Exhibit 10(e)
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of December 4, 1992,
Amended and Restated as of January 1, 1996
Among
CHOCK FULL O'NUTS CORPORATION,
XXXXXXXXXX REALTY ASSOCIATES,
CHOCK REALTY CORPORATION,
XXXX'X COFFEE CO.,
QUIKAVA, INC.
THE LENDERS NAMED HEREIN,
and
NATWEST BANK N.A., AS AGENT
[Execution Copy]
TABLE OF CONTENTS
Page
I. DEFINITIONS 1
II. THE LOANS 26
SECTION 2.01. Term Loan Commitments and
Revolving
Credit Commitments 26
SECTION 2.02. Loans 29
SECTION 2.03. Notice of Loans 31
SECTION 2.04. Notes; Repayment of Loans 31
SECTION 2.05. Interest on Loans 33
SECTION 2.06. Fees 34
SECTION 2.07. Termination and Reduction of
Revolving Credit
Commitments and Term Loan
Commitments 34
SECTION 2.08. Interest on Overdue Amounts;
Alternate Rate of Interest 35
SECTION 2.09. Prepayment of Loans 36
SECTION 2.10. Reserve Requirements; Change in
Circumstances 39
SECTION 2.11. Reserves 42
SECTION 2.12. Indemnity 42
SECTION 2.13. Pro Rata Treatment 44
SECTION 2.14. Sharing of Setoffs 44
SECTION 2.15. Taxes 45
SECTION 2.16. Payments and Computations 48
SECTION 2.17. Making of Revolving Credit Loans 48
SECTION 2.18. Settlement Among Lenders 49
III. COLLATERAL SECURITY 59
SECTION 3.01. Security Documents 59
SECTION 3.02. Filing and Recording 60
IV. REPRESENTATIONS AND WARRANTIES 60
SECTION 4.01. Organization, Legal Existence 60
SECTION 4.02. Authorization 60
SECTION 4.03. Governmental Approvals 61
SECTION 4.04. Binding Effect 61
SECTION 4.05. Material Adverse Change 61
SECTION 4.06. Litigation; Compliance with Laws;
etc. 61
SECTION 4.07. Financial Statements 62
SECTION 4.08. Federal Reserve Regulations 62
SECTION 4.09. Taxes 63
SECTION 4.10. Employee Benefit Plans 63
SECTION 4.11. No Material Misstatements 65
SECTION 4.12. Investment Company Act; Public
Utility Holding
Company Act 65
SECTION 4.13. Security Interest 65
SECTION 4.14. Use of Proceeds 65
SECTION 4.15. Subsidiaries 66
SECTION 4.16. Title to Properties; Possession Under
Leases; Trademarks 66
SECTION 4.17. Solvency 66
SECTION 4.18. Permits, etc 67
SECTION 4.19. Compliance with Environmental
Laws 67
SECTION 4.20. No Change in Credit Criteria or
Collection Policies 68
SECTION 4.21. Warehouses 68
SECTION 4.22. Acquisition Documents 69
V. CONDITIONS OF CREDIT EVENTS 69
SECTION 5.01. All Credit Events 69
SECTION 5.02. First Borrowing 70
SECTION 5.03. First Borrowing 75
VI. AFFIRMATIVE COVENANTS 78
SECTION 6.01. Legal Existence 79
SECTION 6.02. Businesses and Properties 79
SECTION 6.03. Insurance 79
SECTION 6.04. Taxes 80
SECTION 6.05. Financial Statements, Reports, etc. 80
SECTION 6.06. Litigation and Other Notices 82
SECTION 6.07. ERISA 83
SECTION 6.08. Maintaining Records; Access to
Properties and
Inspections; Right to Audit 84
SECTION 6.09. Use of Proceeds 85
SECTION 6.10. Fiscal Year-End 85
SECTION 6.11. Further Assurances 85
SECTION 6.12. Additional Grantors and Guarantors 85
SECTION 6.13. Environmental Laws 85
SECTION 6.14. Pay Obligations to Lenders and
Perform Other Covenants 87
SECTION 6.15. Maintain Operating Accounts 88
SECTION 6.16. Purchase Price Adjustments 88
SECTION 6.17. Amendments 88
SECTION 6.18. Intentionally Omitted 88
SECTION 6.19. Warehouseman's and Landlord's
Consents 88
VII. NEGATIVE COVENANTS 88
SECTION 7.01. Liens 89
SECTION 7.02. Sale and Lease-Back Transactions 90
SECTION 7.03. Indebtedness 90
SECTION 7.04. Dividends, Distributions and
Payments 90
SECTION 7.05. Consolidations, Mergers and Sales of
Assets 91
SECTION 7.06. Investments 91
SECTION 7.07. Capital Expenditures 94
SECTION 7.08. Adjusted Effective Net Worth 94
SECTION 7.09. Intentionally Omitted 94
SECTION 7.10. Total Unsubordinated Liabilities to
Adjusted
Effective Net Worth Ratio 94
SECTION 7.11. Intentionally Omitted 94
SECTION 7.12. Fixed Charge Coverage Ratio 94
SECTION 7.13. Interest Coverage Ratio 94
SECTION 7.14. Intentionally Omitted 94
SECTION 7.15. Business 94
SECTION 7.16. Sales of Receivables 95
SECTION 7.17. Use of Proceeds 95
SECTION 7.18. ERISA 95
SECTION 7.19. Accounting Changes 95
SECTION 7.20. Prepayment or Modification of
Indebtedness;
Modification of Charter Documents 95
SECTION 7.21. Transactions with Affiliates 96
SECTION 7.22. Intentionally Omitted 96
VIII. EVENTS OF DEFAULT 97
IX. AGENT 101
X. MANAGEMENT, COLLECTION AND STATUS OF
RECEIVABLES
AND OTHER COLLATERAL 104
SECTION 10.01. Collection of Receivables;
Management of Collateral 104
SECTION 10.02. Receivables Documentation 106
SECTION 10.03. Status of Receivables and Other
Collateral 106
SECTION 10.04. Monthly Statement of Account 107
SECTION 10.05. Collateral Custodian 108
XI. MISCELLANEOUS 108
SECTION 11.01. Notices 108
SECTION 11.02. Survival of Agreement 108
SECTION 11.03. Successors and Assigns;
Participations 109
SECTION 11.04. Expenses; Indemnity 112
SECTION 11.05. Applicable Law 113
SECTION 11.06. Right of Setoff 113
SECTION 11.07. Payments on Business Days 114
SECTION 11.08. Waivers; Amendments 114
SECTION 11.09. Severability 115
SECTION 11.10. Entire Agreement; Waiver of Jury
Trial, etc 115
SECTION 11.11. Confidentiality 116
SECTION 11.12. Submission to Jurisdiction 116
SECTION 11.13. Counterparts; Facsimile Signature 117
SECTION 11.14. Headings 117
XII. GUARANTEES 117
EXHIBITS
EXHIBIT A Form of Term Note
EXHIBIT B Revolving Credit Note
EXHIBIT C Form of Opinion of Counsel
EXHIBIT D Form of Pledge Agreement
EXHIBIT E Form of Security Agreement
EXHIBIT F Form of Assignment and
Acceptance
EXHIBIT G Form of Security Agreement -
Patents and Trademarks
EXHIBIT H Form of Joint Guarantee
EXHIBIT I Form of Settlement Report
EXHIBIT J Form of Assignment of Contract
SCHEDULES
SCHEDULE 2.01(a) Term Loan Commitments
SCHEDULE 2.01(b) Revolving Credit Commitments
SCHEDULE 4.01 Qualified Jurisdictions
SCHEDULE 4.05 Material Adverse Change
SCHEDULE 4.06(a Litigation
SCHEDULE 4.06(b) Compliance with Laws
SCHEDULE 4.09 Taxes
SCHEDULE 4.10 ERISA
SCHEDULE 4.15 Subsidiaries
SCHEDULE 4.19 Environmental Law Compliance
SCHEDULE 4.21 All Warehouses
SCHEDULE 6.19 Warehousemens Letters
SCHEDULE 7.01 Existing Liens
SCHEDULE 7.03 Existing Indebtedness
SCHEDULE 7.05 Real Property
AMENDED AND RESTATED
CREDIT AGREEMENT dated as
of December 4, 1992, as amended
and restated as of January 1, 1996,
among CHOCK FULL O'NUTS
CORPORATION, a New York
corporation ("Chock"), XXXX'X
COFFEE CO., a Delaware
corporation ("Xxxx'x"),
XXXXXXXXXX REALTY
ASSOCIATES, a New York
limited partnership
("Xxxxxxxxxx"), CHOCK
REALTY CORPORATION, a
California corporation ("Chock
Realty"), and QUIKAVA, INC., a
Massachusetts corporation
("Quikava") (Chock, Cain's,
Broadworth, Chock Realty and
Quikava each a "Borrower" and
collectively, the "Borrowers"), the
lenders named in
Schedules 2.01(a) and 2.01(b)
annexed hereto (collectively,
together with all successors and
assigns, the "Lenders"), and
NATWEST BANK N.A.,
formerly known as National
Westminster Bank USA, as agent
for the Lenders (in such capacity,
the "Agent").
The Borrowers and Lenders wish to amend and
restate the First Amended and Restated Loan Agreement
(such term and all other capitalized terms used in this
paragraph having the respective meanings ascribed to such
terms above or hereinafter) in order to provide for (a) a Term
Loan Facility to the Term Loan Borrowers in an aggregate
principal amount of $10,000,000 and (b) Revolving Credit
Loans to the Revolving Loan Borrowers at any time and from
time to time prior to the Revolving Credit Termination Date
in an aggregate principal amount not in excess of the
Revolving Credit Facility, as such Revolving Credit Facility
shall be reduced in accordance with the terms hereof
including, without limitation, on the Line Expiration Date.
The Grantors will provide Collateral in accordance with the
provisions of this Agreement and the Security Documents.
The Lenders are severally, and not jointly, willing to extend
such Loans to the Borrowers subject to the terms and
conditions hereinafter set forth. Accordingly, the Borrowers,
the Lenders and the Agent hereby agree that the First
Amended and Restated Loan Agreement shall be amended
and restated in its entirety as follows:
I. DEFINITIONS
For purposes hereof, the following terms shall
have the meanings specified below:
"Acquisition" shall mean the purchase by Chock
of all of the issued and outstanding capital stock of Xxxx'x and
certain assets pursuant to the Acquisition Documents.
"Acquisition Agreement" shall mean the Stock
Purchase Agreement dated as of October 16, 1992 by and
between Chock and Nestl Beverage Company, a Delaware
corporation.
"Acquisition Documents" shall mean the
Acquisition Agreement, Tax Indemnity Agreement and all
other agreements, documents and instruments executed and
delivered pursuant thereto or in connection therewith, in each
case as in effect on the First Amended and Restated Closing
Date.
"Adjusted Effective Net Worth" shall mean,
with respect to Chock and its subsidiaries on a Consolidated
basis at any time, (i) the sum of the capital stock, capital in
excess of par or stated value of shares of the capital stock of
Chock and its subsidiaries on a Consolidated basis, retained
earnings and any other account which, in accordance with
generally accepted accounting principles, constitutes
stockholders' equity, plus (ii) all amounts outstanding under
any Subordinated Indebtedness, less (iii) treasury stock, at
cost, as determined based upon the most recent audited
financial statements of Chock, and less (iv) the amount of any
write-up subsequent to the Closing Date in the value of any
asset above the cost or depreciated cost thereof to Chock and
its subsidiaries (but excluding the amount of any such write-
up which is not accompanied by an increase in the amount of
stockholders' equity).
"Adjusted LIBO Rateshall mean, with respect
to any Eurodollar Loan for any Interest Period, an interest rate
per annum (rounded upwards, if necessary, to the next 1/16 of
1%) equal to the product of (i) the LIBO Rate in effect for
such Interest Period and (ii) Statutory Reserves. For purposes
hereof, "Statutory Reserves" shall mean a fraction (expressed
as a decimal), the numerator of which is the number one and
the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including,
without limitation, any marginal, special, emergency, or
supplemental reserves) expressed as a decimal established by
the Board and any other banking authority to which any
Lender is subject with respect to the Adjusted LIBO Rate for
Eurocurrency Liabilities (as defined in Regulation D). Such
reserve percentages shall include, without limitation, those
imposed under Regulation D. Eurodollar Loans shall be
deemed to constitute Eurocurrency Liabilities and as such
shall be deemed to be subject to such reserve requirements
without benefit of or credit for proration, exceptions or offsets
which may be available from time to time to any Lender under
Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in
any reserve percentage.
"Adjusted Net Income" shall mean, with respect
to Chock and its subsidiaries on a Consolidated basis for any
period, the aggregate income (or loss) of Chock and its
subsidiaries on a Consolidated basis for such period which
shall be an amount equal to net revenues and other proper
items of income less the aggregate for Chock and its
subsidiaries on a Consolidated basis of any and all items that
are treated as expenses under generally accepted accounting
principles, and less, without duplication, Federal, state and
local income taxes, but excluding any extraordinary, unusual
and/or non-recurring non-cash gains or losses or any non-cash
gains or losses from the sale or disposition of assets other than
in the ordinary course of business, all computed and
calculated in accordance with generally accepted accounting
principles consistently applied.
"Affiliate" of any person shall mean any other
person which, directly or indirectly, controls or is controlled
by or is under common control with such person and, without
limiting the generality of the foregoing, includes (i) any
person which beneficially owns or holds 5% or more of any
class of voting securities of such person or 5% or more of the
equity interest in such person, (ii) any person of which such
person beneficially owns or holds 5% or more of any class of
voting securities or in which such person beneficially owns or
holds 5% or more of the equity interest in such person and
(iii) any director, officer or employee of such person, except
that for purposes of this Agreement, (i) no persons shall be
deemed "Affiliates" solely as a result of their being
administrators of the ESOP and (ii) no person shall be deemed
an "Affiliate" solely as a result of his being the holder of the
proxy (in such capacity, the "Proxy Holder") pursuant to that
certain Standstill Agreement dated as of June 21, 1991 by and
among Chock, Xxxxxx Xxxxxxxx and certain other parties
thereto. For the purposes of this definition, the term "control"
(including, with correlative meanings, the terms "controlled
by" and "under common control with"), as used with respect
to any person, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management
and policies of such person, whether through the ownership of
voting securities or by contract or otherwise.
"Agent" shall have the meaning assigned to
such term in the preamble to this Agreement.
"Applicable Lending Office" shall mean, with
respect to each Lender, such Lender's Domestic Lending
Office in the case of a Prime Lending Rate Loan and such
Lender's Eurodollar Lending Office in the case of a
Eurodollar Loan.
"Assignment and Acceptance" shall mean an
assignment and acceptance entered into by a Lender and an
assignee and accepted by the Agent, in substantially the form
of Exhibit F annexed hereto.
"Assignment of Contract" shall mean the
Assignment of Contract, dated as of the First Amended and
Restated Closing Date, between Chock and the Agent, for the
benefit of the Lenders, substantially in the form of Exhibit J
annexed hereto, as amended, modified or supplemented from
time to time.
"Availability Reserve" shall mean an amount
equal to $10,000,000.
"Board" shall mean the Board of Governors of
the Federal Reserve System of the United States.
"Borrowers" shall have the meaning assigned to
such term in the preamble to this Agreement.
"Borrowing Base" shall have the meaning
assigned to such term in Section 2.01(b) hereof.
"Xxxxxxxxxx" shall have the meaning assigned
to such term in the preamble to this Agreement.
"Business Day' shall mean any day, other than a
Saturday, Sunday or legal holiday in the State of New York,
on which banks are open for substantially all their banking
business in New York City except that, if any determination
of a "Business Day" shall relate to a Eurodollar Loan, the
term "Business Day" shall in addition exclude any day on
which banks are not open for dealings in dollar deposits in the
London interbank market.
"Xxxx'x" shall have the meaning assigned to
such term in the preamble to this Agreement.
"Xxxx'x Borrowing Base" shall have the
meaning assigned to such term in Section 2.01(b) hereof.
"Xxxx'x Holding" shall mean Xxxx'x Holding
Company, a Delaware corporation.
"Capital Expenditures" shall mean the amount
of all payments made by Chock or its subsidiaries directly or
indirectly for the purpose of acquiring, constructing or
maintaining fixed assets, real property or equipment which, in
accordance with generally accepted accounting principles,
would be added as a debit to the fixed asset account of Chock
or any such subsidiary and shall include, without limitation,
all amounts paid or payable with respect to Capitalized Lease
Obligations.
"Capitalized Lease Obligation" shall mean an
obligation to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real and/or
personal property which obligation is required to be classified
and accounted for as a capital lease on a balance sheet
prepared in accordance with generally accepted accounting
principles consistently applied, and for purposes hereof the
amount of such obligation shall be the capitalized amount
thereof determined in accordance with such principles.
"CFN" shall mean CFN of New York, Inc., a
New York corporation.
"Change of Control" shall mean (i) if any
person (not including the ESOP or any persons solely in their
capacity as administrators of the ESOP, or the Proxy Holder)
or two or more persons (including the ESOP and/or including
the Proxy Holder) acting in concert shall acquire the
beneficial ownership of an aggregate number of shares of the
common stock of Chock (on a fully diluted basis) (x) in
excess of 20% of all outstanding common stock of Chock or
(y) entitling such person or persons to cast the votes required
to elect a majority of the Board of Directors of Chock, (ii) if
Chock shall cease to own 100% of all classes of stock of any
of CFN, Chock Realty, Quikava or Xxxx'x Holding (subject to
Section 7.05 hereof), (iii) if Xxxx'x Holding shall cease to own
100% of all classes of stock of Xxxx'x (subject to Section 7.05
hereof) or (iv) subject to the provisions of Section 7.05
hereof, if at any time prior to the date, if any, as the real
property located at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx is
sold, CFN shall cease to be general partner of Xxxxxxxxxx or
Chock shall cease to be limited partner of Xxxxxxxxxx. For
purposes of this definition, a person shall be deemed to have
beneficial ownership of a security if it, directly or indirectly,
has the power to vote, or to direct the voting of, such security.
"Chock" shall have the meaning assigned to
such term in the preamble to this Agreement.
"Chock Borrowing Base" shall have the
meaning assigned to such term in Section 2.01(b).
"Chock Collateral Assignment (Xxxx Xxxxx)"
shall mean the Assignment of Contract as Collateral Security
(Xxxx Xxxxx) dated as of the First Amended and Restated
Closing Date between Chock and the Agent.
"Chock Realty" shall have the meaning assigned
to such term in the preamble to this Agreement.
"Closing Date" shall mean the date of the first
borrowing under this Agreement, but in no event later than
February 16, 1996.
"Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
"Collateral" shall mean all collateral and
security as described in the Security Documents.
"Commitment" shall mean, with respect to each
Lender, the sum of the Term Loan Commitment of such
Lender as set forth in Schedule 2.01(a), and the Revolving
Credit Commitment of such Lender as set forth in Schedule
2.01(b), as each may be adjusted from time to time pursuant
to Section 2.07.
"Commitment Fee" shall have the meaning
assigned to such term in Section 2.06 hereof.
"Commitment Letters" shall mean (i) the Letter
Agreement between NatWest and Chock (on its behalf and on
behalf of the other Borrowers) dated September 24, 1992, as
amended and (ii) the Letter Agreement among Chemical
Bank, Chock (on its behalf and on behalf of the other
Borrowers) and NatWest, dated November 18, 1992.
"Consolidated" shall mean, in respect of any
person, as applied to any financial or accounting term, such
term determined on a consolidated basis in accordance with
generally accepted accounting principles (except as otherwise
required herein) for the person and all consolidated
subsidiaries thereof.
"Contaminant" shall mean all Hazardous
Materials and all those substances which are regulated by or
form the basis of liability under Federal, state or local
environmental, health and safety statutes or regulations
including, without limitation, asbestos, polychlorinated
biphenyls ("PCBs"), and radioactive substances, or any other
material or substance which constitutes a material health,
safety or environmental hazard to any person or property.
"Credit Event" shall mean each borrowing
hereunder and the issuance of each Letter of Credit hereunder.
"Current Assets" shall mean, with respect to
Chock and its subsidiaries at any date, the aggregate amount
of all assets of Chock and its subsidiaries on a Consolidated
basis which would be classified as current assets at such date,
computed and calculated in accordance with generally
accepted accounting principles consistently applied.
"Current Liabilities" shall mean, with respect to
Chock and its subsidiaries at any date, the aggregate amount
of all liabilities of Chock and its subsidiaries on a
Consolidated basis (including tax and other proper accruals)
which would be classified as current liabilities at such date,
computed and calculated in accordance with generally
accepted accounting principles consistently applied.
"Customer" shall mean and include the account
debtor or obligor with respect to any Receivable.
"DBPI" shall mean DB Private Brands, Inc., a
former Missouri corporation which was a wholly-owned
subsidiary of Chock.
"Xxxx Xxxxx Purchase Agreement" shall mean
the Agreement dated as of November 1, 1992 by and between
Private Brands, L.P. and Xxxx Xxxxx - Private Brands, Inc.,
as in effect on the First Amended and Restated Closing Date.
"Xxxx Xxxxx Purchase Documents" shall mean
the Xxxx Xxxxx Purchase Agreement, the Private Brands
Note and all agreements, documents and instruments executed
and delivered pursuant thereto or in connection therewith.
"Default" shall mean any condition, act or event
which, with notice or lapse of time or both, would constitute
an Event of Default.
"Dilution" shall mean with respect to any
calendar month for the Revolving Loan Borrowers, the
percentage which (i) all non-cash credits to the Receivable
account of the Revolving Loan Borrowers for any such
calendar month constitute of (ii) gross xxxxxxxx to the
Receivable account of the Revolving Loan Borrowers for
such calendar month.
"dollars" or the symbol "$" shall mean dollars in
lawful currency of the United States of America.
"Domestic Lending Office" shall mean, with
respect to any Lender, the office of such Lender specified as
its "Domestic Lending Office" opposite its name on Schedule
2.02 annexed hereto, or such other office of such Lender as
such Lender may from time to time specify to the Borrowers
and the Agent.
"EBITDA" shall mean, with respect to Chock
and its subsidiaries for any period, the sum of (i) Adjusted Net
Income, (ii) Interest Expense, (iii) depreciation and
amortization and (iv) Federal, state and local income taxes, in
each case of Chock and its subsidiaries on a Consolidated
basis for such period, computed and calculated in accordance
with generally accepted accounting principles consistently
applied.
"Eligible Inventory" shall mean inventory
consisting of processed and unprocessed coffee, packaged
coffee, tea, spices, and other non-perishable packaged food
products of the Revolving Loan Borrowers including (subject
to clause (iv) below) packaging supplies, but in any event
shall not include (i) goods on consignment, (ii) damaged, stale
or unsalable goods, (iii) goods located outside the United
States, (iv) packaging supplies which exceed twelve percent
(12%) of the amount of inventory at the time of
determination, (v) inventory at any location other than real
property owned by the Borrowers or leased by the Borrowers
with respect to which a landlord's waiver has been obtained
(except as set forth in Section 6.19 hereof), or any warehouse
with respect to which a warehouseman's letter has been
obtained (except with respect to inventory at locations as to
which reserves with respect thereto have been established by
the Agent in its discretion), (vi) obsolete or slow-moving
goods and (vii) inventory of any type in excess of the
requirements of such Revolving Loan Borrower at such time.
The Agent may, as is set forth in Section 2.11 hereof, impose
such reserves as it deems necessary or desirable in its
discretion to maintain with respect to inventory. Within each
of the categories set forth in clauses (i) through (vii) above,
the Agent may, in its discretion exercised in good faith, fix
and revise standards of eligibility from time to time and
determine whether any item of inventory is Eligible Inventory.
"Eligible Receivables" shall mean in each case,
provided that the Agent shall have a perfected first priority
security interest therein, Receivables of the Revolving Loan
Borrowers arising from transactions with third parties located
in the United States, or Receivables of the Revolving Loan
Borrowers arising from transactions with third parties located
in Puerto Rico or Canada (but as to Customers located in
Canada or Puerto Rico, only up to five percent (5%) of the
aggregate face amount of all Eligible Receivables at any time
outstanding) which Receivables, as of the date of
computation, have been outstanding for not more than ninety
(90) days from the date of invoice. The Agent may, as is set
forth in Section 2.11 hereof, impose such reserves as it deems
reasonably necessary or desirable in its discretion to maintain
with respect to Receivables. Within each of the categories set
forth in clauses (i) through (xii) below, the Agent may, in its
discretion exercised in good faith, fix and revise standards of
eligibility from time to time and determine whether any
Receivable is an Eligible Receivable. Eligible Receivables in
any event shall not include any (i) Receivable arising out of
"xxxx and hold" transactions, conditional sales, guaranteed
sales, consignment transactions or sale or return or any similar
arrangement; (ii) "contra account," which shall mean any
Receivables due from a Customer to which any Revolving
Loan Borrower has any liability, direct or contingent,
outstanding, in the amount and to the extent that such liability
may be offset against such Receivables; (iii) Receivable
subject to any right of offset or counterclaim in the amount
and to the extent of such right of offset or counterclaim; (iv)
Receivable which arises out of contracts other than normal
purchase orders and invoices or which does not provide for
payment in accordance with normal trade terms without offset
rights; (v) Receivable arising from progress xxxxxxxx to a
Customer; (vi) Receivable from a Customer other than
Xxxxxxxx, Wakefern and Supermarket General to the extent
that the face amount of Receivables from such a Customer
exceeds ten percent (10%) of the total face amount of all
outstanding Eligible Receivables at any time (except to the
extent that Receivables from such Customer in excess of such
percentage have been approved by the Agent); (vii)
Receivable from any of Xxxxxxxx, Wakefern and
Supermarket General exceeding the greater of $1,500,000 or
fifteen percent (15%) of the total face amount of all
outstanding Eligible Receivables; (viii) Receivable from any
Customer if more than fifty percent (50%) of the face amount
of Receivables from such Customer shall have been
outstanding for more than ninety (90) days from the date of
invoice; (ix) Receivable having a face amount of $5,000 or
more which is in dispute; (x) Receivable due from a Customer
with whose credit standing the Agent is no longer satisfied;
(xi) Receivable from any Affiliate of any Borrower and (xii)
Receivable which arises out of a contract with the United
States of America or any department, agency or
instrumentality thereof, unless the applicable Revolving Loan
Borrower has taken all actions necessary to comply with the
Federal Assignment of Claims Act. The amount of Eligible
Receivables calculated at any time in accordance with this
definition shall be reduced by the amount of open credit
balances aged over 90 days, if any.
"Environmental Claim" shall mean any written
notice of violation, claim, demand, abatement or other order
by any governmental authority or any person for personal
injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment,
nuisance, pollution, contamination or other adverse effects on
the environment, or for fines, penalties or deed or use
restrictions, resulting from or based upon (i) the existence, or
the continuation of the existence, of a Release (including,
without limitation, sudden or non-sudden, accidental or
nonaccidental Releases), of, or exposure to, any substance,
chemical, material, pollutant, contaminant, odor or audible
noise or other release or emission in, into or onto the
environment (including, without limitation, the air, ground,
water or any surface) at, in, by or from any of the properties
of Chock or its subsidiaries, (ii) the environmental aspects of
the transportation, storage, treatment or disposal of materials
in connection with the operation of any of the properties of
Chock or its subsidiaries or (iii) the violation, or alleged
violation by Chock or its subsidiaries, of any statutes,
ordinances, orders, rules, regulations, Permits or licenses of or
from any governmental authority, agency or court relating to
environmental matters connected with any of the properties of
Chock or its subsidiaries, under any applicable Environmental
Law.
"Environmental Laws" shall mean the
Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. 9601 et seq.), the Hazardous
Material Transportation Act (49 U.S.C. 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.), the Oil Pollution Act of 1990 (P.L. 101-380),
the Safe Drinking Water Act (42 U.S.C. 300(f), et seq.), the
Clear Air Act (42 U.S.C. 7401 et seq.), the Toxic Substances
Control Act, as amended (15 U.S.C. 2601 et seq.), the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
136 et seq.), and the Occupational Safety and Health Act
(29 U.S.C. 651 et seq.), as such laws have been and
hereafter may be amended or supplemented, and any related
or analogous present or future Federal, state or local, statutes,
rules, regulations, ordinances, licenses, permits and
interpretations and orders of regulatory and administrative
bodies.
"ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder, as in effect from time to
time.
"ERISA Affiliate" shall mean any trade or
business (whether or not incorporated) which together with
any of the Borrowers or any subsidiary of any thereof would
be treated as a single employer under the provisions of Title I
or Title IV of ERISA.
"ESOP" shall mean the Employee Stock
Ownership Plan of Chock, effective as of January 1, 1988.
"Eurodollar Lending Office" shall mean, with
respect to any Lender, the office of such Lender specified as
its "Eurodollar Lending Office" opposite its name in Schedule
2.03 annexed hereto (or, if no such office is specified, its
Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the
Borrowers and the Agent.
"Eurodollar Loan" shall mean a Loan based on
the Adjusted LIBO Rate in accordance with Article II hereof.
"Event of Default" shall have the meaning
assigned to such term in Article VIII hereof.
"Excess Cash Flow" shall mean, with respect to
Chock and its subsidiaries for any period of determination
thereof, an amount equal to (A) the sum of (i) Consolidated
Net Income and (ii) Consolidated depreciation and
amortization expense of Chock and its subsidiaries, minus (B)
the sum of (i) the aggregate of payments of principal with
respect to Indebtedness of Chock and its subsidiaries (other
than payments with respect to the Revolving Credit Loans)
during the period of determination, and (ii) Capital
Expenditures during the period of determination.
"Excess Cash Flow Prepayment" shall mean an
amount equal to fifty percent (50%) of Excess Cash Flow, if
any, for the Fiscal Year then ended.
"Federal Funds Effective Rate" shall mean, for
any day, 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 on the next succeeding 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 the day of such transactions received by the
Agent from three Federal funds brokers of recognized
standing selected by it. If for any reason the Agent shall have
determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, including the inability or failure
of the Agent to obtain sufficient quotations in accordance
with the terms hereof, the Prime Rate shall be applicable in all
cases where the Federal Funds Effective Rate would have
applied hereunder until the circumstances giving rise to such
inability no longer exist. Any change in the Federal Funds
Effective Rate shall be effective on the effective date of such
change in the Federal Funds Effective Rate.
"Final Maturity Date" shall mean December 20,
1999.
"Financial Officer" shall mean, with respect to
any person, the chief financial officer of such person.
"First Amended and Restated Closing Date"
shall mean December 4, 1992.
"First Amended and Restated Loan Agreement"
shall mean the Amended and Restated Loan Agreement dated
as of December 4, 1992, as amended.
"Fiscal Year" shall mean the fiscal year of each
of the Borrowers for accounting purposes which in each case
ends on July 31, or the last Friday or last Saturday of July of
each year or on such other date as is determined by the
Borrowers in accordance with Section 6.10 hereof.
"Fixed Charge Coverage Ratio" shall mean,
with respect to Chock and its subsidiaries on a Consolidated
basis for the applicable period of determination, the ratio of
(A) EBITDA for the period of determination to (B) the sum of
(i) the aggregate of payments of principal, if any, with respect
to Indebtedness of Chock and its subsidiaries (other than
Revolving Credit Loans) during the period of determination,
plus (ii) Capital Expenditures during the period of
determination, plus (iii) Interest Expense during the period of
determination, plus (iv) all cash dividends paid, and
repurchases and redemptions of capital stock, by Chock and
its subsidiaries during the period of determination, plus (v) the
aggregate of prepayments, repurchases, redemptions and
retirements (other than by conversion into common stock of
Chock) of Subordinated Indebtedness under Section 7.20
hereof plus (vi) all taxes paid in cash during the period of
determination.
"Grantor" shall mean any Grantor, Pledgor or
Debtor, as such terms are as defined in any of the Security
Documents.
"Guarantee" shall mean any obligation,
contingent or otherwise, of any person guaranteeing or having
the economic effect of guaranteeing any Indebtedness or
obligation of any other person in any manner, whether directly
or indirectly and shall in any event include the Joint
Guarantee, and shall include, without limitation, any
obligation of such person, direct or indirect, to (i) purchase or
pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or obligation or to purchase (or to
advance or supply funds for the purchase of) any security for
the payment of such Indebtedness or obligation, (ii) purchase
property, securities or services for the purpose of assuring the
owner of such Indebtedness or obligation of the payment of
such Indebtedness or obligation, or (iii) maintain working
capital, equity capital, available cash or other financial
condition of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or obligation; provided,
however, that the term Guarantee shall not include
endorsements for collection or collections for deposit, in
either case in the ordinary course of business.
"Guarantor" shall mean, collectively, each
guarantor party to the Joint Guarantee and each person which
becomes a guarantor of the Obligations after the date hereof.
"Hazardous Material" shall mean any pollutant,
contaminant, chemical, or industrial or hazardous, toxic or
dangerous waste, substance or material, defined or regulated
as such in (or for purposes of) any Environmental Law and
any other toxic, reactive, or flammable chemicals, including
(without limitation) any asbestos, any petroleum (including
crude oil or any fraction), any radioactive substance and any
polychlorinated biphenyls; provided, in the event that any
Environmental Law is amended so as to broaden the meaning
of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment; and
provided, further, to the extent that the applicable laws of any
state establish a meaning for "hazardous material," "hazardous
substance," "hazardous waste," "solid waste" or "toxic
substance" which is broader than that specified in any
Environmental Law, such broader meaning shall apply.
"Indebtedness" shall mean, with respect to any
person, (a) all obligations of such person for borrowed money
or with respect to deposits or advances of any kind, (b) all
obligations of such person evidenced by bonds, debentures,
notes or other similar instruments, (c) all obligations of such
person for the deferred purchase price of property or services,
except current accounts payable arising in the ordinary course
of business and not overdue beyond such period as is
commercially reasonable for such person's business, (d) all
obligations of such person under conditional sale or other title
retention agreements relating to property purchased by such
person, (e) all payment obligations of such person with
respect to interest rate or currency protection agreements,
including, without limitation, the Rate Agreements, (f) all
obligations of such person as an account party under any letter
of credit or in respect of bankers' acceptances, (g) all
obligations of any third party secured by property or assets of
such person (regardless of whether or not such person is liable
for repayment of such obligations), (h) all Guarantees of such
person and (i) the redemption price of all redeemable
preferred stock of such person, but only to the extent that such
stock is redeemable at the option of the holder or requires
sinking fund or similar payments at any time prior to the Final
Maturity Date.
"Indemnitees" shall have the meaning assigned
to such term in Section 11.04(c) hereof.
"Information" shall have the meaning assigned
to such term in Section 11.11 hereof.
"Insurance Letter of Credit" shall have the
meaning assigned such term in Section 2A.01 hereof.
"Interest Coverage Ratio" shall mean, with
respect to Chock and its subsidiaries on a Consolidated basis
for the applicable period of determination thereof, the ratio of
(i) EBITDA to (ii) Interest Expense during the period of
determination.
"Interest Expense" shall mean, with respect to
Chock and its subsidiaries for the applicable period of
determination thereof, the interest expense of Chock and its
subsidiaries during such period determined on a Consolidated
basis in accordance with generally accepted accounting
principles consistently applied, and shall in any event include,
without limitation, (i) the amortization of debt discounts, (ii)
the amortization of all fees payable in connection with the
incurrence of Indebtedness to the extent included in interest
expense, (iii) the portion of any Capitalized Lease Obligation
allocable to interest expense, (iv) all fixed and all calculable
dividend payments on preferred stock and (v) payments of
interest expense in kind.
"Interest Payment Date" shall mean (i) in the
case of a Prime Lending Rate Loan, the last day of each
month and (ii) with respect to any Eurodollar Loan, the last
day of the Interest Period applicable thereto.
"Interest Period" shall mean, as to any
Eurodollar Loan, the period commencing on the date of such
Eurodollar Loan and ending on the numerically corresponding
day (or, if there is no numerically corresponding day, on the
last day) in the calendar month that is three (3) months
thereafter; provided however, that (x) if an Interest Period
would end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall
end on the next preceding Business Day, (y) no Interest
Period shall end later than the Final Maturity Date and (z)
interest shall accrue from and including the first day of an
Interest Period to but excluding the last day of such Interest
Period.
"Inventory Turnover" shall mean the quotient of
(A) the product of (i) the aggregate value, computed at the
lower of cost (on a FIFO basis) or current market value, of
inventory of the Revolving Loan Borrowers on the first day of
any calendar month and (ii) 30, and (B) the cost of goods sold
of the Revolving Loan Borrowers during such calendar
month.
"Issuing Lender" shall have the meaning
assigned to such term in Section 2A.01 hereof.
"Joint Guarantee" shall mean the Joint
Guarantee dated the First Amended and Restated Closing
Date and substantially in the form of Exhibit H hereto,
originally executed and delivered by Hillside Holding
Corporation, DB Private Brands, Inc., Xxxx'x Holding, Chock
Coffeemaker Acquisition, Inc. and CFN in favor of the
Agent, as confirmed by the Confirmation of Guarantee dated
as of January 1, 1996 by CFN and Cains Holding, the two
remaining Guarantors thereunder.
"Lender" shall have the meaning assigned to
such term in the preamble to this Agreement.
"Letter of Credit" shall have the meaning
assigned to such term in Section 2A.01 hereof.
"Letter of Credit Usage" shall mean at any time
(i) the aggregate undrawn amount of all outstanding Letters of
Credit at such time plus (ii) the unreimbursed drawings under
all Letters of Credit at such time.
"LIBO Rate" shall mean, with respect to any
Eurodollar Loan for any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of
1%) equal to the rate at which dollar deposits approximately
equal in principal amount to the Eurodollar Loan of the Agent
and for a maturity equal to the applicable Interest Period are
offered in immediately available funds to NatWest by leading
banks in the London interbank market for Eurodollars at
approximately 11:00 A.M., London time, two (2) Business
Days prior to the first day of such Interest Period.
"Lien" shall mean, with respect to any asset, (i)
any mortgage, lien, pledge, encumbrance, charge or security
interest in or on such asset, (ii) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or
other title retention agreement relating to such asset, (iii) in
the case of securities, any purchase option, call or similar
right of a third party with respect to such securities or (iv) any
other right of or arrangement with any creditor to have such
creditor's claim satisfied out of such assets, or the proceeds
therefrom, prior to the general creditors of the owner thereof.
"Line Amount" shall have the meaning assigned
to such term in Section 2.01(b-1) hereof.
"Line Expiration Date" shall have the meaning
assigned to such term in Section 2.01(b-1) hereof.
"Line Revolving Credit Loans" shall have the
meaning assigned to such term in Section 2.01(b-1) hereof.
"Loan" shall mean any Term Loan or any
Revolving Credit Loan, and "Loans" shall mean all Term
Loans and all Revolving Credit Loans.
"Loan Documents" shall mean this Agreement,
each Security Document, each Guarantee executed and
delivered at any time with respect to the Obligations, the
Notes and each other document, instrument, or agreement
now or hereafter delivered to the Agent or any Lender in
connection herewith or therewith.
"Margin Stock" shall have the meaning assigned
to such term in Regulation U.
"Material Adverse Effect" shall mean a material
adverse effect on (i) the business, assets, prospects, operations
or financial condition of any person or its subsidiaries, (ii) the
ability of Chock and its subsidiaries, Grantors or Guarantors
to consummate the Transactions as contemplated hereunder or
under the Acquisition Documents or to perform or pay the
Obligations in accordance with the terms hereof or of any
other Loan Document or (iii) the Agent's Lien on any material
portion of the Collateral or the priority of such Lien.
"Mortgages" shall mean the mortgages and
deeds of trust executed and delivered at any time and from
time to time by Chock and its subsidiaries with respect to the
real property of Chock and its subsidiaries, as each may be
amended, modified or supplemented from time to time in
accordance with its terms.
"Multiemployer Plan" shall mean a
"multiemployer plan" as defined in Section 4001(a)(3) of
ERISA.
"NatWest" shall mean NatWest Bank N.A.
"Net Amount of Eligible Inventory" shall mean
and include at any time with respect to each Revolving Loan
Borrower, without duplication, the aggregate value, computed
at the lower of cost (on a FIFO basis) or current market value,
of Eligible Inventory of such Revolving Loan Borrower.
"Net Amount of Eligible Receivables" shall
mean and include at any time with respect to each Revolving
Loan Borrower, without duplication, the gross amount of
Eligible Receivables of such Revolving Loan Borrower at
such time less (i) sales, excise or similar taxes, (ii) off-invoice
allowances, in an amount estimated by Chock consistent with
its past practices and as to which it has notified the Agent and
(iii) returns, discounts, claims, credits and allowances of any
nature at any time issued, owing, granted, outstanding,
available or claimed.
"Non-Ratable Loans" shall have the meaning
assigned to such term in Section 2.18(c)(iii) hereof.
"Notes" shall mean the Term Notes and the
Revolving Credit Notes.
"'Obligations'' shall mean all
obligations, liabilities and Indebtedness of
Chock and its subsidiaries to the Lenders,
the Issuing Lender and the Agent, whether now
existing or hereafter created, direct or
indirect, due or not, whether created
directly or acquired by assignment,
participation or otherwise, including
without limitation all obligations,
liabilities and Indebtedness of Chock and its
subsidiaries with respect to the Rate
Agreements, the Security Documents and other
Loan Documents, the principal of and
interest on the Revolving Credit Loans, the
Term Loans and the payment or performance of
all other obligations, liabilities, and
Indebtedness of the Borrowers to the Lenders,
the Issuing Lender and the Agent hereunder, or
under any one or more of the other Loan
Documents or Letters of Credit, including
without limitation all fees, costs, expenses
and indemnity obligations hereunder and
thereunder.
"Original Loan Agreement" shall mean the
Amended and Restated Loan Agreement made September 19,
1989 by and between Chock and NatWest, as amended, and
including all related inventory and receivables loan
agreements incorporated by reference therein.
"Original Note" shall mean the Substitute Term
Note dated September 19, 1989 in the principal amount of
$8,875,000, made by Chock to the order of NatWest.
"Other Taxes" shall have the meaning assigned
to such term in Section 2.15(b) hereof.
"PBGC" shall mean the Pension Benefit
Guaranty Corporation.
"Pension Plan" shall mean any Plan which is
subject to the provisions of Title IV of ERISA, other than a
Multiemployer Plan.
"Permits" shall have the meaning assigned to
such term in Section 4.18 hereof.
"person" shall mean any natural person,
corporation, business trust, association, company, joint
venture, partnership or government or any agency or political
subdivision thereof.
"Plan" shall mean any employee benefit plan
within the meaning of Section 3(3) of ERISA and which is
maintained (in whole or in part) for employees of the
Borrowers, any subsidiary or any ERISA Affiliate.
"Pledge Agreement" shall mean the Amended
and Restated Pledge Agreement dated as of the First
Amended and Restated Closing Date, between the Grantor(s)
and the Agent, for the benefit of the Lenders, in substantially
the form of Exhibit D annexed hereto, as amended, modified
or supplemented from time to time.
"Pledge Agreement (Investment Account)" shall
mean the Pledge Agreement (Investment Account) dated as of
the First Amended and Restated Closing Date between Chock
and the Agent, together with each Notification to Broker
Letter delivered pursuant thereto, as amended, modified or
supplemented from time to time.
"Pledged Stock" shall have the meaning
assigned to such term in the Pledge Agreement.
"Prime Rate" shall mean the rate which
NatWest announces from time to time as its prime lending
rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. NatWest may
make commercial loans or other loans at rates of interest at,
above or below the Prime Rate. Any change in the Prime
Rate shall be effective hereunder on the effective date of such
change as announced by NatWest.
"Prime Lending Rate Loan" shall mean a Loan
based on the Prime Lending Rate in accordance with Article
II hereof.
"Private Brands, L.P." shall mean the former
Private Brands Coffee & Tea Company, L.P., a Missouri
Limited Partnership of which DBPI was the general partner.
"Private Brands Note" shall mean the Revolving
Credit Promissory Note dated December 4, 1992, in the
principal amount of up to $3,407,000, by Private Brands, L.P.
in favor of Chock.
"Quikava" shall have the meaning assigned to
such term in the preamble to this Agreement.
"Quikava Advances" shall have the meaning
assigned thereto in Section 2.01(b) hereof.
"Quikava Asset Purchase Agreement" shall
mean the Asset Purchase Agreement dated as of March 11,
1994 by and among Chock, Quikava and certain other parties
thereto.
"Quikava Partnership" shall mean the Quikava
Natick Limited Partnership, a limited partnership formed
under the laws of the State of Massachusetts of which
Quikava is the general partner.
"Rate Agreements" shall mean interest rate
swap, collar, cap or similar hedging agreements purchased by
the Borrowers on terms and conditions (including, without
limitation, with respect to collateral security therefor) as shall
be reasonably satisfactory to the Required Lenders.
"Receivable Turnover" shall mean the quotient
of (A) the product of (i) the total face amount of Receivables
of the Revolving Loan Borrowers on the first day of any
calendar month (less off-invoice allowances in an amount
estimated by Chock, consistent with its past practices, and as
to which it has notified the Agent) and (ii) 30, and (B) the
gross amount of collections by the Revolving Loan Borrowers
with respect to Receivables of the Revolving Loan Borrowers
during such calendar month.
"Receivables" shall mean and include all of the
Borrowers' accounts, instruments, documents, chattel paper
and general intangibles, whether secured or unsecured,
whether now existing or hereafter created or arising, and
whether or not specifically assigned to the Agent for the
ratable benefit of the Lenders.
"Register" shall have the meaning assigned to
such term in Section 11.03(e) hereof.
"Regulation G" shall mean Regulation G of the
Board, as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"Regulation T" shall mean Regulation T of the
Board, as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the
Board, as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the
Board, as the same is from time to time in effect, and all
official rulings and interpretations thereunder.
"Release" shall mean any releasing, spilling,
leaking, seepage, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or
dumping, in each case as defined in Environmental Law, and
shall include any "Threatened Release," as defined in
Environmental Law.
"Remedial Work" shall mean any investigation,
site monitoring, containment, cleanup, removal, restoration or
other remedial work of any kind or nature with respect to any
property of Chock or its subsidiaries (whether such property is
owned, leased, subleased or used), including, without
limitation, with respect to Contaminants and the Release
thereof.
"Reportable Event" shall mean a Reportable
Event as defined in Section 4043(b) of ERISA, other than an
event with respect to which the 10-day notice requirement has
been waived under regulations promulgated by the PBGC.
"Required Lenders" shall mean Lenders having
66-2/3% of the Total Commitment.
"Responsible Officer" shall mean, with respect
to any person, the chairman of the board of directors, or any
vice-chairman, any vice president or president, or the chief
financial officer or controller, of such person.
"Revolving Credit Commitment" shall mean, at
any time, with respect to any Lender, an amount equal to such
Lender's pro rata share (as set forth in Schedule 2.01(b)
annexed hereto) of the Revolving Credit Facility, as the same
may be reduced from time to time pursuant to the terms of this
Agreement including, without limitation, Sections 2.01(b-1)
and 2.07 hereof.
"Revolving Credit Eurodollar Loan" shall mean
a Revolving Credit Loan that is a Eurodollar Loan.
"Revolving Credit Facility" shall mean, at any
time, an amount equal to the Total Commitment (as such may
be reduced in accordance with the terms hereof), minus the
Term Loan Facility.
"Revolving Credit Loan" shall mean a
Revolving Credit Loan made pursuant to Sections 2.01 and
2.02 hereof.
"Revolving Credit Notes" shall mean the
Revolving Credit Notes executed and delivered as provided in
Section 2.04 hereof, in substantially the form of Exhibit B
annexed hereto, as amended, modified or supplemented from
time to time.
"Revolving Credit Prime Lending Rate Loan"
shall mean a Revolving Credit Loan that is a Prime Lending
Rate Loan.
"Revolving Credit Termination Date" shall
mean the earlier to occur of (i) the Final Maturity Date and
(ii) such date as the Revolving Credit Loans shall otherwise
be payable in full and the Revolving Credit Facility and
Revolving Credit Commitments shall be terminated in
accordance with the terms of this Agreement.
"Revolving Loan Borrowers" shall mean Chock,
Xxxx'x and Quikava.
"Security Agreement" shall mean the Amended
and Restated Security Agreement dated as of the First
Amended and Restated Closing Date, between the Grantor(s)
and the Agent, for the benefit of the Lenders, substantially in
the form of Exhibit E annexed hereto, as amended, modified
or supplemented from time to time.
"Security Agreement - Patents and Trademarks"
shall mean the Security Agreement and Mortgage - Patents
and Trademarks, dated as of the First Amended and Restated
Closing Date, between the Debtor(s) and the Agent, for the
benefit of the Lenders, substantially in the form of Exhibit G
annexed hereto, as amended, modified or supplemented from
time to time.
"Security Documents" shall mean the Pledge
Agreement, the Security Agreement, the Security Agreement -
Patents and Trademarks, the Assignment of Contract, the
Mortgages, the Chock Collateral Assignment (Xxxx Xxxxx),
the Pledge Agreement (Investment Account) and each other
agreement now existing or hereafter created providing
collateral security for the payment or performance of any
Obligations.
"Settlement Date" shall mean each Business
Day after the First Amended and Restated Closing Date
selected by the Agent in its sole discretion subject to and in
accordance with the provisions of Section 2.18(c) as of which
a Settlement Report is delivered by the Agent and on which
settlement is to be made among the Lenders in accordance
with the provisions of Section 2.18 hereof.
"Settlement Report" shall mean each report,
substantially in the form attached hereto as Exhibit I hereto,
prepared by the Agent and delivered to each Lender and
setting forth, among other things, as of the Settlement Date
indicated thereon and as of the next preceding Settlement
Date, the aggregate principal balance of all Revolving Credit
Loans outstanding, each Lender's ratable portion thereof, each
Lender's Revolving Credit Loans and all Non-Ratable Loans
made, and all payments of principal received by the Agent
from the Revolving Loan Borrowers during the period
beginning on such next preceding Settlement Date and ending
on such Settlement Date.
"Subordinated Indebtedness" shall mean, with
respect to any of the Borrowers, Indebtedness subordinated in
right of payment to such person's monetary obligations under
this Agreement upon terms satisfactory to and approved in
writing by the Required Lenders, to the extent it does not by
its terms mature or become subject to any mandatory
prepayment or amortization of principal prior to the Final
Maturity Date, and shall in any event include the Indebtedness
of Chock pursuant to the Subordinated Indentures.
"Subordinated Indentures" shall mean (i) the
Indenture dated as of September 25, 1986 between Chock and
Manufacturers Hanover Trust Company with respect to the
issuance of 8% Convertible Subordinated Debentures due
September 15, 2006 in the original aggregate amount of
$50,000,000 and (ii) the Indenture dated as of April 1, 1987
between Chock and IBJ Xxxxxxxx Bank & Trust Company
with respect to the issuance of 7% Convertible Senior
Subordinated Debentures due April 1, 2012 in the original
aggregate amount of $60,000,000, in each case as in effect on
the First Amended and Restated Closing Date.
"subsidiary" shall mean, with respect to any
person, the parent of such person, any corporation, association
or other business entity of which securities or other ownership
interests representing more than 50% of the ordinary voting
power are, at the time as of which any determination is being
made, owned or controlled, directly or indirectly, by the
parent or one or more subsidiaries of the parent.
"Tax Indemnity Agreement" shall mean the Tax
Indemnity Agreement dated as of December 4, 1992 by and
among Chock, Nestle Beverage Company, Inc., a Delaware
corporation, Xxxx'x and Nestle Holdings, Inc., a Delaware
corporation.
"Taxes" shall have the meaning assigned to such
term in Section 2.15(a) hereof.
"Term Eurodollar Loan" shall mean a Term
Loan that is a Eurodollar Loan.
"Term Loan Borrowers" shall have the meaning
assigned to such term in Section 2.01 hereof.
"Term Loan Commitment" shall mean, at any
time with respect to any Lender, an amount equal to such
Lender's pro rata share (as set forth in Schedule 2.01(a)
hereto) of the Term Loan Facility (as the same shall be
reduced from time to time in accordance with the terms
hereof).
"Term Loan Facility" shall mean, at any time,
the amount of the Term Loans outstanding at such time.
"Term Loans" shall mean the Term Loans made
pursuant to Sections 2.01 and 2.02.
"Term Notes" shall mean the Term Notes
executed and delivered as provided in Section 2.04, in
substantially the form of Exhibit A hereto, as amended,
modified or supplemented from time to time.
Term Prime Lending Rate Loan" shall mean a
Term Loan that is a Prime Lending Rate Loan.
"Total Commitment" shall mean the sum of the
Lenders' Total Term Loan Commitment and Total Revolving
Credit Commitment, as the same may be reduced from time to
time pursuant to the terms of this Agreement including,
without limitation, Section 2.01(b-1) and Section 2.07 hereof.
"Total Facility" shall mean the Revolving Credit
Facility together with the Term Loan Facility.
"Total Revolving Credit Commitment" shall
mean the sum of the Lenders' Revolving Credit Commitments
as the same may be reduced from time to time pursuant to the
terms of this Agreement including, without limitation, Section
2.01(b-1) and Section 2.07.
"Total Term Loan Commitment" shall mean
$10,000,000.
"Total Unsubordinated Liabilities" shall mean,
with respect to Chock and its subsidiaries, the total of all
items which would properly be included as liabilities on a
balance sheet, determined in accordance with generally
accepted accounting principles consistently applied, excluding
Subordinated Indebtedness, capital stock, additional paid in
capital, capital surplus, retained earnings, minority interests,
contingency reserves and deferred income taxes.
"Trade Letter of Credit" shall have the meaning
assigned such term in Section 2A.01 hereof."
"Transactions" shall have the meaning assigned
to such term in Section 4.02 hereof.
"Undrawn Availability" shall mean, at any time,
an amount equal to (A) the lesser of (i) the Total Revolving
Credit Commitment and (ii) the Borrowing Base minus the
Availability Reserve at such time and minus all reserves at
such time which have been established by the Agent under
Section 2.11 hereof, minus (B) all Revolving Credit Loans
outstanding at such time and the Letter of Credit Usage at
such time.
Unless otherwise expressly provided herein,
each accounting term used herein shall have the meaning
given it under generally accepted accounting principles in
effect from time to time in the United States applied on a
basis consistent with those used in preparing the financial
statements referred to in Section 6.05 hereof; provided,
however, that each reference in Article VII hereof, or in the
definition of any term used in Article VII hereof, to generally
accepted accounting principles shall mean generally accepted
accounting principles as in effect on the date hereof.
The terms "Amended and Restated Loan
Agreement," "Loan Agreement," "Credit Agreement" and
similar references as used in the documents, instruments and
agreements executed and delivered in connection with the
First Amended and Restated Loan Agreement, shall mean the
First Amended and Restated Loan Agreement as amended and
restated hereby in its entirety, and each of such documents,
instruments and agreements is hereby so amended.
II. THE LOANS
SECTION 2.01. Term Loan Commitments and
Revolving Credit Commitments. (a) The Lenders made
"Term Loans" on the First Amended and Restated Closing
Date to (i) Chock in the aggregate amount of $11,000,000, (ii)
Xxxx'x in the aggregate amount of $2,200,000, (iii)
Xxxxxxxxxx in the aggregate amount of $3,000,000, (iv)
Chock Realty in the aggregate amount of $2,300,000 and (v)
Hillside Coffee of California, Inc. in the aggregate amount of
$1,500,000 (Chock, Cain's, Xxxxxxxxxx and Chock Realty
each a "Term Loan Borrower" and, collectively, the "Term
Loan Borrowers"). The aggregate outstanding principal
amount of the "Term Loans" under the First Amended and
Restated Loan Agreement on the Closing Date was
$10,000,000. Upon the satisfaction of the conditions on the
Closing Date in accordance with Section 5.03 hereof, the
interest of the Lenders in "Term Loans" outstanding under the
First Amended and Restated Credit Agreement shall become
and be for all purposes Term Loans made by the Lenders
hereunder, subject to their respective Term Loan
Commitments set forth on Schedule 2.01(a) hereto and
evidenced by the Term Notes payable to each issued on the
First Amended and Restated Closing Date which shall be
deemed for all purposes hereunder Term Notes issued
pursuant to this Agreement.
(b) Subject to the terms and conditions and
relying upon the representations and warranties herein set
forth, each Lender, severally and not jointly, agrees to make
Revolving Credit Loans to the Revolving Loan Borrowers, at
any time and from time to time from the date hereof to the
Revolving Credit Termination Date, or until the earlier termi-
nation of its Revolving Credit Commitment in accordance
with the terms hereof, in an aggregate principal amount at any
time outstanding not to exceed the amount of such Lender's
Revolving Credit Commitment set forth opposite its name in
Schedule 2.01(b) annexed hereto, as such Revolving Credit
Commitment may be reduced from time to time in accordance
with the provisions of this Agreement including, without
limitation, Section 2.01(b-1) hereof. Notwithstanding the
foregoing, but subject in any event to the provisions contained
in Section 2.01(c) below, and the limitations contained in
Sections 2.01 (b-1) and (d) below, the aggregate amount of
Revolving Credit Loans outstanding at any time to
(A) Chock shall not exceed (I) an amount
(the "Chock Borrowing Base") equal to the sum of (i) 80% of
the Net Amount of Eligible Receivables of Chock, plus (ii)
60% of the Net Amount of Eligible Inventory of Chock,
minus (II) the Letter of Credit Usage at such time which shall
not in any event exceed $6,000,000 at any time,
(B) Xxxx'x shall not exceed an amount (the
"Xxxx'x Borrowing Base") equal to the sum of (i) 80% of the
Net Amount of Eligible Receivables of Xxxx'x, plus (ii) 60%
of the Net Amount of Eligible Inventory of Xxxx'x, and
(C) Quikava (each Revolving Credit Loan to
Quikava referred to herein from time to time as a "Quikava
Advance") shall not exceed an amount (the "Quikava
Borrowing Base" and together with the Chock Borrowing
Base and Xxxx'x Borrowing Base, the "Borrowing Base")
equal to the lesser of (I) $2,500,000 and (II) the sum of (i)
80% of the Net Amount of Eligible Receivables of Quikava,
plus (ii) 60% of the Net Amount of Eligible Inventory of
Quikava, minus (iii) amounts outstanding at such time under
Section 7.06(i) hereof;
provided, however, that in no event shall the aggregate of all
Revolving Credit Loans at any time outstanding exceed the
Borrowing Base minus (x) $2,000,000 and minus (y) the
Letter of Credit Usage at such time; provided, further, that in
no event shall the aggregate amount of Revolving Credit
Loans at any time made against the Net Amount of Eligible
Inventory exceed $32,500,000.
Upon the making of the Revolving Credit Loans
on the Closing Date in accordance with Section 5.03, the
interest of the Lenders in the "Revolving Credit Loans"
outstanding under the First Amended and Restated Credit
Agreement shall become and be for all purposes Revolving
Credit Loans made by the Lenders hereunder subject to their
respective Revolving Credit Commitments set forth on
Schedule 2.01(b), evidenced by the Revolving Credit Notes
payable to each.
The Chock Borrowing Base and Xxxx'x
Borrower Base shall be computed monthly (or more
frequently in the discretion of the Agent) (provided, however,
that with respect to finished goods inventory and packaging
supplies inventory, the computations shall be as of the last day
of the month just ended) and a compliance certificate from a
Responsible Officer of Chock presenting such computation
will be delivered to the Agent in accordance with Section 6.05
hereof; the computation provided in such certificate shall
include a breakdown for each of Chock and Xxxx'x. The Agent
shall have the right in its discretion to require that a Quikava
Borrowing Base be computed and compliance certificate be
delivered to the Agent, in each case in accordance with the
prior sentence.
(b-1) Notwithstanding anything to the contrary
set forth herein, it is hereby agreed that the Total Revolving
Credit Commitment shall be automatically and permanently
reduced, pro rata among the Lenders, on December 31, 1996
(the "Line Expiration Date") by the amount of $20,000,000
(the "Line Amount") and Schedule 2.01(b) hereto shall be
deemed amended to give effect thereto. If at any time prior to
the Line Expiration Date, the sum of (i) Term Loans
outstanding, (ii) Letter of Credit Usage and (iii) Revolving
Credit Loans outstanding, shall exceed $20,000,000, then all
amounts in excess of $20,000,000 shall be deemed to be
Revolving Credit Loans outstanding under the Line Amount
(sometimes referred to herein as "Line Revolving Credit
Loans"). On the Line Expiration Date, the Borrowers shall
prepay so much of the Revolving Credit Loans as shall be
necessary in order that the aggregate principal amount of the
Revolving Credit Loans outstanding, plus the Letter of Credit
Usage, plus the Term Loans outstanding shall not exceed the
lesser of (i) the Total Revolving Credit Commitment
following such reduction by the Line Amount and (ii) the
Borrowing Base minus the Availability Reserve.
(c)(i) In addition to reductions, if any, in
accordance with clauses (ii) and (iii) of this paragraph (c), if
the average of the Receivable Turnover during any three
consecutive months shall exceed 40 days, the advance rate set
forth in each of clauses(A)(I)(i) and (B)(i) of Section 2.01(b)
above shall be reduced by one percent (1%) for each day by
which the average shall exceed 40 days; provided, however,
that such reduction in the advance rate shall be reversed to the
extent that the average (rounded to the nearest whole number)
of the Receivable Turnover at the end of any two (2)
consecutive periods of three (3) months, results in a reduction
in the advance rate less than that presently in effect.
(ii) In addition to reductions, if any, in
accordance with clauses (i) and (iii) of this paragraph (c), (x)
if the Dilution during any three consecutive months shall
exceed twelve percent (12%) but be less than seventeen
percent (17%), the advance rate set forth in each of
clauses(A)(I)(i) and (B)(i) of Section 2.01(b) above shall be
reduced by five percent (5%) and (y) if the Dilution shall be
equal to or greater than seventeen percent (17%) during any
three consecutive months, the advance rate set forth in each of
clauses (A)(I)(i) and (B)(i) of Section 2.01(b) above shall be
reduced by ten percent (10%); provided, however, that such
reduction in the advance rate shall be reversed to the extent
that the average (rounded to the nearest whole number) of the
Dilution at the end of any two (2) consecutive periods of three
(3) months, results in a reduction in the advance rate less than
that presently in effect.
(iii) In addition to reductions, if any, in
accordance with clauses (i) and (ii) of this paragraph (c), (x) if
the average of Inventory Turnover during any three
consecutive months shall exceed 80 days but be less than 85
days, the advance rate set forth in each of clauses(A)(I)(ii)
and (B)(ii) of Section 2.01(b) above shall be reduced by five
percent (5%), and (y) if the average of Inventory Turnover
during any three consecutive months shall be equal to or
greater than 85 days, the advance rate set forth in each of
clauses (A)(I)(ii) and (B)(ii) of Section 2.01(b) above shall be
reduced by ten percent (10%); provided, however, that such
reduction in the advance rate shall be reversed to the extent
that the average (rounded to the nearest whole number) of the
Inventory Turnover at the end of any two (2) consecutive
periods of three (3) months, results in a reduction in the
advance rate less than that presently in effect.
(d) Subject to the foregoing and within the
foregoing limits, the Revolving Loan Borrowers may borrow,
repay (or, subject to the provisions of Section 2.09 hereof,
prepay) and reborrow Revolving Credit Loans, on and after
the date hereof and prior to the Revolving Credit Termination
Date, subject to the terms, provisions and limitations set forth
herein, including, without limitation, (i) the requirement that
no Revolving Credit Loan shall be made hereunder if after
giving effect thereto the sum of the aggregate principal
amount of the Revolving Credit Loans outstanding and the
Letter of Credit Usage at such time hereunder would exceed
the lesser of (x) the Total Commitment (as such amount may
be reduced pursuant to the provisions of this Agreement
including, without limitation, Section 2.01(b-1)), minus the
Term Loan Facility at such time, and (y) the Borrowing Base,
minus the Availability Reserve at such time and (ii) that at
any time there shall be s outstanding, all repayments and
prepayments shall be deemed applied first to such Line
Revolving Credit Loans and upon payment of such Loans in
full, to the other Revolving Credit Loans then outstanding.
SECTION 2.02. Loans. (a) The Revolving
Credit Loans made on any date shall be in the minimum
amount of $25,000 and in integral multiples of $25,000;
provided, however, that Revolving Credit Eurodollar Loans
made on any date shall be in a minimum aggregate principal
amount of $1,500,000.
(b) Subject to the provisions of Sections 2.17
and 2.18 hereof, Loans shall be made ratably by the Lenders
in accordance with their respective Term Loan Commitments
or Revolving Credit Commitments, as the case may be;
provided, however, that the failure of any Lender to make any
Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder. The Term Loan shall be
evidenced by the Term Notes referred to in Section 2.04. The
initial Revolving Credit Loans shall be made by the Lenders
against delivery of Revolving Credit Notes, payable to the
order of the Lenders, as referred to in Section 2.04 hereof.
(c) Subject to the provisions of paragraph (e)
below and to the provisions of Sections 2.17 and 2.18 hereof,
each Lender shall make its Revolving Credit Loans on the
proposed dates thereof by paying the amount required to the
Agent in New York, New York in immediately available
funds not later than 12:00 noon, New York City time, and the
Agent shall as soon as practicable, but in no event later than
5:00 p.m., New York City time, credit the amounts so
received to the general deposit account of the Borrowers with
the Agent in immediately available funds or, if Loans are not
to be made on such date because any condition precedent to a
borrowing herein specified is not met, return the amounts so
received to the respective Lenders.
(d) Each Loan shall be either a Prime
Lending Rate Loan or a Eurodollar Loan, as the Borrowers
may request pursuant to Section 2.03 hereof. Each Lender
may fulfill its obligations under this Agreement by causing its
Applicable Lending Office to make such requested Loan;
provided, however, that the exercise of such option shall not
affect the obligation of the Borrowers to repay such Loan in
accordance with the terms of the applicable Note. In any
event, not more than three (3) Eurodollar Loans may be
outstanding at any one time.
(e) The Borrowers shall have the right at any
time upon prior irrevocable written, telex or facsimile notice
(promptly confirmed in writing) to the Agent given in the
manner and at the times specified in Section 2.03 with respect
to the Loans into which conversion or continuation is to be
made, to convert all or any portion of Eurodollar Loans into
Prime Lending Rate Loans, to convert all or any portion of
Prime Lending Rate Loans into Eurodollar Loans, and to
continue all or any portion of any Loans into a subsequent
Interest Period, subject to the terms and conditions of this
Agreement (including the last sentence of Section 2.02(d)
hereof) and to the following:
(i) in the case of a conversion or
continuation of fewer than all the Loans, the
aggregate principal amount of Loans converted
or continued shall not be less than $1,500,000 in
the case of Prime Lending Rate Loans or
$1,500,000 in the case of Eurodollar Loans and
shall be an integral multiple of $1,000,000;
(ii) accrued interest on a Loan (or
portion thereof) being converted or continued
shall be paid by the Borrowers at the time of
conversion or continuation;
(iii) no Eurodollar Loan may be
converted at any time other than at the end of
the Interest Period applicable thereto;
(iv) any portion of a Revolving Credit
Loan which is subject to an Interest Period
ending on a date that is less than three (3)
months prior to the Revolving Credit
Termination Date or Line Expiration Date, as
applicable may not be converted into, or
continued as, a Eurodollar Loan and shall be
automatically converted at the end of such
Interest Period into a Prime Lending Rate Loan;
(v) any portion of a Term Eurodollar
Loan required to be paid on any Repayment
Date or the Final Maturity Date, as the case may
be, occurring less than three (3) months after the
end of the then current Interest Period
applicable to such Loan, may not be converted
into, or continued as, a Term Eurodollar Loan
and shall be automatically converted at the end
of such Interest Period into a Prime Lending
Rate Loan; and
(vi) no Default or Event of Default
shall have occurred and be continuing.
If the Borrower shall not have given timely
notice to continue any Eurodollar Loan into a subsequent
Interest Period (and shall not otherwise have given notice to
convert such Loan), such Loan (unless repaid or required to
be repaid pursuant to the terms hereof) shall, subject to (iv)
and (v) above, automatically be converted into a Prime
Lending Rate Loan. The Agent shall promptly advise the
Lenders of any notice given pursuant to this Section and of
each Lender's portion of the continuation or conversion
hereunder.
SECTION 2.03. Notice of Loans. The
Borrowers shall, through a Responsible Officer, give the
Agent irrevocable written, telex or facsimile notice (promptly
confirmed in writing) of each borrowing (including, without
limitation, a conversion as permitted by Section 2.02(e)
hereof) not later than 11:00 A.M., New York City time, (i)
three (3) Business Days before a proposed Eurodollar Loan
borrowing or conversion and (ii) on the day of a Prime
Lending Rate Loan borrowing or conversion. Such notice
shall specify (x) whether the Loans then being requested are
to be Prime Lending Rate Loans or Eurodollar Loans and (y)
the date of such borrowing (which shall be a Business Day)
and amount thereof (which amount if requesting Eurodollar
Loans shall be in a minimum aggregate principal amount of
$1,500,000). If no election as to the type of Loan is specified
in any such notice, all such Loans shall be Prime Lending
Rate Loans. The Agent shall advise the Lenders of any notice
given pursuant to this Section 2.03 on the day such notice is
received by the Agent and of each Lender's portion of the
requested borrowing.
SECTION 2.04. Notes; Repayment of Loans.
(a) The Term Loans made by a Lender shall be evidenced by
the Term Note from each Term Loan Borrower which was
duly executed and delivered on behalf of such Term Loan
Borrower on the First Amended and Restated Closing Date, in
substantially the form of Exhibit A annexed hereto. All
Revolving Credit Loans made by a Lender to the Revolving
Loan Borrowers shall be evidenced by a single Revolving
Credit Note, duly executed on behalf of the Revolving Loan
Borrowers, dated the Closing Date, in substantially the form
of Exhibit B annexed hereto, delivered and payable to such
Lender in a principal amount equal to such Lender's
Revolving Credit Commitment on such date. The outstanding
balance of each Revolving Credit Loan, as evidenced by any
such Revolving Credit Note, shall mature and be due and
payable on the Revolving Credit Termination Date.
(b) Each Revolving Credit Note shall bear
interest from its date on the outstanding principal balance
thereof, as provided in Section 2.05 hereof.
(c) The Term Loan shall be due and payable
in full on the Revolving Credit Termination Date. Each Term
Note shall bear interest from January 1, 1996 on the
outstanding principal balance thereof, as provided in Section
2.05. All payments made with respect to the Term Loan
Facility shall be distributed ratably among the Lenders in
accordance with their respective Term Loan Commitments as
set forth in Section 2.18(a) hereof. The Term Loan may not
be prepaid without the consent of the Lenders unless the
Borrowers shall elect to terminate the Total Facility in
accordance with Section 2.07 hereof.
(d) Each Lender, or the Agent on its behalf,
shall, and is hereby authorized by the Borrowers to, endorse
on the schedule attached to the Term Note or Revolving
Credit Note, as applicable, of such Lender (or on a
continuation of such schedule attached to such Note and made
a part thereof) an appropriate notation evidencing the date and
amount of each Loan to the Borrowers from such Lender, as
well as the date and amount of each payment and prepayment
with respect thereto; provided, however, that the failure of
any person to make such a notation on a Note shall not affect
any obligations of the Borrowers under such Note. Any such
notation shall be conclusive and binding as to the date and
amount of such Loan or portion thereof, or payment or
prepayment of principal or interest thereon, absent manifest
error.
(e) The Borrowers hereby irrevocably
authorize and direct the Agent on behalf of itself and the
Lenders to charge the accounts of the Borrowers with the
Agent for all amounts which may now or hereafter be due and
payable by the Borrowers and their subsidiaries hereunder or
under any other Loan Document including, without limitation,
all amounts of principal and interest, fees and expenses;
provided, however, that with respect to fees due third parties
which are invoiced to the Agent or the Lenders and for which
the Borrowers are obligated hereunder, the accounts of the
Borrowers shall not be charged until 45 days have elapsed
from the date of demand by the Agent for payment thereof by
the Borrowers. If at any time there is not sufficient
availability to cover any of the payments referred to in the
prior sentence, and, in any event, upon the occurrence and
during the continuance of any Default, Borrowers shall make
any such payments to the Agent on demand.
SECTION 2.05. Interest on Loans. (a)
Subject to Section 2.05(b), Section 2.05(c) and Section 2.08
hereof, the following interest rates shall apply:
(i) with respect to that portion of the Term
Loans and Revolving Credit Loans which at any time,
together with the Letter of Credit Usage at such time,
are in an aggregate outstanding principal amount of
less than $15,000,000, (x) such portion of the
Revolving Credit Prime Lending Rate Loans and Term
Prime Lending Rate Loans shall bear interest at a rate
per annum equal to the Prime Rate and (y) such portion
of the Revolving Credit Eurodollar Loan and Term
Eurodollar Loans shall bear interest at a rate per annum
equal to the Adjusted LIBO Rate plus one and three
quarter percent ( 13/4%); and
(ii) with respect to that portion of the Term
Loans and Revolving Credit Loans which at any time,
together with the Letter of Credit Usage at such time,
are in an aggregate outstanding principal amount of
$15,000,000 or more, (x) such portion of the
Revolving Credit Prime Lending Rate Loans and Term
Prime Lending Rate Loans shall bear interest at a rate
per annum equal to the Prime Rate plus one quarter of
one percent (1/4%) and (y) such portion of the
Revolving Credit Eurodollar Loans and Term
Eurodollar Loans shall bear interest at a rate per annum
equal to the Adjusted LIBO Rate plus two and one half
percent (2 1/2%).
(b) Interest on each Loan shall be payable in
arrears on each applicable Interest Payment Date, on the
Revolving Credit Termination Date, on the Final Maturity
Date, and in any event, on demand after the occurrence of an
Event of Default, and shall be computed based on the number
of days elapsed in a year of 360 days. The Agent shall
determine each interest rate applicable to the Loans and shall
promptly advise the Borrowers and the Lenders of the interest
rate so determined.
(c) The Borrowers shall pay to the Agent for
its own account, in arrears, on each Interest Payment Date
(the first Interest Payment Date being January 31, 1996), on
the Revolving Credit Termination Date, and in any event, on
demand after the occurrence of an Event of Default, in
immediately available funds, additional interest, which shall
be computed based on the number of days elapsed in a year of
360 days, of one-quarter percent (1/4%) per annum on (i) the
Prime Lending Rate Loans specified in Section 2.05(a)(i)(x)
above (other than the Prime Lending Rate Loans made by
NatWest), (ii) the Eurodollar Loans specified in Section
2.05(a)(i)(y) above and (iii) the Prime Lending Rate Loans
and the Eurodollar Loans specified in Section 2.05(a)(ii)
above.
SECTION 2.06. Fees. The Borrowers shall pay
the Lenders, through the Agent, (i) on each Interest Payment
Date commencing January 31, 1996, (ii) on the date of any
reduction of the Revolving Credit Commitments pursuant to
Section 2.07 hereof and (iii) on the Revolving Credit
Termination Date, in immediately available funds, a
commitment fee (the "Commitment Fee") of one-half of one
percent (1/2%) per annum on the difference between (i) the
Total Commitment (as such may have been reduced in
accordance with Section 2.07 hereof), minus the Line Amount
(through and including the Line Expiration Date) and (ii) the
average amount of Loans outstanding and Letter of Credit
Usage during the month (or shorter period commencing with
the date hereof or ending with the Revolving Credit
Termination Date) ending on such date. The Commitment Fee
due to each Lender under this Section 2.06 shall commence to
accrue on January 1, 1996 and cease to accrue on the earlier
of (i) the Revolving Credit Termination Date and (ii) the
termination of the Revolving Credit Commitment of such
Lender pursuant to Section 2.07 hereof. The Commitment
Fee shall be calculated on the basis of the actual number of
days elapsed in a year of 360 days.
SECTION 2.07. Termination and Reduction of
Revolving Credit Commitments and Term Loan
Commitments. (a) Upon at least three (3) Business Days'
prior irrevocable written notice (or facsimile notice promptly
confirmed in writing) to the Agent, the Borrowers may at any
time in whole permanently terminate, or from time to time in
part permanently reduce, the Total Revolving Credit
Commitment, ratably among the Lenders in accordance with
the amounts of their Revolving Credit Commitments;
provided, however, that the Total Revolving Credit
Commitment shall not be reduced at any time to an amount
less than the Revolving Credit Loans and Letter of Credit
Usage outstanding at such time; and provided, further, that
any reduction shall be subject to the payment of fees in
accordance with clause (e) below; and provided, further, that
all Term Loans shall be due and payable in full, together with
accrued interest thereon, on any such date as the Total
Revolving Credit Commitment shall be terminated. Each
partial reduction of the Total Revolving Credit Commitment
shall be in a minimum of $5,000,000 and an integral multiple
of $5,000,000.
(b) Simultaneously with any termination or
reduction of the Total Revolving Credit Commitment to less
than $20,000,000 pursuant to paragraph (a) of this Section
2.07, the Borrowers shall pay to each Lender, through the
Agent, the Commitment Fee due and owing through and
including the date of such termination or reduction on the
amount of the Total Commitment of such Lender so
terminated or reduced.
(c) The Revolving Credit Commitment of
each Lender shall automatically and permanently terminate on
the Revolving Credit Termination Date, and all Revolving
Credit Loans and Term Loans still outstanding on such date
shall be due and payable in full together with accrued interest
thereon.
(d) Intentionally Omitted.
(e) In the event that the Total Commitment
shall be terminated by the Borrowers prior to the Final
Maturity Date, the Borrowers shall pay a fee to the Agent for
the benefit of the Lenders on the date of such termination in
an amount equal to (i) one percent (1%) of the amount of the
Total Commitment if such termination shall occur prior to the
first anniversary of the Closing Date, (ii) three quarters of one
percent (3/4%) of the amount of the Total Commitment if
such termination shall occur on or after the first anniversary
of the Closing Date but before the second anniversary of the
Closing Date and (iii) one half of one percent (1/2%) of the
Total Commitment if such termination shall occur on or after
the second anniversary of the Closing Date but prior to the
third anniversary of the Closing Date.
SECTION 2.08. Interest on Overdue Amounts;
Alternate Rate of Interest. (a) If there shall occur any Event
of Default under clause (b), (c), (d)(i), (e), (f), (g) (with
respect to default in payment of Subordinated Indebtedness),
(l), (m) or (n) of Article VIII hereof, the Borrowers shall on
demand from time to time pay interest, to the extent permitted
by law, on the Obligations up to the date of actual payment
(after as well as before judgment) at a rate per annum equal to
two percent (2%) in excess of the rates otherwise applicable
thereto.
(b) In the event, and on each occasion, that
on the day which is two (2) Business Days prior to the
commencement of any Interest Period for a Eurodollar Loan
the Agent and/or the Lenders shall have determined that
dollar deposits in the amount of each Eurodollar Loan are not
generally available in the London interbank market, or that
the rate at which dollar deposits are being offered will not
reflect adequately and fairly the cost to any Lender of making
or maintaining such Eurodollar Loan during such Interest
Period, or that reasonable means do not exist for ascertaining
the Adjusted LIBO Rate, the Agent shall as soon as
practicable thereafter give written notice (or facsimile notice
promptly confirmed in writing) of such determination to
Chock and the Lenders, and any request by the Borrowers for
the making of a Eurodollar Loan pursuant to Section 2.03
hereof or conversion or continuation of any Loan into a
Eurodollar Loan pursuant to Section 2.02 hereof shall, until
the circumstances giving rise to such notice no longer exist,
be deemed to be a request for a Prime Lending Rate Loan.
Each determination by the Agent and/or Lenders made
hereunder shall be conclusive absent manifest error.
SECTION 2.09. Prepayment of Loans. (a)
Subject to the terms and conditions contained in this Section
2.09 and elsewhere in this Agreement, the Borrowers shall
have the right to prepay any Revolving Credit Loan at any
time in whole or from time to time in part (except in the case
of a Eurodollar Loan only on the last day of an Interest
Period) without penalty (except as otherwise provided for
herein including, without limitation, Section 2.07(e) hereof).
(b) On the date of any reduction of the Total
Revolving Credit Commitment pursuant to Section 2.07(a)
hereof or elsewhere in this Agreement, the Borrowers shall
pay or prepay so much of the Revolving Credit Loans as shall
be necessary in order that the aggregate principal amount of
the Revolving Credit Loans outstanding and Letter of Credit
Usage at such time will not exceed the lesser of (i) the Total
Revolving Credit Commitment following such reduction and
(ii) the Borrowing Base minus the Availability Reserve at
such time. Any prepayments required by this paragraph (b)
shall be applied to outstanding Revolving Credit Prime
Lending Rate Loans up to the full amount thereof before they
are applied to outstanding Revolving Credit Eurodollar
Loans; provided, however, that the Borrowers shall not be
required to make any prepayment of any Eurodollar Loan
pursuant to this Section until the last day of the Interest Period
with respect thereto so long as an amount equal to such
prepayment is deposited by the Borrowers in a cash collateral
account with the Agent for the benefit of the Lenders to be
held in such account on terms satisfactory to the Agent.
(c) The Borrowers shall make prepayments
of the Revolving Credit Loans from time to time such that the
outstanding principal balance of such Revolving Credit Loans
does not exceed the lesser of (A) the Total Commitment (as
such amount may be reduced pursuant to the terms of this
Agreement including, without limitation, pursuant to Section
2.01(b-1) and Section 2.07 hereof), minus the Term Loan
Facility at such time and (B) the Borrowing Base, minus the
sum of the Availability Reserve, at such time, and minus
$2,000,000, and each Revolving Loan Borrower shall make
prepayments of the Revolving Credit Loans made to such
Borrower from time to time such that the outstanding
principal balance of the Revolving Credit Loans to such
Revolving Loan Borrower does not exceed the lesser of (A)
the Total Commitment (as such amount may be reduced
pursuant to the terms of this Agreement), minus the Term
Loan Facility at such time and (B) the Chock Borrowing
Base, Xxxx'x Borrowing Base or Quikava Borrowing Base, as
applicable, minus the Letter of Credit Usage at such time.
Any prepayments required by this paragraph (c) shall be
applied to outstanding Revolving Credit Prime Lending Rate
Loans up to the full amount thereof before they are applied to
outstanding Revolving Credit Eurodollar Loans; provided,
however, that the Borrower shall not be required to make any
prepayment of any Eurodollar Loan pursuant to this Section
until the last day of the Interest Period with respect thereto so
long as an amount equal to such prepayment is deposited by
the Borrowers in a cash collateral account with the Agent to
be held in such account on terms satisfactory to the Agent.
(d) Within three (3) Business Days of (i) the
sale of any assets (other than inventory in the ordinary course
of business and subject in any event to the provisions
regarding the sale of real property set forth in Section 7.05
hereof) of any of the Borrowers which in the aggregate
exceed $300,000 in aggregate amount in any Fiscal Year or
the capital stock of any of the Borrowers (the conversion of
Subordinated Indebtedness into capital stock not being
deemed a "sale" for purposes of this Section 2.09(d)), (ii) the
consummation of the issuance of any debt securities of any of
the Borrowers, or (iii) the receipt by Chock of any monies in
accordance with the Acquisition Agreement or in accordance
with the Tax Indemnity Agreement, the Borrowers shall make
a mandatory prepayment of the Loans in an amount equal to
100% of the proceeds received (net of taxes due, amounts
required to be paid to a third party or previously paid to such
third party in connection with any amount received under the
Acquisition Agreement or Tax Indemnity Agreement, and any
reasonable expenses of sale), which proceeds shall be applied
as set forth in paragraph (g) below; provided, however, that
with respect to the proceeds of each sale of Chock stock
during the term of this Agreement, 50% of such proceeds
shall be applied in accordance with paragraph (g) hereof; and
provided, further, that nothing contained in this paragraph (d)
shall constitute, or be deemed to constitute, a consent to any
sale of assets or stock or the issuance or incurrence of any
Indebtedness.
(e) Within 90 days of the end of each Fiscal
Year of the Borrowers, commencing with the Fiscal Year
ending on or about July 31, 1996, the Borrowers shall make a
mandatory prepayment of the Loans in an amount equal to the
Excess Cash Flow Prepayment for the Fiscal Year then ended,
such prepayment to be applied as set forth in paragraph (g)
below.
(f) (i) Except as provided in clause (ii) below,
not later than the third day following the receipt by the Agent
or any Borrower or any subsidiary of any Borrower of (x) any
net proceeds of any insurance required to be maintained
pursuant to Section 6.03 hereof on account of each separate
loss, damage or injury in excess of $175,000 (or, if there shall
be continuing a Default or an Event of Default, of any amount
of net proceeds) to any asset of such Borrower or such
subsidiary (including, without limitation, any Collateral), (y)
any net proceeds of any business interruption insurance
required to be maintained pursuant to Section 6.03 hereof in
excess of $175,000 (or, if there shall be continuing a Default
or Event of Default, the full amount of net proceeds) or (z)
unless otherwise provided in any Mortgage, any "Award" (as
such term is defined in any Mortgage), such Borrower or
subsidiary shall notify the Agent of such receipt in writing or
by telephone promptly confirmed in writing, and not later than
the day following receipt by the Agent or such Borrower or
subsidiary of any such proceeds, there shall become due and
payable a prepayment of the Loans in an amount equal to
100% of such proceeds. Prepayments from such net proceeds
shall be applied as set forth in paragraph (g) below.
(ii) In the case of the receipt of net
proceeds described in clause (i) above with respect to the loss,
damage or injury to any asset of a Borrower or any subsidiary
of a Borrower (other than net proceeds of any business
interruption insurance), the Borrowers may elect, by written
notice delivered to the Agent not later than the day on which a
prepayment would otherwise be required under clause (i), to
apply all or a portion of such net proceeds for the purpose of
replacing, repairing, restoring or rebuilding the relevant
tangible property, and, in such event, any required prepayment
under clause (i) above shall be reduced dollar for dollar by the
amount of such election. An election under this clause (ii)
shall not be effective unless: (x) at the time of such election
there is continuing no Default or Event of Default; (y) the
Borrowers shall have certified to the Agent that: (1) the net
proceeds of the insurance adjustment, if applicable, for such
loss, damage or injury, together with other funds available to
the Borrowers shall be sufficient to complete such
replacement, repair, restoration or rebuilding in accordance
with all applicable laws, regulations and ordinances; and (2)
to the best knowledge of the Borrowers, no Default or Event
of Default has arisen or will arise as a result of such loss,
damage, injury, replacement, repair or rebuilding; and (z) if
the amount of net proceeds in question exceeds $175,000 the
Borrowers shall have obtained the written consent of the
Required Lenders to such election.
(iii) In the event of an election under clause
(ii) above, pending application of the net proceeds to the
required replacement, repairs, restoration or rebuilding, the
Borrowers shall not later than the time at which prepayment
would have been, in the absence of such election, required
under clause (i) above, apply such net proceeds to the
prepayment of the outstanding principal balance, if any, of the
Revolving Credit Loans (not in permanent reduction of the
Revolving Credit Commitment), and, if so requested by the
Agent, deposit (the "Special Deposit") with the Agent, the
balance, if any, of such net proceeds remaining after such
application, pursuant to agreements in form, scope and
substance reasonably satisfactory to the Agent. The Special
Deposit, together with all earnings on such Special Deposit,
shall be available to the Borrowers solely for the replacement,
repair, rebuilding or restoration of the tangible property
suffering the injury, loss or damage in respect of which such
prepayment and Special Deposit were made or to such other
purpose as to which the Required Lenders may consent in
writing; provided, however, that at such time as a Default or
Event of Default shall occur, the balance of the Special
Deposit and earnings thereon may be applied by Agent to
repay the Obligations in such order as the Agent shall elect.
The Agent shall be entitled to require proof, as a condition to
the making of any withdrawal from the Special Deposit, that
the proceeds of such withdrawal are being applied for the
purposes permitted hereunder.
(g) When making a prepayment, whether
mandatory or otherwise, pursuant to paragraph (a), (b), (c),
(d), (e) or (f) above, or pursuant to the first proviso to Section
7.05 hereof, the Borrowers shall furnish to the Agent, not later
than 11:00 a.m. (New York City time) one (1) Business Day
prior to the date of such prepayment, written, telex or
facsimile notice (promptly confirmed in writing) of
prepayment which shall specify the prepayment date and the
principal amount of each Loan (or portion thereof) to be
prepaid, which notice shall be irrevocable and shall commit
the Borrowers to prepay such Loan by the amount stated
therein on the date stated therein. All prepayments shall be
accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment. Prepayments made
pursuant to paragraph (d), (e) or (f) above, or pursuant to the
first proviso to Section 7.05 hereof, shall be applied as
follows: (A) first, to outstanding Revolving Credit Prime
Lending Rate Loans up to the full amount thereof and then to
Revolving Credit Eurodollar Loans up to the full amount
thereof and (B) second, the excess, if any, shall be held by the
Agent as cash collateral for the Obligations under terms and
conditions satisfactory to the Required Lenders; provided,
however, that if at the time of the making of any prepayment
in accordance with clause (A) above, there are undrawn
Letters of Credit outstanding, then in the discretion of the
Agent (under terms and conditions satisfactory to the
Required Lenders), all or a portion of any such prepayment
(not to exceed an amount equal to the aggregate undrawn
amount of all such outstanding Letters of Credit) shall be
deposited by the Borrowers in a cash collateral account to be
held by the Agent for the benefit of the Lenders for
application by the Agent to the payment of any drawing made
under any such Letters of Credit; and, provided, further, that
the Borrowers shall not be required to make any prepayment
of any Revolving Credit Eurodollar Loan required pursuant to
this Section 2.09 (g) until the last day of the Interest Period
with respect thereto so long as an amount equal to such
prepayment is deposited by the Borrowers into a cash
collateral account with the Agent to be held in such account
pursuant to terms satisfactory to the Agent.
(h) All prepayments under this Section 2.09
shall be subject to Section 2.12 hereof.
(i) Except as otherwise expressly provided
in this Section 2.09, payments with respect to any paragraph
of this Section 2.09 are in addition to payments made or
required to be made under any other paragraph of this Section
2.09.
SECTION 2.10. Reserve Requirements;
Change in Circumstances. (a) If any existing or future law,
regulation or guideline, or the interpretation thereof by any
court or administrative or governmental authority charged
with the administration thereof, or compliance by the Lenders
with any request or directive (whether or not having the force
of law) of any such authority, shall either (i) impose, modify,
or deem applicable or result in the application of, any reserve,
special deposit, capital maintenance, capital ratio or similar
requirement against loans or loan commitments made by any
Lender or any person to which such Lender sells a
participation in the Loans (such Lender and all such persons
collectively, the "Banks") or against any other extensions of
credit or commitments to extend credit or other assets of or
any deposits or other liabilities taken or entered into by any
Bank, or (ii) cause any Bank, in anticipation of the
effectiveness of any capital maintenance, capital ratio or
similar requirement, to take reasonable action to enable itself
to comply therewith, or (iii) impose on any Bank any other
condition regarding this Agreement or the Commitments, and
the result of any event referred to in clause (i), (ii) or (iii)
above shall be to increase the cost to any Bank of making or
maintaining, or to impose upon any Bank or increase any
capital requirement applicable as a result of the making or
maintenance of, the Commitments or the obligation of the
Borrowers hereunder or to reduce the amounts receivable by
any Bank hereunder (which increase in cost or increase in (or
imposition of) capital requirements or reduction in amounts
receivable may be determined by each Bank's reasonable
allocation of the aggregate of such cost increases, capital
increases or impositions or reductions in amounts receivable
resulting from such events), then, upon demand by such Bank,
the Borrowers, shall be jointly and severally obligated to, at
the Borrowers' option, either (a) pay to the Lenders all
outstanding Obligations and terminate this Agreement or (b)
immediately pay to such Bank from time to time as specified
by such Bank, additional fees which shall be sufficient to
compensate such Bank for such increased cost or increase in
(or imposition of) capital requirements or reduction in
amounts receivable by such Bank from the date of such
change, together with interest on each such amount from the
date demanded until payment in full thereof at the rate
provided in Section 2.08 hereof. Upon the occurrence of any
event referred to in clause (i), (ii) or (iii) above, a certificate
setting forth in reasonable detail the increased cost, reduction
in amounts receivable or amounts necessary to compensate
any Bank as a result of an increase in (or imposition of)
capital requirements submitted by any Bank to the Borrowers,
shall be conclusive, absent manifest error or bad faith, as to
the amount thereof. For purposes of this Section 2.10, in
calculating the amount necessary to compensate a Bank for
any increase in or imposition of capital requirements, such
Bank shall be deemed to be entitled to a rate of return on
capital (after federal, state and local taxes) of fifteen percent
(15%) per annum.
(b) A statement of each Lender or the Agent
setting forth such amount or amounts, supported by
calculations in reasonable detail, as shall be necessary to
compensate such Lender (or the Agent) as specified in
paragraph (a) above shall be delivered to the Borrowers and
shall be conclusive absent manifest error. The Borrowers
shall pay each Lender or the Agent the amount shown as due
on any such statement within ten (10) days after its receipt of
the same.
(c) Failure on the part of any Lender or the
Agent to demand compensation for any increased costs,
reduction in amounts received or receivable or reduction in
the rate of return earned on such Lender's capital, shall not
constitute a waiver of such Lender's or the Agent's rights to
demand compensation for any increased costs or reduction in
amounts received or receivable or reduction in rate of return
in the applicable period. The protection under this Section
2.10 shall be available to each Lender and the Agent
regardless of any possible contention of the invalidity or
inapplicability of any law, regulation or other condition which
shall give rise to any demand by such Lender or the Agent for
compensation.
(d) Any Lender claiming any additional
amounts payable pursuant to this Section 2.10 agrees to use
reasonable efforts (consistent with legal and regulatory
restrictions) to designate a different Applicable Lending
Office if the making of such a designation would avoid the
need for, or reduce the amount of, any such additional
amounts and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.
(e) Notwithstanding any other provision
herein, if any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental
authority charged with the interpretation or administration
thereof (whether or not having the force of law) shall (i)
subject the Agent or any Lender (which shall for the purpose
of this Section 2.10 include any assignee or lending office of
the Agent or any Lender) to any tax with respect to any
amount paid or to be paid by either the Agent or any Lender
with respect to any Eurodollar Loans made by a Lender to the
Borrowers (other than (x) taxes imposed on the overall net
income of the Agent or such Lender and (y) franchise taxes
imposed on the Agent or such Lender, in either case by the
jurisdiction in which such Lender or the Agent has its
principal office or its Applicable Lending Office with respect
to such Eurodollar Loan or any political subdivision or taxing
authority of either thereof); (ii) change the basis of taxation of
payments to any Lender or the Agent of the principal of or
interest on any Eurodollar Loan or any other fees or amounts
payable hereunder (other than taxes imposed on the overall
net income of such Lender or the Agent by the jurisdiction in
which such Lender or the Agent has its principal office or by
any political subdivision or taxing authority therein); (iii)
impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with
or for the account of, or loans or loan commitments extended
by, such Lender; or (iv) impose on any Lender or the London
interbank market any other condition affecting this Agreement
or Eurodollar Loans made by such Lender; and the result of
any of the foregoing shall be to increase the cost to any such
Lender of making or maintaining any Eurodollar Loan, or to
reduce the amount of any payment (whether of principal,
interest or otherwise) receivable by such Lender or to require
such Lender to make any payment in respect of any
Eurodollar Loan, then the Borrowers shall pay to such Lender
or the Agent, as the case may be, upon such Lender's or the
Agent's demand, such additional amount or amounts as well
compensate such Lender or the Agent for such additional
costs or reduction. The Agent and each Lender agree to give
notice to Chock of any such change in law, regulation,
interpretation or administration with reasonable promptness
after becoming actually aware thereof and of the applicability
thereof to the Transactions.
SECTION 2.11. Reserves. The Agent may
from time to time decrease the amount of Revolving Credit
Loans available to be borrowed by an amount equal to the
aggregate amount of all reserves which the Agent reasonably
deems necessary or desirable to maintain with respect to the
Collateral, such reserves to be determined by the Agent in its
reasonable discretion, and shall include in any event reserves
established by the Agent with respect to Liens permitted
under Section 7.01(c) hereof.
SECTION 2.12. Indemnity. (a) The Borrowers
shall indemnify each Lender against any loss or reasonable
expense (including, but not limited to, any loss or reasonable
expense sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired
to effect or maintain any Loan or part thereof as a Eurodollar
Loan) which such Lender may sustain or incur as a
consequence of the following events (regardless of whether
such events occur as a result of the occurrence of an Event of
Default or the exercise of any right or remedy of the Agent or
the Lenders under this Agreement or any other agreement, or
at law): any failure of the Borrowers to fulfill on the date of
any borrowing hereunder the applicable conditions set forth in
Article V hereof applicable to it; any failure of the Borrowers
to borrow hereunder after irrevocable notice of borrowing
pursuant to Section 2.03 hereof has been given; any payment,
prepayment or conversion of a Eurodollar Loan on a date
other than the last day of the relevant Interest Period; any
default in payment or prepayment of the principal amount of
any Loan or any part thereof or interest accrued thereon, as
and when due and payable (at the due date thereof, by
irrevocable notice of prepayment or otherwise); or the
occurrence of an Event of Default. Such loss or reasonable
expense shall include, without limitation, an amount equal to
the excess, if any, of (i) the amount of interest which would
have accrued on the principal amount so paid, prepaid or
converted or not borrowed for the period from the date of
such payment, prepayment or conversion or failure to borrow
to the last day of the Interest Period for such Loan (or, in the
case of a failure to borrow, the Interest Period for such Loan
which would have commenced on the date of such failure to
borrow), at the applicable rate of interest for such Loan
provided for herein over (ii) the amount of interest (as
reasonably determined by such Lender) that would be realized
by such Lender in reemploying the funds so paid, prepaid or
not borrowed in United States Treasury obligations with
comparable maturities for comparable periods. Any such
Lender shall provide to the Borrowers a statement, signed by
an officer of such Lender, explaining any loss or expense and
setting forth, if applicable, the computation pursuant to the
preceding sentence, and such statement shall be conclusive
absent manifest error. The Borrowers shall pay such Lender
the amount shown as due on any such statement within ten
(10) days after the receipt of the same.
(b) Notwithstanding anything to the contrary
herein contained, if any change in any law or regulation or in
the interpretation thereof by any governmental authority
charged with the administration or interpretation thereof shall
make it unlawful for any Lender to make or maintain any
Eurodollar Loan or to give effect to its obligations to make
Eurodollar Loans as contemplated hereby, then, by written
notice to the Borrower and to the Agent, such Lender may:
(i) declare that Eurodollar
Loans will not thereafter by made by
such Lender hereunder, whereupon the
Borrowers shall be prohibited from
requesting Eurodollar Loans from such
Lender hereunder unless such declaration
is subsequently withdrawn; and
(ii) require that all outstanding
Eurodollar Loans, as the case may be,
made by it be converted to Prime
Lending Rate Loans, in which event (A)
all such Eurodollar Loans shall be
automatically converted to Prime
Lending Rate Loans as of the effective
date of such notice as provided in
paragraph (b) below and (B) all
payments of principal which would
otherwise have been applied to repay the
converted Eurodollar Loans shall instead
by applied to repay the Prime Lending
Rate Loans resulting from the conversion
of such Eurodollar Loans.
(b) For purposes of Section 2.10(e) hereof, a
notice to the Borrowers by any Lender shall be effective, if
lawful, on the last day of the then current Interest Period or, if
there are then two or more current Interest Periods, on the last
day of each such Interest Period, respectively; otherwise, such
notice shall be effective with respect to the Borrowers on the
date of receipt by the Borrowers.
(c) The Borrowers shall indemnify each
Lender against any loss or reasonable expense (including, but
not limited to, any loss or reasonable expense sustained or
incurred or to be sustained or incurred in liquidating or
employing deposits from their parties acquired to affect or
maintain any Loan or part thereof as a Eurodollar Loan)
which such Lender may sustain or incur as a consequence of
the following events (regardless of whether such events occur
as a result of the occurrence of an Event of Default or the
exercise of any right or remedy of the Agent or the Lenders
under this Agreement or any other agreement, or at law): any
failure of the Borrowers to fulfill on the date of any
borrowing hereunder the applicable conditions set forth in
Article V hereof applicable to it; any failure of the Borrowers
to borrow hereunder after irrevocable notice of borrowing
pursuant to Section 2.03 hereof has been given; any payment,
prepayment or conversion of a Eurodollar Loan on a date
other than the last day of the relevant Interest Period; any
default in payment or prepayment of the principal amount of
any Loan or any part thereof or interest accrued thereon, as
and when due and payable (at the due date thereof, by
irrevocable notice of prepayment or otherwise); or the
occurrence of an Event of Default. Such loss or reasonable
expense shall include, without limitation, an amount equal to
the excess, if any, of (i) the amount of interest which would
have accrued on the principal amount so paid, prepaid or
converted or not borrowed for the period from the date of
such payment, prepayment or conversion or failure to borrow
to the last day of the Interest Period for such Loan (or, in the
case of a failure to borrow, the Interest Period for such Loan
which would have commenced on the date of such failure to
borrow), at the applicable rate of interest for such Loan
provided for herein over (ii) the amount of interest (as
reasonably determined by such Lender) that would be realized
by such Lender in reemploying the funds so paid, prepaid or
converted or not borrowed in United States Treasury
obligations with comparable maturities for comparable
periods. Any such Lender shall provide to the Borrowers a
statement, signed by an officer of such Lender, explaining any
loss or expense and setting forth, if applicable, the
computation pursuant to the preceding sentence, and such
statement shall be conclusive absent manifest error. The
Borrowers shall pay such Lender the amount shown as due on
any such statement within ten (1) days after the receipt of
same.
SECTION 2.13. Pro Rata Treatment. Except as
permitted under Section 2.10 hereof, and subject to the
provisions of Sections 2.17 and 2.18 hereof, each borrowing,
each payment or prepayment of principal of the Notes, each
payment of interest on the Notes, each payment of any fee or
other amount payable hereunder and each reduction of the
Total Revolving Credit Commitment and Total Term Loan
Commitment shall be made pro rata among the Lenders in the
proportions that their Revolving Credit Commitments bear to
the Total Revolving Credit Commitment or that their Term
Loan Commitments bears to the Total Term Loan
Commitment, as the case may be.
SECTION 2.14. Sharing of Setoffs. Each
Lender agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim against any of the
Borrowers, including, but not limited to, a secured claim
under Section 506 of Title 11 of the United States Code or
other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise,
obtain payment (voluntary or involuntary) in respect of a Note
held by it as a result of which the unpaid principal portion of
the Notes held by it shall be proportionately less than the
unpaid principal portion of the Notes held by any other
Lender, it shall be deemed to have simultaneously purchased
from such other Lender a participation in the Notes held by
such other Lender, so that the aggregate unpaid principal
amount of the Notes and participations in Notes held by it
shall be in the same proportion to the aggregate unpaid
principal amount of all Notes then outstanding as the principal
amount of the Notes held by it prior to such exercise of
banker's lien, setoff or counterclaim was to the principal
amount of all Notes outstanding prior to such exercise of
banker's lien, setoff or counterclaim; provided, however, that
if any such purchase or purchases or adjustments shall be
made pursuant to this Section 2.14 and the payment giving
rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of
such recovery and the purchase price or prices or adjustments
restored without interest. Each of the Borrowers expressly
consents to the foregoing arrangements and agrees that any
Lender holding a participation in a Note deemed to have been
so purchased may exercise any and all rights of banker's lien,
setoff or counterclaim with respect to any and all moneys
owing by such Borrower to such Lender as fully as if such
Lender held a Note in the amount of such participation.
SECTION 2.15. Taxes. (a) Any and all
payments by the Borrowers hereunder shall be made, in
accordance with Section 2.16 hereof, free and clear of and
without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings in any
such case imposed by the United States or any political sub-
division thereof, excluding:
(i) in the case of the Agent and each
Lender, taxes imposed or based on its net
income, and franchise or capital taxes imposed
on it, (A) if the Agent or such Lender is
organized under the laws of the United States or
any political subdivision thereof and (B) if the
Agent or such Lender is not organized under the
laws of the United States or any political sub-
division thereof, and its principal office or
lending office is located in the United States,
and in the case of both (A) and (B), withholding
taxes payable with respect to payments to the
Agent or such Lender at its principal office or
lending office under laws (including, without
limitation, any treaty, ruling, determination or
regulation) in effect on the date hereof, but not
any increase in withholding tax resulting from
any subsequent change in such laws (other than
withholding with respect to taxes imposed or
based on its net income or with respect to
franchise or capital taxes), and
(ii) taxes (including withholding taxes)
imposed by reason of the failure of the Agent or
any Lender, in either case that is organized
outside the United States, to comply with
Section 2.15(f) hereof (or the inaccuracy at any
time of the certificates, documents and other
evidence delivered thereunder)
(all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred
to as "Taxes"). If any of the Borrowers shall be required by
law to deduct any Taxes from or in respect of any sum
payable hereunder to the Lenders or the Agent, (x) the sum
payable shall be increased by the amount necessary so that
after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.15)
such Lender or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such
deductions been made, (y) such Borrower shall make such
deductions and (z) such Borrower shall pay the full amount
deducted to the relevant tax authority or other authority in
accordance with applicable law.
(b) In addition, the Borrowers agree to pay
any present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement (hereinafter referred to as "Other Taxes").
(c) The Borrowers will indemnify each
Lender and the Agent for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other
Taxes imposed by any jurisdiction (except as specified in
clauses (a)(i) and (ii)) on amounts payable under this Section
2.15) paid by such Lender or the Agent (as the case may be)
and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date
such Lender or the Agent (as the case may be) makes written
demand therefor. If any Lender receives a refund in respect
of any Taxes or Other Taxes for which such Lender has
received payment from the Borrowers hereunder, such Lender
shall promptly notify the Borrowers of such refund and such
Lender shall, within 30 days of receipt of a request by the
Borrowers, repay such refund to the Borrowers, provided that
the Borrowers, upon the request of such Lender, agree to
return such refund (plus any penalties, interest or other
charges) to such Lender in the event such Lender is required
to repay such refund.
(d) Within 30 days after the date of any
payment of Taxes or Other Taxes withheld by any of the
Borrowers in respect of any payment to any Lender, the
Borrowers will furnish to the Agent, at its address referred to
in Section 11.01 hereof, such certificates, receipts and other
documents as may be reasonably required to evidence
payment thereof.
(e) Without prejudice to the survival of any
other agreement hereunder, the agreements and obligations
contained in this Section 2.15 shall survive the payment in full
of principal and interest hereunder.
(f) Each Lender that is organized outside of
the United States shall deliver to the Borrowers on the date
hereof (or, in the case of an assignee, on the date of the
assignment) and from time to time as required for renewal
under applicable law duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 (or any
successor or additional forms), as appropriate, indicating in
each case that such Lender is entitled to receive payments
under this Agreement without any deduction or withholding
of any United States federal income taxes. The Agent (if the
Agent is an entity organized outside the United States) and
each Lender that is organized outside the United States shall
promptly notify the Borrowers and the Agent of any change in
its Applicable Lending Office and upon written request of the
Borrowers such Lender shall, prior to the immediately
following due date of any payment by the Borrowers or any
Guarantor hereunder, deliver to the Borrowers or such
Guarantor, as the case may be (with copies to the Agent), such
certificates, documents or other evidence, as required by the
Code or Treasury Regulations issued pursuant thereto,
including without limitation Internal Revenue Service Form
4224, Form 1001 and any other certificate or statement of
exemption required by Treasury Regulation Section
1.1441-4(a) or Section 1.1441-6(c) or any subsequent version
thereof, properly completed and duly executed by such Lender
establishing that such payment is (i) not subject to
withholding under the Code because such payment is
effectively connected with the conduct by such Lender of a
trade or business in the United States or (ii) totally exempt
from United States tax under a provision of an applicable tax
treaty. The Borrowers shall be entitled to rely on such forms
in their possession until receipt of any revised or successor
form pursuant to this Section 2.15(f). If the Agent or a
Lender fails to provide a certificate, document or other
evidence required pursuant to this Section 2.15(f), then (i) the
Borrowers shall be entitled to deduct or withhold on payments
to the Agent or such Lender as a result of such failure, as
required by law, and (ii) the Borrowers shall not be required
to make payments of additional amounts with respect to such
withheld Taxes pursuant to clause (x) of Section 2.15(a)
hereof to the extent such withholding is required solely by
reason of the failure of the Agent or such Lender to provide
the necessary certificate, document or other evidence.
(g) Each Lender and the Agent shall use
reasonable efforts to avoid or minimize any amounts which
might otherwise be payable pursuant to this Section 2.15
(including seeking refunds of any amounts that are reasonably
believed not to have been correctly or legally asserted);
provided, however, that such efforts shall not include the
taking of any actions by such Lender or the Agent that would
result in any tax, costs or other expense to such Lender or the
Agent (other than a tax, cost or other expense for which such
Lender or the Agent shall have been reimbursed or indemni-
fied by the Borrowers pursuant to this Agreement or
otherwise) or any action which would or might in the
reasonable opinion of such Lender or the Agent have an
adverse effect upon its business, operations or financial
condition or otherwise be disadvantageous to such Lender or
the Agent.
SECTION 2.16. Payments and Computations.
The Borrowers shall make each payment hereunder and under
any instrument delivered hereunder not later than 12:00 noon
(New York City time) on the day when due in lawful money
of the United States (in freely transferable dollars) to the
Agent at New York, New York for the account of the
Lenders, in immediately available funds. The Agent may
charge, when due and payable, the Borrowers' account with
the Agent for all amounts owing to the Agent or the Lenders
on or with respect to this Agreement and/or the Loans and
other Loan Documents as set forth in Section 2.04(e).
SECTION 2.17. Making of Revolving Credit
Loans. (a) The Agent may assume that each Lender will
make its ratable portion of any amount to be borrowed
available to the Agent in accordance with Section 2.02(c), and
the Agent may in its discretion, in reliance upon such
assumption, make available to the applicable Revolving Loan
Borrower on such date a corresponding amount. If and to the
extent such Lender shall not make such ratable portion
available to the Agent, such Lender and the applicable
Revolving Loan Borrower severally agree to repay to the
Agent forthwith on demand such corresponding amount,
together with interest thereon for each day from the date such
amount is made available to such Revolving Loan Borrower
until the date such amount is repaid to the Agent, as to such
Revolving Loan Borrower, at the rate of interest applicable to
Revolving Credit Loans hereunder, and as to such other
Lender, at the Federal Funds Effective Rate and until so
repaid such amount shall be deemed to constitute a Revolving
Credit Loan by the Agent to such Revolving Loan Borrower
hereunder entitled to the benefits of the Collateral and the
other provisions hereof applicable to the Revolving Credit
Loans. If such Lender shall repay to the Agent such
corresponding amount, the amount so repaid shall constitute
such Lender's ratable portion of the Revolving Credit Loans
made on such borrowing date for purposes of this Agreement.
No Lender shall be responsible for the failure of any other
Lender to make its ratable portion of such Revolving Credit
Loans available on the borrowing date.
(b) Without limiting the generality of Article
IX, each Lender expressly authorizes the Agent to determine
on behalf of such Lender (i) whether to make Revolving
Credit Loans requested or deemed requested by a Revolving
Loan Borrower on any borrowing date, (ii) any reduction or
increase of advance rates applicable to the Borrowing Base,
(iii) the creation or elimination of any reserves against the
Borrowing Base, and (iv) whether specific items of inventory
or Receivables constitute "Eligible Inventory" or "Eligible
Receivables," respectively, in accordance with the definitions
of such terms set forth in Article I. The Agent shall give
prompt notice to the Lenders of any determinations made
pursuant to clauses(ii) and (iii) above.
SECTION 2.18. Settlement Among Lenders.
(a) The Agent shall pay to each Lender not later than three
(3) days after each Interest Payment Date or Repayment Date,
as the case may be, its ratable portion, based on the principal
amount of the Term Loans owing to such Lender, of all
payments received by the Agent hereunder in respect of the
principal of, or interest on, the Term Loans, net of any
amounts payable by such Lender to the Agent, by wire
transfer.
(b) It is agreed that each Lender's Revolving
Credit Loans are intended by the Lenders to be equal at all
times to such Lender's ratable portion (as determined in
accordance with the percentage amounts set forth in Schedule
2.01(b) hereto) of the aggregate principal amount of all
Revolving Credit Loans outstanding. Notwithstanding such
agreement, the Lenders agree that in order to facilitate the
administration of this Agreement and the other Loan
Documents, settlement among them shall, subject to the
provisions of clause (d) below, take place on a periodic basis
in accordance with the provisions of clause (c) below.
(c) (i) To the extent and in the manner
hereinafter provided in this Section, settlement among the
Lenders as to Revolving Credit Loans shall occur periodically
on Settlement Dates determined from time to time by the
Agent, which may occur before or after the occurrence or
during the continuance of a Default or Event of Default and
whether or not all of the conditions to the making of Loans set
forth in Section 5.01 have been met. On each Settlement
Date, payments shall be made to the Agent for the account of
the Lenders in the manner provided in this Section in
accordance with the Settlement Report delivered by the Agent
pursuant to the provisions of this Section in respect of such
Settlement Date so that as of each Settlement Date, and after
giving effect to the transactions on such Settlement Date, each
Lender's Revolving Credit Loans shall equal such Lender's
ratable portion of the Revolving Credit Loans outstanding as
determined in accordance with the percentage amounts set
forth in Schedule 2.01(b) hereto.
(ii) The Agent shall designate
periodic Settlement Dates which may occur on any Business
Day after the Closing Date; provided, however, that the Agent
shall designate as a Settlement Date each Interest Payment
Date and each Repayment Date, and provided, further, that
Settlement Dates shall occur on the 10th and 25th day of each
month or more frequently as determined by the Agent in its
discretion (including, without limitation, under clause (d)(i)
hereof). The Agent shall designate a Settlement Date by
delivering to each Lender a Settlement Report not later than
12:00 noon (New York City time) on the proposed Settlement
Date, which Settlement Report shall be with respect to the
period beginning on the next preceding Settlement Date and
ending on such designated Settlement Date.
(iii) Between Settlement Dates, the
Agent shall request and NatWest as a Lender shall, subject to
the provisions of clause (d) below, advance to the applicable
Revolving Loan Borrower out of NatWest's own funds, the
entire principal amount of any Revolving Credit Loan
requested or deemed requested pursuant to Section 2.03 (any
such Revolving Credit Loan being referred to as a "Non-
Ratable Loan"). The making of each Non-Ratable Loan by
NatWest shall be deemed to be a purchase by NatWest of a
100% participation in each other Lender's ratable portion of
the amount of such Non-Ratable Loan. All payments of
principal, interest and any other amount with respect to such
Non-Ratable Loan shall be payable to and received by the
Agent for the account of NatWest. Any payments received by
the Agent between Settlement Dates which in accordance
with the terms of this Agreement are to be applied to the
reduction of the outstanding principal balance of Revolving
Credit Loans, shall be paid over to and retained by NatWest
for such application, and such payment to and retention by
NatWest shall be deemed, to the extent of each other Lender's
ratable portion of such payment, to be a purchase by each
such other Lender of a participation in the Revolving Credit
Loans (including the repurchase of participations in Non-
Ratable Loans) held by NatWest immediately prior to the
receipt and application of such payment.
(iv) If on any Settlement Date the
increase, if any, in the dollar amount of any Lender's
Revolving Credit Loans which is required to comply with the
first sentence of Section(b) is less than such Lender's ratable
portion of amounts received by the Agent and paid only to
NatWest since the next preceding Settlement Date, such
Lender and the Agent, in their respective records, shall apply
such Lender's ratable portion of such amounts to the decrease
in such Lender's Revolving Credit Loans, and NatWest shall
pay to the Agent, for the account of such Lender, the excess.
(v) If on any Settlement Date the
increase, if any, in the dollar amount of any Lender's
Revolving Credit Loans which is required to comply with the
first sentence of Section(b) exceeds such Lender's ratable
portion of amounts received by the Agent and paid only to
NatWest since the next preceding Settlement Date, such
Lender and the Agent, in their respective records, shall apply
such Lender's ratable portion of such amounts to the increase
in such Lender's Revolving Credit Loans, and such Lender
shall pay to the Agent, for the account of NatWest, the excess.
(vi) If a Settlement Report indicates
that no Revolving Credit Loans have been made during the
period since the next preceding Settlement Date, then such
Lender's ratable portion of any amounts received by the Agent
but paid only to NatWest shall be paid by NatWest to the
Agent, for the account of such Lender. If a Settlement Report
indicates that the increase in the dollar amount of a Lender's
Revolving Credit Loans which is required to comply with the
first sentence of Section 2.18(b) is exactly equal to such
Lender's ratable portion of amounts received by the Agent but
paid only to NatWest since the next preceding Settlement
Date, such Lender and the Agent, in their respective records,
shall apply such Lender's ratable portion of such amounts to
the increase in such Lender's Revolving Credit Loans.
(vii) If any amounts received by
NatWest in respect of the Obligations are later required to be
returned or repaid by NatWest to the Borrowers or any other
obligor or their respective representatives or successors in
interest, whether by court order, settlement or otherwise, and
such amounts repaid or returned by NatWest are in excess of
NatWest's ratable portion of all such amounts required to be
returned by all Lenders, each other Lender shall, upon
demand by NatWest with notice to the Agent, pay to the
Agent for the account of NatWest, an amount equal to the
excess of such Lender's ratable portion of all such amounts
required to be returned by all Lenders over the amount, if any,
returned directly by such Lender.
(viii) (x) Payment by any Lender to the
Agent shall be made not later than 12:00 noon (New
York City time) on the Business Day such payment is
due, provided that if such payment is due on written
demand by another Lender, including pursuant to
clause (d) below, such written demand shall be made
on the paying Lender not later than 10:00 a.m. (New
York City time) on such Business Day. Payment by
the Agent to any Lender shall be made by wire
transfer, promptly following the Agent's receipt of
funds for the account of such Lender and in the type of
funds received by the Agent, provided that if the Agent
receives such funds at or prior to 12:00 noon (New
York City time), the Agent shall pay such funds to
such Lender by 5:00 p.m. (New York City time) on
such Business Day. If a demand for payment is made
after the applicable time set forth above, the payment
due shall be made by 5:00 p.m. (New York City time)
on the first Business Day following the date of such
demand.
(y) If a Lender shall, at any time, fail to
make any payment to the Agent required hereunder,
the Agent may, but shall not be required to, retain
payments that would otherwise be made to such
Lender hereunder and apply such payments to such
Lender's defaulted obligations hereunder, at such time,
and in such order, as the Agent may elect in its sole
discretion.
(z) With respect to the payment of any funds
under this Section 2.18(c), whether from the Agent to a
Lender or from a Lender to the Agent, the party failing
to make full payment when due pursuant to the terms
hereof shall, upon written demand by the other party,
pay such amount together with interest on such amount
at the Federal Funds Effective Rate.
(d) (i) The Agent shall have the right at any
time to require, by notice to each Lender, that all settlements
in respect of advances and repayments of Revolving Credit
Loans be made on a daily basis. From and after the giving of
such notice (and until such time, if any, as the Agent notifies
the Lenders of its determination to return to a periodic
settlement basis), each Lender shall pay to the Agent such
Lender's ratable portion of the amount of each Revolving
Credit Loan on the date such Loan is made in accordance with
the provisions of clause (c)(viii) above and the Agent shall
pay to each Lender by wire transfer by 5:00 p.m. (New York
City time) funds received before 12:00 noon (New York City
time) on such Business Day by the Agent from the Borrower
and by 5:00 p.m. (New York City time) funds received after
1:00 (New York City time) of the preceding Business Day by
the Agent from a Revolving Loan Borrower, by wire transfer,
such Lender's ratable portion of the net amount of all
payments received by the Agent hereunder in respect of the
principal of the Revolving Credit Loans (after deducting the
principal amount of Revolving Credit Loans made on such
day) or in respect of interest on the Revolving Credit Loans.
Any amount payable pursuant to this subsection which is not
paid when due shall bear interest, payable by the Agent, for
each day until paid in full at the Federal Funds Effective Rate
in effect on such day.
(ii) In addition to, and without limiting the
right of the Agent to require daily settlement pursuant to
clause (i), upon written demand by NatWest with notice
thereof to the Agent, each other Lender shall pay to the
Agent, for the account of NatWest, as the repurchase of
NatWest's participation interest in such Lender's Revolving
Credit Loans, an amount equal to 100% of such Lender's
ratable portion of the unpaid principal amount of all Non-
Ratable Loans. Payments made pursuant to this clause (ii)
shall be made not later than 5:00 p.m. (New York City time)
on any Business Day if demand for such payment is received
not later than 11:00 a.m. (New York City time) on such
Business Day; otherwise, any such payment shall be made on
the next Business Day after demand is received therefor.
IIA. LETTERS OF CREDIT
SECTION 2A.01. Issuance of Letters
of Credit. Upon the request of Chock, and subject to the
conditions set forth in Article V hereof and such other con-
ditions to the opening of letters of credit as NatWest (in such
capacity, the "Issuing Lender"), requires of its customers
generally, the Issuing Lender shall from time to time open the
following letters of credit for the account of Chock: (i)
standby letters of credit (each, an "Insurance Letter of
Credit") which shall be issued solely for the benefit of Liberty
Mutual Insurance Company (or such other insurance company
as shall be designated by Chock) with respect to claims made
in connection with worker compensation, the aggregate
undrawn amount of all outstanding Insurance Letters of
Credit not at any time to exceed $4,000,000; and (ii) trade
letters of credit (each, a "Trade Letter of Credit" and, together
with Insurance Letters of Credit, each a "Letter of Credit"
and, collectively, the "Letters of Credit") which shall be
issued solely with respect to the purchase by Chock of
inventory, the aggregate undrawn amount of all outstanding
Trade Letters of Credit not at any time to exceed $2,000,000.
Notwithstanding the foregoing, the face amount of any Letter
of Credit that Chock may request the Issuing Lender to open
at any time shall not exceed the lesser of (A) the Total
Commitment (minus the Line Amount through and including
the Line Expiration Date) at such time minus (i) the Term
Loan Facility at such time, (ii) the principal amount of all
Revolving Credit Loans outstanding to at such time and (iii)
the undrawn amount of all outstanding Letters of Credit at
such time, and (B) the Chock Borrowing Base at such time
minus (i) the unpaid principal amount of all Revolving Credit
Loans outstanding to Chock at such time and (ii) the undrawn
amount of all outstanding Letters of Credit at such time.
The expiration date of any Insurance Letter of
Credit shall not be later than one (1) year from the date of
issuance thereof (provided, that any such Insurance Letter of
Credit may provide for automatic annual renewals of one year
unless a notice of non-renewal is given to the beneficiary
thereof), and the expiration date of any Trade Letter of Credit
shall be not later than 60 days from the date of issuance
thereof. In any event, no Letter of Credit shall have a final
expiration date later than the Revolving Credit Termination
Date.
The issuance of each Letter of Credit shall be
made on at least three (3) Business Days' prior written notice
from Chock to the Issuing Lender, at its office at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, with a copy to the
Agent, which written notice shall be an application for a
Letter of Credit on the Issuing Lender's customary form.
SECTION 2A.02. Payment; Reimbursement.
Upon the issuance of any Letter of Credit, the Issuing Lender
shall notify the Agent which shall in turn notify each Lender
of the principal amount, the number, and the expiration date
thereof and the amount of such Lender's participation therein.
By the issuance of a Letter of Credit hereunder and without
further action on the part of the Agent or the Lenders, each
Lender hereby accepts from the Issuing Lender a participation
(which participation shall be nonrecourse to the Issuing
Lender) in such Letter of Credit equal to such Lender's pro
rata (based on its pro rata share of the Total Commitment)
share of such Letter of Credit, effective upon the issuance of
such Letter of Credit. Each Lender hereby absolutely and
unconditionally assumes, as primary obligor and not as a
surety, and agrees to pay and discharge, and to indemnify and
hold the Issuing Lender harmless from liability in respect of,
such Lender's pro rata share of the amount of any drawing
under a Letter of Credit. Each Lender acknowledges and
agrees that its obligation to acquire participations in each
Letter of Credit issued hereunder and its obligation to make
the payments specified herein, and the right of the Issuing
Lender to receive the same, in the manner specified herein,
are absolute and unconditional and shall not be affected by
any circumstance whatsoever, including, without limitation,
the occurrence and continuance of a Default or an Event of
Default hereunder, and that each such payment shall be made
without any offset, abatement, withholding or reduction
whatsoever. The Issuing Lender shall review, on behalf of
the Lenders, each draft and any accompanying documents
presented under a Letter of Credit and shall notify the Agent
of any such presentment. Promptly after it shall have
ascertained that any draft and any accompanying documents
presented under such Letter of Credit appear on their face to
be in substantial conformity with the terms and conditions of
the Letter of Credit, the Issuing Lender shall give telephonic
or facsimile notice to the Agent and Chock of the receipt and
amount of such draft and the date on which payment thereon
will be made, and the Lenders shall, by 11:00 a.m., New York
City time on the date such payment is to be made, pay the
amounts required to the Agent on behalf of the Issuing Lender
in New York, New York in immediately available funds, and
the Issuing Lender, not later than 3:00 p.m. on such day, shall
make the appropriate payment to the beneficiary of such
Letter of Credit. If the Lenders and/or Issuing Lender shall
pay any draft presented under a Letter of Credit, then the
Agent, on behalf of the Lenders and/or Issuing Lender, shall
charge the general deposit account of Chock with the Agent
for the amount thereof, together with the Agent's customary
overdraft fee in the event the funds available in such account
shall not be sufficient to reimburse the Lenders and/or Issuing
Lender for such payment and Chock shall not otherwise have
discharged such reimbursement obligation by 11:00 a.m.,
New York City time, on the date of such payment. If the
Lenders and/or Issuing Lender have not been reimbursed with
respect to such drawing as provided above, Chock shall pay to
the Agent, for the account of the Lenders and Issuing Lender,
the amount of the drawing together with interest on such
amount at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal
to the Prime Rate plus one and one half (1 1/2%), payable on
demand. The Borrowers shall be jointly and severally liable
under this Article IIA to reimburse the Agent, the Lenders and
the Issuing Lender for all drawings under Letters of Credit,
and such obligation shall be absolute, unconditional and
irrevocable and shall be satisfied strictly in accordance with
its terms, irrespective of:
(a) any lack of validity or
enforceability of any Letter of Credit;
(b) the existence of any claim, setoff,
defense or other right which Chock, any other
Borrower or any other person may at any time
have against the beneficiary under any Letter of
Credit, the Agent, the Issuing Lender or any
Lender (other than the defense of payment in
accordance with the terms of this Agreement or
a defense based on the bad faith or willful
misconduct of the Agent, the Issuing Lender or
any Lender) or any other person in connection
with this Agreement or any other transaction;
(c) any draft or other document
presented under any Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being
untrue or inaccurate in any respect;
(d) payment by the Agent, the Issuing
Lender or any Lender under any Letter of Credit
against presentation of a draft or other
document which does not comply with the terms
of such Letter of Credit; and
(e) any other circumstance or event
whatsoever, whether or not similar to any of the
foregoing.
It is understood that in making any payment
under any Letter of Credit (x) the Issuing Lender's
exclusive reliance on the documents presented to it
under such Letter of Credit as to any and all matters set
forth therein, including, without limitation, reliance on
the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the
beneficiary equals the amount of such draft and
whether or not any document presented pursuant to
such Letter of Credit proves to be insufficient in any
respect, if such document on its face appears to be in
order, and whether or not any other statement or any
other document presented pursuant to such Letter of
Credit proves to be forged or invalid or any statement
therein proves to be inaccurate or untrue in any respect
whatsoever and (y) any noncompliance in any
immaterial respect of the documents presented under
such Letter of Credit with the terms thereof shall, in
each case, not be deemed bad faith or willful
misconduct of the Issuing Lender or any Lender.
SECTION 2A.03. Issuing Lender's Actions.
Any Letter of Credit may, in the discretion of the Issuing
Lender or its correspondents, be interpreted by them (to the
extent not inconsistent with such Letter of Credit) in
accordance with the Uniform Customs and Practice for
Documentary Credits of the International Chamber of
Commerce, as adopted or amended from time to time, or any
other rules, regulations and customs prevailing at the place
where any Letter of Credit is available or the drafts are drawn
or negotiated. The Issuing Lender and its correspondents may
accept and act upon the name, signature, or act of any party
purporting to be the executor, administrator, receiver, trustee
in bankruptcy, or other legal representative of any party
designated in any Letter of Credit in the place of the name,
signature, or act of such party.
SECTION 2A.04. Payments in Respect of
Increased Costs. (a) Notwithstanding any other provision
herein, if after the date of this Agreement any change in
applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged
with the interpretation or administration thereof (whether or
not having the force of law) or any change in generally
accepted accounting principles or regulatory accounting
principles applicable to the Agent, the Issuing Lender or any
Lender shall (i) impose, modify or make applicable to the
Agent, the Issuing Lender or any Lender any reserve, special
deposit or similar requirement with respect to its obligations
under this Article IIA or any Letter of Credit, (ii) impose on
the Agent, the Issuing Lender or any Lender any other
condition with respect to its obligations under this Article IIA
or any Letter of Credit, or (iii) subject the Agent, the Issuing
Lender or any Lender to any tax (other than (x) taxes imposed
on the overall net income of the Agent, the Issuing Lender or
such Lender and (y) franchise taxes imposed on the Agent, the
Issuing Lender or such Lender, in either case by the
jurisdiction in which the Agent, the Issuing Lender or such
Lender has its principal office or lending office or any
political subdivision or taxing authority of any such
jurisdiction), charge, fee, deduction or withholding of any
kind whatsoever, and the result of any of the foregoing shall
be to increase the cost to the Agent, the Issuing Lender or
such Lender of maintaining such Letter of Credit or making
any payment under such Letter of Credit or this Article IIA or
to reduce the amount of principal, interest or any fee or
compensation receivable by the Agent, the Issuing Lender or
such Lender in respect of this Article IIA or such Letter of
Credit, then such additional amount or amounts as will
compensate the Agent, the Issuing Lender or such Lender for
such additional costs or reduction shall be paid by Chock to
the Agent, the Issuing Lender or such Lender. The Issuing
Lender and each Lender agrees to give notice to Chock and
the Agent of any such change in law, regulation, interpre-
tation or administration with reasonable promptness after
becoming actually aware thereof and of the applicability
thereof to the transactions contemplated in this Article IIA.
(b) If, after the date of this
Agreement, the Issuing Lender or any Lender shall
have determined that the adoption of any applicable
law, rule, regulation or guideline regarding capital
adequacy, or any change therein, or any change in the
interpretation or administration thereof by any
governmental authority, central bank or comparable
agency charged with the interpretation or administra-
tion thereof, or compliance by the Issuing Lender or
any Lender (or its lending office) with any request or
directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central
bank or comparable agency, has or would have the
effect of reducing the rate of return on the Issuing
Lender's or such Lender's capital as a consequence of
its obligations under this Article IIA to a level below
that which the Issuing Lender or such Lender could
have achieved but for such adoption, change or
compliance (taking into consideration the Issuing
Lenders or such Lender's policies with respect to
capital adequacy) then from time to time, Chock shall
pay to such Lender or the Issuing Lender, as
applicable, such additional amount or amounts as will
compensate the Issuing Lender or such Lender for such
reduction. The Issuing Lender and each Lender agrees
to give notice to Chock and the Agent of any adoption
of, change in, or change in interpretation or
administration of, any such law, rule, regulation or
guideline with reasonable promptness after becoming
actually aware thereof and of the applicability thereof
to the transactions contemplated hereby.
(c) A certificate of the Issuing Lender
or a Lender setting forth such amount or amounts,
supported by calculations in reasonable detail, as shall
be necessary to compensate the Issuing Lender or such
Lender as specified in paragraphs(a) and (b) above
shall be delivered to Chock and the Agent shall be
conclusive and binding upon Chock absent manifest
error. Chock shall pay the Issuing Lender or such
Lender the amount shown as due on any such
certificate within five (5) Business Days after its
receipt of the same.
(d) Failure on the part of any Lender
or the Issuing Lender to demand compensation for any
increased costs, reduction in amounts received or
receivable with respect to this Article IIA or any Letter
of Credit or reduction in the rate of return earned on
the Issuing Lender's or such Lender's capital, in each
case pursuant to paragraph (a) or (b) above, shall not
constitute a waiver of the Issuing Lender's or such
Lender's rights to demand compensation for any
increased costs or reduction in amounts received or
receivable or reduction in rate of return pursuant to
paragraph (a) or (b) above. The protection under this
Section 2A.04 shall be available to each Lender and
the Issuing Lender regardless of any possible
contention of the invalidity or inapplicability of any
law, regulation or other condition which shall give rise
to any demand by the Issuing Lender or such Lender
for compensation (but if such law, regulation or other
condition is finally determined to be invalid or
inapplicable, the Issuing Lender or Lender shall
promptly refund (without interest) all amounts paid
under this Section 2A.04 arising from such invalid or
inapplicable law, regulation or other condition).
SECTION 2A.05. Indemnity as to Letters of
Credit. The Borrowers hereby agree, jointly and severally, to
indemnify and hold harmless the Agent, the Issuing Lender
and the Lenders from and against any and all claims,
damages, losses, liabilities, costs or expenses whatsoever
which the Agent, the Issuing Lender or the Lenders may incur
or suffer by reason of or in connection with the execution and
delivery or assignment of, or payment under, any Letter of
Credit, except to the extent that any such claim, damage, loss,
liability, cost or expense shall be found by a court of final
determination to have been caused by the bad faith or willful
misconduct of the Agent, the Issuing Lender or any Lender
performing its obligations under this Agreement. Without
limiting the foregoing, the Borrowers further agree jointly and
severally to indemnify and hold harmless the Issuing Lender,
its officers and directors, each person who controls the
Issuing Lender within the meaning of Section 15 of the
Securities Act of 1933 or any applicable state securities law
and their respective successors from and against any and all
claims, damages, losses, liabilities, costs or expenses, joint or
several, to which they or any of them may become subject
under any Federal or state securities law, rule or regulation, at
common law or otherwise, insofar as such claims, damages,
losses, liabilities, costs or expenses arise out of or are based
upon the execution and delivery by the Issuing Lender of any
Letters of Credit or the execution and delivery of any other
document in connection therewith (but not including any
claims, damages, losses, liabilities, costs or expenses which a
court of final determination finds has been caused by the bad
faith or willful misconduct of the Issuing Lender). The
Borrowers, upon demand by the Issuing Lender at any time,
shall reimburse the Agent, the Issuing Lender and the Lenders
for any reasonable legal or other expenses incurred in
connection with investigating or defending against any of the
foregoing. The indemnities contained herein shall survive the
expiration or termination of the Letters of Credit and this
Agreement.
SECTION 2A.06. Letter of Credit Fees. (a)
The Borrowers agree to pay to the Agent for the ratable
benefit of the Issuing Lender and Lenders at the Agent's
offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (i)
with respect to each Insurance Letter of Credit (x) a letter of
credit fee equal to one and three quarters percent (1 3/4%) per
annum of the face amount of each such Insurance Letter of
Credit, payable monthly in advance in immediately available
funds during the period in which any such Insurance Letter of
Credit is outstanding, commencing with the day of issuance of
each such Insurance Letter of Credit plus (y) an issuance fee
charged by the Issuing Lender for transactions of this nature
(such fees currently being in the amount of up to $200, but
subject to change) payable to the Issuing Lender, on the date
of issuance of such Insurance Letter of Credit in immediately
available funds, and (ii) with respect to each Trade Letter of
Credit (x) a payment fee equal to one quarter of one percent
(1/4%) of the amount paid by the Issuing Lender under any
Trade Letter of Credit on the date of payment by the Issuing
Lender plus (y) the usual fees charged by the Issuing Lender
with respect to Trade Letters of Credit and transactions of this
nature. The Borrowers shall pay to the Issuing Lender at its
offices specified above with respect to any amendment to a
Letter of Credit (other than regularly scheduled amendments
to which the Issuing Lender and Chock agree as at the issuing
date of any Letter of Credit) a fee charged by the Issuing
Lender for transactions of this nature (such fees currently
being in the amount of up to $65, but subject to change). The
Agent shall disburse to the Issuing Lender and each Lender
the Issuing Lender's and such Lender's pro rata share of any
payment of the fees referred to in clauses (i)(x) and (ii)(x) of
the first sentence of this Section 2A.06 in immediately
available funds within two (2) Business Days of the Agent's
receipt of such payment.
(b) The Borrowers agree to pay to the Agent
for the benefit of the Issuing Lender a letter of credit fee in
addition to any fees paid in accordance with paragraph (a)
above with respect to Insurance Letters of Credit, equal to one
quarter of one percent (1/4%) per annum of the face amount
of each Insurance Letter of Credit, at the Agent's offices at
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, monthly in
advance in immediately available funds during the period in
which any such Insurance Letter of Credit is outstanding,
commencing with the day of issuance of each such Insurance
Letter of Credit.
III. COLLATERAL SECURITY
SECTION 3.01. Security Documents. The
Obligations shall be secured by the Collateral described in the
Security Documents and are entitled to the benefits thereof.
The Borrowers shall duly execute and deliver the Security
Documents, all consents of third parties necessary to permit
the effective granting of the Liens created in such agreements,
financing statements pursuant to the Uniform Commercial
Code and other documents, all in form and substance
satisfactory to the Agent, as may be reasonably required by
the Agent to grant to the Lenders a valid, perfected and
enforceable first priority Lien on and security interest in
(subject only to the Liens permitted under Section 7.01
hereof) the Collateral.
SECTION 3.02. Filing and Recording. The
Borrowers shall, at their sole cost and expense, cause all
instruments and documents given as evidence of security
pursuant to this Agreement to be duly recorded and/or filed or
otherwise perfected in all places necessary, in the opinion of
the Agent, and take such other actions as the Agent may
reasonably request, in order to perfect and protect the Liens of
the Agent and Lenders in the Collateral. The Borrowers, to
the extent permitted by law, hereby authorize the Agent to file
any financing statement in respect of any Lien created
pursuant to the Security Documents which may at any time be
required or which, in the opinion of the Agent, may at any
time be desirable although the same may have been executed
only by the Agent or, at the option of the Agent, to sign such
financing statement on behalf of the Borrowers and file the
same, and the Borrowers hereby irrevocably designate the
Agent, its agents, representatives and designees as its agent
and attorney-in-fact for this purpose. In the event that any re-
recording or refiling thereof (or the filing of any statements of
continuation or assignment of any financing statement) is
required to protect and preserve such Lien, the Borrowers
shall, at the Borrowers' cost and expense, cause the same to be
recorded and/or refiled at the time and in the manner
requested by the Agent.
IV. REPRESENTATIONS AND WARRANTIES
Each of the Borrowers jointly and severally
represents and warrants to each of the Lenders that both
before and after giving effect to consummation of the
Transactions (including, without limitation, under the
Acquisition Documents):
SECTION 4.01. Organization, Legal Existence.
Each Borrower and its subsidiaries is a limited partnership or
corporation, as the case may be, duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its organization, has the requisite power and
authority to own its property and assets and to carry on its
business as now conducted and as currently proposed to be
conducted and is qualified or registered to do business in
every jurisdiction where such qualification or registration is
required (all such jurisdictions being listed in Schedule 4.01
annexed hereto), unless failure to so qualify shall not have a
Material Adverse Effect. Each of the Borrowers has the
power to execute, deliver and perform its obligations under
this Agreement and the other Loan Documents to which it is a
party, and to borrow hereunder and to execute and deliver the
Notes.
SECTION 4.02. Authorization. The execution,
delivery and performance by each of the Borrowers of this
Agreement and each of the other Loan Documents to which it
is a party, the borrowings hereunder by the Borrowers, the
execution and delivery by the Borrowers of the Notes, the
grant of security interests in the Collateral created by the
Security Documents and the transactions contemplated to
occur under or in connection with the Acquisition Documents
(collectively, the "Transactions") (a) have been duly
authorized by all requisite partnership or corporate and, if
required, partner or stockholder action, as applicable, and (b)
will not (i) violate (A) any provision of law, statute, rule or
regulation or the certificate or articles of incorporation or
agreement of limited partnership or other applicable
constitutive documents or the by-laws of the Borrowers, or
their respective subsidiaries, as the case may be, (B) any order
of any court, or any rule, regulation or order of any other
agency of government binding upon the Borrowers, or their
respective subsidiaries, or (C) any provisions of any material
indenture, agreement or other instrument to which the
Borrowers, or their respective subsidiaries, or any of their
respective properties or assets are or may be bound, (ii) be in
conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default under any material
indenture, agreement or other instrument referred to in
(b)(i)(C) above or (iii) result in the creation or imposition of
any Lien of any nature whatsoever (other than in favor of the
Agent, for the benefit of the Lenders, as contemplated by this
Agreement and the Security Documents) upon any property or
assets of the Borrowers, or their respective subsidiaries.
SECTION 4.03. Governmental Approvals. No
registration or filing (other than the filings necessary to
perfect the Liens created by the Security Documents) with
consent or approval of, or other action by, any Federal, state
or other governmental agency, authority or regulatory body is
or will be required in connection with the Transactions, other
than any which have been made or obtained.
SECTION 4.04. Binding Effect. This
Agreement and each of the other Loan Documents to which it
is a party constitutes, and each of the Notes when duly
executed and delivered will constitute, a legal, valid and
binding obligation of the Borrowers enforceable in
accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights
generally.
SECTION 4.05. Material Adverse Change.
Except as set forth in Schedule 4.05 annexed hereto, as at the
Closing Date, there has been no material adverse change in
the business, assets, liabilities, prospects or financial
condition of Chock or its subsidiaries since July 31, 1995.
SECTION 4.06. Litigation; Compliance with
Laws; etc. (a) Except as set forth in Schedule 4.06(a)
annexed hereto, there are not any actions, suits or proceedings
at law or in equity or by or before any governmental
instrumentality or other agency or regulatory authority now
pending or, to the knowledge of any Responsible Officer of
any Borrower threatened against or affecting any Borrower or
any of its subsidiaries or the businesses, assets or rights of any
Borrower or any of its subsidiaries (i) which involve any of
the Transactions or (ii) as to which it is probable (within the
meaning of Statement of Financial Accounting Standards No.
5) that there will be an adverse determination and which, if
adversely determined, would, individually or in the aggregate,
materially impair the ability of any Borrower to conduct
business substantially as now conducted, or have a Material
Adverse Effect.
(b) Except as set forth in Schedule 4.06(b)
annexed hereto, no Borrower or subsidiary thereof is in
violation of any material law, or in default with respect to any
judgment, writ, injunction, decree, material rule or material
regulation of any court or governmental agency or instrument-
ality.
SECTION 4.07. Financial Statements. (a)
Chock has heretofore furnished to the Agent Consolidated
and consolidating balance sheets and statements of income
and cash flows of Chock and its subsidiaries dated as of July
31, 1995, the Consolidated financial statements having been
audited by and accompanied by the opinion of independent
certified public accountants. Such balance sheets and
statements of income and cash flows present fairly the
financial condition, results of operations and cash flows of
Chock and its subsidiaries, as of the date and for the period
indicated, and such balance sheets and the notes thereto
disclose all material liabilities, direct or contingent, of Chock
and its subsidiaries as of the dates thereof. The financial
statements referred to in this Section 4.07 have been prepared
in accordance with generally accepted accounting principles
consistently applied.
(b) Chock has heretofore furnished to the
Agent annual projected income statements, balance sheets and
cash flows of Chock on a Consolidated basis through July 31,
2000 demonstrating prospective compliance with all financial
covenants contained in this Agreement, such projections
disclosing all assumptions made by Chock in formulating
such projections and giving effect to the Transactions. The
projections are based upon reasonable estimates and
assumptions, all of which are reasonable in light of the
conditions which existed at the time the projections were
made, have been prepared on the basis of the assumptions
stated therein, and reflect as of the Closing Date the
reasonable estimate of Chock of the results of operations and
other information projected therein.
SECTION 4.08. Federal Reserve Regulations.
(a) No Borrower or subsidiary thereof is engaged principally,
or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying
Margin Stock.
(b) No part of the proceeds of the Loans will
be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, (i) to purchase or
carry Margin Stock or to extend credit to others for the
purpose of purchasing or carrying Margin Stock or to refund
indebtedness originally incurred for such purpose, or (ii) for
any purpose which entails a violation of, or which is
inconsistent with, the provisions of the Regulations of the
Board, including, without limitation, Regulation G, T, U or X
thereof. If requested by any Lender, the Borrowers or any
subsidiary of any thereof shall furnish to such Lender a
statement on Federal Reserve Form U-1 referred to in said
Regulation U.
SECTION 4.09. Taxes. Each Borrower and
each of their respective subsidiaries has filed or caused to be
filed all Federal, state, local and foreign tax returns which are
required to be filed by it, on or prior to the date hereof, other
than tax returns (i) in respect of taxes that (w) are not
franchise, capital or income taxes, (x) in the aggregate are not
material and (y) would not, if unpaid, result in the imposition
of any Lien on any property or assets of any Borrower or any
its subsidiaries which is in excess of that permitted under the
last sentence of this Section and (ii) for the Fiscal Year ended
July 31, 1995 as to which extensions have been granted by the
applicable taxing authority. Each Borrower and each of its
subsidiaries has paid or caused to be paid all taxes shown to
be due and payable on such filed returns or on any
assessments received by it, other than (i) any taxes or assess-
ments the validity of which such Borrower or such subsidiary
is contesting in good faith by appropriate proceedings, with
respect to which the Borrower or such subsidiary shall, to the
extent required by generally accepted accounting principles
consistently applied have set aside on its books adequate
liabilities, and as to which the taxes or assessments being
contested shall not affect the Agent's Lien, or the priority
thereof, on any Collateral, and (ii) taxes other than income,
capital or franchise taxes that in the aggregate are not material
and which would not, if unpaid, result in the imposition of
any Lien on any property or assets of any Borrower or any of
its subsidiaries in excess of that permitted under the last
sentence of this Section. No Federal income tax returns of
any Borrower or any of its subsidiaries are currently being
audited by the United States Internal Revenue Service and no
Borrower or subsidiary thereof has, except as set forth in
clause (ii) of the first sentence of this Section, as of the
Closing Date requested or been granted any extension of time
to file any Federal, state, local or foreign tax return. None of
the Borrowers or their subsidiaries are party to or have any
obligation under any tax sharing agreement. In no event shall
there be permitted Liens imposed under circumstances
contemplated by this Section 4.09 on property or assets of the
Loan Parties in excess of $500,000 at any time.
SECTION 4.10. Employee Benefit Plans. With
respect to the provisions of ERISA:
(i) No Reportable Event has occurred or is
continuing with respect to any Pension Plan.
(ii) No material prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975
of the Code) has occurred with respect to any Plan subject to
Part 4 of Subtitle B of Title I of ERISA.
(iii) Except as set forth on Schedule 4.10,
none of the Borrowers (other than Xxxx'x) or any ERISA
Affiliate is now, or has been during the preceding five years,
obligated to contribute to a Pension Plan or a Multiemployer
Plan except as set forth in Schedule 4.10 hereto. None of the
Borrowers (other than Xxxx'x) or any ERISA Affiliate has (A)
ceased operations at a facility so as to become subject to the
provisions of Section 4068(f) of ERISA, (B) withdrawn as a
substantial employer so as to become subject to the provisions
of Section 4063 of ERISA, (C) ceased making contributions
to any Pension Plan subject to the provisions of Section
4064(a) of ERISA to which the Borrowers, any subsidiary or
any ERISA Affiliate made contributions, (D) incurred or
caused to occur a "complete withdrawal" (within the meaning
of Section 4203 of ERISA) or a "partial withdrawal" (within
the meaning of Section 4205 of ERISA) from a Multi-
employer Plan so as to incur withdrawal liability under
Section 4201 of ERISA (without regard to subsequent
reduction or waiver of such liability under Section 4207 or
4208 of ERISA), or (E) been a party to any transaction or
agreement under which the provisions of Section 4204 of
ERISA were applicable.
(iv) No notice of intent to terminate a
Pension Plan has been filed by any of the Borrowers or any
ERISA Affiliate, nor has any Pension Plan been terminated
pursuant to the provisions of Section 4041(e) of ERISA.
(v) To the knowledge of the Borrowers, the
PBGC has not instituted proceedings to terminate (or appoint
a trustee to administer) a Pension Plan and no event has
occurred or condition exists which constitutes grounds under
the provisions of Section 4042 of ERISA for the termination
of (or the appointment of a trustee to administer) any such
Plan.
(vi) The current liability (calculated as of the
first day of each plan year) of the Pension Plans, as reported
in IRS Form 5500, shall not exceed the fair market value of
the assets of such Plans by more than $3,000,000 (determined
as of the date of the most recent actuarial valuation of the
Plans). No such Pension Plan has incurred any "accumulated
funding deficiency" (as defined in Section 412 of the Code),
whether or not waived.
(vii) There are no actions, suits or claims
pending (other than routine claims for benefits) which could
reasonably be expected to be asserted against any Plan or the
assets of any such Plan. No civil or criminal action brought
pursuant to the provisions of Title I, Subtitle B, Part 5 of
ERISA is pending or, to the knowledge of the Borrowers or
any ERISA Affiliate, threatened against any fiduciary or any
Plan.
(viii) All of the Plans comply currently, and
have complied in the past, both as to form and operation, in
all material respects with their terms and with the provisions
of ERISA and the Code, and all other applicable laws, rules
and regulations; all necessary governmental approvals for the
Plans have been obtained and a favorable determination as to
the qualification under Section 401(a) of the Code of each of
the Plans which is an employee pension benefit plan, if any,
(within the meaning of Section 3(2) of ERISA) has been made
by the Internal Revenue Service and a recognition of
exemption from federal income taxation under Section 501(a)
of the Code of each of the funded employee welfare benefit
plans (within the meaning of Section 3(1) of ERISA) will be
applied for from the Internal Revenue Service, and to the
knowledge of the Borrowers nothing has occurred since the
date of each such determination or recognition letter that
would adversely affect such qualification.
SECTION 4.11. No Material Misstatements.
No information, report, financial statement, exhibit or
schedule prepared or furnished by or on behalf of the
Borrowers to the Agent or any Lender in connection with any
of the Transactions or this Agreement, the Security
Documents, the Notes or any other Loan Documents or
included therein contained or contains any material
misstatement of fact or omitted or omits to state any material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not
misleading.
SECTION 4.12. Investment Company Act;
Public Utility Holding Company Act. No Borrower or
subsidiary thereof is an "investment company" as defined in,
or is otherwise subject to regulation under, the Investment
Company Act of 1940. No Borrower or subsidiary thereof is
a "holding company" as that term is defined in or is otherwise
subject to regulation under, the Public Utility Holding
Company Act of 1935.
SECTION 4.13. Security Interest. Each of the
Security Documents creates and grants to the Agent, for the
benefit of the Lenders, a legal, valid and (except with respect
to the Borrowers' motor vehicles as to which all actions
necessary to perfect the interest of the Agent therein shall be
taken by the Borrowers within 30 days of the Agent's request
after the Closing Date) perfected first (except as permitted
pursuant to Section 7.01 hereof) priority security interest in
the collateral identified therein. Such collateral or property is
not subject to any other Liens whatsoever, except Liens
permitted by Section 7.01 hereof.
SECTION 4.14. Use of Proceeds. All proceeds
of the borrowing under the Total Revolving Credit
Commitment on the Closing Date, if any, and thereafter shall
be used to provide for working capital requirements and for
general corporate purposes of the Borrowers.
SECTION 4.15. Subsidiaries. As of the
Closing Date, Schedule 4.15 annexed hereto sets forth each
subsidiary of each Borrower, its jurisdiction of incorporation,
its capitalization and ownership of capital stock of each such
subsidiary.
SECTION 4.16. Title to Properties; Possession
Under Leases; Trademarks. (a) Each Borrower and each
subsidiary has good and marketable title to, or valid leasehold
interest in, all of its respective properties and assets shown on
the most recent balance sheet referred to in Section 4.07(a)
hereof and all assets and properties acquired since the date of
such balance sheet, except for such properties as are no longer
used or useful in the conduct of its business or as have been
disposed of in the ordinary course of business, and except for
minor defects in title that do not interfere with the ability of
any Borrower or any subsidiary thereof to conduct its business
as now conducted. All such assets and properties are free and
clear of all Liens other than those permitted by Section 7.01
hereof.
(b) Each Borrower and each of its
subsidiaries has complied in all material respects with all
obligations under all leases to which it is a party and under
which it is in occupancy, and all such leases are in full force
and effect and each Borrower and each of its subsidiaries
enjoys peaceful and undisturbed possession under all such
leases.
(c) Each Borrower and each of its respective
subsidiaries owns or controls all material trademarks,
trademark rights, trade names, trade name rights, copyrights,
patents, patent rights and licenses which are necessary for the
conduct of the business of such Borrower and such subsidiary.
No Borrower or subsidiary thereof is infringing upon or
otherwise acting adversely to any of such trademarks,
trademark rights, trade names, trade name rights, copyrights,
patent rights or licenses owned by any other person or
persons. There is no claim or action by any such other person
pending, or to the knowledge of any Responsible Officer of
any Borrower or any subsidiary thereof, threatened, against
any Borrower or any subsidiary thereof with respect to any of
the rights or property referred to in this Section 4.16(c).
SECTION 4.17. Solvency. (a) The fair salable
value of the assets of each Borrower and its Consolidated
subsidiaries is not less than the amount that will be required to
be paid on or in respect of the probable liability on the
existing debts and other liabilities (including contingent
liabilities) of such Borrower and its Consolidated subsidiaries,
as they become absolute and mature.
(b) The assets of each Borrower and its
Consolidated subsidiaries do not constitute unreasonably
small capital for such Borrower and its Consolidated
subsidiaries to carry out their business as now conducted and
as proposed to be conducted including the capital needs of
such Borrower and its Consolidated subsidiaries, taking into
account the particular capital requirements of the business
conducted by such Borrower and its Consolidated subsidiaries
and projected capital requirements and capital availability
thereof.
(c) No Borrower or any subsidiary thereof
intends to incur debts beyond its ability to pay such debts as
they mature (taking into account the timing and amounts of
cash to be received by such Borrower and such subsidiary,
and of amounts to be payable on or in respect of debt of such
Borrower and such subsidiary). The cash flow of each
Borrower and its Consolidated subsidiaries, after taking into
account all anticipated uses of the cash of such Borrower and
its Consolidated subsidiaries, will at all times be sufficient to
pay all such amounts on or in respect of debt of such
Borrower and its Consolidated subsidiaries when such
amounts are required to be paid.
(d) No Borrower or any subsidiary thereof
believes that final judgments against it in actions for money
damages presently pending will be rendered at a time when,
or in an amount such that, it will be unable to satisfy any such
judgments promptly in accordance with their terms (taking
into account the maximum reasonable amount of such
judgments in any such actions and the earliest reasonable time
at which such judgments might be rendered). The cash flow
of such Borrower and its Consolidated subsidiaries, after
taking into account all other anticipated uses of the cash of
such Borrower and its Consolidated subsidiaries (including
the payments on or in respect of debt referred to in paragraph
(c) of this Section), will at all times be sufficient to pay all
such judgments promptly in accordance with their terms.
SECTION 4.18. Permits, etc. Each Borrower
and each of its subsidiaries possesses all licenses, permits,
approvals and consents, including, without limitation, all
environmental, health and safety licenses, permits, approvals
and consents (collectively, "Permits") of all Federal, state and
local governmental authorities which are material to conduct
properly its business, each such Permit is and will be in full
force and effect, each Borrower and each subsidiary is in
compliance in all material respects with all such Permits, and
no event (including, without limitation, any violation of any
law, rule or regulation) has occurred which allows the
revocation or termination of any such Permit or any restriction
thereon.
SECTION 4.19. Compliance with
Environmental Laws. Except as disclosed in Schedule 4.19
hereto: (i) the operations of the Borrowers and their
subsidiaries comply in all material respects with all applicable
Environmental Laws; (ii) the Borrowers and their subsidiaries
and all of their present facilities or operations, as well as to
the knowledge of the Borrowers and their subsidiaries their
past facilities or operations, are not subject to any judicial
proceeding or administrative proceeding or any outstanding
written order or agreement with any governmental authority
or private party respecting (a) any Environmental Law, (b)
any Remedial Work, or (c) any Environmental Claims arising
from the Release of a Contaminant into the environment; (iii)
to the best of the knowledge of the Borrowers and their
subsidiaries, none of their operations is the subject of any
Federal or state investigation evaluating whether any
Remedial Work is needed to respond to a Release of any
Contaminant into the environment in violation of any
Environmental Law; (iv) none of the Borrowers or any
subsidiaries of the Borrowers nor any predecessor of any of
the Borrowers or any subsidiary of any Borrower has filed any
notice under any Environmental Law indicating past or
present treatment, storage, or disposal of a Hazardous
Material or reporting a spill or Release of a Contaminant into
the environment in violation of any Environmental Law; (v)
to the best of the knowledge of the Borrowers and their
subsidiaries, none of the Borrowers or their subsidiaries has
any contingent liability in connection with any Release of any
Contaminant into the environment; (vi) none of the operations
of the Borrowers or their subsidiaries involve the generation,
transportation, treatment or disposal of Hazardous Materials
except de minimis amounts used by the Borrowers in the
ordinary course of manufacturing, all such Hazardous
Materials being used and disposed of in compliance with
Environmental Laws and regulations; (vii) neither the
Borrowers nor their subsidiaries have disposed of any
Contaminant by placing it in or on the ground or waters of any
premises owned, leased or used by any of them and to the
knowledge of the Borrowers and their subsidiaries neither has
any lessee, prior owner, or other person; (viii) to the best of
the Borrowers' knowledge, no underground storage tanks or
surface impoundments are on any property of the Borrowers
and their subsidiaries and in the case of the storage tanks
listed in Schedule 4.19 hereto, the Borrowers are in full
compliance with all applicable Environmental Laws (except
as set forth on Schedule 4.19 hereto) and (ix) no Lien in favor
of any governmental authority for (A) any liability under any
Environmental Law or regulations, or (B) damages arising
from or costs incurred by such governmental authority in
response to a Release of a Contaminant into the environment,
has been filed or attached to the property of the Borrowers
and their subsidiaries.
SECTION 4.20. No Change in Credit Criteria
or Collection Policies. There has been no material change in
credit criteria or collection policies concerning account
receivables of any of the Borrowers since July 31, 1995.
Without duplication, all Eligible Receivables of the
Borrowers are valid, binding and enforceable obligations of
account debtors and are not subject to any claims, defenses or
setoffs. All account receivables (other than Eligible
Receivables) are valid, binding and enforceable obligations of
account debtors.
SECTION 4.21. Warehouses. Schedule 4.21
sets forth the correct names and addresses of all warehouses
in which any Borrower or any subsidiary holds any
inventories and neither the Borrowers nor any subsidiaries
hold any inventories at any location other than such
warehouses or the Borrowers' or subsidiaries' plants located in
Brooklyn, New York, Rochester, New York, St. Louis and
Springfield, Missouri, Hialeah, Florida, Secaucus, New
Jersey, Castroville, California, and Oklahoma City,
Oklahoma.
SECTION 4.22. Acquisition Documents. The
representations and warranties contained in the Acquisition
Documents and made by Nestl Beverage Company are true
and correct in all material respects to the best of Chock's
knowledge, and those made by Chock are true and correct in
all material respects.
V. CONDITIONS OF CREDIT EVENTS
The obligation of each Lender to make Loans
and of the Issuing Lender to issue Letters of Credit hereunder
shall be subject to the following conditions precedent:
SECTION 5.01. All Credit Events. On each
date on which a Credit Event is to occur:
(a) The Agent shall have received a notice of
borrowing as required by Section 2.03 hereof or a
request for the issuance of a Letter of Credit in
accordance with Section 2A.01 hereof.
(b) The representations and warranties set
forth in Article IV hereof and in any documents
delivered herewith, including, without limitation, the
Loan Documents, shall be true and correct in all
material respects with the same effect as though made
on and as of such date (except insofar as such
representations and warranties relate expressly to an
earlier date).
(c) Each Borrower shall be in compliance
with all the terms and provisions contained herein on
its part to be observed or performed, and at the time of
and immediately after such Credit Event no Default or
Event of Default shall have occurred and be
continuing.
(d) Each notice of borrowing shall be
deemed to constitute confirmation by the Borrowers (i)
as to compliance with (b) and (c) above and (ii) with
respect to each Revolving Credit Loan, that after
giving effect thereto the Borrowers are in compliance
with the Borrowing Base.
SECTION 5.02. First Borrowing. The
obligations of the Lenders in respect of the first Credit Event
under the First Amended and Restated Credit Agreement were
subject to the following additional conditions precedent:
(a) The Lenders shall have received the
favorable written opinion of counsel for the Borrowers
and each of the Guarantors and Grantors, substantially
in the form of Exhibit C hereto, dated the First
Amended and Restated Closing Date, addressed to the
Lenders and the Agent and satisfactory to the Agent
and Lenders.
(b) The Lenders shall have received (i) a
copy of the agreement of limited partnership,
certificate or articles of incorporation or constitutive
documents, in each case as amended to date, of each of
the Borrowers, the Grantors and the Guarantors,
certified as of a recent date by the Secretary of State or
other appropriate official of the state of its
organization, and a certificate as to the good standing
of each from such Secretary of State or other official,
in each case dated as of a recent date; (ii) a certificate
of the Secretary of each Borrower, Grantor and
Guarantor, dated the First Amended and Restated
Closing Date and certifying (A) that attached thereto is
a true and complete copy of such person's By-laws as
in effect on the date of such certificate and at all times
since a date prior to the date of the resolution described
in item (B) below, (B) that attached thereto is a true
and complete copy of a resolution adopted by the
general partner of each Borrower which is a
partnership, and by each corporate Borrower's Board of
Directors, authorizing the execution, delivery and
performance of this Agreement, the Security
Documents, the Notes, the other Loan Documents and
the Credit Events hereunder, as applicable, and that
such resolution has not been modified, rescinded or
amended and is in full force and effect, (C) that such
person's agreement of limited partnership, certificate or
articles of incorporation or constitutive documents has
not been amended since the date of the last amendment
thereto shown on the certificate of good standing
furnished pursuant to (i) above, and (D) as to the
incumbency and specimen signature of each of such
person's officers executing this Agreement, the Notes,
each Security Document or any other Loan Document
delivered in connection herewith or therewith, as appli-
cable; (ii) a certificate of another of such person's
officers as to incumbency and signature of its Secretary
and (iii) such other documents as the Agent or any
Lender may reasonably request.
(c) The Agent shall have received a
certificate, dated the First Amended and Restated
Closing Date and signed by the Financial Officer of
each Borrower, confirming compliance with the
conditions precedent set forth in paragraphs (b) and (c)
of Section 5.01 hereof and the conditions set forth in
this Section 5.02.
(d) Each Lender shall have received its
Revolving Credit Note and Term Note duly executed
by the Borrowers, payable to its order and otherwise
complying with the provisions of Section 2.04 hereof.
(e) The Agent shall have received the
Security Documents including, without limitation, the
Mortgages (except as set forth in Section 6.21(a)
hereof) (together with policies of title insurance in
form, scope and amount satisfactory in all respects to
the Agent), and certificates evidencing the Pledged
Stock, together with undated stock powers executed in
blank, each duly executed by the applicable Grantors,
and including evidence satisfactory to the Agent that
each Notice to Broker executed by Chock in
connection with the Pledge Agreement (Investment
Account) was delivered to and received by the broker
named therein.
(f) The Agent shall have received certified
copies of requests for copies or information on Form
UCC-11 or certificates satisfactory to the Lenders of a
UCC Reporter Service, listing all effective financing
statements which name as debtor any Borrower, any
Guarantor or any Grantor and which are filed in the
appropriate offices in the States in which are located
the chief executive office and other operating offices
of such person, together with copies of such financing
statements. With respect to any Liens not permitted
pursuant to Section 7.01 hereof, the Agent shall have
received termination statements in form and substance
satisfactory to it.
(g) Each document (including, without
limitation, each Uniform Commercial Code financing
statement and each real property mortgage or deed of
trust and each leasehold mortgage) required by law or
requested by the Agent to be filed, registered or
recorded in order to create in favor of the Agent for the
benefit of the Lenders a first priority perfected security
interest in the Collateral shall have been, or shall be in
a form such that it can promptly be, properly filed,
registered or recorded in each jurisdiction in which the
filing, registration or recordation thereof is so required
or requested. The Agent shall have received an
acknowledgment copy, or other evidence satisfactory
to it, of each such filing, registration or recordation
which has been completed before the First Amended
and Restated Closing Date.
(h) The Agent shall have received the results
of a search of tax and other liens, judgments and of
Uniform Commercial Code filings made with respect
to each Borrower and each Grantor in each jurisdiction
requested by the Agent and/or in which any Borrower,
Grantor or Guarantor is doing business or in which any
Collateral is located.
(i) The Lenders and the Agent shall have
received and determined to be in form and substance
satisfactory to them:
(i) the schedule and aging of
accounts receivable of Chock and its
subsidiaries (other than Xxxx'x) as at October 31,
1992, and of Xxxx'x as at the end of October,
1992, and inventory designations of Chock and
its subsidiaries (other than Xxxx'x) as at October
31, 1992, and of Xxxx'x as at the end of October,
1992;
(ii) evidence that after giving effect to
the Loans to be made on the First Amended and
Restated Closing Date together with payment of
all fees and expenses in connection with the
Acquisition, there shall be not less than
$8,000,000 of Undrawn Availability;
(iii) evidence that the Borrowers have
at least $95,000,000 of Subordinated
Indebtedness outstanding on the First Amended
and Restated Closing Date, excluding any
conversions of such Subordinated Indebtedness
to common stock since July 31, 1992;
(iv) a copy of a field examination of
the Borrowers' books and records;
(v) evidence of the compliance by the
Borrowers with Section 6.03 hereof including,
without limitation, title insurance with respect
to all real property of the Borrowers;
(vi) the financial statements described
in Section 4.07 hereof, and, in addition, the
Agent shall have determined to its satisfaction
that such statements do not differ in any
material respect from drafts previously
delivered to the Agent;
(vii) evidence that the Transactions are
in compliance with all applicable laws and
regulations;
(viii) the results of an environmental
audit with respect to the Borrowers' and
subsidiaries' properties and operations
conducted by a firm satisfactory to the Agent
and the Lenders, and the scope, methodology
and results of such environmental audit shall be
satisfactory to the Agent and Lenders in all
respects;
(ix) evidence of payment of all fees
owed to the Agent and the Lenders by the
Borrowers under this Agreement, the
Commitment Letters or otherwise;
(x) evidence that all requisite third
party consents (including, without limitation,
consents with respect to each of the Borrowers
and each of the Grantors and Guarantors) to the
Transactions have been received;
(xi) the results of appraisals of the
Borrowers' and subsidiaries' real property and
personal property;
(xii) evidence that there are no actions,
suits or proceedings at law or in equity or by or
before any governmental instrumentality or
other agency or regulatory authority now
pending or threatened against or affecting any
Borrower or any subsidiary thereof or any of
their respective businesses, assets or rights
which involve any of the Transactions;
(xiii) the September 30, 1992 statement
of income and balance sheet of Chock and its
subsidiaries (other than Xxxx'x), including data
regarding Capital Expenditures, depreciation
and amortization;
(xiv) landlord waiver and consent
agreements for all leased premises, and
warehousemen letters with respect to each
warehouse, of Chock and its subsidiaries (other
than such locations of Xxxx'x and all locations of
Hillside as are listed in Schedule 6.19 hereto);
(xv) a Form U-1 for each of the
Borrowers; and
(xvi) if issued, management letters of
Chock for Fiscal Years 1989, 1990 and 1991.
(j) The Agent and the Lenders shall have
had the opportunity, if they so choose, to examine the
books of account and other records and files of the
Borrowers, subsidiaries, the Grantors and the
Guarantors and to make copies thereof, and to conduct
a pre-closing audit which shall include, without
limitation, verification of Eligible Receivables,
payment of payroll taxes and accounts payable and
formulation of an opening Borrowing Base, and the
results of such examination and audit shall have been
satisfactory to the Agent and Lenders in all respects.
(k) The Agent and Lenders shall have
received and had the opportunity to review and
determine to be in form and substance satisfactory:
(i) copies of all lease agreements entered
into by any of the Borrowers and their
subsidiaries; and
(ii) copies of all loan agreements,
notes and other documentation evidencing
Indebtedness for borrowed money of any of the
Borrowers, their subsidiaries, Grantors or
Guarantors.
(l) Messrs. Xxxx, Scholer, Fierman, Xxxx &
Handler, counsel to the Agent, shall have received
payment in full for all legal fees charged, and all costs
and expenses incurred, by such counsel through the
First Amended and Restated Closing Date in
connection with the transactions contemplated under
this Agreement, the Security Documents and the other
Loan Documents and instruments in connection
herewith and therewith.
(m) The Agent and the Lenders shall have:
(i) received copies of each of the
Acquisition Documents, including all
amendments and schedules thereto, each
certified by a Responsible Officer of the
Borrowers;
(ii) received evidence that the
Acquisition Agreement is in full force and
effect and all consents, filings and approvals
required by applicable law in connection
therewith shall have been obtained and made;
(iii) determined that the terms and
provisions of all agreements and documents in
connection with the Acquisition, including
without limitation the Acquisition Documents,
are satisfactory in form and substance and shall
have received such legal opinions, certificates
and copies of necessary governmental filings
and consents as the Agent or the Lenders shall
have requested in connection therewith, and
shall have determined to their satisfaction that
the consummation of the transactions
contemplated by the Acquisition Documents are
in compliance with all applicable laws and
regulations; and
(iv) received evidence that not less
than $20,000,000 of the Borrowers' cash and
marketable securities have been applied toward
payment of the purchase price under the
Acquisition Agreement.
(n) The corporate structure and capitalization
of the Borrowers shall be satisfactory to the Agent and
the Lenders in all respects.
(o) All legal matters in connection with the
Transactions shall be satisfactory to the Agent, the
Lenders and their respective counsel in their sole
discretion.
(p) The Borrowers shall have executed and
delivered to the Agent a disbursement authorization
letter with respect to the disbursement of the proceeds
of the Credit Events made on the First Amended and
Restated Closing Date, in form and substance
satisfactory to the Agent.
(q) The Agent and the Lenders shall have
received a fully executed copy of the Joint Guarantee.
(r) The Borrowers and the Agent (or another
financial institution acceptable to the Agent) shall have
entered into lockbox, blocked account and/or other
cash management arrangements pursuant to
documentation satisfactory in form and substance to
the Agent and the Lenders.
(s) The Agent and the Lenders shall have
received the Xxxx Xxxxx Purchase Documents and
Xxxx Xxxxx Security Documents and shall have
determined them to be in form and substance
satisfactory.
(t) The Agent shall have received a fee letter
in form and substance satisfactory to it.
(u) The Rate Agreements shall be in form
and substance satisfactory to the Agent and the
Lenders and shall have been duly executed and
delivered.
(v) The Agent shall have received such
agreements and instruments as are necessary in the
judgment of the Agent to grant to the Agent a first
priority perfected security interest in all marketable
securities of Chock and its subsidiaries.
(w) The Agent shall have received such other
documents as the Lenders or the Agent or their
respective counsel shall reasonably deem necessary.
SECTION 5.03. First Borrowing. The obligations of
the Lenders in respect of the first Credit Event hereunder is
subject to the following additional conditions precedent:
(a) The Lenders shall have received the
favorable written opinion of counsel for the Borrowers
and each of the Guarantors and Grantors, substantially
in the form of Exhibit C hereto, dated the Closing
Date, addressed to the Lenders and the Agent and
satisfactory to the Agent and Lenders.
(b) The Lenders shall have received (i) a
copy of each amendment, if any, since the First
Amended and Restated Closing Date to the agreement
of limited partnership, certificate or articles of
incorporation or constitutive documents, of each of the
Borrowers, the Grantors and the Guarantors, certified
as of a recent date by the Secretary of State or other
appropriate official of the state of its organization, and
a certificate as to the good standing of each from such
Secretary of State or other official, in each case dated
as of a recent date; (ii) a certificate of the Secretary of
each Borrower, Grantor and Guarantor, dated the
Closing Date and certifying (A) that attached thereto is
a true and complete copy of such person's By-laws as
in effect on the date of such certificate and at all times
since a date prior to the date of the resolution described
in item (B) below, (B) that attached thereto is a true
and complete copy of a resolution adopted by the
general partner of each Borrower which is a
partnership, and by each corporate Borrower's Board of
Directors, authorizing the execution, delivery and
performance of this Agreement, the Notes, the other
Loan Documents to be executed and delivered on the
Closing Date and the Credit Events hereunder, as
applicable, and that such resolution has not been
modified, rescinded or amended and is in full force and
effect, (C) that such person's agreement of limited
partnership, certificate or articles of incorporation or
constitutive documents has not been amended since the
date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to (i)
above, and (D) as to the incumbency and specimen
signature of each of such person's officers executing
this Agreement, the Notes, or any other Loan
Document delivered in connection herewith or
therewith, as applicable; (ii) a certificate of another of
such person's officers as to incumbency and signature
of its Secretary and (iii) such other documents as the
Agent or any Lender may reasonably request.
(c) The Agent shall have received a
certificate, dated the Closing Date and signed by the
Financial Officer of each Borrower, confirming
compliance with the conditions precedent set forth in
paragraphs (b) and (c) of Section 5.01 hereof and the
conditions set forth in this Section 5.03.
(d) Each Lender shall have received its
Revolving Credit Note duly executed by the
Borrowers, payable to its order and otherwise
complying with the provisions of Section 2.04 hereof.
(e) Each document (including, without
limitation, each Uniform Commercial Code financing
statement, each real property mortgage or deed of trust
and each amendment thereto, and each leasehold
mortgage) required by law or requested by the Agent to
be filed, registered or recorded in order to create in
favor of the Agent for the benefit of the Lenders a first
priority perfected security interest in the Collateral
shall have been, or shall be in a form such that it can
promptly be, properly filed, registered or recorded in
each jurisdiction in which the filing, registration or
recordation thereof is so required or requested. The
Agent shall have received an acknowledgment copy, or
other evidence satisfactory to it, of each such filing,
registration or recordation which has been completed
before the Closing Date.
(f) If requested, the Agent shall have
received the results of a search of tax and other liens,
judgments and of Uniform Commercial Code filings
made with respect to each Borrower and each Grantor
in each jurisdiction requested by the Agent and/or in
which any Borrower, Grantor or Guarantor is doing
business or in which any Collateral is located. With
respect to any Liens not permitted pursuant to Section
7.01 hereof, the Agent shall have received termination
statements in form and substance satisfactory to it.
(g) The Lenders and the Agent shall have
received and determined to be in form and substance
satisfactory to them:
(i) the schedule and aging of
accounts receivable and inventory designations
of Chock and its subsidiaries as at November
30, 1995;
(ii) evidence of the compliance by the
Borrowers with Section 6.03 hereof including,
without limitation, title insurance with respect
to all real property of the Borrowers;
(iii) the financial statements described
in Section 4.07 hereof, and, in addition, the
Agent shall have determined to its satisfaction
that such statements do not differ in any
material respect from drafts previously
delivered to the Agent;
(iv) evidence of payment of all fees
owed to the Agent and the Lenders by the
Borrowers under this Agreement or otherwise;
and
(v) evidence that there are no actions,
suits or proceedings at law or in equity or by or
before any governmental instrumentality or
other agency or regulatory authority now
pending or threatened against or affecting any
Borrower or any subsidiary thereof or any of
their respective businesses, assets or rights.
(h) The Agent and the Lenders shall have
had the opportunity, if they so choose, to examine the
books of account and other records and files of the
Borrowers, subsidiaries, the Grantors and the
Guarantors and to make copies thereof, and to conduct
a pre-closing audit which shall include, without
limitation, verification of Eligible Receivables,
payment of payroll taxes and accounts payable and
formulation of an opening Borrowing Base, and the
results of such examination and audit shall have been
satisfactory to the Agent and Lenders in all respects.
(i) The Agent and Lenders shall have
received and had the opportunity to review and
determine to be in form and substance satisfactory:
(i) copies of all lease agreements entered
into by any of the Borrowers and their
subsidiaries; and
(ii) copies of all loan agreements, notes and
other documentation evidencing Indebtedness
for borrowed money of any of the Borrowers,
their subsidiaries, Grantors or Guarantors.
(j) Messrs. Xxxx, Scholer, Fierman, Xxxx &
Handler, counsel to the Agent, shall have received
payment in full for all reasonable legal fees charged,
and all costs and expenses incurred, by such counsel
through the Closing Date in connection with the
transactions contemplated under this Agreement and
the other Loan Documents and instruments in
connection herewith and therewith.
(k) The corporate structure and capitalization
of the Borrowers shall be satisfactory to the Agent and
the Lenders in all respects.
(l) The Agent and the Lenders shall have
received a fully executed copy of a confirmation of the
Joint Guarantee.
(m) The Agent shall have received such other
documents as the Lenders or the Agent or their
respective counsel shall reasonably deem necessary.
VI. AFFIRMATIVE COVENANTS
The Borrowers, jointly and severally, covenant
and agree with each Lender that, so long as this Agreement
shall remain in effect or the principal of or interest on any
Note or any fee, expense or amount payable hereunder or in
connection with any of the Transactions shall be unpaid, each
will, and will cause each of its subsidiaries and, with respect
to Section 6.07 hereof, each ERISA Affiliate, to:
SECTION 6.01. Legal Existence. Except as
permitted under Section 7.05 hereto, do or cause to be done
all things necessary to preserve, renew and keep in full force
and effect its legal existence.
SECTION 6.02. Businesses and Properties. At
all times do or cause to be done all things necessary to
preserve, renew and keep in full force and effect the rights,
licenses, Permits, franchises, patents, copyrights, trademarks
and trade names material to the conduct of its businesses;
maintain and operate such businesses in the same general
manner in which they are presently conducted and operated;
comply with all laws, rules, regulations and governmental
orders (whether Federal, state or local) applicable to the
operation of such businesses whether now in effect or
hereafter enacted (including, without limitation, all applicable
laws, rules, regulations and governmental orders relating to
public and employee health and safety and all Environmental
Laws) and with any and all other applicable laws, rules,
regulations and governmental orders the lack of compliance
with which would have a Material Adverse Effect; take all
actions which may be required to obtain, preserve, renew and
extend all Permits and other authorizations which are material
to the operation of such businesses; and at all times maintain,
preserve and protect all property material to the conduct of
such businesses and keep such property in good repair,
working order and condition and from time to time make, or
cause to be made, all needful and proper repairs, renewals,
additions, improvements and replacements thereto necessary
in order that the business carried on in connection therewith
may be properly conducted at all times.
SECTION 6.03. Insurance. (a) Keep its
insurable properties insured at all times by financially sound
and reputable insurers in amounts set forth in the remainder of
this paragraph, (b) maintain such insurance, to such extent
and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies
similarly situated and in the same or similar businesses, in any
event, such insurance to insure the property of Chock and its
subsidiaries against all risk of physical damage, including,
without limitation, loss by fire, explosion, theft, fraud and
such other casualties as may be reasonably satisfactory to the
Required Lenders, but in no event at any time in an amount
less than the greater of (i) the Obligations and (ii) the
replacement value of the Collateral, (c) maintain in full force
and effect public liability insurance against claims for
personal injury or death or property damage occurring upon,
in, about or in connection with the use of any properties
owned, occupied or controlled by Chock or any of its
subsidiaries, in such amount as the Agent shall reasonably
deem necessary and (d) maintain such other insurance as may
be required by law or as may be reasonably requested by the
Agent for purposes of assuring compliance with this Section
6.03. All insurance covering tangible property subject to a
Lien in favor of the Agent for the benefit of the Lenders
granted pursuant to the Security Documents shall provide that,
in the case of each separate loss the full amount of insurance
proceeds shall be payable to the Agent and shall further
provide for at least 30 days' prior written notice to the Agent
of the cancellation or substantial modification thereof.
SECTION 6.04. Taxes. Pay and discharge
promptly when due all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or
profits or in respect of its property (except to the extent (i)
same are contested in good faith by appropriate proceedings,
(ii) the applicable Borrower has set aside liabilities on its
books adequate therefor in accordance with generally
accepted accounting principles, (iii) such contest shall not
affect the Agent's Lien, or the priority thereof, on any
Collateral and (iv) in any event, any Liens imposed on any
Borrower in connection with any taxes, assessments,
governmental charges or levies being contested shall not at
any time exceed $500,000 in the aggregate) before the same
shall become delinquent or in default (including, without
limitation, any returns as to which extensions have been
granted), as well as all lawful claims for labor, materials and
supplies or otherwise, which, if unpaid, might give rise to
Liens upon such properties or any part thereof.
SECTION 6.05. Financial Statements, Reports,
etc. Furnish to the Agent, with copies for each of the
Lenders, and furnish directly to the Lenders as well as the
Agent in the case of clauses (a), (b), (c), (d), (f) and (h):
(a) within 90 days after the end of each
Fiscal Year, (i) Consolidated and consolidating balance
sheets and Consolidated and consolidating income
statements showing the financial condition of Chock
and its subsidiaries as of the close of such Fiscal Year
and the results of their operations during such year, and
(ii) Consolidated and consolidating statements of
shareholders' equity of Chock and its subsidiaries and
Consolidated and consolidating statements of cash
flow of Chock and its subsidiaries, all the foregoing
Consolidated financial statements to be audited by a
Big Six accounting firm or such other independent
certified public accountants as are acceptable to the
Required Lenders (which report shall not contain any
qualification except with respect to new accounting
principles mandated by the Financial Accounting
Standards Board);
(b) within 45 days after the end of each of
the first three (3) fiscal quarters, unaudited
Consolidated and consolidating balance sheets and
Consolidated and consolidating income statements
showing the financial condition and results of
operations of Chock and its subsidiaries as of the end
of each such quarter and for the period commencing at
the end of the previous Fiscal Year and ending with the
last day of such quarter, Consolidated and
consolidating statements of shareholders' equity of
Chock and its subsidiaries and Consolidated and
consolidating statements of cash flow of Chock and its
subsidiaries as of the end of each such fiscal quarter
and for the period commencing at the end of the
previous Fiscal Year and ending with the last day of
such quarter, prepared and certified by the Financial
Officer of Chock as presenting fairly the financial
condition and results of operations of Chock and its
subsidiaries and as having been prepared in accordance
with generally accepted accounting principles
applicable to quarterly financial statements consistently
applied, and which in the case of Consolidated
financial statements, have been subjected to limited
review procedures by a Big Six accounting firm or
such other independent certified public accountants as
are acceptable to the Required Lenders, in each case
subject to normal year-end audit adjustments;
(c) within 45 days after the end of each
month (other than the first month of each Fiscal Year)
unaudited unconsolidated balance sheets and income
statements showing the financial condition and results
of operations of Chock and its subsidiaries as of the
end of each such month and for the period
commencing at the end of the previous Fiscal Year and
ending with the last day of such month, prepared and
certified by the Financial Officer of Chock as
presenting fairly the financial condition and results of
operations of Chock and its subsidiaries and as having
been prepared in accordance with generally accepted
accounting principles applicable to quarterly financial
statements consistently applied, in each case subject to
normal year-end audit adjustments;
(d) promptly after the same become publicly
available, copies of such registration statements,
annual, periodic and other reports, and such proxy
statements and other information, if any, as shall be
filed by the Borrowers or any subsidiaries with the
Securities and Exchange Commission pursuant to the
requirements of the Securities Act of 1933 or the
Securities Exchange Act of 1934;
(e) (i) concurrently with any delivery (b)
above, a certificate of the person referred to therein
certifying that to the best of his or her knowledge no
Default or Event of Default has occurred (including
calculations demonstrating compliance, as of the dates
of the financial statements being furnished at such
time, with the covenants set forth in Sections 7.07,
7.08, 7.10, 7.12 and 7.13 hereof) and, if such a Default
or Event of Default has occurred, specifying the nature
and extent thereof; provided, however, that any
certificate delivered pursuant to this paragraph (e)
specifying that a Default or Event of Default has
occurred, shall be accompanied by a written
explanation by the Financial Officer of Chock
specifying the corrective action taken or proposed to be
taken with respect to such Default or Event of Default;
and (ii) concurrently with any delivery under (a)
above, a letter of the firm referred to therein specifying
that in making their examination of the Consolidated
financial statements nothing came to their attention
that caused them to believe that Chock and its
subsidiaries failed to comply with the provisions of
Sections 7.01 through 7.08, 7.10, 7.12, 7.13, 7.16, 7.19
and 7.20 hereof on the date of such financial
statements (and including calculations demonstrating
compliance with Sections 7.07, 7.08, 7.10, 7.12 and
7.13) and, if such compliance does not exist, the nature
and extent thereof.
(f) a management letter prepared by the
independent certified public accountants who reported
on the financial statements delivered under (a) above,
with respect to the internal audit and financial controls
of Chock and its subsidiaries;
(g) within 30 days of the end of each fiscal
month, an aging schedule of the Receivables and an
inventory designation in the form previously furnished
by Chock under the First Amended and Restated Loan
Agreement;
(h) within 30 days prior to the beginning of
each Fiscal Year, financial projections (including,
without limitation, with respect to Capital
Expenditures) for Chock and its subsidiaries for such
Fiscal Year (including quarterly balance sheets,
statements of income and data regarding Capital
Expenditures, depreciation and amortization) and
annual projections through July 31, 1999 prepared by
management consistent with its past practice
(including, without limitation, principal assumptions)
and satisfactory to the Required Lenders;
(i) as soon as practicable, copies of all
material reports, forms and filings, and all loan
documents and financial information, in each case
submitted to governmental agencies and/or its
shareholders;
(j) on Wednesday of each week, a
certificate, in form, substance and detail satisfactory to
the Agent, of the Financial Officer of Chock
demonstrating compliance as at the end of the prior
week with the Borrowing Base;
(k) immediately upon becoming aware
thereof, notice to the Agent of the breach by any party
of any material agreement with Chock or any of its
subsidiaries; and
(l) such other information as the Agent or
any Lender may reasonably request.
SECTION 6.06. Litigation and Other Notices.
Give the Agent prompt written notice of the following:
(a) the issuance by any court or
governmental agency or authority of any injunction,
order, decision or other restraint prohibiting, or having
the effect of prohibiting, the making of the Loans or
occurrence of other Credit Events, or invalidating, or
having the effect of invalidating, any provision of this
Agreement, the Notes or the other Loan Documents, or
the initiation of any litigation or similar proceeding
seeking any such injunction, order, decision or other
restraint;
(b) the filing or commencement of any
action, suit or proceeding against Chock or any of its
subsidiaries, whether at law or in equity or by or before
any court or any Federal, state, municipal or other
governmental agency or authority, (i) which is material
and is brought by or on behalf of any governmental
agency or authority, or in which injunctive or other
equitable relief is sought or (ii) as to which it is
probable (within the meaning of Statement of Financial
Accounting Standards No. 5) that there will be an
adverse determination and which, if adversely
determined, would (A) reasonably be expected to result
in liability of Chock or one or more of its subsidiaries
in an aggregate amount of $250,000 or more, not
reimbursable by insurance, or (B) materially impair the
right of Chock or any subsidiary to perform its obliga-
tions under this Agreement, any Note or any other
Loan Document to which it is a party;
(c) any Default or Event of Default,
specifying the nature and extent thereof and the action
(if any) which is proposed to be taken with respect
thereto;
(d) any development in the business or
affairs of Chock or any of its subsidiaries which has
had or which is likely, in the reasonable judgment of
any Responsible Officer of Chock or such subsidiary,
to have, a Material Adverse Effect; and
(e) the existence of any tax claim,
assessment, governmental charges or levies (i) by any
state or local taxing authority which alone or in the
aggregate with other state and/or local tax claims
exceeds $250,000 and (ii) by Federal taxing authorities
which alone or in the aggregate with other Federal tax
claims exceeds $500,000.
SECTION 6.07. ERISA. (a) Pay and
discharge promptly any liability imposed upon it pursuant to
the provisions of Title IV of ERISA; provided, however, that
neither Chock nor any ERISA Affiliate shall be required to
pay any such liability if (1) the amount, applicability or
validity thereof shall be diligently contested in good faith by
appropriate proceedings, and (2) such person shall have set
aside on its books liabilities which are adequate with respect
thereto.
(b) Deliver to the Agent, promptly, and in
any event within 30 days, after (i) the occurrence of any
Reportable Event, a copy of the materials that are filed with
the PBGC, (ii) Chock or any ERISA Affiliate or an
administrator of any Pension Plan files with participants,
beneficiaries or the PBGC a notice of intent to terminate any
such Plan under Section 4041(c) of ERISA, a copy of any
such notice, (iii) the receipt of notice by Chock or any ERISA
Affiliate or an administrator of any Pension Plan from the
PBGC of the PBGC's intention to terminate any Pension Plan
or to appoint a trustee to administer any such Plan, a copy of
such notice, (iv) the filing thereof with the Internal Revenue
Service, copies of each annual report that is filed on Treasury
Form 5500 with respect to any Plan, together with certified
financial statements (if any) for the Plan and any actuarial
statements on Schedule B to such Form 5500, (v) Chock or
any ERISA Affiliate knows of any event or condition which
might constitute grounds under the provisions of Section 4042
of ERISA for the termination of (or the appointment of a
trustee to administer) any Pension Plan, an explanation of
such event or condition, (vi) the receipt by Chock or any
ERISA Affiliate of an assessment of withdrawal liability
under Section 4201 of ERISA from a Multiemployer Plan, a
copy of such assessment, (vii) Chock or any ERISA Affiliate
knows of any event or condition which might cause any one
of them to incur a liability under Section 4062, 4063, 4064 or
4069 of ERISA or Section 412(n) or 4971 of the Code, an
explanation of such event or condition, and (viii) Chock or
any ERISA Affiliate knows or has reason to know that an
application is to be, or has been, made to the Secretary of the
Treasury for a waiver of the minimum funding standard under
the provisions of Section 412 of the Code, a copy of such
application, and in each case described in clauses (i) through
(iii) and (v) through (vii) together with a statement signed by
the Financial Officer setting forth details as to such
Reportable Event, notice, event or condition and the action
which Chock or such ERISA Affiliate proposes to take with
respect thereto.
SECTION 6.08. Maintaining Records; Access
to Properties and Inspections; Right to Audit. Maintain
financial records in accordance with accepted financial
practices and, upon reasonable notice (which may be
telephonic), at all reasonable times and as often as any Lender
may request, permit any authorized representative designated
by such Lender to visit and inspect the properties and
financial records of Chock and its subsidiaries and to make
extracts from such financial records at such Lender's expense,
and permit any authorized representative designated by such
Lender to discuss the affairs, finances and condition of Chock
and its subsidiaries with the appropriate Financial Officer and
such other officers as Chock shall deem appropriate and
Chock's independent certified public accountants, as
applicable. The Agent agrees that it shall schedule any
meeting with any such independent certified public
accountant through Chock and a Responsible Officer of
Chock shall have the right to be present at any such meeting.
The Agent shall have the right to audit as often as it may
request, the existence and condition of the accounts
receivables, inventory, books and records of Chock and its
subsidiaries and to review their compliance with the terms
and conditions of this Agreement and the other Loan
Documents. The Agent shall provide the results of any audit
to any Lender, such results to be provided by the Agent
without representation or warranty of any kind whatsoever by
the Agent including, without limitation, as to the content
thereof or the methods and procedures used in performing
such audit, and without recourse to the Agent.
SECTION 6.09. Use of Proceeds. Use the
proceeds of the Credit Events only for the purposes set forth
in Section 4.14 hereof.
SECTION 6.10. Fiscal Year-End. Deliver to
the Agent 60 days' prior written notice of its intent to change
its Fiscal Year end from July 31 (or the last Friday or
Saturday of July) in each year; in connection therewith, the
Borrowers shall enter into any amendment to this Agreement
or any other Loan Document which in the Agent's judgment is
necessary in order to conform the provisions hereof or thereof
to any changes caused by the new Fiscal Year end.
SECTION 6.11. Further Assurances. Execute
any and all further documents and take all further actions
which may be required under applicable law, or which the
Agent may reasonably request, to grant, preserve, protect and
perfect the first priority security interest created by the
Security Documents in the Collateral.
SECTION 6.12. Additional Grantors and
Guarantors. Cause each direct or indirect subsidiary not in
existence on the date hereof and created or acquired in
accordance with the terms of this Agreement (including,
without limitation, Section 7.06 hereof) to enter into a
Guarantee in form and substance satisfactory to the Agent,
and to execute the Security Documents, as applicable, as a
Grantor, and cause the direct parent of each such subsidiary to
pledge all of the capital stock of such subsidiary, pursuant to
the Pledge Agreement and cause each such subsidiary to
pledge its accounts receivable and all other assets pursuant to
the Security Agreement.
SECTION 6.13. Environmental Laws. (a)
Comply, and cause each of its subsidiaries to comply, in all
material respects with the provisions of all Environmental
Laws, and Chock shall keep its properties and the properties
of its subsidiaries free of any Lien imposed pursuant to any
Environmental Law. Chock shall not cause or suffer or
permit, and shall not suffer or permit any of its subsidiaries to
cause or suffer or permit, the property of Chock or its
subsidiaries to be used for the generation, production,
processing, handling, storage, transporting or disposal of any
Hazardous Material, except for Hazardous Materials used in
the ordinary course of business, all such Hazardous Materials
to be used, stored, generated, treated and disposed of only in
compliance with Environmental Law, and except for
Remedial Work in response to Hazardous Materials on or
about the properties owned, operated, leased or occupied by
Chock or any of its subsidiaries.
(b) Supply to the Agent copies of all
submissions by Chock or any of its subsidiaries to any
governmental body and of the reports of all environmental
audits and of all other environmental tests, studies or
assessments (including the data derived from any sampling or
survey of asbestos, soil, or subsurface or other materials or
conditions) that may be conducted or performed (by or on
behalf of Chock or any of its subsidiaries) on or regarding the
properties owned, operated, leased or occupied Chock or any
of its subsidiaries or regarding any conditions that might have
been affected by Hazardous Materials on or Released or
removed from such properties. Chock shall also permit and
authorize, and shall cause its subsidiaries to permit and
authorize, the consultants, attorneys or other persons that
prepare such submissions or reports or perform such audits,
tests, studies or assessments to discuss such submissions,
reports or audits with the Agent and the Lenders.
(c) Promptly (and in no event more than two
Business Days after Chock or any of its subsidiaries becomes
aware or is otherwise informed of such event) provide oral
and written notice to the Agent upon the happening of any of
the following:
(i) Chock, any subsidiary of Chock,
or any tenant or other occupant of any property
of Chock or such subsidiary receives notice of
any Environmental Claim which either specifies
that it is, or is reasonably expected by Chock to
be, in excess of $50,000 and, in any event,
notice to the Agent of each Environmental
Claim shall be provided if such persons shall
have received such notices of Environmental
Claims which exceed $250,000 in the
aggregate;
(ii) there has been a spill or other
Release of Hazardous Materials upon, under or
about or affecting any of the properties owned,
operated, leased or occupied by Chock or any
subsidiary of Chock, or Hazardous Materials at
levels or in amounts that may have to be
reported, remedied or responded to under
Environmental Law are detected on or in the
soil or groundwater;
(iii) Chock or any subsidiary of Chock
is or may be liable for any costs of cleaning up
or otherwise responding to a Release of
Hazardous Materials;
(iv) any part of the properties owned,
operated, leased or occupied by Chock or any
subsidiary of Chock is or may be subject to a
Lien under any Environmental Law; or
(v) Chock or any subsidiary of Chock
undertakes any Remedial Work with respect to
any Hazardous Materials.
Upon receipt of any notice pursuant to this
clause (c), the Agent may, at Borrower's expense, take such
actions as the Agent deems reasonable to obtain information
regarding the problem specified in the notice.
(d) Timely undertake and complete any
Remedial Work required by any Environmental Law.
(e) Without in any way limiting the scope of
Section 11.04(c) and in addition to any obligations
thereunder, Chock and each other Borrower hereby
indemnifies and agrees to hold the Agent and the Lenders
harmless from and against any liability, loss, damage, suit,
action or proceeding arising out of its business or the business
of its subsidiaries pertaining to Hazardous Materials,
including, but not limited to, claims of any governmental
body or any third person arising under any Environmental
Law or under tort, contract or common law. To the extent
laws of the United States or any applicable state or local law
in which property owned, operated, leased or occupied by
Chock or any subsidiary of Chock is located provide that a
Lien upon such property of Chock or such subsidiary may be
obtained for the removal of Hazardous Materials which have
been or may be Released, no later than sixty days after notice
is given by the Agent to Chock or such subsidiary, Chock or
such subsidiary shall deliver to the Agent a report issued by a
qualified third party engineer certifying as to the existence of
any Hazardous Materials located upon or beneath the
specified property. To the extent any Hazardous Materials
located therein or thereunder either subject the property to
Lien or require removal to safeguard the health of any
persons, the removal thereof shall be an affirmative covenant
of Chock and the Borrowers hereunder.
(f) In the event that any Remedial Work is
required to be performed by Chock or any subsidiary under
any applicable Environmental Law, any judicial order, or by
any governmental entity, Chock or such subsidiary shall
commence all such Remedial Work at or prior to the time
required therefor under such Environmental Law or
applicable judicial orders and thereafter diligently prosecute
to completion all such Remedial Work in accordance with and
within the time allowed under such applicable Environmental
Laws or judicial orders, except where the necessity of the
conduct of Remedial Work is being contested in good faith in
the manner provided by law.
SECTION 6.14. Pay Obligations to Lenders
and Perform Other Covenants. (a) Make full and timely
payment of the Obligations, whether now existing or hereafter
arising, (b) duly comply with all the terms and covenants
contained in this Agreement (including, without limitation,
the borrowing limitations and mandatory prepayments in
accordance with Article II hereof) in each of the other Loan
Documents, all at the times and places and in the manner set
forth therein, and (c) at all times take all actions necessary to
maintain the Liens and security interests provided for under or
pursuant to this Agreement and the Security Documents as
valid and perfected (except for motor vehicles as set forth in
Section 4.13 hereto) first Liens on the property intended to be
covered thereby (subject only to Liens expressly permitted
hereunder) and supply all information to the Agent necessary
for such maintenance.
SECTION 6.15. Maintain Operating Accounts.
Maintain all of its primary operating accounts and all of its
cash management arrangements with the Agent.
SECTION 6.16. Purchase Price Adjustments.
Promptly notify the Agent of any purchase price adjustment as
contemplated by the Acquisition Agreement, any such
adjustment in favor of Chock to be applied as set forth in
Section 2.09(d).
SECTION 6.17. Amendments. Promptly
supply to the Agent certified copies of any amendments to the
Acquisition Agreement (subject to Section 7.20 hereof).
SECTION 6.18. Intentionally Omitted.
SECTION 6.19. Warehouseman's and
Landlord's Consents. (a) Not more than 60 days from the
Closing Date, cause there to be delivered to the Agent a
landlord consent and waiver agreement or warehouseman's
letter agreement, as applicable, in form and substance
satisfactory to the Agent with respect to each location set
forth in Schedule 6.19(a) hereto.
(b) The Borrowers shall promptly pay when
due all rental and other obligations under leases for the
leasehold premises listed on Schedule 6.19(a) hereto and shall
immediately notify the Agent of any default under any such
lease.
(c) Upon the request of the Agent at any time,
Chock shall cause a Mortgage in form and substance
satisfactory to the Agent, granting to the Agent a first priority
security interest in and Lien on the real property of Chock
located in Hialeah, Florida, to be recorded in the appropriate
recording office, and Chock shall cause a policy of title
insurance satisfactory in all respects to the Agent to be issued
with respect thereto.
VII. NEGATIVE COVENANTS
The Borrowers, jointly and severally, covenant
and agree with each Lender that, so long as this Agreement
shall remain in effect or the principal of or interest on any
Note, or any fee, expense or amount payable hereunder or in
connection with any of the Transactions shall be unpaid, each
will not and will not cause or permit any of its subsidiaries
and, in the case of Section 7.18 hereof, any ERISA Affiliate
to, either directly or indirectly:
SECTION 7.01. Liens. Incur, create, assume
or permit to exist any Lien on any of its property or assets
(including the stock of any direct or indirect subsidiary),
whether owned at the date hereof or hereafter acquired, or
assign or convey any rights to or security interests in any
future revenues, except:
(a) Liens incurred and pledges and deposits
made in the ordinary course of business in connection
with workers' compensation, unemployment insurance,
old-age pensions and other social security benefits (not
including any lien described in Section 412(m) of the
Code);
(b) Liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and
vendors' liens and other similar liens, incurred in good
faith in the ordinary course of business and securing
obligations which are not overdue for a period of more
than 15 days or which are being contested in good faith
by appropriate proceedings as to which Chock or any
of its subsidiaries, as the case may be, shall, to the
extent required by generally accepted accounting
principles consistently applied, have set aside on its
books adequate liabilities;
(c) Liens securing the payment of taxes,
assessments and governmental charges or levies, that
are not delinquent or are being diligently contested in
good faith by appropriate proceedings, as to which
adequate liabilities have been established in
accordance with generally accepted accounting
principles and which in any event do not exceed
$500,000 in the aggregate at any time outstanding;
(d) zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions,
waivers, restrictions on the use of property or minor
irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other
encumbrances incurred, created, assumed or permitted
to exist and arising by, through or under a landlord or
owner of the leased property, with or without consent
of the lessee) which do not in the aggregate materially
detract from the value of its property or assets or
materially impair the use thereof in the operation of its
business;
(e) Liens upon any equipment acquired
through the purchase or lease by Chock or any of its
subsidiaries which are created or incurred contempora-
neously with such acquisition to secure or provide for
the payment of any part of the purchase price of, or
lease payments on, such equipment, plus interest (but
no other amounts and not in excess of the purchase
price or lease payments, plus interest); provided,
however, that any such Lien shall not apply to any
other property of Chock or any of its subsidiaries; and
provided, further, that such Liens shall secure
Indebtedness not in excess of $500,000 at any time;
(f) Liens existing on the date of this
Agreement and set forth in Schedule 7.01 annexed
hereto but not the extension, renewal or refunding of
the Indebtedness secured thereby;
(g) Liens created in favor of the Agent for
the benefit of the Lenders;
(h) Liens securing the performance of bids,
tenders, leases, contracts (other than for the repayment
of borrowed money), statutory obligations, surety,
customs and appeal bonds and other obligations of like
nature, incurred as an incident to and in the ordinary
course of business; or
(i) Liens under Rate Agreements purchased
from the Agent, which Liens may be pari passu with
the Liens granted to the Agent for the benefit of the
Lenders.
SECTION 7.02. Sale and Lease-Back
Transactions. Enter into any arrangement, directly or
indirectly, with any person whereby Chock or any of its
subsidiaries shall sell or transfer any property, real or
personal, and used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such
property or other property which Chock or such subsidiary
intends to use for substantially the same purpose or purposes
as the property being sold or transferred.
SECTION 7.03. Indebtedness. Incur, create,
assume or permit to exist any Indebtedness other than (i)
Indebtedness secured by Liens permitted under Section 7.01
hereof, (ii) Indebtedness (including, without limitation,
Guarantees) existing on the date hereof and listed in Schedule
7.03 annexed hereto, but not the extension, renewal or
refunding thereof, (iii) Indebtedness incurred hereunder, (iv)
Indebtedness to trade creditors incurred in the ordinary course
of business, (v) Guarantees constituting the endorsement of
negotiable instruments for deposit or collection in the
ordinary course of business, (vi) Guarantees of the
Obligations, (vii) purchase money Indebtedness to the extent
permitted by Sections 7.01(e) and 7.07 hereof, (viii) Subordi-
nated Indebtedness and (ix) Indebtedness under any Rate
Agreements.
SECTION 7.04. Dividends, Distributions and
Payments. Declare or pay, directly and indirectly, any cash
dividends or make any other distribution, whether in cash,
property, securities or a combination thereof, with respect to
(whether by reduction of capital or otherwise) any shares of
its capital stock or directly or indirectly redeem, purchase,
retire or otherwise acquire for value (or permit any subsidiary
to purchase or acquire) any shares of any class of its capital
stock or set aside any amount for any such purpose; provided,
however, that Chock may pay dividends or redeem shares of
stock for cash, in an amount which does not exceed in the
aggregate (together with the amount of any payments,
prepayments, redemptions, defeasance or repurchases of
Subordinated Indebtedness during the applicable Fiscal Year
under Section(a) hereof) in any Fiscal Year, 25% of Excess
Cash Flow for the most recent Fiscal Year then ended, so long
as at the time of any such payment, prepayment, redemption
or repurchase no Default or Event of Default shall have
occurred and be continuing or would occur after giving effect
thereto.
SECTION 7.05. Consolidations, Mergers and
Sales of Assets. Consolidate with or merge with or into any
other person, or permit another person to merge into it
(including, without limitation, the merger of, with or into any
Borrower and any subsidiary of any Borrower except as set
forth in the last proviso to this sentence), or sell, lease,
transfer or assign to any persons or otherwise dispose of
(whether in one transaction or a series of transactions) any
portion of its assets (whether now owned or hereafter
acquired), or sell any of its inventory other than in the normal
course of business, or sell any machinery and equipment in an
aggregate amount in excess of $300,000 in any Fiscal Year, or
acquire all or substantially all the capital stock or assets of any
other person, except for purchases of assets not to exceed
$500,000 in any Fiscal Year, the terms and conditions of any
such asset purchase to be acceptable to the Required Lenders;
provided, however, that the Term Loan Borrowers shall be
permitted to sell the real property listed in Schedule 7.05
hereto for not less than the amount set forth next to such
property without consent (and the Agent shall take such
actions, at the expense of Chock, as are reasonably requested
by Chock to release the Agent's Lien on such property), so
long as (i) the sale is for cash and such cash is immediately
applied as set forth in Section 2.09(g) hereof and (ii) no
Default or Event of Default shall have occurred and be
continuing or would occur as a result of such sale; and
provided, further, that so long as (i) no Default or Event of
Default shall have occurred and be continuing or would occur
under any other Section of this Agreement after giving effect
to the following, (ii) the Agent shall have been notified in
writing not less than 60 days prior to date on which the
following is proposed to be consummated, and (iii) the Agent
shall have determined in its reasonable judgment that the
following shall not affect the validity, or priority, of its first
priority Lien on any Collateral, nothing contained herein shall
prohibit Chock from causing (x) Cains to merge with and
into Cains Holding and Cains Holding to concurrently
merge with and into Chock (it being hereby agreed and
acknowledged that conforming amendments to this
Agreement and the other Loan Documents agreeable to the
Required Lenders would be required as a result of such
mergers) and (y) ownership of the real property located at 000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx to be transferred by
Xxxxxxxxxx to Chock, whether by dissolution of Xxxxxxxxxx
or otherwise, so long as (aa) the Obligations shall remain
secured by a mortgage thereon satisfactory in all respects to
the Required Lenders and (bb) no recording tax or other fee,
tax, expense or costs shall be incurred by the Agent or
Lenders as a result of such transfer.
SECTION 7.06. Investments. Own, purchase
or acquire any stock, obligations, assets or securities of, or
any interest in, or make any capital contribution or loan or
advance to, any other person, or make any other investments,
except:
(a) certificates of deposit in dollars of any
commercial banks registered to do business in any state
of the United States (i) having capital and surplus in
excess of $5,000,000,000 and (ii) whose long-term
debt rating is at least investment grade as determined
by either Standard & Poor's Corporation or Xxxxx'x
Investor Service, Inc.;
(b) readily marketable direct obligations of
the United States government or any agency thereof
which are backed by the full faith and credit of the
United States;
(c) commercial paper at the time of
acquisition having the highest rating obtainable from
either Standard & Poor's Corporation or Xxxxx'x
Investor Service, Inc.;
(d) federally tax exempt securities rated A or
better by either Standard & Poor's Corporation or
Xxxxx'x Investor Service, Inc.;
(e) investments in the stock of any
subsidiary existing on the Closing Date, but not any
additional investments therein;
(f) loans and advances to shareholders,
directors, officers or employees of Chock or any of its
subsidiaries not in excess of $150,000 in the aggregate
in any Fiscal Year;
(g) up to $1,000,000 in securities of a type
not specified in clauses (a) through (f) above;
(h) up to an aggregate from July 1, 1994
through the Revolving Credit Termination Date of
$15,000,000 for the purchase of assets and/or
businesses which in each case are similar to the
business engaged in by Chock and its subsidiaries on
the Closing Date (each, an "Acquisition"), subject to
the following terms and conditions: (i) no Default or
Event of Default shall have occurred and be continuing
at the time of the Acquisition or would be caused by
such Acquisition under any other Section of this
Agreement; (ii) the Borrowers shall have notified the
Agent and the Lenders not less than 90 days prior to
the proposed closing date for such Acquisition and
shall provide the Agent and the Lenders with all
information with respect to the Acquisition which the
Agent and the Lenders shall reasonably request; (iii)
Acquisitions may be financed with any combination of
cash, notes, Indebtedness assumed pursuant to the
Acquisition, or Loans made under the Revolving
Credit Commitment; provided, however, that with
respect to any Acquisition, any such Loan under the
Revolving Credit Commitment (referred to herein as
an "Acquisition Loan") (x) shall be in a minimum
amount of $5,000,000 with increments of $1,000,000
in addition thereto and (y) except as set forth in the
next proviso, shall be subject to compliance with
conditions to the making of Revolving Credit Loans set
forth in Article II hereof, including, without limitation,
Section 2.01 hereof, but any such Acquisition Loan
shall be deemed for the purposes of repayment thereof
a term loan with a five year straight-line amortization
(with a final payment of the outstanding principal
amount due and owing on the Final Maturity Date),
principal payments to be made on the first day of each
March, June, September and December commencing
with the first such day after the making of the
Acquisition Loan; provided further, that the Borrowers
may request that the Lenders, in their sole discretion,
based upon the results of appraisals of fixed assets
currently owned and being purchased in a proposed
Acquisition, satisfactory in all respects to the Lenders,
make an Acquisition Loan secured by such fixed assets
in an amount in excess of that which would otherwise
be available under Article II hereof; (iv) any single
Acquisition of $10,000,000 or more shall require the
prior written consent of the Lenders; (v) with respect to
(x) any Acquisition, a Guarantee of the Obligations
shall be issued by any subsidiary purchased or formed,
(y) any Acquisition of $3,000,000 or less, the Agent
reserves the right, under Article III and Section 6.12
hereof, to require as a condition to any such
Acquisition that the Agent be granted a first priority
security interest in all assets purchased, including,
without limitation, the pledge of any stock purchased
or of any subsidiary formed, and that such other
actions be taken as the Agent shall request to cause the
Obligations to be secured on a first priority basis and
(z) any Acquisition of over $3,000,000, it shall be a
pre-condition to the consummation of such Acquisition
that the Agent be granted a first priority security
interest in all assets purchased, including, without
limitation, the pledge of any stock purchased or of any
subsidiary formed, and that such other actions be taken
as the Agent shall request to cause the Obligations to
be secured on a first priority basis; and (vi) the
aggregate amount of Acquisitions shall in no event
exceed an amount such that the aggregate of all
Acquisitions and repurchases of Subordinated
Indebtedness under Section 7.20(a) hereof would
exceed $40,000,000;
(i) investments in, and loans to, Quikava (in
any combination of cash, equity and contribution of
property) in the aggregate at any time outstanding not
to exceed an amount equal to (i) $4,300,000 (of which
not more than $600,000 in the aggregate may be
loaned to, or invested in, the Quikava Limited
Partnership) minus (ii) outstanding Quikava Advances
at such time; and
(j) investments in and/or loans to Industrias
Xxxxxx, X.X. de C.V. (Marino), in any combination
of cash, equity and contribution of property (in
addition to equipment to be contributed by Chock from
its Linden, New Jersey plant) in the aggregate at any
time outstanding not to exceed $4,000,000, so long as
(x) no Default or Event of Default shall have occurred
and be continuing at the time of any such investment or
loan, (y) Chock shall deliver to the Agent, together
with the financial statements required under Section
6.05(a) and Section 6.05(b), a detailed accounting of
all investments in and loans to Marino through the date
of such financial statement(s) and (z) all loans to
Marino of $500,000 or more, or series of loans
aggregating $500,000 or more, shall be evidenced by
one or more promissory notes containing terms and
conditions reasonably satisfactory to the Required
Lenders, which promissory note(s) shall be pledged by
Chock to the Agent on behalf of the Lenders pursuant
to one or more pledge agreements in form and
substance satisfactory to the Agent;
provided that, in each case mentioned in clauses (a), (b), (c)
and (d) above, such obligations shall mature not more than
one year from the date of acquisition thereof; and provided,
further, that in each case mentioned in clauses (a) through (e),
Borrower shall have taken all actions necessary in the opinion
of the Agent to grant the Agent for the benefit of the Lenders,
a first priority security interest in all right, title and interest of
Chock and its subsidiaries in and to such obligations.
SECTION 7.07. Capital Expenditures. Permit
the aggregate amount of payments made for Capital
Expenditures, including Capitalized Lease Obligations and
Indebtedness secured by Liens permitted under Section
7.01(e) hereof, in each Fiscal Year to exceed $9,000,000.
SECTION 7.08. Adjusted Effective Net Worth.
Permit the Adjusted Effective Net Worth at any time to be
less than the respective amounts set forth below for the
periods ending on the dates indicated:
Period
Amount
Closing Date through July 30, 1997
$156,000,000
July 31, 1997 through July 30, 1998
$155,000,000
July 31, 1998 and thereafter
$151,000,000
SECTION 7.09. Intentionally Omitted.
SECTION 7.10. Total Unsubordinated
Liabilities to Adjusted Effective Net Worth Ratio. Permit the
ratio of (x) Total Unsubordinated Liabilities to (y)Adjusted
Effective Net Worth, at any time to be greater than .33:1.00.
SECTION 7.11. Intentionally Omitted.
SECTION 7.12. Fixed Charge Coverage Ratio.
Permit the Fixed Charge Coverage Ratio at any time to be
less than 1.10:1.00 for the four consecutive fiscal quarters
ending on January 31, April 30, July 31 and October 31 of
each year commencing with January 31, 1996.
SECTION 7.13. Interest Coverage Ratio.
Permit the Interest Coverage Ratio at any time to be less than
2.40:1.00 for the four consecutive fiscal quarters ending on
January 31, April 30, July 31 and October 31 of each year,
commencing January 31, 1996.
SECTION 7.14. Intentionally Omitted.
SECTION 7.15. Business. Alter the nature of
its business as operated on the date of this Agreement in any
material respect.
SECTION 7.16. Sales of Receivables. Sell,
assign, discount, transfer, or otherwise dispose of any
accounts receivable, promissory notes, drafts or trade
acceptances or other rights to receive payment held by it, with
or without recourse, except for the purpose of collection or
settlement in the ordinary course of business.
SECTION 7.17. Use of Proceeds. Permit the
proceeds of any Credit Event to be used for any purpose
which entails a violation of, or is inconsistent with,
Regulation G, T, U or X of the Board, or for any purpose
other than those set forth in Section hereof or Section 7.06(h)
hereof.
SECTION 7.18. ERISA. (a) Engage in any
transaction in connection with which Chock or any ERISA
Affiliate could be subject to either a material civil penalty
assessed pursuant to the provisions of Section 502 of ERISA
or a material tax imposed under the provisions of Section
4975 of the Code.
(b) Terminate any Pension Plan in a "distress
termination" under Section 4041 of ERISA, or take any other
action which could result in a material liability of Chock or
any ERISA Affiliate to the PBGC.
(c) Fail to make payment when due of all
amounts which, under the provisions of any Plan, Chock or
any ERISA Affiliate is required to pay as contributions
thereto, or, with respect to any Pension Plan, permit to exist
any material "accumulated funding deficiency" (within the
meaning of Section 302 of ERISA and Section 412 of the
Code), whether or not waived, with respect thereto.
(d) Adopt an amendment to any Pension
Plan requiring the provision of security under Section 307 of
ERISA or Section 401(a)(29) of the Code.
SECTION 7.19. Accounting Changes. Make,
or permit any subsidiary to make any change in their
accounting treatment or financial reporting practices except as
required or permitted by generally accepted accounting
principles in effect from time to time.
SECTION 7.20. Prepayment or Modification of
Indebtedness; Modification of Charter Documents. (a)
Directly or indirectly prepay, redeem, defease, purchase or
retire (other than by conversion into capital stock of Chock)
any Indebtedness, including, without limitation, any
Subordinated Indebtedness, other than Indebtedness incurred
hereunder, and except that the Borrowers may prepay,
redeem, repurchase or retire Subordinated Indebtedness
outstanding under the Subordinated Indentures in an amount
which when added to the Acquisitions under Section 7.06,
does not exceed $40,000,000 in the aggregate during the
period from July 1, 1994 through the Revolving Credit
Termination Date, so long as (i) any such Subordinated
Indebtedness is prepaid or repurchased at not more than the
redemption price thereof at such time, but not in any event in
excess of 102.50% of the face value thereof, and (ii) no
Default or Event of Default shall have occurred and be
continuing or would occur after giving effect to any such
prepayment, redemption, repurchase or retirement. Nothing
contained in this subsection shall, or shall be deemed to,
permit the Borrowers to incur Subordinated Indebtedness or
other Indebtedness, issue equity, sell assets or take any other
action with respect to the prepayment, redemption, repurchase
or retirement of Subordinated Indebtedness outstanding under
the Subordinated Indentures except to the extent the same is
permitted under other Sections of this Agreement.
(b) Modify, amend or otherwise alter the
terms and provisions of any Subordinated Indebtedness.
(c) Modify, amend or alter their agreement
of limited partnership, certificates or articles of incorporation
or other charter documents so as to in any manner affect the
ability of the Borrowers to perform and otherwise fulfill their
obligations under the Loan Documents, or in such a manner
as to have a Material Adverse Effect.
(d) Modify, amend or otherwise alter the
terms and provisions of any Acquisition Documents.
SECTION 7.21. Transactions with Affiliates.
Except as otherwise specifically set forth in this Agreement,
directly or indirectly purchase, acquire or lease any property
from, or sell, transfer or lease any property to, or enter into
any other transaction with, any stockholder, Affiliate or agent
of any subsidiary, or any relative thereof, except in the
ordinary course of business and at prices and on terms not less
favorable it than that which would have been obtained in an
arm's-length transaction with a non-affiliated third party.
SECTION 7.22. Intentionally Omitted.
SECTION 7.23. Intentionally Omitted.
SECTION 7.24. Xxxxxxxxxx and Chock Realty.
Notwithstanding anything to the contrary set forth in this
Article VII or elsewhere in this Agreement, other than (i) with
respect to Xxxxxxxxxx, ownership of the real property located
at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, and (ii) with respect
to Chock Realty, ownership of the real property located at 11-
00 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxxx
and Chock Realty shall engage in no activity, operate no
business or enter into any transaction other than under this
Agreement or in the other Loan Documents to which they are
party, and other than ownership (or the leasing on terms and
conditions satisfactory to the Agent) of such real property and
actions directly related thereto (such as payment of real
property taxes, assessments, etc.).
VIII. EVENTS OF DEFAULT
In case of the happening of any of the following
events (herein called "Events of Default"):
(a) any representation or warranty made or
deemed made in or in connection with this Agreement,
any of the Security Documents, the Notes or other
Loan Documents or any Credit Events hereunder, shall
prove to have been incorrect in any material respect
when made or deemed to be made;
(b) default shall be made in the payment of
any principal of any Note when and as the same shall
become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made in the payment of
any interest on any Note, any Commitment Fee or any
other fee or any other amount payable hereunder, or
under the Notes, or any other Loan Document or any
Letter of Credit or in connection with any other Credit
Event or the Transactions when and as the same shall
become due and payable;
(d) (i) default shall be made in the due
observance or performance of any covenant, condition
or agreement to be observed or performed on the part
of Chock or any of its subsidiaries pursuant to the
terms of this Agreement (other than as described in
clause (ii) and clause (iii) of this subsection), any of
the Notes, any of the Security Documents or any other
Loan Document, (ii) a default shall be made in the due
observance or performance of Section 6.02, 6.05, 6.07,
6.10, 6.11, 6.13 or 6.15 through 6.20 and such default
shall continue unremedied for a period of 15 or more
days or (iii) a default shall be made in the due
observance or performance of Section 6.06 and such
default shall continue unremedied for a period of 7 or
more days;
(e) Chock, any Guarantor, any Grantor or
any subsidiary of any thereof shall (i) voluntarily
commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code or any
other Federal, state or foreign bankruptcy, insolvency,
liquidation or similar law, (ii) consent to the institution
of, or fail to contravene in a timely and appropriate
manner, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator or similar
official for Chock, such Guarantor, such Grantor or
such subsidiary or for a substantial part of its property
or assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as
they become due or (vii) take corporate action for the
purpose of effecting any of the foregoing;
(f) an involuntary proceeding shall be
commenced or an involuntary petition shall be filed in
a court of competent jurisdiction seeking (i) relief in
respect of Chock, any Guarantor, any Grantor or any
subsidiary of any thereof, or of a substantial part of the
property or assets of Chock, any Guarantor, any
Grantor or any subsidiary of any thereof, under Title 11
of the United States Code or any other Federal state or
foreign bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator or similar official for Chock,
any Guarantor, any Grantor or any subsidiary of any
thereof or for a substantial part of the property of
Chock, any Guarantor, any Grantor or any subsidiary
of any thereof or (iii) the winding-up or liquidation of
Chock, any Guarantor, any Grantor or any subsidiary
of any thereof; and such proceeding or petition shall
continue undismissed for 30 days or an order or decree
approving or ordering any of the foregoing shall
continue unstayed and in effect for 30 days;
(g) default shall be made with respect to any
Indebtedness or obligations under a capitalized lease of
Chock, any Guarantor, any Grantor or any subsidiary
of any thereof (excluding Indebtedness outstanding
hereunder) which when taken together with all other
Indebtedness of such persons as to which a default has
occurred and be continuing shall exceed $500,000, or
default shall be made with respect to any Subordinated
Indebtedness, if the effect of any such default shall be
to accelerate, or to permit the holder or obligee of any
such Indebtedness or obligations under a capitalized
lease (or any trustee on behalf of such holder or
obligee) at its option to accelerate, the maturity of such
Indebtedness or obligations under a capitalized lease;
(h) (i) a Reportable Event shall have occurred
with respect to a Pension Plan, (ii) the filing by Chock,
any ERISA Affiliate, or an administrator of any Plan of
a notice of intent to terminate such a Plan in a "distress
termination" under the provisions of Section 4041 of
ERISA, (iii) the receipt of notice by Chock, any
ERISA Affiliate, or an administrator of a Plan that the
PBGC has instituted proceedings to terminate (or
appoint a trustee to administer) such a Pension Plan,
(iv) any other event or condition exists which might
reasonably constitute grounds under the provisions of
Section 4042 of ERISA for the termination of (or the
appointment of a trustee to administer) any Pension
Plan by the PBGC, (v) a Pension Plan shall fail to
maintain the minimum funding standard required by
Section 412 of the Code for any plan year or a waiver
of such standard is sought or granted under the
provisions of Section 412(d) of the Code, (vi) Chock
or any ERISA Affiliate has incurred, or is likely to
incur, a liability under the provisions of Section 4062,
4063, 4064 or 4201 of ERISA, (vii) Chock or any
ERISA Affiliate fails to pay the full amount of an
installment required under Section 412(m) of the Code
or (viii) any other event or condition has occurred with
respect to any Plan which would constitute an event of
default under any other agreement entered into by
Chock or any ERISA Affiliate, and in each case in
clauses (i) through (viii) of this subsection (h), such
event or condition, together with all other such events
or conditions, if any, could subject Chock or any
ERISA Affiliate to any taxes, penalties or other
liabilities which, in the opinion of the Agent, could
have a Material Adverse Effect;
(i) Chock or any ERISA Affiliate (i) shall
have been notified by the sponsor of a Multiemployer
Plan that it has incurred any withdrawal liability to
such Multiemployer Plan in excess of $500,000, and
has not paid such amount when due, and (ii) does not
have reasonable grounds for contesting such
withdrawal liability and is not in fact contesting such
withdrawal liability in a timely and appropriate
manner;
(j) a judgment (not reimbursed by insurance
policies of Chock, any Guarantor, any Grantor or any
subsidiary of any thereof) or decree for the payment of
money, a fine or penalty which when taken together
with all other such judgments, decrees, fines and
penalties shall exceed $150,000 shall be rendered by a
court or other tribunal against Chock, any Guarantor,
any Grantor or any subsidiary of any thereof and (i)
shall remain undischarged or unbonded for a period of
30 consecutive days during which the execution of
such judgment, decree, fine or penalty shall not have
been stayed effectively or (ii) any judgment creditor or
other person shall legally commence actions to collect
on or enforce such judgment, decree, fine or penalty;
(k) this Agreement, any Note, any of the
Security Documents, any Guarantee or other Loan
Documents shall for any reason cease to be, or shall be
asserted by Chock, any Guarantor, any Grantor or any
subsidiary of any thereof not to be, a legal, valid and
binding obligation of Chock, such Guarantor, such
Grantor or such subsidiary, as applicable, enforceable
in accordance with its terms, or the security interest or
Lien purported to be created by any of the Security
Documents shall for any reason cease to be, or be
asserted by Chock, any Guarantor, any Grantor or any
subsidiary of any thereof not to be, a valid, first priority
perfected security interest in any Collateral (except to
the extent otherwise permitted under this Agreement or
any of the Security Documents);
(l) there shall occur a Change of Control;
(m) (i) the average of Receivable Turnover
during any three consecutive months shall exceed 55
days, (ii) the average Dilution for any three
consecutive months shall exceed 25% or (iii) the
average Inventory Turnover during any three
consecutive months shall exceed 90 days;
(n) any warehouse in which inventory held
by Chock or any of its subsidiaries shall issue a
warehouse receipt or any other document of title with
respect to all or any portion of such inventory which,
after deducting the value of the inventory subject to
such receipt or documents of title from the aggregate
value of Collateral, shall result in an overadvance
under the Revolving Credit Facility which is not cured
within three (3) days;
(o) at any time an aggregate of $500,000 or
more of the payables of the Borrowers and their
subsidiaries, the payment of which the Borrowers do
not dispute in good faith, shall remain unpaid for thirty
(30) or more days after the due date thereof; or
(p) any single Customer shall account for
more than twenty percent (20%) of the net sales of the
Borrowers for any Fiscal Year;
then, and in any such event (other than an event described in
paragraph (e) or (f) above), and at any time thereafter during
the continuance of such event, the Agent may, and upon the
written request of the Required Lenders shall, by written
notice (or facsimile notice promptly confirmed in writing) to
the Borrowers, take any or all of the following actions at the
same or different times: (i) terminate forthwith all or any
portion of the Total Commitment and all obligations to issue
Letters of Credit hereunder (or permit the increase in the
amount of any Letter of Credit already issued); and (ii)declare
the Notes and any amounts then owing to the Lenders and/or
Issuing Lender on account of any drawings under any Letters
of Credit to be forthwith due and payable, whereupon the
principal of such Notes, together with accrued interest and
fees thereon, any amounts then owing to the Lenders and/or
Issuing Lender on account of any drawings under any Letters
of Credit, and other liabilities of the Borrowers accrued
hereunder, shall become forthwith due and payable both as to
principal and interest, without presentment, demand, protest
or any other notice of any kind, all of which are hereby
expressly waived by the Borrowers, anything contained herein
or in the Notes to the contrary notwithstanding; provided,
however, that with respect to a default described in paragraph
(e) or (f) above, the Total Commitment and all obligations to
issue Letters of Credit hereunder (or permit the increase in the
amount of any Letter of Credit already issued) shall auto-
matically terminate and the principal of the Notes, together
with accrued interest and fees thereon, any amounts then
owing to the Lenders and/or Issuing Lender on account of any
drawings under any Letters of Credit, and any other liabilities
of the Borrowers accrued hereunder shall automatically
become due and payable, both as to principal and interest,
without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the
Borrowers, anything contained herein or in the Notes to the
contrary notwithstanding.
IX. AGENT
In order to expedite the transactions
contemplated by this Agreement, NatWest Bank N.A. is
hereby appointed to act as Agent on behalf of the Lenders.
Each of the Lenders and each subsequent holder of any Note
by its acceptance thereof, irrevocably authorizes the Agent to
take such action on its behalf and to exercise such powers
hereunder and under the Security Documents and other Loan
Documents as are specifically delegated to or required of the
Agent by the terms hereof and the terms thereof together with
such powers as are reasonably incidental thereto. Neither the
Agent nor any of its directors, officers, employees or agents
shall be liable as such for any action taken or omitted to be
taken by it or them hereunder or under any of the Security
Documents and other Loan Documents or in connection
herewith or therewith (a) at the request or with the approval of
the Required Lenders (or, if otherwise specifically required
hereunder or thereunder, the consent of all the Lenders) or (b)
in the absence of its or their own bad faith or willful
misconduct.
The Agent is hereby expressly authorized on
behalf of the Lenders, without hereby limiting any implied
authority, (a) to receive on behalf of each of the Lenders any
payment of principal of or interest on the Notes outstanding
hereunder and all other amounts accrued hereunder paid to the
Agent, and promptly to distribute to each Lender its proper
share of all payments so received, (b) to distribute to each
Lender copies of all notices, agreements and other material as
provided for in this Agreement or in the Security Documents
and other Loan Documents as received by such Agent and (c)
to take all actions with respect to this Agreement and the
Security Documents and other Loan Documents as are
specifically delegated to the Agent.
In the event that (a) Chock fails to pay when
due the principal of or interest on any Note, any amount
payable under any Letter of Credit or any fee payable
hereunder or (b) the Agent receives written notice of the
occurrence of a Default or an Event of Default, the Agent
within a reasonable time shall give written notice thereof to
the Lenders, and shall take such action with respect to such
Event of Default or other condition or event as it shall be
directed to take by the Required Lenders; provided, however,
that, unless and until the Agent shall have received such
directions, the Agent may take such action or refrain from
taking such action hereunder or under the Security Documents
or other Loan Documents with respect to a Default or Event
of Default as it shall deem advisable in the best interests of
the Lenders.
The Agent shall not be responsible in any
manner to any of the Lenders for the effectiveness,
enforceability, perfection, value, genuineness, validity or due
execution of this Agreement, the Notes or any of the other
Loan Documents or Collateral or any other agreements or
certificates, requests, financial statements, notices or opinions
of counsel or for any recitals, statements, warranties or
representations contained herein or in any such instrument or
be under any obligation to ascertain or inquire as to the
performance or observance of any of the terms, provisions,
covenants, conditions, agreements or obligations of this
Agreement or any of the other Loan Documents or any other
agreements on the part of the Borrowers and, without limiting
the generality of the foregoing, the Agent shall, in the absence
of knowledge to the contrary, be entitled to accept any
certificate furnished pursuant to this Agreement or any of the
other Loan Documents as conclusive evidence of the facts
stated therein and shall be entitled to rely on any note, notice,
consent, certificate, affidavit, letter, telegram, teletype
message, statement, order or other document which it believes
in good faith to be genuine and correct and to have been
signed or sent by the proper person or persons. It is
understood and agreed that the Agent may exercise its rights
and powers under other agreements and instruments to which
it is or may be a party, and engage in other transactions with
the Borrowers, as though it were not Agent of the Lenders
hereunder.
The Agent shall promptly give notice to the
Lenders of the receipt or sending of any notice, schedule,
report, projection, financial statement or other document or
information pursuant to this Agreement or any of the other
Loan Documents and shall promptly forward a copy thereof to
each Lender.
Neither the Agent nor any of its directors,
officers, employees or agents shall have any responsibility to
the Borrowers on account of the failure or delay in
performance or breach by any Lender other than the Agent of
any of its obligations hereunder or to any Lender on account
of the failure of or delay in performance or breach by any
other Lender or the Borrowers of any of their respective
obligations hereunder or in connection herewith.
The Agent may consult with legal counsel
selected by it in connection with matters arising under this
Agreement or any of the other Loan Documents and any
action taken or suffered in good faith by it in accordance with
the opinion of such counsel shall be full justification and
protection to it. The Agent may exercise any of its powers
and rights and perform any duty under this Agreement or any
of the other Loan Documents through agents or attorneys.
The Agent and the Borrowers may deem and
treat the payee of any Note as the holder thereof until written
notice of transfer shall have been delivered as provided herein
by such payee to the Agent and the Borrowers.
With respect to the Loans made hereunder, the
Notes issued to it and any other Credit Event applicable to it,
the Agent in its individual capacity and not as an Agent shall
have the same rights, powers and duties hereunder and under
any other Agreement executed in connection herewith as any
other Lender and may exercise the same as though it were not
the Agent, and the Agent and its affiliates may accept deposits
from, lend money to and generally engage in any kind of
business with the Borrowers or other affiliate thereof as if it
were not the Agent.
Each Lender agrees (i) to reimburse the Agent
in the amount of such Lender's pro rata share (based on its
Total Commitment hereunder) of any out of pocket expenses
incurred for the benefit of the Lenders by the Agent, including
reasonable counsel fees and reasonable compensation of
agents and employees paid for services rendered on behalf of
the Lenders after the occurrence of an Event of Default, not
reimbursed by the Borrowers and (ii) to indemnify and hold
harmless the Agent and any of its directors, officers,
employees or agents, on demand, in the amount of its pro rata
share, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against it in
its capacity as the Agent or any of them in any way relating to
or arising out of this Agreement or any of the other Loan
Documents or any action taken or omitted by it or any of them
under this Agreement or any of the other Loan Documents, to
the extent not reimbursed by the Borrowers; provided,
however, that no Lender shall be liable to the Agent for any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgment, suits, costs, expenses or
disbursements resulting from the bad faith or willful
misconduct of the Agent or any of its directors, officers,
employees or agents.
Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any
other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and any other Loan
Document to which such Lender is party. Each Lender also
acknowledges that it will, independently and without reliance
upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other
Loan Document, any related agreement or any document
furnished hereunder.
Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign at
any time by notifying the Lenders and the Borrowers. Upon
any such resignation, the Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have
been so appointed by such Lenders and shall have accepted
such appointment within 30 days after the retiring Agent gives
notice of its resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent which shall
be a bank with an office (or an affiliate with an office) in New
York, New York, having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment
as Agent hereunder by a successor bank, such successor shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent and the
retiring Agent shall be discharged from its duties and obliga-
tions hereunder and under each of the other Loan Documents.
After any Agent's resignation hereunder, the provisions of
this Article shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was
acting as Agent.
The Lenders hereby acknowledge that the Agent
shall be under no duty to take any discretionary action
permitted to be taken by the Agent pursuant to the provisions
of this Agreement or any of the other Loan Documents unless
it shall be requested in writing to do so by the Required
Lenders.
X. MANAGEMENT, COLLECTION AND STATUS OF
RECEIVABLES AND
OTHER COLLATERAL
SECTION 10.01. Collection of Receivables;
Management of Collateral. (a) At the request of the Agent,
the Borrowers will, at their own cost and expense, (i) arrange
for remittances on Receivables to be made directly to
lockboxes designated by the Agent or in such other manner as
the Agent may direct, and (ii) promptly deposit all payments
received by the Borrowers on account of Receivables,
whether in the form of cash, checks, notes, drafts, bills of
exchange, money orders or otherwise, in one or more
accounts designated by the Agent in precisely the form
received (but with any endorsements of the Borrowers
necessary for deposit or collection), subject to withdrawal by
the Agent only, as hereinafter provided, and until such
payments are deposited, such payments shall be deemed to be
held in trust by the Borrowers for and as the Lenders' property
and shall not be commingled with the Borrowers' other funds.
All remittances and payments that are deposited in
accordance with the foregoing will be applied by the Agent on
the day received to reduce the outstanding balance of the
Revolving Credit Loans, subject to final collection in cash of
the item deposited, but for purposes of the calculation of
interest and fees on the Revolving Credit Loans, such
remittances and payments shall be deemed to be applied to the
Revolving Credit Loans after one and one-half Business
Days.
Upon the occurrence and continuance of an
Event of Default, the Agent may send a notice of assignment
and/or notice of the Agent's security interest to any and all
Customers or any third party holding or otherwise concerned
with any of the Collateral, and thereafter the Agent shall have
the sole right to collect the Receivables and/or take possession
of the Collateral and the books and records relating thereto.
The Borrowers shall not, without the Agent's prior written
consent, except in the ordinary course of business and in
compliance with its past practices, grant any extension of the
time of payment of any Receivable, compromise or settle any
Receivable for less than the full amount thereof, release, in
whole or in part, any person or property liable for the payment
thereof, or allow any credit or discount whatsoever thereon
except, prior to the occurrence and continuance of an Event of
Default, as permitted by Section 10.03 hereof.
(b) (i) Each of the Borrowers hereby
constitutes the Agent or the Agent's designee as such
Borrower's attorney-in-fact with power to endorse such
Borrower's name upon any notes, acceptances, checks, drafts,
money orders or other evidences of payment or Collateral that
may come into its possession; to sign such Borrower's name
on any invoice or xxxx of lading relating to any Receivables,
drafts against Customers, assignments and verifications of
Receivables and notices to Customers; to send verifications of
Receivables; upon the occurrence of an Event of Default, to
notify the Postal Service authorities to change the address for
delivery of mail addressed to such Borrower to such address
as the Agent may designate; and to do all other acts and things
necessary to carry out this Agreement. All acts of said
attorney or designee are hereby ratified and approved, and
said attorney or designee shall not be liable for any acts of
omission or commission, for any error of judgment or for any
mistake of fact or law, provided that the Agent or its designee
shall not be relieved of liability to the extent it is determined
by a final judicial decision that its act, error or mistake
constituted bad faith or willful misconduct. This power of
attorney being coupled with an interest is irrevocable until all
of the Obligations are paid in full and this Agreement and the
Total Commitment is terminated.
(ii) The Agent, without notice to or
consent of the Borrowers, upon the occurrence and during the
continuance of an Event of Default, (A) may xxx upon or
otherwise collect, extend the time of payment of, or
compromise or settle for cash, credit or otherwise upon any
terms, any of the Receivables or any securities, instruments or
insurance applicable thereto and/or release the obligor
thereon; (B) is authorized and empowered to accept the return
of the goods represented by any of the Receivables; and (C)
shall have the right to receive, endorse, assign and/or deliver
in its name or the name of any of the Borrowers any and all
checks, drafts and other instruments for the payment of money
relating to the Receivables, and each Borrower hereby waives
notice of presentment, protest and non-payment of any
instrument so endorsed.
(c) Nothing herein contained shall be
construed to constitute Chock as agent of the Agent for any
purpose whatsoever, and the Agent shall not be responsible or
liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same
may be located and regardless of the cause thereof (except to
the extent it is determined by a final judicial decision that the
Agent's or a Lender's act or omission constituted bad faith or
willful misconduct). The Agent and the Lenders shall not,
under any circumstances or in any event whatsoever, have any
liability for any error or omission or delay of any kind
occurring in the settlement, collection or payment of any of
the Receivables or any instrument received in payment thereof
or for any damage resulting therefrom (except to the extent it
is determined by a final judicial decision that the Agent's or
such Lender's error, omission or delay constituted bad faith or
willful misconduct). The Agent and the Lenders do not, by
anything herein or in any assignment or otherwise, assume
any of the Borrowers' obligations under any contract or
agreement assigned to the Agent or the Lenders, and the
Agent and the Lenders shall not be responsible in any way for
the performance by the Borrowers of any of the terms and
conditions thereof.
(d) If any of the Receivables includes a
charge for any tax payable to any governmental tax authority,
the Agent is hereby authorized (but in no event obligated) in
its discretion to pay the amount thereof to the proper taxing
authority for the account of the applicable Borrower and to
charge the Borrowers' account therefor. The Borrowers shall
notify the Agent if any Receivables include any tax due to any
such taxing authority and, in the absence of such notice, the
Agent shall have the right to retain the full proceeds of such
Receivables and shall not be liable for any taxes that may be
due from any Borrower by reason of the sale and delivery
creating such Receivables.
SECTION 10.02. Receivables Documentation.
The Borrowers will, in addition to the monthly Receivables
agings delivered pursuant to this Agreement, at such intervals
as the Agent may require, furnish such further schedules
and/or information as the Agent may require relating to the
Receivables, including, without limitation, sales invoices. In
addition, the Borrowers shall notify the Agent of any non-
compliance in respect of the representations, warranties and
covenants contained in Section 10.03 hereof. The items to be
provided under this Section 10.02 are to be in form satisfac-
tory to the Agent and are to be executed and delivered to the
Agent from time to time solely for its convenience in
maintaining records of the Collateral; the Borrowers' failure
to give any of such items to the Agent shall not affect,
terminate, modify or otherwise limit the Agent's Lien or
security interest in the Collateral.
SECTION 10.03. Status of Receivables and
Other Collateral. Each Borrower covenants, represents and
warrants with respect to all Collateral (but excluding
Receivables of the Borrowers, other than Receivables
generated from the sale of inventory), that: (a) it shall be the
sole owner, free and clear of all Liens except in favor of the
Agent or otherwise permitted hereunder, of and fully
authorized to sell, transfer, pledge and/or grant a security
interest in each and every item of said Collateral owned by it;
(b) each Receivable shall be a good and valid account
representing a bona fide indebtedness incurred or an amount
owed by the person therein named for a fixed sum as set forth
in the invoice relating thereto with respect to an absolute sale
and delivery upon the specified terms of goods sold by a
Borrower, or work, labor and/or services theretofore rendered
by a Borrower; (c) no Receivable is or shall be subject to any
defense, offset, counterclaim, discount or allowance (known
to the Borrowers as of the time of its creation) except as may
be stated in the invoice relating thereto (except for off-invoice
allowances in an amount estimated by Chock consistent with
its past practices), or such that the amount of Receivables at
any time subject to defense, offset or counterclaim is not
greater than $250,000, or discounts and allowances as may be
customary in such Borrowers's business; (d) none of the
transactions underlying or giving rise to any Receivable shall
violate any applicable state or federal laws or regulations, and
all documents relating to any Receivable shall be legally
sufficient under such laws or regulations and shall be legally
enforceable in accordance with their terms; (e) to the best of
its knowledge, each Customer, guarantor or endorser with
respect to any Receivable is solvent as of the time of creation
thereof and will continue to be fully able to pay all
Receivables on which it is obligated in full when due; (f) all
documents and agreements relating to Receivables shall be
true and correct and in all respects what they purport to be; (g)
to the best of its knowledge, all signatures and endorsements
that appear on all documents and agreements relating to
Receivables shall be genuine and all signatories and endorsers
with respect thereto shall have full capacity to contract; (h) it
shall maintain books and records pertaining to the Collateral
in such detail, form and scope as the Agent shall reasonably
require; (i) it will immediately notify the Agent if any
accounts arise out of contracts with the United States or any
department, agency or instrumentality thereof, and will
execute any instruments and take any steps required by the
Agent in order that all monies due or to become due under
any such contract shall be assigned to the Agent and notice
thereof given to the United States Government under the
Federal Assignment of Claims Act; (j) it will, immediately
upon learning thereof, report to the Agent any material loss or
destruction of, or substantial damage to, any of the Collateral,
and any other matters affecting the value, enforceability or
collectability of any of the Collateral; (k) if any amount
payable under or in connection with any Receivable is
evidenced by a promissory note or other instrument, as such
terms are defined in the Uniform Commercial Code, such
promissory note or instrument shall be immediately pledged,
endorsed, assigned and delivered to the Agent as additional
collateral; (l) it shall not re-date any invoice or sale or make
sales on extended dating beyond that customary in the
industry; and (m) it shall conduct a physical count of its
inventory at such intervals as the Agent may reasonably
request and promptly supply the Agent with a copy of such
counts accompanied by a report of the value (based on the
lower of cost (on a FIFO basis) or market value) of such
inventory.
SECTION 10.04. Monthly Statement of
Account. The Agent shall render to the Borrowers each
month a statement of the Borrowers' account, which shall
constitute an account stated and shall be deemed to be correct
and accepted by and be binding upon the Borrowers unless
the Agent receives a written statement of the Borrowers'
exceptions within 45 days after such statement was rendered
to the Borrowers.
SECTION 10.05. Collateral Custodian. Upon
the occurrence and continuance of an Event of Default, the
Agent may at any time and from time to time employ and
maintain in the premises of the Borrowers a custodian
selected by the Agent who shall have full authority to do all
acts necessary to protect the Agent's and Lenders' interests
and to report to the Agent thereon. The Borrowers hereby
agree to cooperate with any such custodian and to do
whatever the Agent may reasonably request to preserve the
Collateral. All costs and expenses incurred by the Agent by
reason of the employment of the custodian shall be charged to
the Borrowers' account and added to the Obligations.
XI. MISCELLANEOUS
SECTION 11.01. Notices. Notices, consents
and other communications provided for herein shall be in
writing and shall be delivered (in the case of telex or facsimile
communication, delivered by telex, graphic scanning,
telecopier or other telecommunications equipment, with
receipt confirmed) addressed,
(a) if to all or any of the Borrowers,
Guarantors, or Grantors, at 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx. Xxxxxx
Xxxxxxx, Senior Vice President, with a copy to Morse,
Zelnick, Rose & Lander, LLP, 000 Xxxx Xxxxxx, Xxxxx
000, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention:
Xxxxxx Xxxxxx, Esq.;
(b) if to the Agent, at NatWest Bank N.A.,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx Xxxxxx, with a copy to Xxxx,
Scholer, Fierman, Xxxx & Handler, at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx Xxxxxxx, Esq.; and
(c) if to any Lender, at the address set forth
below its name in Schedule 2.01 annexed hereto.
All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt if
hand delivered, or upon receipt if by any telex, facsimile or
other telecommunications equipment, in each case addressed
to such party as provided in this Section 11.01 or in
accordance with the latest unrevoked direction from such
party.
SECTION 11.02. Survival of Agreement. All
covenants, agreements, representations and warranties made
by any Borrower or any subsidiary thereof herein and in the
certificates or other instruments prepared or delivered in
connection with this Agreement, any of the Security
Documents, any Guarantee or any other Loan Document, shall
be considered to have been relied upon by the Lenders and
shall survive the making by the Lenders of the Loans and the
execution and delivery to the Lenders of the Notes and
occurrence of any other Credit Event and shall continue in full
force and effect as long as the principal of or any accrued
interest on the Notes or any other fee or amount payable under
the Notes or this Agreement or any other Loan Document is
outstanding and unpaid and so long as the Total Commitment
has not been terminated.
SECTION 11.03. Successors and Assigns;
Participations. (a) 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 party; and all
covenants, promises and agreements by or on behalf of any
Borrower, any Guarantor, any Grantor, any ERISA Affiliate,
any subsidiary of any thereof, the Agent or the Lenders, that
are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns. Without
limiting the generality of the foregoing, the Borrowers
specifically confirm that any Lender may at any time and from
time to time pledge or otherwise grant a security interest in
any Loan or any Note (or any part thereof) to any Federal
Reserve Bank. No Borrower may assign or transfer any of its
rights or obligations hereunder without the written consent of
all the Lenders.
(b) Each Lender, without the consent of the
Borrowers, but only with the consent of the Agent, may sell
participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Revolving
Credit Commitment or Term Loan Commitment) and the
Loans owing to it and undrawn Letters of Credit and the
Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without
limitation, its Revolving Credit Commitment and Term Loan
Commitment) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the banks or other
entities buying participations shall be entitled to the cost
protection provisions contained in Sections 2.10(a) (except to
the extent that application of such Section 2.10(a) to such
banks and entities would cause the Borrowers to make
duplicate payments thereunder), 2.11 and 2.12 hereof, but
only to the extent any of such Sections would be available to
the Lender which sold such participation, and (iv) the
Borrowers, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement;
provided, further, however, that each Lender shall retain the
sole right and responsibility to enforce the obligations of the
Borrowers, Grantors and the Guarantors relating to the Loans,
including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this
Agreement, other than amendments, modifications or waivers
with respect to any fees payable hereunder or the amount of
principal or the rate of interest payable on, or the dates fixed
for any payment of principal of or interest on, the Loans or the
release of all Collateral.
(c) Each Lender may assign by novation, to
any one or more banks or other entities without the prior
written consent of the Borrowers but with the prior written
consent of the Agent, all or a portion of its interests, rights
and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of
its Revolving Credit Commitment or Term Loan Commitment
and the same portion of the Loans and undrawn Letters of
Credit at the time owing to it and the Note or Notes held by
it), provided, however, that (i) each such assignment shall be
of a constant, and not a varying, percentage of all of the
assigning Lender's rights and obligations under this
Agreement, which shall include the same percentage interest
in the Loans, Letters of Credit and Notes, and (ii) the parties
to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register (as
defined below), an Assignment and Acceptance, together with
any Note subject to such assignment and a processing and
recordation fee of $2,500; and provided, further, that NatWest
shall at all times retain for its own account a portion of the
Total Commitment not less than that held at such time by
Chemical Bank. Upon such execution, delivery, acceptance
and recording and after receipt of the written consent of the
Agent, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (x)
the assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and under the
other Loan Documents and (y) the Lender which is assignor
thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(d) By executing and delivering an
Assignment and Acceptance, the Lender which is assignor
thereunder and the assignee thereunder confirm to, and agree
with, each other and the other parties hereto as follows: (i)
other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereunder
free and clear of any adverse claim, such Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made
in or in connection with this Agreement or the execution,
legality, validity, enforceability, perfection, genuineness,
sufficiency or value of this Agreement, the other Loan
Documents or any Collateral with respect thereto or any other
instrument or document furnished pursuant hereto or thereto;
(ii) such Lender makes no representation or warranty and
assumes no responsibility with respect to the financial
condition of any Borrower, or any Grantor or Guarantor or the
performance or observance by any Borrower, Grantor or the
Guarantor of any of their respective obligations under this
Agreement, any Guarantees or any of the other Loan
Documents or any other instrument or document furnished
pursuant hereto or thereto; (iii) such assignee confirms that it
has received a copy of this Agreement, any Guarantees and of
the other Loan Documents, together with copies of financial
statements and such other documents and information as it
has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon
the Agent, such Lender or any other Lender and based on
such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes the Agent to take such action
as the Agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental
thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as
a Lender.
(e) The Agent shall maintain at its address
referred to in Section 11.01 hereof a copy of each Assignment
and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders and the
Revolving Credit Commitment or Term Loan Commitment,
as the case may be, of, and principal amount of the Loans
owing to, each Lender from time to time (the "Register").
The entries in the Register shall be conclusive, in the absence
of manifest error, and the Borrowers, the Agent and the
Lenders may treat each person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agree-
ment. The Register shall be available for inspection by the
Borrowers or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee
together with any Note or Notes subject to such assignment
and the written consent to such assignment, the Agent shall, if
such Assignment and Acceptance has been completed and is
precisely in the form of Exhibit F annexed hereto, (i) accept
such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice
thereof to the Lenders and the Borrowers. Within five (5)
Business Days after receipt of such notice, the Borrowers, at
their own expense, shall execute and deliver to the Agent in
exchange for each surrendered Note or Notes a new Note or
Notes to the order of such assignee in an amount equal to its
portion of the Term Loan Commitment and/or Revolving
Credit Commitment, as the case may be, assumed by it
pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained any Term Loan Commitment or
Revolving Credit Commitment hereunder, a new Note or
Notes to the order of the assigning Lender in an amount equal
to the Term Loan Commitment and/or Revolving Credit
Commitment, as the case may be, retained by it hereunder.
Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such
surrendered Note or Notes or, with respect to the Term Notes,
the principal amount of the Term Loans outstanding at such
time as evidenced by such Term Notes or Notes, shall be
dated the effective date of such Assignment and Acceptance
and shall otherwise be in substantially the form of Exhibit A
or Exhibit B, as the case may be. Notes surrendered to the
Borrowers shall be cancelled by the Borrowers.
(g) Notwithstanding any other provision
herein, any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant
to this Section 11.03, disclose to the assignee or participant or
proposed assignee or participant, any information, including,
without limitation, any Information, relating to the Borrowers
furnished to such Lender by or on behalf of the Borrowers in
connection with this Agreement; provided, however, that
prior to any such disclosure, each such assignee or participant
or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential Information relating to the
Borrowers received from such Lender.
SECTION 11.04. Expenses; Indemnity. (a)
Each Borrower agrees to pay all reasonable out-of-pocket
expenses incurred by the Agent in connection with the
preparation of this Agreement, the Security Documents, the
Notes and the other Loan Documents or with any
amendments, modifications, waivers, extensions, renewals,
renegotiations, or "work-outs" of the provisions hereof or
thereof (whether or not the transactions hereby contemplated
shall be consummated) or incurred by the Agent or any of the
Lenders in connection with the enforcement or protection of
its rights in connection with this Agreement, the Guarantees
or any of the other Loan Documents or with the Loans made
or the Notes or Letters of Credit issued hereunder, or in
connection with any pending or threatened action, proceeding,
or investigation relating to the foregoing, including but not
limited to the reasonable fees and disbursements of counsel
for the Agent and (subject to the Fee Letter dated the date
hereof among the Borrowers and the Agent) ongoing field
examination expenses and charges, and, in connection with
such enforcement or protection, the reasonable fees and
disbursements of counsel for each Lender. The Borrower
further indemnifies the Lenders from and agrees to hold them
harmless against any documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of this Agreement or the Notes.
(b) Each Borrower indemnifies the Agent
and each Lender and their respective directors, officers,
employees and agents against, and agrees to hold the Agent,
each Lender and each such person harmless from, any and all
losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees and expenses, incurred by
or asserted against the Lender or any such person arising out
of, in any way connected with, or as a result of (i) the use of
any of the proceeds of the Loans, (ii) this Agreement, the
Guarantees, any of the Security Documents, the Acquisition
Documents or the other documents contemplated hereby or
thereby, (iii) the performance by the parties hereto and thereto
of their respective obligations hereunder and thereunder
(including but not limited to the making of the Total
Commitment) and consummation of the transactions
contemplated hereby and thereby, (iv) breach of any
representation or warranty, or (v) any claim, litigation,
investigation or proceedings relating to any of the foregoing,
whether or not the Agent, any Lender or any such person is a
party thereto; provided, however, that such indemnity shall
not, as to the Agent or any Lender, apply to any such losses,
claims, damages, liabilities or related expenses to the extent
that they result from the bad faith or willful misconduct of the
Agent or any Lender.
(c) Each Borrower indemnifies, and agrees
to defend and hold harmless the Agent and the Lenders and
their respective officers, directors, shareholders, agents and
employees (collectively, the "Indemnitees") from and against
any loss, cost, damage, liability, lien, deficiency, fine, penalty
or expense (including, without limitation, reasonable
attorneys' fees and reasonable expenses for investigation,
removal, cleanup and remedial costs and modification costs
incurred to permit, continue or resume normal operations of
any property or assets or business of Chock or any subsidiary
thereof or any Grantor) arising from a violation of, or failure
to comply with any Environmental Law and to remove any
Lien arising therefrom except to the extent caused by the bad
faith or willful misconduct of any Indemnitee, which any of
the Indemnitees may incur or which may be claimed or
recorded against any of the Indemnitees by any person.
(d) The provisions of this Section 11.04 shall
remain operative and in full force and effect regardless of the
expiration of the term of this Agreement and the termination
hereof, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Agreement
or the Notes, or any investigation made by or on behalf of the
Agent or any Lender. All amounts due under this Section
11.04 shall be payable on written demand therefor.
SECTION 11.05. Applicable Law. THIS
AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK (OTHER THAN THE CONFLICTS OF LAWS
PRINCIPLES THEREOF).
SECTION 11.06. Right of Setoff. If an Event
of Default shall have occurred and be continuing, upon the
request of the Required Lenders each Lender shall and is
hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time
owing by such Lender to or for the credit or the account of
any Borrower against any and all of the obligations of the
Borrowers now and hereafter existing under this Agreement
and the Notes held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this
Agreement or the Notes and although such obligations may be
unmatured. Each Lender agrees to notify promptly the Agent
and the Borrowers after any such setoff and application made
by such Lender, but the failure to give such notice shall not
affect the validity of such setoff and application. The rights
of each Lender under this Section are in addition to other
rights and remedies (including, without limitation, other rights
of setoff) which may be available to such Lender.
SECTION 11.07. Payments on Business Days.
(a) Should the principal of or interest on the Notes or any fee
or other amount payable hereunder become due and payable
on other than a Business Day, payment in respect thereof may
be made on the next succeeding Business Day (except as
otherwise provided in the definition of Interest Period), and
such extension of time shall in such case be included in
computing interest, if any, in connection with such payment.
(b) All payments by any Borrower hereunder
and all Loans made by the Lenders hereunder shall be made in
lawful money of the United States of America in immediately
available funds at the office of the Agent set forth in Section
11.01 hereof.
SECTION 11.08. Waivers; Amendments. (a)
No failure or delay of any Lender in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such right
or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies
of the Lenders hereunder are cumulative and not exclusive of
any rights or remedies which they may otherwise have. No
waiver of any provision of this Agreement or the Notes nor
consent to any departure by any Borrower therefrom shall in
any event be effective unless the same shall be authorized as
provided in paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on any
Borrower in any case shall entitle it to any other or further
notice or demand in similar or other circumstances. Each
holder of any of the Notes shall be bound by any amendment,
modification, waiver or consent authorized as provided
herein, whether or not such Note shall have been marked to
indicate such amendment, modification, waiver or consent.
(b) Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the
Borrowers and the Required Lenders; provided, however, that
no such agreement shall (i) change the principal amount of, or
extend or advance the maturity of or the dates for the payment
of principal of or interest on, any Note or reduce the rate of
interest on any Note, without the consent of each holder
affected thereby, (ii) change the Revolving Credit
Commitment or Term Loan Commitment of any Lender or
amend or modify the provisions of this Section, Section 2.06,
Section 2.13, Section or Section 11.04 hereof or the definition
of "Required Lenders," or (iii) release any material portion of
the Collateral, in each case without the prior written consent
of each Lender affected thereby and provided, further,
however, that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Agent under this
Agreement or the other Loan Documents without the written
consent of the Agent; and provided, further, however, that the
Agent may waive any non-material breach of the reporting
provisions contained in Section 6.05 hereof without the
consent of the Lenders. Each Lender and holder of any Note
shall be bound by any modification or amendment authorized
by this Section regardless of whether its Notes shall be
marked to make reference thereto, and any consent by any
Lender or holder of a Note pursuant to this Section shall bind
any person subsequently acquiring a Note from it, whether or
not such Note shall be so marked.
SECTION 11.09. Severability. In the event any
one or more of the provisions contained in this Agreement or
in the Notes should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall not in
any way be affected or impaired thereby.
SECTION 11.10. Entire Agreement; Waiver of
Jury Trial, etc. (a) This Agreement, the Notes and the other
Loan Documents constitute the entire contract between the
parties hereto relative to the subject matter hereof. Any
previous agreement among the parties hereto with respect to
the Transactions is superseded by this Agreement, the Notes
and the other Loan Documents. Except as expressly provided
herein or in the Notes or the Loan Documents (other than this
Agreement), nothing in this Agreement, the Notes or in the
other Loan Documents, expressed or implied, is intended to
confer upon any party, other than the parties hereto, any
rights, remedies, obligations or liabilities under or by reason
of this Agreement, the Notes or the other Loan Documents.
(b) EXCEPT AS PROHIBITED BY
LAW, EACH PARTY HERETO HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT, THE
NOTES, ANY OF THE OTHER LOAN DOCUMENTS
OR THE TRANSACTIONS.
(c) Except as prohibited by law, each party
hereto hereby waives any right it may have to claim or recover
in any litigation referred to in paragraph (b) of this Section
11.10 any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual
damages.
(d) Each party hereto (i) certifies that no
representative, agent or attorney of any Lender has rep-
resented, expressly or otherwise, that such Lender would not,
in the event of litigation, seek to enforce the foregoing
waivers and (ii) acknowledges that it has been induced to
enter into this Agreement, the Notes or the other Loan
Documents, as applicable, by, among other things, the mutual
waivers and certifications herein.
SECTION 11.11. Confidentiality. The Agent
and the Lenders agree to keep confidential (and to cause their
respective officers, directors, employees, agents and
representatives to keep confidential) all information, materials
and documents furnished to the Agent or any Lender (the
"Information"). Notwithstanding the foregoing, the Agent
and each Lender shall be permitted to disclose Information (i)
to such of its officers, directors, employees, agents and
representatives as need to know such Information in
connection with its participation in any of the Transactions or
the administration of this Agreement or the other Loan
Documents; (ii) to the extent required by applicable laws and
regulations or by any subpoena or similar legal process, or
requested by any governmental agency or authority; (iii) to the
extent such Information (A) becomes publicly available other
than as a result of a breach of this Agreement, (B) becomes
available to the Agent or such Lender on a non-confidential
basis from a source other than any Borrower, any Guarantor,
any Grantor or any of their respective subsidiaries or (C) was
available to the Agent or such Lender on a non-confidential
basis prior to its disclosure to the Agent or such Lender by
any Borrower, any Guarantor, any Grantor or any of their
respective subsidiaries; (iv) to the extent any Borrowers, any
Guarantor or any of their respective subsidiaries shall have
consented to such disclosure in writing; (v) in connection with
the sale of any Collateral pursuant to the provisions of any of
the other Loan Documents; or (vi) pursuant to Section
11.03(g) hereof.
SECTION 11.12. Submission to Jurisdiction.
(a) Any legal action or proceeding with respect to this
Agreement or the Notes or any other Loan Document may be
brought in the courts of the State of New York or of the
United States of America for the Southern District of New
York, and, by execution and delivery of this Agreement, each
of the Borrowers and each of the Guarantors hereby accepts
for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts.
(b) Each of the Borrowers and each of the
Guarantors hereby irrevocably waive, in connection with any
such action or proceeding, any objection, including, without
limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens, which it may now or
hereafter have to the bringing of any such action or
proceeding in such respective jurisdictions.
(c) Each of the Borrowers and each of the
Guarantors hereby irrevocably consents to the service of
process of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to each such
person, as the case may be, at its address set forth in Section
11.01 hereof.
(d) Nothing herein shall affect the right of
the Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or
otherwise proceed against any Borrower or any Guarantor in
any other jurisdiction.
SECTION 11.13. Counterparts; Facsimile
Signature. This Agreement may be executed in counterparts,
each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and
shall become effective when copies hereof which, when taken
together, bear the signatures of each of the parties hereto shall
be delivered to the Agent. Delivery of an executed
counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually
executed signature page hereto.
SECTION 11.14. Headings. Article and
Section headings and the Table of Contents used herein are
for convenience of reference only and are not to affect the
construction of, or to be taken into consideration in
interpreting, this Agreement.
XII. GUARANTEES
Each Borrower unconditionally guarantees, as a
primary obligor and not merely as a surety, jointly and
severally with each other Borrower, the due and punctual
payment of the principal of and interest on each of the Notes,
when and as due, whether at maturity, by acceleration, by
notice of prepayment or otherwise, and the due and punctual
performance of all other Obligations. Each Borrower further
agrees that the Obligations may be extended and renewed, in
whole or in part, without notice to or further assent from it,
and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligations.
Each Borrower waives presentment to, demand
of payment from and protest to the other Borrowers of any of
the Obligations, and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment. The obliga-
tions of a Borrower hereunder shall not be affected by (a) the
failure of any Lender or the Agent to assert any claim or
demand or to enforce any right or remedy against such
Borrower or any other Borrower under the provisions of this
Agreement, the Notes or any of the other Loan Documents or
otherwise; (b) any rescission, waiver, amendment or
modification of any of the terms or provisions of this
Agreement, the Notes, any of the other Loan Documents, any
guarantee or any other agreement; (c) the release of any
security held by the Agent for the Obligations or any of them;
or (d) the failure of any Lender to exercise any right or
remedy against any other Guarantor of the Obligations.
Each Borrower further agrees that its guarantee
constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be
had by any Lender to any security (including, without
limitation, any Collateral) held for payment of the Obligations
or to any balance of any deposit account or credit on the
books of any Lender in favor of any other Borrower or any
other person.
The obligations of each Borrower hereunder
shall not be subject to any reduction, limitation, impairment or
termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the in-
validity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing,
the obligations of each Borrower hereunder shall not be
discharged or impaired or otherwise affected by the failure of
the Agent or any Lender to assert any claim or demand or to
enforce any remedy under this Agreement, the Notes or under
any other Loan Document, any guarantee or any other
agreement, by any waiver or modification of any provision
thereof, by any default, failure or delay, willful or otherwise,
in the performance of the Obligations, or by any other act or
omission which may or might in any manner or to any extent
vary the risk of such Borrower or otherwise operate as a
discharge of such Borrower as a matter of law or equity.
Each Borrower further agrees that its guarantee
shall continue to be effective or be reinstated, as the case may
be, if at any time payment, or any part thereof, of principal of
or interest on any Obligation is rescinded or must otherwise
be returned by the Agent or any Lender upon the bankruptcy
or reorganization of any Borrower or otherwise.
Each Borrower hereby waives and releases all
rights of subrogation against each other Borrower and its
property and all rights of indemnification, contribution and
reimbursement from each other Borrower and its property, in
each case in connection with this guarantee and any payments
made hereunder, and regardless of whether such rights arise
by operation of law, pursuant to contract or otherwise.
IN WITNESS WHEREOF, the Borrowers, the
Agent and the Lenders have caused this Agreement to be duly
executed by their respective authorized officers as of the day
and year first above written.
CHOCK FULL
O'NUTS CORPORATION
By:_____________
___________________
Name: Xxxxxx
Xxxxxxx
Title: Senior Vice
President
XXXX'X COFFEE
CO.
By:_____________
___________________
Name: Xxxxxx
Xxxxxxx
Title: Vice
President
XXXXXXXXXX
REALTY ASSOCIATES
By: CFN OF NEW
YORK, INC., general
partner
By:_____________
___________________
Name: Xxxxxx
Xxxxxxx
Title: Vice
President
CHOCK REALTY
CORPORATION
B
y:______________________________
Name: Xxxxxx
Xxxxxxx
Title: Vice
President
QUIKAVA, INC. .
By:_____________
___________________
Name: Xxxxxx
Xxxxxxx
Title: Vice
President
NATWEST BANK
N.A., as Lender
By:_____________
___________________
Name:
Title: Vice
President
NATWEST BANK
N.A., as Agent
By:_____________
___________________
Name:
Title: Vice
President
CHEMICAL BANK
By:_____________
_________________
Name:
Title: Vice
President
SCHEDULE 2.01(a)
TERM LOAN COMMITMENTS
Approximate
Term Loan Percentage of Total
Lender Commitment Term Loan Commitment
NatWest Bank N.A. $6,154,000 61.54%
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxx
Chemical Bank $ 3,846,000 38.46%
000 Xxxxx Xxxxxx
Asset Based Region
Xxx Xxxx, XX 00000-0000
Attention: Xx. Xxxxxx Xxxx
SCHEDULE 2.01(b)
REVOLVING CREDIT COMMITMENTS
Approximate
Revolving Percentage of
Credit Total Revolving
Lender Commitment Credit Commitment
NatWest Bank N.A. $24,616,000 61.54%
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxx
Chemical Bank $15,384,000 38.46%
000 Xxxxx Xxxxxx
Asset Based Region
Xxx Xxxx, XX 00000-0000
Attention: Xx. Xxxxxx Xxxx
