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TOM'S FOODS INC.,
as Borrower
LOAN AND SECURITY AGREEMENT
Dated: January 31, 2000
$17,000,000.00
THE FINANCIAL INSTITUTIONS
PARTY HERETO FROM TIME TO TIME, AS LENDERS
AND
FLEET CAPITAL CORPORATION, AS AGENT
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TABLE OF CONTENTS
Page
SECTION 1. CREDIT FACILITIES...........................................................- 1 -
1.1. Revolver Commitments..................................................- 1 -
1.2. Reserved..............................................................- 2 -
1.3. LC Facility...........................................................- 2 -
SECTION 2. INTEREST, FEES AND CHARGES................................................- 6 -
2.1. Interest..............................................................- 6 -
2.2. Fees..................................................................- 8 -
2.3. Computation of Interest and Fees......................................- 9 -
2.4. Reimbursement Obligations............................................- 10 -
2.5. Bank Charges.........................................................- 11 -
2.6. Illegality...........................................................- 11 -
2.7. Increased Costs......................................................- 11 -
2.8. Capital Adequacy.....................................................- 12 -
2.9. Funding Losses.......................................................- 13 -
2.10. Maximum Interest.....................................................- 13 -
SECTION 3. LOAN ADMINISTRATION.........................................................- 14 -
3.1. Manner of Borrowing and Funding Revolver Loans.......................- 14 -
3.2. Defaulting Lender....................................................- 18 -
3.3. Special Provisions Governing LIBOR Loans.............................- 18 -
3.4. All Loans to Constitute One Obligation...............................- 19 -
SECTION 4. PAYMENTS....................................................................- 19 -
4.1. General Payment Provisions...........................................- 19 -
4.2. Repayment of Revolver Loans..........................................- 19 -
4.3. Reserved.............................................................- 20 -
4.4. Payment of Other Obligations.........................................- 20 -
4.5. Marshaling; Payments Set Aside.......................................- 20 -
4.6. Agent's Allocation of Payments and Collections.......................- 20 -
4.7. Application of Payments and Collateral Proceeds......................- 21 -
4.8. Loan Account.........................................................- 21 -
4.9. Gross Up for Taxes...................................................- 22 -
4.10. Withholding Tax Exemption............................................- 22 -
SECTION 5. ORIGINAL TERM AND TERMINATION...............................................- 23 -
5.1. Original Term of Revolver Commitments................................- 23 -
5.2. Termination..........................................................- 23 -
SECTION 6. COLLATERAL..................................................................- 24 -
6.1. Grant of Security Interest...........................................- 24 -
6.2. Other Collateral.....................................................- 25 -
6.3. Lien Perfection; Further Assurances..................................- 25 -
SECTION 7. COLLATERAL ADMINISTRATION...................................................- 25 -
7.1. General Provisions...................................................- 25 -
7.2. Administration of Accounts...........................................- 26 -
7.3. Administration of Inventory..........................................- 28 -
7.4. Borrowing Base Certificates..........................................- 28 -
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SECTION 8. REPRESENTATIONS AND WARRANTIES..............................................- 28 -
8.1. General Representations and Warranties...............................- 28 -
8.2. Reaffirmation of Representations and Warranties......................- 33 -
8.3. Survival of Representations and Warranties...........................- 33 -
SECTION 9. COVENANTS AND CONTINUING AGREEMENTS.........................................- 33 -
9.1. Affirmative Covenants................................................- 33 -
9.2. Negative Covenants...................................................- 37 -
9.3. Financial Covenants..................................................- 41 -
SECTION 10. CONDITIONS PRECEDENT........................................................- 42 -
10.1. Conditions Precedent to Initial Credit Extensions....................- 42 -
10.2. Conditions Precedent to All Credit Extensions........................- 43 -
10.3. Inapplicability of Conditions........................................- 43 -
10.4. Limited Waiver of Conditions Precedent...............................- 43 -
SECTION 11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT...........................- 44 -
11.1. Events of Default....................................................- 44 -
11.2. Acceleration of Obligations; Termination of Revolver Commitments.....- 46 -
11.3. Other Remedies.......................................................- 46 -
11.4. Setoff...............................................................- 47 -
11.5. Remedies Cumulative; No Waiver.......................................- 48 -
SECTION 12. AGENT.......................................................................- 48 -
12.1. Appointment, Authority and Duties of Agent...........................- 48 -
12.2. Agreements Regarding Collateral......................................- 50 -
12.3. Reliance By Agent....................................................- 50 -
12.4. Action Upon Default..................................................- 50 -
12.5. Ratable Sharing......................................................- 51 -
12.6. Indemnification of Agent Indemnitees.................................- 51 -
12.7. Limitation on Responsibilities of Agent..............................- 52 -
12.8. Successor Agent and Co-Agents........................................- 53 -
12.9. Consents, Amendments and Waivers.....................................- 53 -
12.10. Due Diligence and Non-Reliance.......................................- 55 -
12.11. Representations and Warranties of Lenders............................- 55 -
12.12. The Required Lenders.................................................- 55 -
12.13. Several Obligations..................................................- 55 -
12.14. Agent in its Individual Capacity.....................................- 55 -
12.15. No Third Party Beneficiaries.........................................- 56 -
12.16. Notice of Transfer...................................................- 56 -
12.17. Replacement of Certain Lenders.......................................- 56 -
12.18. Remittance of Payments and Collections...............................- 56 -
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS........................- 57 -
13.1. Successors and Assigns...............................................- 57 -
13.2. Participations.......................................................- 57 -
13.3. Assignments..........................................................- 58 -
13.4. Certain Restrictions on Assignments and Participations...............- 59 -
13.5. Tax Treatment........................................................- 59 -
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SECTION 14. MISCELLANEOUS...............................................................- 59 -
14.1. Power of Attorney....................................................- 59 -
14.2. General Indemnity....................................................- 60 -
14.3. Survival of All Indemnities..........................................- 60 -
14.4. Modification of Agreement............................................- 60 -
14.5. Severability.........................................................- 61 -
14.6. Cumulative Effect; Conflict of Terms.................................- 61 -
14.7. Execution in Counterparts............................................- 61 -
14.8. Consent..............................................................- 61 -
14.9. Notices..............................................................- 61 -
14.10. Performance of Borrower's Obligations................................- 61 -
14.11. Credit Inquiries.....................................................- 62 -
14.12. Time of Essence......................................................- 62 -
14.13. Entire Agreement; Appendix A, Exhibits and Schedules.................- 62 -
14.14. Interpretation.......................................................- 62 -
14.15. Obligations Several..................................................- 62 -
14.16. Governing Law; Consent to Forum......................................- 62 -
14.17. Waivers by Borrower..................................................- 63 -
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Revolver Note
Exhibit B Form of Landlord Waiver
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Notice of Borrowing
Exhibit E Form of Compliance Certificate
Exhibit F Form of Opinion Contents
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Notice
Exhibit I Letter of Credit Procurement Request
Exhibit J Form of Dominion Account Agreement
Exhibit K Form of Lockbox Agreement
Exhibit L Form of Payment Direction Agreement
Exhibit M Form of Confirmation of Waiver Letter
Schedule 7.1.1 Borrower's Business Locations
Schedule 8.1.1 Jurisdictions in which Borrower and each Subsidiary is Authorized to do Business
Schedule 8.1.4 Capital Structure of Borrower
Schedule 8.1.5 Corporate Names
Schedule 8.1.12 Surety Obligations
Schedule 8.1.13 Tax Identification Numbers of Borrower and Subsidiaries
Schedule 8.1.15 Patents, Trademarks, Copyrights and Licenses
Schedule 8.1.18 Contracts Restricting Borrower's Right to Incur Debts; Surety Obligations
Schedule 8.1.19 Litigation
Schedule 8.1.21 Capitalized and Operating Leases
Schedule 8.1.22 Benefit Plans
Schedule 8.1.24 Labor Contracts
Schedule 9.2.4 Affiliate Transactions
Schedule 9.2.5 Permitted Liens
Schedule 9.2.8 Restrictions on Upstream Payments
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LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT is made on January 31, 2000, by and
among TOM'S FOODS INC. ("Borrower"), a Delaware corporation with its chief
executive office and principal place of business at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇; the various financial institutions listed on the signature pages
hereof and their respective successors and permitted assigns which become
"Lenders" as provided herein; and FLEET CAPITAL CORPORATION, a Rhode Island
corporation with an office at ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, in its capacity as collateral and administrative agent for the Lenders
pursuant to SECTION 12 hereof (together with its successors in such capacity,
"Agent"). Capitalized terms used in this Agreement have the meanings assigned to
them in Appendix A, General Definitions.
SECTION 1. CREDIT FACILITIES
Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders severally agree to the extent and in the manner hereinafter
set forth to make their respective Pro Rata shares of the Revolver Commitments
available to Borrower, in an aggregate amount up to $17,000,000, as follows:
1.1. REVOLVER COMMITMENTS.
1.1.1. Revolver Loans. Each Lender agrees, severally to the
extent of its Revolver Commitment and not jointly with the other Lenders, upon
the terms and subject to the conditions set forth herein, to make Revolver Loans
to Borrower on any Business Day during the period from the date hereof through
the Business Day before the last day of the Original Term, not to exceed in
aggregate principal amount outstanding at any time such Lender's Revolver
Commitment at such time, which Revolver Loans may be repaid and reborrowed in
accordance with the provisions of this Agreement; provided, however, that
Lenders shall have no obligation to Borrower whatsoever to make any Revolver
Loan on or after the Commitment Termination Date or if at the time of the
proposed funding thereof the aggregate principal amount of all of the Revolver
Loans and Pending Revolver Loans then outstanding exceeds, or would exceed after
the funding of such Revolver Loan, the Borrowing Base. Each Borrowing of
Revolver Loans shall be funded by Lenders on a Pro Rata basis in accordance with
their respective Revolver Commitments (except for Fleet with respect to
Settlement Loans). The Revolver Loans shall bear interest as set forth in
SECTION 2.1 hereof. Each Revolver Loan shall, at the option of Borrower, be made
or continued as, or converted into, part of one or more Borrowings that, unless
specifically provided herein, shall consist entirely of Base Rate Loans or LIBOR
Loans.
1.1.2. Out-of-Formula Loans. If the unpaid balance of
Revolver Loans outstanding at any time should exceed the Borrowing Base at such
time (an "Out-of-Formula Condition"), such Revolver Loans shall nevertheless
constitute Obligations that are secured by the Collateral and entitled to all of
the benefits of the Loan Documents. In the event that Lenders are willing in
their sole and absolute discretion to make Out-of-Formula Loans, such
Out-of-Formula Loans shall be payable ON DEMAND and shall bear interest as
provided in this Agreement for Revolver Loans generally.
1.1.3. Use of Proceeds. The proceeds of the Revolver Loans
shall be used by Borrower solely for one or more of the following purposes: (i)
to satisfy any Debt owing on the Closing Date to Congress Financial Corporation;
(ii) to pay the fees and transaction expenses associated with the closing of the
transactions described herein; (iii) to pay any of the Obligations; and (iv) to
make expenditures for
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other lawful corporate purposes of Borrower to the extent such expenditures are
not prohibited by this Agreement or Applicable Law. In no event may any Revolver
Loan proceeds be used by Borrower to make a contribution to the equity of any
Subsidiary, to purchase or to carry, or to reduce, retire or refinance any Debt
incurred to purchase or carry, any Margin Stock or for any related purpose that
violates the provisions of Regulations T, U or X of the Board of Governors.
1.1.4. Revolver Notes. The Revolver Loans made by each
Lender and interest accruing thereon shall be evidenced by the records of Agent
and such Lender and by the Revolver Note payable to such Lender (or the assignee
of such Lender), which shall be executed by Borrower, completed in conformity
with this Agreement and delivered to such Lender. All outstanding principal
amounts and accrued interest under the Revolver Notes shall be due and payable
as set forth in SECTION 4.2 hereof.
1.1.5. Availability Reserve. Agent shall have the right from
time to time to revise the Availability Reserve to cover amounts owed by
Borrower to Farm Product Sellers for Farm Products directly or indirectly
purchased by Borrower from such Farm Product Sellers (i) if the Farm Products or
any proceeds thereof are or could become subject to a Lien or statutory trust
claim under PACA in favor of, or created by, any such Farm Product Sellers; (ii)
if a purported Lien or statutory trust claim under PACA has been or may be
asserted by any such Farm Product Sellers with respect to any Farm Products or
any Accounts of Borrower, or, as to any such Farm Products or Accounts or the
proceeds thereof, a Lien upon Farm Products purchased by Borrower is sought to
be preserved under the Food Security Act, or a claim is asserted or a remedy is
sought under PACA against Borrower, Agent or any Lender by the Secretary of
Agriculture or other Governmental Authority; or (iii) if Agent determines that
Agent and Lenders or their respective interests in the Collateral are not fully
and effectively protected against and entitled to priority over all potential
Liens and statutory trust claims upon Farm Products purchased by Borrower
directly or indirectly from any Farm Product Sellers involved in the transaction
or upon Accounts or other proceeds thereof.
1.2. RESERVED.
1.3. LC FACILITY.
1.3.1. Procurement of Letters of Credit. During the period
from the date hereof to (but excluding) the 30th day prior to the last day of
the Original Term, and provided no Default or Event of Default exists, Fleet
agrees to establish the LC Facility pursuant to which Fleet shall procure from
Bank one or more Letters of Credit on Borrower's request therefor from time to
time, subject to the following terms and conditions:
(i) Borrower acknowledges that Bank's
willingness to issue any Letter of Credit is conditioned upon Bank's
receipt of (A) the LC Support duly executed and delivered to Bank by
Fleet, (B) an LC Application with respect to the requested Letter of
Credit and (C) such other instruments and agreements as Bank may
customarily require for the issuance of a letter of credit of
equivalent type and amount as the requested Letter of Credit. Fleet
shall have no obligation to execute any LC Support or to join with
Borrower in executing an LC Application unless (x) Fleet receives an LC
Request from Borrower at least 5 Business Days prior to the date on
which Borrower desires to submit such LC Application to Bank and (y)
each of the LC Conditions is satisfied on the date of Fleet's receipt
of the LC Request and at the time of the requested execution of the LC
Application. In no event shall Fleet or any other Lender have any
liability or obligation to Borrower or any Subsidiary for any failure
or refusal by Bank to issue, for Bank's delay in issuing, or for any
error of Bank in issuing any Letter of Credit.
(ii) Letters of Credit may be requested by
Borrower only if they are to be used (a) to support obligations of
Borrower incurred in the Ordinary Course of Business of
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Borrower or (b) for such other purposes as Agent and Lenders may
approve from time to time in writing.
(iii) Borrower shall comply with all of the terms
and conditions imposed on Borrower by Bank, whether such terms and
conditions are contained in an LC Application or in any agreement with
respect thereto, and subject to the rights of Bank, Fleet shall have
the same rights and remedies that Bank has under any agreements that
Borrower may have with Bank in addition to any rights and remedies
contained in any of the Loan Documents. Borrower agrees to reimburse
Bank for any draw under any Letter of Credit as hereinafter provided,
and to pay Bank the amount of all other liabilities and obligations
payable to Bank under or in connection with any Letter of Credit
immediately when due, irrespective of any claim, setoff, defense or
other right that Borrower may have at any time against Bank or any
other Person. If Fleet shall pay any amount under a LC Support with
respect to any Letter of Credit, then Borrower shall pay to Fleet, in
Dollars on the first Business Day following the date on which payment
was made by Fleet under such LC Support (the "Reimbursement Date"), an
amount equal to the amount paid by Lender under such LC Support,
together with interest at the Default Rate from and after the
Reimbursement Date until payment in full is made by Borrower (whether
by the funding of a Revolver Loan or otherwise). Until Fleet has
received payment from Borrower in accordance with the foregoing
provisions of this clause (iii), Fleet, in addition to all of its other
rights and remedies under this Agreement, shall be fully subrogated to
(A) the rights and remedies of Bank as issuer of the Letter of Credit
under any agreement with Borrower relating to the issuance of such
Letter of Credit, and (B) the rights and remedies of each beneficiary
under such Letter of Credit whose claims against Borrower has been
discharged with the proceeds of such Letter of Credit. Whether or not
Borrower submits any Notice of Borrowing to Agent, Borrower shall be
deemed to have requested from Lenders a Borrowing of Base Rate Loans in
an amount necessary to pay to Fleet all amounts due Fleet on any
Reimbursement Date and each Lender agrees to fund its Pro Rata share of
such Borrowing whether or not any Default or Event of Default has
occurred or exists, the Revolver Commitments have been terminated, the
funding of the Borrowing deemed requested by Borrower would result in,
or increase the amount of, any Out-of-Formula Condition, or any of the
conditions set forth in SECTION 10 hereof are not satisfied.
(iv) Borrower assumes all risks of the acts,
omissions or misuses of any Letter of Credit by the beneficiary
thereof. The obligation of Borrower to reimburse Fleet for any payment
made by Fleet under the LC Support shall be absolute, unconditional and
irrevocable and shall be paid without regard to any lack of validity or
enforceability of any Letter of Credit, the existence of any claim,
setoff, defense or other right which Borrower may have at any time
against a beneficiary of any Letter of Credit, or improper honor by
Bank of any draw request under a Letter of Credit. If presentation of a
demand, draft, certificate or other document does not comply with the
terms of a Letter of Credit and Borrower contends that, as a
consequence of such noncompliance it has no obligation to reimburse
Bank for any payment made with respect thereto, Borrower shall
nevertheless be obligated to reimburse Fleet for any payment made under
the LC Support with respect to such Letter of Credit, but without
waiving any claim Borrower may have against Bank in connection
therewith. All disputes regarding any Letter of Credit shall be
resolved by Borrower directly with Bank.
(v) No Letter of Credit shall be extended or
amended in any respect that is not solely ministerial, unless all of
the LC Conditions are met as though a new Letter of Credit were being
requested and issued.
(vi) Borrower hereby authorizes and directs Bank
to deliver to Fleet all instruments, documents and other writings and
Property received by Bank pursuant to or in connection with any Letter
of Credit and to accept and rely upon Fleet's instructions and
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agreements with respect to all matters arising in connection with such
Letter of Credit and the related LC Application.
1.3.2. Participations.
(i) Immediately upon the issuance by Bank of any
Letter of Credit, each Lender (other than Fleet) shall be deemed to
have irrevocably and unconditionally purchased and received from Fleet,
without recourse or warranty, an undivided interest and participation
equal to the Pro Rata share of such Lender (a "Participating Lender")
in all LC Outstandings arising in connection with such Letter of Credit
and any security therefor or guaranty pertaining thereto, but in no
event greater than an amount which, when added to such Lender's Pro
Rata share of all Revolver Loans and LC Outstandings then outstanding,
exceeds such Lender's Revolver Commitment.
(ii) If Fleet makes any payment under an LC
Support and Borrower does not repay or cause to be repaid the amount of
such payment on the Reimbursement Date, Fleet shall promptly notify
Agent, which shall promptly notify each Participating Lender, of such
payment and each Participating Lender shall promptly (and in any event
within 1 Business Day after its receipt of notice from Agent) and
unconditionally pay to Agent, for the account of Fleet, in immediately
available funds, the amount of such Participating Lender's Pro Rata
share of such payment, and Agent shall promptly pay such amounts to
Fleet. If a Participating Lender does not make its Pro Rata share of
the amount of such payment available to Agent on a timely basis as
herein provided, such Participating Lender agrees to pay to Agent for
the account of Fleet, forthwith ON DEMAND, such amount together with
interest thereon at the Federal Funds Rate until paid. The failure of
any Participating Lender to make available to Agent for the account of
Fleet such Participating Lender's Pro Rata share of the LC Outstandings
shall not relieve any other Participating Lender of its obligation
hereunder to make available to Agent its Pro Rata share of the LC
Outstandings, but no Participating Lender shall be responsible for the
failure of any other Participating Lender to make available to Agent
its Pro Rata share of the LC Outstandings on the date such payment is
to be made.
(iii) Whenever Fleet receives a payment on account
of the LC Outstandings, including any interest thereon, as to which
Agent has previously received payments from any Lender for the account
of Fleet, Fleet shall promptly pay to each Participating Lender which
has funded its participating interest therein, in immediately available
funds, an amount equal to such Participating Lender's Pro Rata share
thereof.
(iv) The obligation of each Participating Lender
to make payments to Agent for the account of Fleet in connection with
Fleet's payment under a LC Support shall be absolute, unconditional and
irrevocable, not subject to any counterclaim, setoff, qualification or
exception whatsoever (other than for Fleet's gross negligence or
willful misconduct), and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances and irrespective
of whether or not Borrower may assert or have any claim for any lack of
validity or unenforceability of this Agreement or any of the other Loan
Documents; the existence of any Default or Event of Default; any draft,
certificate or other document presented under a Letter of Credit having
been determined to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect; the existence of any setoff or defense any Obligor may have
with respect to any of the Obligations; or the termination of the
Revolver Commitments.
(v) Neither Fleet nor any of its officers,
directors, employees or agents shall be liable to any Participating
Lender for any action taken or omitted to be taken under or in
connection with any of the LC Documents except as a result of actual
gross negligence or willful
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misconduct on the part of Fleet. Fleet does not assume any
responsibility for any failure or delay in performance or breach by
Borrower or any other Person of any of its obligations under any of the
LC Documents. Fleet does not make to Participating Lenders any express
or implied warranty, representation or guaranty with respect to the
Collateral, the LC Documents, or any Obligor. Fleet shall not be
responsible to any Participating Lender for any recitals, statements,
information, representations or warranties contained in, or for the
execution, validity, genuineness, effectiveness or enforceability of or
any of the LC Documents; the validity, genuineness, enforceability,
collectibility, value or sufficiency of any of the Collateral or the
perfection of any Lien therein; or the assets, liabilities, financial
condition, results of operations, business, creditworthiness or legal
status of Borrower or any other Obligor or any Account Debtor. In
connection with its administration of and enforcement of rights or
remedies under any of the LC Documents, Fleet shall be entitled to act,
and shall be fully protected in acting upon, any certification, notice
or other communication in whatever form believed by Fleet, in good
faith, to be genuine and correct and to have been signed, sent or made
by a proper Person. Fleet may consult with and employ legal counsel,
accountants and other experts and to advise it concerning its rights,
powers and privileges under the LC Documents and shall be entitled to
act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by such experts. Fleet may employ
agents and attorneys-in-fact in connection with any matter relating to
the LC Documents and shall not be liable for the negligence, default or
misconduct of any such agents or attorneys-in-fact selected by Fleet
with reasonable care. Fleet shall not have any liability to any
Participating Lender by reason of Fleet's refraining to take any action
under any of the LC Documents without having first received written
instructions from the Required Lenders to take such action.
(vi) Upon the request of any Participating
Lender, Fleet shall furnish to such Participating Lender copies (to the
extent then available to Fleet) of each outstanding Letter of Credit
and related LC Application and all other documentation pertaining to
such Letter of Credit as may be in the possession of Fleet and
reasonably requested from time to time by such Participating Lender.
1.3.3. Cash Collateral Account. If any LC Outstandings,
whether or not then due or payable, shall for any reason be outstanding (i) at
any time when an Event of Default has occurred and is continuing, (ii) on any
date that Availability is less than zero, or (iii) on or at any time after the
Commitment Termination Date, then Borrower shall, on Fleet's or Agent's request,
forthwith deposit with Agent, in cash, an amount equal to the aggregate amount
of LC Outstandings. If Borrower fails to make such deposit on the first Business
Day following Agent's or Fleet's demand therefor, Lenders may (and shall upon
direction of the Required Lenders) advance such amount as Revolver Loans
(whether or not an Out-of-Formula Condition is created thereby). Such cash
(together with any interest accrued thereon) shall be held by Agent in the Cash
Collateral Account and may be invested, in Agent's discretion, in Cash
Equivalents. Borrower hereby pledges to Agent and grants to Agent a security
interest in, for the benefit of Agent in such capacity and for the Pro Rata
benefit of Lenders, all Cash Collateral held in the Cash Collateral Account from
time to time and all proceeds thereof, as security for the payment of all
Obligations, whether or not then due or payable. From time to time after cash is
deposited in the Cash Collateral Account, Agent may apply Cash Collateral then
held in the Cash Collateral Account to the payment of any amounts, in such order
as Agent may elect, as shall be or shall become due and payable by Borrower to
Agent or any Lender with respect to the LC Outstandings that may be then
outstanding. Neither Borrower nor any other Person claiming by, through or under
or on behalf of Borrower shall have any right to withdraw any of the Cash
Collateral held in the Cash Collateral Account, including any accrued interest,
provided that upon termination or expiration of all Letters of Credit and the
payment and satisfaction of all of the LC Outstandings, any Cash Collateral
remaining in the Cash Collateral Account shall be returned to Borrower unless an
Event of Default then exists (in which event Agent may apply such Cash
Collateral to the payment of any other Obligations outstanding, with any surplus
to be turned over to Borrower).
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1.3.4. Indemnifications.
(i) In addition to any other indemnity which
Borrower may have to Agent or any Lender under any of the other Loan
Documents and without limiting such other indemnification provisions,
Borrower hereby agrees to indemnify and defend each of the Agent
Indemnitees and Lender Indemnitees and to hold each of the Agent
Indemnitees and Lender Indemnitees harmless from and against any and
all Claims which any of the Agent Indemnitees or any of the Lender
Indemnitees may (other than as the actual result of their own gross
negligence or willful misconduct) incur or be subject to as a
consequence, directly or indirectly, of (a) the issuance of, payment or
failure to pay or any performance or failure to perform under any
Letter of Credit or LC Support or (b) any suit, investigation or
proceeding as to which Agent or any Lender is or may become a party to
as a consequence, directly or indirectly, of the issuance of any Letter
of Credit or any LC Support or the payment or failure to pay
thereunder.
(ii) Each Participating Lender agrees to
indemnify and defend each of the Fleet Indemnitees (to the extent the
Fleet Indemnitees are not reimbursed by Borrower or any other Obligor,
but without limiting the indemnification obligations of Borrower under
this Agreement), on a Pro Rata basis, from and against any and all
Claims which may be imposed on, incurred by or asserted against any of
the Fleet Indemnitees in any way related to or arising out of Fleet's
administration or enforcement of rights or remedies under any of the LC
Documents or any of the transactions contemplated thereby (including
costs and expenses which Borrower is obligated to pay under SECTION
14.2 hereof), provided that no Participating Lender shall be liable to
any of the Fleet Indemnitees for any of the foregoing to the extent
that they result solely from the willful misconduct or gross negligence
of such Fleet Indemnitees.
SECTION 2. INTEREST, FEES AND CHARGES
2.1. INTEREST.
2.1.1. Rates of Interest. Borrower agrees to pay interest in
respect of all unpaid principal amounts of the Revolver Loans from the
respective dates such principal amounts are advanced until paid (whether at
stated maturity, on acceleration or otherwise) at a rate per annum equal to the
applicable rate indicated below:
(i) for Revolver Loans made or outstanding as
Base Rate Loans, the Applicable Margin plus the Base Rate in effect
from time to time; or
(ii) for Revolver Loans made or outstanding as
LIBOR Loans, the Applicable Margin plus the relevant Adjusted LIBOR
Rate for the applicable Interest Period selected by Borrower in
conformity with this Agreement.
Upon determining the Adjusted LIBOR Rate for any Interest
Period requested by Borrower, Agent shall promptly notify Borrower thereof by
telephone and, if so requested by Borrower, confirm the same in writing. Such
determination shall, absent manifest error, be final, conclusive and binding on
all parties and for all purposes. The applicable rate of interest for all Loans
(or portions thereof) bearing interest based upon the Base Rate shall be
increased or decreased, as the case may be, by an amount equal to any increase
or decrease in the Base Rate, with such adjustments to be effective as of the
opening of business on the day that any such change in the Base Rate becomes
effective. Interest on each Loan shall accrue from and including the date on
which such Loan is made, converted to a Loan of another Type or continued as a
LIBOR Loan to (but excluding) the date of any repayment
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12
thereof; provided, however, that, if a Loan is repaid on the same day made, one
day's interest shall be paid on such Loan. The Base Rate on the date hereof is
8.50% per annum and, therefore, the rate of interest in effect hereunder on the
date hereof, expressed in simple interest terms, is 8.50% per annum with respect
to any portion of the Revolver Loans bearing interest as a Base Rate Loan.
2.1.2. Conversions and Continuations.
(i) Borrower may on any Business Day, subject to
the giving of a proper Notice of Conversion/Continuation as hereinafter
described, elect (A) to continue all or any part of a LIBOR Loan by
selecting a new Interest Period therefor, to commence on the last day
of the immediately preceding Interest Period, or (B) to convert all or
any part of a Loan of one Type into a Loan of another Type; provided,
however, that no outstanding Loans may be converted into or continued
as LIBOR Loans when any Default or Event of Default exists. Any
conversion of a LIBOR Loan into a Base Rate Loan shall be made on the
last day of the Interest Period for such LIBOR Loan. Any conversion or
continuation made with respect to less than the entire outstanding
balance of the Revolver Loans, must be allocated among Lenders on a Pro
Rata basis, and the Interest Period for Loans converted into or
continued as LIBOR Loans shall be coterminous for each Lender.
(ii) Whenever Borrower desires to convert or
continue Loans under SECTION 2.1.2(I), Borrower shall give Agent
written notice (or telephonic notice promptly confirmed in writing)
substantially in the form of EXHIBIT C, signed by an authorized officer
of Borrower, at least 1 Business Day before the requested conversion
date, in the case of a conversion into Base Rate Loans, and at least 3
Business Days before the requested conversion or continuation date, in
the case of a conversion into or continuation of LIBOR Loans. Promptly
after receipt of a Notice of Conversion/Continuation, Agent shall
notify each Lender in writing of the proposed conversion or
continuation. Each such Notice of Conversion/Continuation shall be
irrevocable and shall specify the aggregate principal amount of the
Loans to be converted or continued, the date of such conversion or
continuation (which shall be a Business Day) and whether the Loans are
being converted into or continued as LIBOR Loans (and, if so, the
duration of the Interest Period to be applicable thereto) or Base Rate
Loans. If, upon the expiration of any Interest Period in respect of any
LIBOR Loans, Borrower shall have failed to deliver the Notice of
Conversion/Continuation, Borrower shall be deemed to have elected to
convert such LIBOR Loans to Base Rate Loans.
2.1.3. Interest Periods. In connection with the making or
continuation of, or conversion into, each Borrowing of LIBOR Loans, Borrower
shall select an interest period (each an "Interest Period") to be applicable to
such LIBOR Loan, which interest period shall commence on the date such LIBOR
Loan is made and shall end on a numerically corresponding day in the first,
second, third or sixth month thereafter; provided, however, that:
(i) the initial Interest Period for a LIBOR Loan
shall commence on the date of such Borrowing (including the date of any
conversion from a Loan of another Type) and each Interest Period
occurring thereafter in respect of such Revolver Loan shall commence on
the date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise
expire on a day that is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day, provided that if any
Interest Period in respect of LIBOR Loans would otherwise expire on a
day which is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day;
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13
(iii) any Interest Period that begins on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period shall expire on the last Business
Day of such calendar month;
(iv) no Interest Period with respect to any
portion of principal of a Loan shall extend beyond a date on which
Borrower is required to make a scheduled payment of such portion of
principal; and
(v) no Interest Period shall extend beyond the
last day of the Original Term.
2.1.4. Interest Rate Not Ascertainable. If Agent shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that on any date for determining the
Adjusted LIBOR Rate for any Interest Period, by reason of any changes arising
after the date of this Agreement affecting the London interbank market or any
Lender's or Bank's position in such market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided for in the
definition of Adjusted LIBOR Rate, then, and in any such event, Agent shall
forthwith give notice (by telephone confirmed in writing) to Borrower of such
determination. Until Agent notifies Borrower that the circumstances giving rise
to the suspension described herein no longer exist, the obligation of Lenders to
make LIBOR Loans shall be suspended, and such affected Loans then outstanding
shall, at the end of the then applicable Interest Period or at such earlier time
as may be required by Applicable Law, bear the same interest as Base Rate Loans.
2.1.5. Default Rate of Interest. Borrower shall pay interest
(before as well as after entry of judgment thereon, to the extent permitted by
Applicable Law) at a rate per annum equal to the Default Rate (i) with respect
to the principal amount of any portion of the Obligations (and, to the extent
permitted by Applicable Law, all past due interest) that is not paid on the due
date thereof (whether due at stated maturity, on demand, upon acceleration or
otherwise) until paid in full; (ii) with respect to the principal amount of all
of the Obligations (and, to the extent permitted by Applicable Law, all past due
interest) upon the earlier to occur of (x) Borrower's receipt of notice from
Agent of the Required Lenders' election to charge the Default Rate based upon
the existence of any Event of Default (which notice Agent shall send only with
the consent or at the direction of the Required Lenders), whether or not
acceleration or demand for payment of the Obligations has been made, or (y) the
commencement by or against Borrower of an Insolvency Proceeding whether or not
under the circumstances described in clauses (i) or (ii) hereof Lender elects to
accelerate the maturity or demand payment of any of the Obligations; and (iii)
with respect to the principal amount of any Out-of-Formula Loans, whether or not
demand for payment thereof has been made by Agent. To the fullest extent
permitted by Applicable Law, the Default Rate shall apply and accrue on any
judgment entered with respect to any of the Obligations and to the unpaid
principal amount of the Obligations during any Insolvency Proceeding of
Borrower. Borrower acknowledges that the cost and expense to Agent and each
Lender attendant upon the occurrence of an Event of Default are difficult to
ascertain or estimate and that the Default Rate is a fair and reasonable
estimate to compensate Agent and Lender for such added cost and expense.
2.2. FEES. In consideration of Lender's establishment of the
Revolver Commitments in favor of Borrower, and Agent's agreement to serve as
collateral and administrative agent hereunder, Borrower agrees to pay the
following fees:
2.2.1. Collateral Management Fee. Borrower shall pay to
Agent a collateral management fee of $1,750 on the Closing Date and monthly, in
arrears, on the first day of each month thereafter, commencing March 1, 2000;
but if the Revolver Commitments are terminated on a day other than the last day
of a month, then such fee payable for such month in which termination shall
occur shall be paid on the effective date of such termination.
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2.2.2. Commitment Fee. Borrower shall pay to Agent for the
Pro Rata benefit of Lenders a fee each quarter, commencing April 1, 2000, and
continuing on the first day of each July, October, January and April thereafter,
equal to the Applicable Margin per annum multiplied by the amount (if any) by
which the Average Loan Balance for such quarter (or portion thereof that the
Revolver Commitments are in effect) is less than $17,000,000; but if the
Revolver Commitments are terminated on a day other than the last day of a
quarter, then any such fee payable for such quarter in which termination shall
occur shall be paid on the effective date of such termination.
2.2.3. LC Facility Fees. Borrower shall pay (i) to Agent
through its Treasury and International Services Group for the ratable account of
each Lender for Letters of Credit, the Applicable Margin in effect for LIBOR
Loans on a per annum basis based on the average amount available to be drawn
under all Letters of Credit outstanding, payable monthly, in arrears, on the
first Business Day of the following month, and (ii) to Agent, through its
Treasury and International Services Group, for its own account a Letter of
Credit processing fee of 0.125% per annum based on the average amount available
to be drawn under all of such Letters of Credit outstanding, payable monthly, in
arrears, on the first Business Day of the following month, and (iii) to Bank for
its own account all normal and customary charges, without limitation, associated
with the issuance, amending, negotiating, processing and administration of
Letters of Credit.
2.2.4. Audit and Appraisal Fees. Borrower shall reimburse
Agent and Lenders for all reasonable costs and expenses incurred by Agent or
Lenders in connection with all appraisals of any Collateral as Agent shall deem
appropriate and shall pay to Agent $650 per day for each day that an employee or
representative of Agent shall conduct a field exam of any of Borrower's books
and records. On the Closing Date, Borrower shall pay to Fleet an appraisal fee
of $9,750 plus all out-of-pocket expenses incurred by Fleet in connection with
the audit and appraisal of Borrower's business and Properties prior to the
Closing Date.
2.2.5. General Provisions. All fees shall be fully earned by
the identified recipient thereof pursuant to the foregoing provisions of this
Agreement on the due date thereof (and, in the case of Letters of Credit, upon
each issuance, renewal or extension of such Letter of Credit) and, except as
otherwise set forth herein or required by Applicable Law, shall not be subject
to rebate, refund or proration. All fees provided for in SECTION 2.2 are and
shall be deemed to be compensation for services and are not, and shall not be
deemed to be, interest or any other charge for the use, forbearance or detention
of money.
2.3. COMPUTATION OF INTEREST AND FEES. All fees and other charges
provided for in this Agreement that are calculated as a per annum percentage of
any amount and all interest shall be calculated daily and shall be computed on
the actual number of days elapsed over a year of 360 days. For purposes of
computing interest and other charges hereunder, all Payment Items and other
forms of payment received by Agent shall be deemed applied by Agent on account
of the Obligations (subject to final payment of such items) on the Business Day
that Agent receives such items in immediately available funds in the Payment
Account, and Agent shall be deemed to have received such Payment Item on the
date specified in SECTION 4.7 hereof.
2.4. REIMBURSEMENT OBLIGATIONS.
2.4.1. Borrower shall reimburse Agent and, during any period
that an Event of Default then exists, each Lender, for all reasonable legal,
accounting, appraisal and other fees and expenses incurred by Agent or any
Lender in connection with (i) the negotiation and preparation of any of the Loan
Documents, any amendment or modification thereto, any waiver of any Default or
Event of Default thereunder, or any restructuring or forbearance with respect
thereto; (ii) the administration of the Loan Documents and the transactions
contemplated thereby, to the extent that such fees and expenses are expressly
provided for in this Agreement or any of the other Loan Documents; (iii) action
taken to perfect
- 9 -
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or maintain the perfection or priority of any of Agent's Liens with respect to
any of the Collateral; (iv) any inspection of or audits conducted with respect
to any of Borrower's books and records or any of the Collateral, provided that
for so long as no Default or Event of Default exists, Borrower shall not be
required to reimburse Agent for more than 2 audits during any 12-month period;
(v) any effort to verify, protect, preserve, or restore any of the Collateral or
to collect, sell, liquidate or otherwise dispose of or realize upon any of the
Collateral; (vi) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by or against Agent, any Lender, any Obligor or any other
Person) in any way arising out of or relating to any of the Collateral (or the
validity, perfection or priority of any of Agent's Liens thereon), any of the
Loan Documents or the validity, allowance or amount of any of the Obligations;
(vii) the protection or enforcement or any rights or remedies of Agent or any
Lender in any Insolvency Proceeding; and (viii) any other action taken by Agent
or any Lender to enforce any of the rights or remedies of Agent or such Lender
against any Obligor or any Account Debtors to enforce collection of any of the
Obligations or payments with respect to any of the Collateral. All amounts
chargeable to Borrower under this SECTION 2.4 shall constitute Obligations that
are secured by all of the Collateral and shall be payable ON DEMAND to Agent.
Borrower shall also reimburse Agent for reasonable expenses incurred by Agent in
its administration of any of the Collateral to the extent and in the manner
provided in SECTION 7 hereof or in any of the other Loan Documents. The
foregoing shall be in addition to, and shall not be construed to limit, any
other provision of any of the Loan Documents regarding the reimbursement by
Borrower of costs, expenses or liabilities suffered or incurred by Agent or any
Lender.
2.4.2. If at any time Agent or any Lender shall agree to
indemnify any Person (including Bank) against losses or damages that such Person
may suffer or incur in its dealings or transactions with Borrower, or guarantee
any liability or obligation of Borrower to such Person, or otherwise provide
assurances of Borrower's payment or performance under any agreement with such
Person, including indemnities, guaranties or other assurances of payment or
performance given by Agent or any Lender with respect to Cash Management
Agreements, Interest Rate Contracts or Letters of Credit, then the Contingent
Obligation of Agent or any Lender providing any such indemnity, guaranty or
other assurance of payment or performance, together with any payment made or
liability incurred by Agent or any Lender in connection therewith, shall
constitute Obligations that are secured by the Collateral and Borrower shall
repay, ON DEMAND, any amount so paid or any liability incurred by Agent or any
Lender in connection with such indemnity, guaranty or assurance, except that
payment with respect to any LC Support shall be due on the Reimbursement Date,
as provided in SECTION 1.3.1(III) hereof. Nothing herein shall be construed to
impose upon Agent or any Lender any obligation to provide any such indemnity,
guaranty or assurance, except to the extent provided in SECTION 1.3 hereof. The
foregoing agreement of Borrower shall apply even if it is oral and the existence
thereof is unknown to Borrower with respect to any indemnity, guaranty or
assurance that is an LC Support or is given to (i) Bank with respect to any Cash
Management Agreement, (ii) any other financial institution with respect to the
banking relationship between Borrower and such other financial institution and
(iii) any landlord with respect to any lease of premises used by Borrower at any
time, and the agreement contained in this SECTION 2.4.2 shall be in addition to
any other provisions of any of the Loan Documents regarding reimbursement by
Borrower of costs, expenses or liabilities suffered or incurred by Agent or any
Lender.
2.5. BANK CHARGES. Borrower shall pay to Agent, ON DEMAND, any and
all fees, costs or expenses which Agent or any Lender pays to a bank or other
similar institution (including any fees paid by Agent or any Lender to any
Participant) arising out of or in connection with (i) the forwarding to Borrower
or any other Person on behalf of Borrower by Agent or any Lender of proceeds of
Loans made by Lenders to Borrower pursuant to this Agreement and (ii) the
depositing for collection by Agent or any Lender of any Payment Item received or
delivered to Agent or any Lender on account of the Obligations. Borrower
acknowledges and agrees that Agent may charge such costs, fees and expenses to
Borrower based upon Agent's good faith estimate of such costs, fees and expenses
as they are incurred by Agent or any Lender.
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2.6. ILLEGALITY. Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if (i) any change in any law or regulation or in
the interpretation thereof by any Governmental Authority charged with the
administration thereof shall make it unlawful for a Lender to make or maintain a
LIBOR Loan or to give effect to its obligations as contemplated hereby with
respect to a LIBOR Loan or (ii) at any time such Lender determines that the
making or continuance of any LIBOR Loan has become impracticable as a result of
a contingency occurring after the date hereof which adversely affects the London
interbank market or the position of such Lender in such market, then such Lender
shall give after such determination Agent and Borrower notice thereof and may
thereafter (1) declare that LIBOR Loans will not thereafter be made by such
Lender, whereupon any request by a Borrower for a LIBOR Loan shall be deemed, in
the case of such Lender, a request for a Base Rate Loan unless such Lender's
declaration shall be subsequently withdrawn (which declaration shall be
withdrawn promptly after the cessation of the circumstances described in clause
(i) or (ii) above); and (2) require that all outstanding LIBOR Loans made by
such Lender be converted to Base Rate Loans, under the circumstances of clause
(i) or (ii) of this SECTION 2.6 insofar as such Lender determines the
continuance of LIBOR Loans to be impracticable, in which event all such LIBOR
Loans shall be converted automatically to Base Rate Loans as of the date of
Borrower's receipt of the aforesaid notice from such Lender.
2.7. INCREASED COSTS. If, by reason of (a) the introduction after
the date hereof of or any change (including any change by way of imposition or
increase of Statutory Reserves or other reserve requirements) in or in the
interpretation of any law or regulation, or (b) the compliance with any
guideline or request from any central bank or other Governmental Authority or
quasi-Governmental Authority exercising control over banks or financial
institutions generally (whether or not having the force of law):
(i) any Lender shall be subject after the date
hereof to any Taxes, duty or other charge with respect to any LIBOR
Loan or its obligation to make LIBOR Loans, or a change shall result in
the basis of taxation of payment to any Lender of the principal of or
interest on its LIBOR Loans or its obligation to make LIBOR Loans
(except for changes in the rate of Tax on the overall net income or
gross receipts of such Lender imposed by the jurisdiction in which such
Lender's principal executive office is located); or
(ii) any reserve (including any imposed by the
Board of Governors), special deposits or similar requirement against
assets of, deposits with or for the account of, or credit extended by,
Lender shall be imposed or deemed applicable or any other condition
affecting its LIBOR Loans or its obligation to make LIBOR Loans shall
be imposed on such Lender or the London interbank market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining LIBOR Loans (except to the
extent already included in the determination of the applicable Adjusted LIBOR
Rate for LIBOR Loans), or there shall be a reduction in the amount received or
receivable by such Lender, then such Lender shall, promptly after determining
the existence or amount of any such increased costs for which such Lender seeks
payment hereunder (but in no event more than 90 days after such increase), give
Borrower notice thereof and Borrower shall from time to time, upon written
notice from and demand by such Lender (with a copy of such notice and demand to
Agent), pay to Agent for the account of such Lender, within 5 Business Days
after the date specified in such notice and demand, an additional amount
sufficient to indemnify such Lender against such increased costs. A certificate
as to the amount of such increased cost, submitted to Borrower by such Lender,
shall be final, conclusive and binding for all purposes, absent manifest error.
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If any Lender shall advise Agent at any time that, because of the
circumstances described hereinabove in this SECTION 2.7 or any other
circumstances arising after the date of this Agreement affecting such Lender or
the London interbank market or such Lender's or Bank's position in such market,
the Adjusted LIBOR Rate, as determined by Agent, will not adequately and fairly
reflect the cost to such Lender of funding LIBOR Loans, then, and in any such
event:
(i) Agent shall forthwith give notice (by
telephone confirmed in writing) to Borrower and Lenders of such event;
(ii) Borrower's right to request and such
Lender's obligation to make LIBOR Loans shall be immediately suspended
and Borrower's right to continue a LIBOR Loan as such beyond the then
applicable Interest Period shall also be suspended, until each
condition giving rise to such suspension no longer exists; and
(iii) such Lender shall make a Base Rate Loan as
part of the requested Borrowing of LIBOR Loans, which Base Rate Loan
shall, for all purposes, be considered part of such Borrowing.
For purposes of this SECTION 2.7, all references to a Lender
shall be deemed to include any bank holding company or bank parent of such
Lender.
2.8. CAPITAL ADEQUACY. If any Lender determines that after the date
hereof (a) the adoption of any Applicable Law regarding capital requirements for
banks or bank holding companies or the subsidiaries thereof, (b) any change in
the interpretation or administration of any such Applicable Law by any
Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or (c) compliance by such Lender or
its holding company with any request or directive of any such Governmental
Authority, central bank or comparable agency regarding capital adequacy (whether
or not having the force of law), has the effect of reducing the return on such
Lender's capital to a level below that which such Lender could have achieved
(taking into consideration such Lender's and its holding company's policies with
respect to capital adequacy immediately before such adoption, change or
compliance and assuming that such Lender's capital was fully utilized prior to
such adoption, change or compliance) but for such adoption, change or compliance
as a consequence of such Lender's commitment to make the Loans pursuant hereto
by any amount deemed by such Lender to be material:
(i) Agent shall promptly, after its receipt of a
certificate from such Lender setting forth such Lender's determination
of such occurrence, give notice thereof to Borrower and Lenders; and
(ii) Borrower shall pay to Agent, for the account
of such Lender, as an additional fee from time to time, ON DEMAND, such
amount as such Lender certifies to be the amount reasonably calculated
to compensate such Lender for such reduction.
A certificate of such Lender claiming entitlement to
compensation as set forth above will be conclusive in the absence of manifest
error. Such certificate will set forth the nature of the occurrence giving rise
to such compensation, the additional amount or amounts to be paid to such Lender
(including the basis for such Lender's determination of such amount), and the
method by which such amounts were determined. In determining such amount, such
Lender may use any reasonable averaging and attribution method. For purposes of
this SECTION 2.8 all references to a Lender shall be deemed to include any bank
holding company or bank parent of such Lender.
2.9. FUNDING LOSSES. If for any reason (other than due to a default
by a Lender or as a result of a Lender's refusal to honor a LIBOR Loan request
due to circumstances described in SECTION 2.6 or
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2.7 hereof) a Borrowing of, or conversion to or continuation of, LIBOR Loans
does not occur on the date specified therefor in a Notice of Borrowing or Notice
of Conversion/ Continuation (whether or not withdrawn), or if any repayment
(including any conversions pursuant to SECTION 2.1.2 hereof) of any of its LIBOR
Loans occurs on a date that is not the last day of an Interest Period applicable
thereto, or if for any reason Borrower defaults in its obligation to repay LIBOR
Loans when required by the terms of this Agreement, then Borrower shall pay to
Agent, for the ratable benefit of the affected Lenders, within 10 days after
Agent's or an affected Lender's demand therefor, an amount (if a positive
number) computed pursuant to the following formula:
L =(R - T) x P x D
---------------
360
where
L = amount payable
R = interest rate applicable to the LIBOR Loan
unborrowed or prepaid T = effective interest
rate per annum at which any readily
marketable bond or other obligations of the
United States, selected at Agent's sole
discretion, maturing on or nearest the last
day of the then applicable or requested
Interest Period for such LIBOR Loan and
in approximately the same amount as such
LIBOR Loan, can be purchased by Agent on the
day of such payment of principal or failure
to borrow
P = the amount of principal paid or the amount
of the LIBOR Loan requested or to have been
continued or converted
D = the number of days remaining in the Interest
Period as of the date of such prepayment or
the number of days in the requested Interest
Period
Borrower shall pay such amount upon presentation by Agent of a statement setting
forth the amount and Agent's calculation thereof pursuant hereto, which
statement shall be deemed true and correct absent manifest error. For purposes
of this SECTION 2.9, all references to a Lender shall be deemed to include any
bank holding company or bank parent of such Lender.
2.10. MAXIMUM INTEREST. Regardless of any provision contained in any
of the Loan Documents, in no contingency or event whatsoever shall the aggregate
of all amounts that are contracted for, charged or received by Agent and Lenders
pursuant to the terms of this Agreement or any of the other Loan Documents and
that are deemed interest under Applicable Law exceed the highest rate
permissible under any Applicable Law. No agreements, conditions, provisions or
stipulations contained in this Agreement or any of the other Loan Documents or
the exercise by Agent of the right to accelerate the payment or the maturity of
all or any portion of the Obligations, or the exercise of any option whatsoever
contained in any of the Loan Documents, or the prepayment by Borrower of any of
the Obligations, or the occurrence of any contingency whatsoever, shall entitle
Agent or any Lender to charge or receive in any event, interest or any charges,
amounts, premiums or fees deemed interest by Applicable Law (such interest,
charges, amounts, premiums and fees referred to herein collectively as
"Interest") in excess of the Maximum Rate and in no event shall Borrower be
obligated to pay Interest exceeding such Maximum Rate, and all agreements,
conditions or stipulations, if any, which may in any event or contingency
whatsoever operate to bind, obligate or compel Borrower to pay Interest
exceeding the Maximum Rate shall be without binding force or effect, at law or
in equity, to the extent only of the excess of Interest over such Maximum Rate.
If any Interest is charged or received in excess of the Maximum Rate ("Excess"),
Borrower acknowledges and stipulates that any such charge or receipt shall be
the result of an accident and bona fide error, and such Excess, to the extent
received, shall be applied first to reduce the principal Obligations and the
balance, if any, returned to Borrower, it being the intent
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of the parties hereto not to enter into a usurious or otherwise illegal
relationship. The right to accelerate the maturity of any of the Obligations
does not include the right to accelerate any Interest that has not otherwise
accrued on the date of such acceleration, and Agent and Lenders do not intend to
collect any unearned Interest in the event of any such acceleration. Borrower
recognizes that, with fluctuations in the rates of interest set forth in SECTION
2.1.1 of this Agreement, and the Maximum Rate, such an unintentional result
could inadvertently occur. All monies paid to Agent or any Lender hereunder or
under any of the other Loan Documents, whether at maturity or by prepayment,
shall be subject to any rebate of unearned Interest as and to the extent
required by Applicable Law. By the execution of this Agreement, Borrower
covenants that (i) the credit or return of any Excess shall constitute the
acceptance by Borrower of such Excess, and (ii) Borrower shall not seek or
pursue any other remedy, legal or equitable, against Agent or any Lender, based
in whole or in part upon contracting for, charging or receiving any Interest in
excess of the Maximum Rate. For the purpose of determining whether or not any
Excess has been contracted for, charged or received by Agent or any Lender, all
Interest at any time contracted for, charged or received from Borrower in
connection with any of the Loan Documents shall, to the extent permitted by
Applicable Law, be amortized, prorated, allocated and spread in equal parts
throughout the full term of the Obligations. Borrower, Agent and Lenders shall,
to the maximum extent permitted under Applicable Law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as Interest and
(ii) exclude voluntary prepayments and the effects thereof. The provisions of
this SECTION 2.10 shall be deemed to be incorporated into every Loan Document
(whether or not any provision of this Section is referred to therein). All such
Loan Documents and communications relating to any Interest owed by Borrower and
all figures set forth therein shall, for the sole purpose of computing the
extent of Obligations, be automatically recomputed by Borrower, and by any court
considering the same, to give effect to the adjustments or credits required by
this SECTION 2.10.
SECTION 3. LOAN ADMINISTRATION
3.1. MANNER OF BORROWING AND FUNDING REVOLVER LOANS. Borrowings
under the Revolver Commitments established pursuant to SECTION 1.1 hereof shall
be made and funded as follows:
3.1.1. Notice of Borrowing.
(i) Whenever Borrower desires to make a
Borrowing under SECTION 1.1 of this Agreement (other than a Borrowing
resulting from a conversion or continuation pursuant to SECTION 2.1.2),
Borrower shall give Agent prior written notice (or telephonic notice
promptly confirmed in writing) of such Borrowing request (a "Notice of
Borrowing"), which shall be in the form of EXHIBIT D annexed hereto and
signed by an authorized officer of Borrower. Such Notice of Borrowing
shall be given by Borrower no later than 12:00 noon at the office of
Agent designated by Agent from time to time (a) on the Business Day of
the requested funding date of such Borrowing, in the case of Base Rate
Loans, and (b) at least 3 Business Days prior to the requested funding
date of such Borrowing, in the case of LIBOR Loans. Notices received
after 12:00 noon shall be deemed received on the next Business Day. The
Revolver Loans made by each Lender on the Closing Date shall be in
excess of $250,000 and shall be made as Base Rate Loans and thereafter
may be made or continued as or converted into Base Rate Loans or LIBOR
Loans. Each Notice of Borrowing (or telephonic notice thereof) shall be
irrevocable and shall specify (a) the principal amount of the
Borrowing, (b) the date of Borrowing (which shall be a Business Day),
(c) whether the Borrowing is to consist of Base Rate Loans or LIBOR
Loans, (d) in the case of LIBOR Loans, the duration of the Interest
Period to be applicable thereto, and (e) the account of Borrower to
which the proceeds of such Borrowing are to be disbursed. Borrower may
not request any LIBOR Loans if a Default or Event of Default exists.
(ii) Unless payment is otherwise timely made by
Borrower, the becoming due of any amount required to be paid under this
Agreement or any of the other Loan Documents with respect to the
Obligations (whether as principal, accrued interest, fees or other
charges,
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including the repayment of any LC Outstandings) shall be deemed
irrevocably to be a request (without any requirement for the submission
of a Notice of Borrowing) for Revolver Loans on the due date of, and in
an aggregate amount required to pay, such Obligations, and the proceeds
of such Revolver Loans may be disbursed by way of direct payment of the
relevant Obligation and shall bear interest as Base Rate Loans. Neither
Agent nor any Lender shall have any obligation to Borrower to honor any
deemed request for a Revolver Loan after the Commitment Termination
Date, when an Out-of-Formula Condition exists or would result
therefrom, or when any condition precedent set forth in SECTION 10
hereof is not satisfied, but may do so in their discretion and without
regard to the existence of, and without being deemed to have waived,
any Default or Event of Default and regardless of whether such Revolver
Loan is funded after the Commitment Termination Date.
(iii) If Borrower elects to establish a Controlled
Disbursement Account with Bank or any Affiliate of Bank, then the
presentation for payment by Bank of any check or other item of payment
drawn on the Controlled Disbursement Account at a time when there are
insufficient funds in such account to cover such check shall be deemed
irrevocably to be a request (without any requirement for the submission
of a Notice of Borrowing) for Revolver Loans on the date of such
presentation and in any amount equal to the aggregate amount of the
items presented for payment, and the proceeds of such Revolver Loans
may be disbursed to the Controlled Disbursement Account and shall bear
interest as Base Rate Loans. Neither Agent nor any Lender shall have
any obligation to honor any deemed request for a Revolver Loan after
the Commitment Termination Date or when an Out-of-Formula Condition
exists or would result therefrom or when any condition precedent in
Section 10 hereof is not satisfied, but may do so in its discretion and
without regard to the existence of, and without being deemed to have
waived, any Default or Event of Default and regardless of whether such
Revolver Loan is funded after the Commitment Termination Date.
(iv) As an accommodation to Borrower, Agent and
Lenders may permit telephonic requests for Borrowings and electronic
transmittal of instructions, authorizations, agreements or reports to
Agent by Borrower; provided, however, that Borrower shall confirm each
such telephonic request for a Borrowing of LIBOR Loans by delivery of
the required Notice of Borrowing to Agent by facsimile transmission
promptly, but in no event later than 5:00 p.m. on the same day. Neither
Agent nor any Lender shall have any liability to Borrower for any loss
or damage suffered by Borrower as a result of Agent's or any Lender's
honoring of any requests, execution of any instructions, authorizations
or agreements or reliance on any reports communicated to it
telephonically or electronically and purporting to have been sent to
Agent or Lenders by Borrower and neither Agent nor any Lender shall
have any duty to verify the origin of any such communication or the
identity or authority of the Person sending it.
3.1.2. Fundings by Lenders. Subject to its receipt of notice
from Agent of a Notice of Borrowing as provided in SECTION 3.1.1(i) (except in
the case of a deemed request by Borrower for a Revolver Loan as provided in
SECTIONS 3.1.1(ii) OR (iii) or 3.1.3(ii) hereof, in which event no Notice of
Borrowing need be submitted), each Lender shall timely honor its Revolver
Commitment by funding its Pro Rata share of each Borrowing of Revolver Loans
that is properly requested by Borrower and that Borrower is entitled to receive
under the Loan Agreement. Agent shall endeavor to notify Lenders of each Notice
of Borrowing (or deemed request for a Borrowing pursuant to SECTION 3.1.1(ii) OR
(iii) hereof), by 12:00 noon on the proposed funding date (in the case of Base
Rate Loans) or by 3:00 p.m. at least 2 Business Days before the proposed funding
date (in the case of LIBOR Loans). Each Lender shall deposit with Agent an
amount equal to its Pro Rata share of the Borrowing requested or deemed
requested by Borrower at Agent's designated bank in immediately available funds
not later than 2:00 p.m. on the date of funding of such Borrowing, unless
Agent's notice to Lenders is received after 12:00 noon on the proposed funding
date of a Base Rate Loan, in which event Lenders shall deposit with Agent their
respective Pro Rata shares of the requested Borrowing on or before 11:00 a.m. of
the next Business Day.
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Subject to its receipt of such amounts from Lenders, Agent shall make the
proceeds of the Revolver Loans received by it available to Borrower by
disbursing such proceeds in accordance with Borrower's disbursement instructions
set forth in the applicable Notice of Borrowing. Unless Agent shall have been
notified in writing by a Lender prior to the proposed time of funding that such
Lender does not intend to deposit with Agent an amount equal such Lender's Pro
Rata share of the requested Borrowing (or deemed request for a Borrowing
pursuant to SECTION 3.1.1(ii) or (iii) hereof), Agent may assume that such
Lender has deposited or promptly will deposit its share with Agent and Agent may
in its discretion disburse a corresponding amount to Borrower on the applicable
funding date. If a Lender's Pro Rata share of such Borrowing is not in fact
deposited with Agent, then, if Agent has disbursed to Borrower an amount
corresponding to such share, then such Lender agrees to pay, and in addition
Borrower agrees to repay, to Agent forthwith ON DEMAND such corresponding
amount, together with interest thereon, for each day from the date such amount
is disbursed by Agent to or for the benefit of Borrower until the date such
amount is paid or repaid to Agent, (a) in the case of Borrower, at the interest
rate applicable to such Borrowing and (b) in the case of such Lender, at the
Federal Funds Rate. If such Lender repays to Agent such corresponding amount,
such amount so repaid shall constitute a Revolver Loan, and if both such Lender
and Borrower shall have repaid such corresponding amount, Agent shall promptly
return to Borrower such corresponding amount in same day funds. A notice of
Agent submitted to any Lender with respect to amounts owing under this SECTION
3.1.2 shall be conclusive, absent manifest error.
3.1.3. Settlement and Settlement Loans.
(i) In order to facilitate the administration of
the Revolver Loans under this Agreement, Lenders agree (which agreement
shall not be for the benefit of or enforceable by Borrower) that
settlement among them with respect to the Revolver Loans may take place
on a periodic basis on dates determined from time to time by Agent
(each a "Settlement Date"), which may occur before or after the
occurrence or during the continuance of a Default or Event of Default
and whether or not all of the conditions set forth in SECTION 10 of
this Agreement have been met. On each Settlement Date, payment shall be
made by or to each Lender in the manner provided herein and in
accordance with the Settlement Report delivered by Agent to Lenders
with respect to such Settlement Date so that, as of each Settlement
Date and after giving effect to the transaction to take place on such
Settlement Date, each Lender shall hold its Pro Rata share of all
Revolver Loans and participations in LC Outstandings then outstanding.
Agent shall request settlement with the Lenders on a basis not less
frequently than once every 5 Business Days.
(ii) Between Settlement Dates, Agent may request
Fleet to advance, and Fleet may, but shall in no event be obligated to,
advance to Borrower out of Fleet's own funds the entire principal
amount of any Borrowing of Revolver Loans that are Base Rate Loans
requested or deemed requested pursuant to this Agreement (any such
Revolver Loan funded exclusively by Fleet being referred to as a
"Settlement Loan"). Each Settlement Loan shall constitute a Revolver
Loan hereunder and shall be subject to all of the terms, conditions and
security applicable to other Revolver Loans, except that all payments
thereon shall be payable to Fleet solely for its own account. The
obligation of Borrower to repay such Settlement Loans to Fleet shall be
evidenced by the records of Fleet and need not be evidenced by any
promissory note. Agent shall not request Fleet to make any Settlement
Loan if (A) Agent shall have received written notice from any Lender
that one or more of the applicable conditions precedent set forth in
SECTION 10 hereof will not be satisfied on the requested funding date
for the applicable Borrowing or (B) the requested Borrowing would
exceed the amount of Availability on the funding date or would cause
the then outstanding principal balance of all Settlement Loans to
exceed $5,000,000. Fleet shall not be required to determine whether the
applicable conditions precedent set forth in SECTION 10 hereof have
been satisfied or the requested Borrowing would exceed the amount of
Availability on the funding date applicable thereto prior to making, in
its sole discretion, any Settlement Loan. On each Settlement Date, or,
if earlier, upon demand by Agent for payment thereof, the then
outstanding Settlement Loans shall be immediately due and payable. As
provided in
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SECTION 3.1.1(ii), Borrower shall be deemed to have requested (without
the necessity of submitting any Notice of Borrowing) Revolver Loans to
be made on each Settlement Date in the amount of all outstanding
Settlement Loans and to have Agent cause the proceeds of such Revolver
Loans to be applied to the repayment of such Settlement Loans and
interest accrued thereon. Agent shall notify the Lenders of the
outstanding balance of Revolver Loans prior to 11:00 a.m. on each
Settlement Date and each Lender (other than Fleet) shall deposit with
Agent (without setoff, counterclaim or reduction of any kind) an amount
equal to its Pro Rata share of the amount of Revolver Loans deemed
requested in immediately available funds not later than 2:00 p.m. on
such Settlement Date, and without regard to whether any of the
conditions precedent set forth in SECTION 10 hereof are satisfied or
the Commitment Termination Date has occurred. If as the result of the
commencement by or against Borrower of any Insolvency Proceeding or
otherwise any Settlement Loan may not be repaid by the funding by
Lenders of Revolver Loans, then each Lender (other than Fleet) shall be
deemed to have purchased a participating interest in any unpaid
Settlement Loan in an amount equal to such Lender's Pro Rata share of
such Settlement Loan and shall transfer to Fleet, in immediately
available funds not later than the 2nd Business Day after Fleet's
request therefor, the amount of such Lender's participation. The
proceeds of Settlement Loans may be used solely for purposes for which
Revolver Loans generally may be used in accordance with SECTION 1.1.3
hereof. If any amounts received by Fleet in respect of any Settlement
Loans are later required to be returned or repaid by Fleet to Borrower
or any other Obligor or their respective representatives or
successors-in-interest, whether by court order, settlement or
otherwise, the other Lenders shall, upon demand by Fleet with notice to
Agent, pay to Agent for the account of Fleet, an amount equal to each
other Lender's Pro Rata share of all such amounts required to be
returned by Fleet.
3.1.4. Disbursement Authorization. Borrower hereby
irrevocably authorizes Agent to disburse the proceeds of each Revolver Loan
requested, or deemed to be requested pursuant to SECTION 3.1.1 or SECTION
3.1.3(ii), as follows: (i) the proceeds of each Revolver Loan requested under
SECTION 3.1.1(i) shall be disbursed by Agent in accordance with the terms of the
written disbursement letter from Borrower in the case of the initial Borrowing,
and, in the case of each subsequent Borrowing, by wire transfer to such bank
account as may be agreed upon by Borrower and Agent from time to time or
elsewhere if pursuant to a written direction from Borrower; and (ii) the
proceeds of each Revolver Loan requested under SECTION 3.1.1(ii) or SECTION
3.1.3(ii) shall be disbursed by Agent by way of direct payment of the relevant
interest or other Obligation.
3.2. DEFAULTING LENDER. If any Lender shall, at any time, fail to
make any payment to Agent or Fleet that is required hereunder, Agent may, but
shall not be required to, retain payments that would otherwise be made to such
defaulting Lender hereunder and apply such payments to such defaulting Lender's
defaulted obligations hereunder, at such time, and in such order, as Agent may
elect in its sole discretion. With respect to the payment of any funds from
Agent to a Lender or from a Lender to Agent, the party failing to make the full
payment when due pursuant to the terms hereof shall, upon demand by the other
party, pay such amount together with interest on such amount at the Federal
Funds Rate. The failure of any Lender to fund its portion of any Revolver Loan
shall not relieve any other Lender of its obligation, if any, to fund its
portion of the Revolver Loan on the date of Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make any Revolver Loan to be
made by such Lender on the date of any Borrowing. Solely as among the Lenders
and solely for purposes of voting or consenting to matters with respect to any
of the Loan Documents, Collateral or any Obligations and determining a
defaulting Lender's Pro Rata share of payments and proceeds of Collateral
pending such defaulting Lender's cure of its defaults hereunder, a defaulting
Lender shall not be deemed to be a "Lender" and such Lender's Revolver
Commitment shall be deemed to be zero (0). The provisions of this SECTION 3.2
shall be solely for the benefit of Agent and Lenders and may not be enforced by
Borrower.
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3.3. SPECIAL PROVISIONS GOVERNING LIBOR LOANS.
3.3.1. Number of LIBOR Loans. In no event may the number of
LIBOR Loans outstanding at any time to any Lender exceed 4.
3.3.2. Minimum Amounts. Each election of LIBOR Loans
pursuant to SECTION 3.1.1(i), and each continuation of or conversion to LIBOR
Loans pursuant to SECTION 2.1.2 hereof, shall be in a minimum amount of
$1,000,000 and integral multiples of $250,000 in excess of that amount.
3.3.3. LIBOR Lending Office. Each Lender's initial LIBOR
Lending Office is set forth opposite its name on the signature pages hereof.
Each Lender shall have the right at any time and from time to time to designate
a different office of itself or of any Affiliate as such Lender's LIBOR Lending
Office, and to transfer any outstanding LIBOR Loans to such LIBOR Lending
Office. No such designation or transfer shall result in any liability on the
part of Borrower for increased costs or expenses resulting solely from such
designation or transfer. Increased costs for expenses resulting from a change in
Applicable Law occurring subsequent to any such designation or transfer shall be
deemed not to result solely from such designation or transfer.
3.3.4. Funding of LIBOR Loans. Each Lender may, if it so
elects, fulfill its obligation to make, continue or convert LIBOR Loans
hereunder by causing one of its foreign branches or Affiliates (or an
international banking facility created by such Lender) to make or maintain such
LIBOR Loans; provided, however, that such LIBOR Loans shall nonetheless be
deemed to have been made and to be held by such Lender and the obligation by
Borrower to repay such LIBOR Loans shall nevertheless be to such Lender for the
account of such foreign branch, Affiliate or international banking facility. The
calculations of all amounts payable to Lenders under SECTIONS 2.7 and 2.9 hereof
shall be made as though each Lender had actually funded or committed to fund its
LIBOR Loan through the purchase of an underlying deposit in an amount equal to
the amount of such LIBOR Loan and having a maturity comparable to the relevant
Interest Period for such LIBOR Loan; provided, however, each Lender may fund its
LIBOR Loan in any manner it deems fit, and the foregoing assumption shall be
utilized only for the calculation of amounts payable under SECTIONS 2.7 and 2.9
hereof.
3.4. ALL LOANS TO CONSTITUTE ONE OBLIGATION. The Loans shall
constitute one general Obligation of Borrower and (unless otherwise expressly
provided in the Security Documents) shall be secured by Agent's Lien upon all of
the Collateral; provided, however, that Agent and each Lender shall be deemed to
be a creditor of Borrower and the holder of a separate claim against Borrower to
the extent of any Obligations owed by Borrower to Agent or such Lender.
SECTION 4. PAYMENTS
4.1. GENERAL PAYMENT PROVISIONS. All payments (including all
prepayments) of principal of and interest on the Loans, LC Outstandings and
other Obligations that are payable to Agent or any Lender shall be made to Agent
in Dollars without any offset or counterclaim and free and clear of (and without
deduction for) any present or future Taxes, and, with respect to payments made
other than by application of balances in the Payment Account, in immediately
available funds not later than 12:00 noon on the due date (and payment made
after such time on the due date to be deemed to have been made on the next
succeeding Business Day). All payments received by Agent shall be distributed by
Agent in accordance with SECTION 4.6 hereof, subject to the rights of offset
that Agent may have as to amounts otherwise to be remitted to a particular
Lender by reason of amounts due Agent from such Lender under any of the Loan
Documents.
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4.2. REPAYMENT OF REVOLVER LOANS.
4.2.1. Payment of Principal. The outstanding principal
amounts with respect to the Revolver Loans shall be repaid as follows:
(i) Any portion of the Revolver Loans consisting
of the principal amount of Base Rate Loans shall be paid by Borrower to
Agent, for the Pro Rata benefit of Lenders (or, in the case of
Settlement Loans, for the sole benefit of Fleet) unless timely
converted to a LIBOR Loan in accordance with this Agreement,
immediately upon (a) each receipt by Agent or any Lender (and, after a
Direct Payment Event and Borrower's receipt of a Payment Direction
Notice, each receipt by Borrower) of any proceeds of any of the
Accounts or Inventory, to the extent of such proceeds, (b) the
Commitment Termination Date, and (c) in the case of Settlement Loans,
the earlier of Fleet's demand for payment or on each Settlement Date
with respect to all Settlement Loans outstanding on such date.
(ii) Any portion of the Revolver Loans consisting
of the principal amount of LIBOR Loans shall be paid by Borrower to
Agent, for the Pro Rata benefit of Lenders, unless converted to a Base
Rate Loan or continued as a LIBOR Loan in accordance with the terms of
this Agreement, immediately upon (a) the last day of the Interest
Period applicable thereto and (b) the Commitment Termination Date. In
no event shall Borrower be authorized to make a voluntary prepayment
with respect to any Revolver Loan outstanding as a LIBOR Loan prior to
the last day of the Interest Period applicable thereto unless Borrower
pays to Agent, for the Pro Rata benefit of Lenders, concurrently with
any prepayment of a LIBOR Loan, any amount due Agent and Lenders under
SECTION 2.9 hereof as a consequence of such prepayment.
(iii) Notwithstanding anything to the contrary
contained elsewhere in this Agreement, if an Out-of-Formula Condition
shall exist, Borrower shall, on the sooner to occur of Agent's demand
or the first Business Day after Borrower has obtained knowledge of such
Out-of-Formula Condition, repay the outstanding Revolver Loans that are
Base Rate Loans in an amount sufficient to reduce the aggregate unpaid
principal amount of all Revolver Loans by an amount equal to such
excess; and, if such payment of Base Rate Loans is not sufficient to
eliminate the Out-of-Formula Condition, then Borrower shall immediately
either (a) deposit with Agent, for the Pro Rata benefit of Lenders, for
application to any outstanding Revolver Loans bearing interest as LIBOR
Loans as the same become due and payable (whether at the end of the
applicable Interest Periods or on the Commitment Termination Date) cash
in an amount sufficient to eliminate such Out-of-Formula Condition, to
be held by Agent pending disbursement of same to Lenders, but subject
to Agent's Lien thereon and rights of offset with respect thereto, or
(b) pay the Revolver Loans outstanding as LIBOR Loans to the extent
necessary to eliminate such Out-of-Formula Condition and also pay to
Agent for the Pro Rata benefit of Lenders any and all amounts required
by SECTION 2.9 hereof to be paid by reason of the prepayment of a LIBOR
Loan prior to the last day of the Interest Period applicable thereto.
4.2.2. Payment of Interest. Interest accrued on the Revolver
Loans shall be due and payable on (i) the first calendar day of each month (for
the immediately preceding month), computed through the last calendar day of the
preceding month, with respect to each Base Rate Loan; (ii) the last day of the
applicable Interest Period in the case of each LIBOR Loan; and (iii) with
respect to each LIBOR Loan having an Interest Period of 6 months, the 90th day
after the funding of such LIBOR Loan. Accrued interest shall also be paid by
Borrower on the Revolver Commitment Termination Date. With respect to any Base
Rate Loan converted into a LIBOR Loan pursuant to SECTION 2.1.2 on a day when
interest would not otherwise have been payable with respect to such Base Rate
Loan, accrued interest to the date of such conversion on the amount of such Base
Rate Loan so converted shall be paid on the conversion date.
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4.3. RESERVED.
4.4. PAYMENT OF OTHER OBLIGATIONS. The balance of the Obligations
requiring the payment of money, including the LC Outstandings and Extraordinary
Expenses incurred by Agent or any Lender, shall be repaid by Borrower to Agent
for allocation among Agent and Lenders as provided in the Loan Documents, or, if
no date of payment is otherwise specified in the Loan Documents, ON DEMAND.
4.5. MARSHALING; PAYMENTS SET ASIDE. None of Agent or any Lender
shall be under any obligation to marshal any assets in favor of Borrower or any
other Obligor or against or in payment of any or all of the Obligations. To the
extent that Borrower makes a payment or payments to Agent or Lenders or any of
such Persons receives payment from the proceeds of any Collateral or exercises
its right of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other Person, then to the extent of any loss by Agent
or Lenders, the Obligations or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor, shall be revived and continued in
full force and effect as if such payment or proceeds had not been made or
received and any such enforcement or setoff had not occurred. The provisions of
the immediately preceding sentence of this SECTION 4.5 shall survive any
termination of the Revolver Commitments and payment in full of the Obligations.
4.6. AGENT'S ALLOCATION OF PAYMENTS AND COLLECTIONS.
4.6.1. Allocation of Payments. All monies to be applied to
the Obligations, whether such monies represent voluntary payments by one or more
Obligors or are received pursuant to demand for payment or realized from any
disposition of Collateral, shall be allocated among Agent and such of the
Lenders as are entitled thereto (and, with respect to monies allocated to
Lenders, on a Pro Rata basis unless otherwise provided herein): (i) first, to
Agent to pay principal and accrued interest on any portion of the Revolver Loans
which Agent may have advanced on behalf of any Lender and for which Agent has
not been reimbursed by such Lender or Borrower; (ii) second, to Fleet to pay the
principal and accrued interest on any portion of the Settlement Loans
outstanding, to be shared with Lenders that have acquired a participating
interest in such Settlement Loans; (iii) third, to the extent that Fleet has not
received from any Participating Lender a payment as required by SECTION 1.3.2
hereof, to Fleet to pay all amounts owing to Fleet pursuant to SECTION 1.3.2(ii)
hereof; (iv) fourth, to Agent to pay the amount of Extraordinary Expenses and
amounts owing to Agent pursuant to SECTION 14.10 hereof that have not been
reimbursed to Agent by Borrower or Lenders, together with interest accrued
thereon at the rate applicable to Revolver Loans that are Base Rate Loans; (v)
fifth, to Agent to pay any Indemnified Amount that has not been paid to Agent by
Obligors or Lenders, together with interest accrued thereon at the rate
applicable to Revolver Loans that are Base Rate Loans; (vi) sixth, to Agent to
pay any fees due and payable to Agent; (vii) seventh, to Lenders for any
Indemnified Amount that they have paid to Agent and any Extraordinary Expenses
that they have reimbursed to Agent or themselves incurred, to the extent that
Lenders have not been reimbursed by Obligors therefor; (viii) eighth, to Fleet
to pay principal and interest with respect to LC Outstandings (or to the extent
any of the LC Outstandings are contingent and an Event of Default then exists,
deposited in the Cash Collateral Account to provide security for the payment of
the LC Outstandings), which payment shall be shared with the Participating
Lenders in accordance with SECTION 1.3.2(iii) hereof; and (ix) ninth, to Lenders
in payment of the unpaid principal and accrued interest in respect of the Loans
and any other Obligations then outstanding to be shared among Lenders on a Pro
Rata basis, or on such other basis as may be agreed upon in writing by Lenders
(which agreement or agreements may be entered into without notice to or the
consent or approval of Borrower). The allocations set forth in this SECTION 4.6
are solely to determine the rights and priorities of Agent and Lenders as among
themselves and may be changed by Agent and Lenders without notice to or the
consent or approval of Borrower or any other Person.
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4.6.2. Erroneous Allocation. Agent shall not be liable for
any allocation or distribution of payments made by it in good faith and, if any
such allocation or distribution is subsequently determined to have been made in
error, the sole recourse of any Lender to whom payment was due but not made
shall be to recover from the other Lenders any payment in excess of the amount
to which such other Lenders are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them).
4.7. APPLICATION OF PAYMENTS AND COLLATERAL PROCEEDS. All Payment
Items received by Agent by 12:00 noon, Hartford, Connecticut time, on any
Business Day shall be deemed received on that Business Day. All Payment Items
received by Agent after 12:00 noon, Hartford, Connecticut time, on any Business
Day shall be deemed received on the following Business Day. Borrower irrevocably
waives the right to direct the application of any and all payments and
Collateral proceeds at any time or times hereafter received by Agent or any
Lender from or on behalf of Borrower, and Borrower does hereby irrevocably agree
that Agent shall have the continuing exclusive right to apply and reapply any
and all such payments and Collateral proceeds received at any time or times
hereafter by Agent or its agent against the Obligations, in such manner as Agent
may deem advisable, notwithstanding any entry by Agent upon any of its books and
records. If as the result of Agent's collection of proceeds of Accounts and
other Collateral as authorized by SECTION 7.2.6 a credit balance exists, such
credit balance shall not accrue interest in favor of Borrower, but shall be
available to Borrower at any time or times for so long as no Default or Event of
Default exists. Lenders may, at their option, offset such credit balance against
any of the Obligations upon and after the occurrence of an Event of Default.
4.8. LOAN ACCOUNT; THE REGISTER; ACCOUNT STATED.
4.8.1. Loan Accounts. Each Lender shall maintain in
accordance with its usual and customary practices an account or accounts (a
"Loan Account") evidencing the Debt of Borrower to such Lender resulting from
each Loan owing to such Lender from time to time, including the amount of
principal and interest payable to such Lender from time to time hereunder and
under each Note payable to such Lender. Any failure of a Lender to record in the
Loan Account, or any error in doing so, shall not limit or otherwise affect the
obligation of Borrower hereunder (or under any Note) to pay any amount owing
hereunder to such Lender.
4.8.2. The Register. Agent shall maintain a register (the
"Register") which shall include a master account and a subsidiary account for
each Lender and in which accounts (taken together) shall be recorded (i) the
date and amount of each Borrowing made hereunder, the Type of each Loan
comprising such Borrowing and any Interest Period applicable thereto, (ii) the
effective date and amount of each Assignment and Acceptance delivered to and
accepted by it and the parties thereto, (iii) the amount of any principal or
interest due and payable or to become due and payable from Borrower to each
Lender hereunder or under the Notes, and (iv) the amount of any sum received by
Agent from Borrower or any other Obligor and each Lender's share thereof. The
Register shall be available for inspection by Borrower or any Lender at the
offices of Agent at any reasonable time and from time to time upon reasonable
prior notice. Any failure of Agent to record in the Register, or any error in
doing so, shall not limit or otherwise affect the obligation of Borrower
hereunder (or under any Note) to pay any amount owing with respect to the Loans
or provide the basis for any claim against Agent.
4.8.3. Entries Binding. The entries made in the Register and
each Loan Account shall constitute rebuttably presumptive evidence of the
information contained therein; provided, however, that if a copy of information
contained in the Register or any Loan Account is provided to any Person or any
Person inspects the Register or any Loan Account, at any time or from time to
time, then the information contained in the Register or the Loan Account, as
applicable shall be conclusive and binding on such Person for all purposes
absent manifest error, unless such Person notifies Agent in writing within 45
days after such Person's receipt of such copy or such Person's inspection of the
Register or Loan Account of its intention to dispute the information contained
therein.
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4.9. GROSS UP FOR TAXES. If Borrower shall be required by
Applicable Law to withhold or deduct any Taxes from or in respect of any sum
payable under this Agreement or any of the other Loan Documents, (a) the sum
payable to Agent or such Lender shall be increased as may be necessary so that,
after making all required withholding or deductions, Agent or such Lender (as
the case may be) receives an amount equal to the sum it would have received had
no such withholding or deductions been made, (b) Borrower shall make such
withholding or deductions, and (c) Borrower shall pay the full amount withheld
or deducted to the relevant taxation authority or other authority in accordance
with Applicable Law.
4.10. WITHHOLDING TAX EXEMPTION. At least 5 Business Days prior to
the first date on which any Person that is not incorporated under the laws of
the United States or any state thereof becomes a Lender, it will deliver to
Borrower and Agent 2 duly completed copies of United States Internal Revenue
Service Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payment under this Agreement and its Note without deduction
or withholding of any United States federal income taxes. Each Lender which so
delivers a Form 1001 or 4224 further undertakes to deliver to Borrower and Agent
2 additional copies of such form (or a successor form) on or before the date
that such form expires (currently, 3 successive calendar years for Form 1001 and
one calendar year for Form 4224) or becomes obsolete or after the occurrence of
any event requiring a change in the most form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by Borrower or Agent, in each case, certifying that such Lender is
entitled to receive payments under this Agreement and its Note without deduction
or withholding of any United States federal income taxes, unless an event
(including any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required that renders all
such forms inapplicable or that would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender advises Borrower
and Agent that it is capable of receiving payments without any deduction or
withholding of United States federal income taxes.
SECTION 5. ORIGINAL TERM AND TERMINATION OF COMMITMENTS
5.1. ORIGINAL TERM OF REVOLVER COMMITMENTS. Subject to each
Lender's right to cease making Loans and other extensions of credit to Borrower
when any Default or Event of Default exists or upon termination of the Revolver
Commitments as provided in SECTION 5.2 hereof, the Revolver Commitments shall be
in effect for a period of 4 years from the date hereof, through the close of
business on January 31, 2004 (the "Original Term"), unless sooner terminated as
provided in SECTION 5.2 hereof.
5.2. TERMINATION.
5.2.1. Termination by Agent. Agent may (and upon the
direction of the Required Lenders, shall) terminate the Revolver Commitments
without notice upon or after the occurrence of an Event of Default; provided,
however, that the Revolver Commitments shall automatically terminate as provided
in SECTION 11.2 hereof.
5.2.2. Termination by Borrower. Upon at least 20 days prior
written notice to Agent, Borrower may, at its option, terminate the Revolver
Commitments; provided, however, no such termination by Borrower shall be
effective until Borrower has satisfied all of the Obligations. Any notice of
termination given by Borrower shall be irrevocable unless Agent otherwise agrees
in writing. Borrower may elect to terminate the Revolver Commitments in their
entirety only. No section of this Agreement, Type of Loan available hereunder or
Revolver Commitment may be terminated by Borrower singly.
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5.2.3. Termination Charges. On the effective date of
termination of the Revolver Commitments pursuant to SECTION 5.2.2, Borrower
shall pay to Agent, for the Pro Rata benefit of Lenders (in addition to the then
outstanding principal, accrued interest, fees and other charges owing under the
terms of this Agreement and any of the other Loan Documents), as liquidated
damages for the loss of the bargain and not as a penalty, an amount equal to
1.0% of the Revolver Commitments if termination occurs during the first Loan
Year; 1.0% of the Revolver Commitments if termination occurs during the second
Loan Year; and 0.5% of the Revolver Commitments if termination occurs during the
third Loan Year. In no event shall any termination charge be payable if the
effective date of termination occurs after the third Loan Year.
5.2.4. Effect of Termination. On the effective date of
termination of the Revolver Commitments by Agent or by Borrower, all of the
Obligations shall be immediately due and payable and Lenders shall have no
obligation to make any Loans, and Fleet shall have no obligation to procure any
Letters of Credit. All undertakings, agreements, covenants, warranties and
representations of Borrower contained in the Loan Documents shall survive any
such termination and Agent shall retain its Liens in the Collateral and all of
its rights and remedies under the Loan Documents notwithstanding such
termination until Borrower has satisfied the Obligations to Agent and Lenders,
in full. For purposes of this Agreement, the Obligations shall not be deemed to
have been satisfied until all Obligations for the payment of money have been
paid to Agent in same day funds and all Obligations that are at the time in
question contingent (including, all LC Outstandings that exist by virtue of an
outstanding Letter of Credit) have been fully cash collateralized in favor and
to the satisfaction of Agent or Agent has received as beneficiary a direct pay
letter of credit in form and from an issuing bank acceptable to Agent and
providing for direct payment to Agent of all such contingent Obligations at the
time they become fixed (including reimbursement of all sums paid by Agent under
any LC Support). Notwithstanding the payment in full of the Obligations, Agent
shall not be required to terminate its security interests in any of the
Collateral unless, with respect to any loss or damage Agent may incur as a
result of the dishonor or return of any Payment Items applied to the
Obligations, Agent shall have received either (i) a written agreement, executed
by Borrower and any Person whose loans or other advances to Borrower are used in
whole or in part to satisfy the Obligations, indemnifying Agent and Lenders from
any such loss or damage; or (ii) such monetary reserves and Liens on the
Collateral for such period of time as Agent, in its reasonable discretion, may
deem necessary to protect Agent from any such loss or damage. The provisions of
SECTIONS 2.4, 2.7, 2.8, 2.9, 4.5, 4.9 and this 5.2.4 and all obligations of
Borrower to indemnify Agent or any Lender pursuant to this Agreement or any of
the other Loan Documents, shall in all events survive any termination of the
Revolver Commitments.
SECTION 6. COLLATERAL
6.1. GRANT OF SECURITY INTEREST. To secure the prompt payment and
performance of all of the Obligations, Borrower hereby grants to Agent, for the
benefit of itself as Agent and for the Pro Rata benefit of Lenders, a continuing
security interest in and Lien upon all of the following Property and interests
in Property of Borrower, whether now owned or existing or hereafter created,
acquired or arising and wheresoever located:
(i) all Accounts;
(ii) all present and future contract rights,
chattel paper, documents, instruments, letters of credit, bankers'
acceptances and guaranties to the extent relating to Accounts or other
Collateral, all present and future Distributor/Franchisee Receivables
and all present and future general intangibles for the payment of money
(including claims and choses in action) to the extent relating to
Accounts, Inventory or other Collateral;
(iii) all present and future monies, securities,
credit balances, deposits, deposit accounts and other property of
Borrower now or hereafter held or received by or in transit to
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Agent, any Lender or their respective Affiliates, or, to the extent
relating to Accounts, Inventory or other Collateral, held at or
received by or in transit to any other depository or other institution
from or for the account of Borrower, in each case whether for
safekeeping, pledge, custody, transmission, collection or otherwise,
and all present and future liens, security interests, rights, remedies,
title and interest in, to and in respect of Accounts, Inventory and
other Collateral, including (a) rights and remedies under or relating
to guaranties, contracts of suretyship, letters of credit and credit
and other insurance related to Accounts, Inventory or other Collateral;
(b) rights of stoppage in transit, replevin, repossession, reclamation
and other rights and remedies of an unpaid vendor, lienor or secured
party relating to Account, Inventory or other Collateral; (c) goods
described in invoices, documents, contracts or instruments with respect
to, or otherwise representing or evidencing, Accounts, Inventory or
other Collateral, including returned, repossessed and reclaimed goods;
and (iv) deposits by and property of Account Debtors or other Persons
securing the obligations of Account Debtors;
(iv) all Inventory;
(v) all present and future trademarks and
tradenames, service marks (together with the goodwill of the business
symbolized thereby), patents, copyrights, and other Intellectual
Property affixed to or appearing on or relating to any Inventory or the
products thereof or other Collateral or otherwise used in the
manufacturing, processing, marketing, preparation for sale,
distribution or sale of Inventory or the products thereof or other
Collateral; provided, that the security interests hereby granted in the
property described in this SECTION 6.1(v) shall be limited to such
right, title and interest as may be required in order for Agent to
exercise its rights and remedies hereunder with respect to the
fulfillment of orders, the manufacturing and processing of Inventory
and the products thereof, and the marketing, preparation for sale,
distribution, sale or other disposition of Inventory and the products
thereof, including the receipt and retention by Agent of the proceeds
thereof;
(vi) all Records; and
(vii) all products and proceeds of the foregoing,
in any form, including insurance proceeds and all claims against third
parties for loss or damage to or destruction of any or all of the
foregoing property described in Section 6.1(i) through (vi), and also
including all proceeds of business interruption insurance and, to the
extent relating to Accounts, Inventory or other Collateral, all other
insurance proceeds, whether or not constituting proceeds of any
Collateral.
6.2. OTHER COLLATERAL. In addition to the items of Property
referred to in SECTION 6.1 above, the Obligations shall also be secured by the
Cash Collateral to the extent provided herein and all of the other items of
Property from time to time described in any of the Security Documents as
security for any of the Obligations.
6.3. LIEN PERFECTION; FURTHER ASSURANCES. Promptly after Agent's
request therefor, Borrower shall execute or cause to be executed and deliver to
Agent such instruments, assignments, title certificates or other documents as
are necessary under the UCC or other Applicable Law to perfect (or continue the
perfection of) Agent's Lien upon the Collateral, and shall take such other
action as may be reasonably requested by Agent to give effect to or carry out
the intent and purposes of this Agreement. Without limiting the generality of
the foregoing, Borrower shall, if and to the extent requested by Agent, deliver
to Agent the originals of the Distributor Notes and Franchisee Notes. Unless
prohibited by Applicable Law, Borrower hereby authorizes Agent to execute and
file any such financing statement on Borrower's behalf. The parties agree that a
carbon, photographic or other reproduction of this Agreement shall be sufficient
as a financing statement and may be filed in any appropriate office in lieu
thereof.
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SECTION 7. COLLATERAL ADMINISTRATION
7.1. GENERAL PROVISIONS.
7.1.1. Location of Collateral. All tangible items of
Collateral, other than Inventory in transit, shall at all times be kept by
Borrower at one or more of the business locations of Borrower set forth in
SCHEDULE 7.1.1 hereto and shall not be moved therefrom, without the prior
written approval of Agent, except that in the absence of an Event of Default and
acceleration of the maturity of the Obligations in consequence thereof, Borrower
may (i) make sales or other dispositions of any Collateral to the extent
authorized by SECTION 9.2.10 hereof and (ii) move Inventory or any record
relating to any Collateral to a location in the United States other than those
shown on SCHEDULE 7.1.1 hereto so long as Borrower has given Agent at least 20
Business Days prior written notice of such new location and prior to moving any
Inventory to such location Borrower has executed and delivered to Agent UCC-1
financing statements and any other appropriate documentation to perfect or
continue the perfection of Agent's Liens with respect to such Inventory.
7.1.2. Insurance of Collateral; Condemnation Proceeds.
Borrower shall maintain and pay for insurance upon all Collateral, wherever
located, covering casualty, hazard, public liability, theft, malicious mischief,
and such other risks in such amounts and with such insurance companies as are
reasonably satisfactory to Agent. All proceeds payable under each such policy
with respect to any Collateral shall be payable to Agent for application to the
Obligations. Borrower shall deliver the originals or certified copies of such
policies to Agent with satisfactory lender's loss payable endorsements
reasonably satisfactory to Agent naming Agent as sole loss payee, assignee or
additional insured, as appropriate. Each policy of insurance or endorsement
shall contain a clause requiring the insurer to give not less than 30 days prior
written notice to Agent in the event of cancellation of the policy for any
reason whatsoever and a clause specifying that the interest of Agent shall not
be impaired or invalidated by any act or neglect of Borrower or the owner of the
Property or by the occupation of the premises for purposes more hazardous than
are permitted by said policy. If Borrower fails to provide and pay for such
insurance, Agent may, at its option, but shall not be required to, procure the
same and charge Borrower therefor. Borrower agrees to deliver to Agent, promptly
as rendered, true copies of all reports made in any reporting forms to insurance
companies. For so long as no Event of Default exists, Borrower shall have the
right to settle, adjust and compromise any claim with respect to any insurance
maintained by Borrower provided that all proceeds thereof are applied in the
manner specified in this Agreement, and Agent agrees promptly to provide any
necessary endorsement to any checks or drafts issued in payment of any such
claim. At any time that an Event of Default exists, only Agent shall be
authorized to settle, adjust and compromise such claims, Agent shall have all
rights and remedies with respect to such policies of insurance as are provided
for in this Agreement and the other Loan Documents.
7.1.3. Protection of Collateral. All expenses of protecting,
storing, warehousing, insuring, handling, maintaining and shipping any
Collateral, all Taxes imposed under any Applicable Law on any of the Collateral
or in respect of the sale thereof, and all other payments required to be made by
Agent to any Person to realize upon any Collateral shall be borne and paid by
Borrower. Agent shall not be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto (except
for reasonable care in the custody thereof while any Collateral is in Agent's
actual possession) or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other Person
whomsoever, but the same shall be at Borrower's sole risk.
7.1.4. Defense of Title to Collateral. Borrower shall at all
times defend Borrower's title to the Collateral and Agent's Liens therein
against all Persons and all claims and demands whatsoever other than Permitted
Liens.
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7.2. ADMINISTRATION OF ACCOUNTS.
7.2.1. Records and Schedules of Accounts. Borrower shall
keep accurate and complete records of its Accounts and all payments and
collections thereon and shall submit to Agent on such periodic basis as Agent
shall request a sales and collections report for the preceding period, in form
satisfactory to Agent. Borrower shall also provide to Agent on or before the
20th day of each Fiscal Month, a detailed aged trial balance of all Accounts
existing as of the last day of the preceding Fiscal Month, specifying the names,
addresses, face value, dates of invoices and due dates for each Account Debtor
obligated on an Account so listed ("Schedule of Accounts"), and, upon Agent's
request therefor, copies of proof of delivery and other related documents,
including repayment histories and present status reports, relating to the
Accounts so scheduled and such other matters and information relating to the
status of then existing Accounts as Agent shall reasonably request. In addition,
if Accounts in an aggregate face amount in excess of $100,000 cease to be
Eligible Accounts in whole or in part, Borrower shall notify Agent of such
occurrence promptly (and in any event within 2 Business Days) after Borrower's
having obtained knowledge of such occurrence and the Borrowing Base shall
thereupon be adjusted to reflect such occurrence. Upon Agent's request, Borrower
shall deliver to Agent copies of invoices or invoice registers related to all of
its Accounts.
7.2.2. Discounts, Disputes and Returns. If Borrower grants
any discounts, allowances or credits that are not shown on the face of the
invoice for the Account involved, Borrower shall report such discounts,
allowances or credits, as the case may be to Agent as part of the next required
Schedule of Accounts. If any amounts due and owing in excess of $100,000 are in
dispute between Borrower and any Account Debtor, or if any returns are made in
excess of $100,000 with respect to any Accounts owing from an Account Debtor,
Borrower shall provide Agent with written notice thereof at the time of
submission of the next Schedule of Accounts, explaining in detail the reason for
the dispute or return, all claims related thereto and the amount in controversy.
Upon and after the occurrence of an Event of Default, Agent shall have the right
to settle or adjust all disputes and claims directly with the Account Debtor and
to compromise the amount or extend the time for payment of any Accounts
comprising a part of the Collateral upon such terms and conditions as Agent may
deem advisable, and to charge the deficiencies, costs and expenses thereof,
including attorney's fees, to Borrower.
7.2.3. Taxes. If an Account of Borrower includes a charge
for any Taxes payable to any governmental taxing authority, Agent is authorized,
in its sole discretion, to pay the amount thereof to the proper taxing authority
for the account of Borrower and to charge Borrower therefor; provided, however,
that neither Agent nor Lenders shall be liable for any Taxes that may be due by
Borrower.
7.2.4. Account Verification. Whether or not a Default or an
Event of Default exists, Agent shall have the right at any time, in the name of
Agent, any designee of Agent or Borrower to verify the validity, amount or any
other matter relating to any Accounts of Borrower by mail, telephone, telegraph
or otherwise. Borrower shall cooperate fully with Agent in an effort to
facilitate and promptly conclude any such verification process.
7.2.5. Lockbox and Dominion Account. Not later than 30 days
after the Closing Date, Borrower shall (i) establish and maintain with the
Lockbox Bank a Lockbox and a Dominion Account, and (ii) execute and deliver, and
cause the Lockbox Bank to execute and deliver, as appropriate, the Lockbox
Agreement, the Dominion Account Agreement and the Payment Direction Agreement.
Borrower shall direct all of the Account Debtors to make payment to the Lockbox.
Borrower shall cause all monies in vending machines to be deposited periodically
in an account with a financial institution under irrevocable instructions from
Borrower to transfer the balances in such account to the Dominion Account or
otherwise in accordances with the written directive of Agent. All collections
received in the Lockbox shall be deposited, on a daily basis, to the Dominion
Account. Agent may at any time on or after the occurrence of a Direct Payment
Event give notice to the Lockbox Bank to cause all Payment Items received in the
Lockbox and all available balances in the Dominion Account to be remitted to
Agent
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by wire transfer of immediately available funds to the Payment Account or
pursuant to such other instructions as Agent may give to the Lockbox Bank from
time to time. After the occurrence of a Direct Payment Event, no elimination of
the Direct Payment Event or other change in circumstances shall require Agent to
direct that amounts represented by Payment Items received in the Lockbox or
available balances in the Dominion Account be transferred to an operating
account of Borrower in lieu of direct remittance to the Payment Account. Agent
shall be deemed to have a Lien upon all Payment Items received in the Lockbox
and in all balances in and all of Borrower's rights with respect to the Dominion
Account.
7.2.6. Collection of Accounts and Proceeds of Collateral. To
expedite collection, Borrower shall endeavor in the first instance to make
collection of Borrower's Accounts for Agent and Lenders. All Payment Items
received by Borrower in respect of its Accounts, together with the proceeds of
any other Collateral, shall be held by Borrower as trustee of an express trust
for Agent's benefit and Borrower shall promptly and diligently deposit same in
kind in the Dominion Account. Agent retains the right at all times after the
occurrence of a Default or an Event of Default to notify Account Debtors of
Borrower that Accounts have been assigned to Agent and to collect Accounts
directly in its own name and to charge to Borrower the collection costs and
expenses, incurred by Agent or Lenders, including reasonable attorneys' fees.
7.3. ADMINISTRATION OF INVENTORY.
7.3.1. Records and Reports of Inventory. Borrower shall keep
accurate and complete records of its Inventory and shall furnish Agent and
Lenders inventory reports respecting such Inventory in form and detail
satisfactory to Agent and Lenders at such times as Agent and Lenders may
request, but so long as no Default or Event of Default exists, no more
frequently than once each Fiscal Month. Inventory reports shall be submitted by
Borrower to Agent on a monthly basis, on or before the 20th day of the Fiscal
Month as of the close of business of the previous Fiscal Month. Borrower shall
conduct a physical inventory no less frequently than annually and shall provide
to Agent and Lenders a report based on each such physical inventory promptly
thereafter, together with such supporting information as Agent shall request.
7.3.2. Returns of Inventory. Borrower shall not return any
of its Inventory to a supplier or vendor thereof, or any other Person, whether
for cash, credit against future purchases or then existing payables, or
otherwise, unless (i) such return is in the Ordinary Course of Business of
Borrower and such Person; (ii) no Default or Event of Default exists or would
result therefrom; (iii) the return of such Inventory will not result in an
Out-of-Formula Condition; (iv) Borrower promptly notifies Agent thereof if the
aggregate Value of all Inventory returned in any Fiscal Month exceeds $100,000;
and (v) any payments received by Borrower in connection with any such return are
promptly turned over to Agent for application to the Obligations.
7.4. BORROWING BASE CERTIFICATES. On the Closing Date and on or
before the 20th day of each Fiscal Month after the Closing Date, Borrower shall
deliver to Agent a Borrowing Base Certificate prepared as of the close of
business of the previous Fiscal Month, and at such other times as Agent may
request. All calculations of Availability in connection with any Borrowing Base
Certificate shall originally be made by Borrower and certified by a Senior
Officer to Agent, provided that Agent shall have the right to review and adjust,
in the exercise of its reasonable credit judgment, any such calculation (i) to
reflect its reasonable estimate of declines in value of any of the Collateral
described therein and (ii) to the extent that such calculation is not in
accordance with this Agreement or does not accurately reflect the amount of the
Availability Reserve.
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SECTION 8. REPRESENTATIONS AND WARRANTIES
8.1. GENERAL REPRESENTATIONS AND WARRANTIES. To induce Agent and
Lenders to enter into this Agreement and to make available the Revolver
Commitments, Borrower warrants and represents to Agent and Lenders that:
8.1.1. Organization and Qualification. Each of Borrower and
its Subsidiaries is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization. Each of
Borrower and its Subsidiaries is duly qualified and is authorized to do
business and is in good standing as a foreign corporation in each state or
jurisdiction listed on SCHEDULE 8.1.1 hereto and in all other states and
jurisdictions in which the failure of Borrower or any of such Subsidiaries to
be so qualified would have a Material Adverse Effect.
8.1.2. Power and Authority. Each of Borrower and its
Subsidiaries is duly authorized and empowered to enter into, execute, deliver
and perform this Agreement and each of the other Loan Documents to which it is
a party. The execution, delivery and performance of this Agreement and each of
the other Loan Documents have been duly authorized by all necessary action and
do not and will not (i) require any consent or approval of any of the holders
of the Equity Interests of Borrower or any Subsidiary; (ii) contravene
Borrower's or any Subsidiary's Organization Documents; (iii) violate, or cause
Borrower or any Subsidiary to be in default under, any provision of any
Applicable Law, order, writ, judgment, injunction, decree, determination or
award in effect having applicability to Borrower or any Subsidiary; (iv) result
in a breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease or instrument to which Borrower or any
Subsidiary is a party or by which it or its Properties may be bound or
affected; or (v) result in, or require, the creation or imposition of any Lien
(other than Permitted Liens) upon or with respect to any of the Properties now
owned or hereafter acquired by Borrower or any Subsidiary.
8.1.3. Legally Enforceable Agreement. This Agreement is, and
each of the other Loan Documents when delivered under this Agreement will be, a
legal, valid and binding obligation of each of Borrower and its Subsidiaries
signatories thereto enforceable against them in accordance with the respective
terms of such Loan Documents, except as the enforceability thereof may be
limited by bankruptcy, insolvency or other similar laws of general application
affecting the enforcement of creditors' rights.
8.1.4. Capital Structure. As of the date hereof, SCHEDULE
8.1.4 hereto states (i) the correct name of each Subsidiary, its jurisdiction
of incorporation and the percentage of its Equity Interests having voting
powers owned by each Person, (ii) the name of each of Borrower's direct
corporate Affiliates and the nature of the affiliation and (iii) the number of
authorized and issued Equity Interests (and treasury shares) of Borrower and
each Subsidiary. Borrower has good title to all of the shares it purports to
own of the Equity Interests of each of its Subsidiaries, free and clear in each
case of any Lien other than Permitted Liens. All such Equity Interests have
been duly issued and are fully paid and non-assessable. Since the date of the
financial statements of Borrower referred to in SECTION 8.1.9 hereof, Borrower
has not made, or obligated itself to make, any Distribution. There are no
outstanding options to purchase, or any rights or warrants to subscribe for, or
any commitments or agreements to issue or sell, or any Equity Interests or
obligations convertible into, or any powers of attorney relating to, shares of
the capital stock of Borrower or any of its Subsidiaries. Except as set forth
on SCHEDULE 8.1.4 hereto, there are no outstanding agreements or instruments
binding upon the holders of Borrower's Equity Interests relating to the
ownership of its Equity Interests.
8.1.5. Corporate Names. During the 5-year period preceding
the date of this Agreement, neither Borrower nor any Subsidiary has been known
as or used any corporate, fictitious or trade names except those listed on
SCHEDULE 8.1.5 hereto. Except as set forth on SCHEDULE 8.1.5, neither Borrower
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nor any Subsidiary has been the surviving corporation of a merger or
consolidation or acquired all or substantially all of the assets of any Person.
8.1.6. Business Locations; Agent for Process. As of the date
hereof, the chief executive office and other places of business of Borrower and
each Subsidiary are as listed on SCHEDULE 7.1.1 hereto. During the 5-year
period preceding the date of this Agreement, neither Borrower nor any
Subsidiary has had its chief executive office, principal place of business or
an agent for service of process in any state other than as listed on SCHEDULE
7.1.1. Except as shown on SCHEDULE 7.1.1 on the date hereof, no Inventory of
Borrower or any Subsidiary is stored on the Closing Date with a bailee,
warehouseman or similar Person, nor is any Inventory consigned to any Person,
other than a Distributor or Franchisee.
8.1.7. Title to Properties; Priority of Liens. Borrower and
each Subsidiary has good and marketable title to and fee simple ownership of,
or valid and subsisting leasehold interests in, all of its real Property, and
good title to all of its personal Property, including all material Property
reflected in the financial statements referred to in SECTION 8.1.9 or delivered
pursuant to SECTION 9.1.3, in each case free and clear of all Liens except
Permitted Liens. Borrower has paid or discharged, and has caused each
Subsidiary to pay and discharge, all lawful claims which, if unpaid, might
become a Lien against any Properties of Borrower or such Subsidiary that is not
a Permitted Lien. The Liens granted to Agent pursuant to this Agreement and the
other Security Documents are first priority Liens, subject only to those
Permitted Liens which are expressly permitted by the terms of this Agreement to
have priority over the Liens of Agent.
8.1.8. Accounts. Agent may rely, in determining which
Accounts are Eligible Accounts, on all statements and representations made by
Borrower with respect to any Account. Unless otherwise indicated by Borrower in
writing to Agent or excluded by Borrower in its calculation of the Borrowing
Base in any Borrowing Base Certificate, with respect to each Account, Borrower
warrants that:
(i) It is genuine and in all respects what it
purports to be, and it is not evidenced by a judgment;
(ii) It arises out of a completed, bona fide
sale and delivery of goods or the performance of Contract Manufacturing
Services by Borrower in the Ordinary Course of Business and
substantially in accordance with the terms and conditions of all
purchase orders, contracts or other documents relating thereto and
forming a part of the contract between Borrower and the Account
Debtor;
(iii) It is for a sum certain maturing as stated
in the duplicate invoice covering such sale or rendition of services,
a copy of which has been furnished or is available to Agent on request;
(iv) Such Account, and Agent's security interest
therein, is not, and will not (by voluntary act or omission of
Borrower) be in the future, subject to any offset, Lien, deduction,
defense, dispute, counterclaim or any other adverse condition except
for disputes resulting in returned goods where the amount in
controversy is deemed by Agent to be immaterial, and each such Account
is absolutely owing to Borrower and is not contingent in any respect
or for any reason;
(v) The contract under which such Account arose
does not condition or restrict Borrower's right to assign to Agent the
right to payment thereunder unless Borrower has obtained the Account
Debtor's consent to such collateral assignment or complied with any
conditions to such assignment (regardless of whether under the UCC or
other Applicable Law
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any such restrictions are ineffective to prevent the grant of a Lien
upon such Account in favor of Agent);
(vi) Borrower has not made any agreement with any
Account Debtor thereunder for any extension, compromise, settlement or
modification of any such Account or any deduction therefrom, except
discounts or allowances which are granted by Borrower in the ordinary
course of its business for prompt payment and which are reflected in
the calculation of the net amount of each respective invoice related
thereto and are reflected in the Schedules of Accounts submitted to
Agent pursuant to SECTION 7.2.1 hereof;
(vii) To the best of Borrower's knowledge, there are
no facts, events or occurrences which are reasonably likely to impair
the validity or enforceability of any of its Accounts or reduce the
amount payable thereunder from the face amount of the invoice and
statements delivered to Agent with respect thereto;
(viii) To the best of Borrower's knowledge, the
Account Debtor thereunder (1) had the capacity to contract at the time
any contract or other document giving rise to the Account was executed
and (2) such Account Debtor is Solvent; and
(ix) To the best of Borrower's knowledge, there are
no proceedings or actions which are threatened or pending against any
Account Debtor thereunder and which are reasonably likely to result in
any material adverse change in such Account Debtor's financial
condition or the collectibility of such Account.
8.1.9. Financial Statements; Fiscal Year. The Consolidated
balance sheets of Borrower and such other Persons described therein (including
the accounts of all Subsidiaries of Borrower for the respective periods during
which a Subsidiary relationship existed) as of January 1, 2000, and the related
statements of income, changes in stockholder's equity, and changes in financial
position for the periods ended on such dates, have been prepared in accordance
with GAAP, and present fairly the financial positions of Borrower and such
Persons at such dates and the results of Borrower's operations for such
periods. Since January 1, 2000, there has been no material change in the
condition, financial or otherwise, of Borrower and such other Persons as shown
on the Consolidated balance sheet as of such date.
8.1.10. Full Disclosure. The financial statements referred to
in SECTION 8.1.9 hereof do not contain any untrue statement of a material fact
and neither this Agreement nor any other written statement made in connection
with this Agreement contains or omits any material fact necessary to make the
statements contained herein or therein not materially misleading. There is no
fact or circumstances in existence on the date hereof that Borrower has failed
to disclose to Agent in writing that may reasonably be expected to have a
Material Adverse Effect.
8.1.11. Solvent Financial Condition. Each of Borrower and its
Subsidiaries is now Solvent and, after giving effect to the Loans to be made
hereunder, the Letters of Credit to be issued in connection herewith and the
consummation of the other transactions described in the Loan Documents,
Borrower and each of its Subsidiaries will be Solvent.
8.1.12. Surety Obligations. Except as set forth on SCHEDULE
8.1.12 hereto on the date hereof, neither Borrower nor any of its Subsidiaries
is obligated as surety or indemnitor under any surety or similar bond or other
contract issued or entered into any agreement to assure payment, performance or
completion of performance of any undertaking or obligation of any Person.
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8.1.13. Taxes. The FEIN of each of Borrower and the
Subsidiaries is as shown on SCHEDULE 8.1.13 hereto. Borrower and each
Subsidiary has filed all federal, state and local tax returns and other reports
it is required by law to file and has paid, or made provision for the payment
of, all Taxes upon it, its income and Properties as and when such Taxes are due
and payable, except to the extent being Properly Contested. The provision for
Taxes on the books of Borrower and each Subsidiary are adequate for all years
not closed by applicable statutes, and for its current Fiscal Year.
8.1.14. Brokers. There are no claims against Borrower for
brokerage commissions, finder's fees or investment banking fees in connection
with the transactions contemplated by this Agreement or any of the other Loan
Documents.
8.1.15. Intellectual Property. Borrower and its Subsidiaries
each owns or has the lawful right to use all Intellectual Property necessary
for the present and planned future conduct of its business without any conflict
with the rights of others; there is no objection to, or pending (or, to
Borrower's knowledge, threatened) Intellectual Property Claim with respect to,
Borrower's or any Subsidiary's right to use any such Intellectual Property and
Borrower is not aware of any grounds for challenge or objection thereto; and,
except as may be disclosed on SCHEDULE 8.1.15, neither Borrower nor any
Subsidiary pays any royalty or other compensation to any Person for the right
to use any Intellectual Property. All such patents, trademarks, service marks,
tradenames, copyrights, licenses and other similar rights are listed on
SCHEDULE 8.1.15 hereto, to the extent they are registered under any Applicable
Law or are otherwise material to Borrower's or any Subsidiary's business.
8.1.16. Governmental Approvals. Each of Borrower and its
Subsidiaries has, and is in good standing with respect to, all Governmental
Approvals which are necessary to continue to conduct its business as heretofore
or proposed to be conducted by it and to own or lease and operate its
Properties as now owned or leased by it and which, if not obtained, would have
a Material Adverse Effect.
8.1.17. Compliance with Laws. Each of Borrower and its
Subsidiaries has duly complied with, and its Properties, business operations
and leaseholds are in compliance in all material respects with, the provisions
of all Applicable Law (except to the extent that any such noncompliance with
Applicable Law could not reasonably be expected to have a Material Adverse
Effect) and there have been no citations, notices or orders of noncompliance
issued to Borrower or any of the Subsidiaries under any such law, rule or
regulation. No Inventory has been produced in violation of the FLSA.
8.1.18. Restrictions. Neither Borrower nor any of the
Subsidiaries is a party or subject to any contract, agreement, or charter or
other corporate restriction, which has or could be reasonably expected to have
a Material Adverse Effect. Neither Borrower nor any of the Subsidiaries is a
party or subject to any Restrictive Agreements, except as set forth on SCHEDULE
8.1.18 hereto, none of which prohibit the execution or delivery of any of the
Loan Documents by any Obligor or the performance by any Obligor of its
obligations under any of the Loan Documents to which it is a party, in
accordance with the terms of such Loan Documents.
8.1.19. Litigation. Except as set forth on SCHEDULE 8.1.19
hereto, there are no actions, suits, proceedings or investigations pending or,
to the knowledge of Borrower, threatened on the date hereof against or
affecting Borrower or any of the Subsidiaries, or the business, operations,
Properties, prospects, profits or condition of Borrower or any of the
Subsidiaries, (i) which relate to any of the Loan Documents or any of the
transactions contemplated thereby or (ii) which, if determined adversely to
Borrower or any Subsidiary, could reasonably be expected to have a Material
Adverse Effect. To the knowledge of Borrower, neither Borrower nor any of its
Subsidiaries is in default on the date hereof with respect to any order, writ,
injunction, judgment, decree or rule of any court, Governmental Authority or
arbitration board or tribunal.
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8.1.20. No Defaults. No event has occurred and no condition
exists which would, upon or after the execution and delivery of this Agreement
or Borrower's performance hereunder, constitute a Default or an Event of
Default. Neither Borrower nor any of the Subsidiaries is in default, and no
event has occurred and no condition exists which constitutes or which with the
passage of time or the giving of notice or both would constitute a default,
under any Material Contract or in the payment (subject to any applicable grace
period) of any Debt of Borrower or a Subsidiary to any Person for Money
Borrowed.
8.1.21. Leases. SCHEDULE 8.1.21 hereto is a complete listing
of all material capitalized and operating leases of Borrower and its
Subsidiaries on the date hereof. Each of Borrower and its Subsidiaries is in
substantial compliance with all of the terms of each of its respective
capitalized and operating leases and there is no basis upon which the lessors
under any such leases could terminate same or declare Borrower or any of its
Subsidiaries in default thereunder.
8.1.22. Pension Plans. Except as disclosed on SCHEDULE 8.1.22
hereto, neither Borrower nor any of the Subsidiaries has any Plan on the date
hereof. Borrower and each of its Subsidiaries is in full substantial compliance
with the requirements of ERISA and the regulations promulgated thereunder with
respect to each Plan. No fact or situation that is reasonably likely to result
in a material adverse change in the financial condition of Borrower or any of
the Subsidiaries exists in connection with any Plan. Neither Borrower nor any
of its Subsidiaries has any withdrawal liability in connection with a
Multi-employer Plan.
8.1.23. Trade Relations. There exists no actual or threatened
termination, cancellation or limitation of, or any materially adverse
modification or change in, the business relationship between Borrower and any
customer or any group of customers whose purchases individually or in the
aggregate are material to the business of Borrower, or with any material
supplier or group of suppliers, and there exists no condition or state of facts
or circumstances which is reasonably likely to have a Material Adverse Effect
or prevent Borrower from conducting such business after the consummation of the
transactions contemplated by this Agreement in substantially the same manner in
which it has heretofore been conducted.
8.1.24. Labor Relations. Except as described on SCHEDULE
8.1.24 hereto, neither Borrower nor any of the Subsidiaries is a party to any
collective bargaining agreement on the date hereof. On the date hereof, there
are no material grievances, disputes or controversies with any union or any
other organization of Borrower's or any Subsidiary's employees, or, to
Borrower's knowledge, any threats of strikes, work stoppages or any asserted
pending demands for collective bargaining by any union or organization.
8.1.25. Not a Regulated Entity. No Obligor is (i) an
"investment company" or a "person directly or indirectly controlled by or
acting on behalf of an investment company" within the meaning of the Investment
Company Act of 1940; (ii) a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935; or (iii) subject to regulation under the Federal
Power Act, the Interstate Commerce Act, any public utilities code or any other
Applicable Law regarding its authority to incur Debt.
8.1.26. Margin Stock. Neither Borrower nor any of the
Subsidiaries is engaged, principally or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock.
8.1.27. Food Security Act. Within the one-year period prior
to the date hereof, Borrower has not received any Food Security Act Notices or
any assertion of a claim or the benefits of a trust under PACA.
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8.2. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty contained in this Agreement and the other Loan
Documents shall be deemed to be reaffirmed by Borrower on each day that any
Obligations are outstanding or that Borrower requests, or is deemed to request,
an extension of credit hereunder, except for changes in the nature of a
Borrower's or, if applicable, any of its Subsidiaries' business or operations
that may occur after the date hereof in the Ordinary Course of Business so long
as Agent has consented to such changes or such changes are not violative of any
provision of this Agreement. Notwithstanding the foregoing, representations and
warranties which by their terms are applicable only to a specific date shall be
deemed made only at and as of such date.
8.3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of Borrower contained in this Agreement or any
of the other Loan Documents shall survive the execution, delivery and
acceptance thereof by Agent, Lenders and the parties thereto and the closing of
the transactions described therein or related thereto.
SECTION 9. COVENANTS AND CONTINUING AGREEMENTS
9.1. AFFIRMATIVE COVENANTS. For so long as there are any Revolver
Commitments outstanding and thereafter until payment in full of the
Obligations, Borrower covenants that, unless the Required Lenders have
otherwise consented in writing, it shall and shall cause each Subsidiary to:
9.1.1. Visits and Inspections. Permit representatives of
Agent, from time to time, as often as may be reasonably requested, but only
during normal business hours and (except when a Default or Event of Default
exists) upon reasonable prior notice to Borrower, to visit and inspect the
Properties of Borrower and each Subsidiary, inspect, audit and make extracts
from Borrower's and each Subsidiary's books and records, and discuss with its
officers, its employees and its independent accountants, Borrower's and each
Subsidiary's business, financial condition, business prospects and results of
operations. Representatives of each Lender shall be authorized to accompany
Agent on each such visit and inspection and to participate with Agent therein,
but at their own expense, unless a Default or Event of Default exists. Neither
Agent nor any Lender shall have any duty to make any such inspection and shall
not incur any liability by reason of its failure to conduct or delay in
conducting any such inspection.
9.1.2. Notices. Notify Agent and Lenders in writing, promptly
after Borrower's obtaining knowledge thereof, (i) of the commencement of any
litigation affecting any Obligor or any of its Properties, whether or not the
claims asserted in such litigation are considered by Borrower to be covered by
insurance, and of the institution of any administrative proceeding, to the
extent that such litigation or proceeding, if determined adversely to such
Obligor, would reasonably be expected to have a Material Adverse Effect; (ii)
of any material labor dispute to which any Obligor may become a party, any
strikes or walkouts relating to any of its plants or other facilities, and the
expiration of any labor contract to which it is a party or by which it is
bound; (iii) of any material default by any Obligor under, or termination of,
any Material Contract or any note, indenture, loan agreement, mortgage, lease,
deed, guaranty or other similar agreement relating to any Debt of such Obligor
exceeding $500,000 that could reasonably be expected to have a Material Adverse
Effect; (iv) of the existence of any Default or Event of Default; (v) of any
default by any Person under any note or other evidence of Debt payable to an
Obligor in an amount exceeding $500,000; (vi) of any judgment against any
Obligor in an amount exceeding $500,000; (vii) of the assertion by any Person
of any Intellectual Property Claim, the adverse resolution of which could
reasonably be expected to have a Material Adverse Effect; (viii) of any
violation or asserted violation by Borrower of any Applicable Law (including
ERISA, OSHA, FLSA or any Environmental Laws), the adverse resolution of which
would reasonably be expected to have a Material Adverse Effect; and (ix) of any
Environmental Release by an Obligor or on any Property owned or occupied by an
Obligor that could reasonably be expected to have a Material Adverse Effect. In
addition, Borrower shall give Agent at least 20 Business Days prior written
notice of any Obligor's opening of any new office or place of business.
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9.1.3. Financial and Other Information. Keep adequate records
and books of account with respect to its business activities in which proper
entries are made in accordance with GAAP reflecting all its financial
transactions; and cause to be prepared and to be furnished to Agent and Lenders
the following (all to be prepared in accordance with GAAP applied on a
consistent basis, unless Borrower's certified public accountants concur in any
change therein, such change is disclosed to Agent and is consistent with GAAP
and, if required by the Required Lenders, the financial covenants set forth in
SECTION 9.3 are amended in a manner requested by the Required Lenders to take
into account the effects of such change):
(i) as soon as available, and in any event
within 120 days after the close of each Fiscal Year, unqualified
audited balance sheets of Borrower and its Subsidiaries as of the end
of such Fiscal Year and related statements of income, shareholders'
equity and cash flow, on a Consolidated and consolidating basis,
certified without material qualification by a firm of independent
certified public accountants of recognized national standing selected
by Borrower but reasonably acceptable to Agent (except for a
qualification for a change in accounting principles with which the
accountant concurs), and setting forth in each case in comparative
form the corresponding Consolidated and consolidating figures for the
preceding Fiscal Year;
(ii) as soon as available, and in any event
within 30 days after the end of each Fiscal Month hereafter (but
within 45 days after the last Fiscal Month in a Fiscal Quarter and 60
days after the last Fiscal Month in a Fiscal Year), including the last
Fiscal Month of Borrower's Fiscal Year, unaudited balance sheets of
Borrower and its Subsidiaries as of the end of such Fiscal Month and
the related unaudited statements of income and cash flow for such
Fiscal Month and for the portion of Borrower's Fiscal Year then
elapsed, on a Consolidated and consolidating basis setting forth in
each case in comparative form the corresponding Consolidated and
consolidating figures for the preceding Fiscal Year and the figures
for the same period covered by the Projections, and certified by the
principal financial officer of Borrower as prepared in accordance with
GAAP and fairly presenting the Consolidated and consolidating
financial position and results of operations of Borrower and its
Subsidiaries for such Fiscal Month and period subject only to changes
from audit and year-end adjustments and except that such statements
need not contain notes;
(iii) not later than 20 days after the end of each
Fiscal Month, a summary trade payable aging as of the last day of such
Fiscal Month, in form acceptable to Agent, and, at Agent's request, a
listing of all of Borrower's trade payables as of the last day of such
Fiscal Month, specifying the name of and balance due each trade
creditor;
(iv) not later than 20 days after each Fiscal
Month, a statement of all accruals for allowances to Distributors
under Distributor incentive programs as of the last day of such Fiscal
Month; and
(v) promptly after the sending or filing
thereof, as the case may be, copies of any proxy statements that
Borrower has made generally available to its shareholders and copies
of any regular, periodic and special reports or registration
statements which Borrower files with the SEC or any Governmental
Authority which may be substituted therefor, or any national
securities exchange.
Concurrently with the delivery of the financial statements described
in clause (i) of this SECTION 9.1.3, Borrower shall deliver to Agent and
Lenders a copy of the accountants' letter to Borrower's management that is
prepared in connection with such financial statements and also shall cause to
be prepared and shall deliver to Agent and Lenders a certificate of the
aforesaid certified public accountants stating to Agent and Lenders that, based
upon such accountants' audit of the Consolidated
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financial statements of Borrower and its Subsidiaries performed in connection
with their examination of said financial statements, nothing came to their
attention that caused them to believe that Borrower was not in compliance with
SECTIONS 9.2 (other than SECTIONS 9.2.1 and 9.2.10 thereof) or 9.3 hereof, or,
if they are aware of such noncompliance, specifying the nature thereof, and
acknowledging, in a manner satisfactory to Agent, that they are aware that
Agent and Lenders are relying on such financial statements in making their
decisions with respect to the Loans. Concurrently with the delivery of the
financial statements described in clause (i) of this SECTION 9.1.3 and with the
delivery at the end of the first 3 Fiscal Quarters of the financial statements
described in clause (ii) of this SECTION 9.1.3, or more frequently if requested
by Agent or any Lender during any period that a Default or Event of Default
exists, Borrower shall cause to be prepared and furnished to Agent and Lenders
a Compliance Certificate executed by the chief financial officer of Borrower.
Promptly after the sending or filing thereof, Borrower shall also
provide to Agent copies of any annual report to be filed in accordance with
ERISA in connection with each Plan and such other data and information
(financial and otherwise) as Agent, from time to time, may reasonably request,
bearing upon or related to the Collateral or Borrower's and each of its
Subsidiaries' financial condition or results of operations.
9.1.4. Landlord Agreements. With respect to each leased
location at which any Inventory of Borrower is maintained and in respect of
which Borrower procures a Landlord Waiver for Agent, provide Agent with copies
of all lease agreements with respect to such location and any and all
amendments from time to time entered into with respect to such leases.
9.1.5. Projections. No later than 60 days after the end of
each Fiscal Year of Borrower, deliver to Agent and Lenders the Projections of
Borrower for the forthcoming 2 Fiscal Years, year by year, and for the
forthcoming Fiscal Year, Fiscal Month by Fiscal Month.
9.1.6. Taxes. Pay and discharge all Taxes prior to the date
on which such Taxes become delinquent or penalties attach thereto, except and
to the extent only that such Taxes are being Properly Contested.
9.1.7. Compliance with Laws. Comply with all Applicable Law,
including ERISA, all Environmental Laws, the Food Security Act, PACA, OSHA,
FLSA and all laws, statutes, regulations and ordinances regarding the
collection, payment and deposit of Taxes, and obtain and keep in force any and
all Governmental Approvals necessary to the ownership of its Properties or to
the conduct of its business, to the extent that any such failure to comply,
obtain or keep in force could be reasonably expected to have a Material Adverse
Effect. Without limiting the generality of the foregoing, if any Environmental
Release shall occur at or on any of the Properties of Borrower or any
Subsidiary, Borrower shall, or shall cause the applicable Subsidiary to, act
promptly and diligently to investigate and report to Agent and all appropriate
Governmental Authorities the extent of, and to make appropriate remedial action
to eliminate, such Environmental Release as may be required by Applicable Law.
9.1.8. Insurance. In addition to the insurance required
herein with respect to the Collateral, maintain with financially sound and
reputable insurers, (i) insurance with respect to its Properties and business
against such casualties and contingencies of such type (including product
liability, workers' compensation, larceny, embezzlement, or other criminal
misappropriation insurance) and in such amounts as is customary in the business
of Borrower or such Subsidiary and (ii) business interruption insurance.
9.1.9. Year 2000 Compatibility. Take all action necessary to
assure that Borrower's computer based systems are (and remain) able to operate
and effectively process data (including dates) at all times after January 1,
2000. Borrower shall (i) promptly take all action necessary to ensure that all
computer based systems of Borrower and its Subsidiaries are (and remain)
capable of the following:
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(a) handling date information involving all and any dates before, during and/or
after January 1, 2000, including accepting input, providing output and
performing date calculations in whole or in part; (b) operating, accurately
without interruption on and in respect of any and all dates before, during and
after January 1, 2000, and without any change in performance; (c) responding to
and processing two digit year input without creating any ambiguity as to the
century; (d) storing and providing date input information without creating any
ambiguity as to the century; and (ii) promptly take all action necessary to
ensure that all computer based systems of each of their vendors, suppliers and
customers are (and remain) capable of (a) through (d) above, where
noncompliance could be reasonably expected to have a Material Adverse Effect.
In addition, at the request of Agent, Borrower shall provide Agent assurances
in form and substance satisfactory to Agent of Borrower's and each of its
Subsidiaries' year 2000 compatibility.
9.1.10. License Agreements. Keep each License Agreement in
full force and effect for so long as Borrower has any Inventory, the
manufacture, sale or distribution of which is in any manner governed by or
subject to such License Agreement.
9.1.11. Purchases of Farm Products. Borrower shall not
purchase any Farm Products unless Borrower acquires title to such Farm Products
free and clear of all Liens (except Permitted Liens) and, in particular, free
from any statutory or other grower's or producer's Liens in favor of any
secured party or lienholder who has taken steps under the Food Security Act or
any other Applicable Law to preserve its Lien rights upon such Farm Products
notwithstanding the passage of title directly or indirectly to Borrower. If at
any time any jurisdiction where any Farm Products purchased by Borrower are
grown or produced has implemented or implements the provisions of the Food
Security Act with respect to the creation of a "central filing system,"
Borrower (i) shall promptly register with the Secretary of State (or equivalent
official) of each such jurisdiction pursuant to the registration requirements
of the Food Security Act, (ii) shall promptly notify Agent in writing of such
registration with the central filing system and (iii) shall promptly provide
Agent with copies of such registration, any Food Security Act Notices, master
lists of "effective financing statements" by the Secretary of State (or the
designated system operator), supplements thereto or other materials then or
thereafter received by Borrower from the Secretary of State (or other
equivalent official) of the central filing system. Borrower shall continue to
comply with all existing and future Food Security Act Notices during their
periods of effectiveness under the Food Security Act, including directions to
make payments to Farm Product Sellers by issuing payment instructions directly
to the secured party or jointly payable to the Farm Product Sellers and the
Farm Product Sellers' secured party as specified in the Food Security Act
Notice, so as to terminate or release the Lien upon Farm Products maintained
under the Food Security Act. In addition, with respect to any Farm Products
purchased by or for resale to Borrower, Borrower shall take all other steps as
may be required, if any, to ensure that all Farm Products are purchased free
and clear of all Liens and other claims by the Farm Product Sellers thereof or
their secured parties. Borrower shall notify Agent in writing within 5 Business
Days after receipt by Borrower of any such Food Security Act Notice or
amendment to a previous Food Security Act Notice or amendment.
9.1.12. Post-Closing Covenants. In addition to the delivery
of the various agreements relating to the Borrower's cash management system
referenced in SECTION 7.2.5 hereof, Borrower shall, not later than 30 days
after the Closing Date, (i) execute and deliver, and cause each of TFH, TFCC
and each applicant with respect to a letter of credit supporting any
Bond-Related Debt to execute and deliver, to Agent a confirmation letter
substantially in the form attached hereto as Exhibit M; (ii) obtain UCC
terminations of all UCC-1 financing statements of record in any jurisdiction
showing either STI Credit Corporation or Canadian Imperial Bank of Commerce,
New York agency, as Agent (and Borrower represents and warrants that all Liens
purporting to be perfected by such UCC-1 financing statements have been
satisfied and released); and (iii) diligently and in good faith seek to obtain
a Landlord Waiver from each landlord of premise where any Inventory is kept
(Borrower acknowledging and understanding that, if any Landlord Waiver is not
obtained within 30 days after the date hereof from a landlord of premises where
any of the Inventory is kept, any such Inventory previously treated as Eligible
Inventory shall cease to be Eligible Inventory).
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9.2. NEGATIVE COVENANTS. For so long as there are any Revolver
Commitments outstanding and thereafter until payment in full of the
Obligations, Borrower covenants that, unless the Required Lenders have
otherwise consented in writing, it shall not and shall not permit any
Subsidiary to:
9.2.1. Fundamental Changes. Merge, reorganize, consolidate or
amalgamate with any Person, or liquidate, wind up its affairs or dissolve
itself, except for mergers or consolidations of any Subsidiary with another
Subsidiary; change Borrower's name or conduct business under any new fictitious
name; or change Borrower's FEIN.
9.2.2. Loans. Make any loans or other advances of money to
any Person other than loans (i) to Subsidiaries in aggregate principal amount
outstanding at any time not to exceed $500,000; (ii) to an officer or employee
of Borrower or a Subsidiary for salary, travel advances, advances against
commissions and other similar advances in the Ordinary Course of Business; or
(iii) to officers or employees of Borrower or a Subsidiary for the payment of
withholding taxes in the Ordinary Course of Business not exceed $250,000 in the
aggregate.
9.2.3. Permitted Debt. Create, incur, assume, guarantee or
suffer to exist any Debt, except:
(i) the Obligations;
(ii) Subordinated Debt existing on the Closing
Date;
(iii) accounts payable by Borrower or a Subsidiary
to trade creditors that are not aged more than 90 days from billing
date or more than 60 days from the due date, in each case incurred in
the Ordinary Course of Business and paid within such time period,
unless the same are being Properly Contested;
(iv) Permitted Purchase Money Debt;
(v) Debt for accrued payroll, Taxes and other
operating expenses (other than for Money Borrowed) incurred in the
Ordinary Course of Business of Borrower or such Subsidiary, including
Cash Management Obligations, in each case so long as payment thereof
is not past due and payable unless, in the case of Taxes only, such
Taxes are being Properly Contested;
(vi) Debt for Money Borrowed (other than the
Obligations), but only to the extent that such Debt is outstanding on
the Closing Date, is reflected in the most recent financial statements
delivered to Agent, and is not to be satisfied on or about the Closing
Date from the proceeds of the initial Loans, including all Debt
represented by the Public Notes and all Bond-Related Debt;
(vii) Debt (if any) existing by reason of the
classification of the Class A Preferred Stock as debt under GAAP,
provided that the only payments or distributions that may be made on
or with respect to the Class A Preferred Stock shall be those (if any)
otherwise permitted under SECTION 9.2.7;
(viii) Debt incurred in connection with Permitted
Acquisitions;
(ix) Permitted Contingent Obligations;
(x) Refinancing Debt so long as each of the
Refinancing Conditions is met;
(xi) Debt that is not otherwise permitted in any of
the preceding paragraphs of this SECTION 9.2.3, is not secured by a
Lien (unless such Lien is a Permitted Lien) and does
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not exceed at any time, in the aggregate, the remainder of $5,000,000
minus Permitted Purchase Money Debt as to Borrower and all of its
Subsidiaries.
9.2.4. Affiliate Transactions. Enter into, or be a party to
any transaction with any Affiliate or stockholder, except: (i) the transactions
contemplated by the Loan Documents; (ii) payment of reasonable compensation to
officers and employees for services actually rendered to Borrower or its
Subsidiaries; (iii) payment of customary directors' fees and indemnities; (iv)
transactions with Affiliates that were consummated prior to the date hereof and
are listed on SCHEDULE 9.2.4 hereto; and (v) in the ordinary course of and
pursuant to the reasonable requirements of Borrower's or such Subsidiary's
business and upon fair and reasonable terms that are fully disclosed to Agent
and are no less favorable to Borrower or such Subsidiary than Borrower or such
Subsidiary would obtain in a comparable arm's length transaction with a Person
not an Affiliate or stockholder of Borrower or such Subsidiary.
9.2.5. Limitation on Liens. Create or suffer to exist any
Lien upon any of its Property, income or profits, whether now owned or
hereafter acquired, except the following (collectively, "Permitted Liens"):
(i) Liens at any time granted in favor of Agent;
(ii) Liens for Taxes (excluding any Lien imposed
pursuant to any of the provisions of ERISA) not yet due or being
Properly Contested;
(iii) statutory Liens (excluding any Lien imposed
pursuant to any of the provisions of ERISA) arising in the Ordinary
Course of Business of Borrower or a Subsidiary, but only if and for so
long as (x) payment in respect of any such Lien is not at the time
required or the Debt secured by any such Liens is being Properly
Contested and (y) such Liens do not materially detract from the value
of the Property of Borrower or such Subsidiary and do not materially
impair the use thereof in the operation of Borrower's or such
Subsidiary's business;
(iv) Purchase Money Liens securing Permitted
Purchase Money Debt;
(v) Liens securing the Public Notes and any
Bond-Related Debt, to the extent in existence on the date hereof;
(vi) Liens arising by virtue of the rendition,
entry or issuance against Borrower or any Subsidiary, or any Property
of Borrower or any Subsidiary, of any judgment, writ, order, or decree
for so long as each such Lien (a) is in existence for less than 20
consecutive days after it first arises or is being Properly Contested
and (b) is at all times junior in priority to any Liens in favor of
Agent;
(vii) Liens incurred or deposits made in the
Ordinary Course of Business to secure the performance of tenders,
bids, leases, contracts (other than for the repayment of Money
Borrowed), statutory obligations and other similar obligations or
arising as a result of progress payments under government contracts,
provided that, to the extent any such Liens attach to any of the
Collateral, such Liens are at all times subordinate and junior to the
Liens upon the Collateral in favor of Agent;
(viii) easements, rights-of-way, restrictions,
covenants or other agreements of record and other similar charges or
encumbrances on real Property of Borrower or a Subsidiary that do not
materially interfere with the ordinary conduct of the business of
Borrower or such Subsidiary;
(ix) normal and customary rights of setoff upon
deposits of cash in favor of banks and other depository institutions
and Liens of a collection bank arising under the UCC on Payment Items
in the course of collection;
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(x) Liens in existence immediately prior to the
Closing Date that are satisfied in full and released on the Closing
Date as a result of the application of Borrower's cash on hand at the
Closing Date or the proceeds of Loans to be made on the Closing Date;
(xi) the inchoate rights (if any) of sellers,
suppliers or agents as a statutory trust beneficiary under PACA with
respect to sales of fresh fruits and fresh vegetables to Borrower in
the Ordinary Course of Business, provided that no amounts owed to any
such Persons are past due and provided further that the inclusion of
statutory trust rights in this SECTION 9.2.5 shall in no way impair or
limit any of Agent's rights with respect to the establishment (or
adjustment pursuant to SECTION 1.1.5 hereof) of the Availability
Reserve;
(xii) such other Liens as appear on SCHEDULE 9.2.5
hereto, to the extent provided therein;
(xiii) Liens upon equipment or real estate that is
purchased by Borrower in connection with Permitted Acquisitions, but
only if such Liens shall at all times be confined solely to the
equipment or real estate purchased in connection with such Permitted
Acquisition and secure only Debt permitted to be incurred in
connection with such Permitted Acquisition; and
(xiv) such other Liens as the Agent and Required
Lenders in their sole discretion may hereafter approve in writing.
The foregoing negative pledge shall not apply to any Margin Stock to the extent
that the application of such negative pledge to such Margin Stock would require
filings or other actions by Agent or any Lender under such regulations or
otherwise result in a violation of such regulations. In no event shall a Lien
in favor of a Farm Product Seller with respect to Farm Products purchased by
Borrower be a Permitted Lien.
9.2.6. Subordinated Debt. Make any payment of all or any part
of any Subordinated Debt or take any other action or omit to take any other
action in respect of any Subordinated Debt, except in accordance with the
subordination agreement relative thereto; or amend or modify the terms of any
agreement applicable to any Subordinated Debt, other than to extend the time of
payment thereof or to reduce the rate of interest payable in connection
therewith. To the extent that any payment is permitted to be made with respect
to any Subordinated Debt pursuant to the provisions of the subordination
agreement relative thereto, as a condition precedent to Borrower's
authorization make any such payment, Borrower shall provide to Agent, not less
than 5 Business Days prior to the scheduled payment, a certificate from a
Senior Officer of Borrower stating that no Default or Event of Default is in
existence as of the date of the certificate or will be in existence as of the
date of such payment (both with and without giving effect to the making of such
payment), and specifying the amount of principal and interest to be paid.
9.2.7. Distributions. Declare or make any Distributions,
provided that (i) a Subsidiary of Borrower may make Upstream Payments to the
extent permitted under Applicable Law and (ii) Borrower may pay dividends in
the form of additional shares of its Class A Preferred Stock or Class B
Preferred Stock to the holders of shares of such preferred stock or increase
the liquidation preference of such preferred stock, in each case in lieu of
cash dividends as permitted by the existing terms, rights and preferences of
such preferred stock as in effect on the date hereof, provided that each such
dividend would be permitted to be issued or paid (as the case may be) under the
terms of the Public Note Agreements as in effect on the date hereof (and
without regard to any waiver or modification of any such terms that may
otherwise exist or be obtained and whether or not the Public Note Agreements
remain in effect for such or any other purpose).
9.2.8. Upstream Payments. Create or suffer to exist any
encumbrance or restriction on the ability of a Subsidiary to make any Upstream
Payment, except for encumbrances or restrictions (i) pursuant to the Loan
Documents, (ii) existing under Applicable Law and (iii) pursuant to the Public
Note Agreements.
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9.2.9. Reserved.
9.2.10. Disposition of Collateral. Sell, assign, lease,
consign or otherwise dispose of any of the Collateral or any interest therein,
including any disposition of Collateral as part of a sale and leaseback
transaction, to or in favor of any Person, except (i) sales of Inventory in the
Ordinary Course of Business, and (ii) other dispositions of Collateral
expressly authorized by other provisions of the Loan Documents.
9.2.11. Subsidiaries. Form or acquire any Subsidiary after
the Closing Date; permit any of the existing Subsidiaries to issue any
additional Equity Interest, except director's qualifying shares; or transfer
any Property to a Subsidiary that is a Restricted Subsidiary or to an
Unrestricted Subsidiary, unless, in the case of an Unrestricted Subsidiary,
such Unrestricted Subsidiary becomes a Guarantor of the Obligations by the
execution and delivery to Agent of an unconditional guaranty of payment in form
and substance satisfactory to Agent and the Property to be transferred to such
Unrestricted Subsidiary does not constitute any of the Collateral or any
proceeds of Loans made by Lenders to Borrower.
9.2.12. Reserved.
9.2.13. Restricted Investments. Make or have any Restricted
Investment.
9.2.14. Tax Consolidation. File or consent to the filing of
any consolidated income tax return with any Person other than TFH and any
Subsidiary.
9.2.15. Accounting Changes. Make any significant change in
accounting treatment or reporting practices, except as may be permitted by
GAAP, or establish a fiscal year different from the Fiscal Year.
9.2.16. Organization Documents. Amend, modify or otherwise
change any of the terms or provisions in any of its Organization Documents as
in effect on the date hereof, except for changes that do not affect in any way
Borrower's or such Subsidiary's rights and obligations to enter into and
perform the Loan Documents to which it is a party and to pay all of the
Obligations and that do not otherwise have a Material Adverse Effect.
9.2.17. Restrictive Agreements. Enter into or become party to
any Restrictive Agreement other than those disclosed in SCHEDULE 8.1.18 hereto,
provided that none of such disclosed agreements shall be amended without prior
notice to and the consent of Agent.
9.2.18. Conduct of Business. Engage in any business other
than the business engaged in by it on the Closing Date and any business or
activities which are substantially similar, related or incidental thereto.
9.3. FINANCIAL COVENANTS. For so long as there are any Revolver
Commitments outstanding and thereafter until payment in full of the
Obligations, Borrower covenants that, unless otherwise consented to by the
Required Lenders in writing, it shall:
9.3.1. Working Capital. Borrower shall at all times maintain
Working Capital in an amount greater than $9,000,000.
9.3.2. Availability. Borrower shall at all times maintain
Availability in an amount greater than $3,000,000.
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SECTION 10. CONDITIONS PRECEDENT
10.1. CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSIONS. Initial
Lender shall not be required to fund any Loan requested by Borrower, procure
any Letter of Credit, or otherwise extend credit to Borrower, unless, on or
before January 31, 2000, each of the following conditions has been satisfied:
10.1.1. Loan Documents. Each of the Loan Documents shall have
been duly executed and delivered to Agent by each of the signatories thereto
(and, with the exception of the Notes, in sufficient counterparts for each
Lender) and accepted by Agent and Initial Lender and each Obligor shall be in
compliance with all of the terms thereof.
10.1.2. Evidence of Perfection and Priority of Liens. Agent
shall have received copies of all filing receipts or acknowledgments issued by
any Governmental Authority to evidence any filing or recordation necessary to
perfect the Liens of Agent in the Collateral and evidence in form satisfactory
to Agent and Initial Lender that such Liens constitute valid and perfected
security interests and Liens, and that there are no other Liens upon any
Collateral except for Permitted Liens.
10.1.3. Organization Documents. Agent shall have received
copies of the Organization Documents of each Obligor, and all amendments
thereto, which, in the case of Borrower's charter, shall be certified by the
Secretary of State or other appropriate officials of the jurisdiction of
Borrower's and each Obligor's states of organization.
10.1.4. Good Standing Certificates. Agent shall have received
good standing certificates for each Obligor, issued by the Secretary of State
or other appropriate official of such Obligor's jurisdiction of organization
and each jurisdiction where the conduct of such Obligor's business activities
or ownership of its Property necessitates qualification.
10.1.5. Opinion Letters. Agent shall have received a
favorable, written opinion of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇ covering, to Agent's
satisfaction, the matters set forth on EXHIBIT F attached hereto.
10.1.6. Insurance. Agent shall have received certified copies
of the property and casualty insurance policies of Borrower with respect to the
Collateral, or certificates of insurance with respect to such policies,
acceptable to Agent, loss payable endorsements on Agent's standard form of loss
payee endorsement naming Agent as loss payee with respect to each such policy
and certified copies of Borrower's liability insurance policies, including
product liability policies, together with endorsements naming Agent as an
additional insured, all as required by the Loan Documents.
10.1.7. No Labor Disputes. Agent shall have received
assurances satisfactory to it that there are no threats of strikes or work
stoppages by any employees, or organization of employees, of any Obligor which
Agent reasonably determines may have a Material Adverse Effect.
10.1.8. Compliance with Laws and Other Agreements. Agent
shall have determined or received assurances satisfactory to it that none of
the Loan Documents or any of the transactions contemplated thereby violate any
Applicable Law, court order or agreement binding upon any Obligor.
10.1.9. No Material Adverse Change. No material adverse
change in the financial condition of any Obligor or in the quality, quantity or
value of any Collateral shall have occurred since January 2, 1999.
10.1.10. Payment of Fees. Borrower shall have paid, or made
provision for the payment on the Closing Date of, all fees and expenses to be
paid hereunder to Agent and Lenders on the Closing Date.
10.1.11. LC Conditions. With respect to the procurement of
any Letter of Credit on the Closing Date, each of the LC Conditions is
satisfied.
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10.1.12. Intercreditor Agreement. The Public Note
Intercreditor Agreement shall have been executed and delivered by each of the
signatories thereto.
10.2. CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. Lenders shall
not be required to fund any Loans, procure any Letters of Credit, or otherwise
extend any credit to or for the benefit of Borrower, unless and until each of
the following conditions has been and continues to be satisfied:
10.2.1. No Defaults. No Default or Event of Default exists at
the time, or would result from the funding, of any Loan or other extension of
credit.
10.2.2. Satisfaction of Conditions in Other Loan Documents.
Each of the conditions precedent set forth in any other Loan Document shall
have been and shall remain satisfied.
10.2.3. No Litigation. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain
or prohibit, or to obtain damages in respect of, or which is related to or
arises out of, this Agreement or any of the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby.
10.2.4. No Material Adverse Effect. No event shall have
occurred and no condition shall exist which has or could be reasonably expected
to have a Material Adverse Effect.
10.2.5. Borrowing Base Certificate. Agent shall have received
the most recent Borrowing Base Certificate required by the terms of this
Agreement or otherwise requested by Agent.
10.2.6. LC Conditions. With respect to the procurement of any
Letter of Credit after the Closing Date, each of the LC Conditions is
satisfied.
10.3. INAPPLICABILITY OF CONDITIONS. None of the conditions precedent
set forth in SECTIONS 10.1 or 10.2 shall be conditions to the obligation of (i)
each Participating Lender to make payments to Fleet pursuant to SECTION 1.3.2,
(ii) each Lender to deposit with Agent such Lender's Pro Rata share of a
Borrowing in accordance with SECTION 3.1.2, (iii) each Lender to fund its Pro
Rata share of a Revolver Loan to repay outstanding Settlement Loans to Fleet as
provided in SECTION 3.1.3(II), (iv) each Lender to pay any amount payable to
Agent or any other Lender pursuant to this Agreement or (v) Agent to pay any
amount payable to any Lender pursuant to this Agreement.
10.4. LIMITED WAIVER OF CONDITIONS PRECEDENT. If Lenders shall make
any Loan, procure any Letter of Credit, or otherwise extend any credit to
Borrower under this Agreement at a time when any of the foregoing conditions
precedent are not satisfied (regardless of whether the failure of satisfaction
of any such conditions precedent was known or unknown to Agent or Lenders), the
funding of such Loan shall not operate as a waiver of the right of Agent and
Lenders to insist upon the satisfaction of all conditions precedent with
respect to each subsequent Borrowing requested by Borrower or a waiver of any
Default or Event of Default as a consequence of the failure of any such
conditions to be satisfied, unless Agent, with the prior written consent of the
Required Lenders, in writing waives the satisfaction of any condition
precedent, in which event such waiver shall only be applicable for the specific
instance given and only to the extent and for the period of time expressly
stated in such written waiver.
SECTION 11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
11.1. EVENTS OF DEFAULT. The occurrence or existence of any one or
more of the following events or conditions shall constitute an "Event of
Default" (each of which Events of Default shall be deemed to exist unless and
until waived by Agent and Lenders in accordance with the provisions of SECTION
12.9 hereof):
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11.1.1. Payment of Obligations. Borrower shall fail to pay
any of the Obligations on the due date thereof (whether due at stated maturity,
ON DEMAND, upon acceleration or otherwise).
11.1.2. Misrepresentations. Any representation, warranty or
other written statement to Agent or any Lender by or on behalf of any Obligor,
whether made in or furnished in compliance with or in reference to any of the
Loan Documents, proves to have been false or misleading in any material respect
when made or furnished or when reaffirmed pursuant to SECTION 8.2 hereof.
11.1.3. Breach of Specific Covenants. Borrower shall fail or
neglect to perform, keep or observe any covenant contained in SECTIONS 6.3,
7.1.1, 7.2.5, 7.2.6, 9.1.1, 9.1.3, 9.1.9, 9.1.10, 9.1.11, 9.1.12, 9.2 or 9.3
hereof on the date that Borrower is required to perform, keep or observe such
covenant.
11.1.4. Breach of Other Covenants. Borrower shall fail or
neglect to perform, keep or observe any covenant contained in this Agreement
(other than a covenant which is dealt with specifically elsewhere in SECTION
11.1 hereof) and the breach of such other covenant is not cured to Agent's and
the Required Lender's satisfaction within 15 days after the sooner to occur of
any Senior Officer's receipt of notice of such breach from Agent or the date on
which such failure or neglect first becomes known to any Senior Officer;
provided, however, that such notice and opportunity to cure shall not apply in
the case of any failure to perform, keep or observe any covenant which is not
capable of being cured at all or within such 15-day period or which is a
willful and knowing breach by Borrower.
11.1.5. Default Under Security Documents/Other Agreements.
Borrower or any other Obligor shall default in the due and punctual observance
or performance of any liability or obligation to be observed or performed by it
under any of the Other Agreements or Security Documents and any cure period
provided for therein shall have elapsed.
11.1.6. Other Defaults. There shall occur any default or
event of default on the part of Borrower or any Subsidiary under any agreement,
document or instrument to which Borrower or any Subsidiary is a party or by
which Borrower or any Subsidiary or any of their respective Properties is
bound, creating or relating to any Debt (other than the Obligations) in excess
of $500,000 (including any default under the Public Note Indenture), if the
payment or maturity of such Debt may be accelerated in consequence of such
event of default or demand for payment of such Debt may be made.
11.1.7. Uninsured Losses. Any loss, theft, damage or
destruction of any of the Collateral not fully covered (subject to such
deductibles as Agent shall have permitted) by insurance if the amount not
covered by insurance exceeds $250,000.
11.1.8. Material Adverse Effect. There shall occur any event
or condition that has a Material Adverse Effect.
11.1.9. Solvency. Any Obligor shall cease to be Solvent.
11.1.10. Insolvency Proceedings. Any Insolvency Proceeding
shall be commenced by any Obligor; an Insolvency Proceeding is commenced
against any Obligor and any of the following events occur: such Obligor
consents to the institution of the Insolvency Proceeding against it, the
petition commencing the Insolvency Proceeding is not timely controverted by
such Obligor, the petition commencing the Insolvency Proceeding is not
dismissed within 30 days after the date of the filing thereof (provided that,
in any event, during the pendency of any such period, Lenders shall be relieved
from their obligation to make Loans or otherwise extend credit to or for the
benefit of Borrower hereunder), an interim trustee is appointed to take
possession all or a substantial portion of the Properties of such Obligor or to
operate all or any substantial portion of the business of such Obligor or an
order for relief shall have been issued or entered in connection with such
Insolvency Proceeding; or any Obligor shall make an offer of settlement
extension or composition to its unsecured creditors generally.
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11.1.11. Business Disruption; Condemnation. There shall occur
a cessation of a substantial part of the business of any Obligor for a period
which may be reasonably expected to have a Material Adverse Effect; or any
Obligor shall suffer the loss or revocation of any license or permit now held
or hereafter acquired by such Obligor which is necessary to the continued or
lawful operation of its business; or any Obligor shall be enjoined, restrained
or in any way prevented by court, governmental or administrative order from
conducting all or any material part of its business affairs; or any material
lease or agreement pursuant to which any Obligor leases or occupies any
premises on which any Collateral is located shall be canceled or terminated
prior to the expiration of its stated term and such cancellation or termination
has a Material Adverse Effect or results in an Out-of-Formula Condition; or any
material part of the Collateral shall be taken through condemnation or the
value of such Property shall be materially impaired through condemnation.
11.1.12. Change in Control or Ownership. There shall occur
any Change in Control or Ownership.
11.1.13. ERISA. A Reportable Event shall occur which Agent,
in its reasonable discretion, shall determine constitutes grounds for the
termination by the Pension Benefit Guaranty Corporation of any Plan or for the
appointment by the appropriate United States district court of a trustee for
any Plan, or if any Plan shall be terminated or any such trustee shall be
requested or appointed, or if Borrower, any Subsidiary or any Obligor is in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan resulting from Borrower's, such Subsidiary's or such
Obligor's complete or partial withdrawal from such Plan.
11.1.14. Challenge to Loan Documents. Any Obligor or any of
its Affiliates shall challenge or contest in any action, suit or proceeding the
validity or enforceability of any of the Loan Documents, the legality or
enforceability of any of the Obligations or the perfection or priority of any
Lien granted to Agent, or any of the Loan Documents ceases to be in full force
or effect for any reason other than a full or partial waiver or release by
Agent and Lenders in accordance with the terms thereof.
11.1.15. Judgment. One or more judgments or orders for the
payment of money in amounts that exceed, individually or in the aggregate,
$250,000 shall be entered against Borrower or any other Obligor and either (i)
enforcement proceedings shall have been commenced by any creditor upon any such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of any such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect.
11.1.16. Repudiation of or Default Under Guaranty. Any
Guarantor shall revoke or attempt to revoke the Guaranty signed by such
Guarantor, shall repudiate such Guarantor's liability thereunder, or shall be
in default under the terms thereof, or shall fail to confirm in writing,
promptly after receipt of Agent's written request therefor, such Guarantor's
ongoing liability under the Guaranty in accordance with the terms thereof.
11.1.17. Criminal Forfeiture. Any Obligor shall be convicted
under any criminal law that could lead to a forfeiture of any Property of such
Obligor.
11.2. ACCELERATION OF OBLIGATIONS; TERMINATION OF REVOLVER
COMMITMENTS. Without in any way limiting the right of Agent to demand payment
of any portion of the Obligations payable ON DEMAND in accordance with this
Agreement:
11.2.1. Upon or at any time after the occurrence of an Event
of Default (other than pursuant to SECTION 11.1.10 hereof) and for so long as
such Event of Default shall exist, Agent may in its discretion (and, upon
receipt of written instructions to do so from the Required Lenders, shall) (a)
declare the principal of and any accrued interest on the Loans and all other
Obligations owing under any of the Loan Documents to be, whereupon the same
shall become without further notice or demand (all of which notice and demand
Borrower expressly waives), forthwith due and payable and Borrower shall
forthwith pay to Agent the entire principal of and accrued and unpaid interest
on the Loans and other Obligations plus reasonable attorneys'
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fees and expenses if such principal and interest are collected by or through an
attorney-at-law and (b) terminate the Revolver Commitments.
11.2.2. Upon the occurrence of an Event of Default specified
in SECTION 11.1.10 hereof, all of the Obligations shall become automatically
due and payable without declaration, notice or demand by Agent to or upon
Borrower and the Revolver Commitments shall automatically terminate as if
terminated by Agent pursuant to SECTION 5.2.1 hereof and with the effects
specified in SECTION 5.2.4 hereof; provided, however, that, if Agent or Lenders
shall continue to make Loans or otherwise extend credit to Borrower pursuant to
this Agreement after an automatic termination of the Revolver Commitments by
reason of the commencement of an Insolvency Proceeding by or against Borrower,
such Loans and other credit shall nevertheless be governed by this Agreement
and enforceable against and recoverable from each Obligor as if such Insolvency
Proceeding had never been instituted.
11.3. OTHER REMEDIES. Upon and after the occurrence of an Event of
Default and for so long as such Event of Default shall exist, Agent may in its
discretion (and, upon receipt of written direction of the Required Lenders,
shall) exercise from time to time the following rights and remedies (without
prejudice to the rights of Agent or any Lender to enforce its claim against any
or all Obligors):
11.3.1. All of the rights and remedies of a secured party
under the UCC or under other Applicable Law, and all other legal and equitable
rights to which Agent may be entitled under any of the Loan Documents, all of
which rights and remedies shall be cumulative and shall be in addition to any
other rights or remedies contained in this Agreement or any of the other Loan
Documents, and none of which shall be exclusive.
11.3.2. The right to collect all amounts at any time payable
to Borrower from any Account Debtor or other Person at any time indebted to
Borrower.
11.3.3. The right to take immediate possession of any of the
Collateral, and to (i) require Borrower to assemble the Collateral, at
Borrower's expense, and make it available to Agent at a place designated by
Agent which is reasonably convenient to both parties, and (ii) enter any
premises where any of the Collateral shall be located and to keep and store the
Collateral on said premises until sold (and if said premises be the Property of
Borrower, then Borrower agrees not to charge Agent for storage thereof).
11.3.4. The right to sell or otherwise dispose of all or any
Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as may
be required by Applicable Law, in lots or in bulk, for cash or on credit, all
as Agent, in its sole discretion, may deem advisable. Borrower agrees that any
requirement of notice to Borrower or any other Obligor of any proposed public
or private sale or other disposition of Collateral by Agent shall be deemed
reasonable notice thereof if given at least 10 days prior thereto, and such
sale may be at such locations as Agent may designate in said notice. Agent
shall have the right to conduct such sales on Borrower's or any other Obligor's
premises, without charge therefor, and such sales may be adjourned from time to
time in accordance with Applicable Law. Agent shall have the right to sell,
lease or otherwise dispose of the Collateral, or any part thereof, for cash,
credit or any combination thereof, and Agent may purchase all or any part of
the Collateral at public or, if permitted by law, private sale and, in lieu of
actual payment of such purchase price, may set off the amount of such price
against the Obligations. The proceeds realized from the sale or other
disposition of any Collateral may be applied, after allowing 2 Business Days
for collection, first to any Extraordinary Expenses incurred by Agent, second
to interest accrued with respect to any of the Obligations; and third, to the
principal balance of the Obligations. If any deficiency shall arise, Obligors
shall remain jointly and severally liable to Agent and Lenders therefor.
11.3.5. The right to the appointment of a receiver, without
notice of any kind whatsoever, to take possession of all or any portion of the
Collateral and to exercise such rights and powers as the court appointing such
receiver shall confer upon such receiver.
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11.3.6. The right to require Borrower to deposit with Agent
funds equal to the LC Outstandings and, if Borrower fails promptly to make such
deposit, Lenders may (and shall upon the direction of the Required Lenders)
advance such amount as a Revolver Loan (whether or not an Out-of-Formula
Condition exists or is created thereby). Any such deposit or advance shall be
held by Agent as a reserve to fund future payments on any LC Support. At such
time as the LC Support has been paid or terminated and all Letters of Credit
have been drawn upon or expired, any amounts remaining in such reserve shall be
applied against any outstanding Obligations, or, if all Obligations have been
indefeasibly paid in full, returned to Borrower.
Agent is hereby irrevocably granted a license or other right to use, without
charge, any or all of Borrower's Intellectual Property and all of Borrower's
computer hardware and software trade secrets, brochures, customer lists,
promotional and advertising materials, labels, and packaging materials, and any
Property of a similar nature, in advertising for sale, marketing, selling and
collecting and in completing the manufacturing of any Collateral, and
Borrower's rights under all licenses and all franchise agreements shall inure
to Agent's benefit.
11.4. SETOFF. In addition to any Liens granted under any of the Loan
Documents and any rights now or hereafter available under Applicable Law, Agent
and each Lender (and each of their respective Affiliates) is hereby authorized
by Borrower at any time that an Event of Default exists, without notice to
Borrower or any other Person (any such notice being hereby expressly waived) to
set off and to appropriate and to apply any and all deposits, general or
special (including Debt evidenced by certificates of deposit whether matured or
unmatured (but not including trust accounts)) and any other Debt at any time
held or owing by Agent, such Lender or any of their Affiliates to or for the
credit or the account of Borrower against and on account of the Obligations of
Borrower arising under the Loan Documents to Agent, such Lender or any of their
Affiliates, including all Loans and LC Outstandings and all claims of any
nature or description arising out of or in connection with this Agreement,
irrespective of whether or not (i) Agent or such Lender shall have made any
demand hereunder, (ii) Agent, at the request or with the consent of the
Required Lenders, shall have declared the principal of and interest on the
Loans and other amounts due hereunder to be due and payable as permitted by
this Agreement and even though such Obligations may be contingent or unmatured
or (iii) the Collateral for the Obligations is adequate. Notwithstanding the
foregoing, each of Agent and Lenders agree with each other that it shall not,
without the express consent of the Required Lenders, and that it shall (to the
extent that it is lawfully entitled to do so) upon the request of the Required
Lenders, exercise its setoff rights hereunder against any accounts of Borrower
now or hereafter maintained with Agent, such Lender or any Affiliate of any of
them, but Borrower shall have no claim or cause of action against Agent or any
Lender for any setoff made without the consent of the Required Lenders and the
validity of any such setoff shall not be impaired by the absence of such
consent. If any party (or its Affiliate) exercises the right of setoff provided
for hereunder, such party shall be obligated to share any such setoff in the
manner and to the extent required by SECTION 12.5.
11.5. REMEDIES CUMULATIVE; NO WAIVER.
11.5.1. All covenants, conditions, provisions, warranties,
guaranties, indemnities, and other undertakings of Borrower contained in this
Agreement and the other Loan Documents, or in any document referred to herein
or contained in any agreement supplementary hereto or in any schedule or in any
Guaranty given to Agent or any Lender or contained in any other agreement
between Agent or any Lender and Borrower, heretofore, concurrently, or
hereafter entered into, shall be deemed cumulative to and not in derogation or
substitution of any of the terms, covenants, conditions, or agreements of
Borrower herein contained. The rights and remedies of Agent and Lenders under
this Agreement and the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies that Agent or any Lender would otherwise
have.
11.5.2. The failure or delay of Agent or any Lender to
require strict performance by Borrower of any provision of any of the Loan
Documents or to exercise or enforce any rights, Liens, powers or remedies under
any of the Loan Documents or with respect to any Collateral shall not operate
as a waiver of such performance, Liens, rights, powers and
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remedies, but all such requirements, Liens, rights, powers, and remedies shall
continue in full force and effect until all Loans and all other Obligations
owing or to become owing from Borrower to Agent and Lenders shall have been
fully satisfied. None of the undertakings, agreements, warranties, covenants
and representations of Borrower contained in this Agreement or any of the other
Loan Documents and no Event of Default by Borrower under this Agreement or any
other Loan Documents shall be deemed to have been suspended or waived by Agent
or any Lender, unless such suspension or waiver is by an instrument in writing
specifying such suspension or waiver and is signed by a duly authorized
representative of Agent or such Lender and directed to Borrower.
11.5.3. If Agent or any Lender shall accept performance by
Borrower, in whole or in part, of any obligation that Borrower is required by
any of the Loan Documents to perform only when a Default or Event of Default
exists, or if Agent or any Lender shall exercise any right or remedy under any
of the Loan Documents that may not be exercised other than when a Default or
Event of Default exists, Agent's or Lender's acceptance of such performance by
Borrower or Agent's or Lender's exercise of any such right or remedy shall not
operate to waive any such Event of Default or to preclude the exercise by Agent
or any Lender of any other right or remedy, unless otherwise expressly agreed
in writing by Agent or such Lender, as the case may be.
SECTION 12. AGENT
12.1. APPOINTMENT, AUTHORITY AND DUTIES OF AGENT.
12.1.1. Each Lender hereby irrevocably appoints and
designates Fleet as Agent to act as herein specified. Agent may, and each
Lender by its acceptance of a Note shall be deemed irrevocably to have
authorized Agent to, enter into all Loan Documents to which Agent is or is
intended to be a party and all amendments hereto and all Security Documents at
any time executed by Borrower, for its benefit and the Pro Rata benefit of
Lenders and, except as otherwise provided in this SECTION 12, to exercise such
rights and powers under this Agreement and the other Loan Documents as are
specifically delegated to Agent by the terms hereof and thereof, together with
such other rights and powers as are reasonably incidental thereto. Each Lender
agrees that any action taken by Agent or the Required Lenders in accordance
with the provisions of this Agreement or the other Loan Documents, and the
exercise by Agent or the Required Lenders of any of the powers set forth herein
or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all Lenders. Without limiting the
generality of the foregoing, Agent shall have the sole and exclusive right and
authority to (a) act as the disbursing and collecting agent for Lenders with
respect to all payments and collections arising in connection with this
Agreement and the other Loan Documents; (b) execute and deliver as Agent each
Loan Document and accept delivery of each such agreement delivered by Borrower
or any other Obligor; (c) act as collateral agent for Lenders for purposes of
the perfection of all security interests and Liens created by this Agreement or
the Security Documents with respect to all material items of the Collateral
and, subject to the direction of the Required Lenders, for all other purposes
stated therein, provided that Agent hereby appoints, authorizes and directs
each Lender to act as a collateral sub-agent for Agent and the other Lenders
for purposes of the perfection of all security interests and Liens with respect
to Borrower's Deposit Accounts maintained with, and all cash and Cash
Equivalents held by, such Lender; (d) subject to the direction of the Required
Lenders, manage, supervise or otherwise deal with the Collateral; and (e)
except as may be otherwise specifically restricted by the terms of this
Agreement and subject to the direction of the Required Lenders, exercise all
remedies given to Agent with respect to any of the Collateral under the Loan
Documents relating thereto, Applicable Law or otherwise. The duties of Agent
shall be ministerial and administrative in nature, and Agent shall not have by
reason of this Agreement or any other Loan Document a fiduciary relationship
with any Lender (or any Lender's participants). Unless and until its authority
to do so is revoked in writing by Required Lenders, Agent alone shall be
authorized to determine whether any Accounts or Inventory constitute Eligible
Accounts or Eligible Inventory (basing such determination in each case upon the
meanings given to such terms in Appendix A), or whether to impose or release
any reserve, and to exercise its own credit judgment in connection therewith,
which determinations and judgments, if exercised in good faith, shall exonerate
Agent from any liability to Lenders or any other Person for any errors in
judgment.
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12.1.2. Agent (which term, as used in this sentence, shall
include reference to Agent's officers, directors, employees, attorneys, agents
and Affiliates and to the officers, directors, employees, attorneys and agents
of Agent's Affiliates) shall not: (a) have any duties or responsibilities
except those expressly set forth in this Agreement and the other Loan Documents
or (b) be required to take, initiate or conduct any litigation, foreclosure or
collection proceedings hereunder or under any of the other Loan Documents
except to the extent directed to do so by the Required Lenders during the
continuance of any Event of Default. The conferral upon Agent any right
hereunder shall not imply a duty on Agent's part to exercise any such right
unless instructed to do so by the Required Lenders in accordance with this
Agreement.
12.1.3. Agent may perform any of its duties by or through its
agents and employees and may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Borrower shall promptly
(and in any event, on demand) reimburse Agent for all reasonable expenses
(including all Extraordinary Expenses) incurred by Agent pursuant to any of the
provisions hereof or of any of the other Loan Documents or in the execution of
any of Agent's duties hereby or thereby created or in the exercise of any right
or power herein or therein imposed or conferred upon it or Lenders (excluding,
however, general overhead expenses), and each Lender agrees promptly to pay to
Agent, ON DEMAND, such Lender's Pro Rata share of any such reimbursement for
expenses (including Extraordinary Expenses) that is not timely made by Borrower
to Agent.
12.1.4. The rights, remedies, powers and privileges conferred
upon Agent hereunder and under the other Loan Documents may be exercised by
Agent without the necessity of the joinder of any other parties unless
otherwise required by Applicable Law. If Agent shall request instructions from
the Required Lenders with respect to any act or action (including the failure
to act) in connection with this Agreement or any of the other Loan Documents,
Agent shall be entitled to refrain from such act or taking such action unless
and until Agent shall have received instructions from the Required Lenders; and
Agent shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any of the Loan Documents pursuant to or in accordance with
the instructions of the Required Lenders except for Agent's own gross
negligence or willful misconduct in connection with any action taken by it.
Notwithstanding anything to the contrary contained in this Agreement, Agent
shall not be required to take any action that is in its opinion contrary to
Applicable Law or the terms of any of the Loan Documents or that would in its
reasonable opinion subject it or any of its officers, employees or directors to
personal liability; provided, however, that if Agent shall fail or refuse to
take action that is not contrary to Applicable Law or to any of the terms of
any of the Loan Documents even if such action in Agent's opinion would subject
it to potential liability, the Required Lenders may remove Agent and appoint a
successor Agent in the same manner and with the same effects as is provided in
this Agreement with respect to Agent's resignation.
12.1.5. Agent shall promptly, upon receipt thereof, forward
to each Lender (i) copies of any significant written notices, reports,
certificates and other information received by Agent from any Obligor (but only
if and to the extent such Obligor is not required by the terms of the Loan
Documents to supply such information directly to Lenders) and (ii) copies of
the results of any field audits by Agent with respect to Borrower. Agent shall
have no liability to any Lender for any errors in or omissions from any field
audit or other examination of Borrower or the Collateral, unless such error or
omission was the direct result of Agent's willful misconduct.
12.2. AGREEMENTS REGARDING COLLATERAL. Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any Lien upon
any Collateral (i) upon the termination of the Revolver Commitments and payment
or satisfaction of all of the Obligations, or (ii) if approved or ratified by
the Required Lenders. Agent shall have no obligation whatsoever to any of the
Lenders to assure that any of the Collateral exists or is owned by Borrower or
is cared for, protected or insured or has been encumbered, or that Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected or enforced or entitled to any particular priority or to exercise any
duty of care with respect to any of the Collateral.
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12.3. RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be
fully protected in so relying, upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram, telecopier
message or cable) believed by it to be genuine and correct and to have been
signed, sent or made by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Agent. As to any matters not expressly provided for by this
Agreement or any of the other Loan Documents, Agent shall in all cases be fully
protected in acting or refraining from acting hereunder and thereunder in
accordance with the instructions of the Required Lenders, and such instructions
of the Required Lenders and any action taken or failure to act pursuant thereto
shall be binding upon Lenders.
12.4. ACTION UPON DEFAULT. Agent shall not be deemed to have knowledge
of the occurrence of a Default or an Event of Default, unless it has received
written notice from a Lender or Borrower specifying the occurrence and nature
of such Default or Event of Default. If Agent shall receive such a notice of a
Default or an Event of Default or shall otherwise acquire actual knowledge of
any Default or Event of Default, Agent shall promptly notify Lenders in writing
and Agent shall take such action and assert such rights under this Agreement
and the other Loan Documents, or shall refrain from taking such action and
asserting such rights, as the Required Lenders shall direct from time to time.
If any Lender shall receive a notice of a Default or an Event of Default or
shall otherwise acquire actual knowledge of any Default or Event of Default,
such Lender shall promptly notify Agent and the other Lenders in writing. As
provided in SECTION 12.3 hereof, Agent shall not be subject to any liability by
reason of acting or refraining to act pursuant to any request of the Required
Lenders except for its own willful misconduct or gross negligence in connection
with any action taken by it. Before directing Agent to take or refrain from
taking any action or asserting any rights or remedies under this Agreement and
the other Loan Documents on account of any Event of Default, the Required
Lenders shall consult with and seek the advice of (but without having to obtain
the consent of) each other Lender, and promptly after directing Agent to take
or refrain from taking any such action or asserting any such rights, the
Required Lenders will so advise each other Lender of the action taken or
refrained from being taken and, upon request of any Lender, will supply
information concerning actions taken or not taken. In no event shall the
Required Lenders, without the prior written consent of each Lender, direct
Agent to accelerate and demand payment of the Loans held by one Lender without
accelerating and demanding payment of all other Loans or to terminate the
Revolver Commitments of one or more Lenders without terminating the Revolver
Commitments of all Lenders. Each Lender agrees that, except as otherwise
provided in any of the Loan Documents and without the prior written consent of
the Required Lenders, it will not take any legal action or institute any action
or proceeding against any Obligor with respect to any of the Obligations or
Collateral or accelerate or otherwise enforce its portion of the Obligations.
Without limiting the generality of the foregoing, none of Lenders may exercise
any right that it might otherwise have under Applicable Law to credit bid at
foreclosure sales, UCC sales or other similar sales or dispositions of any of
the Collateral except as authorized by the Required Lenders. Notwithstanding
anything to the contrary set forth in this SECTION 12.4 or elsewhere in this
Agreement, each Lender shall be authorized to take such action to preserve or
enforce its rights against any Obligor where a deadline or limitation period is
otherwise applicable and would, absent the taken of specified action, bar the
enforcement of Obligations held by such Lender against such Obligor, including
the filing of proofs of claim in any Insolvency Proceeding.
12.5. RATABLE SHARING. If any Lender shall obtain any payment or
reduction (including any amounts received as adequate protection of a bank
account deposit treated as cash collateral under the Bankruptcy Code) of any
Obligation of Borrower hereunder (whether voluntary, involuntary, through the
exercise of any right of set-off or otherwise) in excess of its Pro Rata share
of payments or reductions on account of such Obligations obtained by all of the
Lenders, such Lender shall forthwith (i) notify the other Lenders and Agent of
such receipt and (ii) purchase from the other Lenders such participations in
the affected Obligations as shall be necessary to cause such purchasing Lender
to share the excess payment or reduction, net of costs incurred in connection
therewith, on a Pro Rata basis, provided that if all or any portion of such
excess payment or reduction is thereafter recovered from such purchasing Lender
or additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery or such additional
costs, but without interest. Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this SECTION 12.5 may, to the
fullest extent permitted by Applicable Law,
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exercise all of its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation.
12.6. INDEMNIFICATION OF AGENT INDEMNITEES.
12.6.1. Each Lender agrees to indemnify and defend the Agent
Indemnitees (to the extent not reimbursed by Borrower under this Agreement, but
without limiting the indemnification obligation of Borrower under this
Agreement), on a Pro Rata basis, and to hold each of the Agent Indemnitees
harmless from and against, any and all Claims which may be imposed on, incurred
by or asserted against any of the Agent Indemnitees in any way related to or
arising out of this Agreement or any of the other Loan Documents or any other
document contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses which Borrower
is obligated to pay under SECTION 14.2 hereof or amounts Agent may be called
upon to pay in connection with any lockbox or Dominion Account arrangement
contemplated hereby) or the enforcement of any of the terms hereof or thereof
or of any such other documents, provided that no Lender shall be liable to any
Agent Indemnitee for any of the foregoing to the extent that they result solely
from the willful misconduct or gross negligence of such Agent Indemnitee.
12.6.2. Without limiting the generality of the foregoing
provisions of this SECTION 12.6, if Agent should be sued by any receiver,
trustee in bankruptcy, debtor-in-possession or other Person on account of any
alleged preference or fraudulent transfer received or alleged to have been
received from Borrower or any other Obligor as the result of any transaction
under the Loan Documents, then in such event any monies paid by Agent in
settlement or satisfaction of such suit, together with all Extraordinary
Expenses incurred by Agent in the defense of same, shall be promptly reimbursed
to Agent by Lenders to the extent of each Lender's Pro Rata share.
12.6.3. Without limiting the generality of the foregoing
provisions of this SECTION 12.6, if at any time (whether prior to or after the
Commitment Termination Date) any action or proceeding shall be brought against
any of the Agent Indemnitees by an Obligor or by any other Person claiming by,
through or under an Obligor, to recover damages for any act taken or omitted by
Agent under any of the Loan Documents or in the performance of any rights,
powers or remedies of Agent against any Obligor, any Account Debtor, the
Collateral or with respect to any Loans, or to obtain any other relief of any
kind on account of any transaction involving any Agent Indemnitees under or in
relation to any of the Loan Documents, each Lender agrees to indemnify, defend
and hold the Agent Indemnitees harmless with respect thereto and to pay to the
Agent Indemnitees such Lender's Pro Rata share of such amount as any of the
Agent Indemnitees shall be required to pay by reason of a judgment, decree, or
other order entered in such action or proceeding or by reason of any compromise
or settlement agreed to by the Agent Indemnitees, including all interest and
costs assessed against any of the Agent Indemnitees in defending or
compromising such action, together with attorneys' fees and other legal
expenses paid or incurred by the Agent Indemnitees in connection therewith;
provided, however, that no Lender shall be liable to any Agent Indemnitee for
any of the foregoing to the extent that they arise solely from the willful
misconduct or gross negligence of such Agent Indemnitee. In Agent's discretion,
Agent may also reserve for or satisfy any such judgment, decree or order from
proceeds of Collateral prior to any distributions therefrom to or for the
account of Lenders.
12.7. LIMITATION ON RESPONSIBILITIES OF AGENT. Agent shall in all
cases be fully justified in failing or refusing to act hereunder unless it
shall have received further assurances to its satisfaction from Lenders of
their indemnification obligations under SECTION 12.6 hereof against any and all
Claims which may be incurred by Agent by reason of taking or continuing to take
any such action. Agent shall not be liable to Lenders (or any Lender's
participants) for any action taken or omitted to be taken under or in
connection with this Agreement or the other Loan Documents except as a result
of actual gross negligence or willful misconduct on the part of Agent. Agent
does not assume any responsibility for any failure or delay in performance or
breach by any Obligor or any Lender of its obligations under this Agreement or
any of the other Loan Documents. Agent does not make to Lenders, and no Lender
makes to Agent or the other Lenders, any express or implied warranty,
representation or guarantee with respect to the Loans, the Collateral, the Loan
Documents or any Obligor. Neither Agent nor any of its officers, directors,
employees,
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attorneys or agents shall be responsible to Lenders, and no Lender nor any of
its agents, attorneys or employees shall be responsible to Agent or the other
Lenders, for: (i) any recitals, statements, information, representations or
warranties contained in any of the Loan Documents or in any certificate or
other document furnished pursuant to the terms hereof; (ii) the execution,
validity, genuineness, effectiveness or enforceability of any of the Loan
Documents; (iii) the validity, genuineness, enforceability, collectibility,
value, sufficiency or existence of any Collateral, or the perfection or
priority of any Lien therein; or (iv) the assets, liabilities, financial
condition, results of operations, business, creditworthiness or legal status of
any Obligor or any Account Debtor. Neither Agent nor any of its officers,
directors, employees, attorneys or agents shall have any obligation to any
Lender to ascertain or inquire into the existence of any Default or Event of
Default, the observance or performance by any Obligor of any of the duties or
agreements of such Obligor under any of the Loan Documents or the satisfaction
of any conditions precedent contained in any of the Loan Documents. Agent may
consult with and employ legal counsel, accountants and other experts and shall
be entitled to act upon, and shall be fully protected in any action taken in
good faith reliance upon, any advice given by such experts.
12.8. SUCCESSOR AGENT AND CO-AGENTS.
12.8.1. Subject to the appointment and acceptance of a
successor Agent as provided below, Agent may resign at any time by giving at
least 30 days written notice thereof to each Lender and Borrower. Upon receipt
of any notice of such resignation, the Required Lenders, after prior
consultation with (but without having to obtain consent of) each Lender, shall
have the right to appoint a successor Agent which shall be (i) a Lender, (ii) a
United States based affiliate of a Lender, or (iii) a commercial bank that is
organized under the laws of the United States or of any State thereof and has a
combined capital surplus of at least $100,000,000 and, provided no Default or
Event of Default then exists, is reasonably acceptable to Borrower (and for
purposes hereof, any successor to Fleet shall be deemed acceptable to
Borrower). Upon the acceptance by a successor Agent of an appointment to serve
as an Agent hereunder, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent without further act, deed or conveyance, and the retiring Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this SECTION
12 (including the provisions of SECTION 12.6 hereof) shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Agent. Notwithstanding anything to the contrary
contained in this Agreement, any successor by merger or acquisition of the
stock or assets of Fleet shall continue to be Agent hereunder unless such
successor shall resign in accordance with the provisions hereof.
12.8.2. It is the purpose of this Agreement that there shall
be no violation of any Applicable Law denying or restricting the right of
financial institutions to transact business as agent or otherwise in any
jurisdiction. It is recognized that, in case of litigation under any of the
Loan Documents, or in case Agent deems that by reason of present or future laws
of any jurisdiction Agent might be prohibited from exercising any of the
powers, rights or remedies granted to Agent or Lenders hereunder or under any
of the Loan Documents or from holding title to or a Lien upon any Collateral or
from taking any other action which may be necessary hereunder or under any of
the Loan Documents, Agent may appoint an additional Person as a separate
collateral agent or co-collateral agent which is not so prohibited from taking
any of such actions or exercising any of such powers, rights or remedies. If
Agent shall appoint an additional Person as a separate collateral agent or
co-collateral agent as provided above, each and every remedy, power, right,
claim, demand or cause of action intended by any of the Loan Documents to be
exercised by or vested in or conveyed to Agent with respect thereto shall be
exercisable by and vested in such separate collateral agent or co-collateral
agent, but only to the extent necessary to enable such separate collateral
agent or co-collateral agent to exercise such powers, rights and remedies, and
every covenant and obligation necessary to the exercise thereof by such
separate collateral agent or co-collateral agent shall run to and be
enforceable by either of them. Should any instrument from Lenders be required
by the separate collateral agent or co-collateral agent so appointed by Agent
in order more fully and certainly to vest in and confirm to him or it such
rights, powers, duties and obligations, any and all of such instruments shall,
on request, be executed, acknowledged and delivered by Lenders whether or not a
Default or Event of Default then exists. In case any separate
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collateral agent or co-collateral agent, or a successor to either, shall die,
become incapable of acting, resign or be removed, all the estates, properties,
rights, powers, duties and obligations of such separate collateral agent or
co-collateral agent, so far as permitted by Applicable Law, shall vest in and
be exercised by the Agent until the appointment of a new collateral agent or
successor to such separate collateral agent or co-collateral agent.
12.9. CONSENTS, AMENDMENTS AND WAIVERS.
12.9.1. No amendment or modification of any provision of this
Agreement shall be effective without the prior written agreement of the
Required Lenders and Borrower, and no waiver of any Default or Event of Default
shall be effective without the prior written consent of the Required Lenders;
provided, however, that (i) no amendment or waiver shall be effective with
respect to any provision in SECTION 12 to the extent that such provisions apply
to Agent or to any other provision of any Loan Document as such provisions
relate to the rights, duties of immunities of Agent; (ii) no amendment to the
provisions of SECTIONS 1.3 or 3.1.3 shall be effective without the prior
written consent of Fleet; (iii) without the prior consent of all Lenders, no
waiver of any Default or Event of Default shall be effective if the Default or
Event of Default relates to Borrower's failure to observe or perform any
covenant that may not be amended without the unanimous written consent of
Lenders (and, where so provided hereinafter, the written consent of Agent) as
hereinafter set forth in this SECTION 12.9.1; written agreement of all Lenders
(except a defaulting Lender as provided in SECTION 3.2 of this Agreement) shall
be required to effectuate any amendment, modification or waiver that would (a)
alter the provisions of SECTIONS 2.1, 2.2, 2.4, 2.6, 2.7, 2.8, 2.9, 4.6, 4.7,
4.9, 4.10, 5.1, 12, 13, 14.2, or 14.3 or 14.14, the definitions of
"Availability Reserve," "Borrowing Base" and the other defined terms used in
such definitions, "Pro Rata," "Required Lenders" or any provision of this
Agreement obligating Agent to take certain actions at the direction of the
Required Lenders, or any provision of any of the Loan Documents regarding the
Pro Rata treatment or obligations of Lenders; (b) increase or otherwise modify
any of the Revolver Commitments (other than to reduce proportionately each
Lender's Revolver Commitment in connection with any overall reduction in the
amount of the Revolver Commitments); (c) alter or amend the rate of interest
payable in respect of the Loans (except as may be expressly authorized by the
Loan Documents or as may be necessary, in Agent's judgement, to comply with
Applicable Law); (d) waive or agree to defer collection of any fee, termination
charge or other charge provided for under any of the Loan Documents (except to
the extent that the Required Lenders agree after and during the continuance of
any Event of Default to a waiver or deferral of any termination charge provided
for in SECTION 5.2.3 hereof) or the unused line fee in SECTION 2.2.3 hereof;
(e) subordinate the payment of any of the Obligations to any other Debt or the
priority of any Liens granted to Agent under any of the Loan Documents to Liens
granted to any other Person, except as currently provided in or contemplated by
the Loan Documents in connection with Borrower's incurrence of Permitted
Purchase Money Debt, and except for Liens granted by an Obligor to financial
institutions with respect to amounts on deposit with such financial
institutions to cover returned items, processing and analysis charges and other
charges in the Ordinary Course of Business that relate to deposit accounts with
such financial institutions; (f) alter the time or amount of repayment of any
of the Loans or waive any Event of Default resulting from nonpayment of the
Loans on the due date thereof (or within any applicable period of grace); (g)
forgive any of the Obligations, except any portion of the Obligations held by a
Lender who consents in writing to such forgiveness; or (h) release any Obligor
from liability for any of the Obligations. No Lender shall be authorized to
amend or modify any Note held by it, unless such amendment or modification is
consented to in writing by all Lenders; provided, however, that the foregoing
shall not be construed to prohibit an amendment or modification to any
provision of this Agreement that may be effected pursuant to this SECTION
12.9.1 by agreement of Borrower and the Required Lenders even though such an
amendment or modification results in an amendment or modification of the Notes
by virtue of the incorporation by reference in each of the Notes of this
Agreement. The making of any Loans hereunder by any Lender during the existence
of a Default or Event of Default shall not be deemed to constitute a waiver of
such Default or Event of Default. Any waiver or consent granted by Lenders
hereunder shall be effective only if in writing and then only in the specific
instance and for the specific purpose for which it was given.
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12.9.2. In connection with any proposed amendment to any of
the Loan Documents or waiver of any of the terms thereof or any Default or
Event of Default thereunder, Borrower shall not solicit, request or negotiate
for or with respect to any such proposed amendment or waiver of any of the
provisions of this Agreement or any of the other Loan Documents unless each
Lender shall be informed thereof by Borrower or Agent (to the extent known by
Agent) and shall be afforded an opportunity of considering the same and
supplied by Borrower with sufficient information to enable it to make an
informed decision with respect thereto. Borrower will not, directly or
indirectly, pay or cause to be paid any remuneration or other thing of value,
whether by way of supplemental or additional interest, fee or otherwise, to any
Lender (in its capacity as a Lender hereunder) as consideration for or as an
inducement to the consent to or agreement by such Lender with any waiver or
amendment of any of the terms and provisions of this Agreement or any of the
other Loan Documents unless such remuneration or thing of value is concurrently
paid, on the same terms, on a Pro Rata basis to all Lenders.
12.10. DUE DILIGENCE AND NON-RELIANCE. Each Lender hereby
acknowledges and represents that it has, independently and without reliance
upon Agent or the other Lenders, and based upon such documents, information and
analyses as it has deemed appropriate, made its own credit analysis of each
Obligor and its own decision to enter into this Agreement and to fund the Loans
to be made by it hereunder and to purchase participations in the LC
Outstandings pursuant to SECTION 1.3.2 hereof, and each Lender has made such
inquiries concerning the Loan Documents, the Collateral and each Obligor as
such Lender feels necessary and appropriate, and has taken such care on its own
behalf as would have been the case had it entered into the other Loan Documents
without the intervention or participation of the other Lenders or Agent. Each
Lender hereby further acknowledges and represents that the other Lenders and
Agent have not made any representations or warranties to it concerning any
Obligor, any of the Collateral or the legality, validity, sufficiency or
enforceability of any of the Loan Documents. Each Lender also hereby
acknowledges that it will, independently and without reliance upon the other
Lenders or Agent, and based upon such financial statements, documents and
information as it deems appropriate at the time, continue to make and rely upon
its own credit decisions in making Loans and in taking or refraining to take
any other action under this Agreement or any of the other Loan Documents.
Except for notices, reports and other information expressly required to be
furnished to Lenders by Agent hereunder, Agent shall not have any duty or
responsibility to provide any Lender with any notices, reports or certificates
furnished to Agent by any Obligor or any credit or other information concerning
the affairs, financial condition, business or Properties of any Obligor (or any
of its Affiliates) which may come into possession of Agent or any of Agent's
Affiliates.
12.11. REPRESENTATIONS AND WARRANTIES OF LENDERS. By its execution of
this Agreement, each Lender hereby represents and warrants to Borrower and the
other Lenders that it has the power to enter into and perform its obligations
under this Agreement and the other Loan Documents, and that it has taken all
necessary and appropriate action to authorize its execution and performance of
this Agreement and the other Loan Documents to which it is a party, each of
which will be binding upon it and the obligations imposed upon it herein or
therein will be enforceable against it in accordance with the respective terms
of such documents.
12.12. THE REQUIRED LENDERS. As to any provisions of this Agreement
or the other Loan Documents under which action may or is required to be taken
upon direction or approval of the Required Lenders, the direction or approval
of the Required Lenders shall be binding upon each Lender to the same extent
and with the same effect as if each Lender had joined therein. Notwithstanding
anything to the contrary contained in this Agreement, Borrower shall not be
deemed to be a beneficiary of, or be entitled to enforce, ▇▇▇ upon or assert as
a defense to any of the Obligations, any provisions of this Agreement that
requires Agent or any Lender to act, or conditions their authority to act, upon
the direction or consent of the Required Lenders; and any action taken by Agent
or any Lender that requires the consent or direction of the Required Lenders as
a condition to taking such action shall, insofar as Borrower is concerned, be
presumed to have been taken with the requisite consent or direction of the
Required Lenders.
12.13. SEVERAL OBLIGATIONS. The obligations and commitments of each
Lender under this Agreement and the other Loan Documents are several and
neither Agent nor any Lender shall be responsible
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for the performance by the other Lenders of its obligations or commitments
hereunder or thereunder. Notwithstanding any liability of Lenders stated to be
joint and several to third Persons under any of the Loan Documents, such
liability shall be shared, as among Lenders, Pro Rata according to the
respective Revolver Commitments of Lenders.
12.14. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to lend under this Agreement, the Loans made by it and each Note
issued to it, Agent shall have the same rights and powers hereunder and under
the other Loan Documents as any other Lender or holder of a Note and may
exercise the same as though it were not performing the duties specified herein;
and the terms "Lenders," "Required Lenders," or any similar term shall, unless
the context clearly otherwise indicates, include Agent in its capacity as a
Lender. Agent and its Affiliates may each accept deposits from, maintain
deposits or credit balances for, invest in, lend money to, act as trustee under
indentures of, serve as financial advisor to, and generally engage in any kind
of business with Borrower or any other Obligor, or any affiliate of Borrower or
any other Obligor, as if it were any other bank and without any duty to account
therefor (or for any fees or other consideration received in connection
therewith) to the other Lenders.
12.15. NO THIRD PARTY BENEFICIARIES. This SECTION 12 is not intended
to confer any rights or benefits upon Borrower or any other Person except
Lenders and Agent, and no Person (including Borrower) other than Lenders and
Agent shall have any right to enforce any of the provisions of this SECTION 12
except as expressly provided in SECTION 12.17 hereof. As between Borrower and
Agent, any action that Agent may take or purport to take on behalf of Lenders
under any of the Loan Documents shall be conclusively presumed to have been
authorized and approved by Lenders as herein provided.
12.16. NOTICE OF TRANSFER. Agent may deem and treat a Lender party to
this Agreement as the owner of such Lender's portion of the Revolver Loans for
all purposes, unless and until a written notice of the assignment or transfer
thereof executed by such Lender has been received by Agent.
12.17. REPLACEMENT OF CERTAIN LENDERS. If a Lender ("Affected Lender")
shall have (i) failed to fund its Pro Rata share of any Revolver Loan requested
(or deemed requested) by Borrower which such Lender is obligated to fund under
the terms of this Agreement and which such failure has not been cured, (ii)
requested compensation from Borrower under SECTION 2.7 to recover increased
costs incurred by such Lender (or its parent or holding company) which are not
being incurred generally by the other Lenders (or their respective parents or
holding companies), or (iii) delivered a notice pursuant to SECTION 2.6 hereof
claiming that such Lender is unable to extend LIBOR Loans to Borrower for
reasons not generally applicable to the other Lenders, then, in any such case
and in addition to any other rights and remedies that Agent, any other Lender
or Borrower may have against such Affected Lender, Borrower or Agent may make
written demand on such Affected Lender (with a copy to Agent in the case of a
demand by Borrower and a copy to Borrower in the case of a demand by Agent) for
the Affected Lender to assign, and such Affected Lender shall assign pursuant
to one or more duly executed Assignment and Acceptances within 5 Business Days
after the date of such demand, to one or more Lenders willing to accept such
assignment or assignments, or to one or more Eligible Assignees designated by
Agent, all of such Affected Lender's rights and obligations under this
Agreement (including its Revolver Commitments and all Loans owing to it) in
accordance with SECTION 13 hereof. Agent is hereby irrevocably authorized to
execute one or more Assignment and Acceptances as attorney-in-fact for any
Affected Lender which fails or refuses to execute and deliver the same within 5
Business Days after the date of such demand. The Affected Lender shall be
entitled to receive, in cash and concurrently with execution and delivery of
each such Assignment and Acceptance, all amounts owed to the Affected Lender
hereunder or under any other Loan Document, including the aggregate outstanding
principal amount of the Revolver Loans owed to such Lender, together with
accrued interest thereon through the date of such assignment. Upon the
replacement of any Affected Lender pursuant to this SECTION 12.17, such
Affected Lender shall cease to have any participation in, entitlement to, or
other right to share in the Liens of Agent in any Collateral and such Affected
Lender shall have no further liability to Agent, any Lender or any other Person
under any of the Loan Documents (except as provided in SECTION 12.6 hereof as
to events or transactions which occur prior to the replacement of such Affected
Lender), including any commitment to make Loans.
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12.18. REMITTANCE OF PAYMENTS AND COLLECTIONS.
12.18.1. All payments by any Lender to Agent shall be made
not later than the time set forth elsewhere in this Agreement on the Business
Day such payment is due; provided, however, that if such payment is due ON
DEMAND by Agent and such demand is made on the paying Lender after 11:00 a.m.
on such Business Day, then payment shall be made by 11:00 p.m. on the next
Business Day. Payment by Agent to any Lender shall be made by wire transfer,
promptly following Agent's receipt of funds for the account of such Lender and
in the type of funds received by Agent; provided, however, that if Agent
receives such funds at or prior to 1:00 p.m., Agent shall pay such funds to
such Lender by 2:00 p.m. on such Business Day, but if Agent receives such funds
after 1:00 p.m., Agent shall pay such funds to such Lender by 2:00 p.m. on the
next Business Day.
12.18.2. With respect to the payment of any funds from Agent
to a Lender or from a Lender to Agent, the party failing to make full payment
when due pursuant to the terms hereof shall, ON DEMAND by the other party, pay
such amount together with interest thereon at the Federal Funds Rate. In no
event shall Borrower be entitled to receive any credit for any interest paid by
Agent to any Lender, or by any Lender to Agent, at the Federal Funds Rate as
provided herein.
12.18.3. If Agent pays any amount to a Lender in the belief
or expectation that a related payment has been or will be received by Agent
from an Obligor and such related payment is not received by Agent, then Agent
shall be entitled to recover such amount from each Lender that receives such
amount. If Agent determines at any time that any amount received by it under
this Agreement or any of the other Loan Documents must be returned to an
Obligor or paid to any other Person pursuant to any Applicable Law, court order
or otherwise, then, notwithstanding any other term or condition of this
Agreement or any of the other Loan Documents, Agent shall not be required to
distribute such amount to any Lender.
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
13.1. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of Borrower, Agent and Lenders and their respective
successors and assigns (which, in the case of Agent, shall include any
successor Agent appointed pursuant to SECTION 12.8 hereof), except that (i)
Borrower shall not have the right to assign its rights or delegate performance
of any of its obligations under any of the Loan Documents and (ii) any
assignment by any Lender must be made in compliance with SECTION 13.3 hereof.
Agent may treat the payee of any Note as the owner thereof for all purposes
hereof unless and until such payee complies with SECTION 13.3 in the case of an
assignment thereof or, in the case of any other transfer, a written notice of
the transfer is filed with Agent. Any assignee or transferee of a Note agrees
by acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the holder of a
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
13.2. PARTICIPATIONS.
13.2.1. Permitted Participants; Effect. Any Lender may, in
the ordinary course of its business and in accordance with Applicable Law, at
any time sell to one or more banks or other financial institutions (each a
"Participant") a participating interest in any of the Obligations owing to such
Lender, any Revolver Commitment of such Lender or any other interest of such
Lender under any of the Loan Documents. In the event of any such sale by a
Lender of participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any Note for all purposes
under the Loan Documents, all amounts payable by Borrower under this Agreement
and any of the Notes shall be determined as if such Lender had not sold such
participating interests, and Borrower and Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
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obligations under the Loan Documents. If a Lender sells a participation to a
Person other than an Affiliate of such Lender, then such Lender shall give
prompt written notice thereof to Borrower and the other Lenders.
13.2.2. Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than an
amendment, modification or waiver with respect to any Loans or Revolver
Commitment in which such Participant has an interest which forgives principal,
interest or fees or reduces the stated interest rate or the stated rates at
which fees are payable with respect to any such Loan or Revolver Commitment,
postpones the Commitment Termination Date, or any date fixed for any regularly
scheduled payment of interest or fees on such Revolver Loan or Revolver
Commitment, or releases from liability Borrower or any Guarantor or releases
any substantial portion of any of the Collateral.
13.2.3. Benefit of Set-Off. Borrower agrees that each
Participant shall be deemed to have the right of set-off provided in SECTION
11.4 hereof in respect of its participating interest in amounts owing under the
Loan Documents to the same extent and subject to the same requirements under
this Agreement (including SECTION 12.5) as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents,
provided that each Lender shall retain the right of set-off provided in SECTION
11.4 hereof with respect to the amount of participating interests sold to each
Participant. Lenders agree to share with each Participant, and each Participant
by exercising the right of set-off provided in SECTION 11.4 agrees to share
with each Lender, any amount received pursuant to the exercise of its right of
set-off, such amounts to be shared in accordance with SECTION 12.5 hereof as if
each Participant were a Lender.
13.2.4. Notices. Each Lender shall be solely responsible for
notifying its Participants of any matters relating to the Loan Documents to the
extent that any such notice may be required, and neither Agent nor any other
Lender shall have any obligation, duty or liability to any Participant of any
other Lender. Without limiting the generality of the foregoing, neither Agent
nor any Lender shall have any obligation to give notices or to provide
documents or information to a Participant of another Lender.
13.3. ASSIGNMENTS.
13.3.1. Permitted Assignments. Subject to its giving at least
2 Business Days notice to Agent and Borrower, any Lender may, in accordance
with Applicable Law, at any time assign to any Eligible Assignee all or any
part of its rights and obligations under the Loan Documents, so long as (i)
each assignment is of a constant, and not a varying, ratable percentage of all
of the transferor Lender's rights and obligations under the Loan Documents with
respect to the Loans and the LC Outstandings and, in the case of a partial
assignment, is in a minimum principal amount of $1,000,000 (unless otherwise
agreed by Agent in its sole discretion) and integral multiples of $500,000 in
excess of that amount; (ii) except in the case of an assignment in whole of a
Lender's rights and obligations under the Loan Documents or an assignment by
one original signatory to this Agreement to another such signatory, immediately
after giving effect to any assignment, the aggregate amount of the Revolver
Commitments retained by the transferor Lender shall in no event be less than
$2,000,000 (unless otherwise agreed by Agent in its sole discretion); and (iii)
the parties to each such assignment shall execute and deliver to Agent, for its
acceptance and recording, an Assignment and Acceptance. Nothing contained
herein shall limit in any way the right of Lenders to assign (i) to any
Eligible Assignee all of their rights and obligations under the Loan Documents
or (ii) all or any portion of the Loans owing to it to any Federal Reserve Bank
or the United States Treasury as collateral security pursuant to Regulation A
of the Board of Governors and any Operating Circular issued by such Federal
Reserve Bank, provided that in the case of this clause (ii) any payment in
respect of such assigned Loans made by Borrower to the assigning Lender in
accordance with the terms of this Agreement shall satisfy Borrower's
obligations hereunder in respect of such assigned Loans to the extent of such
payment, but no such assignment shall release the assigning Lender from its
obligations hereunder.
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13.3.2. Effect; Effective Date. Upon (i) delivery to Agent of
a notice of assignment substantially in the form attached as EXHIBIT H hereto,
together with any consents required by SECTION 13.3.1, and (ii) payment of a
$5,000 fee to the Agent for processing any assignment to an Eligible Assignee
that is not an Affiliate of the transferor Lender, such assignment shall become
effective on the effective date specified in such notice of assignment. On and
after the effective date of such assignment, such Eligible Assignee shall for
all purposes be a Lender party to the Agreement and any other Loan Document
executed by the Lenders and shall have all the rights and obligations of the
Lender under the Loan Documents to the same extent as if it were an original
party thereto, and no further consent or action by Borrower, Lenders or Agent
shall be required to release the transferor Lender with respect to the Revolver
Commitment (or portion thereof) of such Lender and Obligations assigned to such
Eligible Assignee. Upon the consummation of any assignment to an Eligible
Assignee pursuant to this SECTION 13.3, the transferor Lender, Agent and
Borrower shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate, replacement
Notes, are issued to such Eligible Assignee, in each case in principal amounts
reflecting their respective Revolver Commitments, as adjusted pursuant to such
assignment. If the transferor Lender shall have assigned all of its interests,
rights and obligations under this Agreement pursuant to SECTION 13.3.1 hereof,
such transferor Lender shall no longer have any obligation to indemnify Agent
with respect to any transactions, events or occurrences that transpire after
the effective date of such assignment, and each Eligible Assignee to which such
transferor shall make an assignment shall be responsible to Agent to indemnify
Agent in accordance with this Agreement with respect to transactions, events
and occurrences transpiring on and after the effective date of such assignment
to it.
13.3.3. Dissemination of Information. Borrower authorizes
each Lender and Agent to disclose to any Participant, any Eligible Assignee or
any other Person acquiring an interest in the Loan Documents by operation of
law (each a "Transferee"), and any prospective Transferee, any and all
information in Agent's or such Lender's possession concerning Borrower, the
Subsidiaries or the Collateral, subject to appropriate confidentiality
undertakings on the part of such Transferee reasonably acceptable to Borrower.
13.4. CERTAIN RESTRICTIONS ON ASSIGNMENTS AND PARTICIPATIONS.
Notwithstanding anything to the contrary contained in SECTION 13.2 or 13.3
hereof and so long as no Default or Event of Default exists, in no event shall
Fleet assign or sell participations in any of its Commitment during the first
12 months following the date hereof if the effect of any such assignment or
participation would result in Fleet owning and controlling, both beneficially
and legally, less than $5,000,000 of the total Commitments.
13.5. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee that is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of SECTION 4.10 hereof.
SECTION 14. MISCELLANEOUS
14.1. POWER OF ATTORNEY. Borrower hereby irrevocably designates,
makes, constitutes and appoints Agent (and all Persons designated by Agent) as
Borrower's true and lawful attorney (and agent-in-fact) and Agent, or Agent's
designee, may, without notice to Borrower and in either Borrower's or Agent's
name, but at the cost and expense of Borrower:
14.1.1. At such time or times as Agent or said designee, in
its sole discretion, may determine, endorse Borrower's name on any Payment Item
or proceeds of the Collateral which come into the possession of Agent or under
Agent's control.
14.1.2. At any time that an Event of Default exists: (i)
demand payment of the Accounts from the Account Debtors, enforce payment of the
Accounts by legal proceedings or otherwise, and generally exercise all of
Borrower's rights and remedies with respect to the collection of the Accounts;
(ii) settle, adjust, compromise, discharge or release any of the Accounts or
other Collateral or any legal proceedings brought
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to collect any of the Accounts or other Collateral; (iii) sell or assign any of
the Accounts and other Collateral upon such terms, for such amounts and at such
time or times as Agent deems advisable; (iv) take control, in any manner, of
any item of payment or proceeds relating to any Collateral; (v) prepare, file
and sign Borrower's name to a proof of claim in bankruptcy or similar document
against any Account Debtor or to any notice of Lien, assignment or satisfaction
of Lien or similar document in connection with any of the Collateral; (vi)
receive, open and dispose of all mail addressed to Borrower and to notify
postal authorities to change the address for delivery thereof to such address
as Agent may designate; (vii) endorse the name of Borrower upon any of the
items of payment or proceeds relating to any Collateral and deposit the same to
the account of Agent on account of the Obligations; (viii) endorse the name of
Borrower upon any chattel paper, document, instrument, invoice, freight ▇▇▇▇,
▇▇▇▇ of lading or similar document or agreement relating to any Accounts or
Inventory of any Obligor and any other Collateral; (ix) use Borrower's
stationery and sign the name of Borrower to verifications of the Accounts and
notices thereof to Account Debtors; (x) use the information recorded on or
contained in any data processing equipment and computer hardware and software
relating to the Accounts, Inventory, or any other Collateral; (xi) make and
adjust claims under policies of insurance; and (xii) do all other acts and
things necessary, in Agent's determination, to fulfill Borrower's obligations
under this Agreement.
14.2. GENERAL INDEMNITY. Borrower hereby agrees to indemnify and
defend the Indemnitees and to hold the Indemnitees harmless from and against
any Claim ever suffered or incurred by any of the Indemnitees arising out of or
related to this Agreement or any of the other Loan Documents, the performance
by Agent or Lenders of their duties or the exercise of any of their rights or
remedies under this Agreement or any of the other Loan Documents, or as a
result of Borrower's failure to observe, perform or discharge any of Borrower's
duties hereunder. Borrower shall also indemnify and defend the Indemnitees
against and save the Indemnitees harmless from all Claims of any Person arising
out of, related to, or with respect to any transactions entered into pursuant
to this Agreement or Agent's Lien upon the Collateral. Without limiting the
generality of the foregoing, this indemnity shall extend to any Claims asserted
against or incurred by any of the Indemnitees by any Person under any
Environmental Laws or similar laws by reason of Borrower's or any other
Person's failure to comply with laws applicable to solid or hazardous waste
materials or other toxic substances. Additionally, if any Taxes (excluding Taxes
imposed upon or measured solely by the net income or gross receipts of Agent
and Lenders, but including any intangibles tax, stamp tax, recording tax or
franchise tax) shall be payable by Agent or any Obligor on account of the
execution or delivery of this Agreement, or the execution, delivery, issuance
or recording of any of the other Loan Documents, or the creation or repayment
of any of the Obligations hereunder, by reason of any Applicable Law now or
hereafter in effect, Borrower will pay (or will promptly reimburse Agent and
Lenders for the payment of) all such Taxes, including any interest and
penalties thereon, and will indemnify and hold Indemnitees harmless from and
against all liability in connection therewith. The foregoing indemnities shall
not apply to Claims incurred by any of the Indemnitees as a direct and
proximate result of their own gross negligence or willful misconduct or that
arise out of any disputes arising solely out of the relationship between Agent
and any Lender.
14.3. SURVIVAL OF ALL INDEMNITIES. Notwithstanding anything to the
contrary in this Agreement or any of the other Loan Documents, the obligation
of Borrower and each Lender with respect to each indemnity given by it in this
Agreement, whether given by Borrower to Agent Indemnitees, Lender Indemnitees
or Fleet Indemnitees or by any Lender to any Agent Indemnitees or Fleet
Indemnitees, shall survive the payment in full of the Obligations and the
termination of any of the Revolver Commitments.
14.4. MODIFICATION OF AGREEMENT. This Agreement may not be modified,
altered or amended, except by an agreement in writing signed by Borrower and
Agent and Lenders (or, where otherwise expressly allowed by SECTION 12 hereof,
the Required Lenders in lieu of Agent and Lenders); provided, however, that no
consent, written or otherwise, of Borrower shall be necessary or required in
connection with any amendment of any of the provisions of SECTION 12 (other
than SECTION 12.17) or any other provision of this Agreement that affects only
the rights, duties and responsibilities of Lenders and Agent as among
themselves so long as no such amendment imposes any additional obligations on
Borrower.
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14.5. SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under Applicable Law, but if any provision of this Agreement shall be
prohibited by or invalid under Applicable Law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
14.6. CUMULATIVE EFFECT; CONFLICT OF TERMS. The provisions of the
Other Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Without limiting the generality of the foregoing,
the parties acknowledge that this Agreement and the other Loan Documents may
use several different limitations, tests or measurements to regulate the same
or similar matters and that such limitations, tests and measures are cumulative
and each must be performed, except as may be expressly stated to the contrary
in this Agreement. Except as otherwise provided in any of the other Loan
Documents by specific reference to the applicable provision of this Agreement,
if any provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
14.7. EXECUTION IN COUNTERPARTS. This Agreement and any amendments
hereto may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which counterparts taken together
shall constitute but one and the same instrument.
14.8. CONSENT. Whenever Agent's, Lenders' or Required Lenders' consent
is required to be obtained under this Agreement or any of the other Loan
Documents as a condition to any action, inaction, condition or event, Agent and
each Lender shall be authorized to give or withhold its consent in its sole and
absolute discretion and to condition its consent upon the giving of additional
collateral security for the Obligations, the payment of money or any other
matter.
14.9. NOTICES. All notices, requests and demands to or upon a party
hereto shall be in writing and shall be sent by certified or registered mail,
return receipt requested, personal delivery against receipt or by telecopier or
other facsimile transmission and shall be deemed to have been validly served,
given or delivered when delivered against receipt or, in the case of facsimile
transmission, when received (if on a Business Day and, if not received on a
Business Day, then on the next Business Day after receipt) at the office where
the noticed party's telecopier is located, in each case addressed to the
noticed party at the address shown for such party on the signature page hereof
or, in the case of a Person who becomes a Lender after the date hereof, at the
address shown on the Assignment and Acceptance by which such Person became a
Lender. Notwithstanding the foregoing, no notice to or upon Agent pursuant to
SECTIONS 1.3, 2.1.2, 3.1 or 5.2.2 shall be effective until after actually
received by the individual to whose attention at Agent such notice is required
to be sent. Any written notice, request or demand that is not sent in
conformity with the provisions hereof shall nevertheless be effective on the
date that such notice, request or demand is actually received by the individual
to whose attention at the noticed party such notice, request or demand is
required to be sent.
14.10. PERFORMANCE OF BORROWER'S OBLIGATIONS. If Borrower shall fail
to discharge any covenant, duty or obligation hereunder or under any of the
other Loan Documents, Agent may, in its sole discretion at any time or from
time to time, for Borrower's account and at Borrower's expense, pay any amount
or do any act required of Borrower hereunder or under any of the Loan Documents
or otherwise lawfully requested by Agent to enforce any of the Loan Documents
or Obligations, preserve, protect, insure or maintain any of the Collateral, or
preserve, defend, protect or maintain the validity or priority of Agent's Liens
in any of the Collateral, including the payment of any judgement against
Borrower, any insurance premium, any warehouse charge, any finishing or
processing charge, any landlord claim, any other Lien upon or with respect to
any of the Collateral. All payments that Agent may make under this Section and
all out-of-pocket costs and expenses (including Extraordinary Expenses) that
Agent pays or incurs in connection with any action taken by it hereunder shall
be reimbursed to Agent by Borrower ON DEMAND with interest from the date such
payment is made or such costs or expenses are incurred to the date of payment
thereof at the Default Rate applicable for Revolver Loans that are Base Rate
Loans. Any payment made or other action taken by
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Agent under this Section shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed thereafter as provided herein or in
any of the other Loan Documents.
14.11. CREDIT INQUIRIES. Borrower hereby authorizes and permits Agent
and Lenders (but Agent and Lenders shall have no obligation) to respond to
usual and customary credit inquiries from third parties concerning Borrower or
any Subsidiaries.
14.12. TIME OF ESSENCE. Time is of the essence of this Agreement,
the Other Agreements and the Security Documents.
14.13. ENTIRE AGREEMENT; APPENDIX A, EXHIBITS AND SCHEDULES. This
Agreement and the other Loan Documents, together with all other instruments,
agreements and certificates executed by the parties in connection therewith or
with reference thereto, embody the entire understanding and agreement between
the parties hereto and thereto with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings and inducements,
whether express or implied, oral or written. Appendix A, each of the Exhibits
and each of the Schedules attached hereto are incorporated into this Agreement
and by this reference made a part hereof.
14.14. INTERPRETATION. No provision of this Agreement or any of the
other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having, or being deemed to have, structured,
drafted or dictated such provision.
14.15. OBLIGATIONS SEVERAL. The obligations of each Lender hereunder
are several, and no Lender shall be responsible for the obligations or Revolver
Commitment of any other Lender. Nothing contained in this Agreement and no
action taken by Lenders pursuant hereto shall be deemed to constitute the
Lenders to be a partnership, association, joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled, to the extent
not otherwise restricted hereunder, to protect and enforce its rights arising
out of this Agreement and any of the other Loan Documents and it shall not be
necessary for Agent or any other Lender to be joined as an additional party in
any proceeding for such purpose.
14.16. GOVERNING LAW; CONSENT TO FORUM. This Agreement has been
negotiated, executed and delivered at and shall be deemed to have been made in
Atlanta, Georgia. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia; provided, however, that if
any of the Collateral shall be located in any jurisdiction other than Georgia,
the laws of such jurisdiction shall govern the method, manner and procedure for
foreclosure of Agent's Lien upon such Collateral and the enforcement of Agent's
other remedies in respect of such Collateral to the extent that the laws of
such jurisdiction are different from or inconsistent with the laws of the State
of Georgia. As part of the consideration for new value received, and regardless
of any present or future domicile or principal place of business of Borrower,
any Lender or Agent, Borrower hereby consents and agrees that the Superior
Court of ▇▇▇▇ County, Georgia, or, at Agent's option, the United States
District Court for the Northern District of Georgia, Atlanta Division, shall
have jurisdiction to hear and determine any claims or disputes among Borrower,
Agent and Lenders pertaining to this Agreement or to any matter arising out of
or related to this Agreement. Borrower expressly submits and consents in
advance to such jurisdiction in any action or suit commenced in any such Court,
and Borrower hereby waives any objection that Borrower may have based upon lack
of personal jurisdiction, improper venue or forum non conveniens and hereby
consents to the granting of such legal or equitable relief as is deemed
appropriate by such Court. Borrower hereby waives personal service of the
summons, complaint and other process issued in any such action or suit and
agrees that service of such summons, complaint and other process may be made by
certified mail addressed to Borrower at the address set forth in this Agreement
and that service so made shall be deemed completed upon the earlier of
Borrower's actual receipt thereof or 3 days after deposit in the U.S. mails,
proper postage prepaid. Nothing in this Agreement shall be deemed or operate to
affect the right of Agent to serve legal process in any other manner permitted
by law, or to
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preclude the enforcement by Agent of any judgment or order obtained in such
forum or the taking of any action under this Agreement to enforce same in any
other appropriate forum or jurisdiction.
14.17. WAIVERS BY BORROWER. To the fullest extent permitted by
Applicable Law, Borrower waives (i) the right to trial by jury (which Agent and
each Lender hereby also waives) in any action, suit, proceeding or counterclaim
of any kind arising out of or related to any of the Loan Documents, the
Obligations or the Collateral; (ii) presentment, demand and protest and notice
of presentment, protest, default, non payment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by Agent on which Borrower may in any way be liable and hereby
ratifies and confirms whatever Agent may do in this regard; (iii) notice prior
to taking possession or control of the Collateral or any bond or security which
might be required by any court prior to allowing Agent to exercise any of
Agent's remedies; (iv) the benefit of all valuation, appraisement and exemption
laws; and (v) notice of acceptance hereof. Borrower acknowledges that the
foregoing waivers are a material inducement to Agent's and Lender's entering
into this Agreement and that Agent and Lenders are relying upon the foregoing
waivers in its future dealings with Borrower. Borrower warrants and represents
that it has reviewed the foregoing waivers with its legal counsel and has
knowingly and voluntarily waived its jury trial rights following consultation
with legal counsel. In the event of litigation, this Agreement may be filed as
a written consent to a trial by the Court.
IN WITNESS WHEREOF, this Agreement has been duly executed in Atlanta,
Georgia, on the day and year specified at the beginning of this Agreement.
BORROWER:
ATTEST: TOM'S FOODS INC.
-------------------------
Secretary By:
------------------------------------
Title:
------------------------------
[CORPORATE SEAL] Address:
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
[Signatures continued on following page]
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LENDER:
FLEET CAPITAL CORPORATION
Revolver Commitment: $17,000,000
By:
------------------------------------
Title:
------------------------------
LIBOR Lending Office:
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Office Head
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
AGENT:
FLEET CAPITAL CORPORATION,
as Agent
By:
------------------------------------
Title:
------------------------------
Address:
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Office Head
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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APPENDIX A
GENERAL DEFINITIONS
When used in the Loan and Security Agreement dated January 31, 2000
(as at any time amended, the "Loan Agreement"), by and among TOM'S FOODS INC.,
a Delaware corporation ("Borrower"), the various financial institutions listed
on the signature pages attached thereto as lenders ("Lenders"), and FLEET
CAPITAL CORPORATION ("Agent"), in its capacity as collateral and administrative
agent for itself and the Lenders, the following terms shall have the following
meanings (terms defined in the singular to have the same meaning when used in
the plural and vice versa):
Accounts - all of Borrower's now owned or hereafter acquired
accounts and all other rights to payment for goods sold or leased or
for services rendered that are not evidenced by an Instrument or
Chattel Paper, whether or not they have been earned by performance.
Account Debtor - any Person who is or may become obligated
under or on account of an Account.
Accounts Formula Amount - on any date of determination
thereof, an amount equal to the lesser of (i) $17,000,000 or (ii) 85%
of the net amount of Eligible Accounts on such date. As used herein,
the phrase "net amount of Eligible Accounts" shall mean the face
amount of such Accounts on any date less any and all returns, rebates,
discounts (which may, at Lender's option, be calculated on shortest
terms), credits, allowances or Taxes (including sales, excise or other
taxes) at any time issued, owing, claimed by Account Debtors, granted,
outstanding or payable in connection with, or any interest accrued on
the amount of, such Accounts at such date.
Adjusted LIBOR Rate - with respect to each Interest Period
for a LIBOR Loan, an interest rate per annum (rounded upwards, to the
next 1/16th of 1%) equal to the quotient of (a) the LIBOR Rate in
effect for such Interest Period divided by (b) a percentage (expressed
as a decimal) equal to 100%, minus Statutory Reserves.
Affiliate - a Person (other than a Subsidiary): (i) which
directly or indirectly through one or more intermediaries controls, or
is controlled by, or is under common control with, another Person;
(ii) which beneficially owns or holds 10% or more of any class of the
Equity Interests of a Person; or (iii) 10% or more of the Equity
Interests with power to vote of which is beneficially owned or held by
another Person or a Subsidiary of another Person. For purposes hereof,
"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 the ownership of any Equity Interest, by
contract or otherwise.
Agent Indemnitees - Agent in its capacity as agent hereunder
and under the other Loan Documents and all of Agent's present and
future officers, directors, agents and attorneys.
Agreement - the Loan and Security Agreement referred to in
the first sentence of this Appendix A, all Exhibits and Schedules
thereto and this Appendix A.
Applicable Law - all laws, rules and regulations applicable
to the Person, conduct, transaction, covenant, Loan Document or
Material Contract in question, including all applicable common law and
equitable principles; all provisions of all applicable state, federal
and foreign constitutions, statutes, rules, regulations and orders of
governmental bodies; and all orders, judgments and decrees of all
courts and arbitrators.
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Applicable Margin - a percentage equal to 0.00% with respect
to Loans that are Base Rate Loans, 2.25% with respect to Loans that
are LIBOR Loans, and 0.375% with respect to Commitment Fees payable to
Lenders pursuant to SECTION 2.2.2, provided that, commencing with the
delivery to Agent of the Borrower's Compliance Certificate for the
fiscal period ending December 31, 1999, the Applicable Margin shall be
increased or (if no Default or Event of Default exists) decreased,
based upon the Leverage Ratio, as follows:
Leverage Ratio Applicable Margin For Applicable Margin For Applicable Margin For
LIBOR Loans Base Rate Loans Commitment Fee
----------------------- --------------------- --------------------- ---------------------
Less than 4.00:1.00 2.00% 0.00% 0.250%
Greater than or Equal 2.25% 0.00% 0.375%
to 4.00:1.00 and Less
than 5.00:1.00
Greater than or Equal 2.50% 0.25% 0.375%
to 5.00:1.00 and Less
than 5.50:1.00
Greater than or Equal 2.75% 0.50% 0.500%
to 5.50:1.00
The Applicable Margin shall be subject to reduction or increase, as
applicable and as set forth in the table above, on a quarterly basis
according to the performance of Borrower as measured by the Leverage
Ratio for the immediately preceding 4 Fiscal Quarters of Borrower.
Except as set forth in the last sentence hereof, any such increase or
reduction in the Applicable Margin provided for herein shall be
effective 3 Business Days after receipt by Agent of the applicable
financial statements and corresponding Compliance Certificate. If the
financial statements and the Compliance Certificate of Borrower
setting forth the Leverage Ratio are not received by Agent by the date
required pursuant to SECTION 9.1.3 of the Agreement, the Applicable
Margin shall be determined as if the Leverage Ratio exceeds 5.50:1.00
until such time as such financial statements and Compliance
Certificate are received and any Event of Default resulting from a
failure timely to deliver such financial statements or Compliance
Certificate is waived in writing by Agent and Lenders; provided,
however, that nothing herein shall be deemed to prevent Agent and
Lenders from charging interest at the Default Rate at any time that an
Event of Default exists. For the final quarter of any Fiscal Year of
Borrower, Borrower may provide the unaudited financial statements of
Borrower, subject only to year-end adjustments, for the purpose of
determining the Applicable Margin; provided, however, that if, upon
delivery of the annual audited financial statements required to be
submitted by Borrower to Agent pursuant to SECTION 9.1.3(i) of the
Agreement, Borrower has not met the criteria for reduction of the
Applicable Margin pursuant to the terms hereinabove for the final
Fiscal Quarter of the Fiscal Year of Borrower then ended, then (a)
such Applicable Margin reduction shall be terminated and, effective on
the first day of the month following receipt by Agent of such audited
financial statements, the Applicable Margin shall be the Applicable
Margin that would have been in effect if such reduction had not been
implemented based upon the unaudited financial statements of Borrower
for the final Fiscal Quarter of the Fiscal Year of Borrower then
ended, and (b) Borrower shall pay to Agent, for the Pro Rata benefit
of the Lenders, on the first day of the month following receipt by
Agent of such audited financial statements, an amount equal to the
difference between the amount of interest that would have been paid on
the principal amount of the Obligations using the Applicable Margin
determined based upon such audited financial statements and the amount
of interest actually paid during the period in which the reduction of
the Applicable Margin was in effect based upon the
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unaudited financial statements for the final Fiscal Quarter of the
Fiscal Year of Borrower then ended.
Assignment and Acceptance - an assignment and acceptance
entered into by a Lender and an Eligible Assignee and accepted by
Agent, in the form of EXHIBIT G.
Availability - on any date, the amount that Borrower is
entitled to borrow as Revolver Loans on such date, such amount being
the difference derived when the sum of the principal amount of
Revolver Loans then outstanding (including any amounts that Agent or
Lenders may have paid for the account of Borrower pursuant to any of
the Loan Documents and that have not been reimbursed by Borrower and
any outstanding Settlement Loans) is subtracted from the Borrowing
Base on such date. If the amount outstanding is equal to or greater
than the Borrowing Base, Availability is zero.
Availability Reserve - on any date of determination thereof,
an amount equal to the sum of the following (without duplication): (i)
a reserve for general inventory shrinkage, whether as a result of
theft or otherwise, that is determined by Agent from time to time in
its reasonable credit judgment based upon Borrower's historical losses
due to such shrinkage; (ii) any amounts that any Obligor is obligated
to pay pursuant to the provisions of any of the Loan Documents that
Agent or any Lender elects to pay for the account of such Obligor in
accordance with authority contained in any of the Loan Documents;
(iii) the LC Reserve; (iv) aggregate amount of reserves established by
Agent in its reasonable discretion in respect of ACH (automated
clearinghouse) transfers or obligations of Borrower under any Interest
Rate Contract; (v) reserves imposed by Agent for unpaid payables
incurred in connection with the purchase of goods as to which a
statutory trust under PACA may arise in the event of non-payment and
reserves imposed by Agent pursuant to SECTION 1.1.5 of the Agreement;
and (vi) such additional reserves as Agent, in the exercise of its
reasonable credit judgment, may elect to impose from time to time to
protect Agent and Lenders diminution in the quantity, quality or value
of any of the Collateral.
Average Loan Balance - for any period, the amount obtained by
adding the aggregate of the unpaid balance of Revolver Loans and LC
Outstandings at the end of each day for the period in question and by
dividing such sum by the number of days in such period.
Bank - Fleet National Bank.
Bankruptcy Code - title 11 of the United States Code.
Base Rate - the rate of interest announced or quoted by Bank
from time to time as its prime rate. The prime rate announced by Bank
is a reference rate and does not necessarily represent the lowest or
best rate charged by Bank. Bank may make loans or other extensions of
credit at, above or below its announced prime rate. If the prime rate
is discontinued by Bank as a standard, a comparable reference rate
designated by Bank as a substitute therefor shall be the Base Rate.
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Base Rate Loan - a Loan, or portion thereof, during any
period in which it bears interest at a rate based upon the Base Rate.
Board of Governors - the Board of Governors of the Federal
Reserve System.
Bond-Related Debt - the Debt of Borrower arising out of or
relating to any of the Bonds.
Bonds - (i) the $4,200,000 aggregate principal amount of
Industrial Development Revenue Bonds of the Industrial Development
Board of the County of ▇▇▇▇ (General Mill, Inc. Project) Series 1979,
together with the existing real property and fixtures of Borrower
located in Knoxville, Tennessee, securing such bonds; and (ii) the
$5,800,000 aggregate principal amount of Industrial Development
Revenue Bonds of ▇▇▇▇▇▇ County, Florida, together with the existing
real property, fixtures and equipment of Borrower located in Perry,
Florida, securing such bonds.
Borrowing - a borrowing consisting of Loans of one Type made
on the same day by Lenders (or by Fleet in the case of a Borrowing
funded by Settlement Loans) or a conversion of a Loan or Loans of one
Type from Lenders on the same day.
Borrowing Base - on any date of determination thereof, an
amount equal to the lesser of: (a) the aggregate amount of the
Revolver Commitments on such date, minus the LC Outstandings on such
date, or (b) an amount equal to (i) the sum of the Accounts Formula
Amount, plus the Inventory Formula Amount on such date, minus (ii) the
Availability Reserve on such date.
Borrowing Base Certificate - a certificate, in the form
requested by Agent, by which Borrower shall certify to Agent and
Lenders the amount of the Borrowing Base as of the date of the
certificate (which date shall be not more than 20 days earlier than
the date of submission of such certificate to Agent) and the
calculation of such amount.
Business Day - any day excluding Saturday, Sunday and any
other day that is a legal holiday under the laws of the State of
Georgia or is a day on which banking institutions located in such
state are closed; provided, however, that when used with reference to
a LIBOR Loan (including the making, continuing, prepaying or repaying
of any LIBOR Loan), the term "Business Day" shall also exclude any day
on which banks are not open for dealings in Dollar deposits on the
London interbank market.
Business Interruption Insurance Assignment - the Collateral
Assignment of Business Interruption Insurance to be executed by
Borrower on or after the Closing Date in favor of Agent, in form and
substance satisfactory to Lender, as security for the payment of the
Obligations.
Capital Expenditures - expenditures made or liabilities
incurred for the acquisition of any equipment or real estate or
improvements, replacements, substitutions or additions thereto which
have a useful life of more than one year, including the total
principal portion of Capitalized Lease Obligations.
Capitalized Lease Obligation - any Debt represented by
obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
Cash Collateral - cash or Cash Equivalents, and any interest
earned thereon, that is deposited with Agent in accordance with the
Agreement for the Pro Rata benefit of Lenders as security for the
Obligations to the extent provided in the Agreement.
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Cash Collateral Account - a demand deposit, money market or
other account established by Agent at such financial institution as
Agent may select in its discretion, which account shall be in Agent's
name and subject to Agent's Liens for the Pro Rata benefit of Lenders.
Cash Equivalents - (i) marketable direct obligations issued
or unconditionally guaranteed by the United States government and
backed by the full faith and credit of the United States government
having maturities of not more than 12 months from the date of
acquisition; (ii) domestic certificates of deposit and time deposits
having maturities of not more than 12 months from the date of
acquisition, bankers' acceptances having maturities of not more than
12 months from the date of acquisition and overnight bank deposits, in
each case issued by any commercial bank organized under the laws of
the United States, any state thereof or the District of Columbia,
which at the time of acquisition are rated A-1 (or better) by S&P or
P-1 (or better) by ▇▇▇▇▇'▇, and (unless issued by a Lender) not
subject to offset rights in favor of such bank arising from any
banking relationship with such bank; (iii) repurchase obligations with
a term of not more than 30 days for underlying securities of the types
described in clauses (i) and (ii) entered into with any financial
institution meeting the qualifications specified in clause (ii) above;
and (iv) commercial paper having at the time of investment therein or
a contractual commitment to invest therein a rating of A-1 (or better)
by S&P or P-1 (or better) by ▇▇▇▇▇'▇, and having a maturity within 9
months after the date of acquisition thereof.
Cash Management Agreements - any agreement entered into from
time to time between Borrower or any of its Subsidiaries, on the one
hand, and Bank or any of its Affiliates or any other banking or
financial institution, on the other, in connection with cash
management services for operating, collections, payroll and trust
accounts of Borrower or its Subsidiaries provided by such banking or
financial institution, including automatic clearinghouse services,
controlled disbursement services, electronic funds transfer services,
information reporting services, lockbox services, stop payment
services and wire transfer services.
CERCLA - the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq. and its
implementing regulations.
Change of Control or Ownership - (i) the failure of the
▇▇▇▇▇▇▇ Group, at any time, to have beneficial and record ownership
and powers to vote at least 24% of the outstanding shares of Voting
Securities of TFCC; (ii) the failure of the ▇▇▇▇▇▇▇ Group, at any
time, to have beneficial and record ownership of and power to vote at
least 55% of the outstanding shares of Voting Securities of TFH; or
(iii) the failure of TFH and the ▇▇▇▇▇▇▇ Group, at any time, to have
beneficial and record ownership of and power to vote at least 80% of
the outstanding shares of capital stock of Borrower; or (iv) the
failure of TFCC, TFH and the ▇▇▇▇▇▇▇ Group, at any time, to own
beneficially and of record and to have the power to vote,
collectively, 100% of the outstanding capital stock of Borrower; or
(v) the failure of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and his immediate family and
Persons wholly owned and controlled by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and his
immediate family, at any time, to have beneficial and record ownership
of and power to vote at least 100% of the outstanding shares of Voting
Securities of Heico Holding; or (vi) the failure of Heico Holding, at
any time, to have the right (or the failure by Heico Holding to
exercise the right) to designate at least a majority of the Board of
Directors of TFH and TFCC; or (vii) the failure of at least the
majority of the members of the Board of Directors of Borrower, at any
time, to be comprised of the same persons appointed by Heico Holding
to be members of the Board of Directors of TFH and/or other persons
designated by Heico Holding or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; or (viii) the
applicability to TFH or Borrower, at any time, of any requirement that
any action by the Board of Directors of TFH or Borrower shall require
a greater affirmative vote than that of the number of directors
designated by the ▇▇▇▇▇▇▇ Group or shall require a consent by any
stockholder of TFH, except for such matters requiring consent of
certain stockholders of TFH as shall be acceptable to Agent.
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Chattel Paper - shall have the meaning given to "chattel
paper" in the UCC.
Claims - any and all claims, demands, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
awards, remedial response costs, expenses or disbursements of any kind
or nature whatsoever (including reasonable attorneys', accountants',
consultants' or paralegals' fees and expenses), whether arising under
or in connection with the Loan Documents, any Applicable Law
(including any Environmental Laws) or otherwise, that may now or
hereafter be suffered or incurred by a Person and whether suffered or
incurred in or as a result of any investigation, litigation,
arbitration or other judicial or non-judicial proceeding or any
appeals related thereto.
Class A Preferred Stock - Borrower's Exchangeable Preferred
Stock, $.01 par value per share, Class A, having the terms, rights and
preferences as in effect on the date hereof.
Class B Preferred Stock - Borrower's Preferred Stock, $.01
par value per share, Class B, having the terms, rights and preferences
as in effect on the date hereof.
Closing Date - the date on which all of the conditions
precedent in SECTION 10 of the Agreement are satisfied and the initial
Loans are made under the Agreement.
Collateral - all of the Property and interests in Property
described in SECTION 6 of the Agreement; all Property described in any
of the Security Documents as security for the payment or performance
of any of the Obligations; and all other Property and interests in
Property that now or hereafter secure (or are intended to secure) the
payment and performance of any of the Obligations.
Commitment Termination Date - the date that is the soonest to
occur of (i) the last day of the Original Term; (ii) the date on which
either Borrower or Agent terminates the Revolver Commitments pursuant
to SECTION 5.2 of the Agreement; or (iii) the date on which the
Revolver Commitments are automatically terminated pursuant to SECTION
11.2 of the Agreement.
Compliance Certificate - a Compliance Certificate to be
provided by Borrower to Agent in accordance with, and in the form
annexed as EXHIBIT E to, the Agreement, and the supporting schedules
to be annexed thereto.
Consolidated - the consolidation in accordance with GAAP of
the accounts or other items as to which such term applies.
Contingent Obligation - with respect to any Person, any
obligation of such Person arising from any guaranty, indemnity or
other assurance of payment or performance of Debt, lease, dividend or
other obligation ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including (i) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the Ordinary Course of Business),
co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (ii) the obligation to
make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement, (iii)
any obligation of such Person, whether or not contingent, (A) to
purchase any such primary obligation or any Property constituting
direct or indirect security therefor, (B) to advance or supply funds
(1) for the purchase or payment of any such primary obligations or (2)
to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary
obligor, (C) to purchase Property, Securities or services primarily
for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of
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such primary obligation or (D) otherwise to assure or hold harmless
the holder of such primary obligation against loss in respect thereof.
The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary
obligation with respect to which such Contingent Obligation is made
(or, if less, the maximum amount of such primary obligation for which
such Person may be liable pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with
respect thereto (assuming such Person is required to perform
thereunder), as determined by such Person in good faith.
Contract Manufacturing Services - contract manufacturing
services performed or rendered by Borrower for other snack food
manufacturers in the Ordinary Course of Business of Borrower.
Controlled Disbursement Account - a demand depository account
maintained by Borrower with Bank or an Affiliate of Bank with respect
to which Borrower and Agent agree that the presentation for payment by
Bank or such Affiliate of Bank of any check or other item of payment
drawn on such account shall be deemed an irrevocable request for a
Revolver Loan pursuant to Section 3.1(1)(iii) of the Agreement.
Current Assets - at any date, the amount at which all of the
current assets of a Person would be properly classified as current
assets shown on a balance sheet at such date in accordance with GAAP
except that amounts due from Affiliates and investments in Affiliates
shall be excluded therefrom.
Current Liabilities - at any date, the amount at which all of
the current liabilities of a Person would be properly classified as
current liabilities on a balance sheet at such date in accordance with
GAAP, excluding the Loans and any portion of the Public Notes that
would be classified as current liabilities.
Debt - as applied to a Person means, without duplication: (i)
all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a
balance sheet of such Person as of the date as of which Debt is to be
determined, including Capitalized Lease Obligations; (ii) all
Contingent Obligations of such Person; (iii) all reimbursement
obligations in connection with letters of credit or letter of credit
guaranties issued for the account of such Person; and (iv) in the case
of Borrower (without duplication), the Obligations. The Debt of a
Person shall include any recourse Debt of any partnership or joint
venture in which such Person is a general partner or joint venturer.
Default - an event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, become
an Event of Default.
Default Rate - a fluctuating rate per annum which, on any
date, is equal to the rate that is otherwise in effect for such date,
plus 2.0%.
Deposit Accounts - all of a Person's demand, time, savings,
passbook, money market or other depository accounts, and all
certificates of deposit, maintained by such Person with any bank,
savings and loan association, credit union or other depository
institution.
Direct Payment Event - either of the following events or
conditions: (i) Availability is on any date less than $3,000,000 or
(ii) the occurrence or existence of an Event of Default, including
such an Event of Default arising from a breach of Section 9.3.2 of the
Agreement whether or not Agent or Lenders exercise any remedies on
account thereof or waive such Event of Default.
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Distribution - in respect of any entity, (i) any payment of
any dividends or other distributions on Equity Interests of the entity
(except distributions in such Equity Interests) and (ii) any purchase,
redemption or other acquisition or retirement for value of any Equity
Interests of the entity or any Affiliate of the entity unless made
contemporaneously from the net proceeds of the sale of Equity
Interests.
Distributor - a Person who agrees to distribute Finished
Goods of Borrower pursuant to the terms of a Distributor Agreement.
Distributor Agreement - a Distributor Agreement between
Borrower and a Distributor of Borrower's products.
Distributor Notes - all present and future promissory notes
and other instruments and agreements now or hereafter evidencing or
relating to obligations owed to Borrower by its Distributors,
including obligations owed for purchases by such Distributors from
Borrower of vehicles, equipment, distributorship rights, vending
machines, and parts, equipment and services relating to vending
machines and obligations owed by Distributors for the purchase of
snack foods.
Distributor/Franchisee Receivables - individually and
collectively, the Distributor Notes and the Franchisee Notes, together
with any Property or guarantees at any time securing the respective
Distributor Notes and Franchisee Notes.
Document - shall have the meaning given to "document" in the
UCC.
Dollars and the sign $ - lawful money of the United States of
America.
Dominion Account - a demand depository account maintained by
Borrower at the Lockbox Bank, into which all collections received in
the Lockbox shall be deposited on a daily basis.
Dominion Account Agreement - the agreement, in form and
substance acceptable to Agent, to be entered into among Borrower,
Agent and the Lockbox Bank substantially in the form of EXHIBIT J
annexed hereto.
EBITDA - for any fiscal period of Borrower, an amount equal
to the sum for such fiscal period of Borrower's (i) net income (or
loss), plus (ii) any provisions for Taxes based on income or franchise
Taxes, plus (iii) interest expense, plus (iv) amortization and
depreciation expense, plus (v) to the extent deducted in determining
such income (or loss), non-recurring or extraordinary non-cash
expenses, minus (iii) to the extent recognized in determining such
income (or loss), non-recurring or extraordinary non-cash gains.
Eligible Account - an Account which arises in the Ordinary
Course of Business of Borrower from the sale of Finished Goods or the
performance of Contract Manufacturing Services, is payable in Dollars,
is subject to Agent's duly perfected Lien, and is deemed by Agent, in
its reasonable credit judgment, to be an Eligible Account. Without
limiting the generality of the foregoing, no Account shall be an
Eligible Account if: (i) it arises out of a sale made by Borrower to a
Subsidiary or an Affiliate of Borrower or to a Person controlled by an
Affiliate of Borrower; (ii) it is unpaid for more than 60 days after
the original due date shown on the invoice; (iii) it is due or unpaid
more than 90 days after the original invoice date; (iv) 50% or more of
the Accounts from the Account Debtor are not deemed Eligible Accounts
hereunder; (v) the total unpaid Accounts of the Account Debtor exceed
20% of the aggregate amount of all Eligible Accounts or exceed a
credit limit established by Agent for such Account
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Debtor, in each case, to the extent of such excess; (vi) any covenant,
representation or warranty contained in the Agreement with respect to
such Account has been breached; (vii) the Account Debtor is also
Borrower's creditor or supplier, or the Account Debtor has disputed
liability with respect to such Account, or the Account Debtor has made
any claim with respect to any other Account due from such Account
Debtor to Borrower, or the Account otherwise is or may become subject
to any right of setoff, counterclaim, reserve or chargeback, provided
that, the Accounts of such Account Debtor shall be ineligible only to
the extent of such offset, counterclaim, disputed amount, reserve or
chargeback; (viii) an Insolvency Proceeding has been commenced by or
against the Account Debtor or the Account Debtor has failed, suspended
business or ceased to be Solvent; (ix) it arises from a sale to an
Account Debtor with its principal office, assets or place of business
outside the United States, unless the sale is backed by an irrevocable
letter of credit issued or confirmed by a bank acceptable to Agent and
that is in form and substance acceptable to Agent and payable in the
full amount of the Account in freely convertible Dollars at a place of
payment within the United States and, if requested by Agent, such
letter of credit, or amounts payable thereunder, is assigned to Agent;
(x) it arises from a sale to the Account Debtor on a ▇▇▇▇-and-hold,
guaranteed sale, sale-or-return, sale-on-approval, consignment or any
other repurchase or return basis; (xi) the Account Debtor is the
United States of America or any department, agency or instrumentality
thereof, unless Borrower is not prohibited from assigning the Account
and, if the aggregate amount of all such Accounts outstanding exceeds
$500,000, Borrower assigns its right to payment of such Account to
Agent, in a manner satisfactory to Lender, so as to comply with the
Assignment of Claims Act of 1940 (31 U.S.C. ss.3727 and 41 U.S.C.
ss.15), or is a state, county or municipality, or a political
subdivision or agency thereof and Applicable Law disallows or
restricts an assignment of Accounts on which it is the Account Debtor;
(xii) the Account Debtor is located in any state which imposes similar
conditions on the right of a creditor to collect accounts receivable,
unless Borrower has either qualified to transact business in such
state as a foreign entity or filed a Notice of Business Activities
Report or other required report with the appropriate officials in
those states for the then current year; (xiii) the Account Debtor is
located in a state in which Borrower is deemed to be doing business
under the laws of such state and which denies creditors access to its
courts in the absence of qualification to transact business in such
state or of the filing of any reports with such state, unless Borrower
has qualified as a foreign entity authorized to transact business in
such state or has filed all required reports; (xiv) the Account is
subject to a Lien other than a Permitted Lien; (xv) the goods giving
rise to such Account have not been delivered to and accepted by the
Account Debtor or the services giving rise to such Account have not
been performed by Borrower and accepted by the Account Debtor or the
Account otherwise does not represent a final sale; (xvi) the Account
is evidenced by Chattel Paper or an Instrument of any kind, or has
been reduced to judgment; (xvii) the Account represents a progress
billing or a retainage; (xviii) Borrower has made any agreement with
the Account Debtor for any deduction therefrom, except for discounts
or allowances which are made in the Ordinary Course of Business for
prompt payment and which discounts or allowances are reflected in the
calculation of the face value of each invoice related to such Account;
(xix) Borrower has made an agreement with the Account Debtor to extend
the time of payment thereof; (xx) the Account has been placed for
collection; (xxi) payment in respect of such Account has been
received, but not applied, to the payment of such Account; or (xxii)
the Account represents, in whole or in part, a billing for interest,
fees or late charges, provided that such Account shall be ineligible
only to the extent of the amount of such billing.
Eligible Assignee - a Lender or a U.S. based Affiliate of a
Lender or any other Person (except Borrower or a Guarantor, or an
Affiliate of either) approved by Agent and, unless a Default or an
Event of Default exists, Borrower (such approval by Borrower not to be
unreasonably withheld or delayed and to be deemed given by Borrower if
no objection is received by the assigning Lender and Agent from
Borrower within 5 Business Days after notice of such
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proposed assignment has been provided by the assigning Lender as set
forth in SECTION 13.3 of the Agreement).
Eligible Inventory - such Inventory of Borrower that Agent,
in its reasonable credit judgment, deems to be Eligible Inventory.
Without limiting the generality of the foregoing, no Inventory shall
be Eligible Inventory unless: (i) it is Raw Materials, Finished Goods
or Packaging Inventory; (ii) it is owned by Borrower and not held by
it on consignment or other sale or return terms; (iii) it is in good,
new and saleable condition and is not damaged or defective; (iv) it is
not slow-moving, obsolete or unmerchantable and is not goods returned
to Borrower by or repossessed from an Account Debtor; (v) it meets all
standards imposed by any Governmental Authority; (vi) it conforms in
all respects to the warranties and representations set forth in the
Agreement; (vii) it is at all times subject to Agent's duly perfected,
first priority security interest and no other Lien except a Permitted
Lien; (viii) it is in Borrower's possession and control at premises
owned by Borrower or leased by Borrower from a landlord who, within 30
days after the date of the Agreement, has executed and delivered to
Agent a Landlord Waiver in favor of Agent, is not in transit or
outside the continental United States and is not contained in a
vending machine; (ix) it is not the subject of a ▇▇▇▇-and-hold sale or
negotiable warehouse receipt or other negotiable Document; (x) it is
not subject to any License Agreement or other agreement that limits,
conditions or restricts Borrower's or Agent's right to sell or
otherwise dispose of such Inventory; and (xi) it is not the subject of
an Intellectual Property Claim.
Environmental Laws - all federal, state and local laws,
rules, regulations, codes, ordinances, programs, permits, guidance
documents promulgated by regulatory agencies, orders and consent
decrees, now or hereafter in effect and relating to human health and
safety or the protection or pollution of the environment, including
CERCLA.
Environmental Release - a release as defined in CERCLA or
under any applicable Environmental Laws.
Equity Interest - the interest of (i) a shareholder in a
corporation, (ii) a partner (whether general or limited) in a
partnership (whether general, limited or limited liability), (iii) a
member in a limited liability company, or (iv) any other Person having
any other form of equity security or ownership interest.
ERISA - the Employee Retirement Income Security Act of 1974
and all rules and regulations from time to time promulgated
thereunder.
Event of Default - as defined in SECTION 11 of the Agreement.
Exchange Notes - those senior secured notes of Borrower
issued pursuant to the Public Note Indenture, which senior secured
notes shall be substantially identical to the Public Notes, either (i)
in exchange for the Public Notes except for the removal of certain
securities laws transfer restrictions as provided for in the Public
Note Indenture or (ii) any additional Public Notes of Borrower (up to
an aggregate of $10,000,000 in original principal amount) issued upon
conversion of the Class A Preferred Stock as provided under the rights
and preferences in effect for such stock and under the Public Note
Indenture.
Extraordinary Expenses - all costs, expenses, fees or
advances that Agent or any Lender may suffer or incur, whether prior
to or after the occurrence of an Event of Default and whether prior
to, after or during the pendency of an Insolvency Proceeding of an
Obligor, on account of or in connection with (i) the audit,
inspection, repossession, storage, repair, appraisal, insuring,
completion of the manufacture of, preparing for sale, advertising for
sale, selling, collecting or otherwise preserving or realizing upon
any Collateral; (ii) the defense of Agent's Lien upon
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any Collateral or the priority thereof or any adverse claim with
respect to the Loans, the Loan Documents or the Collateral asserted by
any Obligor, any receiver or trustee for any Obligor or any creditor
or representative of creditors of any Obligor; (iii) the settlement or
satisfaction of any Liens upon any Collateral (whether or not such
Liens are Permitted Liens); (iv) the collection or enforcement of any
of the Obligations; (v) the negotiation, documentation, and closing of
any restructuring or forbearance agreement with respect to the Loan
Documents or Obligations; (vi) amounts advanced by Agent pursuant to
SECTION 7.1.3 of the Agreement; (vii) the enforcement of any of the
provisions of any of the Loan Documents; or (viii) any payment under
indemnity or other payment agreement provided by Agent to Bank or any
other financial institution in connection with the Lockbox, the
Dominion Account, the Payment Account, any Cash Management Agreement
or otherwise. Such costs, expenses and advances may include transfer
fees, taxes, storage fees, insurance costs, permit fees, utility
reservation and standby fees, legal fees, appraisal fees, brokers'
fees and commissions, auctioneers' fees and commissions, accountants'
fees, environmental study fees, wages and salaries paid to employees
of Borrower or independent contractors in liquidating any Collateral,
travel expenses, all other fees and expenses payable or reimbursable
by Borrower or any other Obligor under any of the Loan Documents, and
all other fees and expenses associated with the enforcement of rights
or remedies under any of the Loan Documents, but excluding
compensation paid to employees (including inside legal counsel who are
employees) of Agent.
Farm Product Sellers - growers, suppliers or sellers (or
their respective agents) of farm products.
Farm Products - shall have the meaning ascribed to it in the
Food Security Act and regulations promulgated pursuant thereto.
Federal Funds Rate - for any period, a fluctuating interest
rate per annum equal for each date during such period to the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) in Atlanta, Georgia by the
Federal Reserve Bank of Atlanta, or if such rate is not so published
for any day which is a Business Day, the average of the quotations for
such day on such transactions received by Agent from 3 federal funds
brokers of recognized standing selected by Agent.
FEIN - with respect to any Person, the Federal Employer
Identification Number of such Person.
Finished Goods - prepackaged snack foods and confection items
that are manufactured by or for Borrower, including chips, sandwiches,
crackers, baked goods, nuts and candies.
Fiscal Month - each consecutive period of 4 weeks, beginning
the first day of a Fiscal Year, and, in the case of a 53-week Fiscal
Year, the ▇▇▇▇▇ ▇-week period at the end of such Fiscal Year.
Fiscal Quarter - each consecutive period of 12 weeks
beginning on the first day of a Fiscal Year and, in the case of the
fourth such period in each Fiscal Year, the final 16 or 17 week period
in such Fiscal Year.
Fiscal Year - Borrower's fiscal year, which is the 52- or
53-week period ending the Saturday nearest December 31.
Fleet - Fleet Capital Corporation, a Rhode Island corporation.
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Fleet Indemnitees - Fleet and all of its present and future
officers, directors and agents.
FLSA - the Fair Labor Standards Act of 1938.
Food Security Act - the Food Security Act.
Food Security Act Notice - a written notice received by
Borrower pursuant to the applicable provisions of the Food Security
Act or pursuant to the UCC or any other Applicable Law from (i) any of
Borrower's supplies or Farm Product Sellers or (ii) any secured party
of any such Farm Product Sellers or (iii) the Secretary of State (or
equivalent official) of any State in which Farm Products purchased by
Borrower are grown or produced, advising or notifying Borrower of a
Lien, or the intention of a Farm Product Seller's secured party to
maintain a Lien, in or to any Farm Products that may be purchased by
Borrower.
Franchisee - a Person who is a franchisee of Borrower.
Franchisee Agreement - a Franchise Agreement between Borrower
and a Franchisee.
Franchisee Notes - all present and future promissory notes
and other instruments and agreements now or hereafter evidencing or
relating to obligations owed to Borrower by its Franchisees, including
obligations owed for fees and other amounts in respect of distribution
rights granted to such Franchisees by Borrower and obligations owed by
Franchisees for the purchase of Finished Goods.
Funded Debt - all of Borrower's Debt for Money Borrowed.
GAAP - generally accepted accounting principles in the United
States of America in effect from time to time.
General Intangibles - all general intangibles of Borrower,
whether now owned or hereafter created or acquired by Borrower,
including all choses in action, causes of action, company or other
business records, inventions, blueprints, designs, patents, patent
applications, trademarks, trademark applications, trade names, trade
secrets, service marks, goodwill, brand names, copyrights,
registrations, licenses, franchises, customer lists, tax refund
claims, computer programs, operational manuals, all claims under
guaranties, security interests or other security held by or granted to
Borrower to secure payment of any of Borrower's Accounts by an Account
Debtor, all rights to indemnification and all other intangible
property of Borrower of every kind and nature (other than Accounts).
Governmental Approvals - all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with,
and reports to, all Governmental Authorities.
Governmental Authority - any federal, state, municipal,
national, foreign 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 District of Columbia or a foreign
entity or government.
Guarantor - each Person who guarantees payment or performance
of the whole or any part of the Obligations.
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Guaranty - each guaranty agreement now or hereafter executed
by a Guarantor in favor of Agent with respect to any of the
Obligations.
▇▇▇▇▇▇▇ Group - Heico Holding, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and members
of his immediate family, and any trust for any of the foregoing, T.F.
Partners L.P. and any entities of which the beneficial and record
ownership of and power to vote 100% of the capital stock and/or other
Voting Securities is held by any one or more of the foregoing.
Heico Holding - Heico Holding, Inc., a Delaware corporation,
formerly known as ▇▇▇▇▇▇▇▇▇ Corporation.
Indemnified Amount - in the case of Agent Indemnitees, the
amount of any loss, cost, expenses or damages suffered or incurred by
Agent Indemnitees and against which Lenders or any Obligor have agreed
to indemnify Agent Indemnitees pursuant to the terms of the Agreement
or any of the other Loan Documents; in the case of Lender Indemnitees,
the amount of any loss, cost, expenses or damages suffered or incurred
by Lender Indemnitees and against which Lender or any Obligor have
agreed to indemnify Lender Indemnitees pursuant to the terms of the
Agreement or any of the other Loan Documents; and, in the case of
Fleet Indemnitees, the amount of any loss, cost, expenses or damages
suffered or incurred by Fleet Indemnitees and against which Lenders or
any Obligor have agreed to indemnify Fleet Indemnitees pursuant to the
terms of the Agreement or any of the other Loan Documents.
Indemnitees - the Agent Indemnitees, the Lender Indemnitees
and the Fleet Indemnitees.
Initial Lender - Fleet Capital Corporation in its capacity as
the sole Lender on the Closing Date.
Insolvency Proceeding - any action, case or proceeding
commenced by or against a Person, or any agreement of such Person, for
(i) the entry of an order for relief under any chapter of the
Bankruptcy Code or other insolvency or debt adjustment law (whether
state, federal or foreign), (ii) the appointment of a receiver,
trustee, liquidator or other custodian for such Person or any part of
its Property, (iii) an assignment or trust mortgage for the benefit of
creditors of such Person, or (iv) the liquidation, dissolution or
winding up of the affairs of such Person.
Instrument - shall have the meaning ascribed to the term
"instrument" in the UCC.
Intellectual Property - Property constituting under any
Applicable Law a patent, patent application, copyright, trademark,
service ▇▇▇▇, tradename, mask work, trade secret or license or other
right to use any of the foregoing.
Intellectual Property Claim - the assertion by any Person of
a claim (whether asserted in writing, by action, suit or proceeding or
otherwise) that Borrower's ownership, use, marketing, sale or
distribution of any Inventory, Intellectual Property or other Property
is violative of any ownership or right to use any Intellectual
Property of such Person.
Interest Period - shall have the meaning ascribed to it in
SECTION 2.1.3 of the Agreement.
Interest Rate Contract - any interest rate agreement,
interest rate collar agreement, interest rate swap agreement, or other
agreement or arrangement at any time entered into by Borrower with
Bank that is designed to protect against fluctuations in interest
rates.
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Inventory - all of Borrower's inventory, whether now owned or
hereafter acquired, including all goods intended for sale or lease by
Borrower, to be furnished by Borrower under contracts of service, or
for display or demonstration; all work in process; all raw materials
and other materials and supplies of every nature and description used
or which might be used in connection with the manufacture, printing,
packing, shipping, advertising, selling, leasing or furnishing of such
goods or otherwise used or consumed in Borrower's business; and all
Documents evidencing and General Intangibles relating to any of the
foregoing, whether now owned or hereafter acquired by Borrower.
Inventory Formula Amount - on any date of determination
thereof, an amount equal to the least of (i) the Accounts Formula
Amount on such date, (ii) $8,500,000 or (iii) the sum of (a) 55% of
the Value of Eligible Inventory on such date consisting of Raw
Materials or Finished Goods plus (b) the 10% of the Value of Eligible
Inventory on such date consisting of Packaging Inventory.
Landlord Waiver - an agreement duly executed in favor of
Agent, in the form of EXHIBIT B annexed hereto, by which an owner or
mortgagee of premises upon which any Property of an Obligor is located
agrees to waive or subordinate any Lien it may have with respect to
such Property in favor of Agent's Lien therein and to permit Agent to
enter upon such premises and to remove such Property or to use such
premises to store or dispose of such Property.
LC Application - an application by Borrower to Bank (on which
Fleet may be a co-applicant), pursuant to a form approved by Bank, for
the issuance of a Letter of Credit, that is submitted to Bank at least
5 Business Days prior to the requested issuance of such Letter of
Credit.
LC Conditions - the following conditions, the satisfaction of
each of which is required before Fleet shall be obligated to provide
any LC Support to Bank for the issuance of a Letter of Credit: (i)
each of the conditions set forth in SECTION 10 of the Agreement has
been and continues to be satisfied, including the absence of any
Default or Event of Default; (ii) after giving effect to the issuance
of the requested Letter of Credit and all other unissued Letters of
Credit for which an LC Application has been signed by Fleet, the LC
Outstandings would not exceed $5,000,000 and no Out-of-Formula
Condition would exist, and, if no Revolver Loans are outstanding, the
LC Outstandings do not, and would not upon the issuance of the
requested Letter of Credit, exceed the Borrowing Base; (iii) the
expiry date of the Letter of Credit does not extend beyond 365 days
from the date of issuance; and (iv) the currency in which payment is
to be made under the Letter of Credit is Dollars.
LC Documents - any and all agreements, instruments and
documents (other than an LC Application or an LC Support) required by
Bank to be executed by Borrower or any other Person and delivered to
Bank for the issuance of a Letter of Credit.
LC Facility - a subfacility of the Revolver Facility
established pursuant to SECTION 1.3 of the Agreement.
LC Outstandings - on any date of determination thereof, an
amount (in Dollars) equal to the sum of (i) all amounts then due and
payable by any Obligor on such date by reason of any payment made on
or before such date by Fleet under any LC Support plus (ii) the
aggregate undrawn amount of all Letters of Credit then outstanding or
to be issued by Bank under an LC Application theretofore submitted to
Bank.
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LC Request - a Letter of Credit Procurement Request from
Borrower to Fleet in the form of EXHIBIT I annexed hereto.
LC Reserve - at any date, the aggregate of all LC
Outstandings outstanding on such date, other than LC Outstandings that
are fully secured by Cash Collateral.
LC Support - a guaranty or other support agreement from Fleet
in favor of Bank pursuant to which Fleet shall guarantee or otherwise
assure the payment or performance by the parties (other than Fleet, if
a party) to an LC Application of such parties' obligations with
respect to such Letter of Credit, including the obligation of such
parties to reimburse Bank for any payment made by Bank under such
Letter of Credit.
Lender Indemnitee - a Lender in its capacity as a lender
under the Agreement and its present and future officers, directors,
agents and attorneys.
Lenders - Fleet (whether in its capacity as a provider of
Loans under SECTION 1 of the Agreement, as the provider of Settlement
Loans under SECTION 3.1.3 of the Agreement, or as the procurer of
Letters of Credit under SECTION 1.3 of the Agreement) and any other
Person who may from time to time become a "Lender" under the
Agreement, and their respective successors and permitted assigns.
Letter of Credit - any standby letter of credit or
documentary letter of credit issued by Bank for the account of
Borrower.
Leverage Ratio - with respect to any fiscal period of
Borrower consisting of 4 consecutive Fiscal Quarters, the ratio of
Borrower's Debt for Money Borrowed (including all LC Outstandings and
other Obligations, but excluding any assurances of payment given by
Borrower hereafter with respect to the Bond-Related Debt) as of the
last day of such period divided by EBITDA for the immediately
preceding 4 Fiscal Quarters of Borrower.
LIBOR Lending Office - with respect to a Lender, the office
designated as a LIBOR Lending Office for such Lender on the signature
page hereof (or on any Assignment and Acceptance, in the case of an
assignee) and such other office of such Lender or any of its
Affiliates that is hereafter designated by written notice to Agent.
LIBOR Loan - a Loan, or portion thereof, during any period in
which it bears interest at a rate based upon the applicable Adjusted
LIBOR Rate.
LIBOR Rate - with respect to an Interest Period, the rate per
annum reported to Agent by Bank as the rate at which deposits of U.S.
Dollars approximately equal in principal amount to or comparable to
the amount of the LIBOR Loan to which such Interest Period relates and
for a term comparable to such Interest Period are offered to Bank by
prime banks in the London interbank foreign currency deposits market
at approximately 11:00 a.m., London time, 2 Business Days prior to the
commencement of such Interest Period. Each determination by Agent of
any LIBOR Rate shall, in the absence of any manifest error, be
conclusive.
License Agreement - any agreement between Borrower and a
Licensor pursuant to which Borrower is authorized to use any
Intellectual Property in connection with the manufacturing, marketing,
sale or other distribution of any Inventory of Borrower.
Licensor - any Person from whom Borrower obtains the right to
use (whether on an exclusive or non-exclusive basis) any Intellectual
Property in connection with Borrower's manufacture, marketing, sale or
other distribution of any Inventory.
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Lien - any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on common law, statute or contract. The
term "Lien" shall also include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purpose of the Agreement, Borrower shall
be deemed to be the owner of any Property which it has acquired or
holds subject to a conditional sale agreement or other arrangement
pursuant to which title to the Property has been retained by or vested
in some other Person for security purposes.
Loan - a Revolver Loan (and each Base Rate Loan and LIBOR
Loan comprising such Loan).
Loan Account - the loan account established by each Lender on
its books pursuant to SECTION 4.8 of the Agreement.
Loan Documents - the Agreement, the Other Agreements and the
Security Documents.
Loan Year - a period commencing each calendar year on the
same month and day as the date of the Agreement and ending on the same
month and day in the immediately succeeding calendar year, with the
first such period (i.e. the first Loan Year) to commence on the date
of the Agreement.
Lockbox - the lockbox established at the Lockbox Bank for
collection of payments in respect of the Accounts and other
Collateral.
Lockbox Agreement - the agreement, in form and substance
acceptable to Agent, to be entered into among Borrower, Agent and the
Lockbox Bank substantially in the form of EXHIBIT K annexed hereto.
Lockbox Bank - Bank of America, N.A., or such other financial
institution as may be approved from time to time in writing by Agent.
Margin Stock - shall have the meaning ascribed to it in
Regulation U and of the Board of Governors.
Material Adverse Effect - the effect of any event or
condition which, alone or when taken together with other events or
conditions occurring or existing concurrently therewith, (i) has a
material adverse effect upon the business, operations, Properties,
prospects or condition (financial or otherwise) of any Obligor; (ii)
has or may be reasonably expected to have any material adverse effect
whatsoever upon the validity or enforceability of the Agreement or any
of the other Loan Documents; (iii) has any material adverse effect
upon the value of the whole or any material part of the Collateral,
the Liens of Agent with respect to the Collateral or the priority of
any such Liens; (iv) materially impairs the ability of any other
Obligor to perform its obligations under this Agreement or any of the
other Loan Documents, including repayment of any of the Obligations
when due; or (v) materially impairs the ability of Agent or any Lender
to enforce or collect the Obligations or realize upon any of the
Collateral in accordance with the Loan Documents and Applicable Law.
Material Contract - an agreement to which an Obligor is a
party (other than the Loan Documents) (i) which is deemed to be a
material contract as provided in Regulation S-K promulgated by the SEC
under the Securities Act of 1933 or (ii) for which breach,
termination, cancellation, nonperformance or failure to renew could
reasonably be expected to have a Material Adverse Effect.
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Maximum Rate - the maximum non-usurious rate of interest
permitted by Applicable Law that at any time, or from time to time,
may be contracted for, taken, reserved, charged or received on the
Debt in question or, to the extent that at any time Applicable Law may
thereafter permit a higher maximum non-usurious rate of interest, then
such higher rate. Notwithstanding any other provision hereof, the
Maximum Rate shall be calculated on a daily basis (computed on the
actual number of days elapsed over a year of 365 or 366 days, as the
case may be).
Money Borrowed - as applied to any Person, (i) Debt arising
from the lending of money by any other Person to such Person; (ii)
Debt, whether or not in any such case arising from the lending of
money by another Person to such Person, (A) which is represented by
notes payable or drafts accepted that evidence extensions of credit,
(B) which constitutes obligations evidenced by bonds, debentures,
notes or similar instruments, or (C) upon which interest charges are
customarily paid (other than accounts payable) or that was issued or
assumed as full or partial payment for Property; (iii) Debt that
constitutes a Capitalized Lease Obligation; (iv) reimbursement
obligations with respect to letters of credit or guaranties of letters
of credit and (v) Debt of such Person under any guaranty of
obligations that would constitute Debt for Money Borrowed under
clauses (i) through (iii) hereof, if owed directly by such Person.
▇▇▇▇▇'▇ - ▇▇▇▇▇'▇ Investors Services, Inc.
Multiemployer Plan - has the meaning set forth in Section
4001(a)(3) of ERISA.
Net Proceeds - with respect to a disposition of any
Collateral, proceeds (including cash receivable (when received) by way
of deferred payment) received by Borrower in cash from the sale,
lease, transfer or other disposition of any Property, including
insurance proceeds and awards of compensation received with respect to
the destruction or condemnation of all or part of such Property, net
of: (i) the reasonable and customary costs of such sale, lease,
transfer or other disposition (including legal fees and sales
commissions); and (ii) amounts applied to repayment of Debt (other
than the Obligations) secured by a Permitted Lien on the Collateral
disposed of that is senior to Agent's Liens with respect to such
Collateral.
Notes - each Revolver Note and any other promissory note
executed by Borrower at Agent's request to evidence any of the
Obligations.
Notice of Borrowing - as defined in SECTION 3.1.1(i) of the
Agreement.
Notice of Conversion/Continuation - as defined in SECTION
2.1.2(ii) of the Agreement.
Obligations - in each case, whether now in existence or
hereafter arising, (i) the principal of, and interest and premium, if
any, on, the Loans; (ii) all LC Outstandings and all other obligations
of any Obligor to Agent or Fleet arising in connection with the
issuance of any Letter of Credit; (iii) all Debt and other obligations
of Borrower to Agent, Bank or Fleet under any Interest Rate Contract,
including any premature termination or breakage costs; and (iv) all
other Debts, covenants, duties and obligations (including Contingent
Obligations) now or at any time or times hereafter owing by Borrower
to Agent or any Lender under or pursuant to the Agreement or any of
the other Loan Documents, whether evidenced by any note or other
writing, whether arising from any extension of credit, opening of a
letter of credit, acceptance, loan, guaranty, indemnification or
otherwise, and whether direct or indirect, absolute or contingent, due
or to become due, primary or secondary, or joint or several, including
all interest, charges, expenses, fees or other sums (including
Extraordinary Expenses) chargeable to any or all Obligors hereunder or
under any of the other Loan Documents.
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Obligor - Borrower, each Guarantor and any other Person that
is at any time liable for the payment of the whole or any part of the
Obligations or that has granted in favor of Agent a Lien upon any of
any of such Person's assets to secure payment of any of the
Obligations.
Ordinary Course of Business - with respect to any transaction
involving any Person, the ordinary course of such Person's business,
as conducted by such Person in accordance with past practices and
undertaken by such Person in good faith and not for the purpose of
evading any covenant or restriction in any Loan Document.
Organization Documents - with respect to any Person, its
charter, certificate or articles of incorporation, bylaws, articles of
organization, operating agreement, members agreement, partnership
agreement, voting trust, or similar agreement or instrument governing
the formation or operation of such Person.
Original Term - as defined in SECTION 5.1 of the Agreement.
OSHA - the Occupational Safety and Hazard Act of 1970.
Other Agreements - the Notes, each LC Support, the Public
Note Intercreditor Agreement, the Subordination Agreement and any and
all agreements, instruments and documents (other than the Agreement
and the Security Documents), heretofore, now or hereafter executed by
Borrower, any Obligor or any other Person and delivered to Agent or
any Lender in respect of the transactions contemplated by the
Agreement.
Out-of-Formula Condition - as defined in SECTION 1.1.2 of the
Agreement.
Out-of-Formula Loan - a Revolver Loan made when an
Out-of-Formula Condition exists or the amount of any Revolver Loan
which, when funded, results in an Out-of-Formula Condition.
PACA - the Perishable Agricultural Commodities Act.
Packaging Inventory - packaging and shipping materials for
Finished Goods, excluding any such materials bearing a brand name or
trade name of a Person other than Borrower.
Participant - as defined in SECTION 13.2.1.
Participating Lender - as defined in SECTION 1.3.2(i).
Payment Account - an account maintained by Agent, to which
all monies from time to time deposited to the Dominion Account shall
be transferred and all other payments shall be sent in immediately
available federal funds.
Payment Direction Agreement - the letter agreement, in form
and substance acceptable to Agent, to be addressed to the Lockbox Bank
and signed by Agent and Borrower substantially in the form of EXHIBIT
L annexed hereto.
Payment Direction Notice - a written notice from Agent to the
Lockbox Bank (with a copy to Borrower) sent on or after a Direct
Payment Event and directing that all balances in the Dominion Account
be remitted to Agent.
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Payment Items - all checks, drafts, or other items of payment
payable to Borrower, including proceeds of any of the Collateral.
Pending Revolver Loans - at any date, the aggregate principal
amount of all Revolver Loans which have been requested in any Notice
of Borrowing received by Agent but which have not theretofore been
advanced by Agent or Lenders.
Permitted Acquisition - an acquisition by Borrower of
Property, either from a Distributor in accordance with the terms of a
Distributor Agreement or from a Franchisee in accordance with the
terms of a Franchise Agreement, but only if (i) Borrower gives Agent
prior written notice of the proposed acquisition to the extent
required by SECTION 7.1.1 of the Agreement and (ii) either (x) such
acquisition is obligatory on the part of Borrower pursuant to the
terms of the Distributor Agreement or the Franchise Agreement, as the
case may be, or (y) in the case of a non-obligatory acquisition, no
Default or Event of Default exists at the time of or would result from
the consummation of such acquisition, after giving effect to the
acquisition Availability is not less than $4,000,000, and the
aggregate amount of Debt incurred by Borrower in connection with all
acquisitions in the Fiscal Year in which such acquisition is to be
consummated will not exceed, after consummation of such acquisition,
$2,000,000.
Permitted Contingent Obligations - Contingent Obligations of
Borrower arising from endorsements for collection or deposit in the
Ordinary Course of Business; Contingent Obligations arising from
Interest Rate Contracts entered into in the Ordinary Course of
Business pursuant to this Agreement or with Agent's prior written
consent; Contingent Obligations existing as of the Closing Date,
including Contingent Obligations in respect of the TFH L/C Obligations
and all extensions and renewals thereof that do not increase the
amount of such Contingent Obligations as of the date of such extension
or renewal; Contingent Obligations incurred in the Ordinary Course of
Business with respect to surety bonds, appeal bonds, performance bonds
and other similar obligations; Contingent Obligations arising under
indemnity agreements to title insurers to cause such title insurers to
issue to Agent title insurance policies; Contingent Obligations of
Borrower to repurchase from Franchisees or Distributors their
respective rights and related assets in accordance with the Franchise
Agreements and Distributor Agreements; and other Contingent
Obligations exceeding $100,000 in the aggregate at any time.
Permitted Lien - a Lien of a kind specified in SECTION 9.2.5
of the Agreement.
Permitted Purchase Money Debt - Purchase Money Debt of
Borrower and its Subsidiaries which is incurred after the date of the
Agreement and which is secured by no Lien or only by a Purchase Money
Lien, provided that the aggregate amount of Purchase Money Debt
outstanding at any time does not exceed $5,000,000. For the purposes
of this definition, the principal amount of any Purchase Money Debt
consisting of capitalized leases shall be computed as a Capitalized
Lease Obligation.
Person - an individual, partnership, corporation, limited
liability company, limited liability partnership, joint stock company,
land trust, business trust, or unincorporated organization, or a
Governmental Authority.
Plan - an employee benefit plan now or hereafter maintained
for employees of Borrower that is covered by Title IV of ERISA.
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Pro Rata - a share of or in all Loans, participations in LC
Outstandings (or, in the case of Fleet, the portion of the LC
Outstandings in which Fleet does not sell a participation interest
pursuant to SECTION 1.3.2 of the Agreement), liabilities, payments,
proceeds, collections, Collateral and Extraordinary Expenses, which
share for any Lender on any date shall be a percentage (expressed as a
decimal, rounded to the ninth decimal place) arrived at by dividing
the amount of the Revolver Commitment of such Lender on such date by
the aggregate amount of the Revolver Commitments of all Lenders on
such date.
Projections - Borrower's forecasted (a) Consolidated and
consolidating balance sheets, profit and loss statements, and cash
flow statements, all prepared on a consistent basis with Borrower's
historical financial statements, together with (b) appropriate
supporting details and a statement of underlying assumptions and a
projection of the Borrowing Base and Availability.
Properly Contested - in the case of any Debt of an Obligor
(including any Taxes) that is not paid as and when due or payable by
reason of such Obligor's bona fide dispute concerning its liability to
pay same or concerning the amount thereof, (i) such Debt is being
properly contested in good faith by appropriate proceedings promptly
instituted and diligently conducted; (ii) such Obligor has established
appropriate reserves as shall be required in conformity with GAAP;
(iii) the non-payment of such Debt will not have a Material Adverse
Effect and will not result in a forfeiture of any assets of such
Obligor; (iv) no Lien is imposed upon any of such Obligor's assets
with respect to such Debt unless such Lien is at all times junior and
subordinate in priority to the Liens in favor of Agent (except only
with respect to property taxes that have priority as a matter of
applicable state law) and enforcement of such Lien is stayed during
the period prior to the final resolution or disposition of such
dispute; (v) if the Debt results from, or is determined by the entry,
rendition or issuance against an Obligor or any of its assets of a
judgment, writ, order or decree, enforcement of such judgment, writ,
order or decree is stayed pending a timely appeal or other judicial
review; and (vi) if such contest is abandoned, settled or determined
adversely (in whole or in part) to such Obligor, such Obligor
forthwith pays such Debt and all penalties, interest and other amounts
due in connection therewith.
Property - any interest in any kind of property or asset,
whether real, personal or mixed and whether tangible or intangible.
Public Note Agreements - the Public Note Indenture and any
and all other instruments or agreements evidencing or securing the
Public Notes.
Public Note Indenture - the Indenture dated as of October 14,
1997, under which Public Note Trustee serves as indenture trustee and
collateral agent.
Public Note Intercreditor Agreement - the Intercreditor
Agreement to be executed on or about the Closing Date between Agent
and the Public Note Trustee.
Public Notes - (i) the 10.5% Senior Secured Notes of Borrower
due Year 2004, issued on or about October 14, 1997, by Borrower in the
aggregate original principal amount of $60,000,000; (ii) the Exchange
Notes; and (iii) any additional notes of Borrower (up to an aggregate
of $10,000,000 in original principal amount) issued upon conversion of
the Class A Preferred Stock as provided under the rights and
preferences in effect for such stock.
Public Note Trustee - Bank of New York (as successor to IBJ
▇▇▇▇▇▇▇▇ Bank & Trust Company), a New York banking corporation, in its
capacities as trustee and collateral agent for the holders of the
Public Notes under the Public Note Agreements, together with any
successor or replacement trustee.
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Purchase Money Debt - means and includes (i) Debt (other than
the Obligations or Debt incurred in connection with any Permitted
Acquisition) for the payment of all or any part of the purchase price
of any equipment or real estate, (ii) any Debt (other than the
Obligations or Debt incurred in connection with any Permitted
Acquisition) incurred at the time of or within 10 days prior to or
after the acquisition of any equipment or real estate for the purpose
of financing all or any part of the purchase price thereof, and (iii)
any renewals, extensions or refinancings (but not any increases in the
principal amounts) thereof outstanding at the time.
Purchase Money Lien - a Lien upon equipment or real estate
that secures Purchase Money Debt, but only if such Lien shall at all
times be confined solely to equipment or real estate acquired through
the incurrence of the Purchase Money Debt secured by such Lien and
such Lien constitutes a purchase money security interest under the
UCC.
Raw Materials - raw materials used in the manufacturing of
Finished Goods, including potatoes, shelled peanuts, corn, sugar,
flour, cooking oil and seasonings.
Records - all of Borrower's present and future books of
account of every kind or nature, purchase and sale agreements,
invoices, ledger cards, bills of lading and other shipping evidence,
statements, correspondence, memoranda, credit files and other data to
the extent relating to the other Collateral or any Account Debtor,
together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which
the foregoing are stored (including any rights of Borrower with
respect to the foregoing maintained with or by any other Person).
Refinancing Conditions - the following conditions, each of
which must be satisfied before Refinancing Debt shall be permitted
under SECTION 9.2.3 of the Agreement: (i) the Refinancing Debt is in
an aggregate principal amount that does not exceed the aggregate
principal amount of the Debt being extended, renewed or refinanced,
(ii) the Refinancing Debt has a later or equal final maturity and a
longer or equal weighted average life than the Debt being extended,
renewed or refinanced, (iii) the Refinancing Debt does not bear a rate
of interest that exceeds a market rate (as determined in good faith by
a Senior Officer) as of the date of such extension, renewal or
refinancing, (iv) if the Debt being extended, renewed or refinanced is
subordinate to the Obligations, the Refinancing Debt is subordinated
to the same extent, (v) the covenants contained in any instrument or
agreement relating to the Refinancing Debt are no less favorable to
Borrower, in any material respect, than those relating to the Debt
being extended, renewed or refinanced, and (vi) at the time of and
after giving effect to such extension, renewal or refinancing, no
Default or Event of Default shall exist.
Refinancing Debt - Debt for Money Borrowed that is permitted
by SECTION 9.2.3 and that is the subject or the result of an
extension, renewal or refinancing.
Regulation D - Regulation D of the Board of Governors.
Register - the register maintained by Agent in accordance
with SECTION 4.8.2 of the Agreement.
Reimbursement Date - as defined in SECTION 1.3.1(iii) of the
Agreement.
Reportable Event - any of the events set forth in Section
4043(b) of ERISA.
Required Lenders - at any date of determination thereof,
Lenders having Revolver Commitments representing at least 51% of the
aggregate Revolver Commitments at such time; provided, however, that
if any Lender shall be in breach of any of its obligations hereunder
to
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Borrower or Agent, including any breach resulting from its failure to
honor its Revolver Commitment in accordance with the terms of this
Agreement, then, for so long as such breach continues, the term
"Required Lenders" shall mean Lenders (excluding each Lender that is
in breach of its obligations under the Agreement) having Revolver
Commitments representing at least 51% of the aggregate Revolver
Commitments at such time; provided further, however, that, if the
Revolver Commitments have been terminated, the term "Required Lenders"
shall mean Lenders (excluding each Lender that is in breach of its
obligations hereunder) holding Loans (including Settlement Loans)
representing at least 51% of the aggregate principal amount of Loans
(including Settlement Loans) outstanding at such time.
Restricted Investment - any acquisition of Property by
Borrower or any of its Subsidiaries in exchange for cash or other
Property, whether in the form of an acquisition of Equity Interests or
Debt, or the purchase or acquisition by Borrower or any Subsidiary of
any other Property, or a loan, advance, capital contribution or
subscription, except acquisitions of the following: (i) equipment or
real estate to be used in the Ordinary Course of Business of Borrower
or any Subsidiary so long as any Purchase Money Debt incurred in
connection therewith constitutes Permitted Purchase Money Debt; (ii)
goods or general intangibles held for sale or lease or general
intangibles to be used in the manufacture of goods or the provision of
services by Borrower or any Subsidiary in the Ordinary Course of
Business; (iii) Current Assets arising from the sale or lease of goods
or the rendition of services in the Ordinary Course of Business of
Borrower or any Subsidiary; (iv) investments in Subsidiaries to the
extent existing on the Closing Date; (v) Cash Equivalents to the
extent they are not subject to rights of offset in favor of any Person
other than Agent or a Lender; (vi) loans or advances of money to the
extent not prohibited by SECTION 9.2.2 of the Agreement; and (vii)
Property acquired in a Permitted Acquisition.
Restricted Subsidiary - a Subsidiary of Borrower that is a
"Restricted Subsidiary" within the meaning of the Public Note
Indenture.
Restrictive Agreement - an agreement (other than any of the
Loan Documents) that, if and for so long as an Obligor or any
Subsidiary of such Obligor is a party thereto, would prohibit,
condition or restrict such Obligor's or Subsidiary's right to incur or
repay Debt for Money Borrowed (including any of the Obligations);
grant Liens upon any of such Obligor's or Subsidiary's assets
(including Liens granted in favor of Agent pursuant to the Loan
Documents); declare or make Distributions; amend, modify, extend or
renew any agreement evidencing Debt for Money Borrowed (including any
of the Loan Documents); or repay any Debt owed to any Obligor.
Revolver Commitment - at any date for any Lender, the
obligation of such Lender to make Revolver Loans and to purchase
participations in LC Outstandings pursuant to the terms and conditions
of the Agreement, which shall not exceed the principal amount set
forth opposite such Lender's name under the heading "Revolver
Commitment" on the signature pages hereof or the signature page of the
Assignment and Acceptance by which it became a Lender, as modified
from time to time pursuant to the terms of the Agreement or to give
effect to any applicable Assignment and Acceptance; and "Revolver
Commitments" means the aggregate principal amount of the Revolver
Commitments of all Lenders, the maximum amount of which shall be
$17,000,000.
Revolver Loan - a Loan made by Lenders as provided in SECTION
1.1 of the Agreement or a Settlement Loan funded solely by Fleet.
Revolver Note - a Revolver Note to be executed by Borrower in
favor of each Lender in the form of EXHIBIT A attached hereto, which
shall be in the face amount of such Lender's
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Revolver Commitment and which shall evidence all Revolver Loans made
by such Lender to Borrower pursuant to the Agreement.
S&P - Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.
Schedule of Accounts - as defined in SECTION 7.2.1 of the
Agreement.
SEC - Securities and Exchange Commission.
Securities - shall have the same meaning as in Section 2(1)
of the Securities Act of 1933.
Security Documents - each Guaranty, the Business Interruption
Insurance Assignment and all other instruments and agreements now or
at any time hereafter securing the whole or any part of the
Obligations.
Senior Officer - the chairman of the board of directors, the
president, the treasurer or the chief financial officer of, or
in-house legal counsel to, Borrower.
Settlement Date - as defined in SECTION 3.1.3(i) of the
Agreement.
Settlement Loan - as defined in SECTION 3.1.3(ii) of the
Agreement.
Settlement Report - a report delivered by Agent to Lenders
summarizing the amount of the outstanding Revolver Loans as of the
Settlement Date and the calculation of the Borrowing Base as of such
Settlement Date.
Solvent - as to any Person, such Person (i) owns Property
whose fair saleable value is greater than the amount required to pay
all of such Person's Debts (including contingent Debts) and (ii) is
able to pay all of its Debts as such Debts mature.
Statutory Reserves - on any date, the percentage (expressed
as a decimal) established by the Board of Governors which is the then
stated maximum rate for all reserves (including any emergency,
supplemental or other marginal reserve requirements) applicable to any
member bank of the Federal Reserve System in respect to Eurocurrency
Liabilities (or any successor category of liabilities under Regulation
D). Such reserve percentage shall include those imposed pursuant to
said Regulation D. The Statutory Reserve shall be adjusted
automatically on and as of the effective date of any change in such
percentage.
Subordinated Debt - Debt of Borrower that is fully and
absolutely subordinated in right of payment to the Obligations in a
manner satisfactory to Agent.
Subordination Agreement - the Debt Subordination Agreement
dated on or about the Closing Date among TFH, TFCC, Borrower and
Agent.
Subsidiary - any Person in which more than 50% of its
outstanding Voting Securities or more than 10% of all Equity Interests
is owned directly or indirectly by Borrower, by one or more other
Subsidiaries of Borrower or by Borrower and one or more other
Subsidiaries.
Taxes - any present or future taxes, levies, imposts, duties,
fees, assessments, deductions, withholdings or other charges of
whatever nature, including income, receipts, excise, property, sales,
use, transfer, license, payroll, withholding, social security and
franchise taxes now or hereafter imposed or levied by the United
States or any other Governmental Authority and all interest,
penalties, additions to tax and similar liabilities with respect
thereto, but excluding,
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in the case of each Lender, taxes imposed on or measured by the net
income or overall gross receipts of such Lender.
TFCC - Tom's Foods Capital Corporation, a Delaware
corporation.
TFH - TFH Corp., a Delaware corporation.
TFH Investor L/Cs - the letters of credit provided by the
shareholders of TFH in the aggregate face amount of $10,000,000 in
favor of Nestle U.K. Limited, as guarantor of the Bonds, under which
the beneficiary may draw for amounts paid by the beneficiary, as
guarantor of the Bonds, to the holders of the Bonds or the trustees
for such holders, together with all extensions, substitutions or
replacements of such letters of credit provided by TFH or its
shareholders (and not by Borrower).
TFH L/C Obligations - the obligations of Borrower (i) to
reimburse TFH for amounts drawn by the beneficiary under the TFH
Investor L/Cs to reimburse such beneficiary, as guarantor of the
Bonds, for amounts paid to the holders of the Bonds or the trustee(s)
for such holders and (ii) to pay or reimburse TFH for amounts payable
or paid by TFH to the providers of the TFH Investor L/Cs for
out-of-pocket expenses or expenses paid by them to the issuers of the
TFH Investor L/Cs.
Transferee - as defined in SECTION 13.3.3 of the Agreement.
Type - any type of a Loan determined with respect to the
interest option applicable thereto, which shall be either a LIBOR Loan
or a Base Rate Loan.
UCC - the Uniform Commercial Code (or any successor statute)
as adopted and in force in the State of Georgia or, when the laws of
any other state govern the method or manner of the perfection or
enforcement of any security interest in any of the Collateral, the
Uniform Commercial Code (or any successor statute) of such state.
Unrestricted Subsidiary - a Subsidiary of Borrower that is
not a Restricted Subsidiary.
Upstream Payment - a payment or distribution of cash or other
Property by a Subsidiary to Borrower, whether in repayment of Debt
owed by such Subsidiary to Borrower, to pay dividends on account of
Borrower's ownership of Equity Interests or otherwise.
Value - with reference to the value of Eligible Inventory,
value determined on the basis of the lower of cost or market of such
Eligible Inventory, with the cost thereof calculated on a first-in,
first-out basis determined in accordance with GAAP.
Voting Securities - Equity Interests of any class or classes
of a corporation or other entity the holders of which are ordinarily,
in the absence of contingencies, entitled to elect a majority of the
corporate directors or Persons performing similar functions.
Working Capital - at any date, the remainder of Current
Assets minus Current Liabilities.
Accounting Terms. Unless otherwise specified herein, all
terms of an accounting character used in the Agreement shall be interpreted,
all accounting determinations under the Agreement shall be made, and all
financial statements required to be delivered under the Agreement shall be
prepared in accordance with GAAP, applied on a basis consistent with the most
recent audited Consolidated financial statements of Borrower and its
Subsidiaries heretofore delivered to Agent and Lenders and using the same
method for inventory valuation as used in such audited financial statements,
except for any
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change permitted by GAAP; provided, however, that for purposes of determining
Borrowers' compliance with financial covenants contained in Section 9.3 of the
Agreement, all accounting terms shall be interpreted and all accounting
determinations shall be made in accordance with GAAP as in effect on the date
of the Agreement and applied on a basis consistent with the application used in
the financial statements referred to in SECTION 8.1.9 of the Agreement.
Other Terms. All other terms contained in the Agreement shall
have, when the context so indicates, the meanings provided for by the UCC to
the extent the same are used or defined therein.
Certain Matters of Construction. The terms "herein," "hereof"
and "hereunder" and other words of similar import refer to the Agreement as a
whole and not to any particular section, paragraph or subdivision. Any pronoun
used shall be deemed to cover all genders. In the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each means "to but
excluding." The section titles, table of contents and list of exhibits appear
as a matter of convenience only and shall not affect the interpretation of the
Agreement. All references to statutes and related regulations shall include any
amendments of same and any successor statutes and regulations; to any of the
Loan Documents shall include any and all modifications thereto and any and all
restatements, extensions or renewals thereof; to any Person shall mean and
include the successors and permitted assigns of such Person; to "including" and
"include" shall be understood to mean "including, without limitation" (and, for
purposes of the Agreement and each other Loan Document, the parties agree that
the rule of ejusdem generis shall not be applicable to limit a general
statement, which is followed by or referable to an enumeration of specific
matters to matters similar to the matters specifically mentioned); or to the
time of day shall mean the time of day on the day in question in Atlanta,
Georgia, unless otherwise expressly provided in the Agreement. A Default or an
Event of Default shall be deemed to exist at all times during the period
commencing on the date that such Default or Event of Default occurs to the date
on which such Default or Event of Default is waived in writing by Agent
pursuant to this Agreement or, in the case of a Default, is cured within any
period of cure expressly provided in this Agreement; and an Event of Default
shall "continue" or be "continuing" until such Event of Default has been waived
in writing by Lender. Whenever a payment by Borrower hereunder is due "on
demand" (other than pursuant to SECTIONS 1.1.2 and 4.2.1(iii) of the
Agreement), such payment shall be due within 5 Business Days after Borrower's
receipt from Agent or a Lender of an invoice, billing statement or notice that
payment is due. Whenever the phrase "to the best of Borrower's knowledge" or
words of similar import relating to the knowledge or the awareness of Borrower
are used herein, such phrase shall mean and refer to (i) the actual knowledge
of a Senior Officer of any Borrower or (ii) the knowledge that a Senior Officer
would have obtained if they had engaged in good faith and diligent performance
of his duties, including the making of such reasonably specific inquiries as
may be necessary of the employees or agents of Borrower and a good faith
attempt to ascertain the existence or accuracy of the matter to which such
phrase relates.
IN WITNESS WHEREOF, this Appendix has been duly executed in Atlanta,
Georgia, on January __, 2000.
BORROWER:
ATTEST: TOM'S FOODS INC.
------------------------- By:
--------------------------------
Secretary Title:
--------------------------
[CORPORATE SEAL]
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LENDERS:
FLEET CAPITAL CORPORATION
By:
--------------------------------
Title:
--------------------------
AGENT:
FLEET CAPITAL CORPORATION,
as Agent
By:
--------------------------------
Title:
--------------------------
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