EXHIBIT 10.8
U.S. $20,000,000
CREDIT AGREEMENT
dated as of October 15, 1997
by and between
TRAVEL SERVICES INTERNATIONAL, INC.,
as Borrower
and
NATIONSBANK, N.A.,
as Lender
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions ......................................1
SECTION 1.02. General .........................................19
ARTICLE II
LOANS
SECTION 2.01. Revolving Credit Facility .......................20
SECTION 2.02. Term Loan .......................................21
SECTION 2.03. Interest on Loans ...............................21
SECTION 2.04. Unavailability of Certain Loans/Funding Losses ..21
SECTION 2.05. Voluntary Reduction of Revolving Commitment;
Funding Losses...................................22
SECTION 2.06. Repayment of Loans ..............................23
SECTION 2.07. Notes ...........................................23
ARTICLE III
OTHER LOAN AND PAYMENT PROVISIONS
SECTION 3.01. Interest on Overdue Payments ....................23
SECTION 3.02. Computations ....................................24
SECTION 3.03. Usury ...........................................24
SECTION 3.04. Payments ........................................24
SECTION 3.05. Insufficient Funds ..............................24
SECTION 3.06. Fees ............................................25
SECTION 3.07. Increased Costs .................................25
SECTION 3.08. Statements of Account ...........................26
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.01. Conditions Precedent to All Loans ...............26
SECTION 4.02. Conditions Precedent to Term Loan ...............29
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PAGE
SECTION 4.03. Conditions Precedent to All Loans ................30
SECTION 4.04. Conditions as Covenants ..........................31
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties ...................31
SECTION 5.02. Survival of Representations and Warranties, Etc ..36
ARTICLE VI
AFFIRMATIVE COVENANTS
SECTION 6.01. Preservation of Existence and Similar Matters ....37
SECTION 6.02. Compliance with Applicable Law ...................37
SECTION 6.03. Maintenance of Property ..........................37
SECTION 6.04. Conduct of Business ..............................37
SECTION 6.05. Insurance ........................................38
SECTION 6.06. Payment of Taxes and Claims ......................38
SECTION 6.07. Visits and Inspections ...........................38
SECTION 6.08. Use of Proceeds ..................................39
SECTION 6.09. Additional Guarantor/Collateral ..................39
SECTION 6.10. Treasury Contracts ...............................39
ARTICLE VII
INFORMATION
SECTION 7.01. Quarterly Financial Statements ...................40
SECTION 7.02. Year-End Statements ..............................40
SECTION 7.03. Projections ......................................40
SECTION 7.04. Accounts/Inventory Certificate ...................40
SECTION 7.05. Collateral Value Report ..........................41
SECTION 7.06. Appraisals .......................................41
SECTION 7.07. Copies of Certificates and Other Reports .........41
SECTION 7.08. Notice of Litigation and Other Matters ...........42
SECTION 7.09. ERISA ............................................42
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PAGE
ARTICLE VIII
NEGATIVE COVENANTS
SECTION 8.01. Financial Covenants .............................43
SECTION 8.02. Indebtedness for Money Borrowed .................43
SECTION 8.03. Guaranties ......................................44
SECTION 8.04. Investments .....................................44
SECTION 8.05. Liens ...........................................44
SECTION 8.06. Plans ...........................................44
SECTION 8.07. Loans ...........................................44
SECTION 8.08. Certain Agreements ..............................44
SECTION 8.09. Transactions with Affiliates ....................45
SECTION 8.10. Merger, Consolidation and Other Arrangements ....45
SECTION 8.11. No Sale of Assets ...............................45
SECTION 8.12. Sale or Discount of Receivables .................45
SECTION8.13. Dividend Limitation .............................45
SECTION8.14. CapitalExpenditures .............................46
ARTICLE IX
DEFAULT
SECTION 9.01. Events of Default ...............................46
SECTION 9.02. Remedies ........................................49
SECTION 9.03. Rights Cumulative ...............................50
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices ........................................50
SECTION 10.02. Expenses .......................................51
SECTION 10.03. Stamp, Intangible and Recording Taxes ..........52
SECTION 10.04. Set-off ........................................53
SECTION 10.05. GOVERNING LAW; ARBITRATION/JURISDICTION ........53
SECTION 10.06. Assignability ..................................54
SECTION 10.07. Amendments .....................................55
SECTION 10.08. Nonliability of the Lender .....................56
SECTION 10.09. Confidential Information .......................56
SECTION 10.10. Indemnification ................................56
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PAGE
SECTION 10.11. Survival........................................57
SECTION 10.12. Titles and Captions.............................57
SECTION 10.13. Severability of Provisions .....................57
SECTION 10.14. Counterparts ...................................57
ANNEX I Lending Office
Schedule 4.01(e) UCC-3 Termination Statements
Schedule 4.01(f) Real Property
Schedule 5.01(b) Corporate Structure
Schedule 5.01(g) Existing Indebtedness for Money Borrowed,
Guaranties, Existing Letters of
Credit and Acceptances and Existing Liens
Schedule 5.01(h) Litigation Schedule
Schedule 5.01(n) Environmental Schedule
Schedule 5.01(o) Intellectual Property Schedule
Schedule 5.01(q) Bank Accounts Schedule
Schedule 6.08 Use of Proceeds to Retire Obligations
Schedule 8.09 Excluded Transactions
Exhibit A Form of Notice of Borrowing
Exhibit B-1 Form of Revolving Note
Exhibit B-2 Form of Term Note
Exhibit C Form of Security Agreement
Exhibit D Form of Trademark Security Agreement
Exhibit E Form of Pledge Agreement
Exhibit F Form of Membership Pledge Agreement
Exhibit G Form of Subsidiary Guaranty
Exhibit H Form of Florida Mortgage
Exhibit I Form of Compliance Certificate
Exhibit J Form of Opinion of Counsel for the
Loan Parties
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THIS CREDIT AGREEMENT, dated as of October 15, 1997, by and between
TRAVEL SERVICES INTERNATIONAL, INC., a Delaware corporation (the "BORROWER") and
NATIONSBANK, N.A. (the "LENDER").
WHEREAS, the Lender desires to make available to the Borrower the
respective credit facilities provided for herein on the terms and conditions
contained herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. In addition to terms defined elsewhere
herein, the following terms shall have the following meanings for the purposes
of this Agreement:
"ACCOUNT" shall have the meaning set forth in the Security
Agreement.
"ACQUISITION" means any transaction, or any series of related
transactions, by which the Borrower and/or any of its Subsidiaries
directly or indirectly (a) acquires any ongoing business or all or
substantially all of the assets of any Person or division thereof,
whether through purchase of assets, merger or otherwise, (b) acquires
(in one transaction or as the most recent transaction in a series of
transactions) control of at least a majority in ordinary voting power
of the securities of a Person which have ordinary voting power for the
election of directors or (c) otherwise acquires control of a more than
5% ownership interest in any such Person.
"ADDITIONAL DEBTOR" shall have the meaning set forth in the
Security Agreement.
"ADDITIONAL GUARANTOR" shall have the meaning set forth in the
Subsidiary Guaranty.
"ADDITIONAL LOAN PARTY" means each Subsidiary as shall from
time to time become an Additional Guarantor under the Subsidiary
Guaranty and an Additional Debtor under the Security Agreement in
accordance with Section 6.09.
"ADJUSTED EURODOLLAR RATE" means, with respect to each
Interest Period for any Eurodollar Rate Loan, the rate obtained by
dividing (a) the Eurodollar Rate for such Interest Period by (b) a
percentage equal to 1 MINUS the then stated maximum rate (stated as a
decimal) of all reserves, if any, required to be maintained against
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve
System (or any successor thereto) (or against any other category of
liabilities which includes deposits by reference to which the interest
rate on Eurodollar Loans is determined or any category of extensions of
credit or other assets which includes loans by a nonUnited States
office of any Lender to United States residents).
"AFFILIATE" means, with respect to any Person, any entity
which directly or indirectly controls, is controlled by, or is under
common control with, such Person or any Subsidiary of such Person or
any Person who is a director, officer or partner of such Person or any
Subsidiary of such Person and, with respect to each Loan Party, shall
include all other Loan Parties. For purposes of this definition,
"control" shall mean the possession, directly or indirectly, of the
power to (a) vote ten percent (10%) or more of the securities having
ordinary voting power for the election of directors of such Person or
(b) direct or cause the direction of management and policies of a
business, whether through the ownership of voting securities, by
contract or otherwise and either alone or in conjunction with others or
any group.
"AGREEMENT" means this Credit Agreement as it may be amended,
restated, modified or supplemented from time to time in accordance with
its terms.
"AGREEMENT DATE" means the date as of which this Agreement is
dated.
"APPLICABLE LAW" means all applicable provisions of
constitutions, statutes, rules, regulations and orders of all
governmental bodies and all applicable orders and decrees of all
courts, tribunals and arbitrators.
"BORROWER" has the meaning set forth in the introductory
paragraph hereof and shall include the Borrower's successors and
permitted assigns.
"BORROWING" means a borrowing by the Borrower of Revolving
Loans pursuant to Section 2.01 hereof or the Term Loan made pursuant to
Section 2.02 hereof.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which banks in Charlotte, Xxxxx Xxxxxxxx xx Xxxx Xxxx
Xxxxx, Xxxxxxx are authorized or required to close.
"CAPITAL EXPENDITURES" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of
assets which are not, in accordance with GAAP, treated as expense items
for such Person in the year made or incurred or as a prepaid expense
applicable to a future year or years, and shall include all Capitalized
Lease Obligations, PROVIDED, that, the computation of Capital
Expenditures of the Borrower and its Subsidiaries made at any time
prior to and including the fiscal quarter ending on September 30, 1997
shall be on a Pro Forma Basis.
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"CAPITALIZED LEASE OBLIGATION" of any Person means
Indebtedness represented by obligations under a lease that is required
to be capitalized for financial reporting purposes in accordance with
GAAP, and the amount of such Indebtedness shall be the amount accounted
for with respect to such obligations determined in accordance with such
principles.
"CHANGE OF CONTROL" means any of the following events or
circumstances:
(i) if (A) any person (as such term is used in
section 13(d) and section 14(d)(2) of the Exchange Act as in
effect on the date hereof) or related persons constituting a
group (as such term is used in Rule 13d-5 under the Exchange
Act), other than the Founding Members, become the "beneficial
owners" (as such term is used in Rule 13d-3 under the Exchange
Act as in effect on the date hereof), directly or indirectly,
of more than 10% of the total voting power of all classes then
outstanding of the Borrower's voting stock and (B) individuals
who, at the beginning of any period of 13 consecutive months,
constitute the Borrower's board of directors (together with
any new director whose election by the Borrower's board of
directors or whose nomination for election by the Borrower's
stockholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors
at the beginning of such period or whose election or
nomination for election was previously so approved) cease for
any reason (other than death or disability) to constitute a
majority of the Borrower's board of directors then in office
as a result of the actions of such beneficial owners;
(ii) individuals who, at the beginning of any period
of 13 consecutive months, constitute the Borrower's board of
directors (together with any new director whose election by
the Borrower's board of directors or whose nomination for
election by the Borrower's stockholders was approved by a vote
of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or
whose election or nomination for election was previously so
approved) cease for any reason (other than death or
disability) to constitute a majority of the Borrower's board
of directors then in office; or
(iii) the failure of the majority of the Founding
Members to be entitled, directly or indirectly, whether
through beneficial or record ownership of stock, contract or
otherwise, to direct or cause the direction of the management
and policies of the Borrower; or
(iv) the failure of the majority of the Founding
Members to be entitled, directly or indirectly, whether
through beneficial or record ownership of stock, contract or
otherwise, to elect a majority of the board of directors of
the Borrower.
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All calculations contemplated in this definition involving the capital
stock of any Person, shall be made with the assumption that all
convertible securities of such Person then outstanding and all
securities issuable upon the exercise of any warrants, options and
other rights outstanding at such time were converted at such time and
that all options, warrants and similar rights to acquire shares of
capital stock of such Person were exercised at such time.
"CLOSING DATE" means October 15, 1997.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means any collateral security pledged by any Loan
Party to secure the obligations of the Borrower hereunder or under any
other Loan Document or the obligations of such Loan Party under the
Loan Documents to which it is a party and includes, without limitation,
all "COLLATERAL", as defined in the Security Agreement.
"COMMITMENT" means the Lender's obligation to make the
Revolving Loans and the Term Loan hereunder.
"COMPLIANCE CERTIFICATE" has the meaning set forth in Section
7.07 hereof.
"CONSOLIDATED" means the consolidated financial information of
the Borrower and its Subsidiaries under GAAP consistently applied.
"CONSOLIDATED ASSETS" means the assets of the Borrower and its
Subsidiaries, as determined in accordance with GAAP, PROVIDED, that,
such determination for any period prior to and including the fiscal
quarter ending on September 30, 1997 shall be on a Pro Forma Basis.
"CONSOLIDATED CAPITALIZATION" shall mean, at any time, the sum
of (i) Indebtedness for Money Borrowed on a Consolidated basis at such
time PLUS (ii) Consolidated Net Worth at such time.
"CONSOLIDATED INCOME AVAILABLE FOR INTEREST CHARGES" means,
with reference to any period, Consolidated Net Income for such period
plus all amounts deducted in the computation thereof on account of (a)
Interest Charges and (b) taxes imposed on or measured by income or
excess profits, PROVIDED, that, such determination for any period prior
to and including the fiscal quarter ending on September 30, 1997 shall
be on a Pro Forma Basis.
"CONSOLIDATED NET INCOME" means, with reference to any period,
the net income (or loss) of the Borrower and its Subsidiaries for such
period (taken as a cumulative whole), as determined in accordance with
GAAP, after eliminating all offsetting debits and
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credits between the Borrower and its Subsidiaries and all other items
required to be eliminated in the course of the preparation of
consolidated financial statements of the Borrower and its Subsidiaries
in accordance with GAAP PROVIDED, that, the computation of Consolidated
Net Income during any period prior to and including the fiscal quarter
ending on September 30, 1997 shall be on a Pro Forma Basis.
"CONSOLIDATED NET WORTH" shall mean, at any time for the
Borrower and its Subsidiaries on a Consolidated basis shareholders'
equity at such time determined in accordance with GAAP, PROVIDED, that,
such determination at any time prior to and including the fiscal
quarter ending on September 30, 1997 shall be on a Pro Forma Basis.
"CONTROL EVENT" means:
(i) the execution by the Borrower or any of its
Subsidiaries or Affiliates of any agreement or letter of
intent with respect to any proposed transaction or event or
series of transactions or events which, individually or in the
aggregate, may reasonably be expected to result in a Change in
Control;
(ii) the execution of any written agreement which,
when fully performed by the parties thereto, would result in a
Change in Control; or
(iii) the acceptance by a sufficient number of the
holders of the common stock of the Borrower of any written
offer by any person (as such term is used in section 13(d) and
section 14(d)(23) of the Exchange Act as in effect on the
Closing Date), or related persons constituting a group (as
such term is used in Rule 13d-5 under the Exchange Act as in
effect on the Closing Date) resulting in any such person or
related persons constituting a group to become the "beneficial
owners" (as such term is used in Rule 13d-3 under the Exchange
Act as in effect on the date hereof), directly or indirectly,
of more than 10% of the total voting power of all classes then
outstanding of the Borrower's voting stock.
"CURRENT ASSETS" means, as at any date of determination, the
Consolidated current assets of the Borrower and its Subsidiaries as
determined in accordance with GAAP consistently applied.
"DEFAULT" means any of the events specified in Section 9.01,
whether or not there has been satisfied any requirement for giving of
notice, lapse of time or the happening of any other condition.
"DOLLARS or "$" means the lawful currency of the United
States.
"EBITDA" means, with reference to any period, Consolidated Net
Income for such period PLUS all amounts deducted in arriving at such
Consolidated Net Income in respect
5
of interest charges (including amortization of debt discount and
expense and imputed interest on Capitalized Lease Obligations) on
Indebtedness other than any capitalized interest PLUS all amounts
deducted in arriving at such Consolidated Net Income for taxes imposed
on, or measured by, income or excess profits PLUS all amounts of cash
expended by Borrower pursuant to Section 8.13 (c) or (d) PLUS all
amounts deducted in arriving at such Consolidated Net Income for
depreciation and amortization expense of assets in accordance with
GAAP, PROVIDED, that, the computation of EBITDA during any period prior
to and including the fiscal quarter ending on September 30, 1997 shall
be on a Pro Forma Basis.
"EFFECTIVE DATE" means the later of:
(a) the Agreement Date; and
(b) the date on which all of the conditions precedent
set forth in Section 4.01 hereof shall have been fulfilled or
waived in writing by the Lender.
"ENVIRONMENTAL LAWS" means any Applicable Law relating to
environmental protection including, without limitation, the following:
Clean Air Act, 42 U.S.C. Section 7401 ET SEQ; Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 ET SEQ.; Solid Waste Disposal Act,
42 U.S.C. Section 6901 ET SEQ.; Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 ET SEQ.;
National Environmental Policy Act, 42 U.S.C. ss. 4321 ET SEQ.;
regulations of the Environmental Protection Agency and any applicable
rule of common law and any judicial interpretation thereof relating
primarily to the environment or Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of
1974, as in effect from time to time.
"ERISA AFFILIATE" means any corporation which is a member of
the same controlled group of corporations as the Borrower within the
meaning of section 414(b) of the Code, or any trade or business which
is under common control with the Borrower within the meaning of section
414(c) of the Code.
"EURODOLLAR BUSINESS DAY" means any day on which banks are
scheduled to be open for business and quoting interest rates for Dollar
deposits on the London interbank market and which is also a Business
Day.
"EURODOLLAR RATE" means, with respect to any Interest Period
for Eurodollar Rate Loans, the offered rate in the London interbank
market for deposits in Dollars of amounts equal or comparable to the
principal amount of such Eurodollar Rate Loan offered for a term
comparable to such Interest Period, as currently shown on the Reuters
Screen LIBO page as of 11:00 a.m., GMT, two Eurodollar Business Days
prior to the first day of such
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Interest Period; PROVIDED, HOWEVER, that (a) if more than one offered
rate as described above appears on the Reuters Screen LIBO page, the
rate used to determine the Eurodollar Rate will be the consensus rate,
if any, shown on such LIBO page, and if no consensus rate is available,
the rate used to determine the Eurodollar Rate will be the arithmetic
average (rounded upward, if necessary, to the next higher 1/10 of 1%)
of such offered rates, or (b) if no such offered rates appear, the rate
used for such Interest Period will be the arithmetic average (rounded
upward, if necessary, to the next higher 1/10 of 1%) of rates quoted by
the Lender at approximately 10:00 a.m., New York time, two Eurodollar
Business Days prior to the first day of such Interest Period for
deposits in Dollars offered to leading European banks for a period
comparable to such Interest Period in an amount comparable to the
principal amount of such Eurodollar Rate Loans. If the Lender ceases to
use the Reuters Screen LIBO page for determining interest rates based
on eurodollar deposit rates, a comparable internationally recognized
interest rate reporting service shall be used to determine such offered
rates.
"EURODOLLAR RATE LOAN" means the Term Loan or a Revolving Loan
that bears interest based upon the Eurodollar Rate.
"EURODOLLAR RATE MARGIN" means, on the date of determination:
(a) 2.00 percent, if for the Preceding Period, the
ratio of Indebtedness for Money Borrowed to EBITDA is equal to
or less than 3.25 to 1.00 and greater than 2.5 to 1.0;
(b) 1.75 percent, if for the Preceding Period, the
ratio of Indebtedness for Money Borrowed to EBITDA is equal to
or less than 2.50 to 1.0 and greater than 2.0 to 1.0;
(c) 1.50 percent, if for the Preceding Period, the
ratio of Indebtedness for Money Borrowed to EBITDA is equal to
or less than 2.0 to 1.0 and greater than 1.5 to 1.0; and
(d) 1.25 percent, if for the Preceding Period, the
ratio of Indebtedness for Money Borrowed to EBITDA is equal to
or less than 1.5 to 1.0.
Each change in the applicable Eurodollar Rate Margin will be
effective from the date of delivery of the financial statements and the
certificate described in Sections 7.01 and 7.07(a), respectively.
Notwithstanding the foregoing, at any time during which the Borrower
has failed to deliver the financial statements or the certificate
described in Sections 7.01 and 7.07(a), respectively, with respect to a
fiscal quarter in accordance with the provisions thereof, or at any
time that an Event of Default shall have occurred and shall be
continuing, the Eurodollar Rate Margin shall be reset, if necessary, to
be 2.00
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percent until such time as the Borrower shall deliver such financial
statements and certificate or such Event of Default shall be cured or
waived.
"EVENT OF DEFAULT" means any of the events specified in
Section 9.01, provided that any requirement for notice or lapse of time
or any other condition has been satisfied.
"EXISTING DEBT" shall have the meaning set forth in Section
6.08.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the
weighted average of the rates on overnight Federal Funds transactions
with members of the Federal Reserve System arranged by Federal Funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Lender from three Federal Funds brokers of
recognized standing selected by it.
"FEES" means the fees and commissions provided for or referred
to in Section 3.06 and any other fees payable by the Borrower hereunder
or under any other Loan Document.
"FINANCING STATEMENTS" means any and all financing statements
executed and delivered by or on behalf of any Loan Party in connection
with the perfection of the Security Interest, together with any
amendments thereto and any continuations thereof.
"FLORIDA MORTGAGE" means that certain Deed to Secure Debt, in
substantially the form of Exhibit H hereto, covering the property of
Cruises Only, LLC located in Orlando, Florida and to be executed by
Cruises Only, LLC and delivered to Lender as a condition to Lender's
obligation to make the Term Loan as provided in Section 4.02 hereof.
"FOUNDING MEMBERS" means collectively, Xxxxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxx Xxxxxx, Xxxx X.
Xxxxxxxx, Elan X. Xxxxxxxxx, D. Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxx
Xxxxx, Alpine Consolidated LLC and Capstone
Partners, LLC.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"GOVERNMENTAL APPROVALS" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with,
and reports to, all governmental bodies.
"GOVERNMENTAL AUTHORITY" means any national, state or local
government (whether domestic or foreign), any political subdivision
thereof or any other governmental, quasi-governmental, judicial, public
or statutory instrumentality, authority, body, agency,
8
bureau or entity (including, without limitation, the FDIC, the
Comptroller of the Currency or the Federal Reserve Board, any central
bank or any comparable authority or the Securities and Exchange
Commission) or any arbitrator with authority to bind a party at law.
"GUARANTY", "GUARANTEED" or to "GUARANTEE" as applied to any
obligation means and includes
(a) a guaranty (other than by endorsement of
negotiable instruments for collection in the ordinary course
of business), directly or indirectly, in any manner, of any
part or all of such obligation, or
(b) an agreement, direct or indirect, contingent or
otherwise, and whether or not constituting a guaranty, the
practical effect of which is to assure the payment or
performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation whether
by
(i) the purchase of securities or
obligations,
(ii) the purchase, sale or lease of property
or the purchase or sale of services primarily for the
purpose of enabling the obligor with respect to such
obligation to make any payment or performance (or
payment of damages in the event of nonperformance) of
or on account of any part or all of such obligation,
or to assure the owner of such obligation against
loss,
(iii) repayment of amounts drawn down by
beneficiaries of letters of credit, or
(iv) the supplying of funds to or investing
in a Person on account of all or any part of such
Person's obligation under a Guaranty of any
obligation or indemnifying or holding harmless, in
any way, such Person against any part or all of such
obligation.
"GUARANTY SUPPLEMENT" shall have the meaning set forth in the
Subsidiary Guaranty.
"HAZARDOUS MATERIALS" means and includes, without limitation,
(a) hazardous waste as defined in the Resource Conservation and
Recovery Act of 1976, or in any other applicable Environmental Laws,
(b) hazardous substances, as defined in the Comprehensive Environmental
Response, Compensation and Liability Act, or in any other applicable
Environmental Laws, (c) gasoline, or any other petroleum product or
by-product, (d) toxic substances, as defined in the Toxic Substances
Control Act of 1976, or
9
in any other applicable Environmental Laws, (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide,
Fungicide, and Rodenticide Act of 1975, or in any other applicable
Environmental Laws, or (f) any hazardous waste, hazardous substances,
hazardous materials, toxic substances or toxic pollutants, as those
terms are used or defined in the Hazardous Materials Transportation
Act, the Clean Air Act or the Clean Water Act, as each such Act,
statute or regulation may be amended from time to time.
"HOSTILE ACQUISITION" means any Acquisition involving a tender
offer or proxy contest that has not been recommended or approved by the
board of directors (or similar governing body) of the Person that is
the subject of such Acquisition prior to the first public announcement
or disclosure relating to such Acquisition.
"INDEBTEDNESS" as applied to a Person means, without
duplication, (a) all indebtedness of such Person which in accordance
with GAAP would be included in determining total liabilities as shown
on the liability side of a balance sheet of such Person as at the date
as of which Indebtedness is to be determined (other than trade payables
and accrued expenses, customer deposits, deferred revenues and deferred
taxes arising in the ordinary course of business) including, without
limitation, all Capitalized Lease Obligations of such Person and all
reimbursement obligations due or that may become due of such Person
under letters of credit and acceptances issued for its account, and (b)
all obligations of other Persons which such Person has Guaranteed.
"INITIAL PUBLIC OFFERING" means the initial public offering by
the Borrower and the related acquisitions, all as described in its
Final Prospectus, dated July 22, 1997 and filed with the Securities and
Exchange Commission.
"INTEREST CHARGES" means, with respect to any period, all
interest in respect of Indebtedness of the Borrower and its
Subsidiaries in accordance with GAAP (including imputed interest on
Capitalized Lease Obligations) deducted in determining Consolidated Net
Income for such period (eliminating all offsetting debits and credits
between the Borrower and its Subsidiaries and all other items required
to be eliminated in the course of the preparation of consolidated
financial statements of the Borrower and its Subsidiaries in accordance
with GAAP), PROVIDED, that, the calculation of Interest Charges
incurred at any time prior to and including the fiscal period ending on
September 30, 1997 shall be on a Pro Forma Basis.
"INTEREST CHARGES COVERAGE RATIO" means, at any time, the
ratio of (a) Consolidated Income Available for Interest Charges for the
Preceding Period to (b) Interest Charges for such period.
"INTEREST PERIOD" means the period (a "EURODOLLAR INTEREST
PERIOD") commencing on the date of the Borrowing of such Eurodollar
Rate Loan and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of
10
each Eurodollar Interest Period shall be one month. In no event shall
an Interest Period extend beyond the Revolving Termination Date.
Whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day;
PROVIDED, HOWEVER, that if such extension would cause the last day of
such Interest Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the next preceding
Business Day.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended.
"INVENTORY" shall have the meaning set forth in the Security
Agreement.
"INVESTMENT" means the acquisition of any interest in any
Person or property, a loan or advance to any Person or other
arrangement for the purpose of providing funds or credit to any Person,
a capital contribution in or to any Person, or any other investment in
any Person or property.
"LENDER" means NationsBank, N.A. and its successors and
assigns.
"LENDING OFFICE" means, for the Lender and for each Type of
Loan, the office of the Lender specified for the Lender on Annex I
attached hereto.
"LIEN" as applied to the property of any Person means: (a) any
mortgage, deed to secure debt, deed of trust, lien, pledge, charge,
lease constituting a Capitalized Lease Obligation, conditional sale or
other title retention agreement, or other security interest, security
title or encumbrance of any kind in respect of any property of such
Person, or upon the income or profits therefrom; (b) any arrangement,
express or implied, under which any property of such Person is
transferred, sequestered or otherwise identified for the purpose of
subjecting the same to the payment of Indebtedness or performance of
any other obligation in priority to the payment of the general,
unsecured creditors of such Person; and (c) the filing of any financing
statement under the Uniform Commercial Code or its equivalent in any
jurisdiction.
"LOAN" means any Eurodollar Rate Loan or Prime Rate Loan.
"LOAN DOCUMENT" means this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, the
Revolving Note, the Term Note, the Subsidiary Guaranty, each Guaranty
Supplement, the Security Agreement, each Security Agreement Supplement,
the Trademark Security Agreement, the Membership Pledge Agreement, the
Florida Mortgage and the Pledge Agreement.
"LOAN PARTY" means each of the Borrower and each of its
Material Subsidiaries.
11
"MATERIALLY ADVERSE EFFECT" means a materially adverse effect
upon (a) the business, assets, liabilities, financial condition,
results of operations or business prospects of the Borrower and its
Material Subsidiaries, taken as a whole, as determined by the Lender in
its sole discretion exercised in good faith or (b) any Loan Party's
ability to perform its obligations under any Loan Document to which it
is a party.
"MATERIAL SUBSIDIARY" means: (a) each of Auto Europe, LLC,
Cruises, Inc., Cruises Only, LLC, Travel 800, LLC, D-FW Tours, Inc. and
D-FW Travel Arrangements, Inc., and any successor thereto; (b) a
Subsidiary of the Borrower that (as of any date of determination), (i)
contributed at least ten percent (10%) to Consolidated Net Income as of
the most recently ended fiscal quarter, or (ii) owned assets
constituting at least ten percent (10%) of Consolidated Assets as of
the most recently ended fiscal quarter; and (c) with respect to any
Subsidiary organized or acquired subsequent to the date hereof, a
Subsidiary that as of (x) the date it becomes a Subsidiary, would have
owned (on a pro forma basis if such Subsidiary had been a Subsidiary of
the Borrower at the end of the preceding fiscal quarter) assets
constituting at least ten percent (10%) of Consolidated Assets at the
end of the fiscal quarter immediately prior to the fiscal quarter in
which it is organized or acquired, or (y) any date of determination
thereafter, (A) contributed at least ten percent (10%) to Consolidated
Net Income as of the most recently ended fiscal quarter, or (B) owned
assets constituting at least ten percent (10%) of Consolidated Assets
as of the most recently ended fiscal quarter.
"MEMBERSHIP PLEDGE AGREEMENT" means that certain Security
Agreement and Pledge of Membership Interest, dated as of the date
hereof, between the Borrower and the Lender in substantially the form
of Exhibit F attached hereto.
"MONEY BORROWED" means, as applied to the Indebtedness of a
Person (excluding reimbursement obligations due or that may become due
of such Person under letters of credit and acceptances issued for its
account),
(a) Indebtedness for money borrowed, or
(b) Indebtedness, whether or not in any such case the
same was for money borrowed, but other than trade indebtedness
of such Person incurred in the ordinary course of business:
(i) represented by notes payable, and drafts
accepted, that represent extensions of credit,
(ii) constituting obligations evidenced by
bonds, debentures, notes or similar instruments, or
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(iii) upon which interest charges are
customarily paid or that was issued or assumed as
full or partial payment for property, or
(c) Indebtedness that constitutes a Capitalized Lease
Obligation, or
(d) Indebtedness that is such by virtue of clause (b)
of the definition of Indebtedness, but only to the extent that
the obligations Guaranteed are obligations that would
constitute Indebtedness for Money Borrowed.
"MORTGAGED PROPERTY" means that certain property described in
and covered by the Florida Mortgage.
"MULTIEMPLOYER PLAN" has the meaning set forth in Section
4001(a)(3) of ERISA, as amended or revised from time to time.
"NOTES" means, collectively, the Revolving Note and the Term
Note.
"NOTICE OF BORROWING" means a notice in the form of Exhibit A
hereto to be delivered to the Lender pursuant to Section 2.01(b)
indicating the Borrower's intention to borrow a Revolving Loan.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor agency.
"PERMITTED ACQUISITION" means an Acquisition that:
(i) the Person to be acquired is in the same or
complimentary line of business as described in Section 6.04;
and
(ii) the Person to be acquired has formally approved
such Acquisition; and
(iii) the Borrowing requested for such Acquisition
does not exceed the lesser of (x) $4,000,000 and (y) the
difference between (A) $20,000,000 and (B) the principal
amount outstanding as of the date of such Borrowing of all
other Borrowings used for Acquisitions during the Preceding
Period.
"PERMITTED ENCUMBRANCES" means, with respect to the Mortgaged
Property, such restrictions, easements, reservations and exceptions of
title as are set forth in the mortgage policy or title commitment
delivered with respect thereto pursuant to Section 4.02(c)(i) and such
restrictions as are approved by the Lender in writing.
"PERMITTED INVESTMENTS" means any one or more of the
following:
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(i) Investments in property to be used in the
ordinary course of business of the Borrower and its
Subsidiaries;
(ii) Investments in current assets arising from the
sale of goods and services in the ordinary course of business
of the Borrower and its Subsidiaries;
(iii) Investments in cash;
(iv) Investments in United States Governmental
Securities, PROVIDED that such obligations mature within one
(1) year from the date of acquisition thereof;
(v) Investments in commercial paper, banker's
acceptances and asset-backed securities rated "A-1" (or
higher) by Standard & Poor's or "P-1" (or higher) by Xxxxx'x
(or any future comparable ratings issued by Standard & Poor's
or Xxxxx'x), PROVIDED that such obligations mature within two
hundred seventy (270) days from the date of creation thereof;
(vi) Investments in time deposits and certificates of
deposit of the Lender or any commercial bank organized under
the laws of the United States, any State thereof or the
District of Columbia having, or which is the principal banking
subsidiary of a bank holding company organized under the laws
of the United States, any State thereof, or the District of
Columbia having, combined capital and surplus of at least $200
million and having a long term unsecured debt rating of at
least "A" or the equivalent thereof from Standard & Poor's or
at least "P-1" or the equivalent thereof from Xxxxx'x, with
maturities of not more than one (1) year from the date of
acquisition by such Person;
(vii) Investments in overnight repurchase agreements
and repurchase obligations with a term of not more than seven
days for underlying securities of the type described in clause
(iv) above entered into with any bank meet the qualifications
specified in clause (vi) above;
(viii) Investments in money market or mutual funds
substantially all of whose assets are comprised of securities
of the types described in clauses (iv) through (vii) above;
(ix) Investments in demand deposit accounts
maintained in the ordinary course of business;
(x) Capital Expenditures to the extent permitted by
Section 8.14;
(xi) Investments in securities of trade creditors or
customers received in any plan of reorganization or similar
arrangement on the bankruptcy or insolvency
14
of such trade creditors or customers or received in settlement
of delinquent obligations of, and other disputes with,
suppliers arising in the ordinary course of business;
(xii) Investments by the Borrower and Material
Subsidiaries in Material Subsidiaries that are wholly owned
Subsidiaries of the Borrower; and
(xiii) Investments by a Subsidiary in the Borrower or
a Material Subsidiary.
"PERMITTED LIENS" means, as to any Person: (a) inchoate Liens
securing taxes, assessments and other governmental charges or levies
(excluding any Lien imposed pursuant to any of the provisions of ERISA)
or the claims of materialmen, mechanics, carriers, warehousemen or
landlords for labor, materials, supplies or rentals incurred in the
ordinary course of business; (b) Liens (excluding any Lien imposed
pursuant to any of the provisions of ERISA) consisting of deposits or
pledges made, in the ordinary course of business, in connection with,
or to secure payment of, obligations under workmen's compensation,
unemployment insurance or similar legislation, or to secure the
performance of tenders, statutory obligations, surety bonds, bids,
government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money); (c) Permitted Encumbrances and Liens consisting of
encumbrances in the nature of zoning restrictions, easements, and
rights or restrictions of record on the use of property, which do not
materially detract from the value of such property or materially impair
the use thereof in the business of such Person; (d) Liens in existence
as of the date hereof listed on Schedule 5.01(g) and not required to be
terminated pursuant to Section 4.01(e) hereof; (e) Liens in favor of
the Lender or created pursuant to the Loan Documents; (f) Purchase
Money Liens in an aggregate amount at any time less than $500,000; (g)
leases or subleases to providers of services or other equipment to be
located in the respective properties of the Borrower or any of its
Subsidiaries to other Persons in the ordinary course of business; (h)
Liens upon assets or equipment subject to Capitalized Lease
Obligations; (i) Liens arising from precautionary Uniform Commercial
Code financing statements filings in any jurisdiction regarding
operating leases; (j) Liens arising out of judgments or awards
PROVIDED, that the judgments secured shall, within 60 days after the
entry thereof, have been discharged or execution thereof stayed pending
appeal, or shall have been discharged within 60 days after the
expiration of any such stay.
"PERSON" means an individual, corporation, partnership,
association, trust or unincorporated organization, or a government or
any agency or political subdivision thereof.
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"PLAN" means an employee benefit plan maintained for employees
of the Borrower or any of its Subsidiaries that is covered by Title IV
of ERISA, including such plans as may be established after the
Agreement Date.
"PLEDGE AGREEMENT" means the Pledge Agreement dated as the
date hereof between the Borrower and the Lender pursuant to which the
Borrower has pledged all of its ownership interests in each of its
Material Subsidiaries to the Lender, in substantially the form of
Exhibit E hereto.
"POST-DEFAULT RATE" means, with respect to a Loan, a rate
equal to five percent (5%) per annum above the then applicable interest
rate of such Loan.
"PRECEDING PERIOD" means, with respect to any Person, as of
the date of determination, the most recently completed four fiscal
quarters of such Person, PROVIDED, that any calculations made with
reference to a fiscal period of the Borrower or any Subsidiary thereof
ending on or prior to September 30, 1997 shall be made on a Pro-Forma
Basis.
"PREFERRED STOCK", as applied to any corporation, shall mean
shares of stock of such corporation which are entitled to preference or
priority over any other shares of such corporation in respect of the
payment of dividends or distribution of assets upon liquidation or
dissolution or both.
"PRIME RATE" means the rate of interest publicly announced by
the Lender from time to time as its "PRIME RATE" (it being understood
that the Prime Rate may not be the lowest rate the Lender charges its
customers); PROVIDED, HOWEVER, that in no event shall the Prime Rate
charged hereunder be lower than the Federal Funds Rate PLUS .5 of one
percent in effect on such date.
"PRIME RATE LOAN" means the Term Loan or a Revolving Loan that
bears interest based upon the Prime Rate.
"PRINCIPAL OFFICE" means the office of the Lender located at
0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxx Xxxxx, Xxxxxxx
00000.
"PRO FORMA BASIS" shall mean on a pro forma basis after giving
effect to the Related Transactions prepared on a basis consistent with
the financial statements described in Section 5.01(j)(i) hereof.
"PROJECTIONS" means the Borrower's forecasted consolidated and
consolidating: (a) balance sheets; (b) profit and loss statements and
(c) cash flow statements each on a quarterly and annual basis
consistent with Borrower's (and its Subsidiaries') historical
16
financial statements, together with appropriate supporting details and
a statement of underlying assumptions.
"PURCHASE MONEY LIEN" means any Lien created to secure all or
any part of the purchase price, or to secure Indebtedness incurred or
assumed to pay all or any part of the purchase price or cost of
construction, of tangible property (or any improvement thereon)
acquired or constructed by the Borrower or a Subsidiary after the
Closing Date, PROVIDED that
(i) any such Lien shall extend solely to the item or
items of such property (or improvement thereof) so acquired or
constructed and, if required by the terms of the instrument
originally creating such Lien, other property (or improvement
thereon) which is an improvement to or its acquired or
constructed property (or improvement thereof) or which is real
property being improved by such acquired or constructed
property (or improvement thereon);
(ii) the principal amount of the Indebtedness secured
by any such Lien shall at no time exceed an amount equal to
the lesser of (A) the cost to the Borrower or such Subsidiary
of the property (or improvement thereon) so acquired or
constructed and (B) the fair market value (as determined in
good faith by the board of directors of the Borrower) of such
property (or improvement thereon) at the time of such
acquisition or construction; and
(iii) any such Lien shall be created
contemporaneously with, or within 10 days after, the
acquisition or construction of such property.
"RECEIVABLES FINANCING" shall mean a transaction pursuant to
which funds are advanced to the Borrower and/or any of its Subsidiaries
in exchange for which the Borrower and/or any of its Subsidiaries shall
sell, pledge, contribute or place a Lien on any or all of its accounts
or note receivables to repay, in whole or in part, such funds.
"RELATED TRANSACTIONS" means the Initial Public Offering, the
acquisition by the Borrower, in separate combination transactions, of
all of (i) the stock of Cruises, Inc., D-FW Tours, Inc. and D-FW Travel
Arrangements, Inc., (ii) the ownership interests of Auto Europe, LLC,
Cruises Only, LLC, and Travel 800, LLC and (iii) substantially all of
the assets of Auto-Europe, Inc, Cruises Only, Inc. and 1-800-Ideas,
Inc., and the payment of all fees, costs and expenses associated with
all of the foregoing.
"REPORTABLE EVENT" has the meaning set forth in Section
4043(b) of ERISA, but shall not include a Reportable Event as to which
the provision for 30 days' notice to the PBGC is waived under
applicable regulations.
17
"RESPONSIBLE OFFICER" means, with respect to any Loan Party,
its President, chief executive officer, chief operating officer, a Vice
President or chief financial officer.
"REVOLVING COMMITMENT" means Twenty Million Dollars
($20,000,000), as the same may be reduced permanently from time to time
pursuant to Section 2.05(a) hereof.
"REVOLVING CREDIT FACILITY" means the revolving loan facility
described in Section 2.01 hereof.
"REVOLVING LOAN" has the meaning set forth in Section 2.01(a)
hereof.
"REVOLVING NOTE" has the meaning set forth in Section 2.07
hereof.
"REVOLVING TERMINATION DATE" means October 15, 2000.
"SECURED OBLIGATIONS" means, individually and collectively:
(a) the Revolving Loans; (b) the Term Loan and (c) all other
indebtedness, liabilities, obligations, covenants and duties of the
Borrower owing to the Lender of every kind, nature and description,
under or in respect of this Agreement, any Note or any of the other
Loan Documents including, without limitation, the Fees, whether direct
or indirect, absolute or contingent, due or not due, contractual or
tortious, liquidated or unliquidated, and whether or not evidenced by
any note.
"SECURITY AGREEMENT" means the Security Agreement executed and
delivered by the Borrower and each of its Material Subsidiaries on the
date hereof, in favor of the Lender, in substantially the form of
Exhibit C hereto, and each other Material Subsidiary made a party
thereto by the execution and delivery of a Security Agreement
Supplement.
"SECURITY AGREEMENT SUPPLEMENT" shall have the meaning set
forth in the Security Agreement.
"SECURITY INTEREST" means the Lien of the Lender upon, and the
collateral assignment to the Lender of, the Collateral effected hereby,
by the execution and delivery of the Security Agreement, the Pledge
Agreement, the Membership Pledge Agreement and by any other Loan
Document or pursuant to the terms hereof or thereof including without
limitation any Security Agreement Supplement and the Florida Mortgage.
"SUBSIDIARY" means each of the Persons specified on Schedule
5.01(b) and any other Person of which an aggregate of 50% or more of
the voting stock of any class or classes or 50% or more of other voting
or equity interests is owned of record or beneficially by another
Person, or by one or more Subsidiaries of such other Person, or by such
other Person and one or more Subsidiaries of such Person.
18
"SUBSIDIARY GUARANTY" means the Guaranty Agreement dated as of
the date hereof executed by each Material Subsidiary in favor of the
Lender, in substantially the form of Exhibit G hereto, and each other
Material Subsidiary made a party thereto by the execution and delivery
of a Guaranty Supplement.
"TERM LOAN" means the term loan made to the Borrower pursuant
to Section 2.02 hereof.
"TERM NOTE" has the meaning set forth in Section 2.07 hereof.
"TERMINATION EVENT" means (a) a Reportable Event; (b) the
filing of a notice of intent to terminate a Plan or the treatment of a
Plan amendment as a termination under Section 4041 of ERISA or (c) the
institution of proceedings to terminate a Plan by the PBGC under
Section 4042 of ERISA, or the appointment of a trustee to administer
any Plan.
"TRADEMARK SECURITY AGREEMENT" means the Collateral Assignment
and Trademark Security Agreement, executed and delivered by the
Borrower and each Material Subsidiary on the date hereof, in favor of
Lender, in substantially the form of Exhibit D hereto, and each
additional Trademark Security Agreement executed by each Additional
Loan Party pursuant to Section 6.09 hereof.
"TYPE" with respect to the Term Loan or a Revolving Loan,
refers to whether such Loan is a Eurodollar Rate Loan or a Prime Rate
Loan.
"UNFUNDED VESTED ACCRUED BENEFITS" means with respect to any
Plan at any time, the amount (if any) by which (a) the present value of
all vested nonforfeitable benefits under such Plan EXCEEDS (b) the fair
market value of all Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plan.
"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform
Commercial Code as in effect from time to time in the State of New
York.
SECTION 1.02. GENERAL. All terms of an accounting nature not
specifically defined herein shall have the meaning ascribed thereto by GAAP.
References in this Agreement to "Sections", "Articles", "Exhibits" and
"Schedules" are to sections, articles, Exhibits and Schedules herein and hereto
unless otherwise indicated. References in this Agreement to any document,
instrument or agreement (a) shall include all Exhibits, Schedules and other
attachments thereto, (b) shall include all documents, instruments or agreements
issued or executed in replacement thereof, and (c) shall mean such document,
instrument or agreement, or replacement or predecessor thereto, as amended,
modified or supplemented from time to time in accordance with its terms and in
effect at any given time. Wherever from the context it appears appropriate, each
term stated in either the singular or plural shall include the singular and
plural, and pronouns
19
stated in the masculine, feminine or neuter gender shall include the masculine,
the feminine and the neuter. Unless explicitly set forth to the contrary, a
reference to "Subsidiary" shall mean a Subsidiary of the Borrower or a
Subsidiary of such Subsidiary and a reference to an "Affiliate" shall mean a
reference to an Affiliate of the Borrower. Unless otherwise indicated, all
references to time are references to Eastern Standard Time. Unless otherwise
indicated, all accounting terms, ratios and measurements shall be interpreted or
determined in accordance with GAAP consistently applied.
ARTICLE II
LOANS
SECTION 2.01. REVOLVING CREDIT FACILITY.
(a) REVOLVING LOANS. Subject to the terms and conditions hereof, during
the period from the Effective Date to the Revolving Termination Date, the Lender
agrees at any time and from time to time to make a revolving loan or revolving
loans (each, a "REVOLVING LOAN" and, collectively, the "REVOLVING LOANS") to the
Borrower in an aggregate principal amount at any time outstanding up to, but not
exceeding, the Revolving Commitment; PROVIDED, HOWEVER, that any given Borrowing
of Revolving Loans made pursuant to this Article II shall not exceed the
Revolving Commitment at the time of such Borrowing. Subject to the terms and
conditions of this Agreement, during the period from the Effective Date to the
Revolving Termination Date, the Borrower may borrow, repay and reborrow
Revolving Loans. All Borrowings of Revolving Loans shall be in integral
multiples of $100,000.
(b) BORROWINGS UNDER REVOLVING CREDIT FACILITY. The Borrower shall give
the Lender written notice pursuant to a Notice of Borrowing or telephonic notice
of each Borrowing which notice shall be irrevocable and effective upon receipt.
Any such telephonic notice shall be subsequently confirmed in writing by the
Borrower pursuant to a Notice of Borrowing sent to the Lender by telecopy on the
same day of such telephonic notice by a Responsible Officer of the Borrower. The
Notice of Borrowing shall specify the aggregate principal amount of the
Revolving Loan to be made by the Lender pursuant to the Notice of Borrowing and
the date of such Borrowing. Each Notice of Borrowing shall be irrevocable by and
binding on the Borrower.
(c) DISBURSEMENTS OF REVOLVING LOANS. Provided that the applicable
conditions set forth in Article IV hereof applicable for a Revolving Loan are
fulfilled and the applicable Notice of Borrowing is delivered to the Lender
before 12:00 noon (EST) on any Business Day, the Lender will make such funds
available to the Borrower at the account specified by the Borrower in such
Notice of Borrowing on the Business Day specified in such Notice of Borrowing.
Provided that the applicable conditions set forth in Article IV hereof
applicable for a Revolving Loan are fulfilled and the applicable Notice of
Borrowing is delivered to the Lender later than 12:00 noon (EST) on any Business
Day, the Lender will make such funds available to the
20
Borrower at the account specified by the Borrower in such Notice of Borrowing on
the following Business Day.
SECTION 2.02. TERM LOAN. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
contained herein, the Lender agrees to lend to the Borrower on or prior to
February 15, 1998 the Term Loan (after which time the Term Loan can no longer be
requested). The aggregate amount of the Term Loan shall be equal to 75% of the
appraised value of the Mortgaged Property. The Term Loan shall be funded in one
drawing. Amounts borrowed under this Section 2.02 and repaid may not be
reborrowed.
SECTION 2.03. INTEREST ON LOANS. Subject to the provisions of Section
3.01 hereof, interest on each Eurodollar Rate Loan shall be payable on the last
day of each Interest Period with respect thereto and at maturity of such Loan
(whether by acceleration or otherwise or upon demand), at an interest rate per
annum during the Interest Period for such Loan equal to the Adjusted Eurodollar
Rate for the Interest Period in effect for such Eurodollar Rate Loan PLUS the
Eurodollar Rate Margin. The Lender upon determining the Adjusted Eurodollar Rate
for any Interest Period shall promptly notify the Borrower by telephone
(confirmed promptly in writing by facsimile transmission) or in writing by
facsimile transmission thereof and of the amount of interest which will become
payable at the end of such Interest Period. Each determination by the Lender of
an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error. Subject to the provisions of Section 3.01 hereof,
interest on each Prime Rate Loan shall be payable on the last day of each
calendar month and at maturity of such Loan (whether by acceleration or
otherwise or upon demand), at an interest rate per annum equal to the Prime
Rate.
SECTION 2.04. UNAVAILABILITY OF CERTAIN LOANS/FUNDING LOSSES.
(a) Notwithstanding any other provision of this Article II to the
contrary:
(i) if the Lender is unable to determine (which determination
shall be conclusive and binding upon the Borrower), by reason of
circumstances affecting the interbank Eurodollar market, the Eurodollar
Rate for Eurodollar Rate Loans the Lender shall give telecopy notice
thereof to the Borrower and the right of the Borrower to select or
maintain Eurodollar Rate Loans shall be suspended until the Lender
shall notify the Borrower that the circumstances causing such
suspension no longer exists; and
(ii) if the Lender shall, at least one Business Day before the
date of any requested Borrowing notify the Borrower that the Adjusted
Eurodollar Rate comprising such Borrowing will not adequately reflect
the cost to the Lender of making or funding the Eurodollar Rate Loans,
the right of the Borrower to select Eurodollar Rate Loans shall be
suspended until the Lender notifies the Borrower that such rates in
fact reflect the cost to the Lender of making or funding such Loans.
21
If either of the events specified in clauses (i) or (ii) of the preceding
sentence occurs, on the last day of the then existing Interest Period therefor,
the Loans shall convert into Prime Rate Loans. Such Loans may be re-converted
into Eurodollar Rate Loans one Business Day after Lender has notified the
Borrower that such rates reflect the cost to the Lender of making or funding
such Loans and receipt by the Lender of the written request of the Borrower to
re-convert such Loans.
(b) In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Loans, the Borrower shall
indemnify the Lender against any loss, cost or expense incurred by the Lender as
a result of any failure of the Borrower to fulfill for any reason whatsoever
including the exercise of any remedies under Section 9.02, on or before the date
for such Borrowing specified in such Notice of Borrowing, the applicable
conditions set forth in Article IV hereof or as a result of the failure of the
Borrower to borrow any such requested Eurodollar Rate Loan, including, without
limitation, any loss (including loss of anticipated profits after taking into
account any reinvestment of funds), cost or expense incurred by the Lender by
reason of the liquidation or re-employment of deposits or other funds acquired
by the Lender to fund the Eurodollar Rate Loan to be made by the Lender as part
of such Borrowing, such amount to be determined by the Lender and such
determination by the Lender shall be binding upon the Borrower, absent manifest
error. The Lender shall promptly notify the Borrower of any such amount.
SECTION 2.05. VOLUNTARY REDUCTION OF REVOLVING COMMITMENT; FUNDING
LOSSES.
(a) The Borrower shall have the right to reduce permanently the amount
of the Revolving Commitment at any time and from time to time without penalty or
premium but in no event more frequently than one time during any calendar week
upon not less than twenty-four hours prior written notice to the Lender of each
such reduction, which notice shall specify the effective date thereof and the
amount of any such reduction (which in the case of any partial reduction shall
not be less than $100,000 and integral multiples of $100,000 in excess of that
amount) and shall be irrevocable once given and effective only upon receipt by
the Lender. Notwithstanding the foregoing, in no event shall the Borrower be
permitted to reduce the Revolving Commitment below an aggregate amount equal to
the aggregate principal amount of Revolving Loans outstanding at such time. The
Revolving Commitment once reduced pursuant to this Section shall not be
increased.
(b) The Borrower may prepay any Loan at any time; PROVIDED, HOWEVER,
that in the event the Borrower prepays any Eurodollar Rate Loan prior to the end
of the applicable Interest Period therefor for any reason whatsoever including
the exercise of any remedies under Section 9.02, the Borrower shall indemnify
the Lender against any loss, cost or expense incurred by the Lender as a result
of any such prepayment including, without limitation, any loss (including loss
of anticipated profits after taking into account any reinvestment of funds),
cost or expense incurred by the Lender by reason of the liquidation or
re-employment of deposits or other funds acquired by the Lender to fund the
Eurodollar Rate Loan made by the Lender, such amount to be determined by the
Lender and such determination by the Lender shall be binding upon the
22
Borrower, absent manifest error. The Lender shall promptly notify the Borrower
of any such amount. The Borrower may prepay any Prime Rate Loan at any time
without penalty or premium.
SECTION 2.06. REPAYMENT OF LOANS.
(a) REPAYMENT OF REVOLVING LOANS. The Borrower shall repay the entire
outstanding principal amount of, and all accrued but unpaid interest on, the
Revolving Loans on the Revolving Termination Date. If at any time the aggregate
principal amount of Revolving Loans outstanding at such time exceeds the
Revolving Commitment in effect at such time, the Borrower shall immediately pay
to the Lender the amount of such excess. Such payment shall be applied to pay
all amounts of principal outstanding on the Revolving Loans. In the event the
Borrower is required to pay any outstanding Eurodollar Rate Loans by reason of
this Section 2.06(a) prior to the end of the applicable Interest Period
therefor, the Borrower shall indemnify the Lender against the losses, costs and
expenses described in Section 2.05(b) hereof incurred by the Lender.
(b) REPAYMENT OF TERM LOAN. The Borrower agrees to repay the principal
amount of the Term Loan in monthly installments based on a fifteen year equal
amortization of principal, each such installment being payable on the fifth
calendar day of each calendar month, commencing on the fifth day of the month
following the advance of the Term Loan in an amount as set forth in the Term
Note, with the last such installment due and payable on October 5, 2000. Any
repayment or prepayment of the Term Loan prior to the scheduled maturity date
shall be applied in satisfaction of the required payments of principal in
inverse order of their scheduled due dates.
SECTION 2.07. NOTES. The obligation of the Borrower to repay the
Revolving Loans shall be evidenced by a promissory note (the "REVOLVING NOTE").
The Revolving Note shall be payable to the Lender, shall be in the face amount
equal to the Revolving Commitment, and shall be in substantially the form of
Exhibit B-1 hereto. The obligation of the Borrower to repay the Term Loan shall
also be evidenced by a promissory note (the "TERM NOTE"). The Term Note shall be
payable to the Lender, shall be in a face amount equal to 75% of the appraised
value of the Mortgaged Property, and shall be in substantially the form of
Exhibit B-2 hereto.
ARTICLE III
OTHER LOAN AND PAYMENT PROVISIONS
SECTION 3.01. INTEREST ON OVERDUE PAYMENTS. In the event the Borrower
shall fail to pay when due (whether at maturity, by reason of acceleration or
otherwise) any principal of, or interest on, any of the Loans or any other
amount owing hereunder or under any Note or other Loan Document when due or any
other Default or Event of Default shall have occurred and be continuing, all
Loans shall bear interest, to the extent permitted by law, at the Post-Default
Rate
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until such unpaid amount has been paid in full (whether before or after
judgment). All interest provided for in this Section shall be immediately due
and payable.
SECTION 3.02. COMPUTATIONS. Unless otherwise expressly set forth
herein, any accrued interest on any Loan and any Fees due hereunder shall be
computed on the basis of a year of 360 days and the actual number of days
elapsed.
SECTION 3.03. USURY. In no event shall the amount of interest due or
payable on the Loans exceed the maximum rate of interest allowed by Applicable
Law and, in the event any such payment is paid by the Borrower or received by
any Lender, then such excess sum shall be credited as a payment of principal,
unless the Borrower shall notify the Lender in writing that the Borrower elects
to have such excess sum returned to it forthwith. It is the express intent of
the parties hereto that the Borrower not pay and the Lender not receive,
directly or indirectly, in any manner whatsoever, interest in excess of that
which may be lawfully paid by the Borrower under Applicable Law.
SECTION 3.04. PAYMENTS. Except to the extent otherwise provided herein,
all payments of principal, interest and other amounts to be made by the Borrower
under this Agreement, the Notes or any other Loan Document shall be made in
Dollars, in immediately available funds, to the Lender at its Principal Office,
not later than 2:00 p.m. on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day) and shall be made in accordance
with the wiring instructions set forth for the Lender on Annex I attached
hereto. The parties agree that if the Borrower makes any payment due hereunder
after 2:00 p.m. but before 5:00 p.m. on the date such payment is due, such late
payment shall not constitute a Default under Section 9.01(a) hereof but shall
nevertheless be deemed to have been paid as of the next succeeding Business Day
as provided in the parenthetical phrase of the preceding sentence. The Lender
may (but shall not be obligated to) debit the amount of any such payment which
is not made by such time from any special or general deposit account of the
Borrower with the Lender (with prior notice to the Borrower, PROVIDED, that the
failure by the Lender to provide such notice shall not in any manner affect the
Lender's rights hereunder). The Borrower shall, at the time of making each
payment under this Agreement or any Note, specify to the Lender the amounts
payable by the Borrower hereunder to which such payment is to be applied and in
the event that it fails to so specify, or an Event of Default has occurred and
is continuing, the Lender may apply such payment to the Loans or any other
obligation of the Borrower under the Loan Documents in such manner as the Lender
may determine to be appropriate. If the due date of any payment under this
Agreement or any Note would otherwise fall on a day which is not a Business Day
such date shall be extended to the next succeeding Business Day and interest
shall be payable for the period of such extension.
SECTION 3.05. INSUFFICIENT FUNDS. If the Lender receives funds
insufficient to pay in full the outstanding principal of any Loans and/or
interest and/or fees and expenses due and payable on any date such amounts are
due, the Lender shall apply any such funds received by it:
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(a) FIRST, to pay all fees and expenses owing to the Lender
under or in connection with this Agreement and the other Loan
Documents;
(b) SECOND, to pay all accrued but unpaid interest on all
outstanding Loans;
(c) THIRD, to pay all amounts of principal outstanding on (i)
FIRST, the Revolving Loans and, (ii) SECOND, the Term Loan in
accordance with the second sentence of Section 2.06(b) hereof.
SECTION 3.06. FEES.
(a) FACILITY FEE. In consideration of the extension of the Term Loan
facility established hereby, the Borrower agrees to pay, on the date the Term
Loan is made, to the Lender, a facility fee equal to the Dollar amount
calculated as 5/8 of 1% of the aggregate initial principal amount of the Term
Loan.
(b) UNUSED FEE. The Borrower shall pay to the Lender a fee for the
period from and including the date of the initial Borrowing of Revolving Loans
to and excluding the Revolving Termination Date (or such earlier date upon which
the Revolving Commitment shall have been terminated) in an amount equal to the
Revolving Commitment less the sum of the average daily balance of the Revolving
Loans outstanding during the preceding fiscal quarter of the Borrower multiplied
by 1/4 of 1 percent per annum, such fee to be payable quarterly in arrears on
the last day of December following the Closing Date and the last day of each
March, June, September and December, thereafter, or on such earlier date upon
which the Revolving Commitment is terminated.
SECTION 3.07. INCREASED COSTS. The Borrower agrees that if: (a) any
change after the Agreement Date in any Applicable Law or in any request,
guideline or directive of any administrative or governmental authority (whether
or not having the force of law) or in the interpretation thereof by any court or
administrative or governmental authority charged with administration thereof,
shall either impose, affect, modify or deem applicable any reserve, special
deposit, capital maintenance or similar requirement against any Loan or impose
on the Lender any other condition regarding any Loan or (b) there shall occur
any change after the Agreement Date in the basis of taxation of payments to the
Lender of any amount owing to the Lender hereunder (except for a change in the
rate or amount of taxation on the overall net income of the Lender), and the
result of any event referred to in clause (a) or (b) above shall be to increase
the cost to the Lender of making or maintaining any Loan or to reduce the rate
of return on capital with respect to any Loan, then, upon demand by the Lender,
the Borrower shall immediately pay to the Lender additional amounts which shall
be sufficient to compensate the Lender for such increased cost, tax or reduced
rate of return, together with interest on such amount from the date five days
after the date the Borrower receives the statement(s) referred to in the next
sentence to the date the Borrower pays such increased cost, tax or reduced rate
of return in full at the Prime Rate. A statement setting forth the basis for
requesting such compensation and the method for determining
25
the amount thereof, submitted by the Lender to the Borrower, shall be conclusive
absent manifest error.
SECTION 3.08. STATEMENTS OF ACCOUNT. The Lender will account to the
Borrower upon its request but not more frequently than monthly with a statement
of Loans, interest, fees, expenses, charges and any other payments made pursuant
to this Agreement and the other Loan Documents, and such account rendered by the
Lender shall be deemed final, binding and conclusive upon Borrower unless the
Lender is notified by the Borrower in writing within thirty days after the date
each account is delivered to the Borrower that the Borrower objects to the
information, calculations or items therein contained. Such notice shall only be
deemed an objection to those items specifically objected to therein. The failure
of the Lender to deliver such a statement of accounts shall not relieve or
discharge the Borrower from its obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.01. CONDITIONS PRECEDENT TO ALL LOANS. This Agreement and the
obligation of the Lender to make the initial Revolving Loan or the Term Loan to
the Borrower in accordance with the terms hereof, are subject to the condition
precedent that the Borrower shall comply with each of the following, such
compliance shall be satisfactory to the Lender and any documents delivered to
the Lender shall be in form and substance reasonably satisfactory to the Lender:
(a) LOAN DOCUMENTS. The following documents shall have been
duly authorized, executed and delivered to the Lender by each Loan
Party a party thereto, shall be in full force and effect on the Closing
Date without any event or condition having occurred or existing which
constitutes, or with the giving of notice or lapse of time or both
would constitute, a default thereunder or breach thereof or would give
any party thereto the right to terminate any thereof:
(i) this Agreement;
(ii) the Revolving Note;
(iii) the Subsidiary Guaranty;
(iv) the Security Agreement;
(v) the Trademark Security Agreement;
(vi) the Membership Pledge Agreement; and
(vii) the Pledge Agreement;
(b) RESOLUTIONS. Each Loan Party shall have delivered to the
Lender certified copies (certified by the respective Secretary or
Assistant Secretary of each Loan Party (such Person shall be the
"AUTHENTICATING PERSON" with respect to such Loan Party)) of all
corporate or other necessary action taken by each Loan Party
authorizing the execution,
26
delivery and performance of the Loan Documents (other than the Term
Note and the Florida Mortgage) to which it is a party;
(c) CORPORATE CERTIFICATES. Each Loan Party shall have
delivered to the Lender (i) copies certified by an Authenticating
Person with respect to each Loan Party, as applicable, of (A) the
articles of incorporation certified by the Secretary of State of the
jurisdiction of its incorporation and by-laws of such Loan Party
certified by an Authenticating Person or (B) the operating agreement of
such Loan Party; (ii) with respect to each Loan Party, a certificate of
formation or other good standing certificate issued by the Secretary of
State of the jurisdiction in which such Loan Party was formed and in
the State of its principal place of business and in each State where
such Loan Party is qualified to do business; and (iii) certificates of
incumbency and specimen signatures signed by the appropriate
Authenticating Person with respect to each of the officers or other
Persons of each Loan Party who are authorized to execute and deliver
the Loan Documents to which such Loan Party is a party;
(d) RECORD SEARCHES. Completion of favorable UCC, tax,
judgment and lien search reports with respect to the Borrower and each
Loan Party in all necessary or appropriate jurisdictions and under all
legal and appropriate trade names indicating that there are no prior
Liens on any of the Collateral other than Permitted Liens;
(e) FILINGS AND RECORDINGS. All Uniform Commercial Code
financing statements and other documents or memoranda, if any, in
respect thereof, necessary or advisable, in the opinion of the Lender
shall have been duly filed or recorded including without limitation
each of the following:
(i) UCC-1 financing statements naming each Loan Party
as "DEBTOR" and the Lender as "SECURED PARTY" and covering the
Collateral and filed in all necessary and appropriate
jurisdictions; and
(ii) UCC-3 or UCC-2 termination statements identified
in Schedule 4.01(e) hereto;
(f) CONSENTS AND APPROVALS. All actions, approvals, consents,
waivers, exemptions, variances, franchises, orders, permits,
authorizations, rights and licenses required to be taken, given or
obtained in connection with the execution, delivery and performance of
any Loan Document (other than the Term Note and the Florida Mortgage)
shall have been taken, given or obtained, as the case may be, shall be
in full force and effect in all material respects and shall include
without limitation Agreements, as required by the Lender, with the
landlords of all premises leased by the Borrower or any of its
Subsidiaries and identified on Schedule 4.01(f) containing such
consents and waivers as required by the Lender; and
27
(g) INSURANCE CERTIFICATE. Each Loan Party shall have
delivered a certificate of insurance together with copies of each of
the policies of insurance (or binder or certificate of insurance with
respect thereto) covering any of the tangible insurable Collateral of
such Loan Party which comply with Section 6.05.
(h) APPRAISALS. On or before the Closing Date, the Lender
shall have received appraisals with respect to the Collateral, in form
and substance, and performed by appraisers, satisfactory to the Lender.
(i) OPINIONS OF COUNSEL. The Borrower shall have delivered to
the Lender the following legal opinions:
(i) Opinion of Kramer, Levin, Naftalis & Xxxxxxx,
counsel to the Loan Parties substantially in the form attached
hereto as Exhibit J;
(ii) Reliance letter of Akin, Gump, Strauss, Havrot
Xxxx, LLC, counsel to the Loan Parties; and
(iii) Opinions of special local counsel to the
Borrower and its Subsidiaries as required by the Lender.
(j) NOTICE OF BORROWING. With respect to each Borrowing of a
Revolving Loan, the Borrower shall have delivered to the Lender a
Notice of Borrowing executed by the Borrower;
(k) SOLVENCY CERTIFICATE/FINANCIAL INFORMATION. A Responsible
Officer of the Borrower and each Loan Party shall have delivered to the
Lender a certificate as to such Person's solvency, together with the
following financial information:
(i) The financial information required by Section
5.01(j) (other than the information indicated in clauses (a)
and (c) of the definition of "Projections"); and
(ii) The Borrower's forecasted consolidated profit
and loss statements for the period commencing on the date
hereof and concluding on December 31, 1998.
(l) ACCOUNTANTS LETTER. A letter authorizing Xxxxxx Xxxxxxxx &
Co., the independent certified public accountants of the Borrower and
the Material Subsidiaries to communicate with the Lender and
acknowledging the reliance by the Lender on past, present and future
financial statements audited by Xxxxxx Xxxxxxxx & Co.
(m) ADDITIONAL DOCUMENTS. Such other documents and instruments
as the Lender may reasonably request.
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SECTION 4.02. CONDITIONS PRECEDENT TO TERM LOAN. The obligation of the
Lender to make the Term Loan to the Borrower, in accordance with the terms
hereof, is subject to the further condition precedent that the Borrower has
complied with each of the following, such compliance shall be satisfactory to
the Lender and any documents delivered to the Lender shall be in form and
substance reasonably satisfactory to the Lender:
(a) TERM NOTE AND FLORIDA MORTGAGE AND RELATED RESOLUTIONS.
The Term Note shall have been duly authorized, executed and delivered
by the Borrower and the Florida Mortgage (or an assignment, in form and
substance acceptable to the Lender, of the mortgage covering the
Mortgaged Property on the date of closing of the Term Loan) shall have
been duly authorized, executed and delivered by Cruises Only, LLC, and
each such Loan Document shall be in full force and effect on the date
the Term Loan is made without any event or condition having occurred or
existing which constitutes, or with the giving of notice or lapse of
time or both would constitute, a default thereunder or breach thereof,
and each Loan Party party to the Term Note or Florida Mortgage shall
have delivered to the Lender copies of evidence of all corporate or
other necessary action taken by such Loan Party authorizing the
execution, delivery and performance of the Term Note or Florida
Mortgage, as the case may be, certified by an Authenticating Person.
(b) FILINGS AND RECORDINGS. The Florida Mortgage and all
Uniform Commercial Code financing statements and other documents or
memoranda, if any, in respect thereof, necessary or advisable, in the
opinion of the Lender, to perfect the security interest granted under
the Florida Mortgage shall have been duly filed or recorded.
(c) REAL ESTATE DOCUMENTS. With respect to the Mortgaged
Property, all reports, searches, evaluations, agreements and such other
documents as the Lender reasonably may request shall have been
delivered to the Lender in form and substance satisfactory to the
Lender including without limitation the following:
(i) An ALTA mortgagee's Policy of Title Insurance (or
binder to issue such a policy) in favor of the Lender for the
Florida Mortgage in an aggregate amount of coverage equal to
an amount satisfactory to the Lender, issued by a title
insurance company acceptable to the Lender, showing fee simple
title to the land and improvements described in each as vested
in Cruises Only, LLC and insuring that the lien granted by the
Florida Mortgage is a valid lien against said real property,
subject only to the Permitted Encumbrances;
(ii) A current as-built boundary survey of the
Mortgaged Property, performed by surveyors licensed in the
State of Florida, or other surveys, drawings or maps
acceptable to the Lender;
29
(iii) A satisfactory Phase I environmental audit
report conducted with respect to the Mortgaged Property and
performed by an environmental engineering company acceptable
to the Lender; and
(iv) Evidence of zoning compliance and issuance of
necessary permits and copies of leases and assignments thereof
with respect to the property covered by such Mortgage.
(d) APPRAISAL. On or before the date of the making of the Term
Loan, the Lender shall have received an appraisal with respect to the
Mortgaged Property which shall satisfy all of the applicable
regulations adopted by the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, the office of the
Thrift Supervision and the Office of the Comptroller of the Currency
pursuant to Title XI -- Real Estate Appraisal Reform, Amendments of the
Financial Institution Reform, Recovery and Enforcement Act of 1989.
(e) TERMINATION OF EXISTING DEBT. The Lender shall have
received a pay-off letter from Xxxxxxx Bank.
(f) OPINION OF COUNSEL. The Borrower shall have delivered to
the Lender the opinion of special Florida real estate counsel to the
Borrower.
(g) FEES. The Borrower shall have paid in immediately
available funds the fee payable on the date of the making of the Term
Loan and specified in Section 3.06(a).
SECTION 4.03. CONDITIONS PRECEDENT TO ALL LOANS. The obligation of the
Lender to make Revolving Loans and the Term Loan is subject to the further
condition precedent that, as of the date of each such Revolving Loan or the Term
Loan and after giving effect thereto: (a) no Default or Event of Default shall
have occurred and be continuing or would occur as a result of the Borrowing; (b)
the representations and warranties made or deemed made by the Borrower in this
Agreement and the other Loan Documents to which it is a party and by each other
Loan Party in the Loan Documents to which it is a party, shall be true and
correct in all material respects on and as of the date of the making of such
Loan with the same force and effect as if made on and as of such date except to
the extent that such representations and warranties expressly relate solely to
an earlier date (in which case such representations and warranties shall have
been true and correct in all material respects on and as of such earlier date)
and except for changes in factual circumstances specifically permitted
hereunder; and (c) no Materially Adverse Effect has occurred since the Effective
Date. Each Notice of Borrowing delivered by the Borrower to the Lender hereunder
and each Borrowing of Loans shall constitute a certification by the Borrower to
the effect set forth in the preceding sentence (both as of the date of such
instrument and as of the date of such Borrowing, after giving effect to such
Borrowing) and such Notice of Borrowing shall have attached to it a Compliance
Certificate based on the last financial statements delivered to the
30
Lender pursuant to Article VII hereof, showing compliance immediately prior to
and after such Borrowing.
SECTION 4.04. CONDITIONS AS COVENANTS. In the event the Lender makes
the initial Revolving Loan or the Term Loan prior to the satisfaction of all
conditions precedent set forth in Section 4.01 hereof and with respect to the
Term Loan, Sections 4.01 and 4.02 hereof, the Borrower shall nevertheless cause
such condition or conditions to be satisfied within thirty days after the date
of the making of such initial Revolving Loan and Term Loan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. REPRESENTATIONS AND WARRANTIES. The Borrower represents
and warrants to the Lender as follows:
(a) ORGANIZATION; POWER; QUALIFICATION. The Borrower and each
of its Subsidiaries is a corporation or limited liability company, as
the case may be, duly organized, validly existing and in good standing
under the laws of the State of its organization, has the power and
authority to own or lease its properties and to carry on its business
as now being and hereafter proposed to be conducted and is duly
qualified and is in good standing as a corporation or limited liability
company, as the case may be, and authorized to do business, in each
jurisdiction in which the character of its properties or the nature of
its business requires such qualification or authorization and where the
failure to be so qualified or authorized would have a Materially
Adverse Effect.
(b) OWNERSHIP STRUCTURE. Schedule 5.01(b) correctly sets forth
as of the date hereof the corporate structure and ownership interests
of the Borrower and each of its Subsidiaries including the correct
legal name of the Borrower and each of its Subsidiaries and the
shareholders or other Persons holding equity interests in greater than
5% of the total equity interests outstanding in the Borrower and each
of its Subsidiaries and their percentage equity or voting interest in
the Borrower and each of its Subsidiaries. Except as set forth in
Schedule 5.01(b):
(i) neither the Borrower nor any of its Subsidiaries
has issued to any third party any securities convertible into
ownership interests in its capital stock or any options,
warrants or other rights to acquire any securities convertible
into such shares, and
(ii) the outstanding stock and securities of or other
equity interests, as applicable, in each of the Borrower's
Subsidiaries are owned by the Persons indicated on Schedule
5.01(b), free and clear of all Liens, warrants, options and
31
rights of others of any kind whatsoever except as contemplated
by the Pledge Agreement.
(c) AUTHORIZATION OF AGREEMENT, NOTES, LOAN DOCUMENTS AND
BORROWINGS. The Borrower has the corporate power, and has taken all
necessary corporate action to authorize it, to borrow hereunder and to
execute, deliver and perform this Agreement, the Notes and the other
Loan Documents to which it is a party in accordance with their
respective terms and to consummate the transactions contemplated
hereby. This Agreement, the Notes and each of the other Loan Documents
to which the Borrower is a party have been duly executed and delivered
by the duly authorized officers of the Borrower and each is the legal,
valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with its respective terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or limiting
creditors' rights or by equitable principles generally (regardless of
whether enforcement is sought in equity of at law).
(d) COMPLIANCE OF AGREEMENT, NOTES, LOAN DOCUMENTS AND
BORROWING WITH LAWS, ETC. The execution, delivery and performance of
this Agreement, the Revolving Note and the other Loan Documents (other
than the Term Note and the Florida Mortgage) to which the Borrower is a
party and the Borrowings hereunder do not, the execution, delivery and
performance of the Term Note will not, and, to the knowledge of the
Borrower, the execution, delivery and performance of any Loan Document
will not, by the passage of time, the giving of notice, a determination
of materiality, the satisfaction of any condition, any combination of
the foregoing, or otherwise: (i) require any Governmental Approval or
violate any Applicable Law relating to the Borrower or any of its
Subsidiaries; (ii) conflict with, result in a breach of or constitute a
default under the articles of incorporation or bylaws of the Borrower,
or any indenture, material agreement or other instrument to which the
Borrower is a party or by which it or any of its properties may be
bound; or (iii) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter
acquired by the Borrower or any of its Subsidiaries other than
Permitted Liens.
(e) COMPLIANCE WITH LAW; GOVERNMENTAL APPROVALS. The Borrower
and each of its Subsidiaries is in compliance with each Governmental
Approval applicable to it in respect of the conduct of its business and
the ownership of its property and in compliance with all other
Applicable Law relating to the business of the Borrower or any of its
Subsidiaries, except for noncompliances which, and Governmental
Approvals the failure to possess which, would not, singly or in the
aggregate, cause a Default or Event of Default or have a Materially
Adverse Effect and, where appropriate, in respect of which adequate
reserves have been established on the books of the Borrower.
(f) TITLES TO PROPERTIES. Each of the Borrower and each of its
Subsidiaries has good, marketable and legal title to, or a valid
leasehold interest in, its properties and assets
32
including, but not limited to, those reflected on the balance sheets of
the Borrower and its Subsidiaries as at March 31, 1997.
(g) INDEBTEDNESS AND GUARANTEES. Schedule 5.01(g) is a
complete and correct listing of all (i) Indebtedness for Money Borrowed
of the Borrower and each of its Material Subsidiaries, (ii) Guarantees
of the Borrower or any of its Material Subsidiaries and (iii) all
letters of credit and acceptances issued or created by any Person for
the account of the Borrower or any of its Material Subsidiaries
existing on the date hereof, excluding any Indebtedness incurred by, or
Guarantees of, the Borrower and its Material Subsidiaries under the
Loan Documents. Each of the Borrower and each of its Material
Subsidiaries has performed and is in compliance with all of the
material terms of such Indebtedness and such Guarantees and all
instruments and agreements relating thereto, and, to the best knowledge
of the Borrower, no default or event of default, or event or condition
which with the giving of notice, the lapse of time, a determination of
materiality, the satisfaction of any other condition or any combination
of the foregoing, would constitute such a default or event of default,
exists with respect to any such Indebtedness or Guaranty.
(h) LITIGATION. Except as set forth on Schedule 5.01(h), there
are no actions, suits or proceedings pending (nor, to the knowledge of
the Borrower, are there any actions, suits or proceedings threatened)
against the Borrower or any of its Subsidiaries or any of their
respective property in any court or before any arbitrator of any kind
or before or by any governmental body which would have a Materially
Adverse Effect. There are no strikes or walkouts in progress relating
to any labor contracts to which the Borrower or any of its Subsidiaries
is a party.
(i) TAX RETURNS AND PAYMENTS. All federal, state and other tax
returns of the Borrower or any of its Subsidiaries required by
Applicable Law to be filed have been duly filed (except where valid
extension of time for filing has been obtained), and all federal, state
and other taxes, assessments and other governmental charges or levies
upon the Borrower or any of its Subsidiaries and its properties,
income, profits and assets which are due and payable have been paid,
other than those contested in good faith and for which adequate
reserves have been established in accordance with GAAP.
(j) FINANCIAL INFORMATION.
(i) FINANCIAL STATEMENTS. The Borrower has furnished
to the Lender copies of the unaudited balance sheets of the
Borrower and its Subsidiaries as at March 31, 1997, and the
related statements of operations, changes in stockholders'
equity and cash flows for the periods covered thereby, and the
unaudited consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as at June 30, 1997 and the
related consolidated and consolidating statements of
operations, each certified by the chief financial officer of
the Borrower to be in
33
compliance with the next succeeding sentence. Such balance
sheets and statements (including in each case related
Schedules and notes) are complete and correct and present
fairly, in accordance with GAAP consistently applied
throughout the period involved, the financial position of the
Borrower and its Subsidiaries as at such date and the results
of operations and the cash flow for such period. Except as
disclosed in such balance sheet or statements, the Borrower
has on the Closing Date no material liabilities, contingent or
otherwise, and nor were there any material unrealized or
anticipated losses of the Borrower or its Subsidiaries.
(ii) PRO FORMAS. The Borrower has furnished to the
Lender copies of (A) the unaudited pro forma combined balance
sheet of the Borrower and its Subsidiaries as at March 31,
1997 and the related statements of income for the periods
covered thereby based on the balance sheets described in the
preceding clause (i) and prepared in accordance with GAAP,
with only such adjustments thereto as would be required in
accordance with GAAP; and (B) Schedules of Add-Backs of the
Borrower and its Subsidiaries for the calendar years 1994,
1995 and 1996 and calendar quarters ending March 31, 1996,
June 30, 1996, September 30, 1996, December 31, 1996, March
31, 1997 and June 30, 1997 based on the balance sheets
described in the preceding clause (i) and prepared in
accordance with GAAP, with only such adjustments thereto as
would be required in accordance with GAAP.
(iii) PROJECTIONS. The Projections delivered on the
Closing Date pursuant to Section 4.01(k)(i) have been prepared
by Borrower in light of the past operations of the business of
Borrower and its Subsidiaries. The Projections reflect as of
the date thereof the good faith estimate of Borrower and its
senior management concerning the most probable course of its
business after taking into account the Related Transactions,
PROVIDED, HOWEVER, the Lender recognizes that actual results
may differ from the Projections and that the Borrower makes no
representation that the Projections will be attained.
(k) ERISA. The Borrower and its ERISA Affiliates are in
compliance with ERISA in all material respects. No material liability
to the PBGC or to a Multiemployer Plan has been, or is expected by the
Borrower or its Affiliates to be, incurred by the Borrower or any ERISA
Affiliates.
(l) ABSENCE OF DEFAULTS. No event has occurred, which has not
been remedied, cured or waived: (i) which constitutes a Default or an
Event of Default; or (ii) which constitutes, or which with the passage
of time, the giving of notice, a determination of materiality, the
satisfaction of any condition, or any combination of the foregoing,
would constitute, a default or event of default by the Borrower or any
of its Subsidiaries of any material agreement (other than this
Agreement) or judgment, decree or order to which the
34
Borrower or any of its Subsidiaries is a party or by which the Borrower
or any of its Subsidiaries or any of its respective properties may be
bound.
(m) ACCURACY AND COMPLETENESS OF INFORMATION. All written
information, reports and other papers and data furnished to the Lender
by, on behalf of, or at the direction of, any Loan Party were, at the
time the same were so furnished, true and correct in all material
respects, to the extent necessary to give the recipient a true and
accurate knowledge of the subject matter, or, in the case of financial
statements, present fairly, in accordance with GAAP consistently
applied throughout the periods involved, the financial position of the
Loan Parties involved as at the date thereof and the results of
operations for such periods. No fact is known to the Borrower which has
had, or may in the future have (so far as the Borrower can reasonably
foresee), a Materially Adverse Effect which has not been set forth in
the financial statements referred to in Section 5.01(j) or in such
information, reports or other papers or data or otherwise disclosed in
writing to the Lender prior to the date hereof. No document furnished
or written statement made to the Lender in connection with the
negotiation, preparation and execution of this Agreement or any of the
other Loan Documents contains or, to the Borrower's best knowledge,
will contain any untrue statement of a fact material to the
creditworthiness of the Borrower or any other Loan Party or omits or
will, to the Borrower's best knowledge, omit to state a material fact
necessary in order to make the statements contained therein not
misleading.
(n) ENVIRONMENTAL LAWS. Except as set forth on Schedule
5.01(n), each of the Borrower and each of its Subsidiaries has obtained
all Governmental Approvals required under Environmental Laws and is in
compliance in all material respects with all terms and conditions of
such Governmental Approvals, and each is also in compliance in all
material respects with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules, and
timetables contained in the Environmental Laws. Except as set forth on
Schedule 5.01(n), the Borrower is not aware of, and has not received
notice of, any past, present, or future events, conditions,
circumstances, activities, practices, incidents, actions, or plans
which, with respect to the Borrower or any of its Subsidiaries, may
prevent compliance or continued compliance in all material respects
with Environmental Laws or may require the Borrower or any of its
Subsidiaries to notify any Governmental Authority of any of the
foregoing. There is no civil, criminal, or administrative action, suit,
demand, claim, hearing, notice, or demand letter, notice or violation,
investigation, or proceeding pending or, to the Borrower's knowledge,
threatened, against the Borrower or any of its Subsidiaries relating in
any way to Environmental Laws.
(o) INTELLECTUAL PROPERTY. Each of the Borrower and each of
its Subsidiaries, after the consummation of the Related Transactions,
owns, is licensed to use or otherwise has the right to use, all
patents, trademarks, trade names and copyrights used in or necessary
for the conduct of its business as currently conducted that are
material to the condition (financial or other), business or operations
of the Borrower or its Subsidiaries
35
(collectively called "INTELLECTUAL PROPERTY") and all such Intellectual
Property is identified on Schedule 5.01(o) and, in the Borrower's
reasonable discretion, fully protected and/or duly and properly
registered, filed or issued in the appropriate office and jurisdictions
for such registrations, filing or issuances. All Intellectual Property
that is registered or for which application for registration is pending
is identified on Schedule 5.01(o). Except as disclosed in Schedule
5.01(o), no claim has been asserted by any Person with respect to the
use of any Intellectual Property, or challenging or questioning the
validity, use or effectiveness of any Intellectual Property. Except as
disclosed in Schedule 5.01(o), to the Borrower's best knowledge, the
use of such Intellectual Property by Borrower and its Subsidiaries does
not infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any liabilities
on the part of the Borrower and its Subsidiaries that are material to
Borrower or its Subsidiaries.
(p) SOLVENCY. As of and from and after the Agreement Date and
after giving effect to the consummation of the Related Transactions and
Borrowing of the Loans, each of the Borrower and each of its Material
Subsidiaries: (a) owns and will own assets the fair saleable value of
which are (i) greater than the total amount of its liabilities
(including contingent liabilities) and (ii) greater than the amount
that will be required to pay its then existing debts as they become
absolute and matured considering all financing alternatives and
potential asset sales reasonably available to it; (b) has capital that
is not unreasonably small in relation to its business as presently
conducted or any contemplated or undertaken transaction; and (c) does
not intend to incur and does not believe that it will incur debts
beyond its ability to pay such debts as they become due.
(q) BANK ACCOUNTS. Schedule 5.01(q) sets forth the account
numbers and location of all bank accounts of the Borrower and its
Subsidiaries as of the date hereof.
(r) HOLDING COMPANY AND INVESTMENT COMPANY STATUS. Neither the
Borrower nor any Subsidiary is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", or a
"public utility", within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or a "public utility" within the
meaning of the Federal Power Act, as amended. Neither the Borrower nor
any Subsidiary is an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
SECTION 5.02. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the Agreement Date, the Effective Date and at and as of the
date of making the Term Loan and each Revolving Loan, except to the extent that
such representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date) and except for
changes in factual circumstances specifically permitted hereunder.
36
ARTICLE VI
AFFIRMATIVE COVENANTS
For so long as any of the Secured Obligations remains unpaid or
unperformed, or this Agreement is in effect, unless the Lender shall otherwise
consent in the manner provided for in Section 10.07, the Borrower will:
SECTION 6.01. PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. Subject to
Section 8.10 hereof, preserve and maintain, and cause each Material Subsidiary
to preserve and maintain, its respective existence, rights, franchises, licenses
and privileges in the jurisdiction of its formation and qualify and remain
qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization and the failure to be so qualified or authorized
would have a Materially Adverse Effect.
SECTION 6.02. COMPLIANCE WITH APPLICABLE LAW. Comply, and cause each
Subsidiary to comply, with all Applicable Laws as the same may be amended from
time to time, and the obtaining of all Governmental Approvals relating to the
Borrower or such Subsidiary where noncompliance would have a Materially Adverse
Effect except where the Borrower or such Subsidiary is challenging in good faith
by appropriate proceedings diligently pursued the application or enforcement of
such Applicable Law or requirement for such Governmental Approval and against
which adequate reserves have been established in accordance with GAAP, where
appropriate.
SECTION 6.03. MAINTENANCE OF PROPERTY. In addition to, and not in
derogation of, the requirements of any of the other Loan Documents, (a) protect
and preserve, and cause each Subsidiary to protect and preserve, all of its
properties necessary for the conduct of its business and maintain in good
repair, working order and condition all of its tangible properties ordinary wear
and tear excepted, and (b) from time to time, in the Borrower's reasonable
discretion, make or cause to be made, and cause each Subsidiary to make or cause
to be made, all needed and appropriate repairs, renewals, replacements and
additions to such properties, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
SECTION 6.04. CONDUCT OF BUSINESS. At all times carry on, and cause
each Subsidiary to carry on, its business in the same or complimentary line of
business as engaged in on the date hereof. The Borrower will not, and will not
permit any of its Subsidiaries to, engage to any substantial extent in any
business other than the businesses in which the Borrower and its Subsidiaries
are engaged on the date of this Agreement as described in its Final Prospectus,
dated July 22, 1997 and businesses reasonably related or complimentary thereto
or in furtherance thereof.
37
SECTION 6.05. INSURANCE. Maintain, and cause each Subsidiary to
maintain, at all times with such insurance companies as shall be reasonably
satisfactory to the Lender, with all premiums thereon to be paid by the
Borrower, insurance with respect to its properties (including without limitation
the Collateral) and business against such casualties and contingencies
(including but not limited to public liability and business interruption) and in
such amounts as is customary in the case of similarly situated corporations
engaged in the same or similar businesses or as requested by the Lender. Each
such insurance policy shall name the Lender as loss payee and additional insured
and shall provide for at least ten (10) days prior written notice to the Lender
of any default under, termination of or proposed cancellation of such policy due
to non-payment of premium and thirty (30) days prior written notice to the
Lender of any default under, termination of or proposed cancellation of such
policy due to any reason, other than non-payment of premium. Notwithstanding the
Lender being named as loss payee, each such insurance policy shall provide that
amounts paid in respect of such policy up to an aggregate $25,000 per occurrence
(each, a "BORROWER INSURANCE PAYMENT") shall be payable directly to the
Borrower, PROVIDED, that the Borrower shall pay or cause to be paid to the
Lender any Borrower Insurance Payment if the amount of such payment, when
aggregated with all previous Borrower Insurance Payments, would exceed $250,000.
All such amounts paid in respect of such policy in excess of $25,000 per
occurrence shall be paid directly to the Lender and shall become part of the
Collateral. From time to time deliver to the Lender upon its request a detailed
list, together with copies of all policies of the insurance then in effect,
stating the names of the insurance companies, the amounts and rates of the
insurance, the dates of the expiration thereof and the properties and risks
covered thereby.
SECTION 6.06. PAYMENT OF TAXES AND CLAIMS. Pay or discharge when due
(a) all taxes, assessments and governmental charges or levies imposed upon it or
any Subsidiary or upon the income or profits of the Borrower or any Subsidiary
or upon any properties belonging to the Borrower or any Subsidiary, and (b) all
lawful claims of materialmen, mechanics, carriers, warehousemen and landlords
for labor, materials, supplies and rentals which, if unpaid, might become a Lien
on any properties of the Borrower or any Subsidiary or which would otherwise
adversely affect the value of any Collateral; PROVIDED, HOWEVER, that this
Section shall not require the payment or discharge of any such tax, assessment,
charge, levy or claim in an amount less than $10,000 or any such tax,
assessment, charge, levy or claim which is being contested in good faith by
appropriate proceedings which operate to suspend the collection thereof and for
which adequate cash reserves have been established in an amount equal to such
tax, assessment, charge, levy or claim; PROVIDED, FURTHER, HOWEVER, neither the
Borrower nor any Subsidiary thereof may contest any such tax, assessment,
charge, levy or claim if the contest thereof will impair the value or
marketability of any Collateral or the Lender's Lien therein.
SECTION 6.07. VISITS AND INSPECTIONS. Permit, and cause its
Subsidiaries to permit, representatives or agents of the Lender, upon reasonable
notice, from time to time, as often as may be reasonably requested, but only
during normal business hours, to: (a) visit and inspect its respective
properties (including the Collateral); (b) inspect and make extracts from its
relevant books and records, including but not limited to management letters
prepared by independent
38
accountants; and (c) discuss with its principal officers, and its independent
accountants, matters relating to its business, assets, liabilities, financial
conditions, results of operations and business prospects.
SECTION 6.08. USE OF PROCEEDS. (a) Use the proceeds of the Loans to
retire prior to February 15, 1998 all obligations specified on Schedule 6.08
(the "EXISTING DEBT"); (b) use the proceeds of all other Revolving Loans for
working capital purposes or for Permitted Acquisitions; PROVIDED, HOWEVER, the
Borrowings for working capital purposes shall not exceed $5,000,000 in the
aggregate at any time outstanding; and (c) not use any part of the proceeds of
the Term Loan or the Revolving Loans (x) for a Hostile Acquisition or (y) to
purchase or carry, or to reduce or retire or refinance any credit incurred to
purchase or carry, any margin stock (within the meaning of Regulations U and X
of the Board of Governors of the Federal Reserve System) or to extend credit to
others for the purpose of purchasing or carrying any margin stock.
SECTION 6.09. ADDITIONAL GUARANTOR/COLLATERAL. Within 45 days of the
last date of any fiscal quarter in which any of its Subsidiaries (i) guarantees
any Indebtedness of the Borrower or (ii) satisfies (at any time) the
requirements hereunder which describe a Material Subsidiary, cause such
Subsidiary to execute and deliver in favor of the Lender a Supplement to the
Subsidiary Guaranty, in the form attached as Annex A thereto (the "GUARANTY
SUPPLEMENT") and a Supplement to the Security Agreement, in the form attached as
Annex A thereto (the "SECURITY AGREEMENT SUPPLEMENT") and, where applicable, a
Trademark Security Agreement. Each such Supplement and Trademark Security
Agreement shall be governed by the laws of the State of New York and shall
contain such other terms and provisions as the Lender determines to be necessary
or appropriate (after consulting with legal counsel) in order that such
Supplement or Trademark Security Agreement complies with local laws, rules and
regulations and is fully enforceable against such Additional Loan Party.
In connection with the delivery of any such Supplement by an Additional
Loan Party there shall be delivered an opinion of counsel (which counsel and the
form and substance of such opinion shall be reasonably satisfactory to the
Lender) addressed to the Lender as it relates to such Additional Loan Party and
the Guaranty Supplement and the Security Agreement Supplement and any other Loan
Document and such officers' certificates, financing statements, applications for
registration, directors and shareholders resolutions and other agreements,
instruments and documents as the Lender may reasonably request.
SECTION 6.10. TREASURY CONTRACTS. Within 30 days of the Closing Date
and at all times amounts remain outstanding hereunder or under the Notes, the
Borrower shall maintain sufficient operations and personnel to monitor currency
exchange rate and interest rate changes applicable to its business or the
business of its Subsidiaries and shall engage in a reasonable manner in prudent
currency and interest rate hedging activities to protect it and its Subsidiaries
from changes in such rates and, with respect to interest rates, for an amount
not less than the sum of the entire outstanding principal amount of the Term
Note and 50 percent of the outstanding principal amount of the Revolving Note.
39
ARTICLE VII
INFORMATION
For so long as any of the Secured Obligations remains unpaid or
unperformed, or this Agreement is in effect, unless the Lender shall otherwise
consent in the manner set forth in Section 10.07, the Borrower will furnish to
the Lender at its Principal Office:
SECTION 7.01. QUARTERLY FINANCIAL STATEMENTS. Within forty-five days
after the close of each quarterly accounting period of the Borrower, the
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such period (on a Pro Forma Basis for the period
ending September 30, 1997) and the related statement of income of the Borrower
and its Subsidiaries for such period (on a Pro Forma Basis for the period ending
September 30, 1997), setting forth in each case in comparative form the figures
for the corresponding periods of the previous fiscal year, all of which shall be
certified by the chief financial officer of the Borrower, in his or her opinion,
to present fairly, in accordance with GAAP consistently applied (subject to
changes resulting from normal year-end adjustments), the financial position of
the Borrower and its Subsidiaries as at the date thereof and the results of
operations for such period,
SECTION 7.02. YEAR-END STATEMENTS. Within 120 days after the end of
each fiscal year of the Borrower, the consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and
the related statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal year, setting forth in comparative form the figures
as at the end of and for the previous fiscal year, all of which shall be
certified by the chief financial officer of the Borrower, in his or her opinion,
to present fairly, in accordance with GAAP consistently applied, the financial
position of the Borrower and its Subsidiaries as at the date thereof and the
results of operations for such period and with respect to the consolidated
financial statements by independent certified public accountants of recognized
national standing or otherwise acceptable to the Lender, whose certificate shall
be in scope and substance satisfactory to the Lender and who shall have
authorized the Borrower to deliver such financial statements and certification
thereof to the Lender pursuant to this Agreement, PROVIDED, that, such
certification by independent certified public accountants shall not be required
hereunder with respect to consolidated financial statements for the period ended
December 31, 1997..
SECTION 7.03. PROJECTIONS. Together with the delivery of financial
statements required by Section 7.02 above, the delivery of Projections, in form
and substance satisfactory to the Lender, for the ensuing fiscal year on an
annual and quarterly basis.
SECTION 7.04. ACCOUNTS/INVENTORY CERTIFICATE. From time to time and in
any event within 45 days after the end of each fiscal quarter during which this
Agreement remains in effect a Schedule of Accounts which shall consist of a
detailed aged trial balance of all of the Borrower's then existing Accounts,
specifying the names, balance due of each Account Debtor obligated on
40
an Account so listed, together with an aging summary, and a Schedule of
Inventory, all as certified as true, complete and correct by the chief financial
officer of the Borrower and to be in form reasonably satisfactory to the Lender.
SECTION 7.05. COLLATERAL VALUE REPORT. Not more than once every other
calendar year prior to an Event of Default and at any time while and so long as
an Event of Default shall have occurred and be continuing, the Borrower will
upon the request of the Lender, at the Borrower's expense, obtain and deliver to
the Lender a report of an independent collateral auditor satisfactory to the
Lender with respect to the Accounts and Inventory which report shall include,
with respect to Accounts, verification with respect to the amount, aging,
identity and credit of the respective account debtors and the billing practices
of the Borrower and with respect to Inventory, verification as to the value,
location and respective types.
SECTION 7.06. APPRAISALS. From time to time, if the Lender determines
that obtaining appraisals is necessary in order to comply with Applicable Laws,
the Lender will, at the Borrower's expense, obtain appraisal reports in form and
substance and from appraisers satisfactory to the Lender stating the then
current fair market values of all or any portion of the Collateral owned by the
Borrower or any of its Subsidiaries. In addition, not more than once every other
calendar year prior to an Event of Default and at any time while and so long as
an Event of Default shall have occurred and be continuing, the Borrower will
upon the request of the Lender, at the Borrower's expense, obtain and deliver to
the Lender appraisal reports or updated appraisals in form and substance and
from appraisers satisfactory to the Lender, stating (1) the then current fair
market and orderly liquidation values of all or any portion of the Collateral
and (2) the then current business value of Borrower or any of its Subsidiaries
as a going concern.
SECTION 7.07. COPIES OF CERTIFICATES AND OTHER REPORTS.
(a) Together with each delivery of financial statements required by
Sections 7.01 and Section 7.02 above, a Compliance Certificate, substantially in
the form of Exhibit I hereto, demonstrating (with computations in reasonable
detail) compliance by the Borrower and its Subsidiaries with the provisions of
Section 8.01 and stating that there exists no Event of Default or Default, or,
if any Event of Default or Default exists, specifying the nature and period of
existence thereof and what action the Borrower has taken, is taking or proposes
to take with respect thereto. Together with each delivery of financial
statements required by Section 7.02 above, the Borrower will deliver a
certificate of such accountants stating that, in making the audit necessary for
their report on such financial statements, they have obtained no knowledge of
any Event of Default or Default, or, if they have obtained knowledge of any
Event of Default or Default, specifying the nature and period of existence
thereof to the extent permitted under generally accepted auditing standards.
(b) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower by the Borrower's independent public accountants
including, without limitation, any management report; and
41
(c) From time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, documents or further
information regarding the business, assets, liabilities, financial condition,
results of operations or business prospects of the Borrower as the Lender may
reasonably request. The rights of the Lender under this Section are in addition
to and not in derogation of its rights under any other provision of this
Agreement or any of the other Loan Documents.
SECTION 7.08. NOTICE OF LITIGATION AND OTHER MATTERS. Prompt notice of
and in any event within 10 Business Days after the occurrence thereof:
(a) to the extent the Borrower is aware of the same, the
commencement of all proceedings and investigations by or before any
governmental or nongovernmental body and all actions and proceedings in
any court or other tribunal or before any arbitrator against or in any
other way relating adversely to, or adversely affecting, the Borrower
or any of its Subsidiaries or any of their respective properties,
assets or businesses which, if adversely determined or resolved, would
have a Materially Adverse Effect, including without limitation, any
claim, action, demand, suit, proceeding, hearing, study, or
investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling
or the emission, discharge, release or threatened release into the
environment, of any pollutant, contaminant, chemical, or industrial,
toxic, or other Hazardous Material which would result in an aggregate
liability of $100,000 for the Borrower or any of its Subsidiaries;
(b) any amendment to the articles of incorporation of the
Borrower or any of its Material Subsidiaries;
(c) any change in the senior management of the Borrower or any
of its Material Subsidiaries, and any change in the business, assets,
liabilities, financial condition, results of operations or business
prospects of the Borrower or any of its Material Subsidiaries, in
either case which has had or may have Materially Adverse Effect; and
(d) any Default or Event of Default or any event which
constitutes or which with the passage of time, the giving of notice, a
determination of materiality, the satisfaction of any condition or any
combination of any of the foregoing would constitute a default or event
of default by the Borrower or any of its Subsidiaries under any
material agreement (other than this Agreement) to which the Borrower or
such Subsidiary is a party or by which the Borrower or such Subsidiary
or any of its respective properties may be bound.
SECTION 7.09. ERISA. As soon as possible and in any event within 30
days after the Borrower knows, or has reason to know:
42
(a) that any Termination Event with respect to a Plan has
occurred or will occur; or
(b) of the existence of any Unfunded Vested Accrued Benefits
under all Plans; or
(c) that the Borrower or any ERISA Affiliate is in "default"
(as defined in Section 4219(c)(5) of ERISA) with respect to payments to
a Multiemployer Plan required by reason of its complete or partial
withdrawal (as described in Section 4203 or 4205 of ERISA) from such
Plan, a certificate of a Responsible Officer of the Borrower setting
forth the details of such of the events described in clauses (a)
through (c) as applicable and the action which is proposed to be taken
with respect thereto, together with any notice or filing which may be
required by the PBGC or other agency of the United States government
with respect to such of the events described in clauses (a) through (c)
as applicable.
ARTICLE VIII
NEGATIVE COVENANTS
So long as any of the Secured Obligations remains unpaid or
unperformed, or this Agreement is in effect, unless the Lender shall otherwise
consent in the manner set forth in Section 10.07, the Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly:
SECTION 8.01. FINANCIAL COVENANTS. Permit at any time on a Consolidated
basis:
(a) RATIO OF FUNDED DEBT TO EBITDA. The ratio of Indebtedness
for Money Borrowed to EBITDA for the Preceding Period to be more than
3.25 to 1.0.
(b) COVERAGE REQUIREMENTS. The Interest Charges Coverage Ratio
to be less than 1.50 to 1.00; or
(c) RATIO OF FUNDED DEBT TO CAPITALIZATION. The ratio of
Indebtedness for Money Borrowed to Consolidated Capitalization to be
more than .50 to 1.00.
SECTION 8.02. INDEBTEDNESS FOR MONEY BORROWED. Create, assume, or
otherwise become or remain obligated in respect of, or permit or suffer to exist
or to be created, assumed or incurred or to be outstanding any Indebtedness for
Money Borrowed, except that this Section shall not apply to Indebtedness: (a)
for Money Borrowed represented by the Loans and the Notes, (b) set forth on
Schedule 5.01(g) hereof , (c) Indebtedness incurred in connection with a
Purchase Money Lien and Indebtedness incurred in connection with Capitalized
Lease Obligations, which, in the aggregate, do not exceed at any time $500,000,
(d) intercompany indebtedness among the
43
Borrower and its Subsidiaries to the extent permitted by Section 8.07 and (e)
Indebtedness of the Borrower under interest rate agreements establishing a fixed
or maximum interest rate for all or any portion of the Loans; PROVIDED, HOWEVER,
that Indebtedness referred to in clauses (b) (other than with respect to letters
of credit set forth on Schedule 5.01(g)) and (c) above may not be renewed,
extended or refinanced without the prior written consent of the Lender.
SECTION 8.03. GUARANTIES. Become or remain liable on or under any
Guaranty (other than with respect to (a) the Subsidiary Guaranty, (b) Guaranty
Supplements, (c) Indebtedness set forth on Schedule 5.01(g) and (d) Guaranties
by the Borrower of the obligations of the Material Subsidiaries).
SECTION 8.04. INVESTMENTS. After the Agreement Date, make or purchase
any Investment or, after such date, permit any Investment to be outstanding
other than (i) Permitted Investments; (ii) Permitted Acquisitions; (iii)
Investments in existence as of the date hereof; (iv) Investments permitted under
Section 8.07; or (v) Investments made in the ordinary course of business as
conducted by the Borrower and its Subsidiaries on the Effective Date and not in
excess of $250,000, individually or $500,000 in the aggregate for any calendar
year.
SECTION 8.05. LIENS. Create, assume, incur or permit or suffer to exist
(upon the happening of a contingency or otherwise) or to be created, assumed or
incurred, any Lien upon any of its properties or assets of any character whether
now owned or hereafter acquired or any income or profits therefrom or assign or
otherwise convey any right to receive income or profits, except for Permitted
Liens.
SECTION 8.06. PLANS. Take any action which would cause any Unfunded
Vested Accrued Benefits under any Plan of the Borrower to exist.
SECTION 8.07. LOANS. Except as provided in Section 8.04 hereof, extend
credit to, or make any advance, loan or contribution of money or goods to, any
Person, PROVIDED, that, (a) the Borrower may make advances to any Subsidiary
thereof that is not a Material Subsidiary, and any such Subsidiary may make
advances to the Borrower or any Material Subsidiary, if the indebtedness
incurred in connection with any such advance is evidenced by a demand note that
is pledged to the Lender, and (b) the Borrower and any Subsidiary thereof may
make advances in the ordinary course of business to their respective employees,
PROVIDED, that any such advance under clause (a) or (b) of this Section shall be
repaid within one year and the sum of all such advances made under clauses (a)
and (b) of this Section shall not exceed $100,000 at any one time outstanding.
SECTION 8.08. CERTAIN AGREEMENTS. (a) Amend, supplement or otherwise
modify any material term of any material agreement, oral or written, other than
in the ordinary course of business, or (b) permit Auto Europe, LLC to default in
the performance of its obligations under the Credit Enhancement Agreement, dated
as of June 1, 0000, xxxxxxx Xxxx xx Xxxxxxxx, Xxxxx
44
and Auto Europe, Inc. (as predecessor to Auto Europe, LLC) if such default would
result in liability in excess of $100,000.
SECTION 8.09. TRANSACTIONS WITH AFFILIATES. Except as specified on
Schedule 8.09 hereto, enter into any transaction or series of related
transactions, whether or not in the ordinary course of business, with any
Affiliate of the Borrower, other than on terms and conditions substantially as
favorable to the Borrower as would be obtainable by the Borrower at the time in
a comparable arm's length transaction with a Person not an Affiliate
("UNAFFILIATED TRANSACTION") other than any transaction or series of
transactions with respect to assets or services of the Borrower or its
Subsidiaries having a value in an Unaffiliated Transaction equal to or less than
$250,000 individually or $500,000 in the aggregate.
SECTION 8.10. MERGER, CONSOLIDATION AND OTHER ARRANGEMENTS. Merge or
consolidate with any other Person unless the Borrower or a Subsidiary is the
surviving and continuing corporation and the financial condition, business or
operations of the Borrower or such Subsidiary shall not be materially and
adversely affected thereby and at the time of such merger or consolidation and
after giving effect thereto no Default or Event of Default shall have occurred
and be continuing, PROVIDED, that, the Borrower or any Subsidiary may liquidate,
dissolve or wind-up any Subsidiary that is not a Material Subsidiary.
SECTION 8.11. NO SALE OF ASSETS. Sell, lease, assign, transfer or
otherwise dispose of substantially all of its respective assets other than: (i)
Inventory in the ordinary course of its business; and (ii) property no longer
used or useful in the conduct of such Person's business and disposed of in the
ordinary course of business.
SECTION 8.12. SALE OR DISCOUNT OF RECEIVABLES. Sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of its
notes or Accounts including without limitation pursuant to a Receivables
Financing.
SECTION 8.13. DIVIDEND LIMITATION. (i) Pay or declare any cash dividend
on any class of its stock or make any other distribution on account of any class
of its stock; or (ii) redeem, purchase or otherwise acquire, directly or
indirectly, any shares of its stock; except for:
(a) dividends payable in common stock;
(b) any Subsidiary of the Borrower may pay dividends or any
other such distribution to the Borrower or any Material Subsidiary of
the Borrower;
(c) the Borrower may repurchase shares of common stock and/or
options to purchase such common stock held by directors, executive
officers, members of management or employees of the Borrower or any of
its Subsidiaries upon the death, disability, retirement or termination
of employment of such directors, executive officers, members of
management or employees so long as (x) no Default or Event of Default
then
45
exists or would result therefrom and (y) the aggregate amount of cash
expended by the Borrower pursuant to this clause (c) does not exceed
$1,000,000 in any fiscal year of the Borrower; and
(d) the Borrower may repurchase shares of its common stock
and/or options to purchase such common shares held by any Person so
long as (x) no Default or Event of Default then exists or would result
therefrom and (y) the aggregate amount of cash expended by the Borrower
pursuant to this clause (d) does not exceed $1,000,000 in any fiscal
year of the Borrower.
The term "STOCK" as used in this Section 8.13 shall include warrants or
options to purchase stock and any Preferred Stock.
SECTION 8.14. CAPITAL EXPENDITURES. During any period of four
consecutive fiscal quarters, not incur on a Consolidated basis, Capital
Expenditures individually or in the aggregate in excess of 25% of Consolidated
Net Income plus depreciation and amortization for such period, PROVIDED, that
the computation of Capital Expenditures and Consolidated Income for periods
ending on or prior to the fiscal quarter ending on September 30, 1997 shall be
on a Pro-Forma Basis.
ARTICLE IX
DEFAULT
SECTION 9.01. EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default:
(a) DEFAULT IN PAYMENT. The Borrower shall fail to pay when
due (whether upon demand, at maturity, by reason of acceleration or
otherwise) the principal of any of the Loans or the Notes or shall fail
to pay when due, and such failure shall continue for five (5) or more
days, any interest on any of the Loans or any of the Notes or on any of
the other obligations owing by the Borrower under this Agreement or any
other Loan Document or any other Loan Party shall fail to pay when due
any obligation owing by such Loan Party under any Loan Document to
which it is a party.
(b) MISREPRESENTATIONS. Any statement, representation or
warranty made or deemed made by or on behalf of the Borrower or any
other Loan Party under this Agreement or under any other Loan Document,
or any amendment hereto or thereto, or in any other writing or
statement at any time furnished or made or deemed made by or on behalf
of the Borrower or any other Loan Party to the Lender in connection
with any Loan Document or with respect to the transactions contemplated
by the Loan Documents, shall
46
at any time prove to have been incorrect or misleading in any material
respect when furnished or made.
(c) DEFAULT IN PERFORMANCE. (i) The Borrower shall fail to
perform or observe any term, covenant, condition or agreement contained
in Article VIII hereof or Section 2.06 or Section 6.09 hereof or (ii)
the Borrower or any Loan Party shall fail to perform or observe any
term, covenant, condition or agreement contained in this Agreement or
any other Loan Document to which it is a party and not otherwise
mentioned in this Section 9.01 and the continuance of such failure
shall have continued for a period of thirty days.
(d) CROSS DEFAULT. The Borrower or any Material Subsidiary
defaults (whether as primary obligor or as guarantor or other surety)
in any payment of principal of or interest on any other obligation for
Money Borrowed (or any Capitalized Lease Obligation, any obligation
under a conditional sale or other title retention agreement, any
obligation issued or assumed as full or partial payment for property
whether or not secured by a purchase money mortgage or any obligation
under notes payable or drafts accepted representing extensions of
credit) beyond any period of grace provided with respect thereto, or
the Borrower or any Material Subsidiary fails to perform or observe any
other agreement, term or condition contained in any agreement under
which any such obligation is created (or if any other event thereunder
or under any such agreement shall occur and be continuing) and the
effect of such failure or other event is to cause, or to permit the
holder or holders of such obligation (or a trustee on behalf of such
holder or holders) to cause, such obligation to become due (or to be
repurchased or defeased by the Borrower or any Material Subsidiary)
prior to any stated maturity; or
(e) VOLUNTARY BANKRUPTCY PROCEEDING. The Borrower or any of
its Subsidiaries shall: (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect); (ii) file a petition
seeking to take advantage of any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or
composition for adjustment of debts; (iii) consent to or fail to
contest in a timely and appropriate manner any petition filed against
it in an involuntary case under such bankruptcy laws or other laws;
(iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by,
a receiver, custodian, trustee, or liquidator of itself or of a
substantial part of its property, domestic or foreign; (v) admit in
writing its inability to pay its debts as they become due; (vi) make a
general assignment for the benefit of creditors; (vii) make a
conveyance fraudulent as to creditors under any state or federal law;
or (viii) take any corporate action for the purpose of effecting any of
the foregoing.
(f) INVOLUNTARY BANKRUPTCY PROCEEDING. A case or other
proceeding shall be commenced against the Borrower or any of its
Subsidiaries in any court of competent jurisdiction seeking: (i) relief
under the federal bankruptcy laws (as now or hereafter in
47
effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of
debts; or (ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of such Person, or of all or any substantial
part of the assets, domestic or foreign, of such Person and, in either
event, shall not be discharged within 60 days.
(g) LITIGATION. The Borrower or any Loan Party shall challenge
or contest in any action, suit or proceeding in any court or before any
arbitrator or governmental body the validity or enforceability of this
Agreement, any Note or any other Loan Document.
(h) JUDGMENT. A judgment or order for the payment of money
(not paid or fully covered by insurance) individually or in the
aggregate equal to or greater than $100,000 shall be entered against
the Borrower by any court and such judgment or order shall continue
undischarged or unstayed for a period of forty-five days.
(i) ATTACHMENT. A warrant or writ of attachment or execution
or similar process shall be issued against any property of the Borrower
or any of its Subsidiaries which, individually or together with all
other such processes, would have a Materially Adverse Effect and such
processes shall continue undischarged for a period of forty-five days;
PROVIDED, HOWEVER, that if such processes shall require the payment of
money individually or in the aggregate equal to or greater than
$100,000, such forty-five day period shall not be required to pass for
an Event of Default to occur hereunder.
(j) ERISA. (i) Any Termination Event with respect to a Plan
shall occur; (ii) any Plan shall incur an "accumulated funding
deficiency" (as defined in Section 412 of the Internal Revenue Code or
Section 302 of ERISA) for which a waiver has not been obtained in
accordance with the applicable provisions of the Internal Revenue Code
and ERISA; or (iii) the Borrower is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
resulting from the Borrower's complete or partial withdrawal (as
described in Section 4203 or 4205 of ERISA) from such Multiemployer
Plan.
(k) CESSATION OF OPERATIONS. Except as permitted pursuant to
Section 8.10, the business operations as conducted on the Closing Date
of the Borrower or any of its Material Subsidiaries shall be suspended
for a period of 30 consecutive days or longer.
(l) SECURITY INTEREST. The Security Interest shall for any
reason cease to be a valid, enforceable, perfected and first-priority
Lien on any of the Collateral, subject only to Permitted Liens, except
to the extent such failure to perfect arises out of Lender's
negligence.
(m) GUARANTIES. The Subsidiary Guaranty or any Guaranty
Supplement (if any) or any provisions thereof shall be found or held
invalid or unenforceable by a court of
48
competent jurisdiction or shall have ceased to be effective as to any
Material Subsidiary of the Borrower or such Subsidiary shall have
repudiated its obligations under the Subsidiary Guaranty or Guaranty
Supplement to which it is a party.
(n) CHANGE OF CONTROL. A Control Event and/or Change of
Control shall occur.
(o) EXECUTIVE OFFICERS. (i) Both of the individuals specified
in (A) below or (ii) any of the individuals specified in (B) below
shall cease to hold the office specified opposite his or her name (x)
for any reason other than his or her death, disability or non-renewal
of the initial term of his or her employment contract, or (y) due to
his or her death, disability or non-renewal of the initial term of his
or her employment contract, and a successor satisfactory to the Lender
does not assume his or her responsibilities and position within 60 days
of cessation:
NAME OFFICE
---- ------
(A) Xxxxxx X. Xxxxxxxx Chief Executive Officer of Borrower and
Xxxxxxx X. Xxxxxxxx Chief Operating Officer of Borrower; or
(B) Xxxxxx X. Xxxxxxx Chief Executive Officer of Cruises, Inc.
Xxxxx Xxxxxx Chief Executive Officer of Cruises Only,
LLC
Xxxx Xxxxxxx Chief Executive Officer of Auto Europe,
LLC
Xxxxx Xxxxxx Chief Executive Officer of Travel 800, LLC
Xxxx X. Xxxxxxxx Chief Executive Officer of DFW Tours, Inc.
and DFW Travel Arrangements, Inc.
SECTION 9.02. REMEDIES. Upon the occurrence of an Event of Default the
following provisions shall apply:
(a) AUTOMATIC. Upon the occurrence of an Event of Default
specified in Sections 9.01(e) or (f), the principal of, and the
interest on, the Loans and the Notes at the time outstanding, and (ii)
all of the other obligations of the Borrower hereunder, including, but
not limited to, the other amounts owed to the Lender under this
Agreement, the Notes or any of the other Loan Documents, and all other
Secured Obligations shall become automatically due and payable by the
Borrower without presentment, demand, protest, or other notice of any
kind, all of which are expressly waived by the Borrower and the
Revolving Credit Facility, the obligation of the Lender to make
Revolving Loans under the Revolving Credit Facility, and the Lender's
Commitment shall immediately and automatically terminate.
49
(b) OPTIONAL. If any other Event of Default (other than as set
forth in Section 9.01 (e) or (f)) shall have occurred and be
continuing, the Lender may declare the principal of, and interest on,
the Loans and the Notes at the time outstanding, and all of the other
obligations of the Borrower hereunder, including, but not limited to,
the other amounts owed to the Lender under this Agreement, the Notes or
any of the other Loan Documents, and all other Secured Obligations to
be forthwith due and payable, whereupon the same shall immediately
become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived by the Borrower
and terminate the Lender's Commitment, the Revolving Credit Facility
and the obligation of the Lender to make Revolving Loans under the
Revolving Credit Facility. The Lender shall provide prompt notice of
any such declaration to the Borrower, however, the failure of the
Lender to so notify the Borrower shall not affect Lender's rights
hereunder.
(c) OTHER LOAN DOCUMENTS. The Lender may exercise any and all
rights under any and all of the Loan Documents.
(d) APPLICATION OF PROCEEDS. All proceeds of Collateral and
other sums received by Lender upon the exercise of its rights and
remedies under the Loan Documents, including, without limitation,
proceeds of insurance and proceeds from any condemnation, may be
applied by the Lender, after deduction for any expenses incurred in
connection with such exercise which are reimbursable to the Lender
hereunder, to the Secured Obligations in such manner as the Lender may
determine then to be appropriate.
SECTION 9.03. RIGHTS CUMULATIVE. The rights and remedies of the Lender
under this Agreement, the Notes and each of the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies which it would otherwise
have under Applicable Law. In exercising its rights and remedies the Lender may
be selective and no failure or delay by the Lender in exercising any right shall
operate as a waiver of it, nor shall any single or partial exercise of any power
or right preclude its other or further exercise or the exercise of any other
power or right.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. Unless otherwise provided herein,
communications provided for hereunder or under any other Loan Document shall be
in writing and shall be mailed, telecopied or delivered as follows:
50
If to the Borrower:
Travel Services International, Inc.
000 Xxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx, Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to the Lender:
NationsBank, N.A.
1555 Palm Beach Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Commercial Banking Manager
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and other
communications shall be effective (i) if mailed, when received; (ii) if
telecopied, when transmission is confirmed; or (iii) if hand delivered, when
delivered.
SECTION 10.02. EXPENSES. The Borrower will pay all present and future
expenses of the Lender in connection with:
51
(a) the negotiation, preparation, execution, delivery and
administration of this Agreement, the Notes and each of the other Loan
Documents, whenever the same shall be executed and delivered, including
appraisers' fees, search fees, recording fees (including any intangible
recording taxes) and the reasonable fees and disbursements of: (i) King
& Spalding, and (ii) each local counsel retained by the Lender;
(b) the negotiation, preparation, execution and delivery of
any waiver, amendment or consent by the Lender relating to this
Agreement, the Notes or any of the other Loan Documents;
(c) any restructuring, refinancing or "workout" of the
transactions contemplated by this Agreement, the Notes and the other
Loan Documents, including the reasonable fees and disbursements of
counsel to the Lender;
(d) consulting with one or more Persons engaged by the Lender,
including appraisers, accountants and lawyers, concerning or related to
the servicing of this Agreement or the nature, scope or value of any
right or remedy of the Lender hereunder, under the Notes or under any
of the other Loan Documents, including any review of factual matters in
connection therewith, which expenses shall include the reasonable fees
and disbursements of such Persons;
(e) the collection or enforcement of the obligations of the
Borrower or any Loan Party under this Agreement, the Notes or any other
Loan Document including the reasonable fees and disbursements of
counsel to the Lender if such collection or enforcement is done by,
through or with the assistance of an attorney;
(f) prosecuting or defending any claim in any way arising out
of, related to, or connected with this Agreement, the Notes or any of
the other Loan Documents, which expenses shall include the reasonable
fees and disbursements of counsel to the Lender and of experts and
other consultants retained by the Lender;
(g) the exercise by the Lender of any right or remedy granted
to it under this Agreement, the Notes or any of the other Loan
Documents including the reasonable fees and disbursements of counsel to
the Lender; and
(h) reasonable costs and expenses incurred by the Lender in
gaining possession of, maintaining, handling, preserving, storing,
shipping, appraising, selling, preparing for sale and advertising to
sell the Collateral, whether or not a sale is consummated.
SECTION 10.03. STAMP, INTANGIBLE AND RECORDING TAXES. The Borrower will
pay any and all applicable stamp, intangible, registration, recordation and
similar taxes, fees or charges and shall indemnify the Lender against any and
all liabilities with respect to or resulting from any delay in the payment or
omission to pay any such taxes, fees or charges, which may be payable
52
or determined to be payable in connection with the execution, delivery,
performance or enforcement of this Agreement, the Notes and any of the other
Loan Documents or the perfection of any rights or Liens thereunder, other than
any such liabilities resulting from Lender's gross negligence or willful
misconduct.
SECTION 10.04. SET-OFF. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of an Event of Default, the
Lender is hereby authorized by the Borrower, at any time or from time to time,
without notice to the Borrower or to any other Person, any such notice being
hereby expressly waived, to set-off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other Indebtedness at any time held or owing by the Lender or any Affiliate of
the Lender, to or for the credit or the account of the Borrower against and on
account of any of the Secured Obligations, irrespective of whether or not the
Lender shall have declared any or all of the Loans and all other Secured
Obligations to be due and payable as permitted by Section 9.02, and although
such obligations shall be contingent or unmatured.
SECTION 10.05. GOVERNING LAW; ARBITRATION/JURISDICTION. (a) THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF
LAW.
(b) ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, INCLUDING, WITHOUT
LIMITATION, ANY DISPUTE CONCERNING THE SCOPE OF THIS ARBITRATION CLAUSE SHALL BE
RESOLVED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT
(OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ ENDISPUTE AND
ANY SUCCESSOR THEREOF (J.A.M.S.), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.
ANY PARTY TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR
EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH
THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
(c) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN NEW
YORK, NEW YORK AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT THREE
ARBITRATORS, COMPRISED OF AT LEAST ONE ATTORNEY AND ONE
53
ACCOUNTANT; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE
ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60
DAYS.
(d) RESERVATION OF RIGHTS. NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO
(i) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION
OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (ii) BE A WAIVER BY
THE LENDER OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (iii) LIMIT THE RIGHT OF THE LENDER (A)
TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SET-OFF, OR (B) TO
FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN
FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE
LENDER MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR
OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE
PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS AGREEMENT.
NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE
OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL
CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY
SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES.
SECTION 10.06. ASSIGNABILITY.
(a) The Borrower shall not have the right to assign this Agreement or
any interest therein except with the prior written consent of the Lender.
(b) The Lender may make, carry or transfer Loans at, to or for the
account of, any of its United States branch offices or the United States office
of an Affiliate of the Lender or the Lender may pledge any Loans or Notes to any
Federal Reserve Bank.
(c) The Lender may assign to one or more financial institutions all or
a portion of its Commitment, the Loans owing to it and the Note or Notes held by
it and shall provide notice thereof and a copy of the instrument of assignment
to the Borrower, however, the failure by the Lender to so notify the Borrower or
to provide the Borrower with a copy of the instrument of assignment shall not
affect the Lender's rights hereunder. Upon the effectiveness of the assignment,
(x) the assignee thereunder shall be a party hereto, and, to the extent that
rights and
54
obligations hereunder have been assigned to it, such assignee shall have the
rights and obligations of a "LENDER" hereunder and (y) the assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it, relinquish its rights (other than any rights it may have pursuant to
Sections 10.02 and 10.10 which will survive such assignment) and be released
from its obligations under this Agreement, other than with respect to Section
10.09 hereof (and, in the case of an assignment for all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, the Notes
and the other Loan Documents the Lender shall cease to be a party hereto). If a
bank syndicate is formed, the Lender agrees to serve as agent thereof.
(d) The Lender may sell participations (without the consent of the
Borrower) to one or more parties in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Loans owing to it and the Note or Notes held by
it); PROVIDED, HOWEVER, that (i) the Lender's obligations under this Agreement
and the other Loan Documents (including, without limitation, its Commitment to
the Borrower hereunder) shall remain unchanged, (ii) the Lender shall remain
solely responsible to the Borrower and the other Loan Parties for the
performance of such obligations, (iii) the Lender shall remain the holder of any
such Note for all purposes of this Agreement, (iv) the Borrower shall continue
to deal solely and directly with the Lender in connection with the Lender's
rights and obligations under this Agreement and (v) the Lender shall not
transfer, grant, assign or sell any participation under which the participant
shall have rights to approve any amendment or waiver of this Agreement except to
the extent such amendment or waiver would (A) extend the final maturity date or
the date of the payments of any installment of fees or principal or interest of
any Loans in which such participant is participating, (B) reduce the amount of
any installment of principal of any Loans in which such participant is
participating, (C) reduce the interest rate applicable to any Loans in which
such participant is participating, or (D) except as otherwise expressly provided
in this Agreement, reduce any fees payable to the Lender hereunder.
(e) The Lender agrees that, without the prior written consent of the
Borrower, it will not make any assignment hereunder in any manner or under any
circumstances that would require registration or qualification of, or filings in
respect of, any Loan or the Notes under the securities laws of the United States
of America or of any other jurisdiction.
(f) In connection with the efforts of the Lender to assign its rights
or obligations or to participate interests, the Lender may disclose to any
proposed participant and their counsel any information in its possession
regarding the Borrower or any Loan Party, subject to the provisions of Section
10.09.
SECTION 10.07. AMENDMENTS. Except as otherwise expressly provided in
this Agreement, any consent or approval required or permitted by this Agreement
or in any Loan Document to be given by the Lender may be given, and any term of
this Agreement or of any other Loan Document may be amended, and the performance
or observance by the Borrower of any terms of this Agreement or such other Loan
Document or the continuance of any Default or Event of Default may be waived
(either generally or in a particular instance and either
55
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the Lender. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of the Lender in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. Except as
otherwise explicitly provided for herein or in any other Loan Document, no
notice to or demand upon the Borrower shall entitle the Borrower to other or
further notice or demand in similar or other circumstances.
SECTION 10.08. NONLIABILITY OF THE LENDER. The relationship between the
Borrower and the Lender shall be solely that of borrower and lender. The Lender
shall not have any fiduciary responsibilities to the Borrower. The Lender does
not undertake any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's business
or operations.
SECTION 10.09. CONFIDENTIAL INFORMATION. Except as otherwise provided
by law, the Lender shall utilize all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential or
proprietary by the Borrower in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe and
sound banking practices but in any event may make disclosure: (i) to any of its
Affiliates (provided they shall agree to keep such information confidential in
accordance with the terms of this Section 10.09); (ii) as reasonably required by
any BONA FIDE transferee or participant in connection with the contemplated
transfer of any of the Revolving Commitment, the Term Loan or participations
therein as permitted hereunder (provided they shall agree to keep such
information confidential in accordance with the terms of this Section 10.09);
(iii) as required by any Governmental Authority or representative thereof or
pursuant to legal process; (iv) to the Lender's independent auditors and other
professional advisors (provided they shall agree to keep such information
confidential in accordance with the terms of this Section 10.09); and (v) after
the happening and during the continuance of an Event of Default, to any other
Person, in connection with the exercise of the Lender's rights hereunder or
under any of the other Loan Documents.
SECTION 10.10. INDEMNIFICATION. The Borrower shall and hereby agrees to
indemnify, defend and hold harmless the Lender and its directors, officers,
agents, employees and counsel from and against (a) any and all losses, claims,
damages, liabilities, deficiencies, judgments or expenses incurred by any of
them (except in each case to the extent that it is judicially determined to have
resulted from their own gross negligence or willful misconduct) arising out of
or by reason of any litigations, investigations, claims or proceedings which
arise out of or are in any way related to: (i) this Agreement or any Loan
Document or the transactions contemplated hereby or thereby including, without
limitation, amounts paid in settlement, Lender's court costs and the reasonable
fees and disbursements of counsel to the Lender incurred in connection with any
such litigation, investigation, claim or proceeding; (ii) the making of Loans;
(iii) any actual or proposed use by the Borrower of the proceeds of the Loans;
and (b) any such losses, claims, damages, liabilities, deficiencies, judgments
or expenses incurred in connection with any remedial or other
56
action taken by the Borrower or the Lender in connection with compliance by the
Borrower or any of the Subsidiaries, or any of their respective properties, with
any federal, state or local Environmental Laws or other environmental rules,
regulations, orders, directions, ordinances, criteria or guidelines. If and to
the extent that the obligations of the Borrower hereunder are unenforceable for
any reason, the Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
Applicable Law. The Borrower's obligations hereunder shall survive any
termination of this Agreement and the other Loan Documents and the payment in
full of the Secured Obligations, and are in addition to, and not in substitution
of, any other of its obligations set forth in this Agreement.
SECTION 10.11. SURVIVAL. Notwithstanding any termination of this
Agreement, or of the other Loan Documents, the indemnities to which the Lender
is entitled under the provisions of Sections 10.02 and 10.10 and under any other
provision of this Agreement and the other Loan Documents shall continue in full
force and effect and shall protect the Lender against events arising after such
termination as well as before.
SECTION 10.12. TITLES AND CAPTIONS. Titles and captions of Articles,
Sections, subsections and clauses in this Agreement are for convenience only,
and neither limit nor amplify the provisions of this Agreement.
SECTION 10.13. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.14. COUNTERPARTS. This Agreement and any other Loan Document
may be executed in any number of counterparts, each of which shall be deemed to
be an original and shall be binding upon all parties, their successors and
assigns.
[Signatures on next page]
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S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their authorized officers all as of the day and year first above
written.
TRAVEL SERVICES INTERNATIONAL, INC.
By: /s/ XXXX X. XXXXX
------------------------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President and
Chief Financial Officer
NATIONSBANK, N.A.
By: /s/ XXXX X. XXXXXX
-------------------------------------
Name: Xxxx X. Xxxxxx
Title:
