AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF OCTOBER 19, 2001
BY AND AMONG
▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
(THE "BORROWER"),
AS BORROWER
AND
EACH OF THE FINANCIAL INSTITUTIONS INITIALLY A
SIGNATORY HERETO, TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 13.06 HEREOF,
AS LENDERS
AND
SOUTHTRUST BANK, AN ALABAMA BANKING CORPORATION
AS ADMINISTRATIVE AGENT AND FUNDING AGENT
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS.............................................................................. 1
SECTION 1.02. GENERAL..................................................................................18
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.01. REVOLVING CREDIT FACILITY................................................................18
SECTION 2.02. BORROWINGS UNDER REVOLVING CREDIT FACILITY...............................................18
SECTION 2.03. DISBURSEMENTS UNDER REVOLVING CREDIT FACILITY............................................19
SECTION 2.04. SEVERAL OBLIGATIONS......................................................................19
SECTION 2.05. REPAYMENT OF REVOLVING LOANS.............................................................19
SECTION 2.06. REVOLVING NOTES..........................................................................20
SECTION 2.07. TERM LOAN FACILITY.......................................................................20
SECTION 2.08. TERM NOTES...............................................................................20
SECTION 2.09. TERM LOAN AMORTIZATION AND MATURITY......................................................21
SECTION 2.10. INTEREST ON LOANS........................................................................22
SECTION 2.11. NOTICE OF CONTINUATION AND NOTICE OF CONVERSION/UNAVAILABILITY OF CERTAIN LOANS/FUNDING
LOSSES.........................................................................................22
SECTION 2.12. VOLUNTARY REDUCTION OF REVOLVING COMMITMENT; VOLUNTARY PREPAYMENTS; FUNDING LOSSES.......24
SECTION 2.13. UNUSED REVOLVING CREDIT FACILITY FEES....................................................24
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.01. LETTERS OF CREDIT/LENDERS' PARTICIPATION.................................................24
SECTION 3.02. METHOD OF ISSUANCE OF LETTERS OF CREDIT..................................................26
SECTION 3.03. LETTER OF CREDIT FEES....................................................................26
SECTION 3.04. LETTER OF CREDIT REIMBURSEMENT...........................................................26
SECTION 3.05. NATURE OF LETTER OF CREDIT ISSUER'S DUTIES...............................................27
SECTION 3.06. OBLIGATIONS ABSOLUTE.....................................................................28
SECTION 3.07. EXPIRATION DATE OF LETTERS OF CREDIT.....................................................29
SECTION 3.08. VOLUNTARY REDUCTION OF L/C COMMITMENT....................................................29
ARTICLE IV
OTHER LOAN AND PAYMENT PROVISIONS
SECTION 4.01. INTEREST ON OVERDUE PAYMENTS.............................................................29
SECTION 4.02. COMPUTATIONS.............................................................................30
SECTION 4.03. USURY....................................................................................30
SECTION 4.04. PAYMENTS.................................................................................30
SECTION 4.05. PRO RATA TREATMENT.......................................................................30
ii
SECTION 4.06. SHARING OF PAYMENTS, ETC.................................................................30
SECTION 4.07. INSUFFICIENT FUNDS.......................................................................31
SECTION 4.08. FEES.....................................................................................31
SECTION 4.09. [INTENTIONALLY OMITTED]..................................................................32
SECTION 4.10. INCREASED COSTS..........................................................................32
SECTION 4.11. STATEMENTS OF ACCOUNT....................................................................32
SECTION 4.12. DEFAULTING LENDER'S STATUS...............................................................32
SECTION 4.13. AGENT'S RELIANCE.........................................................................32
ARTICLE V
SECURITY
SECTION 5.01. SECURITY INTERESTS.......................................................................33
SECTION 5.02. MORTGAGES................................................................................33
SECTION 5.03. FURTHER ASSURANCES.......................................................................33
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. CONDITIONS PRECEDENT TO EFFECTIVENESS....................................................34
SECTION 6.02. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS................................................35
SECTION 6.03. CONDITIONS AS COVENANTS..................................................................35
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. REPRESENTATIONS AND WARRANTIES...........................................................35
SECTION 7.02. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC..........................................38
ARTICLE VIII
AFFIRMATIVE COVENANTS
SECTION 8.01. PRESERVATION OF EXISTENCE AND SIMILAR MATTERS............................................39
SECTION 8.02. COMPLIANCE WITH APPLICABLE LAW...........................................................39
SECTION 8.03. MAINTENANCE OF PROPERTY..................................................................39
SECTION 8.04. CONDUCT OF BUSINESS......................................................................39
SECTION 8.05. INSURANCE................................................................................39
SECTION 8.06. PAYMENT OF TAXES AND CLAIMS..............................................................40
SECTION 8.07. VISITS AND INSPECTIONS...................................................................40
SECTION 8.08. USE OF PROCEEDS..........................................................................40
SECTION 8.09. SUBSIDIARY SECURITIES REGISTRATION.......................................................40
SECTION 8.10. ENVIRONMENTAL COMPLIANCE.................................................................40
ARTICLE IX
INFORMATION
SECTION 9.01. QUARTERLY REPORTS........................................................................41
SECTION 9.02. YEAR-END STATEMENTS......................................................................41
SECTION 9.03. MONTHLY REPORTS..........................................................................42
SECTION 9.04. COPIES OF OTHER REPORTS..................................................................42
SECTION 9.05. NOTICE OF LITIGATION AND OTHER MATTERS...................................................42
SECTION 9.06. ERISA....................................................................................42
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ARTICLE X
NEGATIVE COVENANTS
SECTION 10.01. INDEBTEDNESS FOR BORROWED MONEY.........................................................43
SECTION 10.02. GUARANTIES..............................................................................43
SECTION 10.03. INVESTMENTS.............................................................................43
SECTION 10.04. LIENS...................................................................................43
SECTION 10.05. RESTRICTED DISTRIBUTIONS AND PURCHASES..................................................44
SECTION 10.06. MERGER, CONSOLIDATION AND OTHER ARRANGEMENTS............................................44
SECTION 10.07. PLANS...................................................................................44
SECTION 10.08. LOANS...................................................................................44
SECTION 10.09. SUBSIDIARIES............................................................................44
SECTION 10.10. TRANSACTIONS WITH AFFILIATES............................................................44
SECTION 10.11. NO SALE OF ASSETS.......................................................................44
SECTION 10.12. CHANGE IN ACCOUNTING METHOD OR FISCAL YEAR END..........................................44
SECTION 10.13. CHANGE OF SENIOR MANAGEMENT OR CONTROL..................................................44
SECTION 10.14. CHANGE IN ORGANIZATIONAL DOCUMENTS......................................................44
SECTION 10.15. ADDITIONAL SUBSIDIARIES EQUITIES........................................................45
SECTION 10.16. DIVIDENDS...............................................................................45
ARTICLE XI
FINANCIAL COVENANTS
SECTION 11.01. MINIMUM TANGIBLE NET WORTH..............................................................45
SECTION 11.02. INTEREST COVERAGE RATIO.................................................................45
SECTION 11.03. FIXED CHARGE COVERAGE...................................................................45
SECTION 11.04. FUNDED DEBT RATIO. .....................................................................46
SECTION 11.05. FUNDED DEBT TO EBITDA...................................................................46
SECTION 11.06. ........................................................................................46
ARTICLE XII
DEFAULT
SECTION 12.01. EVENTS OF DEFAULT.......................................................................46
SECTION 12.02. REMEDIES................................................................................48
SECTION 12.03. RIGHTS CUMULATIVE.......................................................................49
ARTICLE XIII
THE AGENT
SECTION 13.01. AUTHORIZATION AND ACTION................................................................49
SECTION 13.02. AGENT'S RELIANCE, ETC...................................................................50
SECTION 13.03. AGENT AS LENDER.........................................................................50
SECTION 13.04. LENDER CREDIT DECISION, ETC.............................................................50
SECTION 13.05. INDEMNIFICATION.........................................................................50
SECTION 13.06. COLLATERAL MATTERS......................................................................51
SECTION 13.07. SUCCESSOR AGENT.........................................................................52
ARTICLE XIV
MISCELLANEOUS
iv
SECTION 14.01. NOTICES.................................................................................52
SECTION 14.02. EXPENSES................................................................................53
SECTION 14.03. STAMP, INTANGIBLE AND RECORDING TAXES...................................................54
SECTION 14.04. SETOFF..................................................................................54
SECTION 14.05. LITIGATION..............................................................................54
SECTION 14.06. ASSIGNABILITY...........................................................................55
SECTION 14.07. AMENDMENTS..............................................................................57
SECTION 14.08. NONLIABILITY OF AGENT AND LENDERS.......................................................57
SECTION 14.09. INFORMATION.............................................................................57
SECTION 14.10. INDEMNIFICATION.........................................................................58
SECTION 14.11. SURVIVAL................................................................................58
SECTION 14.12. TITLES AND CAPTIONS.....................................................................58
SECTION 14.13. SEVERABILITY OF PROVISIONS..............................................................58
SECTION 14.14. GOVERNING LAW...........................................................................58
SECTION 14.15. COUNTERPARTS............................................................................58
SECTION 14.16. OBLIGATIONS WITH RESPECT TO BORROWER....................................................59
SECTION 14.17. BINDING EFFECT..........................................................................59
v
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS
CREDIT AGREEMENT dated as of October 19, 2001 by and among ▇▇▇▇▇▇▇▇▇
INTERNATIONAL, INC. (the "BORROWER"), SOUTHTRUST BANK, an Alabama banking
corporation, as Administrative Agent and Funding Agent (collectively "AGENT"),
and each of the financial institutions initially a signatory hereto, together
with those Assignees pursuant to Section 14.06 hereof (individually, a "LENDER"
and, collectively, the "LENDERS").
WHEREAS, the Borrower, SouthTrust as Agent, and as defined in the
Credit
Agreement dated November 17, 1999, as subsequently amended (the "Original
Credit
Agreement"), the Lenders, agreed to make Term and Revolving Loans to the
Borrower from time to time, the Letter of Credit Issuers agreed to issue Letters
of Credit from time to time for the account of the Borrower, and the Lenders
agreed to purchase participating interests in such Letters of Credit, provided
that the aggregate outstanding principal amount of all such Revolving Loans and
Term Loans PLUS the aggregate Stated Amounts of all outstanding Letters of
Credit, would not exceed $70,000,000 (the "LOAN COMMITMENT");
WHEREAS, the Borrower, the Lenders and the Agent have agreed to amended
terms for the Revolving Loans, the Term Loans and the Letters of Credit and wish
to set forth such agreements herein on the terms and conditions contained
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. In addition to terms defined elsewhere herein,
the following terms shall have the following meanings for the purposes of this
Agreement:
"ACCOUNTS" means all accounts and any and all rights to the payment of
money or other forms of consideration of any kind (whether classified under the
Uniform Commercial Code as accounts, chattel paper, general intangibles, or
otherwise) for goods sold or leased or for services rendered including, but not
limited to, accounts receivable, proceeds of any letters of credit naming the
Borrower or any of its Subsidiaries as beneficiary, chattel paper, tax refunds,
insurance proceeds, contract rights, notes, drafts, instruments, documents,
acceptances, all contract rights and agreements to purchase or sell Inventory,
and all other debts, obligations and liabilities in whatever form from any
Person.
"ACCOUNT DEBTOR" means a Person obligated under an Account.
"ADJUSTED BASE RATE" means a rate equal to the Base Rate plus the
Applicable Margin.
"ADJUSTED EURODOLLAR RATE" means the interest rate per annum equal to the
Eurodollar Rate plus the Applicable Margin.
1
"AFFILIATE" means, with respect to any Person, any entity which directly
or indirectly controls, is controlled by, or is under common control with, such
Person or any Subsidiary of such Person or any Person who is a director, officer
or partner of such Person or any Subsidiary of such Person. For purposes of this
definition, "control" shall mean the possession, directly or indirectly, of the
power to (a) vote ten percent (10%) or more of the securities having ordinary
voting power for the election of directors of such Person or (b) direct or cause
the direction of management and policies of a business, whether through the
ownership of voting securities, by contract or otherwise and either alone or in
conjunction with others or any group.
"AGENT" means SouthTrust Bank, an Alabama banking corporation, and its
successors.
"AGREEMENT" means this
Credit Agreement as it may be amended, restated,
modified or supplemented from time to time in accordance with its terms.
"AGREEMENT DATE" means the date as of which this Agreement is dated.
"APPLICABLE LAW" means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all Governmental Authorities and all
orders and decrees of all courts, tribunals and arbitrators.
"APPLICABLE MARGIN" shall mean:
The percentage per annum designated below based on the Borrower's Funded Debt to
EBITDA ratio for the four (4) fiscal quarter periods most recently ended:
------------------------------------------------------------------------------------------------
Level Funded Applicable Margin Applicable Margin Term
Debt/EBITDA Revolving Loans Loans
------------------------------------------------------------------------------------------------
Eurodollar Base Unused Eurodollar
Rate Rate Revolver Fee Rates Base Rate
------------------------------------------------------------------------------------------------
I GREATER THAN 3.0 2.50% .75% .375% 3.0% 1.25%
and LESS THAN 3.50
------------------------------------------------------------------------------------------------
II LESS THAN OR EQUAL TO 3.00 2.25% .50% .375% 2.75% 1.00%
and GREATER THAN 2.50
------------------------------------------------------------------------------------------------
III LESS THAN OR EQUAL TO 2.50 2.00% .25% 0.25% 2.50% 0.75%
and GREATER THAN 2.0
------------------------------------------------------------------------------------------------
IV LESS THAN 2.0 1.75% .00% 0.25% 2.25% 0.50%
------------------------------------------------------------------------------------------------
Adjustments to the Applicable Margin shall be based on changes in the Funded
Debt to EBITDA Ratio as set forth above calculated quarterly, and shall be
determined based on the computations set forth in the Compliance Certificate
("Certificate") furnished to the Agent pursuant to Section 9.01 and shall be
effective commencing on the date following the date such Certificate is received
(or if earlier, the date such Certificate was required to be delivered), and in
each case, until the date following the date on which a new Certificate is
delivered or is required to be delivered, whichever shall first occur, PROVIDED
however, if the Borrower shall fail to deliver any such Certificate within the
time period required by Section 9.01, then the Applicable Margin with respect to
the Revolving Loans and the Term Loan shall be at Level I until the appropriate
Certificate is so delivered.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" has the meaning set forth in Section
14.06.
"AUTHENTICATING PERSON" has the meaning set forth in Section 6.01(d).
2
"AUTHORIZED REPRESENTATIVE" means any of the Chief Executive Officer,
President or any Vice President of the Borrower or, with respect to financial
matters, the Chief Financial Officer, Treasurer or Controller of the Borrower,
or any other Person expressly designated by the Board of Directors of the
Borrower (or appropriate committee thereof) as an Authorized Representative of
the Borrower, as set forth from time to time in a certificate in the form of
Exhibit "A".
"AVAILABLE REVOLVING COMMITMENT" means, on any date of determination, the
lesser of (a) and (b), with (a) being equal to the Revolving Commitment in
effect on such date and (b) being equal to the then current Borrowing Base less
the aggregate principal balance of the Term Loans on such date.
"BASE RATE" means the lending rate as announced by the Agent from time to
time as its base rate, which may change as often as daily, provided, however,
that at no time shall the rate of interest exceed the highest rate allowed by
law.
In the event that the Agent does not, for any reason, announce a Base Rate
or discontinues the use of the term "Base Rate" as a benchmark for interest rate
on its loans, the Base Rate shall be the rate quoted as the "Prime Rate" as
reported in the "Money Rates" section of the Wall Street Journal (or the
arithmetic average of the rates so quoted, if more than one rate is quoted) or
in the event of discontinuance of such publication or such section thereof, the
Base Rate shall mean the monthly average Prime Rate as reported and published in
the FEDERAL RESERVE BULLETIN published monthly by the Board of Governors of the
Federal Reserve System under the table styled "Prime Rate Charged by Banks on
Short Term Business Loans". In the event of the discontinuance of both such
publications or such section or table thereof, the Base Rate shall mean the
Prime Rate as from time to time announced or published by Citibank, N.A. at its
principal office in New York, New York.
The terms "Base Rate" and "Prime Rate" are intended by the parties to be
benchmarks only and are not to be construed as indicating that such rates are
the best or lowest rates offered by the Agent to any of its customers regardless
of their creditworthiness.
"BASE RATE LOAN" means a Loan that bears interest based upon the Adjusted
Base Rate.
"BENEFICIARY" means any third Person designated by the Borrower to whom
the Agent is to make payment or on whose order payment is to be made under a
Letter of Credit.
"BORROWER" shall have the meaning set forth in the introductory paragraph
hereof and shall include Borrower's successors and permitted assigns. In each
instance where the term Borrower is used herein it shall be deemed to refer to
each of the parties comprising Borrower individually as well as collectively.
"BORROWING" means a borrowing of Revolving Loans pursuant to Section 2.01
hereof, the Borrowing of Term Loans on the Effective Date pursuant to Section
2.07 hereof, or a deemed Borrowing pursuant to Section 2.11 hereof.
"BORROWING BASE" means, at any date of determination, an amount equal to
the sum of (i) eighty percent (80%) of the Eligible Accounts, PLUS (ii) fifty
percent (50%) of Eligible Inventory, (iii) PLUS sixty percent (60%) of
Borrower's Fixed Assets.
3
"BORROWING BASE CERTIFICATE" means a certificate of the Borrower in
substantially the form of Exhibit "B" hereto and delivered to the Agent pursuant
to Section 9.03 hereof.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which commercial banks in Birmingham, Alabama are authorized or required to
close by law, and, if the applicable Business Day relates to determination of
the Eurodollar Rate, a day on which commercial bank are open for domestic and
international business (including dealings in U.S. Dollar deposits) in London,
England.
"BUSINESS UNIT" means the assets constituting the business or a division
or operating unit of any Person.
"CAPITALIZED LEASE OBLIGATION" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with such principles.
"CASH COLLATERAL ACCOUNT" means a special non-interest bearing deposit
account maintained at the Principal Office of the Agent and under the sole
dominion and control of the Agent. The monies deposited into the Cash Collateral
Account pursuant to this Agreement shall be applied to the Reimbursement
Obligations.
"COLLATERAL" shall mean (a) a first, perfected security interest (subject
to the Permitted Liens) in (i) all the intangible and tangible real and personal
property assets of the Obligors (other than the assets located outside the fifty
(50) states of the United States of America), including, without limitation,
Accounts, Chattel Paper, Documents, Equipment, Instruments, Intangible Assets
and Inventory, whether now owned or hereafter existing or acquired and (ii) all
property of the Obligors now or at any time hereafter in the possession of the
Administrative Agent or its Affiliates in any capacity whatsoever, including but
not limited to, deposit balances, accounts, items, certificates of deposit or
monies, and (b) proceeds of the foregoing, all as more particularly described in
the Security Documents, together with all other property of any type at any time
pledged or assigned to the Administrative Agent and/or the Lenders as collateral
for the Obligations.
"COMMITMENT" means, as to each Lender, such Lender's obligation to make
Loans hereunder and to purchase participation interests in Letters of Credit to
the extent of such Lender's Credit Percentage.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any fiscal period of
Borrower, total interest expense (including without limitation, interest expense
attributable to capitalized leases) of Borrower and its Subsidiaries on a
consolidated basis but shall not include interest on the Tank Loan.
"CONSOLIDATED INTEREST EXPENSE COVERAGE RATIO" means, as of any date of
determination for the Borrower and its Subsidiaries on a consolidated basis, the
ratio of (a) EBITDA to (b) the Consolidated Interest Expense for such period, in
each case determined in accordance with GAAP.
"CONTINUATION" has the meaning given in Section 2.11 hereof.
"CONTROL" means that any one Person or group of related Persons (other
than Angostura Limited and/or its Affiliates) which own or acquire more than
fifty percent (50%) of the outstanding shares of voting stock of the Borrower or
any Subsidiary thereof. In the event a form 13(d) is filed with the SEC
4
by Borrower, Angostura or its Affiliates relating to the acquisition of
additional stock of Borrower by Angostura or its Affiliates a copy of the form
13(d) will be provided to the Agent simultaneously with the filing with the
SEC.
"CONVERT", "CONVERSION" and "CONVERTED" each refers to a conversion of
Loans of one Type into Loans of another Type pursuant to Section 2.11(b) hereof.
"CREDIT EVENT" means any of the following: (a) the making (or deemed
making) or Continuation of any Loan; (b) the Conversion of a Borrowing of Loans
from one Type to another Type; and (c) the issuance of a Letter of Credit.
"CREDIT PERCENTAGE" means, as to each Lender, the percentage set forth on
Annex I.
"CURRENT SUBSIDIARIES" means Virgin Islands Rum Industries Ltd. and
▇▇▇▇▇▇▇▇▇ Bahamas Limited which are Subsidiaries of Borrower.
"DATE OF ISSUANCE" means the date of issuance by a Letter of Credit Issuer
of a Letter of Credit under this Agreement.
"DEFAULT" means any of the events specified in Section 11.01, whether or
not there has been satisfied any requirement for giving of notice, lapse of time
or the happening of any other condition.
"DOCUMENT" shall mean any now owned or hereafter acquired ▇▇▇▇ of lading,
dock warrant, dock receipt, warehouse receipt or order for the delivery of
goods, and also any other document, whether negotiable or non-negotiable, that
in the regular course of business of financing is treated as adequately
evidencing that the Person in possession of it is entitled to receive, hold and
dispose of the document and the goods it covers.
"DOLLARS" or "$" means the lawful currency of the United States of
America.
"DRAWING" means a drawing by a Beneficiary under any Letter of Credit.
"DOMESTIC SUBSIDIARY" means any Subsidiary of Borrower organized under the
laws of the United States of America, any state or the District of Columbia.
"EBITDA" means, for any period, the sum of (i) net income (or loss) of the
Borrower and its Subsidiaries on a consolidated basis for such period, plus (ii)
to the extent deducted in determining such net income (loss) (A) provisions for
income taxes for such period, (B) interest expense for such period, (C)
depreciation and amortization of intangible assets during such period, (D) less
extraordinary income and expense items realized in such period, and (E) less the
gains or losses on the sale or disposition of assets outside the ordinary course
of Borrower's business, in each case determined in accordance with GAAP. For the
purposes of this Agreement, EBITDA will be determined based on the most recent
four (4) fiscal quarters of Borrower.
"EFFECTIVE DATE" means the date on which all of the conditions set forth
in Section 6.01 hereof shall have been fulfilled or waived in writing by the
Lenders.
5
"ELIGIBLE ACCOUNT" shall mean an Account of the Borrower or any Subsidiary
arising from a sale made to a customer by the Borrower or any Subsidiary in the
ordinary course of business with respect to which the Borrower has furnished to
the Agent information as set forth in Section 9.03 or otherwise qualified under
subsection (h) below, provided that no Account of the Borrower or such
Subsidiary shall be deemed to be an Eligible Account if, as determined by Agent
in its sole and absolute discretion:
(a) such Account arises out of a sale made by the Borrower or such
Subsidiary to an Affiliate of the Borrower which is not an arms length
transaction on substantially the same terms as Borrower or the Subsidiary
would have concluded the sale with an unrelated third party; or
(b) such Account arises out of a sale having terms for final payment
in excess of ninety (90) days from the date of purchase; or
(c) such Account remains unpaid for more than 90 days after the due
date of the invoice for such Account; or
(d) twenty percent (20%) or more of the amount of the Accounts of the
Account Debtor and its Affiliates remain unpaid for more than 90 days after
the date of the invoice for such Account; or
(e) (i) the Account Debtor is also a creditor of the Borrower or such
Subsidiary, to the extent of the amount owed by the Borrower or such
Subsidiary to the Account Debtor (unless the Agent receives from such Account
Debtor an agreement or other writing satisfactory to the Agent pursuant to
which such Account Debtor agrees to waive any right of offset it may have with
respect to any amounts owing by the Borrower or such Subsidiary to such
Account Debtor); (ii) the Account Debtor has disputed its liability on, or the
Account Debtor has made any claim with respect to, such Account or any other
Account due from such Account Debtor to the Borrower or such Subsidiary which
has not been resolved, to the extent of the amount of such dispute or claim;
or (iii) the Account otherwise is contractually or by operation of law subject
to any right of setoff by the Account Debtor, to the extent of the amount of
such setoff; or
(f) the Account Debtor has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or made an
assignment for the benefit of creditors, or if a decree or order for relief
has been entered by a court having jurisdiction over the Account Debtor in an
involuntary case under the federal bankruptcy laws, as now constituted or
hereafter amended which has not been dismissed with forty-five (45) days after
filing, or if any other petition or other application for relief under the
federal bankruptcy laws has been filed by or against the Account Debtor, or if
the Account Debtor has failed, suspended business, declared itself to be
insolvent, or consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion of its
assets or affairs; or
(g) Agent determines, in its discretion that collection of such
Account is insecure or that such Account may not be paid by reason of the
Account Debtor's financial inability to pay; or
(h) the Account Debtor is the United States of America or any
department, agency or instrumentality thereof and the aggregate principal
amount owed is in excess of Fifty Thousand and no/100s Dollars ($50,000.00),
unless the Borrower duly assigns its rights to payment of such Account to the
Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Section 3727 ET SEQ.), or the Account Debtor is Canada or any department,
agency or instrumentality thereof, unless the Borrower or such Subsidiary duly
assigns its rights to payment of such Account to the Agent pursuant to any
6
equivalent to the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Section 3727 ET SEQ.) in Canada, provided, however, that subsidies or
promotional allowances received by Borrower or a Subsidiary which have
historically been received by Borrower or a Subsidiary from the United States
of America or the Government of the United States Virgin Islands shall not be
excluded from Eligible Accounts; or
(i) such Account is evidenced by an "instrument" or "chattel paper"
(within the meaning of the UCC) of any kind unless such instrument or chattel
paper is delivered to the Agent with all appropriate endorsements in favor of
the Agent thereon; or
(j) such Account does not represent a complete BONA FIDE transaction
which requires no further act under any circumstances on the part of the
Borrower or such Subsidiary to make such Account payable by the Account
Debtor; or
(k) such Account is not a valid, legally enforceable obligation of the
Account Debtor with respect thereto or is subject to a present or contingent
(or there exist facts which are the basis for any future) offset, deduction,
counterclaim, dispute or other defense on the part of such Account Debtor; or
(l) the Inventory giving rise to such Account was at the time of sale
thereof subject to a Lien other than Permitted Liens; or
(m) such Account has otherwise been determined by the Agent in good
faith to be ineligible for any other reason.
"ELIGIBLE INVENTORY" means the Inventory Value of Inventory of the
Borrower or any Subsidiaries which the Agent, in its sole and absolute
discretion, determines meets all of the following requirements:
(a) such Inventory is (i) owned by and in the possession and under the
control of the Borrower or such Subsidiary or located in a bonded warehouse
convenient to the Borrower or such Subsidiary monitored by a third party not
affiliated with the Borrower or such Subsidiary and acceptable to the Agent in
its sole discretion, and (ii) as to which the Borrower has furnished to the
Agent the information required by Section 9.03;
(b) such Inventory has not been sold;
(c) such Inventory (i) is owned by the Borrower or such Subsidiary,
and (ii) is subject to no Lien whatsoever other than Permitted Liens;
(d) such Inventory is in good condition and meets all standards
imposed by any governmental agency, or department or division thereof, having
regulatory authority over such goods, their use or sale;
(e) such Inventory is currently either usable or salable in the normal
course of the business of the Borrower or such Subsidiary;
(f) such Inventory is located within the United States or one of its
territories; and
(g) such Inventory is not determined by the Agent in good faith to be
ineligible for any other reason.
7
"ENVIRONMENTAL LAWS" means any Applicable Law relating to environmental
protection including, without limitation, the following: Clean Air Act, 42
U.S.C. Section 7401 ET SEQ; Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 ET SEQ.; Solid Waste Disposal Act, 42 U.S.C. Section 6901 ET
SEQ.; Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 ET SEQ.; National Environmental Policy Act, 42 U.S.C.
Section 4321 ET SEQ.; regulations of the Environmental Protection Agency and
any applicable rule of common law and any judicial interpretation thereof
relating primarily to the environment or Hazardous Materials.
"EQUIPMENT" shall mean all now existing and hereafter acquired goods
(other than Inventory) owned by an Obligor or used primarily in the business of
any Obligor, wherever located, including, but not limited to, machinery, motor
vehicles, rolling stock, furniture, furnishings, fixtures, leasehold
improvements, parts (including spare parts and repair parts) and tools, together
with all fittings, accessories, accessions, additions, modifications,
improvements, equipment and special tools now or hereafter affixed to any or any
part of the foregoing or used in connection with any part of the foregoing and
all replacements of any part thereof and all products and proceeds of any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as in
effect from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"EURODOLLAR RATE" means the interest rate per annum calculated according
to the following formula:
Eurodollar = Interbank Offered Rate
Rate -----------------------------------
1-Eurodollar Reserve Percentage
"EURODOLLAR RATE LOAN" means a Loan that bears interest based upon the
Adjusted Eurodollar Rate.
"EURODOLLAR RESERVE PERCENTAGE" means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
or any successor regulation, as the reserve requirement (including any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Rate Loans is determined), whether or not the
Agent or any Lender has any Eurocurrency liabilities subject to such
requirements, without benefits of credits or proration, exceptions or offsets
that may be available from time to time to the Agent or any Lender. The
Eurodollar Rate shall be adjusted automatically on and as of the effective date
of any change in the Eurodollar Reserve Percentage.
"EVENT OF DEFAULT" means any of the events specified in Section 12.01,
provided that any requirement for notice or lapse of time or any other condition
has been satisfied.
"FACILITY TERMINATION DATE" has the meaning set forth in Section 3.07.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum (rounded upward to the nearest 1/100th of 1%) equal, for each day
during such period, to the weighted average of the rates on overnight Federal
Funds transactions with members of the Federal Reserve System arranged by
Federal Funds brokers, as published for such day (or, if such day is not a
Business Day, for the next
8
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day on such transactions received by the Agent from
three Federal Funds brokers of recognized standing selected by it.
"FEES" means the fees and commissions provided for or referred to in
Sections 3.03 and 4.08 and any other fees payable by the Borrower hereunder or
under any other Loan Document.
"FINANCING STATEMENTS" shall mean the financing statements permitted under
the UCC or any other state law for the purpose of perfecting or continuing the
Security Interest.
"FIXED ASSETS" means the gross fixed assets of Borrower without deduction
for depreciation or amortization.
"FIXED CHARGES" means the scheduled principal and interest payments on
Funded Debt due in the period in question but not including any additional
principal payments made by Borrower pursuant to Section 2.09.
"FIXED CHARGE COVERAGE RATIO" means the ratio of EBITDA to Fixed Charges
which shall be measured on the basis of the preceding four (4) fiscal quarters
of Borrower but not including any additional principal payments made by Borrower
pursuant to Section 2.09.
"FOREIGN SUBSIDIARY" means a Subsidiary other than a Domestic Subsidiary a
majority of whose Voting Securities, or a majority of whose voting interests,
are owned directly by Borrower or a Domestic Subsidiary.
"FUNDING AGENT" means SouthTrust Bank, National Association, as Agent for
the Lenders under the terms of this Agreement, and any successor Agent.
"FUNDED DEBT" means without duplication, the principal balance of all
indebtedness, for money borrowed, purchase money mortgages, capitalized leases,
conditional sales contracts and similar title retention debt instruments under
which Borrower or any of its Subsidiaries is an obligor, including any current
maturities of such indebtedness, plus all debt of other entities or Persons,
other than Subsidiaries, which has been guaranteed by the Borrower or any
Subsidiary (other than the current balance of the indebtedness of Premier Wines
& Spirts, Ltd. as of the Effective Date guaranteed by Borrower), or which is
supported by a letter of credit issued for the account of the Borrower or any
Subsidiary which by its terms matures more than one year from the date of any
calculation thereof and/or which is renewable or extendible at the option of the
obligor to a date beyond one year from such date; PROVIDED THAT, for the
purposes of this Agreement, "Funded Debt" shall not include the Tank Loan or
amounts transferred quarterly to Borrower's Bahamian or Virgin Islands'
Subsidiaries and the bi-weekly excise tax payments made by Borrower in
connection therewith, provided that such transfers and excise payments shall not
in the aggregate exceed Five Million and no/100s Dollars ($5,000,000.00).
"GAAP" or "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means generally
accepted accounting principles, being those principles of accounting set forth
in pronouncements of the Financial Accounting Standards Board, the American
Institute of Certified Public Accountants or which have other substantial
authoritative support and are applicable in the circumstances as of the date of
a report.
9
"GOVERNMENTAL APPROVALS" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"GOVERNMENTAL AUTHORITY" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau or entity (including, without limitation, the
FDIC, the Comptroller of the Currency or the Federal Reserve Board, any central
bank or any comparable authority) or any arbitrator with authority to bind a
party at law.
"GUARANTY", "GUARANTEED" or to "GUARANTEE" as applied to any obligation
means and includes:
(a) a guaranty (other than by endorsement of negotiable instruments or
items for collection in the ordinary course of business or delivery to the
Agent on account of the Obligations), directly or indirectly, in any manner,
of any part or all of such obligation; or
(b) an agreement, direct or indirect, contingent or otherwise, and
whether or not constituting a guaranty, the practical effect of which is to
assure the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation whether by:
(i) the purchase of securities or obligations,
(ii) the purchase, sale or lease (as lessee or lessor) of property
or the purchase or sale of services primarily for the purpose of enabling the
obligor with respect to such obligation to make any payment or performance (or
payment of damages in the event of nonperformance) of or on account of any part
or all of such obligation, or to assure the owner of such obligation against
loss,
(iii) the supplying of funds to or in any other manner investing
in the obligor with respect to such obligation,
(iv) repayment of amounts drawn down by beneficiaries of letters
of credit, or
(v) the supplying of funds to or investing in a Person on
account of all or any part of such Person's obligation under a Guaranty of any
obligation or indemnifying or holding harmless, in any way, such Person
against any part or all of such obligation.
"HAZARDOUS MATERIALS" means all hazardous or toxic materials as defined by
any Applicable Law and includes, without limitation, (a) hazardous waste as
defined in the Resource Conservation and Recovery Act of 1976, or in any other
applicable Environmental Laws, (b) hazardous substances, as defined in the
Comprehensive Environmental Response, Compensation and Liability Act, or in any
other applicable Environmental Laws, (c) gasoline, or any other petroleum
product or by-product, (d) toxic substances, as defined in the Toxic Substances
Control Act of 1976, or in any other applicable Environmental Laws, (e)
insecticides, fungicides, or rodenticides, as defined in the Federal
Insecticide, Fungicide, and Rodenticide Act of 1975, or in any other applicable
Environmental Laws, or (f) any hazardous waste, hazardous substances, hazardous
materials, toxic substances or toxic pollutants, as those terms are used or
defined in the Hazardous Materials Transportation Act, the Clean Air Act or the
Clean Water Act, as each such Act, statute or regulation may be amended from
time to time.
10
"INDEBTEDNESS" as applied to a Person means, without duplication, (a) all
items which in accordance with GAAP would be included in determining total
liabilities as shown on the liability side of a balance sheet of such Person as
at the date as of which Indebtedness is to be determined including, without
limitation, all Capitalized Lease Obligations of such Person and all
reimbursement obligations due or that may become due of such Person under
letters of credit and acceptances issued for its account, and (b) all
obligations of other Persons which such Person has Guaranteed.
"INSTRUMENT" shall mean a negotiable instrument or any other writing that
evidences a right to payment of money and is not itself a security agreement or
lease and is of a type that is in the ordinary course of business transferred by
delivery with any necessary endorsement or assignment.
"INTANGIBLE ASSETS" shall mean any of a Person's personal property
(including choses in action) other than goods, Accounts, Documents, Instruments
and money and including, but not limited to all now owned or hereafter acquired
(i) deferred assets, other than prepaid insurance and prepaid taxes, (ii)
goodwill, manufacturing and processing rights, patents, patent right licenses,
franchises, permits, copyrights, trademarks, service marks, trade names,
trademark and trade name registrations and applications, trade secrets, customer
lists, tax refund claims, incentive payments, insurance proceeds, experimental
expenses and other similar assets which would be classified as "intangible
assets" under GAAP, (iii) treasury stock and any write-up of the value of any
assets after the date hereof unless in accordance with GAAP, and (iv) all
proceeds of any and all of the foregoing.
"INTERBANK OFFERED RATE" means, for any Eurodollar Rate Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100th of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London Interbank Offered Rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two (2) Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period. If,
for any reason, such rate is not available, the term "Interbank Offered Rate"
shall mean, with respect to any Eurodollar Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100th of 1%) appearing on Reuters Screen LIBOR Page as the London interbank
offered rate of deposits in Dollars at approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
specified on Reuters Screen LIBOR Page, the applicable rate shall be the
arithmetic means of all such rates.
"INTEREST PERIOD" means for any Base Rate Loan one (1) day and for any
Eurodollar Loan, the period commencing on the date of the Borrowing, Conversion
or Continuation of such Eurodollar Loan and ending on the last day of the period
pursuant to the provisions below. The duration of each Interest Period for
Eurodollar Rate Loans shall be one (1), two (2) or three (3) months, as
designated by Borrower. Borrower shall, in an appropriate Notice of Borrowing,
Notice of Continuation or Notice of Conversion, designate the beginning of each
such Interest Period. In no event shall an Interest Period on a Revolving Loan
extend beyond the Revolving Termination Date. Whenever the last day of any
Interest Period would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on the next
succeeding Business Day; PROVIDED, HOWEVER, that if such extension would cause
the last day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next preceding
Business Day.
Any Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month.
11
There shall not be more than eight (8) Interest Periods in effect for the
Revolving Loans and one (1) Interest Period in effect for the Terms Loans on any
day.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended.
"INVENTORY" means (a) all inventory of the Borrower or any Subsidiaries
and all goods intended for sale or lease by the Borrower or any Subsidiaries, or
for display or demonstration; (b) all work-in-process; (c) all raw materials and
other materials and supplies of every nature and description used or which might
be used in connection with the manufacture, packing, shipping, advertising,
selling, leasing or furnishing of such goods or otherwise used or consumed in
the Borrower's or such Subsidiary's business; and (d) all warehouse receipts and
other documents relating to any of the foregoing.
"INVENTORY VALUE" means the lesser of (i) the contract amount for the sale
of any Inventory or (ii) the market value of such Inventory.
"L/C COMMITMENT AMOUNT" equals $2,000,000, as the same may be reduced
permanently from time to time pursuant to Section 3.08 hereof.
"L/C TERMINATION DATE" means the Revolving Termination Date or the
Facility Termination Date, whichever occurs first.
"LENDER" shall have the meaning set forth in the introductory paragraph
hereof and shall include each Lender's successors and permitted assigns.
"LENDING OFFICE" means, for each Lender, the "Lending Office" specified
for such Lender on the signature pages attached hereto.
"LETTER OF CREDIT" has the meaning set forth in Section 3.01(a).
"LETTER OF CREDIT FACILITY" means the credit facility described in Article
III pursuant to which the Letters of Credit are to be issued.
"LETTER OF CREDIT ISSUER" means the Agent or, with the written consent of
the Agent and the Borrower, any other Lender that issues Letters of Credit for
the account of the Borrower pursuant to Section 3.01.
"LIEN" as applied to the property of any Person means: (a) any mortgage,
deed to secure debt, deed of trust, lien, pledge, charge, lease constituting a
Capitalized Lease Obligation, conditional sale or other title retention
agreement, or other security interest, security title or encumbrance of any kind
in respect of any property of such Person, or upon the income or profits
therefrom; (b) any arrangement, express or implied, under which any property of
such Person is transferred, sequestered or otherwise identified for the purpose
of subjecting the same to the payment of Indebtedness or performance of any
other obligation in priority to the payment of the general, unsecured creditors
of such Person; and (c) the filing of, or any agreement to give, any financing
statement under the UCC or its equivalent in any jurisdiction.
12
"LOAN" or "LOANS" means any Revolving Loan or Term Loan or collectively
all of the Revolving Loans and Term Loans.
"LOAN COMMITMENT" means the aggregate commitments of $70,000,000 from the
Lenders for Term Loans, Revolving Loans and Letters of Credit.
"LOAN DOCUMENT" means this Agreement, each of the Notes, the Security
Documents and each other document or instrument executed and delivered by a
party comprising Borrower in connection with this Agreement, the Revolving
Credit Facility, the Term Loan Facility, the Letter of Credit Facility or any of
the foregoing agreements.
"MARKETABLE SECURITIES" means securities which are Permitted Investments.
"MATERIAL ADVERSE EFFECT" means, with respect to any Person, a material
adverse effect upon such Person's business, assets, liabilities, financial
condition, results of operations or business prospects, as determined by the
Required Lenders in their sole discretion exercised in good faith.
"MONEY BORROWED" means, as applied to the Indebtedness of a Person,
(a) Indebtedness for money borrowed, or
(b) Indebtedness, whether or not in any such case the same was for money
borrowed, but other than trade debt of such Person incurred in the ordinary
course of business:
(i) represented by notes payable, and drafts accepted, that
represent extensions of credit,
(ii) constituting obligations evidenced by bonds, debentures,
notes or similar instruments, or
(iii) upon which interest charges are customarily paid or that was
issued or assumed as full or partial payment for property, or
(c) Indebtedness that constitutes a Capitalized Lease Obligation, or
(d) Guaranty of Indebtedness that is such by virtue of clause (b) of the
definition of Indebtedness, but only to the extent that the obligations
Guaranteed are obligations that would constitute Indebtedness for Money
Borrowed.
"MORTGAGE" means, collectively, all mortgages, deeds of trust, deeds to
secure debt and/or similar document or instrument granting a Lien to the Agent
(or a trustee for the benefit of the Agent) for the benefit of the Agent and the
Lenders in Mortgaged Property, as such documents may be amended, modified or
supplemented from time to time.
"MORTGAGED PROPERTY" means, collectively, each parcel of real property and
all improvements, fixtures and other items of real property related thereto and
the products and proceeds thereof now owned or hereafter acquired by Borrower or
any Domestic Subsidiary that is described on Schedule 1 attached hereto.
13
"MORTGAGED PROPERTY SUPPORT DOCUMENTS" means, for each Mortgaged Property,
(i) the Title Policy pertaining thereto, (ii) such surveys that permit the
survey exception to the title policy to be deleted except for such
encroachments, overlaps and other matters that are acceptable to the Agent,
flood hazard certifications, appraisals, and environmental reports thereof as
the Agent may require prepared by recognized experts in their respective fields
selected by Borrower and reasonably satisfactory to the Agent, (iii) as to
Mortgaged Properties located in a flood hazard area, such flood hazard insurance
as the Agent may require, (iv) with respect to facilities leased or subleased to
third parties, such lessees' estoppel, waiver and consent certificates and
subordination, nondisturbance and attornment agreements, (v) such owner's or
lessee's affidavits as the Agent may reasonably require, (vi) such opinions of
local counsel with respect to the Mortgages as the Agent may reasonably require,
and (vii) such other documentation as the Agent may reasonably require, in each
case as shall be in form and substance reasonably acceptable to the Agent.
"MULTIEMPLOYER PLAN" has the meaning set forth in Section 4001(a)(3) of
ERISA, as amended or revised from time to time.
"NOTE" means a Revolving Note or a Term Note, and "NOTES" means each and
every Note.
"NOTICE OF BORROWING" means a notice in the form of Exhibit "C" hereto to
be delivered to the Agent pursuant to Section 2.02 and 2.07 indicating the
intention of the Borrower to borrow Revolving Loans and the Term Loan.
"NOTICE OF CONTINUATION/CONVERSION" means a notice in the form of Exhibits
"D" and "E", respectively, hereto to be delivered to the Agent pursuant to
Section 2.02 in connection with the election of a subsequent Interest Period for
any Eurodollar Rate Loan, the continuation or conversion of a Eurodollar Rate
Loan into a Base Rate Loan or the continuation or conversion of any Base Rate
Loan into a Eurodollar Rate Loan.
"OBLIGATIONS" means, individually and collectively: (a) the Revolving
Loans; (b) the Term Loans, (c) all Reimbursement Obligations; and (d) all other
indebtedness, liabilities, obligations, covenants and duties of the Borrower and
any Subsidiary owing to the Agent or Lenders of every kind, nature and
description, under or in respect of this Agreement, any Note or any of the other
Loan Documents including, without limitation, any renewals or extensions
thereof, the Fees, and whether direct or indirect, absolute or contingent, due
or not due, contractual or tortious, liquidated or unliquidated, and whether or
not evidenced by any note.
"OBLIGORS" shall mean Borrower and any of its Domestic Subsidiaries which
have title to any Collateral.
"PAYMENT DATE" shall have the meaning set forth in Section 3.04(a).
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
agency.
"PERMITTED INVESTMENTS" means (i) prime commercial paper of a domestic
issuer rated at least "A-1" or "P-1", (ii) certificates of deposit with
maturities of one year or less from the date of acquisition issued by any
commercial bank organized under the laws of the United States or Canada having
capital resources in excess of $500,000,000 and a short-term debt rating of
"A-1" or "P-1" and a long term debt
14
rating of "A" or higher and denominated in U.S. Dollars, (iii) direct
obligations of the United States government or any agency thereof, and
obligations guaranteed by the United States government, with maturities or
one year or less from the date of acquisition, or (iv) money market deposit
accounts with a commercial bank organized under the laws of the United States
or Canada having capital resources in excess of $500,000,000 and a short term
debt rating of "A-1" or "P-1" and a long term debt rating of "A" or higher
and denominated in U.S. Dollars.
"PERMITTED LIENS" means, as to any Person:
(a) inchoate Liens securing taxes, assessments and other governmental
charges or levies (excluding any Lien imposed pursuant to any of the provisions
of ERISA) or the claims of materialmen, mechanics, carriers, warehousemen or
landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business payment of which is not yet due;
(b) Liens consisting of deposits or pledges made, in the ordinary course
of business, in connection with, or to secure payment of, obligations under
workmen's compensation, unemployment insurance or similar legislation;
(c) Liens consisting of encumbrances in the nature of zoning
restrictions, easements, and rights or restrictions of record on the use of
real property, which do not materially detract from the value of such
property or materially impair the use thereof in the business of such Person;
(d) Liens in existence as of the date hereof and specified on
Schedule 7.01(g);
(e) Liens in favor of the Agent on behalf of the Lenders;
(f) Liens which have been approved by the Required Lenders;
(g) Liens upon property leased under a capital lease and placed upon
such property to secure the lease payments under such capital lease,
provided, (i) any such Lien shall not encumber any other property of the
Borrower or such Subsidiary, (ii) any such lien shall not exceed the total of
such lease payments, and (iii) the Agent has approved such capital lease
transaction;
(h) Purchase money liens on capital assets acquired after the date
hereof securing the purchase price, or a portion thereof, of such capital
asset, provided (i) any such Liens shall not encumber any other property of
the Borrower or any Subsidiary, (ii) any such Lien shall not exceed the
purchase price of such capital asset, and (iii) the aggregate amount of the
debt secured by such liens does not exceed $250,000.00; and
(i) The lien on the Tank Project securing the Tank Loan.
"PERSON" means an individual, corporation, partnership, limited liability
corporation or partnership, association, trust or unincorporated organization,
or a government or any agency or political subdivision thereof.
"PLAN" means an employee benefit plan maintained for employees of the
Borrower or any of its Subsidiaries that is covered by Title IV of ERISA,
including such plans as may be established after the Agreement Date.
15
"PLEDGE AGREEMENT" means the pledge in the form attached hereto as Exhibit
"F" pursuant to which the stock in the Current Subsidiaries is pledged to the
Agent for the benefit of the Lenders to secure the Loans.
"POST-DEFAULT RATE" means a rate equal to two percent (2%) per annum above
the Base Rate as in effect from time to time.
"PRINCIPAL OFFICE" means with respect to the Agent, the office of the
Agent located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn:
Florida
Corporate Banking (West Palm Beach).
"QUARTERLY PAYMENT DATE" means the last Business Day of each March, June,
September and December to and including the Term Loan Maturity Date, commencing
December 31, 2001.
"REAL ESTATE" shall mean any parcel or parcels of real property owned by
an Obligor.
"REIMBURSEMENT OBLIGATION" means the absolute and unconditional obligation
of the Borrower to reimburse the Letter of Credit Issuer for any Drawing
pursuant to Section 3.04(b).
"REPORTABLE EVENT" has the meaning set forth in Section 4043(b) of ERISA,
but shall not include a Reportable Event as to which the provision for 30 days'
notice to the PBGC is waived under applicable regulations.
"REQUIRED LENDERS" means Lenders holding 66 2/3% of the Commitments
provided that, if the Commitments shall have been terminated for any reason,
"Required Lenders" shall mean Lenders holding 66 2/3% of the outstanding
principal amount of the Loans and participation interests in Letters of Credit.
"RESTRICTED DISTRIBUTION" means any payment, dividend or other
distribution of income, cash or other assets of the Borrower by the Borrower to
any of the Borrower's shareholders, partners or other Persons holding an equity
interest in the Borrower other than payments to employees, officers and
directors of Borrower in the ordinary course of Borrower's business as currently
conducted.
"RESTRICTED PURCHASE" means any payment by the Borrower to any of the
Borrower's shareholders, partners or other Persons holding an equity interest in
the Borrower on account of the purchase, redemption or other acquisition or
retirement of such equity interest in the Borrower.
"REVOLVING COMMITMENT" means $30,000,000, as the same may be reduced
permanently from time to time pursuant to Section 2.12 hereof.
"REVOLVING CREDIT FACILITY" means the revolving credit facility described
in Section 2.01 hereof.
"REVOLVING LOAN" has the meaning set forth in Section 2.01 hereof.
"REVOLVING NOTE" has the meaning set forth in Section 2.06 hereof.
"REVOLVING TERMINATION DATE" means the date that is three (3) years after
the date of this Agreement, provided that if such date is not a Business Day,
"Revolving Termination Date" shall mean the immediately preceding Business Day.
16
"SEC" means the Securities & Exchange Commission of the United States of
America.
"SECURED OBLIGATIONS" means, individually and collectively: (a) the
Revolving Loans; (b) the Term Loans, (c) all Reimbursement Obligations; and (d)
all other indebtedness, liabilities, obligations, covenants and duties of the
Borrower owing to the Agent or Lenders of every kind, nature and description,
under or in respect of this Agreement, any Note or any of the other Loan
Documents including, without limitation, any renewals or extensions thereof, the
Fees, and whether direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note.
"SECURITY AGREEMENT" means, collectively, that certain Security Agreement
executed by the Obligors in favor of the Administrative Agent, substantially in
the form of Exhibit "G" attached hereto granting a Security Interest to the
Administrative Agent for the benefit of the Lenders in the Collateral, as the
same may be amended, modified, supplemented, restated or replaced from time to
time.
"SECURITY DOCUMENTS" means the Mortgages, Security Agreement, the
Financing Statements, the Pledge Agreement and all other documents, agreements,
instruments, assignments, financing statements, certificates of title, notices,
returns and other security instruments and records, however described or
denominated, now or hereafter created or existing, pledging or evidencing any
pledge of any property or assets, however described, to secure any or all of the
Obligations.
"SECURITY INTEREST" means the Lien of the Agent for the benefit of the
Lenders upon, and the collateral assignment to the Agent for the benefit of the
Lenders of, the Collateral pursuant to the Pledge Agreement and any other Loan
Document.
"SENIOR MANAGEMENT" includes, but is not limited to, Messrs. Pincourt,
Maltby, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ and specifically requires that Messrs.
Pincourt, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ in the aggregate have and exercise the same extent
of management control and responsibilities as they had on the date of execution
of the
Credit Agreement.
"STATED AMOUNT" means the amount available to be drawn by a Beneficiary
under a Letter of Credit from time to time, as the Stated Amount of any such
Letter of Credit may be increased or reduced from time to time in accordance
with the terms of such Letter of Credit.
"SUBSIDIARY" means any corporation or other entity in which more than 50%
of its outstanding voting stock or more than 50% of all equity interests are
owned directly or indirectly by the Borrower and/or by one or more of the
Borrower's Subsidiaries.
"SUBSIDIARY SECURITIES" means the shares of capital stock or the other
equity interests issued by or equity participations in any Foreign Subsidiary,
whether or not constituting a "security" under Article 8 of the Uniform
Commercial Code as in effect in any jurisdiction.
"SURVEY" means an ALTA survey of each parcel of Real Estate sufficient to
allow the title insurer to delete the standard survey title exception from the
title insurance policy issued to the Agent.
"TANGIBLE NET WORTH" means, with respect to any date of determination and
any Person, the consolidated shareholders' equity of such Person less (i) all
goodwill, non-compete agreements, and other assets which are classified as
intangible assets in accordance with GAAP except the trademarks listed on
17
Schedule 7.01(p), and (ii) all Indebtedness owing to such Person by any of its
Affiliates other than Indebtedness owing to Borrower on the date hereof from
Premier Wines & Spirits, Ltd. and Antillean Liquors, N.V. disclosed on Schedule
7.01(g), the aggregate principal balance of which does not exceed $2,000,000.
"TANK PROJECT" means the new molasses storage tank to be constructed at
the St. Croix facility owned by Virgin Islands Rum Industries, Ltd.
"TANK LOAN" means the loan from Westway Trading Corporation which is to be
used to finance the construction of the Tank Project.
"TERM LOAN COMMITMENT" means $40,000,000.
"TERM LOAN FACILITY" means the Term Loan facility described in Section
2.07 hereof.
"TERM LOAN" means a loan made to the Borrower pursuant to Section 2.07
hereof.
"TERM LOAN MATURITY DATE" means September 30, 2006, provided that if such
date is not a Business Day, "TERM LOAN MATURITY DATE" shall mean the immediately
preceding Business Day.
"TERM NOTE" has the meaning set forth in Section 2.08 hereof.
"TERMINATION EVENT" means (a) a Reportable Event; (b) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA or (c) the institution of proceedings to
terminate a Plan by the PBGC under Section 4042 of ERISA, or the appointment of
a trustee to administer any Plan.
"TITLE POLICY" means, with respect to each Mortgaged Property, the
mortgagee title insurance policy (together with such endorsements as the Agent
may reasonably require) issued to the Agent in respect of such Mortgaged
Property by an insurer selected by Borrower and reasonably acceptable to the
Agent, insuring (in an amount satisfactory to the Agent) the Lien of the Agent
for the benefit of the Agent and the Lenders on such Mortgaged Property to be
duly perfected and of first priority, subject only to such exceptions as shall
be acceptable to the Agent.
"TYPE" with respect to any Loan, refers to whether such Loan is a
Eurodollar Rate Loan or a Base Rate Loan.
"UNFUNDED VESTED ACCRUED BENEFITS" means with respect to any Plan at any
time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan EXCEEDS (b) the fair market value of all
Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan.
"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform Commercial Code as in
effect from time to time in the State of
Florida.
SECTION 1.02. GENERAL. All terms of an accounting nature not specifically
defined herein shall have the meaning ascribed thereto by GAAP. References in
this Agreement to "Sections", "Articles", "Exhibits" and "Schedules" are to
sections, articles, exhibits and schedules herein and hereto unless otherwise
indicated. References in this Agreement to any document, instrument or agreement
(a) shall
18
include all exhibits, schedules and other attachments thereto, (b) shall
include all documents, instruments or agreements issued or executed in
replacement thereof, and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified or
supplemented from time to time in accordance with its terms and in effect at
any given time. Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter. Unless explicitly set
forth to the contrary, a reference to "Subsidiary" shall mean a Subsidiary of
the Borrower or a Subsidiary of such Subsidiary. Unless otherwise indicated,
all references to time are references to prevailing Eastern time. Unless
otherwise indicated, all accounting terms, ratios and measurements shall be
interpreted or determined in accordance with generally accepted accounting
principles. References in this Agreement to "including" shall mean "including
without limiting the generality of any description preceding such term."
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.01. REVOLVING CREDIT FACILITY. Subject to the terms and
conditions hereof, during the period from the Effective Date to the Revolving
Termination Date, each Lender severally agrees to make revolving loans (the
"REVOLVING LOANS") to the Borrower in an aggregate principal amount at any time
outstanding up to, but not exceeding the product of (a) and (b), with (a) being
equal to (i) the Available Revolving Commitment at such time LESS (ii) the
aggregate Stated Amounts of Letters of Credit outstanding at such time, and (b)
being equal to such Lender's Credit Percentage; PROVIDED, however, that the
Lenders will not be required and shall have no obligation to make any such loan
(i) so long as a Default or an Event of Default has occurred and is continuing,
or (ii) if the Agent has accelerated the maturity of any of the Notes as a
result of an Event of Default. Subject to the terms and conditions of this
Agreement, during the period from the Effective Date until but not including the
Revolving Termination Date, the Borrower may borrow, repay and reborrow
Revolving Loans; PROVIDED, however, that (y) no Revolving Loan that is an
Eurodollar Rate Loan shall be made which has an Interest Period that extends
beyond the Revolving Termination Date, and (z) each Revolving Loan that is an
Eurodollar Rate Loan may, subject to the provisions of Section 2.12, be repaid
only on the last day of the Interest Period with respect thereto unless such
payment is accompanied by the additional payment, if any, required by Section
2.12. All Borrowings of Revolving Loans which are Eurodollar Rate Loans shall be
in an aggregate minimum amount of $1,000,000 and integral multiples of $100,000
thereof in excess of that amount and if such Loans are Base Rate Loans, shall be
in the aggregate minimum amount of $250,000 and integral multiples of $100,000
thereof in excess of that amount. At no one time will there be outstanding more
than eight (8) Eurodollar Rate Loans.
SECTION 2.02. BORROWINGS UNDER REVOLVING CREDIT FACILITY. An Authorized
Representative shall give the Agent (1) at least three (3) Business Days'
irrevocable written notice by telefacsimile transmission of a Notice of
Borrowing with appropriate insertions, effective upon receipt, of each Revolving
Loan that is an Eurodollar Rate Loan (whether representing an additional
borrowing hereunder or the conversion of a borrowing hereunder from Base Rate
Loans to Eurodollar Rate Loans) prior to 11:00 a.m. prevailing Eastern Time
("ET"), and (2) irrevocable written notice by telefacsimile transmission of a
Notice of Borrowing with appropriate insertions, effective upon receipt, of each
Revolving Loan that is a Base Rate Loan (whether representing an additional
borrowing hereunder or the conversion of borrowing hereunder from Eurodollar
Rate Loans to Base Rate Loans) prior to 11:00 a.m. EST on the day of such
proposed Revolving Loan which shall be a Business Day. Each such notice shall
19
specify the amount of the borrowing, the Type of Revolving Loan, and the date of
the borrowing. Notice of receipt of such Borrowing Notice together with the
amount of each Lender's portion of the Loan requested thereunder, shall be
provided by the Agent to each Lender by telefacsimile transmission with
reasonable promptness, but (provided the Agent shall have received such notice
by 11:00 a.m. ET) not later than 2:00 p.m. ET on the same date as the Agent's
receipt of such notice.
SECTION 2.03. DISBURSEMENTS UNDER REVOLVING CREDIT FACILITY.
(a) No later than 3:00 p.m. ET on the date specified in a Notice of
Borrowing on which Revolving Loans are to be borrowed, each Lender will make
available for the account of its applicable Lending Office to the Agent at the
address of the Agent set forth on the signature pages hereof, the Revolving Loan
to be made by it, by wire transfer of immediately available funds pursuant to
wiring instructions set forth on Annex I attached hereto or as otherwise
directed by the Agent in writing. Unless the Agent shall have been notified in
writing by any Lender prior to the requested date of any Borrowing that such
Lender does not intend to make available to the Agent its portion of the
Borrowing requested to be made on such date, the Agent may assume that such
Lender will make such amount available to the Agent on the date of the requested
Borrowing as set forth in the Notice of Borrowing and the Agent may, in reliance
upon such assumption, make available to the Borrower the amount of the Borrowing
to be provided by such Lender.
(b) Provided that the applicable conditions set forth in Article VI
hereof for such Borrowing are fulfilled, all funds received by the Agent from
the Lenders pursuant to Section 2.03(a) will be made available to the
Borrower by credit to the account of the Borrower maintained with the Agent
and specified in the Notice of Borrowing.
(c) If the amount described in Section 2.03(a) is not in fact made
available to the Agent by a Lender (such Lender being herein referred to as a
"DEFAULTING LENDER") and the Agent has nevertheless made available to the
Borrower the amount of the Borrowing to be provided by such Lender, the Agent
shall be entitled to recover such corresponding amount on demand from such
Defaulting Lender. If such Defaulting Lender does not pay such corresponding
amount forthwith upon the Agent's demand therefor, the Agent shall promptly
notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to
recover from such Defaulting Lender interest on such corresponding amount in
respect of each day from the date such amount was made available to the
Borrower to the date such corresponding amount is recovered by the Agent, at
a rate per annum equal to the overnight Federal Funds Rate. Nothing herein
shall be deemed to relieve any Lender of its obligation to fulfill its
commitments hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any default by such Lender hereunder.
SECTION 2.04. SEVERAL OBLIGATIONS. No Lender shall be responsible for the
failure of any other Lender to make a Revolving Loan to be made by such other
Lender pursuant to a Notice of Borrowing; PROVIDED, HOWEVER, that the failure of
any Lender to make a Revolving Loan to be made by it under a Notice of Borrowing
shall not relieve the obligation of each other Lender to make the Revolving Loan
to be made by such other Lender under such Notice of Borrowing.
SECTION 2.05. REPAYMENT OF REVOLVING LOANS.
20
(a) Pursuant to the terms of the Revolving Notes, the Borrower shall repay
the entire outstanding principal amount of, and all then accrued, unpaid
interest on, the Revolving Loans on the Revolving Termination Date.
(b) If at any time the aggregate principal amount of the Revolving Loans
PLUS the aggregate Stated Amounts of all Letters of Credit outstanding at such
time exceeds the Available Revolving Commitment in effect at such time, the
Borrower shall immediately pay to the Agent for the respective accounts of the
Lenders the amount of such excess. Such payment shall be applied to pay all
amounts of principal outstanding on the Revolving Loans PRO RATA in accordance
with the first sentence of Section 4.05 hereof and the remainder, if any, shall
be deposited by the Agent into the Cash Collateral Account for application to
any Reimbursement Obligation that may become due with respect to any Letters of
Credit then outstanding. In the event the Borrower is required to pay any
outstanding Eurodollar Rate Loans by reason of this Section 2.05(b) prior to the
end of the applicable Interest Period therefor, the Borrower shall indemnify
each Lender against the losses, costs and expenses described in Section 2.12
hereof incurred by such Lender.
SECTION 2.06. REVOLVING NOTES. The obligation of the Borrower to repay the
Revolving Loans shall be evidenced by promissory notes (each a "REVOLVING NOTE"
and collectively, the "REVOLVING NOTES"). Each Revolving Note delivered to each
Lender shall be payable to such Lender, shall be in the face amount equal to the
product of: (a) such Lender's Credit Percentage TIMES (b) the Revolving
Commitment, and shall be in substantially the form of Exhibit "H" hereto. Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower resulting from each
Revolving Loan made by such Lender from time to time and the amounts of
principal and interest payable and paid from time to time in respect of each
such Revolving Loan. In any legal action or proceeding in respect of this
Agreement, the entries made in such account or accounts shall be presumptive
evidence of the existence and amounts of the obligations of the Borrower therein
recorded absent manifest error.
SECTION 2.07. TERM LOAN FACILITY. Subject to the terms and conditions
hereof, each Lender severally agrees to make a Term Loan to the Borrower on the
Effective Date in a principal amount equal to its Credit Percentage of the Term
Loan Commitment. An Authorized Representative shall give the Agent (1) at least
three (3) Business Days' irrevocable written notice by telefacsimile
transmission of a Notice of Borrowing with appropriate insertions, effective
upon receipt, if a Eurodollar Rate Loan (including conversion from a Base Rate
Loan to a Eurodollar Rate Loan) prior to 11:00 a.m. ET, and (2) irrevocable
written notice by telefacsimile transmission of a Notice of Borrowing with
appropriate insertions, effective upon receipt, if a Base Rate Loan (including
conversion from a Eurodollar Rate Loan to a Base Rate Loan) prior to 11:00 a.m.
ET on the Effective Date. Notice of receipt of such Borrowing Notice together
with the amount of each Lender's portion of the Loan requested thereunder shall
be provided by the Agent to each Lender by telefacsimile transmission with
reasonable promptness, but (provided the Agent shall have received such notice
by 11:00 a.m. ET) not later than 1:00 p.m. ET on the same date as the Agent's
receipt of such notice. No later than 2:00 p.m. ET on the Effective Date each
Lender will make available for the account of its applicable Lending Office to
the Agent, at the address of the Agent set forth on the signature pages hereof,
the Term Loan to be made by it by wire transfer of immediately available funds
pursuant to the wiring instructions set forth on Annex I attached hereto or as
otherwise directed by the Agent in writing. No later than 5:00 p.m. ET on the
Effective Date the Agent shall make available to or for the account of the
Borrower, and in accordance with the written instructions of the Borrower, the
proceeds of the Term Loans made available to the Agent by the Lenders. No Lender
shall be responsible for the failure of any other Lender to make the Term Loan
to be made by such other
21
Lender pursuant to this Section 2.07; PROVIDED, HOWEVER, that the failure of
any Lender to make the Term Loan to be made by it under this Section 2.07
shall not relieve the obligation of each other Lender to make the Term Loan
to be made by such other Lender under this Section 2.07.
SECTION 2.08. TERM NOTES. The obligation of the Borrower to repay the Term
Loans shall be evidenced by promissory notes (each a "TERM NOTE" and,
collectively, the "TERM NOTES"). Each Term Note delivered to a Lender shall be
payable to such Lender, shall be in the face amount equal to the principal
amount of such Lender's Term Loan made on the Effective Date, and shall be
substantially in the form of Exhibit "I" hereto. Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from the Term Loan made by such Lender
and the amounts of principal and interest payable and paid from time to time in
respect of such Term Loan. In any legal action or proceeding in respect of this
Agreement, the entries made in such account or accounts shall be presumptive
evidence of the existence and amounts of the obligations of the Borrower therein
recorded absent manifest error.
SECTION 2.09. TERM LOAN AMORTIZATION AND MATURITY. On each Quarterly
Payment Date commencing with the Quarterly Payment Date occurring on December
31, 2001 and on the Term Loan Maturity Date, the Borrower shall, pursuant to the
terms of the Term Notes, make a scheduled payment of the outstanding principal
amount of the Term Loan in an aggregate amount equal to the lesser of (i) the
then outstanding principal balance of all Term Notes and (ii) the amount set
forth below opposite such Quarterly Payment Date or Term Loan Maturity Date, as
the case may be:
Term Loan Maturity Date
Quarterly Payment Date Occurring in: Aggregate Principal Payment
------------------------------------ ---------------------------
December 31, 2001 $1,000,000
March 31, 2002 $1,000,000
June 30, 2002 $1,000,000
September 30, 2002 $1,000,000
December 31, 2002 $1,000,000
March 31, 2003 $1,000,000
June 30, 2003 $1,000,000
September 30, 2003 $1,000,000
December 31, 2003 $1,000,000
March 31, 2004 $1,000,000
June 30, 2004 $1,000,000
September 30, 2004 $1,000,000
December 31, 2004 $1,000,000
March 31, 2005 $1,000,000
June 30, 2005 $1,000,000
September 30, 2005 $1,000,000
December 31, 2005 $1,000,000
March 31, 2006 $1,000,000
June 30, 2006 $1,000,000
September 30, 2006 Remaining unpaid principal balance
22
In addition to the foregoing payments, Borrower shall make an additional payment
against the principal balance of the Term Loans in an amount equal to fifty
percent (50%) of the Borrower's domestic operating profit excluding operating
profits generated by Subsidiaries which are organized outside the fifty (50)
states of the United States of America less interest payments, taxes and debt
service within one hundred twenty (120) days after the end of each fiscal year
of Borrower beginning September 30, 2002 during the term of this Term Loans
until such time as Borrower's Funded Debt to EBITDA Ratio falls below 3.0 to
1.0.
SECTION 2.10. INTEREST ON LOANS.
(a) INTEREST ON EURODOLLAR RATE LOANS. Subject to the provisions of
Section 4.01 hereof, (i) in the case of each Revolving Loan or portion thereof
that is a Eurodollar Rate Loan, interest shall be payable on the day after the
expiration of each Interest Period commencing with the end of the first such
Interest Period (and after maturity of such Loan (whether by acceleration or
otherwise) upon demand) at an interest rate per annum equal to the Adjusted
Eurodollar Rate for the Interest Period in effect for such Eurodollar Rate Loan,
and (ii) in the case of the Term Loan if a Eurodollar Rate Loan, interest shall
be payable at the expiration of each Interest Period commencing with the end of
the first such Interest Period (and after maturity of such Loan (whether by
acceleration or otherwise) upon demand) at an interest rate per annum equal to
the Adjusted Eurodollar Rate for the Interest Period in effect for such
Eurodollar Rate Loan. The Agent upon determining the Adjusted Eurodollar Rate
for any Interest Period shall promptly notify the Borrower and the Lenders. Each
determination by the Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(b) INTEREST ON BASE RATE LOANS. Subject to the provisions of Section 4.01
hereof, (i) in the case of each Revolving Loan or portion thereof that is a Base
Rate Loan, interest shall be payable quarterly on each Quarterly Payment Date
commencing December 31, 2001 and the Revolving Termination Date (and after
maturity (whether by acceleration or otherwise) upon demand) at an interest rate
per annum equal to the Adjusted Base Rate, and (ii) in the case of the Term Loan
if a Base Rate Loan, interest shall be payable quarterly on each Quarterly
Payment Date commencing December 31, 2001 and on the Term Loan Maturity Date
(and after maturity of such Loan (whether by acceleration or otherwise) upon
demand) at an interest rate per annum equal to the Adjusted Base Rate. In the
event of any change in the Base Rate, the rate hereunder shall change, effective
as of the day the Base Rate changes.
(c) INTEREST ON TERM LOANS. Notwithstanding any provision to the contrary
in this Agreement or any other Loan Document the interest rate on the entire
principal balance of the Term Loans shall be either at one Adjusted Eurodollar
Rate or at one Base Rate as selected by Borrower as provided herein.
SECTION 2.11. NOTICE OF CONTINUATION AND NOTICE OF
CONVERSION/UNAVAILABILITY OF CERTAIN LOANS/FUNDING LOSSES.
(a) With respect to any Borrowing consisting of Eurodollar Rate Loans, the
Borrower may, subject to the provisions of Section 2.11(c) and Section 6.02,
elect to maintain such Borrowing or any portion thereof consisting of Eurodollar
Rate Loans by selecting a new Interest Period for such Borrowing, which new
Interest Period shall commence on the day immediately following the last day of
the immediately preceding Interest Period. If such election pertains to Term
Loans the election shall be effective for all of the Term Loans then
outstanding. Each selection of a new Interest Period (a
23
"CONTINUATION") shall constitute a Borrowing and shall be made by written
notice given not later than 11:00 a.m. ET three (3) Business Days prior to
the date of any such Continuation relating to Eurodollar Rate Loans by the
Borrower to the Agent. Such Notice of Continuation shall be by telefacsimile,
in substantially the form of Exhibit "D" hereto, specifying (i) the date of
such Continuation which shall be a Business Day, (ii) the aggregate amount of
Loans subject to such Continuation and (iii) the selected Interest Period,
all of which shall be specified in such manner as is necessary to comply with
all limitations on Loans outstanding under this Agreement. Upon receipt of a
Notice of Continuation and two (2) days prior to the beginning of the new
Interest Period, the Agent shall determine the Adjusted Eurodollar Rate and
promptly notify the Borrower and the Lenders in writing thereof by facsimile
transmission. The Borrower may elect to maintain more than one Borrowing
which consists of Revolving Loans but not Term Loans as Eurodollar Rate Loans
by combining such Borrowings into one Borrowing and selecting a new Interest
Period pursuant to this Section 2.11(a); PROVIDED, HOWEVER, that each of the
Borrowings so combined shall consist of Eurodollar Rate Loans having Interest
Periods commencing and ending on the same date. Borrowings of Revolving Loans
may not be combined with Borrowings of Term Loans and vice versa. If the
Borrower shall fail to select a new Interest Period for any Borrowing
consisting of Eurodollar Rate Loans in accordance with this Section 2.11(a),
the Agent will continue such Loans as Base Rate Loans.
(b) The Borrower may on any Business Day, upon a Notice of Conversion
given to the Agent, and subject to the provisions of Section 2.11(c) and Section
6.02, convert the entire amount of the outstanding Term Loans or a portion of
all Revolving Loans of one Type into Loans of another Type; PROVIDED, HOWEVER,
that any conversion of any Eurodollar Rate Loans into Loans of another Type
shall be made on, and only on, the last day of an Interest Period for such
Loans. Each such Notice of Conversion shall be given not later than 11:00 a.m.
ET on the same Business Day of any proposed conversion into Base Rate Loans and
three (3) Business Days prior to the date of any proposed Conversion into
Eurodollar Rate Loans. Subject to the restrictions specified above, each Notice
of Conversion shall be made in writing by telefacsimile in substantially the
form of Exhibit "E" hereto specifying (i) the requested date of such Conversion
which shall be a Business Day, (ii) the Type of Loans to be converted, (iii) the
portion of such Type of Loan to be converted, (iv) the Type of Loan into which
such Loans are to be converted and (v) if such Conversion is into Eurodollar
Rate Loans, the requested Interest Period of such Loan. Each Conversion shall be
in an aggregate amount for the Loans of all Lenders of not less than $1,000,000
or an integral multiple of $100,000 in excess thereof for Eurodollar Rate Loans
and not less than $250,000 or an integral multiple of $100,000 in excess thereof
for Base Rate Loans. Upon receipt of a Notice of Conversion to a Eurodollar Rate
Loan, and two (2) days prior to the beginning of a new Interest Period the Agent
shall determine the Adjusted Eurodollar Rate and shall promptly notify the
Borrower and the Lenders in writing thereof via facsimile transmission. The
Borrower must elect to convert the entire amount of the outstanding Term Loans
or may elect to convert the entire amount of or a portion of all Revolving Loans
into Loans of another Type. Borrower may convert Revolving Loans into another
Type by combining such Borrowings into one Borrowing consisting of Loans of
another Type; PROVIDED, HOWEVER, that such Loans shall have Interest Periods
ending on the same date.
(c) Notwithstanding paragraphs (a) and (b) above or any other provision
of this Article II to the contrary:
(i) if the Agent is unable to determine the Eurodollar Rate for
Eurodollar Rate Loans comprising any requested Borrowing, Continuation or
Conversion, the right of the Borrower to select or maintain Eurodollar Rate
Loans for such Borrowing or any subsequent Borrowing shall be suspended
24
until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exists, and each Loan
comprising such Borrowing shall be a Base Rate Loan; and
(ii) if the Lenders shall, at least two (2) Business Days before the
date of any requested Borrowing, Continuation or Conversion, notify the Agent
that the Adjusted Eurodollar Rate for any such Borrowing, Continuation or
Conversion will not adequately reflect the cost to such Lenders of making,
funding or maintaining their respective Loans for such Borrowing, Continuation
or Conversion, the right of the Borrower to select Eurodollar Rate Loans for
such Borrowing shall be suspended until such Lenders notify the Agent and the
Borrower that such rates in fact reflect the cost to such Lenders of making,
funding or maintaining their respective Loans, and each Loan comprising such
Borrowing, Continuation or Conversion shall be a Base Rate Loan.
(d) Each Notice of Borrowing, Notice of Continuation and Notice of
Conversion shall be irrevocable by and binding on the Borrower. In the case of
any Borrowing, Continuation or Conversion that the related Notice of Borrowing,
Notice of Continuation or Notice of Conversion specifies is to be comprised of
Eurodollar Rate Loans, the Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any failure of the
Borrower to fulfill for any reason whatsoever including the exercise of any
remedies under Section 12.02, on or before the date for such Borrowing,
Continuation or Conversion specified in such Notice of Borrowing, Notice of
Continuation or Notice of Conversion, the applicable conditions set forth in
Section 6.02 hereof or as a result of the failure of the Borrower to borrow any
such requested Eurodollar Rate Loan, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or re-employment of deposits or other funds acquired by such
Lender to fund the Loan to be made by such Lender as part of such Borrowing,
Continuation or Conversion, such amount to be determined by each Lender and such
determination by such Lender shall be binding upon the Borrower, absent manifest
error.
SECTION 2.12. VOLUNTARY REDUCTION OF REVOLVING COMMITMENT; VOLUNTARY
PREPAYMENTS; FUNDING LOSSES. (a) The Borrower shall have the right to reduce
permanently the amount of the Revolving Commitment at any time and from time to
time without penalty or premium but in no event more frequently than one time
during any calendar month upon not less than three (3) Business Days prior
written notice which may be by telefacsimile to the Agent of each such
reduction, which notice shall specify the effective date thereof and the amount
of any such reduction (which in the case of any partial reduction shall not be
less than $1,000,000 and integral multiples of $500,000 in excess of that
amount) and shall be irrevocable once given and effective only upon receipt by
the Agent. The Agent will promptly transmit such notice to each Lender.
Notwithstanding the foregoing, in no event shall the Borrower be permitted to
reduce the Revolving Commitment below an aggregate amount equal to the sum of
the aggregate principal amount of Revolving Loans outstanding at such time plus
the aggregate Stated Amounts of all outstanding Letters of Credit at such time.
The Revolving Commitment once reduced pursuant to this Section shall not be
increased.
(b) The Borrower may prepay any Loan at any time; PROVIDED, HOWEVER, that
in the event the Borrower prepays a Eurodollar Rate Loan prior to the end of the
applicable Interest Period therefor for any reason whatsoever including the
exercise of any remedies under Section 12.02, the Borrower shall indemnify each
Lender against any loss, cost or expense incurred by such Lender as a result of
any such prepayment including, without limitation, any loss (including loss of
anticipated profits after taking into account any reinvestment of funds), cost
or expense incurred by reason of the liquidation or re-employment of deposits or
other funds acquired by such Lender to fund the Loan made by such Lender, such
amount to be determined by each Lender and such determination by such Lender
shall be binding
25
upon the Borrower absent manifest error. The Borrower may prepay any Base
Rate Loan at any time without penalty or premium. Any prepayment of the Term
Loans shall be applied to scheduled payments in inverse order of maturity.
SECTION 2.13. UNUSED REVOLVING CREDIT FACILITY FEES. Borrower shall pay to
the Agent for the account of and distribution to the Lenders, a commitment fee,
computed at an annual rate equal to that shown as the Unused Revolver Fee on the
grid incorporated into the definition of Applicable Margin, on the daily unused
portions of the Revolving Commitment of each Lender, such fee being payable
quarterly in arrears on each Quarterly Payment Date and on the Revolving
Termination Date.
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.01. LETTERS OF CREDIT/LENDERS' PARTICIPATION.
(a) Subject to the terms and conditions of this Agreement, the Letter of
Credit Issuer, on behalf of the Lenders, agrees to issue for the account of the
Borrower one or more documentary or standby letters of credit (individually, a
"LETTER OF CREDIT" and collectively, the "LETTERS OF CREDIT") in such form as
may be requested from time to time by the Borrower and agreed to by the Letter
of Credit Issuer, from and including the Effective Date to the L/C Termination
Date, up to a maximum aggregate Stated Amount at any one time outstanding equal
to the lesser of (x) the L/C Commitment Amount and (y) the Available Revolving
Commitment LESS the aggregate outstanding principal amount of Revolving Loans.
Each Letter of Credit shall have an expiration date on or prior to 360 days
after the Date of Issuance of such Letter of Credit.
(b) The Letters of Credit shall be in a form customarily used by the
Letter of Credit Issuer or in such other form as has been approved by the Letter
of Credit Issuer. At the time of issuance, the amount and the terms and
conditions of each Letter of Credit shall be subject to approval by the Letter
of Credit Issuer and the Borrower. Any Letter of Credit containing an automatic
renewal provision shall also contain a provision pursuant to which,
notwithstanding any other provisions thereof, it shall have a final Expiration
Date no later than the L/C Termination Date.
(c) Immediately upon the issuance by the Letter of Credit Issuer of any
Letter of Credit in accordance with the procedures set forth in this Article
III, each Lender shall be deemed to have irrevocably and unconditionally
purchased and received from the Letter of Credit Issuer, without recourse or
warranty, an undivided interest and participation to the extent of such Lender's
Credit Percentage of the liability of the Letter of Credit Issuer with respect
to such Letter of Credit (including, without limitation, all obligations of the
Borrower with respect thereto, other than amounts owing to the Letter of Credit
Issuer under Section 3.03(b) hereof) and any security therefor or guaranty
pertaining thereto. Accordingly, each Lender severally agrees that it shall be
unconditionally and irrevocably liable, without regard to the occurrence of any
Default or Event of Default or any condition precedent whatsoever, to the extent
of such Lender's Credit Percentage, to reimburse the Letter of Credit Issuer on
demand in immediately available funds in Dollars for the amount of each Drawing
paid by the Letter of Credit Issuer under each Letter of Credit issued by the
Letter of Credit Issuer to the extent such amount is not reimbursed by the
Borrower pursuant to Section 3.04; PROVIDED, HOWEVER, that the Lenders shall not
be obligated to reimburse the Letter of Credit Issuer pursuant to this Section
3.01(c) with respect to a Letter of Credit if the Letter of Credit Issuer issues
such Letter of Credit after an Event of Default has occurred and the Obligations
shall have been accelerated and become due and payable pursuant to Section
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12.02(a)(i) or (ii). The failure of any Lender to honor its obligations
hereunder shall not relieve any other Lender of its duty to honor its
obligations hereunder. Upon the written request of a Lender, the Letter of
Credit Issuer shall deliver to such Lender a copy of any Letter of Credit and
copies of all material documents delivered to the Letter of Credit Issuer in
connection with any Drawing with respect to such Letter of Credit.
(d) Each payment made by a Lender to the Letter of Credit Issuer pursuant
to Section 3.01(c) above shall be treated as the purchase by such Lender of a
participating interest in the Borrower's Reimbursement Obligation under Section
3.04 in an amount equal to such payment. Each Lender, so long as it has made the
payment required to be made by it pursuant to Section 3.01(c), shall share in
accordance with its Credit Percentage in any interest which accrues pursuant to
Section 3.04(b). All amounts recovered by the Letter of Credit Issuer hereunder
or under any other Loan Document and which are applied by the Letter of Credit
Issuer to the Reimbursement Obligations of the Borrower shall be distributed by
the Letter of Credit Issuer to the Lenders who have made the payments required
to be made by them pursuant to Section 3.01(c) PRO RATA in accordance with their
respective Credit Percentages.
(e) In addition to other remedies the Letter of Credit Issuer may have
under Applicable Law and under this Agreement, if and to the extent that any
Lender shall fail to make available to the Letter of Credit Issuer the amount
required to be paid by such Lender pursuant to Section 3.01(c), the Letter of
Credit Issuer shall be subrogated to the rights of such Lender under this
Agreement to the extent of such failure. If any Lender fails to reimburse the
Letter of Credit Issuer as provided in Section 3.01(c), such unreimbursed amount
shall bear interest from the date of the Letter of Credit Issuer's demand
therefor thereof until the date three (3) Business Days after such demand, at
the Federal Funds Rate, and thereafter, until paid, at the Base Rate, such
interest to be payable by such Lender upon demand therefor by the Letter of
Credit Issuer.
SECTION 3.02. METHOD OF ISSUANCE OF LETTERS OF CREDIT.
(a) NOTICE OF ISSUANCE. The Borrower shall give the Letter of Credit
Issuer written notice (or telephonic notice confirmed in writing) at least three
(3) Business Days prior to the requested Date of Issuance of a Letter of Credit,
such notice to be in substantially the form of Exhibit "J" hereto (a "LETTER OF
CREDIT REQUEST"). The Borrower shall also execute and deliver such customary
letter of credit application forms as requested from time to time by the Letter
of Credit Issuer.
(b) ISSUANCE. Provided the Borrower has given the notice prescribed by
Section 3.02(a) and subject to the other terms and conditions of this Agreement,
including, but not limited to, the satisfaction of any applicable conditions
precedent set forth in Article V, the Letter of Credit Issuer shall issue the
requested Letter of Credit on the requested Date of Issuance as set forth in the
applicable Letter of Credit Request on behalf of the Lenders for the benefit of
the stipulated Beneficiary and shall deliver the original of such Letter of
Credit to the Beneficiary at the address specified in the notice. At the request
of the Borrower, the Letter of Credit Issuer shall deliver a copy of each Letter
of Credit to the Borrower within a reasonable time after the Date of Issuance
thereof. Upon the written request of the Borrower, the Letter of Credit Issuer
shall deliver to the Borrower a copy of any Letter of Credit proposed to be
issued hereunder prior to the issuance thereof.
(c) REPORTING TO LENDERS. Upon the request of a Lender, the Letter of
Credit Issuer shall report, from time to time but not more frequently than
monthly, to the Lenders the aggregate Stated Amount of all Letters of Credit
then outstanding and such other information concerning the Letters of
27
Credit as a Lender shall reasonably request. The Letter of Credit Issuer
shall, at the request of a Lender, deliver copies of any Letter of Credit
issued hereunder. Other than as set forth in this Section 3.02(c), the
Letter of Credit Issuer shall have no duty to notify the Lenders regarding
the issuance or other matters regarding Letters of Credit issued hereunder.
The failure of the Letter of Credit Issuer to perform its requirements under
this Section 3.02(c) shall not relieve the Lenders' reimbursement obligations
under Section 3.01(c).
SECTION 3.03. LETTER OF CREDIT FEES. In consideration for the issuance of
each Letter of Credit hereunder, the Borrower hereby agrees to pay (a) to the
Agent, for the ratable account of the Lenders in accordance with their
respective Credit Percentages, a letter of credit fee of one percent (1%) of the
Stated Amount, and (b) to the Letter of Credit Issuer for such Letter of Credit,
for the account of such Letter of Credit Issuer, a fronting fee accruing at a
rate per annum equal to .25% on the Stated Amount from time to time of such
Letter of Credit. The fee provided in (b) above shall be payable quarterly in
arrears on each Quarterly Payment Date and on the L/C Termination Date.
SECTION 3.04. LETTER OF CREDIT REIMBURSEMENT.
(a) NOTICE OF DRAWING. The Letter of Credit Issuer shall promptly notify
the Borrower and each Lender by telephone, telecopy, telex or other
telecommunication of any Drawing under a Letter of Credit and of the anticipated
date for payment (the "PAYMENT DATE"). On the Payment Date, the Letter of Credit
Issuer shall confirm to the Borrower and each Lender by telephone or telecopy
that payment of the Drawing is to be made by the Letter of Credit Issuer on such
date.
(b) PAYMENTS. The Borrower hereby agrees to pay to the Letter of Credit
Issuer, in the manner provided in Section 3.04(c):
(i) on each Payment Date, an amount equal to the amount paid by
the Letter of Credit Issuer under a Letter of Credit; and
(ii) if any Drawing shall be reimbursed to the Letter of Credit
Issuer after 2:00 p.m. on the Payment Date, interest on any and all amounts
required to be paid pursuant to clause (i) of this Section 3.04(b) from and
after the due date thereof until payment in full, payable on demand, at an
annual rate of interest equal to the Post-Default Rate.
(c) METHOD OF REIMBURSEMENT. The Borrower shall reimburse the Letter of
Credit Issuer for each Drawing under any Letter of Credit in the following
manner:
(i) the Borrower shall immediately reimburse the Letter of Credit
Issuer in accordance with Section 4.04; or
(ii) (A) if the Borrower has not reimbursed the Letter of Credit
Issuer pursuant to subparagraph (i) above and (B) the applicable conditions set
forth in Article V have been fulfilled and (C) the Available Revolving
Commitment in effect at such time LESS the aggregate Stated Amounts of all
outstanding Letters of Credit at such time equals or exceeds the amount of the
Drawing to be reimbursed, the Borrower shall request a Borrowing of Revolving
Loans as provided in Section 3.04(d), and the proceeds of such Borrowing shall
be made available to the Letter of Credit Issuer, by wire transfer of
immediately available funds at the address of the Letter of Credit Issuer set
forth on the signature pages
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hereof and pursuant to the wiring instructions specified on Exhibit "K" for
the Letter of Credit Issuer in satisfaction of the obligations of the
Borrower set forth in subparagraph (i) above; or
(iii) Pursuant to Section 4.04 but subject to Section 4.06, the
Agent may debit any deposit account of the Borrower maintained with it in an
amount equal to the amount of such Drawing and make available such amount to the
Letter of Credit Issuer, by wire transfer of immediately available funds at the
address of the Letter of Credit Issuer set forth on the signature pages hereof
and pursuant to the wiring instructions specified on Annex 1 for the Letter of
Credit Issuer in satisfaction of the obligations of the Borrower set forth in
subparagraph (i) above.
(d) LOANS TO FUND DRAWINGS. Upon any Drawing, the Letter of Credit Issuer
shall notify Agent if the Borrower has elected to reimburse the Letter of Credit
Issuer using the proceeds of Revolving Loans. Upon receipt of such notice and if
the conditions set forth in subparagraph (c)(ii) above have been satisfied, each
Lender agrees to deliver to the Letter of Credit Issuer its PRO RATA share of
the amount of Loans necessary to reimburse the Letter of Credit Issuer for any
payment made by the Letter of Credit Issuer pursuant to such Drawing not later
than one Business Day after receipt of such notice. Any funds delivered to the
Letter of Credit Issuer under this paragraph (d) shall be delivered in the
manner set forth in the first sentence of Section 2.03. Unless the Borrower
complies with the applicable notice requirements as set forth in Section
2.02(a), any Loan used to repay any Reimbursement Obligation shall initially be
a Base Rate Loan.
SECTION 3.05. NATURE OF LETTER OF CREDIT ISSUER'S DUTIES. In determining
whether to honor any Drawing under any Letter of Credit, the Letter of Credit
Issuer shall be responsible only to determine that the documents and
certificates required to be delivered under that Letter of Credit have been
delivered and that they materially comply on their face with the requirements of
that Letter of Credit. The Borrower otherwise assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit issued by the Letter of Credit
Issuer by, the respective Beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, but subject to the last
sentence of this Section 3.05, neither the Letter of Credit Issuer nor any of
the other Lenders shall be responsible (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of, or any Drawing honored
under, a Letter of Credit even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit, or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex, telecopy or otherwise, whether or not they be in
cipher; (iv) for errors in interpretation of technical terms; (v) for any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under a Letter of Credit, or the proceeds thereof; (vi) for the
misapplication by the Beneficiary of a Letter of Credit, of the proceeds of any
drawing honored under a Letter of Credit; and (vii) for any consequences arising
from causes beyond the control of the Letter of Credit Issuer or the other
Lenders. None of the above shall affect, impair or prevent the vesting of any of
the Letter of Credit Issuer's rights or powers hereunder. Without limitation of
the foregoing, any action taken or omitted to be taken by the Letter of Credit
Issuer under or in connection with any Letter of Credit, if taken or omitted in
the absence of gross negligence or willful misconduct, shall not create against
the Letter of Credit Issuer any liability to the Borrower or any Lender.
29
SECTION 3.06. OBLIGATIONS ABSOLUTE. The obligations of the Borrower to
reimburse the Letter of Credit Issuer for Drawings honored under Letters of
Credit and the obligations of the Lenders under Section 3.01(c) to reimburse the
Letter of Credit Issuer for any Reimbursement Obligation not reimbursed by the
Borrower shall be joint and several and unconditional and irrevocable and shall
be paid strictly in accordance with the terms of this Agreement under all
circumstances including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower or any Affiliate of the Borrower may have at any time against
a Beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such Beneficiary or transferee may be acting), the Letter
of Credit Issuer, any Lender or any other Person, whether in connection with
this Agreement, the transactions contemplated herein or any unrelated
transaction;
(iii) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(v) any non-application or misapplication by the Beneficiary of
the proceeds of any Drawing under a Letter of Credit;
(vi) the fact that a Default or Event of Default shall have
occurred and be continuing; or
(vii) any other circumstance or happening whatsoever that may
constitute a legal or equitable discharge of the obligations of the Borrower to
reimburse the Letter of Credit Issuer for Drawings on Letters of Credit or of
the obligations of the Lenders under Section 3.01(e) to reimburse the Letter of
Credit Issuer for any Reimbursement Obligation not so reimbursed by the
Borrower.
SECTION 3.07. EXPIRATION DATE OF LETTERS OF CREDIT. If on the date (the
"FACILITY TERMINATION DATE") this Agreement and the Letter of Credit Facility is
terminated prior to the Expiration Date of any Letter of Credit outstanding
hereunder, the Borrower shall, on the Facility Termination Date, deposit with
the Letter of Credit Issuer an amount of money equal to the Stated Amount of
such Letter of Credit in the Cash Collateral Account. If a Drawing pursuant to
such Letter of Credit occurs on or prior to the Expiration Date of such Letter
of Credit, the Borrower authorizes the Letter of Credit Issuer to use the monies
deposited in the Cash Collateral Account to make payment to the Beneficiary with
respect to such Drawing. If no Drawing occurs on or prior to the Expiration Date
of such Letter of Credit, the Letter of Credit Issuer shall return to the
Borrower the monies deposited in the Cash Collateral Account with respect to
such outstanding Letter of Credit on the date which is five (5) Business Days
after the Expiration Date of such Letter of Credit. The Borrower hereby
collaterally assigns to the Letter of Credit Issuer for its benefit and the
benefit of the Lenders and grants to the Letter of Credit Issuer for its benefit
and the benefit of the Lenders, a security interest in all funds held in the
Cash Collateral Account from time to time and proceeds thereof, as security for
the payment of all amounts due and to become due from the Borrower to the Letter
of Credit Issuer and the Lenders under this Agreement. The Cash Collateral
30
Account shall be in the name of the Borrower and the Letter of Credit Issuer as
a cash collateral account but the Letter of Credit Issuer shall have sole
dominion and control over, and sole access to, the Cash Collateral Account.
Neither the Borrower nor any Person claiming on behalf of or through the
Borrower shall have any right to withdraw any of the funds held in the Cash
Collateral Account. The Borrower agrees that it will not (i) sell or otherwise
dispose of any interest in the Cash Collateral Account or any funds held
therein, or (ii) create or permit to exist any Lien upon or with respect to the
Cash Collateral Account or any funds held therein, except as provided in or
contemplated by this Agreement. The Letter of Credit Issuer shall exercise
reasonable care in the custody and preservation of any funds held in the Cash
Collateral Account and shall be deemed to have exercised such care if such funds
are accorded treatment substantially equivalent to that which the Letter of
Credit Issuer accords other funds deposited with the Letter of Credit Issuer, it
being understood that the Letter of Credit Issuer shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any funds held in the Cash Collateral Account.
SECTION 3.08. VOLUNTARY REDUCTION OF L/C COMMITMENT. The Borrower shall
have the right to reduce permanently the amount of the L/C Commitment at any
time and from time to time without penalty or premium but in no event more
frequently than one time during any calendar month upon not less than three (3)
Business Days prior written notice to the Letter of Credit Issuer of each such
reduction, which notice shall specify the effective date thereof and the amount
of any such reduction (which in the case of any partial reduction shall not be
less than $1,000,000 and integral multiples of $100,000 in excess of that
amount) and shall be irrevocable once given and effective only upon receipt by
the Letter of Credit Issuer. The Letter of Credit Issuer will promptly transmit
such notice to each Lender. Notwithstanding the foregoing, in no event shall the
Borrower be permitted to reduce the L/C Commitment below an amount equal to the
aggregate Stated Amount of the Letters of Credit outstanding at such time. The
L/C Commitment once reduced pursuant to this Section may not be increased.
ARTICLE IV
OTHER LOAN AND PAYMENT PROVISIONS
SECTION 4.01. INTEREST ON OVERDUE PAYMENTS. In the event the Borrower
shall fail to pay when due (whether upon demand, at maturity, as required under
Sections 2.05 and 2.09, by reason of acceleration or otherwise) any principal
of, or interest on, any of the Loans or any Reimbursement Obligation or any
other amount owing hereunder or under any Note or other Loan Document when due,
such overdue amounts shall bear interest at the Post-Default Rate until such
unpaid amount has been paid in full (whether before or after judgment). All
interest provided for in this Section shall be immediately due and payable upon
demand.
SECTION 4.02. COMPUTATIONS. Unless otherwise expressly set forth herein,
any accrued interest on any Loan and any accrued Fees shall be computed on the
basis of a year of 360 days and the actual number of days elapsed.
SECTION 4.03. USURY. In no event shall the amount of interest due or
payable in respect of the Loans exceed the maximum rate of interest allowed by
Applicable Law and, in the event any such amount in excess of the maximum rate
of interest allowed by Applicable Law is paid by the Borrower or received by any
Lender, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify the respective Lender in writing that the Borrower
elects to have such excess sum returned to it forthwith. It is the express
intent of the parties hereto that the Borrower not pay and the Lenders not
31
receive, directly or indirectly, in any manner whatsoever, interest in excess of
that which may be lawfully paid by the Borrower under Applicable Law.
SECTION 4.04. PAYMENTS. Except to the extent otherwise provided herein or
in the Notes, all payments of principal, interest and other amounts to be made
by the Borrower under this Agreement, the Notes or any other Loan Document shall
be made in Dollars, in immediately available funds, to the Agent at the Agent's
Principal Office, not later than 2:00 p.m. ET on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day) and shall be made
in accordance with the wiring instructions set forth for the Agent on Annex I
attached hereto. The parties agree that if the Borrower makes any payment due
hereunder after 2:00 p.m. ET but before 5:00 p.m. ET on the date such payment is
due, such late payment shall not constitute a Default under Section 12.01(a)
hereof but shall nevertheless be deemed to have been paid as of the next
succeeding Business Day as provided in the parenthetical phrase of the preceding
sentence. Subject to Sections 4.05 and 4.06 hereof, the Agent or any Lender for
whose account any such payment is made, may (but shall not be obligated to)
debit the amount of any such payment which is not made by such time from any
special or general deposit account of the Borrower with the Agent or such
Lender, as the case may be (with notice to the Borrower, the other Lenders and
the Agent). The Borrower shall, at the time of making each payment under this
Agreement or any Note, specify to the Agent the amounts payable by the Borrower
hereunder to which such payment is to be applied, and in the event that it fails
to so specify, or an Event of Default has occurred and is continuing, the Agent
shall apply such payment to the Loans, any Reimbursement Obligation or any other
obligation of the Borrower under the Loan Documents in such manner as the Agent
may determine to be appropriate, subject to Section 4.05 hereof. Each payment
received by the Agent for the account of the Lenders under this Agreement or any
Note shall be paid promptly to such Lender (but no later than the next Business
Day), by wire transfer of immediately available funds in accordance with the
wiring instructions set forth for such Lender on the Annex I attached hereto,
for the account of such Lender at the applicable Lending Office of such Lender.
If the due date of any payment under this Agreement or any Note would otherwise
fall on a day which is not a Business Day such date shall be extended to the
next succeeding Business Day and interest shall be payable for the period of
such extension; PROVIDED, HOWEVER, that in no event shall any such due date be
extended beyond the Revolving Termination Date and Term Loan Maturity Date.
SECTION 4.05. PRO RATA TREATMENT. Unless set forth to the contrary herein,
(a) each Borrowing of Revolving Loans and Term Loans, (b) each payment of the
principal of or interest on the Revolving Loans and the Term Loans, and (c) each
other payment to be made by the Borrower hereunder or under any Loan Document
shall be made by, or credited to the account of, the Lenders PRO RATA in
accordance with their respective Credit Percentages. All fees referred to in
Section 3.03(b) shall be for the sole account of the respective Letter of Credit
Issuer.
SECTION 4.06. SHARING OF PAYMENTS, ETC. The Borrower agrees that, in
addition to (and without limitation of) any right of set-off, banker's lien or
counterclaim a Lender may otherwise have, each Lender shall be entitled, at its
option, to offset balances held by it for the account of the Borrower at any of
such Lender's offices, in Dollars or in any other currency, against any
principal of, or interest on, any of such Lender's Loans hereunder (or other
Obligations, if any, owing to such Lender hereunder) which is not paid when due
(regardless of whether such balances are then due to the Borrower), in which
case such Lender shall promptly notify the Borrower, all other Lenders and the
Agent thereof; PROVIDED, HOWEVER, such Lender's failure to give such notice
shall not affect the validity of such offset. If a Lender shall obtain payment
of any principal of, or interest on, any Loan made by it to the Borrower under
this
32
Agreement, or shall obtain payment on any other Secured Obligation, if any,
owing by the Borrower or a Subsidiary through the exercise of any right of
set-off, banker's lien or counterclaim or similar right or otherwise or
through voluntary prepayments directly to a Lender or other payments made by
the Borrower to a Lender not in accordance with the terms of this Agreement
and such payment, pursuant to Section 4.05 hereof, should be distributed to
the Lenders PRO RATA in accordance with their Credit Percentage, such Lender
shall promptly purchase from the other Lenders participations in (or, if and
to the extent specified by such Lender, direct interests in) the Loans made
by the other Lenders or other Obligations arising under or in connection with
the Loan Documents owed to such other Lenders in such amounts, and make such
other adjustments from time to time as shall be equitable, to the end that
all the Lenders shall share the benefit of such payment (net of any expenses
which may be incurred by such Lender in obtaining or preserving such benefit)
PRO RATA in accordance with their respective Credit Percentages. To such end,
all the Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or
must otherwise be restored. The Borrower agrees that any Lender so purchasing
a participation (or direct interest) in the Loans or other Obligations
arising under or in connection with the Loan Documents owed to such other
Lenders made by other Lenders may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as
fully as if such Lender were a direct holder of Loans in the amount of such
participation. Nothing contained herein shall require any Lender to exercise
any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower.
SECTION 4.07. INSUFFICIENT FUNDS. If on any date the Agent receives funds
insufficient to pay in full the principal of any Loans, any Reimbursement
Obligation, or any interest, fees or expenses due and payable on or prior to
such date, the Agent shall distribute any such funds received by it:
(a) FIRST, to pay all reasonable expenses due and payable to the
Agent PRO RATA in accordance with the respective amounts of such fees and
expenses due and payable to Agent;
(b) SECOND, to pay all fees and expenses due and payable to the
Lenders (including the Letter of Credit Issuers) PRO RATA in accordance with the
respective amounts of such fees and expenses due and payable to each such
Lender;
(c) THIRD, to pay all accrued but unpaid interest on all
outstanding Loans PRO RATA in accordance with Section 4.05; and
(d) FOURTH, to pay all amounts of principal outstanding on the Loans
and any Reimbursement Obligation PRO RATA in accordance with Section 4.05.
SECTION 4.08. FEES. All Fees payable on a per annum percentage basis shall
be calculated on the basis of the actual number of days elapsed in a 360-day
year. All Fees shall be payable in addition to, and not in lieu of, interest,
compensation, expense, reimbursement, indemnification and other Obligations. All
Fees shall be fully earned and non-refundable when paid. All Fees shall bear
interest, if not paid when due, at the Post-Default Rate and shall constitute
Obligations.
SECTION 4.09. [INTENTIONALLY OMITTED]
SECTION 4.10. INCREASED COSTS. The Borrower agrees that if: (a) any change
after the Agreement Date in any law, executive order or regulation or in any
request, guideline or directive of any
33
administrative or governmental authority (whether or not having the force of
law) or in the interpretation thereof by any court or administrative or
governmental authority charged with administration thereof, shall either
impose, affect, modify or deem applicable any reserve, special deposit,
capital maintenance or similar requirement against any Loan or Letter of
Credit or the participation of any Lender therein or impose on the Agent, any
Letter of Credit Issuer or any Lender any other condition regarding any Loan
or Letter of Credit or any Lender's participation therein or (b) there shall
occur any change after the Agreement Date in the basis of taxation of
payments to any Lender, any Letter of Credit Issuer or the Agent of any
amount owing to such Lender, any Letter of Credit Issuer or the Agent
hereunder (except for a change in the rate of taxation on the overall net
income of the Agent, any Letter of Credit Issuer or any Lender or the
branches or foreign Subsidiaries of the Agent, any Letter of Credit Issuer or
any Lender), and the result of any event referred to in clause (a) or (b)
above shall be to increase the cost to such Lender, any Letter of Credit
Issuer or the Agent of making or maintaining any Loan or issuing or
maintaining any Letter of Credit hereunder or to reduce the rate of return on
capital with respect to any Loan or Letter of Credit, then, upon demand by
the Agent, any Letter of Credit Issuer or any such Lender, as the case may
be, the Borrower shall immediately pay to the Agent, any Letter of Credit
Issuer or such Lender, as the case may be, additional amounts which shall be
sufficient to compensate the Agent, any Letter of Credit Issuer or such
Lender for such increased cost, tax or reduced rate of return, together with
interest on such amount from the date fifteen days after the date the
Borrower receives the statement(s) referred to in the next sentence to the
date the Borrower pays such increased cost, tax or reduced rate of return in
full at the Base Rate. A statement setting forth the basis for requesting
such compensation and the method for determining the amount thereof,
submitted by the Agent, any Letter of Credit Issuer or such Lender, as the
case may be, to the Borrower, shall be conclusive, absent manifest error.
SECTION 4.11. STATEMENTS OF ACCOUNT. The Agent will account to the
Borrower upon request but not more frequently than monthly with a statement of
Loans, Letters of Credit, charges and payments made pursuant to this Agreement
and the other Loan Documents, and such account rendered by the Agent shall be
deemed final, binding and conclusive upon Borrower unless the Agent is notified
by the Borrower in writing within thirty days after the date each account is
delivered to Borrower that the Borrower objects to the information, calculations
or items therein contained. Such notice shall only be deemed an objection to
those items specifically objected to therein. The failure of the Agent to
deliver such a statement of accounts shall not relieve or discharge the Borrower
from its obligations hereunder.
SECTION 4.12. DEFAULTING LENDER'S STATUS. Notwithstanding anything
contained herein to the contrary, but in addition to provisions regarding the
failure of a Lender to perform its obligations hereunder set forth elsewhere in
this Agreement, so long as any Lender shall be in default in its obligation to
fund its Credit Percentage of any Revolving Loan or participate to the extent of
such Lender's Credit Percentage of any Reimbursement Obligation or shall have
rejected its Commitment, then for purposes of voting or consenting to matters
with respect to the Loan Documents, such Lender's Credit Percentage shall be
deemed to be reduced prorata in proportion to the failure to fund, unless and
until such failure to fulfill its obligation to fund is cured and such Lender
shall have paid, as and to the extent provided in this Agreement, to the
applicable party, such amount then owing together with interest thereon as
provided in this Agreement. No Commitment of any Lender shall be increased or
otherwise affected by any such failure or rejection by any Lender.
SECTION 4.13. AGENT'S RELIANCE. Neither the Agent nor any Lender shall
incur any liability to the Borrower for acting upon any telefacsimile or
telephonic notice referred to in this Agreement which the Agent or such Lender
believes in good faith to have been given by a person authorized to deliver a
34
Notice of Borrowing or a Request for Letter of Credit on behalf of the Borrower
under Sections 2.02, 2.07, 2.11, 2.18, 3.02 or 3.08 hereof or for otherwise
acting in good faith.
ARTICLE V
SECURITY
SECTION 5.01. SECURITY INTERESTS. As security for the full and timely
payment and performance of (i) all Obligations now existing or hereafter arising
with respect to clauses (a), (b) and (c) of this Section 5.01. Borrower shall,
and shall cause each Subsidiary to, on the Closing Date deliver to the Agent, in
form and substance reasonably acceptable to the Agent, the following documents:
(a) PLEDGE AGREEMENT. A Pledge Agreement which shall pledge to
the Agent for the benefit of the Agent and the Lenders (1) 65% of the
Voting Securities of each Foreign Subsidiary (or if a lesser amount shall
be owned by Borrower or any Subsidiary, then 100% of such lesser amount),
(B) if such Subsidiary Securities are in the form of certificated
securities, such certificated securities, together with duly executed
undated stock powers or other appropriate transfer documents endorsed in
blank pertaining thereto, and (C) Uniform Commercial Code financing
statements reflecting the Lien in favor of the Agent on such Subsidiary
Securities, and shall take such further action and deliver or cause to be
delivered such further documents as required by the Security Documents or
otherwise as the Agent may reasonably request to effect the transactions
contemplated by this Article V; and
(b) SECURITY AGREEMENT. The Security Agreement, Financing
Statements pertaining thereto, and each other Security Document sufficient
to grant to the Agent a valid, duly perfected security interest in the
Collateral described therein, subject to no prior Liens other than
Permitted Liens, and do all things necessary in the opinion of the Agent
and its counsel to grant to the Agent for the benefit of the Lenders a
security interest, duly perfected with respect to Collateral governed by
the UCC, in all Collateral subject to no Lien other than Permitted Liens.
(c) OTHER SECURITY DOCUMENTS. Each other Security Documents
sufficient to grant to the Agent a duly perfected security interest in
the Collateral.
SECTION 5.02. MORTGAGES. At Closing, Borrower shall deliver, and shall
cause each Domestic Subsidiary to deliver, to the Agent for the benefit of the
Agent and the Lenders (a) a Mortgage with respect to the Mortgaged Property and
(b) the Mortgaged Property Support Documents relating thereto, with the effect
that the Agent shall thereby obtain a duly perfected first priority Lien on
such property for the benefit of the Agent and the Lenders, subject only to
Permitted Liens.
SECTION 5.03. FURTHER ASSURANCES. At the request of the Agent,
Borrower will or will cause its Subsidiaries, as the case may be, to
execute, by its duly authorized officers, alone or with the Agent, any
certificate, instrument, statement or document, or to procure any such
certificate, instrument, statement or document, or to take such other
action (and pay all connected costs) which the Agent reasonably deems
necessary from time to time to create, continue or preserve the Liens in
the Collateral (and the perfection and priority thereof) of the Agent
contemplated hereby and by the other Loan Documents and specifically
including all Collateral acquired by Borrower or any Domestic Subsidiary
after the Closing Date.
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ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. CONDITIONS PRECEDENT TO EFFECTIVENESS. The
effectiveness of this Agreement, and the obligation of the Lenders to make
any Loans to the Borrower in accordance with the terms hereof and the
obligation of any Letter of Credit Issuer to issue Letters of Credit in
accordance with the terms hereof, are subject to the condition precedent
that the Borrower deliver to the Agent each of the following, each of
which shall be satisfactory in form and substance to the Lenders:
(a) A Revolving Note executed and delivered by the Borrower,
payable to each Lender and complying with the terms of Section 2.06;
(b) A Term Note executed and delivered by the Borrower,
payable to each Lender and complying with the requirements of Section
2.08;
(c) The Security Documents executed and delivered by Borrower
and the Subsidiaries to the Agent together with the Mortgaged Property
Support Documents and the Stock Certificates required by Section 5.01(a).
(d) Copies certified as of the Effective Date by the
respective Secretary or Assistant Secretary of Borrower (each such Person
shall be the "AUTHENTICATING PERSON" with respect to Borrower) of all
corporate and other necessary action taken by Borrower to authorize the
execution, delivery and performance of the Loan Documents to which it is a
party;
(e) (i) Copies certified as of the Effective Date by an
Authenticating Person of the articles of incorporation of Borrower and
each Subsidiary and by-laws of Borrower or each Subsidiary; (ii) a
certificate of existence or other good standing certificate for Borrower
and each Subsidiary issued as of a recent date by the Secretary of State
of the jurisdiction of its incorporation, of the State in which its
principal place of business is located and of each State in which any
Inventory is located; and (iii) certificates dated as of the Effective
Date signed by an Authenticating Person with respect to the incumbency and
specimen signatures of each of the officers or other Persons of Borrower
and each Subsidiary who are authorized to execute and deliver this
Agreement and the other Loan Documents to which Borrower or a Subsidiary
is a party;
(f) Copies of each of the policies of insurance (or binder or
certificate of insurance with respect thereto) covering any of the
tangible insurable property of the Borrower, together with loss payable
clauses naming the Agent on behalf of the Lenders as loss payee, and
naming the Agent on behalf of the Lenders as additional insureds which
comply with the terms of the relevant Loan Documents;
(g) Favorable UCC, tax, judgment and lien search reports with
respect to the Borrower and any Subsidiary in all necessary or appropriate
jurisdictions and under all legal and appropriate trade names indicating
that there are no prior Liens on any of the property of Borrower or any
Subsidiary other than Permitted Liens;
36
(h) An opinion of counsel to the Borrower, dated the Effective
Date and addressed to the Agent and the Lenders, in form and content
reasonably satisfactory to the Agent and the Lenders;
(i) A disbursement letter executed by the Borrower authorizing
the disbursement of the proceeds of the Term Loans and any other Loans to
be made on the Effective Date;
(j) A Borrowing Base Certificate duly completed by the Borrower,
such certificate to be prepared as of the Effective Date;
(k) [Intentionally Omitted].
(l) A certificate from the chief financial officer of the
Borrower dated the Effective Date to the effect that no material adverse
change in the financial condition, business, operations or prospects of
the Borrower or any of its Subsidiaries has occurred since June 30, 2001;
and
(m) Such other documents and instruments as Agent or any Lender
may reasonably request.
SECTION 6.02. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The
obligations of the Lenders to make Revolving Loans and the Term Loans and
of any Letter of Credit Issuer to issue Letters of Credit are subject to
the further condition precedent that, as of the date of each such
Revolving Loan, and Term Loan and Date of Issuance of each such Letter of
Credit and after giving effect thereto: (a) no Default or Event of Default
shall have occurred and be continuing; (b) the representations and
warranties made or deemed made by the Borrower in this Agreement and the
other Loan Documents to which it is a party shall be true and correct in
all material respects on and as of the date of the making of such Loan or
the Date of Issuance of such Letter of Credit with the same force and
effect as if made on and as of such date except to the extent that such
representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true
and accurate on and as of such earlier date); (c) no event or condition
having a Material Adverse Effect with respect to the Borrower has occurred
since the Effective Date and (d) the Borrower is in compliance with the
Borrowing Base requirements. Each Notice of Borrowing, Continuation or
Conversion, and Request for Letter of Credit delivered by the Borrower
hereunder and each borrowing of Loans or issuance of a Letter of Credit
shall constitute a certification by the Borrower to the effect set forth
in the preceding sentence (both as of the date of such Notice of
Borrowing, Continuation or Conversion or Request for Letter of Credit and,
unless the Borrower otherwise notifies the Agent prior to the date of such
borrowing or issuance, as of the date of such borrowing or issuance).
SECTION 6.03. CONDITIONS AS COVENANTS. In the event the Lenders make
any Revolving Loan or Term Loan, or the Letter of Credit Issuer issues a
Letter of Credit on or after the Agreement Date and prior to the
satisfaction of all conditions precedent set forth in Section 6.01 hereof,
the Borrower shall nevertheless cause such condition or conditions to be
satisfied within thirty days after the date of the making of such Loan or
the issuance of such Letter of Credit.
37
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to the Agent and each of the Lenders as follows:
(a) ORGANIZATION; POWER; QUALIFICATION. Each of the Borrower and its
Subsidiaries is a corporation duly formed, validly existing and in good
standing under the laws of its jurisdiction of incorporation, has the
power and authority to own or lease its properties and to carry on its
business as now being and hereafter proposed to be conducted and is duly
qualified and is in good standing as a foreign corporation, and authorized
to do business, in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization and where the failure to be so qualified or authorized could
have a Material Adverse Effect on the Borrower or such Subsidiary.
(b) OWNERSHIP STRUCTURE. Schedule 7.01(b) correctly sets forth as of
September 30, 2001, the corporate structure of Borrower and ownership
interests of the ten (10) shareholders (as provided to Borrower from a
▇▇▇▇▇▇▇▇ Screen and for which Borrower does not undertake to verify the
accuracy but which to the best of Borrower's knowledge and belief is not
incorrect) owning the greatest number of shares of the Borrower including
the correct legal name of the Borrower. Except as set forth in Schedule
7.01(b) neither the Borrower nor any Subsidiary has issued to any third
party any securities convertible into or exercisable for equity interests
in the Borrower or any Subsidiary or any options, warrants or other rights
to acquire any securities convertible into or exercisable for such equity
interests.
(c) AUTHORIZATION OF AGREEMENT, NOTES, LOAN DOCUMENTS AND
BORROWINGS. The Borrower has the right and power, and has taken all
necessary action to authorize it, to borrow hereunder and to execute,
deliver and perform this Agreement, the Notes and the other Loan Documents
to which it is a party in accordance with their respective terms and to
consummate the transactions contemplated hereby. This Agreement, the Notes
and each of the other Loan Documents to which the Borrower is a party have
been duly executed and delivered by the duly authorized officers of the
Borrower and each is a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its respective terms;
provided that enforceability of the Loan Documents is subject to
limitation by the general principles of equity and to bankruptcy,
insolvency and similar laws affecting the enforcement of creditors' rights
generally.
(d) NO VIOLATION OF LAWS, ETC. The execution, delivery and
performance by Borrower of any Loan Document to which it is a party in
accordance with its terms and the Credit Events hereunder do not and will
not, by the passage of time, the giving of notice, a determination of
materiality, the satisfaction of any condition, any combination of the
foregoing, or otherwise: (i) require any Governmental Approval or violate
any Applicable Law relating to Borrower; (ii) conflict with, result in a
breach of or constitute a default under the charter or bylaws of Borrower,
or any indenture, agreement or other instrument to which the Borrower or
any of its Subsidiaries is a party or by which it or any of its properties
may be bound where such conflict, breach or default could have a Material
Adverse Effect on Borrower; or (iii) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired
38
by the Borrower or any of its Subsidiaries other than Permitted Liens.
(e) COMPLIANCE WITH LAW; GOVERNMENTAL APPROVALS. Except as set forth
in Schedule 7.01(e), the Borrower and each Subsidiary is in compliance
with each Governmental Approval applicable to it and in compliance with
all other Applicable Law relating to the Borrower and each Subsidiary,
except for noncompliances which, and Governmental Approvals the failure to
possess which, would not, singly or in the aggregate, cause a Default or
Event of Default or have a Material Adverse Effect on the Borrower or the
Subsidiary and in respect of which adequate reserves have been established
on the books of the Borrower or the Subsidiary in accordance with GAAP.
(f) TITLES TO PROPERTIES. Each of the Borrower and its Subsidiaries
has good, marketable and legal title to, or a valid leasehold interest in,
its properties and assets including, but not limited to, those reflected
on the consolidated balance sheet of Borrower as at June 30, 2001, except
those which have been disposed of by the Borrower or such Subsidiary
subsequent to such date in the ordinary course of business. None of the
properties or assets owned by the Borrower or any of its Subsidiaries and
none of the Borrower's or any of its Subsidiaries' leasehold interests are
subject to any Lien, except Permitted Liens.
(g) INDEBTEDNESS AND GUARANTEES. Schedule 7.01(g) is a complete and
correct listing of all (i) Indebtedness for Money Borrowed of the Borrower
or any Subsidiary, (ii) Guarantees of the Borrower or any Subsidiary, and
(iii) all letters of credit and acceptances issued or created by any
Person for the account of the Borrower or any Subsidiary. The Borrower and
its Subsidiaries have performed and are in compliance with all of the
terms of such Indebtedness and such Guarantees and all instruments and
agreements relating thereto, and no default or event of default, or event
or condition which with the giving of notice, the lapse of time, a
determination of materiality, the satisfaction of any other condition or
any combination of the foregoing, would constitute such a default or event
of default, exists with respect to any such Indebtedness or Guarantees,
the aggregate principal balance of which exceeds $250,000.
(h) LITIGATION. Except as set forth on Schedule 7.01(h), there are
no actions, suits or proceedings pending (nor, to the knowledge of the
Borrower, threatened, nor is there any basis therefor) against or in any
other way relating adversely to or affecting the Borrower or any
Subsidiary or any of their respective property in any court or before any
arbitrator of any kind or before or by any governmental body which could
have a Material Adverse Effect on Borrower or any Subsidiary. There are no
strikes or walkouts in progress relating to any labor contracts to which
the Borrower or any Subsidiary is a party.
(i) TAX RETURNS AND PAYMENTS. All federal, state and other tax
returns of the Borrower required by Applicable Law to be filed have been
duly filed, and all federal, state and other taxes, assessments and other
governmental charges or levies upon the Borrower and its properties,
income, profits and assets which are due and payable have been paid,
except any such nonpayment which is at the time permitted under Section
8.06.
(j) FINANCIAL STATEMENTS. The Borrower has furnished to each Lender
copies of the consolidated balance sheet of the Borrower as at June 30,
2001, and the related consolidated statements of income and cash flows for
the period covered thereby, certified by the President or Chief Financial
Officer or other senior executive officer of the Borrower to be complete
and
39
correct and present fairly in all material respects, in accordance
with GAAP consistently applied throughout the period involved, the
financial position of the Borrower as at its date and the results of
operations and the cash flows for such period. Except as disclosed in such
balance sheet or statements, the Borrower and its Subsidiaries have no
material liabilities, contingent or otherwise, and nor were there any
material unrealized or anticipated losses of the Borrower or any of its
Subsidiaries for the period covered thereby.
(k) ERISA. The Borrower and its Affiliates are in compliance with
ERISA in all material respects. No Reportable Event has occurred and is
continuing with respect to any Plan; to the knowledge of the Borrower, no
notice of intent to terminate a Plan has been filed nor has any Plan been
terminated, the termination of which would result in liability to the
Borrower or any Subsidiary of the Borrower in excess of $50,000 in the
aggregate at any one time; no circumstance exists which constitutes
grounds under Section 4042 of ERISA entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor
has the PBGC instituted any such proceedings; neither the Borrower nor any
Affiliate has completely or partially withdrawn under Sections 4201 or
4204 of ERISA from a Multiemployer Plan which withdrawal would result in
liability to the Borrower in excess of $50,000 in the aggregate at any one
time; the Borrower and each Affiliate has met its minimum funding
requirements under ERISA with respect to all of its Plans and there are no
unfunded vested liabilities in excess of $50,000 in the aggregate at any
one time; and neither the Borrower nor any Affiliate has incurred any
liability to the PBGC under ERISA in excess of $50,000 in the aggregate at
any one time, which liability has not been satisfied.
(l) ABSENCE OF DEFAULTS. No event has occurred and is continuing:
(i) which constitutes a Default or an Event of Default; or (ii) which
constitutes, or which with the passage of time, the giving of notice, a
determination of materiality, the satisfaction of any condition, or any
combination of the foregoing, would constitute, a default or event of
default by the Borrower or any of its Subsidiaries under any material
agreement (other than this Agreement) or judgment, decree or order to
which the Borrower or any of its Subsidiaries is a party or by which the
Borrower or any of its Subsidiaries or any of their properties may be
bound.
(m) ACCURACY AND COMPLETENESS OF INFORMATION. All written
information, reports and other papers and data furnished to Agent or any
Lender by, on behalf of, or at the direction of, Borrower or any
Subsidiary (including, without limitation, all information regarding
location, amount and other particulars of the Inventory and Accounts of
the Borrower and its Subsidiaries) were, at the time the same were so
furnished, complete and correct in all material respects, to the extent
necessary to give the recipient a true and accurate knowledge of the
subject matter, or, in the case of financial statements, present fairly in
all material respects, in accordance with GAAP consistently applied
throughout the periods involved, the financial position of the Persons
involved as at the date thereof and the results of operations for such
periods. No fact is known to the Borrower which has had, or may in the
future have (so far as the Borrower can reasonably foresee), a Material
Adverse Effect upon the Borrower or any Subsidiary which has not been set
forth in the financial statements referred to in Section 7.01(j) or in
such information, reports or other papers or data or otherwise disclosed
in writing to the Agent and the Lenders prior to the Agreement Date. No
document furnished or statement made to any Agent or Lender in connection
with the negotiation, preparation or execution of this Agreement or any of
the other Loan Documents contains or will contain any untrue statement of
a material fact or omits or will omit to state a material fact necessary
in order to make the statements contained therein not
40
misleading.
(n) ENVIRONMENTAL LAWS. Borrower and its Subsidiaries are in
compliance in all material respects with all terms and conditions of all
Governmental Approvals required under Environmental Laws to be obtained by
Borrower and its Subsidiaries for operation in the ordinary course of
business. Neither the Borrower nor any of its Subsidiaries is aware of, or
has received notice of, any past, present, or future events, conditions,
circumstances, activities, practices, incidents, actions, or plans which
may prevent compliance or continued compliance in all material respects
with Environmental Laws which have not been completely remediated to the
extent required by the applicable Environmental Laws. There is no civil,
criminal, or administrative action, suit, demand, claim, hearing, notice,
or demand letter, notice or violation, investigation, or proceeding
pending or, to the Borrower's knowledge, threatened, against the Borrower
or any of its Subsidiaries relating in any way to Environmental Laws.
(o) SENIOR MANAGEMENT EMPLOYMENT AGREEMENTS. Borrower has entered
into employment agreements with Messrs. Pincourt, Maltby, ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ for terms of not less than five (5) years from July 15, 1999,
true and complete copies of which have been delivered to the Agent.
(p) TRADEMARKS. The tradenames and trademarks listed on Schedule
7.01(p) attached hereto are all of the tradenames and trademarks included
in the computation of Borrower's Tangible Net Worth. The current
valuations of such tradenames and trademarks used in calculating
Borrower's Tangible Net Worth are shown on Schedule 7.01(p).
(q) OWNERSHIP OF SUBSIDIARIES AND COLLATERAL. Borrower is the owner
of one hundred percent (100%) of all shares of voting stock of each of the
Subsidiaries except as shown on Schedule 7.01(b), the Subsidiary
Securities issued by each of the Foreign Subsidiaries is shown on the
books of that Subsidiary as being owned by the Borrower and that there are
no restrictions on the granting to the Agent by the Borrower of a security
interest in the Collateral as set forth in the Pledge Agreement.
SECTION 7.02. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
statements contained in any certificate, financial statement or other
instrument delivered by or on behalf of Borrower to Agent or any Lender
pursuant to or in connection with this Agreement or any of the other Loan
Documents (including, but not limited to, any such statement made in or in
connection with any amendment thereto or any statement contained in any
certificate, financial statement or other instrument delivered by or on
behalf of Borrower prior to the date hereof and delivered to Agent or such
Lender in connection with the closing the transactions contemplated
hereby) shall constitute representations and warranties made by the
Borrower under this Agreement. All representations and warranties made
under this Agreement shall be deemed to be made at and as of the Agreement
Date, the Effective Date, the date of making each Loan, the date of each
Continuation or Conversion thereof and the Date of Issuance of each Letter
of Credit, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as
of such earlier date).
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ARTICLE VIII
AFFIRMATIVE COVENANTS
For so long as any of the Obligations remain unpaid or unperformed,
or this Agreement is in effect, unless the Lenders shall otherwise consent
in the manner provided for in Section 14.07, the Borrower will and will
cause each of its Subsidiaries to:
SECTION 8.01. PRESERVATION OF EXISTENCE AND SIMILAR MATTERS.
Preserve and maintain its respective existence, rights, franchises,
licenses and privileges in the jurisdiction of its formation and qualify
and remain qualified and authorized to do business in each jurisdiction in
which the character of its properties or the nature of its business
requires such qualification or authorization and the failure to be so
qualified or authorized could have a Material Adverse Effect on the
Borrower or such Subsidiary.
SECTION 8.02. COMPLIANCE WITH APPLICABLE LAW. Comply with all
Applicable Law (including, without limitation, all Environmental Laws) as
the same may be amended from time to time, and obtain all Governmental
Approvals required by the Borrower or any of its Subsidiaries to be so
obtained, except where such noncompliance would not have a Material
Adverse Effect on Borrower or where the Borrower or such Subsidiary is
challenging in good faith by appropriate proceedings (diligently pursued)
the application or enforcement of such Applicable Law or requirement for
such Governmental Approval and against which adequate reserves have been
established in accordance with GAAP.
SECTION 8.03. MAINTENANCE OF PROPERTY. In addition to, and not in
derogation of, the requirements of any of the other Loan Documents, (a)
protect and preserve all of its properties, including, but not limited to,
copyrights, patents, trade names and trademarks, and maintain in good
repair, working order and condition all tangible properties, and (b) from
time to time make or cause to be made all needed and appropriate repairs,
renewals and replacements to such properties, so that the business carried
on in connection therewith may be properly and advantageously conducted at
all times.
SECTION 8.04. CONDUCT OF BUSINESS. At all times carry on its
business in the same fields as disclosed in Borrower's 10K filing with the
SEC for the fiscal year ended September 30, 2000. Neither Borrower nor any
of its Subsidiaries shall enter into any field of business not otherwise
engaged in as of the date hereof.
SECTION 8.05. INSURANCE. Maintain at all times with such insurance
companies as shall be reasonably satisfactory to the Agent, with all
premiums thereon to be paid, insurance with respect to its properties and
business against such casualties and contingencies (including but not
limited to public liability and business interruption) and in such amounts
as is customary in the case of similarly situated corporations engaged in
the same or similar businesses and are consistent with Borrower's current
insurance practices as of the Effective Date. From time to time deliver to
the Agent upon its request a detailed list, together with copies of all
policies of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
SECTION 8.06. PAYMENT OF TAXES AND CLAIMS. Pay or discharge when due
(a) all taxes, assessments and governmental charges or levies imposed upon
it or upon its income or
42
profits or upon any properties belonging to it, and (b) all lawful
claims of materialmen, mechanics, carriers, warehousemen and landlords
for labor, materials, supplies and rentals which, if unpaid, might
become a material Lien on any of its properties or which would
otherwise materially adversely affect the value of any Collateral;
PROVIDED, HOWEVER, that this Section shall not require the payment or
discharge of any such tax, assessment, charge, levy or claim which is
being contested in good faith by appropriate proceedings which operate
to suspend the collection thereof and for which adequate cash reserves
have been established in an amount in accordance with GAAP; PROVIDED,
FURTHER, HOWEVER, neither the Borrower nor any of its Subsidiaries may
contest any such tax, assessment, charge, levy or claim if the contest
thereof will impair the value or marketability of any Collateral or the
Agent's Security Interest therein.
SECTION 8.07. VISITS AND INSPECTIONS. Permit representatives or
agents of Agent or any Lender, from time to time, as often as may be
reasonably requested and reasonably necessary for monitoring of the Loans,
but only during normal business hours, at the expense of the Borrower, to:
(a) visit and inspect the properties (including Collateral inspections to
occur not more than four times annually) of the Borrower and its
Subsidiaries; (b) inspect and make extracts from relevant books and
records of the Borrower and its Subsidiaries, including but not limited to
management letters prepared by independent accountants; (c) discuss with
principal officers, and independent accountants of the Borrower and its
Subsidiaries, the business, assets, liabilities, financial conditions,
results of operations and business prospects of the Borrower and its
Subsidiaries; and (d) conduct an audit of the Collateral.
SECTION 8.08. USE OF PROCEEDS. (a) Use the proceeds of all Revolving
Loans to finance its working capital requirements and for general
corporate purposes only; and (b) not use any part of the proceeds of the
Revolving Loans to purchase or carry, or to reduce or retire or refinance
any credit incurred to purchase or carry, any margin stock (within the
meaning of Regulations U and X of the Board of Governors of the Federal
Reserve System) or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
SECTION 8.09. SUBSIDIARY SECURITIES REGISTRATION. If any Subsidiary
shall become registered and traded in any nationally recognized stock
exchange, Borrower shall cause each Subsidiary to promptly and completely
file all reports required to be filed under the 1934 Act, such that all
current public information as defined in Rule 144 is available and at the
request of the Agent, each Subsidiary will, if applicable, use its best
efforts to cooperate in good faith with the Agent to release any
restrictions on the stock certificates for the Subsidiary Securities as
and when permitted under the 1933 Act. At Agent's request, Borrower shall
cause each Subsidiary, at its expense, to file whatever forms, statements
or documents which are necessary with the SEC and other regulatory
agencies so that any legend and/or other restrictions associated with the
Subsidiary Securities may be cleared or released as soon as possible.
SECTION 8.10. ENVIRONMENTAL COMPLIANCE Assure compliance with all
past, present or future Federal, state or local laws, rules, regulations,
ordinances or other governmental actions relating to the use, handling,
storage, transportation, or disposal of hazardous or toxic materials on
the Real Estate as defined by such laws, rules, regulations, ordinance or
other governmental actions. Borrower shall deliver promptly upon receipt
copies of all reports, correspondence and other documentation regarding
the Property that relate to environmental impact rules and regulations.
43
ARTICLE IX
INFORMATION
For so long as any of the Obligations remains unpaid or unperformed,
or this Agreement is in effect, unless the Lenders shall otherwise consent
in the manner set forth in Section 14.07, the Borrower will furnish to the
Agent and each Lender at its Lending Office:
SECTION 9.01. QUARTERLY REPORTS. Within fifty (50) days after the
close of each quarterly accounting period of the Borrower, except
Borrower's fiscal year end, a copy of Form 10Q as filed by Borrower with
the SEC for such period. In the event Borrower does not file a Form 10Q
with the SEC within fifty (50) days after the close of each quarterly
accounting period of Borrower, Borrower shall, within such fifty (50) day
period, deliver the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such period and the related consolidated
statement of income of the Borrower and its Subsidiaries for such period,
setting forth in comparative form the figures as at the end of and for the
corresponding fiscal quarter of the prior fiscal year, all of which shall
be certified by an Authorized Representative of Borrower to present fairly
in all material respects, in accordance with GAAP consistently applied
(except for footnotes and subject to changes resulting from normal
year-end adjustments), the consolidated financial position of the Borrower
and its Subsidiaries as at the date thereof and the results of operations
for such period. With each such report Borrower shall submit to the Agent
a fully completed compliance certificate in the form attached hereto as
Exhibit "L" (the "Compliance Certificate") duly certified in form and
substance acceptable to Agent by an Authorized Representative of Borrower.
SECTION 9.02. YEAR-END STATEMENTS. Within one hundred twenty (120)
days after the end of each fiscal year of the Borrower, a copy of Form 10K
as filed by Borrower with the SEC and a fully completed Compliance
Certificate duly certified in form and substance acceptable to Agent by an
Authorized Representative of Borrower. In the event Borrower does not file
a Form 10K with the SEC within one hundred twenty (120) days after the
close of each fiscal year of Borrower, Borrower shall, within such one
hundred twenty (120) day period, deliver the consolidated balance sheet of
the Borrower as at the end of such fiscal year and the related
consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal year, setting forth in comparative form the
figures as at the end of and for the previous fiscal year, all of which
shall be certified by an Authorized Representative of Borrower to present
fairly in all material respects, in accordance with GAAP consistently
applied, the consolidated financial position of the Borrower and its
Subsidiaries as at the date thereof and the consolidated results of
operations for such period, and also shall be certified by McGladrey &
▇▇▇▇▇▇, LLP or such other independent certified public accountants of
recognized national standing proposed by Borrower and otherwise reasonably
acceptable to the Lenders, whose certificate shall be in scope and
substance satisfactory to the Lenders and who shall have authorized the
Borrower to deliver such financial statements and certification thereof to
the Agent and the Lenders pursuant to this Agreement. Together with each
delivery of the annual financial statements required above, Borrower shall
deliver to the Agent and each Lender a letter from the Borrower's
accountants stating that in performing the audit necessary to render an
opinion on the financial statements delivered under this Section 9.02,
they obtained no knowledge of any Default or Event of Default by the
Borrower in the fulfillment of the terms and provisions of this Agreement
insofar as they related to financial matters (which at the date of such
statement remains uncured), or if the
44
accountants have obtained knowledge of such Default or Event of
Default, a statement specifying the nature and period of existence
thereof. At the midpoint of each fiscal year of Borrower, Borrower will
present to the Agent or, at the Agent's option, allow the Agent to
conduct a field examination, at Borrower's expense, of the working
assets of Borrower and its Subsidiaries all in form and substance
reasonably acceptable to the Agent. Within ninety (90) days after the
beginning of each fiscal year of Borrower, Borrower shall deliver to
Agent, in form and substance reasonably acceptable to Agent, a report
of the projected financial performance of Borrower and its Subsidiaries
for that fiscal year on a consolidated basis.
SECTION 9.03. MONTHLY REPORTS. Not later than 5:00 p.m. ET on the
twenty-fifth (25th) day of each calendar month (or more frequently, if
requested by the Agent), a duly completed Borrowing Base Certificate, with
respect to the immediately prior month period, certified by an Authorized
Representative of Borrower. In addition, Borrower shall simultaneously
provide account receivable aging reports, inventory reports by location,
internally prepared and certified financial summary reports and operating
statements by product groups, certified by the Chief Executive Officer or
the Chief Financial Officer of Borrower all in form and substance
reasonably acceptable to Agent.
SECTION 9.04. COPIES OF OTHER REPORTS.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower by the Borrower's independent public accountants
including any management report; and
(b) From time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, documents or
further information regarding the business, assets, liabilities, financial
condition, results of operations or business prospects of the Borrower and
its Subsidiaries as any Lender or the Agent may reasonably request. The
rights of the Lenders and the Agent under this Section are in addition to
and not in derogation of their rights under any other provision of this
Agreement or any of the other Loan Documents.
SECTION 9.05. NOTICE OF LITIGATION AND OTHER MATTERS. Prompt
notice of:
(a) the commencement of all proceedings and investigations by or
before any governmental or nongovernmental body and all actions and
proceedings in any court or other tribunal or before any arbitrator
against or in any other way relating adversely to, or adversely affecting,
the Borrower or any Subsidiary or any of their respective properties,
assets or businesses which, if adversely determined or resolved, could
have a Material Adverse Effect on the Borrower or any Subsidiary, as
applicable, including without limitation, any claim, action, demand, suit,
proceeding, hearing, study, or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant (chemical or
industrial), toxic, or other Hazardous Material;
(b) any change in the Senior Management of the Borrower unless
within one hundred twenty (120) days the senior manager is replaced by a
manager of comparable experience and ability as determined in the
reasonable judgment of the Required Lenders and any change in the
business, assets, liabilities, financial condition, results of operations
or business
45
prospects of the Borrower or any Subsidiary which has had or may have a
Material Adverse Effect on the business operations of the Borrower or any
Subsidiary, as applicable; and
(c) any Default or Event of Default or any event which constitutes
or which with the passage of time, the giving of notice, a determination
of materiality, the satisfaction of any condition or any combination of
any of the foregoing would constitute a default or event of default by the
Borrower or any Subsidiary under any material agreement (other than this
Agreement) to which the Borrower or any Subsidiary is a party or by which
the Borrower or any Subsidiary or any of its respective properties may be
bound and such action that the Borrower or such Subsidiary is taking to
remedy such Default, Event of Default or event.
SECTION 9.06. ERISA. As soon as possible and in any event within
30 days after the Borrower knows, or has reason to know, that:
(a) any Termination Event with respect to a Plan has occurred
or will occur; or
(b) the existence of any Unfunded Vested Accrued Benefits under
all Plans; or
(c) the Borrower or any Affiliate is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan required by reason of its complete or partial withdrawal (as
described in Section 4203 or 4205 of ERISA) from such Plan,
a certificate of the President or Chief Executive Officer of the Borrower
setting forth the details of such of the events described in clauses (a)
through (c) as applicable and the action which is proposed to be taken
with respect thereto, together with any notice or filing which may be
required by the PBGC or other agency of the United States government with
respect to such of the events described in clauses (a) through (c) as
applicable.
ARTICLE X
NEGATIVE COVENANTS
So long as any of the Obligations remains unpaid or unperformed, or
this Agreement is in effect, unless the Lenders shall otherwise consent in
the manner set forth in Section 14.07, the Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly:
SECTION 10.01. INDEBTEDNESS FOR BORROWED MONEY. Create, assume, or
otherwise become or remain obligated in respect of, or permit or suffer to
exist or to be created, assumed or incurred or to be outstanding any
Indebtedness for Money Borrowed, except that this Section shall not apply
to (a) Indebtedness for Money Borrowed represented by the Loans and the
Notes, (b) the Indebtedness set forth on Schedule 7.01(g), (c) reasonable
and customary business expenses incurred in the ordinary course of
Borrower's or its Subsidiaries' businesses and trade debt incurred in the
ordinary course of business, (d) Indebtedness secured by Permitted Liens,
and (e) intracompany Indebtedness from the Borrower to any of its
Subsidiaries or between Subsidiaries which do not, in the aggregate for
all Subsidiaries, exceed Two Million and No/100 Dollars ($2,000,000.00) at
any one time and which are made in the ordinary course of Borrower's and
the Subsidiaries' businesses as currently conducted or has otherwise been
approved by the Required Lenders; [PROVIDED, HOWEVER, that such
Indebtedness described in subparagraph (d) that
46
is owing by the Borrower or any of its Subsidiaries to an Affiliate
thereof shall be subordinated to the Obligations on terms and
conditions satisfactory to the Agent in its sole discretion] and
provided further that the foregoing shall not prohibit Subsidiaries
from lending to the Borrower.
SECTION 10.02. GUARANTIES. Become or remain liable on or under
any Guaranty, except for any Guaranty in existence on the date hereof
and set forth on Schedule 7.01(g).
SECTION 10.03. INVESTMENTS. Acquire any Person or any Business Unit
of any Person or make or purchase any investment or permit any investment
to be outstanding other than investments in existence as of the date
hereof and those permitted under Section 10.08, 10.10 and 10.11.
SECTION 10.04. LIENS. Create, assume, incur or permit or suffer to
exist or to be created, assumed or incurred, any Lien upon any of its
properties or assets of any character whether now owned or hereafter
acquired other than Permitted Liens or to enter into an agreement with any
Person restricting or prohibiting the creation of liens or other
encumbrances on the property of Borrower or any Subsidiary.
SECTION 10.05. RESTRICTED DISTRIBUTIONS AND PURCHASES. Declare or
make any Restricted Distribution or Restricted Purchase.
SECTION 10.06. MERGER, CONSOLIDATION AND OTHER ARRANGEMENTS. Merge
or consolidate with any other Person, acquire any other Person or
liquidate or dissolve or wind-up its respective affairs, or enter into any
partnerships, joint ventures or sale-leaseback transactions or purchase or
otherwise acquire (in one or a series of related transactions) any part of
the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of
any Person; provided, however, that a Subsidiary may merge or consolidate
with another Subsidiary so long as the surviving entity remains a
Subsidiary and Agent has been given prior written notice and has given its
written consent.
SECTION 10.07. PLANS. Take any action which would cause any Unfunded
Vested Accrued Benefits under any Plan of the Borrower and its Affiliates
to exist.
SECTION 10.08. LOANS. Extend credit to, or make any advance, loan or
contribution of money or goods to, any Person other than salary and travel
advances outstanding to employees of the Borrower and its Subsidiaries,
consistent with the past practices of the Borrower and its Subsidiaries,
in an aggregate amount at any time outstanding not to exceed $500,000 and
extensions of loans to Subsidiaries disclosed on Schedule 7.01(g) on terms
approved by the Agent in its reasonable judgment.
SECTION 10.09. SUBSIDIARIES. Incorporate, create or acquire any
Subsidiary.
SECTION 10.10. TRANSACTIONS WITH AFFILIATES. Enter into any
transaction or series of transactions, whether or not related or in the
ordinary course of business, with any other Affiliate of the Borrower or
such Subsidiary, other than on terms and conditions substantially as
favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm's-length
transaction with a Person not an Affiliate PROVIDED, HOWEVER, that this
Section 10.10 shall not prohibit any transaction solely among the Borrower
and its current Subsidiaries shown on Schedule 7.01(b) provided such
transactions are within the
47
ordinary course of Borrower's business as currently conducted.
SECTION 10.11. NO SALE OF ASSETS. Sell, lease, assign, transfer or
otherwise dispose of any assets whether in one or a series of transactions
(whether or not related) other than: (a) Inventory in the ordinary course
of business; (b) obsolete or worn out property disposed of in the ordinary
course of business; (c) the disposition by ▇▇▇▇▇▇▇▇▇ Bahamas, Limited of
its assets located in the Bahamas, provided the net proceeds of such
assets shall be retained by Borrower or a Subsidiary; and (d) other
dispositions of assets; PROVIDED that: (x) such other dispositions are for
fair value; (y) the aggregate consideration (whether in the form of cash,
promissory notes or other instruments) for such other dispositions does
not exceed $500,000 in the aggregate for any fiscal year; and (z) such
consideration is reinvested in the business of the Borrower.
SECTION 10.12. CHANGE IN ACCOUNTING METHOD OR FISCAL YEAR END. Make
any change in accounting treatment and reporting practices except as
required by GAAP, or change its fiscal year end.
SECTION 10.13. CHANGE OF SENIOR MANAGEMENT OR CONTROL. Allow any
change in Senior Management unless within one hundred twenty (120) days
the senior manager is replaced by a manager of comparable experience and
ability as determined in the reasonable judgment of the Required Lenders
or a change in Control.
SECTION 10.14. CHANGE IN ORGANIZATIONAL DOCUMENTS. Make any change
in the articles of incorporation, bylaws or other organizational documents
affecting the governance of Borrower or any Subsidiary, including, without
limitation, any provision affecting any voting rights or percentages for
approval of any corporate action.
SECTION 10.15. ADDITIONAL SUBSIDIARIES EQUITIES. Allow any
Subsidiary to issue any additional shares of common stock or other
evidence of equity ownership whether privately or to the public or by way
of stock dividend, stock split or stock sale.
SECTION 10.16. DIVIDENDS. Until such time as all Obligations have
been paid in full, declare or distribute a dividend to its shareholders
either in cash, stock or property; PROVIDED, HOWEVER, that Borrower's
Subsidiaries may pay cash dividends to Borrower.
ARTICLE XI
FINANCIAL COVENANTS
So long as any of the Obligations remain unpaid or unperformed or
this Agreement is in effect, unless the Lenders shall otherwise consent in
the manner set forth in Section 14.07, the Borrower and all Subsidiaries
shall, on a consolidated basis:
SECTION 11.01. MINIMUM TANGIBLE NET WORTH. Maintain a Tangible Net
Worth as of the last day of each fiscal quarter of Borrower of not less
than $30,000,000 for each fiscal quarter of Borrower through September 30,
2002, and thereafter Tangible Net Worth shall be a minimum of $30,000,000,
plus 50% of the annual net income (but not loss) of the Borrower and its
Subsidiaries for the prior fiscal year of Borrower (on a consolidated
basis in accordance with GAAP), plus 75% of the net proceeds of any equity
or subordinated debt offering completed by
48
Borrower after the Agreement Date. Tangible Net Worth shall be tested
on a quarterly basis beginning on September 30, 2001 and adjusted
annually thereafter beginning December 31, 2002.
SECTION 11.02. INTEREST COVERAGE RATIO. Maintain the ratio of EBITDA
to Consolidated Interest Expense determined at the end of each fiscal
quarter of Borrower for the four consecutive fiscal quarters then ended at
least as follows:
For any fiscal quarter ending
Ratio during the period:
----- -----------------------------
3.0 to 1.0 From and including the fiscal
quarter ended September 30, 2001
to and including the fiscal
quarter ending December 31, 2001
3.5 to 1.0 From and including the fiscal
quarter ending March 31, 2002 to
and including the fiscal quarter
ending March 31, 2003
4.0 to 1 From June 30, 2003 through
September 30, 2004
4.5 to 1.0 At any time after the fiscal
quarter ending September 30, 2004
SECTION 11.03. FIXED CHARGE COVERAGE. Maintain, at all times after
September 30, 2001, a Fixed Charge Coverage Ratio of not less than 1.75 to 1.0
which shall be tested at each fiscal quarter end of Borrower for the four
consecutive quarters then ended. Through the fiscal quarter of Borrower ending
on June 30, 2002, Fixed Charges shall be calculated as if the payments of
principal on the Term Loans totaled One Million and no/100s Dollars
($1,000,000.00) per quarter.
SECTION 11.04. FUNDED DEBT RATIO. Maintain at all times Funded Debt as a
percentage of the Funded Debt plus Tangible Net Worth as of the end of each of
the four fiscal quarters of Borrower of not more than the following:
For any fiscal quarter ending
Ratio during the period:
----- -----------------------------
0.65 to 1.0 From and including the fiscal
quarter ended September 30, 2001
to and including the fiscal
quarter ending September 30, 2002
0.60 to 1.0 From and including the fiscal
quarter ending December 31, 2002
to and including the fiscal
quarter ending September 30, 2003
0.55 to 1.0 From and including the fiscal
quarter ending December 31, 2003
to and including the fiscal
quarter ending September 30, 2004
0.50 to 1.0 At any time after the fiscal
quarter ending September 30, 2004
SECTION 11.05. FUNDED DEBT TO EBITDA. Maintain a ratio of Funded Debt to
EBITDA as of the end of any fiscal quarter of Borrower of not more than the
following. Such ratio shall be measured on the basis of the financial results
of Borrower for the most recent four (4) fiscal quarters of Borrower ending on
the dates of measurement.
49
For any fiscal quarter
Ratio ending during the period:
----- -------------------------
3.50 to 1.0 From the fiscal quarter ending September 30,
2001 to and including the fiscal quarter
ending September 30, 2002
3.0 to 1.0 From and including the fiscal quarter ending
December 31, 2002 to and including the fiscal
quarter ending September 30, 2003
2.75 to 1.0 At any time after the fiscal quarter ending
thereafter
SECTION 11.06. LIQUIDITY. Maintain a minimum Liquidity of Four Million
and no/100s Dollars ($4,000,000.00) at the end of each fiscal quarter of
Borrower. "Liquidity" is defined as unencumbered cash or marketable securities
owned by Borrower and held in an account with the Agent or with a depository
acceptable to the Agent. Written proof of such balance shall be submitted to
the Agent within ten (10) days after the end of each fiscal quarter of
Borrower.
ARTICLE XII
DEFAULT
SECTION 12.01. EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or nongovernmental body:
(a) DEFAULT IN PAYMENT. The Borrower shall fail to pay when due (whether
upon demand, at maturity, by reason of acceleration or otherwise) the principal
of, or interest on, any of the Loans or Notes, or any amount payable hereunder
when and as required to be made pursuant to any Reimbursement Obligation, or
shall fail to pay when due any of the other obligations owing by the Borrower
under this Agreement or any other Loan Document within ten (10) days after the
date due.
(b) MISREPRESENTATIONS. Any statement, representation or warranty made or
deemed made by or on behalf of the Borrower under this Agreement or under any
other Loan Document, or any amendment hereto or thereto, or in any other
statement at any time furnished or made or deemed made by or on behalf of the
Borrower to the Agent or any Lender in connection with any Loan Document or
with respect to the transactions contemplated by the Loan Documents, shall at
any time prove to have been incorrect or misleading in any material respect
when furnished or made or deemed made.
(c) DEFAULT IN PERFORMANCE. (i) The Borrower shall fail to perform or
observe any term, covenant, condition or agreement contained in Article X or
Article XI and such failure shall continue for thirty (30) days, or (ii) the
Borrower shall fail to perform or observe any term, covenant, condition or
agreement contained in this Agreement or any other Loan Document to which it is
a party and not otherwise mentioned in this Section 12.01 and such failure
shall continue for a period of thirty days.
(d) VOLUNTARY BANKRUPTCY PROCEEDING. The Borrower or any Subsidiary
shall: (i) commence a voluntary case under the federal bankruptcy laws (as now
or hereafter in effect); (ii) file a
50
petition seeking to take advantage of any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment
of debts; (iii) consent to or fail to contest in a timely and appropriate
manner any petition filed against it in an involuntary case under such
bankruptcy laws or other laws; (iv) apply for or consent to or fail to
contest in a timely and appropriate manner, the appointment of, or the taking
of possession by, a receiver, custodian, trustee, or liquidator of itself or
of a substantial part of its property, domestic or foreign; (v) admit in
writing its inability to pay its debts as they become due; (vi) make a
general assignment for the benefit of creditors; (vii) make a conveyance
fraudulent as to creditors under any state or federal law; or (viii) take any
corporate or partnership action for the purpose of effecting any of the
foregoing.
(e) INVOLUNTARY BANKRUPTCY PROCEEDING. A case or other proceeding shall
be commenced against the Borrower or any Subsidiary in any court of competent
jurisdiction seeking and not dismissed within sixty (60) days after the date of
filing: (i) relief under the federal bankruptcy laws (as now or hereafter in
effect) or under any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or adjustment of debts; or (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like for such
Person or all or any substantial part of its assets, domestic or foreign.
(f) LITIGATION. The Borrower shall challenge or contest in any action,
suit or proceeding in any court or before any arbitrator or governmental body
the validity or enforceability of this Agreement, any Note or any other Loan
Document.
(g) JUDGMENT. A judgment or order for the payment of money individually
or in the aggregate equal to or greater than $250,000 shall be entered against
the Borrower or any Subsidiary by any court and such judgment or order shall
continue undischarged, unstayed and unbonded for thirty (30) days after filing.
(h) ATTACHMENT. A warrant or writ of attachment or execution or similar
process shall be issued against any property of the Borrower or any Subsidiary
for an amount equal to or greater than $250,000 which shall continue
undischarged and unbonded for a period of thirty (30) days.
(i) ERISA. (i) Any Termination Event with respect to a Plan shall occur
and continue uncured for a period of ninety (90) days after occurrence if
curable; (ii) any Plan shall incur an "accumulated funding deficiency" (as
defined in Section 412 of the Internal Revenue Code or Section 302 of ERISA)
for which a waiver has not been obtained in accordance with the applicable
provisions of the Internal Revenue Code and ERISA; or (iii) the Borrower is in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan resulting from the Borrower's complete or partial
withdrawal (as described in Section 4203 or 4205 of ERISA) from such
Multiemployer Plan.
(j) CROSS DEFAULT. Borrower or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment of principal of
or interest on any other obligation for Money Borrowed (or any Capitalized
Lease Obligation, any obligation under a conditional sale or other title
retention agreement, any obligation issued or assumed as full or partial
payment for property whether or not secured by a purchase money mortgage or any
obligation under notes payable or drafts accepted representing extensions of
credit) beyond any period of grace provided with respect thereto; or Borrower
or any Subsidiary fails to perform or observe any other agreement, term or
condition contained in any agreement under which any such obligation is created
(or if any other event thereunder or under any such
51
agreement shall occur and be continuing) and the effect of such failure or
other event is to cause, or to permit the holder or holders of such
obligation (or a trustee on behalf of such holder or holders) to cause, such
obligation to become due (or to be repurchased or defeased by Borrower or any
Subsidiary) prior to its stated maturity.
(k) MATERIAL ADVERSE EFFECT. Any change shall have occurred in the
business, assets, liabilities, financial condition, results of operations or
business prospects of the Borrower or any of its Subsidiaries which has had or
may have a Material Adverse Effect on the Borrower and its Subsidiaries, taken
as a whole.
(l) SECURITY INTEREST. The Security Interest shall for any reason
cease to be a valid, enforceable, perfected and first-priority Lien on any
of the Collateral, subject only to Permitted Liens.
SECTION 12.02. REMEDIES. Upon the occurrence of an Event of Default
the following provisions shall apply:
(a) ACCELERATION; TERMINATION OF FACILITIES.
(i) AUTOMATIC. Upon the occurrence of an Event of Default specified
in Sections 12.01(d) or (e), then (A)(1) the principal of, and the interest on,
the Loans and the Notes at the time outstanding, (2) an amount equal to the
Stated Amount of all Letters of Credit outstanding as of the date of the
occurrence of the Event of Default and (3) all of the other obligations of the
Borrower hereunder, including, but not limited to, the other amounts owed to
the Lenders and the Agent under this Agreement, the Notes or any of the other
Loan Documents, and all other Obligations, shall become automatically due and
payable by the Borrower without presentment, demand, protest, or other notice
of any kind, all of which are expressly waived by the Borrower and (B) the
Revolving Credit Facility and the Letter of Credit Facility, the obligations of
the Lenders to make Revolving Loans under the Revolving Credit Facility, the
obligation of the Letter of Credit Issuer to issue Letters of Credit under the
Letter of Credit Facility and each Lender's respective Commitment shall
immediately and automatically terminate.
(ii) OPTIONAL. If any other Event of Default shall have occurred
and be continuing (other than an Event of Default specified in Section 12.01(d)
or (e)), then (xx) the Agent, at the direction of the Required Lenders, shall:
(A) declare (1) the principal of, and interest on, the Loans and the Notes at
the time outstanding, (2) an amount equal to the Stated Amount of all Letters
of Credit outstanding as of the date of the occurrence of the Event of Default
and (3) all of the other obligations of the Borrower hereunder, including, but
not limited to, the other amounts owed to the Lenders and the Agent under this
Agreement, the Notes or any of the other Loan Documents, and all other
Obligations, to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or
other notice of any kind, all of which are expressly waived by the Borrower and
(B) terminate each Lender's respective Commitment, the Revolving Credit
Facility and the Letter of Credit Facility, the obligation of the Lenders to
make Revolving Loans under the Revolving Credit Facility and the obligation of
the Letter of Credit Issuer to issue Letters of Credit under the Letter of
Credit Facility.
(b) LOAN DOCUMENTS. The Agent, upon the direction of the Required
Lenders, shall exercise any and all of its rights under any and all of the
other Loan Documents.
(c) CASH COLLATERAL. The Agent, upon the direction and at the election of
the Required
52
Lenders, may require the Borrower to deposit into the Cash Collateral Account
the amounts specified in Sections 12.02(a)(i)(A)(2) or 12.02(a)(ii)(A)(2), as
applicable. The monies so deposited therein shall be used in the manner
specified in Section 3.07 hereof as if the Facility Termination Date were the
date the applicable Event of Default had occurred.
SECTION 12.03. RIGHTS CUMULATIVE. The rights and remedies of the Agent
and the Lenders under this Agreement, the Notes and each of the other Loan
Documents shall be cumulative and not exclusive of any rights or remedies which
it would otherwise have under Applicable Law. In exercising its rights and
remedies the Agent and the Lenders may be selective and no failure or delay by
the Agent or any of the Lenders in exercising any right shall operate as a
waiver of it, nor shall any single or partial exercise of any power or right
preclude its other or further exercise or the exercise of any other power or
right.
ARTICLE XIII
THE AGENT
SECTION 13.01. AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes the Agent to take such action as Agent on such Lender's behalf and
to exercise such powers under this Agreement and the other Loan Documents as
are delegated to Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. The power of attorney set forth
herein shall be irrevocable and coupled with an interest. The relationship
between Agent and the Lenders shall be that of principal and agent only and
nothing herein shall be construed to deem Agent a trustee for any Lender nor to
impose on Agent duties or obligations other than those expressly provided for
herein. At the request of a Lender, the Agent will forward to each Lender
copies or, where appropriate, originals of the documents delivered to the Agent
pursuant to Section 7.01 hereof. The Agent will also furnish to any Lender,
upon the request of such Lender, a copy of any certificate or notice furnished
to the Agent by the Borrower, or any other Affiliate of the Borrower, pursuant
to this Agreement or any other Loan Document not already delivered to such
Lender pursuant to the terms of this Agreement or any such other Loan Document.
As to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), the Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding upon all Lenders and all
holders of Notes; PROVIDED, HOWEVER, that Agent shall not be required to take
any action which is contrary to this Agreement or any other Loan Document or
Applicable Law. Not in limitation of the foregoing, Agent shall not exercise
any right or remedy it or the Lenders may have under any Loan Document upon the
occurrence of a Default or an Event of Default unless the Required Lenders have
so directed Agent to exercise such right or remedy.
SECTION 13.02. AGENT'S RELIANCE, ETC. Neither the Agent nor any
directors, officers, agents, employees or counsel shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, Agent: (a) may
treat the payee of any Note as the holder thereof until such Agent receives
written notice of the assignment or transfer thereof signed by such payee and
in form satisfactory to the Agent; (b) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Lender
and shall not be
53
responsible to any Lender for any statements, warranties or representations
made in or in connection with this Agreement or any other Loan Document
including, without limitation, any Borrowing Base Certificate; (d) shall not
have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of any of this Agreement or any
other Loan Document or the satisfaction of any conditions precedent under
this Agreement or any Loan Document on the part of any or all of the Borrower
or other Persons or inspect the property, books or records of any or all of
the Borrower or any other Person; (e) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document, any other
instrument or document furnished pursuant thereto or any collateral covered
thereby or the perfection or priority of any Lien in favor of any Agent on
behalf of the Lenders in any such collateral; and (f) shall incur no
liability under or in respect of this Agreement or any other Loan Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telephone or telecopy) believed by it to be genuine and
signed, sent or given by the proper party or parties.
SECTION 13.03. AGENT AS LENDER. SouthTrust Bank, as a Lender, shall have
the same rights and powers under this Agreement and any other Loan Document as
any other Lender and may exercise the same as though it were not the Agent; and
the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include the Agent in its individual capacity. The Agent and its Affiliates may
each accept deposits from, maintain deposits or credit balances for, invest in,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with the Borrower, or any other Affiliate thereof as if it
were any other bank and without any duty to account therefor to the other
Lenders.
SECTION 13.04. LENDER CREDIT DECISION, ETC. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or other Affiliates has made any
representations or warranties to such Lender and that no act by Agent
hereinafter taken, including any review of the affairs of the Borrower, shall
be deemed to constitute any representation or warranty by Agent to any Lender.
Each Lender acknowledges that it has, independently and without reliance upon
Agent, any other Lender or counsel to Agent, and based on the financial
statements of the Borrower and its Affiliates, its review of the Loan
Documents, the legal opinions required to be delivered to it hereunder, the
advice of its own counsel and such other documents and information as it has
deemed appropriate, made its own credit and legal analysis and decision to
enter into this Agreement and the transaction contemplated hereby. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent, any other Lender or counsel to the Agent, and based on such review,
advice, documents and information as it shall deem appropriate at the time,
continue to make its own decisions in taking or not taking action under the
Loan Documents. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by Agent hereunder, Agent shall have no
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, financial and other
condition or creditworthiness of the Borrower or any other Affiliate thereof
which may come into possession of Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or other Affiliates.
SECTION 13.05. INDEMNIFICATION. The Lenders agree to indemnify Agent (to
the extent not reimbursed by the Borrower and without limiting the obligation
of the Borrower to do so) PRO RATA in accordance with the Lenders' respective
Credit Percentages, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may at any time be imposed
on, incurred by, or asserted against
54
Agent in any way relating to or arising out of the Loan Documents or any
action taken or omitted by Agent under the Loan Documents; PROVIDED, HOWEVER,
that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from Agent's gross
negligence or willful misconduct or if Agent fails to follow the written
direction of the Lenders unless such failure is pursuant to the advice of
counsel of which the Lenders have received notice. Without limiting the
generality of the foregoing, each Lender agrees to reimburse Agent promptly
upon demand for its ratable share of any reasonable out-of-pocket expenses
(including reasonable counsel fees) incurred by Agent in connection with the
preparation, execution, administration, or enforcement of, or legal advice
with respect to the rights or responsibilities of the parties under, the Loan
Documents, to the extent that Agent is not reimbursed for such expenses by
the Borrower. The agreements in this Section shall survive the payment of the
Loans and all other amounts payable hereunder or under the other Loan
Documents and the termination of this Agreement.
SECTION 13.06. COLLATERAL MATTERS.
(a) Each Lender authorizes and directs the Agent to enter into the Loan
Documents for the benefit of the Lenders. Each Lender hereby agrees that,
except as otherwise set forth herein, any action taken by the Lenders in
accordance with the provisions of this Agreement or the Loan Documents, and the
exercise by the Lenders of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders. Except as otherwise required by
Section 14.07, the Agent is hereby authorized on behalf of all of the Lenders,
without the necessity of any notice to or further consent from any Lender, from
time to time prior to an Event of Default, to take any action with respect to
any Loan Documents including any action which may be necessary or desirable to
maintain, perfect or realize on the Security Interest granted in the
Collateral.
(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien hereafter granted to or held by the Agent upon
any Collateral owned by Borrower or its Subsidiaries (i) upon termination of
the Commitments and payment and satisfaction of all of the Obligations at any
time arising under or in respect of this Agreement or the Loan Documents or the
transactions contemplated hereby or thereby or (ii) constituting property being
sold or disposed of upon receipt of the proceeds of such sale by the Agent if
the Borrower certifies to the Agent that the sale or disposition is made in
compliance with Section 10.11 hereof (and the Agent may rely conclusively on
any such certificate, without further inquiry). Upon request by the Agent at
any time, the Lenders will confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this Section 13.06.
(c) Upon any sale and transfer of Collateral which is expressly permitted
pursuant to the terms of this Agreement, or consented to in writing by the
Lenders and upon at least five (5) Business Days' prior written request by the
Borrower, the Agent shall (and is hereby irrevocably authorized by the Lenders
to) execute such documents as may be necessary to evidence the release of the
Liens granted to the Agent for the benefit of the Lenders herein or pursuant
hereto upon the Collateral that was sold or transferred; PROVIDED, HOWEVER,
that (i) the Agent shall not be required to execute any such document on terms
which, in the Agent's opinion, would expose the Agent to
55
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty and (ii) such release
shall not in any manner discharge, affect or impair the Secured Obligations
or any Liens upon (or obligations of the Borrower or any Subsidiary in
respect of) all interests retained by the Borrower or any Subsidiary,
including (without limitation) the proceeds of the sale, all of which shall
continue to constitute part of the Collateral. In the event of any sale or
transfer of Collateral, or any foreclosure with respect to any of the
Collateral, the Agent shall be authorized to deduct all of the expenses
reasonably incurred by the Agent from the proceeds of any such sale, transfer
or foreclosure.
(d) The Agent shall have no obligation whatsoever to the Lenders or to
any other Person to assure that the Collateral exists or is owned by the
Borrower or any Subsidiary or is cared for, protected or insured or that the
Liens granted to the Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising
at all or in any manner or under any duty of care, disclosure or fidelity any
of the rights, authorities and powers granted or available to the Agent in this
Section 13.06 or in any of the Loan Documents, it being understood and agreed
that in respect of the Collateral, or any act, omission or event related
thereto, the Agent may act in any manner it may deem appropriate, in its sole
discretion, given the Agent's own interest in the Collateral as one of the
Lenders and that the Agent shall have no duty or liability whatsoever to the
Lenders, except in each case for its gross negligence or willful misconduct.
(e) At any time or times, in order to comply with any legal requirement
in any jurisdiction or in order to facilitate the validity, perfection,
priority or enforceability of the security interests of the Agent in the
Collateral, the Agent may appoint another bank or trust company or one or more
Persons, to act as co-agent or co-agents, jointly with the Agent, or to act as
separate agent or agents on behalf of the Agent and the Lenders with such power
and authority as may be necessary for the effectual operation of the provisions
hereof and of the other Loan Documents and specified in the instrument of
appointment.
SECTION 13.07. SUCCESSOR AGENT. Agent may resign at any time in its
capacity as Agent under the Loan Documents by giving written notice thereof to
the Lenders and the Borrower. In the event of a material breach of its duties
hereunder, any Agent may be removed as an Agent under the Loan Documents at any
time by the Required Lenders. Upon any such resignation or removal, the Lenders
shall have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Lenders, and shall have accepted such
appointment, within 30 days after the resigning Agent's giving of notice of
resignation or the Required Lenders' removal of the resigning Agent, then the
56
resigning Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a Lender, if any Lender shall be willing to serve, and otherwise shall
be a commercial bank having combined capital and surplus of at least
$1,000,000,000 and reasonably acceptable to the Lenders. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Agent, and the retiring Agent shall be
discharged from its duties and obligations under the Loan Documents. After any
resigning Agent's resignation or removal hereunder as Agent, the provisions of
this Article XIII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under the Loan Documents.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. NOTICES. Unless otherwise provided herein,
communications provided for hereunder shall be in writing and shall be mailed,
telecopied or delivered as follows:
If to the Borrower: ▇▇▇▇▇▇▇▇▇ International, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
▇▇▇▇▇▇▇▇ Point
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Agent or Lender: To such Person's address or telecopy
number, as applicable, set forth on
the then current Annex I attached hereto.
or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and other
communications shall be effective (i) if mailed, when received; (ii) if
telefacsimile, when transmitted with electronic confirmation of receipt; or
(iii) if hand delivered, when delivered. Notwithstanding the immediately
preceding sentence, all notices or communications to Agent or any Lender under
Articles II and III shall be effective only when actually received.
SECTION 14.02. EXPENSES. The Borrower will pay all reasonable present and
future expenses of the Agent and the Lenders in connection with the following
expenses which shall not include internal expenses of the Agent or any Lender:
(a) the negotiation, preparation, execution, delivery and administration
of this Agreement,
57
the Notes and each of the other Loan Documents, whenever the same shall be
executed and delivered, including appraisers' fees, search fees, recording
fees and the fees and disbursements of: (i) Akerman, Senterfitt & ▇▇▇▇▇▇,
P.A., counsel for the Agent, and (ii) each local and foreign counsel retained
by the Agent;
(b) the negotiation, preparation, execution and delivery of any waiver,
amendment or consent by the Agent or any Lender relating to this Agreement, the
Notes or any of the other Loan Documents;
(c) any restructuring, refinancing or "workout" of the transactions
contemplated by this Agreement, the Notes and the other Loan Documents, or any
material amendment to the terms of this Agreement or any other Loan Document,
including the fees and disbursements of counsel to Agent or any Lender;
(d) consulting on a reasonable basis with one or more Persons engaged by
the Agent, including appraisers, collateral inspectors, accountants and
lawyers, concerning or related to the servicing of this Agreement or the
nature, scope or value of any right or remedy of Agent or any Lender hereunder,
under the Notes or under any of the other Loan Documents, including any review
of factual matters in connection therewith, which expenses shall include the
fees and disbursements of such Persons;
(e) the collection or enforcement of the obligations of the Borrower
under this Agreement, the Notes or any other Loan Document including the fees
and disbursements of counsel to the Agent or any Lender if such collection or
enforcement is done by, through or with the assistance of an attorney;
(f) prosecuting or defending any claim in any way arising out of, related
to, or connected with this Agreement, the Notes or any of the other Loan
Documents, which expenses shall include the fees and disbursements of counsel
to Agent or any Lender and of experts and other consultants retained by Agent
or any Lender; and
(g) the exercise by Agent or any Lender of any right or remedy granted to
it under this Agreement, the Notes or any of the other Loan Documents including
the fees and disbursements of counsel to Agent or any Lender.
SECTION 14.03. STAMP, INTANGIBLE AND RECORDING TAXES. The Borrower will
pay any and all stamp, intangible, registration, recordation and similar taxes,
fees or charges (other than income taxes of any Lender or its Subsidiaries) and
shall indemnify the Agent and each Lender against any and all liabilities with
respect to or resulting from any delay in the payment or omission to pay any
such taxes, fees or charges, which may be payable or determined to be payable
in connection with the execution, delivery, performance or enforcement of this
Agreement, the Notes and any of the other Loan Documents or the perfection of
any rights or Liens thereunder.
SECTION 14.04. SETOFF. Subject to Section 4.06 and in addition to any
rights now or hereafter granted under Applicable Law and not by way of
limitation of any such rights, from and after the occurrence of an Event of
Default each Lender is hereby authorized by the Borrower, at any time or from
time to time, without notice to the Borrower or to any other Person, any such
notice being hereby expressly waived, to set-off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by such Lender
or any Affiliate of
58
such Lender, to or for the credit or the account of the Borrower against and
on account of any of the Obligations, irrespective of whether or not the
Lenders shall have declared any or all of the Loans and other Obligations to
be due and payable as permitted by Section 12.02, and although such
obligations shall be contingent or unmatured. The benefits of such setoff
shall be shared by the Lenders in accordance with the pro rata share of their
aggregate Commitments as compared to the aggregate Commitments of all Lenders.
SECTION 14.05. LITIGATION. (a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY
DISPUTE OR CONTROVERSY BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF THE
LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT.
ACCORDINGLY, EACH OF THE LENDERS, THE AGENT AND THE BORROWER HEREBY WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR
TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST THE BORROWER ARISING
OUT OF THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT OR IN CONNECTION
WITH THE COLLATERAL OR ANY LIEN OR BY REASON OF ANY OTHER CAUSE OR DISPUTE
WHATSOEVER BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF THE LENDERS OF
ANY KIND OR NATURE.
(b) THE BORROWER, THE AGENT AND EACH LENDER EACH HEREBY AGREE THAT THE
CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT OF
FLORIDA, LOCATED IN PALM
BEACH COUNTY,
FLORIDA AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF
FLORIDA, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE
ANY CLAIMS OR DISPUTES BETWEEN OR AMONG ANY OR ALL OF THE BORROWER, THE AGENT
OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, THE
NOTES OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING HERE FROM OR
THEREFROM OR THE COLLATERAL. THE BORROWER EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH
COURTS. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO
PRECLUDE THE BRINGING OF ANY ACTION BY AGENT OR ANY LENDER FOR THE ENFORCEMENT
BY SUCH AGENT OR LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER
APPROPRIATE JURISDICTION.
(c) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF COUNSEL AND
WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF.
SECTION 14.06. ASSIGNABILITY.
(a) The Borrower shall not have the right to assign this Agreement or any
interest therein except with the prior written consent of the Agent and the
Lenders.
(b) Notwithstanding Section 14.06(c) below, without the consent of the
Agent and the Borrower (i) any Lender may make, carry or transfer Loans at, to
or for the account of, any of its branch offices or the office of an Affiliate
of such Lender or (ii) any Lender may pledge any Loans or Notes to any Federal
Reserve Bank.
(c) Each Lender may, with the consent of the Agent and the Borrower
(which consent will
59
not be unreasonably withheld or delayed), assign to one or more financial
institutions all or a portion of its respective Commitment; PROVIDED,
HOWEVER, that (i) for each such assignment, the parties thereto shall execute
and deliver to the Agent for acceptance and recording by the Agent in the
Register (as defined below), an Assignment and Assumption Agreement
substantially in the form of Exhibit "M" (each an "ASSIGNMENT AND ASSUMPTION
AGREEMENT"), together with any Note subject to such assignment and a
processing and recordation fee of $2,500, which, unless otherwise agreed,
shall be payable by the assignor, and (ii) no such assignment shall be for
less than one hundred percent (100%) of the Commitment of such Lender, unless
such assignment is to a then-current holder of a Note. Upon the effectiveness
of the Assignment and Assumption Agreement as provided therein, from and
after the date specified as the effective date in the Assignment and
Assumption Agreement (the "ACCEPTANCE DATE"), (x) the assignee thereunder
shall be a party hereto, and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Assumption
Agreement, such assignee shall have the rights and obligations of a "Lender"
hereunder and (y) the assignor thereunder shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to such
Assignment and Assumption Agreement, relinquish its rights (other than any
rights it may have pursuant to Sections 14.02 and 14.10 which will survive
such assignment) and be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption Agreement covering all or
the remaining portion of an assigning Lender's rights and obligations under
this Agreement, the Notes and the other Loan Documents such Lender shall
cease to be a party hereto). Agent and each Lender agrees that in connection
with any such assignment, they will exert good faith efforts to assure that
Borrower and the assignment are not subject to
Florida documentary stamp or
transfer taxes by reason of such assignment. If however after the exertion of
good faith efforts such assignment is found to be subject to such taxes,
Borrower shall be obligated to pay same and any interest, penalties or fees
in connection therewith.
(d) The Agent shall maintain at the Principal Office a copy of each
Assignment and Assumption Agreement delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitments of each Lender from time to time (the "REGISTER"). The Agent shall
give notice to each Lender of any assignment. The Borrower, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register and copies of
each Assignment and Assumption Agreement shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice to the Agent.
(e) Upon its receipt of an Assignment and Assumption Agreement executed
by an assigning Lender, together with each Note subject to such assignment (the
"SURRENDERED NOTE"), the Agent shall, if such Assignment and Assumption
Agreement has been completed and is in substantially the form of Exhibit "M",
(i) accept such Assignment and Assumption Agreement, (ii) record the
information contained therein in the Register, (iii) give prompt notice thereof
to the Borrower and (iv) revise the information set forth on Annex I to reflect
the effect of such Assignment and Assumption Agreement, and distribute a copy
of such revised Annex I to each Lender and the Borrower. Within five Business
Days after its receipt of such notice, the Borrower shall acknowledge such
Assignment and Assumption Agreement and shall execute and deliver to the Agent
in exchange for the Surrendered Note or Notes a new Note or Notes to the order
of the assignee in an amount equal to the Commitment or Commitments assumed by
it pursuant to such Assignment and Assumption Agreement and, if the assigning
Lender has retained a Commitment or Commitments hereunder, a new Note or Notes
to the order of the assigning Lender in an amount equal to the Commitment or
Commitments retained by it hereunder. Such new Note or Notes shall re-evidence
the indebtedness outstanding under the old Note or Notes and shall be in
60
an aggregate principal amount equal to the aggregate principal amount of such
Surrendered Note or Surrendered Notes, shall be dated the Agreement Date and
shall otherwise be in substantially the form, of the Note or Notes subject to
such assignments. The assignment by a Lender of a Commitment or portion
thereof to another Person and the execution and delivery of a new Note or
Notes shall not constitute a novation of the indebtedness evidenced by the
Surrendered Note or Surrendered Notes and incurred in connection with such
assigned Commitment.
(f) Each Lender may sell participations (PROVIDED, HOWEVER, that prior to
selling any such participations, such Lender shall have given the prior written
notice to the Agent and the Borrower of such participation) to one or more
parties in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Loans owing to it and the Note or Notes held by it); PROVIDED, HOWEVER,
that (i) such Lender's obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender shall remain the
holder of any such Note for all purposes of this Agreement, (iv) the Borrower,
the Agent, and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and (v) such Lender shall not transfer, grant, assign or sell
any participation under which the participant shall have rights to approve any
amendment or waiver of this Agreement except to the extent such amendment or
waiver would (A) extend the final maturity date or the date of the payments of
any installment of fees or principal or interest of any Loans or Reimbursement
Obligations in which such participant is participating, (B) reduce the amount
of any installment of principal of the Loans or Reimbursement Obligations in
which such participant is participating, (C) reduce the interest rate
applicable to the Loans or Reimbursement Obligations in which such participant
is participating, or (D) except as otherwise expressly provided in this
Agreement, reduce any fees payable to the Lenders hereunder.
(g) Each Lender agrees that, without the prior written consent of the
Borrower and the Agent, it will not make any assignment hereunder in any manner
or under any circumstances that would require registration or qualification of,
or filings in respect of, any Loan or Note under the securities laws of the
United States of America or of any other jurisdiction.
(h) In connection with the efforts of any Lender to assign its rights or
obligations or to participate interests, such Lender may disclose any
information in its possession regarding the Borrower; PROVIDED, HOWEVER, that
prior to disclosing any such information, such Lender shall receive the prior
written consent of the Agent.
SECTION 14.07. AMENDMENTS. Except as otherwise expressly provided in this
Agreement, any consent or approval required or permitted by this Agreement or
in any Loan Document to be given by the Lenders may be given, and any term of
this Agreement or of any other Loan Document may be amended, and the
performance or observance by the Borrower of any terms of this Agreement or
such other Loan Document or the continuance of any Default or Event of Default
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the written consent of the Required Lenders. Notwithstanding the
foregoing, the rates of interest on the Loans and the Notes, the dates on which
any interest payable by the Borrower under any Loan Document is due, the
Revolving Termination Date, the repayment obligations with respect to any
Reimbursement Obligations, any financial covenant, the amount and payment date
of any Fees (other than Fees payable solely to the Agent) and this Section
14.07 may not be amended, or the Borrower's compliance thereunder may not be
waived, without the written consent of all the Lenders
61
and the Borrower. Further, the definition of any minimum requirement
necessary for the Lenders to take action hereunder, Available Revolving
Commitment, Revolving Commitment, L/C Commitment Amount and L/C Termination
Date may not be amended without the written consent of all of the Lenders and
the Borrower. Further, the Form of Borrowing Base Certificate, the
definitions used therein and the percentages and advance rates used in
calculating the Borrowing Base may not be amended without the written consent
(which may be given orally and confirmed in writing) of all of the Lenders
and the Borrower other than any immaterial changes approved by the Agent in
ordinary course. Further, no amendment, waiver or consent unless in writing
and signed by the Agent, in addition to the Lenders required hereinabove to
take such action, shall affect the rights or duties of the Agent under this
Agreement or any of the other Loan Documents. Further, no Collateral at any
time held by the Agent shall be released or disposed of by the Agent unless
all of the Lenders so direct the Agent and except in accordance with Section
13.06 hereof. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing
or delay or omission on the part of any Lender or the Agent in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto.
Except as otherwise explicitly provided for herein or in any other Loan
Document, no notice to or demand upon the Borrower shall entitle the Borrower
to other or further notice or demand in similar or other circumstances. In no
event shall the Borrower be required to enter into an amendment pursuant to
this Section 14.07 if such amendment would otherwise require the consent of
all of the Lenders as provided in this Section 14.07. Notwithstanding any of
the foregoing to the contrary, the consent of the Borrower shall not be
required for any amendment, modification or waiver of the provisions of
Article XIII (other than the provisions of Section 13.07). In addition, the
Borrower and the Lenders hereby authorize the Agent to modify this Agreement
by unilaterally amending or supplementing Annex I from time to time in the
manner requested by the Borrower, the Agent or any Lender in order to reflect
any assignments or transfers of the Commitments as provided for hereunder;
PROVIDED, HOWEVER, that the Agent shall promptly deliver a copy of any such
modification to the Borrower and each Lender.
SECTION 14.08. NONLIABILITY OF AGENT AND LENDERS. The relationship
between the Borrower and the Lenders and the Agent shall be solely that of
borrower and lender. Neither the Agent nor any Lender shall have any fiduciary
responsibilities to the Borrower. Neither the Agent nor any Lender undertake
any responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower's business or operations.
SECTION 14.09. INFORMATION. Except as otherwise provided by law, the
Agent and Lenders shall utilize all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential or
proprietary by the Borrower in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe
and sound banking practices but in any event may make disclosure: (i) to any of
their respective Affiliates (provided they shall agree to keep such information
confidential in accordance with the terms of this Section 14.09); (ii) as
reasonably required by any BONA FIDE transferee or participant in connection
with the contemplated transfer of any Commitment or participations therein as
permitted hereunder (Agent and Lender agree to exert good faith efforts to
require such transferee or participant to maintain such information in
confidence); (iii) as required by any Governmental Authority or representative
thereof or pursuant to legal process; (iv) to such Lender's independent
auditors and other professional advisors (provided they shall be notified of
the confidential nature of the information); and (v) after the happening and
during the continuance of an Event of Default, to any other Person, in
connection with the exercise of the Lender's rights hereunder or under any of
the other Loan Documents.
62
SECTION 14.10. INDEMNIFICATION. The Borrower shall and hereby agrees to,
indemnify, defend and hold harmless the Agent and each of the Lenders and their
respective directors, officers, agents, employees and counsel from and against
(a) any and all losses, claims, damages, liabilities, deficiencies, judgments
or expenses incurred by any of them (except to the extent that it is finally
judicially determined to have resulted from their own gross negligence or
willful misconduct) and (b) any such losses, claims, damages, liabilities,
deficiencies, judgments or expenses incurred in connection with any remedial or
other action taken by the Borrower, any Subsidiary or any of the Lenders in
connection with compliance by the Borrower, any Subsidiary or any of their
respective properties, with any federal, state or local Environmental Laws or
other environmental rules, regulations, orders, directions, ordinances,
criteria or guidelines. If and to the extent that the obligations of the
Borrower hereunder are unenforceable for any reason, the Borrower hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under Applicable Law. The obligations of the
Borrower hereunder shall survive any termination of this Agreement and the
other Loan Documents and the payment in full of the Obligations, and are in
addition to, and not in substitution of, any other of their obligations set
forth in this Agreement.
SECTION 14.11. SURVIVAL. Notwithstanding any termination of this
Agreement, or of the other Loan Documents, the expense reimbursements and
indemnities to which the Agent and the Lenders are entitled under the
provisions of Sections 14.02 and 14.10 and any other provision of this
Agreement and the other Loan Documents shall continue in full force and effect
and shall protect the Agent and the Lenders against events arising after such
termination as well as before.
SECTION 14.12. TITLES AND CAPTIONS. Titles and captions of Articles,
Sections, subsections and clauses in this Agreement are for convenience only,
and neither limit nor amplify the provisions of this Agreement.
SECTION 14.13. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 14.14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
FLORIDA WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 14.15. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
shall be binding upon all parties, their successors and assigns.
SECTION 14.16. OBLIGATIONS WITH RESPECT TO BORROWER. The Borrower
expressly waives all rights it may now or in the future have under any statute,
or at common law, or at law or in equity, or otherwise, to compel any Agent or
Lender to proceed in respect of the Obligations against the Borrower or any
other Person or against any security for the payment and performance of the
Obligations before proceeding against, or as a condition to preceding against,
the Borrower. The Borrower further expressly waives and agrees not to assert or
take advantage of any defense based upon the failure of any Agent or Lender to
commence an action in respect of the Obligations against any other Person or
any security for the payment and performance of the Obligations. The Borrower
agrees that any notice or
63
directive given at any time to any Agent or Lender which is inconsistent
with the waivers in the preceding sentences shall be null and void and may
be ignored by such Agent or Lender, and, in addition, may not be pleaded or
introduced as evidence in any litigation relating to this Agreement for the
reason that such pleading or introduction would be at variance with the
written terms of this Agreement, unless the Agent and the Lenders have
specifically agreed otherwise in writing. The foregoing waivers are the
essence of the transaction contemplated by this Agreement and the Loan
Documents and, but for such waivers, the Lenders would decline to make the
Loans and purchase participations in the Letters of Credit and the Letter of
Credit Issuer would decline to issue the Letters of Credit under this
Agreement. The Borrower represents, warrants and agrees that its obligations
under this Agreement and the other Loan Documents are not and shall not be
subject to any counterclaims, offsets or defenses of any kind against the
Agent or the Lenders now existing or which may arise in the future, other
than compulsory counterclaims or defenses which would be lost if not
asserted in that action.
SECTION 14.17. BINDING EFFECT. All of the terms and provisions of this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties hereto and their respective legal representatives, successors and
permitted assigns, whether so expressed or not.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their authorized officers all as of the day and year first above
written.
THE BORROWER:
▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
By: /s/ A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
----------------------------
Print Name: A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
------------------------
Title: Chairman and Chief Executive Officer
------------------------------------
64
THE AGENT:
SOUTHTRUST BANK, an Alabama banking
corporation
By: /s/ D. ▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Print Name: D. ▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------
Title: Senior Vice President
------------------------------
Address for Notices:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
Florida Corporate Banking (West Palm Beach)
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Akerman, Senterfitt & ▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ Point - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
65
THE LENDERS:
SOUTHTRUST BANK, an Alabama banking
corporation
By: /s/ D. ▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Print Name: D. ▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------
Title: Senior Vice President
-----------------------------
Address for Notices:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
Florida Corporate Banking (West Palm Beach)
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Akerman, Senterfitt & ▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ Point - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
66
FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------
Title: Vice President
-----------------------------
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
With a copy to:
First Union National Bank
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
32nd Floor - Legal Division
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
67
SUNTRUST BANK, a Georgia corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Title: Vice President
-----------------------------
Address for Notices:
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
68
NATIONAL CITY BANK, NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Title: Vice President
-----------------------------
Address for Notices:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Locator #2077
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
69
ANNEX I TO
CREDIT AGREEMENT
LIST OF LENDERS,
CREDIT PERCENTAGES AND LENDING OFFICES
LENDER CREDIT PERCENTAGE
SouthTrust Bank, an Alabama banking corporation 35.714%
Lending Office (All Types):
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
Florida Corporate Banking (West Palm Beach)
Wiring Instructions:
SouthTrust Bank, an Alabama banking corporation
ABA #▇▇▇-▇▇▇▇-▇▇
Birmingham, AL
Account Number: 131009
Ref: ▇▇▇▇▇▇▇▇▇ International
Attn: ▇▇▇▇▇▇ Gunding
Call: ▇▇▇-▇▇▇-▇▇▇▇ (upon receipt)
First Union National Bank 28.571%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Wiring Instructions:
First Union National Bank
ABA # ▇▇▇▇▇▇▇▇▇
Charlotte, NC
Account Number: GL45916-2008
Ref: ▇▇▇▇▇▇▇▇▇ International, Inc.
Attn: ▇▇▇▇▇ ▇▇▇▇▇-Jax
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, N.A. 21.429%
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Wiring Instructions:
SunTrust Bank, South Florida, N.A.
ABA #▇▇▇▇▇▇▇▇▇
Ft. Lauderdale, FL
Account Number: 9607004110
Ref: ▇▇▇▇▇▇▇▇▇ International, Inc. and Subsidiaries
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
National City Bank, National Association 14.286%
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Locator #2077
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Wiring Instructions:
National City Bank
ABA #▇▇▇▇▇▇▇▇
Account Number: 151804 - Commercial Loan Operations
Ref: ▇▇▇▇▇▇▇▇▇ International, Inc. and Subsidiaries
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
71