b) The Borrower shall notify the Administrative Agent
by telephone (confirmed by telecopy) of any prepayment
hereunder not later than 1 p.m., New York City time, (the
following date, as applicable, the "Prepayment Date") (i)
with respect to Tranche A Loans, six Business Days before
the date of prepayment or (ii) with respect to Tranche B
Loans, ten (10) Business Days before the date of prepayment.
Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing
or portion thereof to be prepaid; provided that, if a notice
of prepayment is given in connection with a conditional
notice of termination of the Commitments as contemplated by
Section 2.09, then such notice of prepayment may be revoked
if such notice of termination is revoked in accordance with
Section 2.09; provided further that any prepayment of
Tranche B Loans shall be subject to the Tranche B Lenders
rights to exercise the conversion rights under Section 2.07
hereof at any time prior to the expiration of the ten (10)
Business Day notice period. Promptly following receipt of
any such notice relating to a Borrowing, the Administrative
Agent shall advise the Lenders of the contents thereof.
Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of
a Borrowing as provided in Section 2.02. Each prepayment of
a Borrowing shall be applied ratably to the Loans included
in the prepaid Borrowing. Prepayments shall be accompanied
by accrued interest to the extent required by Section 2.13
and Section 2.14. At its discretion, Borrower may elect to
make such payment of accrued interest on the date of a
prepayment through a Stock Payment in accordance with
Section 2.14 hereof.
(c) The Borrower may reborrow any principal amount
repaid under this Section 2.11 in accordance with the
provisions of this Article II, provided that the Borrower
can satisfy the requirements for obtaining a Loan set forth
in Section 4.02 hereof, and provided further that with
respect to Tranche A Loans, Borrower may not reborrow any
amounts repaid unless the full $10,000,000 in principal
amount of the Tranche B Loans is outstanding and/or has
Page 29
been converted into Conversion Shares in accordance with
Section 2.07 hereof. Each such reborrowing shall be treated
as a Borrowing for all purposes hereunder.
(d) Notwithstanding any other provision of this
Agreement, any provision in any other Loan Documents or any
provision of the Term Loan Documents, no prepayment or
repayments of the Tranche B Loans may be made until all
other Loan Obligations (excluding the outstanding principal
of the Tranche B Loans) have been paid in full to the
Lenders and the Administrative Agent. Mandatory or optional
prepayments by Borrower shall first apply to currently
outstanding Tranche A Loans or the Term Loan Obligations
(excluding the principal of the Tranche B Loans) (as
allocated between such Loan Obligations within the sole
discretion of the Administrative Agent). Further, the
Administrative Agent and the Lenders shall have right to
exercise their conversion rights prior to any prepayment of
the Tranche B Loans in accordance with Sections 2.07 and
2.11(b) hereof.
SECTION 2.12 FEES.
(a) As a fee for this amended and restated facility
and the Loans to Borrower hereunder, on the Effective Date,
the Borrower shall execute and deliver to the Administrative
Agent for the account of each Lender (i) the Fee Warrant
Certificate, (ii) the Purchaser Certificate, and (iii) the
Additional Stock Letter Agreement, each in form and
substance satisfactory to the Administrative Agent (in
Administrative Agent's absolute discretion).
(b) All fees payable hereunder shall be paid on the
date due to the Administrative Agent for distribution to the
Lenders. Fees paid shall not be refundable under any
circumstances.
SECTION 2.13 INTEREST.
(a) The Loans comprising each Borrowing shall bear
interest at a rate per annum equal to the Applicable
Interest Rate for the Interest Period in effect for such
Borrowing.
(b) Notwithstanding the foregoing, if any principal of
or interest on any Loan or any fee or other amount payable
by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of
overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided in the preceding
paragraph of this Section or (ii) in the case of any other
amount, 2% plus the rate applicable to Loans as provided in
paragraph (a) of this Section.
(c) Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and upon
termination of the Commitments; provided that (i) interest
accrued pursuant to paragraph (b) of this Section shall be
payable on demand and (ii) in the event of any repayment or
prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of
such repayment or prepayment.
(d) All interest hereunder shall be computed on the
basis of a year of 360 days, and shall be payable for the
actual number of days elapsed (including the first day but
Page 30
excluding the last day). The LIBO Rate shall be determined
by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.14 STOCK PAYMENT ELECTION.
(a) In its sole discretion, as provided in this
section, Borrower may elect to pay accrued interest on a
Borrowing on an Interest Payment Date (or, in the case of a
prepayment under Section 2.11, on the Prepayment Date) for
such Borrowing through the remittance of the Stock Payment
(instead of immediately available funds) (such election a
"Stock Payment Election").
(b) To make a Stock Payment Election pursuant to this
Section 2.14 with respect to any Borrowing for any Interest
Period (or in the case of a prepayment under Section 2.11,
the portion of an Interest Period ending on the Prepayment
Date), the Borrower shall notify the Administrative Agent of
such election by telephone not later than 1:00 p.m., New
York time, six (6) Business Days before the Interest Payment
Date (or, in the case of a prepayment under Section 2.11,
six (6) Business Days before the Prepayment Date) for the
current Interest Period for such Borrowing (the "Stock
Payment Election Deadline"). Each telephone Stock Payment
Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative
Agent of a written Stock Payment Election Request in a form
approved by the Administrative Agent and signed by the
Borrower. Promptly upon receipt of the written Stock
Payment Election Request, the Administrative Agent shall
give notice of such Stock Payment Election Request to the
Lenders.
(c) Each telegraphic and written Stock Payment
Election Request shall specify the Borrowing to which such
Stock Payment Election Request applies;
(d) Following receipt of a Stock Payment Election
Request, the Administrative Agent shall advise each Lender
and the Borrower by 11 a.m., New York time, on the Interest
Payment Date (or, in the case of a prepayment under
Section 2.11, on the Prepayment Date) relating to such Stock
Payment Election Request of the details thereof, including
the Administrative Agent's determination of the Stock
Payment (including its calculation thereof) as determined
pursuant to Subsection (g) hereof.
(e) If the Borrower fails to deliver a timely Stock
Payment Election Request with respect to any Borrowing prior
to the Stock Payment Election Deadline applicable thereto
and in accordance with requirements of this section, then
(a) the Borrower shall be deemed to have decided not to
elect the Stock Payment Election for that Borrowing for that
Interest Period and (b) the Applicable Interest Rate for
that Borrowing for that Interest Period shall be the Cash
Payment Rate.
(f) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to make the
Stock Payment Election or notify the Administrative Agent of
a Stock Payment Election Request if a Default or an Event of
Default has occurred and is continuing (unless this
requirement is waived by the Required Lenders).
(g) With respect to any Borrowing for which a Stock
Payment Election has been made in accordance with this
Section 2.14, the Stock Payment shall mean the quantity of
Page 31
shares of the Borrower's Common Stock (with any fractional
amount rounded to the next highest integer) that has a value
at least equal to the amount of accrued interest at the
Stock Payment Rate for that Borrowing for the Interest
Period (or, in the case of a prepayment under Section 2.11,
the portion of an Interest Period ending on the Prepayment
Date) for which the Stock Payment Election has been made
(the "Stock Payment"). For purposes of this Section 2.14,
the value of each share of Common Stock shall equal the
average daily Closing Price of the Common Stock over the
five (5) Business Days immediately prior to the Interest
Payment Date (or, in the case of a prepayment under
Section 2.11, over the five (5) Business Days immediately
prior to the Prepayment Date) for the Borrowing for which
the Stock Payment Election has been made.
SECTION 2.15 INCREASED COSTS.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by,
any Lender; or
(ii) impose on any Lender any other condition affecting
this Agreement or Applicable Interest Rate Loans made by
such Lender or participation therein;
and the result of any of the foregoing shall be to increase the
cost to such Lender of making or maintaining any Applicable
Interest Rate Loan (or of maintaining its obligation to make any
such Loan) or to increase the cost to such Lender or to reduce
the amount of any sum received or receivable by such Lender
hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.
(b) If any Lender determines that any Change in Law
regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's capital or on the
capital of such Lender's holding company, if any, as a
consequence of this Agreement or the Loans made by such Lender to
a level below that which such Lender or such Lender's holding
company could have achieved but for such Change in Law (taking
into consideration such Lender's policies and the policies of
such Lender's holding company with respect to capital adequacy),
then from time to time the Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender or
such Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount
or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b)
of this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such
Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
(d) Failure or delay on the part of any Lender to
demand compensation pursuant to this Section 2.15 shall not
constitute a waiver of such Lender's right to demand such
compensation; provided that the Borrower shall not be required to
compensate a Lender pursuant
Page 32
to this Section 2.15 for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to
claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.
SECTION 2.16 INCREASED COSTS; PROBLEMS ASCERTAINING
APPLICABLE INTEREST RATE. If prior to the commencement of
the Interest Period for a Borrowing:
(a) the Administrative Agent determines (which
determination shall be conclusive absent manifest error)
that adequate and reasonable means do not exist for
ascertaining the LIBO Rate for such Interest Period; or
(b) if Administrative Agent determines that the LIBO
Rate for such Interest Period will not adequately and fairly
reflect the cost to the Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the
Borrower and the Lenders by telephone or telecopy as promptly as
practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances
giving rise to such notice no longer exist, any Borrowing Request
that requests such Borrowing shall be ineffective.
SECTION 2.17 TAXES.
(a) Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and
clear of and without deduction for any Indemnified Taxes or
Other Taxes; provided that if the Borrower shall be required
to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section) the Administrative Agent or Lender (as
the case may be) receives an amount equal to the sum it
would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other
Taxes to the relevant Governmental Authority in accordance
with applicable law.
(c) The Borrower shall indemnify the Administrative
Agent and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or
Other Taxes paid by the Administrative Agent or such Lender,
as the case may be, on or with respect to any payment by or
on account of any obligation of the Borrower hereunder
(including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of
Page 33
such payment or liability delivered to the Borrower by a
Lender, or by the Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest
error.
(d) As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a
Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to
the Administrative Agent.
(e) Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law
of the jurisdiction in which the Borrower is located, or any
treaty to which such jurisdiction is a party, with respect
to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by
applicable law or reasonably requested by the Borrower as
will permit such payments to be made without withholding or
at a reduced rate.
SECTION 2.18 PAYMENTS GENERALLY; PRO RATA TREATMENT;
SHARING OF SET-OFFS.
(a) The Borrower shall make each payment required to
be made by it hereunder (whether of principal, interest,
fees or reimbursements, or of amounts payable under
Section 2.15, 2.17 or 2.20, or otherwise) prior to 2:00
p.m., New York City time, on the date when due, in
immediately available funds (or (a) with respect to accrued
interest for a Borrowing for which the Borrower has made the
Stock Payment Election in accordance with Section 2.14,
Common Stock, or (b) with respect to fees under
Section 2.12, the Fee Warrant Certificate), without set-off
or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent,
be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Administrative Agent
at its offices at c/o ING Baring (U.S.) Capital LLC, ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇
▇▇▇▇▇▇▇, Vice President, except that payments pursuant to
Sections 2.15, 2.17, 2.20 and 9.03 shall be made directly to
the Persons entitled thereto. The Administrative Agent
shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day,
the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be
made in dollars (or, (a) in the case of a Stock Payment
Election, Common Stock, or (b) in the case of the fees under
Section 2.12, the Fee Warrant Certificate).
(b) If at any time insufficient funds or property are
received by and available to the Administrative Agent to pay
fully all amounts of principal, interest and fees then due
hereunder, such funds or property shall be applied
(i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to
such parties, (ii) second, towards payment of principal on
the Tranche A Loans then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of
principal then due to such parties, and (iii) third, towards
payment of
Page 34
principal on the Tranche B Loans then due hereunder, ratably
among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of
set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans
resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and accrued
interest thereon than the proportion received by any other
Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in
the Loans of other Lenders to the extent necessary so that
the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans;
provided that (i) if any such participations are purchased
and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the
Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender
as consideration for the assignment of or sale of a
participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as
if such Lender were a direct creditor of the Borrower in the
amount of such participation.
(d) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which
any payment is due to the Administrative Agent for the
account of the Lenders hereunder that the Borrower will not
make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In
such event, if the Borrower has not in fact made such
payment, then each of the Lenders severally agrees to repay
to the Administrative Agent forthwith on demand the amount
so distributed to such Lender with interest thereon, for
each day from and including the date such amount is
distributed to it to but excluding the date of payment to
the Administrative Agent, at the greater of the Federal
Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry
rules on interbank compensation.
(e) If any Lender shall fail to make any payment
required to be made by it to the Administrative Agent
pursuant to the terms of this Agreement, then the
Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such
Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.19 MITIGATION OBLIGATIONS; REPLACEMENT OF
LENDERS.
(a) If any Lender requests compensation under
Section 2.15, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable
Page 35
efforts to designate a different lending office for funding
or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the
case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under
Section 2.15, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to
Section 2.17, or if any Lender defaults in its obligation to
fund Loans hereunder, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all its
interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment);
provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent
shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of
all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in
such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.
SECTION 2.20 BREAK FUNDING PAYMENTS. In the event of
(a) the payment of any principal of any Loan other than on
the last day of an Interest Period therefor (including as a
result of an Event of Default), or (b) the failure to
borrow, continue or prepay any Loan on the date specified in
any notice delivered pursuant hereto, then, in such event,
the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of any
Loan, the loss to any Lender attributable to any such event
shall be deemed to include an amount determined by such
Lender to be equal to the excess, if any, of (i) the amount
of interest that such Lender would pay for a deposit equal
to the principal amount of such Loan for the period from the
date of such payment to the last day of the then current
Interest Period for such Loan if the interest rate payable
on such deposit were equal to the Cash Payment Rate for such
Interest Period, over (ii) the amount of interest that such
Lender would earn on such principal amount for such period
if such Lender were to invest such principal amount for such
period at the interest rate that would be bid by such Lender
(or an affiliate of such Lender) for deposits from other
banks in the eurocurrency market at the commencement of such
period. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower
and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.
Page 36
SECTION 2.21 CERTAIN MANDATORY PREPAYMENTS. In
addition to any other prepayments required under the Loan
Documents, prepayments of the Loan Obligations shall be
required as follows (any prepayment of the Revolver Loan
Obligations set forth in (a) and (b) of this
Subsection shall be effected in each case in the manner and
to the extent specified in Subsection (c) of this
Section 2.21).
(a) Certain Mandatory Prepayments for Equity
Contribution. To the extent, if any, that Borrower raises,
collects, or receives, in any manner, a cumulative amount
after September 30, 2001 equal to or greater than $7,500,000
from the Net Available Proceeds from, relating to, or
arising from any Equity Issuance, then the Borrower shall
prepay the Loan Obligations an aggregate amount equal to 25%
of such cumulative proceeds in excess of $7,500,000 to
prepay the Lender's outstanding loans (as allocated between
the Revolving Loan Obligations and the Term Loan Obligations
as determined by ING in its sole discretion).
(b) Payments from the Metropolitan Water District of
Southern California. If the Borrower or its Subsidiaries
receives any Metropolitan Water District Payments, then the
Borrower shall prepay the Loan Obligations in an aggregate
amount equal to 100% of the Net Available Proceeds thereof
(as allocated between the Revolving Loan Obligations and the
Term Loan Obligations as determined by the ING in its sole
discretion).
(c) Application. Prepayments to the Revolving Loan
Obligations described in the above subsections of
Section 2.21 and allocated, in accordance with subsections
2.21(a) and (b) for the prepayment of Revolving Loan
Obligations, shall be applied in the following order:
(i) then due and payable interest and fees under the
Revolving Loan Documents; and
(ii) then the principal amounts outstanding under the
Tranche A Loans, and
(iii) then the principal amounts outstanding under
the Tranche B Loans, and
(iv) then all other Revolving Loan Obligations and
other amounts due under the Revolving Loan Documents.
(d) For purposes of this Section 2.21, the following
terms shall have the following meanings:
"EQUITY ISSUANCE" shall mean (a) any issuance or sale
by the Borrower or any of its Subsidiaries after
September 30, 2001 of (i) any capital stock, (ii) any
warrants or options exercisable in respect of capital
stock (other than any warrants or options issued to
directors, officers or employees of the Borrower or any
of its Subsidiaries pursuant to employee benefit plans
established in the ordinary course of business and any
capital stock of the Borrower issued upon the exercise
of such warrants or options) or (iii) any other
security or instrument representing an equity interest
(or the right to obtain any equity interest), in the
Borrower or any of its Subsidiaries, or (iv) to the
extent not covered in subsections (a)(i) through (iii)
above, the proceeds from convertible debt or debt with
warrants attached thereto that
Page 37
provides the lender with an effective annual yield in
excess of 18% (as reasonably determined by the Lender
using ▇▇▇▇▇-▇▇▇▇▇▇'▇ pricing methodology), or (b) the
receipt by the Borrower or any of its Subsidiaries
after September 30, 2001 of any capital contribution
(whether or not evidenced by any equity security issued
by the recipient of such contribution); provided that
Equity Issuance shall not include (x) any such issuance
or sale by any Subsidiary of the Borrower to the
Borrower or any Subsidiary of the Borrower, (y) any
capital contribution by the Borrower or any Wholly
Owned Subsidiary of the Borrower to any Subsidiary of
the Borrower, or (z) the issuance or sale of any
securities described in subsection (a) above of any of
the Sun World Entities if, under the terms of the Sun
World Indenture (1) the Net Available Proceeds of such
issuance or sale are required to be offered to the
holders of pre-existing debt obligations of any of the
Sun World Entities, or (2) any of the Sun World
Entities are prohibited from distributing or otherwise
transferring the Net Available Proceeds to Borrower or
from directly applying the Net Available Proceeds to
the payment of the obligations of the Borrower .
"METROPOLITAN WATER DISTRICT PAYMENTS" shall mean, any
payments received by the Borrower or any of its
Subsidiaries or Affiliates from or on account of the
Metropolitan Water District of Southern California
and/or the Cadiz Groundwater Storage and Dry-Year
Supply Program.
"NET AVAILABLE PROCEEDS" shall mean, (1) in the case of
any Equity Issuance, the aggregate amount of all cash
received by the Borrower and its Subsidiaries in
respect of such Equity Issuance net of reasonable
expenses incurred by the Borrower and its Subsidiaries
in connection therewith, and (2) in the case of any
Metropolitan Water District Payments, the aggregate
amount of all cash received by the Borrower and its
Subsidiaries in respect of such Metropolitan Water
District Payments, but excluding out-of-pocket expense
reimbursements paid to the Borrower or its subsidiaries
by the Metropolitan Water District of Southern
California and/or the Cadiz Groundwater Storage and Dry-
Year Supply Program in an aggregate amount not to
exceed $5,000,000.
SECTION 2.22 REGISTRATION RIGHTS. Borrower hereby
agrees that all Common Stock of Borrower, each of the
Revolving Credit Agreement Warrants and their respective
underlying shares and/or issued at any time, whether before
or after the date hereof, under any of the Loan Documents,
including stock issued pursuant to a Stock Payment Election
in accordance with Section 2.14 of this Agreement, shall be
accorded registration rights by the Borrower as set forth in
the Registration Rights Addendum.
Page 38
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders
that the following representations and warranties are true and
correct on the date hereof as if made on the date hereof (except,
to the extent any such representations and warranties
specifically refer to an earlier date, in which case, such
representations or warranties are represented and warranted to be
true and correct as of such earlier specified date):
SECTION 3.01 ORGANIZATION; POWERS. Each of the
Borrower and its Participating Subsidiaries is duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as
now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is
qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required.
SECTION 3.02 AUTHORIZATION; ENFORCEABILITY. The
Transactions are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate and, if
required, stockholder action. This Agreement has been duly
executed and delivered by the Borrower and constitutes a
legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03 GOVERNMENTAL APPROVALS; NO CONFLICTS.
The Transactions (a) do not require any consent or approval
of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or
made and are in full force and effect, (b) will not violate
any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any of its
Subsidiaries or any order of any Governmental Authority,
(c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the
Borrower or any of its Subsidiaries or its assets, or give
rise to a right thereunder to require any payment to be made
by the Borrower or any of its Subsidiaries, and (d) will not
result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Subsidiaries (except
those imposed by the Loan Documents).
SECTION 3.04 FINANCIAL CONDITION; NO MATERIAL ADVERSE
CHANGE.
(a) The Borrower has heretofore furnished to the
Administrative Agent its consolidated balance sheet and
statements of income, stockholders equity and cash flows
(i) as of and for the fiscal year ended December 31, 2000,
reported on by PricewaterhouseCoopers LLP, independent
public accountants, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended September
30, 2001, certified by its chief financial officer. Such
financial statements present fairly, in all material
respects, the financial position and results of operations
and cash flows of the Borrower and its consolidated
Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments
and the absence of footnotes in the case of the statements
referred to in clause (ii) above.
Page 39
(b) Since September 30, 2001, there has been no
material adverse change in the business, assets, operations,
prospects or condition, financial or otherwise, of the
Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05 PROPERTIES.
(a) Each of the Borrower and its Participating
Subsidiaries has good title to, or valid leasehold interests
in, all its real and personal property material to its
business, except for Permitted Encumbrances and minor
defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize
such properties for their intended purposes.
(b) Each of the Borrower and its Participating
Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by
the Borrower and its Participating Subsidiaries does not
infringe upon the rights of any other Person, except for any
such infringements that, individually or in the aggregate,
could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.06 LITIGATION AND ENVIRONMENTAL MATTERS.
(a) There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries
(i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined,
could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters) or (ii) that involve this
Agreement or the Transactions.
(b) Except for the Disclosed Matters and except with
respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a
Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental
Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental
Law, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c) Since the date of this Agreement, there has been
no change in the status of the Disclosed Matters that,
individually or in the aggregate, has resulted in, or
materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07 COMPLIANCE WITH LAWS AND AGREEMENTS.
Each of the Borrower and the Participating Subsidiaries is
in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding
upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default
has occurred and is continuing.
Page 40
SECTION 3.08 INVESTMENT AND HOLDING COMPANY STATUS.
Neither the Borrower nor any of its Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940 or (b) a "holding
company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09 TAXES. Each of the Borrower and its
Participating Subsidiaries has timely filed or caused to be
filed all tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for
which the Borrower or such Participating Subsidiary, as
applicable, has set aside on its books adequate reserves or
(b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.10 ERISA. No ERISA Event has occurred or
is reasonably expected to occur that, when taken together
with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected
to result in a Material Adverse Effect. The present value
of all accumulated benefit obligations under each Plan
(based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such
amounts, exceed by more than $500,000 the fair market value
of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such
amounts, exceed by more than $500,000 the fair market value
of the assets of all such underfunded Plans.
SECTION 3.11 DISCLOSURE. The Borrower has disclosed
to the Administrative Agent all agreements, instruments and
corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of
the reports, financial statements, certificates or other
information furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the
negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state
any material fact necessary to make the statements therein,
in the light of the circumstances under which they were
made, not misleading; provided that, with respect to
projected financial information, the Borrower represents
only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time.
SECTION 3.12 SECURITY INTERESTS. Except for (a) the
filing of UCC financing statements in respect of the
collateral covered by the Security Documents in the States
of Delaware and California and such other applicable
jurisdictions in the United States of America and (b) filing
and recording of Mortgages in respect of the real property
collateral in the county in which the real property is
located, which filings shall have been made and be in effect
on (or simultaneously with) the Effective Date, the taking
of possession by the Administrative Agent of the
certificates representing the shares of capital stock of the
Participating Subsidiaries and various instruments pledged
to it pursuant to the Pledge and Security Agreement, and the
delivery of notice of the security interests granted in the
accounts covered by the Pledge and
Page 41
Security Agreement to the bank or banks whereat such
accounts are maintained and receipt of acknowledgements of
such notices by such banks (which actions shall be effected
as of or promptly following the Effective Date), no further
filing or recording of any document and no other action is
necessary or advisable in the States of Delaware or
California or any other applicable jurisdiction in the
United States of America in order to establish and perfect,
under the laws of Delaware or California or such other
applicable jurisdiction in the United States of America, the
Administrative Agent's security interest in such collateral,
to the extent required by the applicable Security Documents,
on behalf of the Lenders.
SECTION 3.13 PARTICIPATING SUBSIDIARIES. The
Borrower has no Participating Subsidiaries except as set
forth on Schedule 3.13 hereto.
SECTION 3.14 INACTIVE SUBSIDIARIES. The Borrower has
no Inactive Subsidiaries except as set forth on Schedule
3.14 hereto. The Inactive Subsidiaries (a) do not conduct
any business activities of any type or nature, and (b) do
not own or have any interest in any assets or property of
any type or nature.
SECTION 3.15 SOLVENCY. After giving effect to
the Transactions, (i) the assets of the Borrower, at a fair
valuation, will exceed its debts, (ii) the Borrower's
capital will not be unreasonably small to conduct its
business, (iii) the Borrower will not have incurred debts,
or have intended to incur debts, beyond its ability to pay
such debts as they mature, and (iv) the then-current fair
salable value of the Borrower's assets will be greater than
the amount that will be required to pay its probable
liabilities (including debts) as they become absolute and
matured. For purposes of this Section, "debt" means any
liability on a claim, and "claim" means (x) the right to
payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured
or unsecured, or (y) the right to an equitable remedy for
breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy
is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured. For
purposes of this Section, the Borrower may assume that the
Loans will be refinanced on the Maturity Date.
SECTION 3.16 EXCLUDED ITEMS. The aggregate
acquisition cost of (i) all Excluded Items plus (ii) all
Rolling Stock (in existence as of the Effective Date or
thereafter acquired) for which the Borrower or other
Obligor, as the case may be, has not granted Liens in favor
of the Administrative Agent, for itself and on behalf of the
Lenders, is not more than $2,000,000.
SECTION 3.17 EQUITY ACQUISITION ASSETS. The
aggregate acquisition cost of all Equity Acquisition Assets
for which the Borrower or other Obligor, as the case may be,
has not granted Liens in favor of the Administrative Agent,
for itself and on behalf of the Lenders, is not more than
$2,000,000.
SECTION 3.18 ROLLING STOCK. The aggregate
acquisition cost of all Rolling Stock for which the
Borrower, without the consent of the Administrative Agent,
has not granted Liens in favor of the Administrative Agent,
for itself and on behalf of the Lenders, is not more than
$2,000,000.
Page 42
SECTION 3.19 CERTAIN ACKNOWLEDGEMENTS. The Borrower
hereby expressly acknowledges and agrees that as of the
Effective Date (and prior to any draw on the Tranche B
Loans), the outstanding principal under the Loan Documents
is in the amount of $15,000,000.00, representing the full
Tranche A Commitments. The foregoing amount does not
include accrued and unpaid interest from and after January
31, 2002. Further, the Borrower hereby confirms that (a)
the following documents remain valid and binding agreements
and/or instruments, and (b) the Borrower and, as applicable,
its Participating Subsidiaries remain bound by the terms and
provisions of the following documents:
(i) the Pledge and Security Agreement (together with
the share certificates representing all of the issued and
outstanding shares of the Participating Subsidiaries,
endorsed in blank), and the Mortgages, and/or any amendments
to any such existing Loan Documents;
(ii) the Revised and Restated Initial Draw Warrant
Certificate;
(iii) the Revised and Restated Additional Draw
Warrant Certificate;
(iv) the Eighth Warrant Certificate;
(v) the Ninth Warrant Certificate;
(vi) the Tenth Warrant Certificate;
(vii) the Eleventh Warrant Certificate;
(viii) the Cadiz Reaffirmation Agreement; and
(ix) the other Loan Documents, as amended from time to
time.
SECTION 3.20 NO SATISFACTION. The Borrower hereby
expressly represents, warrants, acknowledges and agrees that
nothing in this Agreement or in any document or instrument
executed in connection with or pursuant to this Agreement
shall constitute a satisfaction of or a novation as to all
or any portion of Borrower's indebtedness under the Loan
Documents. Borrower hereby unconditionally reaffirms,
reconfirms and restates its obligation to pay in full the
Revolving Loan Obligations arising under the Loan Documents
and all other Loan Obligations to the Administrative Agent
and/or the Lenders, as the case may be. Borrower hereby
further acknowledges and agrees that it has no defenses to
the enforcement of the Revolving Loan Obligations (or any
portion thereof), or the other Loan Obligations, nor any
counter-claims or claims of offset whatsoever and that
neither this Agreement nor the consummation of the
transactions contemplated herein will give rise to any such
defenses, counter-claims or claims of offset.
Page 43
ARTICLE IV
CONDITIONS
SECTION 4.01 EFFECTIVE DATE. The obligations of the
Lenders to make Loans hereunder shall not become effective
until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent shall have received the
following documents, each in form and substance satisfactory
to the Administrative Agent , duly executed and delivered by
all the parties thereto:
(i) this Agreement;
(ii) the Borrower filed or registered certificate of
incorporation, as amended, modified, restated or
supplemented to the date hereof and certified as of the
Effective Date as being a true and correct copy thereof by
an officer of the Borrower;
(iii) a copy, certified as of the Effective Date of
the resolutions of the board of directors of the Borrower
duly authorizing the execution, delivery and performance by
the Borrower of this Agreement and the other Loan Documents
to which it is a party, and each other document required to
be executed and delivered by the Borrower pursuant to this
Agreement;
(iv) a certificate, dated the Effective Date and signed
by the President, a Vice President or a Financial Officer of
the Borrower, confirming compliance with the conditions set
forth in paragraphs (o) and (q) of this Section 4.01;
(v) Fourth Amendment to the Revolving Credit Note, in
the form as attached hereto in Exhibit I;
(vi) Fourth Modification of the Pledge and Security
Agreement, in the form as attached hereto in Exhibit J;
(vii) Fourth Modification of the Revolver Deed of
Trust, in the form as attached hereto in Exhibit K;
(viii) Fourth Modification of the Revolver SWFG Deed of
Trust, in the form as attached hereto in Exhibit L;
(ix) Fourth Modification of the Revolver Piute Deed of
Trust, in the form as attached hereto in Exhibit M;
(x) the Registration Rights Addendum, in the form as
attached hereto in Exhibit H;
(xi) the Fee Warrant Certificate, in the form as
attached hereto in Exhibit D;
Page 44
(xii) the Purchaser Certificate in the form as
attached hereto in Exhibit G;
(xiii) the Additional Stock Letter Agreement, in the
form as attached hereto in Exhibit A.
(b) The Borrower shall have confirmed in writing that
the following documents remain valid and binding agreements
and/or instruments, which written confirmation is in form
and substance satisfactory to the Administrative Agent, in
its sole discretion, and that Borrower and, as applicable,
its Participating Subsidiaries remain bound by the terms and
provisions of the following documents:
(i) the Pledge and Security Agreement (together with
the share certificates representing all of the issued and
outstanding shares of the Participating Subsidiaries,
endorsed in blank), and the Mortgages, and/or any amendments
to any such existing Loan Documents;
(ii) the Revised and Restated Initial Draw Warrant
Certificate;
(iii) the Revised and Restated Additional Draw
Warrant Certificate;
(iv) the Eighth Warrant Certificate;
(v) the Ninth Warrant Certificate;
(vi) the Tenth Warrant Certificate;
(vii) the Eleventh Warrant Certificate;
(viii) the Cadiz Reaffirmation Agreement; and
(ix) the other Loan Documents, as amended from time to
time.
(c) The Administrative Agent shall have received an
opinion from the Borrower's counsel in form and substance
satisfactory to the Administrative Agent (A) that Borrower
is in good standing in the States of Delaware and
California, (B) as to the due authorization, execution and
delivery of this Agreement and the other Loan Documents,
(C) that this Agreement and the other Loan Documents
constitute valid, binding and enforceable obligations of
Borrower, and (D) as to such other matters as the
Administrative Agent shall reasonably request.
(d) The Administrative Agent shall have received
certified copies of the resolutions (in form and content
satisfactory to Administrative Agent) of the Board of
Directors of Borrower approving and authorizing this
Agreement and the other documents executed and/or delivered
in connection herewith (including each of the exhibits
hereto), and the effectuation of the transactions
contemplated herein and/or therein, as the case may be, and
any and all actions to be taken by Borrower in furtherance
and in connection with this Agreement and/or the other
documents executed and/or delivered in connection herewith.
Page 45
(e) The Administrative Agent shall have received from
the Delaware Secretary of State a Certificate of Good
Standing with respect to Borrower and a certificate
evidencing that Borrower is qualified to do business in
California, all of which certificates must be in form and
content satisfactory to Administrative Agent.
(f) The Administrative Agent shall have received
certificates (in form and content satisfactory to
Administrative Agent) of the Secretary of Borrower,
certifying as to the names and signatures of the officers
authorized to sign this Agreement and the other documents to
be executed and delivered on its behalf pursuant to this
Agreement.
(g) To the best of Borrower's knowledge, all real
property taxes with respect to the property encumbered by
any of the ING Collateral, as well as all real property
taxes affecting the property encumbered by any and all deeds
of trust pledged or assigned to Administrative Agent as
security for the Revolving Loan Obligations (or any of
them), shall have been paid prior to the date any fine,
penalty, interest, late-charge or loss may be added to such
taxes or charged against such real property or other ING
Collateral for the non-payment or late-payment of such
taxes.
(h) The Borrower shall have caused appropriate
officers of Borrower to execute and deliver to
Administrative Agent such additional certificates with
respect to matters relating to the transactions contemplated
herein as Administrative Agent may reasonably require.
(i) The Borrower shall have executed and delivered or
caused the appropriate third parties to execute and/or
deliver (in recordable form, where appropriate, and
otherwise in form and content satisfactory to Administrative
Agent) such other documents, instruments, agreements and
writings as Administrative Agent may reasonably require in
connection with the creation or continuation of any security
interest(s) granted to Administrative Agent in furtherance
of the transactions contemplated by this Agreement or as
Administrative Agent may otherwise require in connection
with the consummation of such transactions (including,
without limitation, estoppel certificates, guaranty waivers,
security agreements, pledges, assignments, subordination
agreements, endorsements, certificates, certifications,
reports, and studies).
(j) as of the date hereof, or as soon as practicable
hereafter, but in no event later than ten (10) days
hereafter, UCC financing statements covering all the
security interests created by or pursuant to the Pledge and
Security Agreements in the collateral pledged pursuant
thereto, shall have been executed and delivered by the
Borrower to the Administrative Agent and such financing
statements, or other statements or documents to the same
purposes, shall have been duly filed in all other applicable
jurisdictions in the United States of America necessary or
desirable to perfect said security interests and there shall
have been taken all other action as the Administrative Agent
or any Lender through the Administrative Agent may
reasonably request or as shall be necessary to perfect such
security interests to the extent required by the applicable
Security Documents.
(k) [Intentionally omitted].
Page 46
(l) The representations and warranties of the Borrower
set forth in this Agreement and each other Loan Document
shall be true and correct on and as of the Effective Date of
such Borrowing.
(m) No Default shall have occurred and be continuing.
(n) The Borrower shall have performed or observed and
be continuing to perform each term, covenant or agreement
contained in any Loan Document.
(o) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the
President, a Vice President or a Financial Officer of the
Borrower, confirming compliance with the conditions set
forth in paragraphs (a) and (b) of Section 4.02.
(p) The Administrative Agent shall have received all
fees and other amounts due and payable on or prior to the
Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.
(q) All governmental and third party approvals
necessary or, in the discretion of the Administrative Agent,
advisable in connection with the Transaction, the financing
contemplated hereby and the continuing operations of the
Borrower shall have been obtained and be in full force and
effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any
competent authority which would restrain, prevent or
otherwise impose adverse conditions on the Transactions or
the financing thereof.
(r) The Administrative Agent shall have received a
"date down and modification" endorsement to each of the
mortgagee title insurance policies (collectively, the "Title
Policies") issued for the benefit of the Lender with respect
to the Revolver Deeds of Trust, which endorsements shall
(i) be issued by the Chicago Title Insurance Company for the
benefit of the Lender and its successors and assigns,
(ii) insure the amendments to the Revolver Deeds of Trust
required to be delivered pursuant to this Section 4.01 of
this Agreement and the continued priority of Revolver Deeds
of Trust granted to the Lender, (iii) confirm that all real
property taxes with respect to the property encumbered by
the Revolver Deeds of Trust have been paid prior to the date
any fine, penalty, interest, late charge or similar fine or
penalty shall accrue with respect to the payment of such
taxes, (iv) be otherwise in form and substance satisfactory
to the Lender in its sole discretion.
(s) The Lender shall have received confirmation, in
form and substance satisfactory to the Lender, that
(i) Borrower has paid (a) all premiums for the endorsements
to the Title Policies required pursuant to Section 4.01(r)
hereof and (b) all recording and filing fees relating to the
recording of the amendment to the Revolver Deeds of Trust
required to be delivered pursuant to this Section 4.01 of
this Agreement and (ii) all amendments to the Revolver Deeds
of Trust required to be delivered pursuant to this Section
4.01 of this Agreement have been duly accepted for
recording.
(t) The Administrative Agent shall have received such
other documents as the Administrative Agent may reasonably
request.
Page 47
The Administrative Agent shall notify the Borrower and the
Lenders of the Effective Date, and such notice shall be
conclusive and binding. Notwithstanding the foregoing, the
obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 9.02) at or prior
to 3:00 p.m., New York City time, on March 20, 2002 (and, in
the event such conditions are not so satisfied or waived,
the Commitments shall terminate at such time).
SECTION 4.02 EACH CREDIT EVENT. The obligation of
each Lender to make a Loan on the occasion of any Borrowing
is subject to the satisfaction of the following conditions:
(a) The representations and warranties of the Borrower
set forth in this Agreement shall be true and correct on and
as of the date of such Borrowing.
(b) At the time of and immediately after giving effect
to such Borrowing, no Default shall have occurred and be
continuing.
Each Borrowing shall be deemed to constitute a representation and
warranty by the Borrower on the date thereof as to the matters
specified in paragraphs (a) and (b) of this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated
and the principal of and interest on each Loan and all fees
payable hereunder shall have been paid in full, the Borrower
covenants and agrees with the Lenders that:
SECTION 5.01 FINANCIAL STATEMENTS AND OTHER
INFORMATION. The Borrower will furnish to the Administrative
Agent and each Lender:
(a) within 15 days following Borrower's filing each
Annual Report on Form 10-K with the Commission, its audited
consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the
end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year,
all reported on by PricewaterhouseCoopers LLP or other
independent public accountants of recognized national
standing (without a "going concern" or like qualification or
exception and without any qualification or exception as to
the scope of such audit) to the effect that such
consolidated financial statements present fairly in all
material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries
on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 15 days following Borrower's filing each
Quarterly Report on Form 10-Q with the Commission, its
consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the
end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or
periods of (or, in the case of
Page 48
the balance sheet, as of the end of) the previous fiscal
year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal
year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial
statements under Subsection (a) or (b) above, a certificate
of a Financial Officer of the Borrower (i) certifying as to
whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, and
(ii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the
audited financial statements referred to in Section 3.04
and, if any such change has occurred, specifying the effect
of such change on the financial statements accompanying such
certificate;
(d) [Intentionally omitted]
(e) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements
and other materials filed by the Borrower or any Subsidiary
with the Commission, or any Governmental Authority
succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally,
as the case may be; and
(f) promptly following any request therefor, such
other information regarding the operations, business affairs
and financial condition of the Borrower or any Subsidiary,
or compliance with the terms of this Agreement, as the
Administrative Agent or any Lender may reasonably request.
SECTION 5.02 NOTICES OF MATERIAL EVENTS. The
Borrower will furnish to the Administrative Agent and each
Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental
Authority against or affecting the Borrower or any Affiliate
thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred,
could reasonably be expected to result in a Material Adverse
Effect; and
(d) any other development that results in, or could
reasonably be expected to result in, a Material Adverse
Effect.
Each notice delivered under this Section 5.02 shall be
accompanied by a statement of a Financial Officer or other
executive officer of the Borrower setting forth the details of
the event or
Page 49
development requiring such notice and any action taken or
proposed to be taken with respect thereto.
SECTION 5.03 EXISTENCE; CONDUCT OF BUSINESS. The
Borrower will, and will cause each of its Subsidiaries
(including Sun World, but excluding Borrower's Inactive
Subsidiaries and the subsidiaries of Sun World) to, do or
cause to be done all things necessary to preserve, renew and
keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises
material to the conduct of its business; provided that the
foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03.
SECTION 5.04 PAYMENT OF OBLIGATIONS. The Borrower
will, and will cause each of its Subsidiaries to, pay its
obligations, including tax liabilities, that, if not paid,
could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) the Borrower or such
Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure
to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.05 MAINTENANCE OF PROPERTIES; INSURANCE.
The Borrower will, and will cause each of its Participating
Subsidiaries and SWFG to, (a) keep and maintain all property
material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted, and
(b) maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar
locations. Further, within ten (10) Business Days after the
Effective Date, the Borrower shall provide evidence to the
Administrative Agent of the insurance required to be carried
pursuant to the foregoing sentence, which evidence shall be
in form and substance satisfactory to, in form and substance
satisfactory the Administrative Agent.
SECTION 5.06 BOOKS AND RECORDS; INSPECTION RIGHTS.
The Borrower will, and will cause each of its Subsidiaries
to, keep proper books of record and account in which full,
true and correct entries are made of all dealings and
transactions in relation to its business and activities.
The Borrower will, and will cause each of its Subsidiaries
(excluding the Sun World Entities) to, permit any
representatives designated by the Administrative Agent or
any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants,
all at such reasonable times and as often as reasonably
requested.
SECTION 5.07 COMPLIANCE WITH LAWS. The Borrower
will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 5.08 USE OF PROCEEDS. Subject to the terms
and restrictions set forth herein, the proceeds of the Loans
will be used solely for the purpose of (a) financing a
Page 50
Permitted Investment and (b) financing the working capital
and general corporate needs of the Borrower. No part of the
proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations G, U
and X. Notwithstanding the foregoing, to the extent that
the Borrower transfers any proceeds of the Loans to any of
its Affiliates, such transfer must be a loan evidenced by a
note and as properly authorized by the Board of Directors of
the Borrower and the board of directors for such Affiliate;
which note shall be pledged to the Borrower and constitute
ING Collateral.
SECTION 5.09 NEW SUBSIDIARIES. In the event that any
Person shall become a Participating Subsidiary of Borrower
after the date hereof, Borrower shall execute (or cause such
other Participating Subsidiary as may be the direct parent
company of the new Participating Subsidiary to execute) a
Pledge and Security Agreement, as the case may be,
sufficient to subject all of the capital stock of such new
or additional Participating Subsidiary to a Lien in favor of
the Administrative Agent, on behalf of the Lenders, and any
other documents as the Administrative Agent may reasonably
request from time to time in order to perfect or maintain
the perfection of the Administrative Agent's Liens
thereunder, each in form and substance reasonably
satisfactory to the Administrative Agent.
SECTION 5.10 ACQUISITIONS BY BORROWER.
(a) In the event that after the date of this Agreement
the Borrower acquires ownership of any additional real or
personal property of any type or nature (including, but not
limited to, notes or other obligations from a Subsidiary or
Affiliate to Borrower), the Borrower shall promptly give
written notice of such acquisition to the Administrative
Agent, and if requested by the Administrative Agent at the
direction of the Required Lenders, Borrower shall execute
and deliver any and all Security Documents or collateral
assignments, security agreements, mortgages, deeds of trust,
pledge agreements, financing statements, fixture filings,
notice filings or other documents as the Administrative
Agent may reasonably request from time to time in order for
the Administrative Agent to acquire a Lien on the property
so acquired by Borrower as additional security for the
obligations under this Agreement or to perfect or maintain
the perfection of such Lien.
(b) Notwithstanding paragraph (a) of this
Section 5.10, so long as no Event of Default is then in
existence, Borrower shall not be required to deliver to the
Administrative Agent any Security Documents or collateral
assignments, security agreements, mortgages, deeds of trust,
pledge agreements, financing statements, fixture filings,
notice filings or other documents for any item of real or
personal property acquired by Borrower on or after the
Effective Date if both (i) the acquisition cost of each such
item of real or personal property (including, but not
limited to, Rolling Stock) is less than $250,000 and
(ii) the aggregate acquisition cost of (A) all such real or
personal property (including, but not limited to, Rolling
Stock) in which no Lien has been granted in favor of the
Administrative Agent pursuant to this paragraph (b) of this
Section (collectively, the "Excluded Items") plus
(B) Rolling Stock in existence as of the Effective Date is
not more than $2,000,000. To the extent that the aggregate
acquisition cost of (i) all Excluded Items plus (ii) Rolling
Stock in existence as of the Effective Date is more than
$2,000,000 (the "Excluded Items/Rolling Stock Threshold"),
Borrower will, and will cause its Subsidiaries to, grant
(and such Liens shall be deemed immediately to have
Page 51
been granted) Liens on such assets to the extent in excess
of the Excluded Items/Rolling Stock Threshold in favor of
the Administrative Agent, for itself and on behalf of the
Lenders.
(c) Notwithstanding paragraph (a) and (b) of this
Section 5.10, so long as no Event of Default is then in
existence, Borrower also shall not be required to deliver to
the Administrative Agent any Security Documents or
collateral assignments, security agreements, mortgages,
deeds of trust, pledge agreements, financing statements,
fixture filings, notice filings or other documents for any
item of real or personal property acquired on or after the
Effective Date if each of the following conditions are
satisfied: (a) each such item of real or personal property
is acquired or purchased on or after the Effective Date
solely in exchange for the Common Stock or other equity
interest in the Borrower (an "Equity Acquisition Asset"),
(b) no Lien is created, imposed, or permitted to exist on
any Equity Acquisition Asset, and (c) the aggregate
acquisition value of all Equity Acquisition Assets does not
exceed $2,000,000. To the extent that the aggregate
acquisition value of all Equity Acquisition Assets is more
than $2,000,000 ("Equity Acquisition Threshold"), Borrower
will, and will cause its Subsidiaries to, grant Liens (and
such Liens shall be deemed immediately to have been granted)
on such assets to the extent in excess of the Equity
Acquisition Threshold in favor of the Administrative Agent,
for itself and on behalf of the Lenders.
SECTION 5.11 ACQUISITIONS WITH PROCEEDS OF LOANS. In
the event that after the date of this Agreement, a
Subsidiary or Borrower's Affiliate utilizes the proceeds of
any Loans, which are either directly or indirectly
transferred or otherwise forwarded to such Subsidiary or
Borrower's Affiliate from Borrower, to acquire real or
personal property of any type or nature, Borrower shall
promptly give written notice of such acquisition to the
Administrative Agent, and if requested by the Administrative
Agent at the direction of the Required Lenders, Borrower
shall cause such Subsidiary or Borrower's Affiliate to
execute and deliver Security Documents or collateral
assignments, security agreements, mortgages, deeds of trust,
pledge agreements, financing statements, fixture filings,
notice filings or other documents the Administrative Agent
may reasonably request from time to time in order for the
Administrative Agent to acquire a Lien on the property so
acquired by the Subsidiary or Borrower's Affiliate as the
case may be, as additional security for the obligations
under this Agreement or to perfect or maintain the
perfection of such Lien.
SECTION 5.12 REVOLVING CREDIT AGREEMENT WARRANTS. On
the date hereof, the Borrower shall issue the Fee Warrant
Certificate and the Purchaser Certificate. The Fee Warrant
Certificate shall be duly executed and registered in such
name or names and in such denominations as each Lender shall
have notified the Borrower and shall be deemed earned in
accordance with Section 2.12 hereof and the terms and
conditions of the Fee Warrant Certificate. The Borrower
shall keep available for issuance upon exercise of the Fee
Warrant Certificate and the other Revolving Credit Agreement
Warrants a sufficient quantity of Common Stock to satisfy
the exercise in full of the Revolving Credit Agreement
Warrants from time to time outstanding. The Borrower will
comply in all respects with its obligations under the
Revolving Credit Agreement Warrants and shall take all steps
as shall be necessary to insure that the Lenders and any
subsequent holders of the Revolving Credit Agreement
Warrants receive all of the benefits which they are intended
to receive thereunder.
Page 52
SECTION 5.13 STOCK PAYMENT COMMON STOCK. On each
Interest Payment Date that the Borrower has made a Stock
Payment Election on account of a Borrowing, the Borrower
shall issue Common Stock to the Lenders equal to the
applicable Stock Payment ("Stock Payment Common Stock").
All shares of Common Stock issued pursuant to a Stock
Payment shall be duly authorized, validly issued, fully
paid, non-assessable, and free and clear of all Liens and
other encumbrances.
SECTION 5.14 CONVERSION SHARES. The Borrower shall
keep available for issuance a sufficient quantity of Common
Stock to satisfy, at all times, the exercise by any Tranche
B Lender of such Tranche B Lenders' conversion rights
pursuant to Section 2.07 hereof. All shares of Common Stock
issued pursuant to the exercise of conversion rights under
Section 2.07 hereof shall be duly authorized, validly
issued, fully paid, non-assessable, and free and clear of
all Liens and other encumbrances.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and
the principal of and interest on each Loan and all fees payable
hereunder have been paid in full, the Borrower covenants and
agrees with the Lenders that:
SECTION 6.01 INDEBTEDNESS. The Borrower will not,
and will not permit any Participating Subsidiary or SWFG to,
create, incur, assume or permit to exist any Indebtedness of
Borrower, the Participating Subsidiaries or SWFG, except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on November 25, 1997 and set
forth in Schedule 6.01 and extensions, renewals and
replacements of any such Indebtedness that do not increase
the outstanding principal amount thereof;
(c) Indebtedness of the Borrower to any Subsidiary and
of any Subsidiary to the Borrower or any other Subsidiary;
(d) Guarantees by the Borrower of Indebtedness of any
Subsidiary and by any Subsidiary of Indebtedness of the
Borrower or any other Subsidiary;
(e) Indebtedness of the Borrower or any Subsidiary
incurred to finance the acquisition, construction or
improvement of any assets, including Capital Lease
Obligations and any Indebtedness assumed in connection with
the acquisition of any such assets or secured by a Lien on
any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal
amount thereof; provided that (i) such Indebtedness is
incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement and
(ii) the aggregate principal amount of Indebtedness
permitted by this Subsection (e) shall not exceed $135
million at any time outstanding;
Page 53
(f) Indebtedness of the Borrower or any Subsidiary as
an account party in respect of trade letters of credit;
(g) "Parent Permitted Debt" (as defined in the Sun
World Indenture), to the extent such debt may be incurred by
Borrower pursuant to the terms of the Sun World Indenture
without any action or authorization by the Sun World Trustee
under the Sun World Indenture or by the holders of the Sun
World Notes; provided, however, no "Parent Permitted Debt"
(as defined in the Sun World Indenture) may be created,
incurred, assumed or permitted to exist that would have a
Material Adverse Effect upon Borrower's ability to satisfy
the Borrower's obligations hereunder and under the other
Loan Documents;
(h) intercompany loans payable to the Borrower that
evidences the intercompany transfer of the proceeds of the
Loans to affiliates of the Borrower, provided, however, that
any such intercompany loan is evidenced by a note that is
pledged by Borrower to and for the benefit of the
Administrative Agent for account of the Lenders.
SECTION 6.02 LIENS. The Borrower will not, and will
not permit any Subsidiary (excluding the Sun World Entities)
to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Borrower
or any Subsidiary (excluding the Sun World Entities)
existing on November 25, 1997 and set forth in Schedule
6.02; provided that (i) such Lien shall not apply to any
other property or asset of the Borrower or any Subsidiary
and (ii) such Lien shall secure only those obligations which
it secured on November 25, 1997 and extensions, renewals and
replacements thereof that do not increase the outstanding
principal amount thereof;
(c) any Lien existing on any property or asset prior
to the acquisition thereof by the Borrower or any Subsidiary
or existing on any property or asset of any Person that
becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary; provided that (i) such
Lien is not created in contemplation of or in connection
with such acquisition or such Person becoming a Subsidiary,
as the case may be, (ii) such Lien shall not apply to any
other property or assets of the Borrower or any Subsidiary
and (iii) such Lien shall secure only those obligations
which it secures on the date of such acquisition or the date
such Person becomes a Subsidiary, as the case may be and
extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;
(d) Liens on assets acquired, constructed or improved
by the Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by
Subsection (e) of Section 6.01, (ii) such security interests
and the Indebtedness secured thereby are incurred prior to
or within 90 days after such acquisition or the completion
of
Page 54
such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed 90% of the cost of
acquiring, constructing or improving such assets and
(iv) such security interests shall not apply to any other
property or assets of the Borrower or any Subsidiary;
(e) Liens to the extent permitted pursuant to the
terms of the Sun World Indenture without any action or
authorization by the Sun World Trustee under the Sun World
Indenture or by the holders of the Sun World Notes; provided
that such Liens do not include any Liens on the ING
Collateral; and
(f) Liens on the Excluded Items or any portion
thereof;
notwithstanding the foregoing, the Borrower will not, and will
not permit any Subsidiary to, create, incur, assume or permit to
exist any Lien on any Equity Acquisition Asset now owned or
hereafter acquired, or any proceeds thereof.
SECTION 6.03 FUNDAMENTAL CHANGES.
(a) The Borrower will not, and will not permit any
Subsidiary, excluding the Sun World Entities, to, merge into
or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction
or in a series of transactions) any substantial part of its
assets, or all or substantially all of the stock of any of
its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that,
if at the time thereof and immediately after giving effect
thereto no Default shall have occurred and be continuing
(i) any Subsidiary/Person may merge into the Borrower in a
transaction in which the Borrower is the surviving
corporation, (ii) any Subsidiary/Person may merge into any
Subsidiary in a transaction in which the surviving entity is
a Subsidiary, (iii) any Subsidiary may sell, transfer, lease
or otherwise dispose of its assets to the Borrower or to
another Subsidiary and (iv) any Subsidiary may liquidate or
dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the
Lenders; provided that any such merger involving a Person
that is not a wholly owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by
Section 6.04.
(b) The Borrower will not, and will not permit any of
its Subsidiaries (excluding the Sun World Entities) to,
engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its
Subsidiaries on the date of execution of this Agreement and
businesses reasonably related thereto.
(c) Notwithstanding the foregoing, the Borrower may
sell assets to the extent such sale may be consummated
pursuant to the terms of the Sun World Indenture without any
action or authorization by the Sun World Trustee under the
Sun World Indenture or the holders of the Sun World Notes;
provided that such sales do not include or affect in any
manner the ING Collateral.
(d) Unless an Inactive Subsidiary shall comply with
each and every obligation that Participating Subsidiaries
(either directly or indirectly) have hereunder or under any
of the Loan Documents, (a) the Borrower will not permit such
Inactive Subsidiary to engage in any
Page 55
business of any type or nature, (b) the Borrower will not
permit the Inactive Subsidiaries, and will cause the
Inactive Subsidiaries to refrain from, obtaining any assets
or properties of any type or nature, (c) the Borrower will
not permit any Inactive Subsidiary to, create, incur, assume
or permit to exist any Indebtedness, and (d) the Borrower
will not permit any Inactive Subsidiary to, create, incur,
assume or permit to exist any Lien on any property or asset
now owned or hereafter acquired by it, or assign or sell any
income or revenues.
SECTION 6.04 INVESTMENTS, LOANS, ADVANCES, GUARANTEES
AND ACQUISITIONS. The Borrower will not, and will not
permit any of its Subsidiaries (excluding the Sun World
Entities) to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a wholly owned
Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances
to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person,
or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person
constituting a business unit, except:
(a) Permitted Investments;
(b) investments by the Borrower existing on the date
hereof in the capital stock, other securities or equity
interests of its Subsidiaries;
(c) loans or advances made by the Borrower to any
Subsidiary and made by any Subsidiary to the Borrower or any
other Subsidiary;
(d) Guarantees constituting Indebtedness permitted by
Section 6.01; and
(e) assets acquired by Borrower solely in exchange for
the equity interests of the Borrower.
SECTION 6.05 HEDGING AGREEMENTS. The Borrower will
not, and will not permit any of its Subsidiaries (excluding
the Sun World Entities) to, enter into any Hedging
Agreement, other than Hedging Agreements entered into in the
ordinary course of business to hedge or mitigate risks to
which the Borrower or any Subsidiary is exposed in the
conduct of its business or the management of its
liabilities.
SECTION 6.06 RESTRICTED PAYMENTS. The Borrower will
not, and will not permit any of its Subsidiaries to, declare
or make, or agree to pay or make, directly or indirectly,
any Restricted Payment; except that the Borrower and its
Affiliates may make "Restricted Payments" (as defined in the
Sun World Indenture) to the extent such payments may be
effected pursuant to the terms of the Sun World Indenture
without any action or authorization by the Sun World Trustee
under the Sun World Indenture or by the holders of the Sun
World Notes, provided, however, that no such "Restricted
Payments" (as defined in the Sun World Indenture) may be
made that would have a Material Adverse Effect upon
Borrower's ability to satisfy the Borrower's obligations
hereunder and under the other Loan Documents.
SECTION 6.07 TRANSACTIONS WITH AFFILIATES. The
Borrower will not, and will not permit any of its
Subsidiaries to, sell, lease or otherwise transfer any
property or assets
Page 56
to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions
with, any of its Affiliates, except (a) in the ordinary
course of business at prices and on terms and conditions not
less favorable to the Borrower or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third
parties, (b) transactions between or among the Borrower and
its Subsidiaries not involving any other Affiliate, (c) any
Restricted Payment permitted by Section 6.06, and
(d) "Affiliate Transactions" (as defined in the Sun World
Indenture), to the extent such transactions may be incurred
by Borrower and its Subsidiaries pursuant to the terms of
the Sun World Indenture without any action or authorization
by the Sun World Trustee under the Sun World Indenture or by
the holders of the Sun World Notes, provided, however, that
no such "Affiliate Transactions" (as defined in the Sun
World Indenture) may be undertaken that would have a
Material Adverse Effect upon Borrower's ability to satisfy
the Borrower's obligations hereunder and under the other
Loan Documents.
SECTION 6.08 RESTRICTIVE AGREEMENTS. The Borrower
will not, and will not permit any of its Subsidiaries
(excluding the Sun World Entities) to, directly or
indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower
or any Subsidiary (excluding the Sun World Entities) to
create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Subsidiary
(excluding the Sun World Entities) to pay dividends or other
distributions with respect to any shares of its capital
stock or to make or repay loans or advances to the Borrower
or any other Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Subsidiary; provided that (i) the
foregoing shall not apply to restrictions and conditions
imposed by law or by this Agreement or any other Loan
Document, (ii) the foregoing shall not apply to restrictions
and conditions existing on November 25, 1997 identified on
Schedule 6.08 (but shall apply to any amendment or
modification expanding the scope of any such restriction or
condition), (iii) except as may be required pursuant to
Section 5.10 hereof, the foregoing shall not apply to
customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such
sale, provided such restrictions and conditions apply only
to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) except as may be required pursuant
to Section 5.10 hereof, Subsection (a) of the foregoing
shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to
the property or assets securing such Indebtedness and
(v) except as may be required pursuant to Section 5.10
hereof, Subsection (a) of the foregoing shall not apply to
customary provisions in leases and other contracts
restricting the assignment thereof.
SECTION 6.09 USE OF PROCEEDS. Borrower shall not use
the proceeds of any of the Loans for any purpose other than
as and to the extent permitted by Section 5.08 hereof.
SECTION 6.10 MANAGEMENT FEES FROM SUN WORLD.
Borrower shall not, and will cause Sun World to refrain from
taking any action to, either directly or indirectly, amend,
modify, alter or voluntary terminate or suspend the
Borrower/Sun World Services Agreement in any manner that
would restrict, limit, affect, modify, suspend or terminate
Borrower's right to receive at least $1,500,000.00 annually
for management fees paid by Sun World to Cadiz under the
terms of the Cadiz/Sun World Services Agreement.
Page 57
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of,
or interest on, any Loan or any fee or any other amount
payable under this Agreement or any other Loan Document when
and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof
or otherwise;
(b) any representation or warranty made or deemed made
by or on behalf of the Borrower or any Subsidiary in or in
connection with this Agreement or any other Loan Document or
any amendment or modification hereof or waiver hereunder, or
in any report, certificate, financial statement or other
document furnished pursuant to or in connection with this
Agreement or any other Loan Document or any amendment or
modification hereof or waiver hereunder, shall prove to have
been incorrect in any material respect when made or deemed
made;
(c) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02,
5.03 (with respect to the Borrower's existence) or 5.08 or
in Article VI;
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement
(other than those specified in clauses (a), (b) or (c) of
this Article), and such failure shall continue unremedied
for a period of 30 days after notice thereof from the
Administrative Agent to the Borrower (which notice will be
given at the request of any Lender);
(e) the Borrower or any Subsidiary shall fail to make
any payment (whether of principal or interest and regardless
of amount) in respect of any Material Indebtedness, when and
as the same shall become due and payable; provided that this
clause (e) shall not apply solely by reason of a failure to
make a payment when and as the same shall become due and
payable under the Sun World Indenture or other Sun World
Documents unless (i) such failure would cause an Event of
Default hereunder pursuant to a Section other than this
Section (e), (ii) the Sun World Notes or any of the
obligations under the Sun World Documents to the Sun World
Trustee or the holders of the Sun World Notes have been
accelerated pursuant to the provisions of the Sun World
Indenture or otherwise, (iii) the Sun World Trustee and/or
any of the holders of the Sun World Notes have instituted
legal proceedings to enforce the Sun World Notes, the Sun
World Indenture, or any obligations referred to in any of
the Sun World Documents, (iv) the Sun World Trustee and/or
any of the holders of the Sun World Notes have commenced
foreclosure proceedings (judicial or nonjudicial) with
respect to any collateral held as security for the
obligations under the Sun World Documents, or (v) such
failure to make payments has a Material Adverse Effect upon
Borrower's ability to satisfy its obligations under this
Agreement or any other Loan Document (as determined solely
in the Administrative Agent's reasonable judgment); provided
further
Page 58
that this clause (e) shall not apply solely by reason of a
failure to make a payment when and as the same shall become
due and payable under any other Sun World Indebtedness
unless (i) such failure would cause an Event of Default
hereunder pursuant to a Section other than this Section (e),
(ii) such Sun World Indebtedness have been accelerated
pursuant to the terns thereof or otherwise, (iii) the
holders of such Sun World Indebtedness or any agent therefor
have instituted legal proceedings to enforce such Sun World
Indebtedness, (iv) the holders of such Sun World
Indebtedness or any agent therefor have commenced
foreclosure proceedings (judicial or nonjudicial) with
respect to any collateral held as security for such
Indebtedness, or (v) such failure to make payments has a
Material Adverse Effect upon Borrower's ability to satisfy
its obligations under this Agreement or any other Loan
Document (as determined solely in the Administrative Agent's
reasonable judgment).
(f) any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or
holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to
become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (f) shall not apply to
secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets
securing such Indebtedness; provided further that this
clause (f) shall not apply solely by reason of an "Event of
Default" under the Sun World Indenture or other Sun World
Documents unless (i) such event would cause an Event of
Default hereunder regardless of its classification as an
"Event of Default" under the Sun World Indenture or other
Sun World Documents, (ii) the Sun World Notes or any of the
obligations under the Sun World Documents to the Sun World
Trustee or the holders of the Sun World Notes have been
accelerated pursuant to the provisions of the Sun World
Indenture or otherwise, (iii) the Sun World Trustee and/or
any of the holders of the Sun World Notes have instituted
legal proceedings to enforce the Sun World Notes, the Sun
World Indenture, or any obligations referred to in any of
the Sun World Documents, (iv) the Sun World Trustee and/or
any of the holders of the Sun World Notes have commenced
foreclosure proceedings (judicial or nonjudicial) with
respect to any collateral held as security for the
obligations under the Sun World Documents, or (v) such event
has a Material Adverse Effect upon Borrower's ability to
satisfy its obligations under this Agreement or any other
Loan Document (as determined solely in the Administrative
Agent's reasonable judgment); provided further that this
clause (f) shall not apply solely by reason of an "Event of
Default" under any other Sun World Indebtedness unless
(i) such event would cause an Event of Default hereunder
regardless of its classification as an "Event of Default"
for such other Sun World Indebtedness, (ii) such Sun World
Indebtedness has been accelerated pursuant to the terms
thereof or otherwise, (iii) the holders of such Sun World
Indebtedness or any agent therefor have instituted legal
proceedings to enforce the Sun World Indebtedness, (iv) the
holders of such Sun World Indebtedness or any agent therefor
have commenced foreclosure proceedings (judicial or
nonjudicial) with respect to any collateral held as security
for such Indebtedness, or (v) such event has a Material
Adverse Effect upon Borrower's ability to satisfy its
obligations under this Agreement or any other Loan Document
(as determined solely in the Administrative Agent's
reasonable judgment).
Page 59
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or
any Subsidiary or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for
the Borrower or any Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall
be entered;
(h) the Borrower or any Subsidiary shall
(i) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under
any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition
described in clause (g) of this Article, (iii) apply for or
consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for
the Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(i) the Borrower or any Subsidiary (other than PSWRI
and SWFG) shall become unable, admit in writing or fail
generally to pay its debts as they become due;
(j) one or more judgments for the payment of money in
excess of insurance coverage in an aggregate amount in
excess of $500,000 shall be rendered against the Borrower,
any Participating Subsidiary, SWFG or any combination
thereof and the same shall remain undischarged for a period
of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by
a judgment creditor to attach or levy upon any assets of the
Borrower or any Participating Subsidiary to enforce any such
judgment;
(k) an ERISA Event shall have occurred that, in the
opinion of the Required Lenders, when taken together with
all other ERISA Events that have occurred, could reasonably
be expected to result in a Material Adverse Effect;
(l) a Change in Control shall occur;
(m) any of the Security Documents shall for any reason
cease to be a valid perfected security interest in favor of
the Administrative Agent, for itself and on behalf of the
Lenders, in the Borrower's right, title and interest in and
to the collateral subject thereto (subject only to Permitted
Encumbrances), to the extent required by such Security
Document, and in the case of any Mortgage, such cessation
continues unremedied for more than 10 days; or
(n) an "Event of Default" shall have occurred and be
continuing under any other Loan Document;
Page 60
then, and in every such event (other than an event with respect
to the Borrower described in clause (g) or (h) of this Article),
and at any time thereafter during the continuance of such event,
the Administrative Agent may, and at the request of the Required
Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments
shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable,
together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Borrower; and in case of any event with respect to the Borrower
described in clause (g) or (h) of this Article, the Commitments
shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees
and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower. In addition to any other remedies
available to the Administrative Agent and the Lenders hereunder
or at law or otherwise, if an Event of Default shall have
occurred and so long as the same shall be continuing unremedied,
then and in every such case, the Administrative Agent and the
Required Lenders may exercise any or all of the rights and powers
and pursue any and all of the remedies set forth in any Security
Document in accordance with terms thereof.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01 APPOINTMENT, POWERS AND IMMUNITIES.
Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent
by the terms hereof and by the other Loan Documents, together
with such actions and powers as are reasonably incidental
thereto.
SECTION 8.02 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL
CAPACITY. The Lender serving as the Administrative Agent
hereunder and under the other Loan Documents shall have the same
rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the
Administrative Agent, and such Lender and its Affiliates may lend
money to and generally engage in any kind of business with the
Borrower or any Subsidiary or other Affiliate thereof as if it
were not the Administrative Agent hereunder. In that regard, the
terms "Lenders", "Required Lenders", or any similar terms used
herein shall, unless the context clearly otherwise indicates,
include the Administrative Agent in its individual capacity. The
Administrative Agent may lend money to, and generally engage in
any kind of financial, financial advisory or other business with
the Borrower or any Affiliate of the Borrower as if it were not
performing the duties specified herein, and may accept fees and
other consideration from the Borrower for services in connection
with this Agreement and otherwise without having to account for
the same to the Lenders.
Page 61
SECTION 8.03 NATURE OF DUTIES OF ADMINISTRATIVE
AGENT. The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the
other Loan Documents. Without limiting the generality of the
foregoing (a) the Administrative Agent shall not be subject to
any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative
Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights
and powers expressly contemplated hereby that the Administrative
Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02),
and (c) except as expressly set forth herein or in any other Loan
Document, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its
Subsidiaries that is communicated to or obtained by the Lender
serving as Administrative Agent or any of its Affiliates in any
capacity. The Administrative Agent shall not be liable for any
action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of
its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any
Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement,
(ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or
other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or
any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or
elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.
SECTION 8.04 CERTAIN RIGHTS OF ADMINISTRATIVE AGENT.
If the Administrative Agent shall request instructions from the
Required Lenders with respect to any act or action (including the
failure to act) in connection with this Agreement or any other
Credit Document, the Administrative Agent shall be entitled to
refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the
Required Lenders; and the Administrative Agent shall not incur
liability to any Person by reason of so refraining. Without
limiting the foregoing, but subject to the terms of Section 9.02
hereof, no Lender shall have any right of action whatsoever
against the Administrative Agent as a result of the
Administrative Agent acting or refraining from acting hereunder
in accordance with the instructions of the Required Lenders.
SECTION 8.05 RELIANCE BY ADMINISTRATIVE AGENT. The
Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or
sent by the proper Person. The Administrative Agent also may
rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative
Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not
Page 62
taken by it in accordance with the advice of any such counsel,
accountants or experts. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Administrative
Agent pursuant to Section 9.04 below. Any request, authority or
consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall
be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or any Note issued in exchange therefor.
SECTION 8.06 SUB-AGENTS. The Administrative Agent
may perform any and all its duties and exercise its rights and
powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities
as Administrative Agent.
SECTION 8.07 RESIGNATION BY ADMINISTRATIVE AGENT.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the
Administrative Agent may resign at any time by notifying the
Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have
been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring
Administrative Agent and the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder and under
the other Loan Documents. The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent's resignation
hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by
any of them while it was acting as Administrative Agent.
SECTION 8.08 NON-RELIANCE ON ADMINISTRATIVE AGENT AND
OTHER LENDERS. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative 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. Each Lender also
acknowledges that it will, independently and without reliance
upon the Administrative Agent or any other Lender and based on
such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related
agreement or any document furnished hereunder or thereunder.
Page 63
SECTION 8.09 SECURITY DOCUMENTS.
(a) Each Lender hereby authorizes the Administrative
Agent to enter into each of the Security Documents and to
take all actions contemplated thereby. All rights and
remedies under the Security Documents may be exercised by
the Administrative Agent for the benefit of the Lenders and
the other beneficiaries thereof upon the terms thereof.
With the consent of the Required Lenders, the Administrative
Agent may assign its rights and obligations as
Administrative Agent under any of the Security Documents to
any Affiliate of the Administrative Agent, and such
Affiliate thereafter shall be entitled to (i) all the rights
of the Administrative Agent under the applicable Security
Document and (ii) all rights hereunder of the Administrative
Agent with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of
any Security Document, the Administrative Agent shall have
the right to grant or withhold any consent, exercise any
remedy, make any determination or direct any action by the
Administrative Agent under such Security Document, the
Administrative Agent shall act in respect of such consent,
exercise of remedies, determination or action, as the case
may be, with the consent of and at the direction of the
Required Lenders; provided, however, that no such consent of
the Required Lenders shall be required with respect to any
consent, determination or other matter that is, in the
Administrative Agent's judgment, ministerial or
administrative in nature. In each circumstance where any
consent of or direction from the Required Lenders is
required, the Administrative Agent shall send to the Lenders
a written notice setting forth a description in reasonable
detail of the matter as to which consent or direction is
requested and the Administrative Agent's proposed course of
action with respect thereto. In the event the
Administrative Agent shall not have received a response from
any Lender within five (5) Business Days after the giving of
such notice, such Lender shall be deemed to have agreed to
the course of action proposed by the Administrative Agent.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 NOTICES. Except in the case of notices
and other communications expressly permitted to be given by
telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered
mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at:
Cadiz Inc.
Attn: Chief Financial Officer
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to the Administrative Agent, to it at:
ING Baring (U.S.) Capital LLC
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
Reference: Cadiz
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(c) if to ING, as a Lender, to it at:
ING Baring (U.S.) Capital LLC
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
Reference: Cadiz
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Page 65
(d) if to any other Lender, to it at its address (or
telecopy number) set forth in its Administrative
Questionnaire.
Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other
parties hereto. All notices and other communications given to
any party hereto in accordance with the provisions of this
Agreement shall be deemed to have been given on the date of
receipt.
SECTION 9.02 WAIVERS; AMENDMENTS.
(a) No failure or delay by the Administrative Agent or
any Lender in exercising any right or power hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and
remedies of the Administrative Agent and the Lenders
hereunder are cumulative and are not exclusive of any rights
or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure
by the Borrower therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing,
the making of a Loan shall not be construed as a waiver of
any Default, regardless of whether the Administrative Agent
or any Lender may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any provision hereof
may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the
Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required
Lenders; provided that no such agreement shall (i) increase
the Commitment of any Lender without the written consent of
such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each
Lender affected thereby, (iii) postpone the scheduled date
of payment of the principal amount of any Loan or any
interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone
the scheduled date of expiration of any Commitment, without
the written consent of each Lender affected thereby,
(iv) change Section 2.18(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any
of the provisions of this Section 9.02 or the definition of
"Required Lenders" or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or make any determination or
grant any consent hereunder, without the written consent of
each Lender, or (vi) release any security interest in any
material collateral for the obligations evidenced by the
Loan Documents (except in accordance with the Loan
Documents) without the written consent of each Lender;
provided further that no such agreement shall amend, modify
or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written
consent of the Administrative Agent.
Page 66
SECTION 9.03 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent
and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent,
in connection with the syndication of the credit facilities
provided for herein, the preparation and administration of
this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions
hereof (whether or not the transactions contemplated hereby
or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent
or any Lender, including the fees, charges and disbursements
of any counsel for the Administrative Agent or any Lender,
in connection with the enforcement or protection of its
rights in connection with this Agreement or any other Loan
Document, including its rights under this Section 9.03, or
in connection with the Loans made hereunder, including all
such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative
Agent and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or
delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated therein, the
performance by the parties hereto of their respective
obligations hereunder or the consummation of the
Transactions or any other transactions contemplated hereby,
(ii) any Loan or the use of the proceeds therefrom,
(iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any
amount required to be paid by it to the Administrative Agent
under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent such
Lender's Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was
incurred by or asserted against the Administrative Agent in
its capacity as such.
(d) To the extent permitted by applicable law, the
Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.
Page 67
(e) All amounts due under this Section 9.03 shall be
payable promptly after written demand therefor.
SECTION 9.04 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and
their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent
shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent
expressly contemplated hereby, the Related Parties of each
of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Lender may assign to one or more assignees all
or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and
the Loans at the time owing to it); provided that (i) except
in the case of an assignment to a Lender or an Affiliate of
a Lender, each of the Borrower and the Administrative Agent
must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld),
(ii) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitment, the
amount of the Commitment of the assigning Lender subject to
each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less
than $2,000,000 unless each of the Borrower and the
Administrative Agent otherwise consents, (iii) each partial
assignment shall be made as an assignment of a proportionate
part of all the assigning Lender's rights and obligations
under this Agreement, (iv) the parties to each assignment
shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and
recordation fee of $1,000, and (v) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire; provided further that any
consent of the Borrower otherwise required under this
paragraph shall not be required if an Event of Default under
clause (h) or (i) of Article VII has occurred and is
continuing. Subject to acceptance and recording thereof
pursuant to paragraph (d) of this Section, from and after
the effective date specified in each Assignment and
Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations
of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.17 and
9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (e)
of this Section.
Page 68
(c) The Administrative Agent, acting for this purpose
as an agent of the Borrower, shall maintain at its offices
in The City of New York a copy of each Assignment and
Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and
the Commitment of, and principal amount of the Loans owing
to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall
be available for inspection by the Borrower and any Lender,
at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of a duly completed Assignment
and Acceptance executed by an assigning Lender and an
assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to
such assignment required by paragraph (b) of this Section,
the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in
the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(e) Any Lender may, without the consent of the
Borrower or the Administrative Agent, sell participations to
one or more banks or other financial institutions (a
"Participant") in all or a portion of such Lender's rights
and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) the Borrower,
the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under
this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that
such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that
such agreement or instrument may provide that such Lender
will not, without the consent of the Participant, agree to
any amendment, modification or waiver described in the first
proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the
benefits of Sections 2.15 and 2.17 to the same extent as if
it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to
the benefits of Section 9.08 as though it were a Lender,
provided such Participant agrees to be subject to
Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any
greater payment under Section 2.15 or 2.17 than the
applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.17
unless the Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.17(e) as
though it were a Lender.
Page 69
(g) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to
a Federal Reserve Bank, and this Section 9.04 shall not
apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
SECTION 9.05 SURVIVAL. All covenants, agreements,
representations and warranties made by the Borrower herein
and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this
Agreement and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent or any
Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit
is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest
on any Loan or any fee or any other amount payable under
this Agreement is outstanding and unpaid and so long as the
Commitments have not expired or terminated. The provisions
of Sections 2.15, 2.17 and 9.03 and Article VIII shall
survive and remain in full force and effect regardless of
the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration of the
Commitments or the termination of this Agreement or any
provision hereof.
SECTION 9.06 COUNTERPARTS; INTEGRATION;
EFFECTIVENESS. This Agreement may be executed in
counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a
single contract. This Agreement and any separate letter
agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among
the parties relating to the subject matter hereof and
supersede any and all previous agreements and
understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and
their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement
by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07 SEVERABILITY. Any provision of this
Agreement held to be invalid, illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and
the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any
other jurisdiction.
SECTION 9.08 RIGHT OF SETOFF. If an Event of Default
shall have occurred and be continuing, each Lender and each
of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other
obligations at any time owing by such Lender or Affiliate to
or for the credit or the account of the Borrower
Page 70
against any of and all the obligations of the Borrower now
or hereafter existing under this Agreement held by such
Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender
under this Section 9.08 are in addition to other rights and
remedies (including other rights of setoff) which such
Lender may have.
SECTION 9.09 GOVERNING LAW; JURISDICTION; CONSENT TO
SERVICE OF PROCESS.
(a) This Agreement shall be construed in accordance
with and governed by the law of the State of California.
(b) The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of (i) the Supreme Court of the
State of New York sitting in New York County, (ii) the
United States District Court of the Southern District of New
York, (iii) any United States federal court sitting in the
Central District of California, or (iv) any other court of
appropriate jurisdiction sitting in the County of Los
Angeles, City of Los Angeles, and any appellate court from
any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be
heard and determined in such New York State or California
Court or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the
Administrative Agent or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement
against the Borrower or its properties in the courts of any
jurisdiction.
(c) The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section.
Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents
to service of process in the manner provided for notices in
Section 9.01. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD
Page 71
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.10.
SECTION 9.11 HEADINGS. Article and Section headings
and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration
in interpreting, this Agreement.
SECTION 9.12 CONFIDENTIALITY. Each of the
Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it
being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such
Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process,
(d) to any other party to this Agreement, (e) in connection
with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the
enforcement of rights hereunder, (f) subject to an agreement
containing provisions substantially the same as those of
this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights
or obligations under this Agreement, (g) with the consent of
the Borrower or (h) to the extent such Information
(i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the
Administrative Agent or any Lender on a nonconfidential
basis from a source other than the Borrower; provided,
however, that such information, to the Administrative
Agent's or Lender's knowledge, without any duty of inquiry,
has not been provided in violation of any obligation owed by
the source thereof to the Borrower. For the purposes of
this Section, "Information" means all information received
from the Borrower relating to the Borrower or its business,
other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential
basis prior to disclosure by the Borrower; provided that, in
the case of information received from the Borrower after the
date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such
Information as such Person would accord to its own
confidential information.
SECTION 9.13 FORECLOSURE OF CADIZ/SUN WORLD LEASE.
If, in enforcing remedies hereunder, the Administrative
Agent or a Lender forecloses on the property subject to that
certain Cadiz/Sun World Lease, whether judicially or non-
judicially, or obtains title to such property by deed in
lieu of foreclosure, by purchase, or otherwise, then (a) so
long as Sun World is not in default under the Cadiz/Sun
World Lease: (i) Sun World and the Sun World Trustee under
the Sun World Indenture shall be named or joined in any
foreclosure, trustee's sale or other proceeding only if
required by law; and (ii) the enforcement of any remedies
hereunder that effects a transfer of title to the property
subject to the Cadiz/Sun World Lease shall not terminate the
Cadiz/Sun World Lease nor terminate nor affect in any manner
the lien of the Sun World Trustee thereon, nor disturb Sun
World in the possession and use of the property subject
thereto.
Page 72
SECTION 9.14 WAIVER OF ANTI-DEFICIENCY PROTECTION.
Borrower hereby waives, as to this Agreement and any and all
Loan Documents heretofore or hereafter executed in
connection with the Transactions any defense, protection or
right under:
(a) California Code of Civil Procedure ("CCP")
Section 580(d) concerning the bar against
rendition of a deficiency judgment after
foreclosure under a power of sale;
(b) CCP Section 580(a) purporting to limit the amount
of a deficiency judgment which may be obtained
following exercise of a power of sale under a deed
of trust; and
(c) CCP Section 726 concerning exhaustion of
collateral, the form of foreclosure proceedings
with respect to real property security located in
California and otherwise limiting the amount of a
deficiency judgment which may be recovered
following completion of judicial foreclosure by
reference to the "fair value" of the foreclosed
collateral.
SECTION 9.15 COSTS BORNE BY NON-PREVAILING PARTY. In
the event of any dispute with respect to this Agreement or
any other Loan Document, the prevailing party shall be
entitled to recover from the non-prevailing party all costs
and attorneys' fees.
SECTION 9.16 INTEREST RATE LIMITATION.
Notwithstanding anything herein to the contrary, if at any
time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the
"Charges"), shall exceed the maximum lawful rate (the
"Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable
in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but
were not payable as a result of the operation of this
Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Maximum Rate therefor)
until such cumulated amount, together with interest thereon
at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.17 STATUS OF ING. ING hereby represents to
the Borrower that it is not a Foreign Lender.
SECTION 9.18 AMENDMENTS TO SUN WORLD INDENTURE. An
amendment or modification of the Sun World Indenture will be
a Non-Adverse Amendment only upon the satisfaction of each
and every one of the following conditions (such amendment or
modification that satisfies all of the following
requirements, a "Non-Adverse Amendment"):
(a) the Borrower, in accordance with Section 9.01 of
this Credit Agreement, gives notice of, and
delivers to, the Administrative Agent, a true and
correct copy of such amendment or modification;
Page 73
(b) as determined solely in the Administrative Agent's
reasonable judgment, the terms of the amendment or
modification of the Sun World Indenture do not,
and will not, adversely affect either (i) the
ability of the Borrower or the other Obligors to
satisfy their respective obligations under this
Credit Agreement and/or the other Loan Documents
or (ii) the rights of the Administrative Agent or
Lenders hereunder or under the other Loan
Documents; and
(c) such amendment or modification of the Sun World
Indenture is validly effected and becomes
effective pursuant to the terms of the Sun World
Indenture.
The failure of the Borrower to notify, and deliver
to, the Administrative Agent any amendment or
modification of the Sun World Indenture will
preclude such amendment or modification from being
a Non-Adverse Amendment until each of the
requirements set forth in the previous sentence
are satisfied. If, however,
(x) the Borrower gives notice of, and delivers to, the
Administrative Agent, a true and correct copy of
an amendment or modification to the Sun World
Indenture; and
(y) the Administrative Agent does not notify the
Borrower within five (5) Business Days after the
Administrative Agent's receipt of the documents
set forth in subclause (x) above that the
amendment or modification (in the Administrative
Agent's reasonable judgment) has or will have an
adverse effect upon (i) the ability of the
Borrower or the other Obligors to satisfy their
respective obligations under this Credit Agreement
and/or the other Loan Documents or (ii) the rights
of the Administrative Agent or Lenders hereunder
or under the other Loan Documents;
then such amendment or modification of the Sun World Indenture
shall be deemed to be a Non-Adverse Amendment for all purposes
hereunder. Notwithstanding the foregoing, and without requiring
any action by the Borrower or the Administrative Agent, any
amendments or modifications of the Sun World Indenture that may
be validly effected pursuant to the terms of the Sun World
Indenture without any action or authorization by the holders of
the Sun World Notes (or any portion of such holders) shall also
be deemed to be a Non-Adverse Amendment provided that such
amendment or modification does not, and will not, in the
Administrative Agent's reasonable judgment, adversely affect
(i) Borrower's ability to satisfy the Borrower's obligations
hereunder and under the other Loan Documents or (ii) the rights
of the Administrative Agent or Lenders hereunder or under the
other Loan Documents.
SECTION 9.19 GENERAL RELEASE. In consideration of
the amendments, waivers, consents, and the other terms and
provisions of this Agreement and the other Loan Documents,
Borrower, on behalf of itself, its agents, successors, assigns,
subsidiaries, partners and Affiliates hereby fully release and
forever discharge the Administrative Agent, the Lenders and each
of their agents, consultants, heirs, successors, assigns,
Affiliates, directors, officers, employees, shareholders,
executives, servants, attorneys, accountants, representatives and
other
Page 74
related persons (collectively, the "Released Parties") from any
and all rights, claims, demands, actions, causes of action,
costs, losses, suits, liens, debts, damages, judgments,
executions and demands of every nature, kind and description
whatsoever, whether now known or unknown, either at law, in
equity or otherwise, which Borrower or any of its agents,
successors, assigns, subsidiaries, partners and/or Affiliates
ever had or may have against the Administrative Agent, the
Lenders or the other Released Parties, including, without
limitation, all claims arising under or in connection with the
Loan Documents, and/or in connection with the dealings between
the parties up to and including the closing of the transactions
contemplated in this Agreement and all claims which have arisen
or may arise in any other way whatsoever; provided that nothing
herein shall be deemed to release the Administrative Agent, the
Lenders or any other Released Party from any liability or
obligations arising in connection with facts or circumstances
which occur or arise for the first time after the Effective Date.
It is further understood and agreed that the foregoing general
release extends to all claims of every kind and nature
whatsoever, known, suspected or unsuspected, liquidated or
contingent, foreseen or unforeseen, and Borrower and its agents,
successors, assigns, subsidiaries, partners and Affiliates hereby
waive all rights under Section 1542 of the California Civil Code.
Section 1542 of the California Civil Code provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH DEBTOR."
Page 75
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.
CADIZ INC.,
the Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
ING BARING (U.S.) CAPITAL LLC,
Individually and as
Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice PResident