EXHIBIT 4.17
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GROCERS CAPITAL COMPANY
$10,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of December 7, 2001
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NATIONAL CONSUMER COOPERATIVE BANK
Agent
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ..................................................... 1
1.1 Certain Defined Terms ......................................... 1
1.2 Accounting Terms; GAAP Changes ................................ 15
1.3 Interpretation ................................................ 15
ARTICLE II THE LOANS ...................................................... 16
2.1 The Loans ..................................................... 16
2.2 Borrowing Procedure ........................................... 16
2.3 Conversion or Continuation Requirements ....................... 16
2.4 Eurodollar Costs .............................................. 17
2.5 Illegality; Impossibility ..................................... 18
2.6 Disaster ...................................................... 19
2.7 Lending Offices ............................................... 19
2.8 Notes; Recordkeeping; Statements of Obligations ............... 19
2.9 Loans By Lenders .............................................. 20
2.10 Pro Rata Treatment ............................................ 20
2.11 Payments; Application ......................................... 20
2.12 Non-Receipt of Funds .......................................... 21
2.13 Termination of the Commitments; Repayment of the Loans ........ 21
2.14 Voluntary Commitment Reductions ............................... 21
ARTICLE III INTEREST, PAYMENTS, FEES AND TAXES ............................ 21
3.1 Interest ...................................................... 21
3.2 Interest Payment Dates ........................................ 22
3.3 Fees .......................................................... 22
3.4 Computation of Interest and Fees .............................. 23
3.5 Highest Lawful Rate ........................................... 23
3.6 Increased Risk-Based Capital Cost ............................. 23
3.7 Taxes ......................................................... 24
ARTICLE IV CONDITIONS PRECEDENT ........................................... 25
4.1 Conditions Precedent to the Initial Loans and Maintenance of
Original Credit Agreement Loans ............................... 25
4.2 Conditions Precedent to All Loans ............................. 27
ARTICLE V REPRESENTATIONS AND WARRANTIES .................................. 28
5.1 Representations and Warranties ................................ 28
ARTICLE VI COVENANTS ...................................................... 32
6.1 Reporting Covenants ........................................... 32
6.2 Financial Covenants ........................................... 34
6.3 Additional Affirmative Covenants .............................. 35
6.4 Negative Covenants ............................................ 37
ARTICLE VII EVENTS OF DEFAULT ............................................. 41
7.1 Events of Default ............................................. 41
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7.2 Effect of Event of Default ........................................ 44
ARTICLE VIII AGENT AND LENDER .............................................. 44
8.1 Appointment and Powers of Agent ................................... 44
8.2 Agent's Reliance .................................................. 45
8.3 Defaults .......................................................... 45
8.4 Rights as a Lender, Rights under NCB Loan Purchase Agreement ...... 46
8.5 Indemnification ................................................... 46
8.6 Non-Reliance by Lenders ........................................... 46
8.7 Failure to Act .................................................... 47
8.8 Excess Payments ................................................... 47
8.9 Sharing of Setoffs ................................................ 47
8.10 Characterization Of Action ........................................ 48
8.11 Resignation by or Removal of Agent ................................ 48
8.12 No Obligation of Borrower ......................................... 48
ARTICLE IX LENDERS' REPRESENTATIONS ........................................ 48
9.1 Investment Representation ......................................... 48
ARTICLE X EXPENSES AND INDEMNITEES ......................................... 49
10.1 Expenses ........................................................... 49
10.2 Indemnity .......................................................... 49
ARTICLE XI MISCELLANEOUS ................................................... 50
11.1 Destruction of Borrower's Documents ................................ 50
11.2 Amendments, etc. ................................................... 50
11.3 Notices ............................................................ 51
11.4 No Waiver; Cumulative Remedies ..................................... 51
11.5 Right of Set-Off ................................................... 51
11.6 Survival ........................................................... 52
11.7 Benefits of Agreement .............................................. 52
11.8 Assignments and Participations ..................................... 52
11.9 GOVERNING LAW ...................................................... 53
11.10 CONSENT TO VENUE ................................................... 53
11.11 WAIVER OF JURY TRIAL ............................................... 54
11.12 Demand, Protest, Notice ............................................ 54
11.13 Confidential Relationships ......................................... 54
11.14 Limitation on Liability ............................................ 55
11.15 Entire Agreement ................................................... 55
11.16 Interpretation ..................................................... 55
11.17 Confidentiality .................................................... 55
11.18 Severability ....................................................... 55
11.19 Counterparts ....................................................... 56
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated as
of December 7, 2001, is made among GROCERS CAPITAL COMPANY, a California
corporation ("Borrower"), the financial institutions listed on the signature
pages of this Agreement under the heading "Lenders" (each a "Lender" and,
collectively, the "Lenders"), and NATIONAL CONSUMER COOPERATIVE BANK, dba
National Cooperative Bank, a federally chartered banking corporation with
principal offices located in Washington, D.C. ("NCB"), as agent for the Lenders
(NCB in such capacity and any successor in such capacity is referred to herein
as "Agent").
RECITALS
WHEREAS, Borrower and NCB, as agent, entered into a Credit Agreement
dated as of September 20, 1996 (as amended to the date hereof, the "Original
Credit Agreement");
WHEREAS, Borrower and the other parties to the Original Credit
Agreement desire to amend and restate the Original Credit Agreement as set forth
in this Agreement; and
WHEREAS, the Loans outstanding under the Original Credit Agreement
(each an "Original Credit Agreement Loan" and, collectively, the "Original
Credit Agreement Loans") shall remain outstanding as Loans under, and subject to
the terms of, this Agreement.
NOW, THEREFORE, for full and fair consideration, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms
As used in this Agreement, the following terms shall have the following
meanings:
"Additional Loan/Lease Receivables" means Deposit Fund Loans, Affiliate
Loans, Program Leases, and, if designated as Additional Loan/Lease Receivables
pursuant to Section 6.4(l), New Lease/Loan Products.
"Affiliate" means any Person which, directly or indirectly, controls,
is controlled by or is under common control with another Person. For purposes of
the foregoing, "control," "controlled by" and "under common control with" with
respect to any Person shall mean the possession, directly or indirectly, of the
power (i) to vote more than 10% of the securities having ordinary voting power
of the election of directors of such Person, or (ii) to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise. The mere fact that a
representative of a Unified Patron serves and acts as a director of Unified or
Borrower shall not cause such Unified Patron to be an Affiliate of Unified or
Borrower.
"Affiliate Loans" means loans made by Borrower to wholly-owned, direct
or indirect, subsidiaries of Unified.
"Agent" has the meaning set forth in the introduction to this
Agreement.
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"Agent's Account" means the account of Agent maintained at PNC Bank,
Philadelphia, Pennsylvania, ABA Number: ▇▇▇▇▇▇▇▇▇, Account Number: ▇▇▇▇▇▇▇▇▇▇,
Account Name: NCB Clearing Account, Reference: GCC Credit Agreement or such
other account at such bank as the Agent from time to time shall designate in a
written notice to Borrower and the Lenders.
"Agent's Expenses" means and includes, without duplication, all actual
out-of-pocket: (a) costs or expenses (including, without limitation, taxes and
insurance premiums), presently existing or arising hereafter, required to be
paid by Borrower under this Agreement, the Security Agreement or under any of
the Notes which are paid or advanced by Agent or any Lender; (b) filing,
recording, publication and search fees incurred or paid by Agent or any Lender
in connection with Agent's and such Lender's transactions with Borrower in
connection herewith; (c) all fees, costs and expenses incurred or paid by Agent
in connection with any audit during the existence of an Event of Default, and up
to $5,000 fees plus all out-of-pocket costs and expenses incurred or paid by
Agent in connection with not more than one (1) audit for each fiscal year which
is conducted absent an Event of Default; (d) costs and expenses (including
reasonable attorneys' fees) incurred by Agent or any Lender in collecting the
Collateral (with or without suit), or in gaining possession, of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale or
advertising to sell the Collateral, whether or not a sale is consummated; (e)
costs and expenses incurred by Agent or any Lender in defending this Agreement,
the Notes, the Security Agreement and all other agreements, instruments, and
documents contemplated hereby and thereby, or any portion hereof or thereof,
whether or not suit is brought; (f) the cost of delivering the Notes to any
Lender pursuant to the provisions of this Agreement; and (g) the reasonable
costs and expenses (including reasonable attorneys' fees and expenses, including
allocated fees and expenses of in-house counsel or local counsel of Agent)
incurred by Agent or any Lender in connection with any bankruptcy or other
insolvency proceeding, reorganization, workout, composition, or other creditor
arrangement of Borrower, or of any of Borrower's Subsidiaries, provided,
however, that each Lender (other than Agent) agrees to instruct its counsel to
take reasonable steps to avoid duplication of effort with counsel to Agent.
"Alternative Use Receivables" means any Receivable from a Unified
Patron other than (a) an Additional Loan/Lease Receivable, (b) a Finance
Receivable or (c) any Receivable from an Expansion Loan.
"Authorized Officer" means any individual authorized by Borrower to act
on Borrower's behalf in connection with the Loan Documents as specified in a
certificate delivered pursuant to Section 4.1(e)(ii), or in the latest such
certificate delivered by Borrower to Agent to reflect any change in the
authorization of any such individual.
"Bank" means Union Bank of California, N.A.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978.
"Base LIBOR" means, for any Interest Period, the rate for deposits in
U.S. Dollars with maturities comparable to the length of such Interest Period
which appears on the screen designated as page "LIBOR" on the appropriate
display on the Bloomberg Financial Markets System (or such other screen as may
replace same on such service) at 11:00 A.M. (London Time), two (2) Eurodollar
Business Days prior to the commencement of such Interest Period. If Base LIBOR
does not appear as contemplated in the preceding sentence, then Base LIBOR for
such Interest Period will be the same as Base LIBOR in effect during the
immediately preceding Interest Period for the applicable Eurodollar Rate Loan.
"Borrower" has the meaning set forth in the introduction to this
Agreement.
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"Borrower's Account" means the account of Borrower maintained at Bank's
branch located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
bearing the number 0700479994, or such other account as Borrower from time to
time shall designate in a written notice to Agent for the deposit of funds
borrowed under this Agreement.
"Borrowing" means a borrowing consisting of simultaneous Loans made at
any one time to Borrower from Lenders pursuant to Article II.
"Borrowing Base" means at any time the sum of (i) 75% of Eligible
Collateral consisting of Finance Receivables, plus (ii) 50% of Eligible
Collateral consisting of Additional Loan/Lease Receivables, plus (iii) a
percentage (determined by Agent in its sole discretion with respect to each such
Receivable) of Eligible Collateral consisting of Alternative Use Receivables,
but only if, with respect to any such Alternative Use Receivable, Agent has
given its prior written approval (in Agent's sole discretion) to the inclusion
of such Alternative Use Receivable in the Borrowing Base, plus (iv) 75% of
Eligible Collateral consisting of Expansion Loans, provided that no Expansion
Loan shall under any circumstances remain in the Borrowing Base for more than
twelve months.
"Borrowing Base Certificate" means a certificate of the chief financial
officer or treasurer of Borrower, in substantially the form of Exhibit 1.1 B-1,
with such changes thereto as Agent or any Lender may from time to time
reasonably request.
"Business Day" means a day (i) other than Saturday or Sunday, and (ii)
on which commercial banks are open for business in Washington, D.C., and Los
Angeles, California.
"Capital Debt" means, as of any date of determination, any and all
Indebtedness of Borrower due more than one year from the date of determination
which is (i) owed to any Affiliate of Borrower, and (ii) by its terms expressly
subordinated to all Senior Debt and to any Subordinated Debt of Borrower on
terms no less favorable to the holders of such Senior Debt and Subordinated Debt
than those set forth in the Investment Agreement.
"Capital Lease" means, for any Person, any lease of property (whether
real, personal or mixed) which, in accordance with GAAP, would, at the time a
determination is made, be required to be recorded as a capital lease in respect
of which such Person is liable as lessee.
"Closing Date" means the date when all of the conditions set forth in
Section 4.1 have been satisfied.
"Collateral" means the property described in the Collateral Documents,
and all other property now existing or hereafter acquired which may at any time
be or become subject to a Lien in favor of Agent or Lenders pursuant to the
Collateral Documents or otherwise, securing the payment and performance of
Obligations; but in no event shall "Collateral" include Released Collateral.
"Collateral Documents" means the Security Agreement, any other
agreement pursuant to which Borrower or any other Person provides a Lien on its
assets in favor of Lenders or Agent for the benefit of Lenders and all financing
statements, fixture filings, patent, trademark and copyright filings,
assignments, acknowledgments and other filings, documents and agreements made or
delivered pursuant thereto.
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"Collateral Procedures" means any procedures and documentation
specified in Section 3(b) of the Security Agreement for perfection of the first
priority Lien of Agent (on behalf of Lenders) on the Collateral.
"Commitment" means, when used with reference to any Lender at the time
any determination thereof is to be made, the amount set forth opposite the name
of such Lender on the signature pages of this Agreement, as such amount may be
reduced from time to time pursuant to Section 2.14, or, where the context so
requires, the obligation of such Lender to make Loans up to such amount, as such
amount may be reduced from time to time pursuant to Section 2.14, on the terms
and conditions set forth in this Agreement.
"Commitment Termination Date" means October 31, 2004.
"Compliance Certificate" means a certificate of the chief financial
fficer of Borrower, in substantially the form of Exhibit 1.1 C-1, with such
changes thereto as Agent or any Lender may from time to time reasonably request.
"Consolidated" means, when used in connection with any financial
statement or financial term, that the statement or term has been prepared or
determined on a consolidated basis in accordance with GAAP for Unified and its
Subsidiaries, or for Borrower and its Subsidiaries, as the case may be.
"Consolidated Adjusted Tangible Net Worth" means, as of any date of
determination, Consolidated Total Assets plus Capital Debt minus Consolidated
Total Liabilities; provided, however, that there shall be excluded from
Consolidated Total Assets the following: (i) all assets which would be
classified as intangible assets in accordance with GAAP, including goodwill,
organizational expense, research and development expense, patent applications,
patents, trademarks, trade names, brands, copyrights, trade secrets, customer
lists, licenses, franchises and covenants not to compete; (ii) all unamortized
debt discount and expense; (iii) all treasury stock; (iv) all receivables from
and other obligations of directors (other than in their capacities as Unified
Patrons), employees or officers of Borrower; and (v) the excess, if any, of (A)
the aggregate balance of Receivables that are more than 90 days past due, over
(B) reserves for loan losses.
"Consolidated EBIT" means, for any period, Consolidated net income,
plus Consolidated Interest Expense, plus income tax expense of Borrower and its
Subsidiaries on a Consolidated basis, as determined in accordance with GAAP;
provided, however, that for purposes of determining Consolidated EBIT there
shall be excluded from Consolidated net income any notes or other payment in
kind received by Borrower in payment of any obligations owing to it.
"Consolidated Interest Expense" means, for any period, interest expense
(including that attributable to Capital Leases) of Borrower and its Subsidiaries
on a Consolidated basis, as determined in accordance with GAAP.
"Consolidated Tangible Net Worth" means, as of any date of
determination, Consolidated Total Assets minus Consolidated Total Liabilities;
provided, however, that there shall be excluded from Consolidated Total Assets
the following: (i) all assets which would be classified as intangible assets in
accordance with GAAP, including goodwill, organizational expense, research and
development expense, patent applications, patents, trademarks, trade names,
brands, copyrights, trade secrets, customer lists, licenses, franchises and
covenants not to compete; (ii) all unamortized debt discount and expense; (iii)
all treasury stock; and (iv) all receivables from and other obligations of
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directors (other than in their capacities as Unified Patrons), employees or
officers of Borrower or Unified.
"Consolidated Total Assets" means, as of any date of determination, the
total assets of Borrower and its Subsidiaries on a Consolidated basis, as
determined in accordance with GAAP.
"Consolidated Total Liabilities" means, as of any date of
determination, the total liabilities of Borrower and its Subsidiaries on a
Consolidated basis, as determined in accordance with GAAP.
"Default" means an Event of Default or an event or condition which with
notice or lapse of time or both would constitute an Event of Default.
"Deposit Fund Loans" means "Deposit Fund Loans" made to Unified Patrons
by Borrower in accordance with the GCC Loan Guidelines.
"Dollars" and "$" each means lawful money of the United States.
"Eligible Collateral" means at any time the aggregate amount of
Receivables arising in the ordinary course of Borrower's business, excluding the
following:
(i) Receivables for which Borrower's right to receive payment
has not been fully earned by performance or is contingent upon the fulfillment
of any condition whatsoever or which otherwise do not arise from a bona fide
completed transaction with Borrower;
(ii) Receivables which have been disputed, or against which
there have been asserted any defenses, offsets, claims, counterclaims, or other
defenses of any nature, whether well-founded or otherwise, or which are
otherwise conditional;
(iii) Receivables that do not comply with all applicable legal
requirements, including all laws, rules, regulations and orders of any
Governmental Authority;
(iv) Receivables which are not owned by Borrower free and
clear of all Liens and rights of others (other than the Liens in favor of Agent
on behalf of Lenders and other than other Permitted Liens);
(v) Receivables in which Agent on behalf of Lenders shall not
have a valid and perfected first-priority Lien;
(vi) Receivables owing by any officer, director (other than in
his or her capacity as a Unified Patron), employee, agent, partner, Subsidiary
or Affiliate of Borrower (other than Affiliate Loans);
(vii) Receivables owing by the United States or any department,
agency or instrumentality thereof or by a State or any department, agency,
instrumentality or political subdivision thereof;
(viii) Receivables denominated in a currency other than Dollars
or owing by any non-resident of the United States;
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(ix) Receivables not complying with the GCC Loan Guidelines
and other documentation, credit and collection policies and practices of
Borrower as in effect from time to time;
(x) Receivables owing by any Receivable Debtor who, as of the
end of the previous collection period, has failed to make full payment within 90
days from the due date on the Receivables or any portion thereof owing to
Borrower by such Receivable Debtor, except that if a good faith dispute exists
as to any such unpaid Receivables of a Receivable Debtor, only such unpaid
Receivables shall be excluded;
(xi) Receivables owing by any Receivable Debtor who is the
subject of a case or proceeding described in Section 7.l(e) or who takes any
other action described in Section 7.1(e);
(xii) Receivables which are subordinated to the prior payment
of any other obligations of the Receivable Debtor obligated in respect of such
Receivable;
(xiii) Receivables with respect to which the terms or conditions
prohibit or restrict assignment or collection rights or which require the
consent of the Receivable Debtor, and such consent has not been obtained; and
(xiv) Receivables with respect to which Agent, in its
reasonable discretion, deems the creditworthiness or financial condition of the
Receivable Debtor to be unsatisfactory or the prospect of payment or performance
to be impaired, and other Receivables which, in Agent's reasonable discretion,
are otherwise ineligible; provided that, with respect to Alternative Use
Receivables, the Agent may (in its sole discretion) waive any or all of
preceding clauses (iv), (v), (vi), (vii), (ix) and/or (xii).
"Employee Benefit Plan" means any Pension Plan and any employee
welfare benefit plan, as defined in Section 3(1) of ERISA, that is maintained
for the employees of Unified or any ERISA Affiliate of Unified.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directives, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to or imposing liability or standards of conduct concerning
environmental protection matters, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Clean Air Act, the Federal
Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances Control Act, the
Emergency Planning and Community Right-to-Know Act, the California Hazardous
Waste Control Law, the California Solid Waste Management, Resource Recovery and
Recycling Act, the California Water Code and the California Health and Safety
Code.
"Equipment Loans" means "Equipment Loans" made to Unified Patrons by
Borrower in accordance with the GCC Loan Guidelines or acquired by Borrower from
URI or Unified on or before the date of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
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"ERISA Affiliate" means, as applied to any Person, any trade or
business (whether or not incorporated) which is a member of a group of which
that Person is a member and which is under common control within the meaning of
the regulations promulgated under Section 414 of the Internal Revenue Code.
"Eurodollar Business Day" means any Business Day on which major
commercial banks are open for international business (including dealings in
Dollar deposits) in Los Angeles, California, Washington, D.C., and London,
England.
"Eurodollar Rate" means the rate per annum (rounded upwards if
necessary to the nearest whole one-hundredth of one percent (.01%)), determined
as the quotient of: (i) Base LIBOR; divided by (ii) the number equal to one
hundred percent (100%) minus the LIBOR Reserve Percentage. The Eurodollar Rate
shall be adjusted automatically on the effective date of any change in the LIBOR
Reserve Percentage, such adjustment to affect any Eurodollar Loans outstanding
on such effective date to the extent such change is applied retroactively to
eurocurrency funding of a member bank in the Federal Reserve System. Each
determination of a Eurodollar Rate by Agent, including, but not limited to, any
determination as to the applicability or allocability of reserves to
eurocurrency liabilities or as to the amount of such reserves, shall be
conclusive and final in the absence of manifest error.
"Eurodollar Rate Loan" means any Loan bearing interest by reference to
the Eurodollar Rate pursuant to a designation by Borrower under Sections 2.2 or
2.3.
"Event of Default" has the meaning set forth in Section 7.1.
"Expansion Loan" has the meaning set forth in the NCB Loan Purchase
Agreement.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100 of 1%), as determined by Agent, equal
to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers, as
published for any day of determination (or if such day of determination is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, 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 three Federal funds brokers of recognized standing
selected by Agent.
"Finance Receivables" means Store Development Loans, Equipment Loans,
Inventory Loans, and, if designated as Finance Receivables pursuant to Section
6.4(l), New Lease/Loan Products.
"Fleet" means Fleet Capital Corporation, formerly Sanwa Business
Credit Corporation.
"Fleet Loans" means the loans set forth on Schedule 1.1 F-2 owned by
Fleet on the Closing Date.
"Fleet Loan Purchase Agreement" means the January 29, 1999 agreement
among Fleet, as buyer, and Borrower, as seller and servicer, providing for the
acquisition of Receivables in an aggregate amount not to exceed $20,000,000, as
amended or restated from time to time.
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"GAAP" means generally accepted accounting principles in the U.S. as
in effect from time to time.
"GCC Loan Guidelines" means the written guidelines of Borrower for
provision of financing to qualified Unified Patrons and the documentation
thereof as in effect from time to time and furnished to Agent and Lenders in
accordance herewith, described on Exhibit 1.1 G-1.
"Governmental Authority" means any federal, state, local or other
governmental department, commission, board, bureau, agency, central bank, court,
tribunal or other instrumentality or authority, domestic or foreign, exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranty" means that certain Amended and Restated Guaranty, dated as
of the date hereof, executed by Borrower in favor of NCB.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
Indebtedness, lease, dividend, letter of credit or other obligation (the
"primary obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, or (ii) to advance or provide funds (A) for the payment or discharge
of any such primary obligation, or (B) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, or (iii) 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 such primary
obligation, or (iv) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof.
"Hazardous Substances" means any toxic or hazardous substances,
materials or wastes, contaminants or pollutants, including asbestos, PCBs,
petroleum products and byproducts, substances defined or listed as "hazardous
substances," "hazardous materials" or "toxic substances" (or similarly
identified), regulated under or forming the basis for liability under any
applicable Environmental Law.
"Incremental Purchase" has the meaning set forth in the NCB Loan
Purchase Agreement and also includes similar purchases under the Fleet Loan
Purchase Agreement.
"Indebtedness" means, for any Person: (i) all indebtedness or other
obligations of such Person for borrowed money or for the deferred purchase price
of property or services; (ii) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of property, assets or businesses; (iii) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property); (iv)
all obligations under Capital Leases; (v) all reimbursement or other obligations
of such Person under or in respect of letters of credit, bankers acceptances,
interest rate swaps, caps, floors and collars, currency swaps, or other similar
financial products; (vi) all Guaranty Obligations of such Persons; and (vii) all
indebtedness of another Person secured by any Lien upon or in property owned by
the Person for whom Indebtedness is being determined, whether or not such Person
has assumed or become liable for the payment of such indebtedness of such other
Person.
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"Interest Period" means, with respect to each Eurodollar Rate Loan,
the period commencing on the date of such Eurodollar Rate Loan and ending one
(1) or three (3) months thereafter, as Borrower may elect pursuant to the
applicable Notice of Borrowing or Notice of Conversion or Continuation;
provided, however, that:
(i) any Interest Period which would otherwise end on a day
which is not a Eurodollar Business Day shall be extended to the next succeeding
Eurodollar Business Day unless such Eurodollar Business Day falls in another
calendar month in which case such Interest Period shall end on the next
preceding Eurodollar Business Day;
(ii) any Interest Period which begins on the last Eurodollar
Business Day of the calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Eurodollar Business Day of the calendar month in
which it would have ended if there were a numerically corresponding day in such
calendar month; and
(iii) no Interest Period may extend beyond the Commitment
Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
including (unless the context otherwise requires) any rules or regulations
promulgated thereunder.
"Inventory Loans" means "Inventory Loans" and secured "Inventory
Deferred Loans" made to Unified Patrons by Borrower in accordance with the GCC
Loan Guidelines or acquired by Borrower from URI or Unified on or before the
date of this Agreement.
"Investment Agreement" means that certain Third Amended and Restated
Investment Agreement, dated as of October 2, 2000, between Borrower and Unified,
as may be from time to time amended, supplemented or restated.
"IRS" means the Internal Revenue Service, or any successor thereto.
"Lender" and "Lenders" each has the meaning set forth in the
introduction of this Agreement.
"Lending Office" has the meaning set forth in Section 2.7.
"LIBOR Reserve Percentage" means, for any Interest Period of any
Eurodollar Rate Loan, the daily average of the stated maximum rate (rounded
upward to the nearest one-hundredth of one percent (.01%)), as determined by
Agent in accordance with its usual procedures (which determination shall be
conclusive in the absence of manifest error), at which reserves are required to
be maintained during such Interest Period (including supplemental, marginal, and
emergency reserves) under Regulation D by Agent or Majority Lenders against
"eurocurrency liabilities" (as such term is defined in Regulation D), but
without benefit or credit of proration, exemptions, or offsets that might
otherwise be available to Agent or any Lender from time to time under Regulation
D. Without limiting the generality of the foregoing, "LIBOR Reserve Percentage"
shall include any other reserves required by law to be maintained by Agent or
Majority Lenders against (i) any category of liabilities that includes deposits
by reference to which the Eurodollar Rate for a Eurodollar Rate Loan is being
determined and (ii) any category of extension of credit or other assets that
includes Eurodollar Rate Loans.
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"Lien" means any mortgage, deed of trust, pledge, security interest,
assignment, deposit arrangement, charge or encumbrance, lien (statutory or
other), or other preferential arrangement (including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing or any agreement to give any
security interest).
"Loan" has the meaning set forth in Section 2.1(a).
"Loan Documents" means this Agreement, the Notes, the Collateral
Documents and all other certificates, documents, agreements and instruments
delivered to Agent and Lenders under or in connection with this Agreement.
"Loan Purchase Agreements" means the NCB Loan Purchase Agreement and
the Fleet Loan Purchase Agreement.
"Majority Lenders" means at any time Lenders holding at least 51% of
the then aggregate unpaid principal amount of the Loans, or, if no such
principal amount is then outstanding, Lenders having at least 51% of the
aggregate Commitments at such time.
"Material Adverse Effect" means any event, matter, condition or
circumstance which (i) has or would reasonably be expected to have a material
adverse effect on the business, properties, results of operations or condition
(financial or otherwise) of Borrower or any of its Subsidiaries, or Unified and
its Subsidiaries taken as a whole; (ii) would materially impair the ability of
Borrower or any other Person to perform or observe its obligations under or in
respect of the Loan Documents; or (iii) affects the legality, validity or
enforceability of any of the Loan Documents or the perfection or priority of any
Lien granted to Lenders or Agent for the benefit of Lenders under any of the
Collateral Documents.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which Unified or any ERISA Affiliate of
Unified is making, or is obligated to make, contributions, or has made, or been
obligated to make, contributions within the preceding 5 years.
"NCB" means National Consumer Cooperative Bank, dba National
Cooperative Bank, a federally chartered banking corporation with principal
offices located in Washington, D.C.
"NCB Loan Purchase Agreement" means that certain Amended and Restated
Loan Purchase and Servicing Agreement, dated as of the date hereof, between
Borrower, as seller and servicer, and NCB, as buyer, as amended or restated from
time to time.
"NCB Stock" shall have the meaning given to such term in Section
6.3(k).
"New Lease/Loan Products" means new lease and loan products entered
into or made to Unified Patrons under new lease or loan programs in accordance
with the GCC Loan Guidelines.
"Note" means a promissory note of Borrower payable to the order of a
Lender with respect to such Lender's Commitment, in substantially the form of
Exhibit 1.1 N-1.
"Notice of Borrowing" means an irrevocable notice from Borrower to
Agent of Borrower's intention to borrow, substantially in the form of Exhibit
1.1 N-2.
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"Notice of Conversion or Continuation" means a written notice given
pursuant to the terms of Section 2.3, substantially in the form of Exhibit 1.1
N-3.
"Obligations" means the indebtedness, liabilities and other obligations of
Borrower to Agent or any Lender under or in connection with this Agreement, the
Notes or any other Loan Documents, including all Loans, all interest accrued
thereon, all fees due under this Agreement and all other amounts payable by
Borrower to Agent or any Lender thereunder or in connection therewith, whether
now or hereafter existing or arising, and whether due or to become due, absolute
or contingent, liquidated or unliquidated, determined or undetermined.
"Operating Agreement" means that certain Third Amended and Restated
Operating Agreement dated as of October 2, 2000, between Borrower and Unified,
as may be from time to time amended, supplemented or restated.
"Operating Lease" means, for any Person, any lease of any property of any
kind by that Person as lessee which is not a Capital Lease.
"Original Credit Agreement" has the meaning set forth in the first WHEREAS
clause of this Agreement.
"Original Credit Agreement Loans" has the meaning set forth in the third
WHEREAS clause of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" means any employee pension benefit plan, as defined in
Section 3(2) of ERISA, that is maintained for the employees of Unified or any
ERISA Affiliate of Unified, other than a Multiemployer Plan.
"Permitted Investments" means any of the following investments denominated
and payable in Dollars, maturing within one year from the date of acquisition,
selected by Borrower: (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States;
(ii) marketable direct obligations issued by any state of the United States or
any political subdivision of any such state or any public instrumentality
thereof and, at the time of acquisition, having the highest credit rating
obtainable from either Standard & Poor's Corporation ("S&P") or ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's"); (iii) commercial paper or corporate
promissory notes bearing at the time of acquisition the highest credit rating
either of S&P or Moody's issued by United States, Australian, Canadian, European
or Japanese bank holding companies or industrial or financial companies; (iv)
certificates of deposit issued by and bankers acceptances of and interest
bearing deposits with any Lender, or with any United States, Australian,
Canadian, European or Japanese commercial banks having combined capital and
surplus of at least $1,000,000,000 or the equivalent and which has (or the
parent of which has) long-term debt term securities bearing a credit rating from
S&P of "AA" or better or from Moody's of "Aa2 " or better; and (v) money market
funds organized under the laws of the United States or any state thereof that
invest predominantly in any of the foregoing investments permitted under clauses
(i), (ii), (iii) and (iv).
"Permitted Liens" means:
(i) Liens in favor of Lenders or Agent for the benefit of Lenders to
secure the Obligations;
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(ii) the existing Liens listed in Schedule 1.1 P-1 or incurred in
connection with the extension, renewal or refinancing of the Indebtedness
secured by such existing Liens, provided that any extension, renewal or
replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the Indebtedness being extended, renewed or
refinanced does not increase;
(iii) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings and which are adequately reserved for in accordance with
GAAP;
(iv) Liens of materialmen, mechanics, warehousemen, carriers or
employees or other like Liens arising in the ordinary course of business and
securing obligations either not delinquent or being contested in good faith by
appropriate proceedings and which are adequately reserved for in accordance with
GAAP and which do not in the aggregate materially impair the use or value of the
property subject thereto or risk the loss or forfeiture of title thereto;
(v) Liens consisting of deposits or pledges to secure the payment
of worker's compensation, unemployment insurance or other social security
benefits or obligations, or to secure the performance of bids, trade contracts,
leases, public or statutory obligations, surety or appeal bonds or other
obligations of a like nature incurred in the ordinary course of business (other
than for Indebtedness or any Liens arising under ERISA);
(vi) easements, rights of way, servitudes or zoning or building
restrictions and other minor encumbrances on real property and irregularities in
the title to such property which do not in the aggregate materially impair the
use or value of such property or risk the loss or forfeiture of title thereto;
(vii) statutory landlord's Liens under leases to which Borrower or
any of its Subsidiaries is a party;
(viii) any judgment, attachment or similar Lien, unless the judgment
it secures is not fully covered by insurance and has not been discharged or
execution thereof effectively stayed pending appeal within 20 days of the entry
thereof, or shall not have been discharged within 20 days of the expiration of
any such stay;
(ix) Liens in favor of NCB on the NCB Stock; and
(x) Liens granted under the Loan Purchase Agreements, so long as
such Liens attach only to the Released Collateral or to any Separate Account,
Security Account or Lockbox Account (each as defined in the NCB Loan Purchase
Agreement).
"Person" means an individual, corporation, partnership, joint venture,
trust, unincorporated organization or any other entity of whatever nature or any
Governmental Authority.
"Premises" means any and all real property, including all buildings and
improvements now or hereafter located thereon and all appurtenances thereto, now
or hereafter owned, leased, occupied or used by Borrower or any of its
Subsidiaries.
"Prime Rate" means the higher of: (i) the Federal Funds Rate plus
one-quarter of one (0.25) percentage points (25 basis points); and (ii) the
variable rate of interest, per annum, most recently announced by Agent at its
principal office in Washington, D.C., as its "prime rate," with the
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understanding that the Agent's "prime rate" is one of its base rates and serves
as a basis upon which effective rates of interest are calculated for loans
making reference thereto and may not be the lowest of the Agent's base rates.
"Prime Rate Loan" means any Loan bearing interest by reference to the Prime
Rate pursuant to the designation by Borrower under Sections 2.2 or 2.3.
"Program Leases" means leases entered into by Borrower with Unified Patrons
under Borrower's "Lease Financing Program" in accordance with the GCC Loan
Guidelines.
"Purchase Notice" has the meaning set forth in the Security Agreement.
"Receivable Debtor" means any Person obligated on a Receivable.
"Receivables" means all present and future rights, interests and claims of
Borrower under and in respect of Finance Receivables, Additional Loan/Lease
Receivables, Expansion Loans and Alternative Use Receivables, including all
rights of Borrower to receive moneys due or to become due with respect thereto,
other than such rights, interest and claims in any Released Collateral or
proceeds thereof.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System.
"Release" has the meaning set forth in the Security Agreement.
"Released Collateral" means (i) such of the Finance Receivables, Additional
Loan/Lease Receivables, Alternative Use Receivables, Expansion Loans and any
related assets of Borrower constituting Property (as defined in the NCB Loan
Purchase Agreement or the Fleet Loan Purchase Agreement, as applicable), for
which Borrower has duly executed and delivered to Agent a Purchase Notice, and
Agent has duly executed and delivered a Release pursuant to Section 3(d)(ii) of
the Security Agreement, (ii) each of the "Existing Loans" and related "Property"
sold to NCB prior to the "Effectiveness Date" (as each such term is defined in
the NCB Loan Purchase Agreement) and (iii) each of the Fleet Loans.
"Security Agreement" means that certain Amended and Restated Security
Agreement between Borrower and Agent, of even date herewith, securing the
Obligations, and any amendments, supplements or restatements thereto or thereof.
"Senior Debt" means the obligations and any and all other Indebtedness (if
any) of the types referred to in clauses (i), (ii) and (iv) of the definition of
Indebtedness in this Section 1.1 other than Capital Debt and Subordinated Debt.
"Solvent" means, with respect to any Person on the date any determination
thereof is to be made, that on such date: (a) the present fair valuation of the
property and assets of such Person is greater than such Person's probable
liability in respect of existing Indebtedness; (b) such Person does not intend
to, and does not believe that it will, incur Indebtedness beyond such Person's
ability to pay as such Indebtedness matures; and (c) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, which would leave such Person with property and assets remaining
which would constitute unreasonably small capital after giving effect to the
nature of the particular business or transaction. For purposes of this
definition (i) the "fair valuation" of any property or assets means the amount
realizable within a reasonable time, either through collection or
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sale of such property or assets at their regular market value, which is the
amount obtainable by a capable and diligent Person from an interested buyer
willing to purchase such property or assets within a reasonable time under
ordinary circumstances; and (ii) the term "Indebtedness" includes any payment
obligation, whether or not reduced to judgment, equitable or legal, matured or
unmatured, liquidated or unliquidated, disputed or undisputed, secured or
unsecured, absolute, fixed or contingent.
"Store Development Loans" means "Store Development Loans" (also referred to
as "Buy/Sell Loans") made to Unified Patrons by Borrower in accordance with the
GCC Loan Guidelines or acquired by Borrower from URI or Unified on or before the
date of this Agreement.
"Subordinated Debt" means any Indebtedness of Borrower due more than one
year from the date of determination which is (A) owed to any Person other than
an Affiliate of Borrower, and (B) by its terms expressly subordinated to the
Senior Debt on terms satisfactory to the Majority Lenders.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership, joint venture or other business entity of which more
than 50% of the voting stock or other equity interest is owned directly or
indirectly by any Person or one or more of the other Subsidiaries of such Person
or a combination thereof.
"Taxes" has the meaning set forth in Section 3.7(a).
"Termination Event" means (a) a "reportable event" described in Section
4043 of ERISA and the regulations issued thereunder (other than a reportable
event not subject to the provision for 30-day notice to the PBGC under such
regulations), or (b) the withdrawal of Unified or any of its ERISA Affiliates
from a Pension Plan during a plan year in which it was a "substantial employer"
as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a notice of
intent to terminate a Pension Plan or the treatment of a Pension Plan amendment
as a termination under Section 4041 of ERISA, or (d) the institution of
proceedings to terminate a Pension Plan by the PBGC, or (e) any other event or
condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan.
"UCC" means the Uniform Commercial Code of the jurisdiction the law of
which governs the Loan Document in which such term is used or the attachment,
perfection or priority of the Lien on any Collateral.
"Unified" means Unified Western Grocers, Inc., a California corporation.
"Unified Loan Agreement" means the Secured Revolving Credit Agreement,
dated as of September 29, 1999, by and among Unified, the lenders named therein
and Cooperatieve Centrale Raiffeisen - Boerenleenbank B.A., "Rabobank
Nederland", New York Branch, as Agent, as the same may be amended, supplemented
or replaced from time to time.
"Unified Patron" means a member-patron or associate patron of Unified.
"United States" and "U.S." each means the United States of America.
"URI" means United Resources, Inc., an Oregon corporation.
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1.2 Accounting Terms; GAAP Changes
(a) Accounting Terms. Unless otherwise defined or the context
otherwise requires, all accounting terms used herein shall be construed in
accordance with GAAP, and, except where otherwise specified, all financial data
required to be delivered hereunder shall be prepared in accordance with GAAP.
(b) GAAP Changes. If any changes in GAAP from those used in the
preparation of the financial statements referred to in Section 6.1(a) ("GAAP
Changes") hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) result in a change in the method of
calculation of any of the financial covenants, standards or other terms or
conditions found in this Agreement, the parties hereto agree to enter into
negotiations to amend such provisions so as to reflect equitably such GAAP
Changes with the desired result that the criteria for evaluating the financial
condition and performance of Borrower and its Subsidiaries shall be the same
after such GAAP Changes as if such GAAP Changes had not been made.
1.3 Interpretation
In this Agreement and the other Loan Documents, except to the extent
the context otherwise requires:
(i) Any reference to an Article, a Section, a Schedule or an
Exhibit is a reference to an article or Section of the particular agreement in
which the reference appears, or a schedule or an exhibit to the particular
agreement in which the reference appears, respectively, and to a subsection or a
clause is, unless otherwise stated, a reference to a subsection or a clause of
the Section or subsection in which the reference appears.
(ii) The words "hereof," "herein," "hereto," "hereunder" and
the like mean and refer to this Agreement or any other Loan Document as a whole
and not merely to the specific Article, Section, subsection, paragraph or clause
in which the respective word appears.
(iii) The meaning of defined terms shall be equally applicable
to both the singular and plural forms of the terms defined.
(iv) The words "including," "includes" and "include" shall be
deemed to be followed by the words "without limitation."
(v) References to agreements and other contractual instruments
shall be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are not
prohibited by the terms of the Loan Documents.
(vi) References to statutes or regulations are to be construed
as including all statutory and regulatory provisions consolidating, amending or
replacing the statute or regulation referred to.
(vii) Any table of contents, captions and headings are for
convenience of reference only and shall not affect the construction of this
Agreement or any other Loan Document.
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ARTICLE II
THE LOANS
2.1 The Loans
(a) Borrowing Availability. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make revolving loans (each a
"Loan" and, collectively, the "Loans") to Borrower from time to time from the
Closing Date up to but not including the Commitment Termination Date, in an
aggregate principal amount up to but not exceeding at any time such Lender's
Commitment; provided, however, that immediately after giving effect to such
Loans the aggregate principal amount of Loans then outstanding shall not exceed
the Borrowing Base. Within the foregoing limits, during such period Borrower may
borrow, repay the Loans in whole or in part, and reborrow, all in accordance
with the terms and conditions hereof. Without limiting the generality of the
foregoing, for all purposes hereof, "Loan" shall include each Original Credit
Agreement Loan and "Loans" shall include all Original Credit Agreement Loans.
The Original Credit Agreement Loans consisting of Prime Rate Loans (if any)
shall no longer be characterized as Original Credit Agreement Loans on and after
the Closing Date. The Original Credit Agreement Loans consisting of Eurodollar
Rate Loans (if any) shall, upon the expiration of the Interest Period applicable
thereto on the Closing Date, no longer be characterized as Original Credit
Agreement Loans.
(b) Payment of Overadvance. All Loans shall be added to and be deemed
part of the Obligations when made or extended. If, at any time and for any
reason, the aggregate amount of the Loans exceeds the percentages or limitations
set forth in Section 2.l(a), Borrower shall immediately pay to Agent, on behalf
of Lenders, in immediately available Dollars, the amount of such excess.
2.2 Borrowing Procedure
(a) Date of Borrowing. Each Borrowing of a Prime Rate Loan shall be
made on a Business Day and each Borrowing of a Eurodollar Rate Loan shall be
made on a Eurodollar Business Day.
(b) Notice of Borrowing. Each Borrowing shall be made upon written
notice by way of a Notice of Borrowing, given by telex, telecopy, mail, or
personal service, delivered to Agent at Agent's office located at ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, setting forth the amount of the
requested Loan in accordance with Section 2.1(a), the date on which the
requested Loan is to be made, whether the Borrowing is of a Prime Rate Loan or a
Eurodollar Rate Loan, and, in the latter case, the requested Interest Period. If
for a Prime Rate Loan, Agent shall be given notice no later than 2:00 p.m.,
Washington, D.C. time, on the day on which such Prime Rate Loan is to be made,
and, if for a Eurodollar Rate Loan, Agent shall be given notice at least three
(3) Eurodollar Business Days prior to the day on which such Eurodollar Rate Loan
is to be made, and such notice shall state the amount thereof (subject to the
provisions of this Article II).
2.3 Conversion or Continuation Requirements
(a) Option to Convert or Continue. Borrower shall have the option to:
(i) convert, at any time, all or any part of the outstanding Loans equal to One
Million Dollars ($1,000,000), and integral multiples of One Hundred Thousand
Dollars ($100,000) in excess of such amount, from a Prime Rate Loan to a
Eurodollar Rate Loan and vice-versa; or (ii) upon the expiration of any Interest
Period applicable to a Eurodollar Rate Loan, to continue all or any portion of
the Eurodollar Rate Loan as a Eurodollar Rate Loan, with the succeeding Interest
Period(s) of such continued Eurodollar Rate
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Loan commencing on the expiration date of the Interest Period previously
applicable thereto; provided, however, that a Eurodollar Rate Loan may only be
converted into a Prime Rate Loan or continued as a Eurodollar Rate Loan on the
expiration date of the Interest Period applicable thereto; provided further,
however, that no outstanding Loan may be continued as, or be converted into, a
Eurodollar Rate Loan in the event that, on the earlier of the date of the
delivery of the Notice of Conversion or Continuation or the telephonic notice in
respect thereof, any Default has occurred and is continuing; provided further,
however, that if Borrower fails to deliver the appropriate Notice of Conversion
or Continuation or the telephonic notice in respect thereof, pursuant to the
required notice period, before the expiration of the Interest Period of a
Eurodollar Rate Loan, such Eurodollar Rate Loan shall automatically be converted
to a Prime Rate Loan.
(b) Notice of Conversion or Continuation. Borrower shall deliver a
Notice of Conversion or Continuation, given by telex, telecopy, mail, or
personal service, delivered to Agent at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, no later than 2:00 p.m., Washington, D.C. time, on the
proposed conversion date (in the case of a conversion to a Prime Rate Loan), and
at least three (3) Eurodollar Business Days in advance of the proposed
conversion or continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). If such Notice of Conversion or
Continuation is received by Agent not later than 2:00 p.m., Washington, D.C.
time, on a Eurodollar Business Day such day shall be treated as the first
Eurodollar Business Day of the required notice period. In any other event, such
notice will be treated as having been received at the opening of business of the
next Eurodollar Business Day. A Notice of Conversion or Continuation shall
specify: (1) the proposed conversion or continuation date (which shall be a
Business Day or a Eurodollar Business Day, as applicable); (2) the amount of the
Loan to be converted or continued; (3) the nature of the proposed conversion or
continuation; and (4) in the case of a conversion to, or continuation of, a
Eurodollar Rate Loan, the requested Interest Period.
(c) [Intentionally Omitted]
(d) Irrevocable Notice. Any Notice of Continuation or Conversion (or
telephonic notice in respect thereof) shall be irrevocable and Borrower shall be
bound to convert or continue in accordance therewith.
(e) Notice to Lenders. Upon receipt of a Notice of Continuation or
Conversion (or telephonic notice in respect thereof), the Agent shall promptly
notify each Lender of the contents thereof.
(f) Original Credit Agreement Loans. (i) That portion, if any, of the
Original Credit Agreement Loans consisting of Prime Rate Loans (as defined in
the Original Credit Agreement) shall, on the Closing Date, be maintained
hereunder as Prime Rate Loans. Thereafter, the Borrower may, subject to the
terms and conditions of this Agreement, maintain such Loans as Prime Rate Loans
or convert all or a portion of such Loans to Eurodollar Rate Loans. (ii) That
portion, if any, of the Original Credit Agreement Loans consisting of Eurodollar
Rate Loans shall, on and after the Closing Date, be maintained hereunder as
Eurodollar Rate Loans until the expiration of the Interest Period(s) applicable
thereto. Thereafter, the Borrower may, subject to the terms and conditions of
this Agreement, continue such Loans as Eurodollar Rate Loans or convert such
Loans to Prime Rate Loans.
2.4 Eurodollar Costs.
(a) Borrower shall reimburse Agent or Lenders for any increase in
their costs (which shall include, but not be limited to, taxes, other than taxes
imposed on the overall net income
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of Agent or Lenders, fees or charges), or any loss or expense (including,
without limitation, any loss or expense incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by Agent or Lenders to fund or
maintain outstanding the principal amount of the Loans) incurred by them
directly or indirectly resulting from the making of any Eurodollar Rate Loan due
to: (i) the modification, adoption, new application or enactment of any law,
regulation or treaty or the interpretation thereof by any governmental or other
authority (whether or not having the force of law); (ii) compliance by Agent or
Lenders with any request or directive (whether or not having the force of law)
of any monetary or fiscal agency or authority; (iii) violations by Borrower of
the terms of this Agreement; or (iv) any prepayment of a Eurodollar Rate Loan at
any time prior to the end of the applicable Interest Period.
(b) The amount of such costs, losses, or expenses shall be determined
solely by Agent or any Lender asserting such claim for reimbursement based upon
the assumption that Agent or any such Lender funded one hundred percent (100%)
of each Eurodollar Rate Loan in the Eurodollar market. In attributing Agent's or
any such Lender's general costs relating to its eurocurrency operations to any
transaction under this Agreement, or averaging any costs over a period of time,
Agent or such Lender may use any reasonable attribution or averaging methods
which it deems appropriate and practical. Agent or such Lender shall notify
Borrower of the amount due Agent or such Lender pursuant to this Section 2.4 in
respect of any Eurodollar Rate Loan as soon as practicable but in any event
within forty-five (45) days after the last day of the Interest Period of such
Loan and Borrower shall pay to Agent or such Lender the amount due within
fifteen (15) days of its receipt of such notice. A certificate as to the amounts
payable pursuant to the foregoing sentence, together with whatever detail is
reasonably available to Agent or such Lender, shall be submitted by Agent or
such Lender to Borrower. Such determination shall, if not objected to within ten
(10) days, be conclusive and binding upon Borrower in the absence of manifest
error. If Agent or any Lender claim increased costs, losses or expenses pursuant
to this Section 2.4, then Agent or such Lender, if requested by Borrower, will
use reasonable efforts to take such steps, that Borrower reasonably requests,
including designating different lending offices, as would eliminate or reduce
the amount of such increased costs, losses or expenses, so long as taking such
steps would not, in the judgment of Agent or such Lender, otherwise be
disadvantageous to Agent or such Lender. Any recovery by Agent or any Lender or
their Lending Offices of amounts previously borne by Borrower pursuant to this
Section 2.4 shall be promptly remitted, without interest (unless the affected
Lender received interest on such recovered amounts), to Borrower by Agent or any
such Lender.
2.5 Illegality; Impossibility
In the event that any change in circumstances or any law, regulation,
treaty or directive, or any change therein or in the interpretation or
application thereof, shall at any time in the reasonable opinion of Agent or
Majority Lenders make it unlawful or impractical for Agent or Majority Lenders
to fund or maintain a Eurodollar Rate Loan in the Eurodollar market or to
continue such funding or maintaining, or to determine or charge interest rates
based upon any appropriate Eurodollar Rate, Agent shall give notice of such
circumstances to Borrower and (i) in the case of any Eurodollar Rate Loan which
is outstanding, Borrower shall, if requested by Agent, prepay such Eurodollar
Rate Loan on or before the date specified in such request, together with
interest accrued thereon and any amounts due pursuant to Section 2.4, and
concurrently with any such prepayment, Lenders shall make a Prime Rate Loan to
Borrower in a principal amount equal to the principal amount of the Eurodollar
Rate Loan so prepaid, and (ii) Lenders shall not be obligated to make any
further Eurodollar Rate Loans to Borrower until Agent or Majority Lenders shall
determine that it would no longer be unlawful or impractical to do so. If Agent
or Majority Lenders shall give any notice pursuant to this Section 2.5, then
Agent or Majority Lenders, if requested by Borrower, will use reasonable efforts
to take such steps, that Borrower reasonably requests, including designating
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different Lending Offices, as would avoid the illegality or impracticality which
is the subject of such notice, so long as taking such steps would not, in the
judgment of Agent or Majority Lenders, otherwise be disadvantageous to Agent or
such Lenders.
2.6 Disaster
Notwithstanding anything herein to the contrary, if Agent reasonably
determines (which determination shall be conclusive) that (a) Agent is unable to
determine the Eurodollar Rate with respect to any Notice of Borrowing or Notice
of Conversion or Continuation selecting the Eurodollar Rate because quotations
of interest rates for the relevant deposits are not being provided in the
relevant amounts or for the relative maturities or (b) the Eurodollar Rate will
not adequately reflect the cost to Majority Lenders of making or funding
Eurodollar Rate Loans, then (i) the right of Borrower to select the Eurodollar
Rate shall be suspended until Agent notifies Borrower that the circumstances
causing such suspension no longer exist, and (ii) Borrower shall repay in full
the then outstanding principal balance of all Eurodollar Rate Loans, together
with interest accrued thereon, on the last day of the Interest Period applicable
to each such Eurodollar Rate Loan.
2.7 Lending Offices
The Loans made by each Lender may be made from and maintained at such
offices (each a "Lending Office") of such Lender or its Affiliates as such
Lender may from time to time designate (whether or not such office or Affiliate
is specified on the signature pages hereof). A Lender shall not elect a Lending
Office that, at the time of making such election, increases the amounts which
would have been payable by Borrower to such Lender under this Agreement in the
absence of such election. With respect to Eurodollar Rate Loans made from and
maintained at any Lender's foreign offices or Affiliates, the obligation of
Borrower to repay such Eurodollar Rate Loans shall nevertheless be to such
Lender and shall, for all purposes of this Agreement (including for purposes of
the definition of the term "Majority Lenders") be deemed made or maintained by
it, for the account of any such office or Affiliate.
2.8 Notes; Recordkeeping; Statements of Obligations
(a) Notes. As additional evidence of the Indebtedness of Borrower to
each Lender resulting from the Loans made by such Lender, Borrower shall execute
and deliver for the account of each Lender, a Note, dated the Closing Date,
setting forth such Lender's Commitment as the maximum principal amount thereof.
(b) Recordkeeping. Each Lender shall record in its internal records
the date and amount of each Loan made, each conversion to a different interest
rate, each relevant Interest Period, the amount of principal and interest due
and payable from time to time hereunder, each payment thereof and the resulting
unpaid principal balance of such Loan. Any such recordation shall be rebuttable
presumptive evidence of the accuracy of the information so recorded. Any failure
so to record or any error in doing so shall not, however, limit or otherwise
affect the obligations of Borrower hereunder and under any Note to pay the
principal of and interest on the Loans.
(c) Monthly Statements. Agent shall render monthly statements of the
Obligations, including statements of all principal, interest, and Agent's
Expenses owing, and such statements shall be presumed to be correct and accurate
and constitute an account stated between Borrower and Agent unless, within
thirty (30) days after receipt thereof by Borrower, Borrower shall deliver to
Agent, in accordance with Section 11.3, written objection thereof specifying the
error or errors, if any, contained in any such statement.
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2.9 Loans By Lenders
(a) Pro Rata Loans By Lenders. Agent shall promptly notify each
Lender of that Lender's pro rata portion of a Borrowing requested pursuant to
Section 2.2. Not later than 2:00 p.m., Washington, D.C. time, on the date
specified by Agent, which shall be at least weekly, each Lender, subject to the
terms and conditions hereof, shall make its pro rata portion (as advised by
Agent) of the Borrowing available, in immediately available Dollars, to Agent at
Agent's office located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇,
together with interest thereon accrued from the date of such Borrowing to the
date on which Lender initiates payment to Agent at the Prime Rate.
(b) Lender's Failure to Fund. Each Lender's obligation to make any
Loan pursuant hereto is several, and not joint or joint and several, and is not
conditioned upon the performance by each, any, or all of the other Lenders of
their obligations to make Loans. The failure by any Lender to perform its
obligation to make Loans will not affect or increase any other Lender's share of
the Commitment. Agent shall notify Lenders of the failure by any Lender to
perform its obligation to make a Loan required to be made by it hereunder and
any Lender (other than a Lender that has failed to perform its obligation to
make its Loan) may, if it desires, assume, in such proportion as Agent may
determine, the obligation to make Loans of the nonperforming Lender or Lenders,
but no Lender shall be obligated to do so.
2.10 Pro Rata Treatment
Except as otherwise provided in this Agreement, each Borrowing
hereunder, each payment (including each prepayment) by Borrower on account of
the principal of and interest on the Loans and on account of any upfront fee or
commitment fee, and each conversion or continuation of Loans, shall be made
ratably in accordance with the Commitments.
2.11 Payments; Application
(a) Payments by Borrower. Borrower shall make each payment hereunder
or under the Notes by making, or causing to be made, the amount thereof
available to Agent, for the account of each Lender, in immediately available
Dollars, by deposit to Agent's Account (or at such other location as Agent may
designate, in writing, from time to time), not later than 2:00 p.m., Washington,
D.C. time, on the date when due.
(b) Payments From Account Debtors. Unless and until Agent gives
Borrower other written instructions, Borrower shall instruct all Receivable
Debtors and other account debtors of Borrower to remit all payments as
contemplated under the Operating Agreement. Upon the occurrence of an Event of
Default, Agent may instruct Receivable Debtors and other account debtors, in
each case with respect to Receivables generated by Borrower, to remit all
payments to post office boxes which have been established as lock boxes by Agent
and Borrower, and, in such event, all checks and other payments received by
Agent shall be applied by Agent, in accordance with the provisions of Section
2.11(c), in reduction of the Obligations. The receipt of any check or other
payment by Agent shall not be considered a payment on account until such check
or other payment is honored when presented for payment by Agent and has been
paid to Agent.
(c) Application of Payments. In the event of receipt of direct
collections by Agent, all checks and other instruments received by Agent in
payment of or on account of the Obligations constitute only conditional payment
until such items are actually paid to Agent. Agent will credit Borrower with any
such payments made by check or other instruments on the same day that such items
are credited to Agent by their depositary bank. All such payments shall be
deemed made to
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each Lender and shall constitute satisfaction of Borrower's obligations to each
Lender with respect to the Loans so repaid on the same day that such items are
credited to Agent by their depositary bank in compliance with the terms of this
Section 2.11(c). Borrower waives the right to direct the application of, any and
all payments at any time or times hereafter received by Agent on account of the
Obligations and Borrower agrees that Agent shall have the continuing exclusive
right to apply and reapply such payments in any manner as Agent may deem
advisable, notwithstanding any entry by Agent upon its books.
(d) Payments to Lenders. Agent will promptly distribute to each
Lender its ratable share of each payment received by Agent for the account of
Lenders.
2.12 Non-Receipt of Funds
Unless Agent shall have received notice from Borrower prior to the
date on which any payment is due to any of Lenders hereunder that Borrower
shall not make such payment in full, Agent may assume that Borrower has made
such payment in full to Agent on such date and Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent Borrower shall
not have so made such payment in full to Agent, each Lender shall repay to Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to Agent, at the Federal
Funds Rate.
2.13 Termination of the Commitments; Repayment of the Loans
The Commitments shall terminate on the Commitment Termination Date.
Borrower shall repay to Lenders in full on the Commitment Termination Date the
aggregate principal amount of the Loans outstanding on such date plus all
accrued but unpaid interest thereon.
2.14 Voluntary Commitment Reductions
Prior to the Commitment Termination Date, Borrower shall have the
right, at any time and from time to time, subject to Section 2.4, to voluntarily
reduce permanently the unfunded and unused portion of the Commitments. Borrower
shall give Agent not less than ten (10) Business Days' prior written notice
designating the date (which shall be a Business Day) of such reduction and the
amount of such reduction. Such reduction shall be effective on the date
specified in Borrower's notice given in compliance herewith. Any reduction shall
be in a minimum amount of Five Million Dollars ($5,000,000) and, thereafter, in
any integral multiple of One Million Dollars ($1,000,000), divided among the
Lenders on a pro -rata basis.
ARTICLE III
INTEREST, PAYMENTS, FEES AND TAXES
3.1 Interest
(a) Rates. Borrower shall pay interest on the unpaid principal amount
of each Loan at the following rates:
(i) in respect of each Prime Rate Loan, at a per annum rate
equal at all times to the Prime Rate; and
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(ii) in respect of each Eurodollar Rate Loan, at a per annum rate
equal at all times during each Interest Period for such Eurodollar Rate Loan to
the Eurodollar Rate for such Interest Period plus two and one-half percent
(2.5%).
Unless otherwise requested by Borrower, all Loans shall bear interest at the
rate specified in Section 3.1(a)(i).
(b) Overdue Payment Rate. In the event that any amount of principal
of or interest on any Loan, or any other amount payable hereunder or under the
Notes, is not paid in full when due (whether at stated maturity, by acceleration
or otherwise), Borrower agrees to pay interest on such unpaid principal,
interest or other amount, from the date such amount becomes due until the date
such amount is paid in full, payable on demand, at a per annum rate equal at all
times to two percent (2%) in excess of the rates otherwise applicable thereto.
3.2 Interest Payment Dates
Except as otherwise provided in Section 3.1(b), and, unless sooner
accelerated pursuant to Section 7.2, interest on the Loans shall be payable in
arrears on the following dates:
(a) Prime Rate Loans. Interest on each Prime Rate Loan (including any
Original Credit Agreement Loans consisting of Prime Rate Loans (as defined in
the Original Credit Agreement)) shall be payable (i) monthly on the first
Business Day of each month commencing on January 2, 2002, (ii) on the date of
any prepayment or conversion of any such Prime Rate Loan, and (iii) on the
Commitment Termination Date;
(b) Eurodollar Rate Loans. Interest on each Eurodollar Rate Loan
(including any Original Credit Agreement Loans consisting of Eurodollar Rate
Loans) shall be payable (i) on the last day of each Interest Period for such
Eurodollar Rate Loan, and (ii) on the Commitment Termination Date; provided that
if any prepayment, conversion or continuation is effected other than on the last
day of such Interest Period, accrued interest on such Eurodollar Rate Loan shall
be due on such prepayment, conversion or continuation date as to the principal
amount of such Eurodollar Rate Loan prepaid, converted or continued.
(c) Holidays. Any payment (other than in respect of a Eurodollar Rate
Loan) which would otherwise become due on a day other than a Business Day, shall
instead become due on the next succeeding Business Day and such extension shall
be reflected in the computation of any payments hereunder on such adjusted date.
3.3 Fees
(a) Unused Line Fee. Borrower agrees to pay to Agent for the account
of each Lender an unused line fee on the average daily unused portion of such
Lender's Commitment as in effect from time to time from the Closing Date until
the Commitment Termination Date at the rate of one-eighth of one percent
(0.125%) per annum, payable (i) quarterly in arrears on the first Business Day
of each April, July, October and January, commencing on the first such date
after the Closing Date, and (ii) on the Commitment Termination Date.
(b) Agent's Fee. Borrower agrees to pay to Agent an annual fee in the
amount of Twenty-five Thousand Dollars ($25,000), payable (i) in arrears, in
quarterly installments of Six Thousand, Two Hundred and Fifty Dollars ($6,250)
each on the first Business Day of each of April, July, October and January,
commencing on the first such date after the Closing Date and (ii) on the
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Commitment Termination Date, at which time a final installment of Six Thousand,
Two Hundred and Fifty Dollars ($6,250) shall be due and payable. It is
understood and agreed that the $6,500 installment payable on the Commitment
Termination Date under the Original Credit Agreement shall be credited to the
first installment payable under this Agreement.
(c) Audit Expenses. Borrower agrees to pay to Agent and Lenders, upon
demand therefor, all out of pocket audit expenses actually incurred by Agent
and/or Lenders in connection with each audit conducted pursuant to Section
6.3(e), regardless of frequency of such audits.
3.4 Computation of Interest and Fees
All computations of interest and unused line fees for any period shall
be calculated on the basis of a year of three hundred sixty (360) days for the
actual days elapsed in such period. Interest shall accrue from the first day of
the making of a Loan to the date of repayment of such Loan in accordance with
the provisions of this Agreement; provided, however, that if a Loan is repaid on
the same day on which it is made, then one (1) day's interest shall be paid on
that Loan. Any and all interest not paid when due shall thereafter be deemed to
be a Prime Rate Loan made under Section 2.1 and shall bear interest thereafter
as provided for in Section 3.1(a)(i) to the greatest extent permitted by law.
3.5 Highest Lawful Rate
Anything herein to the contrary notwithstanding, if during any period
for which interest is computed hereunder, the applicable interest rate, together
with all fees, charges and other payments which are treated as interest under
applicable law, as provided for herein or in any other Loan Document, would
exceed the maximum rate of interest which may be charged, contracted for,
reserved, received or collected by any Lender in connection with this Agreement
under applicable law (the "Maximum Rate"), Borrower shall not be obligated to
pay, and such Lender shall not be entitled to charge, collect, receive, reserve
or take, interest in excess of the Maximum Rate, and during any such period the
interest payable hereunder shall be limited to the Maximum Rate.
3.6 Increased Risk-Based Capital Cost
If the amount of capital required or expected to be maintained by any
Lender or any Person directly or indirectly owning or controlling such Lender
(each a "Control Person"), shall be affected by:
(i) the introduction or phasing in of any law, rule or
regulation after the date hereof,
(ii) any change after the date hereof in the interpretation of
any existing law, rule or regulation by any central bank or United States or
foreign governmental authority charged with the administration thereof, or
(iii) compliance by such Lender or such Control Person with any
directive, guideline or request from any central bank or United States or
foreign governmental authority (whether or not having the force of law)
promulgated or made after the date hereof, and such Lender shall have reasonably
determined that such introduction, phasing in, change or compliance shall have
had or will thereafter have the effect of reducing (x) the rate of return on
such Lender's or such Control Person's capital, or (y) the asset value to such
Lender or such Control Person of the Loans made or maintained by such Lender, in
either case to a level below that which such Lender or
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such Control Person could have achieved or would thereafter be able to achieve
but for such introduction, phasing in, change or compliance (after taking into
account such Lender's or such Control Person's policies regarding capital), in
either case by an amount which such Lender in its reasonable judgment deems
material, then, promptly upon demand by such Lender given concurrently to Agent
and Borrower, Borrower shall pay to such Lender or such Control Person such
additional amount or amounts as shall be sufficient to compensate such Lender or
such Control Person, as the case may be, for such reduction. Each Lender shall
use its commercial best efforts to notify Agent and Borrower within 45 days of
such Lender obtaining notice that amounts will be due under this Section 3.6;
provided, however, any failure by any Lender to so notify Agent or Borrower,
shall not limit or otherwise affect the obligations of Borrower hereunder to pay
such amounts.
3.7 Taxes
(a) No Reduction of Payments. Borrower shall pay all amounts of
principal, interest, fees and other amounts due hereunder free and clear of, and
without reduction for or on account of, any present and future taxes, levies,
imposts, duties, fees, assessments, charges, deductions or withholdings and all
liabilities with respect thereto excluding in the case of each Lender and Agent,
income and franchise taxes imposed on it by the jurisdiction under the laws of
which such Lender or Agent is organized or in which its principal executive
offices may be located or any political subdivision or taxing authority thereof
or therein, and by the jurisdiction of such Lender's Lending Office and any
political subdivision or taxing authority thereof or therein (all such
nonexcluded taxes, levies, imposts, duties, fees, assessments, charges,
deductions, withholdings and liabilities being hereinafter referred to as
"Taxes"). If any Taxes shall be required by law to be deducted or withheld from
any payment, Borrower shall increase the amount paid so that the respective
Lender receives, or Agent receives, when due (and is entitled to retain), after
deduction or withholding for or on account of such Taxes (including deductions
or withholdings applicable to additional sums payable under this Section 3.7),
the full amount of the payment provided for in this Agreement.
(b) Deduction or Withholding; Tax Receipts. If Borrower makes any
payment hereunder in respect of which it is required by law to make any
deduction or withholding, it shall pay the full amount to be deducted or
withheld to the relevant taxation or other authority within the time allowed for
such payment under applicable law and promptly thereafter shall furnish to Agent
(for itself or for redelivery to the Lender to or for the account of which such
payment was made) an original or certified copy of a receipt evidencing payment
thereof, together with such other information and documents as Agent or any
Lender (through Agent) may reasonably request.
(c) Indemnity. If any Lender or Agent is required by law to make any
payment on account of Taxes, or any liability in respect of any Tax is imposed,
levied or assessed against any Lender or Agent, Borrower shall indemnify Agent
and Lenders for and against such payment or liability, together with any
incremental taxes, interest or penalties, and all costs and expenses, payable or
incurred in connection therewith, including Taxes imposed on amounts payable
under this Section 3.7, whether or not such payment or liability was correctly
or legally asserted. A certificate of Agent or any Lender as to the amount of
any such payment shall, in the absence of manifest error, be conclusive and
binding for all purposes.
(d) Forms 1001 and 4224. Each Lender that is incorporated under the
laws of any jurisdiction outside the United States agrees to deliver to Agent
and Borrower on or prior to the Closing Date, and in a timely fashion
thereafter, Form 1001, Form 4224 or such other documents and forms of the United
States Internal Revenue Service, duly executed and completed by such Lender, as
are required under United States law to establish such Lender's status for
United States withholding tax purposes.
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(e) Mitigation. Each Lender agrees that as promptly as practicable
after it becomes aware of the occurrence of an event that would cause Borrower
to make any payment in respect of Taxes to such Lender or a payment in
indemnification with respect to any Taxes, and in any event if so requested by
Borrower following such occurrence, each Lender shall use reasonable efforts to
make, fund or maintain its affected Loan (or relevant part thereof) through
another Lending Office if as a result thereof the additional amounts so payable
by Borrower would be avoided or materially reduced and if, in the reasonable
opinion of such Lender, the making, funding or maintaining of such Loan (or
relevant part thereof) through such other Lending Office would not in any
material respect be disadvantageous to such Lender or contrary to such Lender's
normal banking practices.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions Precedent to the Initial Loans and Maintenance of Original
Credit Agreement Loans
The obligations hereunder of each Lender, including the obligation to
make its initial Loan(s) hereunder and to maintain any Original Credit Agreement
Loan hereunder, shall be subject to the satisfaction of each of the following
conditions precedent on or before the Closing Date:
(a) Fees. Borrower shall have paid all fees then due in accordance
with Section 3.3.
(b) Loan Documents. Agent shall have received (i) this Agreement and
the Notes, duly executed by Borrower; and (ii) the Collateral Documents duly
executed by each of the respective parties thereto.
(c) UCC Search. Agent shall have received the results, dated as of a
recent date prior to the Closing Date, of searches conducted in the UCC filing
records in each of the governmental offices in each jurisdiction in which
personal property and fixture Collateral is located, which shall have revealed
no Liens with respect to any of the Collateral except Permitted Liens.
(d) Additional Closing Documents. Agent shall have received the
following, in form and substance satisfactory to it:
(i) a certificate of the chief financial officer of Borrower,
dated the Closing Date, certifying copies of the Investment Agreement (setting
forth such terms and conditions as Agent shall require and otherwise in form and
substance satisfactory to Agent and its counsel), the Operating Agreement
(setting forth such terms and conditions as Agent shall require and otherwise in
form and substance satisfactory to Agent and its counsel), the GCC Loan
Guidelines (including therein descriptions of Program Leases) and all agreements
and documents relating to outstanding Subordinated Debt and Capital Debt;
(ii) certificates of one or more nationally recognized insurance
brokers or other insurance specialists acceptable to Agent, dated as of a recent
date prior to the Closing Date, evidencing that all insurance with respect to
Borrower required under this Agreement and the Collateral Documents is in full
force and effect, naming Agent as loss payee with respect to casualty coverages
and as additional insured with respect to all general liability coverages;
(iii) evidence that all (A) authorizations or approvals, and all
material licenses, permits or authorizations, of any Governmental Authority and
(B) approvals or consents of
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any other Person, required in connection with the execution, delivery and
performance of the Loan Documents or the operation and conduct of Borrower's
business and ownership of its properties shall have been obtained and shall be
in full force and effect;
(iv) (in sufficient copies for Lenders) the unaudited
Consolidated financial statements of Borrower and its Subsidiaries as at June
30, 2001;
(v) a completed Borrowing Base Certificate as of November 30,
2001, together with the related collateral reports and information, also as of
such date, specified in Section 6.1(a)(vii);
(vi) a certificate of the chief financial officer of Borrower,
dated the Closing Date, stating that (A) the representations and warranties
contained in Article V and in the other Loan Documents are true and correct on
and as of the date of such certificate as though made on and as of such date,
(B) on and as of the Closing Date, no Default shall have occurred and be
continuing or shall result from the initial Borrowing or the maintenance of the
Original Credit Agreement Loans, (C) no Material Adverse Effect has occurred and
is continuing and (D) no "Event of Default" under (and as defined in) the
Unified Loan Agreement shall have occurred and be continuing or shall result
from the initial Borrowing or the maintenance of the Original Credit Agreement
Loans;
(vii) a certificate of the chief financial officer of Borrower,
attesting that both before and after giving effect to the transactions
contemplated by this Agreement, Borrower is and will be Solvent; and
(viii) a certificate of the chief financial officer of Borrower,
attesting that there is no pending or threatened litigation, proceeding, inquiry
or other action seeking an injunction, restraining order, damages or other
relief of any kind or nature whatsoever, legal or equitable, with respect to the
transactions contemplated by this Agreement, the Collateral Documents, or
Borrower's other business activities.
(e) Corporate Documents. Agent shall have received the following, in
form and substance satisfactory to it:
(i) certified copies of the articles of incorporation of
Borrower, together with certificates as to good standing and tax status, from
the Secretary of State or other Governmental Authority, as applicable, of
Borrower's state of incorporation and certificates from the Secretary of State
or other Governmental Authority, as applicable, of each other state where
Borrower is qualified to do business as a foreign corporation as to Borrower's
status as a foreign corporation and tax status, each dated as of a recent date
prior to the Closing Date; and
(ii) a certificate of the Secretary or Assistant Secretary of
Borrower, dated the Closing Date, certifying (A) copies of the bylaws of
Borrower and the resolutions of the Board of Directors of Borrower authorizing
the execution, delivery and performance of the Loan Documents and (B) the
incumbency, authority and signatures of each Authorized Officer who will act as
such in connection with the Loan Documents.
(f) Legal Opinion. Agent shall have received the opinion of Sheppard,
Mullin, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to Borrower, dated the Closing Date, in
substantially the form of the opinion rendered by such law firm in connection
with the Original Credit Agreement.
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(g) Due Diligence and Other Matters. Agent shall have completed its
due diligence investigation of Borrower, and shall be satisfied, in its sole
discretion, with the results thereof, including an investigation confirming that
there has not occurred a substantial impairment of the financial markets
generally.
4.2 Conditions Precedent to All Loans.
The obligation of each Lender to make a Loan on the occasion of each
Borrowing, including the initial Loan, shall be subject to the satisfaction of
each of the following conditions precedent:
(a) Notice. Borrower shall have given the Notice of Borrowing or
telephonic notice thereof as provided in Section 2.2.
(b) Borrowing Base Certificate and Collateral Reports. Borrower shall
have delivered to Agent a completed Borrowing Base Certificate dated as of a
date at least as recent as that required under Section 6.1(a)(vii), in form and
substance satisfactory to Agent, together with the related collateral reports
and information required under Section 6.1(a)(vii), and the statements contained
therein shall be true and correct on and as of the date thereof. The giving of
any Notice of Borrowing and the acceptance by Borrower of the proceeds of a
Borrowing shall each be deemed a certification to Agent and Lenders that on and
as of the date of such Borrowing such statements are true and correct as of the
date of such Borrowing Base Certificate and that any changes in the information
set forth therein have been only in the ordinary course of business.
(c) Collateral. Agent shall have received, in form and substance
satisfactory to it, evidence that all filings, registrations and recordings have
been made in the appropriate governmental offices, and all other action has been
taken, which shall be necessary to create, in favor of Agent on behalf of
Lenders, a perfected first priority Lien on the Collateral, including the filing
of completed UCC-1 financing statements in the appropriate governmental offices,
any necessary deliveries of Collateral (including all Collateral consisting of
instruments) to the extent and in the manner provided in Section 3 of the
Security Agreement, together with appropriate endorsements, and compliance with
all other Collateral Procedures.
(d) Material Adverse Effect. On and as of the date of such Borrowing,
there shall have occurred no Material Adverse Effect since the date of this
Agreement (in the case of the initial Borrowing) or the date of the most recent
Borrowing (in the case of any subsequent Borrowing), as the case may be.
(e) Representations and Warranties, No Default. On the date of such
Borrowing, both before and after giving effect thereto and to the application of
proceeds therefrom: (i) the representations and warranties contained in Article
V and in the other Loan Documents shall be true and correct on and as of the
date of such Borrowing as though made on and as of such date; and (ii) no
Default shall have occurred and be continuing or shall result from such
Borrowing. For purposes of this Section 4.2(e) in respect of the representation
and warranty contained in Section 5.1(q), clause (i) shall be deemed to refer to
the last day of the most recent fiscal quarter and fiscal year for which
financial statements have then been delivered and shall not be deemed to refer
to any other representations and clause (i) warranties which relate solely to a
specific date provided that such other representations and warranties shall be
true and correct as of such date. The giving of any Notice of Borrowing and the
acceptance by Borrower of the proceeds of each Borrowing following the Closing
Date shall each be deemed a certification to Agent and Lenders that on and as of
the date of such Borrowing such statements are true.
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(f) No Event of Default Under Unified Loan Agreement. No "Event of
Default" under (and as defined in) the Unified Loan Agreement shall have
occurred and be continuing.
(g) Additional Documents. Agent shall have received, in form and
substance satisfactory to it, such additional approvals, opinions, documents and
other information as Agent or any Lender (through Agent) may reasonably request
(including, without limitation, any of the foregoing as the same may relate to
Alternative Use Receivables or Expansion Loans).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties. Borrower represents and warrants to
each Lender and Agent that:
(a) Organization and Powers. Each of Borrower and its Subsidiaries is
a corporation duly organized, validly existing and in good standing under the
law of the jurisdiction of its incorporation, is qualified to do business and is
in good standing in each jurisdiction in which the failure so to qualify or be
in good standing would have a Material Adverse Effect and has all requisite
power and authority to own its assets and carry on its business and to execute,
deliver and perform its obligations under the Loan Documents.
(b) Authorization, No Conflict. The execution, delivery and
performance by Borrower of the Loan Documents have been duly authorized by all
necessary corporate action of Borrower and do not and will not (i) contravene
the terms of the certificate or articles, as the case may be, of incorporation
and the bylaws of Borrower or 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 is a party or by which it or its properties may be
bound or affected; (ii) violate any provision of any law, rule, regulation,,
order, writ, judgment, injunction, decree or the like binding on or affecting
Borrower; or (iii) except as contemplated by this Agreement, result in, or
require, the creation or imposition of any Lien upon or with respect to any of
the properties of Borrower.
(c) Binding Obligation. The Loan Documents to which Borrower is or
will become a party constitute, or when delivered under this Agreement will
constitute, legal, valid and binding obligations of Borrower, enforceable
against Borrower in accordance with their respective terms.
(d) Consents. No authorization, consent, approval, license, exemption
of, or filing or registration with, any Governmental Authority, or approval or
consent of any other Person, is required for the due execution, delivery or
performance by Borrower of any of the Loan Documents, except for recordings or
filings in connection with the perfection of the Liens on the Collateral in
favor of Agent on behalf of Lenders.
(e) No Defaults. Neither Borrower nor any of its Subsidiaries is in
default under any material contract, lease, agreement, judgment, decree or order
to which it is a party or by which it or its properties may be bound, which
default would have a Material Adverse Effect.
(f) Title to Properties, Liens. Borrower and its Subsidiaries have
good and marketable title to their properties and assets, including all property
forming a part of the Collateral, and there is no Lien upon or with respect to
any of such properties or assets, including any of the Collateral, except for
Permitted Liens.
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(g) Litigation. There are no actions, suits or proceedings
pending or, to the best of Borrower's knowledge, threatened against or
affecting Borrower or any of its Subsidiaries or the properties of Borrower
or any of its Subsidiaries before any Governmental Authority or arbitrator
which if determined adversely to Borrower or any such Subsidiary would have
a Material Adverse Effect.
(h) Compliance with Environmental Laws. Each of Borrower and
its Subsidiaries is in full compliance with all Environmental Laws, whether
in connection with the ownership, use, maintenance or operation of its
Premises or the conduct of any business thereon, or otherwise. Neither
Borrower, any of its Subsidiaries nor to the best of Borrower's knowledge,
after due and diligent inquiry and investigation, any previous owner,
tenant, occupant, user or operator of the Premises, or any present tenant
or other present occupant, user or operator of the Premises, has used,
generated, manufactured, installed, treated, released, stored or disposed
of any Hazardous Substances on, under, or at the Premises, except in
compliance with all applicable Environmental Laws. After due and diligent
inquiry and investigation, Borrower has determined that no Hazardous
Substances have at any time been spilled, leaked, dumped, deposited,
discharged, disposed of or released on, under, at or from the Premises, nor
have any of the Premises been used at any time by any Person as a landfill
or waste disposal site. There are no actions, suits, claims, notices of
violation, hearings, investigations or proceedings pending or, to the best
of Borrower's knowledge, threatened against or affecting Borrower or any of
its Subsidiaries or with respect to the ownership, use, maintenance and
operation of the Premises, relating to Environmental Laws or Hazardous
Substances.
(i) Governmental Regulation. Neither Borrower nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of
1940, the Interstate Commerce Act, any state public utilities code or any
other federal or state statute or regulation limiting its ability to incur
Indebtedness.
(j) ERISA. All Pension Plans of Unified, including terminated
Pension Plans, that are intended to be qualified under Section 401(a) of
the Internal Revenue Code have been determined by the IRS to be qualified.
All Pension Plans of the Borrower existing as of the date hereof continue
to be so qualified. No "reportable event" (as defined in Section 4043 of
ERISA) has occurred and is continuing with respect to any Pension Plan of
Unified for which the thirty-day notice requirement may not be waived other
than those of which the appropriate Governmental Authority has been
notified. All Employee Benefit Plans of Unified have been operated in all
material respects in accordance with their terms and applicable law,
including ERISA, and no "prohibited transaction" (as defined in ERISA and
the Code) that would result in any material liability to Unified, Borrower
or any of Borrower's Subsidiaries has occurred with respect to any such
Employee Benefit Plan.
(k) Subsidiaries: Ownership
(i) The name, capital structure and ownership of each Subsidiary
of Borrower on the date of this Agreement is as set forth in Schedule
5.1(k). All of the outstanding capital stock of, or other interest in, each
such Subsidiary has been validly issued, and is fully paid and
nonassessable. Except as set forth in such Schedule, on the date of this
Agreement Borrower has no material equity interest in any Person.
(ii) Unified is directly the record and beneficial owner of 100%
of the issued and outstanding shares of capital stock of Borrower.
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(l) Receivables
(i) At the time of the creation of a Receivable constituting
Eligible Collateral, such Receivable will be a bona fide existing
obligation in the ordinary and usual course of Borrower's (or URI's)
business; to the best of Borrower's knowledge at the time of the creation
of a Receivable, such Receivable will be owed without any defenses,
disputes, offsets, or counterclaims, or any rights of cancellation;
Borrower shall not have received notice of actual or imminent bankruptcy or
insolvency of any Receivable Debtor at the time the Receivable due from
such Receivable Debtor is created; in accordance with prudent credit
policies, to the best knowledge of Borrower at the time of the creation of
any Receivable, the Receivable Debtor will be able to timely discharge all
of its Indebtedness to Borrower; and, in the event Borrower becomes aware
or is notified that any of the warranties, representations or covenants
contained in this Section 5.1(l) is no longer completely accurate or true,
or becomes aware of any fact or event which would adversely affect any or
all of the Receivable Debtor's ability to timely discharge any or all of
its Indebtedness to Borrower, Borrower will immediately provide Agent with
written notification of such change in circumstances and any and all
information Borrower has regarding same.
(ii) At the time each Receivable constituting Eligible
Collateral is created, all performance by Borrower (or URI) giving rise to
such Receivable shall have been completed. Borrower shall deliver to Agent,
all originals of all Store Development Loans, Equipment Loans, Inventory
Loans, Deposit Fund Loans, Affiliate Loans, Program Leases, New Lease/Loan
Products, Alternative Use Receivables, and such other documentation as
Agent may from time to time reasonably require. All copies of all such
items, whether retained by Borrower, the Receivable Debtor thereunder, or
any other party, shall be conspicuously marked "Copy."
(iii) At the time each Receivable constituting Eligible
Collateral is created, all such Receivables will be due and payable on
terms based upon Borrower's historical ordinary course of business
practices or upon terms more favorable to Borrower (or on such other terms
approved in writing by Agent in advance of the creation of such Receivable
and which are expressly set forth on the face of all Finance Receivables,
Additional Loan/Lease Receivables, Expansion Loans and Alternative Use
Receivables, copies of which shall be held by Borrower as custodian for
Agent).
(iv) Agent shall retain its security interest in all
Receivables, eligible and ineligible, until all Obligations have been fully
repaid and the Commitments have been terminated. Borrower shall promptly
notify Agent of all recoveries and, on request, promptly notify Agent of
all disputes and claims. During the existence of an Event of Default, no
discount, credit or allowance shall be granted to any Receivable Debtor by
Borrower without Agent's consent. Agent may, during the existence of an
Event of Default, settle or adjust disputes and claims directly with
Receivable Debtors for amounts and upon terms which Agent considers
advisable, and in such cases Agent will credit Borrower's account with only
the net amounts received by Agent in payment of the Receivables, after
deducting all Agent's Expenses in connection therewith.
(m) Margin Regulations. Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying "margin stock"
(within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System of the United States). No part of the proceeds of
the Loans will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin
stock.
(n) Taxes. Each of Borrower and its Subsidiaries has duly filed all
tax and information returns required to be filed, and has paid all taxes,
fees, assessments and other
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governmental charges or levies that have become due and payable, except to
the extent such taxes or other charges are being contested in good faith
and are adequately reserved against in accordance with GAAP.
(o) Patents and Other Rights. Each of Borrower and its Subsidiaries
possesses all permits, franchises, licenses, patents, trademarks, trade
names, service marks, copyrights and all rights with respect thereto, free
from burdensome restrictions, that are necessary for the ownership,
maintenance and operation of its business and neither Borrower nor any such
Subsidiary is in violation of any rights of others with respect to the
foregoing.
(p) Insurance. The properties of Borrower and its Subsidiaries are
insured, with financially sound and reputable insurance companies, in such
amounts, with such deductibles and covering such risks as is customarily
carried by companies engaged in similar businesses and owning similar
properties in the localities where Borrower or such Subsidiary operates.
(q) Financial Statements. The audited Consolidated balance sheet of
Borrower and its Subsidiaries as at September 30, 2000, and the related
Consolidated statements of income, shareholders' equity and cash flows for
the fiscal year then ended, and the unaudited Consolidated balance sheet of
Borrower and its Subsidiaries as at June 30, 2001 and the related
Consolidated statement of income for the month then ended and the six month
period then ended, are complete and correct and fairly represent the
financial condition of Borrower and its Subsidiaries as at such dates and
the results of operations of Borrower and its Subsidiaries for the periods
covered by such statements, in each case in accordance with GAAP
consistently applied. Since September 30, 2000, there has been no Material
Adverse Effect.
(r) Liabilities. Neither Borrower nor any of its Subsidiaries has any
material liabilities, fixed or contingent, that are not reflected in the
financial statements referred to in subsection (q), in the notes thereto or
otherwise disclosed in writing to Lenders, other than liabilities arising
in the ordinary course of business since September 30, 2000, the NCB Loan
Purchase Agreement, the Fleet Loan Purchase Agreement and the Guaranty.
(s) Labor Disputes, Etc. There are no strikes, lockouts or other
labor disputes against Borrower or any of its Subsidiaries, or, to the
best of Borrower's knowledge, threatened against or affecting Borrower or
any of its Subsidiaries, which may have a Material Adverse Effect.
(t) Disclosure. None of the representations or warranties made by
Borrower or any of its Subsidiaries in the Loan Documents as of the date of
such representations and warranties, and none of the statements contained
in each exhibit or report furnished by or on behalf of Unified, Borrower or
any of its Subsidiaries to Agent and Lenders in connection with the Loan
Documents, contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they
are made, not misleading.
(u) Subordinated Debt, Other Agreements. Borrower is not in default
under or in breach of the terms of any Subordinated Debt or any other
indentures or agreements to which it is a party.
(v) Material Adverse Effect. No other Material Adverse Effect has
occurred and is continuing.
(w) Solvency. Borrower is and shall hereafter be at all times
Solvent.
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ARTICLE VI
COVENANTS
6.1 Reporting Covenants
So long as any of the Obligations shall remain unpaid or any
Lender shall have any Commitment, Borrower agrees that:
(a) Financial Statements and Other Reports. Borrower will
furnish to Agent in sufficient copies for distribution to Lenders:
(i) as soon as available and in any event within 120
days after the end of each fiscal year of Borrower, a Consolidated balance
sheet of Borrower and its Subsidiaries as of the end of such fiscal year,
and the related Consolidated statements of income, shareholders' equity and
cash flows of Borrower and its Subsidiaries for such fiscal year, prepared
in accordance with GAAP consistently applied, all in reasonable detail and
setting forth in comparative form the figures for the previous fiscal year,
and accompanied by a report thereon of independent certified public
accountants of recognized national standing acceptable to Agent, which
report shall be unqualified as to scope of audit or the status of Borrower
and its Subsidiaries as a going concern, and shall state that such
consolidated financial statements present fairly the financial condition of
Borrower as at the dates indicated and the results of operations and
changes in cash flows for the periods then ended in conformity with GAAP
applied on a basis consistent with the previous years (except as otherwise
stated therein) together with a certificate of such independent public
accountants stating that (1) their audit examination of Borrower and its
Subsidiaries has included a review of the terms of this Agreement as they
relate to accounting matters; (2) in the course of such audit examination,
which audit was conducted by such accountants in accordance with generally
accepted auditing standards, such accountants have obtained no knowledge
that any Default has occurred and is continuing, or, if such Default has
occurred and is continuing, indicating the nature thereof; provided that
such accountants shall not be liable by reason of any failure to obtain
knowledge of any Default that would not be disclosed in the course of their
audit examination; and (3) based on their audit examination nothing has
come to their attention which causes them to believe that the matters set
forth in the Compliance Certificate delivered pursuant to clause (iv) for
the applicable fiscal year with respect to compliance with the provisions
of Section 6.2 and subsections (a), (f), (g) and (h) of Section 6.4 are not
stated in accordance with the terms of this Agreement;
(ii) as soon as available and in any event within 45 days
after the end of each quarter, a Consolidated balance sheet of Borrower and
its Subsidiaries as of the end of such quarter, and the related
Consolidated and consolidating statement of income of Borrower and its
Subsidiaries for such quarter and the portion of the fiscal year through
such quarter, prepared in accordance with GAAP consistently applied, all in
reasonable detail and setting forth in comparative form (A) the figures for
the corresponding period in the preceding fiscal year and (B) the projected
figures for the corresponding period contained in the forecast for the
current fiscal year delivered to Lenders hereunder, together with a
certificate of the chief financial officer of Borrower stating that such
financial statements fairly present the financial position of Borrower and
its Subsidiaries as at such date and the results of operations of Borrower
and its Subsidiaries for the period ended on such date and have been
prepared in accordance with GAAP (except for the absence of footnote
disclosure) consistently applied, subject to changes for normal, year-end
adjustments;
(iii) concurrent with the financial statements delivered
pursuant to subsection (i) above, copies of the reports submitted to
Borrower by its independent certified public accountants in connection with
each annual audit examination of Borrower and its Subsidiaries made
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by such accountants, including any "management letter" submitted by such
accountants to Borrower in connection with their annual audit relating to
the results of operations of Borrower and any variance from Borrower's
projections;
(iv) as soon as available and in any event within 45 days
after the end of each of the first three fiscal quarters of each fiscal
year of Borrower and together with the annual financial statements required
pursuant to clause (i), a Compliance Certificate as of the end of such
fiscal quarter or fiscal year;
(v) as soon as available and in any event not more than 90
days after the start of each fiscal year of Borrower and its Subsidiaries,
a Consolidated financial forecast for Borrower and its Subsidiaries for the
following fiscal year, including forecasted Consolidated balance sheets and
statements of income and cash flows of Borrower and its Subsidiaries, which
forecast shall (A) state the assumptions used in the preparation thereof,
(B) contain such other information as requested by any Lender and (C) be in
form satisfactory to the Majority Lenders;
(vi) as soon as available, copies of all financial statements,
reports and other material delivered by Unified under Section 6.1 of the
Unified Loan Agreement, together with all certificates accompanying or
delivered in connection such financial statements, reports and other
material;
(vii) as soon as available and in any event not later than
fifteen Business Days after the end of each calendar month (or more
frequently if requested by the Majority Lenders), (A) a completed Borrowing
Base Certificate, (B) a report with respect to the Receivables containing
(1) detailed aging information, (2) summaries of the Receivables, including
a breakdown thereof by category, (3) descriptions of any amendments,
modifications and waivers entered into with or otherwise granted to any
Receivable Debtors, and (4) a listing of all charge-offs since the date of
the last such report, and (C) the "Watch Report" prepared by Borrower with
respect to the Receivable Debtors, each as of the end of such month (or
other reporting period so requested) and in form and substance satisfactory
to Agent;
(viii) such reports and notices as are required by the Security
Agreement;
(ix) prompt written notice of any proposed changes in the GCC
Loan Guidelines and material changes to the other documentation, credit
and collection policies and practices of Borrower, setting forth the
details thereof; and
(x) promptly after the giving, sending or filing thereof,
copies of all reports, if any, which Unified sends to the holders of its
capital stock or other securities and of all reports or filings, if any, by
Unified, Borrower or any of their Subsidiaries with the Securities and
Exchange Commission or any national securities exchange.
(b) Additional Information. Borrower will furnish to Agent:
(i) concurrent with the financial statements delivered
pursuant to Sections 6.1(a)(i) and (ii), a certificate of the chief
financial officer of Borrower certifying that as of the end of the fiscal
year or quarter, as applicable, no Default has occurred and is continuing,
or, if a Default has occurred and is continuing, setting forth details of
such Default and the action which Borrower proposes to take with respect
thereto;
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(ii) prompt written notice of (A) any proposed
acquisition of stock, assets or property by Borrower that could reasonably
be expected to result in environmental liability under Environmental Laws,
and (B)(1) any spillage, leakage, discharge, disposal, leaching, migration
or release of any Hazardous Substances required to be reported to any
Governmental Authority under applicable Environmental Laws, and (2) all
actions, suits, claims, notices of violation, hearings, investigations or
proceedings pending, or to the best of Borrower's knowledge, threatened
against or affecting Borrower with respect to the ownership, use,
maintenance and operation of the Premises, relating to Environmental Laws
or Hazardous Substances, in each case together with a statement of an
Authorized Officer setting forth the details thereof and the action which
Borrower proposes to take with respect thereto;
(iii) prompt written notice of all actions, suits and
proceedings before any Governmental Authority or arbitrator pending, or to
the best of Borrower's knowledge, threatened against or affecting Borrower
or any of its Subsidiaries which (A) if adversely determined would involve
an aggregate liability of $250,000 or more, or (B) otherwise may have a
Material Adverse Effect;
(iv) promptly upon becoming aware of the occurrence of
any (x) Termination Event in connection with any Pension Plan or (ii)
"prohibited transaction" (as such term is defined in ERISA and the Internal
Revenue Code) in connection with any Employee Benefit Plan or any trust
created thereunder, a written notice specifying the nature thereof, what
action has been taken, is being taken or is proposed to be taken with
respect thereto, and, when known, any action taken or threatened by the IRS
or the PBGC with respect thereto;
(v) with reasonable promptness, copies of (x) all
notices received by Unified or any of its ERISA Affiliates of the PBGC's
intent to terminate any Pension Plan or to have a trustee appointed to
administer any Pension Plan, (ii) each Schedule B (Actuarial Information)
to the annual report (Form 5500 Series) filed by Unified or any of its
ERISA Affiliates with the IRS with respect to each Pension Plan covering
employees of Unified or any of its Subsidiaries, and (iii) all notices
received by Unified or any of its ERISA Affiliates from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA;
(vi) promptly upon receipt, any challenge by the IRS to
the qualification under Section 401 or 501 of the Internal Revenue Code of
any Pension Plan;
(vii) the information regarding insurance maintained by
Borrower as required under Section 6.3(c);
(viii) prompt written notice of any Event of Default or
any other condition or event which has resulted, or that could reasonably
be expected to result, in a Material Adverse Effect; and
(ix) such other information respecting the operations,
properties, business or condition (financial or otherwise) of Unified,
Borrower or their respective Subsidiaries (including with respect to the
Collateral) as any Lender (through Agent) may from time to time reasonably
request.
6.2 Financial Covenants.
So long as any of the Obligations shall remain unpaid or any
Lender shall have any Commitment, Borrower agrees that:
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(a) Debt Ratio. Borrower will maintain a ratio of its Indebtedness
(excluding any Capital Debt) to Consolidated Adjusted Tangible Net Worth as of
the end of each of Borrower's fiscal quarters of not more than 1.6 to 1.0.
(b) Minimum Consolidated Tangible Net Worth. Borrower will maintain
Consolidated Tangible Net Worth at all times of not less than $15,000,000.
(c) Interest Coverage Ratio. Borrower will maintain a ratio of
Consolidated EBIT to Consolidated Interest Expense, for the period of four
consecutive fiscal quarters of Borrower then ended (taken as one accounting
period), of not less than 2.0 to 1.0, as determined as of the end of each of
Borrower's fiscal quarters; provided, however, that such ratio shall be computed
excluding gains, losses, interest and other expenses and taxes relating to
Borrower's interest in Sav Max Foods, Inc.
6.3 Additional Affirmative Covenants.
So long as any of the Obligations shall remain unpaid or any Lender
shall have any Commitment, Borrower agrees that:
(a) Preservation of Existence, Etc. Borrower will, and will cause each
of its Subsidiaries to, maintain and preserve its corporate existence, its
rights to transact business and all other rights, franchises and privileges
necessary or desirable in the normal course of its business and operations and
the ownership of its properties.
(b) Payment of Taxes, Etc. Borrower will, and will cause each of its
Subsidiaries to, pay and discharge all taxes, fees, assessments and governmental
charges or levies imposed upon it or upon its properties or assets prior to the
date on which penalties attach thereto, and all lawful claims for labor,
materials and supplies which, if unpaid, might become a Lien upon any properties
or assets of Borrower or any Subsidiary, except to the extent such taxes, fees,
assessments or governmental charges or levies, or such claims, are being
contested in good faith by appropriate proceedings and are adequately reserved
against in accordance with GAAP.
(c) Maintenance of Insurance. Borrower, at its expense, shall keep and
maintain the Collateral insured against loss or damage by fire, theft,
explosion, sprinklers, and all other hazards and risks ordinarily insured
against by other owners who use such properties in businesses for the full
insurable replacement value thereof. Borrower shall also keep and maintain
business interruption insurance and public liability and property damage
insurance relating to Borrower's ownership and use of the Collateral and its
other assets. All such policies of insurance shall be in such form, with such
companies and in such amounts as may be satisfactory to Agent. Borrower shall
deliver to Agent certified copies of such policies of insurance and, upon
Agent's request, evidence of the payments of all premiums therefor. All such
policies of insurance except those of public liability and those relating to
property damage caused by Borrower or Borrower's agents and employees shall
contain an endorsement in a form satisfactory to Agent showing Agent, on behalf
of Lenders, as an additional insured thereunder, with a waiver of warranties
thereof, and all proceeds payable thereunder shall be payable to Agent, on
behalf of Lenders, and, upon receipt by Agent, shall be applied on the account
of the Obligations. To secure the payment of the Obligations, Borrower grants
Agent, on behalf of Lenders, a security interest in and to all such policies of
insurance relating to the Collateral and the proceeds thereof, and Borrower
shall direct all insurers under such policies of insurance relating to the
Collateral to pay all proceeds thereof directly to Agent, on behalf of Lenders.
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Borrower hereby irrevocably appoints Agent, on behalf of Lenders
(acting through any of Agent's officers, employees or agents designated by
Agent) to act during the existence of an Event of Default, as Borrower's
attorney in fact for the purpose of making, settling, and adjusting claims under
such policies of insurance relating to the Collateral, endorsing the name of
Borrower on any check, draft, instrument or other item of payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect to such policies of insurance. Absent the existence of an
Event of Default, Borrower shall have the right to make, settle and adjust any
and all claims under such policies of insurance; provided, however, that
Borrower shall not legally conclude the settlement or adjustment of any claim in
excess of Two Hundred Fifty Thousand Dollars ($250,000) without first obtaining
the written consent of Agent. Borrower will not cancel any of such policies
without Agent's prior written consent. Each such insurer shall agree by
endorsement upon the policy or policies of insurance issued by it to Borrower as
required above, or by independent instruments furnished to Agent, that it will
give Agent at least ten (10) days' written notice before any such policy or
policies of insurance shall be altered or cancelled, and that no act or default
of Borrower, or any other Person, shall affect the right of Agent to recover
under such policy or policies of insurance required above or to pay any premium
in whole or in part relating thereto. If Borrower fails to obtain such policy or
policies of insurance, Agent may, without waiving or releasing any Obligations
or Default, but shall have no obligation to do so, obtain and maintain such
policies of insurance and pay such premiums and take any other action with
respect to such policies which Agent deems advisable. All sums so disbursed by
Agent, as well as reasonable attorneys' fees, court costs, expenses, and other
charges relating thereto, shall be a part of the Obligations and payable on
demand.
(d) Keeping of Records and Books of Account. Borrower at all times
hereafter shall maintain, and shall cause each of its Subsidiaries to maintain,
a standard and modern system of accounting in accordance with GAAP, consistently
applied, with ledger and account cards or computer tapes and computer discs,
computer printouts and computer records pertaining to the Collateral which
contain information as may from time to time be requested by Agent. Borrower
shall not, and Borrower shall not permit any of its Subsidiaries to, modify or
change its method of accounting or enter into, modify or terminate any agreement
presently existing, or at any time hereafter entered into with any third party
accounting firm or service bureau for the preparation or storage of Borrower's
and its Subsidiaries' accounting records without written consent of Agent first
obtained and without said accounting firm or service bureau agreeing to provide
information regarding the Collateral and Borrower's financial condition to
Agent.
(e) Inspection Rights; Audits. Borrower will at any reasonable time
and from time to time (i) permit Agent and Lenders or any of their respective
agents or representatives to visit and inspect any of the properties of Borrower
and its Subsidiaries and to examine and make copies of and abstracts from the
records and books of account of Borrower and its Subsidiaries, and to discuss
the business affairs, finances and accounts of Borrower and any such Subsidiary
with any of the officers, employees or accountants of Borrower or such
Subsidiary, and (ii) permit Agent or any of its agents or representatives to
conduct one (1) periodic audit of the Collateral each twelve month period,
commencing the Closing Date (or more during the continuance of an Event of
Default and at such other frequencies as Agent or the Majority Lenders shall
reasonably request absent an Event of Default), provided that communications
between Agent or its agents or representatives and any Receivable Debtor in
connection with any such audit shall be subject to the prior consent of Borrower
at all times other than during the existence of an Event of Default, which
consent of Borrower shall not be unreasonably withheld or delayed.
(f) Compliance with Laws, Etc. Borrower will, and will cause each of
its Subsidiaries to, comply in all material respects with the requirements of
all applicable laws, rules, regulations and orders of any Governmental Authority
(including all Environmental Laws) and the
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terms of any indenture, contract or other instrument to which it may be a party
or under which it or its properties may be bound.
(g) Maintenance of Properties, Etc. Borrower will, and will cause each
of its Subsidiaries to, maintain and preserve all of its properties necessary or
useful in the proper conduct of its business in good working order and condition
in accordance with the general practice of other corporations of similar
character and size, ordinary wear and tear excepted.
(h) Licenses. Borrower will, and will cause each of its Subsidiaries
to, obtain and maintain all licenses, authorizations, consents, filings,
exemptions, registrations and other governmental approvals necessary in
connection with the execution, delivery and performance of the Loan Documents,
the consummation of the transactions therein contemplated or the operation and
conduct of its business and ownership of its properties.
(i) Action Under Environmental Laws. Borrower will, and win cause each
of its Subsidiaries to, upon becoming aware of the presence of any Hazardous
Substance or the existence of any environmental liability under applicable
Environmental Laws with respect to the Premises, take all actions, at their cost
and expense, as shall be necessary or advisable to investigate and clean up the
condition of the Premises, including all removal, containment and remedial
actions, and restore the Premises to a condition in compliance with applicable
Environmental Laws.
(j) Use of Proceeds. Borrower will use the proceeds of the Loans
solely for the purpose of providing financing to (x) Unified Patrons in
accordance with the GCC Loan Guidelines (or, in the case of Loan proceeds which
give rise to, or enable the Borrower to make or maintain, Alternative Use
Receivables, as otherwise approved by the Agent) and (y) to Affiliates of
Borrower pursuant to Affiliate Loans.
(k) NCB Stock. Borrower shall hold that number of shares of Class B
capital stock of NCB ("NCB Stock"), par value $100 per share, which is equal to
one percent (1.0%) of the maximum amount of NCB's Commitment, and Borrower shall
promptly execute and deliver such additional documents or instruments as NCB
shall deem necessary or appropriate for NCB to obtain a perfected first priority
Lien on such NCB Stock.
(l) Further Assurances and Additional Acts. Borrower will execute,
acknowledge, deliver, file, notarize and register at its own expense all such
further agreements, instruments, certificates, documents and assurances and
perform such acts as Agent or the Majority Lenders shall deem necessary or
appropriate to effectuate the purposes of the Loan Documents, and promptly
provide Agent with evidence of the foregoing satisfactory in form and substance
to Agent and the Majority Lenders, including, without limitation, any such
agreements, instruments and documents that Agent shall deem necessary or
desirable to reflect the release of any Collateral in connection with an
Incremental Purchase.
6.4 Negative Covenants
So long as any of the Obligations shall remain unpaid or any Lender
shall have any Commitment, Borrower agrees that:
(a) Indebtedness. Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or otherwise become liable for or suffer
to exist any Indebtedness, other than:
(i) Indebtedness of Borrower to Lenders hereunder;
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(ii) accounts payable to trade creditors for goods and services
and current operating liabilities (not the result of the borrowing of money)
incurred in the ordinary course of Borrower's or such Subsidiary's business in
accordance with customary terms and paid within the specified time, unless
contested in good faith by appropriate proceedings and reserved for in
accordance with GAAP;
(iii) Indebtedness consisting of guarantees resulting from
endorsement of negotiable instruments for collection by Borrower or any of its
Subsidiaries in the ordinary course of business;
(iv) existing Indebtedness of Borrower and its Subsidiaries set
forth in Schedule 6.4(a)(iv);
(v) Senior Debt and Subordinated Debt of Borrower and its
Subsidiaries in an aggregate principal amount not to exceed $30,000,000 at any
time outstanding;
(vi) Indebtedness consisting of Capital Debt;
(vii) Indebtedness of Borrower and its Subsidiaries under
Capital Leases in an aggregate principal amount not to exceed $1,000,000 at any
time outstanding;
(viii) Indebtedness of Borrower to any of its wholly-owned
Subsidiaries or of any of its wholly-owned Subsidiaries to another of its
wholly-owned Subsidiaries; and
(ix) Indebtedness of Borrower incurred pursuant to the Loan
Purchase Agreements in a maximum principal amount not to exceed $90,000,000 and
Indebtedness of Borrower under the Guaranty.
(b) Liens. Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any of its properties or assets, whether now owned or hereafter
acquired, other than Permitted Liens.
(c) Change in Nature of Business. Borrower will not, and will not
permit any of its Subsidiaries to, engage in any material line of business
substantially different from those lines of business carried on by it at the
date hereof.
(d) Restrictions on Fundamental Changes. Borrower will not, and will
not permit any of its Subsidiaries to, (i) liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or (ii) merge with or consolidate
into, or acquire all or substantially all of the assets of, any Person, or enter
into any partnership or joint venture with any Person, or sell, transfer, lease
or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets, except that (x) any of
Borrower's wholly-owned Subsidiaries may merge with, consolidate into or
transfer all or substantially all of its assets to another of Borrower's
wholly-owned Subsidiaries or to Borrower and (y) Borrower may merge with URI,
provided that Borrower is the surviving corporation in any such Merger.
(e) Sales and Leases of Assets. Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease, transfer or otherwise dispose
of, or part with control of (whether in one transaction or a series of
transactions) any assets (including any shares of stock in any Subsidiary or
other Person), except (i) sales or other dispositions of assets in the ordinary
course of business which have become worn out or obsolete or which are promptly
being replaced; (ii) sales or other
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dispositions of assets by any of its wholly-owned Subsidiaries to another of its
wholly-owned Subsidiaries or to Borrower; (iii) the sale of any Receivables to
Unified to facilitate the collection of such Receivables in accordance with the
provisions of the Operating Agreement; (iv) the sale or other disposition of
Receivables or other lease or loan assets if (A) such sale or other disposition
by Borrower is effected as part of and contemporaneously with the extension of
credit by Borrower to the Receivables Debtor which gives rise to the Receivable,
loan or lease asset subject of the sale or disposition, and (B) payments by the
Receivable Debtors thereon shall be made directly to the transferees of such
assets and such transferees shall have all other loan servicing obligations with
respect to such assets; (v) the sale or other disposition effected by Borrower
of assets acquired as an Investment permitted under Section 6.4(f)(iv) which
sale or other disposition is effected in compliance with obligations of Borrower
incurred when such Investment was made; and (vi) the sale of the Released
Collateral in accordance with the Loan Purchase Agreements.
(f) Loans and Investments. Borrower will not, and will not permit any
of its Subsidiaries to, purchase or otherwise acquire the capital stock, assets
(constituting a business unit), obligations or other securities of or any
interest in any Person, or otherwise extend any credit to or make any additional
investments in any Person, other than in connection with:
(i) Receivables under the GCC Loan Guidelines in the ordinary
course of Borrower's business, except as provided in clauses (iv) and (v);
(ii) Affiliate Loans;
(iii) Permitted Investments and the NCB Stock,
(iv) extensions of credit in the form of subordinated
Indebtedness from, and equity investments in, Unified Patrons, provided that,
except for the investments and subordinated Indebtedness set forth on Schedule
6.4(f)(iv), no such extension of credit shall be made or investment consummated
if, after and giving effect thereto, the aggregate amount of such subordinated
Indebtedness and equity investments shall exceed, at the time of the credit
extension or investment, as the case may be, the amount set forth below under
the heading "Maximum Amount" during a time that the amount of Consolidated
Adjusted Tangible Net Worth of Borrower shall be within the range set forth
opposite such Maximum Amount:
--------------------------------------------------------------------------------
Consolidated Adjusted Tangible Net Worth Maximum Amount
---------------------------------------- --------------
--------------------------------------------------------------------------------
Less than $15,000,000 $ 0
--------------------------------------------------------------------------------
$15,000,000 to $19,999,999 $22,000,000
--------------------------------------------------------------------------------
$20,000,000 to $22,499,999 $22,500,000
--------------------------------------------------------------------------------
$22,500,000 to $24,999,999 $23,000,000
--------------------------------------------------------------------------------
$25,000,000 and above $23,500,000
--------------------------------------------------------------------------------
provided that nothing in this clause (iv) shall require the liquidation or
redemption of any such subordinated Indebtedness or equity investment that was
permitted hereunder when made; provided, further, any increase in the book or
fair market value of any such equity investments in Unified Patrons shall be
disregarded for purpose of the computation of Maximum Amount; provided further,
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for the purpose of calculating Consolidated Adjusted Tangible Net Worth for this
Section 6.4(f)(iv), Capital Debt shall not include that portion, if any, thereof
that exceeds fifty percent (50%) of Consolidated Tangible Net Worth; or
(v) without duplication, Alternative Use Receivables and Expansion
Loans.
(g) Capital Expenditures. Borrower will not, and will not permit any of
its Subsidiaries to, make any expenditures for fixed or capital assets,
including obligations under Capital Leases, in excess of $250,000, on a
Consolidated basis, in any fiscal year of Borrower. For purposes of the
foregoing, the acquisition by Borrower, of (i) equipment for the purpose of
leasing such equipment to Unified Patrons in the ordinary course of business or
(ii) assets upon foreclosure of a security interest securing a Receivable, or in
settlement thereof, arising in the ordinary course of business shall not be
deemed an expenditure for fixed or capital assets.
(h) Operating Leasebacks. Borrower will not, and will not permit any of
its Subsidiaries to, make any expenditures in respect of Operating Leases,
except for: (i) Operating Leases between Borrower and any of its wholly-owned
Subsidiaries or between any Subsidiary and any of Borrower's wholly-owned
Subsidiaries; and (ii) Operating Leases which would not cause Borrower and its
Subsidiaries, on a Consolidated basis, to make payments exceeding $250,000 in
any fiscal year of Borrower.
(i) Sales and Leasebacks. Borrower will not, and will not permit any of
its Subsidiaries to, become liable, directly or indirectly, with respect to any
lease, whether an Operating Lease or a Capital Lease, of any property (whether
real, personal or mixed), whether now owned or hereafter acquired, (i) which
Borrower or such Subsidiary has sold or transferred or is to sell or transfer to
any other Person or (ii) which Borrower or such Subsidiary intends to use for
substantially the same purposes as any other property which has been or is to be
sold or transferred by Borrower or such Subsidiary to any other Person in
connection with such lease.
(j) Distributions. Borrower will not (i) declare or pay any dividends in
respect of Borrower's capital stock, or purchase, redeem, retire or otherwise
acquire for value any of its capital stock now or hereafter outstanding, return
any capital to its shareholders as such, or make any distribution of assets to
its shareholders as such, or permit any of its Subsidiaries to purchase, redeem,
retire, or otherwise acquire for value any stock of Borrower, except that
Borrower may declare and deliver dividends and distributions payable only in
common stock of Borrower, or (ii) permit any Subsidiary of Borrower to grant or
otherwise agree to or suffer to exist any consensual restrictions on the ability
of such Subsidiary to pay dividends and make other distributions to Borrower, or
to pay any Indebtedness owed to Borrower or transfer properties and assets to
Borrower.
(k) Amendments of Certain Documents. Borrower will not (i) agree to or
permit any amendment, modification or waiver of Section 8 of the Operating
Agreement, or agree to or permit any amendment, modification or waiver of any
other material provision of, or terminate, the Investment Agreement or the
Operating Agreement; or (ii) agree to or permit any amendment, modification or
waiver of any provision of any agreement related to any Capital Debt or
Subordinated Debt (including any amendment, modification or waiver pursuant to
an exchange of other securities or instruments for outstanding Capital Debt or
Subordinated Debt) if the effect of such amendment, modification or waiver is to
(A) increase the interest rate on such Capital Debt or Subordinated Debt or
change (to earlier dates) the dates upon which principal and interest are due
thereon; (B) alter the redemption, prepayment or subordination provisions
thereof; (C) alter the covenants and events of default in a manner which would
make such provisions more onerous or restrictive to Borrower or
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such Subsidiary; or (D) otherwise increase the obligations of Borrower in
respect of such Subordinated Debt or Capital Debt or confer additional rights
upon the holders thereof which individually or in the aggregate would be adverse
to Borrower, its Subsidiaries or Lenders.
(l) Amendments of GCC Loan Guidelines. Borrower will not agree to or
permit any amendment, modification or waiver of any provision of the GCC Loan
Guidelines or other documentation, credit and collection policies and practices
of Borrower that has the effect of diminishing the credit quality standards or
expanding the credit availability criteria set forth in the GCC Loan Guidelines,
making such policies and practices less rigorous, adding New Lease/Loan
Products, or that otherwise would have a Material Adverse Effect without the
prior written consent of Majority Lenders, which consent will not be
unreasonably delayed or withheld and which consent shall include, with respect
to New Lease/Loan Products, a designation as to whether each such New Lease/Loan
Product shall be considered a Finance Receivable, Additional Loan/Lease
Receivable or an Expansion Loan.
(m) Transactions with Related Parties. Borrower will not, and will not
permit any of its Subsidiaries to, enter into any transaction, including the
purchase, sale or exchange of property or the rendering of any services, with
any Affiliate, any officer or director thereof or any Person which beneficially
owns or holds five percent (5.0%) or more of the equity securities, or five
percent (5.0%) or more of the equity interest, thereof (a "Related Party"), or
enter into, assume or suffer to exist, or permit any Subsidiary to enter into,
assume or suffer to exist, any employment or consulting contract with any
Related Party, except a transaction or contract which is in the ordinary course
of Borrower's or such Subsidiary's business and which is upon fair and
reasonable terms not less favorable to Borrower or such Subsidiary than it would
obtain in a comparable arm's length transaction with a Person not a Related
Party; provided, however, that nothing in this subsection shall prohibit the
Operating Agreement or any Affiliate Loans made by Borrower in the ordinary
course of its business (subject to the limitations thereon set forth in
subsection (f)).
(n) Hazardous Substances. Borrower will not, and will not permit any
of its Subsidiaries to, use, generate, manufacture, install, treat, release,
store or dispose of any Hazardous Substances, except in compliance with all
applicable Environmental Laws.
(o) Subordinated Debt. Borrower will not, and will not permit any of
its Subsidiaries to, prepay, purchase, acquire, redeem or retire any
Subordinated Debt.
(p) Purchases Under Loan Purchase Agreements. Borrower will not make
Incremental Purchases, or sell, transfer or otherwise dispose of any Collateral
or rights or interests therein to NCB or Fleet, as the case may be, in
connection with any Incremental Purchase, unless Borrower shall,
contemporaneously with delivery under the applicable Loan Purchase Agreement to
the buyer (under the applicable Loan Purchase Agreement) of proper written
notice of a request to make an Incremental Purchase, deliver to Agent a duly
executed Purchase Notice and a completed, unsigned Release.
ARTICLE VII
EVENTS OF DEFAULT
7.1 Events of Default
Any of the following events which shall occur shall constitute an
"Event of Default":
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(a) Payments. Borrower shall fail to pay when due any amount of
principal of, or interest on, any Loan or Note, or any fee or other amount
payable hereunder or under any of the other Loan Documents, when due.
(b) Representations and Warranties. Any representation or warranty by
Borrower under or in connection with this Agreement or the other Loan Documents
shall prove to have been incorrect in any material respect when made or deemed
made.
(c) Failure by Borrower to Perform Certain Covenants. Borrower shall
fail in any material respect to perform or observe any term, covenant or
agreement contained in Section 6.2, subsections (a) or (j) of Section 6.3 or
Section 6.4.
(d) Failure by Borrower to Perform Other Covenants. Borrower shall
fail in any material respect to perform or observe any other term, covenant or
agreement contained in this Agreement or any other Loan Document on its part to
be performed or observed and any such failure shall remain unremedied for a
period of twenty (20) days from the occurrence thereof (unless the Majority
Lenders determine that such failure is not capable of remedy).
(e) Bankruptcy. Borrower or any of its Subsidiaries, or Unified shall
admit in writing its inability to, or shall fail generally or be generally
unable to, pay its debts (including its payrolls) as such debts become due, or
shall make a general assignment for the benefit of creditors; or Borrower,
Unified or any such Subsidiary of Borrower shall file a voluntary petition in
bankruptcy or a petition or answer seeking reorganization, to effect a plan or
other arrangement with creditors or any other relief under the Bankruptcy Code
or under any other state or federal law relating to bankruptcy or reorganization
granting relief to debtors, whether now or hereafter in effect, or shall file an
answer admitting the jurisdiction of the court and the material allegations of
any involuntary petition filed against Borrower, Unified or any such Subsidiary
of Borrower pursuant to the Bankruptcy Code or any such other state or federal
law; or Borrower, Unified or Subsidiary of Borrower shall be adjudicated a
bankrupt, or shall make an assignment for the benefit of creditors, or shall
apply for or consent to the appointment of any custodian, receiver or trustee
for all or any substantial part of Borrower's, Unified's or any such Subsidiary
of Borrower's property, or shall take any action to authorize any of the actions
set forth above in this subsection; or an involuntary petition seeking any of
the relief specified in this subsection shall be filed against Borrower, Unified
or any such Subsidiary of Borrower and shall not be dismissed within twenty (20)
days; or any order for relief shall be entered against Borrower, Unified or any
such Subsidiary of Borrower in any involuntary proceeding under the Bankruptcy
Code or any such other state or federal law referred to in this subsection (e).
(f) Default Under Other Indebtedness. (i) Borrower, Unified or any
Subsidiary of Borrower shall fail (A) to make any payment of any principal of,
or interest or premium on, any Indebtedness (other than in respect of the Loans)
in an aggregate principal amount outstanding of at least $150,000 ($5,000,000 in
the case of Unified) when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness, or (B) to perform or observe any term,
covenant or condition on its part to be performed or observed under any
agreement or instrument relating to any such Indebtedness, when required to be
performed or observed, and such failure shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such failure to perform or observe is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated maturity
thereof; (ii) any "Event of Default" shall occur and be
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continuing under the Unified Loan Agreement; or (iii) any "Termination Event" or
event of default shall occur and be continuing under any Loan Purchase
Agreement, the Guaranty or any other Guaranty Obligation related to any Loan
Purchase Agreement.
(g) Judgments. (i) A final judgment or order for the payment of money
in excess of $500,000 which is not fully covered by insurance shall be rendered
against Borrower or any of its Subsidiaries that remains unsatisfied for a
period in excess of thirty (30) consecutive days; or (ii) any non-monetary
judgment or order shall be rendered against Borrower or any of its Subsidiaries
which has or would reasonably be expected to have a Material Adverse Effect; and
in each case there shall be any period of thirty (30) consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
(h) Material Adverse Effect. A Material Adverse Effect not otherwise
expressly mentioned in this Section 7.1, shall have occurred which gives
reasonable grounds to conclude, in the reasonable judgment of the Majority
Lenders, that Borrower may not, or will be unable to, perform or observe its
obligations under the Loan Documents or Unified may not, or will be unable to,
perform or observe in the normal course its obligations under the Operating
Agreement.
(i) Change in Ownership or Control. Unified shall (A) cease to own and
control, directly or indirectly, one hundred percent (100%) of the issued and
outstanding shares of capital stock of Borrower or (B) fail to possess, directly
or indirectly, capital stock representing voting control of Borrower.
(j) Failure to Perform Under Operating Agreement; Invalidity of
Operating Agreement. Unified shall fail to perform or observe any term, covenant
or agreement in Section 8 of the Operating Agreement, or shall fail in any
material respect to perform or observe any other term, covenant or agreement
contained in the Operating Agreement on its part to be performed or observed and
any such failure shall remain unremedied for a period of twenty (20) days from
the occurrence thereof (unless the Majority Lenders determine that such failure
in not capable of remedy); or the Operating Agreement shall for any reason be
revoked or invalidated, or otherwise terminate or cease to be in full force and
effect, or Unified or any other Person shall contest in any manner the validity
or enforceability thereof or deny that it has any further liability or
obligation thereunder.
(k) Invalidity of Subordination Provisions. The Investment Agreement
or any agreement or instrument governing any Subordinated Debt or Capital Debt
shall for any reason be revoked or invalidated or otherwise cease to be in full
force and effect; or Unified or any other Person shall contest in any manner the
validity or enforceability thereof or deny that it has any further liability or
obligation thereunder, or the Indebtedness hereunder shall for any reason be
subordinated or shall not have the priority contemplated by this Agreement or
the Investment Agreement.
(l) Invalidity of or Breach Under Collateral Documents. Borrower or
any other Person shall fail in any material respect to perform or observe any
term, covenant or agreement contained in the Collateral Documents on its part to
be performed or observed and any such failure shall remain unremedied for a
period of twenty (20) days from the occurrence thereof (unless the Majority
Lenders determine that such failure is not capable of remedy); any of the
Collateral Documents after delivery thereof shall for any reason be revoked or
invalidated, or otherwise cease to be in full force and effect, or Borrower or
any other Person shall contest in any manner the validity or enforceability
thereof, or Borrower or any other Person shall deny that it has any further
liability or obligation thereunder; or any of the Collateral Documents for any
reason, except to the extent permitted by the terms thereof, shall cease to
create a valid and perfected first priority Lien subject only to Permitted Liens
in any of the Collateral purported to be covered thereby.
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(m) Purchases under NCB Loan Purchase Agreement. Borrower shall sell,
or shall accept any amount in respect of the Purchase Price (as defined in the
NCB Loan Purchase Agreement) for, any Property (as defined in the NCB Loan
Purchase Agreement) without obtaining the execution of and delivery by Agent of
a Release with respect to all Collateral constituting or relating to such
Property.
(n) Purchases under Fleet Loan Purchase Agreement. Borrower shall
sell, or shall accept any amount in respect of the Purchase Price (as defined in
the Fleet Loan Purchase Agreement) for, any Property (as defined in the Fleet
Loan Purchase Agreement) without obtaining the execution of and delivery by
Agent of a Release with respect to all Collateral constituting or relating to
such Property.
7.2 Effect of Event of Default
If any Event of Default shall occur, Agent may, subject to Section
8.3, at its election, and without notice of election and without demand, on
behalf of Lenders, do any one or more of the following all of which are
authorized by Borrower:
(i) Declare the Obligations, whether evidenced by this
Agreement, by the Notes, or otherwise, immediately due and payable;
(ii) Cease advancing money or extending credit to or for the
benefit of Borrower under this Agreement and terminate the daily automatic funds
transfers from Agent's Account to Borrower's Account;
(iii) Terminate this Agreement and the Commitments as to any
future liability or obligation of Agent and Lenders, but without affecting
Agent's and Lenders' rights and security interest in the Collateral and the
Obligations;
(iv) Exercise any or all of Agent's rights and remedies under
the Collateral Documents; and
(v) Proceed to enforce all other rights and remedies available
to Agent and Lenders under applicable law.
ARTICLE VIII
AGENT AND LENDER
8.1 Appointment and Powers of Agent
Each Lender hereby appoints and authorizes Agent to take such action
as agent on its behalf and to exercise such powers and discretion under this
Agreement and the Collateral Documents as are delegated to Agent by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto. Without limiting the foregoing, each Lender hereby expressly authorizes
Agent to execute, deliver, and perform its obligations under this Agreement and
each of the Collateral Documents to which Agent is a party, and to exercise all
rights, powers, and remedies that Agent may have hereunder or thereunder. As to
any matters not expressly provided for by this Agreement or the Collateral
Documents (including enforcement or collection of the Notes), Agent (which term
as used in this sentence, in Section 8.2, in Section 8.5, and in the first
sentence of Section 8.6 shall include reference to its Affiliates and to its own
and its Affiliates' officers, directors, employees, and agents) shall not be
required to exercise any discretion or take any action, but shall be required to
act or to
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refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of Majority Lenders, and such instructions
shall be binding upon all Lenders and all holders of the Notes; provided,
however, that Agent shall not be required to take any action which exposes Agent
to personal liability or which is contrary to this Agreement, the Collateral
Documents, the Notes, or applicable law. Agent agrees to give to each Lender
prompt notice of each notice given to it by Borrower pursuant to the terms of
this Agreement or the Collateral Documents.
8.2 Agent's Reliance
Agent shall not be liable for any action taken or omitted to be taken
by it under or in connection with this Agreement, the Notes, any Purchase
Notice, any Release, or any Collateral Document or any other Loan Document,
except for its own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, Agent: (a) may treat the payee of any Note as the
holder thereof until Agent receives and accepts an assignment and acceptance
entered into by the Lender which is the payee of such Note, as assignor, and an
assignee as provided in Section 11.8; (b) may consult with legal counsel,
independent public accountants, and other experts selected by them and shall not
be liable for any action taken or omitted to be taken in good faith by Agent in
accordance with the advice of such counsel, accountants, or experts; (c) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties, or representations made in or in
connection with this Agreement, the Notes, or any Collateral Document or any
other Loan Document ; (d) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants, or conditions
of this Agreement, the Notes, or any of the Collateral Documents or any other
Loan Documents on the part of any Person party hereto or thereto or to inspect
any asset (including the books and records) of Borrower or any of its
Subsidiaries; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency, or value of this
Agreement, the Notes, or any Collateral Document or any other Loan Document, or
any other instrument or document furnished pursuant hereto or thereto; (f) shall
incur no liability under or in respect of this Agreement, the Notes, or any
Collateral Document or any other Loan Document by acting upon any notice,
consent, certificate, or other instrument or writing (which may be by telegram,
cable, telefacsimile, or telex) believed by them to be genuine and signed or
sent by the proper Person or Persons; and (g) may execute and deliver, and shall
incur no liability under or in respect to this Agreement, the Notes, or any
Collateral Document by executing and delivering, or executing or delivering any
other document, instrument or agreement releasing any Collateral in connection
with such execution and delivery of, a Release in respect of any Purchase Notice
received by it.
8.3 Defaults
Agent shall not be deemed to have knowledge of the occurrence of an
Event of Default unless Agent has received notice from a Lender or Borrower
specifying the occurrence of such Event of Default and stating that such notice
is a "Notice of Default." In the event that Agent receives such a notice of the
occurrence of an Event of Default, Agent shall give prompt notice thereof to
Lenders. Agent shall (subject to Sections 8.1, 8.5, and 8.7) take such action
with respect to such Event of Default as shall be directed by Majority Lenders;
provided, however, that, unless and until Agent shall have received such
directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall in its sole and absolute discretion deem advisable in the best interest of
Lenders.
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8.4 Rights as a Lender, Rights under NCB Loan Purchase Agreement
With respect to its Commitment and the Loans made by it, NCB (and any
successor acting as Agent), in its capacity as a Lender hereunder, shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not an Agent, and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include NCB (and any successor acting as
Agent), in its individual capacity. NCB (and any successor acting as Agent), and
its Affiliates may (without having to account therefor to any Lender) accept
deposits from (to the extent permitted by law), lend money to, act as trustee
under indentures of, and generally engage in any kind of banking, trust, or
other business with Borrower, or any of its Subsidiaries or Affiliates, as if it
were not the Agent, and NCB and its Affiliates, may accept fees and other
consideration from Borrower, or any of its respective Subsidiaries or
Affiliates, for services rendered in connection with this Agreement or otherwise
without having to account for the same to any Lender. NCB shall have the right
to perform its obligations in its capacity as "Buyer" under the NCB Loan
Purchase Agreement.
8.5 Indemnification
Each Lender hereby agrees to indemnify and hold Agent harmless (to the
extent not reimbursed on demand by Borrower), ratably according to the
respective principal amount of the Notes then held by each of them (or, if no
principal is outstanding under the Notes at that time, according to their
respective Commitments) from and against any and all losses, liabilities
(including liabilities for penalties), actions, suits, judgments, demands,
damages, costs, disbursements, or expenses (including attorneys' fees and
expenses) of any kind or nature whatsoever which are imposed on, incurred by, or
asserted against Agent in any way relating to or arising out of this Agreement,
the Notes, or the Collateral Documents or any other Loan Documents, or as a
result of any action taken or omitted to be taken by Agent; provided, however,
that no Lender shall be liable for any portion of any such losses, liabilities
(including liabilities for penalties), actions, suits, judgments, demands,
damages, costs, disbursements, or expenses resulting from the gross negligence
or willful misconduct of Agent. Without limiting the generality of the
foregoing, each Lender hereby agrees, in the ratio aforesaid, to reimburse Agent
promptly following demand for reimbursement of any out-of-pocket expenses
(including attorneys' fees and expenses) incurred by Agent in connection with
the preparation, execution, delivery, administration, modification, amendment,
or enforcement (whether through negotiations, legal proceedings, or otherwise)
of, or legal advice in respect of, Agent's rights or responsibilities under this
Agreement, the Notes, or the Collateral Documents, any Loan Document or any
other documents contemplated by this Agreement, to the extent that Agent is not
reimbursed (or are not entitled to be reimbursed), on demand, for such amounts
by Borrower. Each Lender's obligations hereunder shall survive the termination
of this Agreement and the discharge of Borrower's obligations hereunder.
8.6 Non-Reliance by Lenders
Each Lender hereby acknowledges that it has, independently of and
without reliance upon Agent or any other Lender, and based upon the financial
statements referred to in Section 4.1(d) and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently of and without reliance upon Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own independent credit decisions in taking or
omitting to take action under or in connection with this Agreement. Agent shall
not be required to keep informed as to the performance or observance by Borrower
or any other Person of this Agreement, the Notes, the Collateral Documents or
any other Loan Document, or to inspect the assets or books and records of
Borrower, any of its Subsidiaries or Affiliates, or any other Person.
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Agent shall promptly furnish to Lenders, as and when received by Agent, copies
of the financial statements and reports set forth in Section 6.1(a) and of any
other notices, reports, and other documents as Lenders may reasonably request of
Agent. Except for notices, reports, and other documents and 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 credit or
other information concerning the affairs, financial condition, or business of
Borrower or its subsidiaries or Affiliates which may come into the possession of
Agent or any of its Affiliates.
8.7 Failure to Act
Except for action expressly required of Agent hereunder, Agent shall
in all cases be fully justified in failing or refusing to act hereunder unless
it shall be indemnified to its satisfaction by Lenders against any and all
liability and expense which may be incurred by them by reason of taking or
continuing to take any such action.
8.8 Excess Payments
If any Lender or other holder of a Note shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of offset,
setoff, or otherwise) on account of principal of or interest on any Note in
excess of its pro rata share of payments and other recoveries obtained by all
Lenders or holders of Notes, such Lender or other holder shall purchase from the
other Lenders or holders such participations in the Notes held by them as shall
be necessary to cause such purchasing Lender or holder to share the excess
payment or other recovery ratably with each of the other Lenders or holders;
provided, however, that, if all or any portion of the excess payment or other
recovery is thereafter recovered from such purchasing Lender or holder, the
purchase shall be rescinded and the purchase price restored to such Lender or
other holder to the extent of such recovery, but without interest.
8.9 Sharing of Setoffs
Each Lender severally agrees that if it, through the exercise of the
right of setoff, banker's lien, or counterclaim against Borrower or otherwise,
receives payment of the Obligations due it hereunder and under the Notes that is
ratably more than any other Lender, through any means, then: (a) the Lender
exercising the right of setoff, banker's lien, or counterclaim or otherwise
receiving such payment shall purchase, and shall be deemed to have
simultaneously purchased, from the other Lenders a participation in the
Obligations held by the other Lenders and shall pay to the other Lenders a
purchase price in an amount so that the share of the Obligations held by each
Lender after the exercise of the right of setoff, banker's lien, or counterclaim
or receipt of payment shall be in the same proportion that existed prior to the
exercise of the right of setoff, banker's lien, or counterclaim or receipt of
payment, and (b) such other adjustments and purchases of participations shall be
made from time to time as shall be equitable to ensure that all Lenders share
any payment obtained in respect of the Obligations ratably in accordance with
each Lender's share of the Obligations immediately prior to, and without taking
into account, the payment; provided, however, that, if all or any portion of a
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker's lien, counterclaim or otherwise is thereafter recovered from
the purchasing Lender by Borrower or any Person claiming through or succeeding
to the rights of Borrower, the purchase of a participation shall be rescinded
and the purchase thereof shall be restored to the extent of the recovery, but
without interest; provided, further, however, that the rights of NCB with
respect to the NCB Stock shall not be subject to the provisions of this Section
8.9. Each Lender that purchases a participation in the Obligations pursuant to
this Section 8.9 shall from and after the purchase have the right to give all
notices, requests, demands, directions and other communications under this
Agreement with respect to
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the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased. Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in an Obligation so purchased may exercise any and all
rights of setoff, banker's lien or counterclaim with respect to the
participation as fully as if the Lender were the original owner of the
Obligation purchased; provided, however, that each Lender agrees that it shall
not exercise any right of setoff, banker's lien or counterclaim without first
obtaining the consent of the Majority Lenders.
8.10 Characterization Of Action
Nothing contained in this Agreement, and no action taken by any Lender
or Agent pursuant hereto or in connection herewith or pursuant to or in
connection with the Notes or the Collateral Documents shall be deemed to
constitute Lenders, together or with or without Agent, a partnership,
association, joint venture, or other entity.
8.11 Resignation by or Removal of Agent
Agent may resign at any time as an Agent under this Agreement and the
Collateral Documents and the other Loan Documents by giving written notice
thereof to Lenders and Borrower and may be removed at any time with or without
cause by Majority Lenders. Upon any such resignation or removal, the Majority
Lenders shall have the right to appoint a successor Agent. If no successor Agent
shall have been so appointed by Majority Lenders and shall have accepted such
appointment, within thirty (30) calendar days after the retiring Agent's giving
of notice of resignation or Majority Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of Lenders, appoint a successor Agent.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all of
the obligations, rights, powers, privileges, and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement, and the Collateral Documents and the other Loan Documents. After
any retiring Agent's resignation or removal hereunder as Agent, the provisions
of this Article XI shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
8.12 No Obligation of Borrower.
Borrower shall not have any obligations to Agent or any Lender under
this Article VIII which governs solely the rights and obligations of Lenders and
Agent, inter se.
ARTICLE IX
LENDERS' REPRESENTATIONS
9.1 Investment Representation
Each Lender hereby represents to Borrower and to each other Lender
that it will make its Loans for its own account in the ordinary course of its
commercial lending business and not with a view to the public distribution or
sale of any Note held by such Lender.
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ARTICLE X
EXPENSES AND INDEMNITEES
10.1 Expenses
(a) Payment by Agent on Behalf of Borrower. If Borrower fails to pay
promptly when due to any other Person, expenses or monies which Borrower is
required to pay by reason of any provision in this Agreement, Agent may, but
shall not be required to, pay the same and charge Borrower's account therefor as
Agent's Expenses; provided, however, that Agent shall not pay the same to the
extent and so long as: (a) the same are being diligently contested, in good
faith and by appropriate proceedings, and in such a manner as not to cause any
Material Adverse Effect; and (b) Borrower shall have set aside on its books
reserves (segregated to the extent required by GAAP) adequate with respect
thereto. All such sums shall become additional Obligations owing to Lenders,
shall bear interest at the rate set forth in Section 3.1(a)(i), and shall be
secured by the Collateral. Any payments made by Agent shall not constitute: (i)
an agreement by Agent to make similar payments in the future, or (ii) a waiver
by Agent of any Default. Agent need not inquire as to, or contest the validity
of, any such expense, tax, security interest, encumbrance, or lien and the
receipt of any customary official notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing.
(b) Agent's Expenses Due on Demand. Irrespective of whether the
transactions contemplated hereby shall be consummated, Borrower hereby agrees to
pay to Agent, on demand, all Agent's Expenses, and Borrower hereby authorizes
and approves all advances and payments by Agent for items constituting Agent's
Expenses.
10.2 Indemnity
In addition to the payment of Agent's Expenses pursuant to Section
10.1 and irrespective of whether the transactions contemplated hereby shall be
consummated, Borrower hereby agrees to indemnify, exonerate, pay, and hold
harmless Agent, Lenders, and the holders of any of the Notes, and the officers,
directors, employees, and agents of Agent, Lenders, or such holders
(collectively, the "Indemnitees" and individually, an "Indemnitee") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, causes of action, judgments, suits, claims, costs, expenses, of any
kind or nature whatsoever, including the reasonable fees and expenses of counsel
to Indemnitees (including allocated fees and expenses of in-house counsel of
Agent), in connection with any investigative, administrative, or judicial
proceeding, irrespective of whether such Indemnitee shall be designated a party
thereto, which may be imposed on, incurred by, or asserted against such
Indemnitee, in any manner relating to or arising out of this Agreement, any
other Loan Document, any Loans hereunder, the use or intended use of the
proceeds of the Loans, or the consummation of the transactions contemplated by
this Agreement or any other Loan Document (the "Indemnified Liabilities");
provided, however, that Borrower's obligations to indemnify shall not extend to
any losses, damages, liabilities, actions, or claims against any Indemnitee
arising as a result of the gross negligence or willful misconduct of such
Indemnitee. Each Indemnitee shall promptly notify Borrower of each event of
which it has knowledge which may give rise to a claim under the indemnification
provisions of this Section 10.2. If any investigative, judicial, or
administrative proceeding arising from any of the foregoing is brought against
any Indemnitee, Borrower, to the extent and in the manner directed by such
Indemnitee or upon Borrower's election (by prior notice to the Indemnitee) to so
do, will resist and defend such action, suit, or proceeding by counsel
designated by Borrower (which counsel shall be reasonably satisfactory to such
Indemnitee); provided, however, that Borrower's obligation to so resist or
defend any such action, suit, or proceeding shall exist if and only if Borrower
is directed to do so by the Indemnitee or if Borrower has given Indemnitee prior
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notice of its election to assume such defense. Such Indemnitee will use its best
efforts to cooperate in all respects in the defense of any such action, suit, or
proceeding. To the extent that the undertaking to indemnify, exonerate, pay, and
hold harmless set forth in this Section 10.2 may be unenforceable because it is
violative of any law or public policy as determined by a final judgment of a
court of competent jurisdiction, Borrower shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The obligations of Borrower under this Section
10.2 shall survive the termination of this Agreement and the discharge of
Borrower's other obligations hereunder.
ARTICLE XI
MISCELLANEOUS
11.1 Destruction of Borrower's Documents
Except for original instruments or chattel paper, any documents,
schedules, invoices or other papers delivered to Agent may be destroyed by Agent
six (6) months after they are delivered to or received by Agent, unless (i)
within such six month period, Borrower requests, in writing, the return of said
documents, schedules, invoices or other papers and makes arrangements, at
Borrower's expense, for their return or (ii) such documents, schedules, invoices
or other papers relate to any Released Collateral, in which case such documents,
schedules, invoices or other papers may be destroyed at any time after 30 days
following the execution by NCB of the Release related to any such Released
Collateral, unless Borrower requests, in writing, the return of said documents,
schedules, invoices or other papers.
11.2 Amendments, etc.
(a) Amendments with Consent of Agent. Borrower and Agent may enter
into one or more amendments to any Collateral Document or this Agreement without
the consent of any Lender for any of the following purposes:
(i) to cure any ambiguity, defect or inconsistency herein or in
any Collateral Document or to make any change not inconsistent with the
provisions hereof;
(ii) to convey, transfer, assign, mortgage, or pledge any
property to or with Agent, or to make any other provisions with respect to
matters or questions arising hereunder or under any Collateral Document, so long
as such action shall not adversely affect the interests of Lenders;
(iii) to add to the covenants of Borrower hereunder for the
benefit of Lenders; and
(iv) to add to the rights of Lenders. Any such amendment must be
in writing and signed by Agent to be effective and then such amendment shall be
effective only in the specific instance and for the specific purpose for which
given. Agent shall promptly deliver to each Lender a copy of any such amendment.
(b) Amendments with Consent of Lenders. Except as provided in
subsection (a) of this Section 11.2 and except as contemplated in the definition
of "Eligible Collateral", no amendment or waiver of any provision of this
Agreement or any Loan Document, nor consent to any departure by Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders and then such waiver or consent shall be
effective only in specific
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instance and for the specific purpose for which given; provided, however, that
no amendment, waiver, or consent shall, unless in writing and signed by all
Lenders, do any of the following: (i) increase the Commitments of Lenders or
subject Lenders to any additional obligations, (ii) reduce the principal of, or
interest on, the Loans or any fees or other amounts payable hereunder, (iii)
postpone any date fixed for any payment of principal of, or interest on, the
Loans or any fees or other amounts payable hereunder, including, without
limitation, to extend the Commitment Termination Date, (iv) change the
percentage, or the aggregate unpaid, principal amount of the Notes or Loans, or
the number of Lenders, which shall be required for Lenders or any of them to
take any action hereunder, (v) release any Collateral, except to the extent
expressly provided herein or in the Collateral Documents, or (vi) amend this
Section 11.2; provided further, however, that no amendment, waiver, or consent
shall, unless in writing and signed by Agent in addition to the Lenders required
above to take such action, affect the rights or duties of Agent under this
Agreement or any other Loan Document.
11.3 Notices
Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement shall be in writing and either (a)
personally served or (b) sent by regular United States mail, first class postage
prepaid, with a copy sent via facsimile or overnight courier; to Borrower or to
Agent, as the case may be, at its address set forth below:
If to Borrower: GROCERS CAPITAL COMPANY
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
If to Agent: NATIONAL COOPERATIVE BANK
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Corporate Banking Division
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other. All notices or demands sent in accordance with this Section 11.3 shall be
deemed received on the earlier of the date of actual receipt or five (5) days
after the deposit thereof in the United States mail.
11.4 No Waiver; Cumulative Remedies
No failure on the part of Agent or any Lender to exercise, and no
delay in exercising, any right, remedy, power or privilege hereunder or under
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement and the other
Loan Documents are cumulative and not exclusive of any rights, remedies, powers
and privileges that may otherwise be available to Agent or any Lender.
11.5 Right of Set-Off
Upon the occurrence and during the continuance of any Event of
Default, each Lender hereby is authorized at any time and from time to time,
without notice to Borrower (any such notice
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being expressly waived by Borrower), subject to Section 8.9, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of Borrower against any and all of the
obligations of Borrower now or hereafter existing under this Agreement and the
Note held by such Lender, irrespective of whether or not such Lender shall have
made any demand under this Agreement or such Note and although such obligations
may be unmatured. Each Lender agrees promptly to notify Borrower (through Agent)
after any such set-off and application made by such Lender; provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 11.5 are in addition
to other rights and remedies (including other rights of set-off) which such
Lender may have.
11.6 Survival
All covenants, agreements, representations and warranties made in any
Loan Documents shall, except to the extent otherwise provided therein, survive
the execution and delivery of this Agreement, the making of the Loans and the
execution and delivery of the Notes, and shall continue in full force and effect
so long as any Lender has a Commitment, any Loans remain outstanding or any
other Obligations remain unpaid or any obligation to perform any other act
hereunder or under any other Loan Document remains unsatisfied. Without limiting
the generality of the foregoing, the obligations of Borrower under Sections 2.4,
2.5, 3.3, 3.6, 3.7, 10.1 and 10.2 and of Lenders under Sections 2.12 and 8.5,
and all similar obligations under the other Loan Documents (including all
obligations to pay costs and expenses and all indemnity obligations), shall
survive the repayment of the Loans and the termination of the Commitments.
11.7 Benefits of Agreement
This Agreement and the other Loan Documents are entered into for the
sole protection and benefit of the parties hereto and their successors and
assigns, and no other Person shall be a direct or indirect beneficiary of, or
shall have any direct or indirect cause of action or claim in connection with,
this Agreement or any other Loan Document.
11.8 Assignments and Participations
(a) Assignments. Any Lender may make one or more assignments of its
rights, interests and obligations in the Loans (together with a pro rata
interest in its Commitment) to one or more assignees (the "Assignee") with the
prior written consent of Borrower (which consent will not be unreasonably
withheld or delayed); provided, however, that any Lender may, subject to the
limitations contained hereinbelow in this Section 11.8(a), assign to another
Lender any portion of its Loans or Commitments without the prior written consent
of Borrower or Agent; provided further, however, that Borrower shall not be
obligated to pay the costs and expenses of any assigning Lender or any Assignee
in connection with any such assignment. Each such Assignee shall become a party
to this Agreement as a "Lender" upon: (i) the execution of an amendment to this
Agreement or the execution of a supplemental assignment and acceptance agreement
with the assigning Lender, the Assignee, Agent, and, in the event Borrower's
prior written consent to such assignment is required, Borrower; (ii) the
notification of Borrower and Agent by the assigning Lender of the identity of
the Assignee and the amount of the Loans or Commitment assigned; and (iii) the
payment to Agent, for its own account, of a processing and recordation fee of
Three Thousand Dollars ($3,000); whereupon, from and after the effective date of
such assignment as designated by Agent, the assigning Lender shall be released
and discharged from, and such Assignee shall assume, all rights, duties and
obligations with respect to the interest so assigned. Any such assignment shall
be made pro rata according to all of such Lender's Loans and its Commitment. At
such time, the Commitment amounts referenced herein shall be
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modified to reflect the pro rata share of the Commitment of such new Lender and
of the existing Lenders. In addition, Borrower will, in exchange for the
assigning Lender's existing Notes issue new Notes hereunder to such new Lender
and to the assigning Lender in conformity with the requirements of this
Agreement in order to reflect their revised pro rata shares of the Commitment
and, if applicable, Loans. The Notes received by Agent in exchange for such new
Notes shall be cancelled and returned to Borrower. Any partial assignment under
this Agreement (other than to any Affiliate of the assigning Lender or to any
other Lender) shall be in a minimum amount equal to Five Million Dollars
($5,000,000).
(b) Participations. Any Lender may grant one or more participations
in its interests in the Loans or its Commitment; provided, however, that: (i)
such Lender shall remain a "Lender" for all purposes under this Agreement and
the participant shall not constitute a "Lender" under this Agreement; (ii) any
such grant of a participation will be made in compliance with all applicable
state or federal laws, rules, and regulations; (iii) any such participation
shall be made pro rata according to all of such Lender's Loans or its
Commitment; and (iv) no Lender shall grant any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement, the Notes, or the Collateral Documents, except as to matters
specifically relating to rates of interest on the Obligations, the amount of
such Lender's Commitment, and extensions to the Commitment Termination Date. In
the case of any participation, the participant shall not have any rights under
this Agreement or any of the other documents entered into in connection herewith
(the participant's rights against such Lender in respect of such participation
to be those set forth in the participation or other agreement executed by such
Lender and the participant relating thereto) and all amounts payable to any
Lender hereunder shall be determined as if such Lender had not sold such
participation. In no event shall any participant grant a participation in its
participation interest in the Loans or the Commitment in which it is
participating without the prior written consent of Agent.
(c) Affiliates. Notwithstanding anything to the contrary contained in
clauses (a) and (b) of this Section 11.8, no Lender shall be restricted from
making assignments or granting participations to any of its Affiliates.
(d) Inurement; No Assignment by Borrower. Subject to subsections (a),
(b), and (c) of this Section 11.8, this Agreement shall bind and inure to the
benefit of the respective successors and assigns of Lenders. Borrower may not
assign this Agreement or any rights hereunder without Lenders' prior written
consent and any prohibited assignment shall be absolutely void. No consent to an
assignment by Lenders shall release Borrower of its Obligations to Lenders.
11.9 GOVERNING LAW. EXCEPT AS SPECIFICALLY SET FORTH IN ANY COLLATERAL
DOCUMENT (A) THIS AGREEMENT, THE NOTES, AND THE COLLATERAL DOCUMENTS SHALL BE
DEEMED TO HAVE BEEN MADE IN THE STATE OF CALIFORNIA; AND (B) THE VALIDITY OF
THIS AGREEMENT, THE NOTES, AND THE COLLATERAL DOCUMENTS, AND THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE
PARTIES HERETO AND THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
11.10 CONSENT TO VENUE. THE PARTIES HERETO AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT, THE NOTES, OR THE
COLLATERAL DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL
COURTS LOCATED IN THE COUNTY OF LOS
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ANGELES, STATE OF CALIFORNIA. EACH OF BORROWER, LENDERS, AND AGENT HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO
OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
SECTION 11.10 AND STIPULATES THAT THE STATE AND FEDERAL COURTS LOCATED IN THE
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, SHALL HAVE JURISDICTION AND VENUE
OVER IT FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE NOTES, OR THE
COLLATERAL DOCUMENTS. SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN
ANY ACTION AGAINST EACH OF BORROWER, LENDERS, AND AGENT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS INDICATED
IN SECTION 11.3. EACH OF BORROWER, LENDERS, AND AGENT AGREES THAT ANY FINAL
JUDGMENT RENDERED AGAINST IT IN ANY ACTION OR PROCEEDING SHALL BE CONCLUSIVE AS
TO THE SUBJECT OF SUCH FINAL JUDGMENT AND MAY BE ENFORCED IN OTHER JURISDICTIONS
IN ANY MANNER PROVIDED BY LAW.
11.11 WAIVER OF JURY TRIAL. EACH OF BORROWER, LENDERS, AND AGENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE
OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, THE
NOTES, OR THE COLLATERAL DOCUMENTS, OR IN ANY WAY CONNECTED WITH, OR RELATED TO,
OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS
AGREEMENT, THE NOTES, THE COLLATERAL DOCUMENTS, OR THE TRANSACTIONS RELATED
HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. EACH OF
BORROWER, LENDERS, AND AGENT HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION,
CAUSE OF ACTION, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY
AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 11.11 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER
PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
11.12 Demand, Protest, Notice
Borrower waives demand, protest, notice of protest, notice of default
or dishonor, notice of payment and nonpayment, notice of any default, nonpayment
at maturity, release, compromise, settlement, extension, or renewal of any or
all commercial paper, accounts, documents, instruments, chattel paper, and
guarantees at any time held by Agent or Lenders on which Borrower may in any way
be liable.
11.13 Confidential Relationships
Borrower waives the right to assert a confidential relationship, if
any, it may have with any accounting firm or service bureau in connection with
any information requested by Agent or Lenders pursuant to or in accordance with
this Agreement, and agrees that Agent or Lenders may contact directly any such
accounting firm or service bureau in order to obtain such information.
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11.14 Limitation on Liability
No claim shall be made by Borrower or its Affiliates against Agent,
Lenders or any of their respective Affiliates, directors, employees, attorneys
or agents for any special, indirect, exemplary, consequential or punitive
damages in respect of any breach or wrongful conduct (whether or not the claim
therefor is based on contract, tort or duty imposed by law), in connection with,
arising out of or in any way related to the transactions contemplated by this
Agreement or the other Loan Documents or any act or omission or event occurring
in connection therewith; and Borrower hereby waives, releases and agrees not to
▇▇▇ upon any such claim for any such damages, whether or not accrued and whether
or not known or suspected to exist in its favor.
11.15 Entire Agreement
This Agreement and the other Loan Documents reflect the entire
agreement among Borrower, Lenders and Agent with respect to the matters set
forth herein and therein and supersede any prior agreements, drafts,
communications, commitments, discussions and understandings, oral or written,
with respect thereto.
11.16 Interpretation
This Agreement and the other Loan Documents are the result of
negotiations between and have been reviewed by counsel to Agent, Borrower and
other parties, and are the product of all parties hereto. Accordingly, this
Agreement and the other Loan Documents shall not be construed against any of
Lenders or Agent merely because of Agent's or any Lender's involvement in the
preparation thereof.
11.17 Confidentiality
Each Lender and Agent shall hold all non-public information relating
to Unified, Borrower and their respective Subsidiaries obtained by it under this
Agreement in accordance with its customary procedures for handling confidential
information of this nature, except for: (i) disclosure to its counsel or to any
agent or advisor acting on its behalf in connection with the negotiation,
execution or performance of the Loan Documents; (ii) disclosure as reasonably
required in connection with a transfer to a prospective assignee or participant
of all or part of its Loans or any participation therein, as provided in Section
11.8; (iii) disclosure as may be required or requested by Governmental Authority
or representative thereof or pursuant to legal process; and (iv) any other
disclosure with the prior written consent of Borrower or Unified, as the case
may be. Prior to any disclosure by any Lender or Agent of such non-public
information permitted under clause (iii) (other than in connection with an
examination of the financial condition of such Lender, Agent or any of their
Affiliates by any Governmental Authority), it shall, if permitted by applicable
law or judicial order, notify Borrower of such pending disclosure. In no event
shall any Lender or Agent be obligated or required to return any materials
furnished by Unified, Borrower or any of their Subsidiaries. Notwithstanding the
foregoing, such obligation of confidentiality shall not apply if the information
or substantially similar information (A) is rightfully received by any Lender or
Agent from a Person other than Unified, Borrower or any of their Affiliates
without such Lender or Agent being under an obligation to such Person not to
disclose such information, or (B) is or becomes part of the public domain.
11.18 Severability
Whenever possible, each provision of this Agreement and the other
Loan Documents shall be interpreted in such manner as to be effective and valid
under all applicable laws and
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regulations. If, however, any provision of this Agreement or any of the other
Loan Documents shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed
modified to conform to the minimum requirements of such law or regulation, or,
if for any reason it is not deemed so modified, it shall be ineffective and
invalid only to the extent of such prohibition or invalidity without affecting
the remaining provisions of this Agreement and the other Loan Documents, or the
validity or effectiveness of such provision in any other jurisdiction.
11.19 Counterparts
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement. This Agreement shall become effective
when it shall have been executed by Borrower and Agent and when Agent shall have
been notified by each Lender that such Lender has executed it.
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IN WITNESS WHEREOF the parties hereto have duly executed this
Agreement as of the date first above written.
Borrower
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GROCERS CAPITAL COMPANY
By: _______________________________________
Title:
Agent
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NATIONAL CONSUMER COOPERATIVE BANK
By: _______________________________________
Title:
Commitment Lenders
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$10,000,000 NATIONAL CONSUMER COOPERATIVE BANK
By: _______________________________________
Title:
[SIGNATURE PAGE-
GROCERS CAPITAL COMPANY
AMENDED AND RESTATED CREDIT AGREEMENT]