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EXHIBIT 10.19
AMENDED AND RESTATED
CREDIT AGREEMENT
Between
NEWBEVCO, INC.
And
COMERICA BANK
DATED AS OF DECEMBER 10, 1998
$20,000,000.00 Revolving Credit
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................................................... 1
1.1 Defined Terms.................................................................................. 1
1.2 Other Definitional Provisions..................................................................18
SECTION 2. AMOUNT AND TERMS OF CREDIT............................................................................19
2.1 The Revolving Credit...........................................................................19
2.2 Conversion to Term Loan........................................................................22
2.3 Use of Proceeds of Revolving Credit............................................................23
2.4 Interest Rate..................................................................................23
2.5 Prepayment.....................................................................................24
2.6 Unused Fee for Revolving Credit................................................................24
SECTION 3. SECURITY AND GUARANTY.................................................................................25
3.1 Security Interest..............................................................................25
3.2 Guaranty.......................................................................................25
SECTION 4. REPRESENTATIONS AND WARRANTIES........................................................................26
4.1 Corporate Existence; Power; Compliance with Law; Restricted Subsidiaries; Name History.........26
4.2 Capital Stock; Parent; Subsidiaries............................................................26
4.3 Corporate Power and Authorization to Execute Loan Documents; No Conflict; No Consent...........27
4.4 Enforceable Obligations........................................................................28
4.5 Financial Condition............................................................................28
4.6 No Litigation..................................................................................28
4.7 Investment Company Act; Regulation.............................................................29
4.8 Disclosure and No Untrue Statements............................................................29
4.9 Title to Assets; Leases in Good Standing.......................................................29
4.10 Investments....................................................................................30
4.11 Payment of Taxes...............................................................................30
4.12 Agreement or Contract Restrictions; No Default.................................................30
4.13 Patents, Trademarks, Licenses, Etc. ...........................................................31
4.14 Government Contract............................................................................31
4.15 Compliance with ERISA; Multiemployer Plans.....................................................31
4.16 Compliance with Environmental Laws.............................................................32
4.17 Labor Relations................................................................................33
4.18 Solvency.......................................................................................34
4.19 Racketeer Influenced and Corrupt Organizations Act.............................................34
SECTION 5. CONDITIONS OF LENDING.................................................................................35
5.1 Continuing Accuracy of Representations and Warranties..........................................35
5.2 No Default.....................................................................................35
5.3 Opinion of the Borrower's Counsel..............................................................35
5.4 Opinion of the Bank's Counsel..................................................................35
5.5 Loan Documents.................................................................................36
5.6 Supporting Documents...........................................................................36
SECTION 6. AFFIRMATIVE COVENANTS.................................................................................36
6.1 Financial Reports and Other Information........................................................36
6.2 Payment of Indebtedness to the Bank; Performance of other Covenants; Payment of
Other Obligations.............................................................................38
6.3 Conduct of Business; Maintenance of Existence and Rights.......................................38
6.4 Maintenance of Property........................................................................39
6.5 Right of Inspection; Discussions...............................................................39
6.6 Notices........................................................................................39
6.7 Payment of Taxes; Liens........................................................................41
6.8 Insurance of Properties........................................................................41
6.9 True Books.....................................................................................42
6.10 Observance of Laws.............................................................................42
6.11 Further Assurances.............................................................................42
6.12 ERISA..........................................................................................42
6.13 Change of Name, Principal Place of Business, Office, or Agent..................................42
6.14 Financial Covenants............................................................................43
SECTION 7. NEGATIVE COVENANTS...................................................................................43
7.1 Limitations on Mortgages, Liens, Etc. .........................................................43
7.2 Consolidation and Merger, Sale of Assets, Etc. ................................................43
7.3 Transfer and Sale of Assets; Sale and Leaseback................................................44
7.4 Restricted Subsidiary Dividends................................................................45
7.5 Limitations on Restricted Payments.............................................................46
7.6 Limitations on Restricted Investments..........................................................46
7.7 Regulation U...................................................................................46
7.8 Transactions with Affiliates...................................................................47
7.9 Limitation on Nature of Business...............................................................47
7.10 Restricted Subsidiaries........................................................................47
7.11 Changes in Governing Documents, Accounting Methods, Fiscal Year................................48
7.12 Limitation on Incurrence of Debt...............................................................48
SECTION 8. EVENTS OF DEFAULT....................................................................................49
8.1 Payment of Obligations Under Loan Documents....................................................49
8.2 Representation or Warranty.....................................................................49
8.3 Covenants under this Agreement.................................................................49
8.4 Other Covenants Under the Loan Documents.......................................................49
8.5 Payment, Performance, or Default of other Monetary Obligations.................................49
8.6 Covenants or Defaults to the Bank or Others....................................................50
8.7 Liquidation; Dissolution; Bankruptcy; Etc. ....................................................50
8.8 Involuntary Bankruptcy, Etc. ..................................................................50
8.9 Judgments......................................................................................50
8.10 Attachment, Garnishment, Liens Imposed by Law..................................................51
8.11 ERISA..........................................................................................51
8.12 Corporate Existence............................................................................51
8.13 Defaults Generally.............................................................................51
SECTION 9. REMEDIES OF THE BANK.................................................................................52
SECTION 10. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS....................................................52
10.1 Reimbursement of Prepayment Costs..............................................................52
10.2 Bank's Eurocurrency Lending Office.............................................................53
10.3 Circumstances Affecting Eurocurrency-based Rate Availability...................................53
10.4 Laws Affecting Eurocurrency-based Advance Availability.........................................54
10.5 Increased Cost of Eurocurrency-based Advances..................................................54
10.6 Other Increased Costs..........................................................................55
SECTION 11. MISCELLANEOUS.......................................................................................55
11.1 Course of Dealing; Amendment; Supplemental Agreements..........................................55
11.2 Waiver By the Bank of Requirements.............................................................55
11.3 Waiver of Default..............................................................................56
11.4 Notices........................................................................................56
11.5 No Waiver; Cumulative Remedies.................................................................56
11.6 Reliance Upon, Survival of, and Materiality of Representations and Warranties, Agreements,
and Covenants.................................................................................56
11.7 Set-Off........................................................................................57
11.8 Severability and Enforceability of Provisions..................................................57
11.9 Payment of Expenses, Including Attorneys' Fees and Taxes.......................................57
11.10 Obligations Absolute...........................................................................58
11.11 Successors and Assigns.........................................................................58
11.12 Counterparts; Effective Date...................................................................58
11.13 Participations.................................................................................59
11.14 Law of Michigan................................................................................59
11.15 Consent to Jurisdiction........................................................................59
11.16 Title and Headings; Table of Contents..........................................................59
11.17 Complete Agreement; No Other Consideration.....................................................59
11.18 Legal or Governmental Limitations..............................................................60
11.19 Interest.......................................................................................60
11.20 Independence of Covenants......................................................................60
11.21 Amendment and Restatement......................................................................60
11.22 WAIVER OF TRIAL BY JURY........................................................................60
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made and entered into as of this 10th day of
December, 1998, by and between NEWBEVCO, INC., a Delaware corporation (the
"Borrower") and COMERICA BANK, a Michigan banking corporation (the "Bank").
BACKGROUND
Borrower and Bank entered into a Credit Agreement dated as of February 19,
1997, as amended, ("Prior Agreement") pursuant to which Bank extended a two-year
$10,000,000 revolving credit facility to Borrower. The Borrower has applied to
the Bank to increase the revolving credit availability to a maximum principal
amount of Twenty Million and no/100 Dollars ($20,000,000.00). The Bank is
willing to establish on its books such revolving credit availability for the
Borrower upon the terms and conditions described in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
covenants, and conditions herein, the Borrower and the Bank agree that the Prior
Agreement is amended and restated as follows:
SECTION 1. DEFINITIONS.
1.1 DEFINED TERMS.
Except as otherwise expressly provided in this Agreement, the capitalized
terms used in the foregoing preamble and background sections and the following
capitalized terms shall have the respective meanings ascribed to them for all
purposes of this Agreement:
"Advance" means a borrowing requested by Borrower and made by Bank under
Subsection 2.1(a) of this Agreement, including without limitation any readvance,
refunding or conversion of such borrowing pursuant to Subsection 2.1(c) hereof,
and shall include, as applicable, a Eurocurrency-based Advance and/or
Prime-based Advance.
"Affiliate" means with respect to any Person, any other Person (i) which,
directly or indirectly, through one or more intermediaries controls, or is
controlled by, or is under common control with, such Person or another Affiliate
of such Person, (ii) which beneficially owns or holds 10% or more of the shares
of any class of the voting stock of such Person, or (iii) 10% or more of the
shares of any class of voting stock of which is beneficially owned or held of
record by such Person or any of its Subsidiaries. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting stock, by contract, or otherwise. The term "Affiliate," when
used herein without reference to any Person, shall mean an Affiliate of the
Borrower.
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"Aggregate Adjusted Restricted Payments and Investments" means, as of any
date of determination thereof, the amount, if any, by which (1) the amount of
Aggregate Restricted Payments and Investments as of such date exceeds (2) the
amount of Applied Equity Proceeds as of such date. For the purpose of such
definition: (i) "Aggregate Restricted Payments and Investments" shall mean, as
of any date of determination thereof, the aggregate amount of all Restricted
Payments and Restricted Investments made subsequent to May 1, 1992, and on or
prior to such date of determination; (ii) "Applied Equity Proceeds" shall mean,
as of any date of determination thereof, the sum of the amounts of individual
receipts of Equity Proceeds Applied to Capital Stock Repurchases and/or
Restricted Investments of Proceeds made subsequent to May 1, 1992, and on or
prior to such date of determination; (iii) "Equity Proceeds" shall mean, as of
any date of determination thereof, the amount of (x) the net cash proceeds of
any sale by the Borrower of common stock or preferred stock or warrants or
options or any other right to purchase common stock or preferred stock received
after May 1, 1992, and on or prior to such date of determination, (y) the
amount of any capital contribution received by the Borrower after May 1, 1992,
and on or prior to such date of determination, or (z) the principal amount of
any Indebtedness of the Borrower which has been converted into common stock or
preferred stock after May 1, 1992, and on or prior to such date of
determination; (iv) "Restricted Investment of Proceeds" shall mean the amount
of any Restricted Investment which is not an Investment in an Affiliate of the
Borrower other than a Subsidiary of the Borrower; and (v) "Applied" shall mean,
with respect to the amount of any Capital Stock Repurchase or Restricted
Investment of Proceeds, the offsetting of some or all of the amount thereof
against the amount of any individual receipt of Equity Proceeds received by the
Borrower within, one year before or within one year after the date on which
such Capital stock Repurchase or Restricted Investment of Proceeds is made for
the purpose of determining Applied Equity Proceeds; provided, however, that,
for the purpose of determining the amount of Applied Equity Proceeds, (x) the
amount of each individual receipt of Equity Proceeds may only be Applied,
without duplication, to the extent of the amount of any Capital Stock
Repurchase or Restricted Investment of Proceeds made within one Year before or
within one year after such receipt of Equity Proceeds and (y) the amount of any
Capital Stock Repurchase or Restricted Investment of Proceeds may be Applied
only once, but to the extent that the entire amount of any such Capital Stock
Repurchase or Restricted Investment of Proceeds is not Applied to an individual
receipt of Equity Proceeds, the portion thereof which has not been Applied may
be Applied to any subsequent receipt of Equity Proceeds within one year before
or within one year after the making of such Capital Stock Repurchase or
Restricted Investment of Proceeds.
"Agreement" means this Amended and Restated Credit Agreement, as the same
may be amended, restated, supplemented, or replaced from time to time in
accordance with the provisions hereof.
"Applicable Interest Rate" shall mean the Prime-based Rate or the
Eurocurrency-based Rate as selected by Borrower from time to time pursuant to
the terms of this Agreement.
"Attributable Indebtedness" shall mean, as of the date of any determination
thereof, with respect to any Capital Lease under which any Person is a lessee,
the sum of the present value of the amount of each remaining payment of rent
under the terms of such Capital Lease (including any
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period for which the term of any such Capital Lease has been or may be, at the
option of the lessor, extended), as such amount would be reflected on the
liability side of a balance sheet in accordance with generally accepted
accounting principles.
"Bank" has the meaning specified in the first sentence hereof.
"Xxxxxxx Loan Agreement" means that certain Credit Agreement dated as of
September 23, 1993 between Borrower and Xxxxxxx Bank of Broward County, N.A., as
amended by amendments dated as of November 10, 1994, November 21, 1995, February
29, 1996, April 24, 1996, November 14, 1996, February 18, 1998 and December 10,
1998, and as may be further amended, restated, supplemented or replaced from
time to time.
"Xxxxxxx Term Loan Agreement" means that certain Term Loan Credit Agreement
dated February 29, 1996 between Borrower and Xxxxxxx Bank of Broward County,
N.A., as may be amended, restated, supplemented or replaced from time to time.
"Borrower" has the meaning specified in the first sentence hereof.
"Borrowing Base" shall mean an amount equal to the sum of (i) eighty-five
percent (85%) of Eligible Receivables and (ii) the lesser of (A) seventy five
percent (75%) of Eligible Inventory and (B) Twenty Million Dollars
($20,000,000).
"Business Day" means any day on which commercial banks are open for
domestic and international business in Detroit, London and New York.
"Capital Lease" means any Lease or other agreement for the use of property
which is required to be capitalized on a balance sheet of the lessee or other
user of property in accordance with Generally Accepted Accounting Principles
applied on a Consistent Basis.
"Capital Stock Repurchase" means any purchase, redemption, retirement, or
other acquisition by the Borrower of any shares of its capital stock or by any
Restricted Subsidiary of any shares of its capital stock or any of its
partnership interests or any shares of capital stock of the Borrower (in each
such case, other than any such shares or partnership interests held by the
Borrower or a Restricted Subsidiary), now or hereafter outstanding, or of any
warrants, rights, or options (other than such warrants, options, or rights held
by the Borrower or any Restricted Subsidiary) evidencing a right to purchase or
acquire any such shares or partnership interests (except in exchange for other
shares of capital stock or partnership interests or warrants, rights, or options
evidencing a right to purchase or acquire any such shares or partnership
interests).
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute, together with the rules and regulations
thereunder.
"Committed Amount" has the meaning specified in Subsection 2.1(a) hereof.
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"Consistent Basis" means in reference to the application of Generally
Accepted Accounting Principles, that the accounting principles observed in the
current period are comparable in all material respects to those applied in the
preceding period.
"Consolidated" means, when it precedes any accounting term, such term as it
would apply to the Borrower and its Restricted Subsidiaries on a consolidated
basis, determined in accordance with Generally Accepted Accounting Principles,
applied on a Consistent Basis.
"Consolidated Net Income" means, for any fiscal period, the consolidated
net income of the Borrower and its Restricted Subsidiaries for such fiscal
period determined in accordance with Generally Accepted Accounting Principles
applied on a Consistent Basis, after eliminating all offsetting debits and
credits between the Borrower and its Restricted Subsidiaries and other items to
be eliminated in accordance with Generally Accepted Accounting Principles, and
after deducting portions of income attributable to Minority Interests, if any,
but, in any event, excluding:
(a) All items properly classified as extraordinary in accordance with
Generally Accepted Accounting Principles;
(b) Except as expressly otherwise, provided in this Agreement, net
earnings and losses of any Restricted Subsidiary accrued prior to the date it
became a Restricted Subsidiary;
(c) Except as expressly otherwise provided herein, net earnings and losses
of any Person (other than a Restricted Subsidiary), substantially all the assets
of which have been acquired by the Borrower or any Restricted Subsidiary in any
manner, realized by such other Person prior to the date of such acquisition;
(d) Except as expressly otherwise provided in this Agreement, net earnings
and losses of any Person (other than Restricted Subsidiary) which shall have
been merged into or consolidated with the Borrower or any Restricted Subsidiary
prior to the date of such merger or consolidation;
(e) Net earnings of any Person (but not including any Restricted
Subsidiary) in which the Borrower or any Restricted Subsidiary has an ownership
interest except to the extent such net earnings shall have actually been
received by the Borrower or such Restricted Subsidiary in the form of cash
distributions;
(f) The undistributed net earnings of any Restricted Subsidiary to the
extent that the declaration or distribution or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the time permitted by the
terms of its charter, any agreement, instrument, judgment, decree, order,
statute, or governmental rule or regulation applicable to such Restricted
Subsidiary; and
(g) Earnings resulting from any reappraisal, revaluation, or write-up of
assets subsequent to April 27, 1991.
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"Consolidated Net Worth" means Consolidated Stockholder's Equity less (i)
treasury stock and (ii) Investments in Affiliates which are Restricted
Investments.
"Consolidated Total Capitalization" means the sum of Consolidated Funded
Debt, Consolidated Stockholder's Equity, and deferred income taxes as determined
in accordance with Generally Accepted Accounting Principles applied on a
Consistent Basis.
"Consolidated Working Capital" means Consolidated Current Assets less
Consolidated Current Liabilities.
"Current Assets" means, with respect to any Person, as of the date of any
determination thereof, the current assets of such Person determined in
accordance with Generally Accepted Accounting Principles applied on a Consistent
Basis.
"Current Liabilities" means, with respect to any Person, as of the date of
any determination thereof, (i) all Indebtedness payable on demand or maturing
within one year of such date of determination (other than any current portion of
Funded Debt); and (ii) all other Indebtedness of such Person which would be
reflected as current liabilities on a balance sheet of such Person as at such
date of determination in accordance with Generally Accepted Accounting
Principles applied on a Consistent Basis, provided, however, that, Indebtedness
incurred or outstanding under any working capital or other revolving credit
facility of the Borrower or a Restricted Subsidiary shall not be treated as an
incurrence of Funded Debt or included in Consolidated Funded Debt (and shall
instead be treated as a Current Liability of the Borrower or such Restricted
Subsidiary and included in Consolidated Current Liabilities) if and so long as,
during the most recently completed period of twelve (12) consecutive calendar
months, no Indebtedness has been outstanding under such facility for a period of
at least thirty (30) consecutive days.
"Default" means an event which with the giving of notice or passage of
time, or both, would constitute an Event of Default.
"Default Rate" has the meaning specified in Subsection 2.4(d) hereof.
"Depreciation Expense" means, for any fiscal period, without duplication,
the consolidated expense of the Borrower and its Restricted Subsidiaries during
such fiscal period for depreciation of fixed assets and amortization of
intangible assets determined in accordance with Generally Accepted Accounting
Principles applied on a Consistent Basis, after eliminating all offsetting
debits and credits between the Borrower and its Restricted Subsidiaries and
other items to be eliminated in accordance with the Generally Accepted
Accounting Principles.
"Documentary Stamp Tax and Intangible Tax Indemnification Agreement" means
that certain agreement between the Borrower and the Bank of even date providing
for payment and indemnification for certain documentary stamp tax and intangible
tax matters, as may be amended or restated from time to time.
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"Eligible Inventory" means the lower of FIFO costs or wholesale market
value of the inventory of Borrower.
"Eligible Receivables" means the aggregate outstanding balance (net of
retainages and allowances for doubtful accounts) of all of the accounts of the
Borrower resulting from the sale of goods and services in the ordinary course of
business, but excludes any account if (i) any of the goods that gave rise to it
have been returned, rejected, or repossessed, or a good faith dispute exists
between the Borrower and the account debtor with respect to either it or the
goods that gave rise to it (provided that the Bank may in its sole discretion
exclude only that percentage of the account receivable equal to the value of the
returned, rejected, or repossessed goods or the amount involved in the dispute);
(ii) the account is unpaid for more than 60 days after the due date of the
invoice related to it; (iii) the account has been sold to, assigned to,
discounted with, or financed with or become subject to a lien in favor of, a
factor, lender or other party (other than the Bank); (iv) the account debtor is
an Affiliate or Restricted Subsidiary of the Borrower or the Parent; (v) the
account debtor is a supplier or creditor of the Borrower, or any Restricted
Subsidiary; provided, however, such an account shall only be excluded from
Eligible Receivables to the extent that Borrower or any Restricted Subsidiary is
indebted to any supplier or creditor, provided further that any account
receivable amounts for a supplier or creditor which are in excess of the amount
owed by Borrower to any supplier of credit shall constitute Eligible
Receivables; (vi) the sale represented by the account is to an account debtor
located outside the United States unless the sale is on letter of credit or
acceptance terms acceptable to the Bank; (vii) the account is denominated in
other than United States Dollars or is payable outside the United States; (viii)
the sale represented by the account is on a xxxx-and-hold, guaranteed sale, sale
or return, or sale on approval basis; (ix) the sale represented by the account
is on terms longer than 60 days if the account is in respect of goods other than
seasonally dated goods, or on terms longer than 120 days if the account is in
respect of seasonally dated goods; (x) the account is subject to any material
claim or set-off by the account debtor; (xi) the account is not evidenced by an
invoice or other writing in form acceptable to the Bank in its reasonable
discretion; (xii) the Borrower, in order to be entitled to collect the account,
is required to deliver additional goods to, or perform additional services for,
or perform or incur additional obligations to, the account debtor; (xiii) the
Borrower has received notice of the bankruptcy or insolvency of the account
debtor, or (xiv) it is owing by an account debtor who has failed to pay
twenty-five percent (25%) or more of the aggregate amount of accounts owing to
Borrower within sixty (60) days after the due date of the respective invoices or
other writings evidencing such Accounts.
"Environmental Certificate" means that certain Environmental Certificate
between the Borrower and the Bank of even date herewith relating to
environmental matters, as may be amended, restated, supplemented or replaced
from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute, together with the rules and
regulations thereunder.
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"ERISA Affiliate" means any Person which is under "common control" with the
Borrower or any Subsidiary (within the meaning of Section 414 (b) or (c) of the
Code or Section 4001 (a) (14) of ERISA).
"ERISA Termination Event" means (a) a "reportable events" (within the
meaning of Section 4043(b) of ERISA) with respect to a Pension Plan (other than
a "reportable event" as to which the PBGC h(is by regulation waived the 30 day
notice requirement under Section 4043 (a) of ERISA); provided, however, that a
failure to meet the minimum funding standards of Section 412 of the Code shall
be an ERISA Termination Event regardless of the issuance of any waiver under
Section 412(d) of the Code; (b) the withdrawal of the Borrower, any Subsidiary,
or any ERISA Affiliate from a Pension Plan during a plan year in which it was a
"substantial employer" (within the meaning of Section 4001 (a) (2) of ERISA) (c)
the complete or partial withdrawal of the Borrower, any Subsidiary, or any ERISA
Affiliate from a Multiemployer Plan under Section 4201 or 4204 or ERISA; (d) the
receipt by the Borrower, any Subsidiary, or any ERISA Affiliate of notice from a
Multiemployer Plan that is in reorganization or insolvent under Section 4241 or
4245 of ERISA or that it intends to terminate or has terminated under Section
4041A of ERISA; (e) the providing of a notice of intent to terminate a Pension
Plan pursuant to Section 4041(a) (2) of ERISA or the treatment of a Pension Plan
amendment as a termination under Section 4041(e) of ERISA; (f) the institution
of proceedings by the PBGC to terminate a Pension Plan or the appointment of a
trustee to administer any Pension Plan under Section 4042 of ERISA; (g) the
receipt by the Borrower, any Subsidiary, or any ERISA Affiliate of a notice from
any Multiemployer Plan that any action described in clause (f) has been taken
with respect to that Multiemployer Plan; or (h) any other event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan.
"Eurocurrency-based Advance" means an Advance which bears interest at the
Eurocurrency-based Rate.
"Eurocurrency-based Rate" means, with respect to any Eurocurrency-Interest
Period, the per annum interest rate which is equal to the sum of one percent
(1%) plus the quotient of:
(A) the per annum interest rate at which deposits in eurocurrencys are
offered to Bank's Eurocurrency Lending Office by other prime banks in
the eurocurrency market in an amount comparable to the relevant
Eurocurrency-based Advance and for a period equal to the relevant
Eurocurrency-Interest Period at approximately 11:00 A.M. Detroit time
two (2) Business Days prior to the first day of such
Eurocurrency-Interest Period, divided by
(B) an amount equal to one minus the stated maximum rate (expressed as a
decimal) of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) that
is specified on the first day of such Eurocurrency-Interest Period by
the Board of Governors of the Federal Reserve System (or any successor
agency thereto) for determining the maximum reserve requirement with
respect to eurocurrency funding (currently referred to as
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"eurocurrency liabilities" in Regulation D of such Board) maintained
by a member bank of such System,
all as conclusively determined (absent manifest error) by the Bank, such sum to
be rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.
"Eurocurrency-Interest Period" means the Interest Period applicable to a
Eurocurrency-based Advance.
"Eurocurrency Lending Office" means Bank's office located at Grand Cayman,
British West Indies or such other branch or branches of Bank, domestic or
foreign, as it may hereafter designate as a Eurocurrency Lending Office by
notice to Borrower.
"Event of Default" means any of the events specified in Section 8 hereof.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended
from time to time.
"Fair Valuation" has the meaning specified in Subsection 4.18 hereof.
"Federal Funds Effective Rate" means, for any day, a fluctuating interest
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Bank from three Federal funds brokers of recognized standing
selected by it, all as conclusively determined by the Bank, such sum to be
rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.
"Fixed Charge Coverage Ratio" means for any fiscal period, the ratio of (a)
Net Cash From Operations for such fiscal period plus Rentals for such fiscal
period to (b) Fixed Charges for such fiscal period.
"Fixed Charges" means, for any fiscal period, Interest Expense for such
fiscal period plus Rentals for such fiscal period.
"Formula Loans" means as of any date of determination all Indebtedness of
Borrower as of such date but only in respect of money borrowed or evidenced by a
promissory note, debenture or other like obligation to pay money pursuant to
which borrowings are based on Borrower's and/or its Subsidiaries' accounts
receivable or inventory, including, without limitation, all Indebtedness of
Borrower under this Agreement and the Revolving Credit Note (without
duplication) and the Xxxxxxx Loan Agreement (including without limitation (i)
the aggregate principal then outstanding under the promissory note(s) issued
thereunder, (ii) the aggregate undrawn portion of any letters of credit issued
thereunder then outstanding and (iii) the outstanding obligations of Borrower
for
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reimbursement of payments made under any letter of credit issued thereunder) but
excluding Indebtedness of Borrower under the Note Purchase Agreement and the
Xxxxxxx Term Loan Agreement.
"Funded Debt" means, with respect to any Person, all Indebtedness of such
Person which has a final maturity of one year or more from the date of creation
thereof (or which is renewable or extendible at the option of the obligor for
more than one year from the date of creation), or which under a revolving credit
or similar agreement, obligates a lender to extend credit over a period of one
year or more, including, without limitation, current maturities of Funded Debt;
provided, however, that, Indebtedness incurred or outstanding under any working
capital or other revolving credit facility of the Borrower or a Restricted
Subsidiary shall not be treated as an incurrence of Funded Debt or included in
Consolidated Funded Debt (and shall instead be included in Consolidated Current
Liabilities) if and so long as, during the most recently completed period of
twelve (12) consecutive calendar months, no Indebtedness has been outstanding
under such facility for a period of at least thirty (30) consecutive days. For
purposes of this Agreement, Funded Debt shall not include trade payables and
accrued liabilities.
"Generally Accepted Accounting Principles" means those principles of
accounting set forth in opinions of the Financial Accounting Standards Board or
the American Institute of Certified Public Accountants or which have other
substantial authoritative support and are applicable in the circumstances as of
the date of any report required herein or as of the date of an application of
such principles as required herein.
"Guaranty" and "Guaranties" have the meaning specified in Subsection 3.2
hereof.
"Indebtedness" means, with respect to any Person, all items (other than
capital stock, capital surplus, retained earnings, deferred taxes, long-term
insurance accruals (in an amount not to exceed 15% of Consolidated Stockholder's
Equity), and Minority Interests), without duplication, which in accordance with
Generally Accepted Accounting Principles applied on a Consistent Basis would be
included in determining total liabilities of such Person as shown on the
liability side of a balance sheet of such Person as at the date on which
Indebtedness is to be determined. The term "Indebtedness" shall also include,
whether or not so reflected, (a) indebtedness, obligations, and liabilities
secured by any Lien on property of such Person whether or not the Indebtedness
secured thereby shall have been assumed by such Person, (b) all obligations in
respect of Capital Leases, and (c) all guarantees of such Person (but only to
the extent that the Indebtedness guaranteed is not also included in Indebtedness
of such Person). Notwithstanding the foregoing, in determining the Indebtedness
of the Borrower and its Restricted Subsidiaries, (1) there shall be included all
Indebtedness of the Borrower or any of its Restricted Subsidiaries of the
character referred to in the foregoing clauses (a), (b), and (c) deemed to be
extinguished under Generally Accepted Accounting Principles but for which such
Person remains legally liable and (2) there shall be no duplication with respect
to any Indebtedness of the Borrower or any Restricted Subsidiary, so that in any
determination of Indebtedness on a consolidated basis any such Guaranty shall be
excluded and only the principal amount of such Indebtedness shall be included.
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"Indebtedness for Money Borrowed" means, with respect to any Person, all
Indebtedness of such Person (a) in respect of money borrowed or evidenced by a
promissory note, debenture, or other like written obligation to pay money, (b)
in respect of obligations under any Capital Lease, (c) representing all or part
of the deferred purchase price of any assets acquired by such Person, and (d)
representing guarantees by such Person of any Indebtedness for Money borrowed of
another Person (and for such purpose, without duplication, the securing of
Indebtedness for Money Borrowed of another Person, which property of such Person
shall be deemed to be a guaranty by such Person).
"Interest Expense" means, for any fiscal period, without duplication, the
consolidated interest expense of the Borrower and its Restricted Subsidiaries
paid or accrued for such fiscal period determined in accordance with Generally
Accepted Accounting Principles applied on a Consistent Basis, after eliminating
all offsetting debits and credits between the Borrower and its Restricted
Subsidiaries and other items to be eliminated in accordance with Generally
Accepted Accounting Principles, including in any event, but not limited to,
interest expense in respect of Capital Leases, amortization of discount, and
other similar noncash items and capitalized interest.
"Interest Period" means, with respect to a Eurocurrency-based Advance or
portion of the Term Note which bears interest at the Eurocurrency-based Rate,
one (1), two (2) or three (3) months (or any lesser or greater number of days
agreed to in advance by Borrower and Bank) as selected by Borrower pursuant to
Subsection 2.1 or 2.2, provided, however, that any Eurocurrency-Interest Period
which commences on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent
calendar month. Each Interest Period which would otherwise end on a day which is
not a Business Day shall end on the next succeeding Business Day or, if such
next succeeding Business Day falls in the next succeeding calendar month, on the
next preceding Business Day, and no Interest Period which would end after the
Termination Date shall be permitted with respect to any Advance, no Interest
Period with respect to that portion of the Term Loan required to be paid on any
installment date shall end past such principal installment date and no Interest
Period shall extend beyond the Term Loan Maturity Date.
"Investment" means any loan, advance, or extension of credit, without
duplication (except for accounts and notes receivable for merchandise sold or
services furnished in the ordinary course of business, and amounts paid in
advance on account of the purchase price of merchandise to be delivered to the
payor within one year of the date of the advance), or purchase of stock, notes,
bonds, or other securities, evidences of Indebtedness, or property not used in
the business activities of the Borrower or a Restricted Subsidiary, or capital
contribution to any Person, whether in cash or other property.
"IRS" means the Internal Revenue Service or any successor thereof.
"Lease" means any lease of property, whether real, personal, or mixed, with
a remaining term of at least one year (including any period for which such lease
is renewable at the option of the lessor) other than leases between the Borrower
and its Restricted Subsidiaries and leases between Restricted Subsidiaries.
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"Letter of Credit" has the meaning set forth in Section 2.1(f) hereof.
"Lien" means any interest in property securing an obligation owed to, or a
claim by, any Person other than the owner of the property, whether such interest
shall be based on the common law, civil law, statute, civil code, or contract,
whether or not such interest shall be recorded or perfected, and whether or not
such interest shall be contingent upon the occurrence of some future event or
events or the existence of some future circumstance or circumstances, and
including the lien, privilege, security interest, or other encumbrance arising
from a mortgage, deed of trust, hypothecation, transfer, assignment, pledge,
adverse claim or charge, conditional sale, or trust receipt, or from a lease,
consignment, or bailment for security purposes. The term "Lien" also includes
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and encumbrances
affecting property. For the purposes of this Agreement, a Person shall be deemed
to be the owner of any property that such Person shall have acquired or shall
hold subject to a conditional sale agreement or other arrangement (including a
leasing arrangement) pursuant to which title to the property shall have been
retained by or vested in some other Person for security purposes.
"Loan Documents" means this Agreement, the Revolving Credit Note, the term
Note, the Guaranties, the Documentary Stamp Tax and Intangible Tax
Indemnification Agreement, the Environmental Certificate and each of the
Security Documents delivered to Bank at any time after the date hereof.
"Minority Interests" has the meaning attributed to it in accordance with
Generally Accepted Accounting Principles.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (within
the meaning of Section 4001(a)(3) of ERISA).
"Net Cash From Operations" means, for any fiscal period, Consolidated Net
Income for such fiscal period, plus (i) to the extent actually deducted in
determining Consolidated Net Income for such period, any (a) Interest Expense
for such fiscal period, (b) Depreciation Expense for such fiscal period, and (c)
provision for taxes for such fiscal period, minus (ii) (a) the amount of any
revenue for such fiscal period (net of any related expenses) which is not
derived from the operating activities of the Borrower and its Restricted
Subsidiaries, (b) any gains or losses on the sale or other disposition (other
than a sale or other disposition in the ordinary course of business) of
Investments or fixed or capital assets, and any taxes on such excluded gains and
any tax deductions or credits on account of any such excluded losses, (c) any
gain arising from the acquisition of any capital stock or other securities of
the Borrower or any Restricted Subsidiary, and (d) earnings resulting from any
reversal of any material reserve established prior to the beginning of such
fiscal period.
"Note" shall mean the Revolving Credit Note or the Term Note and "Notes"
shall mean both of them.
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"Note Purchase Agreement" means that certain Note Purchase Agreement, dated
June 5, 1992, by and between the Borrower and the Purchasers named therein, and
all loan documents related thereto.
"Notice of Term Rate" shall have the meaning set forth in Section 2.2.
"Operating Lease" means any Lease which is not a capital Lease, but
excluding any individual Lease providing for aggregate rent payments of less
than $25,000.00; provided, however, that individual Leases providing for rent
payments of less than $25,000.00 shall only be excluded to the extent that rent
payments provided for thereunder do not in the aggregate exceed $1,000,000.00;
provided, further, that for the purpose of the exclusion of individual Leases
providing for aggregate rent payments of less than $25,000.00, in the case of
any individual Lease which is entered into under or pursuant to a master Lease,
such master Lease (and not such individual Lease) shall be deemed to be the
individual Lease.
"Parent" means National Beverage Corp., a Delaware corporation.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereof.
"Pension Plan" means any Plan that is an "employee pension benefit plan"
(within the meaning of Section 3 (2) of ERISA).
"Permitted Investment" means any of the following Investments:
(a) Marketable direct obligations issued or unconditionally guaranteed by
the United States of America or any agency thereof and maturing within one year
from the date of acquisition thereof;
(b) Commercial paper of any corporation incorporated in the United States
of America having (i) a rating of "A-1" or better by S&P or "P-1" or better by
Moody's and (ii) combined capital, surplus, and undivided profits of not less
than $100,000,000.00;
(c) Certificates of deposit, repurchase agreements, bankers acceptances,
eurocurrency deposits, and yankee certificates of deposit (i) in an amount not
in excess of the maximum amount of insurance provided by the Federal Deposit
Insurance Corporation, or (ii) issued by commercial banks or trust companies
incorporated under the laws of the United States of America, each being a member
of the Federal Deposit Insurance Corporation and having unsecured long-term debt
that is rated "A-" or better by S&P or "A3" or better by Moody's;
(d) Readily marketable debt securities issued by any state or municipality
within the United States or any political subdivision, agency, or
instrumentality thereof maturing within twelve months or less of the date of
acquisition and rated "MIG-1" or better by Moody's;
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(e) Investments in so-called "money market funds" registered under the
Investment Company Act of 1940, as amended, and organized under the laws of the
United States of America or any jurisdiction thereof, having total net assets of
at least $100,000,000.00 and investing primarily in Investments of the types
specified in clauses (a), (b), (c), and/or (d), but in each case without
limitation as to maturity (so that it may reasonably be expected that at any
time at least 80% of its invested funds will be invested in such Investments);
(f) Trust certificates or other instruments evidencing an ownership
interest in debt securities held by a trustee or custodian and meeting the
requirements of clause (d) hereof (except as to maturity), so long as the holder
thereof has the right, at least as often as every thirty (30) days, to cause the
purchase of such trust certificate or other instrument by a bank which meets the
requirements of clause (c) hereof;
(g) Investments in (i) any Restricted Subsidiary or (ii) any corporation
which, simultaneously therewith, becomes a Restricted Subsidiary; and
(h) Investments held by the Borrower or any Restricted Subsidiary on the
date of this Agreement and described on Schedule 1.1.A hereto.
"Permitted Liens" means:
(a) Liens existing on the date of this Agreement which are: (i) described
in Schedule 1.1.A hereto; or (ii) individually in each case, on property with a
book value of less than $30,000.00 and in the aggregate on property with a book
value not exceeding $1,000,000.00 and which are not securing Indebtedness for
Money Borrowed;
(b) Liens securing taxes, assessments, governmental charges or levies or
the claims or carriers, warehousemen, materialmen, mechanics and other like
Persons not yet due or the payment of which is not then required by this
Agreement; provided, however, that this clause (b) shall not be deemed to permit
any Liens which may be imposed pursuant to Section 4068 of ERISA or Section
412(n) of the Code;
(c) Liens incidental to the ordinary course of business or the ownership
of properties and assets, including, without limitation, (i) Liens, deposits, or
pledges securing the performance of bids, tenders, leases, or trade contracts,
(ii) Liens securing statutory obligations (including those arising under workers
compensation, unemployment insurance, and other social security legislation), or
(iii) Liens to secure the performance of surety and appeal bonds, performance
bonds, and other similar obligations; provided, however, that (A) any such Lien
shall not be created in connection with and shall not secure Indebtedness for
Money Borrowed; (B) any obligation secured by any such Lien shall not be overdue
or, if overdue, is being contested in good faith by appropriate actions or
proceedings during which there is no right on the part of the secured party to
seize, take possession of or sell or cause the sale of the property subject to
such Lien, and adequate book reserves have been established in accordance with
Generally Accepted Accounting Principles; (C) all such Liens, pledges, and
deposits shall not in the aggregate materially impair the use or diminish the
value of
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the properties of the Borrower or any Restricted Subsidiary in the operation of
the respective businesses of the Borrower and the Restricted Subsidiaries; and
(D) no letters of credit secured by a Lien shall be permitted by this clause
(c); and, provided, further, that this clause (c) shall not be deemed to permit
any Liens which may be imposed pursuant to Section 4068 of ERISA or Section
412(n) of the Code;
(d) Liens securing letters of credit or reimbursement obligations with
respect thereof; provided, however, that (A) any such letter of credit shall be
utilized in connection with the Borrower's self-insurance program or to support
other obligations of the Borrower and/or Restricted Subsidiaries incurred in the
ordinary course of business; (B) the value of the collateral subject to such
Liens (which may be cash) shall not in the aggregate at any time exceed 5% of
Consolidated Total Capitalization at the end of the most recent fiscal quarter;
(C) any such Lien shall not secure Indebtedness for Money Borrowed (except to
the extent that the reimbursement obligation with respect to any such letter of
credit may be deemed to constitute Indebtedness for Money Borrowed); and (D) any
obligation secured by any such Lien shall not be overdue or, if overdue, is
being contested in good faith by appropriate actions or proceedings during which
there is no right on the part of the secured party to seize, take possession of
or sell or cause the sale of the property subject to such Lien, and adequate
book reserves have been established in accordance with Generally Accepted
Accounting Principles;
(e) Minor survey exceptions and minor encumbrances, easements, or
reservations, or rights of others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use of real properties,
which are necessary for the conduct of the activities of the Borrower and the
Restricted Subsidiaries or which customarily exist on properties of corporations
engaged in similar activities and similarly situated and which do not in any
event materially impair the use or diminish the value of any of such properties
in the operation of the businesses of the Borrower and the Restricted
Subsidiaries;
(f) Liens originally created to secure payment of a portion of the
purchase price relating to fixed assets or equipment which the Borrower or any
Restricted Subsidiary acquires after the date hereof from a non-affiliate, but,
with respect to any such Lien, such property shall be purchased not more than
sixty (60) days prior to the date of the creation of such Lien; provided,
however, that (i) no such lien shall extend to any other property of the
Borrower or any Restricted Subsidiary; (ii) the outstanding principal amount of
Indebtedness secured by any such Lien shall, at the time that such Lien is
created, be greater than 75%, but not more than 100%, of the lesser of (x) the
fair market value of the property upon which such Lien exists or (y) the cost to
the purchaser thereof of the property upon which such Lien exists; and (iii) the
Indebtedness secured by any such Lien is incurred in compliance with this
Agreement;
(g) Liens securing Indebtedness of a corporation outstanding on the date
such corporation (i) is designated as a Restricted Subsidiary pursuant to the
provisions of this Agreement, (ii) merges into or consolidates with the Borrower
or any Restricted Subsidiary pursuant to the provisions of subsection 7.3 hereof
or (iii) is acquired by the purchase of all or substantially all of such
corporations assets (the "acquired assets") and the assumption of such
Indebtedness of such
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corporation by the Borrower or any Restricted Subsidiary; provided, however,
that such Liens are not applicable to the Borrower or any previously designated
Restricted Subsidiary or the assets (other than the acquired assets) of the
Borrower or any previously designated Restricted Subsidiary; provided, further,
that none of such Liens is created prior to and in anticipation of such
designation, merger, consolidation, or acquisition;
(h) Liens which may arise to secure Indebtedness incurred under the
Xxxxxxx Loan Agreement, the Xxxxxxx Term Loan Agreement and the Note Purchase
Agreement as a result of security interests granted Bank in accordance with
clause (ii) of Section 3.1(b), so long as property of the Borrower and/or
Restricted Subsidiaries is subjected to such Liens in compliance with the
provisions of this Agreement; and
(l) The extension, renewal, or replacement of any Lien specified in the
foregoing clauses (a) through (h); provided, however that (i) no property shall
become subject to such extended, renewal, or replacement Lien that was not
subject to the Lien extended, renewed, or replaced; (ii) the aggregate principal
amount of Indebtedness secured by any such extended, renewed, or replacement
Lien shall not be increased by such extension, renewal, or replacement; (iii)
the Indebtedness secured by such Lien could be incurred in compliance with the
applicable limitations of this Agreement at the time of such extension, renewal,
or replacement; and (iv) after giving effect thereto, no Event of Default shall
exist.
"Person" means any corporation, business entity, natural person, firm,
joint venture, partnership, trust, unincorporated organization, association,
government, or any department or agency of any government.
"Plan" means any "employee benefit plan" (within the meaning of Section 3
(3) of ERISA) that the Borrower, any Subsidiary, or any ERISA Affiliate
maintains, contributes to, or is obligated to contribute to for the benefit of
employees or former employees of the Borrower, any Subsidiary, or any ERISA
Affiliate.
"Prime-based Advance" means an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" means for any day, that rate of interest which is equal
to the greater of (i) one half of one percent (1/2%) below the Prime Rate and
(ii) one percent (1%) plus the Federal Funds Effective Rate.
"Prime Rate" means the per annum rate of interest announced by Bank, at its
main office from time to time as its "prime rate" (it being acknowledged that
such announced rate may not necessarily be the lowest rate charged by Bank, to
any of its customers), which Prime Rate shall change simultaneously with any
change in such announced rate.
"Prior Note" shall mean the Revolving Credit Note dated February 19, 1997
made in the principal amount of $10,000,000 by Borrower payable to Bank.
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"Rentals" means, for any fiscal period, the aggregate amount of minimum
rental obligations (direct or indirect, as lessee, guarantor, or surety) of the
Borrower and its Restricted Subsidiaries paid under all noncancellable Operating
Leases in effect or to be in effect at any time during such period, as
calculated in accordance with Generally Accepted Accounting Principles and
determined on a Consolidated basis, after eliminating all offsetting debits and
credits and other items to be eliminated in accordance with Generally Accepted
Accounting Principles.
"Responsible Officer" means the Chief Executive Officer, Chief Operating
Officer, or Chief Financial Officer of the Borrower.
"Restricted Investment" means any Investment (including any Indebtedness
received by the Borrower as consideration for a sale of assets pursuant to the
terms of Subsection 7.3 (a) (iv) hereof) other than (i) a Permitted Investment,
(ii) Investments in property owned by the Borrower or any Restricted Subsidiary
and used in, or current assets arising from the sale of goods and services in,
the ordinary course of business, and (iii) Investments in joint ventures;
provided, however, that (x) each other party to any such joint venture (other
than the entity created by such joint venture) shall not be an Affiliate of the
Borrower; (y) the entity created by such joint venture shall not engage in any
line of business other than lines of business which the Borrower may engage in
pursuant to Subsection 7.9 hereof; and (z) the aggregate amount of the
Borrower's Investment in any such joint venture shall not exceed the greater, of
Four Million and No/100 Dollars ($4,000,000.00) and twenty percent (20%) of
Consolidated Stockholder's Equity. The amount of Restricted Investments made
subsequent to any date for the purposes of Subsections (ii) and (iii) hereof
shall be equal to the aggregate amount expended by the Borrower and its
Restricted Subsidiaries after that date to acquire Restricted Investments, less
all amounts (A) recovered, or (B) written-off (but only to the extent that the
loss incurred by the Borrower in connection with such a write-off shall be
subtracted in determining Consolidated Net Income) on or prior to that date upon
the disposition or repayment of such Restricted Investments to the extent of the
original purchase price thereof (but not including any capital gains realized
upon such disposition or repayment or any dividends, interest, or other amounts
paid upon or with respect to such Restricted Investments). The aggregate amount
expended by the Borrower or a Restricted Subsidiary to acquire a Restricted
Investment and the aggregate amount recovered by the Borrower or a Restricted
Subsidiary in connection with the disposition of a Restricted Investment, shall
be the amount of cash and/or the fair market value of property (other than
common stock or preferred stock of the Borrower or warrants or options or any
other right to purchase common stock or preferred stock of the Borrower) given
or received in exchange therefor.
"Restricted Payment" means (a) any dividend or other distribution, direct
or indirect, in respect of any shares of the capital stock of or any partnership
interests in the Borrower or any Restricted Subsidiary (other than dividends or
distributions payable to the Borrower or a Restricted Subsidiary and dividends
or distributions payable solely in capital stock of the Borrower or any
Restricted Subsidiary, as the case may be); or (b) any Capital Stock Repurchase;
provided, however, that no payment made by the Borrower or a Restricted
Subsidiary under and in compliance with the terms of a Tax Sharing Agreement
shall be deemed to be a Restricted Payment.
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"Restricted Subsidiary" means the Subsidiaries designated as "Restricted
Subsidiaries" in Schedule 1.1.B hereto, and any other Subsidiary that may be
designated as a Restricted Subsidiary by resolution of the board of directors of
the Borrower so long as (i) such Subsidiary conducts substantially all of its
business and owns substantially all of its property within the United States or
such other location as is consented to by the Bank, and (ii) at least eighty
percent (80%) of each class of the voting stock and one hundred percent (100%)
of the preferred stock of such Subsidiary is legally and beneficially owned by
the Borrower; provided, however, that any such designation of a Subsidiary as a
Restricted Subsidiary shall not be effective unless the provisions of Subsection
7.10 hereof shall have been complied with. Once a Subsidiary becomes a
Restricted Subsidiary, it may not thereafter become an Unrestricted Subsidiary.
"Revolving Credit" means the revolving credit loan to be advanced to the
Borrower by Bank pursuant to Subsection 2.1 of this Agreement, in an aggregate
amount, not to exceed, at any one time outstanding, the Committed Amount.
"Revolving Credit Note" means the revolving credit note described in
Subsection 2.1 hereof, made by Borrower payable to Bank, in the form annexed to
this amendment as Exhibit "A", as such note may be amended or supplemented from
time to time, and other note issued in substitution, replacement or renewal
thereof from time to time.
"S&P" means Standard & Poor's Corporation.
"Sale Leaseback Transaction" has the meaning specified in Subsection 7.3(b)
hereof.
"SEC" means the Securities and Exchange Commission, or any successor
organization.
"Security Documents" has the meaning set forth in Subsection 3.1(b) hereof.
"Senior Debt" means (i) with respect to the Borrower, all Funded Debt of
Borrower which is not Subordinated Debt and (b) with respect to any other
Person, all Funded Debt of that Person.
"Solvent" has the meaning specified in Subsection 4.18 hereof.
"Stockholder's Equity" means, with respect to any corporation, the
aggregate sum of such Person's common stock, preferred stock, capital surplus,
and retained earnings accounts as determined in accordance with Generally
Accepted Accounting Principles, applied on a Consistent Basis.
"Subordinated Debt" means Indebtedness for Money Borrowed of Borrower which
is subordinate to the Indebtedness of Borrower to Bank pursuant to a
subordination agreement in form reasonably satisfactory to Bank.
"Subsidiary" means, for any Person, any corporation, partnership, or other
entity of which fifty percent (50%) or more of the securities or other ownership
interests having ordinary voting
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power to elect the board or directors or having direct power to perform
functions similar to that of a board of directors is at the time directly or
indirectly owned or controlled by such Person. Unless the context clearly
indicates otherwise, the term. "Subsidiary" refers to a subsidiary of the
Borrower.
"Tax Sharing Agreement" means the Tax Sharing Agreement dated as of June 1,
1992, between the Borrower and the Parent as presently in effect and any similar
agreement approved in writing by the Bank. The Borrower will not, nor will it
permit any Restricted Subsidiary to, amend or supplement any provision of a Tax
Sharing Agreement without the prior written consent of the Bank, which consent
will not be unreasonably withheld.
"Termination Date" means December 10, 1999, subject to extension pursuant
to the terms of Section 2.1(g) hereof.
"Term Loan" shall have the meaning set forth in Subsection 2.2.
"Term Loan Maturity Date" shall mean the date which is one year from the
date of the Term Note issued pursuant to Subsection 2.2 hereof.
"Term Note" shall mean the promissory note in the form annexed hereto as
Exhibit "F".
"Unrestricted Subsidiary" means a Subsidiary which is not a Restricted
Subsidiary.
"Voting Stock" means with respect to a corporation, the stock of such
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect members of the board of directors (or other
governing body) of such corporation, and with respect to any partnership, the
partnership interests in such partnership the owners of which are entitled to
manage the management of the affairs of the partnership or the designation of
another Person as the Person entitled to manage the affairs the partnership (it
being understood that, in the case of any partnership, "shares of Voting Stock"
shall refer to such partnership interests).
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) The terms "material" and "materially" shall have the meanings ascribed
to such terms under Generally Accepted Accounting Principles as such would be
applied to the business of the Borrower or others, except as the context shall
clearly otherwise require; (b) all of the terms defined in this Agreement shall
have such defined meanings when used in other documents issued under, or
delivered pursuant to, this Agreement unless the context shall otherwise
require; (c) all terms defined in this Agreement in the singular shall have
comparable meanings when used in the plural, and vice versa; (d) accounting
terms to the extent not otherwise defined shall have the respective meanings
given them under, and shall be construed in accordance with, Generally Accepted
Accounting Principles; (e) terms defined in, or by reference to, Article 9 of
the Uniform Commercial Code as adopted in Michigan to the extent not otherwise
defined herein shall have the respective
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meanings given to them in Article 9 with the exception of the word "document"
unless the context clearly requires such meaning; (f) the words "hereby,"
"hereto," "hereof," "herein," "hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; (g) the masculine and neuter genders are
used herein and whenever used shall include the masculine, feminine, and neuter
as well; and (h) whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such parties unless the context shall expressly provide otherwise.
SECTION 2. AMOUNT AND TERMS OF CREDIT.
2.1 THE REVOLVING CREDIT.
(a) REVOLVING CREDIT COMMITMENT. Subject to the terms and conditions of
this Agreement, Bank agrees to make Advances of the Revolving Credit to Borrower
from time to time on any Business Day during the period from the effective date
hereof until (but excluding) the Termination Date in an aggregate amount not to
exceed at any one time outstanding Twenty Million Dollars ($20,000,000) (the
"Committed Amount"). All of such Advances hereunder shall be evidenced by the
Revolving Credit Note, under which advances, repayments and readvances may be
made, subject to the terms and conditions of this Agreement.
(b) ACCRUAL OF INTEREST AND MATURITY. Subject to the provisions of Section
2.2 hereof, the Revolving Credit Note, and all principal and interest
outstanding thereunder, shall mature and become due and payable in full on the
Termination Date, and each Advance evidenced by the Revolving Credit Note from
time to time outstanding hereunder shall, from and after the date of such
Advance, bear interest at its Applicable Interest Rate. The amount and date of
each Revolving Credit Advance, its Applicable Interest Rate, its Interest Period
(if any), and the amount and date of any repayment shall be noted on Bank's
records, which records will be conclusive evidence thereof, absent manifest
error; provided, however, that any failure by the Bank to record any such
information shall not relieve Borrower of its obligation to repay the
outstanding principal amount of such Advance, all interest accrued thereon and
any amount payable with respect thereto in accordance with the terms of this
Agreement and the other Loan Documents.
(c) REQUESTS FOR ADVANCES AND REQUESTS FOR REFUNDINGS AND CONVERSIONS OF
ADVANCES. Borrower may request an Advance, refund any Advance in the same type
of Advance or convert any Advance to any other type of Advance only after
delivery to Bank of a Request for Advance executed by an authorized officer of
Borrower, subject to the following and to the remaining provisions hereof:
(i) each such Request for Advance shall set forth the information
required on the Request for Advance form annexed hereto as Exhibit "B",
including without limitation:
(A) the proposed date of the Advance, which must be a Business
Day;
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(B) whether the Advance is a refunding or conversion of an
outstanding Advance; and
(C) whether such Advance is to be a Prime-based Advance or a
Eurocurrency-based Advance, and, except in the case of a
Prime-based Advance, the first Interest Period applicable
thereto;
(ii) each such Request for Advance shall be delivered to Bank by 11:00
a.m. (Detroit time) two (2) Business Days prior to the proposed date of
Advance, except in the case of a Prime-based Advance, for which the Request
for Advance must be delivered by 10 a.m. (Detroit time) on such proposed
date;
(iii) the principal amount of such requested Advance plus the
principal amount of all other Advances then outstanding hereunder, shall
not exceed the lesser of (i) Committed Amount and (ii) the Borrowing Base;
(iv) the principal amount of such Advance, plus the amount of any
other outstanding indebtedness under this Agreement to be then combined
therewith having the same Applicable Interest Rate and Interest Period, if
any, shall be at least Two Hundred Fifty Thousand Dollars ($250,000) or a
larger integral multiple of Fifty Thousand Dollars ($50,000) and at any one
time there shall not be in effect more than ten (10) Interest Periods;
(v) each Request for Advance, once delivered to Bank, shall not be
revocable by Borrower, and shall constitute and include a certification by
the Borrower as of the date thereof that:
(A) both before and after the Revolving Credit Advance, the
obligations of the Borrower and Restricted Subsidiaries set
forth in this Agreement and the Loan Documents, as applicable,
are valid, binding and enforceable obligations of such
parties;
(B) to the best knowledge of Borrower all conditions to Advances
of the Revolving Credit have been satisfied;
(C) both before and after the Advance, there is no Default or
Event of Default in existence; and
(D) both before and after the Advance, the representations and
warranties contained in this Agreement and the Loan
Documents are true and correct in all material respects;
(d) PRIME-BASED ADVANCE IN ABSENCE OF ELECTION OR UPON DEFAULT. If, as to
any outstanding Eurocurrency-based Advance, Bank has not received payment on the
last day of the Interest Period applicable thereto, or does not receive a timely
Request for Advance meeting the
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requirements of this Subsection 2.1 with respect to the refunding or conversion
of such Advance, or, subject to Subsection 2.4(d) hereof, if on such day a
Default or Event of Default shall have occurred and be continuing, the principal
amount thereof which is not then prepaid shall be converted automatically to a
Prime-based Advance and the Bank shall thereafter promptly notify Borrower of
said action.
(e) BORROWING BASE. Bank shall have no obligation to make any Advance
under the Revolving Credit if the amount of the requested Advance plus the
principal indebtedness then outstanding under the Formula Loans exceeds the
Borrowing Base. If at any time the principal amount outstanding under the
Formula Loans exceeds the then existing Borrowing Base, the Borrower shall pay
to the Bank upon demand such amount (not to exceed the aggregate amount of
Advances then outstanding under the Revolving Credit) as shall be required to
cause the aggregate principal amount outstanding under the Formula Loans to be
less than or equal to the then existing Borrowing Base. The Borrower hereby
authorizes the Bank to charge any deposit account of the Borrower for the amount
of required to be paid by Borrower under this Subsection 2.1(e). Amounts paid by
Borrower to Bank under this Subsection 2.1(e) shall be applied first to
Prime-based Advances outstanding under the Revolving Credit and then to
Eurocurrency-based Advances outstanding under the Revolving Credit.
(f) In addition to direct Advances under the Revolving Credit Note to be
provided to Borrower to Bank under and pursuant to Section 2.1 of this
Agreement, Bank further agrees to issue, or commit to issue, from time to time,
standby letters of credit for the account of Borrower (herein individually
called a "Letter of Credit" and collectively "Letters of Credit") in aggregate
undrawn amounts not to exceed Five Hundred Thousand Dollars ($500,000) at any
one time outstanding; provided, however, that the sum of the aggregate amount of
Advances under the Revolving Credit Note plus the aggregate amount of Letters of
Credit (and the unpaid amount of any draws or other demands for payment under
any Letters of Credit) shall not exceed Twenty Million Dollars ($20,000,000) at
any one time; and provided further that no Letter of Credit shall, by its terms,
have an expiration date which extends beyond the Term Loan Maturity Date. In
addition to the terms and conditions of this Agreement, the issuance of any
Letters of Credit shall also be subject to the terms and conditions of any
letter of credit applications and agreements executed and delivered by Borrower
to Bank with respect thereto. Borrower shall pay to Bank annually in advance a
fee equal to 1% of the amount of each Letter of Credit.
(g) EXTENSION OF TERMINATION DATE. No later than December 1, 1999, and on
each December 1 thereafter, provided Bank has consented to an extension of the
Termination Date in each previous year throughout the term of the Revolving
Credit and upon the request of the Borrower, the Bank may, in its sole
discretion, consent in writing to an extension of the Termination Date for an
additional period of one year, in such case extending the Termination Date by an
additional year.
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2.2 CONVERSION TO TERM LOAN.
(a) On or before the Termination Date, and provided no Default or Event of
Default shall have occurred and be continuing hereunder, Borrower may elect to
convert the aggregate direct Advances outstanding under the Revolving Credit to
a one year term loan ("Term Loan"). Upon Borrower's election to convert the
Revolving Loan to a Term Loan, Bank's obligation to make additional Advances
shall cease. The Term Loan shall be evidenced by the Term Note and shall be
subject to all of the terms and conditions of this Agreement.
(b) Prior to conversion of the Revolving Credit to a Term Loan, Bank shall
have received the Term Note and such documents and instruments, including
without limitation, legal opinions and affirmations of guaranties, as Bank may
reasonably request in connection therewith.
(c) The principal indebtedness represented by the Term Note shall be due
and payable in full, together with unpaid interest thereon as set forth below,
on the Term Loan Maturity Date.
(d) The Term Note shall bear interest from the date thereof on the unpaid
principal balance thereof from time to time outstanding at a rate per annum
equal to the Prime-based Rate or the Eurocurrency-based Rate, as the Borrower
may elect subject to the provisions of this Agreement.
(e) Not less than two days prior to the issuance of the Term Note,
Borrower shall designate the initial Applicable Interest Rate with respect to
the Term Note.
(f) The Borrower shall elect the initial Interest Period applicable to the
Term Note with respect to which the Applicable Interest Rate is the
Eurocurrency-based Rate by its Notice of Term Rate given to the Bank pursuant to
paragraph (g) below and subsequent Interest Periods by its Notice of Term Rate
given to the Bank pursuant to paragraph (g), as the case may be. Provided that
no Event of Default shall have occurred and be continuing, the Borrower may
elect to continue a portion of the Term Note with respect to which the
Applicable Interest Rate is the Eurocurrency-based Rate by giving irrevocable
written notice thereof to the Bank by its Notice of Term Rate, not less than
three (3) Business Days prior to the last day of the then current Interest
Period applicable to that portion of the Term Note specifying the duration of
the succeeding Interest Period therefor. If the Bank does not receive timely
notice of the election and the Interest Period elected by the Borrower, the
Borrower shall be deemed to have elected to convert such Applicable Interest
Rate to the Prime-based Rate at the end of the then current Interest Period.
(g) Subject to the provisions of paragraph (f) above, provided that no
Event of Default shall have occurred and be continuing, the Borrower may, on any
Business Day, convert the Applicable Interest Rate with respect to a portion of
the Term Note to another Applicable Interest Rate, provided that any conversion
while the Applicable Interest Rate is the Eurocurrency-based Rate shall be made
only on the last Business Day of the then current Interest Period. If the
Borrower desires to convert an Applicable Interest Rate, it shall give the Bank
irrevocable written notice in form annexed hereto as EXHIBIT "G" ("Notice of
Term Rate") thereof not less than three (3) Business Days' prior to the
effective date of any such change specifying the date of such conversion,
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the Applicable Interest Rate elected and, if the conversion is into the
Eurocurrency-based Rate, the duration of the first Interest Period therefor.
(h) At its option and upon three (3) Business Days' prior written,
telephonic or telegraphic notice to the Bank, the Borrower may prepay that
portion of the Term Note with respect to which the Applicable Interest Rate is
the Prime-based Rate or the Eurocurrency-based Rate in whole at any time or in
part from time to time, without premium or penalty but with accrued interest on
the principal being prepaid to the date of such prepayment, provided that: (i)
in the case of that portion of the Term Note bearing interest at the Prime-based
Rate each partial prepayment shall be in an amount not less than $250,000 or an
integral multiple thereof; and (ii) in the case of that portion of the Term Note
bearing interest at the Eurocurrency-based Rate, each partial prepayment shall
be in an amount not less than $250,000 and such portion of the Term Note may
only be prepaid on the last Business Day of the then current Interest Period
with respect thereto.
2.3 USE OF PROCEEDS OF REVOLVING CREDIT. The initial Advance of the
Revolving Credit Note shall be used to repay the indebtedness outstanding (if
any) under the Prior Note. The proceeds of each subsequent Advance shall be used
by the Borrower solely for working capital needs and the temporary financing of
acquisitions.
2.4 INTEREST RATE.
(a) PRIME-BASED INTEREST PAYMENTS. Interest on the unpaid balance of all
Prime-based Advances and that portion of the Term Note which bears interest at
the Prime-based Rate from time to time outstanding shall accrue at a per annum
interest rate equal to the Prime-based Rate, and shall be payable in immediately
available funds monthly commencing on the first day of the month next succeeding
the month during which the initial Advance is made and on the first day of each
month thereafter. Interest accruing at the Prime-based Rate shall be computed on
the basis of a 360 day year and assessed for the actual number of days elapsed,
and in such computation effect shall be given to any change in the interest rate
resulting from a change in the Prime-based Rate on the date of such change in
the Prime-based Rate.
(b) EUROCURRENCY-BASED INTEREST PAYMENTS. Interest on each
Eurocurrency-based Advance or portion of the Term Note which bears interest at
the Eurocurrency-based Rate having a related Eurocurrency-Interest Period of 3
months or less shall accrue at its Eurocurrency-based Rate and shall be payable
in immediately available funds on the last day of the Interest Period applicable
thereto. Interest shall be payable in immediately available funds on each
Eurocurrency-based Advance or portion of the Term Note which bears interest at
the Eurocurrency-based Rate outstanding from time to time having a
Eurocurrency-Interest Period of more than 3 months, at intervals of 3 months
after the first day of the applicable Interest Period, and shall also be payable
on the last day of the Interest Period applicable thereto. Interest accruing at
the Eurocurrency-based Rate shall be computed on the basis of a 360 day year and
assessed for the actual number of days elapsed from the first day of the
Interest Period applicable thereto to, but not including, the last day thereof.
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(c) INTEREST PAYMENTS ON CONVERSIONS. Notwithstanding anything to the
contrary in Subsection 2.4(a) or (b), all accrued and unpaid interest on any
Advance or portion of the Term Note refunded or converted pursuant to Section
2.1(c) or 2.2(f) or (g) hereof shall be due and payable in full on the date such
Advance is refunded or converted.
(d) INTEREST ON DEFAULT. Notwithstanding anything to the contrary set
forth in Subsection 2.4(a), (b) or (c), in the event and so long as any Event of
Default shall exist under this Agreement, interest shall be payable daily on the
principal amount of all Advances and the indebtedness under the Term Note, as
applicable, from time to time outstanding (and on all other monetary obligations
of Borrower hereunder and under the other Loan Documents) at a per annum rate
equal to the Applicable Interest Rate in respect of each such Advance or portion
of the Term Note, as applicable, plus, in the case of Eurocurrency-based
Advances or portion of the Term Note which bears interest at the Prime-based
Rate, three percent (3%) per annum for the remainder of the then existing
Interest Period (but only so long as any Event of Default shall continue to
exist), if any, and at all other such times and for all Prime-based Advances or
portion of the Term Note which bears interest at the Eurocurrency-based Rate, at
a per annum rate equal to the Prime-based Rate, plus three percent (3%)
("Default Rate").
2.5 PREPAYMENT. Borrower may prepay all or part of the outstanding balance
of any Prime-based Advance(s) or portion of the Term Note which bears interest
at the Prime-based Rate (subject to not less than one (1) Business Day's notice
to Bank) at any time, provided that the amount of any partial prepayment shall
be at least Two Hundred Fifty Thousand Dollars ($250,000) and the aggregate
balance of Prime-based Advance(s) remaining outstanding under the Revolving
Credit Note shall be at least Two Hundred Fifty Thousand Dollars ($250,000).
Borrower may prepay all or part of any Eurocurrency-based Advance or portion of
the Term Note which bears interest at the Eurocurrency-based Rate, (subject to
not less than three (3) Business Days' notice to Bank) only on the last day of
the Interest Period applicable thereto, provided that the amount of any such
partial prepayment shall be at least Two Hundred Fifty Thousand Dollars
($250,000), and the unpaid portion of such Advance which is refunded or
converted under Subsection 2.1(c) or 2.2 (f) or (g) shall be at least Two
Hundred Fifty Thousand Dollars ($250,000). Any prepayment made in accordance
with this Subsection 2.5 shall be without premium, penalty or prejudice to the
right to reborrow under the terms of this Agreement. Any other prepayment of all
or any portion of the Revolving Credit or Term Note, whether by acceleration,
mandatory or required prepayment or otherwise, shall be subject to Section 10
hereof, but otherwise without premium, penalty or prejudice.
2.6 UNUSED FEE FOR REVOLVING CREDIT. As consideration for making the
Revolving Credit available, the Borrower shall pay to the Bank an unused fee
from the date hereof through the Termination Date equal to per annum of the
unused portion of the Committed Amount under the Revolving Credit. Such fee
shall be computed on the basis of the average daily unused portion of the
Committed Amount and shall be payable quarterly in arrears beginning on February
10, 1999 and continuing on the 10th day of each of the following months
thereafter during the term of the Revolving Credit: May, August, November and
February.
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SECTION 3. SECURITY AND GUARANTY.
The obligations and liabilities of the Borrower hereunder and under the
Loan Documents shall be secured and guaranteed as provided in this Section 3,
subject to the provisions set forth below.
3.1 SECURITY INTEREST.
(a) The Revolving Credit Note and the Term Note shall be unsecured except
as provided for in subsection 3.1(b) below.
(b) (i) In the event that any real or personal property of the Borrower
becomes subject to a Lien (in violation of this Agreement) which is not a
Permitted Lien and which Lien is not removed within thirty days of Borrower's
receipt of notice of any Lien (and without regard to any additional cure period)
or (ii) upon the occurrence of any Event of Default which has not otherwise been
cured or waived at any time, the Bank shall have the right after written
notification to the agent of the Purchasers named in the Note Purchase Agreement
and to Xxxxxxx Bank of Broward County, N.A. (with a copy to Borrower) to become
secured by a first perfected (as set forth below) security interest in and
mortgage of all the real and personal property of the Borrower now owned or
hereafter acquired or arising, and all proceeds thereof. The Borrower shall
execute and deliver to the Bank such mortgages and security agreements as the
Bank shall require and as are customary for a transaction of that type, covering
said real and personal property in form and substance satisfactory to the Bank
(the "Security Documents"), securing the foregoing obligations to the full
extent permitted under applicable law. The Security Documents shall be
sufficient, when notice thereof is properly filed or recorded in the appropriate
jurisdictions, to grant to the Bank a first perfected security interest in and
lien on the Borrower's property, subject to no prior Liens or encumbrances
except as expressly permitted herein, except the equal and ratable lien, if any,
to be granted pursuant to the Note Purchase Agreement or the Xxxxxxx Loan
Agreement or the Xxxxxxx Term Loan Agreement, or except as the Bank permits in
writing. The Borrower agrees to execute or otherwise provide to the Bank any and
all financing statements, modifications, and other agreements or consents
required by the Bank now or in the future to perfect Bank's interest in the
collateral and otherwise in connection therewith. The grant of a lien and
security interest pursuant to this Subsection shall not cure any violation of
this Agreement, any such violation shall constitute an Event of Default
hereunder taking into account the expiration of any applicable cure period.
3.2 GUARANTY. Payment of the Revolving Credit Note and the Term Note, any
other obligations under this Agreement or the other Loan Documents, presently
existing or hereafter arising, shall be guaranteed by each of the Restricted
Subsidiaries as set forth in that certain Continuing and Unconditional Guaranty
of even date herewith executed by each Restricted Subsidiary (the "Guaranty").
In the event of the designation of any additional Restricted Subsidiaries, a
joinder agreement in the form attached hereto as Exhibit "C" shall be executed
and delivered to the Bank by each such additional Restricted Subsidiary (also, a
"Guaranty"), together with such supporting attorney's opinion, if requested by
Lender, evidence of corporate authorization, and other instruments and documents
as the Bank may reasonably request.
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SECTION 4. REPRESENTATIONS AND WARRANTIES.
To induce the Bank to enter into this Agreement and to establish the
Revolving Credit, make the Advances and convert the Revolving Credit into a Term
Loan, the Borrower represents and warrants to the Bank (which representations
and warranties shall survive the delivery of the documents mentioned herein and
the establishment of the credit and the making of the advances contemplated
hereby) as follows:
4.1 CORPORATE EXISTENCE; POWER; COMPLIANCE WITH LAW; RESTRICTED
SUBSIDIARIES; NAME HISTORY. Each of the Borrower and the Restricted Subsidiaries
is a corporation duly incorporated and organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation. Each of the
Borrower and the Restricted Subsidiaries has all requisite power and authority
(corporate and otherwise) to own and operate its properties and to carry on its
business as now being conducted, is duly qualified as a foreign corporation to
do business and is good standing in every jurisdiction in which the failure to
so qualify is reasonably likely to materially adversely affect the business,
earnings, prospects, properties, or condition (financial or otherwise) of the
Borrower and its Restricted Subsidiaries, taken as a whole. Each of the Borrower
and the Restricted Subsidiaries has all licenses and permits necessary to carry
on and conduct its business in all states and localities wherein it now operates
and is in compliance with all other requirements of law, rule, or regulation
applicable to it and to its business, if the failure to possess such licenses
and permits or to so comply, either individually or in the aggregate, is
reasonably likely to materially adversely affect the business, earnings,
properties, or condition (financial or otherwise) of the Borrower and the
Restricted Subsidiaries, taken as a whole.
The Borrower is a Subsidiary of the Parent. All of the Subsidiaries of the
Borrower are listed on Schedule 1.1.B hereto. None of the Borrower or the
Restricted Subsidiaries have merged, changed its name, or done business under a
fictitious name during the past five years, except as set forth in Schedule
1.1.B hereto.
4.2 CAPITAL STOCK; PARENT; SUBSIDIARIES.
(a) The authorized capital stock of the Borrower consists of 1,000 shares
of common stock, par value $0.01 per share, which is voting stock and is vested
with all the voting rights in the Borrower, of which 100 shares are issued and
outstanding, and 1,000 shares of preferred stock, par value $0.01 per share, of
which no shares are issued or outstanding. All such outstanding shares have been
duly authorized, validly issued and are fully paid, nonassessable and free of
preemptive rights. No shares of common stock are held in the treasury of the
Borrower. There are no subscriptions, options, warrants, or calls relating to
the issuance by the Borrower of any shares of common stock, including any right
of conversion or exchange under any outstanding security or other instrument.
There are no voting trusts or other agreements or understandings with respect to
the voting of the common stock of the Borrower. The Borrower is not subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its common stock
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or any security convertible into or exchangeable for any of its common stock.
All of the outstanding shares of common stock of the Borrower are owned
beneficially and of record by the Parent.
(b) The authorized capital stock of the Parent consists of 50,000,000
shares of common stock, par value $0.01 per share, which is voting stock and, is
vested with all the voting rights in the Parent, of which 22,034,012 shares are
issued and 18,463,288 are outstanding, and 1,000,000 shares of preferred stock,
par value $1.00 per share, none of which are issued and outstanding. The only
Subsidiaries of The Borrower and those listed in Schedule 1.1.B hereto.
(c) The only Subsidiaries of the Borrower are as listed in Schedule 1.1.B
hereto. Schedule 1.1.B correctly sets forth as to each Subsidiary its name, the
jurisdiction of its incorporation if a corporation, or the jurisdiction of its
formation if a partnership, whether such Subsidiary is a Restricted Subsidiary,
the jurisdiction of its principal place of business, the address of its
principal place of business, chief executive office, and the office where all
books and records are kept, if different, the name of its parent company, the
number of authorized shares, and the number of outstanding shares of each class
of capital stock of such Subsidiary, and the number of such outstanding shares
owned by the Borrower or other parent company. All of the outstanding shares of
capital stock of each class of each Subsidiary have been validly issued and are
fully paid and nonassessable. The Borrower owns beneficially and of record all
of the outstanding shares of capital stock of each Subsidiary indicated as being
owned by it on Schedule 1.1.B hereto, free and clear of any Liens.
4.3 CORPORATE POWER AND AUTHORIZATION TO EXECUTE LOAN DOCUMENTS; NO
CONFLICT; NO CONSENT. Each of the Borrower and the Restricted Subsidiaries has
the corporate power and authority and the legal right to execute and deliver the
Loan Documents to be executed by it and to perform its obligations thereunder,
and has taken all corporate action necessary to authorize the execution,
delivery, and performance of such Loan Documents and to authorize the
transactions contemplated thereby. The execution, delivery, and performance by
the Borrower or the Restricted Subsidiaries of the Loan Documents to be executed
by it will not contravene, conflict with, result in the breach of, or constitute
a violation of or default under, or result in the creation of any lien, charge,
or encumbrance upon any property or assets of the such Person, pursuant to, the
articles of incorporation or bylaws or other governing instruments of such
Person, or any applicable law, rule, regulation, judgment, order, writ,
injunction, or decree or any indenture or other agreement or instrument to which
the Borrower, or a Restricted Subsidiary is a party, or by which such Person or
its property may be bound or affected which has a material adverse effect on the
business earnings, prospects, properties, or conditions (financial or otherwise)
of the Borrower and the Restricted Subsidiaries taken as a whole. No consent,
license, or authorization of, or filing with, or notice to, any Person or entity
(including, without limitation, any governmental authority), is necessary or
required in connection with the execution, delivery, performance, validity, or
enforceability of the Loan Documents and the transactions as contemplated
thereunder, except for consents, licenses, authorizations, filings, and notices
obtained or performed by the Borrower or any Restricted Subsidiary and of which
the Bank has been provided written notice, or referred to or disclosed in the
Loan Documents. Any such consents, licenses, authorizations, filings, or notices
remain in full force and effect.
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4.4 ENFORCEABLE OBLIGATIONS. The Loan Documents constitute legal, valid,
and binding agreements enforceable against the respective parties thereto and
any property described therein in accordance with their respective terms, except
as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, arrangement, moratorium, or other laws relating to or affecting
the rights of creditors generally and (ii) general principles of equity,
regardless of whether enforcement is considered in proceedings at law or in
equity.
4.5 FINANCIAL CONDITION.
(a) The financial statements of the Borrower as of August 1, 1998 and the
financial statements of the Parent as of August 1, 1998, copies of which have
been furnished to the Bank, fairly present the financial condition of the
Borrower and the Parent, respectively, as at the date of the financial
statements, and fairly present the results of the operations of the Borrower and
the Parent for the period covered thereby.
(b) Neither the Borrower, nor any of the Restricted Subsidiaries have any
direct or contingent liabilities, liabilities for taxes, long-term leases, or
unusual forward or long-term commitments as of the date of this Agreement which,
either individually or in the aggregate, are or are reasonably likely to be
material to the Borrower and the Restricted Subsidiaries, which are not
disclosed by provided for, or reserved against in the foregoing financial
statements or referred to in notes thereto, other than liabilities incurred
since August 1, 1998 in the ordinary course of business which in the aggregate
have no material adverse effect on the Borrower and the Restricted Subsidiaries,
taken as a whole, or on the conduct of the business of the Borrower and the
Restricted Subsidiaries, taken as a whole. The Borrower does not know of any
basis for any material unrealized or anticipated losses of the Borrower. The
financial statements furnished to the Bank have been prepared in accordance with
Generally Accepted Accounting Principles applied on a Consistent Basis
maintained throughout the period involved. There has been no material adverse
change in the business, earnings, prospects, properties, or condition, financial
or otherwise, of the Borrower and the Restricted Subsidiaries, taken as a whole,
since the date of such financial statements.
4.6 NO LITIGATION. Except as set forth in Schedule 4.6 hereto, there is no
suit or proceeding at law or in equity or other proceeding or investigation
(including proceedings by or before any court, arbitrator, governmental or
administrative commission, board or bureau, or other administrative agency)
pending, or to the best knowledge of the Borrower threatened, by or against or
involving the Parent, the Borrower, or any Subsidiary, or against any of their
respective properties, existence, or revenues which, individually or in the
aggregate, (a) if adversely determined, is reasonably likely to have a material
adverse effect on the properties, assets, or business, or on the condition,
financial or otherwise, of the Borrower and the Restricted Subsidiaries, taken
as a whole, (b) materially impair the right or ability of the Borrower and the
Restricted Subsidiaries, taken as a whole, to carry on their operations
substantially as now conducted or as anticipated to be conducted in the future,
(c) which would substantially impair the ability of the Borrower to perform its
obligations under the Loan Documents, or, regardless of outcome, which questions
the validity of the transactions contemplated by the Loan Documents, or (d)
regardless of
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outcome, which would be required to be disclosed in notes to any balance sheet
as of the date hereof of the Borrower prepared in reasonable detail in
accordance with Generally Accepted Accounting Principles applied on a Consistent
Basis.
4.7 INVESTMENT COMPANY ACT; REGULATION.
(a) Neither the Borrower nor any of its Subsidiaries is an "investment
company" or an "affiliated person" of an "investment company," or a company
"controlled" by an "investment company," and neither the Borrower nor any of its
Subsidiaries is an "investment advisor" or an "affiliated person" of an
"investment advisor," and as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended, (b) neither the Borrower nor any of
its Subsidiaries is subject to regulation under any state or local public
utilities code or any federal, state, or local statute or regulation limiting
its ability to incur Indebtedness for Money Borrowed or to pledge assets of the
type contemplated hereunder.
4.8 DISCLOSURE AND NO UNTRUE STATEMENTS. No representation or warranty
made by the Borrower in the Loan Documents or which will be made by the Borrower
from time to time in connection with the Loan Documents (a) contains or will
contain any misrepresentation or untrue statement of any material fact, or (b)
omits or will omit to state any material fact necessary to make the statements
therein not misleading. There is no fact (excluding information relating to
world or national economic, social, or political conditions generally) known to
any Responsible Officer of Borrower which materially adversely affects, or which
would in the future materially adversely affect, the business, assets,
properties, or condition, financial or otherwise, of the Borrower and the
Restricted Subsidiaries, taken as a whole, or materially affects, or which might
in the future materially adversely affect, the ability of the Borrower and the
Restricted Subsidiaries to perform their obligations under the Loan Documents,
or except as set forth or referred to in the Loan Documents or otherwise
disclosed in writing to the Bank.
4.9 TITLE TO ASSETS; LEASES IN GOOD STANDING.
(a) Each of the Borrower and the Restricted Subsidiaries has good and
valid title (or, with respect to interests as lessee or otherwise, its
equivalent under applicable law) to properties and assets purported to be owned
(or leased) by it that are material to the conduct of the business of the
Borrower and the Restricted Subsidiaries, taken as a whole, and including
properties and assets reflected in the financial statements and notes thereto
described in Subsection 4.5 hereof, except for such assets as have been disposed
of in the ordinary course of business. All such properties and assets are
subject to no Liens, other than Permitted Liens. Schedule 1.1.A accurately lists
(i) each financing statement, deed, agreement, or other instrument in effect on
the date hereof which has been filed, recorded, or registered pursuant to any
United States federal, state, or local law or regulation that names the Borrower
or any of the Restricted Subsidiaries as debtor or lessee or as the grantor or
the transferor of the interest created thereby, and (ii) as to each such
financing statement, deed, agreement, or other instrument, the names of the
debtor, lessee, grantor, or transferor and the secured party, lessor, grantee,
or transferee and the name of the jurisdiction in which such financing
statement, deed, agreement or other instrument has been filed, recorded, or
registered. Except as
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contemplated hereby, and pursuant to the Note Purchase Agreement, the Xxxxxxx
Loan Agreement and the Xxxxxxx Term Loan Agreement, neither the Borrower nor any
of the Restricted Subsidiaries has signed any agreement or instrument in effect
on the date hereof authorizing any secured party thereunder to file any such
financing statement, deed, agreement, or other instrument (other than any such
agreement or instrument relating to the Liens permitted under paragraph (d) or
(f) of the definition of Permitted Liens).
(b) Each of the Borrower and its Restricted Subsidiaries has the right to,
and does, enjoy peaceful and undisturbed possession under all leases under which
it is leasing property that are material to the conduct of the business of the
Borrower and its Restricted Subsidiaries, taken as a whole. All such leases are
valid, subsisting and in full force and effect, subject only to Permitted Liens,
and neither the Borrower nor any of its Restricted subsidiaries in default in
the performance, observance, or fulfillment of any obligation under any
provision of any such lease, which default is reasonably likely to result in a
termination of such lease or have a material adverse effect on the Borrower and
its Restricted Subsidiaries, taken as a whole. No Responsible Officer has
received any written notice that any other party to any such lease is in default
under any such lease.
4.10 INVESTMENTS. The Borrower and the Restricted Subsidiaries do not own
any Investments other than Permitted Investments of the types described in
clauses (a)-(e) of the definition of such term in Subsection 1.1 hereof and
other than the Investments listed in Schedule 1.1.A hereto, which Item correctly
sets forth the amounts (determined as provided in the definition of
"Investments" in Subsection 1.1) of the Investments listed thereon.
4.11 PAYMENT OF TAXES. Each of the Borrower, and the Subsidiaries has filed
or caused to be filed all, federal, state, and local tax returns which are
required to be filed by it and has paid or caused to be paid all taxes as shown
on said returns or on any assessment received by it, to the extent that such
taxes have become due, other than taxes being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves
have been established in accordance with Generally Accepted Accounting
Principles. No controversy in respect of additional taxes of the Parent, the
Borrower or any Subsidiary is pending, or, to the knowledge of the Borrower,
threatened, except as shown on the Borrower's financial statements described in
Subsection 4.5 hereof or in notes thereto, and other than amounts in respect of
business carried on by the Borrower, and the Subsidiaries in the ordinary course
since the date of such financial statements, and other than amounts which,
either individually or in the aggregate, do not materially and adversely affect,
and are not likely to materially and adversely affect, the business, earnings,
prospects, properties, or condition (financial or otherwise) of the Borrower and
the Restricted Subsidiaries, taken as a whole.
4.12 AGREEMENT OR CONTRACT RESTRICTIONS; NO DEFAULT. Neither the Borrower
nor any of the Subsidiaries is a party to, or is bound by, any agreement,
contract, or instrument or subject to any charter or other corporate restriction
which materially and adversely affects the business, properties, assets,
operations, or condition, financial or otherwise, of the Borrower and the
Restricted Subsidiaries, taken as a whole. The ability of the Borrower or any of
its Restricted Subsidiaries to declare, make, or pay dividends in respect of any
shares of its common stock is not expressly limited
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by the provisions of any agreement or instrument other than the Note Purchase
Agreement, the Xxxxxxx Loan Agreement and the Xxxxxxx Term Loan Agreement. Each
of the Borrower and the Restricted Subsidiaries is in full compliance with and
is not in default in the performance, observance, or fulfillment of any
obligations, covenants, or conditions contained in any agreement or instrument
to which it is a party, other than any defaults which individually or in the
aggregate are not reasonably likely to materially adversely affect the business,
earnings, prospects, properties, or condition (financial or otherwise) of the
Borrower and the Restricted Subsidiaries, taken as a whole.
4.13 PATENTS, TRADEMARKS, LICENSES, ETC. Each of the Borrower and the
Restricted Subsidiaries owns, possesses, or has the right to use, and holds free
from burdensome restrictions or known conflicts with the rights of others, all
patents, patent rights, licenses, trademarks, trademark rights, trade names,
trade name rights, and copyrights, and all rights with respect to the foregoing,
necessary to conduct their respective businesses as now being conducted, and is
in full compliance with the terms and conditions, if any, of all such patents,
patent rights, licenses, trademarks, trademark rights, trade names, trade name
rights, or copyrights and the terms and conditions of any agreements relating
thereto, except for such conflicts or noncompliance which, either individually
or in the aggregate, do not materially and adversely affect the business,
earnings, prospects, properties, or condition (financial or otherwise) of the
Borrower and the Restricted Subsidiaries, taken as a whole. Further, each of the
Restricted Subsidiaries and the Borrower agree that they shall not transfer any
and all patents, patent rights, licenses, trademarks, trademark rights, trade
name, trade name rights and copyrights and all rights to the foregoing presently
held by Borrower or any Restricted Subsidiary to any Person or entity including
the Parent, however, transfers between (a) Borrower and the Restricted
Subsidiaries; (b) Restricted Subsidiaries; and (c) Restricted Subsidiaries and
Borrower shall be permitted.
4.14 GOVERNMENT CONTRACT. Neither the Borrower nor any Subsidiary is
subject to the renegotiation of any government contract in any material amount.
4.15 COMPLIANCE WITH ERISA; MULTIEMPLOYER PLANS.
(a) Neither the execution and delivery of this Agreement or the other Loan
Documents, the incurrence of the indebtedness hereunder by the Borrower, the
application by the Borrower of the proceeds thereof, nor the consummation of any
of the other transactions contemplated by this Agreement, constitutes or will
constitute a "prohibited transaction" (within the meaning of Section 4975 of the
Code or Section 406 of ERISA).
(b) Each Plan is in compliance in all material respects with applicable
provisions of ERISA and the Code. Each of the Borrower and the Subsidiaries has
made all contributions to the Plans required to be made by them.
(c) Except for liabilities to make contributions and to pay PGGC premiums
and administrative costs, neither the Borrower, of the Subsidiaries, nor any
ERISA Affiliate has incurred any material liability to or on, account of any
Plan or Pension Plan under applicable provisions of
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ERISA or the Code, and no condition exists which presents a material risk to the
Borrower, any of its subsidiaries, or any ERISA Affiliate of incurring any such
liability. No domestic Pension Plan has an "accumulated funding deficiency"
(within the meaning of Section 412 of the Code), whether or not waived. Neither
the Parent, the Borrower, any of its Subsidiaries, any ERISA Affiliate, the
PBGC, nor any other Person has instituted any proceedings or taken any other
action to terminate any Pension Plan, nor (in the case of the Parent, the
Borrower, or any Subsidiary) has any present intention of terminating any
Pension Plan.
(d) Except with respect to any Multiemployer Plan, the present value of
the "current liability" (within the meaning of Section. 412 (1) (7) (a) of the
Code) under each Pension Plan (based on the assumptions used in the funding of
such Pension Plan, which assumptions are reasonable, and determined as of the
last day of the most recent plan year of such Pension Plan for which an annual
report has been filed with the IRS, did not exceed the current fair market value
of the assets of such Pension Plan as of such last day.
(e) None of the Plans is a Multiemployer Plan, and neither the Borrower,
any of its Restricted Subsidiaries, nor any ERISA Affiliate (i) has contributed
or been obligated to contribute to any Multiemployer Plan at any time within the
preceding six years, (ii) has incurred or is reasonably expected to incur any
"withdrawal liability" (within the meaning of Part I of Subtitle E of Title IV
of ERISA) ; or (iii) has been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is insolvent, is in reorganization, or has been
"terminated" (within the meaning of Title IV of ERISA).
4.16 COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) Each of the Borrower and the Restricted Subsidiaries is, and will
continue to be, in full compliance with all applicable federal, state, and local
environmental laws, regulations, and ordinances governing its business,
products, properties, or assets with respect to all discharges into the ground
and surface water, emissions into the ambient air and generation, accumulation,
storage, treatment, transportation, labeling, or disposal of waste materials or
process by-products, the violation of which is reasonably likely to materially
and adversely affect the business, earnings, prospects, properties, or condition
(financial or otherwise) of the Borrower and the Restricted Subsidiaries, taken
as a whole, and, neither the Borrower nor any of its Restricted Subsidiaries is
liable for any penalties, fines, or forfeitures for failure to comply with any
such laws, regulations, and ordinances other than penalties, fines or
forfeitures which are not reasonably likely to materially and adversely affect
the business, earnings, prospects, properties, or condition (financial or
otherwise) of the Borrower and Restricted Subsidiaries, taken as a whole. All
licenses, permits or registrations required for the business of the Borrower and
its Restricted Subsidiaries, as presently conducted and proposed to be
conducted, under any federal, state, or local environmental laws, regulations or
ordinances have been obtained or made, other than any such licenses, permits, or
registrations the failure to obtain or make which, either individually or in the
aggregate, do not materially and adversely affect, and are not reasonably likely
to materially and adversely affect, the business, earnings, prospects,
properties, or condition (financial or otherwise) of the Borrower and its
Restricted Subsidiaries, taken as a whole, and the Borrower and its Restricted
Subsidiaries each
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is in compliance with all such licenses, permits, and registrations other than
any such licenses, permits, or registrations the failure to obtain, make or
comply with which, either individually or in the aggregate, do not materially
and adversely affect, and are not reasonably likely to materially and adversely
affect, the business, earnings, prospects, properties or condition (financial or
otherwise) of the Borrower and its Restricted Subsidiaries, taken as a whole.
(b) No release, emission, or discharge into the environment of hazardous
substances, as defined under the Comprehensive Environmental Responses,
compensation, and Liability Act, as amended, or hazardous waste, as defined
under the Resource Conservation and Recovery Act, or air pollutants as defined
under the Clean Air Act, or pollutants, as defined under the Clean Water Act,
has occurred or is presently occurring on or from any property owned or leased
by the Borrower or its Subsidiaries in excess of federal, state or local
permitted release or reportable quantities, or other concentrations,, standards,
or limitations under the foregoing laws, or any state or local law governing the
protection of health and the environment, or under any other federal state, or
local laws or regulations (then or now applicable, as the case may be) other
than any such releases, emissions, or discharges which, either individually or
in the aggregate, do not materially and adversely affect, and are not reasonably
likely to materially and adversely affect, the business, earnings, prospects,
properties, or condition (financial or otherwise) of the Borrower and the
Restricted Subsidiaries, taken as a whole.
(c) Neither the Borrower nor any of its Restricted Subsidiaries has ever
(i) owned, occupied, or operated a site or structure on or in which any
hazardous substance was or is stored, transported, or disposed of, or (ii)
transported or arranged for the transportation of any hazardous substance
except, in each case, in full compliance with all applicable federal, state, and
local environmental laws, regulations, and ordinances governing its business,
products, properties, or assets or the storage, transportation, or disposal of
hazardous substances, which ownership, occupation, operation, transportation or
arranging is reasonably likely to (i) subject the Parent, the Borrower and the
Restricted Subsidiaries to any liabilities, expenses, fines or penalties which,
individually or in the aggregate, are material to the Parent, the Borrower and
its Restricted Subsidiaries, taken as a whole, or (ii) inhibit or result in the
prohibition by the use by the Borrower or any Restricted Subsidiary of any
property necessary in the conduct of the business of the Parent, the Borrower or
such Subsidiary, the effect of which, individually or in the aggregate, is
reasonably likely to materially adversely affect the business, earnings,
prospects, properties, or condition (financial or otherwise) of the Parent, the
Borrower and the Restricted Subsidiaries, taken as a whole. Neither the Parent,
the Borrower nor any of its Restricted Subsidiaries has ever caused or been held
legally responsible for any release or threatened release of any hazardous
substance, or received notification from any federal, state, or other
governmental authority of any such release or threatened release, of any
hazardous substance from any site or structure owned, occupied, or operated by
the Borrower or any of its Restricted Subsidiaries, individually or in the
aggregate, reasonably likely to lead to liabilities, expenses, fines, and
penalties in an amount material to the Borrower and the Restricted Subsidiaries,
taken as a whole.
4.17 LABOR RELATIONS. Neither the Borrower nor any of its Subsidiaries is
engaged in any unfair labor practice which is reasonably likely to materially
adversely affect the business, earnings,
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prospects, properties, or condition (financial or otherwise) of the Borrower
and the Restricted Subsidiaries, taken as a whole. There is (a) no unfair labor
practice complaint pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any of its Restricted Subsidiaries before
the National Labor Relations Board or any court or labor board, and no
grievance or arbitration proceedings arising out of or under collective
bargaining agreements is so pending or, to the best knowledge of the Borrower,
threatened; (b) no strike, lock-out, labor dispute, slowdown, or work stoppage
pending or, to the best knowledge of the Borrower, threatened against the
Borrower or any of its Restricted Subsidiaries; and (c) no union representation
or certification question existing or pending with respect to the employees of
the Borrower or any of its Subsidiaries and, to the best knowledge of the
Borrower, no union organization activity taking place, which unfair labor
practice complaint, grievance, or arbitration proceedings, strike, lock-out,
labor dispute, slowdown, or work stoppage or union representation or
certification question, individually or in the aggregate, is reasonably likely
to have a material adverse affect on the business, earnings, prospects,
properties, or condition (financial or otherwise) of the Borrower and the
Restricted Subsidiaries, taken as a whole.
4.18 SOLVENCY. The Borrower is, and immediately after giving effect to the
consummation of the transactions contemplated by the Agreement will be, Solvent.
For purposes of this Subsection, the term "Solvent" shall mean, with
respect to any Person, that:
(a) the assets of such Person, at a Fair Valuation, exceed the total
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities) of such Person;
(b) based on current projections, which are based on underlying
assumptions which provide a reasonable basis for the projections and which
reflect such Person's judgment based on present circumstances of the most likely
set of conditions and such Person's most likely course of action for the period
projected, such Person believes it has sufficient cash flow to enable it to pay
its debts as they mature; and
(c) such Person does not have an unreasonably small capital with which to
engage in its anticipated business.
For purposes of this Subsection, the "Fair Valuation" of the assets of any
Person shall be determined on the basis of the amount which may be realized
within a reasonable time, either through collection or sale of such assets at
the regular market value, conceiving the latter as the amount which could be
obtained for the property in question within such period by a capable and
diligent businessman from an interested buyer who is willing to purchase under
ordinary selling conditions.
4.19 RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT. Neither the
Borrower, or any Subsidiary has ever been or is now engaged, or will engage,
directly or Indirectly, in any pattern of "racketeering activity" or in any
"collection of any unlawful debt," as each of the noted terms or
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phrases is defined or used by the Racketeer Influenced and Corrupt Organization
(s) Act of either the United States or the Xxxxx xx Xxxxxxx, Xxxxx 00, Xxxxxx
Xxxxxx Code, Section 1961 et seq.; Chapter 895, Florida Statutes, respectively,
as each act now exists or is hereafter amended (the "RICO Lien Acts"). None of
the real property of the Parent, the Borrower, or any Subsidiary, none of the
Parent's, the Borrower's or any Subsidiary's interest or interests of any kind,
including any beneficial interest or interests, mortgages and leases, in or on
real property and none of the Parent's, the Borrower's or any Subsidiary's
personal property, including money, has ever been, is now, or is in any way
reasonably anticipated by the Borrower to become, subject to any lien, notice,
civil investigative demand, action, suit or other proceeding pursuant to the
RICO Lien Acts.
SECTION 5. CONDITIONS OF LENDING.
Borrower covenants and agrees that it will, and, as applicable, it will
cause each of its Subsidiaries, until the Termination Date and thereafter until
final payment in full of the obligations and liabilities of Borrower hereunder
and under the Revolving Credit Note and the Term Note and the performance by the
Borrower of all other obligations under this Agreement and the other Loan
Documents, unless Bank shall otherwise consent in writing:
5.1 CONTINUING ACCURACY OF REPRESENTATIONS AND WARRANTIES. At the time of
each Advance, the representations and warranties set forth in Section 4 hereof,
as supplemented by written disclosures by the Borrower to the Bank of changes
affecting such representations and warranties (but which changes do not breach
any term of this Agreement except as may have been waived or for which consent
has been given by the Bank) or as supplemented by subsequent financial
statements provided to the Bank, shall be true and correct on and as of the date
of the borrowing with the same effect as though the representations and
warranties had been made on and as of the date of the borrowing, except to the
extent that such representations and warranties may expressly relate to an
earlier date, in which case the shall continue to be true as of such date.
5.2 NO DEFAULT. At the time of each borrowing or issuance or renewal of a
letter of credit hereunder, the Borrower shall be in compliance with all terms
and conditions set forth herein, and no Event of Default, nor any event which
upon notice or lapse of time or both would constitute an Event of Default, shall
have occurred and be continuing at the time of such borrowing, unless such Event
of Default shall have been waived by the Bank in writing.
5.3 OPINION OF THE BORROWER'S COUNSEL. On or prior to the date of this
Agreement, and to the extent required by the Bank at the time of any borrowing
hereunder, the Bank shall have received the favorable opinion of counsel for the
Borrower, in form and substance satisfactory to the Bank.
5.4 OPINION OF THE BANK'S COUNSEL. At the option of the Bank, the Bank
shall have received at the time of closing the favorable opinion of counsel of
the Bank, in form and substance satisfactory to the Bank, as to such matters as
the Bank may require. All legal matters in connection with the Loan Documents
and the transactions herein and therein contemplated and all documents and
proceedings shall be satisfactory in form and substance to counsel of the Bank.
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5.5 LOAN DOCUMENTS. On or prior to the date of this Agreement, the Bank
shall have received, duly executed, this Agreement and the other Loan Documents
(with the exception of any Security Documents), all in form and substance
satisfactory to the Bank and counsel for the Bank.
5.6 SUPPORTING DOCUMENTS. On or prior to the date of this Agreement, the
Bank shall have received all other documents and instruments required hereunder
or otherwise reasonably required by the Bank to be executed and delivered or
otherwise provided to the Bank in form and substance satisfactory to the Bank
and counsel for the Bank.
SECTION 6. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that until the Termination Date and
thereafter until final payment in full of all obligations and liabilities
hereunder, and under the Revolving Credit Note and the Term Note and the
performance by the Borrower of all other obligations under this Agreement and
the other Loan Documents, unless Bank shall otherwise consent in writing, the
Borrower will fully comply and will cause each Restricted Subsidiary to comply
with the following provisions:
6.1 FINANCIAL REPORTS AND OTHER INFORMATION. The Borrower will deliver or
cause to be delivered to the Bank the following:
(a) As soon as practicable and in any event within fifty (50) days after
the end of each fiscal quarter other than the last quarter of each fiscal year,
a consolidated balance sheet for the Borrower and the Restricted Subsidiaries as
at the last day of such quarter and the related consolidated statement of income
for such quarter and cumulative year-to-date for the Borrower and the Restricted
Subsidiaries, setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, all in reasonable detail and
satisfactory in scope to the Bank and certified by the chief financial officer
of the Borrower as to the fairness of such financial statements and that the
same have been prepared in accordance with Generally Accepted Accounting
Principles applied on a Consistent Basis, subject to changes resulting from
normal, recurring year-end adjustments; provided, however, that if, so long as
the Borrower is a Subsidiary of the Parent, the Parent duly files with the SEC
any Form 12b-25 under the Exchange Act (or any successor form thereunder) with
respect to its inability to timely file its quarterly report on Form 1Q for a
fiscal quarter and obtains a valid extension of such time to file, the financial
information required to be delivered by this paragraph may be delivered later
than fifty (50) days after the end of such fiscal quarter but in no event later
than the extended deadline for filing such quarterly report imposed by said Rule
12b-25.
(b) As soon as practicable and in any event within one hundred (100) days
after the end of each fiscal year, the consolidated balance sheet of the
Borrower and the Restricted Subsidiaries as at the end of such fiscal year, and
related consolidated statements of income, retained earnings, and changes in
financial position for such fiscal year, setting forth in each case in
comparative form figures for the corresponding period in the preceding calendar
year, all in reasonable detail and satisfactory in scope to the Bank and
certified by and containing an unqualified opinion of
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PricewaterhouseCoopers, or other independent certified public accountants of
recognized national standing selected by the Borrower and reasonably
satisfactory to the Bank, provided, however, that if, so long as the Borrower is
a Subsidiary of the Parent, the Parent shall duly file with the SEC any Form
12b-25 under the Exchange Act (or any successor form thereunder) with respect to
its inability to timely file its annual report on Form 10-K for a fiscal year
and obtains a valid extension of such time to file, the financial information
required to be delivered by this paragraph may be delivered later than one
hundred (100) days after the end of such fiscal year but in no event later than
the extended deadline for filing such annual report imposed by said Rule 12b-25.
(c) As soon as practicable, and in any event within fifty (50) days after
the end of each fiscal quarter, other than the last quarter of each fiscal year,
a consolidated balance sheet as at the last day of such quarter and the related
consolidated statement of income for such quarter and cumulative year-to-date
for the Parent and its Subsidiaries, setting forth in each case in comparative
form figures for the corresponding period in the preceding fiscal year, all in
reasonable detail and satisfactory in scope to the Bank and certified by the
chief accounting officer of the Parent as to the fairness of such financial
statements and that the same have been prepared in accordance with Generally
Accepted Accounting Principles applied on a Consistent Basis, subject to changes
resulting from nonrecurring year-end adjustments; provided, however, that the
delivery of the Parent's quarterly report on Form 10-Q promptly after its timely
filing with the SEC thereof shall satisfy the requirements of this paragraph
with regard to consolidation of financial statements;
(d) As soon as practicable, and in any event within one hundred (100) days
after the end of each fiscal year, the consolidated balance sheet of the Parent
and its Subsidiaries as at the end of such fiscal year, and related consolidated
statements of income, retained earnings, and changes in financial position for
such fiscal year, setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, all in reasonable detail and
satisfactory in scope to the Bank and certified by and containing an unqualified
opinion of PricewaterhouseCoopers, or other independent certified public
accountants of recognized national standing selected by the Parent and
reasonably satisfactory to the Bank; provided, however, that, the delivery of
the Parent's annual report on Form 10-K promptly after its timely filing with
the SEC thereof shall satisfy the requirements of this paragraph with regard to
consolidated financial statements;
(e) Together with each delivery of those items required by clauses (a) and
(b) above, a Certificate of Compliance in the form attached hereto as Exhibit
"D", executed by the chief financial officer or the Vice President-Comptroller
of the Borrower;
(f) Within fifteen (15) Business Days after the end of each month, a
Borrowing Base Certificate as of the end of such month in substantially the form
of Exhibit "E" annexed hereto;
(g) Together with each delivery of the financial statements required by
clause (b) above, a certificate of the independent certified accountants stating
that in making the examination necessary to said certification of the financial
statements, they obtained no knowledge of any condition or event pertaining to
financial or accounting matters that constitutes an Event of Default,
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or event which after notice by the Bank or lapse of time, or both, or would
constitute an Event of Default; or if the accountants have obtained knowledge of
any Event of Default or such event, a statement specifying the nature and period
of existence thereof.
(h) Promptly upon distribution thereof, copies of all annual or quarterly
financial or other statements of Borrower and the Parent (including proxy
statements, documents, and reports as the Borrower) shall send to any class of
its shareholders;
(i) At any time when the Borrower or the Parent is obligated to file
reports with the SEC pursuant to the Exchange Act, promptly, and in any event
within fifteen (15) days after the filing thereof, copies of all periodic
reports, current reports, and registration statements which the Borrower files
with the SEC or any equivalent governmental agency and, promptly upon written
request therefor, copies of any financial statements which the Borrower files
annually with any federal, state, or local regulatory agency or agencies;
(j) As soon as practicable and in any event within fifteen (15) days after
the end of each month, accounts receivable aging reports and reports as to
Eligible Inventory, as of the end of such month, in form and reasonable
substance satisfactory to the Bank and certified by the chief financial officer
or the Vice President-Comptroller of the Borrower to have been prepared in
accordance with Generally Accepted Accounting Principles applied on a Consistent
Basis; and, upon the request of the Bank, within fifteen (15) days after the end
of each month, such reports as of the fifteenth (15th) day of such month; and
(k) With reasonable promptness such additional financial or other
information as the Bank may from time to time reasonably request (including,
without limitation, consolidating financial statements with respect to any
Subsidiary); provided, however, that the Borrower shall not be required to
furnish any information requested pursuant to this paragraph to the extent that
such information is not then available or may not be produced without
unreasonable effort or expense.
Bank is hereby authorized to deliver a copy of any financial statements or any
other information relating to the business, operations, or financial condition
of the Parent, the Borrower, or the Subsidiaries, which may be furnished to it
or come to its attention pursuant to the Loan Documents or otherwise, to any
regulatory body or agency having jurisdiction over the Bank or to any Person
which shall or shall have the right or obligation to, succeed to all or any part
of the Bank's interest in the Loan Documents.
6.2 PAYMENT OF INDEBTEDNESS TO THE BANK; PERFORMANCE OF OTHER COVENANTS;
PAYMENT OF OTHER OBLIGATIONS. The Borrower will (a) make full and timely payment
of the principal of and interest on the Indebtedness owed hereunder; and (b)
duly comply with all the terms and covenants contained in the Loan Documents.
6.3 CONDUCT OF BUSINESS; MAINTENANCE OF EXISTENCE AND RIGHTS. The Borrower
will, and will cause its Subsidiaries to, (i) do or cause to be done all things
necessary to preserve and to keep in full force and effect its respective
corporate existence and rights and privileges as a
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corporation, and will not liquidate or dissolve, and will take and fulfill, or
cause to be taken and fulfilled, all actions and conditions necessary to
qualify, and to preserve and keep in full force and effect its qualification, to
do business as a foreign corporation in the jurisdictions in which the conduct
of its business or the ownership or leasing of its properties requires such
qualification, except where the failure to so qualify or maintain such
qualification is reasonably likely to materially adversely affect the business,
earnings, prospects, properties, or condition (financial or otherwise) of the
Borrower and the Restricted Subsidiaries, taken as a whole; provided, however,
that this Subsection shall not be deemed to prohibit any transaction permitted
by Subsections 7.2 and 7.3 hereof, and (ii) obtain and maintain franchises,
licenses, trade names, patents, trademarks, and permits which are necessary to
the ownership of its property or to the continuance of its business except where
the failure to obtain or maintain, either individually or in the aggregate, is
reasonably likely to materially adversely affect the business earnings
prospects, properties, or condition (financial or otherwise) of the Borrower and
the Restricted Subsidiaries, taken as a whole.
6.4 MAINTENANCE OF PROPERTY. The Borrower will, and will cause its
Subsidiaries to, maintain its property in good condition and repair and, from
time to time, make all necessary repairs, renewals, replacements, additions,
betterments, and improvements thereto, so that the business carried on in
connection therewith may be conducted in the ordinary course at all times.
6.5 RIGHT OF INSPECTION; DISCUSSIONS. The Borrower will, and will cause
its Subsidiaries to, permit any Bank employee or agent designated by the Bank,
at the Bank's expense, to visit and inspect any of the properties, corporate
books, records, papers, and financial reports of the Borrower or such
Subsidiary, including the making of any copies thereof and abstracts therefrom,
and to discuss its affairs, finances, and accounts with its principal officers
and independent certified accountants (and by this provision the Borrower hereby
authorizes and directs said accountants to discuss with any such Person the
finances and accounts of the Borrower and the Subsidiaries), all upon reasonable
notice, at reasonable times during normal business hours, and with reasonable
frequency. The Borrower will, and will cause each of its Subsidiaries to, also
permit the Bank, or its designated representative, to audit or appraise any of
its respective assets or financial and business records. Each such inspection
(including any audit or appraisal) shall be at the expense of the Person making
the inspection, unless such inspection shall be made during the continuance of
an Event of Default (in which event, the reasonable expenses of any Person
making any such inspection shall be borne by the Borrower). Notwithstanding the
foregoing sentence, it is understood and agreed by the Borrower that all
expenses in connection with any such inspection incurred by the Borrower or any
Subsidiary, any officers and employees thereof, and the independent certified
accountants therefor shall be expenses payable by the Borrower and shall not be
expenses of the Person making the inspection.
6.6 NOTICES. The Borrower will promptly, and in any event, within fifteen
(15) Business Days thereafter, give notice to the Bank of:
(a) the institution of any suit, action, or proceeding against the
Borrower or any Restricted Subsidiary which is reasonably likely, in the
reasonable judgment of the Borrower, to have a materially adverse effect on the
business, earnings, prospects,
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properties, or condition (financial or otherwise) of the Borrower and the
Restricted Subsidiaries, taken as a whole;
(b) upon the obtaining of knowledge thereof by any Responsible Officer,
any change in any law which is reasonably likely to have a materially adverse
effect on the business, earnings, prospects, properties, or condition (financial
or otherwise) of the Borrower and the Restricted Subsidiaries, taken as a whole;
(c) copies of any notice of violation, order, or other document evidencing
noncompliance with any environmental law which is reasonably likely to have a
materially adverse effect on the business, earnings, prospects, properties, or
condition (financial or otherwise) of the Borrower and the Restricted
Subsidiaries, taken as a whole;
(d) upon the obtaining of actual knowledge thereof by any Responsible
Officer, any Event of Default, specifying the nature and period of existence
thereof, what action the Borrower has taken or is taking or proposes to take
with respect thereto, and an estimate of the time necessary to cure such Event
of Default;
(e) upon any Responsible Officer being aware thereof, the occurrence of
any (i) ERISA Termination Event; (ii) "prohibited transaction" (within the
meaning of Section 4975 of the Code or Section 406 of ERISA), other than one to
which an exemption applies; (iii) failure to make a timely contribution to any
Pension Plan, if such failure has given rise to a lien under Section 412 (n) of
the Code; or (iv) actual, asserted, or alleged violation of ERISA, the Code, or
comparable provision of applicable foreign law, that, with respect to any of the
events set forth in the forgoing clauses (i) through (iv), could result in a
tax, penalty, or other consequence to the Borrower, any Subsidiary, or any ERISA
Affiliate in connection with any Plan, which tax, penalty, or other consequence,
individually or in the aggregate, would materially affect, individually or in
the aggregate, the business, earnings, prospects, properties, or condition
(financial or otherwise) of the Borrower and its Restricted Subsidiaries, taken
as a whole, what action the Borrower is taking or proposes to take with respect
thereto, and, when known, any action taken by the IRS, the U.S. Department of
Labor, the PBGC, any foreign governmental entity, or any other Person with
respect thereto;
(f) upon the obtaining of actual knowledge by any Responsible Officer,
that any franchise or license held by the Borrower or any Restricted Subsidiary
will be revoked, terminated, or suspended, other than any termination in
connection with the sale of any assets pursuant to Subsections 7.2 and 7.3
hereof, and other the revocations, terminations, and suspensions which,
individually or in the aggregate, would not have a material adverse effect on
the business, earnings, prospects, properties, or condition (financial or
otherwise) of the Borrower and the Restricted Subsidiaries, taken as a whole;
(g) copies of all press releases and other written statements made
available generally by the Borrower to its stockholders or to one or more
financial news services concerning material developments in the business of the
Borrower and the Restricted Subsidiaries, taken as a whole;
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(h) copies of any notice of the exercise of any remedy by any secured
party with respect to any of the material assets or property of the Borrower and
the Restricted Subsidiaries, taken as a whole; and
(i) the occurrence of any material casualty to any material facility of
the Borrower or any other force majeure (including, without limitation, any
strike or other labor disturbance) materially affecting the operation or value
of any such facility and which is reasonably likely to have a materially adverse
effect on the business, earnings, prospects, properties, or condition (financial
or otherwise) of the Borrower and the Restricted Subsidiaries, taken as a whole
(specifying whether or not such casualty or force majeure is covered by
insurance).
6.7 PAYMENT OF TAXES; LIENS. The Borrower will, and will cause its
Subsidiaries to, pay and discharge promptly when due:
(a) all taxes, assessments, and governmental charges and levies imposed
upon it, its income, or prof its or any of its properties, before the same shall
become delinquent; and
(b) all lawful claims of materialmen, mechanics, carriers, warehousemen,
landlords, and other similar Persons for labor, materials, supplies and rentals
that, if unpaid, might by law become a Lien upon any of its property;
provided, however, that none of the foregoing need be paid while the same is
being contested in good faith by appropriate proceedings diligently conducted so
long as adequate reserves shall have been established in accordance with
Generally Accepted Accounting Principles with respect thereto, title of the
Borrower or, any subsidiary, as the case may be, to the particular property
shall not be divested thereby, and the right of the Borrower or such Subsidiary
to use said property shall not be materially adversely affected thereby;
provided, further, that any delinquency or non-payment of an immaterial amount
which does not result in the imposition of a Lien which is not a Permitted Lien
shall not be an Event of Default hereunder. Each of the Borrower and its
Subsidiaries will file all federal, state and local tax returns and all other
tax reports as required by law.
6.8 INSURANCE OF PROPERTIES. The Borrower will, and will cause each
Subsidiary to maintain, with respect to its business and properties, insurance
at all times by insurance companies of nationally recognized stature and
responsibility which the Borrower believes to be financially sound, of a
character usually insured by corporations engaged in the same or a similar
business similarly situated against loss or damage of the kinds and in the
amounts customarily insured against and for by such corporations, and carry or
cause to be carried, with such insurers in customary amounts (with customary
deductibles), such other insurance, including public liability insurance, as is
usually carried by corporations engaged in the same or a similar business
similarly situated; provided, however, that all insurance maintained pursuant to
this paragraph shall be carried in amounts sufficient to prevent the Borrower or
any Subsidiary from incurring liability as a co-insurer under law or the terms
of the applicable policy or policies.
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6.9 TRUE BOOKS. The Borrower will, and will cause its Subsidiaries to,
keep proper books of record and account, in which entries will be made of all of
its respective dealings and transactions in accordance with and to the extent
required by Generally Accepted Accounting Principles, and establish on its books
such accruals and reserves in amounts deemed adequate in the reasonable opinion
of the Borrower, that, in accordance with Generally Accepted Accounting
Principles, should be set aside in connection with the business of the Borrower
and its Subsidiaries, including reserves for depreciation, obsolescence,
amortization, third-party insurance payment, and claims and accruals for taxes
based on or measured by income on profits, and for all other taxes.
6.10 OBSERVANCE OF LAWS. The Borrower will, and will cause the Parent and
its Subsidiaries to, conform to and duly observe all laws, regulations, and
other valid requirements of any governmental authority with respect to the
conduct of its business, the violation of which, individually or in the
aggregate, is reasonably likely to materially adversely affect the business,
earnings, prospects, properties, or condition (financial or otherwise) of the
Borrower and its Restricted Subsidiaries, taken as a whole.
6.11 FURTHER ASSURANCES. Upon request of the Bank, the Borrower will, and
will cause Restricted Subsidiary to, duly execute and deliver or cause to be
duly executed and delivered to the Bank such further instruments or documents
and do and cause to be done such further acts as may be reasonably necessary or
proper in the reasonable opinion of the Bank to carry out more effectively the
provisions and purposes of this Agreement And the other Loan Documents.
6.12 ERISA.
(a) Each of the Borrower, its Subsidiaries, and the ERISA Affiliates will
take all actions and fulfill all conditions necessary to maintain any and all
Plans in substantial compliance with applicable requirements of ERISA, the Code,
and applicable foreign law until such Plans are terminated, and the liabilities
thereof discharged, in accordance with applicable law.
(b) No domestic Pension Plan (other than a Multiemployer Plan) will incur
any "accumulated funding deficiency" (within the meaning of Section 412 of the
Code), and no foreign Pension Plan will be in violation of any funding
requirement imposed by applicable foreign law, which deficiency or violation
would or would be reasonably likely to, materially adversely affect the
business, earnings, prospects, properties, or condition (financial or otherwise)
of the Borrower and the Restricted Subsidiaries, taken as a whole.
6.13 CHANGE OF NAME, PRINCIPAL PLACE OF BUSINESS, OFFICE, OR AGENT. The
Borrower will provide the Bank with at least fifteen (15) Business Days' prior
written notice of any change in the name of the Borrower, the Parent, or any
Subsidiary, the principal place of business of the Borrower, the Parent, or any
Subsidiary, the office where the books and records of the Borrower, the Parent,
or any Subsidiary are kept, or any change in the registered agent of the
Borrower, the Parent, or any subsidiary for the purposes of service of process.
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6.14 FINANCIAL COVENANTS. The Borrower will, in accordance with Generally
Accepted Accounting Principles applied on a Consistent Basis, maintain:
(a) Consolidated Working Capital at each fiscal quarter end of not less
than the funded portion of the Revolving Credit. If at the end of any fiscal
quarter the funded portion of the Revolving Credit is zero, the minimum
consolidated working capital must be a ratio of not less than 1.00 to 1.00.
(b) A Fixed Charge Coverage Ratio at each fiscal quarter end, calculated
for the preceding four consecutive fiscal quarters, of not less than 2.00 to
1.00.
(c) Consolidated Net Worth at each fiscal quarter end of not less than the
sum of (i) $31,570,000, plus (ii) fifty percent (50.0%) of cumulative
Consolidated Net Income for each fiscal year during the period beginning May 1,
1996, through the end of the most recent fiscal year (but only if each such
yearly amount is positive), with the computation of such Consolidated Net Income
increment to be made on May 1 of each year.
(d) A ratio of Consolidated Funded Debt to Consolidated Net Worth at each
fiscal quarter end of not more than 3.5 to 1.0.
SECTION 7. NEGATIVE COVENANTS.
The Borrower covenants and agrees that from the date of this Agreement
until payment in full of all present or future indebtedness hereunder, and
termination of all present or future credit facilities established hereunder,
unless the Bank shall otherwise consent in writing, the Borrower will fully
comply and will cause each Subsidiary to fully comply with the following
provisions:
7.1 LIMITATIONS ON MORTGAGES, LIENS, ETC. The Borrower will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, or suffer or permit to exist, any Lien, other than in favor of Bank or
the Permitted Liens.
7.2 CONSOLIDATION AND MERGER, SALE OF ASSETS, ETC. The Borrower will not,
and will not permit or any Restricted Subsidiary to, merge into or consolidate
with, or sell, lease, or otherwise dispose of all or substantially all of its
assets, directly or indirectly, in one or a series of transactions, to any other
Person, or permit any other Person to merge into or consolidate with it or any
Restricted Subsidiary except:
(a) The Borrower may permit any corporation to merge into it so long
as: (i) the Borrower shall be the surviving corporation; (ii) immediately after
giving effect to the transaction, the Borrower shall be permitted by the
provisions of this Agreement to incur at least $1.00 of additional Funded Debt;
and (iii) immediately before and after giving effect to the transaction, no
Event of Default shall exist;
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(b) The Borrower may merge into or consolidate with, or sell all or
substantially all of its assets to, any other corporation, so long as: (i) the
corporation which survives such merger or results from such consolidation or
acquires such assets shall be organized under the laws of the United States of
America, a state thereof or the District of Columbia; (ii) the surviving
corporation shall assume, by an instrument reasonably satisfactory in form and
substance to the Bank, the obligations of the Borrower under this Agreement;
(iii) immediately after giving effect to the transaction, the surviving
corporation shall be permitted by the provisions of this Revolving Credit to
incur at least $1.00 of additional Funded Debt; (iv) immediately before and
after giving effect to the transaction, no Event of Default shall exist; and (v)
an opinion of counsel (reasonably satisfactory in form and substance to the
Bank) shall be delivered to the Bank upon consummation of the transaction to the
effect that this Agreement, the Revolving Credit Note, or the Term Note, as
applicable and the instrument referred to in the foregoing clause (ii) are
legal, valid, and binding obligations of the surviving corporation, enforceable
against the surviving corporation in accordance with their respective terms, and
as to such other matters as to which the Bank shall have received a legal
opinion on the date of this Agreement as the Bank may reasonably request;
(c) Any Restricted Subsidiary may merge into or consolidate with (i)
the Borrower; (ii) any other Restricted Subsidiary; or (iii) any other
corporation, so long as (x) if such other corporation is the surviving
corporation, it is organized under the laws of the United States of America, a
state thereof, or the District of Columbia and, simultaneously with the
consummation of such merger or consolidation, is designated a Restricted
subsidiary pursuant to Subsection 7.10 hereof; (y) immediately after and giving
effect to such merger or consolidation, the Borrower shall be permitted by the
Provisions of this Agreement to incur at least $1.00 of additional Funded Debt;
and (z) immediately before and after giving effect to the transaction, no Event
of Default shall exist; and
(d) Any Restricted Subsidiary may sell all or substantially all of
its assets to (i) the Borrower; (ii) any other Restricted Subsidiary; or (iii)
any other corporation, so long as (v) such transaction complies with the
provisions of Subsections 7.2 and 7.3 hereof, (w) any Indebtedness of such
Restricted Subsidiary to the Borrower and to any other Restricted Subsidiary is
repaid prior to or contemporaneously with such transaction, (x) no Investment of
such Restricted Subsidiary in the Borrower or any other Restricted Subsidiary is
included among the assets sold in such transaction, (y) immediately before and
after giving effect to such transaction, the Borrower shall be permitted by the
provisions of this Agreement to incur at least $1.00 of additional Funded Debt,
and (z) immediately before and after giving effect to such transaction, no Event
of Default shall exist.
7.3 TRANSFER AND SALE OF ASSETS; SALE AND LEASEBACK.
(a) The Borrower will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, through a single transaction or a series
of transactions, sell, lease, transfer, or otherwise dispose of or suffer to be
sold, leased, transferred, abandoned, or otherwise disposed of, all or any part
of its assets except:
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(i) The Borrower or any Restricted Subsidiary may sell its
inventory, materials, and surplus and obsolete equipment in each case in
the ordinary course of its business;
(ii) The Borrower or any Restricted Subsidiary may sell all or
substantially all of its assets to the extent permitted under this
Agreement;
(iii) Any Restricted Subsidiary may sell, lease, transfer, or
otherwise dispose of any of its assets to the Borrower or any other
Restricted Subsidiary; and
(iv) The Borrower or any Restricted Subsidiary may sell, lease,
or otherwise dispose of assets to a Person which is not an Affiliate of the
Borrower for cash and/or Indebtedness issued by the purchaser of such
assets in consideration therefor (each such sale, lease, or other
disposition of assets pursuant to this clause (iv) being hereinafter
referred to as a "sale"), so long as such sale is determined in good faith
by the Borrower to be for a price or rental at least equal to the fair
market sale or rental value of the assets sold, leased, or otherwise
disposed of and to be in the best interest of the Borrower.
(b) The Borrower will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, sell, transfer, or otherwise dispose of
any property, whether now owned or hereafter acquired, in connection with a
transaction in which it is contemplated that such property, or any portion
thereof, or any other property that the Borrower or such Restricted Subsidiary,
as the case may be, intends to use for substantially the same purpose as the
property so sold, transferred, or otherwise disposed of, will simultaneously or
subsequently be leased back to the Borrower or any Restricted Subsidiary (a
"Sale Leaseback Transaction") unless:
(i) Such Sale Leaseback Transaction involves a lease which (x)
if such Lease is an Operating Lease, would be permitted pursuant to the
provisions of this Agreement and, (y) if such Lease is a Capital Lease, the
Attributable Indebtedness associated with such Capital Lease would be
permitted pursuant to the provisions of this Agreement;
(ii) such Sale Leaseback Transaction relates solely to property
or assets with respect to which the Borrower or any Restricted Subsidiary
may create a Lien pursuant to the provisions of paragraphs (f), (g), or (h)
of the definition of "Permitted Liens" set forth in Subsection 1.1 hereof;
and
(iii) Such Sale Leaseback Transaction either (x) complies with
the provisions of this Agreement or (y) is consummated within twelve (12)
months of the date on which the construction of all the leased assets has
been completed, whichever is later.
7.4 RESTRICTED SUBSIDIARY DIVIDENDS. The Borrower will not, and it will
not permit any of its Restricted Subsidiaries to, enter into any agreement,
instrument, or other document which prohibits or restricts in any way or to
otherwise, directly or indirectly, create or cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary
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to (i) pay dividends, or make any other distribution in respect of its capital
stock or any other equity interest or participation in its profits owned by the
Borrower or any Restricted Subsidiary, or pay or repay any Indebtedness owed to
the Borrower or any Restricted Subsidiary, (ii) make loans or advances to the
Borrower, or (iii) transfer any of its properties or assets to the Borrower or
any Restricted Subsidiary (subject to the rights of any holder of a Lien on any
such properties or assets which Lien is a Permitted Lien).
7.5 LIMITATIONS ON RESTRICTED PAYMENTS. Neither the Borrower nor any
Restricted Subsidiary will, at any time, directly or indirectly, declare, make
or pay, or incur any liability to make or pay, or cause or permit to be
declared, made or paid, any Restricted Payment unless, immediately thereafter
and after giving effect thereto: (i) the amount of Aggregate Adjusted Restricted
Payments and Investments shall not exceed an amount equal to (x) $3,500,000 plus
(y) 50% of aggregate Consolidated Net Income for each fiscal year during the
period subsequent to May 1, 1992 through the end of the then most recently
completed year (or if Consolidated Net Income for any such fiscal year is a
loss, minus 100% of Consolidated Net Income for such fiscal year), plus (z) 50%
of aggregate Consolidated Net Income for the completed fiscal quarters of the
current fiscal year, treating such completed fiscal quarters as a single
accounting period (or if Consolidated Net Income for any such accounting period
of completed fiscal quarters is a loss, minus 100% of Consolidated Net Income
for such accounting period); (ii) the Borrower shall be permitted by the
provisions of this Agreement to incur at least $1.00 of additional Funded Debt;
and (iii) no Event of Default shall exist.
7.6 LIMITATIONS ON RESTRICTED INVESTMENTS. Neither the Borrower nor any
Restricted Subsidiary will, at any time, make any Restricted Investment unless
immediately thereafter and after giving effect thereto: (i) the amount of
Aggregate Adjusted Restricted Payments and Investments shall not exceed an
amount equal to the sum of (x) $3,500,000.00, plus (y) 50% of aggregate
Consolidated Net Income for each fiscal year during the period subsequent to May
1, 1992 through the end of the then most recently completed fiscal year (or if
Consolidated Net Income for any such fiscal year is a loss, minus 100% of
Consolidated Net Income for such fiscal year), plus (z) 50% of aggregate
Consolidated Net Income for the completed fiscal quarters of the current fiscal
year, treating such completed fiscal quarters as a single accounting period (or
if Consolidated Net Income for any such accounting period of completed fiscal
quarters is a loss, minus 100% of Consolidated Net Income for such accounting
period); (ii) the Borrower shall be permitted by the provisions of this
Agreement to incur at least $1.00 of additional Funded Debt; and (iii) no Event
of Default shall exist.
7.7 REGULATION U. The Borrower will not permit any part of the proceeds of
the loan or loans made pursuant to this Agreement to be used to purchase or
carry or to reduce or retire any loan incurred 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 any such margin stock, or to be used for any other
purpose which violates, or which would be inconsistent with, the provisions of
Regulation U or other applicable regulation. The Borrower covenants that it is
not engaged and will not become engaged as one of its principal or important
activities in extending credit for the purpose of purchasing or carrying such
margin
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stock. If requested by the Bank, the Borrower will furnish to the Bank in
connection with any loan or loans hereunder, a statement in conformity with the
requirements of Federal Reserve Form U-1 referred to in said Regulation. In
addition, the Borrower covenants that no part of the proceeds of the loan or
loans hereunder will be used for the purchase of commodity future contracts (or
margins therefor for short sales) for any commodity not required for the normal
raw material inventory of the Borrower.
7.8 TRANSACTIONS WITH AFFILIATES. Neither the Borrower nor any Restricted
Subsidiary will enter into any transaction (including, without limitation, the
purchase, sale, lease, or exchange of any property, the rendering of any
services, or the payment of management fees) with any Affiliate, except: (i)
transactions in the ordinary course of the business of the Borrower or such
Restricted Subsidiary, and in good faith and upon commercially reasonable terms
that are no less favorable to it than it would obtain in a comparable arm's
length transaction with a Person other than an Affiliate; and (ii) transactions
between the Borrower and any wholly-owned Restricted Subsidiary which are not
otherwise prohibited by this Agreement.
7.9 LIMITATION ON NATURE OF BUSINESS. The Borrower and the Restricted
Subsidiaries will remain engaged in lines of business related to the businesses
in which the Borrower and its Restricted Subsidiaries are currently engaged.
7.10 RESTRICTED SUBSIDIARIES. The Borrower will not hereafter designate any
corporation as a Restricted Subsidiary hereunder (and any such designation shall
be without effect hereunder) unless:
(i) The board of directors of the Borrower shall have duly
adopted a resolution approving such designation, and the Bank shall have
received a copy of such resolution certified by the secretary or assistant
secretary of the company;
(ii) Such corporation satisfies the requirements of the
definition of "Restricted Subsidiary" set forth in this Agreement;
(iii) No Event of Default shall exist prior to, as a result of,
or immediately after giving effect to, such designation;
(iv) Immediately after such designation and including such
corporation in such determination, the Borrower shall be permitted to incur
at least $1.00 of additional Funded Debt pursuant to the provisions of this
Agreement;
(v) Such corporation shall have executed a joinder agreement
pursuant to the provisions of Subsection 3.2 hereof and obtained, if
required by the Bank, an opinion of counsel reasonably satisfactory to it
as to the due authorization, execution, and delivery of such Guaranty by
such corporation; and
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(vi) The Borrower shall promptly, and in any event within seven
(7) Business Days after such designation, give notice to the Bank of the
fact of such designation, the name, jurisdiction of incorporation,
principal business address, and business of such newly-designated
Restricted Subsidiary, and certifications as to and computations showing
compliance with the requirements of this Subsection, and shall deliver to
the Bank with such notice the joinder agreement and counsel opinion, if
any;
provided, however, that, for the purposes of this Subsection, any computation of
any financial covenant in connection with the determination of the absence of an
Event of Default or the ability of the Borrower to incur Indebtedness after
giving effect to the designation of a corporation as a Restricted Subsidiary
shall be made on a pro forma basis, and, without limitation, shall include the
Indebtedness of such corporation in any such computation for the relevant period
in the case of any such designation and include the net income or net cash from
operations of such corporation in such computation in the case of any such
designation. Notwithstanding the foregoing provisions of this Subsection, to the
extent that a Subsidiary is not designated a Restricted Subsidiary within ninety
(90) days after the day on which such Subsidiary becomes a Subsidiary of the
Borrower, such Subsidiary shall be deemed to be an Unrestricted Subsidiary. Any
designation of a Person as a Restricted Subsidiary shall be irrevocable.
7.11 CHANGES IN GOVERNING DOCUMENTS, ACCOUNTING METHODS, FISCAL YEAR. The
Borrower will not, and will not permit its Subsidiaries to, amend in any respect
its articles of incorporation or bylaws from that in existence on the date of
this Agreement or change its respective accounting methods or practices, its
depreciation or amortization policy or rates, or its fiscal year end from that
in existence as of the date of the financial statements provided to the Bank
pursuant to Subsection 4.5 hereof, except as required to comply with law or with
Generally Accepted Accounting Principles.
7.12 LIMITATION ON INCURRENCE OF DEBT. The Borrower agrees that throughout
the term of the Revolving Credit.
(a) Neither the Borrower nor any Restricted Subsidiary at any time,
directly or indirectly, incur, create, assume, guarantee or become liable in any
manner with respect to any Senior Debt unless, immediately after giving effect
to such incurrence; (i) the ratio of Consolidated Senior Debt (determined
immediately after giving effect to such incurrence) to Net Cash from Operations
(for the four(4) most recent fiscal quarters) shall be equal to or less than
3.50 to 1.00; and (ii) no Event of Default shall exist.
(b) For purposes of this Section 7.12, if Senior Debt or Funded Debt is
incurred by the Borrower or a Restricted Subsidiary for the purpose of acquiring
Voting Stock of or any assets of any Person which is not a Restricted Subsidiary
and, immediately after and giving effect to such acquisition, such Person will
be a Restricted Subsidiary (in the case of an acquisition of Voting Stock) or
such assets will be owned by Borrower of a Restricted Subsidiary (in the case of
an acquisition of assets), then the amounts of net cash from the operations of
such Person or of net cash from operations attributable to such assets which
would have been included in Net Cash from
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Operations if such Person had been a Restricted Subsidiary or such assets had
been owned by Borrower or a Restricted Subsidiary during the relevant fiscal
quarters shall be included in Net Cash from Operations for the relevant fiscal
quarters for purposes of determining compliance with this Section 7.12.
SECTION 8. EVENTS OF DEFAULT.
The following events shall constitute "Events of Default" hereunder:
8.1 PAYMENT OF OBLIGATIONS UNDER LOAN DOCUMENTS. The Borrower fails to
make timely payment of any principal, interest, or other amount due on any
indebtedness owed the Bank under the Loan Documents, or fails to make any other
payment to the Bank as contemplated thereunder either by the terms hereof or
otherwise when due, and such failure shall continue for five (5) days.
8.2 REPRESENTATION OR WARRANTY. Any representation or warranty made or
deemed made by the Borrower or any Restricted Subsidiary herein or in any
writing furnished in connection with or pursuant to the Loan Documents, or any
report certificate, financial statement, or other information provided by others
and furnished by the Borrower or any Restricted Subsidiary to the Bank in
connection with or pursuant to the Loan Documents, shall be false or misleading
in any material respect on the date when made or when deemed made.
8.3 COVENANTS UNDER THIS AGREEMENT. A default in the observance or
performance of any of the conditions, covenants or agreements of Borrower set
forth in Subsections 2.1(e), 6.5, 6.6(d) or 7.1 through 7.12, inclusive.
8.4 OTHER COVENANTS UNDER THE LOAN DOCUMENTS. The Borrower or any other
Person fails to fully and promptly perform when due (i) any other agreement,
covenant, term, or condition binding on it contained in this Agreement, and such
failure shall have continued unremedied for thirty (30) days after notice
thereof has been given to Borrower or (ii) any agreement, covenant, term or
condition binding on it contained in any other Loan Document (taking into
account applicable periods of notice and cure, if any).
8.5 PAYMENT, PERFORMANCE, OR DEFAULT OF OTHER MONETARY OBLIGATIONS. The
Borrower or any Restricted Subsidiary fails to make payment on any contract
obligation or of principal or interest on any Indebtedness other than that
created under the Loan Documents or otherwise owed to the Bank, individually or
in the aggregate, exceeding $2,500,000.00, beyond any period of grace provided
with respect thereto, or fails to fully and promptly perform any other
obligation, agreement, term, or condition contained in any agreement under which
any such other Indebtedness is created, or there is otherwise a default or event
of default thereunder, if the effect of any such failure or default is to cause,
or permit the holder or holders of such indebtedness (or a trustee or other
person or entity acting in behalf of such holder or holders) to cause, such
indebtedness to become due prior to its stated maturity.
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8.6 COVENANTS OR DEFAULTS TO THE BANK OR OTHERS; REVOCATION OF GUARANTY.
The Borrower or any Restricted Subsidiary fails to fully and promptly perform
when due any agreement, covenant, term, or condition binding on it, contained in
any lease, contract, or other agreement to which it is a party or in respect of
which it is obligated, other than the Loan Documents and other than any monetary
default (as described above), including but not limited to any failure to
perform under the Note Purchase Agreement or related documents, beyond any
period of grace provided with respect thereto, or there is otherwise a default
or event of default thereunder, if such failure or default would, either
individually or in the aggregate, materially and adversely affect the business,
earnings, prospects, properties, or conditions (financial or otherwise) of the
Borrower and the Restricted Subsidiaries, taken as a whole; or any Restricted
Subsidiary revokes or attempts to revoke any Guaranty.
8.7 LIQUIDATION; DISSOLUTION; BANKRUPTCY; ETC. Liquidation or dissolution
of the Borrower, the Parent or any Restricted Subsidiary, suspension of the
business of the Borrower or any Restricted Subsidiary, or the filing or
commencement by the Borrower, the Parent or any Restricted Subsidiary of a
voluntary petition, case, proceeding, or other action seeking reorganization,
arrangement, readjustment of its debts, or any other relief under any existing
or future law of any jurisdiction, domestic or foreign, state or federal,
relating to bankruptcy, insolvency, reorganization or relief of debtors, or any
other action of the Borrower, the Parent or any Restricted Subsidiary indicating
its consent to, approval of, or acquiescence in, any such petition, case,
proceeding, or other action seeking to have an order for relief entered with
respect to it or its debts; the application by the Borrower, the Parent or any
Restricted Subsidiary for, or the appointment, by consent or acquiescence of, a
receiver, trustee, custodian, or other similar official for the Borrower or any
Restricted Subsidiary, or for all or a substantial part of its respective
property; the making by the Borrower or any Restricted Subsidiary of an
assignment for the benefit of creditors; or the inability of the Borrower or any
Restricted Subsidiary, or the admission by the Borrower or any Restricted
Subsidiary in writing of its inability to pay its debts as they mature.
8.8 INVOLUNTARY BANKRUPTCY, ETC. Commencement of an involuntary petition,
case, proceeding, or other action against the Borrower, the Parent or any
Restricted Subsidiary under the Bankruptcy Code or seeking reorganization,
arrangement, readjustment of its debts, or any other relief under any existing
or future law of any jurisdiction, domestic or foreign, state or federal,
relating to bankruptcy, insolvency, reorganization, or relief of debtors; or the
involuntary appointment of a receiver, trustee, custodian, or other similar
official for the Borrower, the Parent or any Restricted Subsidiary, or for all
or a substantial part of its respective property or assets; or there shall be
commenced against the Borrower, the Parent or any Restricted Subsidiary any
case, proceeding, or other action seeking issuance of a warrant of attachment,
execution, distraint, or similar process against all or any substantial part of
the assets, or property of such person which results in the entry of an order
for such relief, and the continuance of any of such for sixty (60) days without
being vacated, discharged, stayed, bonded, or dismissed.
8.9 JUDGMENTS. The rendition of a judgment against the Borrower or any
Restricted Subsidiary for the payment of damages or money, individually or in
the aggregate, in excess of $2,500,000, if the same is not discharged or if a
writ of execution or similar process is issued with
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respect thereto and is not stayed within the time allowed by law for filing
notice of appeal of the final judgment.
8.10 ATTACHMENT, GARNISHMENT, LIENS IMPOSED BY LAW. The issuance of a writ
of attachment or garnishment against, or the imposition of a lien by operation
of law on, any property of the Borrower or any Restricted Subsidiary, if the
amount of the claim or the value of the affected property is in excess of
$2,500,000.00, individually or in the aggregate, and if forty-five (45) days
have elapsed and the proceeding or lien has not been vacated, satisfied,
dismissed, or stayed pending appeal.
8.11 ERISA.
(a) Any domestic Pension Plan (other than a Multiemployer Plan) shall
incur an "accumulated funding deficiency" (within the meaning of Section 412 of
the Code) with respect to any plan year; or
(b) Any waiver shall be sought or granted under Section 412(d) of the
Code; or
(c) Any foreign Pension Plan shall violate any funding requirement
imposed by applicable foreign law; or
(d) Any Pension Plan shall be, have been or be likely to be
terminated or the subject of termination proceedings under ERISA; or
(e) the Borrower, the Parent, any Subsidiary, or any ERISA Affiliate
shall incur or be likely to incur a liability to or on account of a Pension Plan
under Sections 4062, 4063, 4064, or 4201 of ERISA or comparable provision of
applicable foreign law, and there shall result from one or more of the events
set forth in the foregoing clauses (i) through (v) either a liability or a
material risk of incurring a liability to the PBGC, any foreign governmental
entity, or a Pension Plan, which could have a material and adverse effect on the
business, earnings, prospects, properties, or condition (financial or otherwise)
of the Borrower or the Borrower and its Restricted Subsidiaries, taken as a
whole.
8.12 CORPORATE EXISTENCE. Any act or omission (formal or informal) of the
Borrower, the Parent or any Restricted Subsidiary or its officers, directors, or
shareholders leading to, or resulting in, the termination, invalidation (partial
or total), revocation, suspension, interruption, or unenforceability of (i) its
corporate existence, rights, and privileges, or (ii) its licenses, franchises,
or permits where the failure to maintain, either individually or in the
aggregate, is reasonably likely to materially adversely affect the business,
earnings, prospects, properties, or condition (financial or otherwise) of the
Borrower and its Restricted Subsidiaries, taken as a whole.
8.13 DEFAULTS GENERALLY. Any Event of Default based on the failure by
Borrower to cause or prevent any event to occur or circumstance to exist within
any period, at any time, or with respect to any period, shall be deemed to have
ceased to exist or to be continuing upon the Borrower causing
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or preventing, as the case may be, such event to occur or circumstance to exist
at any later time or with respect to any other period, as the case may be. For
example, an Event of Default based on the failure to deliver a document within
the required period shall be deemed to cease to exist upon the delivery of such
document at any later time.
SECTION 9. REMEDIES OF THE BANK.
If any one or more of the Events of Default described in Section 8 shall
occur, the Bank may, at its option at any time thereafter, take one or more of
the following actions: (i) Declare all amounts due and payable hereunder by the
Borrower to the Bank and all other obligations and indebtedness owed by the
Borrower to the Bank to be forthwith due and payable (with the exception of an
Event of Default described in Subsection 8.8 in which case the amounts due and
payable hereunder by the Borrower to the Bank and all other obligations and
indebtedness owed by the Borrower to the Bank shall automatically become due and
payable), whereupon the indebtedness owed to the Bank by the Borrower hereunder
and all other obligations owed by the Borrower to the Bank with accrued interest
thereon, whether contingent or direct, shall forthwith become due and payable,
without presentment, demand, protest, or other notice of any kind from the Bank,
all of which are hereby expressly waived, anything contained in the Loan
Documents to the contrary notwithstanding, and all commitments to make Advances
and the Term Loan shall terminate; (ii) require the Borrower to xxxxx x xxxx or
a security interest in all assets of the Borrower to the Bank, subject to the
provisions of Subsection 3.1(b) hereof, and (iii) immediately proceed to do all
other things provided for by law or the Loan Documents to enforce its rights
hereunder and to collect all amounts owing to the Bank by the Borrower. No
right, power, or remedy conferred upon the Bank by the Loan Documents shall be
exclusive of any other right, power, or remedy referred to therein or now or
hereafter available at law or in equity.
Upon the occurrence of any Event of Default, Borrower shall immediately
upon demand by Bank deposit with Bank cash collateral in an amount equal to the
maximum amount available to be drawn at any time under all Letters of Credit
then outstanding.
SECTION 10. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.
10.1 REIMBURSEMENT OF PREPAYMENT COSTS. If Borrower makes any payment of
principal with respect to any Eurocurrency-based Advance or portion of the Term
Note which bears interest at the Eurocurrency-based Rate (or converts or
refunds, or attempts to convert or refund any such Advance or portion of the
Term Note) on any day other than the last day of the Interest Period applicable
thereto (whether voluntarily, by acceleration, or otherwise), or if Borrower
fails to borrow, refund or convert any Eurocurrency-based Advance or portion of
the Term Note which bears interest at the Eurocurrency-based Rate after notice
has been given by Borrower to Bank in accordance with the terms hereof
requesting such Advance, or if Borrower fails to make any payment of principal
or interest in respect of a Eurocurrency-based Advance or portion of the Term
Note which bears interest at the Eurocurrency-based Rate when due, Borrower
shall reimburse Bank
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on demand for any resulting loss, cost or expense incurred by Bank as a result
thereof, including, without limitation, any such loss, cost or expense incurred
in obtaining, liquidating, employing or redeploying deposits from third parties,
whether or not Bank shall have funded or committed to fund such Advance. Such
amount payable by Borrower to Bank may include, without limitation, an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, refunded or converted, for
the period from the date of such prepayment or of such failure to borrow, refund
or convert, through the last day of the relevant Interest Period, at the
applicable rate of interest for said Advance(s) or portion of the Term Note
provided under this Agreement, over (b) the amount of interest (as reasonably
determined by Bank) which would have accrued to Bank on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank Eurocurrency market. Calculation of any amounts payable to Bank under
this paragraph shall be made as though such Bank shall have actually funded or
committed to fund the relevant Advance or portion of the Term Note through the
purchase of an underlying deposit in an amount equal to the amount of such
Advance and having a maturity comparable to the relevant Interest Period or
portion of the Term Note; provided, however, that Bank may fund any
Eurocurrency-based Advance or portion of the Term Note which bears interest at
the Eurocurrency-based Rate in any manner it deems fit and the foregoing
assumptions shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph. Upon the written request of Borrower, Bank shall
deliver to Borrower a certificate setting forth the basis for determining such
losses, costs and expenses, which certificate shall be conclusively presumed
correct, absent manifest error.
10.2 BANK'S EUROCURRENCY LENDING OFFICE. For any Advance or portion of the
Term Note to which the Eurocurrency-based Rate is applicable, if Bank shall
designate a Eurocurrency Lending Office which maintains books separate from
those of the rest of Bank, Bank shall have the option of maintaining and
carrying the relevant Advance or portion of the Term Note on the books of such
Eurocurrency Lending Office.
10.3 CIRCUMSTANCES AFFECTING EUROCURRENCY-BASED RATE AVAILABILITY. If with
respect to any Interest Period, Bank shall determine that, by reason of
circumstances affecting the interbank markets generally, deposits in
eurocurrencys in the applicable amounts are not being offered to Bank for such
Interest Period, then Bank shall forthwith give notice thereof to the Borrower.
Thereafter, until Bank notifies Borrower that such circumstances no longer
exist, the obligation of Bank to make Eurocurrency-based Advances, and the right
of Borrower to convert an Advance to or refund an Advance as a
Eurocurrency-based Advance or to convert or refund any portion of the Term Note
to bear interest at the Eurocurrency-based Rate, shall be suspended, and the
Borrower shall repay in full (or cause to be repaid in full) the then
outstanding principal amount of each such Eurocurrency-based Advance or portion
of the Term Note which bears interest at the Eurocurrency-based Rate covered
hereby together with accrued interest thereon, and all other amounts payable
hereunder on the last day of the then current Interest Period applicable to such
Advance. Upon the date for repayment as aforesaid and unless Borrower notifies
Bank to the contrary within two (2) Business Days after receiving a notice from
Bank pursuant to this Subsection, such outstanding principal amount shall be
converted to a Prime-based Advance and such portion of the Term Note shall bear
interest at the Prime-based Rate as of the last day of such Interest Period.
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10.4 LAWS AFFECTING EUROCURRENCY-BASED ADVANCE AVAILABILITY. In the event
that any applicable law, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not currently applicable to Bank or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by Bank (or its
Eurocurrency Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, shall make it unlawful or
impossible for Bank (or its Eurocurrency Lending Offices) to honor its
obligations hereunder to make or maintain any Advance or portion of the Term
Note with interest at the Eurocurrency-based Rate, Bank shall so notify Borrower
and the right of Borrower to convert an Advance or portion of the Term Note or
refund an Advance or portion of the Term Note as a Eurocurrency-based Advance,
or bearing interest at the Eurocurrency-based Rate shall be suspended and
thereafter Borrower may select as Applicable Interest Rates only those which
remain available and which are permitted to be selected hereunder, and if Bank
may not lawfully continue to maintain an Advance or portion of the Term Loan to
the end of the then current Interest Period applicable thereto at the
Eurocurrency-based Rate, Borrower shall immediately prepay such Advance or
portion of the Term Note, together with interest to the date of payment, and any
amounts payable under Subsection 10.1 with respect to such prepayment and the
applicable Advance shall immediately be converted to a Prime-based Advance and
such portion of the Term Note shall thereafter bear interest at the Prime-based
Rate and the Prime-based Rate shall be applicable thereto.
10.5 INCREASED COST OF EUROCURRENCY-BASED ADVANCES. In the event that any
applicable law, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not currently applicable to Bank or any
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by Bank with any request or directive (whether or not
having the force of law) made by any such authority, central bank or comparable
agency after the date hereof:
(a) shall subject Bank to any tax, duty or other charge with respect
to any Advance or any Note or shall change the basis of taxation of
payments to Bank of the principal of or interest on any Advance or any Note
or any other amounts due under this Agreement in respect thereof (except
for changes in the rate of tax on the overall net income or revenues of
Bank imposed by the United States of America or the jurisdiction in which
such Bank's principal executive office is located); or
(b) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by Bank or shall
impose on Bank or the interbank markets any other condition affecting any
Advance or any Note;
and the result of any of the foregoing is to increase the costs to Bank of
making, funding or maintaining any part of the Indebtedness hereunder bearing
interest at the Eurocurrency-based Rate or to reduce the amount of any sum
received or receivable by the Bank under this Agreement or under any Note
bearing interest at the Eurocurrency-based Rate then Bank shall promptly notify
the
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Borrower in writing of such fact and demand compensation therefor and, within
fifteen (15) days after such notice, Borrower agrees to pay to Bank such
additional amount or amounts as will compensate Bank for such increased cost or
reduction. A certificate of Bank setting forth the basis for determining such
additional amount or amounts necessary to compensate Bank shall be conclusively
presumed to be correct save for manifest error.
10.6 OTHER INCREASED COSTS. In the event that after the date hereof the
adoption of or any change in any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to Bank, or any interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof, or compliance by Bank with any guideline, request or directive of any
such authority (whether or not having the force of law), including any risk
based capital guidelines, affects or would affect the amount of capital required
or expected to be maintained by Bank (or any corporation controlling Bank) and
Bank determines that the amount of such capital is increased by or based upon
the existence of Bank's obligations or Advances hereunder or under the Notes and
such increase has the effect of reducing the rate of return on Bank's (or such
controlling corporation's) capital as a consequence of such obligations or
Advances hereunder to a level below that which Bank (or such controlling
corporation) could have achieved but for such circumstances (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by Bank to be material, then the Borrower shall pay to Bank, from time to time,
upon request by such Bank, additional amounts sufficient to compensate such Bank
(or such controlling corporation) for any increase in the amount of capital and
reduced rate of return which Bank reasonably determines to be allocable to the
existence of Bank's obligations or Advances hereunder. A statement as to the
amount of such compensation, prepared in good faith and in reasonable detail by
Bank, shall be submitted by Bank to the Borrower, reasonably promptly after
becoming aware of any event described in this Subsection 10.6 and shall be
conclusive, absent manifest error in computation.
SECTION 11. MISCELLANEOUS.
11.1 COURSE OF DEALING; AMENDMENT; SUPPLEMENTAL AGREEMENTS. No course of
dealing between the parties hereto shall be effective to amend, modify, or
change any provision of this Agreement. This Agreement may not be amended,
modified, or changed in any respect except by an agreement in writing signed by
the party against whom such change is to be enforced. The parties hereto may,
subject to the provisions of this Subsection, from time to time, enter into
written agreements supplemental hereto for the purpose of adding any provisions
to this Agreement or changing in any manner the rights and obligations of the
parties hereunder. Any such supplemental agreement in writing shall be binding
upon the parties thereto.
11.2 WAIVER BY THE BANK OF REQUIREMENTS. The Bank may, in its sole
discretion, sign and deliver to the Borrower a written statement waiving any of
the requirements of this Agreement and in such event the waiver shall be
effective only in the specific instance and for the specific purpose for which
given.
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11.3 WAIVER OF DEFAULT. The Bank may, in its sole discretion, by written
notice to the Borrower, at any time and from time to time, waive any Event of
Default and its consequences, or any default in the performance or observance of
any condition, covenant, or other term hereof and its consequences. Any such
waiver shall be for such period and subject to such conditions as shall be
specified in any such notice. In the case of any such waiver, the Borrower and
the Bank shall be restored to their former positions prior to such Event of
Default or default and shall have the same rights as they had thereto, and any
Event of Default or default so waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Event of
Default or default, or impair any right consequent thereto.
11.4 NOTICES. Notwithstanding any provisions to the contrary contained in
the other Loan Documents, all notices, requests and demands to or upon the
parties to this Agreement pursuant to any Loan Document shall be deemed to have
been given or made when delivered by hand, or when deposited in the mail,
postage prepaid by registered or certified mail, return receipt requested,
addressed as follows or to such other address as may be hereafter designated in
writing by one party to the other:
The Borrower: NEWBEVCO, INC.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: President
and
Attention: Legal Counsel
The Bank: COMERICA BANK
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: U.S. Banking Dept.-East
except in cases where it is expressly herein provided that such notice, request,
or demand is not effective until received by the party to whom it is addressed.
11.5 NO WAIVER; CUMULATIVE REMEDIES. No omission or failure of the Bank to
exercise and no delay in exercising by the Bank of any right, power, or
privilege hereunder, shall impair such right, power, or privilege, shall operate
as a waiver thereof or be construed to be a waiver thereof; nor shall any single
or partial exercise of any right, power, or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided in the Loan Documents are cumulative
and not exclusive of any rights or remedies provided by law, and the warranties,
representations, covenants, and agreements made therein shall be cumulative,
except in the case of irreconcilable inconsistency, in which case the provisions
of this Agreement shall control.
11.6 RELIANCE UPON, SURVIVAL OF, AND MATERIALITY OF REPRESENTATIONS AND
WARRANTIES, AGREEMENTS, AND COVENANTS. All representations and warranties,
agreements, and covenants made
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by the Borrower in the Loan Documents are material and shall be deemed to have
been relied upon by the Bank and shall survive the execution and delivery of the
Loan Documents and the making of the loan or loans herein contemplated, and
shall continue in full force and effect so long as any indebtedness is owed to
the Bank by the Borrower pursuant hereto or so long as there shall be any
commitment by the Bank to make loans to the Borrower hereunder. All statements
contained in any certificate to the Bank by Borrower, the Parent or any
Subsidiary at any time by or on behalf of the Borrower pursuant hereto shall
constitute representations and warranties by the Borrower hereunder.
11.7 SET-OFF. Upon the occurrence of any Event of Default, the Bank is
hereby authorized at any time and from time to time, without notice to the
Borrower, to set off, appropriate, and apply any and all monies, securities and
other property of the Borrower and all proceeds thereof, now or hereafter held
or received by, or in transit to, the Bank from or for the Borrower, and also
upon any and all deposits (general or special) and credits of the Borrower, if
any, at the Bank or all items hereinabove referred to against all indebtedness
of the Borrower owed to the Bank, whether under the Loan Documents or otherwise,
whether now existing or hereafter arising. The Bank shall be deemed to have
exercised such right of set-off and to have made a charge against such items
immediately upon the occurrence of such Event of Default although made or
entered on its books subsequent thereof.
11.8 SEVERABILITY AND ENFORCEABILITY OF PROVISIONS. In the event that any
one or more of the provisions of the Loan Documents is determined to be invalid,
illegal, or unenforceable in any respect as to one or more of the parties, all
remaining provisions nevertheless shall remain effective and binding on the
parties thereto and the validity, legality, and enforceability thereof shall not
be affected or impaired thereby. To the extent permitted by applicable law, the
parties hereby waive any provision of law that renders any provision hereof
invalid, illegal, or unenforceable in any respect.
11.9 PAYMENT OF EXPENSES, INCLUDING ATTORNEYS' FEES AND TAXES. The Borrower
agrees (a) to pay or reimburse the Bank for all its reasonable and customary
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation, execution, and delivery of, and any amendment, supplement, or
modification to, or waiver or consent under, the Loan Documents, and the
consummation of the transactions contemplated thereby, including, without
limitation, the reasonable and customary fees and disbursements of counsel for
the Bank, taxes, and all recording or filing fees, (b) except as expressly
provided otherwise herein, to pay or reimburse the Bank for all of its costs and
expenses incurred in connection with the administration, supervision,
collection, or enforcement of, or the preservation of any rights under, the Loan
Documents, including, without limitation, the reasonable fees and disbursements
of counsel for the Bank, including attorneys' fees out of court, in trial, on
appeal, in bankruptcy proceedings, or otherwise, (c) without limiting the
generality of provision (a) hereof, to pay or reimburse the Bank for, and
indemnify and hold the Bank harmless against liability for, any and all
documentary stamp taxes, non-recurring intangible taxes, or other taxes,
together with any interest, penalties, or other liabilities in connection
therewith, that the Bank now or hereafter determines, are payable with respect
to the Loan Documents, the obligations evidenced by the Loan Documents, any
Advances under the Loan Documents, and any guaranties or mortgages or other
security instruments, and (d) to pay, indemnify, and hold the Bank
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harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance, and administration of the Loan Documents with the
exception of the willful or gross negligence of the Bank. The agreements in this
Subsection shall survive repayment of all other amounts payable hereunder or
pursuant hereto, now or in the future, and shall be secured by all collateral
that secures the loan or loans described herein.
11.10 OBLIGATIONS ABSOLUTE. The obligations of the Borrower under this
Agreement are primary, absolute, independent, unconditional, and irrevocable,
and shall be paid and performed strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including without limitation, the
following circumstances:
(a) Any lack of validity or enforceability of any portion of any
letter of credit, this Agreement, or any agreement or instrument relating
thereto;
(b) Any amendment or waiver of or any consent to or actual departure
from any letter of credit, this Agreement, or any agreement or instrument
relating thereto;
(c) Any exchange, release, or nonperfection of any collateral;
(d) Any delay, extension of time, renewal, compromise, or other
indulgence or modification granted to or agreed by the Bank, with or without
notice to or approval by the Borrower in respect of any of the Borrower's
indebtedness to the Bank under this Agreement; or
(e) The failure of the Bank to give any notice to the Borrower
hereunder.
11.11 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Bank and the Borrower, and, to the extent permitted
herein, their respective successors, assignees, or transferees. In the event of
such transfer or assignment, the rights and privileges herein conferred upon the
Bank shall automatically extend to and be vested in the successor, assignee, or
transferee of the Bank, and the Bank shall be relieved of all liability
hereunder. Bank shall only assign this Revolving Credit to a related Comerica
Bank entity or upon a sale or takeover of the Bank. The Borrower may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of the Bank.
11.12 COUNTERPARTS; EFFECTIVE DATE. This Agreement may be signed in any
number of separate counterparts, no one of which need contain all of the
signatures of the parties, and as many of such counterparts as shall together
contain all of the signatures of the parties shall be deemed to constitute one
and the same instrument. A set of the counterparts of this Agreement signed by
all parties hereto shall be lodged with the Bank. This Agreement shall become
effective upon the receipt by the Bank of signed counterparts of this Agreement
from each of the parties hereto or telecopy confirmation of the signing of
counterparts of this Agreement by each of the parties hereto.
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11.13 PARTICIPATIONS. The Borrower recognizes that the Bank may enter into
participation agreements with other financial institutions, including one or
more banks or other lenders, whereby Bank will allocate a portion of the loan or
loans contemplated hereunder. For the benefit of such other banks and lenders,
the Borrower agrees that such other banks and lenders shall have the same rights
of set-off against the Borrower granted the Bank in Subsection 11.7 hereof. The
Bank will use its best efforts to advise the Borrower of the names of any
participants and the extent of their interest herein. Notwithstanding the
provisions hereof, the Bank will continue at all times to be the controlling
bank, notwithstanding any participation of the Revolving Credit.
11.14 LAW OF MICHIGAN. This Agreement and the Revolving Note has been
delivered and the Term Note will be delivered at Detroit, Michigan, and shall be
governed by and construed and enforced in accordance with the laws of the State
of Michigan, except to the extent that the Uniform Commercial Code, other
personal property law or real property law of a jurisdiction where Collateral is
located is applicable and except as and to the extent expressed to the contrary
in any of the Loan Documents. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
11.15 CONSENT TO JURISDICTION. Borrower and Banks hereby irrevocably submit
to the non-exclusive jurisdiction of any United States Federal or Michigan state
court sitting in Detroit in any action or proceeding arising out of or relating
to this Agreement or any of the other Loan Documents and Borrower and Banks
hereby irrevocably agree that all claims in respect of such action or proceeding
may be heard and determined in any such United States Federal or Michigan state
court. Borrower irrevocably consents to the service of any and all process in
any such action or proceeding brought in any court in or of the State of
Michigan by the delivery of copies of such process to Borrower at its address
specified on the signature page hereto or by certified mail directed to such
address or such other address as may be designated by Borrower in a notice to
the other parties that complies as to delivery with the terms of Section 14.7.
Nothing in this Section shall affect the right of the Bank to serve process in
any other manner permitted by law or limit the right of Bank to bring any such
action or proceeding against Borrower or any Restricted Subsidiary or any of its
or their property in the courts of any other jurisdiction. Borrower hereby
irrevocably waives any objection to the laying of venue of any such suit or
proceeding in the above described courts.
11.16 TITLE AND HEADINGS; TABLE OF CONTENTS. The titles and headings
preceding the text of Sections and Subsections of this Agreement and the Table
of Contents have been included solely for convenience of reference and shall
neither constitute a part of this Agreement nor affect its meaning,
interpretation, or effect.
11.17 COMPLETE AGREEMENT; NO OTHER CONSIDERATION. The Loan Documents
contain the final, complete, and exclusive expression of the understanding of
the Borrower and the Bank with respect to the transactions contemplated by the
Loan Documents and supersede any prior or contemporaneous agreement or
representation, oral or written, by or between the parties related to
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the subject matter hereof. Without limiting the generality of the foregoing,
there does not exist any consideration or inducement other than as stated herein
for the execution, delivery and performance by the Borrower of the Loan
Documents.
11.18 LEGAL OR GOVERNMENTAL LIMITATIONS. Anything contained in this
Agreement to the contrary notwithstanding, the Bank shall not be obligated to
extend credit or make loans to the Borrower in an amount in violation of any
limitations or prohibitions provided by any applicable statute or regulation.
11.19 INTEREST. In the event the obligation of Borrower to pay interest on
the principal balance of the Revolving Credit Note or Term Note is or becomes in
excess of the maximum interest rate which Borrower is permitted by law to
contract or agree to pay, giving due consideration to the execution date of this
Agreement, then, in that event, the rate of interest applicable thereto shall be
deemed to be immediately reduced to such maximum rate and all previous payments
in excess of the maximum rate shall be deemed to have been payments in reduction
of principal and not of interest.
11.20 INDEPENDENCE OF COVENANTS. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default.
11.21 AMENDMENT AND RESTATEMENT. This Agreement amends and restates in its
entirety, that certain Credit Agreement dated as of February 19, 1997 between
Borrower and Bank, as amended.
11.22 WAIVER OF TRIAL BY JURY. THE BORROWER AND THE BANK HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THE LOAN DOCUMENTS AND ANY OTHER DOCUMENT EXECUTED IN
CONJUNCTION WITH THE LOAN OR LOANS HEREUNDER, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN), OR ACTION OF EITHER PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK TO ENTER INTO ANY LOAN
TRANSACTIONS HEREUNDER.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BORROWER:
NEWBEVCO, INC.,
a Delaware corporation
By: \s\ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President-Treasurer
BANK:
COMERICA BANK, a Michigan banking
corporation
By: \s\ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
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