EXHIBIT 10.c
REVOLVING CREDIT AND
REIMBURSEMENT AGREEMENT
by and among
WORLD FUEL SERVICES CORPORATION
as Borrower,
NATIONSBANK, N.A.,
as Lender
November 30, 1998
TABLE OF CONTENTS
PAGE
----
ARTICLE I
Definitions
1.1. Definitions................................................................. 2
1.2. Rules of Interpretation.....................................................19
ARTICLE II
The Revolving Credit Facility
2.1. Loans.......................................................................22
2.2. Payment of Interest.........................................................23
2.3. Payment of Principal........................................................24
2.4. Non-Conforming Payments.....................................................24
2.5. Notes.......................................................................24
2.6. Reductions..................................................................24
2.7. Conversions and Elections of Subsequent Interest Periods....................25
2.8. Increase and Decrease in Amounts............................................25
2.9. Fees........................................................................25
2.10. Use of Proceeds.............................................................26
ARTICLE III
Letters of Credit
3.1. Letters of Credit...........................................................27
3.2. Reimbursement...............................................................27
3.3. Letter of Credit Facility Fees..............................................29
3.4. Administrative Fees.........................................................30
ARTICLE IV
Change in Circumstances
4.1. Increased Cost and Reduced Return...........................................31
4.2. Limitation on Types of Loans................................................32
4.3. Illegality..................................................................33
4.4. Treatment of Affected Loans.................................................33
4.5. Compensation................................................................33
4.6. Taxes.......................................................................33
ARTICLE V
Conditions to Making Loans and Issuing Letters of Credit
5.1. Conditions of Initial Advance...............................................35
5.2. Conditions of Loans and Letter of Credit....................................36
ARTICLE VI
Representations and Warranties
6.1. Organization and Authority..................................................38
6.2. Loan Documents..............................................................38
6.3. Solvency....................................................................39
6.4. Subsidiaries and Stockholders...............................................39
6.5. Ownership Interests.........................................................39
6.6. Financial Condition.........................................................39
6.7. Title to Properties.........................................................40
6.8. Taxes.......................................................................40
6.9. Other Agreements............................................................40
6.10. Litigation..................................................................40
6.11. Margin Stock................................................................41
6.12. Investment Company..........................................................41
6.13. Patents, Etc................................................................41
6.14. No Untrue Statement.........................................................41
6.15. No Consents, Etc............................................................41
6.16. Employee Benefit Plans......................................................42
6.17. No Default..................................................................43
6.18. Hazardous Materials.........................................................43
6.19. RICO........................................................................43
6.20. Year 2000 Compliance........................................................43
ARTICLE VII
Affirmative Covenants
7.1. Financial Reports, Etc......................................................44
7.2. Maintain Properties.........................................................45
7.3. Existence, Qualification, Etc...............................................45
7.4. Regulations and Taxes.......................................................45
7.5. Insurance...................................................................46
7.6. True Books..................................................................46
7.7. Right of Inspection.........................................................46
ii
7.8. Observe all Laws............................................................46
7.9. Governmental Licenses.......................................................46
7.10. Covenants Extending to Other Persons........................................46
7.11. Officer's Knowledge of Default..............................................46
7.12. Suits or Other Proceedings..................................................46
7.13. Notice of Discharge of Hazardous Material or Environmental Complaint........47
7.14. Environmental Compliance....................................................47
7.15. Indemnification.............................................................47
7.16. Further Assurances..........................................................47
7.17. Employee Benefit Plans......................................................48
7.18. Continued Operations........................................................48
7.19. New Subsidiaries............................................................48
7.20. Year 2000 Compliance........................................................49
ARTICLE VIII
Negative Covenants
8.1. Financial Covenants.........................................................50
8.2. Acquisitions................................................................50
8.3. Capital Expenditures........................................................50
8.4. Liens.......................................................................50
8.5. Indebtedness................................................................51
8.6. Transfer of Assets..........................................................53
8.7. Investments.................................................................53
8.8. Merger or Consolidation.....................................................54
8.9. Restricted Payments.........................................................54
8.10. Transactions with Affiliates................................................54
8.11. Compliance with ERISA.......................................................55
8.12. Fiscal Year.................................................................55
8.13. Dissolution, etc............................................................55
8.14. Negative Pledge Clauses.....................................................55
8.15. Partnerships................................................................56
ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default...........................................................57
9.2. Lender to Act...............................................................60
9.3. Cumulative Rights...........................................................60
9.4. No Waiver...................................................................60
9.5. Allocation of Proceeds......................................................60
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ARTICLE X
Miscellaneous
10.1. Participations..............................................................61
10.2. Notices.....................................................................61
10.3. Setoff......................................................................62
10.4. Survival....................................................................62
10.5. Expenses....................................................................62
10.6. Amendments..................................................................63
10.7. Counterparts................................................................63
10.8. Termination.................................................................63
10.9. Indemnification; Limitation of Liability....................................64
10.10. Severability................................................................64
10.11. Entire Agreement............................................................64
10.12. Agreement Controls..........................................................64
10.13. Usury Savings Clause........................................................64
10.14. GOVERNING LAW; WAIVER OF JURY TRIAL.........................................65
EXHIBIT A Notice of Appointment (or Revocation) of Authorized Representative....A-1
EXHIBIT B Form of Borrowing Notice..............................................B-1
EXHIBIT C Form of Interest Rate Selection Notice................................C-1
EXHIBIT D Form of Revolving Note................................................D-1
EXHIBIT E Form of Opinion of Borrower's Counsel.................................E-1
EXHIBIT F Compliance Certificate................................................F-1
EXHIBIT G Form of Guaranty Agreement............................................G-1
Schedule 1.1 Existing Letters of Credit............................................S-1
Schedule 6.4 Subsidiaries and Investments in Other Persons.........................S-2
Schedule 6.6 Indebtedness..........................................................S-3
Schedule 6.7 Liens.................................................................S-4
Schedule 6.8 Tax Matters...........................................................S-5
Schedule 6.10 Litigation............................................................S-6
Schedule 6.18 Hazardous Materials...................................................S-7
Schedule 7.6 Indebtedness..........................................................S-8
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REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT
THIS REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT, dated as of November
30, 1998 (the "Agreement"), is made by and between WORLD FUEL SERVICES
CORPORATION, a Florida corporation having its principal place of business in
Miami Springs, Florida (the "Borrower"), NATIONSBANK, N.A., a national banking
association organized and existing under the laws of the United States, as a
Lender (the "Lender");
W I T N E S S E T H:
WHEREAS, the Borrower has requested and the Lender has agreed, subject
to terms and conditions of this Agreement, to make available to the Borrower a
revolving credit facility of up to $25,000,000, the proceeds of which are to be
used for working capital, capital expenditures and other general corporate
purposes and which shall include a letter of credit facility of up to
$10,000,000 for the issuance of documentary and standby letters of credit; and
NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1 DEFINITIONS. For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Acquisition" means the acquisition of (i) a controlling
equity interest in another Person (including the purchase of an option,
warrant or convertible or similar type security to acquire such a
controlling interest at the time it becomes exercisable by the holder
thereof), whether by purchase of such equity interest or upon exercise
of an option or warrant for, or conversion of securities into, such
equity interest, or (ii) assets of another Person which constitute all
or substantially all of the assets of such Person or of a line or lines
of business conducted by such Person.
"Advance" means a borrowing under the Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan.
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with the Borrower; or (ii) which beneficially owns
or holds 20% or more of any class of the outstanding voting stock (or
in the case of a Person which is not a corporation, 20% or more of the
equity interest) of the Borrower; or 20% or more of any class of the
outstanding voting stock (or in the case of a Person which is not a
corporation, 20% or more of the equity interest) of which is
beneficially owned or held by the Borrower. The term "control" means
the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether
through ownership of voting stock, by contract or otherwise.
"Applicable Margin" means that percent per annum set forth
below, which shall be based upon the Consolidated Fixed Charge Coverage
Ratio for the Four-Quarter Period most recently ended as specified
below:
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APPLICABLE
MARGIN
----------
CONSOLIDATED FIXED EURODOLLAR
CHARGE COVERAGE RATIO RATE
--------------------- ----------
(a) Greater than or equal
to 7.00 to 1.0 .50%
(b) Greater than or equal
to 6.00 to 1.00 but
less than 7.00 to 1.00 .55%
(c) Greater than or equal
to 5.00 to 1.00 but
less than 6.00 to 1.00 .65%
(d) Greater than or equal
to 3.50 to 1.00 but
less than 5.00 to 1.00 .75%
(e) Greater than or equal
to 1.35 to 1.00 but
less than 3.50 to 1.00 1.00%
The Applicable Margin shall be established at the end of each fiscal
quarter of the Borrower (each, a "Determination Date"). Any change in
the Applicable Margin following each Determination Date shall be
determined based upon the computations set forth in the certificate
furnished to the Lender pursuant to SECTION 7.1(a)(II) and SECTION
7.1(b)(II), subject to review and approval of such computations by the
Lender, 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) until the date following the
date on which a new certificate is delivered or is required to be
delivered, whichever shall first occur.
"Applicable Unused Fee" means that percent per annum set forth
below, which shall be based upon the Consolidated Fixed Charge Coverage
Ratio for the Four-Quarter Period most recently ended as specified
below:
3
APPLICABLE
CONSOLIDATED FIXED UNUSED
CHARGE COVERAGE RATIO FEE
--------------------- ----------
(a) Greater than or equal
to 7.00 to 1.0 .15%
(b) Greater than or equal
to 6.00 to 1.00 but
less than 7.00 to 1.00 .18%
(c) Greater than or equal
to 5.00 to 1.00 but
less than 6.00 to 1.00 .20%
(d) Greater than or equal
to 3.50 to 1.00 but
less than 5.00 to 1.00 .25%
(e) Greater than or equal
to 1.35 to 1.00 but
less than 3.50 to 1.00 .375%
The Applicable Unused Fee shall be established at the end of each
fiscal quarter of the Borrower (the "Determination Date"). Any change
in the Applicable Unused Fee following each Determination Date shall be
determined based upon the computations set forth in the certificate
furnished to the Lender pursuant to SECTION 7.1(A)(ii) and SECTION
7.1(B)(ii), subject to review and approval of such computations by the
Lender 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) until the date following the date on
which a new certificate is delivered or is required to be delivered,
whichever shall first occur.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of
Credit.
"Authorized Representative" means any of the President,
Executive Vice President, Chief Financial Officer or Chairman of the
Board of Directors of the Borrower, or any other Person expressly
designated by the Board of Directors of the Borrower (or the
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.
"Base Rate" means the per annum rate of interest equal to the
greater of (i) the Prime Rate or (ii) the Federal Funds Effective Rate
plus one-half of one percent (1/2%). Any change
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in the Base Rate resulting from a change in the Prime Rate or the
Federal Funds Effective Rate shall become effective as of 12:01 A.M. of
the Business Day on which each such change occurs. The Base Rate is a
reference rate used by the Lender in determining interest rates on
certain loans and is not intended to be the lowest rate of interest
charged on any extension of credit to any debtor.
"Base Rate Loan" means a Loan for which the rate of interest
is determined by reference to the Base Rate.
"Base Rate Refunding Loan" means a Base Rate Loan made to
satisfy Reimbursement Obligations arising from a drawing under a Letter
of Credit.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Borrower's Account" means a demand deposit account with the
Lender, which may be maintained at one or more offices of the Lender.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility, in the form of EXHIBIT B.
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
States of New York and North Carolina are authorized or obligated by
law, executive order or governmental decree to be closed and, (ii) with
respect to any Eurodollar Rate Loan, any day which is a Business Day,
as described above, and on which the relevant international financial
markets are open for the transaction of business contemplated by this
Agreement in London, England, New York, New York and Charlotte, North
Carolina.
"Capital Expenditures" means, with respect to the Borrower
and its Subsidiaries, for any period the SUM of (without duplication)
(i) all expenditures (whether paid in cash or accrued as liabilities)
by the Borrower or any Subsidiary during such period for items that
would be classified as "property, plant or equipment" or comparable
items on the consolidated balance sheet of the Borrower and its
Subsidiaries, including without limitation all transactional costs
incurred in connection with such expenditures provided the same have
been capitalized, excluding, however, the amount of any Capital
Expenditures paid for with proceeds of casualty insurance as evidenced
in writing and submitted to the Lender together with any compliance
certificate delivered pursuant to SECTION 7.1(a) or (b), and (ii) with
respect to any Capital Lease entered into by the Borrower or its
Subsidiaries during such period, the present value of the lease
payments due under such Capital Lease over the term of such Capital
Lease applying a discount rate equal to the interest rate provided in
such lease (or in the absence of a stated interest rate, that rate used
in the preparation of the financial statements described in SECTION
7.1(a)), all the foregoing in accordance with GAAP applied on a
Consistent Basis.
5
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
"Change of Control" means, at any time any "person" or "group"
(each as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
either (A) becomes the "beneficial owner" (as defined in Rule 13d-3 of
the Exchange Act), directly or indirectly, of Voting Stock of the
Borrower (or securities convertible into or exchangeable for such
Voting Stock) representing 33-1/3% or more of the combined voting power
of all Voting Stock of the Borrower (on a fully diluted basis) or (B)
otherwise has the ability, directly or indirectly, to elect a majority
of the board of directors of the Borrower.
"Closing Date" means the date as of which this Agreement is
executed by the Borrower and the Lender and on which the conditions set
forth in SECTION 5.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Consistent Basis" means, in reference to the application of
GAAP, that the accounting principles observed in the period referred to
are comparable in all material respects to those applied in the
preparation of the audited financial statements of the Borrower
referred to in SECTION 6.6(a).
"Consolidated Capitalization" means, at any time at which the
amount thereof is to be determined, the sum of Consolidated Funded
Indebtedness plus Consolidated Shareholders' Equity.
"Consolidated Current Liabilities" means, the aggregate amount
carried as current liabilities on the books of the Borrower and its
Subsidiaries, on a consolidated basis and after eliminating all
intercompany items, determined in accordance with GAAP applied on a
Consistent Basis, LESS any such amount constituting (i) Obligations of
the Borrower incurred pursuant to this Agreement and (ii) obligations
of WFI and TTI under the WFI/TTI Credit Agreement.
"Consolidated EBITDA" means, with respect to the Borrower and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the SUM of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) provisions for
income taxes, (iv) depreciation, and (v) amortization, all determined
on a consolidated basis in accordance with GAAP applied on a Consistent
Basis.
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to the Borrower and its Subsidiaries for any Four-Quarter Period ending
on the date of computation thereof, the ratio of (i) the sum, for such
period, of Consolidated EBITDA, MINUS capital expenditures to (ii)
Consolidated Fixed Charges for such period.
6
"Consolidated Fixed Charges" means, with respect to Borrower
and its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the SUM of, without duplication, (i) Consolidated
Interest Expense,(ii) Current Maturities of Long-Term Debt (including
all Capital Lease obligations), and (iii) all cash dividends and
distributions paid during such period (regardless of when declared) on
any shares of capital stock of the Borrower then outstanding, all
determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Funded Indebtedness" means, at any time as of
which the amount thereof is to be determined, (i) all Indebtedness for
Money Borrowed (excluding from the computation thereof Consolidated
Current Liabilities other than Current Maturities of Long-Term Debt),
PLUS (ii) the face amount of all outstanding Standby Letters of Credit
issued for the account of the Borrower or any of its Subsidiaries and
all obligations (to the extent not duplicative) arising under such
Letters of Credit, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis.
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Borrower and its Subsidiaries, including without limitation (i) the
amortization of debt discounts, (ii) the amortization of all fees
(including fees payable in respect of any Rate Hedging Obligation)
payable in connection with the incurrence of Indebtedness to the extent
included in interest expense, and (iii) the portion of any payments
made in connection with Capital Leases allocable to interest expense,
all determined on a consolidated basis in accordance with GAAP applied
on a Consistent Basis.
"Consolidated Net Income" means, for the Borrower and its
Subsidiaries, for any period of computation thereof, the amount which,
in conformity with GAAP, would be set forth opposite the caption "Net
Income" (or any like caption) on a consolidated statement of earnings
of the Borrower and its Subsidiaries.
"Consolidated Shareholders' Equity" means, as of any date on
which the amount thereof is to be determined, the sum of the following
in respect of the Borrower and its Subsidiaries (determined on a
consolidated basis and excluding intercompany items among the Borrower
and its Subsidiaries and any upward adjustment after the Closing Date
due to revaluation of assets): (i) the amount of issued and outstanding
share capital, PLUS (ii) the amount of additional paid-in capital and
retained income (or, in the case of a deficit, minus the amount of such
deficit), PLUS (iii) the amount of any foreign currency translation
adjustment (if positive, or, if negative, minus the amount of such
translation adjustment) MINUS (iv) the book value of any treasury stock
and the book value of any stock subscription receivables, all as
determined in accordance with GAAP applied on a Consistent Basis.
"Consolidated Tangible Net Worth" means, as of any date on
which the amount thereof is to be determined, Consolidated
Shareholders' Equity MINUS the net book value of all assets which would
be treated as intangible assets, all as determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis.
7
"Contingent Obligation" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect agreement
to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss)
the Indebtedness of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of
dividends or other distributions upon the shares of any other Person.
The amount of any person's obligation under any Contingent Obligation
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount (or maximum principal amount, if larger)
of the Indebtedness guaranteed thereby.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to SECTION 2.7 hereof of a Eurodollar Rate Loan
of one Type as a Eurodollar Rate Loan of the same Type from one
Interest Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to SECTION 2.7 or ARTICLE IV of one Type of Loan
into another Type of Loan.
"Credit Party" means, collectively, the Borrower and each
Guarantor.
"Current Maturities of Long-Term Debt" means, with respect to
Indebtedness for Money Borrowed that matures more than one year from
the date of its creation or matures within one year of the date of its
creation but is renewable or extendable, at the option of the Borrower
or any Subsidiary, to a date more than one year from the date of its
creation, all payments in respect thereof that are required to be made
within one year from the date of any determination thereof.
"Default" means any of the occurrences set forth as such in
SECTION 9.1 which, upon the expiration of any applicable grace period,
would constitute an Event of Default hereunder.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan, until the end of the Interest Period applicable thereto, a rate
of two percent (2%) above the Eurodollar Rate applicable to such Loan,
and thereafter at a rate of interest per annum which shall be two
percent (2%) above the Base Rate, (ii) with respect to Base Rate Loans,
at a rate of interest per annum which shall be two percent (2%) above
the Base Rate and (iii) in any case, the maximum rate permitted by
applicable law, if lower.
"Documentary Letters of Credit" means the documentary letters
of credit issued by the Issuing Bank for the account of the Borrower or
any of its Subsidiaries upon the terms and conditions of this
Agreement.
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Lender:
8
(a) Government Securities;
(b) obligations of any corporation organized under
the laws of any state of the United States of America or under
the laws of any other nation, payable in the United States of
America, expressed to mature not later than 92 days following
the date of issuance thereof and rated in an investment grade
rating category by S&P and ▇▇▇▇▇'▇;
(c) interest bearing demand or time deposits issued
by the Lender or certificates of deposit maturing within one
year days from the date of issuance thereof and issued by a
bank or trust company organized under the laws of the United
States or of any state thereof having capital surplus and
undivided profits aggregating at least $400,000,000 and being
rated "A-" or better by S&P or "A" or better by ▇▇▇▇▇'▇;
(d) Repurchase Agreements;
(e) Municipal Obligations;
(f) Pre-Refunded Municipal Obligations;
(g) shares of mutual funds which invest in
obligations described in paragraphs (a) through (f) above, the
shares of which mutual funds are at all times rated "AAA" by
S&P;
(h) tax-exempt or taxable adjustable rate preferred
stock issued by a Person having a rating of its long term
unsecured debt of "A" or better by S&P or "A-3" or better by
▇▇▇▇▇'▇; and
(i) asset-backed remarketed certificates of
participation representing a fractional undivided interest in
the assets of a trust, which certificates are rated at least
"A-1" by S&P and "P-1" by ▇▇▇▇▇'▇.
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (i) is maintained for
employees of the Borrower or any of its ERISA Affiliates or is assumed
by the Borrower or any of its ERISA Affiliates in connection with any
Acquisition or (ii) has at any time been maintained for the employees
of the Borrower or any current or former ERISA Affiliate.
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order, decree, permit
or license regulating, relating to, or imposing liability or standards
of conduct concerning any environmental matters or conditions,
environmental protection or conservation, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; the Superfund Amendments and Reauthorization
Act of 1986, the Resource Conservation and Recovery Act, as amended;
the Toxic Substances Control Act, as amended; the Clean Air Act, as
amended; the Clean
9
Water Act, as amended; together with all regulations promulgated
thereunder, and any other "Superfund" or "Superlien" law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any
Person or trade or business which is a member of a group which is under
common control with the Borrower, who together with the Borrower, is
treated as a single employer within the meaning of Section 414(b) and
(c) of the Code.
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = INTERBANK OFFERED RATE + Applicable
--------------------------------
Rate 1-Eurodollar Reserve Requirement Margin
"Event of Default" means any of the occurrences set forth as
such in SECTION 9.1, for which the applicable grace period, if any, has
expired.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"Existing Letters of Credit" means those Letters of Credit
described on SCHEDULE 1.1 previously issued by the Issuing Bank under
the Prior Agreement.
"Facility Guaranty" means the Guaranty and Suretyship
Agreement between the Guarantors and the Lender, delivered as of the
Closing Date and thereafter each Guaranty and Suretyship Agreement
between one or more Guarantors and the Lender delivered pursuant to
SECTION 7.19, as the same may be amended, modified or supplemented.
"Facility Termination Date" means the date on which the
Revolving Credit Termination Date shall have occurred, no Letters of
Credit shall remain outstanding and the Borrower shall have fully,
finally and irrevocably paid and satisfied all Obligations.
"Federal Funds Effective Rate" means, for any day, the rate
per annum (rounded upward to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day, PROVIDED that (a) if
such day is not a Business Day, the Federal Funds Effective Rate for
such day shall be such rate on such transactions on the
10
next preceding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Effective Rate for
such day shall be the average rate quoted to the Lender on such day on
such transaction as determined by the Lender.
"Fiscal Year" means the twelve month fiscal period of the
Borrower and its Subsidiaries commencing on April 1 of each calendar
year and ending on March 31 of the next following calendar year.
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan.
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrower and its Subsidiaries, taken together as
one accounting period.
"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.
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on which are
fully and unconditionally guaranteed by, the United States of America.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Guaranties" means all obligations of the Borrower or any
Subsidiary directly or indirectly guaranteeing, or in effect
guaranteeing, any Indebtedness or other obligation of any other Person.
"Guarantors" means, at any date, the Subsidiaries who are
required to be parties to a Facility Guaranty at such date; provided,
however, that neither of WFI and TTI shall be required to be
Guarantors.
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials, and lead), the generation, handling,
storage, disposal, treatment or emission of which is subject to any
Environmental Law.
11
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property or arising under Rate
Hedging Obligations, all indebtedness secured by any Lien on the
property of such Person whether or not such indebtedness is assumed,
all liability of such Person by way of endorsements (other than for
collection or deposit in the ordinary course of business), all
Contingent Obligations and Letters of Credit, and other items which in
accordance with GAAP is required to be classified as a liability on a
balance sheet; but excluding all accounts payable in the ordinary
course of business so long as payment therefor is due within one year;
provided that in no event shall the term Indebtedness include surplus
and retained earnings, lease obligations (other than pursuant to
Capital Leases), reserves for deferred income taxes and investment
credits, other deferred credits or reserves, or deferred compensation
obligations.
"Indebtedness for Money Borrowed" means with respect to the
Borrower and its Subsidiaries on a consolidated basis, all indebtedness
of the Borrower or any of its Subsidiaries in respect of money
borrowed, including without limitation all Capital Leases and the
deferred purchase price of any property or asset, evidenced by a
promissory note, bond, debenture or similar written obligation for the
payment of money (including without limitation conditional sales
contracts or similar title retention agreements).
"Interbank Offered Rate" means, for any Eurodollar Rate Loan
or Eurodollar Market Loan for the Interest Period applicable thereto,
the rate per annum (rounded upwards, if necessary, to the nearest
one-one hundredth (1/100) of one percent) appearing on Dow ▇▇▇▇▇
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 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, for any Eurodollar Rate Loan or Eurodollar Market Loan for the
Interest Period applicable thereto, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two 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 LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to
the nearest 1/100 of 1%).
"Interest Period" means, for each Eurodollar Rate Loan, a
period commencing on the date such Eurodollar Rate Loan is made or
converted and ending, at the Borrower's option, on the date one, two,
three or six months thereafter as notified to the Lender by the
Authorized Representative three (3) Business Days prior to the
beginning of such Interest Period; PROVIDED, that,
(i) if the Authorized Representative fails to notify
the Lender of the length of an Interest Period three (3)
Business Days prior to the first day of such Interest Period,
the Loan for which such Interest Period was to be determined
shall be deemed to be a Base Rate Loan as of the first day
thereof;
12
(ii) if an Interest Period for a Eurodollar Rate Loan
would end on a day which is not a Business Day, such Interest
Period shall be extended to the next Business Day (unless such
extension would cause the applicable Interest Period to end in
the succeeding calendar month, in which case such Interest
Period shall end on the next preceding Business Day);
(iii) 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;
(iv) no Interest Period with respect to any Loans
shall extend past the Stated Termination Date; and
(v) there shall not be more than five (5) Interest
Periods in effect on any day.
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate
Loan or the conversion of any Eurodollar Rate Loan into a Base Rate
Loan or the conversion of any Base Rate Loan into a Eurodollar Rate
Loan, in the form of EXHIBIT C.
"Issuing Bank" means NationsBank as issuer of Letters of
Credit under ARTICLE III.
"LC Account Agreement" means the LC Account Agreement dated as
of the date hereof between the Borrower and the Issuing Bank, as
amended, modified or supplemented from time to time.
"Lending Office" means the Lending Office of the Lender
designated on the signature pages hereof or such other office of the
Lender (or of an affiliate of the Lender) as the Lender may from time
to time specify to the Authorized Representative as the office by which
its Loans are to be made and maintained.
"Letters of Credit" means, collectively, all Documentary
Letters of Credit, and all Standby Letters of Credit, advancing credit
or securing an obligation on behalf of the Borrower or any of its
Subsidiaries.
"Letter of Credit Commitment" means an amount not to exceed
$10,000,000.
"Letter of Credit Facility" means the facility described in
ARTICLE III hereof providing for the issuance by the Issuing Bank for
the account of the Borrower or any of its Subsidiaries, other than WFI
and TTI, of Letters of Credit in an aggregate stated amount at any time
outstanding not exceeding the Total Letter of Credit Commitment.
13
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount remaining undrawn under all Letters
of Credit plus Reimbursement Obligations then outstanding.
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.
"Loan" or "Loans" means any borrowing pursuant to an Advance
under the Revolving Credit Facility.
"Loan Documents" means this Agreement, the Note, the Facility
Guaranties, the LC Account Agreement, the Applications and Agreements
for Letter of Credit, and all other instruments and documents
heretofore or hereafter executed or delivered to or in favor of the
Lender in connection with the Loans made and transactions contemplated
under this Agreement, as the same may be amended, supplemented or
replaced from the time to time.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole, (ii)
the ability of the Borrower or any of its Subsidiaries to pay or
perform its respective obligations, liabilities and indebtedness under
the Loan Documents as such payment or performance becomes due in
accordance with the terms thereof, or (iii) the rights, powers and
remedies of the Lender under any Loan Document or the validity,
legality or enforceability thereof (including for purposes of clauses
(ii) and (iii) the imposition of burdensome conditions thereon);
provided, however, that the termination of the aviation joint venture
in Ecuador shall not be deemed to have a Material Adverse Effect.
"Material Contracts" means, collectively, any contract, lease,
agreement or commitment of the Borrower or any Subsidiary, including,
without limitation, any fuel purchase agreements, the expiration or
termination of which could result in a Material Adverse Effect.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
14
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal corporation or other public body
organized under the laws of any such state which are rated in the
highest investment rating category by both S&P and ▇▇▇▇▇'▇.
"Note" means the promissory note of the Borrower evidencing
Loans executed and delivered to the Lender substantially in the form of
EXHIBIT D.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Note, (ii) the Reimbursement
Obligations and otherwise in respect of the Letters of Credit, (iii)
all liabilities of Borrower to the Lender which arise under a Swap
Agreement, and (iv) the payment and performance of all other
obligations, liabilities and Indebtedness of the Borrower to the Lender
hereunder, under any one or more of the other Loan Documents or with
respect to the Loans.
"Outstandings" means, collectively, at any date, the Letter of
Credit Outstandings and Revolving Credit Outstandings on such date.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within
the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412
of the Code and which (i) is maintained for employees of the Borrower
or any of its ERISA Affiliates or is assumed by the Borrower or any of
its ERISA Affiliates in connection with any Acquisition or (ii) has at
any time been maintained for the employees of the Borrower or any
current or former ERISA Affiliate.
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof.
"Pre-Refunded Municipal Obligations" means obligations of any
state of the United States of America or of any municipal corporation
or other public body organized under the laws of any such state which
are rated, based on the escrow, in the highest investment rating
category by both S&P and ▇▇▇▇▇'▇ and which have been irrevocably called
for redemption and advance refunded through the deposit in escrow of
Government Securities or other debt securities which are (i) not
callable at the option of the issuer thereof prior to maturity, (ii)
irrevocably pledged solely to the payment of all principal and interest
on such obligations as the same becomes due and (iii) in a principal
amount and bear such rate or rates of interest as shall be sufficient
to pay in full all principal of, interest, and premium, if any, on such
obligations as the same becomes due as verified by a nationally
recognized firm of certified public accountants.
15
"Prime Rate" means the rate of interest per annum announced
publicly by the Lender as its prime rate from time to time. The Prime
Rate is not necessarily the best or the lowest rate of interest offered
by the Lender.
"Principal Office" means the office of the Lender at
NationsBank, N.A., ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Agency Services, or such
other office and address as the Lender may from time to time designate.
"Prior Agreement" means the Amended and Restated Credit
Agreement dated February 21, 1997 between the Borrower and NationsBank,
N.A. (successor by merger of NationsBank, N.A. (South)).
"Rate Hedging Obligations" means any and all obligations of
the Borrower or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals,extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; and (ii) any
and all cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing.
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Regulatory Change" means any change effective after the
Closing Date in United States federal or state laws or regulations
(including Regulation D and capital adequacy regulations) or foreign
laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks,
which includes the Lender, under any United States federal or state or
foreign laws or regulations (whether or not having the force of law) by
any court or governmental or monetary authority charged with the
interpretation or administration thereof or compliance by the Lender
with any request or directive regarding capital adequacy, including
those relating to "highly leveraged transactions," whether or not
having the force of law, and whether or not failure to comply therewith
would be unlawful and whether or not published or proposed prior to the
date hereof.
"Reimbursement Obligation" shall mean at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse the Issuing Bank (including by the receipt by the Issuing
Bank of proceeds of Loans pursuant to SECTION 3.2) for amounts
theretofore paid by the Issuing Bank pursuant to a drawing under such
Letter of Credit.
16
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or ▇▇▇▇▇'▇ or "A-1" by
S&P or "P-1" by ▇▇▇▇▇'▇.
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board by member banks
of the Federal Reserve System (or any successor) by member banks of the
Federal Reserve System against "Eurocurrency liabilities" (as such term
is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the
Eurodollar Rate is to be determined, or (ii) any category of extensions
of credit or other assets which include Eurodollar Rate Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Restricted Payment" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of Borrower or any of its Subsidiaries (other than those
payable or distributable solely to the Borrower) now or hereafter
outstanding, except a dividend payable solely in shares of a class of
stock to the holders of that class; (b) any redemption, conversion,
exchange, retirement or similar payment, purchase or other acquisition
for value, direct or indirect, of any shares of any class of stock of
Borrower or any of its Subsidiaries (other than those payable or
distributable solely to the Borrower) now or hereafter outstanding; (c)
any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of stock of Borrower or any of its Subsidiaries now or hereafter
outstanding; and (d) any issuance and sale of capital stock of any
Subsidiary of the Borrower (or any option, warrant or right to acquire
such stock) other than to the Borrower.
"Revolving Credit Commitment" means the obligation of the
Lender to make Loans to the Borrower up to an aggregate principal
amount at any one time outstanding equal to $25,000,000.
"Revolving Credit Facility" means the facility described in
ARTICLE II hereof providing for Loans to the Borrower by the Lender in
the aggregate principal amount of the Revolving Credit Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Loans then
outstanding and all interest accrued thereon.
"Revolving Credit Termination Date" means (i) the Stated
Termination Date or (ii) such earlier date of termination of Lender's
obligations pursuant to SECTION 9.1 upon the occurrence of an Event of
Default, or (iii) such date as the Borrower may voluntarily and
permanently terminate the Revolving Credit Facility by payment in full
of all Revolving Credit Outstandings and Letter of Credit Outstandings
and cancellation of all Letters of Credit.
17
"S&P" means Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇.
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrower or any
Subsidiary is an "employer" as described in Section 4001(b) of ERISA
and which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including Contingent Obligations; and
(ii) it is then able and expects to be able to pay
its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Standby Letters of Credit" means the standby letters of
credit issued by the Issuing Bank for the account of the Borrower or
any of its Subsidiaries upon the terms and conditions of this
Agreement.
"Stated Termination Date" means November 29, 2003.
"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 is owned directly or indirectly by the Borrower and/or
by one or more of the Borrower's Subsidiaries.
"Swap Agreement" means one or more agreements between the
Borrower and any Person with respect to Indebtedness evidenced by any
or all of the Note, on terms mutually acceptable to Borrower and such
Person, which agreements create Rate Hedging Obligations; PROVIDED,
HOWEVER, that no such approval of the Lender shall be required to the
extent such agreements are entered into between the Borrower and the
Lender.
"Termination Event" means: (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(ii) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4062(e) of ERISA; or (iii) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (iv) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (v) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA
for the termination of, or the appointment of a trustee to administer,
any Pension Plan; or (vi)
18
the partial or complete withdrawal of the Borrower or any ERISA
Affiliate from a Multiemployer Plan; or (vii) the imposition of a Lien
pursuant to Section 412 of the Code or Section 302 of ERISA; or (viii)
any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or Section 4245
of ERISA, respectively; or (ix) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or
the institution by the PBGC of proceedings to terminate a Multiemployer
Plan under Section 4042 of ERISA.
"TTI" means Trans-Tec International, S.A., a corporation
organized under the laws of Costa Rica and a wholly-owned subsidiary of
the Borrower.
"Type" shall mean any type of Loan (i.e., a Base Rate Loan or
a Eurodollar Rate Loan).
"Voting Stock" means shares of capital stock issued by a
corporation, or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been
suspended by the happening of such a contingency.
"WFI" means World Fuel International, S.A., a corporation
organized under the laws of Costa Rica and a wholly-owned Subsidiary of
the Borrower; WFI also operates under the name `Petromundo
Internacional, S.A.'
"WFI/TTI Credit Agreement" means the Revolving Credit and
Reimbursement Agreement dated of even date herewith among WFI, TTI and
NationsBank, N.A., as lender, as amended, modified or restated from
time to time.
"Year 2000 Compliant" means all computer applications
(including those affected by information received from its suppliers
and vendors) that are material to the Borrower's or any of its
Subsidiaries' business and operations will on a timely basis be able to
perform properly data-sensitive functions involving all dates on and
after January 1, 2000;
"Year 2000 Problem" means the risk that computer applications
used by the Borrower and any of its Subsidiaries (including those
affected by information received from its suppliers and vendors) may be
unable to recognize and perform properly data-sensitive functions
involving certain dates on and after January 1, 2000.
1.2 RULES OF INTERPRETATION.
(a) All accounting terms not specifically defined herein shall
have the meanings assigned to such terms and shall be interpreted in
accordance with GAAP applied on a Consistent Basis.
19
(b) Each term defined in Article 1 or 9 of the Florida Uniform
Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code
of another jurisdiction is controlling, in which case such terms shall
have the meaning given in the Uniform Commercial Code of the applicable
jurisdiction.
(c) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision thereof.
(d) Except as otherwise expressly provided, references herein
to articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules are references to articles, sections,
paragraphs, clauses, annexes, appendices, exhibits and schedules in or
to this Agreement.
(e) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such
defined term, and all references to the masculine gender shall include
reference to the feminine or neuter gender, and VICE VERSA, as the
context may require.
(f) When used herein or in any other Loan Document, words such
as "hereunder", "hereto", "hereof" and "herein" and other words of like
import shall, unless the context clearly indicates to the contrary,
refer to the whole of the applicable document and not to any particular
article, section, subsection, paragraph or clause thereof.
(g) References to "including" means including without limiting
the generality of any description preceding such term, and for purposes
hereof the rule of EJUSDEM GENERIS shall not be applicable to limit a
general statement, followed by or referable to an enumeration of
specific matters, to matters similar to those specifically mentioned.
(h) All dates and times of day specified herein shall refer to
such dates and times at Charlotte, North Carolina.
(i) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the opportunity
to request) revisions to, the Loan Documents, and any rule of
construction that ambiguities are to be resolved against the drafting
party shall be inapplicable in the construing and interpretation of the
Loan Documents and all exhibits, schedules and appendices thereto.
(j) Any reference to an officer of the Borrower or any other
Person by reference to the title of such officer shall be deemed to
refer to each other officer of such Person, however titled, exercising
the same or substantially similar functions.
(k) All references to any agreement or document as amended,
modified or supplemented, or words of similar effect, shall mean such
document or agreement, as the case
20
may be, as amended, modified or supplemented from time to time only as
and to the extent permitted therein and in the Loan Documents.
21
ARTICLE II
THE REVOLVING CREDIT FACILITY
2.1 LOANS.
(a) COMMITMENT. Subject to the terms and conditions of this
Agreement, the Lender agrees to make Advances to the Borrower under the
Revolving Credit Facility from time to time from the Closing Date until the
Revolving Credit Termination Date up to but not exceeding the Revolving Credit
Commitment, PROVIDED, however, that the Lender will not be required and shall
have no obligation to make any such Advance (i) so long as a Default or an Event
of Default has occurred and is continuing or (ii) if the Lender has accelerated
the maturity of the Note as a result of an Event of Default; PROVIDED further,
however, that immediately after giving effect to each such Advance, the
principal amount of Revolving Credit Outstandings plus Letter of Credit
Outstandings shall not exceed the Revolving Credit Commitment. Within such
limits, the Borrower may borrow, repay and reborrow under the Revolving Credit
Facility on a Business Day from the Closing Date until, but (as to borrowings
and reborrowings) not including, the Revolving Credit Termination Date;
PROVIDED, however, that (y) no Loan that is a Eurodollar Rate Loan shall be made
which has an Interest Period that extends beyond the Stated Termination Date and
(z) each Loan that is a Eurodollar Rate Loan may, subject to the provisions of
SECTION 2.6, 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 4.4.
(b) AMOUNTS. Except as otherwise permitted by the Lender from
time to time, the aggregate unpaid principal amount of the Revolving Credit
Outstandings plus Letter of Credit Outstandings shall not exceed at any time the
Revolving Credit Commitment, and, in the event there shall be outstanding any
such excess, the Borrower shall immediately make such payments and prepayments
as shall be necessary to comply with this restriction. Each Loan hereunder,
other than Base Rate Refunding Loans, and each conversion under SECTION 2.7,
shall be in an amount of at least $100,000, and, if greater than $100,000, an
integral multiple of $100,000.
(c) ADVANCES. An Authorized Representative shall give the
Lender (1) at least three (3) Business Days' irrevocable written notice by
telefacsimile transmission of a Borrowing Notice or Interest Rate Selection
Notice (as applicable) with appropriate insertions, effective upon receipt, of
each Loan that is a 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 10:30 A.M. and (2) irrevocable written
notice by telefacsimile transmission of a Borrowing Notice or Interest Rate
Selection Notice (as applicable) with appropriate insertions, effective upon
receipt, of each Loan (other than Base Rate Refunding Loans to the extent the
same are effected without notice pursuant to SECTION 2.1(c)(iv)) 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 10:30 A.M. on the day of such proposed Loan. Each such notice shall
specify the amount of the borrowing, the type of Loan (Base Rate or Eurodollar
Rate), the date of borrowing and, if a Eurodollar Rate Loan, the Interest Period
to be used in the computation of interest.
22
(ii) Not later than 2:00 P.M. on the date specified for each borrowing
under this SECTION 2.1, the Lender shall, pursuant to the terms and subject to
the conditions of this Agreement, make the amount of the Advance or Advances
available to the Borrower by delivery of the proceeds thereof to the Borrower's
Account or otherwise as shall be directed in the applicable Borrowing Notice by
the Authorized Representative and reasonably acceptable to the Lender.
(iii) The Borrower shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to Convert the Loans in
accordance with SECTION 2.7. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, PROVIDED, HOWEVER, there shall not be outstanding
at any one time Eurodollar Rate Loans having more than five (5) different
Interest Periods. If the Lender does not receive a Borrowing Notice or an
Interest Rate Selection Notice giving notice of election of the duration of an
Interest Period or of Conversion of any Loan to or Continuation of a Loan as a
Eurodollar Rate Loan by the time prescribed by SECTION 2.1(c) OR 2.7, the
Borrower shall be deemed to have elected to Convert such Loan to (or Continue
such Loan as) a Base Rate Loan until the Borrower notifies the Lender in
accordance with SECTION 2.7.
(iv) Notwithstanding the foregoing, if a drawing is made under any
Letter of Credit, such drawing is honored by the Issuing Bank prior to the
Stated Termination Date, and the Borrower shall not immediately fully reimburse
the Issuing Bank in respect of such drawing, (A) provided that the conditions to
making a Loan as herein provided shall then be satisfied, the Reimbursement
Obligation arising from such drawing shall be paid to the Issuing Bank by the
Lender without the requirement of notice to or from the Borrower from
immediately available funds which shall be advanced as a Base Rate Refunding
Loan by the Lender under the Revolving Credit Facility, and (B) if the
conditions to making a Loan as herein provided shall not then be satisfied, the
Lender shall fund by payment to the Issuing Bank in immediately available funds
the purchase price from the Issuing Bank of the Reimbursement Obligation. Any
such Base Rate Refunding Loan shall be advanced as, and shall continue as, a
Base Rate Loan unless and until the Borrower Converts such Base Rate Loan in
accordance with the terms of SECTION 2.7.
2.2 PAYMENT OF INTEREST. (a) The Borrower shall pay interest to the
Lender on the outstanding and unpaid principal amount of each Loan for the
period commencing on the date of such Loan until such Loan shall be due at the
then applicable Base Rate for Base Rate Loans or applicable Eurodollar Rate for
Eurodollar Rate Loans, as designated by the Authorized Representative pursuant
to SECTION 2.1; PROVIDED, however, that if any amount shall not be paid when due
(at maturity, by acceleration or otherwise), all amounts outstanding hereunder
shall bear interest thereafter at the Default Rate.
(b) Interest on each Loan shall be computed on the basis of a year
of 360 days and calculated in each case for the actual number of days elapsed.
Interest on each Loan shall be paid (i) quarterly in arrears not later than
three (3) Business Days following the last Business Day of each March, June,
September and December, commencing December 31, 1998 for each Base Rate Loan,
(ii) on the last day of the applicable Interest Period for each Eurodollar Rate
Loan and, if such Interest Period extends for more than three (3) months, at
intervals of three (3) months after the first day of such Interest Period, and
(iii) upon payment in full of the principal amount of such Loan.
23
2.3 PAYMENT OF PRINCIPAL. The principal amount of each Loan shall be
due and payable to the Lender in full on the Revolving Credit Termination Date,
or earlier as specifically provided herein. The principal amount of any Base
Rate Loan may be prepaid in whole or in part at any time. The principal amount
of any Eurodollar Rate Loan may be prepaid only at the end of the applicable
Interest Period unless the Borrower shall pay to the Lender the additional
amount, if any, required under SECTION 4.4. All prepayments of Loans made by the
Borrower shall be in the amount of $100,000 or such greater amount which is an
integral multiple of $100,000, or the amount equal to all Revolving Credit
Outstandings, or such other amount as necessary to comply with SECTION 2.1(b) or
SECTION 2.7.
2.4 NON-CONFORMING PAYMENTS. (a) Each payment of principal (including
any prepayment) and payment of interest and fees, and any other amount required
to be paid to the Lender with respect to the Loans, shall be made to the Lender
at the Principal Office in Dollars and in immediately available funds before
12:30 P.M. on the date such payment is due. The Lender may, but shall not be
obligated to, debit the amount of any such payment which is not made by such
time to any ordinary deposit account, if any, of the Borrower with the Lender.
(b) The Lender shall deem any payment made by or on behalf of the
Borrower hereunder that is not made both in Dollars and in immediately available
funds and prior to 12:30 P.M. to be a non-conforming payment. Any such payment
shall not be deemed to be received by the Lender until the later of (i) the time
such funds become available funds and (ii) the next Business Day. Any
non-conforming payment may constitute or become a Default or Event of Default.
Interest shall continue to accrue on any principal as to which a non-conforming
payment is made until the later of (x) the date such funds become available
funds or (y) the next Business Day at the Default Rate from the date such amount
was due and payable.
(c) In the event that any payment hereunder or under the Note becomes
due and payable on a day other than a Business Day, then such due date shall be
extended to the next succeeding Business Day unless provided otherwise under
clause (ii) of the definition of "Interest Period"; PROVIDED that interest shall
continue to accrue during the period of any such extension and PROVIDED further,
that in no event shall any such due date be extended beyond the Revolving Credit
Termination Date.
2.5 NOTES. Loans made or Continued by the Lender pursuant to the terms
and conditions of this Agreement shall be evidenced by the Note payable to the
order of the Lender in the amount of the Revolving Credit Commitment, which Note
shall be dated the Closing Date and shall be duly completed, executed and
delivered by the Borrower.
2.6 REDUCTIONS. The Borrower shall, by notice from an Authorized
Representative, have the right from time to time but not more frequently than
once each calendar month, upon not less than three (3) Business Days' written
notice to the Lender, effective upon receipt, to reduce the Revolving Credit
Commitment. Each such reduction shall be in the aggregate amount of $500,000 or
such greater amount which is in an integral multiple of $100,000, or the entire
remaining Revolving Credit Commitment, and shall permanently reduce the
Revolving Credit Commitment. Each reduction of the Revolving Credit Commitment
shall be accompanied by payment of the Loans to the extent that
24
the principal amount of Revolving Credit Outstandings plus Letter of Credit
Outstandings exceeds the Revolving Credit Commitment after giving effect to such
reduction, together with accrued and unpaid interest on the amounts prepaid. No
such reduction shall result in the payment of any Eurodollar Rate Loan other
than on the last day of the Interest Period of such Eurodollar Rate Loan unless
such prepayment is accompanied by amounts due, if any, under SECTION 4.4.
2.7 CONVERSIONS AND ELECTIONS OF SUBSEQUENT INTEREST PERIODS. Subject
to the limitations set forth below and in ARTICLE IV, the Borrower may:
(a) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Lender on or before 10:30 A.M. on any
Business Day, Convert all or a part of Eurodollar Rate Loans to Base Rate Loans
on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) provided that no Default or Event of Default shall have
occurred and be continuing and upon delivery, effective upon receipt, of a
properly completed Interest Rate Selection Notice to the Lender on or before
10:30 A.M. three (3) Business Days' prior to the date of such election or
Conversion:
(i) elect a subsequent Interest Period for all or a portion of
Eurodollar Rate Loans to begin on the last day of the then current
Interest Period for such Eurodollar Rate Loans; and
(ii) Convert Base Rate Loans to Eurodollar Rate Loans on any
Business Day.
Each election and Conversion pursuant to this SECTION 2.7 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in SECTIONS 2.1, 2.3 and ARTICLE IV.
2.8 INCREASE AND DECREASE IN AMOUNTS. The amount of the Revolving
Credit Commitment which shall be available to the Borrower as Advances shall be
reduced by the aggregate amount of Outstanding Letters of Credit.
2.9 FEES.
(a) UNUSED FEE. For the period beginning on the Closing Date and ending
on the Revolving Credit Termination Date, the Borrower agrees to pay to the
Lender an unused fee equal to the Applicable Unused Fee multiplied by the
average daily amount by which the Revolving Credit Commitment exceeds the sum of
(i) Revolving Credit Outstandings plus (ii) Letter of Credit Outstandings. Such
fees shall be due in arrears not later than three (3) Business Days following
the last Business Day of each March, June, September and December commencing
December 31, 1998 to and on the Revolving Credit Termination Date (or such
earlier date as the Lenders refuse to fund hereunder).
25
(b) FACILITY FEE. The Borrower agrees to pay to the Lender, for its own
account a one time fee upon terms and conditions as provided in that certain Fee
Letter dated April 17, 1998 for agreeing to amend and extend the terms of this
Agreement.
2.10 USE OF PROCEEDS. The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Borrower to repay
Indebtedness outstanding under the Prior Agreement, for general working capital
needs and other corporate purposes, including the making of Acquisitions and
Capital Expenditures permitted hereunder.
26
ARTICLE III
LETTERS OF CREDIT
3.1 LETTERS OF CREDIT. The Issuing Bank agrees, subject to the terms
and conditions of this Agreement, upon request of the Borrower to issue from
time to time for the account or benefit of the Borrower or any of its
Subsidiaries, other than WFI and TTI, Letters of Credit upon delivery to the
Issuing Bank of an Application and Agreement for Letter of Credit relating
thereto in form and content acceptable to the Issuing Bank; PROVIDED, that if a
Letter of Credit is to be issued for the account or benefit of a Subsidiary of
the Borrower, both the Borrower and such Subsidiary jointly and severally as
co-applicants shall deliver to the Issuing Bank an Application and Agreement for
Letter of Credit, and PROVIDED FURTHER, that (i) the Letter of Credit
Outstandings shall not exceed the Letter of Credit Commitment and (ii) no Letter
of Credit shall be issued if, after giving effect thereto, Letter of Credit
Outstandings plus Revolving Credit Outstandings shall exceed the Revolving
Credit Commitment. No Letter of Credit shall have an expiry date (including all
rights of the Borrower or any Subsidiary named in such Letter of Credit to
require renewal) or payment date occurring later than the earlier to occur of
(A) one year after the date of its issuance with respect to Standby Letters of
Credit or one hundred eighty days after the date of its issuance with respect to
Documentary Letters of Credit; or (B) the fifth Business Day prior to the Stated
Termination Date. Borrower agrees that it is jointly and severally liable for
all Reimbursement Obligations and other obligations with respect to Letters of
Credit previously issued or to be issued for the account or benefit of any
Subsidiary as if and to the same extent as if Borrower were the sole applicant
therefor, and that any Letters of Credit issued on application of a Subsidiary
or the joint application of the Borrower and a Subsidiary shall be subject to
all the terms of this Agreement, including applicable sublimits.
3.2 REIMBURSEMENT.
(a) The Borrower hereby unconditionally agrees to pay to the
Issuing Bank immediately on demand at the Principal Office all amounts required
to pay all drafts drawn or purporting to be drawn under the Letters of Credit
and all reasonable expenses incurred by the Issuing Bank in connection with the
Letters of Credit, and in any event and without demand to place in possession of
the Issuing Bank (which shall include Advances under the Revolving Credit
Facility if permitted by SECTION 2.1) sufficient funds to pay all debts and
liabilities arising under any Letter of Credit. The Issuing Bank agrees to give
the Borrower prompt notice of any request for a draw under a Letter of Credit.
The Issuing Bank may charge any account the Borrower may have with it for any
and all amounts the Issuing Bank pays under a Letter of Credit, plus charges and
reasonable expenses as from time to time agreed to by the Issuing Bank and the
Borrower; provided that to the extent permitted by SECTION 2.1(c)(IV) , amounts
shall be paid pursuant to Advances under the Revolving Credit Facility. The
Borrower agrees to pay the Issuing Bank interest on any Reimbursement
Obligations not paid when due hereunder at the Base Rate, or the maximum rate
permitted by applicable law, if lower, such rate to be calculated on the basis
of a year of 360 days for actual days elapsed.
27
(b) In accordance with the provisions of SECTION 2.1(C), the
Issuing Bank shall notify the Lender of any drawing under any Letter of Credit
promptly following the receipt by the Issuing Bank of such drawing.
(c) The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in ARTICLE V, be
subject to the conditions that such Letter of Credit be in such form and contain
such terms as shall be reasonably satisfactory to the Issuing Bank consistent
with the then current practices and procedures of the Issuing Bank with respect
to similar letters of credit, and the Borrower shall have executed and delivered
such other instruments and agreements relating to such Letters of Credit as the
Issuing Bank shall have reasonably requested consistent with such practices and
procedures. All Letters of Credit shall be issued pursuant to and subject to the
Uniform Customs and Practice for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500 and all subsequent
amendments and revisions thereto.
(d) The Borrower agrees that the Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of Credit,
any drafts or other documents otherwise in order which may be signed or issued
by an administrator, executor, trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver, attorney in fact or
other legal representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents.
(e) Without limiting the generality of the provisions of
SECTION 10.9, the Borrower hereby agrees to indemnify and hold harmless the
Issuing Bank from and against any and all claims and damages, losses,
liabilities, reasonable costs and expenses which the Issuing Bank may incur (or
which may be claimed against the Issuing Bank) by any Person by reason of or in
connection with the issuance or transfer of or payment or failure to pay under
any Letter of Credit; PROVIDED that the Borrower shall not be required to
indemnify the Issuing Bank for any claims, damages, losses, liabilities, costs
or expenses to the extent, but only to the extent, (i) caused by the willful
misconduct or gross negligence of the party to be indemnified or (ii) caused by
the failure of the Issuing Bank to pay under any Letter of Credit after the
presentation to it of a request for payment strictly complying with the terms
and conditions of such Letter of Credit, unless such payment is prohibited by
any law, regulation, court order or decree. The indemnification and hold
harmless provisions of this SECTION 3.2(E) shall survive repayment of the
Obligations, occurrence of the Revolving Credit Termination Date and expiration
or termination of this Agreement.
(f) Without limiting Borrower's rights as set forth in SECTION
3.2(e), the obligation of the Borrower to immediately reimburse the Issuing Bank
for drawings made under Letters of Credit and the Issuing Bank's right to
receive such payment shall be absolute, unconditional and irrevocable, and that
such obligations of the Borrower shall be performed strictly in accordance with
the terms of this Agreement and such Letters of Credit and the related
Applications and Agreement for any Letter of Credit, under all circumstances
whatsoever, including the following circumstances:
(i) any lack of validity or enforceability of the
Letters of Credit, the obligation supported by the Letters of
Credit or any other agreement or instrument relating thereto
(collectively, the "Related LC Documents");
28
(ii) any amendment or waiver of or any consent to or
departure from all or any of the Related LC Documents;
(iii) the existence of any claim, setoff, defense
(other than the defense of payment in accordance with the
terms of this Agreement) or other rights which the Borrower
may have at any time against any beneficiary or any transferee
of a Letter of Credit (or any persons or entities for whom any
such beneficiary or any such transferee may be acting), the
Lender or any other Person, whether in connection with the
Loan Documents, the Related LC Documents or any unrelated
transaction;
(iv) any breach of contract or other dispute between
the Borrower and any beneficiary or any transferee of a Letter
of Credit (or any persons or entities for whom such
beneficiary or any such transferee may be acting), the Lender
or any other Person;
(v) any draft, statement or any other document
presented under the Letters of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect
whatsoever;
(vi) any delay, extension of time, renewal,
compromise or other indulgence or modification granted or
agreed to by the Lender, with or without notice to or approval
by the Borrower in respect of any of Borrower's Obligations
under this Agreement; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
Nothing contained in this subsection (f) shall relieve the Issuing Bank of its
obligations under the Uniform Customs and Practices for Documentary Credits,
1993 revision, International Chamber of Commerce Publication No. 500.
3.3 LETTER OF CREDIT FACILITY FEES. The Borrower shall pay to the
Issuing Bank a fee on the aggregate amount available to be drawn on each
outstanding Letter of Credit at a rate equal to (a) the Applicable Margin for
each outstanding Standby Letter of Credit, and (b) .10% per annum for each
outstanding Documentary Letter of Credit. Such fees shall be due with respect to
each Letter of Credit quarterly in advance on the first day of each January,
April, July and October, the first such payment to be made (x) on the Closing
Date with respect to Letters of Credit outstanding and to the extent such fees
have not yet been paid for such Letters of Credit with respect to the then
current calendar quarter, or (y) on the date of issuance of a Letter of Credit,
and thereafter on the first day of the calendar quarter occurring after either
the Closing Date or the date of issuance of a Letter of Credit as applicable.
The fees described in this SECTION 3.3 shall be calculated on the basis of a
year of 360 days for the actual number of days elapsed.
29
3.4 ADMINISTRATIVE FEES. The Borrower shall pay to the Issuing Bank
such administrative fee and other fees, if any, in connection with the Letters
of Credit in such amounts and at such times as the Issuing Bank and the Borrower
shall agree from time to time.
30
ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1 INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, the adoption of any applicable
law, rule, or regulation, or any change in any applicable law, rule, or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by the Lender (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any such governmental authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Lending Office)
to any tax, duty, or other charge with respect to any
Eurodollar Rate Loans, its Note, or its obligation to make
Eurodollar Rate Loans, or change the basis of taxation of any
amounts payable to the Lender (or its Lending Office) under
this Agreement or its Note in respect of any Eurodollar Rate
Loans (other than taxes imposed on the overall net income of
the Lender by the jurisdiction in which the Lender has its
principal office or such Lending Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement
(other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate) relating to any
extensions of credit or other assets of, or any deposits with
or other liabilities or commitments of, the Lender (or its
Lending Office), including the Revolving Credit Commitment of
the Lender hereunder; or
(iii) shall impose on the Lender (or its Lending
Office) or on the London interbank market any other condition
affecting this Agreement or its Note or any of such extensions
of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of making, Converting into, Continuing, or maintaining
any Eurodollar Rate Loans or to reduce any sum received or receivable by such
Lender (or its Lending Office) under this Agreement or its Note with respect to
any Eurodollar Rate Loans, then the Borrower shall pay to the Lender on demand
such amount or amounts as will compensate the Lender for such increased cost or
reduction; PROVIDED that the Lender not will be entitled to any compensation for
any such increased cost or reduction if demand for payment thereof is made by
the Lender more than 180 days after the occurrence of the circumstances giving
rise to such claim. If the Lender requests compensation by the Borrower under
this SECTION 4.1(a), the Borrower may, by notice to the Lender, suspend the
obligation of the Lender to make or Continue Loans of the Type with respect to
which such compensation is requested, or to Convert Loans of any other Type into
Loans of such Type, until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of
31
SECTION 4.4 shall be applicable); PROVIDED that such suspension shall not affect
the right of the Lender to receive the compensation so requested.
(b) If, after the date hereof, the Lender shall have determined that
the adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of the
Lender or any corporation controlling the Lender as a consequence of the
Lender's obligations hereunder to a level below that which the Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Borrower shall pay to the
Lender such additional amount or amounts as will compensate the Lender for such
reduction.
(c) The Lender shall promptly notify the Borrower of any event of which
it has knowledge, occurring after the date hereof, which will entitle the Lender
to compensation pursuant to this Section and will designate a different Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the reasonable judgment of the Lender, be
otherwise disadvantageous to it. The Lender claiming compensation under this
Section shall furnish to the Borrower a statement setting forth the additional
amount or amounts to be paid to it hereunder which shall be conclusive in the
absence of manifest error. In determining such amount, the Lender may use any
reasonable averaging and attribution methods that the Lender uses for its
customers that are similarly situated to the Borrower.
4.2 LIMITATION ON TYPES OF LOANS. If on or prior to the first day of
any Interest Period for any Eurodollar Rate Loan:
(a) the Lender reasonably determines (which determination
shall be conclusive) that by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period; or
(b) the Lender reasonably determines (which determination
shall be conclusive) that the Eurodollar Rate will not adequately and
fairly reflect the cost to the Lender of funding Eurodollar Rate Loans
for such Interest Period;
then the Lender shall give the Borrower prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Lender shall be under no obligation to make
additional Loans of such Type, Continue Loans of such Type, or to Convert Loans
of any other Type into Loans of such Type and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans or Convert such Loans into another Type
of Loan in accordance with the terms of this Agreement.
32
4.3 ILLEGALITY. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for the Lender or its Lending Office to
make, maintain, or fund Eurodollar Rate Loans hereunder, then the Lender shall
promptly notify the Borrower thereof and the Lender's obligation to make or
Continue Eurodollar Rate Loans and to Convert other Types of Loans into
Eurodollar Rate Loans shall be suspended until such time as the Lender may again
make, maintain, and fund Eurodollar Rate Loans (in which case the provisions of
SECTION 4.4 shall be applicable).
4.4 TREATMENT OF AFFECTED LOANS. If the obligation of the Lender to
make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other
Type into, Loans of a particular Type shall be suspended pursuant to SECTION 4.1
or 4.3 hereof (Loans of such Type being herein called "Affected Loans" and such
Type being herein called the "Affected Type"), the Lender's Affected Loans shall
be automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for Affected Loans (or, in the case of a Conversion
required by SECTION 4.3 hereof, on such earlier date as the Lender may specify
to the Borrower) and, unless and until the Lender gives notice as provided below
that the circumstances specified in SECTION 4.1 or 4.3 hereof that gave rise to
such Conversion no longer exist:
(a) to the extent that the Lender's Affected Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to the Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by the
Lender as Loans of the Affected Type shall be made or Continued instead
as Base Rate Loans, and all Loans of the Lender that would otherwise be
Converted into Loans of the Affected Type shall be Converted instead
into (or shall remain as) Base Rate Loans.
4.5 COMPENSATION. Upon the request of the Lender, the Borrower shall
pay to the Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of the Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar
Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to SECTION 9.1) on a date other than
the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
ARTICLE V to be satisfied) to borrow, Convert, Continue, or prepay a
Eurodollar Rate Loan on the date for such borrowing, Conversion,
Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this
Agreement.
4.6 TAXES. (a) Any and all payments by the Borrower to or for the
account of the Lender hereunder or under any other Loan Document shall be made
free and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, EXCLUDING, in the case of the Lender, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which the Lender (or
33
its Lending Office) is organized or any political subdivision thereof (all such
non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings,
and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
under this Agreement or any other Loan Document to the Lender, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this SECTION 4.6) the Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions, (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law, and (iv) the Borrower shall furnish to the Lender, at its address referred
to in SECTION 10.2, the original or a certified copy of a receipt evidencing
payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Agreement
or any other Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "Other Taxes").
(c) The Borrower agrees to indemnify the Lender for the full amount of
Taxes and Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this SECTION
4.6) paid by the Lender and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto.
(d) If the Borrower is required to pay additional amounts to or for the
account of the Lender pursuant to this SECTION 4.6, then the Lender will agree
to use reasonable efforts to change the jurisdiction of its Lending Office so as
to eliminate or reduce any such additional payment which may thereafter accrue
if such change, in the judgment of the Lender, is not otherwise disadvantageous
to the Lender.
(e) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Lender the original or a certified copy of a
receipt evidencing such payment.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 4.6 shall survive the termination of the Revolving Credit
Commitments and the payment in full of the Notes.
34
ARTICLE V
CONDITIONS TO MAKING LOANS AND ISSUING LETTERS OF CREDIT
5.1 CONDITIONS OF INITIAL ADVANCE. The obligation of the Lender to make
the initial Advance under the Revolving Credit Facility, and of the Issuing Bank
to issue any additional Letter of Credit, is subject to the conditions precedent
that:
(a) the Lender shall have received on the Closing Date, in
form and substance satisfactory to the Lender, the following:
(i) executed originals of each of this Agreement,
the Note, the initial Facility Guaranties, the LC Account
Agreement and the other Loan Documents, together with all
schedules and exhibits thereto;
(ii) the favorable written opinion or opinions with
respect to the Loan Documents and the transactions
contemplated thereby of counsel to the Credit Parties dated
the Closing Date, addressed to the Lender and satisfactory to
▇▇▇▇▇ ▇▇▇▇▇ Mulliss & ▇▇▇▇▇, L.L.P., special counsel to the
Lender, substantially in the form of EXHIBIT E;
(iii) resolutions of the boards of directors or
other appropriate governing body (or of the appropriate
committee thereof) of each Credit Party certified by its
secretary or assistant secretary as of the Closing Date,
approving and adopting the Loan Documents to be executed by
such Person, and authorizing the execution and delivery
thereof;
(iv) specimen signatures of officers of each Credit
Party executing the Loan Documents on behalf of such Credit
Party, certified by the secretary or assistant secretary of
such Credit Party;
(v) the charter documents of each Credit Party
certified as of a recent date by the Secretary or Assistant
Secretary of the Borrower;
(vi) the bylaws of each Credit Party certified as of
the Closing Date as true and correct by its secretary or
assistant secretary;
(vii) certificates issued as of a recent date by the
Secretaries of State of the respective jurisdictions of
formation of each Credit Party as to the due existence and
good standing of each Credit Party;
(viii) notice of appointment of the initial
Authorized Representative(s);
(ix) certificate of an Authorized Representative
dated the Closing Date demonstrating compliance with the
financial covenants contained in SECTIONS 8.1(a)
35
through 8.1(d) as of the most recently ended fiscal quarter
period, substantially in the form of EXHIBIT F;
(x) an initial Borrowing Notice, if any, and, if
elected by the Borrower, Interest Rate Selection Notice;
(xi) evidence that all fees payable by the Borrower
on the Closing Date to the Lender have been paid in full;
(xii) such other documents, instruments,
certificates and opinions as the Lender may reasonably request
on or prior to the Closing Date in connection with the
consummation of the transactions contemplated hereby; and
(b) In the good faith judgment of the Lender:
(i) there shall not have occurred or become known to
the Lender any event, condition, situation or status since the
date of the information contained in the financial and
business projections, budgets, pro forma data and forecasts
concerning the Borrower and its Subsidiaries delivered to the
Lender prior to the Closing Date that has had or could
reasonably be expected to result in a Material Adverse Effect;
(ii) no litigation, action, suit, investigation or
other arbitral, administrative or judicial proceeding shall be
pending or threatened which could reasonably be likely to
result in a Material Adverse Effect; and
(iii) the Borrower and its Subsidiaries shall have
received all approvals, consents and waivers, and shall have
made or given all necessary filings and notices as shall be
required to consummate the transactions contemplated hereby
without the occurrence of any default under, conflict with or
violation of (A) any applicable law, rule, regulation, order
or decree of any Governmental Authority or arbitral authority
or (B) any agreement, document or instrument to which any of
the Borrower or any Subsidiary is a party or by which any of
them or their properties is bound.
5.2 CONDITIONS OF LOANS AND LETTER OF CREDIT. The obligations of the
Lender to make any Loans, and the Issuing Bank to issue Letters of Credit,
hereunder on or subsequent to the Closing Date are subject to the satisfaction
of the following conditions:
(a) the Lender shall have received a Borrowing Notice if
required by ARTICLE II;
(b) the representations and warranties of the Borrower and the
Subsidiaries set forth in ARTICLE VI and in each of the other Loan
Documents shall be true and correct in all material respects on and as
of the date of such Advance, with the same effect as though such
representations and warranties had been made on and as of such date,
except to the extent that such representations and warranties expressly
relate to an earlier date and except that the financial statements
referred to in SECTION 6.6(a) shall be deemed to be those financial
36
statements most recently delivered to the Lender pursuant to SECTION
7.1 from the date financial statements are delivered to the Lender in
accordance with such Section;
(c) in the case of the issuance of a Letter of Credit, the
Borrower with any of its Subsidiaries as co-applicant, as applicable,
shall have executed and delivered to the Issuing Bank an Application
and Agreement for Letter of Credit in form and content acceptable to
the Issuing Bank together with such other instruments and documents as
it shall request;
(d) at the time of (and after giving effect to) each Advance
or the issuance of a Letter of Credit, no Default or Event of Default
specified in ARTICLE IX shall have occurred and be continuing; and
(e) immediately after giving effect to:
(i) a Loan, the aggregate principal balance of all
outstanding Loans shall not exceed the Revolving Credit
Commitment;
(ii) a Letter of Credit or renewal thereof, the
aggregate principal balance of all outstanding Letters of
Credit and Reimbursement Obligations for the Lender shall not
exceed the Letter of Credit Commitment;
(iii) a Loan or a Letter of Credit or renewal
thereof, the sum of Letter of Credit Outstandings plus
Revolving Credit Outstandings shall not exceed the Revolving
Credit Commitment.
37
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants with respect to itself and to its
Subsidiaries (which representations and warranties shall survive the delivery of
the documents mentioned herein and the making of Loans), that:
6.1 ORGANIZATION AND AUTHORITY.
(a) The Borrower and each Subsidiary is a corporation or
partnership duly organized and validly existing under the laws of the
jurisdiction of its formation;
(b) The Borrower and each Subsidiary (x) has the requisite
power and authority to own its properties and assets and to carry on
its business as now being conducted and as contemplated in the Loan
Documents, and (y) is qualified to do business in every jurisdiction in
which failure so to qualify would have a Material Adverse Effect;
(c) The Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party;
(d) Each Subsidiary executing a Facility Guaranty has the
power and authority to execute, deliver and perform the Facility
Guaranty and each of the other Loan Documents to which it is a party;
and
(e) When executed and delivered, each of the Loan Documents to
which the Borrower or any Subsidiary is a party will be the legal,
valid and binding obligation or agreement, as the case may be, of the
Borrower or such Subsidiary, enforceable against the Borrower or such
Subsidiary in accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other
similar law affecting the enforceability of creditors' rights generally
and to the effect of general principles of equity (whether considered
in a proceeding at law or in equity).
6.2 LOAN DOCUMENTS. The execution, delivery and performance by the
Borrower and each Subsidiary of each of the Loan Documents to which it is a
party:
(a) have been duly authorized by all requisite corporate
action (including any required shareholder or partner approval) of the
Borrower and each Subsidiary required for the lawful execution,
delivery and performance thereof;
(b) do not violate any provisions of (i) applicable law, rule
or regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority
binding on the Borrower or any Subsidiary or its properties, or (iii)
the charter documents, partnership agreement or bylaws of the Borrower
or any Subsidiary;
38
(c) does not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which, with
notice or lapse of time or both, would constitute an event of default,
under any contract (including without limitation any Material
Contract), indenture, agreement or other instrument or document to
which Borrower or any Subsidiary is a party, or by which the properties
or assets of Borrower or any Subsidiary are bound; and
(d) does not and will not result in the creation or imposition
of any Lien upon any of the properties or assets of Borrower or any
Subsidiary.
6.3 SOLVENCY. The Borrower and each Subsidiary is Solvent after giving
effect to the transactions contemplated by the Loan Documents.
6.4 SUBSIDIARIES AND STOCKHOLDERS. The Borrower has no Subsidiaries
other than those Persons listed as Subsidiaries in SCHEDULE 6.4 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
SECTION 7.19; SCHEDULE 6.4 states as of the date hereof the organizational form
of each entity, the authorized and issued capitalization of each Subsidiary
listed thereon, the number of shares or other equity interests of each class of
capital stock or interest issued and outstanding of each such Subsidiary and the
number and/or percentage of outstanding shares or other equity interest
(including options, warrants and other rights to acquire any interest) of each
such class of capital stock or other equity interest owned by Borrower or by any
such Subsidiary; the outstanding shares or other equity interests of each such
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable; and Borrower and each such Subsidiary owns beneficially and of
record all the shares and other interests it is listed as owning in SCHEDULE
6.4, free and clear of any Lien.
6.5 OWNERSHIP INTERESTS. Borrower owns no interest in any Person other
than the Persons listed in SCHEDULE 6.4, equity investments in Persons not
constituting Subsidiaries permitted under SECTION 8.7 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
SECTION 7.19.
6.6 FINANCIAL CONDITION.
(a) The Borrower has heretofore furnished to the Lender an
audited consolidated balance sheet of the Borrower and its Subsidiaries
as of March 31, 1997 and March 31, 1998 and the notes thereto and the
related consolidated statements of income, stockholders' equity and
cash flows for the Fiscal Year then ended as examined and certified by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and unaudited consolidated interim financial
statements of the Borrower and its Subsidiaries consisting of
consolidated balance sheets and related consolidated statements of
income, stockholders' equity and cash flows, in each case without
notes, for and as of the end of the three (3) month period ending June
30, 1998. Except as set forth therein, such financial statements
(including the notes thereto) present fairly the financial condition of
the Borrower and its Subsidiaries as of the end of such Fiscal Year and
three (3) month period and results of their operations and the changes
in its stockholders' equity for the Fiscal Year and interim period then
ended, all in conformity with GAAP applied on a Consistent Basis,
subject however, in the case of unaudited interim statements to year
end audit adjustments;
39
(b) since June 30, 1998 there has been no material adverse
change in the condition, financial or otherwise, of the Borrower and
its Subsidiaries taken as a whole or in the businesses, properties,
performance, prospects or operations of the Borrower and its
Subsidiaries taken as a whole, nor have such businesses or properties
been materially adversely affected as a result of any fire, explosion,
earthquake, accident, strike, lockout, combination of workers, flood,
embargo or act of God; and
(c) except as set forth in the financial statements referred
to in SECTION 6.6(a) or in SCHEDULE 6.6 or permitted by SECTION 8.5,
neither Borrower nor any Subsidiary has incurred, other than in the
ordinary course of business, any material Indebtedness, Contingent
Obligation or other commitment or liability which remains outstanding
or unsatisfied.
6.7 TITLE TO PROPERTIES. The Borrower and each of its Subsidiaries has
good and marketable title to all its real and personal properties, subject to no
transfer restrictions or Liens of any kind, except for the transfer restrictions
and Liens described in SCHEDULE 6.7 and Liens permitted by SECTION 8.4.
6.8 TAXES. Except as set forth in SCHEDULE 6.8, the Borrower and each
of its Subsidiaries has filed or caused to be filed all federal, state and local
tax returns which are required to be filed by it and, except for taxes and
assessments being contested in good faith by appropriate proceedings diligently
conducted and against which reserves reflected in the financial statements
described in SECTION 6.6(A) and satisfactory to the Borrower's independent
certified public accountants have been established, have paid or caused to be
paid all taxes as shown on said returns or on any assessment received by it, to
the extent that such taxes have become due.
6.9 OTHER AGREEMENTS. Neither the Borrower nor any Subsidiary is
(a) a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions, which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect; or
(b) in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement
or instrument, including without limitation any Material Contract, to
which the Borrower or any Subsidiary is a party, which default has, or
if not remedied within any applicable grace period could reasonably be
likely to have, a Material Adverse Effect.
6.10 LITIGATION. Except as set forth in SCHEDULE 6.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of the Borrower, threatened by or against the Borrower or any
Subsidiary or affecting the Borrower or any Subsidiary or any properties or
rights of the Borrower or any Subsidiary or other Credit Party, which could
reasonably be likely to have a Material Adverse Effect.
40
6.11 MARGIN STOCK. The proceeds of the borrowings made hereunder will
be used by the Borrower only for the purposes expressly authorized herein. None
of such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute any of the Loans
under this Agreement a "purpose credit" within the meaning of said Regulation U
or Regulation X (12 C.F.R. Part 224) of the Board. Neither the Borrower nor any
agent acting in its behalf has taken or will take any action which might cause
this Agreement or any of the documents or instruments delivered pursuant hereto
to violate any regulation of the Board or to violate the Securities Exchange Act
of 1934, as amended, or the Securities Act of 1933, as amended, or any state
securities laws, in each case as in effect on the date hereof.
6.12 INVESTMENT COMPANY. Neither the Borrower nor any of its
Subsidiaries is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C.
ss. 80a-1, et seq.). The application of the proceeds of the Loans and repayment
thereof by the Borrower and the performance by the Borrower and its Subsidiaries
of the transactions contemplated by the Loan Documents will not violate any
provision of said Act, or any rule, regulation or order issued by the Securities
and Exchange Commission thereunder, in each case as in effect on the date
hereof.
6.13 PATENTS, ETC. The Borrower and each of its Subsidiaries owns or
has the right to use, under valid license agreements or otherwise, all material
patents, licenses, franchises, trademarks, trademark rights, trade names, trade
name rights, trade secrets and copyrights necessary to or used in the conduct of
its businesses as now conducted and as contemplated by the Loan Documents,
without known conflict with any patent, license, franchise, trademark, trade
secret, trade name, copyright, other proprietary right of any other Person.
6.14 NO UNTRUE STATEMENT. Neither (a) this Agreement nor any other Loan
Document or certificate or document executed and delivered by or on behalf of
the Borrower or any Subsidiary in accordance with or pursuant to any Loan
Document nor (b) any statement, representation, or warranty provided to the
Lender in connection with the negotiation or preparation of the Loan Documents
contains any misrepresentation or untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstance under which it was
made, in order to make any such warranty, representation or statement contained
therein not misleading.
6.15 NO CONSENTS, ETC. Neither the respective businesses or properties
of the Borrower or any Subsidiary, nor any relationship between the Borrower or
any Subsidiary and any other Person, nor any circumstance in connection with the
execution, delivery and performance of the Loan Documents and the transactions
contemplated thereby, is such as to require a consent, approval or authorization
of, or filing, registration or qualification with, any Governmental Authority or
any other Person on the part of the Borrower or any Subsidiary as a condition to
the execution, delivery and performance of, or consummation of the transactions
contemplated by the Loan Documents, which, if not obtained or effected, would be
reasonably likely to have a Material Adverse Effect, or if so,
41
such consent, approval, authorization, filing, registration or qualification has
been duly obtained or effected, as the case may be.
6.16 EMPLOYEE BENEFIT PLANS.
(a) The Borrower and each ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and
published interpretations thereunder and in compliance with all Foreign
Benefit Laws with respect to all Employee Benefit Plans except for any
required amendments for which the remedial amendment period as defined
in Section 401(b) of the Code has not yet expired. Each Employee
Benefit Plan that is intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so
qualified, and each trust related to such plan has been determined to
be exempt under Section 501(a) of the Code. No material liability has
been incurred by the Borrower or any ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan;
(b) Neither the Borrower nor any ERISA Affiliate has (i)
engaged in a nonexempt prohibited transaction described in Section 4975
of the Code or Section 406 of ERISA affecting any of the Employee
Benefit Plans or the trusts created thereunder which could subject any
such Employee Benefit Plan or trust to a material tax or penalty on
prohibited transactions imposed under Internal Revenue Code Section
4975 or ERISA, (ii) incurred any accumulated funding deficiency with
respect to any Employee Benefit Plan, whether or not waived, or any
other liability to the PBGC which remains outstanding other than the
payment of premiums and there are no premium payments which are due and
unpaid, (iii) failed to make a required contribution or payment to a
Multiemployer Plan, or (iv) failed to make a required installment or
other required payment under Section 412 of the Code, Section 302 of
ERISA or the terms of such Employee Benefit Plan;
(c) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan, and neither the Borrower nor any ERISA Affiliate has incurred any
unpaid withdrawal liability with respect to any Multiemployer Plan;
(d) The present value of all vested accrued benefits under
each Employee Benefit Plan which is subject to Title IV of ERISA, did
not, as of the most recent valuation date for each such plan, exceed
the then current value of the assets of such Employee Benefit Plan
allocable to such benefits;
(e) To the best of the Borrower's knowledge, each Employee
Benefit Plan subject to Title IV of ERISA, maintained by the Borrower
or any ERISA Affiliate, has been administered in accordance with its
terms in all material respects and is in compliance in all material
respects with all applicable requirements of ERISA and other applicable
laws, regulations and rules;
42
(f) The consummation of the Loans and the issuance of the
Letters of Credit provided for herein will not involve any prohibited
transaction under ERISA which is not subject to a statutory or
administrative exemption; and
(g) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Borrower after
due inquiry, is threatened concerning or involving any Employee Benefit
Plan.
6.17 NO DEFAULT. As of the date hereof, there does not exist any
Default or Event of Default hereunder.
6.18 HAZARDOUS MATERIALS. Except as set forth on SCHEDULE 6.18, the
Borrower and each Subsidiary is in compliance with all applicable Environmental
Laws in all material respects. Neither the Borrower nor any Subsidiary has been
notified of any action, suit, proceeding or investigation which, and neither the
Borrower nor any Subsidiary is aware of any facts which, (i) calls into
question, or could reasonably be expected to call into question, compliance by
the Borrower or any Subsidiary with any Environmental Laws, (ii) which seeks, or
could reasonably be expected to form the basis of a meritorious proceeding, to
suspend, revoke or terminate any license, permit or approval necessary for the
generation, handling, storage, treatment or disposal of any Hazardous Material,
or (iii) seeks to cause, or could reasonably be expected to form the basis of a
meritorious proceeding to cause, any property of the Borrower or any Subsidiary
to be subject to any restrictions on ownership, use, occupancy or
transferability under any Environmental Law.
6.19 RICO. Neither the Borrower nor any Subsidiary is engaged in or has
engaged in any course of conduct that could subject any of their respective
properties to any Lien, seizure or other forfeiture under any criminal law,
racketeer influenced and corrupt organizations law, civil or criminal, or other
similar laws.
6.20 YEAR 2000 COMPLIANCE. The Borrower and its Subsidiaries have (i)
initiated a review and assessment of all areas within its and each of its
Subsidiaries' business and operations (including those affected by information
received from suppliers and vendors) that could reasonably be expected to be
adversely affected by the Year 2000 Problem, (ii) developed a plan and timeline
for addressing the Year 2000 Problem by not later than September 30, 1999, and
(iii) to date, implemented that plan substantially in accordance with that
timetable. The Borrower reasonably believes that all computer applications
(including those affected by information received from its suppliers and
vendors) that are material to its or any of its Subsidiaries' business and
operations will on a timely basis be Year 2000 Compliant, except to the extent
that a failure to do so could not reasonably be expected to have Material
Adverse Effect.
43
ARTICLE VII
AFFIRMATIVE COVENANTS
Until the Facility Termination Date, unless the Lender shall otherwise
consent in writing, the Borrower will, and where applicable will cause each
Subsidiary to:
7.1 FINANCIAL REPORTS, ETC. (a) As soon as practical and in any event
within 90 days after the end of each Fiscal Year of the Borrower, deliver or
cause to be delivered to the Lender (i) a consolidated balance sheet of the
Borrower and its Subsidiaries of at the end of such Fiscal Year, and the notes
thereto, and the related consolidated statements of income, stockholders' equity
and cash flows, and the respective notes thereto, for such Fiscal Year, setting
forth comparative financial statements for the preceding Fiscal Year, all
prepared in accordance with GAAP applied on a Consistent Basis and containing,
with respect to the consolidated financial statements, opinions of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, or other such independent certified public accountants selected by
the Borrower and approved by the Lender, which are unqualified as to the scope
of the audit performed and as to the "going concern" status of the Borrower and
without any exception not acceptable to the Lender, and (ii) a certificate of an
Authorized Representative demonstrating compliance with SECTIONS 8.1(A) through
8.1(D) and 8.3, which certificate shall be in the form of EXHIBIT F and which
shall include a certification by an Authorized Representative that the Borrower
and the Subsidiaries are (x) current with all trade payables, except trade
payables contested in good faith in the ordinary course of business, and (y) in
full compliance with the established sublimits and terms of the Letters of
Credit issued pursuant this Agreement;
(b) as soon as practical and in any event within 45 days after the end
of each fiscal quarter (except the last fiscal quarter of the Fiscal Year),
deliver to the Lender (i) a consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal quarter, and the related consolidated
statements of income, stockholders' equity and cash flows for such fiscal
quarter and for the period from the beginning of the then current Fiscal Year
through the end of such reporting period, and accompanied by a certificate of an
Authorized Representative to the effect that such financial statements present
fairly the financial position of the Borrower and its Subsidiaries as of the end
of such fiscal period and the results of their operations and the changes in
their financial position for such fiscal period, in conformity with the
standards set forth in SECTION 6.6(A) with respect to interim financial
statements, and (ii) a certificate of an Authorized Representative containing
computations for such quarter comparable to that required pursuant to SECTION
7.1(A)(II);
(c) together with each delivery of the financial statements required by
SECTION 7.1(A)(I), deliver to the Lender a letter from the Borrower's
accountants specified in SECTION 7.1(A)(I) stating that in performing the audit
necessary to render an opinion on the financial statements delivered under
SECTION 7.1(a)(I), 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 relate to financial matters (which at the date of such statement
remains uncured); or if the accountants have obtained knowledge of such Default
or Event of Default, a statement specifying the nature and period of existence
thereof;
44
(d) promptly upon their becoming available to the Borrower, the
Borrower shall deliver to the Lender a copy of (i) all regular or special
reports or effective registration statements which Borrower or any Subsidiary
shall file with the Securities and Exchange Commission (or any successor
thereto) or any securities exchange, (ii) any proxy statement distributed by the
Borrower or any Subsidiary to its shareholders, bondholders or the financial
community in general, and (iii) any management letter or other report submitted
to the Borrower or any Subsidiary by independent accountants in connection with
any annual, interim or special audit of the Borrower or any Subsidiary;
(e) as soon as practicable and in any event within 45 days following
the end of each of the first three fiscal quarters and within ninety (90) days
following each fiscal year end, deliver to the Lender an accounts receivable
aging report in form and detail substantially similar to that furnished to the
Lender prior to the Closing Date; and
(f) promptly, from time to time, deliver or cause to be delivered to
the Lender such other information regarding Borrower's and any Subsidiary's
operations, business affairs and financial condition as the Lender may
reasonably request;
The Lender is hereby authorized to deliver a copy of any such financial
or other information delivered hereunder to the Lender (or any affiliate of the
Lender), to any Governmental Authority having jurisdiction over the Lender
pursuant to any written request therefor or in the ordinary course of
examination of loan files, or to any other Person who shall acquire or consider
the assignment of, or acquisition of any participation interest in, any
Obligation permitted by this Agreement.
7.2 MAINTAIN PROPERTIES. Maintain all properties necessary to its
operations in good working order and condition, make all needed repairs,
replacements and renewals to such properties, and maintain free from Liens all
Material Contracts, trademarks, trade names, patents, copyrights, trade secrets,
know-how, and other intellectual property and proprietary information (or
adequate licenses thereto), in each case as are reasonably necessary to conduct
its business as currently conducted or as contemplated hereby, all in accordance
with customary and prudent business practices.
7.3 EXISTENCE, QUALIFICATION, ETC. Except as otherwise expressly
permitted under SECTION 8.8, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material rights
and franchises, and maintain its license or qualification to do business as a
foreign corporation and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary.
7.4 REGULATIONS AND TAXES. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of its
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves acceptable
to the Borrower's independent certified public accountants have been established
unless and until any Lien resulting therefrom attaches to any of its property
and becomes enforceable against its creditors.
45
7.5 INSURANCE. (a) Keep all of its insurable properties adequately
insured at all times with responsible insurance carriers against loss or damage
by fire and other hazards to the extent and in the manner as are customarily
insured against by similar businesses owning such properties similarly situated,
(b) maintain general public liability insurance at all times with responsible
insurance carriers against liability on account of damage to persons and
property and (c) maintain insurance under all applicable workers' compensation
laws (or in the alternative, maintain required reserves if self-insured for
workers' compensation purposes) and against loss by reason by business
interruption such policies of insurance to have such limits, deductibles,
exclusions, co-insurance and other provisions providing no less coverages than
are maintained by similar businesses that are similarly situated, such insurance
policies to be in form reasonably satisfactory to the Lender.
7.6 TRUE BOOKS. Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and transactions,
and set up on its books such reserves as may be required by GAAP with respect to
doubtful accounts and all taxes, assessments, charges, levies and claims and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements.
7.7 RIGHT OF INSPECTION. Permit any Person designated by the Lender to
visit and inspect any of the properties, corporate books and financial reports
of the Borrower or any Subsidiary and to discuss its affairs, finances and
accounts with its principal officers and independent certified public
accountants, all at reasonable times, at reasonable intervals and with
reasonable prior notice.
7.8 OBSERVE ALL LAWS. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business.
7.9 GOVERNMENTAL LICENSES. Obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents.
7.10 COVENANTS EXTENDING TO OTHER PERSONS. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Borrower in SECTIONS 7.2 through 7.9, and 7.18
inclusive.
7.11 OFFICER'S KNOWLEDGE OF DEFAULT. Upon any officer of the Borrower
obtaining knowledge of any Default or Event of Default hereunder or under any
other obligation of the Borrower or any Subsidiary cause such officer or an
Authorized Representative to promptly notify the Lender of the nature thereof,
the period of existence thereof, and what action the Borrower or such Subsidiary
proposes to take with respect thereto.
7.12 SUITS OR OTHER PROCEEDINGS. Upon any officer of the Borrower
obtaining knowledge of any litigation or other proceedings being instituted
against the Borrower or any Subsidiary, or any attachment, levy, execution or
other process being instituted against any assets of the Borrower or any
Subsidiary, making a claim or claims in an aggregate amount greater than
$1,000,000 not
46
otherwise covered by insurance, promptly deliver to the Lender written notice
thereof stating the nature and status of such litigation, dispute, proceeding,
levy, execution or other process.
7.13 NOTICE OF DISCHARGE OF HAZARDOUS MATERIAL OR ENVIRONMENTAL
COMPLAINT. Promptly provide to the Lender true, accurate and complete copies of
any and all notices, complaints, orders, directives, claims, or citations
received by the Borrower or any Subsidiary relating to any (a) violation or
alleged violation by the Borrower or any Subsidiary of any applicable
Environmental Law; (b) release or threatened release by the Borrower or any
Subsidiary, or at any facility or property owned or leased or operated by the
Borrower or any Subsidiary, of any Hazardous Material, except where occurring
legally; or (c) liability or alleged liability of the Borrower or any Subsidiary
for the costs of cleaning up, removing, remediating or responding to a release
of Hazardous Materials where, in any of the foregoing events, the aggregate
amount at any time involved exceeds $1,000,000.
7.14 ENVIRONMENTAL COMPLIANCE. If the Borrower or any Subsidiary shall
receive any letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or any Subsidiary has violated any Environmental Law
or is liable for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials, the Borrower shall, within the time period
permitted by the applicable Environmental Law or the Governmental Authority
responsible for enforcing such Environmental Law, remove or remedy, or cause the
applicable Subsidiary to remove or remedy, such violation or release or satisfy
such liability unless and only during the period that the applicability of the
Environmental Law, the fact of such violation or liability or what is required
to remove or remedy such violation is being contested by the Borrower or the
applicable Subsidiary by appropriate proceedings diligently conducted and all
reserves with respect thereto as may be required under Generally Accepted
Accounting Principles, if any, have been made, and no Lien in connection
therewith shall have attached to any property of the Borrower or the applicable
Subsidiary which shall have become enforceable against creditors of such Person.
7.15 INDEMNIFICATION. Without limiting the generality of SECTION 10.9,
the Borrower hereby agrees to indemnify and hold the Lender and its officers,
directors, employees and agents, harmless from and against any and all claims,
losses, penalties, liabilities, damages and expenses (including assessment and
cleanup costs and reasonable attorneys' fees and disbursements) arising directly
or indirectly from, out of or by reason of (a) the violation of any
Environmental Law by the Borrower or any Subsidiary or with respect to any
property owned, operated or leased by the Borrower or any Subsidiary or (b) the
handling, storage, treatment, emission or disposal of any Hazardous Materials by
or on behalf of the Borrower or any Subsidiary or on or with respect to property
owned or leased or operated by the Borrower or any Subsidiary. The provisions of
this SECTION 7.15 shall survive the Facility Termination Date and expiration or
termination of this Agreement.
7.16 FURTHER ASSURANCES. At the Borrower's cost and expense, upon
request of the Lender, duly execute and deliver or cause to be duly executed and
delivered, to the Lender such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Lender to carry out more effectively the provisions and purposes of this
Agreement and the other Loan Documents.
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7.17 EMPLOYEE BENEFIT PLANS. (a) With reasonable promptness, and in any
event within thirty (30) days thereof, give notice to the Lender of (a) the
establishment of any new Pension Plan (which notice shall include a copy of such
plan), (b) the commencement of contributions to any Employee Benefit Plan to
which the Borrower or any of its ERISA Affiliates was not previously
contributing, (c) any material increase in the benefits of any existing Employee
Benefit Plan, (d) each funding waiver request filed with respect to any Employee
Benefit Plan and all communications received or sent by the Borrower or any
ERISA Affiliate with respect to such request and (e) the failure of the Borrower
or any ERISA Affiliate to make a required installment or payment under Section
302 of ERISA or Section 412 of the Code by the due date; and
(b) Promptly and in any event within thirty (30) days of becoming aware
of the occurrence or forthcoming occurrence of any (a) Termination Event or (b)
nonexempt "prohibited transaction," as such term is defined in Section 406 of
ERISA or Section 4975 of the Code, in connection with any Pension Plan or any
trust created thereunder, deliver to the Lender a notice specifying the nature
thereof, what action the Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto.
7.18 CONTINUED OPERATIONS. Continue at all times to conduct its
business and engage principally in the same line or lines of business
substantially as heretofore conducted.
7.19 NEW SUBSIDIARIES. In the event of the acquisition or creation of
any Subsidiary, cause to be delivered to the Lender each of the following within
sixty (60) days of the acquisition or creation of such Subsidiary.
(a) a Facility Guaranty executed by such Subsidiary
substantially in the form of EXHIBIT G;
(b) an opinion of counsel to the Subsidiary dated as of the
date of delivery of the Facility Guaranty provided for in this SECTION
7.19 and addressed to the Lender, in form and substance reasonably
acceptable to the Lender (which opinion may include assumptions and
qualifications of similar effect to those contained in the opinions of
counsel delivered pursuant to SECTION 5.1(a)), to the effect that:
(A) such Subsidiary is duly organized, validly
existing and in good standing in the jurisdiction of its
formation, has the requisite power and authority to own its
properties and conduct its business as then owned and then
conducted and proposed to be conducted, and is duly qualified
to transact business and is in good standing as a foreign
corporation or partnership in each other jurisdiction in which
the character of the properties owned or leased, or the
business carried on by it, requires such qualification and the
failure to be so qualified would reasonably be likely to
result in a Material Adverse Effect; and
(B) the execution, delivery and performance of the
Facility Guaranty described in this SECTION 7.19 to which such
Subsidiary is a signatory have been duly
48
authorized by all requisite corporate or partnership action
(including any required shareholder or partner approval), such
agreement has been duly executed and delivered and constitutes
the valid and binding agreement of such Subsidiary,
enforceable against such Subsidiary in accordance with its
terms, subject to the effect of any applicable bankruptcy,
moratorium, insolvency, reorganization or other similar law
affecting the enforceability of creditors' rights generally
and to the effect of general principles of equity (whether
considered in a proceeding at law or in equity);
(c) current copies of the charter documents, including
partnership agreements and certificate of limited partnership, if
applicable, and bylaws of such Subsidiary, minutes of duly called and
conducted meetings (or duly effected consent actions) of the Board of
Directors, partners, or appropriate committees thereof (and, if
required by such charter documents, bylaws or by applicable law, of the
shareholders) of such Subsidiary authorizing the actions and the
execution and delivery of documents described in this SECTION 7.19.
7.20 YEAR 2000 COMPLIANCE. The Borrower will promptly notify the Lender
in the event the Borrower discovers or determines that any computer application
(including those affected by information received from its suppliers and
vendors) that is material to its or any of its Subsidiaries' business and
operations will not be Year 2000 Compliant by not later than September 30, 1999,
except to the extent that such failure could not reasonably be expected to have
a Material Adverse Effect.
49
ARTICLE VIII
NEGATIVE COVENANTS
Until the Obligations have been paid and satisfied in full, no Letters
of Credit remain outstanding and this Agreement has been terminated in
accordance with the terms hereof, unless the Lender shall otherwise consent in
writing, the Borrower will not, nor will it permit any Subsidiary to:
8.1 FINANCIAL COVENANTS.
(a) CONSOLIDATED TANGIBLE NET WORTH. Permit at any time its
Consolidated Tangible Net Worth to be less than $61,000,000;
(b) CONSOLIDATED FUNDED INDEBTEDNESS TO CONSOLIDATED
CAPITALIZATION. Permit at any time the ratio of Consolidated Funded
Indebtedness to Consolidated Capitalization to be equal to or greater
than .55 to 1.00;
(c) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the
Consolidated Fixed Charge Coverage Ratio to be at any time less than
1.35 to 1.00.
8.2 ACQUISITIONS. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition, unless (i) the Person to be (or whose assets
are to be) acquired does not oppose such Acquisition and the line or lines of
business of the Person to be acquired are substantially the same as one or more
line or lines of business conducted by the Borrower and its Subsidiaries, (ii)
no Default or Event of Default shall have occurred and be continuing either
immediately prior to or immediately after giving effect to such Acquisition and
the Borrower shall have furnished to the Lender (A) pro forma historical
financial statements as of the end of the most recently completed Fiscal Year of
the Borrower giving effect to such Acquisition and (B) a certificate in the form
of EXHIBIT G prepared on a historical pro forma basis giving effect to such
Acquisition, which certificate shall demonstrate that no Default or Event of
Default would exist immediately after giving effect thereto, (iii) the Person
acquired shall be a wholly-owned Subsidiary, or be merged into the Borrower or a
wholly-owned Subsidiary, immediately upon consummation of the Acquisition (or if
assets are being acquired, the acquiror shall be the Borrower or a wholly-owned
Subsidiary), and (iv) the cost of acquisition shall not exceed $25,000,000.
8.3 CAPITAL EXPENDITURES. Make or become committed to make Capital
Expenditures, excluding Costs of Acquisitions, which exceed in the aggregate in
any Fiscal Year of the Borrower $6,000,000 (on a noncumulative basis, with the
effect that amounts not expended in any Fiscal Year may not be carried forward
to a subsequent period).
8.4 LIENS. Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to any property or assets now
owned or hereafter acquired by the Borrower or any Subsidiary, other than
50
(a) Liens existing as of the date hereof and as set forth in
SCHEDULE 6.7;
(b) Liens imposed by law for taxes, assessments or charges of
any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP and which Liens
are not yet enforceable against other creditors;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business and in existence less than
90 days from the date of creation thereof for amounts not yet due or
which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP and which Liens are not yet enforceable against other creditors;
(d) Liens incurred or deposits made in the ordinary course of
business (including, without limitation, surety bonds and appeal bonds)
in connection with workers' compensation, unemployment insurance and
other types of social security benefits or to secure the performance of
tenders, bids, leases, contracts (other than for the repayment of
Indebtedness), statutory obligations and other similar obligations or
arising as a result of progress payments under government contracts;
(e) easements (including reciprocal easement agreements and
utility agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded), which do not interfere
materially with the ordinary conduct of the business of the Borrower or
any Subsidiary and which do not materially detract from the value of
the property to which they attach or materially impair the use thereof
to the Borrower or any Subsidiary;
(f) purchase money Liens to secure Indebtedness permitted
under SECTION 8.5(d) and incurred to purchase fixed assets, provided
such Indebtedness represents not less than 75% of the purchase price of
such assets as of the date of purchase thereof and no property other
than the assets so purchased secures such Indebtedness; and
(g) Liens arising in connection with Capital Leases permitted
under SECTION 8.5(d); provided that no such Lien shall extend to any
Collateral or to any other property other than the assets subject to
such Capital Leases.
8.5 INDEBTEDNESS. Incur, create, assume or permit to exist any
Indebtedness, howsoever evidenced, except:
(a) Indebtedness existing as of the Closing Date as set forth
in SCHEDULE 6.6; PROVIDED, none of the instruments and agreements
evidencing or governing such Indebtedness shall be amended, modified or
supplemented after the Closing Date to change any terms of
51
subordination, repayment or rights of conversion, put, exchange or
other rights from such terms and rights as in effect on the Closing
Date;
(b) Indebtedness owing to the Lender in connection with this
Agreement, the Note or other Loan Document;
(c) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(d) purchase money Indebtedness of the Borrower or a Guarantor
described in SECTION 8.4(F) and Indebtedness arising from Capital
Leases entered into by the Borrower or a Guarantor described in SECTION
8.4(G), collectively not to exceed an aggregate outstanding amount at
any time of $5,000,000;
(e) unsecured intercompany Indebtedness for loans and advances
made by the Borrower or any Guarantor to the Borrower or any Guarantor,
provided that such intercompany Indebtedness is evidenced by a
promissory note or similar written instrument acceptable to the Lender
which provides that such Indebtedness is subordinated to obligations,
liabilities and undertakings of the holder or owner thereof under the
Loan Documents on terms acceptable to the Lender;
(f) trade credit from vendors incurred in the ordinary course
of business and the guaranty of the same by the Borrower in the case of
trade credit of Subsidiaries and the bonding thereof;
(g) loans made by the Borrower to the Petro Sur-World Fuel
joint-venture in Ecuador in an amount not to exceed in the aggregate
$2,000,000;
(h) insurance notes payable;
(i) any installment note or capitalized leases assumed through
a permitted Acquisition which by virtue of its terms contains a
prepayment fee;
(j) Indebtedness arising from Rate Hedging Obligations
(provided that such Indebtedness is incurred to limit risks of currency
or interest rate fluctuations to which the Borrower and its
Subsidiaries are otherwise subject by virtue of the operations of their
business, and not for speculative purposes) of the Borrower and its
Subsidiaries in an aggregate notional, in the case of currency and
interest rate obligations and speculative fuel transaction, amount not
to exceed $10,000,000 at any time; provided, however, that the Borrower
and its Subsidiaries may enter into non-speculative fuel hedging
transactions without limitation;
(k) Indebtedness of the Borrower, as guarantor, and WFI and
TTI as borrowers, under the WFI/TTI Credit Agreement; and
52
(l) Indebtedness extending the maturity of, or renewing,
refunding or refinancing, in whole or in part, Indebtedness incurred
under clauses (a) and (d) of this SECTION 8.5, provided that the terms
of any such extension, renewal, refunding or refinancing Indebtedness
(and of any agreement or instrument entered into in connection
therewith) are no less favorable to the Lender than the terms of the
Indebtedness as in effect prior to such action, and provided further
that (1) the aggregate principal amount of such extended, renewed,
refunded or refinanced Indebtedness shall not be increased by such
action, (2) the group of direct or contingent obligors on such
Indebtedness shall not be expanded as a result of any such action, and
(3) immediately before and immediately after giving effect to any such
extension, renewal, refunding or refinancing, no Default or Event of
Default shall have occurred and be continuing; PROVIDED, the Borrower
shall not permit WFI or TTI to incur, create, assume or permit to exist
any Indebtedness, howsoever evidenced, other than (i) to the Lender,
(ii) trade credit to customers incurred in the ordinary course of
business, and (iii) additional Indebtedness permitted under the WFI/TTI
Credit Agreement, and PROVIDED, further that the incurring of any such
Indebtedness does not cause, create or result in the occurrence or
continuation of a Default or Event of Default hereunder.
8.6 TRANSFER OF ASSETS. Sell, lease, transfer or otherwise dispose of
any assets of Borrower or any Subsidiary other than (a) dispositions of assets
in the ordinary course of business, (b) dispositions of property that is
substantially worn, damaged, obsolete or, in the judgment of the Borrower, no
longer best used or useful in its business or that of any Subsidiary, and (c)
transfers of assets necessary to give effect to merger or consolidation
transactions permitted by SECTION 8.8, and (d) the disposition of Eligible
Securities in the ordinary course of management of the investment portfolio of
the Borrower and its Subsidiaries.
8.7 INVESTMENTS. Purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock or other securities, or make or permit to
exist any interest whatsoever in any other Person or permit to exist any loans
or advances to any Person, except that Borrower may maintain investments or
invest in:
(a) securities of any Person acquired in an Acquisition
permitted hereunder;
(b) Eligible Securities;
(c) investments existing as of the date hereof and as set
forth in SCHEDULE 6.4;
(d) accounts receivable arising and trade credit granted in
the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof in connection with
accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss;
(e) investments in Subsidiaries which are Guarantors;
(f) loans made by the Borrower to the Petro Sur-World Fuel
joint-venture described in SECTION 8.5(g);
53
(g) loans between the Borrower and the Guarantors described in
SECTION 8.5(e); and
(h) loans or investments in or to a joint venture of which the
Borrower or a Subsidiary is a party, so long as the aggregate amount of
such loans or investments do not exceed 5% of Consolidated Tangible Net
Worth.
8.8 MERGER OR CONSOLIDATION. (a) Consolidate with or merge into any
other Person, or (b) permit any other Person to merge into it, or (c) liquidate,
wind-up or dissolve or sell, transfer or lease or otherwise dispose of all or a
substantial part of its assets (other than sales permitted under SECTION 8.6(a),
(b) AND (d)); PROVIDED, HOWEVER, (i) any Subsidiary of the Borrower may merge or
transfer all or substantially all of its assets into or consolidate with the
Borrower or any Guarantor, and (ii) any other Person may merge into or
consolidate with the Borrower or any Guarantor and any Subsidiary may merge into
or consolidate with any other Person in order to consummate an Acquisition
permitted by SECTION 8.2, PROVIDED FURTHER, that any resulting or surviving
entity shall execute and deliver such agreements and other documents, including
a Facility Guaranty, and take such other action as the Lender may require to
evidence or confirm its express assumption of the obligations and liabilities of
its predecessor entities under the Loan Documents.
8.9 RESTRICTED PAYMENTS. Make any Restricted Payment or apply or set
apart any of their assets therefor or agree to do any of the foregoing; PROVIDED
HOWEVER, the Borrower may (a) issue stock as a dividend up to 10% of total
outstanding shares immediately prior to such dividend; (b) declare and pay cash
dividends on outstanding shares of any class of its capital stock provided that
the aggregate amount of such dividends declared or paid during any Four-Quarter
Period shall not exceed 25% of Consolidated Net Income for such Four-Quarter
Period; and (c) repurchase for an aggregate purchase price not to exceed
$6,000,000 shares of its Voting Stock from Persons which are not Affiliates or
directors, officers or employees of the Borrower or its Subsidiaries, so long as
prior to such actions described in (a) or (b) or (c) above and after giving
effect thereto, the Borrower is in compliance with all terms, conditions,
covenants, and representations and warranties in the Agreement, and prior to
such actions defined in (a) and (b) and (c) above and after giving effect
thereto, no Default or Event of Default has or will occur.
8.10 TRANSACTIONS WITH AFFILIATES. Other than transactions permitted
under SECTIONS 8.7 and 8.8, enter into any transaction after the Closing Date,
including, without limitation, the purchase, sale, lease or exchange of
property, real or personal, or the rendering of any service, with any Affiliate
of the Borrower, except (a) that such Persons may render services to the
Borrower or its Subsidiaries for compensation at the same rates generally paid
by Persons engaged in the same or similar businesses for the same or similar
services, (b) that the Borrower or any Subsidiary may render services to such
Persons for compensation at the same rates generally charged by the Borrower or
such Subsidiary and (c) in either case in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's (or any Subsidiary's)
business consistent with past practice of the Borrower and its Subsidiaries and
upon fair and reasonable terms no less favorable to the Borrower (or any
Subsidiary) than would be obtained in a comparable arm's-length transaction with
a Person not an Affiliate.
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8.11 COMPLIANCE WITH ERISA. With respect to any Pension Plan, Employee
Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which would
result in a liability on the part of the Borrower or any ERISA
Affiliate to the PBGC; or
(b) permit the present value of all benefit liabilities under
all Pension Plans to exceed the current value of the assets of such
Pension Plans allocable to such benefit liabilities; or
(c) permit any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) with respect to any
Pension Plan, whether or not waived; or
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto; or
(e) engage, or permit any Borrower or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to Section
502(I) of ERISA or a tax pursuant to Section 4975 of the Code may be
imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan; or
(g) fail, or permit the Borrower or any ERISA Affiliate to
fail, to establish, maintain and operate each Employee Benefit Plan in
compliance in all material respects with the provisions of ERISA, the
Code, all applicable Foreign Benefit Laws and all other applicable laws
and the regulations and interpretations thereof.
8.12 FISCAL YEAR. Change its Fiscal Year.
8.13 DISSOLUTION, ETC. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a merger or
consolidation permitted pursuant to SECTION 8.8.
8.14 NEGATIVE PLEDGE CLAUSES. Enter into or cause, suffer or permit to
exist any agreement with any Person other than the Lender pursuant to this
Agreement or any other Loan Documents which prohibits or limits the ability of
any of the Borrower or any Subsidiary to create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, PROVIDED that the Borrower and any Subsidiary may enter
into such an agreement
55
in connection with property subject to any Lien permitted by this Agreement and
not released after the date hereof, when such prohibition or limitation is by
its terms effective only against the assets subject to such Lien.
8.15 PARTNERSHIPS. Become a general partner in any general or limited
partnership except a partnership which complies with the provisions of SECTION
8.07(h).
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ARTICLE IX
EVENTS OF DEFAULT AND ACCELERATION
9.1. EVENTS OF DEFAULT. (A) If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment of the
principal of any Loan, Reimbursement Obligation or other Obligation,
when and as the same shall be due and payable whether pursuant to any
provision of ARTICLE II or ARTICLE III, at maturity, by acceleration
or otherwise; or
(b) if default shall be made in the due and punctual payment of any
amount of interest on any Loan, Reimbursement Obligation or other
Obligation or of any fees or other amounts payable to the Lender on
the date on which the same shall be due and payable; or
(c) if default shall be made in the performance or observance of
any covenant set forth in SECTION 7.7, 7.11, 7.12, 7.19 or ARTICLE
VIII;
(d) if a default shall be made in the performance or observance of,
or shall occur under, any covenant, agreement or provision contained
in this Agreement or the Note (other than as described in clauses (a),
(b) or (c) above) and such default shall continue for 30 or more days
after the earlier of receipt of notice of such default by the
Authorized Representative from the Lender or an Authorized
Representative of the Borrower has actual knowledge of such default,
or if a default shall be made in the performance or observance of, or
shall occur under, any covenant, agreement or provision contained in
any of the other Loan Documents (beyond any applicable grace period,
if any, contained therein) or in any instrument or document evidencing
or creating any obligation, guaranty, or Lien in favor of the Lender
or delivered to the Lender in connection with or pursuant to this
Agreement or any of the Obligations, or if any Loan Document ceases to
be in full force and effect (other than by reason of any action by the
Lender), or if without the written consent of the Lender, this
Agreement or any other Loan Document shall be disaffirmed or shall
terminate, be terminable or be terminated or become void or
unenforceable for any reason whatsoever (other than in accordance with
its terms in the absence of default or by reason of any action by the
Lender); or
(e) if there shall occur (i) a default, which is not waived, in the
payment of any principal, interest, premium or other amount with
respect to any Indebtedness or Rate Hedging Obligations (other than
the Loans and other Obligations) of the Borrower or any Subsidiary in
an amount not less than $1,000,000 in the aggregate outstanding, or
(ii) a default, which is not waived, in the performance, observance or
fulfillment of any term or covenant contained in any agreement or
instrument under or pursuant to which any such
57
Indebtedness or Rate Hedging Obligation may have been issued,
created, assumed, guaranteed or secured by the Borrower or any
Subsidiary, or (iii) any other event of default as specified in any
agreement or instrument under or pursuant to which any such
Indebtedness or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by the Borrower or any Subsidiary, and
such default or event of default shall continue for more than the
period of grace, if any, therein specified, or such default or event
of default shall permit the holder of any such Indebtedness (or any
agent or trustee acting on behalf of one or more holders) to
accelerate the maturity thereof; or
(f) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report
or statement at any time furnished to the Lender by or on behalf of
the Borrower or any other Credit Party pursuant to or in connection
with any Loan Document, or otherwise, shall be false or misleading in
any material respect when given; or
(g) if the Borrower or any Subsidiary or other Credit Party shall
be unable to pay its debts generally as they become due; file a
petition to take advantage of any insolvency statute; make an
assignment for the benefit of its creditors; commence a proceeding for
the appointment of a receiver, trustee, liquidator or conservator of
itself or of the whole or any substantial part of its property; file a
petition or answer seeking liquidation, reorganization or arrangement
or similar relief under the federal bankruptcy laws or any other
applicable law or statute; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or any Subsidiary or of the
whole or any substantial part of its properties and such order,
judgment or decree continues unstayed and in effect for a period of
sixty (60) days, or approve a petition filed against the Borrower or
any Subsidiary seeking liquidation, reorganization or arrangement or
similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any
state, which petition is not dismissed within sixty (60) days; or if,
under the provisions of any other law for the relief or aid of
debtors, a court of competent jurisdiction shall assume custody or
control of the Borrower or any Subsidiary or of the whole or any
substantial part of its properties, which control is not relinquished
within sixty (60) days; or if there is commenced against the Borrower
or any Subsidiary any proceeding or petition seeking reorganization,
arrangement or similar relief under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state which proceeding or petition remains undismissed for a period of
sixty (60) days; or if the Borrower or any Subsidiary takes any action
to indicate its consent to or approval of any such proceeding or
petition; or
(i) if (i) one or more final judgments or orders where the amount
not covered by insurance (or the amount as to which the insurer denies
liability) is in excess of $1,000,000 is rendered against the Borrower
or any Subsidiary, or (ii) there is any attachment, injunction or
execution against any of the Borrower's or Subsidiaries' properties
for any amount in excess of $1,000,000 in the aggregate; and such
judgment, attachment, injunction or
58
execution remains unpaid, unstayed, undischarged, unbonded or
undismissed for a period of thirty (30) days; or
(j) if the Borrower or any Subsidiary shall, other than in the
ordinary course of business (as determined by past practices), or,
except as specifically permitted by this Agreement, suspend all or any
part of its operations material to the conduct of the business of the
Borrower or such Subsidiary for a period of more than 60 days;
(k) if there shall occur a Change in Control in the Borrower; or
(l) if there shall occur and not be waived an Event of Default as
defined in any of the other Loan Documents; or
(m) if there shall occur and not be waived an Event of Default as
defined in the WFI/TTI Credit Agreement;
(B) then, and in any such event and at any time thereafter, if such
Event of Default or any other Event of Default shall have not been waived,
(a) either or both of the following actions may be taken: (i) the
Lender may declare any obligation of the Lender and the Issuing Bank
to make further Loans or to issue additional Letters of Credit
terminated, whereupon the obligation of the Lender to make further
Loans and of the Issuing Bank to issue additional Letters of Credit,
hereunder shall terminate immediately, and (ii) the Lender, at its
option, declare by notice to the Borrower any or all of the
Obligations to be immediately due and payable, and the same, including
all interest accrued thereon and all other obligations of the Borrower
to the Lender, shall forthwith become immediately due and payable
without presentment, demand, protest, notice or other formality of any
kind, all of which are hereby expressly waived, anything contained
herein or in any instrument evidencing the Obligations to the contrary
notwithstanding; PROVIDED, however, that notwithstanding the above, if
there shall occur an Event of Default under clause (g) or (h) above,
then the obligation of the Lender to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall automatically
terminate and any and all of the Obligations shall be immediately due
and payable without the necessity of any action by the Lender or
notice to the Lender;
(b) the Borrower shall, upon demand of the Lender, deposit cash
with the Issuing Bank in an amount equal to the amount of any Letter
of Credit Outstandings, as collateral security for the repayment of
any future drawings or payments under such Letters of Credit, and such
amounts shall be held by the Issuing Bank pursuant to the terms of the
LC Account Agreement; and
(c) the Lender shall have all of the rights and remedies available
under the Loan Documents or under any applicable law.
59
9.2. LENDER TO ACT. In case any one or more Events of Default shall
occur and not have been waived, the Lender may proceed to protect and enforce
its rights or remedies either by suit in equity or by action at law, or both,
whether for the specific performance of any covenant, agreement or other
provision contained herein or in any other Loan Document, or to enforce the
payment of the Obligations or any other legal or equitable right or remedy.
9.3. CUMULATIVE RIGHTS. No right or remedy herein conferred upon the
Lender is intended to be exclusive of any other rights or remedies contained
herein or in any other Loan Document, and every such right or remedy shall be
cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
9.4. NO WAIVER. No course of dealing between the Borrower and the
Lender or any failure or delay on the part of the Lender in exercising any
rights or remedies under any Loan Document or otherwise available to it shall
operate as a waiver of any rights or remedies and no single or partial exercise
of any rights or remedies shall operate as a waiver or preclude the exercise of
any other rights or remedies hereunder or of the same right or remedy on a
future occasion.
9.5. ALLOCATION OF PROCEEDS. If an Event of Default has occurred and
not been waived, and the maturity of the Note has been accelerated pursuant to
ARTICLE IX hereof, all payments received by the Lender hereunder, in respect of
any principal of or interest on the Obligations or any other amounts payable by
the Borrower hereunder, shall be applied by the Lender in the following order:
(a) amounts due to the Lender pursuant to SECTIONS 2.9, 3.3, 3.4
AND 10.5;
(b) payments of interest on Loans and Reimbursement Obligations;
(c) payments of principal of Loans and Reimbursement Obligations;
(d) payments of cash amounts to the Lender in respect of
outstanding Letters of Credit pursuant to SECTION 9.1(B);
(e) amounts due to the Lender pursuant to SECTIONS 3.2(E), 7.15 and
10.9;
(f) payments of all other amounts due under any of the Loan
Documents, if any;
(g) amounts due to any of the Lender in respect of Obligations
consisting of liabilities under any Swap Agreement with the Lender;
and
(h) any surplus remaining after application as provided for herein,
to the Borrower or otherwise as may be required by applicable law.
60
ARTICLE X
MISCELLANEOUS
10.1. PARTICIPATIONS. The Lender may sell participations at its expense
to one or more banks or other entities as to all or a portion of its rights and
obligations under this Agreement; PROVIDED, that (i) the Lender's obligations
under this Agreement shall remain unchanged, (ii) the Lender shall remain solely
responsible to the Borrower for the performance of such obligations, (iii) the
Lender shall remain the holder of any Note issued to it for the purpose of this
Agreement, (iv) such participations shall be in a minimum amount of $1,000,000
and, if greater, an amount which is an integral multiple of $1,000,000, (v) the
Borrower shall continue to deal solely and directly with the Lender in
connection with the Lender's rights and obligations under this Agreement and
with regard to any and all payments to be made under this Agreement; PROVIDED,
that the participation agreement between the Lender and its participants may
provide that the Lender will obtain the approval of such participant prior to
the Lender's agreeing to any amendment or waiver of any provisions of any Loan
Document which would (A) extend the maturity of the Note, (B) reduce the
interest rates hereunder or (C) increase the Revolving Credit Commitment or
Letter of Credit Commitment, and (vi) the sale of any such participations which
require Borrower to file a registration statement with the United States
Securities and Exchange Commission or under the securities regulations or laws
of any state shall not be permitted.
10.2. NOTICES. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such address, telefacsimile
number or telex number as may from time to time be specified by such party in
written notice to the other parties hereto or otherwise received), in the case
of notice by telegram, telefacsimile or telex, respectively (where the receipt
of such message is verified by return), or (iii) on the fifth Business Day after
the day on which mailed, if sent prepaid by certified or registered mail, return
receipt requested, in each case delivered, transmitted or mailed, as the case
may be, to the address, telex number or telefacsimile number, as appropriate,
set forth below or such other address or number as such party shall specify by
notice hereunder:
(a) if to the Borrower:
World Fuel Services Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
61
(b) if to the Lender:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Credit Support
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any Guarantor, at the address set forth in SECTION 14 of
the Facility Guaranty executed by such Guarantor.
10.3. SETOFF. From and after the occurrence of a Default or an Event of
Default the Lender may set off the obligations and liabilities of Borrower
against any and all monies then owed by the Lender to the Borrower in any
capacity whatsoever whether or not then due and the Lender shall be deemed to
have exercised its right to set off immediately at the time its right to elect
such set off accrues even though no charge is made or entered on the books of
the Lender at that time and the same is made subsequent thereto; the Lender may
proceed against the Borrower's bank account(s), certificates of deposit or any
other investments and the Subsidiary's bank account(s) and certificates of
deposit or any other investments. For the purposes of this paragraph, all
remittances and property shall be deemed to be in the possession of the Lender
as soon as the same may be put in transit to it by mail or carrier or by other
bailee.
10.4. SURVIVAL. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lender of the Loans and
the issuance of the Letters of Credit and the execution and delivery to the
Lender of this Agreement and the Notes and shall continue in full force and
effect so long as any of Obligations remain outstanding or the Lender has any
commitment hereunder or the Borrower has continuing obligations hereunder unless
otherwise provided herein. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and agreements by
or on behalf of the Borrower which are contained in the Loan Documents shall
inure to the benefit of the successors and permitted assigns of the Lender.
10.5. EXPENSES. The Borrower agrees (a) to pay or reimburse the Lender
for all its reasonable out-of-pocket costs and expenses incurred in connection
with the preparation, negotiation and execution of, and any amendment,
supplement or modification to, any of the Loan Documents (including due
diligence expenses and travel expenses relating to closing), and the
consummation of the transactions contemplated thereby, including the reasonable
fees, which shall not exceed $20,000 (including legal fees incurred in
connection with the WFI/TTI Credit Agreement), and disbursements of counsel to
the Lender, (b) to pay or reimburse the Lender for all of its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
the Loan Documents, including the reasonable fees and disbursements of their
counsel and any payments in indemnification or otherwise payable by the Lender
pursuant to the Loan Documents, and (c) to pay, indemnify and hold the Lender
harmless from any and all recording and filing fees and any and all liabilities
with
62
respect to, or resulting from any failure to pay or delay in paying,
documentary, stamp, excise and other similar taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of any
of the Loan Documents, or consummation of any amendment, supplement or
modification of, or any waiver or consent under or in respect of, any Loan
Document.
10.6. AMENDMENTS. No amendment, modification or waiver of any provision
of any Loan Document and no consent by the Lender to any departure therefrom by
the Borrower or any other Credit Party shall be effective unless such amendment,
modification or waiver shall be in writing and signed by the Lender, shall have
been approved by the Lender through its written consent, and the same shall then
be effective only for the period and on the conditions and for the specific
instances and purposes specified in such writing. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances, except as otherwise expressly
provided herein. No delay or omission on the Lender's part in exercising any
right, remedy or option shall operate as a waiver of such or any other right,
remedy or option or of any Default or Event of Default.
10.7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
10.8. TERMINATION. The termination of this Agreement shall not affect
any rights of the Borrower or the Lender or any obligation of the Borrower or
the Lender, arising prior to the effective date of such termination, and the
provisions hereof shall continue to be fully operative until all transactions
entered into or rights created or obligations incurred prior to such termination
have been fully disposed of, concluded or liquidated and the Obligations arising
prior to or after such termination have been irrevocably paid in full. The
rights granted to the Lender under the Loan Documents shall continue in full
force and effect, notwithstanding the termination of this Agreement, until all
of the Obligations have been paid in full after the termination hereof (other
than Obligations in the nature of continuing indemnities or expense
reimbursement obligations not yet due and payable, which shall continue) or the
Borrower has furnished the Lender with an indemnification satisfactory to the
Lender with respect thereto. All representations, warranties, covenants, waivers
and agreements contained herein shall survive termination hereof until payment
in full of the Obligations unless otherwise provided herein. Notwithstanding the
foregoing, if after receipt of any payment of all or any part of the
Obligations, the Lender is for any reason compelled to surrender such payment to
any Person because such payment is determined to be void or voidable as a
preference, impermissible setoff, a diversion of trust funds or for any other
reason, this Agreement shall continue in full force and the Borrower shall be
liable to, and shall indemnify and hold the Lender harmless for, the amount of
such payment surrendered until the Lender shall have been finally and
irrevocably paid in full. The provisions of the foregoing sentence shall be and
remain effective notwithstanding any contrary action which may have been taken
by the Lender in reliance upon such payment, and any such contrary action so
taken shall be without prejudice to the Lender's rights under this Agreement and
shall be deemed to have been conditioned upon such payment having become final
and irrevocable.
63
10.9. INDEMNIFICATION; LIMITATION OF LIABILITY. In consideration of the
execution and delivery of this Agreement by the Lender and the extension of
credit under the Loans, the Borrower hereby indemnifies, exonerates and holds
the Lender and its affiliates, officers, directors, employees, agents and
advisors (collectively, the "Indemnified Parties") free and harmless from and
against any and all claims, actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable attorneys' fees
and disbursements (collectively, the "Indemnified Liabilities") that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
execution, delivery, enforcement, performance or administration of this
Agreement and the other Loan Documents, or any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of any
Loan or Letter of Credit, whether or not such action is brought against the
Lender, the shareholders or creditors of the Lender or an Indemnified Party or
an Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated herein are consummated, except to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct, and if and to the
extent that the foregoing undertaking may be unenforceable for any reason, the
Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. The Borrower agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to it,
any of its Subsidiaries, any Credit Party, or any security holders or creditors
thereof arising out of, related to or in connection with the transactions
contemplated herein, except to the extent that such liability is found in a
final non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct;
provided, however, in no event shall any Indemnified Party be liable for
consequential, indirect or special, as opposed to direct, damages.
10.10. SEVERABILITY. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and binding
on the parties hereto.
10.11. ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, commitments and other communications between or among the
parties, both oral and written, with respect thereto.
10.12. AGREEMENT CONTROLS. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
10.13. USURY SAVINGS CLAUSE. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under applicable law shall not exceed the Highest Lawful Rate (as
64
such term is defined below). If the rate of interest (determined without regard
to the preceding sentence) under this Agreement at any time exceeds the Highest
Lawful Rate (as defined below), the outstanding amount of the Loans made
hereunder shall bear interest at the Highest Lawful Rate until the total amount
of interest due hereunder equals the amount of interest which would have been
due hereunder if the stated rates of interest set forth in this Agreement had at
all times been in effect. In addition, if when the Loans made hereunder are
repaid in full the total interest due hereunder (taking into account the
increase provided for above) is less than the total amount of interest which
would have been due hereunder if the stated rates of interest set forth in this
Agreement had at all times been in effect, then to the extent permitted by law,
the Borrower shall pay to the Lender an amount equal to the difference between
the amount of interest paid and the amount of interest which would have been
paid if the Highest Lawful Rate had at all times been in effect. Notwithstanding
the foregoing, it is the intention of the Lender and the Borrower to conform
strictly to any applicable usury laws. Accordingly, if the Lender contracts for,
charges, or receives any consideration which constitutes interest in excess of
the Highest Lawful Rate, then any such excess shall be cancelled automatically
and, if previously paid, shall at the Lender's option be applied to the
outstanding amount of the Loans made hereunder or be refunded to the Borrower.
As used in this paragraph, the term "Highest Lawful Rate" means the maximum
lawful interest rate, if any, that at any time or from time to time may be
contracted for, charged, or received under the laws applicable to the Lender
which are presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.
10.14. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE
SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE
GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.
(b) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE STATE
OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN,
OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE BORROWER
HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
65
(c) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER
LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE
BORROWER PROVIDED IN SECTION 10.2, OR BY ANY OTHER METHOD OF SERVICE
PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF
FLORIDA.
(d) NOTHING CONTAINED IN SUBSECTIONS (A) OR (B) HEREOF SHALL
PRECLUDE THE LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS OF ANY
JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S PROPERTY OR
ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE
APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY
ANY SUCH OTHER COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE
UNDER APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE LENDER HEREBY
AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY AND HEREBY IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY
SUCH ACTION OR PROCEEDING.
[Signatures on following pages]
66
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
WORLD FUEL SERVICES CORPORATION
WITNESS:
/s/ ▇.▇. ▇▇▇▇▇▇▇▇
---------------------- By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------- Title: Vice President & Chief
Financial Officer
CREDIT AGREEMENT
Page 1 of 2
NATIONSBANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Lending Office:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Credit Support
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
NationsBank, N.A.
ABA#▇▇▇▇▇▇▇▇▇
Account No.:
Reference: World Fuel Services
Attention: Corporate Credit Services
CREDIT AGREEMENT
Page 2 of 2
EXHIBIT A
Notice of Appointment (or Revocation) of Authorized Representative
Reference is hereby made to the Revolving Credit and Reimbursement
Agreement dated as of November 30, 1998 (the "Agreement") by and between World
Fuel Services Corporation, a Florida corporation (the "Borrower") and
NationsBank, N.A. as Lender (the "Lender"). Capitalized terms used but not
defined herein shall have the respective meanings therefor set forth in the
Agreement.
The Borrower hereby nominates, constitutes and appoints each individual
named below as an Authorized Representative under the Loan Documents, and hereby
represents and warrants that (i) set forth opposite each such individual's name
is a true and correct statement of such individual's office (to which such
individual has been duly elected or appointed), a genuine specimen signature of
such individual and an address for the giving of notice, and (ii) each such
individual has been duly authorized by the Borrower to act as Authorized
Representative under the Loan Documents:
Name and Address Office Specimen Signature
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------- ------------------- ----------------------
--------------------- Vice President & /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------- Chief Financial
Officer
--------------------- ------------------- ----------------------
---------------------
---------------------
Borrower hereby revokes (effective upon receipt hereof by the Lender) the prior
appointment of ________________ as an Authorized Representative.
This the 30th day of November, 1998.
WORLD FUEL SERVICES CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President & Chief
Financial Officer
A-1
EXHIBIT B
Form of Borrowing Notice
To: NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Credit Support
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Reference is hereby made to the Revolving Credit and Reimbursement
Agreement dated as of November 30, 1998 (the "Agreement") by and between World
Fuel Services Corporation (the "Borrower") and NationsBank, N.A., as Lender (the
"Lender"). Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Lender that Loans of the type and amount set forth below be made on the
date indicated:
TYPE OF LOAN INTEREST AGGREGATE
(CHECK ONE) PERIOD(1) AMOUNT(2) DATE OF LOAN(3)
Base Rate Loan ______ _________ ____________
Eurodollar Rate Loan ______ _________ ____________
-----------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $100,000 or if greater an integral multiple of $100,000, unless a
Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
The Borrower hereby requests that the proceeds of Loans described in
this Borrowing Notice be made available to the Borrower as follows: [INSERT
TRANSMITTAL INSTRUCTIONS] .
The undersigned hereby certifies that:
1. No Default or Event of Default exists either now or after giving
effect to the borrowing described herein; and
2. All the representations and warranties set forth in ARTICLE VI of
the Agreement and in the Loan Documents (other than those expressly stated to
refer to a particular date) are true and correct as of the date hereof except
that the reference to the financial statements in SECTION 6.6(A) of the
Agreement are to those financial statements most recently delivered to you
pursuant to SECTION
B-1
7.1 of the Agreement (it being understood that any financial statements
delivered pursuant to SECTION 7.1(B) have not been certified by independent
public accountants) and attached hereto are any changes to the Schedules
referred to in connection with such representations and warranties.
3. All conditions contained in the agreement to the making of any Loan
requested hereby have been met or satisfied in full.
WORLD FUEL SERVICES CORPORATION
BY:
-----------------------------
Authorized Representative
DATE:
---------------------------
B-2
EXHIBIT C
Form of Interest Rate Selection Notice
To: NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Credit Support
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Reference is hereby made to the Revolving Credit and Reimbursement
Agreement dated as of November 30, 1998 (the "Agreement") by and between World
Fuel Services Corporation, a Florida corporation (the "Borrower") and
NationsBank, N.A., as Lender (the "Lender"). Capitalized terms used but not
defined herein shall have the respective meanings therefor set forth in the
Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Lender of the following selection of a type of Loan and Interest Period:
TYPE OF LOAN INTEREST AGGREGATE
(CHECK ONE) PERIOD(1) AMOUNT(2) DATE OF LOAN(3)
Base Rate Loan ______ _________ ____________
Eurodollar Rate Loan ______ _________ ____________
-----------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $100,000 or if greater an integral multiple of $100,000, unless a
Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
WORLD FUEL SERVICES CORPORATION
BY:
-----------------------------
Authorized Representative
DATE:
---------------------------
C-1
EXHIBIT D
Form of Revolving Note
Promissory Note
(Revolving Credit Facility)
SEE EXHIBIT 10.d
EXHIBIT E
Form of Opinion of Borrower's Counsel
SEE ATTACHED.
E-1
[▇▇▇▇▇▇ & ▇▇▇▇▇ LETTERHEAD]
November 9, 1998
NationsBank, N.A.
NationsBank ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
RE: $25,000,000 REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT BY AND
BETWEEN NATIONSBANK, N.A., AS LENDER, AND WORLD FUEL SERVICES
CORPORATION, AS BORROWER
Ladies and Gentlemen:
We have acted as counsel to World Fuel Services Corporation, a Florida
corporation (the "Borrower"), and to each of its Subsidiaries listed on EXHIBIT
A to the Credit and Reimbursement Agreement (as defined below), (each a
"Guarantor" and collectively the "Guarantors" and together with the Borrower,
the "Credit Parties") in connection with a Revolving Credit Facility of up to
$25,000,000, including a $10,000,000 Letter of Credit Facility constituting part
of the Revolving Credit Facility, each being made available to the Borrower by
you on this date pursuant to the Revolving Credit and Reimbursement Agreement of
even date herewith by and between NationsBank, N.A. (the "Lender") and the
Borrower (the "Credit and Reimbursement Agreement"), and the other transactions
contemplated under the Credit and Reimbursement Agreement.
This opinion is being delivered in accordance with the conditions set forth
in SECTION 5.1(a) of the Credit and Reimbursement Agreement. All capitalized
terms not otherwise defined herein shall have the meanings provided therefor in
the Credit and Reimbursement Agreement.
As such counsel, we have reviewed the following documents:
1. the Credit and Reimbursement Agreement;
2. the Note;
NationsBank, N.A.
November 9, 1998
Page 2
3. the Facility Guaranty; and
4. The LC Account Agreement.
The documents described in items 1 through 4 immediately above are referred to
herein as the "Loan Documents".
For purposes of giving this opinion, we have examined such corporate records
of the Borrower and the other Credit Parties, certificates of public officials,
certificates of appropriate officials of the Borrower and the other Credit
Parties, and such other documents, and have made such inquires of the Credit
Parties, as we have deemed appropriate.
Based upon and subject to the foregoing, and subject to the qualifications
set forth elsewhere herein, it is our opinion that:
1. The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida and to our knowledge is
duly qualified to transact business as a foreign corporation and is in good
standing in all jurisdictions in which the nature of its business requires such
qualification, and in which the failure to so qualify could reasonably be
expected to have a Material Adverse Effect. The Borrower has full corporate
power and authority to own its assets and conduct the businesses in which it is
now engaged and as are expressly contemplated by the Loan Documents, and has
full corporate power and authority to enter into each of the Loan Documents to
which it is a party and to perform its obligations thereunder.
2. Each of the Loan Documents to which the Borrower is a party had been duly
authorized by the Board of Directors of the Borrower (and by any required
shareholder action), has been duly executed and delivered by the Borrower, and
constitutes the legal, valid and binding obligation, agreement, instrument or
conveyance, as the case may be, of the Borrower, enforceable against the
Borrower in accordance with its respective terms, except as the enforceabiity
thereof may be limited by applicable bankruptcy, insolvency, reorganization and
other similar laws relating to or affecting creditors' rights generally and by
the application of general equitable principles (whether considered in
proceedings at law or in equity).
NationsBank, N.A.
November 9, 1998
Page 3
3. Each Credit Party (other than the Borrower) is a corporation duly
organized, validly existing and in good standing under the laws of the
respective jurisdiction of its formation and to our knowledge is duly qualified
to transact business as a foreign entity and is in good standing in all
jurisdictions in which the nature of its business requires such qualification,
and in which the failure to so qualify could reasonably be expected to have a
Material Adverse Effect. Each Credit Party (other than the Borrower) has full
corporate power and authority to own its assets and conduct the businesses in
which it is now engaged and as expressly contemplated in the Loan Documents, and
has full corporate power and authority to enter into each of the Loan Documents
to which it is a party and to perform its obligations thereunder.
4. Each of the Loan Documents to which each Credit Party (other than the
Borrower) is a party has been duly authorized by the Board of Directors of such
Credit Party (and by any required shareholder action), has been duly executed
and delivered by such Credit Party, and constitutes the legal, valid and binding
obligation, agreement or instrument, as the case may be, of such Credit Party,
enforceable against such Credit Party in accordance with its respective terms,
except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization and other similar laws relating to or affecting
creditors' rights generally and by the application of general equitable
principles (whether considered in proceedings at law or in equity).
5. Neither the execution or delivery of, nor performance by the Borrower or
any other Credit Party of its obligations under, the Loan Documents (a) does or
will conflict with, violate or constitute a breach of (i) the charter or bylaws
of the Borrower or any other Credit Party, (ii) any laws, rules or regulations
applicable to the Borrower or any other Credit Party, or (iii) any contract,
agreement, indenture, lease, instrument, judgment, writ, determination, order,
decree or arbitral award known to us to which the Borrower or any other Credit
Party is a party or by which the Borrower or any other Credit Party or any of
their properties is bound, (b) requires the prior consent of, notice to, license
from or filing with any Governmental Authority which has not been duly obtained
or made on or prior to the date hereof, or (c) to our knowledge, does or will
result in the creation or imposition of any lien, pledge, charge or encumbrance
of any nature upon or with respect to any of the properties of the Borrower or
any other Credit Party.
6. To our knowledge, there is no pending or threatened action, suit,
investigation or proceeding (including, without limitation, any action, suit,
investigation, or proceeding under any environmental or labor law), nor is there
any basis therefor, before
NationsBank, N.A.
November 9, 1998
Page 4
or by any court, or governmental department, commission, board, bureau,
instrumentality, agency or arbitral authority, (i) which calls into question the
validity or enforceability of any of the Loan Documents, or the titles to their
respective offices or authority of any officers of the Borrower or any other
Credit Party or (ii) an adverse result in which would reasonably be likely to
have a Material Adverse Effect.
7. The Borrower is not subject to any charter, bylaw, or other corporate
restrictions, nor, to the best of our knowledge, is the Borrower party to or
bound by any contract or agreement, which restricts, limits, or prohibits
performance of any of its obligations pursuant to the terms of the Loan
Documents.
8. None of the transactions contemplated by the Credit and Reimbursement
Agreement, including, without limitation, the use of the proceeds of the Loans
provided for in the Loan Documents, will violate or result in a violation of
Section 7 of the Securities Exchange Act of 1934, as amended, any regulations
issued pursuant thereto, or regulations, G, T, U or X of the Board of Governors
of the Federal Reserve System.
The foregoing opinions are subject to the qualifications, limitations and
assumptions noted therein, as well as the following qualifications, limitations
and assumptions:
A. Our opinion concerning the validity, binding effect and
enforceability of the Loan Documents means that: (a) the Loan Documents
constitute effective contracts under the applicable law, (b) the Loan Documents
are not invalid in their entirety because of a specific statutory prohibition or
public policy and are not subject in their entirety to a contractual defense,
and (c) subject to the last sentence of this paragraph, some remedy is available
if Borrower is in material default under the Loan Documents. This opinion does
not mean that: (a) any particular remedy is available upon a material default,
or (b) every provision of the loan Documents will be upheld or enforced in any
or each circumstance by a court. Furthermore, the validity, binding effect and
enforceability of the Loan Documents may be limited or otherwise affected by:
(a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar statues, rules, regulations or other laws affecting the
enforcement of creditors' rights and remedies generally, and (b) the
unavailability of, or limitation on the availability of, a particular right or
remedy (whether in a proceeding in equity or at law) because of any equitable
principle or a requirement as to commercial reasonableness, conscionability or
good faith.
NationsBank, N.A.
November 9, 1998
Page 5
B. In rendering the opinions set forth herein, we have made the
following assumptions:
i. The legal capacity of each natural person.
ii. The legal existence of all persons other than the Borrower and
an other Credit Party.
iii. The power and authority of each person (other than the
Borrower and any other Credit Party) to execute, deliver, and perform each
document executed and delivered and to do each other act done or to be done by
such person for the authorization, execution and delivery by such person of each
document executed and delivered or to be executed and delivered by such person.
iv. The due execution and delivery of the Loan Documents by each
party hereto other than the Borrower and any other Credit Party, and the
legality, validity, binding effect and enforceability of the Loan Documents as
to each party other than the Borrower and any other Credit Party.
v. The genuineness of all signature (other than those of the
Borrower and any other Credit Party), the completeness of each of the documents
submitted to us, the authenticity of each document submitted to us as an
original, the conformity of the original of each document submitted to us as a
copy and the authenticity of the original of each document reviewed by us as a
copy.
C. No opinion is given or expressed and none shall be inferred or
implied as to any matters other than as expressly set forth herein.
D. Whenever our opinion herein is qualified by the phrase "to our
knowledge" or "known to us" it is intended to indicate that during the course of
our representation of the Borrower and the other Credit Parties, no information
has come to our attention which would give us actual knowledge that any matter
is other than as opined to herein. However, except to the extent expressly set
forth herein, we have not inspected the operations or properties of the Borrower
or the other Credit Parties, nor have we undertaken any independent
investigation to determine the existence or absence of any such matters and no
inference as to our knowledge of such matters shall be drawn from the fact of
our representation of the Borrower or the other Credit Parties.
NationsBank, N.A.
November 9, 1998
Page 6
E. We are members of the Florida Bar and do not hold ourselves out as
experts on, nor are we, in rendering our opinions herein, passing upon any
matter of, the laws of any jurisdiction other than the laws of the United State,
the internal laws of Florida and the corporate law of Delaware, as now existing.
With respect to the Foreign Subsidiaries (defined below), we express no opinion
herein as to whether, under the corporate and other laws of the Foreign
Subsidiary's jurisdiction of incorporation: (1) the Guaranty Agreements are
supported by sufficient consideration so as to make then enforceable, or (2) the
execution and delivery of the Guaranty Agreements constitutes an ultra ▇▇▇▇▇ act
of any such Foreign Subsidiary. The "Foreign Subsidiaries" refers to each of the
Credit Parties whose jurisdiction of incorporation is outside of the United
States.
Our opinions contained herein are rendered solely in connection with the
transactions contemplated under the Loan Documents and may not be relied upon in
any manner by any Person other than the addressees hereof, any successor or
assignee of any addressee (including successive assignees) and any Person who
shall acquire a participation interest in the interest of the Lender
(collectively, the "Reliance Parties"), or by any Reliance Party for any other
purpose. Our opinions herein shall not be quoted or otherwise included,
summarized or referred to in any publication or document, in whole or in part,
for any purposes whatsoever, or furnished to any Person other than a Reliance
Party (or Person considering whether to become a Reliance Party), except as may
be required of any Reliance party by applicable law or regulation or in
accordance with any auditing or oversight function or request of regulatory
agencies to which a Reliance Party is subject
Very truly yours,
/s/ ▇▇▇▇▇▇ & ▇▇▇▇▇
------------------
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
EXHIBIT F
Compliance Certificate
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Credit Support
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Reference is hereby made to the Revolving Credit and Reimbursement
Agreement dated as of November 30, 1998 (the "Agreement") by and between World
Fuel Services Corporation, a Florida corporation (the "Borrower") and
NationsBank, N.A., as Lender (the "Lender"). Capitalized terms used but not
otherwise defined herein shall have the respective meanings therefor set forth
in the Agreement. The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as of __________ (the "Determination
Date") as follows:
1. Calculations:
A. Consolidated Tangible Net Worth as of the Determination Date
was $__________.
Required: Not less than $__________.
[See Section 8.1(a) of the Agreement]
B. Consolidated Funded Indebtedness to Consolidated Capitalization
as of the Determination Date was _____ to 1.00 calculated as follows:
(i) Consolidated Funded Indebtedness as of the
Determination Date: $__________
(ii) Consolidated Capitalization as of the
Determination Date: $__________
(iii) (i) divided by (ii): __________
required: Less than .55 to 1.00.
[See Section 8.1(b) of the Agreement]
C. Consolidated Fixed Charge Coverage Ratio as of the
Determination Date was _____ to 1.00 calculated as follows:
F-1
(i) Consolidated EBITDA (for the Four Quarter
Period ending on (or most recently ended
prior to) the Determination Date): $__________
(ii) capital expenditures (for the Four Quarter
Period ending on (or most recently ended
prior to) the Determination Date): $__________
(iii) (i) MINUS (ii): $__________
(iv) Consolidated Fixed Charges (for the Four
Quarter Period ending on (or most recently
ended prior to) the Determination Date): $__________
(v) (iii) divided by (iv): __________
Required: Equal or greater than 1.35 to 1.00.
[See Section 8.1(c) of the Agreement]
D. Applicable Margin is _______%
Applicable Unused Fee is _______%
2. No Default
A. Since __________ (the date of the last similar certification),
(a) the Borrower has not defaulted in the keeping, observance,
performance or fulfillment of its obligations pursuant to any of the
Loan Documents; and (b) no Default or Event of Default specified in
ARTICLE IX of the Agreement has occurred and is continuing.
B. If a Default or Event of Default has occurred since __________
(the date of the last similar certification), the Borrower proposes to
take the following action with respect to such Default or Event of
Default:_______________________________________________________________
_____________________________.
(NOTE, if no Default or Event of Default has occurred, insert "Not
Applicable").
C. The Borrower and its Subsidiaries are current with all trade
payables, except trade payables contested in good faith in the ordinary
course of business.
D. As of the Determination Date, the Borrower and its Subsidiaries
are in full compliance with the established sublimits and terms of the
Letters of Credit issued pursuant to the Agreement.
F-2
The Determination Date is the date of the last required financial statements
submitted to the Lender in accordance with SECTION 7.1 of the Agreement.
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
By:____________________________
Authorized Representative
Name:_______________________
Title:______________________
F-3
EXHIBIT G
FORM OF GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Guaranty") is entered into as of this ___
day of _________, 199_, by and among the undersigned Subsidiaries of World Fuel
Services Corporation, a Florida corporation (individually a "Guarantor" and
collectively the "Guarantors"), and NATIONSBANK, N.A., as Lender (the "Lender").
Unless the context otherwise requires, all terms used herein without definition
shall have the respective definitions provided therefor in the Credit Agreement
(as defined below).
W I T N E S S E T H:
WHEREAS, World Fuel Services Corporation (the "Borrower") and the
Lender have entered into that certain Revolving Credit and Reimbursement
Agreement, dated as of November 30, 1998, whereby the Lender has made available
to the Borrower a Revolving Credit Facility (as at any time hereafter amended,
restated, modified or supplemented, the "Credit Agreement"); and
WHEREAS, the Credit Agreement requires the execution of this Guaranty
by any Subsidiary of the Borrower acquired or created after the date thereof,
and
WHEREAS, the Guarantors will substantially benefit from the loans and
advances made or to be made by the Lender and the letters of credit issued or to
be issued by the Issuing Bank to the Borrower under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and conditions herein
set forth, it is hereby agreed as follows:
1. Guarantors hereby absolutely and unconditionally guaranty, jointly
and severally, to the Lender, with full power to satisfy, discharge, release,
foreclose, assign and transfer the within Guaranty, the due performance and full
and prompt payment, whether at maturity or by acceleration or otherwise, of any
and all Borrower's Liabilities (as hereinafter defined) (hereinafter
collectively referred to as the "Guarantors' Obligations"); PROVIDED, HOWEVER,
that the liability of any Guarantor hereunder with respect to the Guarantors'
Obligations shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of
any applicable state law.
2. For purposes of this Guaranty, "Borrower's Liabilities" shall mean
and include any and all advances (including those made by the Lender to protect,
enlarge or preserve the priority, propriety, or amount of any lien in favor of
the Lender against mechanic's lien, equitable lien, or statutory claimants, or
otherwise), debts, obligations and liabilities of Borrower pursuant to the terms
of the Credit Agreement, the Notes, any Swap Agreement and all other Loan
Documents executed in connection therewith heretofore, now, or hereafter made,
incurred or created, extended, renewed, replaced, refinanced or restructured,
whether or not from time to time decreased or extinguished and
G-1
later increased, created or incurred, whether voluntary or involuntary and,
however arising, whether due or not, absolute or contingent, liquidated or
non-liquidated, determined or undetermined, and whether Borrower may be liable
individually or jointly with others, or whether recovery upon such indebtedness
may be or hereafter become barred by any statute of limitations, or whether such
indebtedness may be or hereafter become otherwise unenforceable (collectively
referred to hereinafter as the "Borrower's Liabilities"). This is a continuing
Guaranty relating to the Borrower's Liabilities, and any other indebtedness
arising under subsequent or successive transactions which increase the
Borrower's Liabilities, and said Guaranty shall be irrevocable and remain
outstanding until all the Borrower's Liabilities are satisfied in full and the
Lender shall have no further obligation to make Loans and Advances and the
Issuing Bank to issue Letters of Credit under the Credit Agreement.
3. The obligations of the Guarantors hereunder are independent of the
obligations of Borrower, and a separate action or actions may be brought and
prosecuted against any Guarantor, whether such action is brought against
Borrower or whether Borrower be joined in any such action or actions.
4. Each Guarantor authorizes the Lender, without notice or demand and
without affecting such Guarantor's liability hereunder, from time to time to (a)
renew, amend, compromise, extend, accelerate or otherwise change the time for
payment of, or otherwise change the terms of the Borrower's Liabilities or any
part thereof, including increase or decrease of the rate of interest thereon;
(b) take and hold security for the payment of this Guaranty and the Guarantors'
Obligations and exchange, enforce, waive and release any such security; (c)
apply such security and direct the order or manner of sale thereof as the Lender
may determine; and (d) release or substitute any one or more endorsers or
guarantors of the Borrower's Liabilities. The Lender may without notice assign
this Guaranty in whole or in part in connection with an assignment as permitted
under the Credit Agreement.
5. Each Guarantor waives any right to require the Lender to (a) proceed
against Borrower; (b) proceed against or exhaust any security held from
Borrower; or (c) pursue any other remedy in the Lender's power whatsoever. Each
Guarantor waives any defense arising by reason of any disability or other
defense of Borrower or by reason of the cessation from any cause whatsoever of
the liability of the Borrower to the Lender. Until all the Borrower's
Liabilities shall have been paid in full and the Lender shall have no further
obligation to make Loans and Advances and the Issuing Bank to issue Letters of
Credit under the Credit Agreement, each Guarantor waives any right to endorse
any remedy which the Lender now has or may hereafter have against the Borrower,
and waives any benefit of, and any right to participate in, any security now or
hereafter held by the Lender as collateral security for the Borrower's
Liabilities. Each Guarantor waives all presentments, demands for performance,
notices of non-performance, protests, notices of dishonor, notices of acceptance
of this Guaranty and of the existence, creation, or incurring of new or
additional indebtedness; any defense or circumstance which might otherwise
constitute a legal or equitable discharge of a guarantor or a surety; and all
rights under any state or federal statute dealing with or affecting the rights
of creditors. Each Guarantor covenants to cause Borrower to maintain and
preserve the enforceability of any instruments now or hereafter executed in
favor of the Lender, and to take no action of any kind which might be the basis
for a claim that such Guarantor has any defense hereunder in connection with the
above-mentioned Loan Documents, other than payment in full of
G-2
the Borrower's Liabilities. Each Guarantor waives any right or claim of right to
cause a marshaling of Borrower's assets or to require the Lender to proceed
against the Guarantors or any other guarantor of the Borrower's Liabilities in
any particular order. No delay on the part of the Lender in the exercise of any
right, power or privilege under the Loan Documents or under this Guaranty shall
operate as a waiver of any such privilege, power or right.
6. Until the Borrower's Liabilities are paid in full and the Lender is
under no further obligation to make Loans and Advances and the Issuing Bank to
issue Letters of Credit under the Credit Agreement, any indebtedness of Borrower
now or hereafter held by any Guarantor is hereby subordinated to the Borrower's
Liabilities; and such indebtedness of Borrower to any Guarantor, if the Lender
so requests, shall be collected, enforced and received by such Guarantor as
trustee for the Lender and be paid over to the Lender on account of the
Borrower's Liabilities, but without reducing or affecting in any manner the
liability of such Guarantor under the other provisions of this Guaranty. Each
Guarantor, at the request of the Lender, shall execute such further documents in
favor of the Lender to further evidence and support the purpose of this Section
6. Each Guarantor hereby irrevocably waives and releases any right or rights of
subrogation or contribution existing at law, by contract or otherwise to recover
all or a portion of any payment made hereunder from the Borrower or any other
guarantor.
7. Upon the default of Borrower with respect to any of its obligations
or liabilities to the Lender in connection with the Loan Documents, or in case
Borrower or any Guarantor shall become insolvent or make an assignment for the
benefit of creditors, or if a petition in bankruptcy or for corporate
reorganization or for an arrangement be filed by or against Borrower or any
Guarantor (and if such petition is filed against Borrower or any Guarantor and
is not stayed or dismissed within sixty (60) days), or in the event of the
appointment of a receiver for Borrower or any Guarantor of their properties, or
in the event a judgment is obtained or warrant of attachment is issued against
Borrower or any Guarantor (which judgment or warrant is not satisfied or bonded
or removed within sixty (60) days), all or any part of the Guarantors'
Obligations shall, without notice or demand, at the option of the Lender, become
immediately due and payable and shall be paid forthwith, jointly and severally,
by Guarantors without any offset of any kind whatsoever, without the Lender
first being required to make demand upon the Borrower or pursue any of its
rights against Borrower, or against any other person, including other guarantors
(whether or not party to this Guaranty).
8. Notwithstanding any provision herein or in any instrument now or
hereafter executed in connection with this Guaranty or the Guarantors'
Obligations hereunder, the total liability for payments in the nature of
interest shall not exceed the limits now imposed by the usury laws of the State
of Florida governing the provisions of this Guaranty or in any instrument now or
hereafter executed in connection with this Guaranty or the Guarantors'
Obligations hereunder.
9. Each Guarantor acknowledges that the Lender has been induced by this
Guaranty to make and to continue to make Loans and Advances to the Borrower and
the Issuing Bank to issue and continue to issue Letters of Credit on behalf of
the Borrower and its Subsidiaries under the Credit Agreement, and this Guaranty
shall, without further reference or assignment, pass to, and may be relied upon
and enforced by, any successor or participant or assignee of the Lender in and
to any of Borrower's Liabilities.
G-3
10. Each Guarantor hereby warrants and represents to the Lender, that:
(a) it is a duly organized and validly existing corporation under the laws of
the state of its incorporation; (b) it is qualified to do business in each state
in which qualification is necessary; (c) it has the power to execute this
Guaranty; (d) that the execution of this Guaranty has been duly authorized; and
(e) that this Guaranty is a binding and valid corporate obligation.
11. Each Guarantor acknowledges that the liabilities of said Guarantor
shall be independent of the Obligations of Borrower, and separate or joint
actions may be instituted by the Lender, against such Guarantors; and said
actions may be instituted against Borrower and any of the Guarantors, or
separately against any of the Guarantors. Any action taken by the Lender
pursuant to the provisions herein contained or contained in the Credit
Agreement, the Notes or the Loan Documents, shall not release the party to this
Guaranty until all of the Borrower's Liabilities are paid in full and the Lender
shall have no further obligation to make Loans and Advances and the Issuing Bank
to issue Letters of Credit under the Credit Agreement.
12. The Guarantors will upon demand pay to the Lender, jointly and
severally, the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
it may reasonably incur in connection with enforcement of this Guaranty or the
failure by any Guarantor to perform or observe any of the provisions hereof. The
Guarantors agree to indemnify and hold harmless the Lender from and against any
and all claims, demands, losses, judgments and liabilities (including
liabilities for penalties) of whatsoever kind or nature, growing out of or
resulting from this Guaranty or the exercise by the Lender of any right or
remedy granted to it hereunder or under the other Loan Documents, other than
such items arising out of the bad faith, gross negligence or willful misconduct
on the part of the Lender. If and to the extent that the obligations of the
Guarantors under this Section 12 are unenforceable for any reason, Guarantors
hereby agree to make the maximum contribution to the payment and satisfaction of
such obligations which is permissible under applicable law.
13. If claim is ever made upon the Lender for repayment or recovery of
any amount or amounts received in payment or on account of the Guarantors'
Obligations and the Lender repays all or part of said amount by reason of (a)
any judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property, or (b) any settlement or
compromise of any such claim effected by the Lender with any such claimant
(including the original obligor), then and in such event each Guarantor agrees
that any such judgment, decree, order, settlement or compromise shall be binding
upon it, notwithstanding any revocation hereof or the cancellation of any Notes
or other instrument evidencing any Guarantied Obligations or any security
therefor, and the Guarantors shall be and remain jointly and severally liable to
the Lender for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by the Lender.
14. All notices required to be given hereunder shall be in writing, and
shall be given by certified mail, return receipt requested, and shall be deemed
given when they shall have been deposited in the United States Mail, with
sufficient postage prepaid thereon to carry them to their addressed destination,
addressed to the party for whom it is intended, as follows:
G-4
For a Guarantor: such Guarantor
c/o World Fuel Services Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
For Lender: NationsBank, N.A.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Independence Center, 15th Floor
Charlotte, North Carolina 28255
Attention: Corporate Credit Support
15. Whenever the text of this instrument so requires, the use of any
gender shall be deemed to include all genders, and the use of the singular shall
include the plural, and in such event, wherever the word "Guarantor" is used
herein, then such word shall be deemed to be "Guarantors" or either or any of
them.
16. This Guaranty shall be binding upon each Guarantor, successors,
legal representatives and assigns of each Guarantor.
17. This Guaranty shall, for all purposes, be governed by and construed
in accordance with the laws of the State of Florida.
18. THE LENDER AND EACH GUARANTOR KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
CONNECTION WITH ANY MATTER DIRECTLY OR INDIRECTLY RELATING TO THIS GUARANTY OR
ANY OTHER LOAN DOCUMENT.
G-5
SIGNATURE PAGE 1 OF 2
IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be
duly executed by their duly authorized officers, all as of the day and year
first above written.
[GUARANTOR]:
By:______________________________
Name:_________________________
Title:________________________
[GUARANTOR]:
By:______________________________
Name:_________________________
Title:________________________
SIGNATURE PAGE 1 0F 2
G-6
LENDER:
NATIONSBANK, N.A.
By:______________________________
Name:_________________________
Title:________________________
SIGNATURE PAGE 2 0F 2
G-7
WORLD FUEL SERVICES CORPORATION
LETTERS OF CREDIT
AS OF: 04-Nov-98
LC DATE
ISSUING BANK # SUB NUMBER TYPE EXPIRES BENEFICIARY AMOUNT %
------------ -- ------ ------- ---- ------- -------------------------------- ------------
Nations 2 WFSLTD 017574 A30 3/15/99 Enamalta 100,000.00
Bank
3
4 WSFLTD 017572 A30 11/1/98 * Ceylon Petroleum Corp.
5 WFS, SNG 920033 N 4/29/99 Petronas Dagangan Berhad 200,000.00
8 TTS SNG 049678 N 10/30/98 * ESSO Singapore
BG95/024 8/30/98 *
9 TTS INC 000273 N 3/31/99 Hyundai Oil Refinery Co. Ltd. 500,000.00
10 TTS INC 000949 N 5/4/99 Ssangyong Oil Refinery Co. Ltd. 750,000.00
11 TTS INC 000841 N 4/30/99 LG - Caltex Oil Corporation 1,000,000.00
Uk/a Honam Oil Refinery Co. Ltd.
12 WFS LTD 0001843 A 2/2/99 Shell UK Ltd. 200,000.00
C Open
13 TTS INC 001039 N 2/12/99 * Hanwha Internationsl (S) Pte Ltd. 500,000.00
BG95/032 11/13/98 *
14 WFS INC 003566 N 8/31/98 Condor Fuel Corporation 396,375.00
15 TTS INC 0000266 N 8/31/99 * Petroles Del Peru 150,000.00
16 WFS LTD 000289 A 12/31/98 * LLoyds Bank PLC 210,000.00
G90/51192 C Open Naftal
GTS70-082 N 12/31/98 * Agip Petroli SPA
GTS70-250 C Open Reposol Comercial Productos
▇▇▇▇▇-▇▇▇ ▇ ▇/▇▇/▇▇ ▇▇▇▇▇▇▇▇ Nati Oil Co.
17 WFS LTD C000152 N 7/31/99 ▇▇▇▇▇ Aviation Services 15,000.00
20 TTS INC 003568 N 6/30/98 Societe Cooperative Des Petroles 500,000.00
21 TTS INC 003567 N 5/23/99 Misr Petroleum Company 1,000,000.00
22 WFST SNG 920046 N 10/5/99 Pakistan State Oil Company Limited 50,000.00
23 WFS SNG 98002 A 1/14/99 PERTAMINA 100,000.00
-------------
Subtotal 5,671,375.00
-------------
ILLEGIBLE 27 TTS INC 5933222201 Open Ministry of Economy 50,000.00
ILLEGIBLE PETROSUR-WORLD FUEL 11/19/98 Petrocomercial $1,689,387.95
PETROSUR-WORLD FUEL 11/19/98 Petrocomercial $1,407,000.00
A=Automatic Total Outstanding $8,817,762.95
N=Non-automatic =============
C=Continuous
*=Cancellation Deadline in 30 days
ISSUING BANK # COMMENTS
------------ -- ---------------------------------------------------
Nations 2 Fuel Purchases - Malta
Bank
3
4 Fuel Purchases - ▇▇▇▇▇▇▇▇
▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇
▇ L/C Issued to Nationsbank SGA
B/G Issued from Nationsbank SGA
9 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇
12 L/C Issued to Nationsbank UK
B/G Issued from Nastionsbank Uk
13 L/C Issued to Nationsbank SGA
B/G Issued from Nationsbank ▇▇▇
▇▇ ▇▇ ▇▇▇▇▇▇
15 L/C Issued to Banco Continental
16 L/C FOR 5 LLOYDS' BANK GUARANTEES:
Fuel Purchases - Algeria must be in French: $25,000
Fuel Purchases - Italy, Kenya Seychelles: $35,000
Fuel Purchases - Spain: $50,000
Fuel Purchases - UAE: $100,000
17 Fuel purchases Angola
20 ▇▇▇▇▇ Scoppeluclo
21 ▇▇▇▇▇ Scoppetuclo
22 ▇▇▇▇▇▇▇▇▇ ▇▇▇
23 ▇▇▇▇▇▇▇▇▇ ▇▇▇
ILLEGIBLE 27 TTS - Services
ILLEGIBLE Fuel Purchases - Ecuador-Sucres S/. 10,682,000,000
Fuel Purchases - Ecuador-US Dollar
SCHEDULE 6.4
Subsidiaries and Investments in Other Persons
Advance Petroleum, Inc., a Florida corporation (1)
Advance Aviation Services, Inc., a Florida corporation (10)
AirData Limited, a United Kingdom corporation (2)
Air Terminaling, Inc., a Florida corporation (10)
Baseops Europe Limited, a United Kingdom corporation (3)
Baseops International, Inc., a Texas corporation
Casa ▇▇▇▇▇ ▇.▇., a Costa Rica corporation
Cherokee Group, Inc., a Florida corporation
International Environmental Services, Inc. a Florida corporation
International Petroleum Corporation, a Florida corporation (4)
International Petroleum Corporation of LA, a Louisiana corporation
International Petroleum Corporation of Maryland, a Maryland corporation (4)
International Petroleum Corp. of Delaware, a Delaware corporation (4)
International Petroleum Corp. of Georgia, a Georgia corporation (10)
International Petroleum Corp. of Pennsylvania, a Pennsylvania corporation (10)
Jet Fuel Supplier del Peru S.A., a Peru corporation
Pacific Horizon Petroleum Services, Inc., a Delaware corporation
PetroServicios de Costa Rica S.A., a Costa Rica corporation (5)
PetroServicios de Mexico S.A. de C.V., a Mexico corporation (5)
PetroServicios WFS del Peru, S.A., a Peru corporation (9)(10)
Resource Recovery Atlantic, Inc., a Delaware corporation (7)(10)
Resource Recovery Mid South, Inc., a Virginia corporation (7)(10)
Resource Recovery of America, Inc., a Florida corporation (10)
Servicios Auxiliares de Mexico S.A. de C.V., a Mexico corporation (6)
Servicios Turbo Jet del Peru S.A., a Peru corporation
Trans-Tec Argantina S.A., an Argentina corporation (10)
Trans-Tec International S.A., a Costa Rica corporation
Trans-Tec Services, Inc., a Delaware corporation
Trabs-Tec Services (UK) Ltd., a United Kingdom corporation
Trans-Tec Services (Singapore) PTE. Ltd., a Singapore corporation (8)
World Fuel International S.A., a Costa Rica corporation
World Fuel Miami, Inc., a Florida corporation (10)
World Fuel Services, Inc., a Texas corporation
World Fuel Services, Ltd., a United Kingdom corporation
World Fuel Services (Singapore) PTE. Ltd., a Singapore corporation
World Fuel Services of Chile S.A., a Chile corporation (6)(10)
World Fuel Services del Peru, S.A., a Peru corporation (9)(10)
(1) Advance Petroleum, Inc., operates under the name "World Fuel Services of
FL."
(2) This corporation is a wholly-owned subsidiary of Baseops Europe Ltd.
(3) This corporation is a wholly-owned subsidiary of Baseops International,
Inc.
(4) These corporations collect and purchase used oil under the name
"International Oil Service."
(5) This corporation is owned 55% by Casa ▇▇▇▇▇ ▇.▇. and 45% by World Fuel
Services Corporation.
(6) This corporation is owned 50% by Advance Aviation Services, Inc. and 50% by
Air Terminaling, Inc.
(7) These corporations are wholly-owned subsidiaries of Resource Recovery of
America, Inc.
(8) This corporation is a wholly-owned subsidiary of Trans-Tec Services (UK)
Ltd.
(9) These corporations are owned 99% by World Fuel Services Corporation and 1%
by Advance Aviation Services, Inc.
(10) Inactive.
SCHEDULE 6.6
Indebtedness
SEE SCHEDULE 7.6
SCHEDULE 6.7
Liens
SEE SCHEDULE 7.6 FOR EQUIPMENT LIENS
SCHEDULE 6.8
Tax Matters
NONE
SCHEDULE 6.10
Litigation
NONE
SCHEDULE 6.18
Hazardous Materials
The Company has exited several environmental businesses which handled hazardous
wastes. These wastes were transported to various disposal facilities and/or
treated by the Company. The Company may be held liable as a potentially
responsible party for the cleanup of such disposal facilities in certain cases
pursuant to current Federal and State laws and regulations.
The Company is currently responsible to Federal and Florida environmental
agencies for cleanup costs at the Mulberry, Florida site formerly operated by
its subsidiary, Resource Recovery of America, which has been sold by the
Company. Under the terms of the sale, the Company contractually transferred to
the buyer the responsibility for the state cleanup. However, the buyer has been
unwilling to fund expenses incurred to date. The site also qualified under the
state reimbursement program, which the Company anticipates will cover the cost
of the cleanup. The Company is actively involved in the coordination of cleanup
requirements by the EPA and the state to assure the Company's compliance.
The Company intends to pay an estimated $1,000,000 over the next several years
to cleanup contamination which was present at the Company's Delaware used oil
recycling facility when it was acquired by the Company. The cleanup costs will
be capitalized as part of the cost of the site, up to the fair market value of
the site.
SCHEDULE 7.6
Indebtedness
As of September 30, 1998
LONG-TERM DEBT:
NationsBank Line-Of-Credit:
Base Rate Loan $1,100,000
Libor Rate Loan (30 Days) 1,000,000
Equipment Notes:
Money Equipment 11.00% 51,468
Polar Trailer and ▇▇▇▇ Truck 8.52% 68,771
Polar Trailers and ▇▇▇▇ Trucks 8.52% 275,082
Total Indebtedness $2,495,321
==========
LETTERS OF CREDIT - NON-NATIONSBANK:
ISSUING BANK SUBSIDIARY BENEFICIARY AMOUNT
------------ ---------- ----------- ------
Citibank Trans-Tec Services, Inc. Ministry of Economy $ 50,000
Filanbanco PetroSur - World Fuel Petrocomercial $1,689,388
Services (denominated in
Sucres)
Petrocomercial $1,407,000