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Exhibit 10.1
EXECUTION COPY
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REVOLVING CREDIT AGREEMENT
dated as of August 6, 1998
by and among
SYLVAN INC. and SYLVAN FOODS (NETHERLANDS) B.V.,
as Borrowers,
THE BANKS PARTY HERETO FROM TIME TO TIME,
as Banks,
MELLON BANK, N.A.,
as Issuing Bank,
and
MELLON BANK, N.A.,
as Agent
ABN AMRO BANK N.V., PITTSBURGH BRANCH,
Documentation Agent
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TABLE OF CONTENTS
ARTICLE/SECTION PAGE
ARTICLE I. DEFINITIONS; CONSTRUCTION.................................................. 1
1.01. Certain Definitions; Construction.......................................... 1
ARTICLE II. THE CREDITS................................................................ 1
2.01 Revolving Credit Loans..................................................... 1
(a) The Commitments............................................ 1
(b) Nature of the Credit....................................... 2
(c) Revolving Credit Notes..................................... 2
(d) Commitment Fee............................................. 2
2.02 Making of Revolving Credit Loans........................................... 2
2.03 Interest Rates............................................................. 3
(a) Optional Bases of Borrowing................................ 3
(i) Prime Rate Option.................................... 3
(ii) Euro-Rate Option..................................... 3
(b) Applicable Margin.......................................... 4
(c) Funding Periods............................................ 4
(d) Transactional Amounts...................................... 4
(e) Euro-Rate Unascertainable; Impracticality.................. 5
2.04 Conversion or Renewal of Interest Rate Options............................. 6
(a) Conversion or Renewal...................................... 6
(b) Failure to Convert or Renew................................ 6
2.05 Prepayments Generally...................................................... 6
2.06 Optional Prepayments....................................................... 7
2.07 Mandatory Prepayments...................................................... 7
2.08 Interest Payment Dates..................................................... 7
2.09 Pro Rata Treatment and Payments............................................ 7
2.10 Letter of Credit Subfacility............................................... 9
(a) Letters of Credit.......................................... 9
(b) Commitment Usage........................................... 9
(c) Letter of Credit Fees...................................... 9
(d) Payments with Respect to Letters of Credit................. 10
(e) Additional Understandings Regarding Letters
of Credit................................................ 10
(f) Participation, Interests, Generally........................ 10
(g) Payment by Banks on Account of
Unreimbursed Draws....................................... 11
(h) Obligations Several........................................ 11
(i) Obligations Absolute....................................... 11
(j) Distributions.............................................. 11
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(k) Rescission................................................. 11
(l) The Issuing Bank and the Banks............................. 12
(m) Letter of Credit Documentation............................. 13
(n) Revised Article 5.......................................... 13
2.11 [Intentionally Omitted]
2.12 Multicurrency Payments..................................................... 13
(a) Dollar Equivalent Amounts.................................. 13
(b) Unavailability............................................. 14
2.13 Additional Compensation in Certain Circumstances, etc...................... 15
(a) Increased Costs or Reduced Return Resulting
From Taxes, Reserves, Capital Adequacy
Requirements, Expenses, Etc.............................. 15
(b) Funding Breakage........................................... 16
2.14 Funding by Branch, Subsidiary or Affiliate................................. 17
(a) Notional Funding........................................... 17
(b) Actual Funding............................................. 17
2.15 Taxes .................................................................. 18
(a) Payments Net of Taxes...................................... 18
(b) Other Taxes................................................ 18
(c) Indemnity.................................................. 18
(d) Receipts, etc.............................................. 19
(e) Other...................................................... 19
(f) Withholding Tax Exemption.................................. 19
(g) Refunds, Credits etc....................................... 20
ARTICLE III. REPRESENTATIONS AND WARRANTIES............................................. 20
3.01 Organization and Qualifications............................................ 20
3.02 Authority and Authorization................................................ 21
3.03 Execution and Binding Effect............................................... 21
3.04 Authorizations and Filings................................................. 21
3.05 Absence of Conflicts....................................................... 21
3.06 Financial Statements....................................................... 21
3.07 No Event of Default, Compliance with Instruments........................... 22
3.08 Litigation................................................................. 22
3.09 Subsidiaries and Partnerships.............................................. 22
3.10 Employee Benefits.......................................................... 22
3.11 Title to Property.......................................................... 23
3.12 Taxes .................................................................. 24
3.13 No Material Adverse Change................................................. 24
3.14 Margin Regulations......................................................... 24
3.15 Compliance with Laws....................................................... 24
3.16 Intellectual Property...................................................... 25
3.17 Use of Proceeds............................................................ 25
3.18 Insurance.................................................................. 25
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3.19 Solvency Matters........................................................... 25
3.20 Accurate and Complete Disclosure........................................... 26
3.21 Year 2000 Compliance....................................................... 26
ARTICLE IV. CONDITIONS OF LENDING...................................................... 26
4.01 Conditions to Initial Loans................................................ 26
(a) Agreement, Notes, Security Documents....................... 26
(b) Cash Management Documentation.............................. 26
(c) Corporate Proceedings...................................... 26
(d) Legal Opinion of Counsel to the Borrower Parties........... 26
(e) Officers' Certificates..................................... 27
(f) Fees, Expenses, etc........................................ 27
(g) Additional Matters......................................... 27
4.02 Conditions to All Loans.................................................... 27
(a) Notice; Applications....................................... 27
(b) Representations and Warranties............................. 27
(c) No Defaults................................................ 27
(d) No Violations of Law, etc.................................. 27
ARTICLE V. AFFIRMATIVE COVENANTS...................................................... 28
5.01 Reporting and Information Requirements..................................... 28
(a) Annual Audit Reports....................................... 28
(b) Quarterly Reports.......................................... 28
(c) Compliance Certificates.................................... 29
(d) Quarterly Calculation Certificate.......................... 29
(e) Other Reports and Information.............................. 29
(f) Further Information........................................ 29
(g) Notice of Certain Events................................... 30
(h) Visitation................................................. 30
5.02 Preservation of Existence and Franchises................................... 30
5.03 Insurance.................................................................. 30
5.04 Maintenance of Properties.................................................. 30
5.05 Payment of Taxes and Other Potential Charges and
Priority Claims; Payment of Other Current Liabilities.................... 31
5.06 Financial Accounting Practices............................................. 31
5.07 Compliance with Laws....................................................... 31
5.08 Use of Proceeds............................................................ 31
5.09 Government Approvals and Filings........................................... 32
5.10 Continuation Of or Change In Business...................................... 32
ARTICLE VI. NEGATIVE COVENANTS......................................................... 32
6.01 Financial Maintenance Covenants............................................ 32
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(a) Consolidated Leverage Ratio................................ 32
(b) Consolidated Net Worth..................................... 32
(c) Consolidated Interest Coverage Ratio....................... 32
6.02 Liens .................................................................. 32
6.03 Indebtedness............................................................... 34
6.04 Guarantees and Contingent Liabilities...................................... 34
6.05 Loans and Investments...................................................... 35
6.06 Dividends and Related Distributions........................................ 36
6.07 Mergers, Acquisitions, etc................................................. 37
6.08 Dispositions of Properties................................................. 38
6.09 Self-Dealing............................................................... 38
6.10 Consolidated Tax Returns................................................... 39
6.11 Regulation U............................................................... 39
6.12 Limitation on Other Restrictions on Liens.................................. 39
6.13 Limitation on Other Restrictions on Stock
Payments, Loans and Investments.......................................... 39
ARTICLE VII. DEFAULTS................................................................... 39
7.01 Events of Default.......................................................... 39
7.02 Consequences of an Event of Default........................................ 43
7.03 Set-Off .................................................................. 44
7.04 Equalization Among Banks and Participants.................................. 44
7.05 Judgment Currency.......................................................... 45
ARTICLE VIII. THE AGENT.................................................................. 45
8.01 Appointment................................................................ 45
8.02 Delegation of Duties....................................................... 45
8.03 Nature of Duties; Independent Credit Investigation......................... 45
8.04 Actions in Discretion of Agent; Instructions from Banks.................... 46
8.05 Exculpatory Provisions..................................................... 46
(a) Liability of Agent......................................... 46
(b) Notice of Default.......................................... 46
8.06 Reimbursement and Indemnification.......................................... 47
8.07 Reliance by Agent.......................................................... 47
8.08 Mellon Bank, N.A. in its Individual Capacity............................... 47
8.09 Holders of Notes........................................................... 48
8.10 Successor Agent............................................................ 48
8.11 Calculations............................................................... 48
8.12 Agent's Fee................................................................ 48
8.13 Documentation Agent........................................................ 48
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ARTICLE IX. MISCELLANEOUS.............................................................. 49
9.01 Holidays .................................................................. 49
9.02 Records .................................................................. 49
9.03 Amendments and Waivers..................................................... 49
9.04 No Implied Waiver; Cumulative Remedies..................................... 49
9.05 Notices .................................................................. 50
9.06 Expenses; Taxes; Attorneys' Fees........................................... 50
9.07 Severability............................................................... 50
9.08 Governing Law; Submission to Jurisdiction.................................. 50
9.09 Prior Understanding........................................................ 51
9.10 Duration; Survival......................................................... 51
9.11 Counterparts............................................................... 51
9.12 Successors and Assigns; Participations; Assignments........................ 51
(a) Successors and Assigns..................................... 51
(b) Participations............................................. 52
(c) Assignments................................................ 52
(d) Register................................................... 54
(e) Financial and Other Information............................ 54
9.13 Secured Hedge Agreements; Application of Security.......................... 54
9.14 Amendment and Restatement.................................................. 56
ANNEXES
Annex A Definitions and Construction
Annex B Pricing Grid
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B-1 Form of Company Guaranty
Exhibit B-2 Form of Subsidiary Guaranty
Exhibit C Form of Opinions
Exhibit D Form of Transfer Supplement
Exhibit E-1 Form of Mellon Letter of Credit Documentation
Exhibit E-2 Form of Mellon Cash Management Documentation
Exhibit F Form of Secured Hedge Agreement
SCHEDULES
Schedule 1.01 Other Currencies
Schedule 2.10 Existing Letters of Credit
Schedule 3.08 Litigation
Schedule 3.09 Subsidiaries; Partnerships
Schedule 6.02 Liens
Schedule 6.03 Indebtedness
Schedule 6.04 Guaranties
Schedule 6.05 Loans; Investments
Schedule 6.13 Other Restrictions
Schedule 9.13 Existing Secured Hedge Agreements
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this "Agreement"), dated as
of August 6, 1998, by and among SYLVAN INC., a Nevada corporation (the
"Company"), and SYLVAN FOODS (NETHERLANDS) B.V., a Dutch corporation ("SFNBV"
and together with the Company, the "Borrowers"), THE BANKS PARTY HERETO FROM
TIME TO TIME (individually, a "Bank" and collectively, the "Banks"), MELLON
BANK, N.A., a national banking association, as issuing bank hereunder (the
"Issuing Bank"), and MELLON BANK, N.A., a national banking association, as agent
for the Banks and the Issuing Bank hereunder (in such capacity, together with
its successors and assigns, the "Agent").
RECITALS:
WHEREAS, the Borrowers have requested the Banks to provide a
reducing revolving credit to the Borrowers in an initial US Dollar Equivalent
Amount not to exceed $50,000,000, and the Banks are willing to provide such
credit to the Borrowers on the terms and subject to the conditions herein
contained.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.01. CERTAIN DEFINITIONS; CONSTRUCTION. In addition to other
words and terms defined elsewhere in this Agreement, as used herein the words
and terms defined in Annex A shall have the meanings given them in Annex A and
this Agreement shall be construed in accordance with the provisions of Annex A.
ARTICLE II
THE CREDITS
2.01. REVOLVING CREDIT LOANS.
(a) THE COMMITMENTS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Bank,
severally and not jointly, agrees (such agreement being herein called such
Bank's "Revolving Credit Commitment") to make loans (the "Revolving Credit
Loans") to the Borrowers in US Currency or in one of the Other Currencies at any
time or from time to time on or after the Closing Date and up to but not
including the Revolving Credit Expiration Date. A Bank shall have no obligation
to make any Revolving Credit Loan to the extent that the Dollar Equivalent
Amount of such Bank's aggregate Credit Exposure at any time would exceed such
Bank's Commitment Amount at such time. The sum of the Commitment Amounts of the
Banks shall not at any time exceed the Revolving Credit Commitment Amount.
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(b) NATURE OF THE CREDIT. Within the limits of time and amount
set forth in this Section 2.01, and subject to the provisions of this Agreement,
the Borrowers may borrow, repay and reborrow hereunder. The failure of any Bank
to make a Revolving Credit Loan shall not relieve any other Bank of its
obligation to lend hereunder, but neither the Agent nor any Bank shall be
responsible for the failure of any other Bank to make a Revolving Credit Loan.
Each Revolving Credit Loan shall be made to a single Borrower and shall be made
in the US Currency or one of the Other Currencies.
(c) REVOLVING CREDIT NOTES. The obligations of the Borrowers
to repay the unpaid principal amount of the Revolving Credit Loans made to it by
each Bank and to pay interest thereon shall be evidenced in part by a single
promissory note of the Borrowers in substantially the form of Exhibit A-1
attached hereto (the "Revolving Credit Notes"), with the blanks appropriately
filled, payable to the order of such Bank in a face amount equal to such Bank's
Commitment Amount.
(d) COMMITMENT FEE. The Borrowers agree to pay to the Agent
for the account of each Bank, as consideration for the Revolving Credit
Commitment of such Bank, a commitment fee (the "Commitment Fee") for each day
from and including the Closing Date to and including the Revolving Credit
Expiration Date, which for each day shall be equal to (i) the Commitment Fee
Rate for such day, multiplied by (ii) 1/360, multiplied by (iii) an amount (not
less than zero) equal to the unborrowed amount of the Revolving Credit
Commitment Amount for such day. For the purposes of this Section 2.01(d), (i)
the term "unborrowed amount" for any Bank at any time shall mean the Commitment
Amount of such Bank less the Credit Exposure of such Bank at such time and (ii)
the Commitment Fee Rate for each day shall mean the applicable percentage set
forth in Annex B based on the Applicable Tier for such day. Such Commitment Fee
shall be due and payable for the preceding period on (i) each Regular Payment
Date after the Closing Date to the Revolving Credit Expiration Date, (ii) the
date of each reduction of the Revolving Credit Commitment Amount (on the amount
so reduced) and (iii) the Revolving Credit Expiration Date.
2.02. MAKING OF REVOLVING CREDIT LOANS. Whenever any Borrower
desires the Banks to make Revolving Credit Loans, such Borrower shall provide
Standard Notice to the Agent setting forth (a) the name of the Borrower to whom
such proposed Loans are to be made, (b) the date, which shall be a Business Day,
on which such proposed Loans are to be made, (c) the currency, which shall be
either US Currency or any Other Currency, in which such Loans are to be made,
(d) the aggregate principal amount of such proposed Loans, which shall be the
sum of the principal amounts selected pursuant to clause (e) of this Section
2.02, and which shall have a Dollar Equivalent Amount in an integral multiple of
$50,000 not less than $250,000, (e) the interest rate Option or Options selected
in accordance with Section 2.03(a) hereof and the principal amount selected in
accordance with Section 2.03(d) hereof of the Prime Rate Portion and each
Funding Segment of the Euro-Rate Portion of such proposed Loans and (f) with
respect to each such Funding Segment of such proposed Loans, the Funding Period
to apply to such Funding Segment selected in accordance with Section 2.03(c)
hereof. The Agent shall promptly give notice to each Bank of the information
contained in such notice and of the amount of such
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Bank's Revolving Credit Loan. Unless any applicable condition specified in
Article IV hereof has not been satisfied on the date specified in such Standard
Notice, each Bank shall make the proceeds of its Revolving Credit Loan available
to the Agent (a) with respect to US Currency, at the Agent's Domestic Office, no
later than 12:00 o'clock Noon, Pittsburgh time, (b) with respect to any Other
Currency, at the Agent's London Office, no later than 12:00 o'clock Noon, London
time, on the date specified in such notice, in funds immediately available at
such Office. The Agent will make the funds so received available to the Borrower
in funds immediately available at the Agent's Domestic Office or the Agent's
London Office, as the case may be.
2.03. INTEREST RATES.
(a) OPTIONAL BASES OF BORROWING. The unpaid principal amount
of the Revolving Credit Loans shall bear interest for each day until due on one
or more bases selected by a Borrower from among the interest rate Options set
forth below. Subject to the provisions of this Agreement a Borrower may select
different Options to apply simultaneously to different Portions of the Revolving
Credit Loans and may select different Funding Segments to apply simultaneously
to different parts of the Euro-Rate Portion of the Revolving Credit Loans.
(i) PRIME RATE OPTION: A rate per annum (computed on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed) for
each day equal to the Prime Rate for such day.
(ii) EURO-RATE OPTION: A rate per annum (based on a year of
360 days and actual days elapsed) for each day equal to the Euro-Rate for such
day plus the Applicable Margin for such day. "Euro-Rate" for any day, as used
herein, shall mean for each Funding Segment of the Euro-Rate Portion
corresponding to a proposed or existing Euro-Rate Funding Period the rate per
annum determined by the Agent by dividing (the resulting quotient to be rounded
upward to the nearest 1/100 of 1%) (A) the rate of interest (which shall be the
same for each day in such Euro-Rate Funding Period) determined in good faith by
the Agent in accordance with its usual procedures (which determination shall be
conclusive absent manifest error) to be the average of the rates per annum for
deposits in US Currency or any Other Currency, as applicable, offered to major
money center banks in the London interbank market at approximately 1:00 a.m.,
London time, two London Business Days prior to the first day of such Euro-Rate
Funding Period for delivery on the first day of such Euro-Rate Funding Period in
amounts comparable to such Funding Segment and having maturities comparable to
such Funding Period by (B) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage.
The "Euro-Rate" may also be expressed by the following
formula:
[average of the rates offered to major money]
[center banks in the London interbank market]
Euro-Rate = [determined by the Agent per subsection (A)]
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[1.00 - Euro-Rate Reserve Percentage]
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"Euro-Rate Reserve Percentage" for any day shall mean the
percentage (expressed as a decimal, rounded upward to the nearest 1/100 of 1%),
as determined in good faith by the Agent (which determination shall be
conclusive absent manifest error), which is in effect on such day as prescribed
by the Board of Governors of the Federal Reserve System (or any successor)
representing the maximum reserve requirement (including, without limitation,
supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as "Eurocurrency liabilities") of a
member bank in such System. The Euro-Rate shall be adjusted automatically as of
the effective date of each change in the Euro-Rate Reserve Percentage. The
Euro-Rate Option shall be calculated in accordance with the foregoing whether or
not any Bank is actually required to hold reserves in connection with its
eurocurrency funding or, if required to hold such reserves, is required to hold
reserves at the "Euro-Rate Reserve Percentage" as herein defined.
The Agent shall give prompt notice to the Borrower and to the
Banks of the Euro-Rate determined or adjusted in accordance with the definition
of the Euro-Rate, which determination or adjustment shall be conclusive, absent
manifest error, if made in good faith.
(b) APPLICABLE MARGIN. The Applicable Margin for each day
shall mean the applicable percentage set forth in Annex B based on the
Applicable Tier on such day.
(c) FUNDING PERIODS. At any time when a Borrower shall select,
convert to or renew the Euro-Rate Option to apply to any part of its Revolving
Credit Loans, the Borrower shall specify one or more periods (the "Euro-Rate
Funding Periods") during which such Option shall apply, such Euro-Rate Funding
Periods being one, two, three or six months; provided, that (i) each Euro-Rate
Funding Period shall begin on a London Business Day, and the term "month", when
used in connection with a Euro-Rate Funding Period, shall be construed in
accordance with prevailing practices in the London interbank market at the
commencement of such Euro-Rate Funding Period, as determined in good faith by
the Agent (which determination shall be conclusive absent manifest error); (ii)
such Borrower may not select a Euro-Rate Funding Period that would end after the
Revolving Credit Expiration Date; and (iii) such Borrower shall, in selecting
any Euro-Rate Funding Period, allow for scheduled mandatory payments and
foreseeable mandatory prepayments of its Loans.
(d) TRANSACTIONAL AMOUNTS. Every selection of, conversion
from, conversion to or renewal of an interest rate Option and every payment or
prepayment of any Revolving Credit Loans shall be in a principal amount such
that after giving effect thereto the aggregate principal amount of the Prime
Rate Portion of such Loans or the aggregate principal amount of each Funding
Segment of the Euro-Rate Portion of such Loans shall be as set forth below:
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PORTION OR FUNDING SEGMENT ALLOWABLE AGGREGATE PRINCIPAL AMOUNTS
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Prime Rate Portion Any
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Each Funding Segment of the Euro-Rate Portion Dollar Equivalent Amount in an integral multiple of
$50,000 not less than $250,000
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(e) EURO-RATE UNASCERTAINABLE; IMPRACTICALITY. If
(i) on any date on which a Euro-Rate would otherwise be set
the Agent (in the case of clauses (A) or (B) below) or any Bank (in the
case of clause (C) below) shall have determined in good faith (which
determination shall be conclusive absent manifest error) that:
(A) adequate and reasonable means do not exist for
ascertaining such Euro-Rate,
(B) a contingency has occurred which materially and
adversely affects the London interbank market, or
(C) the effective cost to such Bank of funding a
proposed Funding Segment of the Euro-Rate Portion from a
Corresponding Source of Funds shall exceed the Euro-Rate
applicable to such Funding Segment, or
(ii) at any time any Bank shall have determined in good faith
(which determination shall be conclusive absent manifest error) that
the making, maintenance or funding of any part of the Euro-Rate Portion
has been made impracticable or unlawful by compliance by such Bank or a
Notional Euro-Rate Funding Office in good faith with any Law or
guideline or interpretation or administration thereof by any Official
Body charged with the interpretation or administration thereof or with
any request or directive of any such Official Body (whether or not
having the force of Law);
then, and in any such event, the Agent or such Bank, as the case may be, may
notify the Borrower of such determination (and any Bank giving such notice shall
notify the Agent). Upon such date as shall be specified in such notice (which
shall not be earlier than the date such notice is given), the obligation of each
of the Banks to allow the Borrower to select, convert to or renew the Euro-Rate
Option shall be suspended until the Agent or such Bank, as the case may be,
shall have later notified the Borrower (and any Bank giving such notice shall
notify the Agent) of the Agent's or such Bank's determination in good faith
(which determination shall be conclusive absent manifest error) that the
circumstance giving rise to such previous determination no longer exists.
If any Bank notifies the Borrower of a determination under
subsection (ii) of this Section 2.03(e), the Euro-Rate Portion of the Loans of
such Bank (the "Affected Bank") shall automatically be converted to the Prime
Rate Option as of the date specified in such notice.
If at the time the Agent or a Bank makes a determination under
subsection (i) or (ii) of this Section 2.03(e) the Borrower previously has
notified the Agent that it wishes to select, convert to or renew the Euro-Rate
Option with respect to any proposed Loans but such Loans
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have not yet been made, such notification shall be deemed to provide for
selection of, conversion to or renewal of the Prime Rate Option instead of the
Euro-Rate Option with respect to such Loans or, in the case of a determination
by a Bank, such Loans of such Bank.
2.04. CONVERSION OR RENEWAL OF INTEREST RATE OPTIONS.
(a) CONVERSION OR RENEWAL. Subject to the provisions of
Section 2.13(b) hereof, a Borrower may convert any part of its Revolving Credit
Loans from any interest rate Option or Options to one or more different interest
rate Options and may renew the Euro-Rate Option as to any Funding Segment of the
Euro-Rate Portion: (i) at any time with respect to conversion from the Prime
Rate Option; or (ii) at the expiration of any Funding Period with respect to
conversions from or renewals of the Euro-Rate Option as to the Funding Segment
corresponding to such expiring Funding Period. Whenever a Borrower desires to
convert or renew any interest rate Option or Options, the Borrower shall provide
to the Agent Standard Notice setting forth the following information: (i) the
Revolving Credit Loans to which such conversion or renewal is to apply; (ii) the
date, which shall be a Business Day, on which the proposed conversion or renewal
is to be made; (iii) the principal amounts selected in accordance with Section
2.03(d) hereof of the Prime Rate Portion and each Funding Segment of the
Euro-Rate Portion to be converted from or renewed; (iv) the interest rate Option
or Options selected in accordance with Section 2.03(a) hereof and the principal
amounts selected in accordance with Section 2.03(d) hereof of the Prime Rate
Portion and each Funding Segment of the Euro-Rate Portion to be converted to;
and (v) with respect to each Funding Segment to be converted to or renewed, the
Funding Period selected in accordance with Section 2.03(c) hereof to apply to
such Funding Segment. Standard Notice having been so provided, after the date
specified in such Standard Notice, interest shall be calculated upon the
principal amount of the Loans as so converted or renewed.
(b) FAILURE TO CONVERT OR RENEW. Absent due notice from a
Borrower of conversion or renewal in the circumstances described in Section
2.04(a)(ii) hereof, any part of the Euro-Rate Portion for which such notice is
not received shall be (i) converted automatically to the Prime Rate Option on
the last day of the expiring Funding Period if such Euro-Rate Portion is in US
Currency or (ii) renewed automatically for one month on the last day of the
expiring Funding Period if such Euro-Rate Portion is in any Other Currency.
2.05. PREPAYMENTS GENERALLY. Whenever a Borrower desires or is
required to prepay any part of its Revolving Credit Loans, it shall provide
Standard Notice to the Agent setting forth the following information: (a) the
date, which shall be a Business Day, on which the proposed prepayment is to be
made; (b) subject to Section 2.09, the currency, which shall be either US
Currency or any Other Currency, in which such proposed prepayment is to be made,
(c) the total principal amount of such prepayment, which shall be the sum of the
principal amounts selected pursuant to clause (d) of this Section 2.05 and (d)
the principal amounts selected in accordance with Section 2.03(d) hereof of the
Prime Rate Portion and each part of each Funding Segment of Euro-Rate Portion to
be prepaid. Standard Notice having been so provided, on the date specified in
such Standard Notice, the principal amounts of the Prime Rate Portion and each
part of the Euro-Rate Portion specified in such notice, together with interest
on each such principal amount to such date, shall be due and payable.
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2.06. OPTIONAL PREPAYMENTS. A Borrower shall have the right at
its option from time to time voluntarily to prepay its Revolving Credit Loans in
whole or part without premium or penalty (subject, however, to Section 2.13(b)
hereof): (a) at any time with respect to any part of the Prime Rate Portion; or
(b) at the expiration of any Funding Period with respect to prepayment of the
Euro-Rate Portion with respect to any part of the Funding Segment corresponding
to such expiring Funding Period. Any such prepayment shall be made in accordance
with Section 2.05 hereof.
2.07. MANDATORY PREPAYMENTS.
(a) On or before the date of each reduction of the Revolving
Credit Commitment Amount, the Borrowers shall prepay a principal amount of
Revolving Credit Loans (subject to Section 2.13(b)) equal to the amount
necessary to reduce the outstanding principal balance of the Revolving Credit
Loans to an amount not exceeding the Revolving Credit Commitment Amount as so
reduced.
(b) If the Dollar Equivalent Amount of the aggregate Credit
Exposure of the Banks exceeds the Revolving Credit Commitment Amount at any
time, then the Borrowers shall immediately prepay a principal amount of
Revolving Credit Loans (subject to Section 2.13(b)) so as to reduce the Dollar
Equivalent Amount of the aggregate Credit Exposures of the Banks to an amount
not exceeding the Revolving Credit Commitment Amount at such time.
2.08. INTEREST PAYMENT DATES. Interest on the Prime Rate
Portion shall be due and payable on each Regular Payment Date. Interest on each
Funding Segment of the Euro-Rate Portion shall be due and payable on each
Regular Payment Date and also on the last day of the corresponding Euro-Rate
Funding Period. After maturity of any part of the Revolving Credit Loans (by
acceleration or otherwise), interest on such part of the Revolving Credit Loans
shall be due and payable on demand.
2.09. PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing from the Banks and each payment or
prepayment to the Banks hereunder (except as specifically provided in Sections
2.13, 2.14 and 2.15) and all fees payable by the Borrowers hereunder (except the
fee payable to the Issuing Bank pursuant to the last sentence of Section 2.10(d)
hereof and the fees payable to the Agent pursuant to Section 8.12 hereof) shall
be made pro rata in accordance with each Bank's Commitment Percentage and from
and to each Bank on the same date ("Pro Rata").
(b) The parties agree that (i) all payments of principal,
interest and other amounts in connection with Revolving Credit Loans denominated
in US Currency and all fees shall be made in US Currency and (ii) all payments
of principal, interest and other amounts (other than fees) in connection with
Revolving Credit Loans denominated in any Other Currency shall be made in such
Other Currency.
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(c) All payments and prepayments to be made in respect of
principal, interest, fees or other amounts due from the Borrowers in US Currency
shall be payable by 12:00 Noon, Pittsburgh time, on the day when due without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, and an action therefor shall immediately accrue. Such payments
shall be made to the Agent at its Domestic Office in US Currency in funds
immediately available at such Office without setoff, counterclaim or other
deduction of any nature. The Agent shall make the funds so received available to
each Bank in funds immediately available at the Agent's Domestic Office.
(d) All payments and prepayments to be made in respect of
principal, interest fees or other amounts due from the Borrower in any Other
Currency shall be payable by 12:00 Noon, London time, on the day when due
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, and an action therefor shall immediately accrue. Such
payments shall be made to the Agent at its London Office in such Other Currency
in funds immediately available at such Office without setoff, counterclaim or
other deduction of any nature. The Agent shall promptly make the funds so
received available to each Bank in funds immediately available at each Bank's
office designated in writing to the Agent.
(e) To the extent permitted by law, after there shall have
become due (by acceleration or otherwise) interest, funding fees or any other
amounts due from a Borrower hereunder or under its Notes (excluding overdue
principal, which shall bear interest as described in the immediately-following
sentence), such amounts shall bear interest for each day until paid (before and
after judgment), payable on demand, at a rate per annum (based on a year of 365
or 366 days, as the case may be, with respect to Revolving Credit Loans bearing
interest at the Prime Rate and based on a year of 360 days with respect to
Revolving Credit Loans bearing interest at the Euro-Rate Option) equal to the
following: (i) in the case of any part of the Euro-Rate Portion of the Revolving
Credit Loans, (A) until the end of the applicable then-current Euro-Rate Funding
Period, at a rate per annum 2 % above the rate otherwise applicable to such
part, and (B) thereafter, in accordance with the following clause (ii); and (ii)
otherwise, 2% above the then-current Prime Rate Option, such interest rate to
change automatically from time to time effective as of the effective date of
each change in the Prime Rate. After the principal amount of any Revolving
Credit Loan has become due (by acceleration or otherwise), such Revolving Credit
Loan shall bear interest for each day until paid (before and after judgment) at
a rate per annum (based on a year of 365 or 366 days, as the case may be, with
respect to Loans bearing interest at the Prime Rate and based on a year of 360
days with respect to Loans bearing interest at the Euro-Rate Option) which shall
be equal to the following: (i) in the case of any part of the Euro-Rate Portion
of the Revolving Credit Loans, (A) until the end of the applicable then-current
Euro-Rate Funding Period, at a rate per annum 2 % above the rate otherwise
applicable to such part, and (B) thereafter, in accordance with the following
clause (ii); and (ii) in the case of any other principal amount due, the greater
of (x) 2 % above the Prime Rate Option on the day such Revolving Credit Loan
shall have become due and (y) 2 % above the then-current Prime Rate Option, such
interest rate to change automatically from time to time effective as of the
effective date of each change in the Prime Rate.
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(f) The provisions of this Section 2.09 are cumulative and not
exclusive of the other provisions of this Agreement; without limitation, the
increased interest rates provided for herein are cumulative with the adjustments
in interest rates provided for elsewhere in this Agreement (including but not
limited to the adjustments provided for in Sections 2.04(b)). The Banks and the
Borrower's acknowledge that, in no event shall the interest charged on any
Revolving Credit Loan exceed the maximum rate permitted under applicable law.
Interest in excess of the maximum allowed by applicable law will not be
collected and, if inadvertently collected, will be credited as a reduction of
principal, effective as of the date inadvertently collected. Any payment of
principal in excess of the then outstanding principal balance resulting from the
inadvertent collection of interest in excess of the maximum rate allowed by law
shall be refunded to the relevant Borrower, effective as of the date
inadvertently collected.
2.10. LETTER OF CREDIT SUBFACILITY.
(a) LETTERS OF CREDIT. At the request of any Borrower (which
shall be made at least five Business Days prior to the date, which shall be a
Business Day, on which a Letter of Credit is proposed to be issued) and pursuant
to an Application duly executed by such Borrower, the Issuing Bank agrees (such
agreement being herein called the "Letter of Credit Commitment") to issue one or
more letters of credit (each, a "Letter of Credit" and collectively, the
"Letters of Credit") in US Dollars or one of the Other Currencies for the
account of such Borrower on behalf of itself or any of its Subsidiaries at any
time and from time to time on or after the Closing Date and up to but not
including the date that is 90 days prior to the Revolving Credit Expiration
Date. The Borrowers shall not request any Letter of Credit except within the
following limitations: (i) no Letter of Credit shall be issued later than 90
days prior to the Revolving Credit Expiration Date; (ii) no Letter of Credit
shall mature later than seven Business Days prior to the Revolving Credit
Expiration Date; (iii) on the date of issuance of any Letter of Credit, the
Dollar Equivalent Amount of the aggregate Credit Exposure of the Banks (after
giving effect to such Letter of Credit) shall not exceed the Revolving Credit
Commitment Amount; and (iv) on the date of issuance of any Letter of Credit, the
Dollar Equivalent Amount of the aggregate Letter of Credit Exposure (after
giving effect to such Letter of Credit) shall not exceed $5,000,000 (the "Letter
of Credit Limit").
(b) COMMITMENT USAGE. The Letters of Credit described on
Schedule 2.10(b) are currently outstanding, and the aggregate amount in respect
of such outstanding Letters of Credit constituting undrawn or unreimbursed
amounts thereunder shall be charged against the Letter of Credit Limit and
against the Letter of Credit Exposure.
(c) LETTER OF CREDIT FEES. The Agent shall be paid a fee by
the Borrowers equal to the Applicable Margin based upon the undrawn amount of
the Letter of Credit issued, which shall be payable on the last Business Day of
each calendar quarter, and on the last date on which any Letter of Credit issued
hereunder expires or is drawn upon, in each case for the preceding period for
which such fee has not been paid and which fee shall be payable by the
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Agent to the Banks pro rata in accordance with each Bank's percentage interest
in such Letter of Credit. The Issuing Bank shall be paid a fee by the Borrowers
equal to one eighth of one percent (1/8%) of the face amount of each Letter of
Credit upon issuance of the Letter of Credit.
(d) PAYMENTS WITH RESPECT TO LETTERS OF CREDIT. As to each
Letter of Credit the respective Borrower shall reimburse the Issuing Bank
forthwith and otherwise in accordance with the terms of any related Application
or reimbursement or other like agreement, for any payment made by the Issuing
Bank under a Letter of Credit; provided, that, subject to Section 2.12(b),
payments in connection with any Letter of Credit (i) denominated in US Currency
shall be made in US Currency and (ii) denominated in any Other Currency shall be
made in such Other Currency. Any such reimbursement to the Issuing Bank shall be
made absolutely and unconditionally and without any set-off, counterclaim or
reduction and free and clear of any withholding or similar taxes other than any
tax, levy, impost or duty based. in whole or in part, upon the income, revenues
or operations of the Issuing Bank. Such Borrower shall pay to the Issuing Bank
interest on any unreimbursed portion of each such payment made by the Issuing
Bank from the date of such payment by the Issuing Bank until reimbursement in
full therefor at a rate per annum equal to two and one half percent (2-1/2 %)
above the Prime Rate.
(e) ADDITIONAL UNDERSTANDINGS REGARDING LETTERS OF CREDIT. In
order to induce the Issuing Bank to establish each Letter of Credit: (i) the
Borrowers agree that neither the Issuing Bank nor the Banks shall be responsible
or liable for, and the obligation of the Borrowers to reimburse the Issuing Bank
for any payment made by the Issuing Bank under or in respect of any Letter of
Credit shall not be affected by (A) the validity, enforceability or genuineness
of any instrument or document (or any endorsement thereof) presented under such
Letter of Credit which, upon examination by the Issuing Bank and in the absence
of gross negligence or willful misconduct, appears on its face to be in
accordance with the terms and conditions of such Letter of Credit, even if such
instrument or document (or such endorsement) is proven to be invalid,
unenforceable, fraudulent or forged, or (B) any dispute between a Borrower and
the beneficiary or beneficiaries under such Letter of Credit; (ii) the Borrowers
agree that drawings under any Letter of Credit issued hereunder may be made only
upon presentation of an appropriate sight draft and any other documentation
required by the Letter of Credit, and that all Letters of Credit issued
hereunder shall have an expiration date and (if applicable) an automatically
renewing standby letter of credit renewal notification date permitting renewal
by the Issuing Bank that is no later than one year after the date of issuance of
such Letter of Credit and is in any event no later than seven Business Days
prior to the Revolving Credit Expiration Date; and (iii) to the extent that
there shall be an inconsistency between the provisions of this Agreement and the
provisions of an Application, the provisions of this Agreement shall control.
(f) PARTICIPATION, INTERESTS, GENERALLY. Concurrently with the
issuance of a Letter of Credit, the Issuing Bank shall (under circumstances
described in the immediately succeeding sentence) irrevocably and
unconditionally, sell, assign, transfer and convey to each Bank, and each Bank
automatically shall be deemed, irrevocably and unconditionally, severally to
have purchased, acquired, accepted and assumed from the Issuing Bank, without
recourse to, or representation or warranty by, the Issuing Bank, an undivided
interest, in a percentage equal to such Bank's Commitment Percentage, in all the
Issuing Bank's rights and obligations in, to or
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under such Letter of Credit, the reimbursement obligations thereof and all
collateral and other rights from time to time directly or indirectly securing
the foregoing. Each Bank shall purchase an undivided interest in each Letter of
Credit in a percentage equal to such Bank's Commitment Percentage (each such
Letter of Credit being referred to as a "Participated Letter of Credit").
(g) PAYMENT BY BANKS ON ACCOUNT OF UNREIMBURSED DRAWS. If the
Issuing Bank makes a payment under a Participated Letter of Credit and is not
reimbursed in full therefor on the date of such drawing, the Issuing Bank
promptly shall notify the Agent thereof (which notice may be made by telephone),
and the Agent shall notify each Bank. No later than the Agent's close of
business on the date such notice is given, each such Bank shall pay to the
Agent, for the account of the Issuing Bank, in immediately available funds, an
amount equal to such Bank's Commitment Percentage of the unreimbursed payment by
the Issuing Bank. To the extent that any Bank fails to make such payment to the
Agent on the date of the Issuing Bank's payment, such Bank shall pay, on demand,
interest to the Agent for the account of the Issuing Bank for each day from the
day of the Issuing Bank's payment to and including the date of payment by such
Bank (before and after judgment) at a rate per annum (based on a year of 365 or
366 days, as the case may be) equal to the average federal funds rate quoted by
the Board of Governors of the Federal Reserve System (or any successor). All
payments by Banks under this Section 2.10(g) shall be made (i) with respect to
US Currency, to the Agent at its Domestic Office in Dollars (ii) with respect to
any Other Currency, to the Agent at its London Office, in funds immediately
available at such Office, without set-off, withholding, counterclaim or other
deduction of any nature.
(h) OBLIGATIONS SEVERAL. The failure of any Bank to fund its
Commitment Percentage of any unreimbursed payment under a Participated Letter of
Credit shall not relieve any other Bank of its funding obligation hereunder, but
no Bank shall be responsible for the failure of any other Bank to meet its
funding obligation hereunder.
(i) OBLIGATIONS ABSOLUTE. Each Bank hereby agrees that its
obligation to participate in the Participated Letters of Credit issued hereunder
and to pay or to reimburse the Issuing Bank for its Commitment Percentage of the
drafts drawn thereunder shall be absolute, irrevocable and unconditional.
(j) DISTRIBUTIONS. If, at any time after the Issuing Bank has
made payment under a Participated Letter of Credit and has received from any
Bank such Bank's Commitment Percentage of the unreimbursed payment, the Issuing
Bank receives any payment on account of such payment, or any payment of interest
on account thereof, or makes any application of funds on account thereof, the
Issuing Bank shall pay to the Agent, for the account of such Bank, its
Commitment Percentage thereof.
(k) RESCISSION. If any payment received by the Issuing Bank,
or interest thereon, or any application made by the Issuing Bank on account of
any payment on account of a Participated Letter of Credit, shall be rescinded or
otherwise shall be required to be returned or paid over by the Issuing Bank for
any reason at any time, whether before or after the termination of this
Agreement (or the Issuing Bank believes in good faith that such rescission,
return or
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payment is required, whether or not such matter has been adjudicated), each such
Bank shall, promptly upon notice to the Agent by the Issuing Bank, pay over to
the Agent, for the account of the Issuing Bank, its Commitment Percentage of the
amount so rescinded, returned or paid over, together with its Commitment
Percentage of any interest or penalties payable with respect thereto.
(l) THE ISSUING BANK AND THE BANKS.
(i) The Issuing Bank may consult with legal counsel,
independent public accountants and any other experts selected by it and shall
not be liable to the Banks for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts.
(ii) The Issuing Bank shall have no duties or responsibilities
except those expressly set forth in this Agreement. The duties of the Issuing
Bank shall be ministerial and administrative in nature; the Issuing Bank shall
not by reason of this Agreement have a fiduciary relationship in respect of any
Bank; and nothing in this Agreement expressed or implied, is intended to or
shall be so construed as to impose upon the Issuing Bank any obligations in
respect of this Agreement except as expressly set forth herein or therein. Each
Bank expressly acknowledges: (A) that the Issuing Bank has not made any
representations or warranties to it and that no act by the Issuing Bank
hereafter taken, including any review of the affairs of the Borrowers or their
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Issuing Bank to any Bank; (B) that it has made and will make its own
independent investigation of the financial condition and affairs, and its own
appraisal of the creditworthiness, of the Borrowers or their subsidiaries in
connection with the Letters of Credit and the Applications; and (C) that the
Issuing Bank shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Bank with any credit or other information
except as otherwise provided herein, whether coming into its possession before
the issuance of the Letters of Credit hereunder or at any time or times
thereafter.
(iii) Neither the Issuing Bank nor any of its directors,
officers, employees or agents shall be liable to any Bank for any action taken
or omitted to be taken by it or them hereunder or in connection herewith, unless
caused by its or their own gross negligence or willful misconduct. In performing
its functions and duties hereunder the Issuing Bank shall exercise the same care
which it would exercise in dealing with letters of credit for its own account,
but it shall not (A) be responsible in any manner to any of the Banks for the
effectiveness, enforceability, genuineness, validity or due execution of this
Agreement or the Applications, or for any recital, representation, warranty,
document, certificate, report or statement herein or therein or made or
furnished under or in connection with this Agreement or the Applications, or (B)
be under any obligation to any of the Banks to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions hereof or
thereof on the part of any Borrower, or the financial condition of any Borrower,
or the existence or possible existence of any Event of Default or Potential
Default.
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(iv) Each Bank agrees to reimburse and indemnify the Issuing
Bank (to the extent not reimbursed by the applicable Borrower), ratably in
proportion to its Commitment Percentage, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Issuing Bank, in its capacity as
such, in any way relating to or arising out of the Participated Letters of
Credit or any action taken or omitted by the Issuing Bank hereunder or
thereunder, provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent that they result from the Issuing
Bank's gross negligence or willful misconduct.
(v) The Issuing Bank shall be entitled to rely upon any
writing, telegram, telex or teletype message, resolution, notice, consent,
certificate, letters, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper party or parties, and upon
opinions of counsel and other professional advisers selected by the Issuing
Bank. The Issuing Bank shall be fully justified in failing or refusing to take
any action hereunder unless it shall first be indemnified to its satisfaction by
the Banks against any and all liability and expense (which may be incurred by it
by reason of taking or continuing to take any such action.
(vi) The Issuing Bank appoints the Agent as its agent
hereunder and under the Security Documents and the transactions contemplated
hereby and thereby, and references to the "Banks" in Article VIII hereof are
deemed to include references to the Issuing Bank.
(m) LETTER OF CREDIT DOCUMENTATION. The representations,
warranties and covenants by the Borrowers under, and rights and remedies of the
Issuing Bank under, any agreements relating to any letter of credit issued by
the Issuing Bank to the Borrowers from time to time, are in addition to, and not
in limitation or derogation of, representations, warranties and covenants by the
Borrowers under, and rights and remedies of the Issuing Bank and the Banks
under, this Agreement, any Note, any Security Document or any other applicable
documents, instruments and agreements, and applicable law. Subject to the
foregoing, in the event of any inconsistency between the terms of this Agreement
and any such agreements or instruments, this Agreement shall prevail. The terms
of this Agreement shall be deemed to be incorporated by reference into each such
agreement or instrument (whether or not such agreement or instrument so states).
(n) REVISED ARTICLE 5. In the event that the Commonwealth of
Pennsylvania adopts revisions to Article 5 of its Uniform Commercial Code that
are inconsistent with the provisions of this Section 2.10, the Borrowers, the
Banks and the Issuing Bank shall upon the request of the Agent agree to a
modification of the provisions of this Section 2.10 that is consistent with the
intent hereof and permissible under revised Article 5.
2.11. [Intentionally Omitted].
2.12. MULTICURRENCY PAYMENTS.
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(a) DOLLAR EQUIVALENT AMOUNTS.
(i) CALCULATION OF DOLLAR EQUIVALENT AMOUNTS. Upon each making
and upon each payment of a Revolving Credit Loan or a Letter of Credit
denominated in an Other Currency, the Agent shall calculate the Dollar
Equivalent Amount of such Revolving Credit Loan or Letter of Credit, as
the case may be, and shall provide written confirmation to the Banks.
(ii) RECALCULATION OF DOLLAR EQUIVALENT AMOUNTS. In
determining the Dollar Equivalent Amount of the aggregate Credit
Exposure of the Banks, the Agent may use the respective Dollar
Equivalent Amounts for the Revolving Credit Loans and the Letters of
Credit pursuant to paragraph (i) of this subsection (a), unless such
Dollar Equivalent Amount so calculated exceeds 90% of the Revolving
Credit Commitment Amount, in which case the Agent shall recalculate the
Dollar Equivalent Amount of the Revolving Credit Loans and the Letters
of Credit outstanding no less frequently than once each week. The Agent
may recalculate the Dollar Equivalent Amounts of each of the Revolving
Credit Loans and the Letters of Credit as frequently as it determines to
do so in its discretion, provided, that such recalculation shall be made
for all of the Revolving Credit Loans and the Letters of Credit no less
frequently than once each week during any period when the aggregate
Dollar Equivalent Amount of the aggregate Credit Exposure of the Banks
exceeds 90% of the Revolving Credit Commitment Amount.
(b) UNAVAILABILITY.
(i) GENERAL. Subject to paragraph (ii) of this subsection (b),
if, in the reasonable judgment of the Agent, any Other Currency ceases
to be available and freely tradable in the London foreign exchange
market, such Other Currency shall cease to be an Other Currency. The
Agent shall give prompt notice to the Borrowers and the Banks of such
event. In the event that (A) the Agent has determined that an Other
Currency has ceased to be available and freely tradable in the London
foreign exchange market and (B) the Agent has determined in good faith
that such Other Currency is not otherwise available to the Borrowers,
then, on the date any Revolving Credit Loan or Letter of Credit
denominated in such Other Currency would become due under the terms of
this Agreement (other than as a result of an optional prepayment under
Section 2.06 or of the acceleration of such Loans under Section 7.02),
the Borrowers shall repay such Loans by paying to each Bank an amount
in Dollars equal to the amount determined in good faith by such Bank
(which determination shall be conclusive absent manifest error)
necessary to compensate such Bank for the principal of and accrued
interest on such Loans and any additional cost, expense or loss
incurred by such Bank as a result of such Loans being repaid in Dollars
(rather than in the denominated Other Currency).
(ii) EUROPEAN MONETARY UNION. If, in the reasonable judgment
of the Agent, as a result of the implementation of European monetary
union, (A) any European Currency ceases to be lawful currency of the
nation issuing the same and is replaced by a
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European common currency (the "Euro"), or (B) any European Currency
and the Euro are at the same time recognized by any Official Body of
the nation issuing such European Currency as lawful currency of such
nation, such European Currency shall cease to be an Other Currency and
the Agent shall give prompt notice to the Borrowers and the Banks
that, on the date any Revolving Credit Loan or Letter of Credit
denominated in such European Currency would become due under the terms
of this Agreement (other than as a result of an optional prepayment
under Section 2.06 or of the acceleration of such Loans under Section
7.02), the Borrowers shall repay such Loans by paying to each Bank an
amount in the Euro equal to the amount determined in good faith by
such Bank (which determination shall be conclusive absent manifest
error) necessary to compensate such Bank for the principal of and
accrued interest on such Loans and any additional cost, expense or
loss incurred by such Bank as a result of such Loans being repaid in
the Euro (rather than in the denominated Other Currency) as determined
by converting the amount payable in such European Currency to the Euro
at the exchange rate recognized by the European Central Bank for the
purpose of implementing European monetary union. Prior to the
occurrence of the event or events described in paragraphs (ii)(A) and
(ii)(B) of this subsection (b), each amount payable under this
Agreement in any European Currency shall, except as otherwise provided
herein, continue to be payable only in such European Currency. The
Borrowers affirm and agree that neither the fixation of the exchange
rate of any European Currency against the Euro as recognized by the
European Central Bank for the purpose of implementing European
monetary union, nor the conversion of any Revolving Credit Loan or
Letter of Credit denominated in any European Currency to a Revolving
Credit Loan or Letter of Credit denominated in the Euro will be (A) a
reason for the early termination or the revision or reformation, in
whole or in part, of this Agreement or any other Loan Document, or (B)
create any liability of any Bank toward any Borrower or any Borrower
Party or any other Bank for any direct, consequential, or other loss
arising from the occurrence of the event or events described in
paragraphs (ii)(A) and (ii)(B) of this subsection (b).
2.13. ADDITIONAL COMPENSATION IN CERTAIN CIRCUMSTANCES, ETC.
(a) INCREASED COSTS OR REDUCED RETURN RESULTING FROM TAXES,
RESERVES, CAPITAL ADEQUACY REQUIREMENTS, EXPENSES, ETC. If any Law or guideline
or interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive of any Official Body (whether or not having the force of Law) now
existing or hereafter adopted:
(i) subjects any Bank or any Notional Euro-Rate Funding Office
to any tax or changes the basis of taxation with respect to this
Agreement, the Notes, the Security Documents, the Loans or payments by
a Borrower of principal, interest, commitment fee or other amounts due
from such Borrower hereunder or under the Notes (except for taxes on
the overall net income or overall gross receipts of such Bank or such
Notional Euro-Rate Funding Office imposed by the jurisdictions
(federal, state and local) in which the Bank's principal office or
Notional Euro-Rate Funding Office is located),
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(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments
to extend credit extended by, assets (funded or contingent) of,
deposits with or for the account of, other acquisitions of funds by,
such Bank or any Notional Euro-Rate Funding Office (other than
requirements expressly included herein in the determination of the
Euro-Rate hereunder),
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or
contingent) of, or credits or commitments to extend credit extended by,
any Bank or any Notional Euro-Rate Funding Office, or (B) otherwise
applicable to the obligations of any Bank or any Notional Euro-Rate
Funding Office under this Agreement, or
(iv) imposes upon any Bank or any Notional Euro-Rate Funding
Office any other condition or expense with respect to this Agreement,
the Notes or its making, maintenance or funding of any Loans or any
security therefor,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank, any Notional Euro-Rate Funding Office or, in the case of clause (iii)
hereof, any person controlling a Bank, with respect to this Agreement, the Notes
or the making, maintenance or funding of any Loan (or, in the case of any
capital adequacy or similar requirement, to have the effect of reducing the rate
of return on such Bank's or controlling person s capital, taking into
consideration such Bank's or controlling person's policies with respect to
capital adequacy) by an amount which such Bank deems to be material (such Bank
being deemed for this purpose to have made, maintained or funded each Funding
Segment of the Euro-Rate Portion from a Corresponding Source of Funds), such
Bank may from time to time notify such Borrower of the amount determined in good
faith (using any averaging and attribution methods) by such Bank (which
determination shall be conclusive absent manifest error) to be necessary to
compensate such Bank or such Notional Euro-Rate Funding Office for such
increase, reduction or imposition. Such amount shall be due and payable by such
Borrower to such Bank five Business Days after such notice is given, together
with an amount equal to interest on such amount from the date two Business Days
after the date demanded until such due date at the Prime Rate Option applicable
to Term Loans. A certificate by such Bank as to the amount due and payable under
this Section 2.13(a) from time to time and the method of calculating such amount
shall be conclusive absent manifest error. Each Bank agrees that it will use
good faith efforts to notify the Company of the occurrence of any event that
would give rise to a payment under this Section 2.13(a); provided, however, that
any failure of such Bank to give any such notice shall have no effect on the
Company's obligations hereunder.
(b) FUNDING BREAKAGE. If (i) any Borrower fails to borrow,
convert or renew any Loan hereunder which would, after such borrowing,
conversion or renewal, have a Euro-Rate Portion, after notice requesting such
borrowing, conversion or renewal has been given by such Borrower (whether such
failure results from failure to satisfy applicable conditions to such borrowing,
conversion, or renewal or otherwise), or (ii) any part of any Funding Segment of
any Euro-Rate Portion of the Loans becomes due (by acceleration or otherwise),
or is paid, prepaid or
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converted to another interest rate Option (whether or not such payment,
prepayment or conversion is mandatory or automatic and whether or not such
payment or prepayment is then due), on a day other than the last day of the
corresponding Funding Period, such Borrower shall indemnify the Banks on demand
against any loss, liability, cost or expense of any kind or nature which the
Banks may sustain or incur in connection with or as a result of such event. Such
indemnification in any event shall include an amount equal to the excess, if
any, of (i) the aggregate amount of interest which would have accrued on the
amount of the Euro-Rate Portion not so borrowed, converted or renewed, or which
so becomes due, or which is so paid, prepaid or converted, from and including
the date on which such borrowing, conversion or renewal would have been made
pursuant to such notice, or on which such part of such Funding Segment so
becomes due, or on which such part of such Funding Segment is so paid, prepaid
or converted, to the last day of the Funding Period applicable to such amount
(or, in the case of a failure to borrow, convert or renew, the Funding Period
that would have been applicable to such amount but for such failure) in each
case at the applicable rate of interest for such Euro-Rate Portion provided for
herein (excluding, however, the Applicable Margin included therein, if any),
over (ii) the aggregate amount of interest (as determined in good faith by the
Banks) which would have accrued to the Banks on such amount for such period by
placing such amount on deposit for such period with leading banks in the London
interbank market. A certificate by the Banks as to any amount that the Banks are
entitled to receive pursuant to this Section 2.13(b) shall be conclusive absent
manifest error if made in good faith.
2.14. FUNDING BY BRANCH, SUBSIDIARY OR AFFILIATE.
(a) NOTIONAL FUNDING. Each Bank shall have the right from time
to time, prospectively or retrospectively, without notice to a Borrower, to deem
any branch, subsidiary or affiliate of such Bank to have made, maintained or
funded any part of the Euro-Rate Portion at any time. Any branch, subsidiary or
affiliate so deemed shall be known as a "Notional Euro-Rate Funding Office."
Such Bank shall deem any part of the Euro-Rate Portion of the Loans or the
funding therefor to have been transferred to a different Notional Euro-Rate
Funding Office if such transfer would avoid or cure an event or condition
described in Section 2.03(e)(ii) hereof or would lessen compensation payable by
the Borrower under Section 2.13(a) hereof, and if such Bank determines in its
sole discretion that such transfer would be practicable and would not have a
material adverse effect on such part of the Loans, such Bank or any Notional
Euro-Rate Funding Office (it being assumed for purposes of such determination
that each part of the Euro-Rate Portion is actually made or maintained by or
funded through the corresponding Notional Euro-Rate Funding Office). Notional
Euro-Rate Funding Offices may be selected by such Bank without regard to such
Bank's actual methods of making, maintaining or funding Loans or any sources of
funding actually used by or available to such Bank.
(b) ACTUAL FUNDING. Each Bank shall have the right from time
to time to make or maintain any part of the Euro-Rate Portion by arranging for a
branch, subsidiary or affiliate of such Bank to make or maintain such part of
the Euro-Rate Portion. Such Bank shall have the right to (i) hold any applicable
Note payable to its order for the benefit and account of such branch, subsidiary
or affiliate or (ii) request the Borrower to (A) execute and deliver to the
Agent (for delivery to such branch, subsidiary or affiliate) a new Revolving
Credit Note in the
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principal amount of such Euro-Rate Portion, in substantially the form of a
Revolving Credit Note, with the blanks appropriately filled, payable to such
branch, subsidiary or affiliate and with appropriate changes reflecting that the
holder thereof is not obligated to make any additional Loans to a Borrower, and
(B) execute and deliver to the Agent (for delivery to such Bank) a replacement
Revolving Credit Note in the principal amount of such Bank's Commitment Amount
minus the amount of the new Revolving Credit Note under subsection (b)(ii)(A)
(such Revolving Credit Note to be in exchange for, but not in payment of, the
Revolving Credit Note then held by such Bank). Each such Revolving Credit Note
shall be dated as of and be in substantially the form of the predecessor
Revolving Credit Note. The Agent shall xxxx the predecessor Revolving Credit
Note "exchanged" and deliver it to the respective Borrower. Each Borrower
agrees to comply promptly with any request under subsection (b)(ii) of this
Section 2.14. If any Bank causes a branch, subsidiary or affiliate to make or
maintain any part of the Euro-Rate Portion hereunder, all terms and conditions
of this Agreement, the Notes, the Security Documents and any other Loan Document
shall, except where the context clearly requires otherwise, be applicable to
such part of the Euro-Rate Portion and to any note payable to the order of such
branch, subsidiary or affiliate to the same extent as if such part of the
Euro-Rate Portion were made or maintained and such note were a Revolving Credit
Note payable to such Bank's order.
2.15. TAXES.
(a) PAYMENTS NET OF TAXES. All payments made by any Borrower
under this Agreement, any Note or any Security Document shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding (i) in the case of each Bank and the Agent, net income taxes
imposed on such Bank or the Agent (as the case may be) by the United States, and
net income taxes and franchise taxes imposed on such Bank or the Agent (as the
case may be) by the jurisdiction under the laws of which such Bank or the Agent
(as the case may be) is organized or by any political subdivision thereof, and
(ii) in the case of each Bank, net income taxes and franchise taxes imposed on
such Bank by the jurisdiction in which is located the Bank's lending office
which makes or books a particular extension of credit hereunder or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deduction,
charges, withholdings and liabilities being referred to as "Taxes"). If any
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable under this Agreement, any Note or any Security Document to any Bank
or the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.15) such Bank or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Borrower shall make such deductions, and
(iii) such Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) OTHER TAXES. In addition, each Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made under this
Agreement, any Note or any Security Document or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, any Note or any
Security Document (hereinafter referred to as "Other Taxes").
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(c) INDEMNITY. Each Borrower will indemnify each Bank and the
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.15) paid by such Bank or the Agent (as the case may
be) and any liability (including, without limitation, penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date such Bank or the Agent (as the case may be)
makes written demand therefor. No Borrower shall have any obligation to make any
payments pursuant to the preceding sentence unless Agent or such Bank has
notified such Borrower of the existence and amount of such liability for Taxes
or Other Taxes in writing and in advance of payment to the relevant authority,
it being understood that such Borrower's payment obligation shall not be
affected by the failure of Agent or such Bank to notify such Borrower as
specified herein unless as a consequence of such failure such Borrower has been
actually prejudiced.
(d) RECEIPTS, ETC. Within 30 days after the date of any
payment of Taxes or Other Taxes, such Borrower will furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof. If no
Taxes or Other Taxes are payable in respect of any payment hereunder by any
Borrower through an account or branch outside the United States or on behalf of
such Borrower by a payor that is not a United States person, such Borrower will
furnish, or will cause such payor to furnish, to the Agent a certificate from
each appropriate taxing authority or an opinion of counsel acceptable to the
Agent, in either case stating that such payment is exempt from or not subject to
Taxes or Other Taxes. For purposes of this Section 2.15(d), the terms "United
States" and "United States person" shall have the meanings specified in Section
7701 of the Internal Revenue Code.
(e) OTHER. Without prejudice to the survival of any other
agreement of the Borrowers hereunder, the obligations of the Borrowers contained
in this Section 2.15 shall survive the payment in full of all other obligations
of the Borrowers under this Agreement, the Notes and the Security Documents,
termination of all commitments to extend credit hereunder, and all other events
and circumstances whatever. Nothing in this Section 2.15 or otherwise in this
Agreement shall require the Agent or any Bank to disclose to the Borrowers any
of its tax returns (or any other information that it deems to be confidential or
proprietary).
(f) WITHHOLDING TAX EXEMPTION.
(i) Each Bank organized under the laws of a jurisdiction
outside the United States shall, on the date such Bank becomes party to
this Agreement, and from time to time thereafter if requested in
writing by the Company or the Agent, provide the Agent and the Company
with the forms prescribed by the United States Internal Revenue Service
certifying as to such Bank's status for purposes of determining
exemption from, or reduced rate applicable to, United States
withholding taxes with respect to payments to be made to such Bank
under this Agreement, the Notes and the Security Documents; provided,
that a Bank shall not be obligated to provide any such form after the
date such Bank becomes party to this Agreement if such Bank is not
legally able to do so.
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(ii) The Borrowers shall not be required to indemnify any
Bank, or to pay any additional amounts to any Bank, in respect of
United States withholding taxes (or any withholding tax imposed by a
state of the United States that applies only when such United States
withholding tax is imposed), pursuant to Sections 2.15(a) or 2.15(c),
to the extent that: (A) the obligation to withhold amounts with respect
to United States withholding tax existed on the date such Bank became a
party to this Agreement; provided, that this clause (A) shall not apply
to a Bank that became a Bank as a result of an assignment made or other
action taken at the request of a Borrower, or (B) the obligation to
make such indemnification or to pay such additional amounts would not
have arisen but for a failure of such Bank to comply with the
provisions of Section 2.15(f)(i).
(g) REFUNDS, CREDITS ETC. If a Bank or the Agent shall become
aware that it is entitled to claim a refund, credit or reduction in tax from a
governmental agency or authority in respect of Taxes or Other Taxes as to which
it has been indemnified by a Borrower, or with respect to which a Borrower has
paid additional amounts, pursuant to this Section 2.15, it shall promptly notify
such Borrower of the availability of such refund claim, credit or reduction in
tax and shall, within 30 days after receipt of a request by such Borrower, make
a claim to such governmental agency or authority for such refund, credit or
reduction in tax, at such Borrower's expense. If a Bank or the Agent receives a
refund or realizes a credit or reduction in tax in respect of any Taxes or Other
Taxes as to which it has been indemnified by a Borrower, or with respect to
which a Borrower has paid additional amounts, pursuant to this Section 2.15, it
shall promptly after the date of such receipt pay over the amount of such refund
or benefit of such credit or reduction in tax to such Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by such Borrower
under this Section 2.15 with respect to the Taxes or Other Taxes giving rise to
such refund, credit or reduction in tax and only to the extent that the Bank has
determined that the amount of any such refund, credit or reduction in tax is
directly attributable to payments made under this Agreement), net of all
reasonable expenses of the Bank or the Agent (including additional Taxes and
Other Taxes attributable to such refund, credit or reduction in tax, as
determined by the Bank) and without interest (other than interest, if any, paid
by the relevant governmental agency or authority with respect to such refund,
credit or reduction in tax). Each Borrower shall, upon demand, pay to such Bank
or Agent any amount paid over to such Borrower by such Bank or Agent (plus
penalties, interest or other charges) in the event such Bank or the Agent is
required to repay any portion of such refund, credit or reduction in tax to such
governmental agency or authority.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company and SFNBV hereby represents and warrants to the
Banks, the Agent and the Issuing Bank on the date hereof and on the Closing Date
that:
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3.01. ORGANIZATION AND QUALIFICATION. Each of the Company and
its Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each of the
Company and its Subsidiaries is duly qualified to do business as a foreign
corporation and in good standing in all jurisdictions in which the ownership of
its properties or the nature of its respective activities or both makes such
qualification necessary, except to the extent that failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect.
3.02. AUTHORITY AND AUTHORIZATION. Each of the Company and its
Subsidiaries has all requisite corporate power and authority to own and operate
its properties and to carry on its business as now conducted and as presently
planned to be conducted. Each of the Borrowers has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. Each of the Borrowers has the corporate power and authority to make
the borrowings provided for herein, to execute and deliver the Notes in evidence
of such borrowings and to perform its obligations thereunder. Each of the
Borrower Parties has the corporate power and authority to execute and deliver
the Security Documents to which it is a party and to performing its obligations
thereunder. All such action has been duly and validly authorized by all
necessary corporate proceedings by each of the Borrower Parties.
3.03. EXECUTION AND BINDING EFFECT. This Agreement, the Notes
and the Security Documents to which each of the Borrower Parties is a party have
been duly and validly executed and delivered by the Borrower Parties and
constitute legal, valid and binding obligations of the Borrower Parties
enforceable in accordance with their respective terms, except as the
enforceability of such documents may be limited by bankruptcy, insolvency or
other similar laws of general application affecting the enforcement of
creditors' rights or by general principles of equity limiting the availability
of equitable remedies.
3.04. AUTHORIZATIONS AND FILINGS. No authorization, consent,
approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Official Body is or
will be necessary or advisable in connection with the execution and delivery of
this Agreement, the Notes or the Security Documents, consummation of the
transactions herein or therein contemplated or performance of or compliance with
the terms and conditions hereof or thereof, except for the filing or recording
of certain of the Security Documents. No Borrower is an "investment company" or
a company "controlled" by an investment company within the meaning of the
Investment Company Act of 1940, as amended.
3.05. ABSENCE OF CONFLICTS. Neither the execution and delivery
of this Agreement, the Notes or the Security Documents nor consummation of the
transactions herein or therein contemplated nor performance of or compliance
with the terms and conditions hereof or thereof will (a) violate any Law where
such violation could reasonably be expected to have a Material Adverse Effect,
(b) conflict with or result in a breach of or a default under the articles of
incorporation or bylaws (or other constitutional documents) of any Borrower
Party or any agreement or instrument to which any Borrower Party is a party or
by which any of them or any of their respective properties (now owned or
hereafter acquired) may be subject or bound or (c) result in the creation or
imposition of any Lien upon any property (now owned or hereafter acquired) of
any Borrower Party except for the Liens created by the Security Documents.
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3.06. FINANCIAL STATEMENTS. The Company has heretofore
furnished to the Banks consolidated balance sheets of the Company and its
Consolidated Subsidiaries as of December 28, 1997 and the related consolidated
statements of income and retained earnings for the fiscal year then ended, as
examined and certified by Xxxxxx Xxxxxxxx & Co., independent certified public
accountants, and has also furnished to the Banks interim unaudited consolidated
balance sheets of the Company and its Consolidated Subsidiaries and the related
statements of income and retained earnings for the fiscal quarter ended March
29, 1998. Such financial statements (including the notes thereto) present fairly
the financial condition of the Company and its Consolidated Subsidiaries as of
the end of such fiscal year and such fiscal quarter ended March 29, 1998 and the
results of their operations for the fiscal year then ended and such fiscal
quarter ended March 29, 1998 all in conformity with GAAP applied on a basis
consistent with that of the preceding fiscal year, subject, in the case of the
interim financial statements, to year-end adjustments.
3.07. NO EVENT OF DEFAULT, COMPLIANCE WITH INSTRUMENTS. No
event has occurred and is continuing and no condition exists which constitutes
an Event of Default or Potential Default.
3.08. LITIGATION. Except as set forth in Schedule 3.08, there
is no pending or, to the Company's knowledge, threatened action, suit,
proceeding or investigation by or before any Official Body against or affecting
the Company or any Subsidiary of the Company, except for (a) matters described
in the financial statements referred to in Section 3.06 hereof, and (b) matters
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
3.09. SUBSIDIARIES AND PARTNERSHIPS. Schedule 3.09 hereof
states as of the date hereof the authorized capitalization of each Subsidiary
which, for fiscal year ended December 28, 1997, accounted for in excess of 5% of
the consolidated assets or of the consolidated revenues of the Company and its
Consolidated Subsidiaries, the number of shares of each class of capital stock
issued and outstanding of each such Subsidiary, and the number and percentage of
outstanding shares of each such class of capital stock owned by the Company and
by each Subsidiary. The outstanding shares of each such Subsidiary have been
duly authorized and validly issued and are fully paid and nonassessable. The
Company and each Subsidiary owns beneficially and of record and has good title
to all of the shares it is listed as owning in such Schedule 3.09, free and
clear of any Lien. There are no options, warrants, calls, subscriptions,
conversion rights, exchange rights, preemptive rights or other rights,
agreements or arrangements (contingent or otherwise) which may in any
circumstances now or hereafter obligate any such Subsidiary to issue any shares
of its capital stock or any other securities except for matters set forth in
Schedule 3.09. As of the date hereof, neither the Company nor any Subsidiary is
a partner (general or limited) of any partnership, is a party to any joint
venture or owns (beneficially or of record) any equity or similar interest in
any person (including but not limited to any interest pursuant to which the
Company or any Subsidiary has or may in any
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circumstance have an obligation to make capital contributions to, or be
generally liable for or on account of the liabilities, acts or omissions of such
other person), except for (a) capital stock of Subsidiaries referred to in this
Section 3.09 hereof and (b) matters set forth or described in Schedule 3.09.
3.10. EMPLOYEE BENEFITS.
(a) No borrowing contemplated by this Agreement is a
transaction which is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax could be imposed pursuant to
Section 4975 of the Code or a civil penalty assessed pursuant to
Section 502(i) of ERISA (assuming that monies other than monies
representing plan assets are borrowed hereunder). Neither the Company,
any of its Subsidiaries nor any other person, including any fiduciary,
has engaged in any prohibited transaction (as defined in Section 4975
of the Code or Section 406 of ERISA) which could subject any of the
Benefit Plans, the Company, or any Subsidiary (or any entity which they
have an obligation to indemnify) to any tax or penalty imposed under
4975 of the Code or Section 502(i) of ERISA or any other material
liability under a foreign law of similar nature which alone or together
with any other item described in this Section 3. 10 would have a
Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries (including
any of their respective Controlled Group Members) (i) has incurred or
expects to incur any liability under Title IV of ERISA or Section
502(g) of ERISA or any analogous provision relating to Section 515 of
ERISA or (ii) has become subject or expects to be subject to the Lien
described in Section 412(n) of the Code, which alone or together with
any other item described in this Section 3. 10 would have a Material
Adverse Effect.
(c) The Pension Plans do not have an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412
of the Code or Section 302 of ERISA. No Pension Plan has benefit
liabilities as defined in Section 4001(a)(16) of ERISA which exceed the
assets of such Pension Plan by such an amount that the termination of
such Pension Plan alone or together with any other item described in
this Section would have a Material Adverse Effect. The Company has
received a favorable determination letter from the IRS with respect to
all Pension Plans except for such Pension Plans with respect to which
the failure to receive such a favorable determination would not alone
or together with any other item described in this Section 3. 10 have a
Material Adverse Effect and nothing has happened since the date of such
letter that has adversely affected such qualification. There is no Lien
outstanding or security interest given in connection with a Pension
Plan or under Title IV of ERISA. As of the date hereof, the Company has
received both IRS and PBGC approval with respect to any terminated
Benefit Plans subject to Title IV of ERISA.
(d) Neither the Company nor any of its Subsidiaries (including
any of their respective Controlled Group Members) is in default in any
material respect under any Benefit Plan and all Benefit Plans are
administered in accordance with their terms and are
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in all material respects in compliance with all applicable Laws,
except where any such default or failure to comply would not alone or
together with any other item described in this Section 3.10 have a
Material Adverse Effect.
3.11. TITLE TO PROPERTY. The Company and each Subsidiary has
good and marketable title in fee simple to all real property owned or purported
to be owned by it and necessary for the operation of its business and good title
to all other property of whatever nature owned or purported to be owned by it,
including but not limited to all property reflected in the most recent audited
balance sheet referred to in Section 3.06 hereof or submitted pursuant to
Section 4.01(a) hereof, as the case may be (except as sold or otherwise disposed
of in the ordinary course of business after the date of such balance sheet or,
after the Closing Date, as otherwise expressly permitted by this Agreement) in
each case free and clear of all Liens, other than Liens permitted pursuant to
Section 6.02 hereof.
3.12. TAXES. All tax and information returns required to be
filed by or on behalf of the Company or any Subsidiary have been properly
prepared, executed and filed. All taxes, assessments, fees and other
governmental charges upon the Company or any Subsidiary or upon any of their
respective properties. incomes, sales or franchises which are due and payable
have been paid (other than those not yet delinquent and payable without premium
or penalty, and except for those being diligently contested in good faith by
appropriate proceedings, and in each case adequate reserves and provisions for
taxes have been made on the books of the Company and each Subsidiary). The
reserves and provisions for taxes on the books of the Company and each
Subsidiary are adequate for all open years and for its current fiscal period.
Neither the Company nor any Subsidiary knows of any proposed additional
assessment or basis for any material assessment for additional taxes (whether or
not reserved against). The federal and state income tax liabilities of the
Company and each of its Subsidiaries have been finally determined by the
Internal Revenue Service and other relevant taxing authorities. or the time for
audit has expired, for all fiscal periods ending on or prior to January 2, 1994,
and all such liabilities (including all deficiencies assessed following audit)
have been satisfied. Neither the Company nor any Subsidiary has at any time
filed a consolidated tax return with any person other than the Company and the
Subsidiaries except for any the result of which would not have a Material
Adverse Effect.
3.13. NO MATERIAL ADVERSE CHANGE. Since December 28, 1997
there has been no material adverse change in the business, operations,
properties, assets or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole.
3.14. MARGIN REGULATIONS. No part of the proceeds of any Loan
hereunder will be used for the purpose of buying or carrying any "margin stock",
as such term is used in Regulations U of the Board of Governors of the Federal
Reserve System, as amended from time to time, or to extend credit to others for
the purpose of buying or carrying any "margin stock." Neither the Company nor
any Subsidiary thereof is engaged in the business of extending credit to others
for the purpose of buying or carrying "margin stock." Neither the making of any
Loan nor any use of proceeds of any such Loan will violate or conflict with the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System, as amended from time to time.
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3.15. COMPLIANCE WITH LAWS. To the knowledge of the Company
after due investigation, neither the Company nor any Subsidiary is in violation
of or subject to any contingent liability on account of any Law (including but
not limited to ERISA, the Code, any applicable occupational and health or safety
Law, environmental protection Law, or hazardous waste or toxic substances
management, handling or disposal Law and including but not limited to (a) any
restrictions, specifications or requirements pertaining to products that the
Company or any Subsidiary manufactures, produces, processes or sells or
pertaining to the services each performs, (b) the conduct of their respective
businesses and (c) the use, maintenance or operation of the real and personal
properties owned or possessed by them), except for violations which in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
3.16. INTELLECTUAL PROPERTY. The Company and each Subsidiary
thereof owns, or is licensed or otherwise has the right to use, all the patents,
trademarks, service marks, names (trade, service, fictitious or otherwise),
copyrights, technology (including but not limited to computer programs and
software), processes, data bases and other rights, free from burdensome
restrictions. necessary to own and operate its properties and to carry on its
business as presently conducted and presently planned to be conducted without
conflict with the rights of others, except for such instances of noncompliance
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
3.17. USE OF PROCEEDS. The proceeds of the Revolving Credit
Loans are to be used to refinance the outstanding revolving credit loans of the
Borrowers under the Existing Credit Agreement and, in addition, may be used for
working capital, capital expenditures, acquisitions, letters of credit and
general corporate purposes.
3.18. INSURANCE. Each of the Company and its Subsidiaries
maintains with financially sound and reputable insurers insurance with respect
to their properties and business and against at least such liabilities,
casualties and contingencies and in at least such types and amounts as is
customary in the case of corporations engaged in the same or a similar business
or having similar properties similarly situated.
3.19. SOLVENCY MATTERS.
(a) As to each Borrower Party, it is not now nor will the
incurrence by it of the obligations to repay its Loans or the
incurrence by it of the obligations under the Security Documents to
which it is a party render it "insolvent". For purposes hereof. the
term "insolvent" means that the present fair market value of a person's
assets is less than the amount that will be required to pay the
probable liability on existing debts, and the term "debts" includes any
legal liability, whether mature or unmatured, liquidated or
unliquidated, absolute, fixed or contingent.
(b) As to each Borrower Party, by incurring the obligations to
repay its Loans or by incurring the obligations under the Security
Documents to which it is a party, such Borrower Party does not incur
debts beyond its ability to pay as they mature.
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(c) As to each Borrower Party, the incurrence of the
obligations to repay its Loans or the incurrence of the obligations
under the Security Documents to which it is a party will not leave it
with insufficient capital.
(d) No Borrower Party has executed this Agreement or any Note
or Security Document, or made any transfer or incurred any obligations
thereunder, with intent to hinder, delay, or defraud either present or
future creditors.
3.20. ACCURATE AND COMPLETE DISCLOSURE. All factual
information (taken as a whole) heretofore, contemporaneously or hereafter
provided by or on behalf of the Company or any Subsidiary to the Agent or any
Bank pursuant to or in connection with this Agreement, any Note, any Security
Document or any transaction contemplated hereby or thereby is or will be (as the
case may be) true and accurate in all material respects on the date as of which
such information is dated (or, if not dated, when received by the Agent or such
Bank, as the case may be).
3.21. YEAR 2000 COMPLIANCE. The Year 2000 Problem will not
result in a Material Adverse Effect.
ARTICLE IV
CONDITIONS OF LENDING
4.01. CONDITIONS TO INITIAL LOANS. The obligation of each Bank
to make its first Loan (and the right of the Borrowers to request a Loan if no
Loans have theretofore been made) is subject to the satisfaction, on or prior to
the Closing Date and prior to or concurrently with the making of such Loan, of
the following conditions precedent, in addition to the conditions precedent set
forth in Section 4.02 hereof:
(a) AGREEMENT, NOTES, SECURITY DOCUMENTS. The Agent shall have
received a counterpart of this Agreement for each Bank, duly executed by the
Borrowers, the Notes, dated the date hereof, conforming to the requirements
hereof, duly executed on behalf of the Borrowers, and the Security Documents,
dated the date hereof, conforming to the requirements hereof, duly executed on
behalf of the respective Borrower Parties party thereto.
(b) CASH MANAGEMENT DOCUMENTATION. The Agent shall have
received the Cash Management Documentation, dated the date hereof, conforming to
the requirements hereof, duly executed by the Company.
(c) CORPORATE PROCEEDINGS. The Agent shall have received, with
a counterpart for each Bank, certificates by the Secretary or Assistant
Secretary of each Borrower Party dated as of the Closing Date as to (i) true
copies of the articles of incorporation and by-laws (or other constituent
documents) of such Borrower Party in effect on such date, (ii) true copies of
all corporate action taken by such Borrower Party relative to this Agreement,
the Notes and the Security Documents to which it is a party and (iii) the
incumbency and signature of the respective officers of such Borrower Party,
together with satisfactory evidence of the incumbency of such Secretary or
Assistant Secretary.
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(d) LEGAL OPINION OF COUNSEL TO THE BORROWER PARTIES. The
Agent shall have received, with an executed counterpart for each Bank, opinions
from Xxxxx Xxxxxxx & Xxxxx LLP, counsel to the Company, and Xxx Xxxxx
Knuppe Xxxxxxx, counsel to SFNBV, each addressed to the Agent and each
Bank, dated the Closing Date, as to the matters set forth on Exhibit C, in form
and substance satisfactory to the Agent.
(e) OFFICERS' CERTIFICATES. The Agent shall have received,
with an executed counterpart for each Bank, certificates from such officers of
the Company as to such matters as the Agent may request.
(f) FEES, EXPENSES, ETC. All fees and other compensation
required to be paid to the Agent and the Banks pursuant hereto or pursuant to
any written agreement on or prior to the Closing Date shall have been paid or
received.
(g) ADDITIONAL MATTERS. All corporate and other proceedings,
and all documents, instruments and other matters in connection with the
transactions contemplated by this Agreement, the Notes and the Security
Documents shall be satisfactory in form and substance to the Agent and each
Bank.
4.02. CONDITIONS TO ALL LOANS. The obligation of each Bank to
make any Loan is subject to the satisfaction, prior to or contemporaneously with
the making of such Loan, of the following conditions precedent:
(a) NOTICE; APPLICATIONS. Appropriate notice of such Loan
shall have been given by the Borrowers as provided in Article II hereof. In
addition, the Agent shall have received any Applications required by the Issuing
Bank in order to issue any Letter of Credit under this Agreement.
(b) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Company in Article III hereof shall
be true and correct in all material respects on and as of such date as if made
on and as of such date, both before and after giving effect to the Loans
requested to be made on such date, except to the extent any such representation
or warranty relates solely and specifically to a prior date.
(c) NO DEFAULTS. No Event of Default or Potential Default
shall have occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
(d) NO VIOLATIONS OF LAW, ETC. Neither the making nor use of
the Loans shall cause any Bank to violate or conflict with any Law.
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Each request by any Borrower for any Loan shall constitute a
representation and warranty by the Borrowers that the conditions set forth in
this Section 4.02 have been satisfied as of the date of such request. Failure of
the Agent to receive notice from the Borrowers to the contrary before such Loan
is made shall constitute a further representation and warranty by the Borrowers
that the conditions referred to in this Section 4.02 have been satisfied as of
the date such Loan is made.
ARTICLE V
AFFIRMATIVE COVENANTS
The Company and SFNBV covenant to the Banks, the Agent and the
Issuing Bank as follows:
5.01. REPORTING AND INFORMATION REQUIREMENTS.
(a) ANNUAL AUDIT REPORTS. As soon as practicable, and in any
event within 90 days after the close of each fiscal year of the Company, the
Company shall furnish to the Agent, with a copy for each Bank, (i) consolidated
statements of income, shareholders' equity and cash flow of the Company and its
Consolidated Subsidiaries for such fiscal year and a consolidated balance sheet
of the Company and its Consolidated Subsidiaries as of the close of such fiscal
year, and notes to each, all in reasonable detail, setting forth in comparative
form the corresponding figures for the preceding fiscal year, with such
consolidated financial statements and balance sheet to be certified by
independent certified public accountants of recognized national standing
selected by the Company (the "Accountants") and (ii) the underlying
consolidating statements of income, shareholders' equity and cash flow of the
Company and its Consolidated Subsidiaries provided by the Company to the
Accountants for the purpose of the preparation by the Accountants of the
consolidated statements described in clause (i) above and with such
consolidating financial statements and balance sheets of the Company and the
Consolidated Subsidiaries to be compiled by the Company. The report of such
Accountants shall be free of exceptions or qualifications not acceptable to the
Banks (it being understood that exceptions constituting items in connection with
this Agreement that have either been cured or waived shall be deemed to be
acceptable to the Banks), such report shall be addressed to the Banks and signed
by such Accountants, and such report shall contain a written statement of such
Accountants substantially to the effect that (i) such Accountants examined such
consolidated statements and balance sheet in accordance with generally accepted
auditing standards and accordingly made such tests of accounting records and
such other auditing procedures as such Accountants considered necessary in the
circumstances and (ii) in the opinion of such Accountants such consolidated
statements and balance sheet present fairly the financial position of the
Company and its Consolidated Subsidiaries as of the end of such fiscal year and
the results of their operations and the changes in their financial position for
such fiscal year, in conformity with GAAP applied on a basis consistent with
that of the preceding fiscal year (except for changes in application in which
such accountants concur).
(b) QUARTERLY REPORTS. As soon as practicable, and in any
event within 45 days after the close of each of the first three quarters of each
fiscal year of the Company, the
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Company shall furnish to the Agent, with a copy for each Bank, unaudited
consolidated statements of income and cash flow for the Company and its
Consolidated Subsidiaries for such fiscal quarter and for the period from the
beginning of such fiscal year to the end of such fiscal quarter, and an
unaudited consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of the close of such fiscal quarter, and notes to each, all in
reasonable detail, setting forth in comparative form the corresponding figures
for the same period or as of the same date during the preceding fiscal year
(except for the balance sheet, which shall set forth in comparative form the
corresponding balance sheet as of the prior fiscal year end), and certified by
the chief financial officer or the principal accounting officer of the Company
as presenting fairly the financial position of the Company and its Consolidated
Subsidiaries as of the end of such fiscal quarter and the results of their
operations and the changes in their financial position for such fiscal quarter,
in conformity with GAAP applied in a manner consistent with that of the most
recent audited financial statements furnished to the Banks, subject to year-end
audit adjustments.
(c) COMPLIANCE CERTIFICATES. Within 45 days after the end of
each fiscal quarter of each fiscal year of the Company, the Company shall
deliver to the Agent, with a copy for each Bank, a certificate dated as of the
end of such quarter signed on behalf of the Company by its chief financial
officer or principal accounting officer (i) stating that as of the date thereof
no Event of Default or Potential Default has occurred and is continuing or
exists, or if an Event of Default or Potential Default has occurred and is
continuing or exists, specifying in detail the nature and period of existence
thereof and any action with respect thereto taken or contemplated to be taken by
the Company and (ii) stating in reasonable detail the information and
calculations necessary to establish compliance with the provisions of Sections
6.01, and (ii) stating in reasonable detail the information and calculations
necessary to determine the Consolidated Leverage Ratio, as well as the
Applicable Tier.
(d) QUARTERLY CALCULATION CERTIFICATE. As soon as practicable
and in any event prior to the close of any fiscal quarter (but no sooner than 10
days prior to the close of such fiscal quarter, the Company shall deliver to the
Agent, with a copy for each Bank, a certificate signed by a Responsible Officer
of the Company setting forth the following information in reasonable detail the
calculation of the Dollar Equivalent Amount of the aggregate Credit Exposures of
the Banks as well as the amount, if any, by which the Dollar Equivalent Amount
of the aggregate Credit Exposures of the Banks exceed the Revolving Credit
Commitment Amount; provided, that the Company shall have no obligation to
furnish such calculations if the aggregate Credit Exposures of the Banks is not,
at the time of such calculation, in excess of 90% of the Revolving Credit
Commitment Amount at such time.
(e) OTHER REPORTS AND INFORMATION. Promptly upon their
becoming available to the Company, the Company shall deliver to the Agent, with
a copy for each Bank, a copy of (i) all regular or special reports or effective
registration statements which the Company shall file with the Securities and
Exchange Commission (or any successor thereto) or any securities exchange, (ii)
all reports, proxy statements, financial statements and other information
distributed by the Company to its stockholders, bondholders or the financial
community in general, and (iii) any reports submitted to the Company by
independent accountants in connection with any annual, interim or special audit
of the Company.
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(f) FURTHER INFORMATION. The Borrowers will promptly furnish
to the Agent, with a copy for each Bank, such other information and in such form
as the Agent or any Bank may reasonably request.
(g) NOTICE OF CERTAIN EVENTS. Promptly upon becoming aware of
any of the following, any Borrower shall give the Agent (with a copy for each
Bank) notice thereof, together with a written statement of a Responsible Officer
of such Borrower setting forth the details thereof and any action with respect
thereto taken or proposed to be taken by such Borrower:
(i) Any Event of Default or Potential Default.
(ii) Any material adverse change in the business, operations,
properties, assets or condition (financial or otherwise) of such
Borrower and its Subsidiaries taken as a whole.
(iii) Any pending action, suit, proceeding or investigation by
or before any Official Body against or affecting such Borrower or any
Subsidiary, except for matters that if adversely decided, individually
or in the aggregate, such Borrower reasonably believes would not have a
Material Adverse Effect.
(h) VISITATION. The Borrowers shall permit such persons as the
Agent or any Bank may designate to visit and inspect any of the properties of
the Borrowers and of any Subsidiary, to examine their respective books and
records and take copies and extracts therefrom and to discuss their respective
affairs with their respective officers, employees and independent accountants at
such times and as often as the Agent or any Bank may reasonably request. The
Company hereby authorizes such officers, employees and independent accountants
to discuss with the Agent or any Bank the affairs of the Borrowers and its
Subsidiaries.
5.02. PRESERVATION OF EXISTENCE AND FRANCHISES. Subject to
Section 6.09 hereof, the Borrowers shall cause themselves, each other Borrower
Party and each other Subsidiary to maintain its corporate existence, rights and
franchises in full force and effect in their jurisdictions of incorporation, the
failure of which to do so in the aggregate could reasonably be expected to have
a Material Adverse Effect. The Borrowers shall cause themselves, each other
Borrower Party and each other Subsidiary, to qualify and remain qualified as a
foreign corporation in each jurisdiction in which failure to receive or retain
such qualification could reasonably be expected to have a Material Adverse
Effect.
5.03. INSURANCE. The Borrowers shall cause themselves and each
Subsidiary to maintain with financially sound and reputable insurers insurance
with respect to its properties and business and against such liabilities,
casualties and contingencies and of such types and in such amounts as are
customary in the case of corporations engaged in the same or a similar business
or having similar properties similarly situated.
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5.04. MAINTENANCE OF PROPERTIES. The Borrowers shall cause
themselves and each Subsidiary to maintain or cause to be maintained in good
repair, working order and condition the properties now or hereafter owned,
leased or otherwise possessed by it and shall make or cause to be made all
repairs, renewals, replacements and improvements reasonably required thereto so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
5.05. PAYMENT OF TAXES AND OTHER POTENTIAL CHARGES AND
PRIORITY CLAIMS; PAYMENT OF OTHER CURRENT LIABILITIES. The Borrowers shall cause
themselves and each Subsidiary to pay or discharge:
(a) prior to the date on which penalties attach thereto, all
taxes, assessments and other governmental charges or levies imposed
upon it or any of its properties or income (including such as may arise
under Section 4062, Section 4063 or Section 4064 of ERISA or any
similar provision of law);
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other
like persons which, if unpaid, might result in the creation of a Lien
upon any such property; and
(c) on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such
property (other than Liens not forbidden by Section 6.02 hereof) or
which, if unpaid, might give rise to a claim entitled to priority over
general creditors of the Borrowers or such Subsidiary in a case under
Title II (Bankruptcy) of the United States Code, as amended, or in any
insolvency proceeding or dissolution or winding-up involving the
Borrowers or such Subsidiary;
provided, that the Borrowers or such Subsidiary need not pay or discharge any
such tax, assessment, charge, levy, claim or current liability so long as the
validity thereof is contested in good faith and by appropriate proceedings
diligently conducted and so long as such reserves or other appropriate
provisions as may be required by GAAP shall have been made therefor and so long
as such failure to pay or discharge could not reasonably be expected to have a
Material Adverse Effect.
5.06. FINANCIAL ACCOUNTING PRACTICES. The Company shall cause
itself and each Subsidiary to keep proper books of record and account in
accordance with normal business practice in which full and appropriate entries
shall be made of all dealings or transactions in relation to its business and
activities.
5.07. COMPLIANCE WITH LAWS. The Borrowers shall cause
themselves and each Subsidiary to comply with all applicable Laws, (including
but not limited to ERISA, the Code and any applicable tax Law, produce safety
Law, occupational safety or health Law,
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environmental protection or pollution control Law, hazardous waste or toxic
substances management, handling or disposal Law) in all respects; provided that
the Borrowers shall not be deemed to be in violation of this Section 5.07 as a
result of any failures to comply which would not result in fines, penalties,
injunctive relief or other civil or criminal liabilities which. in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
5.08. USE OF PROCEEDS. The Borrowers shall apply the proceeds
of all Loans hereunder as described in Section 3.17 hereof.
5.09. GOVERNMENT APPROVALS AND FILINGS. The Borrowers shall
cause themselves and each Subsidiary to keep and maintain in force and effect
all Governmental Actions necessary in connection with execution and delivery of
this Agreement, the Notes or the Security Documents, consummation of the
transactions herein or therein contemplated, performance of or compliance with
the terms and conditions hereof or thereof or to ensure the legality, validity,
binding effect, enforceability or admissibility into evidence hereof or thereof.
5.10. CONTINUATION OF OR CHANGE IN BUSINESS. The enterprise
comprised of the Borrowers and their Subsidiaries taken as a whole shall
continue to engage in its business substantially as conducted and operated
during the present and preceding fiscal year, and the Borrowers will not, and
will not permit any Subsidiary to, engage in any other business; provided, that
the Banks and the Agent acknowledge that the Company's business includes
production of fungal and other microbial agents and spores which are used both
inside and outside the mushroom industry, and that variations in the relative
mix and nature of products sold within and outside the mushroom industry will
not constitute a substantial change in business so long as the production
equipment is suitable without significant modification and acknowledge further
that the Company's business includes composting activities, which do not
constitute a significant change in business.
ARTICLE VI
NEGATIVE COVENANTS
The Company and SFNBV covenants to the Banks, the Agent and
the Issuing Bank as follows:
6.01. FINANCIAL MAINTENANCE COVENANTS.
(a) CONSOLIDATED LEVERAGE RATIO. On the Closing Date and as of
the end of each fiscal quarter of the Company ending after the Closing Date, the
Consolidated Leverage Ratio shall not exceed 3.25 to 1. For purposes of
calculating the Consolidated Leverage Ratio, Consolidated EBITDA shall be
determined on a Rolling Four Quarter Basis.
(b) CONSOLIDATED NET WORTH. On the Closing Date and as of the
end of each fiscal quarter of the Company ending after the Closing Date,
Consolidated Net Worth shall not be less than $42,000,000, plus an amount equal
to 65% of the aggregate Consolidated Net Income for each fiscal quarter of the
Company during the period commencing on the Closing Date and ending on the date
of such determination.
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(c) CONSOLIDATED INTEREST COVERAGE RATIO. On the Closing Date
and as of the end of each fiscal quarter of the Company ending after the Closing
Date, the Consolidated Interest Coverage Ratio shall not be less than 2.5 to 1,
as determined on a Rolling Four Quarter Basis.
6.02. LIENS. The Company shall not permit itself or any
Subsidiary, at any time, to create, incur, assume or suffer to exist any Lien on
any of its property or assets, tangible or intangible, now owned or hereafter
acquired, or agree or become liable to do so, except:
(a) Liens existing on the date hereof and listed in Schedule
6.02 hereto (and extension, renewal and replacement Liens upon the same
property theretofore subject to a listed Lien, provided the amount
secured by each Lien constituting such an extension, renewal or
replacement Lien shall not exceed the amount secured by the Lien
theretofore existing);
(b) Liens arising from taxes, assessments, charges, levies or
claims described in Section 5.05 hereof that are not yet due or that
remain payable without penalty or to the extent permitted to remain
unpaid under the proviso to such Section 5.05;
(c) Deposits or pledges to secure workmen's compensation,
unemployment insurance, old age benefits or other social security
obligations, or in connection with or to secure the performance of
bids, tenders, trade contracts or leases, or to secure statutory
obligations, or stay, surety or appeal bonds, or other pledges or
deposits of like nature and all in the ordinary course of business;
(d) Liens on property securing all or part of the purchase
price thereof to the Company or a Subsidiary and Liens (whether or not
assumed) existing on property at the time of purchase thereof by the
Company or a Subsidiary, as the case may be (and extension, renewal and
replacement Liens upon the same property theretofore subject to a Lien
described in this Section 6.02(d), provided the amount secured by each
Lien constituting such extension, renewal or replacement shall not
exceed the amount secured by the Lien theretofore existing), provided
(i) each such Lien is confined solely to the property
so purchased, improvements thereto and proceeds thereof,
(ii) the aggregate amount secured by all such Liens
on any particular property at the time purchased by the
Company or such Subsidiary, as the case may be. shall not
exceed 100 % of the lesser of the fair market value of such
property at such time or the purchase price of such property
("purchase price" for this purpose including the amount
secured by each such Lien thereon whether or not assumed), and
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(iii) the aggregate amount secured by all Liens
described in this Section 6.02(d) shall not at any time exceed
$4,000,000;
(e) rights reserved to or vested in others to take or receive
any part of the gas, oil or other minerals or by-products thereof or
timber or power grown on or developed, manufactured, generated,
produced, transported, transmitted or processed on or by any property
of the Company or any Subsidiary or to receive royalties, lease rentals
or other payments or remuneration, services or benefits as a result of
the acquisition, construction, development or operation thereof;
(f) Liens arising from legal proceedings, so long as such
proceedings are being contested in good faith by appropriate
proceedings diligently conducted and so long as execution is stayed on
all judgments resulting from any such proceedings;
(g) zoning restrictions, easements, minor restrictions on the
use of real property, minor irregularities in title thereto and other
minor Liens that do not secure the payment of money or the performance
of an obligation and that do not in the aggregate have a Material
Adverse Effect;
(h) Liens created by the Security Documents.
6.03. INDEBTEDNESS. The Company shall not permit itself or any
Subsidiary, at any time, to create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under this Agreement, the Notes, the Secured
Hedge Agreements or the Cash Management Documentation;
(b) Indebtedness existing on the date hereof and listed in
Schedule 6.03 hereto (and extensions, renewals and replacements thereof
on terms no less advantageous than the Indebtedness extended, renewed
or replaced);
(c) Indebtedness secured by a Lien described in Section
6.02(d) hereof;
(d) Indebtedness fully secured by cash collateral; provided,
that the aggregate amount of such Indebtedness shall not exceed
$6,000,000 at any time;
(e) Indebtedness for borrowed money incurred by the Company or
the Subsidiaries from time to time, provided that the aggregate amount
of such Indebtedness (not including Indebtedness under Section 6.03(d))
shall not exceed $6,000,000 at any time; and
(f) current accounts payable arising out of transactions
(other than borrowings) in the ordinary course of business.
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6.04. GUARANTEES AND CONTINGENT LIABILITIES. The Company shall
not permit itself or any Subsidiary, at any time, directly or indirectly, to
assume, guarantee, become surety for, endorse or otherwise agree, become or
remain directly or contingently liable upon or with respect to any obligation or
liability of any other person, except
(a) guarantees and contingent liabilities with respect to
obligations or liabilities of other persons listed on Schedule 6.04 hereto; and
(b) guarantees and contingent liabilities with respect to
obligations or liabilities of other persons not in excess of $4,000,000.
"Direct or contingent liability upon or with respect to any
obligation or liability of any other person" of the Company or a Subsidiary
within the meaning of this Section 6.04 includes but is not limited to an
agreement, contingent or otherwise:
(v) to reimburse banks, surety companies and other persons in
respect of drawings and other payments under letters of credit, guarantees,
surety bonds and similar documents opened or issued by such other persons for
the account of the Company or such Subsidiary;
(w) to purchase an obligation or assume a liability of such
person or to supply funds for the payment or purchase of such
obligation or satisfaction of such liability;
(x) to make any loan, advance, capital contribution or other
investment in, or to purchase any property, services or securities
from, such person so as to enable such person to meet a minimum equity,
net worth, working capital or other financial condition or to enable
such person to satisfy any obligation or liability or pay any dividend
or stock liquidation payment, or otherwise to supply funds to or in any
manner invest in such person;
(y) to purchase, sell or lease (as lessee or lessor) property
or assets or to purchase or sell services (i) primarily for the purpose
of enabling such person to satisfy such obligation or liability or of
assuring the owner of such indebtedness or liability against loss, or
(ii) regardless of the nondelivery of such property or assets or the
failure to furnish such services, or (iii) in a transaction otherwise
having the characteristics of a take-or-pay or throughput contract or
as described in paragraph 6 of FASB Statement of Financial Accounting
Standards No. 47; or
(z) which is substantially equivalent in economic effect to
any of the foregoing or otherwise substantially equivalent in economic
effect to an assumption, guarantee, endorsement or other direct or
contingent liability upon or with respect to any obligation or
liability of such person.
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Notwithstanding the foregoing, however, for purposes of this
Section 6.04, Letters of Credit issued hereunder shall not constitute "direct or
contingent liabilities upon or with respect to any obligation or liability of
any other person".
6.05. LOANS AND INVESTMENTS. The Company shall not permit
itself or any Subsidiary, at any time, to make or suffer to remain outstanding
any loan or advance to, or purchase, acquire or own any stock, bonds, notes or
securities of, or any partnership interest (whether general or limited) in, or
any other interest in, or make any capital contribution to, any other person, or
agree, become or remain liable to do any of the foregoing, except:
(a) loans and investments existing on the date hereof and
listed in Schedule 6.05 hereto (including any extensions or renewals
thereof);
(b) trade credit extended, and loans and advances extended to
subcontractors or suppliers, under usual and customary terms in the
ordinary course of business;
(c) advances to employees to meet expenses incurred by such
employees in the ordinary course of business;
(d) loans to employees of the Company and its Subsidiaries in
an aggregate amount not to exceed $500,000 and incorporating
commercially reasonable terms including without limitation the
applicable interest rate and repayment terms, provided, that all such
loans shall be evidenced by promissory notes;
(e) loans to employees of the Company and its Subsidiaries to
defray the cost of employee relocations in an aggregate amount (not
including loans to employees under Section 6.05(d)) not to exceed
$750,000 and incorporating commercially reasonable terms including
without limitation the applicable interest rate and repayment terms,
provided, that all such loans shall be evidenced by promissory notes;
(f) the capital stock of, or partnership interests in, a
Subsidiary owned on the date hereof and listed in Schedule 3.09 hereto;
(g) demand deposits, time deposits or certificates of deposit
in commercial banks reasonably acceptable to the Required Banks and
maturing not in excess of one year from the date of acquisition;
(h) obligations backed by the full faith and credit of the
United States of America maturing not in excess of one year from the
date of acquisition, commercial paper maturing not in excess of one
year from the date of acquisition and rated P-1 by Mood 's Investors
Service, Inc. or A-1 by Standard & Poor's Corporation on the date of
acquisition, and preferred stock or indebtedness which is (i) traded on
a national securities exchange and (ii) rated A or better by Xxxxx'x
Investors Service, Inc. or Standard & Poor's Corporation on the date of
acquisition;
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(i) notes or securities received in a good-faith settlement of
loans or investments described in this Section 6.05, if such loan or
investment was not made in the expectation of such settlement, which
notes and securities for each settlement of loans or investments in
excess of $1,000,000 shall be delivered to and endorsed in favor of the
Agent for the ratable benefit of the Banks as further security for the
Loans; and
(j) advances to Subsidiaries permitted pursuant to Section
5.08.
6.06. DIVIDENDS AND RELATED DISTRIBUTIONS. The Company shall
not permit itself or any Subsidiary, at any time, to declare or make any Stock
Payment, or agree, become or remain liable (contingently or otherwise) to do any
of the foregoing, except as follows:
(a) a Subsidiary may declare and make Stock Payments if all of
the capital stock of such Subsidiary is owned by the Company or by a direct or
indirect wholly-owned Subsidiary of the Company;
(b) the Company may from time to time declare and make Stock
Payments if such Stock Payment is payable solely in shares of common stock (or
options, warrants or rights therefor) of the Company;
(c) the Company may from time to time declare and make cash
Stock Payments on account of a dividend on, or purchase, redemption, retirement
or acquisition of, its capital stock, if on the date of such payment (or, in the
case of a dividend, on the date of declaration) (the "determination date") no
Event of Default or Potential Default shall exist on the determination date or
immediately thereafter after giving effect to such proposed dividend, purchase,
redemption, retirement or acquisition; and
(d) White Queen may from time to time declare and make cash
Stock Payments to the holders of White Queen's "B" shares, or any shares issued
to replace the "B" shares; provided, that such cash Stock Payments do not
violate any Law and are not in conflict with White Queen's charter and bylaws
(or other constitutional documents); and provided, further, that such cash Stock
Payments do not exceed $250,000 in any fiscal year.
The Company shall not permit itself or any Subsidiary, at any
time, to declare any dividend payable later than 75 days after declaration.
6.07. MERGERS, ACQUISITIONS, ETC. The Company shall not permit
itself or any Subsidiary, at any time, to (v) merge with or into or consolidate
with any other person, (w) liquidate, wind-up, dissolve or divide, (x) acquire
all or any substantial portion of the properties of any going concern or going
line of business, (y) acquire all or any substantial portion of the properties
of any other person other than in the ordinary course of business or (z) agree,
become or remain liable (contingently or otherwise) to do any of the foregoing,
except:
(a) a wholly-owned Subsidiary may merge with or into or
consolidate with any other wholly-owned Subsidiary, provided that no
Event of Default or Potential Default shall occur and be continuing or
shall exist at such time or after giving effect to such transaction;
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(b) a wholly-owned Subsidiary may merge with the Company,
provided that the Company shall be the surviving corporation and no
Event of Default or Potential Default shall occur and be continuing or
shall exist at such time or after giving effect to such transaction;
and
(c) the Company or a Subsidiary may acquire additional
mushroom growing or spore production or related businesses, provided
that (i) the acquisition cost of all such businesses expended in any
calendar year shall not exceed $15,000,000 in the aggregate and (ii)
with respect to any such acquisition in which the acquisition costs
(including but not limited to the purchase price, costs and expenses
and assumed liabilities) exceed $5,000,000 in the aggregate, the
Company shall provide the Agent, no later than ten Business Days prior
to such acquisition, a pro forma financial statement of the Company and
its Consolidated Subsidiaries demonstrating their compliance with
Section 6.01 for the prior four fiscal quarters taking into account the
business or businesses acquired in such acquisition.
6.08. DISPOSITIONS OF PROPERTIES. The Company shall not permit
itself or any Subsidiary, at any time, to sell, convey, assign, lease, transfer,
abandon or otherwise dispose of, voluntarily or involuntarily, any of its
properties or agree, become or remain liable (contingently or otherwise) to do
any of the foregoing, except:
(a) the Company and each Subsidiary may sell inventory in the
ordinary course of business; and
(b) the Company and the Subsidiaries may dispose of
properties, provided that the aggregate value of all such properties
shall not exceed $3,000,000 in any calendar year, it being understood
that licensing arrangements entered into by the Company and its
Subsidiaries with respect to proprietary interests in mushroom growing
or spore production shall not be deemed to be dispositions and,
accordingly, shall not be prohibited by this Section 6.08.
By way of illustration, and without limitation, it is
understood that the following are dispositions of property subject to this
Section 6.08: any disposition of accounts, chattel paper or general intangibles,
with or without recourse; any disposition of any leasehold interest; and any
disposition of any capital stock in or indebtedness of any Subsidiary. Nothing
in this Section 6.08 shall be construed to limit any other restriction on
dispositions of property imposed by the Security Documents.
6.09. SELF-DEALING. The Company shall not permit itself or any
Subsidiary, at any time, to enter into or carry out any transaction with
(including, without limitation, purchasing property or services from or selling
property or services to) any Affiliate except
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(a) directors, officers and employees of the Company and its
Subsidiaries may render services to the Company or such Subsidiary for
compensation at the same rates generally paid by corporations engaged
in the same or similar businesses for the same or similar services; and
(b) the Company or its Subsidiaries may enter into and carry
out other transactions with Affiliates if in the ordinary course of
business, pursuant to the reasonable requirements of the Company's or
such Subsidiary's business, upon terms reasonably found by the board of
directors of the Company or such Subsidiary after due inquiry to be
fair and reasonable and no less favorable to the Company or such
Subsidiary than would obtain in a comparable arms-length transaction.
6.10. CONSOLIDATED TAX RETURNS. The Company shall not permit
itself or any Subsidiary, at any time, to file, or consent to the filing of, any
consolidated income tax return with any person other than the Company or a
Consolidated Subsidiary.
6.11. REGULATION U. No Borrower shall use the proceeds of any
Loans hereunder directly or indirectly to purchase or carry any "margin stock"
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System) or to extend credit to others for the purpose of purchasing or
carrying, directly or indirectly, any such margin stock.
6.12. LIMITATION ON OTHER RESTRICTIONS ON LIENS. The Company
shall not permit itself or any Subsidiary, at any time, to enter into, become or
remain subject to any agreement or instrument to which the Company or such
Subsidiary is a party or by which either of them or any of their respective
properties (now owned or hereafter acquired) may be subject or bound that would
prohibit the grant of any Lien upon any of its assets or properties (now owned
or hereafter required) or that would prohibit a pledge of the stock owned by the
Company or any Subsidiary, except the Security Documents.
6.13. LIMITATION ON OTHER RESTRICTIONS ON STOCK PAYMENTS,
LOANS AND INVESTMENTS. Except as set forth on Schedule 6.13, the Company shall
not permit itself or any Subsidiary, at any time, to enter into, become or
remain subject to any agreement or instrument to which the Company or such
Subsidiary is a party or by which either of them may be subject or bound that
would prohibit any Subsidiary from making any Stock Payment or loan to or
investment in the Company.
ARTICLE VII
DEFAULTS
7.01. EVENTS OF DEFAULT. An Event of Default shall mean the
occurrence or existence of one or more of the following events or conditions
(whatever the reason for such Event of Default and whether voluntary,
involuntary or effected by operation of Law):
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(a) A Borrower shall fail to pay when due principal of or
interest on any Note or an obligor of a reimbursement obligation under
a Letter of Credit shall fail to pay when due such a reimbursement
obligation;
(b) A Borrower shall fail to pay any amount due hereunder or
under any Note (other than the amounts referred to in 7.01 (a) hereof)
or the Company shall fail to pay when due any other amount due
hereunder or any Borrower Party shall fail to pay when due any amount
due under any Security Document and any such failure to pay shall
continue for five Business Days;
(c) Any representation or warranty made by the Company under
this Agreement or any statement made by the Company in any financial
statement, certificate, report, exhibit or document furnished by the
Company to the Agent or any Bank pursuant to this Agreement shall prove
to have been false or misleading in any material respect as of the time
when made;
(d) Any representation or warranty made by the Company or any
Borrower Party under any Security Document or any statement made by the
Company or any Borrower Party in any certificate, report, exhibit or
document furnished by the Company or any Borrower Party to the Agent
pursuant to any Security Document shall prove to have been false or
misleading in any material respect as of the time when made;
(e) The Company shall default in the performance or observance
of any covenant contained in Article VI hereof or of the covenant
contained in Section 5.01(g) hereof;
(f) The Company shall default in the performance or observance
of any other covenant, agreement or duty under this Agreement or any
Note and (i) in the case of a default under Section 5.01 hereof (other
than under subsection (i) of such Section 5.01) such default shall have
continued for a period of ten days after notice from the Agent to the
Company and (ii) in the case of any other default such default shall
have continued for a period of thirty days after notice from the Agent
to the Company;
(g) Any Borrower Party shall default in the performance of any
covenant, agreement or duty under any Security Document and such
default shall have continued for a period of thirty days after notice
from the Agent to such Borrower Party;
(h) Any Borrower Party (i) shall default (as principal or as
guarantor or other surety) in any payment of any obligation (or set of
related obligations) in respect of Indebtedness in excess of $1,000,000
in aggregate amount beyond any period of grace with respect thereto or,
if such obligation or obligations is or are payable or repayable on
demand, shall fail to pay or repay such obligation or obligations when
demanded or (ii) shall default in the observance of any covenant, term
or condition contained in any agreement or instrument by which such
obligation or obligations is or are created, secured or evidenced if
the effect of such default is to cause, or to permit the holder or
holders of
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such obligation or obligations (or a trustee or agent on behalf of
such holder or holders) to cause, all or part of such obligation or
obligations to become due before its or their otherwise stated
maturity;
(i) The Agent shall determine in good faith (which
determination shall be conclusive absent manifest error) that the
potential liabilities associated with the events set forth in
subsections (i) through (vii) below, individually or in the aggregate,
could have a Material Adverse Effect.:
(i) The PBGC notifies a Plan pursuant to Section 4042
of ERISA by service of a complaint, threat of filing a law
suit or otherwise of its determination that an event described
in Section 4042(a) of ERISA has occurred, a Plan should be
terminated, or a trustee should be appointed for a Plan;
(ii) Any action is taken to terminate a Plan pursuant
to its provisions or the plan administrator files with the
PBGC a notice of intent to terminate a Plan in accordance with
Section 4041 of ERISA;
(iii) Any action is taken by a plan administrator to
have a trustee appointed for a Plan pursuant to Section 4042
of ERISA;
(iv) A return is filed with the Internal Revenue
Service, or a Plan is notified by the Secretary of the
Treasury that a notice of deficiency under Section 61-12 of
the Code has been mailed, with respect to the tax imposed
under Section 4971(a) of the Code for failure to meet the
minimum funding standards established under Section 412 of the
Code;
(v) A Reportable Event occurs with respect to a Plan;
(vi) Any action is taken to amend a Plan to become an
employee benefit plan described in Section 4021(b)(1) of
ERISA, causing a Plan termination under Section 4041(e) of
ERISA; or
(vii) The Company, any Subsidiary or any Controlled
Group Member receives a notice of liability or demand for
payment on account of complete withdrawal under Section 4203
of ERISA, partial withdrawal under Section 4205 of ERISA or on
account of becoming secondarily liable for withdrawal
liability payments under Section 4204 of ERISA (sale of
assets);
(j) One or more judgments for the payment of money shall have
been entered against the Company or any Subsidiary, which judgment or
judgments exceed $1,000,000 in the aggregate, and such judgment or
judgments shall have remained undischarged and unstayed for a period of
thirty consecutive days;
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(k) One or more writs or warrants of attachment, garnishment,
execution, distraint or similar process exceeding in value the
aggregate amount of $1,000,000 shall have been issued against the
Company or any Subsidiary or any of their respective properties which
shall have remained undischarged and unstayed for a period of thirty
consecutive days;
(l) Any authorization, consent, approval, license, exemption,
registration, qualification, designation, declaration, filing or other
action or undertaking now or hereafter made by or with any Official
Body in connection with this Agreement, the Notes or any Security
Document or any such action or undertaking now or hereafter necessary
or advisable to make this Agreement, the Notes or any Security Document
legal, valid, enforceable and admissible in evidence is not obtained or
shall have ceased to be in full force and effect or shall have been
modified or amended or shall have been held to be illegal or invalid,
and the Agent shall have determined in good faith (which determination
shall be conclusive) that such event or occurrence may have a material
adverse effect on the Banks' rights under this Agreement, any Note or
any Security Document;
(m) a Change in Control shall have occurred;
(n) The Agent shall have determined in good faith (which
determination shall be conclusive absent manifest error) that a
material adverse change has occurred in the business, operations,
properties, assets or condition (financial or otherwise) of a Borrower
or of the enterprise comprised of the Company and its Subsidiaries
taken as a whole or that the prospect of payment or performance of any
covenant, agreement or duty under this Agreement, the Notes or any
Security Document is impaired;
(o) A Borrower shall fail to pay any amount payable by it in
respect of any Secured Hedge Agreement when the same becomes due and
payable (whether by scheduled payment, early termination or otherwise),
and such failure shall continue beyond any period of grace provided in
such Secured Hedge Agreement with respect thereto (not to exceed 30
days);
(p) A proceeding shall have been instituted in respect of any
of the Borrower Parties or any Other Significant Subsidiary.
(i) seeking to have an order for relief entered in
respect of the Company or such Subsidiary, or seeking a
declaration or entailing a finding that the Company or such
Subsidiary is insolvent or a similar declaration or finding,
or seeking dissolution, winding-up, charter revocation or
forfeiture, liquidation, reorganization, arrangement,
adjustment, composition or other similar relief with respect
to the Company or such Subsidiary, its assets or its debts
under any law relating to bankruptcy, insolvency, relief of
debtors or protection of creditors, termination of legal
entities or any other similar law now or hereafter in effect,
or
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(ii) seeking appointment of a receiver, trustee,
custodian, liquidator, assignee, sequestrator or other similar
official for the Company or such Subsidiary or for all or any
substantial part of its property
and such proceeding shall result in the entry, making or grant of any
such order for relief, declaration, finding, relief or appointment, or
such proceeding shall remain undismissed and unstayed for a period of
thirty consecutive days; or
(q) Any of the Borrower Parties or any Other Significant
Subsidiary shall become insolvent, shall become generally unable to pay
its debts as they become due, shall voluntarily suspend transaction of
its business, shall make a general assignment for the benefit of
creditors, shall institute a proceeding described in Section 7.01(p)(i)
hereof or shall consent to any such order for relief, declaration,
finding or relief described therein, shall institute a proceeding
described in Section 7.01(p)(ii) hereof or shall consent to any such
appointment or to the taking of possession by any such official of all
or any substantial part of its property whether or not any such
proceeding is instituted, shall dissolve, wind-up or liquidate itself
or any substantial part of its property (except as provided in Section
6.08 hereof), or shall take any action in furtherance of any of the
foregoing.
7.02. CONSEQUENCES OF AN EVENT OF DEFAULT.
(a) If an Event of Default specified in subsections (a)
through (o) of Section 7.01 hereof shall occur or exist, then, in
addition to all other rights and remedies which the Agent, any Bank or
the Issuing Bank may have hereunder or under any Security Document, at
law, in equity or otherwise, the Banks shall be under no further
obligation to make Loans and the Issuing Bank shall be under no further
obligation to issue Letters of Credit, and the Agent may, and upon the
written request of the Required Banks shall, by notice to the Borrower,
from time to time do any or all of the following:
(i) Declare the Revolving Credit Commitments (and the
commitments to issue Letters of Credit) terminated, whereupon
the Revolving Credit Commitments (and such commitments to
issue Letters of Credit) will terminate and any fees hereunder
shall be immediately due and payable without presentment,
demand, protest or further notice of any kind, all of which
are hereby waived, and an action therefor shall immediately
accrue,
(ii) Declare the unpaid principal amount of the
Notes, interest accrued thereon and all other obligations of
any of the Borrowers hereunder or under the Security Documents
to be immediately due and payable without presentment, demand,
protest or further notice of any kind, all of which are hereby
waived, and an action therefor shall immediately accrue.
(b) If an Event of Default specified in subsection (p) or (q)
of Section 7.01 hereof shall occur or exist, then, in addition to all
other rights and remedies which
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the Agent, any Bank or the Issuing Bank may have hereunder or under any
Security Document, at law, in equity or otherwise, the Banks shall be
under no further obligation to make Loans or the Issuing Bank shall be
under no further obligation to issue Letters of Credit, and the
following provisions shall automatically apply:
(i) The Revolving Credit Commitments (and the
commitments to issue Letters of Credit) shall terminate, and
any fees hereunder shall be immediately due and payable
without presentment, demand, protest or further notice of any
kind, all of which are hereby waived, and an action therefor
shall immediately accrue.
(ii) The unpaid principal amount of the Notes,
interest accrued thereon and all other obligations of any of
the Borrowers hereunder or under the Security Documents shall
be immediately due and payable without presentment, demand,
protest or further notice of any kind, all of which are hereby
waived, and an action therefor shall immediately accrue.
7.03. SET-OFF. If the unpaid principal amount of any Note,
interest accrued thereon or any other amount owing by a Borrower hereunder or
under any Note or by the Company or any Subsidiary under any Security Document
shall have become due and payable (by acceleration or otherwise), the Banks and
the holder of any participation in any Note shall each have the right, in
addition to all other rights and remedies available to it, without notice to the
Borrower, the Company or any Subsidiary, to set-off against and to appropriate
and apply to such due and payable amounts any debt owing to, and any other funds
held in any manner for the account of, the Borrower, the Company or such
Subsidiary by such Bank or by such holder, including without limitation all
funds in all deposit accounts (whether time or demand, general or special,
provisionally credited or finally credited, or otherwise) now or hereafter
maintained by the Borrower, the Company or such Subsidiary with such Bank or
such holder. Such right shall exist whether or not any such Bank or any such
holder shall have given notice or made any demand hereunder or under any Note,
participation or Security Document, whether or not such debt owing to or funds
held for the account of the Borrower, the Company or such Subsidiary is or are
matured or unmatured, whether or not any amounts owing by any person with
respect to such participation are matured or unmatured, whether or not the
holder of such participation is in privity with or is a creditor of the Borrower
with respect to such participation, and regardless of the existence or adequacy
of any collateral, guaranty or any other security, right or remedy available to
the Banks or any such holder. The Borrowers hereby consent to and confirm the
foregoing arrangements and confirm each Bank's and holder's rights of banker's
lien and set-off. Nothing in this Agreement shall be deemed a waiver or
prohibition of or restriction on any Bank's or holder's rights of banker's lien
or set-off.
7.04. EQUALIZATION AMONG BANKS AND PARTICIPANTS. Each Bank and
each holder of any participation in any Note hereby agree among themselves that,
with respect to all amounts received by such Bank or holder for application on
any obligation hereunder or under the Notes, any such participation or the
Security Documents, whether received by voluntary payment, by realization upon
security, by the exercise of the right of set-off or banker's lien, by
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counterclaim or by any other non-pro rata source, equitable adjustment will be
made in the manner stated in the following sentence so that, in effect, all such
amounts will be shared ratably among the Banks and all such holders in
proportion to their interests in payments under the Notes. Any Bank or holder
receiving any such amount shall purchase for cash from the other Banks and
holders an interest in the Notes or in participations therein, as the case may
be, in such amount as shall result in a ratable participation by each Bank and
holder in the aggregate unpaid amount under the Notes; provided, that if all or
any portion of such amount is thereafter recovered from the Bank or the holder
making such purchase, such purchase shall be rescinded and the purchase price
restored to the extent of such recovery, together with interest or other
amounts, if any, required by Law (including court order) to be paid by such Bank
or the holder making such purchase. The Borrowers hereby consent to and confirm
the foregoing arrangements and hereby confirm the Banks' right without notice to
or consent of the Borrowers to create or dispose of participations in the Notes
(whether such participations are in the form of partial or complete assignments
of the Banks' rights hereunder or under the Notes, creation of a debtor-creditor
or trustee-beneficiary relationship between a Bank and the holders of such
participations or otherwise).
7.05. JUDGMENT CURRENCY. If the Agent obtains a judgment
against a Borrowers in an Other Currency, the obligations of such Borrower in
respect of any sum adjudged to be due to the Banks or the Agent hereunder or
under the Notes (the "Judgment Amount" shall be discharged only to the extent
that, on the Business Day following receipt by such Bank or the Agent of the
Judgment Amount in such Other Currency, such Bank or Agent, in accordance with
normal banking procedures, purchases Dollars with the Judgment Amount in such
Other Currency. If the amount of Dollars so purchased is less than the amount of
Dollars that could have been purchased with the Judgment Amount on the date or
dates the Judgment Amount (excluding the portion of the Judgment Amount which
has accrued as a result of the failure of such Borrower to pay the sum
originally due hereunder or under the Notes when it was originally due hereunder
or under the Notes) was originally due and owing to the Banks or the Agent
hereunder or under the Notes (the "Original Due Date") (the "Loss"), the
Borrowers agree, jointly and severally, as a separate obligation and
notwithstanding any such judgment, to indemnify such Bank or the Agent, as the
case may be, against the Loss, and if the amount of Dollars so purchased exceeds
the amount of Dollars that could have been purchased with the Judgment Amount on
the Original Due Date, such Bank or the Agent agrees to remit such excess to
such Borrower.
ARTICLE VIII
THE AGENT
8.01. APPOINTMENT. The Banks hereby appoint Mellon Bank, N.A.
to act as Agent as herein specified for the Banks hereunder. Each of the Banks
hereby irrevocably authorizes, and each holder of any Note by the acceptance of
such Note shall be deemed irrevocably to authorize, the Agent to take such
action on its behalf under the provisions of this Agreement and any other
instruments and agreements referred to herein, and to exercise such powers and
to perform such duties hereunder, as are specifically delegated to or required
of the Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. Mellon Bank, N.A. agrees to act as Agent on behalf of the
Banks to the extent provided in this Agreement.
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8.02. DELEGATION OF DUTIES. The Agent may perform any of its
duties hereunder by or through agents or employees. The Agent may consult with
legal counsel (including counsel for the Borrowers), independent public
accountants and any other experts selected by it and shall not be liable to the
Banks for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts.
8.03. NATURE OF DUTIES; INDEPENDENT CREDIT INVESTIGATION. The
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement, the Notes and the Security Documents. The duties of the Agent
shall be mechanical and administrative in nature. The Agent shall not have by
reason of this Agreement, the Notes or the Security Documents a fiduciary
relationship in respect of any Bank. Nothing in this Agreement, the Notes or the
Security Documents, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of this
Agreement except as expressly set forth herein or therein. Each Bank expressly
acknowledges (a) that the Agent has not made any representations or warranties
to it and that no act by the Agent hereafter taken, including any review of the
affairs of SFNBV, the Company or the Company's other Subsidiaries, shall be
deemed to constitute any representation or warranty by the Agent to any Bank;
(b) that it has made and will make its own independent investigation of the
financial condition and affairs, and its own appraisal of the creditworthiness,
of SFNBV, the Company and the Company's other Subsidiaries in connection with
this Agreement, the Notes and the Security Documents; and (c) that the Agent
shall have no duty or responsibility, either initially or on a continuing basis,
to provide any Bank with any credit or other information except as otherwise
provided herein, whether coming into its possession before the making of any
Loans hereunder or at any time or times thereafter.
8.04. ACTIONS IN DISCRETION OF AGENT; INSTRUCTIONS FROM BANKS.
The Agent agrees, upon the written request of the Required Banks, to take any
action of the type specified as being within the Agent's rights, powers or
discretion herein or in the Notes or the Security Documents. In the absence of a
request by the Required Banks, the Agent shall have authority pursuant to
Section 8.03 hereof, in its sole discretion, to take or not to take any such
action, unless this Agreement, the Notes or the Security Documents specifically
require the consent of the Required Banks. Any action taken or failure to act
pursuant to such instructions or discretion shall be binding on all of the Banks
and on all holders of Notes. No Bank shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from acting
hereunder or under the Notes or the Security Documents in accordance with the
instructions of the Required Banks, or in the absence of such instructions, in
the absolute discretion of the Agent, subject to the provisions of Section 8.05.
8.05. EXCULPATORY PROVISIONS.
(a) LIABILITY OF AGENT. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable to any Bank for any
action taken or omitted to be taken by it
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or them hereunder or under the Notes or the Security Documents or in connection
herewith or therewith, unless caused by its or their own gross negligence or
willful misconduct. In performing its functions and duties hereunder and
thereunder on behalf of the Banks, the Agent shall exercise the same care which
it would exercise in dealing with loans for its own account, but it shall not
(i) be responsible in any manner to any of the Banks for the effectiveness,
enforceability, genuineness, validity or due execution of this Agreement or any
of the Notes or Security Documents, or for any recital, representation,
warranty, document, certificate, report or statement herein or therein or made
or furnished hereunder or thereunder or in connection herewith or therewith, or
(ii) be under any obligation to any of the Banks to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions
hereof or thereof on the part of any Borrower, the Company or any other
Subsidiary, or the financial condition of the Company, SFNBV or any other
Subsidiary, or the existence or possible existence of any Event of Default or
Potential Default.
(b) NOTICE OF DEFAULT. The Agent shall be under no obligation
to any of the Banks to ascertain the existence or possible existence of any
Potential Default or Event of Default and shall not be deemed to have knowledge
of the occurrence of an Event of Default or Potential Default unless a required
payment by a Borrower to the Agent has not been made or the Agent has received
notice from a Bank, or a Borrower specifying such Event of Default or Potential
Default and stating that such notice is a "Notice of Default". In the event that
the Agent receives such a notice of the occurrence of an Event of Default or
Potential Default, the Agent shall give prompt notice thereof to the Banks (and
shall give each Bank prompt notice of each such nonpayment). The Agent shall
(subject to Section 8.03 hereof) take such action with respect to such Event of
Default or Potential Default as shall be directed by the Required Banks,
provided that, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default or Potential Default
as it shall deem advisable and in the best interests of the Banks.
8.06. REIMBURSEMENT AND INDEMNIFICATION. Each Bank agrees to
reimburse and indemnify the Agent (to the extent not reimbursed by the
Borrowers), ratably in proportion to its Commitment Percentage, for and against
any and all liabilities, obligations, losses (other than any "losses" resulting
from a failure by the Agent to receive from the Borrowers any amount owing
pursuant to Section 8.12 hereof), damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent, in its capacity as such,
in any way relating to or arising out of this Agreement, the Notes or the
Security Documents or any action taken or omitted by the Agent hereunder or
thereunder, provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent that they result from (a) the
Agent's gross negligence or willful misconduct, (b) a claim against the Agent or
such Bank with respect to which such Bank was not given notice and the
opportunity to participate in the defense thereof, at its expense, or (c) a
compromise and settlement agreement entered into without the consent of such
Bank.
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8.07. RELIANCE BY AGENT. The Agent shall be entitled to rely
upon any writing, telegram, telex or teletype message, resolution, notice,
consent, certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper party or parties, and upon
opinions of counsel and other professional advisers selected by the Agent.
Subject to Section 9.05, the Agent shall be fully justified in failing or
refusing to take any action hereunder unless it shall first be indemnified to
its satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
8.08. MELLON BANK, N.A. IN ITS INDIVIDUAL CAPACITY. With
respect to its Revolving Credit Commitment, the Loans made by it and the Notes
held by it, Mellon Bank, N.A. shall have the same rights and powers hereunder
and under the Notes and the Security Documents as any other Bank and may
exercise the same as though it were not the Agent, and the terms "Banks,"
"Issuing Bank" or "holders of Notes" shall, unless the context hereof otherwise
indicates, include Mellon Bank, N.A. in its individual capacity. Except as
otherwise provided herein, Mellon Bank, N.A. and its affiliates may, without
liability to account, make loans to, accept deposits from, act as trustee under
indentures of, and generally engage in any kind of banking or trust business
with, the Company and its stockholders, Subsidiaries and affiliates as though it
were not acting as Agent hereunder.
8.09. HOLDERS OF NOTES. The Agent may deem and treat the payee
of any Note as the owner of such Note for all purposes hereof unless and until
written notice of the assignment or transfer thereof shall have been filed with
the Agent. Any request, authority or consent of any party who at the time of
making such request or giving such authority or consent is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
8.10. SUCCESSOR AGENT. The Agent may resign at any time by
giving 10 days' prior written notice thereof to the Banks, the Company and the
Borrowers. The Agent may be removed by the Required Banks at any time by the
Required Banks' giving 10 days' prior written notice thereof to the Agent, the
other Banks and the Borrowers. Upon any such resignation or removal, the
Required Banks shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed, and shall have accepted such
appointment, within 30 days after such notice of resignation or removal, then
the Agent may, on behalf of the Banks, appoint a successor Agent which shall be
either a Bank or a commercial bank authorized to engage in the business of
banking under the laws of the United States of America or any State thereof and
having a combined capital and surplus of at least $100,000,000. Upon the
acceptance by a successor Agent of its appointment as Agent hereunder, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the former Agent, and the former Agent
shall be discharged from its duties under this Agreement, the Notes and the
Security Documents. After any Agent's resignation or removal hereunder as Agent,
the provisions of this Article IX shall inure to its benefit as to any actions
taken or omitted by it while it was Agent under this Agreement.
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8.11. CALCULATIONS. In the absence of gross negligence or
willful misconduct, the Agent shall not be liable for any error in computing the
amount payable to any Bank whether in respect of the Loans, fees or any other
amounts due to the Banks under this Agreement, the Notes or the Security
Documents. In the event an error in computing any amount payable to any Bank is
made, the Agent, the Borrowers and each affected Bank shall, forthwith upon
discovery of such error, make such adjustments as shall be required to correct
such error and any compensation therefor will be calculated at the daily average
federal funds rate quoted by the Board of Governors of the Federal Reserve
System.
8.12. AGENT'S FEE. The Company agrees to pay to the Agent, for
its individual account, the annual Agent's fees and the up-front arrangement fee
set forth in the fee letter dated June 11, 1998, from the Agent to the Company,
payable in accordance with the terms of such fee letter.
8.13. DOCUMENTATION AGENT. The title "Documentation Agent",
given to ABN AMRO Bank N.V., Pittsburgh Branch, is purely honorific and the
Document Agent, in its capacity as such shall have no duties or
responsibilities.
ARTICLE IX
MISCELLANEOUS
9.01. HOLIDAYS. Except as otherwise provided herein, whenever
any payment or action to be made or taken hereunder or under the Notes shall be
stated to be due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Day and such extension of
time shall be included in computing interest or fees, if any, in connection with
such payment or action.
9.02. RECORDS. The unpaid principal amount of the Notes, the
unpaid interest accrued thereon, the interest rate or rates applicable to such
unpaid principal amount, the duration of such applicability, each Bank's
Commitment Percentage and the accrued and unpaid commitment fee shall at all
times be ascertained from the records of the Agent, which shall be conclusive
absent manifest error. The unpaid Letter of Credit reimbursement obligations,
the unpaid interest accrued thereon, and the interest rate or rates applicable
thereto shall at all times be ascertained from the records of the Issuing Bank,
which shall be conclusive absent manifest error.
9.03. AMENDMENTS AND WAIVERS. The Banks, the Agent, and the
Borrowers may from time to time enter into agreements amending, modifying or
supplementing this Agreement, the Notes or any other documents or instruments
pursuant to or in connection herewith or changing the rights of the Banks or of
the Borrowers hereunder or thereunder, or granting a waiver or consent to a
departure from the due performance of the obligations of the Borrowers, the
Banks and the Issuing Bank hereunder or thereunder. Any such agreement, waiver
or consent must be in writing and be executed by each of the Banks, the Agent
and the Borrowers and shall be effective only to the extent specifically set
forth in such writing. In the case of any such waiver or consent relating to any
Event of Default or Potential Default, any Event of Default or Potential Default
so waived or consented to shall be deemed to be cured and
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not continuing, but no such waiver or consent shall extend to any other or
subsequent Event of Default or Potential Default or impair any right consequent
thereto. Notwithstanding the provisions hereof, the Agent alone may grant a
waiver or consent to a departure from the due performance of the obligations of
the Borrowers under Sections 5.01(a) through (g), inclusive.
9.04. NO IMPLIED WAIVER; CUMULATIVE REMEDIES. No course of
dealing and no delay or failure of the Agent or the Banks in exercising any
right, power or privilege under this Agreement, the Notes, the Security
Documents or any other documents or instruments pursuant to or in connection
herewith shall affect any other or future exercise thereof or exercise of any
other right, power or privilege; nor shall any single or partial exercise of any
such right, power or privilege or an), abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further exercise thereof
or of any other right, power or privilege. The rights and remedies of the Agent
and the Banks under this Agreement, the Notes, the Security Documents or any
other documents or instruments pursuant to or in connection herewith are
cumulative and not exclusive of any rights or remedies which the Agent or the
Banks would otherwise have.
9.05. NOTICES. All notices, requests, demands, directions and
other communications (collectively "notices") under the provisions of this
Agreement or any Note or Security Document shall be in writing (including
telexed communication) unless otherwise expressly permitted hereunder or
thereunder and shall be sent by first-class or overnight express mail, or by
telex with confirmation in writing mailed first-class, in all cases with charges
prepaid, and any such properly given notice shall be effective when received.
All notices shall be sent to the applicable party at the address stated on the
signature page hereof or in accordance with the last unrevoked written direction
from such party to the other parties hereto.
9.06. EXPENSES; TAXES; ATTORNEYS' FEES. The Borrowers agree to
pay or cause to be paid and to save the Agent and the Banks harmless against
liability for the payment of all reasonable out-of-pocket expenses, including
but not limited to (a) fees and expenses of counsel for the Agent and Mellon
Bank, N.A., arising in connection with the preparation, execution, delivery and
performance of this Agreement, the Notes, the Security Documents and any
documents, instruments or transactions pursuant to or in connection herewith,
(b) relating to any requested amendments, waivers or consents to this Agreement,
the Notes, the Security Documents or any such documents or instruments and (c)
arising in connection with the Agent's or any Bank's enforcement or preservation
of rights under this Agreement, the Notes, the Security Documents or any such
documents or instruments, including but not limited to such expenses as may be
incurred by the Agent or the Banks in the collection of any outstanding Note.
The Borrowers agree to pay all stamp, document, transfer, recording or filing
taxes or fees and similar impositions now or hereafter determined by the Agent
or the Banks to be payable in connection with this Agreement, the Notes, the
Security Documents or any other documents, instruments or transactions pursuant
to or in connection herewith, and the Borrowers agree to save the Agent and the
Banks harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions.
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9.07. SEVERABILITY. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
9.08. GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES SHALL BE DEEMED TO BE
CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA AND FOR ALL
PURPOSES SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF SAID COMMONWEALTH.
(b) EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT, ANY NOTE, ANY SECURITY
DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED
LITIGATION") BY ANY BANK OR THE AGENT MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN ALLEGHENY COUNTY,
PENNSYLVANIA AND SUBMITS TO THE JURISDICTION OF SUCH COURTS (BUT
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY BANK TO BRING
ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM);
(ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT,
WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO
ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES
NOT HAVE JURISDICTION OVER SUCH BORROWER; AND
(iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO SUCH BORROWER AT THE ADDRESS
FOR NOTICES TO THE COMPANY SET FORTH ON THE SIGNATURE PAGE HEREOF, AND
CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT
VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE
VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER
PERMITTED BY LAW) AND SFNBV HEREBY APPOINTS THE COMPANY AS ITS AGENT
FOR SERVICE OF PROCESS.
9.09. PRIOR UNDERSTANDING. This Agreement supersedes all prior
understandings and agreements, whether written or oral, among the parties hereto
relating to the transactions provided for herein.
9.10. DURATION; SURVIVAL. All representations and warranties
of the Company or the Borrowers contained herein or made in connection herewith
shall survive the making of and shall not be waived by the execution and
delivery of this Agreement or the Notes, any
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investigation by the Agent or the Banks or the making of any Loan hereunder. All
covenants and agreements of the Borrowers contained herein shall continue in
full force and effect from and after the date hereof so long as the Borrowers
may borrow hereunder and until payment in full of the Notes, interest thereon,
funding fees and all other obligations of the Borrowers under this Agreement or
any Note. Without limitation, it is understood that all obligations of the
Borrowers to make payments to or indemnify the Agent and the Issuing Bank or the
Banks shall survive the payment in full of the Notes and of all other
obligations of the Borrowers thereunder and hereunder.
9.11. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, and by the different parties hereof on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
9.12. SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the Borrowers, the Banks, all future holders of
the Notes, the Agent and their respective successors and assigns, except that no
Borrower may assign or transfer any of its rights hereunder or interests herein
without the prior written consent of all the Banks and the Agent, and any
purported assignment without such consent shall be void.
(b) PARTICIPATIONS. Any Bank may, in the ordinary course of
its commercial banking business and in accordance with applicable Law, at any
time sell participations to one or more commercial banks or other persons (each
a "Participant") in all or a portion of its rights and obligations under this
Agreement, the Notes and the Security Documents (including, without limitation,
all or a portion of its commitments to make Loans (collectively, its
"Commitments") and the Loans owing to it and any Note held by it); provided,
that
(i) any such Bank's obligations under this Agreement, the
Notes and the Security Documents shall remain unchanged,
(ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iii) the parties hereto shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under this Agreement, the Notes and each of the Security
Documents, and
(iv) such Participant shall be bound by the provisions of
Section 7.04 hereof.
The Borrowers agree that any such Participant shall be
entitled to the benefits of Sections 2.13, 2.15 and 9.06 with respect to its
participation in the Commitments and the Loans outstanding from time to time;
provided, that no such Participant shall be entitled to receive any greater
amount pursuant to such Sections than the transferor Bank would have been
entitled to receive in respect of the amount of the participation transferred to
such Participant had no such transfer occurred.
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(c) ASSIGNMENTS. Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable Law, at any time
assign all or a portion of its rights and obligations under this Agreement, the
Notes and the Security Documents (including, without limitation, all or any
portion of its Commitments and Loans owing to it and any Note held by it) to any
Bank, any affiliate of a Bank or to one or more additional commercial banks or
other persons (each a "Purchasing Bank"); provided, that
(i) any such assignment shall be made only with the consent of
each Borrower (which in each case shall not be unreasonably withheld),
the Agent, the Issuing Bank and the Required Banks, except that an
assignment by any Bank to any other Bank, to any affiliate of such
assigning Bank or of any other Bank or to a Federal Reserve Bank shall
not require the consent of the Borrowers,
(ii) if a Bank makes such an assignment of less than all of
its then remaining rights and obligations under this Agreement, the
Notes and the Security Documents, such transferor Bank shall retain,
after such assignment, a Dollar Equivalent Amount equal to a minimum
principal amount of $5,000,000 of the Commitments and Loans then
outstanding, and such assignment shall be in a Dollar Equivalent Amount
equal to a minimum aggregate principal amount of $5,000,000 of the
Commitments and Loans then outstanding,
(iii) each such assignment shall be of a constant, and not a
varying, percentage of each Commitment of the transferor Bank and of
all of the transferor Bank's rights and obligations under this
Agreement, the Notes and the Security Documents, and
(iv) each such assignment shall be made pursuant to a Transfer
Supplement in substantially the form of Exhibit D to this Agreement,
duly completed (a "Transfer Supplement").
In order to effect any such assignment, the transferor Bank
and the Purchasing Bank shall execute and deliver to the Agent a duly completed
Transfer Supplement (including the consents required by clause (i) of the
preceding sentence) with respect to such assignment, together with any Note or
Notes subject to such assignment (the "Transferor Bank Notes") and a processing
and recording fee of $2,000; and, upon receipt thereof, the Agent shall accept
such Transfer Supplement. Upon receipt of the Purchase Price Receipt Notice
pursuant to such Transfer Supplement, the Agent shall record such acceptance in
the Register. Upon such execution, delivery, acceptance and recording, from and
after the close of business at the Agent's Domestic Office on the Transfer
Effective Date specified in such Transfer Supplement:
(x) the Purchasing Bank shall be a party hereto and, to the
extent provided in such Transfer Supplement, shall have the rights and
obligations of a Bank hereunder, and
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(y) the transferor Bank thereunder shall be released from its
obligations under this Agreement to the extent so transferred (and, in
the case of a Transfer Supplement covering all or the remaining portion
of a transferor Bank's rights and obligations under this Agreement,
such transferor Bank shall cease to be a party to this Agreement) from
and after the Transfer Effective Date.
On or prior to the Transfer Effective Date specified in a
Transfer Supplement, the Borrowers, at their expense, shall execute and deliver
to the Agent (for delivery to the Purchasing Bank) new Notes evidencing such
Purchasing Bank's assigned Commitments or Loans and (for delivery to the
transferor Bank) replacement Notes in the principal amount of the Loans or
Commitments retained by the transferor Bank (such Notes to be in exchange for,
but not in payment of, those Notes then held by such transferor Bank). Each such
Note shall be dated the date and be substantially in the form of the predecessor
Note. The Agent shall xxxx the predecessor Notes "exchanged" and deliver them to
the respective Borrowers. Accrued interest and accrued fees shall be paid to the
Purchasing Bank at the same time or times provided in the predecessor Notes and
this Agreement.
(d) REGISTER. The Agent shall maintain at its Domestic Office
a copy of each Transfer Supplement delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Banks and the
Commitment of, and principal amount of the Loans owing to, each Bank from time
to time. The entries in the Register shall be conclusive absent manifest error
and the Borrowers, the Agent and the Banks may treat each person whose name is
recorded in the Register as a Bank hereunder for all purposes of the Agreement.
The Register shall be available for inspection by any Borrower or any Bank at
any reasonable time and from time to time upon reasonable prior notice.
(e) FINANCIAL AND OTHER INFORMATION. Each Borrower authorizes
the Agent and each Bank to disclose to any Participant or Purchasing Bank (each,
a "transferee") and any prospective transferee any and all financial and other
information in such person's possession concerning the Company, the Borrowers
and their respective Subsidiaries and affiliates which has been or may be
delivered to such person by or on behalf of any Borrower in connection with this
Agreement, the Notes or any Security Document or such person's credit evaluation
of the Company, the Borrowers and their respective Subsidiaries and affiliates.
At the request of any Bank, each Borrower, at such Borrower's expense, shall
provide to each prospective transferee the conformed copies of documents
referred to in Section 4 of the form of Transfer Supplement.
9.13. SECURED HEDGE AGREEMENTS; APPLICATION OF SECURITY.
(a) A Hedge Agreement shall constitute a "Secured Hedge
Agreement" entitled to the benefit of the Security Documents if and
only if (i) such Hedge Agreement is between a Borrower and a Bank
which, at the time such Hedge Agreement is designated a "Secured Hedge
Agreement," is party hereto as a Bank (other than by virtue of its
status as party to such Secured Hedge Agreement), and (ii) such
Borrower, such Bank and the Agent enter into a Secured Hedge Supplement
in substantially the form of Exhibit F hereto, designating such Hedge
Agreement as a "Secured Hedge Agreement"
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hereunder. The Agent shall enter into a Secured Hedge Supplement with
respect to any particular Secured Hedge Agreement only at the direction
of the Required Banks, and each of the Banks may give or withhold such
direction in its absolute discretion. A Secured Hedge Agreement shall
cease to constitute a "Secured Hedge Agreement" if, without the consent
of the Agent (who shall give such consent only at the direction of the
Required Banks as aforesaid), such Secured Hedge Agreement (i) is
amended, unless such amendment merely eliminates, waives or renders
less restrictive on the Borrower any term or condition otherwise
applicable to the Borrower, reduces or defers amounts otherwise payable
by the Borrower or increases or accelerates amounts otherwise
receivable by the Borrower, or (ii) is supplemented by an additional
transaction (unless such additional transaction is evidenced by a
confirmation which itself is designated, pursuant to a separate Secured
Hedge Supplement, a "Secured Hedge Agreement"). A Secured Hedge
Agreement shall remain such even if the Secured Hedge Bank party
thereto subsequently ceases to be a Bank party hereto (other than by
virtue of its status as a Secured Hedge Bank). The parties hereby agree
that the Secured Hedge Agreements existing on the date hereof and
listed on Schedule 9.13 hereto are and shall be deemed to be Secured
Hedge Agreements as defined herein.
(b) All cash proceeds received by the Agent in respect of any
realization upon or under any Security Document or any collateral
granted thereunder shall be applied, subject to the provisions of such
Security Document and the provisions of this Section 9.13(b), in the
following order of priority:
(i) first, to the payment of all amounts which may
be due to the Agent in its capacity as such;
(ii) second, to the payment of all principal,
interest, fees, indemnities, expenses and other obligations
which may be due to the Agent, the Banks or the Issuing Bank
under this Agreement, the Notes, any Security Document or any
Secured Hedge Agreement, ratably in proportion to the amounts
then due;
(iii) third, if (x) any obligation under this
Agreement, the Notes, any Security Document or any Secured
Hedge Agreement remains outstanding but is not then due, or
(y) any commitment to extend credit hereunder, any Letter of
Credit issued hereunder or any Secured Hedge Agreement remains
outstanding, then to the Agent, to be held by the Agent as
cash collateral in a non-interest bearing account under the
sole dominion and control of the Agent and thereafter applied
by the Agent from time to time as provided in the foregoing
clauses (i) and (ii) (in that order of priority); and
(iv) fourth, if and when all obligations under this
Agreement, the Notes, the Security Documents and the Secured
Hedge Agreements have been paid in full, all commitments to
extend credit hereunder have terminated, all Letters of Credit
issued hereunder have terminated and all Secured Hedge
Agreements have terminated, then to the grantor under such
Security Document or as otherwise required by law.
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In making the determinations and allocations required by this
Section 9.13(b), the Agent may rely upon information supplied by the Banks and
the Issuing Bank as to the amounts due or outstanding to such parties,
respectively, and the Agent shall have no liability for actions taken in
reliance on such information. The priority of distribution specified above is
based upon the assumptions that the Liens granted under the Security Documents
will be equally valid, perfected and nonavoidable as to each of the Banks, that
such Liens will be deemed of equal priority as against all other persons, and
that the Security Documents will be equally valid, enforceable and nonavoidable
as to each of the Banks; and if and to the extent that any such assumption fails
to be true, the priority of distribution set forth above shall be adjusted so
that the burden of such failure falls upon the Bank or Banks as to which such
assumption fails to be true. The provisions of this Section 9.13(b) apply solely
to priorities of distributions resulting from realization on the Security
Documents, and not to the priorities of the obligations entitled to the benefit
thereof, and nothing in this Agreement or any Security Document is intended to
effect a subordination of any such obligation to any other such obligations.
(c) The Agent, the Banks and the Issuing Bank agree that, upon
any realization upon or under any Security Document or any collateral
granted thereunder, the Agent, the Banks and the Issuing Bank shall
share in the proceeds of such realization in the manner provided in
Section 9.13(b) hereof, and if any party shall realize any funds upon
or under any Security Document or any collateral granted thereunder in
excess of the amount to which it is entitled under such Section
9.13(b), it shall remit the excess to the Agent, who shall apply the
same as provided hereby.
(d) The Banks acknowledge that no Secured Hedge Bank, in its
capacity as such, shall have any right to require the Agent or any Bank
to exercise any right or remedy any of them may have under this
Agreement or any Security Document, at law or otherwise, or to contest
any exercise or failure to exercise any such right or remedy.
9.14. AMENDMENT AND RESTATEMENT. This Agreement is an
amendment and restatement of (and not a novation of) the Amended and Restated
Revolving Credit and Term Loan Agreement, dated as of November 19, 1991, (as
amended, modified or supplemented from time to time, the "Original Agreement")
by and among the Company, Sylvan America (NV), Quincy, Moonlight Mushrooms,
Inc., the Agent, the Banks and the Issuing Bank (without any discharge, release
or satisfaction of the existing indebtedness or any guaranty therefor). Promptly
after receipt of the Revolving Credit Notes each Bank shall deliver to the Agent
its promissory note, if any, issued under the Original Agreement, and upon
receipt of all such promissory notes the Agent shall deliver them to the
Company.
[This Space Intentionally Left Blank.]
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IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of this
6th day of August 1998.
Attest: SYLVAN INC.
_____________________________________ By___________________________________
Name: Xxxxxx X. Xxxxx
Title: Principal Accounting Officer
[CORPORATE SEAL] Address:
000 Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, XX 00000
Attest: SYLVAN FOODS (NETHERLANDS) B.V.
____________________________________ By___________________________________
Name: Xxxxxx X. Xxxxx
Title: Authorized Signer
[CORPORATE SEAL] Address:
Xxxxxxxxxxx 000/X
0000 XX Xxxxx
XXXXXXX
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MELLON BANK, N.A., individually and in
its capacity as Agent and Issuing Bank
By_____________________________________
Name: Xxxx Xxxxx-Xxxxxxx
Title: Assistant Vice President
Address of Domestic Office:
Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Address of London Office:
Princess House, One Sussolk
London ECHROAN
Commitment Percentage:
50.00%
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ABN AMRO BANK N.V., PITTSBURGH
BRANCH
By_________________________________
Name:
Title:
By_________________________________
Name:
Title:
Commitment Percentage:
50.00%
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66
Annex A
to
Credit Agreement
DEFINITIONS AND CONSTRUCTION
1.01. CERTAIN DEFINITIONS. In addition to other words and
terms defined elsewhere in this Agreement, as used herein, the following words
and terms shall have the following meanings, respectively, unless the context
hereof otherwise clearly requires:
"Affected Bank" shall have the meaning set forth in Section
2.03(e) hereof.
"Affiliate" of a person shall mean any person which directly
or indirectly controls, or is controlled by, or is under common control with,
such person. The term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract Or
otherwise.
"Agreement" shall mean this Revolving Credit Agreement, as the
same may be amended, supplemented or modified from time to time.
"Applicable Margin" shall have the meaning set forth in
Section 2.03(b) hereof.
"Applicable Tier" shall have the meaning set forth in Annex B.
"Applications" shall mean the applications and letter of
credit agreement customarily used by the Issuing Bank to document the issuance
and reimbursement obligations relating to letters of credit, a form of which is
attached hereto as Exhibit E-1.
"Bank" shall have the meaning given that term in the preamble
hereof (it being understood that the term "Bank" in any case includes each
Secured Hedge Bank.
"Benefit Plan" shall mean any plan, agreement, arrangement or
commitment which is an employment or consulting agreement, executive
compensation plan, bonus plan, deferred compensation agreement, employee
pension, profit-sharing, savings or retirement plan, employee stock option or
stock purchase plan, retiree medical or life, group life, health, or accident
insurance or other benefit plan, agreement, arrangement or commitment,
including, without limitation, severance, or other bonus practice (including,
but not limited to, employee benefit plans, as defined in section 3(3) of
ERISA), with respect to which the Company, any of its Subsidiaries, or any of
their respective Controlled Group Members, at any relevant time have some
liability or obligation to contribute or pay benefits and which relates to
current or former employees of the Company, any Subsidiary or any of their
respective Controlled Group Members.
"Borrower Parties" shall mean, collectively, the Borrowers,
Sylvan Foods, Sylvan America (PA), Sylvan America (NV) and Quincy.
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"Borrowers" shall mean, collectively, the Company and SFNBV,
or any of their respective successors or assigns, and "Borrower" shall mean any
one of the Company or SFNBV, or any of their respective successors or assigns.
"Business Day" shall mean any day that is a US Business Day or
a London Business Day, as applicable.
"Cash Management Documentation" shall mean the Mellon Global
Cash Management automated borrowing service agreement and promissory note
customarily used by Mellon Bank, N.A., forms of which is attached hereto as
Exhibit E-2.
"Change of Control" shall mean any person or group of persons
(as used in Sections 13 and 14 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations thereunder) shall
have become the beneficial owner (as defined in Rules 13d-3 and 13d-5
promulgated by the Securities and Exchange Commission (the "SEC") under the
Exchange Act) of 51% or more of the combined voting power of all the
outstanding voting securities of the Company and, at any time following an
acquisition as described in this clause, during any period of 2 consecutive
calendar months, individuals who were directors of the Company on the first day
of such period, together with individuals elected as directors by not less than
two-thirds of the individuals who were directors of the Company on the first day
of such period, shall cease to constitute a majority of the members of the board
of directors of the Company.
"Closing Date" shall mean the date on which the Borrowers have
satisfied all of the conditions precedent set forth in Section 4.01.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute of similar import, and regulations thereunder, in each
case as in effect from time to time. References to sections of the Code shall be
construed to also refer to any successor sections.
"Commitment Amount" of any Bank at any time shall mean the
Revolving Credit Commitment Amount at such time multiplied by such Bank's
Commitment Percentage at such time.
"Commitment Fee" shall have the meaning assigned to such term
in Section 2.01(d) hereof.
"Commitment Fee Rate" shall have the meaning set forth in
Annex B.
"Commitment Percentage" of any Bank shall mean the percentage
set forth opposite such Bank's name on the signature page hereof.
"Company Guaranty" shall mean the Guaranty and Suretyship
Agreement, substantially in the form of Exhibit B-1 attached hereto.
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68
Annex A
to
Credit Agreement
"Consolidated EBIT" for any period, with respect to the
Company and its Consolidated Subsidiaries, shall mean the sum of (a)
Consolidated Net Income for such period, (b) Consolidated Interest Expense for
such period and (c) Consolidated Income Tax Expense for such period, all as
determined on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" for any period shall mean Consolidated
EBIT, plus depreciation and amortization expense of the Company and its
Consolidated Subsidiaries; provided, however, that (i) all gains and all losses
realized by Borrower and its Subsidiaries upon the sale or other disposition
(including, without limitation, pursuant to sale and leaseback transactions) of
property or assets which are not sold or otherwise disposed of in the ordinary
course of business, or pursuant to the sale of any capital stock of the
Borrowers or any Consolidated Subsidiary, shall be excluded from such
Consolidated EBIT, (ii) all items of gain or loss which are properly classified
as extraordinary in accordance with GAAP shall be excluded from such
Consolidated EBIT, and (iii) all items which are properly classified in
accordance with GAAP as cumulative effects of accounting changes shall be
excluded from such Consolidated EBIT, all as determined on a consolidated basis
in accordance with GAAP.
"Consolidated Income Tax Expense" for any period, with respect
to the Company and its Consolidated Subsidiaries, shall mean the charges against
income for foreign, federal, state and local income taxes for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio" for any period shall
mean the ratio of Consolidated EBIT to Consolidated Interest Expense for such
period.
"Consolidated Interest Expense" for any period shall mean the
total interest expense of the Company and its Consolidated Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP.
"Consolidated Leverage Ratio" as of the last day of any fiscal
quarter shall mean the ratio of (a) aggregate Consolidated Net Funded
Indebtedness of the Company and its Consolidated Subsidiaries as of such day, to
(b) Consolidated EBITDA for the four fiscal quarters ending on such day,
considered as a single accounting period.
"Consolidated Net Funded Indebtedness" at any time shall mean
all Net Funded Indebtedness of the Company and its Consolidated Subsidiaries at
such time, determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" for any period shall mean the net
income from continuing operations (after taxes) of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Net Worth" at any time shall mean the total
amount of shareholders equity (excluding the effects of any GAAP stated
cumulative foreign currency
3
69
translation adjustment calculated in accordance with Statement of Financial
Accounting Standards (SFAS) No. 52) of the Company and its Consolidated
Subsidiaries at such time, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Subsidiaries" at any time shall mean those
Subsidiaries whose accounts are consolidated with those of the Company in
accordance with GAAP.
"Controlled Group Member" means each trade or business
(whether or not incorporated) which, together with the Company or any
Subsidiary, is treated as a single employer under Section 414(b), 414(c), 414(m)
or 414(o) of the Code or Section 4001(a)(2) of ERISA.
"Corresponding Source of Funds" shall mean in the case of any
Funding Segment of the Euro-Rate Portion, the proceeds of hypothetical receipts
by a Notional Euro-Rate Funding Office or by a Bank through a Notional Euro-Rate
Funding Office of one or more deposits in the Other Currency in the London
interbank market at the beginning of the Euro-Rate Funding Period corresponding
to such Funding Segment having maturities approximately equal to such Euro-Rate
Funding Period and in an aggregate amount approximately equal to such Bank's pro
rata share of such Funding Segment.
"Credit Exposure" of any Bank at any time shall mean the sum
at such time of the outstanding principal amount of such Bank's Revolving Credit
Loans plus such Bank's Pro Rata share of the sum of the aggregate Letter of
Credit Exposure.
"Dollar," "Dollars" and the symbol "$" shall mean lawful money
of the United States of America.
"Dollar Equivalent Amount" of any Revolving Credit Loan or
Letter of Credit shall mean (a) with respect to a Revolving Credit Loan or
Letter of Credit denominated in an Other Currency, an amount equal to the amount
of Dollars that the amount of such Other Currency (equal to the principal amount
of such Revolving Credit Loan or Letter of Credit) could purchase at 12:00 p.m.,
noon, Pittsburgh time, on the date of determination, based upon the quoted spot
rates of the Agent, at which its applicable branch or office offers to exchange
Dollars for such currency in the foreign exchange market and (b) with respect to
a Revolving Credit Loan or Letter of Credit denominated in US Currency, an
amount in Dollars equal to the principal amount of such Revolving Credit Loan or
Letter of Credit.
"Domestic Office" when used in connection with the Agent,
shall mean its office located at the address in Pittsburgh, Pennsylvania, set
forth on the signature page hereof, or such other address of the Agent or
branch, subsidiary or affiliate thereof as may be designated in writing from
time to time by the Agent to the Borrowers.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import. and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed to also refer to any successor sections.
4
70
Annex A
to
Credit Agreement
"Euro" shall have the meaning set forth in Section 2.12(b).
"European Currency" shall mean any Other Currency (other than
the Euro) of a "participating member state" as described in the legislative
measures of the European Council for the introduction of, changeover to or
operation of European monetary union, including but not limited to the Treaty of
Rome of March 25, 1957, as amended by the Single Xxxxxxxx Xxx 0000 and the
Maastricht Treaty (which was signed at Maastricht on February 7, 1992, and came
into force on November 1, 1993), as amended, modified or supplemented from time
to time.
"Euro-Rate" shall have the meaning set forth in Section
2.03(a) hereof.
"Euro-Rate Funding Period" shall have the meaning set forth in
Section 2.03(c) hereof.
"Euro-Rate Option" shall have the meaning set forth in Section
2.03(a) hereof.
"Euro-Rate Portion" of any Loan or Loans shall mean at any
time the portion, including the whole, of such Loan or Loans bearing interest at
any time under the Euro-Rate Option. If no Loan or Loans is specified,
"Euro-Rate Portion" shall refer to the Euro-Rate Portion of all Loans
outstanding at such time.
"Euro-Rate Reserve Percentage" shall have the meaning set
forth in Section 2.03(a) hereof.
"Event of Default" shall mean any of the Events of Default
described in Section 7.01 hereof.
"Existing Credit Agreement" shall mean that certain Revolving
Credit Agreement, dated as of June 1, 1996, among Sylvan Inc. and Sylvan Foods
(Netherlands) B.V., the "Banks" named therein, the "Issuing Bank" named therein,
and Mellon Bank, N.A., as "Agent," as the same may be amended modified or
supplemented from time to time.
"Funding Segment" of the Euro-Rate Portion of the Loans at any
time shall mean the entire principal amount of such Portion to which at the time
in question there is applicable a particular Euro-Rate Funding Period beginning
on a particular day and ending on a particular day. (By definition, each such
Portion is at all times composed of an integral number of discrete Funding
Segments and the sum of the principal amounts of all Funding Segments of any
such Portion at any time equals the principal amount of such Portion at such
time.)
"GAAP" shall mean generally accepted accounting principles as
such principles shall be in effect at the time of the computation or
determination, subject to Annex A hereof.
5
71
"Governmental Action" shall mean any approval, order, consent,
authorization, certificate, license, permit or validation of, or exemption or
other action by, or filing, recording or registration with, or notice to, any
Official Body.
"Hedge Agreement" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other similar agreements designed to
hedge against fluctuations in interest rates or foreign exchange rates.
"Indebtedness" of a person shall mean:
(a) all obligations on account of money borrowed by, or credit
extended to or advances to, such person;
(b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments;
(c) all obligations of such person for the deferred purchase
price of property or services;
(d) all obligations secured by a Lien on property owned by
such person (whether or not assumed) and Capitalized Lease Obligations
of such person (without regard to any limitation of the rights and
remedies of the holder of such Lien or the lessor under such
Capitalized Lease to repossession or sale of such property);
(e) the face amount of all letters of credit issued for the
account of such person and, without duplication, the unreimbursed
amount of all drafts drawn thereunder, and all other obligations of
such person associated with such letters of credit or draws thereon;
and
(f) all obligations of such person in respect of acceptances
or similar obligations issued for the account of such person.
"Interest Payments" shall mean all payments of interest,
including any penalties, on all Indebtedness of the Company or its Consolidated
Subsidiaries.
"Issuing Bank" shall mean Mellon Bank, N.A. in its capacity as
issuer of a Letter of Credit hereunder.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.
6
72
Annex A
to
Credit Agreement
"Letters of Credit" shall mean collectively the letters of
credit issued by the Issuing Bank under this Agreement and "Letter of Credit"
shall mean individually a letter of credit issued by the Issuing Bank under this
Agreement.
"Letter of Credit Commitment" shall have the meaning set forth
in Section 2.01(a).
"Letter of Credit Exposure" at any time shall mean the sum of
the aggregate Letter of Credit Unreimbursed Draws and the aggregate Letter of
Credit Undrawn Availability.
"Letter of Credit Limit" shall have the meaning set forth in
Section 2.10(a) hereof.
"Letter of Credit Undrawn Availability" with respect to a
Letter of Credit at any time shall mean the maximum amount available to be drawn
under such Letter of Credit at such time or thereafter, regardless of the
existence or satisfaction of any conditions or limitations on drawing.
"Letter of Credit Unreimbursed Draws" with respect to a Letter
of Credit at any time shall mean the aggregate amount at such time of all
payments made by the issuer under such Letter of Credit, to the extent not
repaid by the Borrower.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, including but not limited to any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease intended
as, or having the effect of, security.
Loan" shall mean, as the context may require, any Revolving
Credit Loan made by the Banks to a Borrower under this Agreement or any Letter
of Credit issued by the Issuing Bank to a Borrower under this Agreement, and
"Loans" shall mean all of them collectively.
"Loan Documents" shall have the meaning set forth in the
Company Guaranty and the Subsidiary Guaranties.
"London Business Day" shall mean a day for dealing in deposits
in an Other Currency by and among banks in the London interbank market.
"London Office" when used in connection with the Agent, shall
mean its office located at the address in London, England, set forth on the
signature page hereof, or such other address of the Agent or branch, subsidiary
or affiliate thereof as may be designated in writing from time to time by the
Agent to the Borrowers.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the business, operations, properties, assets or condition (financial or
otherwise) of a Borrower or the enterprise comprised of the Company and its
Subsidiaries taken as a whole or (b) the ability of a Borrower Party to perform
its obligations under any of this Agreement, the Notes or the Security Documents
to which it is a party.
7
73
"Multiemployer Plan" means any employee benefit plan which is
a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Company, any Subsidiary or any Controlled Group Member has or had an
obligation to contribute.
"Net Cash Proceeds" with respect to any property shall mean
cash or cash equivalents received by the Company or any of its Subsidiaries from
the sale or other disposition of such property, minus the sum of (a) expenses
reasonably incurred in respect of such sale or other disposition, (b) any sales
or transfer taxes payable as a result of such sale or other disposition, (c) the
amount required to discharge any indebtedness or obligation secured by a Lien on
such property and required to be discharged in connection with such sale or
other disposition and (d) any tax payable on any gain resulting from such sale
or disposition.
"Net Funded Indebtedness" of a person at any time shall mean
all Indebtedness (including the current portion thereof) of such person which
would at such time be classified in whole or part as a long-term liability of
such person in accordance with GAAP and shall also and in any event include (a)
any Indebtedness having a final maturity more than one year from the date of
creation of such Indebtedness and (b) any Indebtedness, regardless of its term,
which is renewable or extendable by such person (pursuant to the terms thereof
or pursuant to a revolving credit or similar agreement or otherwise) to a date
more than one year from such date or more than one year from the date of
creation of such Indebtedness; provided, however, that Net Funded Indebtedness
shall not include any Indebtedness that is cash collateralized.
"Notes" shall mean, collectively, the Revolving Credit Notes.
"Notional Euro-Rate Funding Office" shall have the meaning
given to that term in Section 2.14(a) hereof.
"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic.
"Option" shall mean the Prime Rate Option or the Euro-Rate
Option, as the case may be.
"Other Currency" shall mean any currency listed in Schedule
1.01 or any other currency that has been proposed by the Borrowers as an Other
Currency and approved in writing by all of the Banks from time to time, so long
as such currency remains freely transferable and convertible into Dollars and
readily available to the Banks in the London interbank market.
8
74
Annex A
to
Credit Agreement
"Other Significant Subsidiary" shall mean any Subsidiary
listed in Schedule 3.09 or any other Subsidiary that accounts for 5% of the
consolidated assets or of the consolidated revenues of the Company and its
Consolidated Subsidiaries at any time.
"PBGC" means the Pension Benefit Guaranty Corporation
established under Title IV of ERISA or any other governmental agency, department
or instrumentality succeeding to the functions of said corporation.
"Pension Plan" shall mean a single employer plan as defined in
Section 4001(a)(15) of ERISA or an individual account plan which is subject to
the funding standards of Section 302 of ERISA with respect to which the Company,
any of its Subsidiaries, or their respective Controlled Group Members, at any
relevant time have some liability or obligation to contribute or pay benefits
and which relates to current or former employees of the Company, any of its
Subsidiaries or any of their respective Controlled Group Members.
"Person" shall mean an individual, corporation, partnership,
trust, unincorporated association, joint venture, joint-stock company,
government (including political subdivisions), governmental authority or agency,
or any other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) to which Section 4021 of ERISA applies and (a) which is
maintained for employees of the Company, any Subsidiary or any Controlled Group
Member; or (b) to which the Company, any Subsidiary or any Controlled Group
Member made, or was required to make, contributions at any time within the
preceding five years.
"Portion" shall mean the Prime Rate Portion or the Euro-Rate
Portion, as the case may be.
"Potential Default" shall mean any event or condition which
with notice, the expiration of any applicable cure period or a determination by
the Agent, or any combination of the foregoing, would constitute an Event of
Default.
"Prime Rate", as used herein, shall mean the interest rate per
annum announced from time to time by the Agent as its prime rate at its Domestic
Office, provided, that the prime rate shall not necessarily be the lowest or
best commercial loan rate offered by the Agent at any time or from time to time.
"Prime Rate Option" shall have the meaning set forth in
Section 2.03(a) hereof.
"Prime Rate Portion" of any Loan or Loans shall mean at any
time the portion, including the whole of such Loan or Loans bearing interest at
any time under the Prime Rate Option. If no Loan or Loans is specified, "Prime
Rate Portion" shall refer to the Prime Rate Portion of all Loans outstanding at
such time.
9
75
"Pro Rata" shall have the meaning set forth in Section
2.09(a).
"Quincy" shall mean Quincy Corporation, a Florida corporation.
"Regular Payment Date" shall mean the last day of each
September, December, March and June after the Closing Date, and the Revolving
Credit Expiration Date.
"Reportable Event" means (a) a reportable event described in
Section 4043 of ERISA and regulations thereunder, (b) a withdrawal by a
substantial employer from a Plan to which more than one employer contributes, as
referred to in Section 4063(b) of ERISA, or (c) a cessation of operations at a
facility causing more than twenty percent (20%) of Plan participants to be
separated from employment, as referred to in Section 4062(e) of ERISA.
"Required Banks" shall mean, as of any date, Banks which have
made Loans or have issued or participated in Letters of Credit constituting, in
the aggregate, 100% of the principal amount of Loans or face amount of Letters
of Credit outstanding on such date or, if no Loans or Letters of Credit are
outstanding on such date, Banks which have Commitment Percentages constituting,
in the aggregate, 100%.
"Responsible Officer" shall mean the Chairman, the President,
the Chief Financial Officer, the Principal Accounting Officer or the Treasurer
of the Company.
"Revolving Credit Commitment" shall have the meaning assigned
to such term in Section 2.01(a).
"Revolving Credit Commitment Amount" shall mean, initially,
Fifty Million Dollars ($50,000,000) and shall be reduced, (i) on the fifth
anniversary of the date hereof, to Forty-Five Million Dollars ($45,000,000) and
(ii) on the sixth anniversary of the date hereof, to Forty Million Dollars
($40,000,000).
"Revolving Credit Expiration Date" shall mean August 5, 2005.
"Revolving Credit Loans" shall have the meaning set forth in
Section 2.01(a) hereof.
"Revolving Credit Notes" shall mean the promissory notes of
the Company executed and delivered under Section 2.01 hereof, together with all
extensions, renewals, refinancings or refundings thereof, in whole or in part.
"Rolling Four Quarter Basis" shall mean with respect to any
component of any ratio the sum of such component for each of the four fiscal
quarters of the Company and its Consolidated Subsidiaries immediately preceding
the date with respect to which such ratio is to be determined.
10
76
Annex A
to
Credit Agreement
"Secured Hedge Agreement" shall mean a Hedge Agreement between
a Borrower and a Bank party hereto (which Bank, in its capacity as party to such
Hedge Agreement, is referred to as a "Secured Hedge Bank") which is designated
and remains a "Secured Hedge Agreement" in accordance with Section 9.13 hereof.
"Secured Hedge Bank" shall have the meaning given that term in
the definition of "Secured Hedge Agreement."
"Security Documents" shall mean the following documents, each
dated as of the date hereof, and as any of the same may be amended, supplemented
or modified from time to time: (a) the Company Guaranty made by the Company in
favor of the Agent; and (b) the Subsidiary Guaranties made by Sylvan Foods,
Sylvan America (PA), Sylvan America(NV), and Quincy in favor of the Agent. The
term "Security Documents" shall also include all UCC-1 financing statements and
all other documents that are executed, filed or recorded in order to create,
preserve, perfect or maintain prior and perfected the mortgages, pledges,
security interests and liens granted by the foregoing documents.
"Standard Notice" shall mean an irrevocable notice provided to
the Agent on a Business Day which is:
(a) At least one Business Day in advance in the case of
selection of, conversion to or renewal of the Prime Rate Option or
prepayment of any Prime Rate Portion; and
(b) At least three London Business Days in advance in the case
of selection of the Euro-Rate Option or prepayment of any Euro-Rate
Portion.
Standard Notice must be provided no later than 10:00 a.m.,
Pittsburgh time, on the last day permitted for such notice.
"Stock Payment" by any person shall mean any dividend,
distribution or payment of any nature (whether in cash, securities, or other
property) on account of or in respect of any shares of the capital stock (or
warrants, options or rights therefor) of such person, including but not limited
to any payment on account of the purchase, redemption, retirement, defeasance or
acquisition of any shares of the capital stock (or warrants, options or rights
therefor) of such person, in each case regardless of whether required by the
terms of such capital stock (or warrants, options or rights) or any other
agreement or instrument.
"Subsidiary" at any time shall mean any corporation of which a
majority (by number of shares or number of votes) of any class of outstanding
capital stock normally entitled to vote for the election of one or more
directors (regardless of any contingency which does or may suspend or dilute the
voting rights of such class) is at such time owned directly or indirectly by the
Company or one or more Subsidiaries.
11
77
"Subsidiary Guaranty" shall mean that Guaranty and Suretyship
Agreement, substantially in the form of Exhibit B-2 attached hereto.
"Sylvan America (NV)" shall mean Sylvan America Inc., a Nevada
corporation (formerly known as Sylvan Spawn Laboratory (Nevada), Inc.).
"Sylvan America (PA)" shall mean Sylvan America Inc., a
Pennsylvania corporation (formerly known as Sylvan Spawn Laboratory, Inc.).
"Sylvan Foods" shall mean Sylvan Foods, Inc., a Pennsylvania
corporation.
"Taxes" shall have the meaning set forth in Section 2.15.
"US Business Day" shall mean any day other than a Saturday,
Sunday, public holiday under the laws of the Commonwealth of Pennsylvania or
other day on which banking institutions are authorized or obligated to close in
Pittsburgh, Pennsylvania.
"US Currency" shall mean Dollars.
"White Queen" shall mean White Queen Ltd., a United Kingdom
corporation.
"Year 2000 Problem" shall mean the risk that computer-based
applications and systems or computer-based equipment owned, leased or otherwise
controlled by the Borrower or any of its Subsidiaries may be unable to recognize
or perform properly date sensitive functions involving certain dates prior to,
and any date after, December 31, 1999.
1.02. CONSTRUCTION. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural, the part the whole and "or" has the inclusive meaning
represented by the phrase "and/or." References in this Agreement to
"determination" by the Agent or by any Bank include good faith estimates by the
Agent or by any Bank (in the case of quantitative determinations) and good faith
beliefs by the Agent or by any Bank (in the case of qualitative determinations).
The words "hereof," "herein," "hereunder" and similar terms in this Agreement
refer to this Agreement as a whole and not to any particular provision of this
Agreement. The section and other headings contained in this Agreement and the
Table of Contents preceding this Agreement are for reference purposes only and
shall not control or affect the construction of this Agreement or the
interpretation thereof in any respect. Section, subsection and exhibit
references are to this Agreement unless otherwise specified.
1.03. ACCOUNTING PRINCIPLES.
(a) Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters
and all financial statements to be delivered pursuant to this Agreement
shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), and all accounting or
financial terms shall have the meanings ascribed to such terms by GAAP.
12
78
Annex A
to
Credit Agreement
(b) If any change in GAAP after the date of this Agreement is
or shall be required to be applied to transactions then or thereafter
in existence, and a violation of one or more provisions of this
Agreement shall have occurred or in the opinion of the Company would
likely occur which would not have occurred or be likely to occur if no
change in accounting principles had taken place:
(i) the parties agree that such violation shall not
be considered to constitute an Event of Default or a Potential
Default for a period of 30 days from the date the Company
notifies the Agent of the application of this Section 1.03(b)
of this Annex A;
(ii) the parties agree in such event to negotiate in
good faith an amendment of this Agreement which shall
approximate to the extent possible the economic effect of the
original financial covenants after taking into account such
change in GAAP; and
(iii) if the parties are unable to negotiate such an
amendment within 30 days, the Borrowers shall have the option
of (A) prepaying the Loans (pursuant to applicable provisions
hereof) or (B) submitting the drafting of such an amendment to
a firm of independent certified public accountants of
nationally recognized standing acceptable to the parties,
which shall complete its draft of such amendment within 90
days of submission; if the parties cannot so agree on such an
accounting firm, such firm shall be selected by binding
arbitration in the City of Pittsburgh, Pennsylvania in
accordance with the rules then obtaining of the American
Arbitration Association. If the Borrowers do not exercise
either such option within said period, then as used in this
Agreement, "GAAP" shall mean generally accepted accounting
principles in effect at the date of the relevant financial
statements. The parties agree that if the Borrowers elect the
option in clause (B) above, until such firm has been selected
and completes drafting such amendment, no such violation shall
constitute an Event of Default or a Potential Default.
(c) If any change in GAAP after the date of this Agreement is
required to be applied to transactions or conditions then or thereafter
in existence, and the Agent shall assert that the effect of such change
is or shall likely be to distort materially the effect of any of the
definitions of financial terms in Section 1.01 of this Annex A or any
of the covenants of the Borrowers in Section 6.01 hereof (the
"Financial Provisions"), so that the intended economic effect of any of
the Financial Provisions will not in fact be accomplished:
13
79
(i) the Agent shall notify the Company of such
assertion, specifying the change in GAAP which is objected to,
and until otherwise determined as provided below, the
specified change in GAAP shall not be made by the Company in
its financial statements for the purpose of applying the
Financial Provisions; and
(ii) the parties shall follow the procedures set
forth in paragraph (ii) and the first sentence of paragraph
(iii) of Section 1.03(b) of this Annex A. If the parties are
unable to agree on an amendment as provided in said paragraph
(ii) and if the Company does not exercise either option set
forth in the first sentence of said paragraph (iii) within the
specified period, then as used in this Agreement "GAAP" shall
mean generally accepted accounting principles in effect on the
date of the relevant financial statements, except that the
specified change in GAAP which is objected to by the Agent
shall not be made in applying the Financial Provisions. The
parties agree that if the Company elects the option in clause
(B) of the first sentence of said paragraph (iii), until such
independent firm has been selected and completes drafting such
amendment, the specified change in GAAP shall not be made in
applying the Financial Provisions.
(d) All expenses of compliance with this Section 1.03 shall be
paid for by the Company.
[End of Annex A]
14
80
Annex B
to
Credit Agreement
PRICING GRID
----------------------------------------------------------------------------------------------------------------------
APPLICABLE TIER APPLICABLE MARGIN COMMITMENT FEE RATE
----------------------------------------------------------------------------------------------------------------------
Tier I 1.15% 0.25%
----------------------------------------------------------------------------------------------------------------------
Tier II 1.025% 0.225%
----------------------------------------------------------------------------------------------------------------------
Tier III 0.90% 0.20%
----------------------------------------------------------------------------------------------------------------------
Tier IV 0.65% 0.175%
----------------------------------------------------------------------------------------------------------------------
Tier V 0.525% 0.15%
----------------------------------------------------------------------------------------------------------------------
Tier VI 0.40% 0.125%
----------------------------------------------------------------------------------------------------------------------
As used in this Agreement, the term "Applicable Tier" means,
on any date, whichever of Tier I, Tier II, Tier III, Tier IV, Tier V or Tier VI
applies on such date. Subject to the other provisions of this definition, on the
Closing Date, shall be determined by calculating the Consolidated Leverage Ratio
for the period from July 1, 1997 to June 30, 1998. The Applicable Tier shall be
determined by referring to the Consolidated Leverage Ratio for the period from
July 1, 1997 to June 30, 1998, and such Tier shall continue in effect until
reset in accordance with this definition. Thereafter, subject to the other
provisions of this definition, (i) following the end of each fiscal quarter of
the Borrower, the Borrower shall prepare and deliver to the Agent in accordance
with Section 5.01(c) a Compliance Certificate, duly completed and signed by a
Responsible Officer, computing which of the financial tests in the table set
forth below the Borrower satisfies as of the last day of such fiscal quarter,
and (ii) the Applicable Tier corresponding to such financial test shall take
effect on the first day of the quarter following the quarter in which the Agent
receives such Quarterly Calculation Certificate, and such Applicable Tier shall
continue in effect until reset in accordance with this definition. In the event
that a Quarterly Calculation Certificate is not received by the Agent by the
last day of the month in which it is required to be delivered under Section
5.01(i), then, without limiting any other rights and remedies of the Banks, the
Applicable Tier shall be deemed to be Tier I for each day from and including the
first day of the quarter following the quarter in which such Quarterly
Calculation Certificate was required to be delivered to and including the fifth
day after the date on which such Quarterly Calculation Certificate is received
by the Agent. Notwithstanding anything to the contrary in this definition, the
Applicable Tier shall be deemed to be Tier I each day on which an Event of
Default has occurred and is continuing.
81
For purposes of the foregoing, the "Applicable Tier" shall be
determined by using the following chart:
-------------------------------------------------------------------------------------------------------------
APPLICABLE TIER CONSOLIDATED LEVERAGE RATIO
-------------------------------------------------------------------------------------------------------------
Tier I Less than or equal to 3.25 and greater than 2.75 to 1.00
-------------------------------------------------------------------------------------------------------------
Tier II Less than or equal to 2.75 and greater than 2.25 to 1.00
-------------------------------------------------------------------------------------------------------------
Tier III Less than or equal to 2.25 and greater than 1.75 to 1.00
-------------------------------------------------------------------------------------------------------------
Tier IV Less than or equal to 1.75 and greater than 1.25 to 1.00
-------------------------------------------------------------------------------------------------------------
Tier V Less than or equal to 1.25 and greater than 0.75 to 1.00
-------------------------------------------------------------------------------------------------------------
Tier VI Less than or equal to 0.75 to 1.00
-------------------------------------------------------------------------------------------------------------
[End of Annex B]
2
82
EXHIBIT A
TO
CREDIT AGREEMENT
SYLVAN, INC.
SYLVAN FOODS (NETHERLANDS) B.V.
REVOLVING CREDIT NOTE
$_________________ Pittsburgh, Pennsylvania
August 6, 1998
FOR VALUE RECEIVED, the undersigned, SYLVAN INC., a Nevada
corporation, and SYLVAN FOODS (NETHERLANDS) B.V., a Dutch corporation
(collectively the "Borrowers"), promise to pay, in US Currency or any Other
Currency as required by the Agreement (as defined below), to the order of
[Bank], a [type of bank] (the "Bank"), on or before the Revolving Credit
Expiration Date and at such earlier dates as may be required by the Agreement,
the lesser of (i) the principal sum of [dollars] (or, if applicable, the
equivalent amount in any Other Currency) or (ii) the aggregate unpaid principal
amount of all Revolving Credit Loans made by the Bank to the Borrowers from time
to time pursuant to the Agreement. The Borrowers further promise to pay, in US
Currency or any Other Currency as required by the Agreement, to the order of the
Bank on the dates as set forth in the Agreement, interest on the unpaid
principal amount hereof from time to time outstanding at the rate or rates per
annum determined pursuant to the Agreement.
This Note is one of the "Revolving Credit Notes" as referred
to in, and is entitled to the benefits of, the Revolving Credit Agreement, dated
as of August 6, 1998, by and among the Borrowers, the Banks parties thereto from
time to time, the Issuing Bank named therein and Mellon Bank, N.A., a national
banking association, as Agent for the Banks and the Issuing Bank (as the same
may be amended, modified or supplemented from time to time, the "Agreement"),
which among other things provides for the acceleration of the maturity hereof
upon the occurrence of certain events and for prepayments in certain
circumstances and upon certain terms and conditions. Terms defined in the
Agreement have the same meanings herein.
This Note is secured by, and is entitled to the benefits of,
the Security Documents referred to in the Agreement.
The Borrowers hereby expressly waives presentment, demand,
notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Revolving
Credit Note and the Agreement, and an action for amounts due hereunder or
thereunder shall immediately accrue, in each case except as otherwise expressly
provided in the Agreement.
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This Note shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
principles of conflicts of law.
SYLVAN INC.
By______________________________
Name:
Title:
SYLVAN FOODS (NETHERLANDS) B.V.
By______________________________
Name:
Title:
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EXHIBIT B-1
TO
CREDIT AGREEMENT
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty"),
dated as of August 6, 1998, between SYLVAN INC. (formerly known as Sylvan Foods
Holdings, Inc.), a Nevada corporation having an office at 000 Xxxx Xxxxxx,
Xxxxxxxxx, XX 00000 (the "Guarantor") and MELLON BANK, N.A., a national banking
association having an office at Xxx Xxxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000-0000, as agent (in such capacity, "Agent") for the banks party to the Loan
Agreement (as defined below) from time to time (the "Banks") and the Issuing
Bank.
RECITALS:
WHEREAS, the Guarantor, Sylvan Foods (Netherlands) B.V.
("SFNBV"), the Agent, the Banks and the Issuing Bank have entered into a
Revolving Credit Agreement, dated as of the date hereof (the "Loan Agreement");
and
WHEREAS, it is a condition to the obligations of the Agent,
the Banks and the Issuing Bank under the Loan Agreement that the Guarantor shall
have executed and delivered this Guaranty to the Agent for the ratable benefit
of the Banks and the Issuing Bank.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the Guarantor covenants and agrees as follows:
1. CERTAIN DEFINITIONS. In addition to other words and terms
defined elsewhere in this Guaranty, the following words and terms shall have the
meanings set forth below, respectively, unless the context hereof clearly
otherwise requires. Capitalized terms not defined in this Guaranty shall have
the meanings assigned to such terms in the Loan Agreement.
"Debt" shall mean all obligations of SFNBV to the Agent, the
Banks and the Issuing Bank under the Loan Agreement, the Notes, the Security
Documents or the Secured Hedge Agreements, including any extensions, renewals,
refundings, substitutions of or for such obligations in whole or in part.
"Guaranteed Obligations" shall mean (i) the Debt, (ii) all
other amounts payable by SFNBV, the Guarantor or any other person affiliated
with the Guarantor to the Agent, the Banks or the Issuing Bank under the Loan
Agreement, any or all of the Notes, any other Security Document or any Secured
Hedge Agreement, (iii) all covenants, agreements and undertakings to be
performed and discharged by SFNBV, the Guarantor or any other person affiliated
with the Guarantor under and pursuant to the Loan Agreement, the Notes, any
other Security Document or any Secured Hedge Agreement, (iv) all obligations of
the Guarantor, SFNBV or any other person affiliated with the Guarantor to the
Agent, the Banks or the Issuing Bank for reasonable fees and expenses arising in
connection with the transactions contemplated by the Loan Agreement, (v) all
future advances made by the Agent, the Banks or the Issuing Bank pursuant to
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the Security Documents, when and as the same become due, whether at maturity or
by declaration, acceleration or otherwise, or if now due when payment thereof
shall be demanded by the Agent, the Banks or the Issuing Bank and (vi) any and
all reasonable out-of-pocket costs and expenses, including reasonable
out-of-pocket costs and expenses of collection, paid or incurred by the Agent,
the Banks or the Issuing Bank in connection with the collection of the amounts
referred to in the preceding clauses (i), (ii), (iv) and (v) or the enforcement
of the covenants, agreements and undertakings referred to in clause (iii), in
each of the foregoing clauses (i) through (vi) whether such obligations are
direct or indirect, otherwise secured or unsecured, joint or several, absolute
or contingent, due or to become due, whether for payment or performance, now
existing or hereafter arising.
"Loan Documents" shall mean, collectively, this Agreement, the
Loan Agreement, the Notes, the Security Documents and the Secured Hedge
Agreements.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the business, operations, properties, assets or condition (financial or
otherwise) of the Guarantor and its Subsidiaries taken as a whole or (b) the
ability of the Guarantor to perform its obligations under this Guaranty.
"Subsidiary" at any time shall mean any corporation of which a
majority (by number of shares or number of votes) of any class of outstanding
capital stock normally entitled to vote for the election of one or more
directors (regardless of any contingency which does or may suspend or dilute the
voting rights of such class) is at such time owned directly or indirectly by the
Guarantor or one or more Subsidiaries.
2. GUARANTY AND SURETYSHIP. (a) The Guarantor hereby
absolutely and unconditionally guarantees to the Agent, the Banks and the
Issuing Bank and to their respective successors and assigns, and agrees to
become a surety for, the full, timely and faithful performance and discharge by
SFNBV or any other person affiliated with the Guarantor of any and all
Guaranteed Obligations (including without limitation the due and punctual
payment of the Guaranteed Obligations and every part thereof as and when the
Guaranteed Obligations shall become due and payable in accordance with the terms
thereof, at whatever time and for whatever reasons) that shall not have been
paid when due.
(b) Subject to the provisions of Paragraph 12 hereof, the
obligations of the Guarantor hereunder are absolute and unconditional and shall
remain in full force and effect until the Guarantor shall have fully and
satisfactorily discharged each of its obligations to the Agent, the Banks and
the Issuing Bank under this Guaranty, irrespective of the genuineness, validity,
regularity or enforceability of the Loan Agreement, the Notes, the Security
Documents, the Secured Hedge Agreements or of any assignment, modification or
termination thereof, and shall not be released, discharged or impaired in any
way by reason of (i) any failure of the Agent, the Banks or the Issuing Bank to
retain or preserve any rights against any person, (ii) the invalidity of any
such rights which the Agent, the Banks or the Issuing Bank may attempt to
obtain, (iii) the
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lack of prior enforcement by the Agent, the Banks or the Issuing Bank of any
rights against any person, (iv) the dissolution of any of the Banks or the
Issuing Bank, (v) the waiver, surrender, compromise, settlement, release or
termination of any of or all the obligations, covenants or agreements of SFNBV
contained in the Notes, (vi) the failure to give notice to the Guarantor of the
occurrence of a breach of this Guaranty, (vii) the extension of the time for
payment of any amount owing or payable on the Loan Agreement, the Notes, the
Security Documents or any Secured Hedge Agreement, (viii) the taking or the
omission of any of the actions referred to in this Guaranty, (ix) any
circumstances which might give rise to any right of termination, release,
rescission, discharge, modification or suspension by the Guarantor of its
obligations hereunder by reason of any misstatement, breach of warranty or other
act or omission by the Agent, any of the Banks or the Issuing Bank, whether or
not consented to by the Guarantor, or (x) any other circumstance which might in
the absence of this Paragraph 2(b) constitute a legal or equitable release or
discharge of the Guarantor from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty or limit the recourse of the
Agent, the Banks or the Issuing Bank to the Guarantor, nor shall the obligations
of the Guarantor hereunder be affected in any way by any bankruptcy,
arrangement, reorganization or similar proceeding for relief of debtors under
federal or state law or any similar law of any other jurisdiction hereinafter
initiated by or against SFNBV or the Banks or the Issuing Bank. No setoff,
counterclaim, reduction or diminution of any obligation, or any defense of any
kind or nature (other than the performance by the Guarantor of its obligations
hereunder), shall be available hereunder to the Guarantor against the Agent, the
Banks or the Issuing Bank. The Agent, the Banks or the Issuing Bank need not
exhaust their remedies against SFNBV before proceeding against the Guarantor.
(c) For purposes of this Guaranty Agreement, the Guarantor
hereby unconditionally waives, as a condition precedent to the enforcement of
its obligations hereunder: (i) demand for payment, protest and notice of
nonpayment or dishonor, (ii) all other notices and demands (including without
limitation notice of the acceptance of this Guaranty or of the intention to act
in reliance hereon), (iii) any notice of any of the matters referred to in
Paragraph 2(b) above; (iv) all notices which may be required by statute, rule of
law, or otherwise to preserve any rights against the Guarantor hereunder,
including without limitation any demand, proof or notice of nonpayment of any
sums payable on the Notes, (v) any requirement of diligence, (vi) any
requirement to mitigate the damages resulting from any breach of the Loan
Agreement, the Notes, the Security Documents or any Secured Hedge Agreement, and
(vii) any right or claim to reimbursement from the Banks for monies paid by the
Guarantor pursuant to this Guaranty. The Guarantor also hereby waives any right
to require, and the benefit of all laws now or hereafter in effect giving the
Guarantor the right to require, any prior enforcement, and the Guarantor agrees
that any delay in enforcing or failure to enforce any such rights or in making
demand on the Guarantor for the performance of the obligations of the Guarantor
under this Guaranty shall not in any way affect the liability of the Guarantor
hereunder, even if any such rights are lost; and the Guarantor hereby waives, as
against the Agent, the Banks or the Issuing Bank and any person claiming under
any of them, all rights and benefits which might accrue to it by reason of any
of the aforesaid bankruptcy, arrangement,
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reorganization, or similar proceedings and agrees that its liabilities hereunder
shall not be affected by such an arrangement, reorganization, or similar
proceeding and agrees that its liabilities hereunder shall not be affected by
any modification, limitation or discharge of the obligations of SFNBV that may
result from any such proceedings.
3. COSTS AND EXPENSES. The Guarantor shall pay, in addition to
all other sums for which it is obligated under this Guaranty, the reasonable
out-of-pocket costs and expenses incurred by the Agent, the Banks or the Issuing
Bank in connection with all actions taken to enforce collection or performance
of the Guaranteed Obligations or any part thereof, whether by legal proceedings
or otherwise, including without limitation reasonable attorneys fees and legal
expenses to the extent not reimbursed to the Agent, the Banks or the Issuing
Bank by SFNBV.
4. RECOVERY OF PAYMENTS. The Guarantor agrees that in the
event any amounts are paid by it to the Agent, the Banks or the Issuing Bank
pursuant to this Guaranty, its liability hereunder shall continue and remain in
full force and effect in the event that all or any part of any such payment is
thereafter recovered as a preference or fraudulent transfer under any applicable
bankruptcy or insolvency law.
5. SUBROGATION. The Guarantor agrees that any and all rights
of subrogation or similar rights which the Guarantor may have against SFNBV at
any time shall be subordinate in any and all events to any and all rights which
the Agent, the Banks or the Issuing Bank may have against SFNBV in respect of
the Guaranteed Obligations, and the Guarantor will not enforce any such right
until this Guaranty has terminated pursuant to Paragraph 12 hereof.
6. SET OFF. If the Guarantor shall fail to make prompt payment
of any amount due from it to the Agent, the Banks and the Issuing Bank
hereunder, the Agent, the Banks and the Issuing Bank shall have the right, in
addition to all other rights and remedies available to them, to set off against
the amount due to the Agent, any of the Banks or the Issuing Bank pursuant
hereto any debt owing to the Guarantor by the Agent, such Bank or the Issuing
Bank, including, without limitation any funds in any deposit account (whether
general, special or otherwise) maintained by the Guarantor for its account with
the Agent, such Bank or the Issuing Bank.
7. REPRESENTATIONS AND WARRANTIES OF GUARANTOR. The Guarantor
represents and warrants to the Agent, the Banks and the Issuing Bank as follows:
(a) The Guarantor is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
qualified to do business as a foreign corporation and in good standing in all
jurisdictions in which the ownership of its properties or the nature of its
activities or both makes such qualification necessary, except to the extent that
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect.
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(b) The Guarantor has corporate power and authority to
execute, deliver and perform its obligations under this Guaranty and all such
action has been duly authorized by corporate proceedings on its part.
(c) The making and performance by the Guarantor of this
Guaranty will not violate any provision of any law, rule, regulation, order,
writ, judgment, decree, determination or award presently in effect having
applicability to the Guarantor where such violation could reasonably be expected
to have a Material Adverse Effect and will not conflict with or result in a
breach of or a default under the articles of incorporation or by-laws of the
Guarantor and will not result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property of the Guarantor
pursuant to any agreement or other instrument to which the Guarantor is a party
or by which the Guarantor's properties may be bound or affected, and the
Guarantor is not in default under any such order, writ, judgment, decree,
determination, award, agreement or instrument, and all consents or approvals
under such agreements and instruments necessary to permit the valid execution,
delivery and performance by the Guarantor of this Guaranty have been obtained.
(d) This Guaranty has been duly executed and delivered by the
Guarantor and is the legal, valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its terms except as the
enforceability of this Guaranty may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights and except
as may be limited by the exercise of judicial discretion in applying general
principles of equity regardless of whether considered in a proceeding in equity
or law.
(e) No Event of Default, or event which upon the expiration of
any applicable cure period or the giving of notice or both would constitute an
Event of Default, has occurred and is continuing.
(f) There is no pending or (to the Guarantor's knowledge)
threatened proceeding by or before any government or political subdivision or
any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic ("Official Body") against or affecting the
Guarantor, except for (a) matters described in the financial statements of
Guarantor previously delivered to the Agent and (b) matters that, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(g) The Guarantor is not now nor will the incurrence by it of
the obligations under this Guaranty render it "insolvent". For purposes hereof,
the term "insolvent" means that the present fair market value of a person's
assets is less than the amount that will be required to pay the probable
liability on existing debts, and the term "debts" includes any legal liability,
whether matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent. By incurring the obligations under this Guaranty, the Guarantor does
not incur debts beyond its ability to pay as they mature. The incurrence by the
Guarantor of the obligations hereunder will
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not leave it with insufficient capital. The Guarantor has not executed this
Guaranty or made any transfer or incurred any obligation hereunder with the
intent to hinder, delay or defraud either present or future creditors.
(h) No authorization, consent, approval, license, exemption or
other action by, and no registration, qualification, designation, declaration or
filing with, any Official Body is or will be necessary in connection with the
execution and delivery of this Guaranty, consummation of the transactions herein
contemplated or performance of or compliance with the terms and conditions
hereof.
8. COVENANT OF THE GUARANTOR. So long as this Guaranty remains
in effect, the Guarantor shall maintain its corporate existence, rights and
franchises in full force and effect in its jurisdiction of incorporation.
9. EVENTS OF DEFAULT. If any of the following events (any such
event being an "Event of Default") shall occur and be continuing:
(a) The Guarantor shall fail to pay when due or perform when
due any Guaranteed Obligation; or
(b) Any representation and warranty made by the Guarantor in
this Guaranty shall prove to have been incorrect in any material respect when
made; or
(c) The Guarantor shall fail to perform or observe the
covenant contained in Paragraph 8 of this Guaranty; or
(d) The Guarantor shall become insolvent or generally fail to
pay, or admit in writing its inability to pay, its debts as they become due, or
shall voluntarily commence any proceeding or file any petition under any
bankruptcy, insolvency or similar law seeking dissolution or reorganization or
the appointment of a receiver, trustee, custodian or liquidator for itself or
for a substantial portion of its property, assets or business or to effect a
plan or other arrangement with its creditors, or shall file any answer admitting
the jurisdiction of the court and the material allegations of an involuntary
petition filed against it in any bankruptcy, insolvency or similar proceeding,
or shall be adjudicated bankrupt, or shall make a general assignment for the
benefit of creditors, or shall consent to, or acquiesce in the appointment of, a
receiver, trustee, custodian or liquidator for itself or a substantial portion
of its property, assets or business; or
(e) Involuntary proceedings or an involuntary petition shall
be commenced or filed against the Guarantor under any bankruptcy, insolvency or
similar law, or a receiver, trustee, or custodian shall have been appointed for
the Guarantor or a substantial part of the property, assets or business of the
Guarantor, or any writ, order, judgment, warrant of attachment, execution or
similar process (which writ, order, judgment, warrant of attachment, execution
or similar process exceeds $1,000,000 in the aggregate amount) shall be issued
or levied against a substantial part of the property, assets or business of the
Guarantor and such
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proceeding or petition shall not be dismissed, or such writ, order, judgment,
warrant of attachment, execution or similar process shall not be released,
vacated or fully bonded, within 30 days after commencement, filing or levy, as
the case may be; or
(f) The Guarantor shall fail to perform or observe any other
term, covenant or agreement contained herein and not mentioned in this Paragraph
9, and such failure shall remain unremedied for 30 days after notice from the
Agent;
then, and in any such event, the Agent may in its sole discretion, but shall not
be obligated to, by notice to the Guarantor, declare any of the Guaranteed
Obligations and all other obligations of the Guarantor hereunder (other than
obligations under or in connection with Secured Hedge Agreements) to be
forthwith due and payable, and the same shall thereupon become due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived; provided, however, that in the case of an event
specified in subparagraphs (d) and (e) of this Paragraph 9, the Guaranteed
Obligations (other than obligations under or in connection with Secured Hedge
Agreements) shall become automatically and immediately due and payable without
any notice to the Guarantor or any further action on the part of any person. In
addition to the remedies set forth in the preceding sentence and throughout this
Guaranty, the Guarantor acknowledges that upon breach by the Guarantor of the
Guaranteed Obligations relating to any covenant, agreement or undertaking of
SFNBV other than for the payment of money, the Agent, the Banks and the Issuing
Bank shall be entitled to injunctive relief against the Guarantor, as a remedy
at law would be inadequate and insufficient. Nothing in this Guaranty shall be
construed as limiting the remedies of the Agent, the Banks and the Issuing Bank
in any way.
10. TAXES.
(a) All payments made by the Guarantor under this Agreement or
any other Loan Document shall be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding (x) in the
case of each Bank and the Agent, net income taxes imposed on such Bank or the
Agent (as the case may be) by the United States, and net income taxes and
franchise taxes imposed on such Bank or the Agent (as the case may be) by the
jurisdiction under the laws of which such Bank or the Agent (as the case may be)
is organized or by any political subdivision thereof, and (y) in the case of
each Bank, net income taxes and franchise taxes imposed on such Bank by the
jurisdiction in which is located the Bank's lending office which makes or books
a particular extension of credit hereunder or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deduction, charges, withholdings
and liabilities being referred to as "Taxes"). If the Guarantor shall be
required by law to deduct any Taxes from or in respect of any sum payable under
this Agreement or any other Loan Document to any Bank or the Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Paragraph 10) such Bank or the Agent (as the case may be) receives an
amount equal to the sum
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it would have received had no such deductions been made, (ii) the Guarantor
shall make such deductions, and (iii) the Guarantor shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, the Guarantor agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) The Guarantor will indemnify each Bank and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Paragraph 10) paid by such Bank or the Agent (as the case may be) and any
liability (including, without limitation, penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be made
within 30 days from the date such Bank or the Agent (as the case may be) makes
written demand therefor. Guarantor shall have no obligation to make any payments
pursuant to the preceding sentence unless the Agent or such Bank has notified
Guarantor of the existence and amount of the liability for such Taxes or Other
Taxes in writing and in advance of payment to the relevant authority, it being
understood that Guarantor's payment obligation shall not be affected by the
failure of Agent or such Bank to notify Guarantor as specified herein unless as
a consequence of such failure Guarantor has been actually prejudiced.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes, the Guarantor will furnish to the Agent the original or a certified
copy of a receipt evidencing payment thereof. If no Taxes or Other Taxes are
payable in respect of any payment hereunder by the Guarantor through an account
or branch outside the United States or on behalf of the Guarantor by a payor
that is not a United States person, the Guarantor will furnish, or will cause
such payor to furnish, to the Agent a certificate from each appropriate taxing
authority or an opinion of counsel acceptable to the Agent, in either case
stating that such payment is exempt from or not subject to Taxes or Other Taxes.
For purposes of this Paragraph 10(d), the terms "United States" and "United
States person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Without prejudice to the survival of any other agreement
of the Guarantor hereunder, the obligations of the Guarantor contained in this
Paragraph 10 shall survive the payment in full of all other obligations of the
Guarantor under this Agreement and the other Loan Documents, termination of all
commitments to extend credit under the Loan Documents, and all other events and
circumstances whatever. Nothing in this Paragraph 10 or otherwise in this
Agreement shall require the Agent or any Bank to disclose to the Guarantor any
of its tax returns (or any other information that it deems to be confidential or
proprietary).
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(f) (i) Each Bank organized under the laws of a jurisdiction
outside the United States shall, on the date such Bank becomes party to the Loan
Agreement, and from time to time thereafter if requested in writing by the
Guarantor or the Agent, provide the Agent and the Guarantor with the forms
prescribed by the United States Internal Revenue Service certifying as to such
Bank's status for purposes of determining exemption from, or reduced rate
applicable to, United States withholding taxes with respect to payments to be
made to such Bank under this Agreement and the other Loan Documents; provided,
that a Bank shall not be obligated to provide any such form after the date such
Bank becomes party to this Agreement if such Bank is not legally able to do so.
(ii) The Guarantor shall not be required to indemnify any
Bank, or to pay any additional amounts to any Bank, in respect of United States
withholding taxes (or any withholding tax imposed by a state of the United
States that applies only when such United States withholding tax is imposed),
pursuant to Paragraphs 10(a) or 10(c), to the extent that: (A) the obligation to
withhold amounts with respect to United States withholding tax existed on the
date such Bank became a party to the Loan Agreement; provided, that this clause
(A) shall not apply to a Bank that became a Bank as a result of an assignment
made or other action taken at the request of a Borrower or the Guarantor, or (B)
the obligation to make such indemnification or to pay such additional amounts
would not have arisen but for a failure of such Bank to comply with the
provisions of Paragraph 10(f)(i).
(g) If a Bank or the Agent shall become aware that it is
entitled to claim a refund, credit or reduction in tax from a governmental
agency or authority in respect of Taxes or Other Taxes as to which it has been
indemnified by the Guarantor, or with respect to which the Guarantor has paid
additional amounts, pursuant to this Paragraph 10, it shall promptly notify the
Guarantor of the availability of such refund claim, credit or reduction in tax
and shall, within 30 days after receipt of a request by the Guarantor, make a
claim to such governmental agency or authority for such refund, credit or
reduction in tax, at the Guarantor's expense. If a Bank or the Agent receives a
refund or realizes a credit or reduction in tax in respect of any Taxes or Other
Taxes as to which it has been indemnified by the Guarantor, or with respect to
which the Guarantor has paid additional amounts, pursuant to this Paragraph 10,
it shall promptly after the date of such receipt pay over the amount of such
refund or benefit of such credit or reduction in tax to the Guarantor (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Guarantor under this Paragraph 10 with respect to the Taxes or Other Taxes
giving rise to such refund, credit or reduction in tax and only to the extent
that the Bank has determined that the amount of any such refund, credit or
reduction in tax is directly attributable to payments made under this
Agreement), net of all reasonable expenses of the Bank or the Agent (including
additional Taxes and Other Taxes attributable to such refund, credit or
reduction in tax, as determined by the Bank) and without interest (other than
interest, if any, paid by the relevant governmental agency or authority with
respect to such refund, credit or reduction in tax). The Guarantor shall, upon
demand, pay to such Bank or Agent any amount paid over to the Guarantor by such
Bank or Agent (plus penalties, interest or other charges) in the event such Bank
or the Agent is required to repay any portion of such refund, credit or
reduction in tax to such governmental agency or authority.
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11. PAYMENT; NO SET-OFF. The Guarantor hereby guarantees that
the Guaranteed Obligations for the payment of money will be paid to the Agent
for the benefit of the Agent, the Banks and the Issuing Bank without set-off,
counterclaim or other deduction of any nature, (a) with respect to Revolving
Credit Loans denominated in US Currency, in US Currency at the Agent's Domestic
Office and (b) with respect to Revolving Credit Loans denominated in any Other
Currency, in such Other Currency at the Agent's London Office, in either case in
funds immediately available at such Office.
12. TERMINATION OF GUARANTY. This Guaranty shall terminate
when all Guaranteed Obligations have been paid in full, all commitments to
extend credit under the Loan Agreement have terminated, all Letters of Credit
issued under the Loan Agreement have terminated and all Secured Hedge Agreements
have terminated.
13. MISCELLANEOUS.
(a) No delay or failure on the part of the Agent, any of the
Banks or the Issuing Bank in exercising any right, remedy, power or privilege
hereunder shall affect such right, remedy, power or privilege, nor shall any
single or partial exercise thereof or any abandonment or discontinuance of steps
to enforce such right, remedy, power or privilege preclude any further exercise
thereof or any other right, remedy, power or privilege. The rights and remedies
of the Agent, the Banks and the Issuing Bank hereunder are cumulative and not
exclusive of any rights or remedies which they would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of the Agent,
the Banks or the Issuing Bank or of any breach or default under this Guaranty
must be in writing and shall be effective only to the extent in such writing
specifically set forth.
(b) Until such time as this Guaranty is terminated pursuant to
Paragraph 12 hereof, this Guaranty shall inure to the benefit of the Agent, the
Banks and the Issuing Bank and their respective successors and assigns and shall
bind the Guarantor and its successors or assigns. The Guarantor shall not assign
all or any part of this Guaranty without the prior written consent of the Agent.
(c) If the Agent, any Bank or the Issuing Bank obtains a
judgment against the Guarantor in any Other Currency, the obligations of such
Guarantor in respect of any sum adjudged to be due to the Banks, the Agent or
the Issuing Bank hereunder or under the Loan Documents (the "Judgment Amount")
shall be discharged only to the extent that, on the Business Day following
receipt by such Bank, the Agent or the Issuing Bank of the Judgment Amount in
such Other Currency, such Bank, the Agent or the Issuing Bank, in accordance
with normal banking procedures, purchases Dollars with the Judgment Amount in
such Other Currency. If the amount of Dollars so purchased is less than the
amount of Dollars that could have been
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purchased with the Judgment Amount on the date or dates the Judgment Amount
(excluding the portion of the Judgment Amount which has accrued as a result of
the failure of such Guarantor to pay the sum originally due hereunder or under
the Notes when it was originally due hereunder or under the Loan Documents) was
originally due and owing to the Banks, the Agent or the Issuing Bank hereunder
or under the Loan Documents (the "Original Due Date") (the "Loss"), the
Guarantors agree, jointly and severally, as a separate obligation and
notwithstanding any such judgment, to indemnify such Bank, the Agent or the
Issuing Bank, as the case may be, against the Loss, and if the amount of Dollars
so purchased exceeds the amount of Dollars that could have been purchased with
the Judgment Amount on the Original Due Date, such Bank, the Agent or the
Issuing Bank agrees to remit such excess to such Guarantor.
(d) This Guaranty shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Pennsylvania.
(e) The paragraph headings in this Guaranty are for
convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provision hereof.
(f) If any provision of this Guaranty shall for any reason be
held invalid or unenforceable, to the fullest extent permitted by law, such
invalidity or unenforceability shall not affect any other provision hereof, but
this Guaranty shall be construed as if such invalid or unenforceable provision
had never been contained herein.
(g) This Guaranty may be executed in one or more counterparts,
all of which shall constitute but one and the same instrument.
(h) All notices, requests, demands, directions and other
communications (collectively "notices") required or permitted hereunder shall be
made in accordance with Section 9.05 of the Credit Agreement. All notices shall
be sent to the applicable party at the address stated on the first page hereof
or in accordance with the last unrevoked written direction from such party to
the other parties hereto.
(i) This Guaranty is an amendment and restatement of (and not
a novation of) the Guaranty and Suretyship Agreement, dated as of June 1, 1996,
(as amended, supplemented or modified from time to time, the "Original
Agreement") (without any discharge, release or satisfaction of the Original
Agreement or any indebtedness or obligations thereunder).
IN WITNESS WHEREOF, the parties hereto have caused this
Guaranty to be duly executed and delivered on this __ day of August 1998.
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Attest: SYLVAN INC., as Guarantor
__________________________________ By_______________________________
Name: Name:
Title: Title:
[CORPORATE SEAL]
MELLON BANK, N.A., as Agent
By_______________________________
Name:
Title:
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EXHIBIT B-2
TO
CREDIT AGREEMENT
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty"),
dated as of August 6, 1998, between [SUBSIDIARY GUARANTOR], a [state]
corporation having an office at [address] (the "Guarantor") and MELLON BANK,
N.A., a national banking association having an office at Xxx Xxxxxx Xxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, as agent (in such capacity, "Agent") for
the banks party to the Loan Agreement (as defined below) from time to time (the
"Banks") and the Issuing Bank.
RECITALS:
WHEREAS, Sylvan Inc. (the "Parent"), Sylvan Foods
(Netherlands) B.V. ("SFNBV"), the Agent, the Banks and the Issuing Bank have
entered into a Revolving Credit Agreement dated as of the date hereof (the "Loan
Agreement");
WHEREAS, the Parent and SFNBV are sometimes referred to
collectively as the "Borrowers" and individually as a "Borrower"; and
WHEREAS, it is a condition to the obligations of the Agent,
the Banks and the Issuing Bank under the Loan Agreement that the Guarantor shall
have executed and delivered this Guaranty to the Agent for the ratable benefit
of the Banks and the Issuing Bank.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the Guarantor covenants and agrees as follows:
1. CERTAIN DEFINITIONS. In addition to other words and terms
defined elsewhere in this Guaranty, the following words and terms shall have the
meanings set forth below, respectively, unless the context hereof clearly
otherwise requires. Capitalized terms not defined in this Guaranty shall have
the meanings assigned to such terms in the Loan Agreement.
"Debt" shall mean all obligations of the Borrowers to the
Agent, the Banks and the Issuing Bank arising under the Loan Agreement, the
Notes, the Security Documents or the Secured Hedge Agreements, including any
extensions, renewals, refundings, substitutions of or for such obligations in
whole or in part.
"Guaranteed Obligations" shall mean (i) the Debt, (ii) all
other amounts payable by the Borrowers or any other person affiliated with the
Parent to the Agent, the Banks and the Issuing Bank under the Loan Agreement,
any or all of the Notes, any other Security Document or any Secured Hedge
Agreement, (iii) all covenants, agreements and undertakings to be performed and
discharged by the Guarantors, the Borrowers or any other person affiliated with
the Parent under and pursuant to the Loan Agreement, the Notes, any other
Security Document or any Secured Hedge Agreement, (iv) all obligations of the
Borrowers or any other person affiliated with either of the Borrowers to the
Agent, the Banks or the Issuing Bank for reasonable fees and
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expenses arising in connection with the transactions contemplated by the Loan
Agreement, (v) all future advances made by the Agent, the Banks or the Issuing
Bank made pursuant to the Security Documents, whether at maturity or by
declaration, acceleration or otherwise, or if now due when payment thereof shall
be demanded by the Agent, the Banks or the Issuing Bank and (vi) any and all
reasonable out-of-pocket costs and expenses, including reasonable out-of-pocket
costs and expenses of collection, paid or incurred by the Agent, the Banks or
the Issuing Bank in connection with the collection of the amounts referred to in
the preceding clauses (i), (ii), (iv) and (v) or the enforcement of the
covenants, agreements and undertakings referred to in clause (iii), in each of
the foregoing clauses (i) through (vi) whether such obligations are direct or
indirect, otherwise secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or performance, now
existing or hereafter arising.
"Loan Documents" shall mean, collectively, this Agreement, the
Loan Agreement, the Notes, the Security Documents and the Secured Hedge
Agreements.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the business, operations, properties, assets or condition (financial or
otherwise) of the Guarantor and its Subsidiaries taken as a whole or (b) the
ability of the Guarantor to perform its obligations under this Guaranty.
2. GUARANTY AND SURETYSHIP. (a) The Guarantor hereby
absolutely and unconditionally guarantees to the Agent, the Banks and the
Issuing Bank and to their respective successors and assigns, and agrees to
become a surety for, the full, timely and faithful performance and discharge by
the Borrowers or any other person affiliated with the Parent of any and all
Guaranteed Obligations (including without limitation the due and punctual
payment of the Guaranteed Obligations and every part thereof as and when the
Guaranteed Obligations shall become due and payable in accordance with the terms
thereof, at whatever time and for whatever reasons) that shall not have been
paid when due.
(b) Subject to the provisions of Paragraph 12 hereof, the
obligations of the Guarantor hereunder are absolute and unconditional and shall
remain in full force and effect until the Guarantor shall have fully and
satisfactorily discharged each of its obligations to the Agent, the Banks and
the Issuing Bank under this Guaranty, irrespective of the genuineness, validity,
regularity or enforceability of the Loan Agreement, the Notes, the Security
Documents, the Secured Hedge Agreements or of any assignment, modification or
termination thereof, and shall not be released, discharged or impaired in any
way by reason of (i) any failure of the Agent, the Banks or the Issuing Bank to
retain or preserve any rights against any person, (ii) the invalidity of any
such rights which the Agent, the Banks or the Issuing Bank may attempt to
obtain, (iii) the lack of prior enforcement by the Agent, the Banks or the
Issuing Bank of any rights against any person, (iv) the dissolution of any of
the Banks or the Issuing Bank, (v) the waiver, surrender, compromise,
settlement, release or termination of any of or all the obligations, covenants
or agreements of the Borrowers contained in the Notes, (vi) the failure to give
notice to the Guarantor of the occurrence of a breach of this Guaranty, (vii)
the extension of the time for
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payment of any amount owing or payable on the Loan Agreement, the Notes, the
Security Documents or any Secured Hedge Agreement, (viii) the taking or the
omission of any of the actions referred to in this Guaranty, (ix) any
circumstances which might give rise to any right of termination, release,
rescission, discharge, modification or suspension by the Guarantor of its
obligations hereunder by reason of any misstatement, breach of warranty or other
act or omission by the Agent, any of the Banks or the Issuing Bank, whether or
not consented to by the Guarantor, or (x) any other circumstance which might in
the absence of this Paragraph 2(b) constitute a legal or equitable release or
discharge of the Guarantor from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty or limit the recourse of the
Agent, the Banks or the Issuing Bank to the Guarantor, nor shall the obligations
of the Guarantor hereunder be affected in any way by any bankruptcy,
arrangement, reorganization or similar proceeding for relief of debtors under
federal or state law or any similar law of any other jurisdiction hereinafter
initiated by or against the Borrowers or the Banks or the Issuing Bank. No
setoff, counterclaim, reduction or diminution of any obligation, or any defense
of any kind or nature (other than the performance by the Guarantor of its
obligations hereunder), shall be available hereunder to the Guarantor against
the Agent, the Banks or the Issuing Bank. The Agent, the Banks or the Issuing
Bank need not exhaust their remedies against the Borrowers before proceeding
against the Guarantor.
(c) For purposes of this Guaranty Agreement, the Guarantor
hereby unconditionally waives, as a condition precedent to the enforcement of
its obligations hereunder: (i) demand for payment, protest and notice of
nonpayment or dishonor, (ii) all other notices and demands (including without
limitation notice of the acceptance of this Guaranty or of the intention to act
in reliance hereon), (iii) any notice of any of the matters referred to in
Paragraph 2(b) above; (iv) all notices which may be required by statute, rule of
law, or otherwise to preserve any rights against the Guarantor hereunder,
including without limitation any demand, proof or notice of nonpayment of any
sums payable on the Notes, (v) any requirement of diligence, (vi) any
requirement to mitigate the damages resulting from any breach of the Loan
Agreement, the Notes, the Security Document or any Secured Hedge Agreement, and
(vii) any right or claim to reimbursement from the Banks or the Issuing Bank for
monies paid by the Guarantor pursuant to this Guaranty. The Guarantor also
hereby waives any right to require, and the benefit of all laws now or hereafter
in effect giving the Guarantor the right to require, any prior enforcement, and
the Guarantor agrees that any delay in enforcing or failure to enforce any such
rights or in making demand on the Guarantor for the performance of the
obligations of the Guarantor under this Guaranty shall not in any way affect the
liability of the Guarantor hereunder, even if any such rights are lost; and the
Guarantor hereby waives, as against the Agent, the Banks or the Issuing Bank and
any person claiming under any of them, all rights and benefits which might
accrue to it by reason of any of the aforesaid bankruptcy, arrangement,
reorganization, or similar proceedings and agrees that its liabilities hereunder
shall not be affected by such an arrangement, reorganization, or similar
proceeding and agrees that its liabilities hereunder shall not be affected by
any modification, limitation or discharge of the obligations of the Borrowers
that may result from any such proceedings.
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3. COSTS AND EXPENSES. The Guarantor shall pay, in addition to
all other sums for which it is obligated under this Guaranty, the reasonable
out-of-pocket costs and expenses incurred by the Agent, the Banks or the Issuing
Bank in connection with all actions taken to enforce collection or performance
of the Guaranteed Obligations or any part thereof, whether by legal proceedings
or otherwise, including without limitation reasonable attorneys' fees and legal
expenses to the extent not reimbursed to the Agent, the Banks or the Issuing
Bank by the Borrowers.
4. RECOVERY OF PAYMENTS. The Guarantor agrees that in the
event any amounts are paid by it to the Agent, the Banks or the Issuing Bank
pursuant to this Guaranty, its liability hereunder shall continue and remain in
full force and effect in the event that all or any part of any such payment is
thereafter recovered as a preference or fraudulent transfer under any applicable
bankruptcy or insolvency law.
5. SUBROGATION. The Guarantor agrees that any and all rights
of subrogation or similar rights which the Guarantor may have against the
Borrowers at any time shall be subordinate in any and all events to any and all
rights which the Agent, the Banks or the Issuing Bank may have against the
Borrowers in respect of the Guaranteed Obligations, and the Guarantor will not
enforce any such right until this Guaranty has terminated pursuant to Paragraph
12 hereof.
6. SET OFF. If the Guarantor shall fail to make prompt payment
of any amount due from it to the Agent, the Banks and the Issuing Bank
hereunder, the Agent, the Banks and the Issuing Bank shall have the right, in
addition to all other rights and remedies available to them, to set off against
the amount due to the Agent, any of the Banks or the Issuing Bank pursuant
hereto any debt owing to the Guarantor by the Agent, such Bank or the Issuing
Bank, including, without limitation any funds in any deposit account (whether
general, special or otherwise) maintained by the Guarantor for its account with
the Agent, such Bank or the Issuing Bank.
7. REPRESENTATIONS AND WARRANTIES OF GUARANTOR. The Guarantor
represents and warrants to the Agent, the Banks and the Issuing Bank as follows:
(a) The Guarantor is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
qualified to do business as a foreign corporation and in good standing in all
jurisdictions in which the ownership of its properties or the nature of its
activities or both makes such qualification necessary, except to the extent that
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect.
(b) The Guarantor has corporate power and authority to
execute, deliver and perform its obligations under this Guaranty and all such
action has been duly authorized by corporate proceedings on its part.
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(c) The making and performance by the Guarantor of this
Guaranty will not violate any provision of any law, rule, regulation, order,
writ, judgment, decree, determination or award presently in effect having
applicability to the Guarantor where such violation could reasonably be expected
to have a Material Adverse Effect and will not conflict with or result in a
breach of or a default under the articles of incorporation or by-laws of the
Guarantor and will not result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property of the Guarantor
pursuant to any agreement or other instrument to which the Guarantor is a party
or by which the Guarantor 's properties may be bound or affected, and the
Guarantor is not in default under any such order, writ, judgment, decree,
determination, award, agreement or instrument, and all consents or approvals
under such agreements and instruments necessary to permit the valid execution,
delivery and performance by the Guarantor of this Guaranty have been obtained.
(d) This Guaranty has been duly executed and delivered by the
Guarantor and is the legal, valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its terms except as the
enforceability of this Guaranty may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights and except
as may be limited by the exercise of judicial discretion in applying general
principles of equity regardless of whether considered in a proceeding in equity
or law.
(e) No Event of Default, or event which upon the expiration of
any applicable any period or the giving of notice or both would constitute an
Event of Default, has occurred and is continuing.
(f) There is no pending or (to the Guarantor's knowledge)
threatened proceeding by or before any government or political subdivision or
any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic ("Official Body") against or affecting the
Guarantor, except for (i) matters described in the financial statements of
Guarantor previously delivered to the Agent, and (ii) matters that, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(g) The Guarantor is not now nor will the incurrence by it of
the obligations under this Guaranty render it "insolvent". For purposes hereof,
the term "insolvent" means that the present fair market value of a person's
assets is less than the amount that will be required to pay the probable
liability on existing debts, and the term "debts" includes any legal liability,
whether matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent. By incurring the obligations under this Guaranty, the Guarantor does
not incur debts beyond its ability to pay as they mature. The incurrence by the
Guarantor of the obligations hereunder will not leave it with insufficient
capital. The Guarantor has not executed this Guaranty or made any transfer or
incurred any obligation hereunder with the intent to hinder, delay or defraud
either present or future creditors.
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(h) No authorization, consent, approval, license, exemption or
other action by, and no registration, qualification, designation, declaration or
filing with, any Official Body is or will be necessary in connection with the
execution and delivery of this Guaranty, consummation of the transactions herein
contemplated or performance of or compliance with the terms and conditions
hereof.
8. COVENANT OF THE GUARANTOR. So long as this Guaranty remains
in effect, the Guarantor shall maintain its corporate existence, rights and
franchises in full force and effect in its jurisdiction of incorporation.
9. EVENTS OF DEFAULT. If any of the following events (any such
event being an "Event of Default") shall occur and be continuing:
(a) The Guarantor shall fail to pay when due or perform when
due any Guaranteed Obligation; or
(b) Any representation and warranty made by the Guarantor in
this Guaranty shall prove to have been incorrect in any material respect when
made; or
(c) The Guarantor shall fail to perform or observe the
covenant contained in Paragraph 8 of this Guaranty; or
(d) The Guarantor shall become insolvent or generally fail to
pay, or admit in writing its inability to pay, its debts as they become due, or
shall voluntarily commence any proceeding or file any petition under any
bankruptcy, insolvency or similar law seeking dissolution or reorganization or
the appointment of a receiver, trustee, custodian or liquidator for itself or
for a substantial portion of its property, assets or business or to effect a
plan or other arrangement with its creditors, or shall file any answer admitting
the jurisdiction of the court and the material allegations of an involuntary
petition filed against it in any bankruptcy, insolvency or similar proceeding,
or shall be adjudicated bankrupt, or shall make a general assignment for the
benefit of creditors, or shall consent to, or acquiesce in the appointment of, a
receiver, trustee, custodian or liquidator for itself or a substantial portion
of its property, assets or business; or
(e) Involuntary proceedings or an involuntary petition shall
be commenced or filed against the Guarantor under any bankruptcy, insolvency or
similar law, or a receiver, trustee, or custodian shall have been appointed for
the Guarantor or a substantial part of the property, assets or business of the
Guarantor, or any writ, order, judgment, warrant of attachment, execution or
similar process (which writ, order, judgment, warrant of attachment, execution
or similar process exceeds $1,000,000 in the aggregate amount) shall be issued
or levied against a substantial part of the property, assets or business of the
Guarantor and such proceeding or petition shall not be dismissed, or such writ,
order, judgment, warrant of attachment, execution or similar process shall not
be released, vacated or fully bonded, within 30 days after commencement, filing
or levy, as the case may be; or
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(f) The Guarantor shall fail to perform or observe any other
term, covenant or agreement contained herein and not mentioned in this Paragraph
9, and such failure shall remain unremedied for 30 days after notice from the
Agent;
then, and in any such event, the Agent may in its sole discretion, but shall not
be obligated to, by notice to the Guarantor, declare any of the Guaranteed
Obligations and all other obligations of the Guarantor hereunder (other than
obligations under or in connection with Secured Hedge Agreements) to be
forthwith due and payable, and the same shall thereupon become due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived; provided, however, that in the case of an event
specified in subparagraphs (d) and (e) of this Paragraph 9, the Guaranteed
Obligations (other than obligations under or in connection with Secured Hedge
Agreements) shall become automatically and immediately due and payable without
any notice to the Guarantor or any further action on the part of any person. In
addition to the remedies set forth in the preceding sentence and throughout this
Guaranty, the Guarantor acknowledges that upon breach by the Guarantor of the
Guaranteed Obligations relating to any covenant, agreement or undertaking of the
Borrowers other than for the payment of money, the Agent, the Banks and the
Issuing Bank shall be entitled to injunctive relief against the Guarantor, as a
remedy at law would be inadequate and insufficient. Nothing in this Guaranty
shall be construed as limiting the remedies of the Agent, the Banks and the
Issuing Bank in any way.
10. TAXES.
(a) All payments made by the Guarantor under this Agreement or
any other Loan Document shall be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding (x) in the
case of each Bank and the Agent, net income taxes imposed on such Bank or the
Agent (as the case may be) by the United States, and net income taxes and
franchise taxes imposed on such Bank or the Agent (as the case may be) by the
jurisdiction under the laws of which such Bank or the Agent (as the case may be)
is organized or by any political subdivision thereof, and (y) in the case of
each Bank, net income taxes and franchise taxes imposed on such Bank by the
jurisdiction in which is located the Bank's lending office which makes or books
a particular extension of credit hereunder or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deduction, charges, withholdings
and liabilities being referred to as "Taxes"). If the Guarantor shall be
required by law to deduct any Taxes from or in respect of any sum payable under
this Agreement or any other Loan Document to any Bank or the Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Paragraph 10) such Bank or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Guarantor shall make such deductions, and (iii) the Guarantor shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
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(b) In addition, the Guarantor agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) The Guarantor will indemnify each Bank and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Paragraph 10) paid by such Bank or the Agent (as the case may be) and any
liability (including, without limitation, penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be made
within 30 days from the date such Bank or the Agent (as the case may be) makes
written demand therefor. Guarantor shall have no obligation to make any payments
pursuant to the preceding sentence unless the Agent or such Bank has notified
Guarantor of the existence and amount of the liability for such Taxes or Other
Taxes in writing and in advance of payment to the relevant authority, it being
understood that Guarantor's payment obligation shall not be affected by the
failure of Agent or such Bank to notify Guarantor as specified herein unless as
a consequence of such failure Guarantor has been actually prejudiced.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes, the Guarantor will furnish to the Agent the original or a certified
copy of a receipt evidencing payment thereof. If no Taxes or Other Taxes are
payable in respect of any payment hereunder by the Guarantor through an account
or branch outside the United States or on behalf of the Guarantor by a payor
that is not a United States person, the Guarantor will furnish, or will cause
such payor to furnish, to the Agent a certificate from each appropriate taxing
authority or an opinion of counsel acceptable to the Agent, in either case
stating that such payment is exempt from or not subject to Taxes or Other Taxes.
For purposes of this Paragraph 10(d), the terms "United States" and "United
States person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Without prejudice to the survival of any other agreement
of the Guarantor hereunder, the obligations of the Guarantor contained in this
Paragraph 10 shall survive the payment in full of all other obligations of the
Guarantor under this Agreement and the other Loan Documents, termination of all
commitments to extend credit under the Loan Documents, and all other events and
circumstances whatever. Nothing in this Paragraph 10 or otherwise in this
Agreement shall require the Agent or any Bank to disclose to the Guarantor any
of its tax returns (or any other information that it deems to be confidential or
proprietary).
(f) (i) Each Bank organized under the laws of a jurisdiction
outside the United States shall, on the date such Bank becomes party to the Loan
Agreement, and from time to time thereafter if requested in writing by the
Guarantor or the Agent, provide the Agent and the
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Guarantor with the forms prescribed by the United States Internal Revenue
Service certifying as to such Bank's status for purposes of determining
exemption from, or reduced rate applicable to, United States withholding taxes
with respect to payments to be made to such Bank under this Agreement and the
other Loan Documents; provided, that a Bank shall not be obligated to provide
any such form after the date such Bank becomes party to this Agreement if such
Bank is not legally able to do so.
(ii) The Guarantor shall not be required to indemnify any
Bank, or to pay any additional amounts to any Bank, in respect of United States
withholding taxes (or any withholding tax imposed by a state of the United
States that applies only when such United States withholding tax is imposed),
pursuant to Paragraphs 10(a) or 10(c), to the extent that: (A) the obligation to
withhold amounts with respect to United States withholding tax existed on the
date such Bank became a party to the Loan Agreement; provided, that this clause
(A) shall not apply to a Bank that became a Bank as a result of an assignment
made or other action taken at the request of a Borrower or the Guarantor, or (B)
the obligation to make such indemnification or to pay such additional amounts
would not have arisen but for a failure of such Bank to comply with the
provisions of Paragraph 10(f)(i).
(g) If a Bank or the Agent shall become aware that it is
entitled to claim a refund, credit or reduction in tax from a governmental
agency or authority in respect of Taxes or Other Taxes as to which it has been
indemnified by the Guarantor, or with respect to which the Guarantor has paid
additional amounts, pursuant to this Paragraph 10, it shall promptly notify the
Guarantor of the availability of such refund claim, credit or reduction in tax
and shall, within 30 days after receipt of a request by the Guarantor, make a
claim to such governmental agency or authority for such refund, credit or
reduction in tax, at the Guarantor's expense. If a Bank or the Agent receives a
refund or realizes a credit or reduction in tax in respect of any Taxes or Other
Taxes as to which it has been indemnified by the Guarantor, or with respect to
which the Guarantor has paid additional amounts, pursuant to this Paragraph 10,
it shall promptly after the date of such receipt pay over the amount of such
refund or benefit of such credit or reduction in tax to the Guarantor (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Guarantor under this Paragraph 10 with respect to the Taxes or Other Taxes
giving rise to such refund, credit or reduction in tax and only to the extent
that the Bank has determined that the amount of any such refund, credit or
reduction in tax is directly attributable to payments made under this
Agreement), net of all reasonable expenses of the Bank or the Agent (including
additional Taxes and Other Taxes attributable to such refund, credit or
reduction in tax, as determined by the Bank) and without interest (other than
interest, if any, paid by the relevant governmental agency or authority with
respect to such refund, credit or reduction in tax). The Guarantor shall, upon
demand, pay to such Bank or Agent any amount paid over to the Guarantor by such
Bank or Agent (plus penalties, interest or other charges) in the event such Bank
or the Agent is required to repay any portion of such refund, credit or
reduction in tax to such governmental agency or authority.
9
105
11. PAYMENT; NO SET-OFF. The Guarantor hereby guarantees that
the Guaranteed Obligations for the payment of money will be paid to the Agent
for the benefit of the Agent, the Banks and the Issuing Bank without set-off,
counterclaim or other deduction of any nature, (a) with respect to Revolving
Credit Loans denominated in US Currency, in US Currency at the Agent's Domestic
Office and (b) with respect to Revolving Credit Loans denominated in any Other
Currency, in such Other Currency at the Agent's London Office, in either case in
funds immediately available at such Office.
12. TERMINATION OF GUARANTY. This Guaranty shall terminate
when all Guaranteed Obligations have been paid in full, all commitments to
extend credit under the Loan Agreement have terminated, all Letters of Credit
issued under the Loan Agreement have terminated and all Secured Hedge Agreements
have terminated.
13. FRAUDULENT CONVEYANCE/SOLVENCY. Anything to the contrary
in this Guaranty notwithstanding, at any time when the Guaranteed Obligations
exceed the Adjusted Net Worth of the Guarantor, the maximum liability of the
Guarantor hereunder shall not at any time exceed the greater of (a) the Adjusted
Net Worth of the Guarantor on the Closing Date or (b) the Adjusted Net Worth of
the Guarantor at the earlier of (x) the date of the commencement of a case under
Title 11 of the United States Code involving a Borrower or the Guarantor and (y)
the date enforcement hereunder is sought. "Adjusted Net Worth" of the Guarantor,
as of any date of determination thereof, means 95% of the excess of (x) the
aggregate fair saleable value of the assets of the Guarantor as of such date
determined in accordance with applicable federal and state laws governing
determination of the insolvency of debtors over (y) the amount of all
liabilities of such Guarantor, contingent or otherwise, as of such date,
determined on the basis provided in clause (x) above (but excluding all
potential liabilities under this Guaranty). At any time after the Guaranteed
Obligations are less than the Adjusted Net Worth of the Guarantor, the liability
of the Guarantor shall be limited to the lesser of (a) the amount of Guaranteed
obligations outstanding at such time or (b) the Adjusted Net Worth of the
Guarantor as of the Closing Date.
14. MISCELLANEOUS.
(a) No delay or failure on the part of the Agent, any of the
Banks or the Issuing Bank in exercising any right, remedy, power or privilege
hereunder shall affect such right, remedy, power or privilege, nor shall any
single or partial exercise thereof or any abandonment or discontinuance of steps
to enforce such right, remedy, power or privilege preclude any further exercise
thereof or any other right, remedy, power or privilege The rights and remedies
of the Agent, the Banks and the Issuing Bank hereunder are cumulative and not
exclusive of any rights or remedies which they would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of the Agent,
the Banks or the Issuing Bank or of any breach or default under this Guaranty
must be in writing and shall be effective only to the extent in such writing
specifically set forth.
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(b) Until such time as this Guaranty is terminated pursuant to
Paragraph 12 hereof, this Guaranty shall inure to the benefit of the Agent, the
Banks and the Issuing Bank and their respective successors and assigns and shall
bind the Guarantor and its successors or assigns. The Guarantor shall not assign
all or any part of this Guaranty without the prior written consent of the Agent.
(c) If the Agent obtains a judgment against the Guarantor in
any Other Currency, the obligations of such Guarantor in respect of any sum
adjudged to be due to the Banks, the Agent or the Issuing Bank hereunder or
under the Loan Documents (the "Judgment Amount") shall be discharged only to the
extent that, on the Business Day following receipt by such Bank, the Agent or
the Issuing Bank of the Judgment Amount in such Other Currency, such Bank the
Agent or the Issuing Bank, in accordance with normal banking procedures,
purchases Dollars with the Judgment Amount in such Other Currency. If the amount
of Dollars so purchased is less than the amount of Dollars that could have been
purchased with the Judgment Amount on the date or dates the Judgment Amount
(excluding the portion of the Judgment Amount which has accrued as a result of
the failure of such Guarantor to pay the sum originally due hereunder or under
the Notes when it was originally due hereunder or under the Loan Documents) was
originally due and owing to the Banks, the Agent or the Issuing Bank hereunder
or under the Loan Documents (the "Original Due Date") (the "Loss"), the
Guarantors agree, jointly and severally, as a separate obligation and
notwithstanding any such judgment, to indemnify such Bank, the Agent or the
Issuing Bank, as the case may be, against the Loss, and if the amount of Dollars
so purchased exceeds the amount of Dollars that could have been purchased with
the Judgment Amount on the Original Due Date, such Bank, the Agent or the
Issuing Bank agrees to remit such excess to such Guarantor.
(d) This Guaranty shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Pennsylvania.
(e) The paragraph headings in this Guaranty are for
convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provision hereof.
(f) If any provision of this Guaranty shall for any reason be
held invalid or unenforceable, to the fullest extent permitted by law, such
invalidity or unenforceability shall not affect any other provision hereof, but
this Guaranty shall be construed as if such invalid or unenforceable provision
had never been contained herein.
(g) This Guaranty may be executed in one or more counterparts,
all of which shall constitute but one and the same instrument.
(h) All notices, requests, demands, directions and other
communications (collectively "notices") required or permitted hereunder shall be
made in accordance with Section 9.05 of the Credit Agreement. All notices shall
be sent to the applicable party at the address stated on the first page hereof
or in accordance with the last unrevoked written direction from such party to
the other parties hereto.
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(i) This Guaranty is an amendment and restatement of (and not
a novation of) the Guaranty and Suretyship Agreement dated as of June 1, 1996
(as amended, modified or supplemented from time to time, the "Original
Agreement") (without any discharge, release or satisfaction of the Original
Agreement or any indebtedness or obligations thereunder).
IN WITNESS WHEREOF, the parties hereto have caused this
Guaranty to be duly executed and delivered on this __ day of August 1998.
Attest: [SUBSIDIARY GUARANTOR], as
Guarantor
______________________________ By_______________________________
Name: Name:
Title:
[CORPORATE SEAL]
MELLON BANK, N.A., as Agent
By_____________________________
Name:
Title:
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108
EXHIBIT C
TO
CREDIT AGREEMENT
FORMS OF OPINION
1. Each of the Borrower Parties is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of the Borrower Parties is duly qualified to
do business as a foreign corporation and in good standing in all jurisdictions
in which the ownership of its properties or the nature of its respective
activities or both makes such qualification necessary, except to the extent that
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect.
2. Each of the Borrower Parties has all requisite corporate
power and authority to own and operate its properties and to carry on its
business as now conducted and as presently planned to be conducted. Each of the
Borrowers has the corporate power and authority to execute and deliver the
Agreement and to perform its obligations thereunder. Each of the Borrowers has
the corporate power and authority to make the borrowings provided for in the
Agreement, to execute and deliver the Notes in evidence of such borrowings and
to perform its obligations hereunder. Each of the Borrower Parties has the
corporate power and authority to execute and deliver the Security Documents and
any other Loan Document to which it is a party and to perform its obligations
thereunder. All such action has been duly and validly authorized by all
necessary corporate proceedings by each of the Borrower Parties.
3. The Agreement, the Notes, the Security Documents and any
other Loan Document to which any of the Borrower Parties is a party have been
duly and validly executed and delivered by such Borrower Parties and constitute
legal, valid and binding obligations of such Borrower Parties enforceable in
accordance with their respective terms, except as the enforceability of such
documents may be limited by bankruptcy, insolvency or other similar laws of
general application affecting the enforcement of creditors' rights or by general
principles of equity limiting the availability of equitable remedies.
4. No authorization, consent, approval, license, exemption or
other action by, and no registration, qualification, designation, declaration or
filing with, any Official Body is or will be necessary or advisable in
connection with the execution and delivery of the Agreement, the Notes, the
Security Documents or any other Loan Document, consummation of the transactions
therein contemplated or performance of or compliance with the terms and
conditions thereof.
5. No Borrower is an "investment company" or a company
"controlled" by an investment company within the meaning of the Investment
Company Act of 1940, as amended.
6. Neither the execution and delivery of the Agreement, the
Notes, the Security Documents or any other Loan Document, nor consummation of
the transactions therein contemplated nor performance of or compliance with the
terms and conditions thereof will (a) violate any Law, (b) conflict with or
result in a breach of or a default under the articles of incorporation or bylaws
of any Borrower Party or any agreement or instrument to which any Borrower Party
is a party or by which any of them or any of their respective properties (now
owned or hereafter acquired) may be subject or bound or (c) result in the
creation or imposition of any Lien upon any property (now owned or hereafter
acquired) of any Borrower Party.
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7. Except as set forth in the financial statements referred to
in Section 3.06 of the Agreement, to our knowledge there is no pending or
threatened proceeding by or before any Official Body against or affecting any of
the Borrower Parties which, individually or in the aggregate, could be could be
reasonably expected to have a Material Adverse Effect.
8. The choice by SFNBV of the laws of the Commonwealth of
Pennsylvania, U.S.A., to govern the Agreement, the Notes, the Security Documents
and any other Loan Document is legal, valid and binding under the laws of The
Netherlands. The provisions of the Agreement, the Notes, the Security Documents
and any other Loan Document regarding SFNBV's submission to jurisdiction and
venue and regarding the appointment of an agent for service of process are valid
and effective under the laws of The Netherlands. In the event a final judgment
of any Pennsylvania state or Federal court for the payment of money is rendered
against SFNBV under the Agreement, the Notes, the Security Documents or any
other Loan Documents, the Courts of The Netherlands would regard such judgment
as conclusive and such judgment would be enforced by the courts of The
Netherlands without a further review on the merits.
9. There are no requirements of any laws or regulations of The
Netherlands with respect to the availability and transfer of US Currency or any
Other Currency that must be met in order for SFNBV to make required payments
under the Agreement, the Notes, the Security Documents or any other Loan
Document.
10. None of the Agreement, the Notes, the Security Documents
or any other Loan Document, nor any payments required to be made by SFNBV under
or in connection with the Agreement, the Notes, the Security Documents or any
other Loan Document, whether in the form of principal, interest, fees or any
other form, is subject to any Netherlands tax, withholding, or other similar
deductions. No stamp, duties or other similar taxes are payable under the laws
of The Netherlands in respect of the Agreement, the Notes, the Security
Documents or any other Loan Documents or in respect of the enforcement thereof,
and the holders of the Revolving Credit Notes and any other Loan Document will
not incur or become liable for any transfer or other like taxes under the laws
of The Netherlands by reason of the acquisition, ownership, transfer, or other
disposition of the Revolving Credit Notes or any other Loan Document.
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110
EXHIBIT D
TO
CREDIT AGREEMENT
TRANSFER SUPPLEMENT
THIS TRANSFER SUPPLEMENT, dated as of the date specified in
Item 1 of Schedule I hereto, among the Transferor Bank specified in Item 2 of
Schedule I hereto (the "Transferor Bank"), each Purchasing Bank specified in
Item 3 of Schedule I hereto (each a "Purchasing Bank") and MELLON BANK, N.A., as
Agent for the Banks and the Issuing Bank under the Credit Agreement described
below.
Recitals:
A. This Transfer Supplement is being executed and delivered in
accordance with Section 9.12(c) of the Revolving Credit Agreement, dated as of
August 6, 1998, by and among Sylvan Inc., a Nevada corporation (the "Company"),
Sylvan Foods (Netherlands) B.V., a Dutch corporation ("SFNBV") (the Company and
SFNBV being referred to collectively as the "Borrowers"), the Banks party
thereto from time to time, the Issuing Bank named therein, and Mellon Bank,
N.A., as Agent for the Banks and the Issuing Bank (as the same may be amended,
modified or supplemented from time to time, the "Credit Agreement"). Capitalized
terms used herein without definition have the meaning specified in the Credit
Agreement.
B. Each Purchasing Bank (if it is not already a Bank) wishes
to become a Bank party to the Credit Agreement.
C. The Transferor Bank is selling and assigning to each
Purchasing Bank, and each Purchasing Bank is purchasing and assuming, a certain
portion of the Transferor Bank's rights and obligations under the Credit
Agreement, including, without limitation, the Transferor Bank's Revolving Credit
Commitment and Loans owing to it and any Revolving Credit Note held by it (the
"Transferor Bank's Interests").
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. TRANSFER EFFECTIVE NOTICE. Upon receipt by the Agent of
seven counterparts of this Transfer Supplement (to each of which is attached a
fully completed Schedule I and Schedule II), and each of which has been executed
by the Transferor Bank, by each Purchasing Bank and by any other Person required
by Section 9.12(c) of the Credit Agreement to execute this Transfer Supplement,
the Agent will transmit to each Borrower, the Transferor Bank and each
Purchasing Bank a transfer effective notice, substantially in the form of
Schedule III to this Transfer Supplement (a "Transfer Effective Notice"). The
date specified in such Transfer Effective Notice as the date on which the
transfer effected by this Transfer Supplement shall become effective (the
"Transfer Effective Date") shall be the fifth Business Day following the date of
such Transfer Effective Notice or such other date as shall be agreed upon among
the Transferor Bank, the Purchasing Bank, the Agent and the Borrowers. From and
after the close of business at the Agent's Office on the Transfer Effective Date
each Purchasing Bank (if not already a Bank party to the Credit Agreement) shall
be a Bank party to the Credit Agreement for all purposes thereof having the
respective interests in the Transferor Bank's Interest reflected in this
Transfer Supplement.
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2. PURCHASE PRICE; SALE. At or before 12:00 Noon, local time
at the Transferor Bank's office specified in Schedule III, on the Transfer
Effective Date, each Purchasing Bank shall pay to the Transferor Bank, in
immediately available funds, an amount equal to the purchase price, as agreed
between the Transferor Bank and such Purchasing Bank (the "Purchase Price"), of
the portion being purchased by such Purchasing Bank (such Purchasing Bank's
"Purchased Percentage") of the Transferor Bank's Interest. Effective upon
receipt by the Transferor Bank of the Purchase Price from a Purchasing Bank, the
Transferor Bank hereby irrevocably sells, assigns and transfers to such
Purchasing Bank, without recourse, representation or warranty (express or
implied) except as set forth in Section 6 hereof, and each Purchasing Bank
hereby irrevocably purchases, takes and assumes from the Transferor Bank such
Purchasing Bank's Purchased Percentage of the Transferor Bank's Interest. The
Transferor Bank shall promptly notify the Agent of the receipt of the Purchase
Price from a Purchasing Bank ("Purchase Price Receipt Notice"). Upon receipt by
the Agent of such Purchase Price Receipt Notice, the Agent shall record in the
Register the information with respect to such sale and purchase as contemplated
by Section 9.12(d) of the Credit Agreement.
3. PRINCIPAL, INTEREST AND FEES. All principal payments,
interest, fees and other amounts that would otherwise be payable from and after
the Transfer Effective Date to or for the account of the Transferor Bank in
respect of the Transferor Bank's Interest shall, instead, be payable to or for
the account of the Transferor Bank and the Purchasing Banks, as the case may be,
in accordance with their respective interests as reflected in this Transfer
Supplement.
4. CLOSING DOCUMENTS. Concurrently with the execution and
delivery hereof, the Transferor Bank will request that the Borrower provide to
each Purchasing Bank (if it is not already a Bank party to the Credit Agreement)
conformed copies of all documents delivered to such Transferor Bank on the
Closing Date in satisfaction of conditions precedent set forth in the Credit
Agreement.
5. FURTHER ASSURANCES. Each of the parties to this Transfer
Supplement agrees that at any time and from time to time upon the written
request of any other party, it will execute and deliver such further documents
and do such further acts and things as such other party may reasonably request
in order to effect the purposes of this Transfer Supplement.
6. CERTAIN REPRESENTATIONS AND AGREEMENTS. By executing and
delivering this Transfer Supplement, the Transferor Bank and each Purchasing
Bank confirm to and agree with each other and the Agent and the Banks as
follows:
(a) Other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned hereby free
and clear of any adverse claim, the Transferor Bank makes no
representation or warranty and assumes no responsibility with
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112
respect to (i) the execution, delivery, effectiveness, enforceability,
genuineness, validity or adequacy of the Credit Agreement, any Note or
any Security Document, (ii) any recital, representation, warranty,
document, certificate, report or statement in, provided for in, received
under or in connection with, the Credit Agreement, any Note or any
Security Document, or (iv) the existence, validity, enforceability,
perfection, recordation, priority, adequacy or value, now or hereafter,
of any Lien or other direct or indirect security afforded or purported
to be afforded by any of the Security Documents or otherwise from time
to time.
(b) The Transferor Bank makes no representation or warranty
and assumes no responsibility with respect to (i) the performance or
observance of any of the terms or conditions of the Credit Agreement,
any Note or any Security Document on the part of the Company, any
Borrower or any other Person, (ii) the business, operations, condition
(financial or otherwise) or prospects of the Company, any Borrower or
any other Person, or (iii) the existence of any Event of Default or
Potential Default.
(c) Each Purchasing Bank confirms that it has received a copy
of the Credit Agreement, each Note and each of the other Loan Documents,
together with copies of the financial statements referred to in Section
3.06 thereof, the most recent financial statements delivered pursuant to
Section 5.01 thereof, if any, and such other documents and information
as it has deemed appropriate to make its own credit and legal analysis
and decision to enter into this Transfer Supplement. Each Purchasing
Bank confirms that it has made such analysis and decision independently
and without reliance upon the Agent, the Transferor Bank or any other
Bank.
(d) Each Purchasing Bank, independently and without reliance
upon the Agent, the Transferor Bank or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, will
make its own decisions to take or not take action under or in connection
with the Credit Agreement, any Note or any Security Document.
(e) Each Purchasing Bank irrevocably appoints the Agent to act
as Agent for such Purchasing Bank under the Agreement and the Security
Documents, all in accordance with Article IX of the Credit Agreement and
the other provisions of the Credit Agreement and the Security Documents.
(f) Each Purchasing Bank agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
the Credit Agreement and the Security Documents are required to be
performed by it as a Bank.
7. SCHEDULE II. Schedule II hereto sets forth the revised
Commitment Amount of the Transferor Bank and each Purchasing Bank as well as
administrative information with respect to each Purchasing Bank.
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113
8. GOVERNING LAW. This Transfer Supplement shall be governed
by, construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania, without regard to principles of choice of law.
9. COUNTERPARTS. This Transfer Supplement may be executed on
any number of counterparts and by the different parties hereto on separate
counterparts each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Transfer Supplement to be executed by their respective duly authorized officers
on Schedule I hereto as of the date set forth in Item 1 of Schedule I hereto.
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114
EXHIBIT E-1
TO
CREDIT AGREEMENT
FORM OF MELLON LETTER OF CREDIT DOCUMENTATION
115
Letter of Credit Agreement [MELLON BANK LOGO]
Trade Banking Operations
3 Mellon Bank Center, Room 2329
Xxxxxxxxxx, XX 00000-0000
================================================================================
TO: Mellon Bank N.A. ("Mellon")
In consideration of Mellon's issuing, for the account of Applicant (as defined
below), one or more letters of credit (each, a "Credit") or one or more
amendments to a Credit (each, an "Amendment"), Applicant agrees with Mellon,
intending to be legally bound, that the following terms and conditions shall
apply to each Credit and Amendment issued by Mellon:
================================================================================
A. GENERAL TERMS AND CONDITIONS APPLICABLE TO ALL CREDITS AND AMENDMENTS
--------------------------------------------------------------------------------
1. APPLICATION FOR THE ISSUANCE OF CREDITS; AMENDMENTS
--------------------------------------------------------------------------------
(a) Applicant shall request the issuance of a Credit or an Amendment by
completing Mellon's then current form for such purpose or by any other means
permitted by Mellon's then current procedures (each such request, an
"Application"). Each Application shall constitute a certification by Applicant
that any representation, warranty or commitment made by Applicant in this Letter
of Credit Agreement (together with any future modifications or extensions, this
"Agreement") is true and correct as of the date of such Application. Upon
Mellon's receipt of an Application, Mellon may elect but shall not be required
to issue a Credit (or an Amendment, as the case may be) in response thereto.
Applicant agrees that if Applicant desires to make an Application by other
means, such as microcomputer transmission, it may be necessary for Applicant to
execute one or more additional agreements, and any such agreement shall become
part of this Agreement.
(b) Applicant may, from time to time, request that Mellon issue a Credit for one
or more of Applicant's subsidiaries or affiliates (each, an "Additional
Applicant"). In connection with any such request, Applicant agrees to furnish
Mellon with such information as Mellon may require concerning such Additional
Applicant and to execute and cause to be executed such additional documents or
agreements as Mellon may require. Applicant agrees that it shall be jointly and
severally liable with any Additional Applicant for all obligations and
liabilities under this Agreement and any Credit issued for the account of such
Additional Applicant.
--------------------------------------------------------------------------------
2. APPLICANT'S PAYMENT OBLIGATIONS
--------------------------------------------------------------------------------
(a) Applicant agrees to pay Mellon on demand and in same day funds at Mellon's
principal office in Pittsburgh, Pennsylvania (or at such other place as Mellon
may designate):
(i) the U.S. Dollar Equivalent of each payment made by Mellon under any Credit;
and
(ii) a commission for each Credit issued by Mellon at such rate as Applicant and
Mellon mutually agree, and any and all expenses, obligations or charges paid or
incurred by Mellon (or any other financial institution with which Mellon deals
with respect to a Credit) in connection with any Credit and this Agreement.
(b) All payments to which Mellon is entitled pursuant to this Section 2 shall be
made to Mellon free and clear of and without deduction for any present or future
taxes (except taxes on Mellon's net income), exchange regulation charges or
other levies, deductions or withholdings of any kind.
(c) All payments to which Mellon is entitled pursuant to this Agreement shall be
made by Applicant in United States currency, unless Applicant and Mellon
otherwise mutually agree in advance.
(d) If any amounts payable to Mellon pursuant to this Agreement are not paid
when due, such amounts shall bear interest at the rate Mellon then charges for
delinquent payments. Mellon shall have the right to demand payment reasonably in
advance of any draw or payment demand under a Credit, and such payment shall be
due on demand.
--------------------------------------------------------------------------------
3. EXAMINATION OF CREDITS, INSTRUMENTS AND DOCUMENTS; DISCREPANCIES
--------------------------------------------------------------------------------
(a) Applicant will promptly examine a copy of each Credit and any Amendment sent
to Applicant by Mellon and Applicant will, within one Business Day of
Applicant's receipt thereof, notify Mellon by telecommunication of any
discrepancy, irregularity or claim of non-compliance with Applicant's
instructions, as set forth in the appropriate Application. Applicant will be
conclusively deemed to have waived any such claim against Mellon in connection
with any Credit or Amendment unless Applicant notifies Mellon in accordance with
the preceding sentence.
(b) In the event Mellon notifies Applicant of any discrepancy between any
instrument or document presented under any Credit and the requirements of such
Credit and, in the exercise of Mellon's sole discretion, asks Applicant whether
it will accept such discrepancy, Applicant will, within one Business Day after
Applicant's receipt of such notice (or such shorter interval as circumstances
may require and Mellon shall advise Applicant), notify Mellon by
telecommunication whether or not Applicant accepts the same. Applicant will be
conclusively deemed to have waived any claim of improper honor or dishonor of
any Credit unless Applicant notifies Mellon in accordance with the preceding
sentence.
--------------------------------------------------------------------------------
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116
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4. GENERAL INSTRUCTIONS
--------------------------------------------------------------------------------
Except as written instructions expressly to the contrary have been given to
Mellon by Applicant in any Application that has been accepted by Mellon,
Applicant agrees that (i) any advice of the issuance of a Credit or an Amendment
may, at Mellon's option, be sent either to the named beneficiary under a Credit
(a "Beneficiary") or to any advising bank (which may include any of Mellon's
affiliates); (ii) drafts under any Credit may, at the drawer's option, be drawn
"without recourse"; (iii) Mellon may accept or pay, as complying with the terms
of any Credit, any draft, payment demand or other document otherwise in order
that is signed or issued by the purported administrator, executor, trustee in
bankruptcy, debtor in possession, assignee for the benefit of a creditor,
liquidator, receiver, successor, legal representative or other party that Mellon
reasonably determines is the de facto or de jure successor to the powers, rights
or privileges of the party who is authorized under the Credit to draw or issue
such draft, payment demand or other document; and (iv) Mellon and any other
financial institution with which Mellon deals with respect to a Credit may
accept documents of any character that comply with the provisions of the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, and any subsequent revisions thereof
(the "UCP"). In addition, Applicant agrees that Mellon may, in its sole
discretion, give notice, in accordance with the terms of the Credit, of non-
renewal or termination to any Beneficiary of a Credit that contains an automatic
renewal provision.
--------------------------------------------------------------------------------
5. RESPONSIBILITIES AND LIMITATIONS THEREON
--------------------------------------------------------------------------------
(a) Applicant agrees that Mellon shall not be responsible for, and Applicant's
obligation to pay or reimburse Mellon shall not be affected by (i) acts or
omissions of any other financial institution with which Mellon deals with
respect to a Credit, or any Beneficiary or transferee of any Credit; (ii) the
validity, sufficiency, genuineness or collectibility of any documents or
instruments, or of any endorsements thereon; (iii) any breach of contract
between Applicant and any Beneficiary or any other party, or the use which may
be made of any Credit or funds obtained thereunder; (iv) the consequences of
compliance with laws, orders or regulations in effect in places of negotiation
or payment of any Credit; or (v) any failure of drafts or other payment demands
to bear reference or adequate reference to any Credit; of documents to accompany
drafts at negotiation, or, if so required by any Credit, to forward documents
separately from any drafts or payment demand; of negotiating or paying banks to
comply with Mellon's directions; of any party to surrender or take up any
Credit; or of any act or omission not done or omitted in bad faith. (b) Mellon
shall have no duty to inquire into: (i) the existence of any disputes or
controversies between Applicant and any Beneficiary or any other person, or (ii)
the truth, accuracy or occurrence of any fact or event referred to in any
certificate, document or instrument presented under or in connection with any
Credit. Mellon's sole obligation shall be limited to honoring requests for
payment made under and in compliance with any Credit notwithstanding: (A) any
assistance which Mellon may have rendered in connection with the preparation of
the wording of the Credit or any certificate, document or instrument required to
be presented thereunder; or (B) any awareness or knowledge Mellon may have
concerning any transaction relating to any Credit. Mellon shall have no duty to
determine or control or otherwise monitor the distribution or beneficial use of
the proceeds of any draw on any Credit, or to take any action with respect to
the Beneficiary for any breach of warranty claim.
--------------------------------------------------------------------------------
6. REPRESENTATIONS AND WARRANTIES; COVENANTS
--------------------------------------------------------------------------------
(a) REPRESENTATIONS AND WARRANTIES. Applicant represents and warrants to Mellon
as of the effective date of this Agreement and as of the date of each
Application, that:
(i) Applicant is an entity of the type set forth next to its signature, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and duly qualified to do business in those
jurisdictions in which its ownership of property or the nature of its business
activities makes such qualification necessary.
(ii) Applicant has the requisite power and authority to execute and deliver this
Agreement and to perform its obligations hereunder; and all such action has been
duly authorized by all necessary proceedings on Applicant's part.
(iii) Applicant has furnished to Mellon copies of Applicant's most recent
financial statements, which fairly represent Applicant's financial position as
of the date of such statements and the results of its operations and cash flows
for its fiscal period then ended, in conformity with generally accepted
accounting principles. Since the date of such financial statements, (A) there
has been no material adverse change in Applicant's financial condition or
business; and (B) except as set forth in said financial statements, there is no
litigation or governmental proceeding by or against Applicant pending or, to
Applicant's knowledge, threatened, that is likely to have a material adverse
effect on Applicant's financial condition or business.
(iv) The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms and provisions
hereof will not conflict with or result in a breach of any of the terms of any
law or agreement or instrument to which Applicant is a party or by which
Applicant is bound, or constitute a default thereunder. No authorization,
consent, or other action by, and no registration or filing with, any official
body is or will be necessary or advisable in connection with Applicant's
execution, delivery or performance of this Agreement.
(v) This Agreement has been duly and validly executed and delivered by Applicant
and constitutes Applicant's legal, valid and binding obligation, enforceable in
accordance with its terms except, as to the enforcement of remedies, for
limitations imposed by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally or
by laws limiting the right of specific performance.
(b) COVENANTS. Applicant covenants to Mellon as follows:
(i) Promptly upon its becoming available to Applicant, Applicant will deliver to
Mellon all financial and other information Mellon may request.
(ii) Applicant will: (A) maintain its existence and rights in full force and
effect; (B) preserve, renew and keep in full force and effect the franchises,
licenses and rights necessary for the conduct of its business; and (C) qualify
and remain qualified to do business in each jurisdiction in which failure to
have or retain such qualification would have a material adverse effect on its
financial condition or business.
(iii) Applicant will comply with all applicable laws, regulations and orders.
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117
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7. SET OFF AND RIGHT TO DEMAND COLLATERAL
--------------------------------------------------------------------------------
(a) Applicant's obligations and liability to Mellon and Mellon's claims of every
nature against Applicant arising under this Agreement or any Credit, whether now
or hereafter existing, are hereafter called Applicant's Obligations.
(b) Applicant grants Mellon a continuing lien and security interest for the
amount of Applicant's Obligations upon any and all property in which Applicant
has an interest that is now or hereafter in Mellon's actual or constructive
possession. Applicant also grants Mellon a continuing lien and right of setoff
for the amount of Applicant's Obligations on Applicant's deposits (general or
special) and credits with, and Applicant's claims against, Mellon at any time.
In addition, Applicant agrees that, at any time and from time to time upon
Mellon's demand, Applicant shall deliver and transfer to Mellon such collateral
or additional collateral as Mellon may require to secure Applicant's Obligations
to Mellon, and shall execute and deliver such documents and instruments, and do
such other things, as may be required in order for Mellon to have a valid first
priority security interest in such collateral.
--------------------------------------------------------------------------------
8. DEFAULT
--------------------------------------------------------------------------------
If Applicant fails to perform any of Applicant's Obligations, or as required
under any other agreement with Mellon, or if any of the following shall occur
(each such failure or occurrence, a "Default"): any final unappealable judgment
in a material amount shall be entered against Applicant; Applicant shall default
(beyond any grace or cure period) in the performance of any material obligation
to another party; any proceeding, suit or action for reorganization, dissolution
or liquidation shall be commenced by or against Applicant; Applicant's usual
business activity shall be suspended voluntarily or involuntarily, or
Applicant's business shall be liquidated; Applicant shall become insolvent as
defined under any applicable law; a petition under any of the provisions of any
applicable bankruptcy or insolvency law shall be filed by or against Applicant;
Applicant shall make any material misrepresentation to Mellon; or Applicant's
condition or affairs shall so change that Mellon deems its security to be
impaired, credit risk increased, or otherwise deems itself to be insecure; then,
in any such event, all of Applicant's Obligations, even if not yet due, shall,
without notice or demand, become and be immediately due and payable without
notice of any kind, notwithstanding any notice or grace period otherwise allowed
under any instrument evidencing Applicant's Obligations.
--------------------------------------------------------------------------------
9. INDEMNITY
--------------------------------------------------------------------------------
Applicant agrees to indemnify and hold Mellon harmless from and against any and
all claims, losses, liabilities and expenses (including reasonable attorneys'
fees, which may include internal time charges of counsel employed by Mellon)
resulting from or incurred in connection with this Agreement or any Credit and
not involving Mellon's bad faith.
--------------------------------------------------------------------------------
10. INCREASED COSTS
--------------------------------------------------------------------------------
If any law, regulation or order, any change in any of the same or any
interpretation thereof by any court or administrative or governmental authority,
or any change in generally accepted accounting principles applicable to Mellon
shall, with respect to this Agreement, any Credit or related document: (i)
impose, modify or make applicable any reserve, capital, special deposit or
similar requirement, (ii) impose on Mellon any other condition; or (iii) subject
Mellon to any tax, charge, fee, deduction or withholding of any kind whatsoever,
and the result of any such event or any similar measure shall be to increase the
cost to Mellon of issuing or maintaining any Credit or reduce the amount of
principal of, interest on, or any fee or compensation receivable by Mellon, then
Applicant shall promptly pay to Mellon, on demand, all additional amounts
necessary to compensate Mellon for such increased costs. Mellon's calculation of
such increased costs shall show the manner of calculation and shall be
conclusive (absent manifest error) as to the amount thereof.
--------------------------------------------------------------------------------
11. MISCELLANEOUS
--------------------------------------------------------------------------------
(a) Applicant shall furnish Mellon with a list of persons authorized to act for
Applicant in connection with this Agreement and any Application, Credit or
Amendment. Mellon shall be authorized and entitled to rely on any Application
and any other communication, message or conversation, received or purporting to
be received from any such persons or any other person reasonably believed by
Mellon to be duly authorized to act for Applicant.
(b) Applicant will not assign any of its rights or obligations under this
Agreement without Mellon's prior written consent.
(c) This Agreement shall continue in full force and effect as to all Credits
which Mellon may issue for Applicant's account. This Agreement is not a
commitment to issue any one or more Credits, and notwithstanding anything to the
contrary herein, Mellon shall be entitled to refuse to issue any Credit in
Mellon's complete discretion.
(d) No reasonable delay on Mellon's part in exercising any power or right
hereunder shall operate as a waiver of any power or right, and no single or
partial exercise of any power or right hereunder shall preclude any other or
further exercise thereof or the exercise of any other power or right. The rights
and remedies expressed herein are cumulative and not exclusive of any other
rights or remedies which Mellon or Mellon's assigns may otherwise have.
(e) Notice given by one party to the other in connection with this Agreement or
any Credit shall be in writing and be effective when received by the party
intended to receive such notice at, in the case of the Applicant, the address
set forth under its signature hereto, and, in the case of Mellon, the address
set forth at the head of this Agreement. Either party may change its address for
notice by a notice given in accordance herewith.
(f) Except and to the extent inconsistent with the specific provisions hereof,
this Agreement, each Credit hereunder and all transactions in connection
herewith and therewith shall be interpreted, construed and enforced according to
(i) the UCP, and, (ii) to the extent not inconsistent, the laws of the
Commonwealth of Pennsylvania, including, without limitation, the Uniform
Commercial Code.
(g) Applicant irrevocably submits in any legal proceeding relating to this
Agreement or any Application or Credit to the non-exclusive in personam
jurisdiction of any court sitting in the Commonwealth of Pennsylvania and agrees
to suit being brought in any such court and waives any objection to the venue of
any proceeding in any such court. Applicant further consents to being joined in
any legal proceeding brought against Mellon concerning any Credit issued for
Applicant's account and accepts the jurisdiction and venue of any court where
such proceeding is instituted.
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3
118
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12. CERTAIN DEFINITIONS AND CONSTRUCTION
--------------------------------------------------------------------------------
(a) The term "Applicant" shall be deemed to refer to the undersigned, and the
term "Mellon" shall be deemed to refer to Mellon Bank, N.A., its successors and
assigns.
(b) Unless the context requires otherwise, the term "Credit" shall be deemed to
include any Amendments thereto.
(c) Each Application accepted by Mellon shall merge into and become a part of
this Agreement.
(d) "Business Day" shall mean any day on which banks are not authorized or
required to be closed for business in Pittsburgh, Pennsylvania.
(e) "U.S. Dollar Equivalent" shall mean, with respect to an amount in any
currency other than U.S. dollars, as of any date, the amount of U.S. dollars
into which such amount in such currency may be converted at the spot rate at
which U.S. dollars are offered by Mellon in Pittsburgh for such currency at
approximately 11:00 A.M., Pittsburgh time, on such date.
================================================================================
B. Trade Credits
--------------------------------------------------------------------------------
Applicant agrees that, in addition to the foregoing, the following terms and
conditions shall apply to any Credit issued by Mellon and designated by Mellon
as a Trade or Commercial Credit (each, a "Trade Credit").
--------------------------------------------------------------------------------
1. INSURANCE
--------------------------------------------------------------------------------
Applicant will keep all property shipped in connection with any Trade Credit
insured in amounts, against risks and with insurers satisfactory to Mellon and,
at Mellon's option, assign the policies or certificates of such insurance to
Mellon or make loss payable to Mellon, and furnish Mellon on request with
evidence of compliance with the foregoing. If Mellon at any time and in
connection with any Trade Credit deems such insurance inadequate, Mellon may
procure additional insurance at Applicant's expense.
--------------------------------------------------------------------------------
2. COMPLIANCE WITH LEGAL REQUIREMENTS
--------------------------------------------------------------------------------
Applicant will procure all licenses and comply with all formalities necessary
for the import, export and shipping of any property, and shall comply with all
applicable domestic and foreign laws, regulations and orders (including those
relating to currency exchange) in connection with any Trade Credit; and, upon
Mellon's request, Applicant will promptly furnish Mellon with such evidence of
compliance as Mellon may require. Applicant hereby certifies and warrants to
Mellon that transactions with respect to any property shipped in connection with
any Credit are not prohibited under any United States or foreign law, regulation
or order and that any shipment covered by any Credit or any documents required
thereunder shall fully conform to all existing United States and foreign laws,
regulations and orders.
--------------------------------------------------------------------------------
3. SECURITY
--------------------------------------------------------------------------------
Applicant hereby grants Mellon a security interest in and recognizes and admits
Mellon's unqualified right to the possession and disposition of any and all
property shipped under or pursuant to or in connection with any Trade Credit or
in any way relative thereto, and in and to all shipping documents, warehouse
receipts, policies or certificates of insurance and other documents or
instruments accompanying or relative to drafts or payment demands and in and to
the proceeds to each of the foregoing, all to be held by Mellon subject to the
terms of this Agreement as collateral security for the prompt and unconditional
payment of any and every of Applicant's Obligations.
--------------------------------------------------------------------------------
4. DELIVERIES UNDER TRUST RECEIPTS
--------------------------------------------------------------------------------
In addition to, and not in limitation of, the provisions of Section 3 of this
part B: (a) If Mellon, at Applicant's request and Mellon's discretion, delivers
to Applicant or Applicant's agent all or some of the goods or documents referred
to in or shipped in connection with any Trade Credit before full payment of all
Applicant's Obligations with respect thereto, Applicant agrees to hold any goods
so received in trust for Mellon, readily identifiable and stored separately and
intact under separate accounting, as Mellon's property, and to execute and
deliver to Mellon such trust receipts, security or other agreements and
financing statements, and to carry such insurance covering such goods or
documents (and to furnish such evidence of the same), as Mellon may request, and
to pay all costs and expenses incurred by Mellon (including reasonable
attorneys' fees) in connection with the same. Mellon's rights specified herein
shall be in addition to Mellon's rights under any applicable law or other
agreement.
(b) If Mellon, at Applicant's request and in Mellon's discretion, delivers to
Applicant or Applicant's agent all or some of the goods or documents referred to
in or shipped in connection with any Trade Credit before Mellon accepts, pays or
incurs a deferred payment obligation with respect to any of the related draft(s)
or demand(s) for payment, or if Mellon agrees to expedite the delivery of goods
prior to the arrival of the pertinent documents, Applicant authorizes Mellon to
accept and pay such draft(s) or demand(s) notwithstanding any discrepancies that
may arise in relation thereto.
--------------------------------------------------------------------------------
4
119
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5. MISCELLANEOUS
--------------------------------------------------------------------------------
(a) Partial shipments may be made under any Trade Credit and Mellon may honor
the related draft or payment demand without inquiry, regardless of any apparent
disproportion between the quantity shipped and the amount of the related draft
or payment demand, and the total amount of the Credit and total quantity to be
shipped under the Credit.
(b) Mellon and any other financial institution with which Mellon deals with
respect to a Credit may receive and accept as a transport document under any
Trade Credit any document issued or purporting to be issued by or on behalf of
any carrier which acknowledges receipt of property for transportation, whatever
the specific provisions of such document.
(c) Neither Mellon nor any other financial institution with which Mellon deals
with respect to a Credit shall be responsible for, and Applicant's obligation to
pay or reimburse Mellon shall not be affected by: (i) the existence, character,
nature, quality, quantity, condition, packing, value or delivery of goods
purporting to be represented by documents, or any difference of goods from that
expressed in documents; (ii) any irregularity in connection with shipment,
including, without limitation, any actual or alleged default or fraud by the
shipper or others, the time, place, manner or order of shipment, non-shipment of
goods or partial or incomplete shipments, failure to arrive or delay in arrival
of goods or documents, or failure to give notice of shipment or arrival of goods
or documents; or (iii) consequences of compliance with laws, regulations, orders
or customs requirements in effect in places of negotiation or payment of any
Trade Credit.
IN WITNESS WHEREOF, Applicant has duly executed this Agreement as of the date
below.
------------------------------------------------------------------------------------------------------------------------------------
[Correspondent Bank Name] [Customer Name]
By: By:
------------------------------------------------------------------------------------------------------------------------------------
(Signature) (Signature)
Name: Name:
------------------------------------------------------------------------------------------------------------------------------------
Title: Title:
------------------------------------------------------------------------------------------------------------------------------------
Effective Date:
--------------------------------------------
Type of Entity and Jurisdiction
of Organization:
-------------------------------------------
Address for Notice: Address for Notice:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FX-0079 (Rev.) 7/94 PD 8/94 5 Mellon Bank, N.A.
120
Application for Documentary Letter of Credit [LOGO] MELLON BANK
Mellon Bank, N.A. Phone: (000) 000-0000
Trade Banking Operations or (000) 000-0000
________________________________________________________ 0 Xxxxxx Xxxx Xxxxxx, Xxxx 0000 FAX: (000) 000-0000
Application Date: L/C Number (for Bank Use Only): Xxxxxxxxxx, XX 00000-0000
___________________|_______________________________________________________________________________________________________
Please issue an irrevocable Letter of Credit as set forth below:
Forward the Letter of Credit to your correspondent for delivery to the beneficiary by: (indicate one)
/ / Full Cable/Telex or other teletransmission / / Courier / / Airmail (domestic delivery)
___________________________________________________________________________________________________________________________
Applicant (Name & Complete Address) Beneficiary (Name & Complete Address)
____________________________________________________________|______________________________________________________________
Advising Bank (Name & Complete Address) Expiry Date
|______________________________________________________________
Place of Expiry
|______________________________________________________________
___________________________________________________________________________________________________________________________
Currency:
/ / USD / / Other (specify) ________________ / / Amount _________________________
___________________________________________________________________________________________________________________________
Amount (+/- Options)
/ / About (+/- 10%) / / +/- _______________% / / +/- Amount _____________________
___________________________________________________________________________________________________________________________
Payment at/by / / Sight (draft drawn on Mellon / / Acceptance (draft drawn on / / Deferred Payment
Bank or confirming bank) OR Mellon Bank or confirming bank) OR (no draft required)
___________________________________________________________________________________________________________________________
Tenor (required for acceptance and deferred payment)
/ / ______ Days Sight / / ______ Days After Shipment Date / / Other (specify)
___________________________________________________________________________________________________________________________
Partial Shipments: Transhipment: Latest Shipment Date Earliest Shipment Date
/ / Not Permitted / / Not Permitted
________________________________________________________|__________________________________|_______________________________
Place of Receipt (multi-modal) Port/Airport of Loading
______________________________________________________________________|____________________________________________________
Port/Airport of Discharge Place of Delivery (multi-modal)
______________________________________________________________________|____________________________________________________
Shipping Terms (INCOTERMS 1990)
/ / FOB / / CFR / / CIF / / C&I / / Other
(free on board) (cost & freight) (cost, insurance & freight) (cost & insurance) (specify) __________
___________________________________________________________________________________________________________________________
City/Country or Port/Airport For Shipping Terms
___________________________________________________________________________________________________________________________
Merchandise Description
___________________________________________________________________________________________________________________________
We unconditionally agree that this Letter of Credit shall be governed by the security provisions and all other terms and
conditions of our Continuing Letter of Credit Agreement with you of most recent date. You may keep a copy of the commercial
invoice for your records.
___________________________________________________________________________________________________________________________
Company Name Company Authorized Signature Date
___________________________________________________|____________________________________________|__________________________
Contact at Company (Name & Title) Telephone Number
________________________________________________________________________________________________|(_____)___________________
Correspondent Bank Name Correspondent Bank Authorized Signature Date
___________________________________________________|____________________________________________|__________________________
Contact at Correspondent Bank (Name & Title) Telephone Number
________________________________________________________________________________________________|(_____)___________________
(continued on reverse)
FX-0073p Rev.(5/94)
121
Application for Standby Letter of Credit [LOGO] MELLON BANK
Mellon Bank, N.A. Phone: (000) 000-0000
Trade Banking Operations or (000) 000-0000
________________________________________________________ Three Xxxxxx Xxxx Xxxxxx, Xxxx 0000 FAX: (000) 000-0000
Application Date: L/C Number (for Bank Use Only): Xxxxxxxxxx, XX 00000-0000
___________________|_______________________________________________________________________________________________________
Please issue an irrevocable Letter of Credit in accordance with the terms and conditions set forth below:
Letter of Credit to be delivered by: / / Airmail / / Courier / / Telex or other teletransmission
___________________________________________________________________________________________________________________________
Applicant (Name & Complete Address) Beneficiary (Name & Complete Address)
____________________________________________________________|______________________________________________________________
Advising Bank (Name & Complete Address) Expiry Date at Mellon Bank, N.A.
|______________________________________________________________
___________________________________________________________________________________________________________________________
Currency:
/ / USD / / Other (specify) ________________ / / Amount _________________________
___________________________________________________________________________________________________________________________
Indicate any of the following that are to apply:
/ / Letter of Credit to be "clean" (meaning only a sight draft drawn on Mellon Bank is required for payment)
/ / Issue Letter of Credit in accordance with attached form (subject to approval of Mellon Bank)
/ / Letter of Credit to be transferable.*
* No transfer will be effected until Mellon Bank's transfer form is completed and returned to Mellon Bank along with
the original of this Credit for endorsement and Mellon Bank's transfer fee is paid by the Beneficiary.
/ / (AUTO-RENEWABLE) "It is a condition of this Letter of Credit that it will be automatically extended for periods of
___________ each from the present or any future expiry date, unless we notify you in writing at least ____ days prior
to such expiry date that we elect not to further extend this Letter of Credit. Upon receipt of such notice, you may
draw on this Credit by presenting your one sight draft to us for an amount up to the unused balance of this Letter of
Credit on or before the then relevant expiry date" (For "clean" credits last sentence is not required)
/ / All banking charges other than Mellon Bank's are for the account of:
/ / Beneficiary / / Applicant
/ / Guarantee to be issued by correspondent Bank (the beneficiary of the Letter of Credit) for the account of Applicant
and in favor of
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
for the same amount of this Letter of Credit, to expire at their counters on ___________________ (should be about 30
days prior to the expiry date of this Letter of Credit). This Letter of Credit is to be available against the
beneficiary's signed statement that it has been required to pay under the above guarantee:
/ / Beneficiary may draw by its tested telex/SWIFT message stating that it has been called upon to pay under its
guarantee and that it has airmailed to Mellon Bank the required draft and statement.
/ / Payment against sight draft and any of the following statements or documents to be presented by the beneficiary:
/ / (UNPAID INVOICES) This Letter of Credit covers unpaid invoice(s) and is to be available against (i) the beneficiary's
statement as follows: "We hereby certify that the draft accompanying this statement drawn under your Letter of
Credit represents the amount due (insert name of beneficiary) as a result of the failure of (insert name of
applicant) to pay invoice(s) _________ days after the invoice date as agreed, that payment has been demanded and
not received,"; (ii) and copy(ies) of relative invoice(s) marked "UNPAID".
/ / (PERF) This Letter of Credit is available against beneficiary's signed statement as follows: "We hereby certify
that (insert name of Applicant) has failed to _____________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________."
/ / Any other documents, statements, or certifications required:
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________
The undersigned Applicant agrees to pay Mellon Bank on demand, any and all charges and expenses (including without
limitation attorneys' fees) paid or incurred by Mellon Bank in connection with the Letter of Credit, interest in accordance
with the terms and conditions of the Letter of Credit Agreement between Applicant and Mellon Bank and the following fees
and commissions for establishing the Letter of Credit (plus any customary commission for any increase, amendment or
renewal thereof):
Issuance Fee of $_________, Standby Letter of Credit Commission of $_________ or at ____% per annum, other fees as follows:
___________________________________________________________________________________________________________________________
WE UNCONDITIONALLY AGREE THAT THIS APPLICATION AND LETTER OF CREDIT SHALL BE GOVERNED BY THE TERMS AND CONDITIONS OF OUR
LETTER OF CREDIT AGREEMENT WITH YOU OF MOST RECENT DATE.
___________________________________________________________________________________________________________________________
Company Name Authorized Signature (including title) Date
_____________________________________________|_________________________________________________|___________________________
Contact at Applicant (Name & Title) Telephone Number
_____________________________________________|_________________________________________________|(_____)____________________
Correspondent Bank Name Correspondent Bank Authorized Signature Date
_____________________________________________|_________________________________________________|___________________________
Contact at Correspondent Bank (Name & Title) Telephone Number
_____________________________________________|_________________________________________________|(_____)____________________
FX-0072P Rev. (10/94) PD 10/94
122
EXHIBIT E-2
TO
CREDIT AGREEMENT
FORM OF MELLON CASH MANAGEMENT DOCUMENTATION
123
[MELLON LOGO] MELLON GLOBAL CASH MANAGEMENT(SM) SERVICES
--------------------------------------------------------------------------------
AUTOMATIC BORROWING SERVICE - Mellon Bank, N.A. Page 1 of 3
Agreement Letter
Sylvan Inc. (the "Company") has requested that Mellon Bank, N.A. (the "Bank")
provide the Company with that service which the Bank refers to as its Automatic
Borrowing Service (the "Service") pursuant to which the Bank shall automatically
make advances of funds ("Advances") to and accept repayments thereof
("Payments") from Bank customers. In order to induce the Bank to make the
Service available to the Company, the Company agrees that the following terms
and conditions will govern the Bank's provision and the Company's receipt of the
Service:
1. Prior to the Company's use of the Service, the Bank will have granted
the Company a line of credit and the Company will have executed and
entered into with the Bank, an agreement providing for such line of
credit in the form attached hereto as Exhibit A to this Agreement (the
"Credit Agreement"). The Company agrees with the Bank that in addition
to the terms and conditions of this Agreement, the Credit Agreement
will govern all Advances and Payments and matters related thereto and
is expressly incorporated herein.
2. The Company hereby designates the account identified in Exhibit B to
this Agreement as the account to be used in connection with the Service
(the "Account"). All Advances made by the Bank will be credited to the
Account and all Payments made by the Company will be debited from the
Account. The Company acknowledges and agrees that in addition to the
terms and conditions of this Agreement, the Account will be subject to
the terms and conditions applicable to demand deposit accounts
maintained at the Bank.
3. (a) As a means to utilizing the Service, the Company and the Bank have
agreed upon each of the following:
(i) a target balance ("Target Balance") which shall be the
balance which, except as otherwise specified in this
Agreement, the Service shall attempt to maintain in the
Account;
(ii) an advance trigger amount ("Advance Trigger") which shall be
the Account balance amount which, if reached, shall trigger
an automatic Advance by the Bank to the Company by means of a
credit to the Account;
(iii) an advance increment ("Advance Increment") which shall be the
incremental amount of any Advance made by the Bank to the
Company;
(iv) a payment trigger amount ("Payment Trigger") which shall be
the Account balance amount which, if reached, shall trigger a
Payment to the Bank by means of a debit to the Account;
(v) a payment increment ("Payment Increment") which shall be the
incremental amount of any Payment made by the Company
pursuant to the Service.
(b) The Target Balance, Advance Trigger, Payment Trigger, Advance
Increment and Payment Increment, which the Company and the Bank
have agreed upon are set forth on Exhibit B attached hereto. For
all purposes of this Agreement, the Company and the Bank may amend
Exhibit B from time to time by mutual agreement. Such agreement may
be reached by telephone in which event the Bank shall proceed to
revise Exhibit B accordingly. The Bank's records shall be presumed
correct, absent manifest error.
4. (a) On each banking day at the cutoff time selected by the Company
(from the time or times then currently available), the Bank shall
review all debits and credits posted to the Account on such banking
day prior to such cutoff time. All debits and credits to the
Account shall be in accordance with the terms and conditions
established by the Bank as applicable to such matters. For all
purposes of this Agreement "banking day" shall refer to any day
upon which the Bank's principal office in Pittsburgh, Pennsylvania
is open for the conduct of substantially all of the Bank's banking
functions. The cutoff time selected by the Company is set forth on
Exhibit B.
124
Page 2 of 3
(b) If, during its review of the Account at the agreed upon cutoff
time, the Bank determines that the balance within the account is
less than the Target Balance and provided the Advance Trigger
Amount is reached, the Bank shall make an Advance to the Company in
one or more Advance Increments in order to bring the Account
balance as close as possible to the Target Balance.
(c) If, during its review of the Account at the agreed upon cutoff
time, the Bank determines that the balance within the Account is in
excess of the Target Balance and provided the Payment Trigger
amount is reached, the Bank shall debit the Account in one or more
Payment Increments in order to bring the balance in the Account as
close as possible to the Target Balance. In no event shall the
amount of any Payment exceed the Company's total indebtedness to
the Bank.
5. (a) On any business day, the Company may request that the Bank lend
additional funds in excess of Advances made automatically as part
of the Service. Such requests may be made by either of the
following means:
(i) by telephone call to the Bank at the telephone number
specified on Exhibit B; provided, however, that prior to
making any such request the Company shall have designated on
Exhibit B two or more individuals authorized to act for the
Company ("Authorized Representatives") in requesting
additional Advances hereunder. The Bank shall assign each
Authorized Representative a Personal Identification Number
("PIN") to be used by such Authorized Representative in
requesting additional Advances. The Bank shall be authorized
and entitled to rely upon any telephonic communication
received from any person identifying himself/herself as an
Authorized Representative by means of an appropriate PIN; or
(ii) by utilization of the Bank's Telecash System in accordance
with the terms and conditions of the Bank's Telecash
Agreement.
(b) The Company expressly agrees and acknowledges that in no event
shall the aggregate amount of funds lent to the Company by the Bank
(whether automatically as part of the Service or pursuant to the
Company's request in accordance with this Section 5) exceed the
credit limit applicable to the Company as such limit is set forth
in the Credit Agreement.
6. (a) The Company will pay the Bank for the Service in accordance with
the Bank's current fees for the Service as then in effect. The Bank
may amend all fees from time to time upon thirty (30) days' written
notice to the Company.
(b) The Company agrees to pay all invoices submitted by the Bank within
thirty (30) days of the billing date set forth in the invoice. The
Company may elect to receive a credit against fees owed to the Bank
hereunder based upon the dollar amount of the balances maintained
by the Company in its accounts at the Bank. The amount of such
credit shall be determined in accordance with the Bank's then
current formulae and procedures. The Bank reserves the right to
debit the Company's account in the amount of all fees not paid when
due.
7. (a) Unless the Bank is negligent or does not act in good faith with
respect to its performance of the Service, the Company agrees to
hold the Bank harmless and indemnify the Bank from and against any
and all liabilities, losses, claims, or damages or expenses,
including reasonable attorneys' fees, which the Bank may incur in
connection with this Agreement and its performance of the Services
hereunder.
(b) In the event that the Bank breaches the standard of care set forth
in this Section 7, the Bank will be liable to the Company only for
actual damages directly caused by the Bank's breach. The Company
expressly agrees that in no event will the Bank be liable for any
indirect, special, consequential or punitive damages in connection
with the Bank's performance of the Service.
(c) Notwithstanding any other provision of this Agreement, the Bank
shall not be liable for any failure or inability to perform or any
delay in performance hereunder if such failure, inability or delay
is due to acts of God, war, civil or industrial disturbance,
strikes, natural disaster, equipment malfunction or any other cause
which are beyond the Bank's reasonable control.
125
Page 3 of 3
8. (a) Either party may terminate this Agreement at any time either: (i)
immediately for cause; or (ii) without cause upon prior written
notice to the other party of at least thirty (30) days.
Notwithstanding such termination, this Agreement shall remain in
full force and effect with respect to all transactions hereunder
occurring prior to the date of such termination.
(b) The Bank reserves the right to change any aspect of the Service
upon thirty (30) days' written notice to the Company.
9. (a) All notices permitted or required by this Agreement shall be in
writing and shall be deemed to have been duly given if sent by
personal delivery, mail, telegram or telex addressed to the address
specified for such party in Exhibit B.
(b) This Agreement shall inure to the benefit of and shall be binding
upon the respective successors and assigns of the parties hereto,
but it may not be assigned in whole or in part by either party
without the prior written consent of the other, except that the
Bank may freely assign this Agreement to any company that is
directly or indirectly: (i) in control of the Bank; or, (ii) under
the control of the Bank; or, (iii) under common control with the
Bank.
(c) Nothing contained in this Agreement shall be deemed to impair any
rights which the Bank may have arising out of the Credit Agreement
or by operation of law.
(d) This Agreement supersedes any prior agreements or representations
relating to the subject matter hereof. Except as specified herein,
no amendment or waiver of any provision of this Agreement shall be
effective unless evidenced in writing and signed by the Bank and
the Company.
(e) This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania.
The Company, by a duly authorized officer, agrees and assents to the matters set
forth as of the date of this letter and with an intent to be legally bound.
Very truly yours,
MELLON BANK, N.A. SYLVAN INC.
------------------------------------
Company
By: By:
---------------------------- --------------------------------
Signature Signature
Name: Xxxx Xxxxx-Xxxxxxx Name: Xxxxxx X. Xxxxx
-------------------------- ------------------------------
Title: Assistant Vice President Title: Principal Accounting Officer
------------------------- -----------------------------
Rev 10/15/97
126
Exhibit A
Credit Agreement
----------------
Mellon will attach the loan documents for the Company's line of credit to this
Exhibit.
127
PROMISSORY NOTE [MELLON BANK LOGO]
--------------------------------------------------------------------------------
$5,000,000 August 6, 1998
------------------------ -------- --
FOR VALUE RECEIVED, and intending to be legally bound, Undersigned, as defined
below, promises to pay to Mellon Bank, N.A.
a national banking association
--------------------------------------------------------------------------------
("Bank") or its order at One Mellon Bank Center,
-------------------------------------------------------
Xxxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
the sum of
----------------------------------------------------------------------
Five Million Dollars
----------------------------------------------------------------------
($5,000,000), or such lesser or greater principal amount as may be outstanding
from time to time under a discretionary line of credit established by Bank for
the benefit of Undersigned, with interest on the outstanding balance from the
date of this Note ("Note") at the rate(s) ("Contractual Rate(s)") specified
herein.
After maturity, whether by acceleration or otherwise interest shall accrue at a
rate 2 percent per annum above the Contractual Rate(s) until all sums due
hereunder are paid. Interest shall continue to accrue after the entry of
judgment by confession or otherwise at the Contractual Rate(s) until all sums
due hereunder and/or under the judgment are paid, unless the Contractual Rate(s)
is (are) altered by subsequent maturity. This is the Note or one of the Notes
referred to in that Loan Agreement dated August 6, 1998, between Undersigned and
the Bank, as the same may be supplemented from time to time.
So long as Bank is the holder hereof, Bank's books and records shall be
presumed, except in the case of manifest error, to accurately evidence at all
times all amounts outstanding under this Note and the date and amount of each
advance and payment made pursuant hereto.
The prompt and faithful performance of all of Undersigned's obligations
hereunder, including without limitation time of payment, is of the essence of
this Note.
The Undersigned hereby grants to Bank a security interest in, lien upon, and
right of setoff against, all deposit accounts, credits, securities, moneys, or
other property of Undersigned which may at any time be in the possession of,
delivered to, or owed by Bank, including any proceeds or returned or unearned
premiums of insurance, and the proceeds of all the foregoing property.
1. REPRESENTATIONS. Undersigned hereby makes the following representations and
warranties which shall be true and correct on the date of this Note and shall
continue to be true and correct for so long as any indebtedness evidenced hereby
remains outstanding: (a) Undersigned's residence and/or Chief Executive Office,
as the case may be, is as stated below or as otherwise stated in a subsequent
written notice delivered to Bank pursuant to the terms hereof; and (b) if any of
the Undersigned is an individual, each such individual is at least 18 years of
age and under no legal disability or incapacity.
2. COVENANTS. Undersigned covenants and agrees that until all indebtedness
evidenced hereby has been paid in full, Undersigned shall: (a) use the proceeds
of the loan evidenced hereby only for the purpose specified to Bank at or prior
to the execution hereof; (b) promptly notify Bank in writing of any change in
its or their residence or Chief Executive Office; (c) pay, upon demand by Bank,
all out-of-pocket expenses incurred by Bank in connection with any action or
proceeding taken or commenced by Bank to enforce or collect this Note, including
reasonable attorney's fees.
3. EVENTS OF DEFAULT. The occurrence of any of the following shall constitute an
"Event of Default" hereunder: (a) default in payment or performance of any of
the indebtedness or obligations evidenced by this Note or any other evidence of
liability of Undersigned to Bank; (b) the breach by any Obligor (defined as
Undersigned and each surety or guarantor of any of Undersigned's liabilities to
Bank as well as any person or entity granting Bank a security interest in
property to secure any indebtedness evidenced hereby) of any covenant contained
in the Loan Agreement (if any), this Note, or in any separate security,
guarantee or suretyship agreement between Bank and any Obligor, the occurrence
of any default hereunder or under the terms of any such agreement, or the
discovery by Bank of any false or misleading representation made by any Obligor
herein or in any such agreement or in any other information submitted to Bank by
any Obligor; (c) with respect to any Obligor: (1) death or incapacity of any
individual or general partner; or (2) dissolution of any partnership or
corporation; (d) any assignment for the benefit of creditors by any Obligor; (e)
insolvency of any Obligor; (f) the filing or commencement of any petition,
action, case or proceeding, voluntary or involuntary, under any state or federal
law regarding bankruptcy, insolvency, reorganization, receivership or
dissolution, including the Bankruptcy Reform Act of 1978, as amended, by or
against any Obligor; or (g) the garnishment, attachment or taking by
governmental authority of any property of the Undersigned which is in Bank's
possession or which constitutes security for any indebtedness evidenced hereby.
4. ACCELERATION; REMEDIES. Upon either (i) the occurrence of any Event of
Default, or (ii) if this Note is payable on demand, such demand by Bank: (a) all
amounts due under this Note, including the unpaid balance of principal and
interest hereof, shall become immediately due and payable at the option of Bank,
without any demand or notice whatsoever; and (b) Bank may immediately and
without demand exercise any of its rights and remedies granted herein, under
applicable law, or which it may otherwise have, against Undersigned or
otherwise.
5. BANK'S RIGHTS. Undersigned hereby authorizes Bank, and Bank shall have the
continuing right, at its sole option and discretion, to: (a) do anything which
Undersigned is required but fails to do hereunder.
128
Exhibit B
All information in this Exhibit must be supplied by the Company.
1. Mellon Demand Deposit Account Number: ________
2. Borrowing Parameters:
Target Balance: ____________________________
Advance Trigger: ___________________________
Advance Increment: ______________________________
Payment Trigger: ____________
Payment Increment: __________
3. Cutoff Time: _________________________________
(The Automatic Borrowing Service operates at either 1:30 p.m. or 4:00 p.m.,
Pittsburgh time: No other time will be accepted.)
4. Mellon Bank ABS Telephone Numbers:
Pittsburgh 234-3050
In Pennsylvania 000-000-0000
Outside Pennsylvania 000-000-0000
5. Authorized Company Representatives:
(These Authorized Representatives will be permitted to request that Mellon
lend the Company additional funds.)
Name: ___________________________________________
Title: ________________________________
Name: ___________________________________________
Title: ________________________________
6. Company Mailing Address and Telephone Number:
(Mellon will mail material to the Company at this address and will contact
the Company by phone at this number.)
Mailing Address: ________________________________
_________________________________________________
_________________________________________________
Telephone Number: _______________________________
129
EXHIBIT F
TO
CREDIT AGREEMENT
SECURED HEDGE SUPPLEMENT
THIS SUPPLEMENT to the Revolving Credit Agreement, dated as of
August 6, 1998, by and among Sylvan Inc., a Nevada corporation (the "Company"),
Sylvan Foods (Netherlands) B.V., a Dutch corporation ("SFNBV") (the Company and
SFNBV being referred to collectively as the "Borrowers"), the Banks party
thereto from time to time, the Issuing Bank named therein, and Mellon Bank,
N.A., as Agent for the Banks and the Issuing Bank (as the same may be amended,
modified or supplemented from time to time, the "Credit Agreement"). Capitalized
terms used herein without definition have the meaning specified in the Credit
Agreement.
The parties hereto, intending to be legally bound, hereby
agree as follows:
1. This Supplement is a "Secured Hedge Supplement" referred to
in Section 9.13 of the Credit Agreement.
2. Attached to this Supplement is a copy of a Hedge Agreement
between the Bank party hereto (which is a Bank party to the Credit Agreement)
and the Borrower party hereto, which Hedge Agreement is referred to herein as
the "Designated Hedge Agreement". Such Bank, such Borrower and the Agent (acting
at the direction of the Required Banks as provided in Section 9.13 of the Credit
Agreement) hereby designate the Designated Hedge Agreement to be a "Secured
Hedge Agreement" pursuant to such Section 9.13.
3. The Bank party hereto and the Borrower party hereto hereby
represent, warrant, acknowledge and agree that (a) the attached copy of the
Designated Hedge Agreement is true, correct and complete and contains the entire
agreement of such Bank and such Borrower relating to the subject matter thereof,
(b) to the extent such Designated Hedge Agreement is in the form of a master
agreement, pursuant to which multiple "confirmations" (however named) may be
entered into from time to time, only the transaction(s) evidenced by
confirmation(s) attached hereto shall constitute part of such Designated Hedge
Agreement, and (c) no other transactions have been entered into under such
master agreement, unless such transaction is evidenced by a confirmation which
itself has been designated, pursuant to a separate Secured Hedge Supplement, a
"Secured Hedge Agreement".
130
IN WITNESS WHEREOF, this Supplement has been entered into by
the Bank party hereto, the Borrower party hereto, and the Agent, by their duly
authorized officers, on this __ day of ___________, ____.
[BANK]
By______________________________
Name:
Title:
[BORROWER]
By______________________________
Name:
Title:
MELLON BANK, N.A., as Agent
By______________________________
Name:
Title:
2
131
SCHEDULE 1.01
OTHER CURRENCIES
---------------------------------------------- ----------------------------------------------
COUNTRY CURRENCY COUNTRY CURRENCY
---------------------------------------------- ----------------------------------------------
Argentina Peso Lebanon Pound
---------------------------------------------- ----------------------------------------------
Australia Dollar Malaysia Ringgit
---------------------------------------------- ----------------------------------------------
Austria Xxxxxxxxx Malta Lira
---------------------------------------------- ----------------------------------------------
Bahrain Dinar Mexico Peso
---------------------------------------------- ----------------------------------------------
Belgium Franc Netherland Guilder
---------------------------------------------- ----------------------------------------------
Brazil Real New Zealand Dollar
---------------------------------------------- ----------------------------------------------
Britain Pound Norway Krone
---------------------------------------------- ----------------------------------------------
Canada Dollar Pakistan Rupee
---------------------------------------------- ----------------------------------------------
Chile Peso Peru new Sol
---------------------------------------------- ----------------------------------------------
China Renminbi Philippines Peso
---------------------------------------------- ----------------------------------------------
Colombia Peso Poland Zloty
---------------------------------------------- ----------------------------------------------
Czech. Rep. Koruna Portugal Escudo
---------------------------------------------- ----------------------------------------------
Denmark Krone Russia Xxxxx
---------------------------------------------- ----------------------------------------------
Ecuador Sucre Saudi Arabia Riyal
---------------------------------------------- ----------------------------------------------
Finland Markka Singapore Dollar
---------------------------------------------- ----------------------------------------------
France Franc Slovak Rep. Koruna
---------------------------------------------- ----------------------------------------------
Germany Xxxx Xxxxx Africa Rand
---------------------------------------------- ----------------------------------------------
Greece Drachma South Korea Won
---------------------------------------------- ----------------------------------------------
Hong Kong Dollar Spain Peseta
---------------------------------------------- ----------------------------------------------
Hungary Forint Sweden Krona
---------------------------------------------- ----------------------------------------------
India Rupee Switzerland Franc
---------------------------------------------- ----------------------------------------------
Indonesia Rupiah Taiwan Dollar
---------------------------------------------- ----------------------------------------------
Ireland Punt Thailand Baht
---------------------------------------------- ----------------------------------------------
Israel Shekel Turkey Lira
---------------------------------------------- ----------------------------------------------
Italy Lira United Arab Dirham
---------------------------------------------- ----------------------------------------------
Japan Yen Uruguay New Peso
---------------------------------------------- ----------------------------------------------
Jordan Dinar Venezuela Bolivar
---------------------------------------------- ----------------------------------------------
Kuwait Dinar European Community Euro
---------------------------------------------- ----------------------------------------------
132
SCHEDULE 2.10(b)
EXISTING LETTERS OF CREDIT
---------------------------------------------------------------------------------------------------
NUMBER TERMS
---------------------------------------------------------------------------------------------------
202 451 8035360 In the amount of $1,000,000 to Republic Western Insurance Co.
Expires September 1, 1999
---------------------------------------------------------------------------------------------------
202 451 8006640 In the amount of $1,000,000 to Employers Reinsurance Corp.
Expires September 1, 1999
---------------------------------------------------------------------------------------------------
133
SCHEDULE 3.08
LITIGATION
Sylvan America, Inc.: In March 1994, a civil action alleging a variety of
contractual and tortious claims was filed against Sylvan Inc., Sylvan Foods,
Inc., Sylvan America, Inc, (Pa.), Quincy Corporation and certain of their
officers and employees by Mushroom Central Supply, Inc. of Kennett Square,
Pennsylvania. The action was a result of Sylvan America Inc.'s April 1992
termination of a spawn sales and distribution agreement that it had with
Mushroom Central. The Company believes that Mushroom Central breached the sales
and distribution agreement, that the termination was justified and that the
allegations set forth in the civil action are baseless. The suit has progressed
through several discovery and pleadings stages and some settlement options have
been unsuccessfully explored. The Company is confident that it will prevail in
this action and believes that, regardless of the outcome, the result will not
constitute a Material Adverse Effect.
Quincy Corporation: Arising out of certain short term strike activities at
Quincy in March 1996 are two cases. In one, Quincy sought and obtained a
temporary injunction against the strike activities of the United Farm Workers
and its supporters and the UFW counterclaimed for violation of the
constitutional rights of its supporters by Quincy. An issue relating to wrongful
injunction damages of $75,000 times a multiplier of 1.5 or 2 is pending under
the first action. The second action, UFW's counterclaim, has been unsuccessful
at the trial court level, but the UFW vows to appeal the decision.
With respect to the second case, an asserted class action alleging Quincy's
violation of Florida's general labor statutes and the Florida Constitution in
the treatment of the UFW supporters from March 1994 to the present was filed in
March 1998. The damages sought include back wages for those discriminated
against and attorneys fees. Pending before the court is Quincy's motion for
Partial Summary Judgment. The Company is confident that it will prevail in this
action and believes that, regardless of the outcome, the result will not
constitute a Material Adverse Effect.
134
SCHEDULE 3.09
SUBSIDIARIES
(Subsidiaries which, with respect to fiscal 1997, accounted for
more than $4.7 million of consolidated assets or more than
$4.1 million of consolidated revenues)
=================================================================================================================================
SYLVAN INC.
---------------------------------------------------------------------------------------------------------------------------------
SUBSIDIARY AUTHORIZED CAPITALIZATION NO. OF SHARES ISSUED PERCENTAGE OF OWNERSHIP
& OUTSTANDING BY PARENT
---------------------------------------------------------------------------------------------------------------------------------
Sylvan Foods, Inc. 1,000 shares @ $1 1,000 100%
---------------------------------------------------------------------------------------------------------------------------------
Sylvan Foods (France) S.A. 2,500 shares @ FF100 2,500 100%
---------------------------------------------------------------------------------------------------------------------------------
Sylvan Foods (Netherlands) B.V. 2,000 shares @ DGL100 400 100%
---------------------------------------------------------------------------------------------------------------------------------
Sylvan America, Inc. 25,000 shares @ $1 1,000 100%
---------------------------------------------------------------------------------------------------------------------------------
SYLVAN FOODS, INC.
---------------------------------------------------------------------------------------------------------------------------------
SUBSIDIARY AUTHORIZED CAPITALIZATION NO. OF SHARES ISSUED PERCENTAGE OF OWNERSHIP
& OUTSTANDING BY PARENT
---------------------------------------------------------------------------------------------------------------------------------
Quincy Corporation 30,000 pfd. Shares @ $100 0 pfd.
10,000 com. Shares @ $1 7,190 com. 100%
---------------------------------------------------------------------------------------------------------------------------------
Sylvan America, Inc. 2,000 shares @ $1 1,000 100%
---------------------------------------------------------------------------------------------------------------------------------
SYLVAN FOODS (NETHERLANDS) B.V.
---------------------------------------------------------------------------------------------------------------------------------
SUBSIDIARY AUTHORIZED CAPITALIZATION NO. OF SHARES ISSUED PERCENTAGE OF OWNERSHIP
& OUTSTANDING BY PARENT
---------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxx B.V. 1,500 A shares @ DGL1 300 100%
500 B shares @ DGL1 100 50%
---------------------------------------------------------------------------------------------------------------------------------
White Queen Ltd. 168,000 A shares @ (pound)1 108,000 100%
132,000 B shares @ (pound)1 132,000 0%
---------------------------------------------------------------------------------------------------------------------------------
Sylvan Spawn Limited 50,000 shares @ (pound)1 2 100%
---------------------------------------------------------------------------------------------------------------------------------
Sylvan Spawn Laboratory Hungary 1,026 shares @ 100,000 HUT 380 100%
---------------------------------------------------------------------------------------------------------------------------------
SYLVAN FOODS (FRANCE) S.A.
---------------------------------------------------------------------------------------------------------------------------------
SUBSIDIARY AUTHORIZED CAPITALIZATION NO. OF SHARES ISSUED PERCENTAGE OF OWNERSHIP
& OUTSTANDING BY PARENT
---------------------------------------------------------------------------------------------------------------------------------
Somycel S.A. 307,568 shares @ FF100 307,568 100%
---------------------------------------------------------------------------------------------------------------------------------
135
SCHEDULE 6.02
LIENS
---------------------------------------------------------------------------------------------------------------------
AMOUNT LIENHOLDER NATURE
---------------------------------------------------------------------------------------------------------------------
(pound) 500,000 Midland Bank plc First mortgage on White Queen Ltd. real property
---------------------------------------------------------------------------------------------------------------------
NLG 5,600,000 ABN-AMRO Bank N.V. First mortgage on Xxxxxx Xxxxx property, including
a pledge on inventory and receivables
---------------------------------------------------------------------------------------------------------------------
FF 15,000,000 ABN-AMRO Bank N.V. Pledge of French franc time deposits at ABN-AMRO
Bank N.V., Chicago branch, by Quincy Corporation,
Sylvan America, Inc. and Sylvan Foods, Inc.
---------------------------------------------------------------------------------------------------------------------
IR(pound) 550,000 Bank of Ireland Mortgage on International Mushrooms Limited spawn
plant property
---------------------------------------------------------------------------------------------------------------------
136
SCHEDULE 6.03
INDEBTEDNESS
----------------------------------------------------------------------------------------------------------------------------
AMOUNT BORROWER TERMS
----------------------------------------------------------------------------------------------------------------------------
FF 15,000,000 Sylvan Foods (France) S.A. Working capital loan from Bank Neuflize, Schlumberger
Maillot expiring January 17, 2000
----------------------------------------------------------------------------------------------------------------------------
NLG 2,600,000 Xxxxxx Xxxxx B.V. Amortizing term loan from ABN-AMRO due
April 1, 2015
----------------------------------------------------------------------------------------------------------------------------
NLG 3,300,000 Xxxxxx Xxxxx B.V. Amortizing term loan from ABN-AMRO due
February 28, 2000
----------------------------------------------------------------------------------------------------------------------------
NLG 600,000 Xxxxxx Xxxxx B.V. Overdraft facility (ABN-AMRO)
----------------------------------------------------------------------------------------------------------------------------
(pound) 500,000 White Queen Ltd. Overdraft facility (Midland Bank plc)
----------------------------------------------------------------------------------------------------------------------------
IR(pound) 120,000 International Mushrooms Ltd Overdraft facility (Bank of Ireland)
----------------------------------------------------------------------------------------------------------------------------
IR(pound) 280,000 International Mushrooms Ltd Business expansion loan from ICC Bank plc expiring
September 30, 1999
----------------------------------------------------------------------------------------------------------------------------
IR(pound) 485,000 International Mushrooms Ltd Two regular repayment loans from Bank of Ireland
expiring December 31, 2003
----------------------------------------------------------------------------------------------------------------------------
137
Schedule 6.04
GUARANTEED CONTINGENT LIABILITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Guaranty by Sylvan Foods Holdings, Inc. (now Sylvan Inc.) and Sylvan Foods Inc.
to guarantee such sums as are in default under the Moonlight Mushrooms, Inc.
(now Worthington Holdings, Inc.) self-insured workers' compensation program. The
guaranty is dated November 30, 1989, remains in force until terminated and is
supported by one of the letters of credit listed on Schedule 2.10(b) hereof.
--------------------------------------------------------------------------------
Guaranty by Sylvan Foods Holdings, Inc. (now Sylvan Inc.) and Sylvan Foods Inc.
to guarantee such sums as are in default under the Sylvan Spawn Laboratory, Inc.
(now Sylvan America, Inc.) self-insured workers' compensation program. The
guaranty is dated November 30,1989, remains in force until terminated and is
supported by one of the letters of credit listed on Schedule 2.10(b) hereof.
--------------------------------------------------------------------------------
Guaranty by Sylvan Inc. to guarantee certain credit facilities in the aggregate
principle amount of DGL 700,000 granted by ABN-AMRO Bank (Schweiz) to Sylvan
Foods (Netherlands) B.V. The guaranty is dated January 31,1996 and remains in
force until the termination of the credit available and the payment in full of
SFNBV's loan obligations.
--------------------------------------------------------------------------------
138
EXHIBIT 6.04-(A)
G U A R A N T Y
---------------
WHEREAS, MOONLIGHT MUSHROOMS, INC. is a corporation doing business in
the Commonwealth of Pennsylvania and subject to the Pennsylvania
Workmen's Compensation Act of 1915, as reenacted and amended (hereinafter
referred to as the "Act") and
WHEREAS, the said MOONLIGHT MUSHROOMS, INC. has applied to the Bureau
of Worker's Compensation of the Department of Labor and Industry of the
Commonwealth of Pennsylvania (hereinafter referred to as the "Bureau") under
Section 305 of Article III of the "Act" for the privilege of paying worker's
compensation without insurance, and
WHEREAS, the said MOONLIGHT MUSHROOMS, INC. (hereinafter referred to
as the "Subsidiary") is a subsidiary of Sylvan Foods, Inc., which, in
turn, is a subsidiary of Sylvan Foods Holdings, Inc. (both of which are
hereinafter referred to collectively as the "Guarantors") both of
Xxxxxxxxxxx, XX 00000.
NOW, therefore, in order to additionally secure the payment of worker's
compensation which may now be due or which may become due as an obligation of
the "Subsidiary" as a self-insurer under the "Act,"
It is hereby agreed by the "Guarantors" that in case there shall be at
any time a default in the payment of worker's compensation justly due by the
"Subsidiary," the "Guarantors" shall, upon due notice of the "Bureau," pay such
sums as are in default, and shall thereafter assume such payments of worker's
compensation as become due as an obligation of the "Subsidiary" until such time
as the "Subsidiary" is able to resume, to the satisfaction of the "Bureau," such
payments of worker's compensation as shall become due and payable.
It is further understood and agreed that the "Guarantors" shall
guarantee the payment of all past, present and future liabilities incurred by
the "Subsidiary" while exempt from insuring its liabilities under the "Act"
without regard to specific injuries or diseases, date or dates of same, or the
period over which such payments are to be made so long as such payments are due
and payable under the "Act."
It is further understood and agreed that this Guaranty shall in no way
affect, or be in lieu of, any other agreements or bonds securing compensation
payments executed pursuant to the requirements of Section 305 of Article III of
the "Act" and the rules and regulations of the "Bureau."
Subject to the right of termination as hereinafter provided, it is
further understood and agreed that the terms of this Guaranty are in full force
and effect while the said "Subsidiary" is duly exempt from insuring its worker's
compensation liabilities by the "Bureau," and thereafter so long as any and all
worker's compensation liabilities remain from the period during which the
"Subsidiary" was so exempt.
139
G U A R A N T Y
---------------
Page 2
It is hereby agreed that the "Guarantors" shall have the right to
terminate this Guaranty upon 45 days written notice received by the "Bureau"
under the following conditions:
(1) Termination at the expiration of the annual exemption period of
the "Subsidiary," or,
(2) Termination at such time as the Parent-Subsidiary relationships
expressed hereinbefore no longer legally exist.
It being further understood and agreed that such termination shall not
affect the liability of the "Guarantors" with respect to injury or exposure
occurring prior to the effective date of such termination.
In any proceeding to enforce this Guaranty, service of process shall be
pursuant to the Pennsylvania Rules of Civil Procedure pertaining thereto (42 PA
CSA), including service upon an authorized agent designated by the "Guarantors,"
or upon the Secretary of the Commonwealth or other statutory agent authorized by
law to be so served.
IN WITNESS WHEREOF, this 30th day of November, 1989 the "Guarantors" of
the "Subsidiary" have caused this Guaranty to be executed and attested in their
corporate names by duly-constituted officers thereof and their official seals
affixed thereto.
SYLVAN FOODS HOLDINGS, INC.
ATTEST: SYLVAN FOODS, INC.
/s/ XXXX X. XXXXXXX By: /s/ XXXXXX X. XXXXXX
-------------------------------- ----------------------
Xxxx X. Xxxxxxx Xxxxxx X. Xxxxxx
Secretary/Treasurer (As to Both) President (As to Both)
140
EXHIBIT 6.04-(B)
G U A R A N T Y
---------------
WHEREAS, SYLVAN SPAWN LABORATORY, INC. is a corporation doing
business in the Commonwealth of Pennsylvania and subject to the
Pennsylvania Workmen's Compensation Act of 1915, as reenacted and amended
(hereinafter referred to as the "Act") and
WHEREAS, the said SYLVAN SPAWN LABORATORY, INC. has applied to the
Bureau of Worker's Compensation of the Department of Labor and Industry of the
Commonwealth of Pennsylvania (hereinafter referred to as the "Bureau") under
Section 305 of Article III of the "Act" for the privilege of paying worker's
compensation without insurance, and
WHEREAS, the said SYLVAN SPAWN LABORATORY, INC. (hereinafter referred
to as the "Subsidiary") is a subsidiary of Sylvan Foods, Inc., which, in
turn, is a subsidiary of Sylvan Foods Holdings, Inc. (both of which are
hereinafter referred to collectively as the "Guarantors") both of
Xxxxxxxxxxx, XX 00000.
NOW, therefore, in order to additionally secure the payment of worker's
compensation which may now be due or which may become due as an obligation of
the "Subsidiary" as a self-insurer under the "Act,"
It is hereby agreed by the "Guarantors" that in case there shall be at
any time a default in the payment of worker's compensation justly due by the
"Subsidiary," the "Guarantors" shall, upon due notice of the "Bureau," pay such
sums as are in default, and shall thereafter assume such payments of worker's
compensation as become due as an obligation of the "Subsidiary" until such time
as the "Subsidiary" is able to resume, to the satisfaction of the "Bureau," such
payments of worker's compensation as shall become due and payable.
It is further understood and agreed that the "Guarantors" shall
guarantee the payment of all past, present and future liabilities incurred by
the "Subsidiary" while exempt from insuring its liabilities under the "Act"
without regard to specific injuries or diseases, date or dates of same, or the
period over which such payments are to be made so long as such payments are due
and payable under the "Act."
It is further understood and agreed that this Guaranty shall in no way
affect, or be in lieu of, any other agreements or bonds securing compensation
payments executed pursuant to the requirements of Section 305 of Article III of
the "Act" and the rules and regulations of the "Bureau."
Subject to the right of termination as hereinafter provided, it is
further understood and agreed that the terms of this Guaranty are in full force
and effect while the said "Subsidiary" is duly exempt from insuring its worker's
compensation liabilities by the "Bureau," and thereafter so long as any and all
worker's compensation liabilities remain from the period during which the
"Subsidiary" was so exempt.
141
G U A R A N T Y
---------------
Page 2
It is hereby agreed that the "Guarantors" shall have the right to
terminate this Guaranty upon 45 days written notice received by the "Bureau"
under the following conditions:
(1) Termination at the expiration of the annual exemption period of
the "Subsidiary," or,
(2) Termination at such time as the Parent-Subsidiary relationships
expressed hereinbefore no longer legally exist.
It being further understood and agreed that such termination shall not
affect the liability of the "Guarantors" with respect to injury or exposure
occurring prior to the effective date of such termination.
In any proceeding to enforce this Guaranty, service of process shall be
pursuant to the Pennsylvania Rules of Civil Procedure pertaining thereto (42 PA
CSA), including service upon an authorized agent designated by the "Guarantors,"
or upon the Secretary of the Commonwealth or other statutory agent authorized by
law to be so served.
IN WITNESS WHEREOF, this 30th day of November, 1989 the "Guarantors" of
the "Subsidiary" have caused this Guaranty to be executed and attested in their
corporate names by duly-constituted officers thereof and their official seals
affixed thereto.
SYLVAN FOODS HOLDINGS, INC.
ATTEST: SYLVAN FOODS, INC.
/s/ XXXX X. XXXXXXX By: /s/ XXXXXX X. XXXXXX
-------------------------------- ----------------------
Xxxx X. Xxxxxxx Xxxxxx X. Xxxxxx
Secretary/Treasurer (As to Both) President (As to Both)
142
[SYLVAN LOGO] January 31, 1996
GUARANTY
--------
FOR VALUE RECEIVED, INTENDING TO BE LEGALLY BOUND HEREBY, and to induce
ABN AMRO BANK N.V., a bank organized under the laws of The Netherlands, and each
of its subsidiaries and affiliates (including without limitation ABN AMRO Bank
(Schweiz) (each and every of the foregoing hereinafter, together with its
successors, endorsees, and assigns, called "Bank"), to provide one or more
credit facilities and other financial accommodations in the aggregate maximum
principal amount of SEVEN HUNDRED THOUSAND DUTCH GUILDERS (Dfl. 700,000)
"Loans") to or for the benefit of Sylvan Foods (Netherlands) B.V., a Dutch
company ("Borrower"), the undersigned (the "Guarantor") hereby becomes surety
for and irrevocably and unconditionally hereby guaranties to Bank the full and
punctual payment and performance when due (whether on demand, at stated
maturity, by acceleration, or otherwise and including any amounts which would
become due but for the operation of an automatic stay under the federal
bankruptcy code of the United States or any similar laws of any country or
jurisdiction) of any and all present and future liabilities, indebtedness, and
obligations of Borrower to Bank arising in connection with any of the Loans,
however and whenever incurred or evidenced, whether primary, secondary, direct,
indirect, absolute, contingent, sole, with another, joint or several, due or to
become due, secured or unsecured, contracted or acquired, written or oral, and
whether as maker, drawer, endorser, guarantor, surety or otherwise, whether
arising in the ordinary course of business or otherwise, and any and all
renewals, extensions, substitutions, modifications, amendments, and the like of
any of the foregoing, together with all interest (including, without limitation,
interest which, but for the filing of a petition in bankruptcy or similar
proceedings by or against Borrower, would accrue on any of the foregoing), late
charges, fees, costs, and expenses (including reasonable attorneys' fees and
costs) arising from or relating to any of the foregoing or to the collection,
administration, or enforcement thereof or hereof (all of the foregoing shall be
referred to herein as the "Obligations" and each of the foregoing as an
"Obligation").
1. Unconditional and Irrevocable Guaranty.
(a) If Borrower at any time fails to fully and punctually pay or
perform any of the Obligations when due, Guarantor hereby promises to pay and
perform all such Obligations immediately. All payments made hereunder shall be
made by Guarantor in immediately available funds in the same currency as that of
the Obligation(s) upon which payment is being made. Guarantor further consents
and agrees that the Obligations may be extended or renewed, in whole or in part
one or more times, without notice or further assent from it, and Guarantor shall
remain bound upon this guaranty notwithstanding any one or more extensions or
renewals of any Obligation.
(b) Guarantor waives presentation to, demand for payment from and
protest to, as the case may be, Borrower, Guarantor, and any other obligor on
any of the Obligations, and also waives notice of protest for nonpayment and
notice of default. Guarantor hereby consents to, at any time and from time to
time, and the obligations of Guarantor hereunder shall not be diminished,
terminated, or otherwise similarly affected by: (i) the failure of Bank to
assert any claim or demand or to enforce any right or remedy against Borrower or
any other obligor on any of the Obligations; (ii) any waiver, rescission,
modification, compromise, amendment, impairment, acceleration, extension,
renewal, or the like of any Obligation or of any term or provision of any
document, agreement, or instrument relating to any Obligation or any failure of
Bank to obtain the then contemporaneous consent of Guarantor to any of the
matters addressed in this Section 1 of this guaranty; (iii) the release,
exchange, waiver, impairment, or foreclosure of any security held by
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Bank for any of the Obligations; (iv) the failure of Bank to exercise any right
or remedy against Borrower or any other obligor on any of the Obligations; or
(v) the release or substitution of Borrower or any other obligor on any of the
Obligations. Bank hereby reserves all rights and remedies against Guarantor.
(c) Guarantor further agrees that this guaranty constitutes a guaranty
of performance and of payment when due and not just of collection, and waives
any right to require that any resort be had by Bank to any security held for
payment of any of the Obligations or to any balance of any deposit, account, or
credit on the books of Bank in favor of Borrower or any other obligor on any of
the Obligations; and Guarantor hereby expressly assumes all responsibilities to
remain informed of the financial condition of Borrower and any circumstances
affecting the ability of Borrower to perform any and all Obligations. Guarantor
shall provide from time to time such financial and other information concerning
Guarantor or Borrower as Bank may reasonably request.
(d) Guarantor's guaranty herein shall not be affected by the
genuineness, validity, regularity, sufficiency, or enforceability of the
Obligations or any instrument evidencing any Obligations or by the existence,
validity, enforceability, value, perfection, or extent of any collateral
therefor or by any other circumstance relating to the Obligations, which might
otherwise constitute a defense to this guaranty. Guarantor acknowledges and
agrees that Bank expressly makes no representation or warranty in respect to any
such or related circumstances and has no duty or responsibility whatsoever to
Guarantor in respect to the management or maintenance of the Obligations or any
collateral security for the Obligations.
(e) The obligations of Guarantor hereunder shall not be subject to any
reduction, limitation, impairment, or termination for any reason, including any
claim of one or more waivers, releases, surrenders, alterations or compromises
(as to all of which Guarantor hereby consents); and, the obligations of
Guarantor hereunder shall not be subject to any defense or set-off,
counterclaim, recoupment, reduction, diminution, or termination whatsoever by
reason of (i) the invalidity, illegality, or unenforceability of any of the
Obligations or otherwise, (ii) discharge of Borrower from any of the Obligations
in a bankruptcy or other proceeding, (iii) failure or lack of consideration,
fraudulent conveyance, or fraudulent transfer by or involving Borrower, any
other obligor on any of the Obligations, or any person or entity pledging any
collateral as security therefor, (iv) equitable subordination of any claim of
Bank, or (v) any other circumstance, failure, or omission, whether or not
similar to any of the foregoing, which might otherwise constitute a defense
available to, or discharge of, Borrower, Guarantor, or any other obligor
directly or indirectly obligated on any Obligation. Without limiting the
generality of the foregoing, the obligations of Guarantor hereunder shall not be
discharged or impaired or otherwise diminished by any failure, default,
omission, or delay, willful or otherwise, by Bank or Borrower or any other
obligor on any of the Obligations, or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of Guarantor or would otherwise operate as a discharge of
Guarantor as a matter of law or equity; Guarantor hereby waives any defense to,
or discharge from, the performance of its obligations hereunder based on
principles of suretyship or impairment of collateral or the like.
2. Continuation, Reinstatement, Subrogation, etc.
(a) Upon termination of all credit available from Bank to or for
Borrower and indefeasible payment in full of the Obligations, this guaranty
shall terminate; provided, however, that this guaranty shall continue to be
effective or be reinstated, as the case may be, any time any payment of any of
the Obligations is rescinded, recouped, avoided, or must otherwise be returned
or released by Bank upon or during the insolvency, bankruptcy, or reorganization
of Borrower or for any other reason whatsoever, all as though such payment had
not been made and was due and owing.
-2-
144
(b) Guarantor hereby irrevocably waives, surrenders, and agrees not to
claim or enforce any right to require the marshaling of any assets of Borrower
or Guarantor or any other obligor on any of the Obligations.
(c) Guarantor shall not exercise any rights against Borrower arising in
connection with the Obligations (including rights of subrogation, contribution,
and the like) until the Obligations have been indefeasibly paid in full.
(d) Upon the occurrence and during the continuation of any default
under any Obligation, if any amount shall be paid to Guarantor for the account
of Borrower, such amount shall be held in trust for the benefit of Bank and
shall forthwith be paid to Bank to be credited and applied to the Obligations
when due and payable.
3. Cross-Default, Incorporation of Terms.
A default, breach, or Event of Default under that Amended and Restated
Revolving Credit and Term Loan Agreement by and among Sylvan Spawn Laboratory,
Inc., Sylvan Foods Holdings, Inc., Moonlight Mushrooms, Inc., Quincy
Corporation, Mellon Bank N.A., and Bank, dated as of November 19, 1991, as
amended through the as of date hereof (the "Loan Agreement"), shall be deemed to
be a breach, default, and Event of Default under each and every Obligation for
the purposes hereof, whereupon Bank may, at its option, demand and collect from
Guarantor the full amount of the Obligations outstanding and hold the same in an
account or accounts at Bank (which account or accounts Guarantor hereby pledges
and transfers to Bank as collateral security for the Obligations) as security
for the Obligations. Upon the termination of the Loan Agreement, Bank shall, at
its sole option, be permitted to incorporate into this guaranty such terms and
provisions from the Loan Agreement as Bank shall reasonably select.
4. Miscellaneous.
(a) Any waiver by Bank of any provision hereof shall be effective only
for the specific purpose and event for which given and no waiver shall extend to
any subsequent or other event or impair any right consequent thereto. No single
or partial exercise of any other right, power, or privilege under this guaranty
shall preclude any exercise of that or any other right, power, or privilege. In
addition to and independent of Bank's right of set-off and to secure all
Obligations, Guarantor grants to Bank a continuing lien upon and security
interest in any and all monies, securities, and other property of Guarantor, and
the proceeds thereof, now or hereafter held or received by or in transit to Bank
from or for Guarantor, including any and all deposit and other accounts and
credits of Guarantor at Bank, at any time and from time to time existing.
Guarantor acknowledges and agrees that Bank is and shall act in reliance upon
this guaranty in extending any credit and other financial accommodations, now
and hereafter, to or for the benefit of Borrower.
(b) All rights and remedies of Bank hereunder and under applicable law
and equity are cumulative and not exclusive, and no course of dealing between
Borrower or Guarantor and Bank and no delay or omission in exercising any right
or remedy by Bank shall operate as a waiver of any such right or remedy, and
every right and remedy may be exercised from time to time and as often as shall
be deemed appropriate by Bank.
(c) This guaranty shall be binding upon Guarantor and its successors
and assigns and shall inure to the benefit of Bank and its successors and
assigns. Bank may assign or transfer, or participate an interest in, this
guaranty and any of the Obligations; Guarantor may not assign or delegate any of
its rights or obligations hereunder without the prior written consent of Bank.
-3-
145
(d) As used herein, the terms "hereof," "herein," and terms of similar
import refer to this guaranty as a whole and not to any particular term or
provision; the term "including," as used herein, is not a term of limitation and
means "including without limitation"; "Dfl." means Dutch Guilders
(e) This guaranty shall be governed by and construed in accordance with
the internal laws of the Commonwealth of Pennsylvania without regard to conflict
of laws principles. In the event that any provision of this guaranty shall be
found to be unenforceable or invalid, the remaining provisions shall remain in
full force and effect. This guaranty shall not be modified, waived, or amended,
except in a writing executed by Bank. Any acknowledgment, new promise, payment
of principal or interest, or other similar act, whether by Borrower or Guarantor
or another, with respect to any of the Obligations shall, if the statute of
limitations in favor of Guarantor against Bank shall have commenced to run, toll
the running of such statute of limitations or, if the period of such statute of
limitations shall have expired, prevent the operation of such statute of
limitations.
(f) For the purposes of any action or proceeding involving this
guaranty or any of the Obligations, Guarantor hereby expressly submits to the
non-exclusive jurisdiction of all federal and state courts located in the
Commonwealth of Pennsylvania and Guarantor hereby irrevocably and
unconditionally waives (i) any objection Guarantor may now or hereafter have to
the laying of venue in any such courts for any such actions or proceedings, and
(ii) any claim that any such action or proceeding was brought in an inconvenient
forum; Guarantor hereby waives trial by a jury in connection with any matter
arising hereunder or relating hereto or relating to any of the Obligations.
5. Acknowledgements and Agreements.
(a) Guarantor acknowledges, agrees, represents, and warrants that it is
the owner, directly or indirectly, of Borrower and that financial accommodations
granted by Bank to Borrower shall result in a direct economic benefit to
Guarantor and that this guaranty is a reasonably equivalent exchange of value
therefor.
(b) Guarantor acknowledges and agrees that transmittal by telecopier to
Bank of Guarantor's signature hereon shall constitute valid and effective
execution and delivery hereof.
IN WITNESS WHEREOF and intending to be legally bound hereby, the
undersigned has executed this guaranty as of the day and year first above
written.
SYLVAN INC., a Nevada corporation
Attest:/s/ XXXX X. XXXXXXX By: /s/ XXXXXXX X. XXXXXX (SEAL)
------------------------ --------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
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146
SYLVAN INC.
===========
CERTIFICATE OF SECRETARY: GUARANTY RESOLUTIONS
OF CORPORATE BOARD;
INCUMBENCY CERTIFICATE: BYLAWS: ARTICLES
----------------------------------------
January 31, 1996
I HEREBY CERTIFY: That I am the duly elected and qualified Secretary of
SYLVAN INC., a Nevada corporation (the "Corporation"), and as such officer I am
the official custodian of the records and the corporate seal of the Corporation;
that attached hereto as Exhibit A is a true and correct copy of Resolutions duly
adopted at a meeting of the Corporation's Board of Directors held in accordance
with law and the Corporation's Articles of Incorporation and Bylaws on the 31st
day of January, 1996; and, that such Resolutions conform to the provisions of
the Bylaws of the Corporation relating to the matters set forth in such
Resolutions, are not inconsistent with its Articles of Incorporation or law, and
that such Resolutions have not been amended or revoked and are now in full force
and effect.
I HEREBY FURTHER CERTIFY: That the seal affixed hereto is the corporate
seal of the Corporation, that the individuals named below are duly constituted
officers of this Corporation, presently serving in the respective offices
indicated, are authorized by the attached Resolutions to act in the name of and
on behalf of the Corporation as set forth in the attached Resolutions, and whose
true, genuine, and original signatures appear below:
Xxxxxxx X. Xxxxxx Chief Financial Officer /s/ XXXXXXX X. XXXXXX
------------------ ------------------------ -------------------------
(Name) (Title) (Genuine Signature)
------------------ ------------------------ -------------------------
(Name) (Title) (Genuine Signature)
------------------ ------------------------ -------------------------
(Name) (Title) (Genuine Signature)
I HEREBY FURTHER CERTIFY: That the Bylaws and Articles of Incorporation
of the Corporation have not been amended, modified, or changed in any respect
since June 28, 1994.
IN WITNESS WHEREOF, I hereby certify the foregoing to ABN AMRO Bank
N.V. and I have hereunto affixed my name as Secretary and have caused the seal
of the Corporation to be affixed as of the day and year first above written.
/s/ XXXX X. XXXXXXX
------------------------
Secretary
(AFFIX CORPORATE SEAL)
147
EXHIBIT A
---------
GUARANTY RESOLUTIONS OF CORPORATE BOARD
SYLVAN INC.
RESOLVED, that any one of the President, _________________________, or
Chief Financial Officer of this Corporation (and each of their successors in
office) (each a "Designee") is each hereby authorized for and on behalf of and
in the name of the Corporation, and that this Corporation is hereby authorized,
for such time, at such interest rates, with such collateral, and on such other
terms and conditions, as are deemed appropriate by the Designee, to:
(a) Execute and deliver to ABN-AMRO BANK N.V. and its
affiliates and subsidiaries (hereinafter jointly and severally referred
to as the "Bank"), in such form as may be required by Bank and deemed
advisable by the Designee, a guaranty pursuant to which this
Corporation unconditionally shall be a continuing surety for, and
guaranty the payment and performance of, all present and future
indebtedness, liabilities, and obligations of Sylvan Foods
(Netherlands) B.V. (hereinafter "Borrower"), a Dutch entity, to Bank;
(b) Take any and all action deemed expedient, in the sole and
absolute discretion of the Designee, to consummate any such financial
transactions with the Bank; and
(c) Any and all authorizations, approvals, or consent of the
Board of Directors of this Corporation to take such action are hereby
specifically conferred on the Designee.
FURTHER RESOLVED, that the powers and authorizations hereby granted by
this Board of Directors shall be binding upon the Corporation until written
notice of any changes, modifications, rescissions, or the like thereof have been
duly delivered to the Pittsburgh Branch of ABN AMRO Bank N.V. and accepted by
the same, but any such notice shall in no way affect the rights of Bank relating
to loans, advances, or financial or other accommodations previously made by Bank
and the sole effect of such notice shall be to remove authorization concerning
unrelated transactions and liabilities occurring subsequent to the acceptance of
such notice by Bank;
FURTHER RESOLVED, that the signature of a Designee shall be conclusive
evidence of her or his authority to act on behalf of and in the name of the
Corporation as provided herein;
FURTHER RESOLVED, that these Resolutions are in addition to and not by
way of limitation on other resolutions and consents, if any, of the Directors or
Shareholders of this Corporation in favor of or to the benefit of the Bank and
that any and all previous actions taken by any officer, director, employee, or
agent of the Corporation with respect to any of the foregoing are hereby
confirmed and ratified in all respects; and
FURTHER RESOLVED, that the Secretary of this Corporation be and hereby
is duly authorized and empowered to certify as to the passage and substance of
these Resolutions under the seal of this Corporation.
148
Schedule 6.05
LOANS AND INVESTMENTS
--------------------------------------------------------------------------------
AMOUNT BORROWER LENDER
--------------------------------------------------------------------------------
$375,000 Mushroom Producers' Cooperative, Inc. Sylvan Spawn
[Attached as Exhibit 6.05] Laboratory, Inc.
--------------------------------------------------------------------------------
149
EXHIBIT 6.05
MUSHROOM PRODUCERS' CO-OPERATIVE INC.
PROMISSORY NOTE
---------------
$375,000 Date: November 18, 1994
--------
FOR VALUE RECEIVED, the undersigned MUSHROOM PRODUCERS' CO-OPERATIVE INC., an
Ontario corporation (the "Co-op"), promises to pay to the order of SYLVAN SPAWN
LABORATORY, INC., a Pennsylvania corporation ("Sylvan"), the principal sum of
THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($375,000), together with interest
on the unpaid principal amount thereof from time to time outstanding at the
Interest Rate calculated as hereinbelow set forth at the times and in the manner
hereinafter set forth.
1. DEFINITIONS
--------------
In addition to the other words and terms defined elsewhere in this Note, as used
herein the following words and terms shall have the following meanings:
"Aggregate Liability" shall mean, with respect to each Equity Participant, the
sum in Dollars indicated as the Aggregate Liability (plus interest) and set
forth opposite that Person's name in Schedule A, which is annexed to and made a
part of this Note.
"Dollar," "Dollars" and "$" shall mean lawful money of the Unites States of
America.
"Change of Control" shall be deemed to have occurred whenever any "Person"
including without limitation any "Affiliate" or "Associate" of such Person (as
each of such terms are used in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934 (other than the Co-op or any Person
who is the beneficial owner of more than 10% of the common stock of the Co-op as
of the date of the execution of this Note)), shall become the beneficial owner
of securities of the Co-op representing more than 25% of the combined voting
power of the Co-op's then outstanding voting securities.
"Equity Participant" shall be those Persons whose names are listed on Schedule
A, which is annexed hereto and made a part hereof.
"Facility" shall mean the Co-op's mushroom compost production facility which is
located in Harley, Ontario.
"Interest Rate" shall, in general, mean the London Interbank Offered Rate per
annum for Dollar deposits in the London Interbank market for one month, as
published in the "Money Rates" section of the Wall Street Journal (the
"Journal") on each business day. The specific rate which is used to calculate
the interest payment which is made on the date of the first scheduled
installment of the repayment of principal hereunder (and on the date of any
intervening repayment of principal) shall be the rate which appeared in the
Journal for the date of the making of this Note or if the Journal was not
published for such date, the next succeeding date for which the Journal was
published. The specific
150
rate which is used to calculate the interest payment which is made on each
succeeding scheduled installment payment date (or on the dates of any
intervening repayments of principal) shall be the rate which was published in
the Journal for or as of the immediately prior scheduled installment repayment
date.
"Note" shall mean this Promissory Note.
"Person" shall mean an individual, corporation, partnership, unincorporated
association, joint venture, governmental authority or agency, or any other
entity.
"Default" shall mean any of the events described in Section 5 hereof.
2. REPAYMENT OF PRINCIPAL AND INTEREST
--------------------------------------
Principal. The Co-op agrees to repay the principal of the loan to Sylvan in (a)
59 monthly installments of $3,125.00 each, beginning on June 30, 1995 and
continuing on the same day of each of the succeeding 58 months thereafter and
(b) one installment of $190,625.00 plus any and all previously unpaid monthly
installments, on the same day of the 60th month thereafter. The Co-op shall have
the right at its option from time to time to voluntarily prepay the loan in
whole or in part without premium or penalty.
Interest. The Co-op agrees to pay interest at the Interest Rate on each of the
principal repayment dates set forth above on the unpaid principal amount of this
Note from time to time outstanding.
Place of Repayment. Payments of principal and interest by the Co-op to Sylvan
shall be payable in Dollars to Sylvan at Xxxx Xxxxx Xxxxxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000.
3. REPRESENTATIONS AND WARRANTIES
---------------------------------
The Co-op represents and warrants that:
(a) The Co-op is borrowing the loan amount to provide capital for its Facility;
(b) The Co-op has the full corporate power, authority and legal ability and has
taken all necessary action to execute, deliver and perform in accordance
with this Note;
(c) There is in force no order or decree restraining or enjoining, prohibiting
or invalidating, or otherwise affecting the Co-op's ability to perform in
accordance with this Note and no person has notified the Co-op of its
intention to institute any suit, proceeding, or investigation and no such
suit, proceeding or investigation is pending against the Co-op to restrain,
enjoin, prohibit, invalidate or otherwise affect the Co-op's performance in
accordance with this Note;
(d) Any and all permits, licenses, qualifications, authorizations or approvals
from any governmental authority which are required for the operation of the
Co-op's Facility have either been obtained and are in full force and effect
or are certain of being obtained and placed in full force and effect in a
timely manner;
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151
(e) The Co-op has obtained approval from Scotia Bank to enter into this
transaction and Scotia Bank has agreed to provide funding for the Facility
pursuant to the bank's commitment letter dated December 1, 1994;
(f) The execution of this Note does not affect or impede the Co-op's ability to
obtain guarantees of the Scotia Bank loan under the Farm Improvement
Marketing Cooperatives Loans Act;
(g) There have been delivered to Sylvan guarantee agreements executed by each of
the Equity Participants in form and substance satisfactory to Sylvan, dated
as of the closing date, whereby the Equity Participants unconditionally
guarantee to Sylvan the due and punctual payment of principal and interest
under this Note, when and as such principal and interest become due and
payable; provided, however, that the total liability of each Equity
Participant at any given time shall not exceed the Equity Participant's
Aggregate Liability, less such Equity Participant's proportional share of
the total of all payments of principal which were previously made to Sylvan;
(h) An Exclusive Requirements Agreement(s) by and between Sylvan, the Co-op and
the Equity Participants with respect to the sale of spawn to the Co-op and
the Equity Participants has been executed and is in full force and effect;
and
(i) This Note, the guarantee agreements referenced in Section 3(g) herein and
the Exclusive Requirements Agreement(s) referenced in Section 3(h) herein
are valid, binding and enforceable, each in accord with its respective
terms.
4. FINANCIAL DISCLOSURE
-----------------------
The Co-op agrees to furnish Sylvan, or the holder of this Note, upon demand, but
not more often than annually, so long as any part of the indebtedness under this
Note remains unpaid, a financial statement setting forth, in reasonable detail,
the Co-op's assets, net worth, and income and expenses.
5. DEFAULT
----------
A Default shall mean the occurrence or existence of one or more of the following
events or conditions:
(a) The Co-op shall fail to pay principal or interest payments when due.
(b) The Co-op shall default on the performance of any covenant contained herein.
(c) Any representation or warranty made by the Co-op under this Note or any
statement made by the Co-op in any financial statement, certificate, report,
exhibit or document furnished by the Co-op to Sylvan shall prove to have
been false or misleading in any material respect as of the time when made.
(d) The Co-op or any of its members shall default in the performance of their
responsibilities under the Exclusive Requirements Agreement referenced in
Section 3(h) herein.
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152
(e) Any Equity Participant shall cease its affiliation with the Co-op either
(i) without Sylvan's prior written consent or (ii) without having paid or
provided for the payment of its Aggregate Liability, less its proportional
share of the total of all payments of principal which were previously made
to Sylvan under this Note.
(f) One or more judgments for the payment of money shall have been entered
against the Co-op and such judgment shall have remained undischarged and
unsatisfied for a period of thirty consecutive days.
(g) Any authorization, consent, approval, license, exemption, registration,
qualification, designation, declaration, filing or other action or
undertaking now or hereafter made by or with any governmental authority in
connection with the establishment and operation of the Co-op's Facility and
any action or undertaking now or hereafter necessary or advisable in that
connection is not obtained or shall have ceased to be in full force and
effect or shall have been modified or amended or shall have been held to be
illegal or invalid, and Sylvan shall have determined in good faith (which
determination shall be conclusive) that such event or occurrence may have a
material adverse effect on its rights under this Note.
(h) The Co-op shall become insolvent; become generally unable to pay its debts
as they become due; voluntarily suspend transaction of its business; make a
general assignment for the benefit of creditors, or consent to any such
order for relief, declarations, finding or relief described therein, or
consent to any such appointment or to the taking of possession by any such
official of all or any substantial part of its property whether or not any
such proceeding is instituted; dissolve, wind-up or liquidate itself or any
substantial part of its property; or take any action in furtherance of any
of the foregoing.
6. IN THE EVENT OF A DEFAULT
----------------------------
If a Default shall occur or exist, Sylvan may declare the unpaid principal
amount under this Note and interest accrued thereon to be immediately due and
payable, and an action for amounts due hereunder shall immediately accrue. The
Co-op hereby expressly waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note.
The Co-op agrees to pay, in addition to all other sums payable hereunder, the
reasonable costs and expenses incurred by Sylvan in connection with all actions
taken to enforce collection hereof upon Default by the Co-op, whether by legal
proceedings or otherwise.
7. CONFESSION OF JUDGMENT
-------------------------
The Co-op hereby empowers the prothonotary or any attorney of any court of
record within the United States or elsewhere to appear for the Co-op and, with
or without one or more declarations filed, to confess judgment as often as
necessary against the Co-op in favor of the holder hereof in any such court, as
of any term, for the above sum, together with costs of suit and with release of
all errors. The Co-op hereby waives any right to stay of execution and extension
upon any levy on real estate pursuant to any judgment so entered and also hereby
expressly waives the exemption of all property
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153
from levy and sale on any execution thereon and also any exemption laws now in
force or which may hereafter be enacted by any state or nation insofar as such
exemption laws may be waived.
8. MISCELLANEOUS
----------------
Governing Law. This Note shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
principles of choice of law.
Nonassignability by Co-op. The Co-op shall not assign or delegate its
obligations hereunder and the Note shall be binding on the Co-op's successors.
Assignability by Sylvan. This Note may be delivered to and endorsed in favor of
(a) Mellon Bank N.A. of Pittsburgh, Pennsylvania, for the ratable benefit of the
Banks under the Amended and Restated Revolving Credit and Term Loan Agreement,
dated November 19, 1991, as amended, or (b) an Affiliate of Sylvan's choosing.
"Affiliate", for this purpose, shall mean any company which, by reason of stock
ownership or otherwise, controls, is controlled by or is under common control
with Sylvan.
ATTEST: MUSHROOM PRODUCERS'
CO-OPERATIVE INC.
/s/ ???????????? By:/s/ ?????????????????
------------------------- ------------------------
Title: PRESIDENT
5
154
MUSHROOM PRODUCERS' CO-OPERATIVE INC.
PROMISSORY NOTE
SCHEDULE A
CAPITAL CONTRIBUTIONS
% OF NOTE AGGREGATE
EQUITY PARTICIPANT TOTAL PRINCIPAL LIABILITY
------------------ ----- --------- ---------
683555 Ontario Ltd. C $101,000 34.0% $375,000 $127,525
Xxxx Xxxxxx and Xxxx Xxxx XxxxxxXxxxx C $ 14,000 4.7% $375,000 $ 17,677
Xxxxxx Mushroom Farms Inc. C $ 49,000 16.5% $375,000 $ 61,869
Superb Mushroom Farms Inc. C $ 42,000 14.1% $375,000 $ 53,030
Xxxx Xxxxxxx Farm Products Ltd. C $ 77,000 25.9% $375,000 $ 97,222
Whitecrest Mushrooms Limited C $ 14,000 4.7% $375,000 $ 17,677
-------- --------
TOTAL $297,000 $375,000
155
SCHEDULE 6.13
LIMITATIONS ON OTHER RESTRICTIONS ON STOCK PAYMENTS, LOANS AND INVESTMENTS
Sylvan Holdings Pty. Ltd.: Sylvan Foods (Netherlands) B.V. owns 49% of the
shares of Sylvan Holdings Pty. Ltd., which in turn holds 100% of the shares of
Sylvan Australia Pty. Ltd. Sylvan's representatives on the Sylvan Holdings board
of directors have the right to cast a tie breaking vote in the event of a
deadlock. The board has the right to approve share transfers and to declare
dividends. Sylvan's exercise of a tie breaking vote initiates a buyout valuation
process, whereby Sylvan purchases the remaining 51% of the shares of Sylvan
Holdings after the valuation process is concluded.
Xxxxxx Xxxxx B.V.: Xxxxxx Xxxxx B.V. (a 75% owned subsidiary of Sylvan Foods
(Netherlands) B.V.) is a party to a loan agreement with ABN-AMRO Bank B.V. The
agreement requires the shareholders of the company to maintain a minimum capital
and subordinated loan base of 30% of the company's balance sheet total prior to
the payment of any dividends or the repayment of any subordinated loans.
Certain of Sylvan's U.S. Subsidiaries are subject to restrictions imposed by
their respective jurisdictions of incorporation on the making of stock payments
or loans or investments in the Company if the Subsidiary's capital would be
thereby impaired. Further, French law restricts a French company from making
financial commitments in favor of another company in the same affiliated group
unless (i) the two companies belong to a structured group, the members of which
share a common economic purpose (as opposed, for example, to a conglomerate
situation), (ii) the transaction has been entered into in furtherance of the
company's economic, corporate or financial interests within the framework of a
common policy defined for the group as a whole and (iii) the financial
commitment is entered into for consideration, does not disrupt the balance
between the respective commitments of each company involved and does not exceed
the financial capacities of the company that bears the burden of such
commitment. The Company is not aware of similar restrictions imposed by other
countries. However, the Company believes that if any such restrictions exist,
they would not materially and adversely affect the ability of the Borrowers duty
to perform all of their obligations under the Agreement, the Notes and the
Security Documents.
156
Schedule 9.13
SECURED HEDGE AGREEMENTS
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COUNTERPARTY ABN-AMRO, Chicago ABN-AMRO, Chicago
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NOTIONAL AMOUNT $5,000,000 $5,000,000
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INTEREST RATE 6.08% 6.03%
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MATURITY DATE October 4, 1999 October 29, 1999
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AGREEMENT DATE October 4, 1997 October 29, 1997
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