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EXECUTION COPY
$200,000,000
CREDIT AGREEMENT
Dated as of September 22, 1999
among
XXXXXXXX PROCESSED FOODS, L.L.C.
and
Certain of its U.S. Subsidiaries,
as Borrowers,
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 14.6 HEREOF,
as Lenders,
and
FIRST UNION NATIONAL BANK,
as Agent
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of September 22, 1999
among XXXXXXXX PROCESSED FOODS, L.L.C., a Delaware limited liability
company (the "Company"), such Subsidiaries of the Company as may from
time to time become parties hereto (collectively referred to as the
"Subsidiary Borrowers" or individually referred to as a "Subsidiary
Borrower") (hereinafter, the Company and the Subsidiary Borrowers
collectively referred to as the "Borrowers" or individually referred to
as a "Borrower"), each of the financial institutions identified as
Lenders on SCHEDULE 1.1A hereto (together with each of their successors
and assigns, referred to individually as a "Lender" and, collectively,
as the "Lenders"), and FIRST UNION NATIONAL BANK ("First Union"), acting
in the manner and to the extent described in ARTICLE XIII hereof (in
such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers wish to obtain a revolving credit facility
and a term loan facility for the purposes set forth hereinafter; and
WHEREAS, upon the terms and subject to the conditions set forth
herein, the Lenders are willing to make loans and advances to the
Borrowers;
NOW, THEREFORE, the Borrowers, the Lenders and the Agent hereby
agree as follows:
ARTICLE I
DEFINITIONS.
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified:
"ACCOUNTS" shall mean all of each Borrower's "accounts" (as defined
in the Uniform Commercial Code), whether now existing or existing in the
future, including, without limitation, all (i) accounts receivable
(whether or not specifically listed on schedules furnished to the
Agent), including, without limitation, all accounts created by or
arising from all of each Borrower's sales of goods or rendition of
services made under any of each Borrower's trade names or styles, or
through any of each Borrower's divisions; (ii) unpaid seller's rights
(including rescission, replevin, reclamation and stopping in transit)
relating to the foregoing or arising therefrom, (iii) rights to any
goods represented by any of the foregoing, including returned or
repossessed goods; (iv) reserves and credit balances held by each
Borrower with respect to any such accounts receivable or account
debtors; (v) guarantees or collateral for any of the foregoing; and (vi)
insurance policies or rights relating to any of the foregoing.
"ACKNOWLEDGMENT AGREEMENTS" shall mean (i) the Acknowledgment
Agreements, substantially in the form of EXHIBIT A hereto, between each
Borrower's warehousemen, fillers, packers and processors and the Agent,
in each case acknowledging and agreeing, among other things, (A) that
such warehousemen, fillers, packers and processors do not have any Liens
on any of the property of any Borrower or any Subsidiary and (B) to the
collateral assignment by each Borrower to the Agent of each such
Borrower's interest in the contracts with each of such warehousemen,
fillers, packers and processors and (ii) Landlord Agreements.
"ACQUIRED COMPANY" shall mean the Person (or the assets or business
thereof) which is acquired pursuant to an Acquisition.
"ACQUISITION" shall mean (i) the purchase of the Capital Stock of a
Person, (ii) the purchase of all or a substantial portion of the assets
or business of any Person or (iii) the merger or consolidation with a
Person in which the Company or any other Borrower shall be the surviving
or resulting corporation.
"ACQUISITION DOCUMENTS" shall mean any agreement pursuant to which
an Acquisition is made in accordance with the terms hereof, including
the exhibits and schedules thereto, and all agreements, documents and
instruments executed and delivered pursuant thereto or in connection
therewith.
"ACQUISITION TERM LOANS" shall have the meaning given to such term
in the definition of Term Loan Availability Termination Date.
"AFFILIATE" shall mean any entity which directly or indirectly
controls, is controlled by, or is under common control with, any
Borrower or any Subsidiary of any Borrower. For purposes of this
definition, "control" shall mean the possession, directly or indirectly,
of the power to (i) vote ten percent (10%) or more of the securities
having ordinary voting power for the election of directors of such
Person, or (ii) direct or cause the direction of management and policies
of a business, whether through the ownership of voting securities, by
contract or otherwise and either alone or in conjunction with others or
any group.
"AGENT" shall mean First Union as provided in the preamble to this
Credit Agreement or any successor to First Union.
"AGENT'S FEES" shall mean the fees payable by the Borrowers to the
Agent as described in the Fee Letter.
"APPLICABLE PERCENTAGE" shall mean for Eurodollar Loans, Base Rate
Loans and Unused Line Fees, the appropriate applicable percentages
corresponding to the Average Leverage Ratio in effect as of the most
recent Calculation Date as shown below:
Tier Average Applicable Applicable Applicable
Levels Leverage Percentage for Percentage Percentage
Ratio Eurodollar Loans for for Revolving and Term
Base Rate Loans Unused Line Fees
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1 >4.5 to 1.0 2.50% 1.00% .50%
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2 >4.0 to 1.0, 2.25% .75% .50%
but < or = 4.5 to 1.0
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3 >3.5 to 1.0, 2.00% .50% .375%
but < or = 4.0 to 1.0
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4 >3.0 to 1.0, 1.75% .25% .375%
but < or = 3.5:1
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5 < or = 3.0:1 1.50% 0% .375%
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The Applicable Percentages shall be adjusted quarterly on the date (each
a "Calculation Date") ten Business Days after the date on which the
Company delivers the quarterly officer's certificate for each fiscal
quarter in accordance with the provisions of SECTION 7.1(D); PROVIDED,
HOWEVER, that (i) the initial Applicable Percentages shall be based on
Tier Level 4 (as shown above) and shall remain at Tier Level 4 until the
first Calculation Date subsequent to December 31, 1999, and, thereafter,
the Tier Level shall be determined by the then current Average Leverage
Ratio, and (ii) if the Company fails to deliver the officer's
certificate to the Agent for any fiscal quarter as required by and
within the time limits set forth in SECTION 7.1(D), the Applicable
Percentages from the applicable date of such failure shall be based on
Tier Level 1 until five Business Days after an appropriate officer's
certificate is provided, whereupon the Tier Level shall be determined by
the then current Average Leverage Ratio. Except as set forth above,
each Applicable Percentage shall be effective from one Calculation Date
until the next Calculation Date.
"APPRAISAL" shall have the meaning given to such term in Section
5.2.
"APPRAISAL DATE" shall mean the dated date of the Appraisal.
"ASSET DISPOSITION" shall mean the disposition (other than (i) a
disposition of any of the property listed on SCHEDULE 1.1F hereto, (ii)
a disposition of inventory made in the ordinary course of business or
(iii) a disposition described in clauses (c) or (e) of Section 9.3, so
long as the proceeds thereof are used to repair existing assets or
acquire other assets or property useful in the relevant Borrower's
business within one hundred twenty (120) days of such disposition and
any disposition described in clause (b) of Section 9.3) of any or all of
the assets (including, without limitation, the Capital Stock of a
Borrower or Subsidiary of a Borrower) of any Borrower or its
Subsidiaries, whether by sale, lease, transfer or otherwise, in a single
transaction, or in a series of related transactions in any consecutive
12-month period (a) that have a fair market value in the aggregate in
excess of $250,000 or (b) for Net Cash Proceeds in the aggregate in
excess of $250,000.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
entered into by an assigning Lender and an assignee Lender, accepted by
the Agent, in accordance with SECTION 14.6(F), in the form attached
hereto as EXHIBIT B.
"AVAILABILITY" shall mean an amount equal to the excess of the
Revolving Credit Borrowing Base over the outstanding amount of Revolving
Loans and Letter of Credit Obligations.
"AVERAGE LEVERAGE RATIO" shall mean, as of the last day of each
fiscal quarter, the ratio of (a) average outstanding Consolidated Funded
Debt on the last day of each month in the four fiscal quarters ending on
such date to (b) Consolidated EBITDA for the four fiscal quarters ending
on such date; PROVIDED, HOWEVER, that Consolidated Funded Debt, as a
component of the Average Leverage Ratio (i) for the fiscal quarter
ending December 31, 1999, shall be computed for the fiscal quarterly
period then ended, (ii) for the fiscal quarter ending March 31, 2000,
shall be computed for the two fiscal quarterly periods then ended and
(iii) for the fiscal quarter ending June 30, 2000, shall be computed for
the three fiscal quarterly periods then ended.
"BASE RATE" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (i) the Federal Funds Rate in effect on such day
PLUS 1/2 of 1% or (ii) the Prime Rate in effect on such day. If for any
reason the Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable after due inquiry to
ascertain the Federal Funds Rate for any reason, including the inability
or failure of the Agent to obtain sufficient quotations in accordance
with the terms hereof, the Base Rate shall be determined without regard
to clause (i) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change
in the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Rate, respectively.
"BASE RATE LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the Base Rate.
"BENEFIT PLAN" shall mean a defined benefit plan as defined in
SECTION 3(35) of ERISA (other than a Multiemployer Plan) in respect of
which any Borrower, any Subsidiary of any Borrower or any ERISA
Affiliate is, or within the immediately preceding six (6) years was, an
"employer" as defined in SECTION 3(5) of ERISA.
"BORROWER" and "BORROWERS shall have the meaning given to such
terms in the preamble of this Credit Agreement.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday,
a legal holiday or a day on which banking institutions are authorized or
required by law or other governmental action to close in Xxxxxxxxx,
Xxxxx Xxxxxxxx, Xxx Xxxxxxxx, Xxxxxxxxx or New York, New York; PROVIDED
that in the case of Eurodollar Loans, such day is also a day on which
dealings between banks are carried on in U.S. dollar deposits in the
London interbank market.
"CALCULATION DATE" shall have the meaning given to such term in the
definition of Applicable Percentage.
"CAPEX TERM LOANS" shall have the meaning given to such term in the
definition of Term Loan Availability Termination Date.
"CAPITAL LEASE" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"CAPITAL STOCK" shall mean (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case of
a partnership, partnership interests (whether general or limited), (iv)
in the case of a limited liability company, membership interests and (v)
any other equity interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions
of assets of, the issuing Person.
"CASH EQUIVALENTS" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States
or any agency or instrumentality thereof (PROVIDED that the full faith
and credit of the United States is pledged in support thereof) having
maturities of not more than one (1) year from the date of acquisition,
(ii) time deposits or certificates of deposit of any commercial bank
incorporated under the laws of the United States or any state thereof,
of recognized standing having capital and unimpaired surplus in excess
of $1,000,000,000 and whose short-term commercial paper rating at the
time of acquisition is at least A-1 or the equivalent thereof by
Standard & Poor's Corporation or at least P-1 or the equivalent thereof
by Xxxxx'x Investors Services, Inc. (any such bank, an "Approved Bank"),
with such deposits or certificates having maturities of not more than
one (1) year from the date of acquisition, (iii) repurchase obligations
with a term of not more than seven (7) days for underlying securities of
the types described in clauses (i) and (ii) above entered into with any
Approved Bank, (iv) commercial paper or finance company paper issued by
any Person incorporated under the laws of the United States or any state
thereof and rated at least A-1 or the equivalent thereof by Standard &
Poor's Corporation or at least P-1 or the equivalent thereof by Xxxxx'x
Investors Service, Inc., and in each case maturing not more than one
year after the date of acquisition, and (v) investments in money market
funds that are registered under the Investment Company Act of 1940, as
amended, which have net assets of at least $1,000,000,000 and at least
eighty-five percent (85%) of whose assets consist of securities and
other obligations of the type described in clauses (i) through (iv)
above. All such Cash Equivalents must be denominated solely for payment
in Dollars.
"CBII" shall mean Xxxxxxxx Brands International, Inc., a New Jersey
corporation.
"CBII DISTRIBUTIONS" shall mean the CBII $28.4 Million Distribution
and the CBII $50 Million Distribution.
"CBII $28.4 MILLION DISTRIBUTION" shall mean a distribution by the
Company to its parent for the benefit of CBII of an amount up to
$28,400,000 during the first year following the Closing Date
representing the return of $28,400,000 of equity contributed by CBII to
the Company in June and August 1999.
"CBII $50 MILLION DISTRIBUTION" shall mean a distribution by the
Company to its parent for the benefit of CBII of an amount up to
$50,000,000 during the first year following the Closing Date.
"CHANGE OF CONTROL" shall mean the occurrence of any of the
following: (i) the failure of CBII to own and control, directly or
indirectly, in excess of 50% of the outstanding Voting Stock of the
Company or (ii) the failure of the Company to own, directly or
indirectly, 100% of the outstanding shares of Capital Stock of the other
Credit Parties.
"CLOSING" shall mean the consummation of the making of the initial
loan or advance by the Lenders to the Borrowers under this Credit
Agreement.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"COLLATERAL" shall mean any and all assets and rights and interests
in or to property of the Credit Parties pledged from time to time as
security for the Obligations pursuant to the Security Documents whether
now owned or hereafter acquired, including, without limitation, all of
the Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment,
Fixtures, General Intangibles (including all intellectual property),
Inventory, Instruments and Proceeds of each Borrower, as defined in the
Security Agreement.
"COLLATERAL LOSS" shall have the meaning given to such term in
SECTION 7.10.
"COMMITMENT" of any Lender shall mean the Revolving Credit
Commitment and the Term Loan Commitment of such Lender.
"COMPANY" shall have the meaning given to such term in the preamble
of this Credit Agreement.
"CONSOLIDATED" or "CONSOLIDATED" with reference to any term
defined herein, shall mean that term as applied to the accounts of the
Company and all of its consolidated Subsidiaries, consolidated in
accordance with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any applicable
period of computation, an amount equal to the consolidated aggregate
expenditures of the Company and its consolidated Subsidiaries during
such fiscal period for the acquisition (including the acquisition by
capitalized lease) or improvement of capital assets, as determined in
accordance with GAAP.
"CONSOLIDATED CASH TAXES" shall mean, for any applicable period of
computation, the aggregate of all taxes of the Company and its
consolidated Subsidiaries on a consolidated basis determined in
accordance with applicable law and GAAP applied on a consistent basis,
to the extent the same are paid in cash during such period and the
aggregate amount of all tax distributions made in cash as described in
SCHEDULE 9.6 during such period.. The applicable period of computation
shall be for the four (4) consecutive fiscal quarters ending as of the
date of determination.
"CONSOLIDATED EBITDA" shall mean, for any applicable period of
computation, the sum of (i) Consolidated Net Income for such period, but
excluding therefrom all extraordinary items of income or loss, PLUS (ii)
the aggregate amount of depreciation and amortization charges made in
calculating Consolidated Net Income for such period, PLUS (iii)
aggregate Consolidated Interest Expense for such period, PLUS (iv) the
aggregate amount of all income taxes reflected on the consolidated
statements of income of the Company and its Subsidiaries for such
period. Except as otherwise provided herein, the applicable period of
computation shall be for the four (4) consecutive fiscal quarters ending
as of the date of determination.
"CONSOLIDATED FIXED CHARGES" shall mean, for any applicable period
of computation, without duplication, the sum of (i) all Consolidated
Interest Expense for the applicable period PLUS (ii) Consolidated
Scheduled Funded Debt Payments due during the applicable period PLUS
(iii) Consolidated Cash Taxes for the applicable period PLUS (iv) cash
dividends or other distributions paid by the Company pursuant to SECTION
9.6 during the applicable period excluding the CBII Distributions.
Except as otherwise provided herein, the applicable period of
computation shall be for the four (4) consecutive fiscal quarters ending
as of the date of determination.
"CONSOLIDATED FUNDED DEBT" shall mean, as of the date of
determination, all Funded Indebtedness of the Company and its
consolidated Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any applicable
period of computation, interest expense, net of interest income, in each
case of the Company and its consolidated Subsidiaries for such period,
as determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" shall mean, for any applicable period of
computation, the consolidated net income (or net deficit) of the Company
and its consolidated Subsidiaries for any period, after deduction of all
expenses, taxes and other proper charges, all as determined in
accordance with GAAP.
"CONSOLIDATED SCHEDULED FUNDED DEBT PAYMENTS" shall mean, as of the
end of each fiscal quarter of the Company and its consolidated
Subsidiaries on a consolidated basis, the sum of all scheduled payments
of principal on Consolidated Funded Debt for the applicable period ended
on such date (including the principal component of payments due on
Capital Leases or under any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product (but excluding true leases) during the applicable period ending
on such date); it being understood that Consolidated Scheduled Funded
Debt Payments shall not include voluntary prepayments or the mandatory
prepayments required pursuant to SECTION 2.3.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean, as at any date of
determination, the sum of paid-in capital, accumulated other
comprehensive income or loss, PLUS retained earnings (or minus
accumulated deficit) of the Company and its consolidated Subsidiaries,
on a consolidated basis determined in conformity with GAAP, MINUS net
goodwill determined in conformity with GAAP.
"CONTRACTUAL OBLIGATIONS" shall mean, with respect to any Person,
any term or provision of any securities issued by such Person, or any
indenture, mortgage, deed of trust, contract, undertaking, document,
instrument or other agreement to which such Person is a party or by
which it or any of its properties is bound or to which it or any of its
properties is subject.
"CONTROLLED ERISA AFFILIATE" shall mean an ERISA Affiliate owned or
controlled by any Credit Party.
"CREDIT AGREEMENT" shall mean this credit agreement, dated as of
the date hereof, as the same may be modified, amended, extended,
restated or supplemented from time to time.
"CREDIT DOCUMENTS" shall mean, collectively, this Credit Agreement,
the Revolving Notes, the Term Loan Notes, the Letters of Credit, the
Security Documents and all other documents, agreements, instruments,
opinions and certificates executed and delivered in connection herewith
or therewith, as the same may be modified, amended, extended, restated
or supplemented from time to time.
"CREDIT PARTIES" shall mean the Borrowers and any affiliate of a
Borrower or any of its Subsidiaries which has pledged Collateral or
furnished a guaranty to secure the Obligations.
"DEFAULT" shall mean an event, condition or default which, with the
giving of notice, the passage of time or both would be an Event of
Default.
"DEFAULT RATE" shall have the meaning given to such term in SECTION
4.2.
"DEFAULTING LENDER" shall have the meaning given to such term in
SECTION 2.1(D)(III).
"DISTRIBUTION TERM LOAN BORROWING BASE" shall mean an amount equal
to 80% of the Eligible Equipment of the Borrowers owned as of the
Closing Date, determined as of the Appraisal Date.
"DISTRIBUTION TERM LOANS" shall have the meaning given to such term
in the definition of Term Loan Availability Termination Date.
"DOL" shall mean the U.S. Department of Labor and any successor
department or agency.
"DOLLARS" and "$" shall mean dollars in lawful currency of the
United States of America.
"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean the aggregate face amount
of the Borrowers' Accounts that conform to the warranties contained
herein, less the aggregate amount of all returns, discounts, claims,
credits, charges (including warehousemen's charges) and allowances of
any nature (whether issued, owing, granted or outstanding), and less the
aggregate amount of all reserves for slow paying accounts, foreign
sales, and xxxx and hold (or deferred shipment) transactions. Unless
otherwise approved in writing by the Agent, no Account shall be deemed
to be an Eligible Account Receivable if:
(i) it arises out of a sale made by any Borrower to an
Affiliate; or
(ii) the Account is unpaid more than ninety (90) days after
the original invoice date; or
(iii) fifty percent (50%) or more, in face amount, of
other Accounts from such account debtor (or any affiliate thereof)
are due or unpaid more than ninety (90) days after the original
invoice date; or
(iv) the amount of the Account, when aggregated with all other
Accounts of such account debtor, exceeds fifteen percent (15%) in
face value of all Accounts of the Borrowers then outstanding, to
the extent of such excess; or
(v) (A) the account debtor is also a creditor of any
Borrower, to the extent of the amount owed by such Borrower to the
account debtor, (B) the account debtor has disputed its liability
on, or the account debtor has made any claim with respect to, such
Account or any other Account due from such account debtor to such
Borrower, which has not been resolved or (C) the Account otherwise
is or may become subject to any right of setoff by the account
debtor, to the extent of the amount of such setoff; or
(vi) the Account is owing by an account debtor that has
commenced a voluntary case under the federal bankruptcy laws, as
now constituted or hereafter amended, or made an assignment for the
benefit of creditors, or if a decree or order for relief has been
entered by a court having jurisdiction in the premises in respect
to such account debtor in an involuntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or if any
other petition or other application for relief under the federal
bankruptcy laws has been filed by or against the account debtor, or
if such account debtor has failed, suspended business, ceased to be
solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a
significant portion of its assets or affairs; or
(vii) the sale is to an account debtor outside the
continental United States, unless the sale is (A) on letter of
credit, guaranty or acceptance terms, or subject to credit
insurance, in each case acceptable to the Agent in its sole
discretion, or (B) otherwise approved by and acceptable to the
Agent in its sole discretion; or
(viii) the sale to the account debtor is on a xxxx-and-
hold, guaranteed sale, sale-and-return, sale on approval or
consignment basis or made pursuant to any other written agreement
providing for repurchase or return; or
(ix) the goods giving rise to such Account have not been
shipped and delivered to and accepted by the account debtor or its
designee or the services giving rise to such Account have not been
performed by or on behalf of the applicable Borrower and accepted
by the account debtor or its designee or the Account otherwise does
not represent a final sale; or
(x) the Accounts owing by a particular account debtor exceed
a credit limit as to that account debtor determined by the Agent,
in its reasonable discretion, to the extent such Accounts owing by
the particular account debtor exceed such limit; or
(xi) the Account is subject to a Lien which has priority over
the Lien of the Agent in such Account other than Liens arising from
claims under PACA; provided however, the Agent shall establish a
reserve against Eligible Accounts Receivable to the extent of such
PACA claims.
In addition to the foregoing, Eligible Accounts Receivable shall
include such Accounts as the Borrowers shall request and that the Agent
approves in advance, in writing and in its reasonable judgment.
"ELIGIBLE EQUIPMENT" shall mean the aggregate orderly liquidation
value of each Borrower's harvesting and processing machinery and
equipment generally of the type reflected in the Appraisal, which (i) is
owned solely by such Borrower and with respect to which such Borrower
has good, valid and marketable title; (ii) is stored on property that is
owned or leased by such Borrower (PROVIDED that, with respect to such
equipment stored on property leased by such Borrower, such Borrower
shall have delivered in favor of the Agent an Acknowledgment Agreement
from the landlord of such leased location); (iii) is subject to a valid,
enforceable and first priority Lien in favor of Agent; (iv) is located
in the United States; and (v) is not obsolete, and which otherwise
conforms to the warranties contained herein.
"ELIGIBLE INVENTORY" shall mean (i) the aggregate gross amount of
each Borrower's finished goods Inventory, valued at the lower of average
cost or market, which (A) is owned solely by such Borrower and with
respect to which such Borrower has good, valid and marketable title; (B)
is not stored at a location listed on SCHEDULE 1.1G hereto and is stored
on property that is either (1) owned or leased by such Borrower or (2)
owned or leased by a warehouseman that has contracted with such Borrower
to store Inventory on such warehouseman's property or by a filler,
processor or packer of such Borrower (PROVIDED that, with respect to
Inventory stored on property leased by such Borrower, such Borrower
shall have delivered in favor of the Agent an Acknowledgment Agreement
from the landlord of such leased location, and, with respect to
Inventory stored on property owned or leased by a warehouseman, filler,
processor or packer, such Borrower shall have delivered to the Agent an
Acknowledgment Agreement executed by such warehouseman, filler,
processor or packer); (C) is subject to a valid, enforceable and first
priority Lien in favor of Agent except, with respect to Eligible
Inventory stored at sites described in clause (B)(2) above for normal
and customary warehouseman, filler, packer and processor charges; (D) is
located in the United States; (E) is not more than two (2) years old
from the date that such Inventory was packed; and (F) is not obsolete or
slow moving and for which a markdown reserve has not been made, and
which otherwise conforms to the warranties contained herein; (ii) LESS
markdown reserves; (iii) LESS any goods returned or rejected by such
Borrower's customers for which a credit has not yet been issued and
goods in transit to third parties (other than to such Borrower's agents,
warehouses, fillers, processors or packers that comply with clause
(i)(B)(2) above); (iv) less damaged Inventory; (v) LESS any Inventory
that is a no charge or sample item; (vi) LESS a reserve equal to the
amount of all accounts payable of such Borrower owed or owing to any
filler, packer or processor of such Borrower; (vii) LESS any reserves
required by the Agent in its reasonable discretion for special order
goods; and (viii) LESS any Inventory which is held by a Borrower
pursuant to consignment, sale or return, sale on approval or similar
arrangement. In addition to the foregoing, Eligible Inventory shall
include such items of such Borrower's Inventory as such Borrower shall
request and that the Agent approves in advance, in writing and in its
commercially reasonable judgment.
"EQUITY ISSUANCE" shall mean any issuance by any Borrower or any of
its Subsidiaries to any Person other than to any Borrower or any direct
or indirect parent of a Borrower of (a) shares of its Capital Stock, (b)
any shares of its Capital Stock pursuant to the exercise of options or
warrants or (c) any shares of its Capital Stock pursuant to the
conversion of any debt securities to equity. The term "Equity Issuance"
shall not include any Asset Disposition.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE" shall mean any (i) corporation which is or was at
any time a member of the same controlled group of corporations (within
the meaning of SECTION 414(B) of the Internal Revenue Code) as the
Borrowers or any Subsidiary of Borrower; (ii) partnership or other trade
or business (whether or not incorporated) at any time under common
control (within the meaning of SECTION 414(C) of the Internal Revenue
Code) with the Borrowers or any Subsidiary of the Borrower; and (iii)
member of the same affiliated service group (within the meaning of
SECTION 414(M) of the Internal Revenue Code) as the Borrowers or any
Subsidiary of the Borrower, any corporation described in clause (i)
above, or any partnership or trade or business described in clause (ii)
above.
"EURODOLLAR LOAN" shall mean a Loan bearing interest based at a
rate determined by reference to the Eurodollar Rate.
"EURODOLLAR RATE" shall mean, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = LONDON INTERBANK OFFERED RATE
1 - Eurodollar Reserve Percentage
"EURODOLLAR RESERVE PERCENTAGE" shall mean for any day, that
percentage (expressed as a decimal) which is in effect from time to time
under Regulation D of the Board of Governors of the Federal Reserve
System (or any successor), as such regulation may be amended from time
to time or any successor regulation, as the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency,
special, or marginal reserves) applicable with respect to Eurocurrency
liabilities as that term is defined in Regulation D (or against any
other category of liabilities that includes deposits by reference to
which the interest rate of Eurodollar Loans is determined), whether or
not any Lender has any Eurocurrency liabilities subject to such reserve
requirement at that time. Eurodollar Loans shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject
to reserve requirements without benefits of credits for proration,
exceptions or offsets that may be available from time to time to a
Lender. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve
Percentage.
"EVENT(S) OF DEFAULT" shall have the meaning provided for in
ARTICLE XI.
"EXCESS AVAILABILITY AMOUNT" shall mean, on any date of
determination, the amount of Availability determined as of such date not
to exceed $10,000,000. For purposes of determining the Excess
Availability Amount, Availability shall be calculated based on a
Revolving Credit Borrowing Base Certificate dated as of a recent date
and delivered to the Agent on the Business Day immediately preceding the
date of the relevant Distribution Term Loan.
"EXCLUDED TAXES" shall have the meaning given to such term in
SECTION 2.7.
"FEDERAL FUNDS RATE" shall mean, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the
weighted average of the rates on overnight Federal Funds transactions
with members of the Federal Reserve System arranged by Federal Funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by it.
"FEE LETTER" shall mean the letter agreement, dated August 24,
1999, by and between the Agent and the Company regarding the fees to be
paid by the Company to the Agent.
"FEES" shall mean, collectively, the Agent's Fees, the Lenders'
Fees, the Unused Line Fee, the Letter of Credit Fee and the Issuing Bank
Fees payable hereunder.
"FINANCIALS" shall have the meaning given to such term in SECTION
6.6.
"FIRST UNION" shall mean First Union National Bank, having its
principal office in North Carolina, and its successors and permitted
assigns.
"FIXED CHARGE COVERAGE RATIO" shall mean, as of the last day of
each fiscal quarter of the Company, the ratio of Consolidated EBITDA
(computed for the four fiscal quarterly periods then ended) to
Consolidated Fixed Charges (computed for the four fiscal quarterly
periods then ended); PROVIDED, HOWEVER, the Fixed Charge Coverage Ratio
(i) for the fiscal quarter ending December 31, 1999 shall be computed
for the fiscal quarterly period then ended, (ii) for the fiscal quarter
ending March 31, 2000 shall be computed for the two fiscal quarterly
periods then ended and (iii) for the fiscal quarter ending June 30, 2000
shall be computed for the three fiscal quarterly periods then ended.
"FOOD SECURITY ACT" shall mean the Food Security Act of 1985, as
amended, and any successor statute thereto, including all rules and
regulations thereunder, all as the same may be in effect from time to
time.
"FOREIGN LENDER" shall have the meaning given to such term in
SECTION 2.7(A).
"FUNDED INDEBTEDNESS" shall mean, with respect to any Person,
without duplication, (a) all Indebtedness of such Person other than
Indebtedness of the types referred to in clause (e), (f), (g), (i), (k),
(l) and (m) of the definition of "Indebtedness" set forth in this
SECTION 1.1, (b) all Indebtedness of another Person of the type referred
to in clause (a) above secured by (or for which the holder of such
Funded Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on, or payable out of the proceeds of production
from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (c) all guaranties of
such Person with respect to Indebtedness of the type referred to in
clause (a) above of another Person and (d) Indebtedness of the type
referred to in clause (a) above of any partnership or unincorporated
joint venture in which such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto.
"FUNDING BANK" shall have the meaning given to such term in SECTION
4.7.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, in effect from time to time.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"HEDGING AGREEMENTS" shall mean any Interest Rate Protection
Agreement or other interest rate protection agreement, foreign currency
exchange agreement, commodity purchase or option agreement or other
interest or exchange rate or commodity price hedging agreements
"HIGHEST LAWFUL RATE" shall mean, at any given time during which
any Obligations shall be outstanding hereunder, the maximum nonusurious
interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the indebtedness
under this Credit Agreement, under the laws of the State of North
Carolina (or the law of any other jurisdiction whose laws may be
mandatorily applicable notwithstanding other provisions of this Credit
Agreement and the other Credit Documents), or under applicable federal
laws which may presently or hereafter be in effect and which allow a
higher maximum nonusurious interest rate than under North Carolina or
such other jurisdiction's law, in any case after taking into account, to
the extent permitted by applicable law, any and all relevant payments or
charges under this Credit Agreement and any other Credit Documents
executed in connection herewith, and any available exemptions,
exceptions and exclusions.
"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily
made, (c) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person
(other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of property or services purchased by such Person
(other than trade debt incurred in the ordinary course of business and
due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of
such Person under take-or-pay or similar arrangements or under
commodities agreements, (f) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out
of the proceeds of production from, property owned or acquired by such
Person, whether or not the obligations secured thereby have been
assumed, (g) all guaranties of such Person with respect to Indebtedness
of the type referred in this definition of another Person, (h) the
principal portion of all obligations of such Person under Capital
Leases, (i) all obligations of such Person under Interest Rate
Protection Agreements, (j) the maximum amount of all standby letters of
credit issued or bankers' acceptances facilities created for the account
of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (k) all preferred Capital Stock issued by such
Person and required by the terms thereof to be redeemed, or for which
mandatory sinking fund payments are due, by a fixed date, (l) the
principal portion of all obligations of such Person under synthetic
leases, tax retention operating leases and other similar off-balance
sheet financing arrangements (but excluding true leases) and (m) the
Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer and for which such
Person is legally obligated.
"INDEPENDENT ACCOUNTANT" shall mean a firm of independent public
accountants of nationally recognized standing selected by the Company,
which is "independent" as that term is defined in Rule 2-01 of
Regulation S-X promulgated by the Securities and Exchange Commission.
"INTEREST PERIOD" shall mean, as to Eurodollar Loans, a period of
one month, two months, three months or six months, as selected by the
Borrowers, commencing on the date of the borrowing (including
continuations and conversions thereof); PROVIDED, HOWEVER, (i) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(ii) no Interest Period shall extend beyond the Maturity Date, (iii) any
Interest Period with respect to a Eurodollar Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the relevant
calendar month at the end of such Interest Period and (iv) if the Loans
and Commitments hereunder have not been fully syndicated by the Closing
Date, during the 60-day period after the Closing Date, the Borrowers
shall only be permitted to select Base Rate Loans.
"INTEREST RATE PROTECTION AGREEMENT" shall mean any interest rate
protection agreement, foreign currency exchange agreement, commodity
purchase or option agreement or other interest or exchange rate or
commodity price hedging agreements between any Borrower and any Lender,
or any affiliate of a Lender.
"INTERNAL REVENUE" shall mean the Internal Revenue Service and any
successor agency.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended from time to time, and any successor statute thereto
and all rules and regulations promulgated thereunder.
"INVENTORY" shall mean all of each Borrower's inventory, including
without limitation, (i) all raw materials, work in process, parts,
components, assemblies, supplies and materials used or consumed in the
Borrowers' business; (ii) all goods, wares and merchandise, finished or
unfinished, held for sale or lease or leased or furnished or to be
furnished under contracts of service; and (iii) all goods returned to or
repossessed by the Borrowers.
"INVESTMENT" in any Person shall mean (i) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities or
otherwise, but exclusive of the acquisition of inventory, supplies,
equipment and other property or assets used or consumed in the ordinary
course of business of the applicable Borrower or Subsidiary and
Consolidated Capital Expenditures not otherwise prohibited hereunder) of
assets, shares of Capital Stock, bonds, notes, debentures, partnership,
joint ventures or other ownership interests or other securities of such
Person, (ii) any deposit (other than deposits constituting a Permitted
Lien) with, or advance, loan or other extension of credit (other than
sales of inventory on credit in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms and
sales on credit of the type described in clauses (c) or (d) of Section
9.3) to, such Person or (iii) any other capital contribution to or
investment in such Person, including, without limitation, any obligation
incurred for the benefit of such Person. In determining the aggregate
amount of Investments outstanding at any particular time, (a) the amount
of any Investment represented by a guaranty shall be taken at not less
than the maximum principal amount of the obligations guaranteed and
still outstanding; (b) there shall be deducted in respect of each such
Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (c) there shall not be deducted in respect of
any Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise; and (d) there shall not be
deducted from the aggregate amount of Investments any decrease in the
market value thereof.
"ISSUING BANK" shall mean First Union or any Lender that is
acceptable to the Agent which shall issue a Letter of Credit for the
account of the Borrowers.
"ISSUING BANK FEES" shall have the meaning given to such term in
SECTION 4.5(B).
"LANDLORD AGREEMENT" shall mean a Landlord Lien Waiver Agreement,
substantially in the form of EXHIBIT C hereto, between a Borrower's
landlord and the Agent, acknowledging and agreeing, among other things,
(i) that such landlord does not have any Liens on any of the property of
such Borrower or any Subsidiary and (ii) to permit the Agent access to
the property for the purposes of exercising its remedies under the
Security Agreement.
"LENDER" shall have the meaning given to such term in the preamble
of this Credit Agreement.
"LENDERS' FEES" shall mean the non-refundable fees payable to each
of the Lenders as set forth in each of the Lender's respective fee
letter with the Agent.
"LENDING PARTY" shall have the meaning given to such term in
Section 14.7.
"LETTER OF CREDIT COMMITTED AMOUNT" shall have the meaning given to
such term in Section 3.1.
"LETTER OF CREDIT DOCUMENTS" shall mean, with respect to any Letter
of Credit, such Letter of Credit, any amendments thereto, any documents
delivered in connection therewith, any application therefor, and any
agreements, instruments, guarantees or other documents (whether general
in application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned or
at risk or (ii) any collateral security for such obligations.
"LETTER OF CREDIT FEE" shall have the meaning given to such term in
SECTION 4.5(A).
"LETTER OF CREDIT OBLIGATIONS" shall mean, at any time, the sum of
(i) the aggregate undrawn amount of all Letters of Credit outstanding at
such time, PLUS (ii) the aggregate amount of all drawings under Letters
of Credit for which the Issuing Bank has not at such time been
reimbursed, PLUS (iii) without duplication, the aggregate amount of all
payments made by each Lender to the Issuing Bank with respect to such
Lender's participation in Letters of Credit as provided in SECTION 3.3
for which the Borrowers have not at such time reimbursed the Lenders,
whether by way of a Revolving Loan or otherwise.
"LETTERS OF CREDIT" shall mean (i) the existing stand-by letters
of credit described on SCHEDULE 1.1 B attached hereto and (ii) all stand-
by letters of credit issued by an Issuing Bank for the account of the
Borrowers pursuant to this Credit Agreement, and all amendments,
renewals, extensions or replacements thereof.
"LEVERAGE RATIO" shall mean as of the last day of each fiscal
quarter, the ratio of (i) Consolidated Funded Debt to (ii) Consolidated
EBITDA.
"LIEN(S)" shall mean any lien, claim, charge, pledge, security
interest, deed of trust, mortgage, or other encumbrance.
"LOAN" or "LOANS" shall mean the Revolving Loans and/or the Term
Loans (or a portion of any Revolving Loan or Term Loan), individually or
collectively, as appropriate.
"LONDON INTERBANK OFFERED RATE" shall mean, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately
11:00 (London time) two (2) Business Days prior to the first day of
such Interest Period for a term comparable to such Interest Period;
PROVIDED, HOWEVER, if more than one rate is specified on Telerate Page
3750, the applicable rate shall be the arithmetic mean of all such
rates. If, for any reason, such rate is not available, the term "LONDON
INTERBANK OFFERED RATE" shall mean, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; PROVIDED, HOWEVER, if
more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"MATERIAL ADVERSE CHANGE" shall mean (a) a change in the business,
operations, assets, liabilities or condition (financial or otherwise) of
the Borrowers, taken as a whole, or the Collateral, which in either case
would materially and adversely affect the Borrowers' ability to perform
their respective obligations under the Credit Documents, or (b) a
material adverse change in the rights and remedies of the Lenders
hereunder.
"MATERIAL ADVERSE EFFECT" shall mean (a) an effect on the business,
operations, assets, liabilities or condition (financial or otherwise) of
the Borrowers, taken as a whole, or the Collateral, which in either case
would materially and adversely affect the Borrowers' ability to perform
their respective obligations under the Credit Documents, or (b) a
material adverse effect on the rights and remedies of the Lenders
hereunder.
"MATERIAL CONTRACT" shall mean any contract (other than any of the
Credit Documents), whether written or oral, to which any Borrower or any
Subsidiary is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could reasonably
be expected to have a Material Adverse Effect.
"MATURITY DATE" shall mean the fifth (5th) anniversary of the
Closing Date.
"MERCHANDISE RETURNS" shall mean any of the products manufactured
and sold by the Borrowers or any of their Subsidiaries that are
returned.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined
in SECTION 4001(A)(3) of ERISA and (i) which is, or within the
immediately preceding six (6) years was, contributed to by any Borrower,
any Subsidiary of any Borrower or any ERISA Affiliate or (ii) with
respect to which any Borrower or any Subsidiary of any Borrower may
incur any liability.
"NET CASH PROCEEDS" shall mean the aggregate cash proceeds received
by the Borrowers in respect of any Asset Disposition or Equity Issuance,
net of (a) direct costs (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and (b)
taxes paid or payable as a result thereof; it being understood that "Net
Cash Proceeds" shall include, without limitation, any cash received upon
the sale or other disposition of any non-cash consideration received by
the Borrowers in any Asset Disposition or Equity Issuance.
"NON-DISTRIBUTION TERM LOAN BORROWING BASE" shall mean 80% of
Eligible Equipment acquired (whether pursuant to a Permitted Acquisition
or a capital expenditure permitted to made hereunder) after the Closing
Date which the Borrowers elect to include in the Non-Distribution Term
Loan Borrowing Base, determined immediately prior to the time that the
relevant equipment and machinery is to be acquired and financed with the
proceeds of the Non-Distribution Term Loans.
"NON-DISTRIBUTION TERM LOAN BORROWING BASE CERTIFICATE" shall mean
a borrowing base certificate in substantially the form of EXHIBIT J-2
hereto, duly completed and certified by the Company's chief executive
officer or chief financial officer, detailing the Non-Distribution Term
Loan Borrowing Base as of the most recent date of determination.
"NON-DISTRIBUTION TERM LOANS" shall have the meaning given to such
term in the definition of Term Loan Availability Termination Date.
"NOTE" or "NOTES" shall mean the Revolving Notes and/or the Term
Loan Notes, individually or collectively, as appropriate.
"NOTICE OF BORROWING" shall have the meaning given to such term in
SECTION 2.1(D)(I).
"NOTICE OF EXTENSION/CONVERSION" shall have the meaning given to
such term in SECTION 2.10.
"OBLIGATIONS" shall mean the Loans, any other loans and advances or
extensions of credit made or to be made by any Lender to any Borrower,
or to others for any Borrower's account in each case pursuant to the
terms and provisions of this Credit Agreement, together with interest
thereon (including interest which would be payable as post-petition
interest in connection with any bankruptcy or similar proceeding) and,
including, without limitation, any reimbursement obligation or indemnity
of the Borrowers on account of Letters of Credit and all other Letter of
Credit Obligations, and all indebtedness, fees, liabilities and
obligations which may at any time be owing by any Borrower to any Lender
in each case pursuant to this Credit Agreement or any other Credit
Document, whether now in existence or incurred by a Borrower from time
to time hereafter, whether unsecured or secured by pledge, Lien upon or
security interest in any of a Borrower's assets or property or the
assets or property of any other Person, whether such indebtedness is
absolute or contingent, joint or several, matured or unmatured, direct
or indirect and whether such Borrower is liable to such Lender for such
indebtedness as principal, surety, endorser, guarantor or otherwise.
Obligations shall also include any other indebtedness owing to any
Lender by any Borrower under this Credit Agreement and the other Credit
Documents, any Borrower's liability to any Lender pursuant to this
Credit Agreement as maker or endorser of any promissory note or other
instrument for the payment of money, any Borrower's liability to any
Lender pursuant to this Credit Agreement or any other Credit Document
under any instrument of guaranty or indemnity, or arising under any
guaranty, endorsement or undertaking which any Lender may make or issue
to others for any such Borrower's account pursuant to this Credit
Agreement, including any accommodation extended with respect to
applications for Letters of Credit, and all liabilities and obligations
owing from any Borrower to any Lender, or any affiliate of a Lender,
arising under Interest Rate Protection Agreements entered into for the
purpose of hedging interest rate risk under this Credit Agreement and
the other Credit Documents.
"OPERATIVE DOCUMENTS" shall mean the Credit Documents, the Security
Documents and the Acquisition Documents.
"OTHER TAXES" shall have the meaning given to such term in SECTION
2.7(C).
"PACA" shall mean the Perishable Agricultural Commodities Act, 7
U.S.C. 499.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"PERMITTED ACQUISITIONS" shall mean an Acquisition by any Borrower
of an Acquired Company which Acquisition complies with the following
requirements (in each case to the satisfaction of the Agent): (i) the
Acquired Company shall be an operating company that engages in a line of
business substantially similar to the business of the Borrowers engaged
in on the Closing Date, (ii) the aggregate purchase price for all
Acquired Companies acquired subsequent to the Closing Date shall not
exceed $25,000,000, (iii) the Agent shall have received, if available, a
review of the financial condition of the Acquired Company conducted by a
firm of independent certified public accountants of nationally
recognized standing reasonably acceptable to the Agent and such other
reports and analyses in connection with the Acquisition as the Agent may
reasonably request and an internal summary of the results of the
Company's due diligence and/or its economic justification for such
Acquisition and the bases therefor (excluding any information in any
such report, analyses or summary to which the attorney client privilege
applies), (iv) the Agent shall have received an appraisal from an
appraiser satisfactory to the Agent setting forth the orderly
liquidation value of any harvesting and processing machinery and
equipment of the Acquired Company which the Borrowers desire to include
in the Non-Distribution Term Loan Borrowing Base, (v) the Agent shall
have completed a field examination with respect to the working capital
assets of the Acquired Company to be included in the Revolving Credit
Borrowing Base, (vi) the Agent shall have received all items required by
SECTIONS 7.9 and 7.16 in connection with the Acquired Company, (vii) in
the case of an Acquisition of the Capital Stock of another Person, the
board of directors (or other comparable governing body) of such other
Person shall have duly approved such Acquisition, (viii) the Company
shall have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect to such Acquisition on a Pro
Forma Basis, the Company and its Subsidiaries shall be in compliance
with all of the covenants set forth in Article VIII and no Default or
Event of Default shall exist immediately prior to or immediately after
the consummation of the Acquisition, (ix) after giving effect to the
Acquisition, the lesser of (A) the Revolving Credit Committed Amount or
(B) the Revolving Credit Borrowing Base shall be at least $30,000,000
greater than the sum of the Revolving Loans outstanding PLUS Letter of
Credit Obligations outstanding and (x) the Company shall have delivered
to the Agent all Acquisition Documents in connection with such Permitted
Acquisition which documents shall be reasonably satisfactory to the
Agent.
"PERMITTED INDEBTEDNESS" shall mean:
(i) Indebtedness to the Lenders with respect to the Revolving
Loans, the Term Loans, the Letters of Credit or otherwise, pursuant
to the Credit Documents;
(ii) trade payables incurred in the ordinary course of the
Borrowers' business and other payment obligations under grower
contracts entered into in the ordinary course of business;
(iii) purchase money Indebtedness (including Capital
Leases) hereafter incurred by the Borrowers or any of their
Subsidiaries to finance the purchase of fixed assets PROVIDED that
(A) the total of all such Indebtedness for all such Persons taken
together shall not exceed an aggregate principal amount of
$25,000,000 at any one time outstanding (including any such
Indebtedness referred to in clause (v) immediately below); (B) such
Indebtedness when incurred shall not exceed the purchase price of
the asset(s) financed; and (C) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal
balance outstanding thereon at the time of such refinancing;
(iv) obligations of a Borrower or any of its Subsidiaries in
respect of Hedging Agreements entered into in order to manage
existing or anticipated interest rate or exchange rate risks or
commodity price fluctuations and not for speculative purposes;
(v) Indebtedness described on SCHEDULE 1.1D attached hereto
and any refinancings of such Indebtedness; PROVIDED that the
aggregate principal amount of such Indebtedness is not increased,
the scheduled maturity dates of such Indebtedness are not shortened
and such refinancing is on terms and conditions no more restrictive
than the terms and conditions of the Indebtedness being refinanced;
and
(vi) unsecured Indebtedness owing from one Borrower to another
Borrower.
"PERMITTED INVESTMENTS" shall mean:
(i) Cash Equivalents;
(ii) interest-bearing demand or time deposits (including
certificates of deposit) which are insured by the Federal Deposit
Insurance Corporation ("FDIC") or a similar federal insurance
program; provided, however, that the Borrowers may, in the ordinary
course of their respective businesses, maintain in their operating
accounts from time to time amounts in excess of then applicable
FDIC or other program insurance limits;
(iii) Investments existing on the Closing Date and set
forth on SCHEDULE 1.1E attached hereto;
(iv) advances to officers, directors and employees for
expenses incurred or anticipated to be incurred in the ordinary
course provided such advances do not exceed $250,000 in the
aggregate at any time outstanding;
(v) Permitted Acquisitions;
(vi) Investments in existing or newly created U.S.
Subsidiaries which are or become Borrowers simultaneously with the
making of such Investment; and
(vii) such other Investments as the Agent may approve in
its sole discretion.
"PERMITTED LIENS" shall mean
(i) Liens granted to the Agent or the Lenders or any
Affiliate of a Lender by the Borrowers pursuant to any Credit
Document;
(ii) Liens listed on SCHEDULE 1.1C attached hereto;
(iii) Liens on fixed assets securing purchase money
Indebtedness (including Capital Leases) to the extent permitted
under SECTION 9.2, PROVIDED that (A) any such Lien attaches to such
assets concurrently with or within 30 days after the acquisition
thereof and only to the assets to be acquired and (B) a description
of the assets so acquired is furnished to the Agent;
(iv) Liens of warehousemen, mechanics, materialmen, workers,
repairmen, fillers, packagers, processors, common carriers,
landlords and other similar Liens arising by operation of law or
otherwise, not waived in connection herewith, for amounts that are
not yet due and payable or which are being diligently contested in
good faith by the relevant Borrower by appropriate proceedings,
PROVIDED that in any such case an adequate reserve is being
maintained by such Borrower for the payment of same;
(v) attachment or judgment Liens individually or in the
aggregate not in excess of $250,000 (exclusive of (a) any amounts
that are duly bonded to the satisfaction of the Agent in its
reasonable judgment or (b) any amount adequately covered by
insurance as to which the insurance company has acknowledged in
writing its obligations for coverage);
(vi) Liens for taxes, assessments or other governmental
charges not yet due and payable or which are being diligently
contested in good faith by a Borrower by appropriate proceedings,
PROVIDED that in any such case an adequate reserve is being
maintained by such Borrower for the payment of same in accordance
with GAAP;
(vii) deposits or pledges to secure obligations under
workmen's compensation, social security or similar laws, or under
unemployment insurance;
(viii) deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases,
regulatory or statutory obligations, surety and appeal bonds and
other obligations of like nature arising in the ordinary course of
business; and
(ix) Liens arising from claims under PACA.
"PERSON" shall mean any individual, sole proprietorship,
partnership, joint venture, limited liability company, trust,
unincorporated organization, association, corporation, institution,
entity, party or government (including any division, agency or
department thereof), and, as applicable, the successors, heirs and
assigns of each.
"PLAN" shall mean any employee benefit plan, program or
arrangement, whether oral or written, maintained or contributed to by
any Borrower or any Subsidiary, or with respect to which any Borrower or
any such Subsidiary may incur liability.
"PRIME RATE" shall mean the rate which the Agent 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. The Agent
(and its affiliates) may make commercial loans or other loans at rates
of interest at, above or below the Prime Rate.
"PROPRIETARY RIGHTS" shall have the meaning given to such term in
SECTION 6.18.
"REPORTABLE EVENT" shall mean any of the events described in
SECTION 4043 of ERISA and the regulations thereunder.
"REQUIRED LENDERS" shall mean, at any time, Lenders which are then
in compliance with their obligations hereunder (as determined by the
Agent) and holding in the aggregate at least 51% of (i) the aggregate
Revolving Credit Commitments (and participation interests therein) and
the outstanding Term Loans (and participation interests therein) or (ii)
if the Commitments have been terminated, the outstanding Loans and
participation interests (including the participation interests of the
Issuing Bank in any Letters of Credit).
"RESTRICTED PAYMENT" shall mean (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class
of Capital Stock of any Borrower or any Subsidiary, as the case may be,
now or hereafter outstanding, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of Capital Stock of any Borrower
or any Subsidiary now or hereafter outstanding by such Borrower or any
Subsidiary, as the case may be, except for any redemption, retirement,
sinking funds or similar payment payable solely in such shares of that
class of stock or in any class of stock junior to that class, (iii) any
cash payment made to redeem, purchase, repurchase or retire, or to
obtain the surrender of, any outstanding warrants, options or other
rights to acquire any shares of any class of Capital Stock of any
Borrower or any Subsidiary now or hereafter outstanding, or (iv) any
payment to any Affiliate of any Borrower except to the extent expressly
permitted in this Credit Agreement.
"RETIREE HEALTH PLAN" shall mean an "employee welfare benefit plan"
within the meaning of SECTION 3(1) of ERISA that provides benefits to
persons after termination of employment, other than as required by
SECTION 601 of ERISA.
"REVOLVING CREDIT BORROWING BASE" shall have the meaning given to
such term in SECTION 2.1(B)(I).
"REVOLVING CREDIT BORROWING BASE CERTIFICATE" shall have the
meaning given to such term in SECTION 7.1(E)(I).
"REVOLVING CREDIT COMMITMENT" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the
Revolving Loans in a principal amount up to such Lender's Revolving
Credit Commitment Percentage of the Revolving Credit Committed Amount.
"REVOLVING CREDIT COMMITMENT PERCENTAGE" shall mean, for any
Lender, the percentage identified as its Revolving Credit Commitment
Percentage on SCHEDULE 1.1A, as such percentage may be modified in
connection with any assignment made in accordance with the provisions of
SECTION 14.6.
"REVOLVING CREDIT COMMITTED AMOUNT" shall mean the aggregate
revolving credit line extended by the Lenders to the Borrowers for
Revolving Loans and Letters of Credit pursuant to and in accordance with
the terms of this Credit Agreement, in an amount up to $135,000,000, as
such revolving credit line may be reduced from time to time in
accordance with SECTIONS 2.3(B) and 2.3(C).
"REVOLVING LOANS" shall have the meaning given to such term in
SECTION 2.1(B) and shall include Base Rate Loans and Eurodollar Loans.
"REVOLVING NOTES" shall have the meaning given to such term in
SECTION 2.1(C).
"REVOLVING UNUSED LINE FEE" shall mean the fee required to be paid
to the Agent for the benefit of the Lenders at the end of each calendar
month as partial compensation for extending the Revolving Credit
Committed Amount to the Borrowers, and shall be determined by
multiplying (i) the positive difference, if any, between (A) the
Revolving Credit Committed Amount in effect at such time and (B) the
average daily Revolving Loans of the Borrowers and the Letter of Credit
Obligations outstanding during such calendar month by (ii) the
Applicable Percentage then in effect for the number of days in said
calendar month.
"SECURITY AGREEMENT" shall mean the Security Agreement, of even
date herewith, between the Agent and the Borrowers, in the form attached
hereto as EXHIBIT D.
"SECURITY DOCUMENTS" shall mean, collectively, the Security
Agreement, any Acknowledgment Agreements and any lockbox agreement or
any other tri-party arrangement with respect to the bank accounts of the
Borrowers.
"SETTLEMENT PERIOD" shall have the meaning given to such term in
SECTION 2.1(D)(II).
"SUBSIDIARY" shall mean, as to any Person, (a) any corporation more
than 50% of whose Capital Stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors
of such corporation (irrespective of whether or not at the time, any
class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time
owned by such Person directly or indirectly through Subsidiaries, (b)
any partnership, association, joint venture or other entity in which
such Person directly or indirectly through Subsidiaries has more than a
fifty percent (50%) interest in the total capital, total income and/or
total ownership interests of such entity at any time and (c) any
partnership in which such Person is a general partner.
"SUBSIDIARY BORROWER" and "SUBSIDIARY BORROWERS" shall have the
meaning given to such terms in the preamble of this Credit Agreement.
"TAXES" shall mean any federal, state, local or foreign income,
sales, use, transfer, payroll, personal, property, occupancy, franchise
or other tax, levy, impost, fee, imposition, assessment or similar
charge, together with any interest or penalties thereon.
"TERMINATION EVENT" shall mean (i) a Reportable Event with respect
to any Benefit Plan or Multiemployer Plan; (ii) the withdrawal of any
Borrower, any Subsidiary of any Borrower or any ERISA Affiliate from a
Benefit Plan during a plan year in which such entity was a "substantial
employer" as defined in SECTION 4001(A)(2) of ERISA; (iii) the providing
of notice of intent to terminate a Benefit Plan pursuant to SECTION 4041
of ERISA; (iv) the institution by the PBGC of proceedings to terminate a
Benefit Plan or Multiemployer Plan; (v) any event or condition (a) which
might constitute grounds under SECTION 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Benefit Plan or
Multiemployer Plan, or (b) that may result in termination of a
Multiemployer Plan pursuant to SECTION 4041A of ERISA; or (vi) the
partial or complete withdrawal within the meaning of SECTIONS 4203 and
4205 of ERISA, of any Borrower, any Subsidiary of any Borrower or any
ERISA Affiliate from a Multiemployer Plan.
"TERM LOAN AVAILABILITY TERMINATION DATE" shall mean (i) with
respect to Term Loans made for the purpose of paying the CBII $50
Million Distribution (the "DISTRIBUTION TERM LOANS"), the first
anniversary of the Closing Date, (ii) with respect to Term Loans made
for the purpose of making any Permitted Acquisition (the "ACQUISITION
TERM LOANS"), the second anniversary of the Closing Date and (iii) with
respect to Term Loans made for the purpose of making any capital
expenditures permitted to be made hereunder (the "CAPEX TERM LOANS" and
together with the Acquisition Loans, the "NON-DISTRIBUTION TERM LOANS"),
the third anniversary of the Closing Date.
"TERM LOANS" shall have the meaning given to such term in SECTION
2.2(A) and shall include the Distribution Term Loans, the Acquisition
Term Loans and the Capex Term Loans.
"TERM LOAN COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loan in a
principal amount equal to such Lender's Term Loan Commitment Percentage
of the Term Loan Committed Amount.
"TERM LOAN COMMITMENT PERCENTAGE" shall mean, for any Lender, the
percentage identified as its Term Loan Commitment Percentage on SCHEDULE
1.1A, as such percentage may be modified in connection with any
assignment made in accordance with the provisions of SECTION 14.6.
"TERM LOAN COMMITTED AMOUNT" shall mean the aggregate term loan
facility extended by the Lenders to the Borrowers for Term Loans
pursuant to and in accordance with the terms of this Credit Agreement,
in an amount up to $65,000,000, as such term loan facility shall be
reduced in accordance with SECTION 2.3(C).
"TERM LOAN NOTES" shall have the meaning given to such term in
SECTION 2.2(E) hereof.
"TERM UNUSED LINE FEE" shall mean the fee required to be paid to
the Agent for the benefit of the Lenders at the end of each calendar
month as partial compensation for extending the Term Loan Committed
Amount to the Borrowers, and shall be determined by multiplying (i) the
positive difference, if any, between (A) the Term Loan Committed Amount
in effect at such time and (B) the average daily Term Loans of the
Borrowers outstanding during such calendar month by (ii) the Applicable
Percentage then in effect for the number of days in said calendar month.
"VOTING STOCK" shall mean, with respect to any Person, Capital
Stock issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though
the right so to vote has been suspended by the happening of such a
contingency.
"YEAR 2000 COMPLIANT" shall have the meaning set forth in Section
6.34.
1.2 ACCOUNTING TERMS AND DETERMINATIONS
Unless otherwise defined or specified herein, all accounting terms
shall be construed herein and all accounting determinations for purposes
of determining compliance with SECTIONS 8.1 through 8.3 hereof and
otherwise to be made under this Credit Agreement shall be made in
accordance with GAAP applied on a basis consistent in all material
respects with the Financials. All financial statements required to be
delivered hereunder from and after the Closing Date and all financial
records shall be maintained in accordance with GAAP as in effect as of
the date of such financial statements. If GAAP shall change from the
basis used in preparing the Financials, the certificates required to be
delivered pursuant to SECTION 7.1 demonstrating compliance with the
covenants contained herein shall include calculations setting forth the
adjustments necessary to demonstrate how the Borrowers are in compliance
with the financial covenants based upon GAAP as in effect as of the date
of the Financials. If the Borrowers shall change their method of
inventory accounting, all calculations necessary to determine compliance
with the covenants contained herein shall be made as if such method of
inventory accounting had not been so changed.
1.3 OTHER DEFINITIONAL TERMS.
Terms not otherwise defined herein which are defined in the Uniform
Commercial Code as in effect in the State of North Carolina (the "Code")
shall have the meanings given them in the Code. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this
Credit Agreement shall refer to the Credit Agreement as a whole and not
to any particular provision of this Credit Agreement, unless otherwise
specifically provided. References in this Agreement to "Articles",
"Sections", "Schedules" or "Exhibits" shall be to Articles, Sections,
Schedules or Exhibits of or to this Agreement unless otherwise
specifically provided. Any of the terms defined in SECTION 1.1 may,
unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Include", "includes" and "including" shall
be deemed to be followed by "without limitation" whether or not they are
in fact followed by such words or words of like import. "Writing",
"written" and comparable terms refer to printing, typing, computer disk,
e-mail and other means of reproducing words in a visible form.
References to any agreement or contract are to such agreement or
contract as amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof. References to any Person
include the successors and permitted assigns of such Person. References
"from" or "through" any date mean, unless otherwise specified, "from and
including" or "through and including", respectively. References to any
times herein shall refer to Eastern Standard time or Eastern Daylight
time, as then in effect.
ARTICLE II
LOANS
2.1 REVOLVING LOANS.
(a) COMMITMENT. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth
herein, each of the Lenders severally agrees to lend to the
Borrowers at any time or from time to time on or after the Closing
Date and before the Maturity Date, such Lender's Revolving Credit
Commitment Percentage of the Revolving Loans as may be requested or
deemed requested by the Borrowers.
(b) DETERMINATION OF REVOLVING CREDIT BORROWING BASE.
(i) The Lenders agree, subject to the terms and
conditions of this Credit Agreement, from time to time, to
make loans and advances to the Borrowers hereunder on a
revolving basis. Such loans and advances to the Borrowers
(each, a "Revolving Loan"; and collectively, the "Revolving
Loans") together with the Letter of Credit Obligations
outstanding with respect to the Letters of Credit shall not in
the aggregate exceed the lesser of:
(A) the Revolving Credit Committed Amount then in
effect; or
(B) the following amount (the "REVOLVING CREDIT
BORROWING BASE") calculated as follows:
(1) an amount up to eighty-five percent (85%)
of Eligible Accounts Receivable; PLUS
(2) an amount up to seventy percent (70%) of
Eligible Inventory, MINUS
(3) (x) reserves established by the Agent from
time to time in its sole discretion, exercised in a
commercially reasonable manner and in good faith,
including, without limitation, reserves for claims
under PACA and reserves for accruals to be paid to
customers, and (y) the reserve established for the
Excess Availability Amount allocable to the
Distribution Term Loans made pursuant to the fourth
sentence of Section 2.2(c) hereof, which reserve
shall be in effect until all of the Terms Loans are
repaid in full.
Subject to the relevant terms and provisions set forth herein,
the Agent at all times shall have the right to reduce or
increase the advance rates (but not in excess of the advance
rates set forth in the definition of Revolving Credit
Borrowing Base) and standards of eligibility under this Credit
Agreement, in each case in its sole discretion, exercised in a
commercially reasonable manner and in good faith, if the Agent
shall determine in its reasonable credit judgment that the
Obligations are undersecured as a result of a change in the
condition or valuation of the Collateral. Such reduction or
increase shall become effective after one (1) Business Day's
prior notice from the Agent to the Company and the Lenders.
Each Lender expressly authorizes the Agent to determine,
subject to the terms of this Credit Agreement, on behalf of
such Lender whether or not Accounts shall be deemed to
constitute Eligible Accounts Receivable or Eligible Inventory.
Such authorization may be withdrawn by the Required Lenders;
provided, however, that unless otherwise agreed by the Agent
such withdrawal of authorization shall not become effective
until the thirtieth Business Day after receipt of such notice
by the Agent. Thereafter, the Required Lenders shall jointly
instruct the Agent in writing regarding such matters with such
frequency as the Required Lenders shall jointly determine.
(ii) No Lender shall be obligated at any time to make
available to the Borrowers its Revolving Credit Commitment
Percentage of any requested Revolving Loan if such amount plus
its Revolving Credit Commitment Percentage of all Revolving
Loans and its Revolving Credit Commitment Percentage of all
Letter of Credit Obligations then outstanding would exceed
such Lender's Revolving Credit Commitment at such time. The
aggregate balance of Revolving Loans and the aggregate amount
of all Letter of Credit Obligations outstanding shall not at
any time exceed the Revolving Credit Committed Amount. No
Lender shall be obligated to make available, nor shall the
Agent make available, any Revolving Loans to any of the
Borrowers to the extent such Revolving Loan when added to the
then outstanding Revolving Loans and all Letter of Credit
Obligations would cause the aggregate outstanding Revolving
Loans and all Letter of Credit Obligations to exceed the
Revolving Credit Borrowing Base. The Borrowers shall promptly
repay to the Agent for the account of the Lenders from time to
time the full amount of the excess, if any of (A) the amount
of all Revolving Loans and Letter of Credit Obligations
outstanding over (B) the lesser of (1) the Revolving Credit
Committed Amount and (2) the Revolving Credit Borrowing Base.
(c) REVOLVING NOTES. The obligations to repay the Revolving
Loans and to pay interest thereon shall be evidenced by separate
promissory notes of the Borrowers to each Lender in substantially
the form of EXHIBIT E-1 attached hereto (the "Revolving Notes"),
with appropriate insertions, one Revolving Note being payable to
the order of each Lender in a principal amount equal to such
Lender's Revolving Credit Commitment and representing the
obligations of the Borrowers to pay such Lender the amount of such
Lender's Revolving Credit Commitment or, if less, the aggregate
unpaid principal amount of all Revolving Loans made by such Lender
hereunder, plus interest accrued thereon, as set forth herein. The
Borrowers irrevocably authorize each Lender to make or cause to be
made appropriate notations on its Revolving Note, or on a record
pertaining thereto, reflecting Revolving Loans and repayments
thereof. The outstanding amount of the Revolving Loans set forth
on such Lender's Revolving Note or record shall be PRIMA FACIE
evidence of the principal amount thereof owing and unpaid to such
Lender, but the failure to make such notation or record, or any
error in such notation or record shall not limit or otherwise
affect the obligations of the Borrowers hereunder or under any
Revolving Note to make payments of principal of or interest on any
Revolving Note when due.
(d) BORROWINGS UNDER REVOLVING NOTES.
(i) Each request for borrowings hereunder shall be made by a
notice in the form attached hereto as EXHIBIT F from the Company on
behalf of the Borrowers to the Agent (a "Notice of Borrowing"),
given not later than 11:00 a.m. (A) on the Business Day on which
the proposed borrowing is requested to be made for Revolving Loans
that will be Base Rate Loans and (B) three Business Days prior to
the date of the requested borrowing of Revolving Loans that will be
Eurodollar Loans. Each Notice of Borrowing shall be given by
either telephone, telecopy, telex or cable, and, if requested by
the Agent, confirmed in writing if by telephone, setting forth (1)
the requested date of such borrowing, (2) the aggregate amount of
such requested borrowing, (3) whether such Revolving Loans will be
Base Rate Loans or the Eurodollar Loans, and if appropriate, the
applicable Interest Period, (4) certification by the Company on
behalf of the Borrowers that they have complied in all respects
with ARTICLE 5, all of which shall be specified in such manner as
is necessary to comply with all limitations on Revolving Loans
outstanding hereunder (including, without limitation, availability
under the Revolving Credit Borrowing Base) and (5) the account at
which such requested funds should be made available. Each Notice
of Borrowing shall be irrevocable by and binding on the Borrowers.
The Borrowers shall be entitled to borrow Revolving Loans in a
minimum principal amount of $1,000,000 and integral multiples of
$500,000 in excess thereof (or the remaining amount of the
Revolving Credit Committed Amount, if less) and shall be entitled
to borrow Base Rate Loans or Eurodollar Loans, or a combination
thereof, as the Borrowers may request; PROVIDED that no more than
six (6) Eurodollar Loans (including Term Loans which are Eurodollar
Loans) shall be outstanding hereunder at any one time (including
Term Loans which are Eurodollar Loans); and PROVIDED, FURTHER, that
Eurodollar Loans shall be in a minimum principal amount of
$1,000,000 and integral multiples of $500,000 in excess thereof.
Revolving Loans may be repaid and reborrowed in accordance with the
provisions hereof.
The Agent shall give to each Lender prompt notice (but in no
event later than 2:00 P.M. on the date of the Agent's receipt of
notice from the Borrowers) of each Notice of Borrowing by telecopy,
telex or cable (other than any Notice of Borrowing which will be
funded by the Agent in accordance with subsection (d)(ii) below).
No later than 3:00 P.M. on the date on which a borrowing is
requested to be made pursuant to the applicable Notice of
Borrowing, each Lender will make available to the Agent at the
address of the Agent set forth on the signature pages hereto, in
immediately available funds, its Revolving Credit Commitment
Percentage of such borrowing requested to be made. Unless the
Agent shall have been notified by any Lender prior to the date of
borrowing that such Lender does not intend to make available to the
Agent its portion of the borrowing to be made on such date, the
Agent may assume that such Lender will make such amount available
to the Agent as required above and the Agent may, in reliance upon
such assumption, make available the amount of the borrowing to be
provided by such Lender. Upon fulfillment of the conditions set
forth in ARTICLE V for such borrowing, the Agent will make such
funds available to the Borrowers at the account specified by the
Borrowers in such Notice of Borrowing.
(ii) Because the Borrowers anticipate requesting borrowings of
Revolving Loans on a daily basis and repaying Revolving Loans on a
daily basis through the collection of Accounts and the proceeds of
other Collateral, resulting in the amount of outstanding Revolving
Loans fluctuating from day to day, in order to administer the
Revolving Loans in an efficient manner and to minimize the transfer
of funds between the Agent and the Lenders, the Lenders hereby
instruct the Agent, and the Agent may (but is not obligated to) (A)
make available, on behalf of the Lenders, the full amount of all
Revolving Loans requested by the Borrowers not to exceed
$20,000,000 in the aggregate at any one time outstanding without
requiring that the Borrowers give the Agent a Notice of Borrowing
with respect to such borrowing and without giving each Lender prior
notice of the proposed borrowing, of such Lender's Revolving Credit
Commitment Percentage thereof and the other matters covered by the
Notice of Borrowing and (B) if the Agent has made any such amounts
available as provided in clause (A), upon repayment of Revolving
Loans by the Borrowers, apply such amounts repaid directly to the
amounts made available by the Agent in accordance with clause (A)
and not yet settled as described below; PROVIDED that the Agent
shall not advance funds as described in clause (A) above if the
Agent has actually received prior to such borrowing (1) an
officer's certificate from the Company or any other Borrower
pursuant to and in accordance with SECTION 7.1(J) that a Default or
Event of Default is in existence or (2) a Notice of Borrowing from
any Borrower wherein the certification provided therein states that
the conditions to the making of the requested Revolving Loans have
not been satisfied or (3) a written notice from any Lender that the
conditions to such borrowing have not been satisfied, which
officer's certificate, Notice of Borrowing or notice, in each case,
shall not have been rescinded. If the Agent advances Revolving
Loans on behalf of the Lenders, as provided in the immediately
preceding sentence, the amount of outstanding Revolving Loans and
each Lender's Revolving Credit Commitment Percentage thereof shall
be computed weekly rather than daily and shall be adjusted upward
or downward on the basis of the amount of outstanding Revolving
Loans as of 5:00 P.M. on the Business Day immediately preceding the
date of each computation; PROVIDED, HOWEVER, that the Agent retains
the absolute right at any time or from time to time to make the
aforedescribed adjustments at intervals more frequent than weekly.
The Agent shall deliver to each of the Lenders after the end of
each week, or such lesser period or periods as the Agent shall
determine, a summary statement of the amount of outstanding
Revolving Loans for such period (such week or lesser period or
periods being hereafter referred to as a "Settlement Period"). If
the summary statement is sent by the Agent and received by the
Lenders prior to 12:00 Noon on any Business Day each Lender shall
make the transfers described in the next succeeding sentence no
later than 3:00 P.M. on the day such summary statement was sent;
and if such summary statement is sent by the Agent and received by
the Lenders after 12:00 Noon on any Business Day, each Lender shall
make such transfers no later than 3:00 P.M. on the next succeeding
Business Day. If in any Settlement Period, the amount of a
Lender's Revolving Credit Commitment Percentage of the Revolving
Loans is in excess of the amount of Revolving Loans actually funded
by such Lender, such Lender shall forthwith (but in no event later
than the time set forth in the next preceding sentence) transfer to
the Agent by wire transfer in immediately available funds the
amount of such excess; and, on the other hand, if the amount of a
Lender's Revolving Credit Commitment Percentage of the Revolving
Loans in any Settlement Period is less than the amount of Revolving
Loans actually funded by such Lender, the Agent shall forthwith
transfer to such Lender by wire transfer in immediately available
funds the amount of such difference. The obligation of each of the
Lenders to transfer such funds shall be irrevocable and
unconditional and without recourse to or warranty by the Agent.
Each of the Agent and the Lenders agree to xxxx their respective
books and records at the end of each Settlement Period to show at
all times the dollar amount of their respective Revolving Credit
Commitment Percentages of the outstanding Revolving Loans. Because
the Agent on behalf of the Lenders may be advancing and/or may be
repaid Revolving Loans prior to the time when the Lenders will
actually advance and/or be repaid Revolving Loans, interest with
respect to Revolving Loans shall be allocated by the Agent to each
Lender (including the Agent) in accordance with the amount of
Revolving Loans actually advanced by and repaid to each Lender
(including the Agent) during each Settlement Period and shall
accrue from and including the date such Revolving Loans are
advanced by the Agent to but excluding the date such Revolving
Loans are repaid by the Borrowers in accordance with SECTION 2.4 or
actually settled by the applicable Lender as described in this
SECTION 2.1(D)(II). All such Revolving Loans shall be made as Base
Rate Loans.
(iii) If the amounts described in subsection (d)(i) or
(d)(ii) of this SECTION 2.1 are not in fact made available to the
Agent by a Lender (such Lender being hereinafter referred to as a
"Defaulting Lender") and the Agent has made such amount available
to the Borrowers, the Agent shall be entitled to recover such
corresponding amount on demand from such Defaulting Lender. If
such Defaulting Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent shall
promptly notify the Borrowers and the Borrowers shall immediately
(but in no event later than five Business Days after such demand)
pay such corresponding amount to the Agent. The Agent shall also
be entitled to recover from such Defaulting Lender and the
Borrowers, (A) interest on such corresponding amount in respect of
each day from the date such corresponding amount was made available
by the Agent to the Borrowers to the date such corresponding amount
is recovered by the Agent, at a rate per annum equal to either (1)
if paid by such Defaulting Lender, the overnight Federal Funds Rate
or (2) if paid by the Borrowers, the then applicable rate of
interest, calculated in accordance with SECTION 4.1, PLUS (B) in
each case, an amount equal to any costs (including legal expenses)
and losses incurred as a result of the failure of such Defaulting
Lender to provide such amount as provided in this Credit Agreement.
Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any
rights which the Borrowers may have against any Lender as a result
of any default by such Lender hereunder, including, without
limitation, the right of the Borrowers to seek reimbursement from
any Defaulting Lender for any amounts paid by the Borrowers under
clause (B) above on account of such Defaulting Lender's default.
(iv) The failure of any Lender to make the Revolving Loan to
be made by it as part of any borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Revolving
Loan on the date of such borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the
Revolving Loan to be made by such other Lender on the date of any
borrowing.
(v) Each Lender shall be entitled to earn interest at the
then applicable rate of interest, calculated in accordance with
ARTICLE IV, on outstanding Revolving Loans which it has funded to
the Agent from the date such Lender funded such Revolving Loan to,
but excluding, the date on which such Lender is repaid with respect
to such Revolving Loan.
(vi) Notwithstanding the obligation of the Borrowers to send
written confirmation of a Notice of Borrowing made by telephone if
and when requested by the Agent, in the event that the Agent agrees
to accept a Notice of Borrowing made by telephone, such telephonic
Notice of Borrowing shall be binding on the Borrowers whether or
not written confirmation is sent by the Borrowers or requested by
the Agent. The Agent may act prior to the receipt of any requested
written confirmation, without any liability whatsoever, based upon
telephonic notice believed by the Agent in good faith to be from a
Borrower or its agents. The Agent's records of the terms of any
telephonic Notices of Borrowing shall be conclusive on the
Borrowers in the absence of gross negligence or willful misconduct
on the part of the Agent in connection therewith.
2.2 TERM LOANS.
(a) TERM LOAN COMMITMENTS. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein each Lender severally agrees to make
available to the Borrowers from time to time until the applicable
Term Loan Availability Termination Date term loans in Dollars (each
a "Term Loan"; collectively the "Term Loans") equal to such
Lender's Term Loan Commitment Percentage of the Term Loan Committed
Amount for the purposes hereinafter set forth. The Company shall
give the Agent a Notice of Borrowing prior to 11:00 a.m. (A) on the
Business Day of the requested borrowing in the case of a Term Loan
to be made as a Base Rate Loan or (B) on the third Business Day
prior to the requested borrowing in the case of a Term Loan to be
made as a Eurodollar Loan, requesting that the Lenders make a Term
Loan in the amount specified in the Notice of Borrowing to the
Borrowers specified in the Notice of Borrowing and specifying
whether such Term Loan shall be a Base Rate Loan (which Base Rate
Loan shall be in a minimum principal amount of $5,000,000 or whole
multiples of $1,000,000 in excess thereof), a Eurodollar Loan
(which Eurodollar Loan shall be in a minimum principal amount of
$5,000,000 or whole multiples of $1,000,000 in excess thereof), or
both. The Agent shall promptly notify the Lenders in writing of
each Notice of Borrowing. Once Term Loans are paid or prepaid,
they may not be reborrowed. The Term Loan Committed Amount shall
be automatically and permanently reduced by the amount of Term
Loans made.
(b) FUNDING OF TERM LOANS. Not later than 3:00 P.M. on the
date of the requested borrowing, each Lender will make available to
the Agent for the account of the Borrowers, at the office of the
Agent in funds immediately available to the Agent, the amount of
such Lender's Term Loan Percentage of the requested Term Loan. The
Borrowers hereby irrevocably authorize the Agent to disburse the
proceeds of the Term Loans in immediately available funds by wire
transfer in accordance with the Notice of Borrowing received
pursuant to Section 2.2(a).
(c) MAXIMUM AMOUNT OF TERM LOANS. Distribution Term Loans
may be borrowed in two (2) separate borrowings of $25,000,000 or in
one single borrowing of $50,000,000. Any such borrowings shall be
made on or prior to the first anniversary of the Closing Date. No
such borrowing shall be permitted hereunder until the CBII $28.4
Million Distribution shall have been made in full. The aggregate
maximum principal amount of all Distribution Term Loans shall not
exceed the lesser of (i) $50,000,000 and (ii) the Distribution Term
Loan Borrowing Base; PROVIDED, HOWEVER, that if the Distribution
Term Loan Borrowing Base is less than $50,000,000, the Company may
request Distribution Term Loans in excess of the Distribution Term
Loan Borrowing Base (not to exceed an amount which would cause the
aggregate principal amount of all Distribution Term Loans to exceed
$50,000,000) in an amount up to the Excess Availability Amount,
determined as of the date of borrowing of any such Distribution
Term Loans. The maximum principal amount of Acquisition Term Loans
available for the making of Permitted Acquisitions shall not exceed
$15,000,000 (LESS any proceeds of Capex Term Loans). Any such
borrowings shall be made on or prior to the second anniversary of
the Closing Date. The maximum principal amount of Capex Term Loans
shall not exceed $15,000,000 (LESS any proceeds of Acquisition Term
Loans). Any such borrowings shall be made on or prior to the third
anniversary of the Closing Date. Acquisition Term Loans and Capex
Term Loans shall be made in minimum amounts of $5,000,000. The
aggregate maximum principal amount of all Acquisition Term Loans
shall not exceed the lesser of (A) $15,000,000 (LESS the principal
amount of Capex Term Loans) and (B) the Non-Distribution Term Loan
Borrowing Base (LESS the principal amount of Capex Term Loans
made). The aggregate maximum principal amount of all Capex Term
Loans shall not exceed the lesser of (x) $15,000,000 (LESS the
principal amount of Acquisition Term Loans made) and (y) the Non-
Distribution Term Loan Borrowing Base (LESS the principal amount of
Acquisition Term Loans made). The aggregate maximum principal
amount of all Non-Distribution Term Loans shall not exceed the
lesser of (1) $15,000,000 and (2) the Non-Distribution Term Loan
Borrowing Base. The aggregate maximum principal amount of Term
Loans outstanding shall not at any time exceed the Term Loan
Committed Amount.
(d) REPAYMENT OF TERM LOANS. The principal amount of the
Term Loans shall be repaid in consecutive quarterly payments on the
last day of each calendar quarter commencing with the first
calendar quarter after the first Term Loan is made hereunder and
continuing thereafter through and including the final quarterly
payment which is due and payable on September 30, 2004. The amount
of each such payment (other than the final payment) shall equal
1/28th of the sum of the original principal amount of each
borrowing of Term Loans made during the period from and including
the Closing Date to but excluding the date on which the applicable
payment is to be made. The amount of the final payment shall be an
amount equal to the then outstanding principal balance of the Term
Loans.
(e) TERM NOTES. The obligations to repay the Term Loans and
to pay interest thereon shall be evidenced by separate promissory
notes of the Borrowers to each Lender in substantially the form of
EXHIBIT E-2 attached hereto (the "Term Loan Notes"), with
appropriate insertions, one Term Loan Note being payable to the
order of each Lender in a principal amount equal to such Lender's
Term Loan Commitment and representing the obligations of the
Borrowers to pay such Lender the amount of such Lender's Term Loan
Commitment or, if less, the aggregate unpaid principal amount of
the Term Loans made by such Lender hereunder, plus interest accrued
thereon, as set forth herein. The Borrowers irrevocably authorize
each Lender to make or cause to be made appropriate notations on
its Term Loan Note, or on a record pertaining thereon, reflecting
Term Loans and repayments thereof. The outstanding amount of the
Term Loans set forth on such Lender's Term Loan Note or record
shall be PRIMA FACIE evidence of the principal amount thereof owing
and unpaid to such Lender, but the failure to make such notation or
record, or any error in such notation or record shall not limit or
otherwise affect the obligations of the Borrowers hereunder or
under any Term Loan Note to make payments of principal of or
interest on any Term Loan Note when due.
2.3 OPTIONAL AND MANDATORY PREPAYMENTS; REDUCTION OF COMMITMENTS.
(a) VOLUNTARY PREPAYMENTS. The Borrowers shall have the
right to prepay Loans in whole or in part from time to time,
without premium or penalty; PROVIDED, HOWEVER, that (i) Loans that
are Eurodollar Loans may only be prepaid on three Business Days'
prior written notice to the Agent specifying the applicable Loans
to be prepaid; (ii) any prepayment of Loans that are Eurodollar
Loans will be subject to SECTION 4.10; (iii) each such partial
prepayment of Loans shall be in a minimum principal amount of
$1,000,000 and integral multiples of $500,000 in excess thereof.
Subject to the foregoing terms, amounts prepaid under this SECTION
2.3(A) shall be applied first to Revolving Loans and then to the
Term Loans. Prepayments on Revolving Loans shall be applied first
to Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities. Prepayments on Term Loans shall be
applied to the remaining principal installments thereof in the
inverse order of maturity thereof.
(b) MANDATORY PREPAYMENTS.
(i) REVOLVING CREDIT COMMITTED AMOUNT. If at any
time, the sum of the aggregate principal amount of outstanding
Revolving Loans PLUS Letter of Credit Obligations outstanding
shall exceed the lesser of (A) the Revolving Credit Committed
Amount and (B) the Revolving Credit Borrowing Base, the
Borrowers immediately shall prepay the Revolving Loans, and
(after all Revolving Loans have been repaid) cash
collateralize the Letter of Credit Obligations, in an amount
sufficient to eliminate such excess.
(ii) COLLATERAL LOSS. To the extent of net cash proceeds
received in connection with a Collateral Loss, the Borrowers
shall prepay the Loans in an amount equal to one hundred
percent (100%) of such net cash proceeds if the Agent shall
have elected to apply the proceeds realized from such
Collateral Loss to the prepayment of the Loans (such
prepayment to be applied as set forth in clause (v) below).
(iii) ASSET DISPOSITIONS. Promptly and in any event
within five (5) days following the occurrence of any Asset
Disposition, the Borrowers shall prepay the Loans in an
aggregate amount equal to 100% of the Net Cash Proceeds of the
related Asset Disposition (such prepayment to be applied as
set forth in clause (v) below).
(iv) ISSUANCES OF EQUITY. Promptly and in any event
within five (5) days following the receipt by any Borrower of
Net Cash Proceeds from any Equity Issuance occurring after the
Closing Date, the Borrowers shall prepay the Loans in an
aggregate amount equal to one-hundred percent (100%) of the
Net Cash Proceeds of such Equity Issuance (such prepayment to
be applied as set forth in clause (v) below).
(v) APPLICATION OF MANDATORY PREPAYMENTS. All amounts
required to be paid pursuant to this SECTION 2.3(B) shall be
applied as follows: (A) with respect to all amounts prepaid
pursuant to SECTION 2.3(B)(I), to Revolving Loans and (after
all Revolving Loans have been repaid) to a cash collateral
account in respect of Letter of Credit Obligations, (B) with
respect to all amounts prepaid pursuant to SECTION 2.3(B)(II)
in connection with a Collateral Loss (other than a Collateral
Loss of harvesting and processing machinery and equipment),
(1) FIRST to the Revolving Loans and (after all Revolving
Loans have been repaid) to a cash collateral account in
respect of Letter of Credit Obligations and (2) SECOND to Term
Loans to be applied PRO RATA to the remaining principal
installments thereof and in connection with a Collateral Loss
to harvesting and processing machinery and equipment, (x)
FIRST to the Term Loans to be applied PRO RATA to the
remaining principal installments thereof and (y) SECOND to the
Revolving Loans and (after all Revolving Loans have been
repaid) to a cash collateral account in respect of Letter of
Credit Obligations, (C) with respect to all amounts prepaid
pursuant to SECTION 2.3(B)(III), (1) FIRST to the Term Loans,
but only to the extent the Asset Disposition is of harvesting
and processing machinery and equipment, to be applied PRO RATA
to the remaining principal installments thereof and (2) SECOND
to the Revolving Loans and (after all Revolving Loans have
been repaid) to a cash collateral account in respect of Letter
of Credit Obligations and (D) with respect to all amounts
prepaid pursuant to SECTION 2.3(B)(IV), unless the Company
shall otherwise elect in its discretion (1) FIRST to the
Revolving Loans and (after all Revolving Loans have been
repaid) to a cash collateral account in respect of Letter of
Credit Obligations and (2) SECOND to the Term Loans, to be
applied PRO RATA to the remaining principal installments
thereof. Within the parameters of the applications set forth
above for Revolving Loans, prepayments shall be applied first
to Base Rate Loans and then to Eurodollar Loans in direct
order of Interest Period maturities. All prepayments under
this SECTION 2.3(B) shall be subject to SECTION 4.10. So long
as no Event of Default shall have occurred and be continuing,
amounts on deposit in any cash collateral account in respect
of Letter of Credit Obligations shall be remitted promptly to
the Borrowers upon satisfaction of such Letter of Credit
Obligations. Upon and during the continuance of an Event of
Default, amounts on deposit in any cash collateral account in
respect of Letter of Credit Obligations shall be applied in
accordance with the Security Agreement.
(c) VOLUNTARY REDUCTIONS. The Borrowers may from time to
time permanently reduce or terminate the Revolving Credit Committed
Amount or the Term Loan Committed Amount in whole or in part (in
minimum aggregate amounts of $5,000,000 or in integral multiples of
$5,000,000 in excess thereof (or, if less, the full remaining
amount of the then applicable Revolving Credit Committed Amount or
Term Loan Committed Amount)) upon three Business Days' prior
written notice to the Agent; PROVIDED, HOWEVER, that in the case of
any reduction to the Revolving Credit Committed Amount, no such
termination or reduction shall be made which would cause the
aggregate principal amount of outstanding Revolving Loans PLUS
Letter of Credit Obligations outstanding to exceed the lesser of
(A) the Revolving Credit Committed Amount and (B) the Revolving
Credit Borrowing Base, unless, concurrently with such termination
or reduction, the Revolving Loans are repaid to the extent
necessary to eliminate such excess. The Agent shall promptly
notify each affected Lender of receipt by the Agent of any notice
from the Borrowers pursuant to this SECTION 2.3(C).
(d) MATURITY DATE. The Revolving Credit Commitments of the
Lenders and the Letter of Credit Commitment of the Issuing Bank
shall automatically terminate on the Maturity Date. The Term Loan
Commitments of the Lenders shall terminate on the applicable Term
Loan Availability Termination Date.
(e) GENERAL. The Borrowers shall pay to the Agent for the
account of the Lenders in accordance with the terms of SECTION 4.3,
on the date of each termination or reduction of the Revolving
Credit Committed Amount or the Term Loan Committed Amount, the
Revolving Unused Line Fee and/or the Term Unused Line Fee, as
applicable, accrued through the date of such termination or
reduction on the amount of the Revolving Credit Committed Amount or
Term Loan Committed Amount, as applicable, so terminated or
reduced.
2.4 PAYMENTS AND COMPUTATIONS.
(a) The Borrowers shall make each payment hereunder and under
the Notes not later than 2:00 P.M. on the day when due. Payments
made by the Borrowers shall be in Dollars to the Agent at its
address referred to in SECTION 14.5 hereof in immediately available
funds without deduction, withholding, setoff or counterclaim.
Payments made with respect to the Revolving Loans shall be applied
to repay Revolving Loans consisting of Base Rate Loans first and
then Revolving Loans consisting of Eurodollar Loans. As soon as
practicable after the Agent receives payment from the Borrowers,
but in no event later than one Business Day after such payment has
been made, subject to SECTION 2.1(D)(II), the Agent will cause to
be distributed like funds relating to the payment of principal,
interest, or Fees (other than amounts payable to the Agent to
reimburse the Agent and the Issuing Bank for fees and expenses
payable solely to them pursuant to ARTICLE IV hereof) or expenses
payable to the Agent and the Lenders in accordance with SECTION
14.8 hereof ratably to the Lenders, and like funds relating to the
payment of any other amounts payable to such Lender. The
Borrowers' obligations to the Lenders with respect to such payments
shall be discharged by making such payments to the Agent pursuant
to this SECTION 2.4(A) or if not timely paid or any Event of
Default then exists, may be added to the principal amount of the
Revolving Loans outstanding.
(b) The Borrowers hereby authorize each Lender to charge from
time to time against any or all of the Borrowers' accounts with
such Lender any of the Obligations which are then due and payable.
Each Lender receiving any payment as a result of charging any such
account shall promptly notify the Agent thereof and make such
arrangements as the Agent shall request to share the benefit
thereof in accordance with SECTION 2.8.
(c) Except as otherwise provided herein with respect to
Eurodollar Loans, any payments falling due under this Credit
Agreement on a day other than a Business Day shall be due and
payable on the next succeeding Business Day and shall accrue
interest at the applicable interest rate provided for in this
Credit Agreement to but excluding such Business Day. Except as
otherwise provided herein, computation of interest and fees
hereunder shall be made on the basis of actual number of days
elapsed over a 360 day year.
2.5 MAINTENANCE OF ACCOUNT.
The Agent shall maintain an account on its books in the name of the
Borrowers in which the Borrowers will be charged with all loans and
advances made by the Lenders to the Borrowers or for the Borrowers'
account, including the Revolving Loans, the Term Loans, the Letter of
Credit Obligations and any other Obligations, including any and all
costs, expenses and attorney's fees which the Agent may incur,
including, without limitation, in connection with the exercise by or for
the Lenders of any of the rights or powers herein conferred upon the
Agent (other than in connection with any assignments or participations
by any Lender) or in the prosecution or defense of any action or
proceeding by or against any Borrower or the Lenders concerning any
matter arising out of, connected with, or relating to this Credit
Agreement or the Accounts, or any Obligations owing to the Lenders by
any Borrower. In no event shall prior recourse to any Accounts or other
Collateral be a prerequisite to the Agent's right to demand payment of
any Obligation upon its maturity. Further, it is understood that the
Agent shall have no obligation whatsoever to perform in any respect any
of the Borrowers' contracts or obligations relating to the Accounts.
2.6 STATEMENT OF ACCOUNT
After the end of each month the Agent shall send the Borrowers a
statement showing the accounting for the charges, loans, advances and
other transactions occurring between the Lenders and the Borrowers
during that month. The monthly statements shall be deemed correct and
binding upon the Borrowers and shall constitute an account stated
between the Borrowers and the Lenders unless the Agent receives a
written statement of the Borrowers' exceptions within thirty (30) days
after same is mailed to the Borrowers.
2.7 TAXES.
(a) Any and all payments by the Borrowers hereunder or under
the Notes to or for the benefit of any Lender shall be made, in
accordance with SECTION 2.4, free and clear of and without
deduction for any and all present or future Taxes, deductions,
charges or withholdings and all liabilities with respect thereto,
excluding, in the case of each such Lender and the Agent, Taxes
imposed on or measured by the Agent's or any Lender's net income or
receipts (any such excluded Taxes, collectively, "Excluded Taxes").
If any Borrower shall be required by law to deduct any Taxes (other
than Excluded Taxes) from or in respect of any sum payable
hereunder or under any Note to or for the benefit of any Lender or
the Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions of Taxes
(including deductions of Taxes applicable to additional sums
payable under this SECTION 2.7) 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, (ii) such Borrower shall
make such deductions and (iii) such Borrower shall pay the full
amount so deducted to the relevant taxation authority or other
authority in accordance with applicable law; PROVIDED, HOWEVER,
that such Borrower shall be under no obligation to increase the sum
payable to any Lender not organized under the laws of the United
States or a state thereof (a "Foreign Lender") by an amount equal
to the amount of the U.S. Tax required to be withheld under United
States law from the sums paid to such Foreign Lender, if such
withholding is caused by the failure of such Foreign Lender to be
engaged in the active conduct of a trade or business in the United
States or all amounts of interest and fees to be paid to such
Foreign Lender hereunder are not effectively connected with such
trade or business within the meaning of U.S. Treasury Regulation
1.1441-4(a).
(b) Each Foreign Lender agrees that it will deliver to the
Borrowers and the Agent (i) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or successor
applicable form(s), as the case may be, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form,
together with any other certificate or statement of exemption
required under the Internal Revenue Code or regulations issued
thereunder. Each such Lender also agrees to deliver to the
Borrowers and the Agent two (2) further copies of the said Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms or
other manner of certification, as the case may be, on or before the
date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrowers, and such extensions or
renewals thereof as may reasonably be requested by the Borrowers or
the Agent, unless in any such case an event (including, without
limitation, any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrowers
and the Agent. Such Lender shall certify (A) in the case of a Form
1001 or 4224, that it is entitled to receive payments under this
Credit Agreement without deduction or withholding of any U.S.
federal income taxes and (B) in the case of a Form W-8 or W-9, that
it is entitled to an exemption from U.S. backup withholding tax.
(c) In addition, the Borrowers agree to pay any present or
future stamp, documentary, privilege, intangible or similar Taxes
or any other excise or property Taxes, charges or similar levies
that arise at any time or from time to time (other than Excluded
Taxes) (i) from any payment made under any and all Credit
Documents, (ii) from the transfer of the rights of any Lender under
any Credit Documents to any other Lender or Lenders or (iii) from
the execution or delivery by any Borrower of, or from the filing or
recording or maintenance of, or otherwise with respect to, any and
all Credit Documents (hereinafter referred to as "Other Taxes").
(d) The Borrowers will indemnify each Lender and the Agent
for the full amount of Taxes (including, without limitation and
without duplication, any Taxes imposed by any jurisdiction on
amounts payable under this SECTION 2.7), subject to (i) the
exclusion set out in the first sentence of SECTION 2.7(A), (ii) the
provisions of SECTION 2.7(B), and (iii) the provisions of the
proviso set forth in SECTION 2.7(A), and will indemnify each Lender
and the Agent for the full amount of Other Taxes (including,
without limitation and without duplication, any Taxes imposed by
any jurisdiction on amounts payable under this SECTION 2.7) paid by
such Lender or the Agent (on its own behalf or on behalf of any
Lender), as the case may be, in respect of payments made or to be
made hereunder, and any liability (including penalties, interest
and expenses) arising solely therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally
asserted. Payment of 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.
(e) Within thirty (30) days after the date of any payment of
Taxes or Other Taxes, the applicable Borrower shall furnish to the
Agent, at its address referred to in SECTION 14.5, the original or
certified copy of a receipt evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the
Borrowers contained in this SECTION 2.7 shall survive the payment
in full of all Obligations hereunder and under the Revolving Notes.
2.8 SHARING OF PAYMENTS.
If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of setoff or otherwise)
on account of the Loans made by it or its participation in Letters of
Credit in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall forthwith purchase from the
other Lenders such participations in the Loans made by them or in their
participation in Letters of Credit as shall be necessary to cause such
purchasing Lender to share the excess payment accruing to all Lenders in
accordance with their respective ratable shares as provided for in this
Credit Agreement; PROVIDED, HOWEVER, that if all or any portion of such
excess is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and each such Lender shall
repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing
Lender) or any interest or other amount paid or payable by the
purchasing Lender in respect to the total amount so recovered. The
Borrowers agree that any Lender so purchasing a participation from
another Lender pursuant to this SECTION 2.8 may, to the fullest extent
permitted by law, exercise all of its rights of payment (including the
right of setoff) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrowers in the amount of such
participation.
2.9 PRO RATA TREATMENT.
Each Loan, each payment or prepayment of principal of any Loan or
reimbursement obligations arising from drawings under Letters of Credit,
each payment of interest on the Loans, each payment of the Unused Line
Fee, each payment of the Letter of Credit Fee, each reduction of the
Commitments and each conversion or extension of any Loan, shall be
allocated pro rata among the Lenders in accordance with the respective
principal amounts of their outstanding Loans and their participation
interests in the Letters of Credit; PROVIDED, HOWEVER, that the
foregoing fees payable hereunder to the Lenders shall be allocated to
each Lender based on such Lender's Revolving Credit Commitment
Percentage.
2.10 EXTENSIONS AND CONVERSIONS.
Subject to the terms of ARTICLE V, the Borrowers shall have the
option, on any Business Day, to extend existing Eurodollar Loans into a
subsequent permissible Interest Period, to convert Base Rate Loans into
Eurodollar Loans, or to convert Eurodollar Loans into Base Rate Loans;
PROVIDED, HOWEVER, that (i) except as provided in SECTION 4.10,
Eurodollar Loans may be converted into Base Rate Loans only on the last
day of the Interest Period applicable thereto, (ii) Eurodollar Loans may
be extended, and Base Rate Loans may be converted into Eurodollar Loans,
only if no Default or Event of Default is in existence on the date of
extension or conversion, (iii) Loans extended as, or converted into,
Eurodollar Loans shall be subject to the terms of the definition of
"INTEREST PERIOD" and shall be in such minimum amounts as provided in
with respect to Revolving Loans, SECTION 2.1(D)(I) and with respect to
the Term Loans, SECTION 2.2(A), and (iv) no more than six (6) separate
Eurodollar Loans shall be outstanding hereunder at any time. Each such
extension or conversion shall be effected by the Borrowers by giving a
written notice in the form of EXHIBIT H hereto (a "Notice of
Extension/Conversion") (or telephone notice promptly confirmed in
writing) to the Agent prior to 11:00 a.m. on the Business Day of, in the
case of the conversion of a Eurodollar Loan into a Base Rate Loan, and
on the third Business Day prior to, in the case of the extension of a
Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar
Loan, the date of the proposed extension or conversion, specifying the
date of the proposed extension or conversion, the Loans to be so
extended or converted, the types of Loans into which such Loans are to
be converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for extension or conversion shall
constitute a representation and warranty by the Borrowers of the matters
specified in ARTICLE V. In the event the Borrowers fail to request
extension or conversion of any Eurodollar Loan in accordance with this
Section, or any such conversion or extension is not permitted or
required by this Section, then such Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period
applicable thereto. The Agent shall give each Lender notice as promptly
as practicable of any such proposed extension or conversion affecting
any Loan.
ARTICLE III
LETTERS OF CREDIT
3.1 ISSUANCE.
Subject to the terms and conditions hereof and of the Letter of
Credit Documents, if any, and any other terms and conditions which the
Issuing Bank may reasonably require, the Lenders will participate in the
issuance by the Issuing Bank from time to time of such Letters of Credit
in Dollars from the Closing Date until the Maturity Date as the
Borrowers may request, in a form acceptable to the Issuing Bank;
PROVIDED, HOWEVER, that (a) the Letter of Credit Obligations outstanding
shall not at any time exceed SEVEN MILLION DOLLARS ($7,000,000) (the
"LETTER OF CREDIT COMMITTED AMOUNT") and (b) the sum of the aggregate
principal amount of outstanding Revolving Loans PLUS Letter of Credit
Obligations outstanding shall not at any time exceed the lesser of (i)
the Revolving Credit Committed Amount and (ii) the Revolving Credit
Borrowing Base. No Letter of Credit shall (x) have an original expiry
date more than one year from the date of issuance or (y) as originally
issued or as extended, have an expiry date extending beyond the Maturity
Date. Each Letter of Credit shall comply with the related Letter of
Credit Documents. The issuance and expiry date of each Letter of Credit
shall comply with the related Letter of Credit Documents. The issuance
and expiry date of each Letter of Credit shall be a Business Day.
3.2 NOTICE AND REPORTS.
The request for the issuance of a Letter of Credit shall be
submitted by the Borrowers to the Issuing Bank at least three (3)
Business Days prior to the requested date of issuance. The Issuing Bank
will, upon request, disseminate to each of the Lenders a detailed report
specifying the Letters of Credit which are then issued and outstanding
and any activity with respect thereto which may have occurred since the
date of the prior report, and including therein, among other things, the
beneficiary, the face amount and the expiry date as well as any payment
or expirations which may have occurred.
3.3 PARTICIPATION.
Each Lender, upon issuance of a Letter of Credit, shall be deemed
to have purchased without recourse a risk participation from the Issuing
Bank in such Letter of Credit and the obligations arising thereunder, in
each case in an amount equal to its Revolving Credit Commitment
Percentage of such Letter of Credit, and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Bank therefor and
discharge when due, its Revolving Credit Commitment Percentage of the
obligations arising under such Letter of Credit. Without limiting the
scope and nature of each Lender's participation in any Letter of Credit,
to the extent that the Issuing Bank has not been reimbursed as required
hereunder or under any such Letter of Credit, each such Lender shall pay
to the Issuing Bank its Revolving Credit Commitment Percentage of such
unreimbursed drawing pursuant to the provisions of SECTION 3.4. The
obligation of each Lender to so reimburse the Issuing Bank shall be
absolute and unconditional and shall not be affected by the occurrence
of a Default, an Event of Default or any other occurrence or event. Any
such reimbursement shall not relieve or otherwise impair the obligation
of the Borrowers to reimburse the Issuing Bank under any Letter of
Credit, together with interest as hereinafter provided.
3.4 REIMBURSEMENT.
In the event of any drawing under any Letter of Credit, the Issuing
Bank will promptly notify the Borrowers. Unless the Borrowers shall
immediately notify the Issuing Bank that the Borrowers intend to
otherwise reimburse the Issuing Bank for such drawing, the Borrowers
shall be deemed to have requested that the Lenders make a Revolving Loan
in the amount of the drawing as provided in SECTION 3.5 on the related
Letter of Credit, the proceeds of which will be used to satisfy the
related reimbursement obligations. The Borrowers promise to reimburse
the Issuing Bank on the day of drawing under any Letter of Credit
(either with the proceeds of a Revolving Loan obtained hereunder or
otherwise) in same day funds. If the Borrowers shall fail to reimburse
the Issuing Bank as provided hereinabove, the unreimbursed amount of
such drawing shall bear interest at a per annum rate equal to the Base
Rate plus the sum of (i) the Applicable Percentage for Base Rate Loans
and (ii) two percent (2%). The Borrowers' reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of setoff, counterclaim or defense to payment
the Borrowers may claim or have against the Issuing Bank, the Agent, the
Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation any defense based on any failure of
the Borrowers to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing
Bank will promptly notify the other Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the Agent for
the account of the Issuing Bank in Dollars and in immediately available
funds, the amount of such Lender's Revolving Credit Commitment
Percentage of such unreimbursed drawing. Such payment shall be made on
the Business Day such notice is received by such Lender from the Issuing
Bank if such notice is received at or before 2:00 P.M. otherwise such
payment shall be made at or before 12:00 Noon on the Business Day next
succeeding the day such notice is received. If such Lender does not pay
such amount to the Issuing Bank in full upon such request, such Lender
shall, on demand, pay to the Agent for the account of the Issuing Bank
interest on the unpaid amount during the period from the date of such
drawing until such Lender pays such amount to the Issuing Bank in full
at a rate per annum equal to, if paid within two (2) Business Days of
the date that such Lender is required to make payments of such amount
pursuant to the preceding sentence, the Federal Funds Rate and
thereafter at a rate equal to the Base Rate. Each Lender's obligation
to make such payment to the Issuing Bank, and the right of the Issuing
Bank to receive the same, shall be absolute and unconditional, shall not
be affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder, the
existence of a Default or Event of Default or the acceleration of the
obligations of the Borrowers hereunder and shall be made without any
offset, abatement, withholding or reduction whatsoever. Simultaneously
with the making of each such payment by a Lender to the Issuing Bank,
such Lender shall, automatically and without any further action on the
part of the Issuing Bank or such Lender, acquire a participation in an
amount equal to such payment (excluding the portion of such payment
constituting interest owing to the Issuing Bank) in the related
unreimbursed drawing portion of the Letter of Credit Obligation and in
the interest thereon and in the related Letter of Credit Documents, and
shall have a claim against the Borrowers with respect thereto.
3.5 REPAYMENT WITH REVOLVING LOANS.
On any day on which the Borrowers shall have requested, or been
deemed to have requested, a Revolving Loan advance to reimburse a
drawing under a Letter of Credit, the Agent shall give notice to the
Lenders that a Revolving Loan has been requested or deemed requested by
the Borrowers to be made in connection with a drawing under a Letter of
Credit, in which case a Revolving Loan advance comprised of Base Rate
Loans (or Eurodollar Loans to the extent the Borrower has complied with
the procedures of SECTION 2.1(D)(I) with respect thereto) shall be
immediately made to the Borrowers by all Lenders (notwithstanding any
termination of the Commitments pursuant to SECTION 11.2) PRO RATA based
on the respective Revolving Credit Commitment Percentages of the Lenders
(determined before giving effect to any termination of the Commitments
pursuant to SECTION 11.2) and the proceeds thereof shall be paid
directly by the Agent to the Issuing Bank for application to the
respective Letter of Credit Obligations. Each such Lender hereby
irrevocably agrees to make its Revolving Credit Commitment Percentage of
each such Revolving Loan immediately upon any such request or deemed
request in the amount, in the manner and on the date specified in the
preceding sentence NOTWITHSTANDING (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
ARTICLE V are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed request
for Revolving Loan to be made by the time otherwise required hereunder,
(v) whether the date of such borrowing is a date on which Revolving
Loans are otherwise permitted to be made hereunder or (vi) any
termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving
Loan cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
bankruptcy or insolvency proceeding with respect to any Borrower), then
each such Lender hereby agrees that it shall forthwith purchase (as of
the date such borrowing would otherwise have occurred, but adjusted for
any payments received from the Borrowers on or after such date and prior
to such purchase) from the Issuing Bank such participation in the
outstanding Letter of Credit Obligations as shall be necessary to cause
each such Lender to share in such Letter of Credit Obligations ratably
(based upon the respective Revolving Credit Commitment Percentages of
the Lenders (determined before giving effect to any termination of the
Commitments pursuant to SECTION 11.2)), PROVIDED that at the time any
purchase of participation pursuant to this sentence is actually made,
the purchasing Lender shall be required to pay to the Issuing Bank, to
the extent not paid to the Issuing Bank by the Borrowers in accordance
with the terms of SECTION 3.4, interest on the principal amount of
participation purchased for each day from and including the day upon
which such borrowing would otherwise have occurred to but excluding the
date of payment for such participation, at the rate equal to, if paid
within two (2) Business Days of the date of the Revolving Loan advance,
the Federal Funds Rate, and thereafter at a rate equal to the Base Rate.
3.6 RENEWAL, EXTENSION.
The renewal or extension of any Letter of Credit shall, for
purposes hereof, be treated in all respects the same as the issuance of
a new Letter of Credit hereunder.
3.7 UNIFORM CUSTOMS AND PRACTICES.
The Issuing Bank may provide that the Letters of Credit shall be
subject to The Uniform Customs and Practice for Documentary Credits, as
published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated by
reference therein and deemed in all respects to be a part thereof.
3.8 INDEMNIFICATION; NATURE OF ISSUING BANK'S DUTIES.
(a) In addition to their other obligations under this ARTICLE
III, the Borrowers agree to protect, indemnify, pay and save the
Issuing Bank harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that the Issuing Bank may
incur or be subject to as a consequence, direct or indirect, of (A)
the issuance of any Letter of Credit or (B) the failure of the
Issuing Bank to honor a drawing under a Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental
Authority (all such acts or omissions, herein called "Government
Acts").
(b) As between the Borrowers and the Issuing Bank, the
Borrowers shall assume all risks of the acts, omissions or misuse
of any Letter of Credit by the beneficiary thereof. The Issuing
Bank shall not be responsible: (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid
or ineffective for any reason; (iii) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or
not they be in cipher; (iv) for any loss or delay in the
transmission or otherwise of any document required in order to make
a drawing under a Letter of Credit or of the proceeds thereof; and
(v) for any consequences arising from causes beyond the control of
the Issuing Bank, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the
vesting of the Issuing Bank's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Bank, under or in connection with any Letter
of Credit or the related certificates, if taken or omitted in good
faith, shall not put such Issuing Bank under any resulting
liability to any Borrower. It is the intention of the parties that
this Credit Agreement shall be construed and applied to protect and
indemnify the Issuing Bank against any and all risks involved in
the issuance of the Letters of Credit, all of which risks are
hereby assumed by the Borrowers, including, without limitation, any
and all Government Acts. The Issuing Bank shall not, in any way,
be liable for any failure by the Issuing Bank or anyone else to pay
any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of the
Issuing Bank.
(d) Nothing in this SECTION 3.8 is intended to limit the
reimbursement obligations of the Borrower contained in SECTION 3.4
above. The obligations of the Borrowers under this SECTION 3.8
shall survive the termination of this Credit Agreement. No act or
omission of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Issuing Bank to
enforce any right, power or benefit under this Credit Agreement.
(e) Notwithstanding anything to the contrary contained in
this SECTION 3.8, the Borrowers shall have no obligation to
indemnify the Issuing Bank in respect of any liability incurred by
the Issuing Bank (i) arising solely out of the gross negligence or
willful misconduct of the Issuing Bank, as determined by a court of
competent jurisdiction, or (ii) caused by the Issuing Bank's
failure to pay under any Letter of Credit after presentation to it
of a request strictly complying with the terms and conditions of
such Letter of Credit, as determined by a court of competent
jurisdiction, unless such payment is prohibited by any law,
regulation, court order or decree.
3.9 RESPONSIBILITY OF ISSUING BANK.
It is expressly understood and agreed that the obligations of the
Issuing Bank hereunder to the Lenders are only those expressly set forth
in this Credit Agreement and that the Issuing Bank shall be entitled to
assume that the conditions precedent set forth in ARTICLE III OR V have
been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; PROVIDED, HOWEVER, that
nothing set forth in this ARTICLE III shall be deemed to prejudice the
right of any Lender to recover from the Issuing Bank any amounts made
available by such Lender to the Issuing Bank pursuant to this ARTICLE
III in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence or willful misconduct on the part of the
Issuing Bank.
3.10 CONFLICT WITH LETTER OF CREDIT DOCUMENTS.
In the event of any conflict between this Credit Agreement and any
Letter of Credit Document (including any letter of credit application),
this Credit Agreement shall control.
ARTICLE IV
INTEREST AND FEES
4.1 INTEREST ON LOANS.
Subject to the provisions of SECTION 4.2, interest on the Loans
shall be payable (a) for Base Rate Loans, monthly in arrears on the last
day of each calendar month and the interest rate shall be equal to the
Base Rate PLUS the Applicable Percentage on the outstanding amount of
each such Base Rate Loan and (b) for Eurodollar Loans, on the last day
of the applicable Interest Period and the interest rate shall be equal
to the Eurodollar Rate PLUS the Applicable Percentage on the outstanding
amount of each such Eurodollar Loan. The interest rates hereunder shall
be calculated based on a 360 day year for the actual number of days
elapsed.
4.2 INTEREST AFTER EVENT OF DEFAULT.
Interest on any amount of matured principal under the Loans, and
interest on the amount of principal under the Revolving Loans
outstanding as of the date an Event of Default occurs, and at all times
thereafter until the earlier of the date upon which (a) all Obligations
have been paid and satisfied in full or (b) such Event of Default shall
have been cured or waived, shall be payable on demand at a rate equal to
the Base Rate, PLUS the highest Applicable Percentage, PLUS two percent
(2%) (the "Default Rate"). Interest shall be payable on any other
amount due hereunder and shall accrue at the Default Rate from the date
due and payable until paid in full. The rates hereunder shall be
calculated based on a 360-day year for the actual number of days
elapsed.
4.3 UNUSED LINE FEE.
(a) REVOLVING LOANS. On the last day of each calendar month
the Borrowers shall pay to the Agent for the benefit of the Lenders
the Revolving Unused Line Fee due in respect of such calendar
month.
(b) TERM LOANS. On the last day of each calendar month the
Borrowers shall pay to the Agent for the benefit of the Lenders the
Term Unused Line Fee due in respect of such calendar month.
4.4 LENDERS' FEES/AGENT'S FEES.
On the Closing Date the Agent shall pay to each Lender its
respective Lender's Fees that are required to be paid on the Closing
Date pursuant to the terms of such Lender's fee letter with the Agent.
The Borrowers shall pay all fees required to be paid to the Agent under
the Fee Letter at the times and in the amounts set forth therein.
4.5 LETTER OF CREDIT FEES.
(a) LETTER OF CREDIT FEE. In consideration of the issuance
of Letters of Credit hereunder, the Borrowers promise to pay to the
Agent for the account of each Lender a fee (the "LETTER OF CREDIT
FEE") on such Lender's Revolving Credit Commitment Percentage of
the average daily maximum amount available to be drawn under each
such Letter of Credit computed at a per annum rate for each day
from the date of issuance to the date of expiration equal to the
Applicable Percentage for Eurodollar Loans. The Letter of Credit
Fee will be payable upon issuance.
(b) ISSUING BANK FEES. In addition to the Letter of Credit
Fee payable pursuant to clause (a) above, the Borrowers promise to
pay to the Issuing Bank for its own account without sharing by the
other Lenders the letter of credit fronting and negotiation fees
agreed to by the Borrowers and the Issuing Bank from time to time
and the customary charges from time to time of the Issuing Bank
with respect to the issuance, amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of
Credit (collectively, the "ISSUING BANK FEES").
4.6 AUTHORIZATION TO CHARGE ACCOUNT.
The Borrowers hereby authorize the Agent to charge the Borrowers'
Revolving Loan accounts with the amount of all payments and fees due
hereunder to the Lenders, the Agent and the Issuing Bank as and when
such payments become due. The Borrowers confirm that any charges which
the Agent may so make to the Borrowers' Revolving Loan accounts as
herein provided will be made as an accommodation to the Borrowers and
solely at the Agent's discretion.
4.7 INDEMNIFICATION IN CERTAIN EVENTS.
If after the Closing Date, either (a) any change in or in the
interpretation of any law or regulation is introduced, including,
without limitation, with respect to reserve requirements, applicable to
First Union or any other banking or financial institution from whom any
of the Lenders borrow funds or obtain credit (a "Funding Bank") or any
of the Lenders, or (b) a Funding Bank or any of the Lenders complies
with any future guideline or request from any central bank or other
Governmental Authority or (c) a Funding Bank or any of the Lenders
determines that the adoption of any applicable law, rule or regulation
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
administration thereof has or would have the effect described below, or
a Funding Bank or any of the Lenders complies 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, and in
the case of any event set forth in this clause (c), such adoption,
change or compliance has or would have the direct or indirect effect of
reducing the rate of return on any of the Lenders' capital as a
consequence of its obligations hereunder to a level below that which
such Lender could have achieved but for such adoption, change or
compliance (taking into consideration the Funding Bank's or Lenders'
policies with respect to capital adequacy) by an amount deemed by such
Lender to be material, and the result of any of the foregoing events
described in clauses (a), (b) or (c) is or results in an increase in the
cost to any of the Lenders of funding or maintaining the Revolving
Credit Committed Amount, the Revolving Loans, the Term Loans or the
Letters of Credit, then the Borrowers shall from time to time upon
demand by the Agent, pay to the Agent additional amounts sufficient to
indemnify the Lenders against such increased cost. A certificate as to
the amount of such increased cost shall be submitted to the Borrowers by
the Agent and shall be conclusive and binding absent manifest error.
4.8 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, (a) the Agent
shall have determined in good faith (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of
circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, (b) the Agent has received notice from the Required
Lenders that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Eurodollar Loans during such
Interest Period, or (c) Dollar deposits in the principal amounts of the
Eurodollar Loans to which such Interest Period is to be applicable are
not generally available in the London interbank market, the Agent shall
give telecopy or telephonic notice thereof to the Borrowers and the
Lenders as soon as practicable thereafter, and will also give prompt
written notice to the Borrowers when such conditions no longer exist.
If such notice is given (i) any Eurodollar Loans requested to be made on
the first day of such Interest Period shall be made as Base Rate Loans,
(ii) any Loans that were to have been converted on the first day of such
Interest Period to or continued as Eurodollar Loans shall be converted
to or continued as Base Rate Loans and (iii) each outstanding Eurodollar
Loan shall be converted, on the last day of the then-current Interest
Period thereof, to Base Rate Loans. Until such notice has been
withdrawn by the Agent, no further Eurodollar Loans shall be made or
continued as such, nor shall the Borrowers have the right to convert
Base Rate Loans to Eurodollar Loans.
4.9 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or
any change in any law, treaty, rule or regulation or final, non-
appealable determination of an arbitrator or a court or other
Governmental Authority or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Credit
Agreement, (a) such Lender shall promptly give written notice of such
circumstances to the Borrowers and the Agent (which notice shall be
withdrawn whenever such circumstances no longer exist), (b) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar
Loans shall forthwith be canceled and, until such time as it shall no
longer be unlawful for such Lender to make or maintain Eurodollar Loans,
such Lender shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of the then
current Interest Periods with respect to such Loans or within such
earlier period as required by law. If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrowers shall pay to
such Lender such amounts, if any, as may be required pursuant to SECTION
4.10.
4.10 FUNDING INDEMNITY.
The Borrowers, jointly and severally, promise to indemnify each
Lender and to hold each Lender harmless from any loss or expense which
such Lender may sustain or incur (other than through such Lender's gross
negligence or willful misconduct) as a consequence of (a) default by the
Borrowers in making a borrowing of, conversion into or extension of
Eurodollar Loans after the Borrowers have given a notice requesting the
same in accordance with the provisions of this Credit Agreement, (b)
default by the Borrowers in making any prepayment of a Eurodollar Loan
after the Borrowers have given a notice thereof in accordance with the
provisions of this Credit Agreement, and (c) the making of a prepayment
of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. With respect to Eurodollar Loans, such
indemnification may include an amount equal to the excess, if any, of
(i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or extended, for the period from
the date of such prepayment or of such failure to borrow, convert or
extend to the last day of the applicable Interest Period (or, in the
case of a failure to borrow, convert or extend, the Interest Period that
would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Eurodollar Loans provided for
herein OVER (ii) the amount of interest (as reasonably determined by
such Lender) which would have accrued to such Lender on such amount by
placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. This covenant shall survive
the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
ARTICLE V
CONDITIONS PRECEDENT
The obligation of the Lenders to make the Term Loans or any
Revolving Loan or of the Issuing Bank to issue any Letter of Credit
hereunder is subject to the satisfaction of, or waiver of, immediately
prior to or concurrently with the making of such Term Loans or any
Revolving Loan or issuance of such Letter of Credit the following
conditions precedent:
5.1 CLOSING CONDITIONS.
The obligation of each Lender to make Loans and/or of the
Issuing Bank to issue Letters of Credit hereunder shall be subject to
the satisfaction, on or prior to the Closing Date, of the following
conditions precedent:
(a) EXECUTED CREDIT DOCUMENTS. Receipt by the Agent of duly
executed copies of: this Credit Agreement; the Notes; the Security
Documents; and all other Credit Documents, each in form and substance
acceptable to the Lenders in their sole discretion.
(b) CORPORATE DOCUMENTS. Receipt by the Agent of the following:
(i) CHARTER DOCUMENTS. Copies of the articles or
certificates of incorporation or formation or other charter
documents of each Borrower certified to be true and complete as of
a recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation or formation and
certified by a secretary or assistant secretary of such Borrower to
be true and correct as of the Closing Date.
(ii) BYLAWS. A copy of the bylaws or limited liability
company agreement or similar agreement of each Borrower certified
by a secretary or assistant secretary of such Borrower to be true
and correct as of the Closing Date.
(iii) RESOLUTIONS. Copies of resolutions of the Board of
Directors or similar managing body of each Borrower approving and
adopting the Credit Documents to which it is a party, the
transactions contemplated therein and authorizing execution and
delivery thereof, certified by a secretary or assistant secretary
of such Borrower to be true and correct and in force and effect as
of the Closing Date.
(iv) GOOD STANDING. Copies of (i) certificates of good
standing, existence or its equivalent with respect to each Borrower
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be
in good standing could reasonably be expected to have a Material
Adverse Effect and (ii) to the extent available, a certificate
indicating payment of all corporate franchise taxes certified as of
a recent date by the appropriate taxing Governmental Authorities.
(v) INCUMBENCY. An incumbency certificate of each Borrower
certified by a secretary or assistant secretary to be true and
correct as of the Closing Date.
(c) FINANCIAL STATEMENTS. Receipt by the Agent and the Lenders of
the unaudited balance sheet of the Borrowers as of, and a statement of
income for the period ending, July 31, 1999 prepared by the chief
financial officer of the Company and such other information relating to
the Borrowers as the Agent may reasonably require in connection with the
structuring and syndication of credit facilities of the type described
herein.
(d) OPINIONS OF COUNSEL. Receipt by the Agent of an opinion, or
opinions (which shall cover, among other things, authority, legality,
validity, binding effect, enforceability and attachment and perfection
of liens), satisfactory to the Agent, addressed to the Agent and the
Lenders and dated the Closing Date, from legal counsel to the Borrowers.
(e) PERSONAL PROPERTY COLLATERAL. The Agent shall have received:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Borrower and
each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Agent's security
interest in the Collateral, copies of the financing statements on
file in such jurisdictions and evidence that no Liens exist other
than Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Agent's sole
discretion, to perfect the Agent's security interest in the
Collateral;
(iii) searches of ownership of intellectual property in
the appropriate governmental offices and such
patent/trademark/copyright filings as requested by the Agent in
order to perfect the Agent's security interest in the Collateral;
(iv) all instruments and chattel paper in the possession of
any of the Borrowers, together with allonges or assignments as may
be necessary or appropriate to perfect the Agent's security
interest in the Collateral to the extent required under the
Security Agreement;
(v) duly executed consents as are necessary, in the Agent's
sole discretion, to perfect the Lenders' security interest in the
Collateral, including, without limitation, such Acknowledgment
Agreements from lessors of real property as the Agent may require;
and
(vi) duly executed lockbox agreements and/or lockbox letters
in the form of EXHIBIT G-1 and G-2, as applicable, with respect to
each bank account of the Borrowers (other than payroll and xxxxx
cash bank accounts maintained as zero balance accounts and other
similar bank accounts having limited or no activity and balances of
not more than $10,000).
(f) PRIORITY OF LIENS. The Agent shall have received satisfactory
evidence that the Agent, on behalf of the Lenders, holds a perfected,
first priority Lien on all Collateral (subject only to Permitted Liens).
(g) OPENING REVOLVING CREDIT BORROWING BASE CERTIFICATE. Receipt
by the Agent of a Revolving Credit Borrowing Base Certificate as of
August 31, 1999, substantially in the form of EXHIBIT J-1 and certified
by the chief financial officer of the Company on the Closing Date to be
true and correct as of August 31, 1999.
(h) [INTENTIONALLY OMITTED]
(i) [INTENTIONALLY OMITTED]
(j) EVIDENCE OF INSURANCE. Receipt by the Agent of copies of
insurance policies or certificates of insurance of the Borrowers
evidencing liability and casualty insurance meeting the requirements set
forth in the Credit Documents, including, without limitation, naming the
Agent as loss payee on behalf of the Lenders and as additional insured
to the extent required by Section 7.10.
(k) CORPORATE STRUCTURE. The corporate capital and ownership
structure of the Company and its Subsidiaries shall be as described in
SCHEDULE 6.9.
(l) CONSENTS. Receipt by the Agent of evidence that all
governmental, shareholder and third party consents and approvals
required in connection with the transactions and the related financings
contemplated hereby and expiration of all applicable waiting periods
without any action being taken by any authority that could restrain,
prevent or impose any material adverse conditions on such transactions
or that could seek or threaten any of the foregoing, and no law or
regulation shall be applicable which in the judgment of the Agent could
have such effect.
(m) LITIGATION. There shall not exist any pending or threatened
action, suit, investigation or proceeding against any Borrower or its
assets that could reasonably be expected to have a Material Adverse
Effect.
(n) OTHER INDEBTEDNESS. Receipt by the Agent of evidence that,
after giving effect to the making of the Loans made on the Closing Date,
the Borrowers shall have no Funded Indebtedness other than the
Indebtedness under the Credit Documents and as disclosed on Schedule
1.1D.
(o) SOLVENCY CERTIFICATE. Receipt by the Agent of an officer's
certificate for each Borrower prepared by the chief financial officer of
such Borrower as to the financial condition, solvency and related
matters of such Borrower, in each case after giving effect to the
initial borrowings under the Credit Documents, in substantially the form
of EXHIBIT L hereto.
(p) OFFICER'S CERTIFICATES. The Agent shall have received a
certificate or certificates executed by the president or chief financial
officer of the Company as of the Closing Date stating that (i) after
giving effect to the making of the Loans and application of the proceeds
thereof, each Borrower is in compliance with all existing financial
obligations, (ii) all governmental, shareholder and third party consents
and approvals, if any, with respect to the Credit Documents and the
transactions contemplated thereby have been obtained, (iii) no action,
suit, investigation or proceeding is pending or threatened in any court
or before any arbitrator or governmental instrumentality that purports
to affect any Borrower or any transaction contemplated by the Credit
Documents, if such action, suit, investigation or proceeding could
reasonably be expected to have a Material Adverse Effect and (iv)
immediately after giving effect to this Credit Agreement, the other
Credit Documents and all the transactions contemplated therein to occur
on such date, (A) each of the Borrowers is solvent, (B) no Default or
Event of Default exists, (C) all representations and warranties
contained herein and in the other Credit Documents are true and correct
in all material respects, and (D) the Borrowers are in compliance with
each of the financial covenants set forth in ARTICLE VIII.
(q) FEES AND EXPENSES. Payment by the Borrowers of all fees and
expenses owed by them to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Fee
Letter.
(r) SOURCES AND USES; PAYMENT INSTRUCTIONS. Receipt by the Agent
of (a) a statement of sources and uses of funds covering all payments
reasonably expected to be made by the Company in connection with the
transactions contemplated by the Credit Documents to be consummated on
the Closing Date, including an itemized estimate of all fees, expenses
and other closing costs and (b) payment instructions with respect to
each wire transfer to be made by the Agent on behalf of the Lenders or
the Company or the Borrowers on the Closing Date setting forth the
amount of such transfer, the purpose of such transfer, the name and
number of the account to which such transfer is to be made, the name and
ABA number of the bank or other financial institution where such account
is located and the name and telephone number of an individual that can
be contacted to confirm receipt of such transfer.
(s) ACCOUNT DESIGNATION LETTER. Receipt by the Agent of an
Account Designation Letter substantially in the form of EXHIBIT M
hereto.
(t) MATERIAL ADVERSE CHANGE. (i) No Material Adverse Change, or
development reasonably likely to have a Material Adverse Effect, shall
have occurred since Xxxxx 00, 0000, (xx) no occurrence or event which is
reasonably likely to have a Material Adverse Effect shall have occurred
since March 31, 1999 and be continuing and (iii) on or prior to the
Closing Date, there shall not have occurred a substantial impairment of
the financial markets generally which, in the opinion of the Lenders,
has materially and adversely affected the transactions contemplated
hereby.
(u) OTHER. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, without limitation, information regarding litigation,
tax, accounting, labor, insurance, pension liabilities (actual or
contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Borrowers.
5.2 CONDITIONS TO TERM LOANS.
In addition to the conditions precedent set forth in SECTION 2.2
hereof, the obligation of each Lender to make Term Loans hereunder shall
be subject to the satisfaction of the following additional conditions
precedent:
(a) EQUIPMENT APPRAISAL. Receipt by the Agent of an appraisal of
the orderly liquidation value of the harvesting and processing machinery
and equipment of the Borrowers owned as of the Closing Date in form and
substance satisfactory to the Agent and conducted by an appraiser
satisfactory to the Agent (the "Appraisal").
(b) DISTRIBUTION TERM LOANS. All of the proceeds of the
Distribution Term Loans shall be applied to pay the CBII $50 Million
Distribution and the Agent shall have received a Distribution Term Loan
Borrowing Base Certificate and the Appraisal.
(c) ACQUISITION TERM LOANS. All of the proceeds of the
Acquisition Term Loans shall be applied to make the applicable Permitted
Acquisition and the Agent shall have received a Non-Distribution Term
Loan Borrowing Base Certificate and an appraisal (in form and substance
satisfactory to the Agent and conducted by an appraiser satisfactory to
the Agent) of any Eligible Equipment to be acquired in connection with
the Permitted Acquisition and which is to be included in the Non-
Distribution Term Loan Borrowing Base.
(d) CAPEX TERM LOANS. All of the proceeds of the Capex Term Loans
shall be applied to make the applicable capital expenditures and the
Agent shall have received a Non-Distribution Term Loan Borrowing Base
Certificate and an appraisal (in form and substance satisfactory to the
Agent and conducted by an appraiser satisfactory to the Agent) of the
Eligible Equipment to be acquired in connection with such capital
expenditures and which is to be included in the Non-Distribution Term
Loan Borrowing Base.
5.3 CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT.
(a) On the date of the making of any Term Loan, Revolving Loan or
the issuance of any Letter of Credit, both before and after giving
effect thereto and to the application of the proceeds therefrom, the
following statements shall be true in the reasonable judgment of the
Agent (and each request for a Term Loan, a Revolving Loan and request
for a Letter of Credit, and the acceptance by the Borrower of the
proceeds of such Term Loan, Revolving Loan or issuance of such Letter of
Credit, shall constitute a representation and warranty by the Borrowers
that on the date of such Term Loan, Revolving Loan or issuance of such
Letter of Credit before and after giving effect thereto and to the
application of the proceeds therefrom, such statements are true):
(i) the representations and warranties contained in this
Credit Agreement are true and correct in all material respects on
and as of the date of such Term Loan, Revolving Loan or issuance of
such Letter of Credit as though made on and as of such date, except
to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such
representations and warranties shall have been true and complete on
and as of such earlier date); and
(ii) no event has occurred and is continuing, or would result
from such Term Loan, Revolving Loan or issuance of such Letter of
Credit or the application of the proceeds thereof, which would
constitute a Default or an Event of Default under this Credit
Agreement.
(b) In connection with the making of any Revolving Loan or Term
Loan, the Agent shall have received a Notice of Borrowing to the extent
such Notice of Borrowing is required to be given with respect to the
making of such Revolving Loan or Term Loan.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Credit Agreement
and the Issuing Bank to issue the Letters of Credit, and to make
available the credit facilities contemplated hereby, each Borrower
hereby represents and warrants to the Lenders and the Issuing Bank as of
the Closing Date and on the date of each extension of credit hereunder,
as follows:
6.1 ORGANIZATION AND QUALIFICATION.
Such Borrower and each of its Subsidiaries (i) is a limited
liability company or corporation duly organized, validly existing and in
good standing under the laws of the state of its organization, (ii) has
the power and authority to own its properties and assets and to transact
the businesses in which it is presently, or proposes to be, engaged, and
(iii) is duly qualified and is authorized to do business and is in good
standing in every jurisdiction in which the failure to be so qualified
could reasonably be expected to have a Material Adverse Effect.
SCHEDULE 6.1 contains a true, correct and complete list of all
jurisdictions in which such Borrower and its Subsidiaries are qualified
to do business as a foreign corporation or foreign limited liability
company as of the Closing Date.
6.2 SOLVENCY.
The fair saleable value of such Borrower's assets exceeds all
probable liabilities, including those to be incurred pursuant to this
Credit Agreement. Such Borrower (i) does not have unreasonably small
capital in relation to the business in which it is or proposes to be
engaged or (ii) has not incurred, and does not believe that it will
incur after giving effect to the transactions contemplated by this
Credit Agreement, debts beyond its ability to pay such debts as they
become due.
6.3 LIENS; INVENTORY.
There are no Liens in favor of third parties with respect to any of
the Collateral, including, without limitation, with respect to the
Inventory, wherever located, other than Permitted Liens. To the best of
such Borrower's knowledge, no lessor, warehouseman, filler, processor or
packer of such Borrower has granted any Lien with respect to the
Inventory maintained by such Borrower at the property of any such
lessor, warehousemen, filler, processor or packer. Upon the proper
filing of financing statements and the proper recordation of other
applicable documents with the appropriate filing or recordation offices
in each of the necessary jurisdictions, the security interests granted
pursuant to the Credit Documents constitute and shall at all times
constitute valid and enforceable first, prior and perfected Liens on the
Collateral (other than Permitted Liens). The Borrowers are or will be
at the time additional Collateral is acquired by them, the absolute
owners of the Collateral with full right to pledge, sell, consign,
transfer and create a Lien therein, free and clear of any and all Liens
in favor of third parties, except Permitted Liens. The Borrowers and
the Subsidiaries will at their expense warrant, until payment in full of
the Obligations and termination of the Commitments, and, at the Agent's
request, defend the Collateral from any and all Liens (other than
Permitted Liens) of any third party. The Borrowers will not, and will
not permit any of their Subsidiaries to, grant, create or permit to
exist, any Lien upon the Collateral, or any proceeds thereof, in favor
of any third party (other than Permitted Liens).
6.4 NO CONFLICT.
The execution and delivery by such Borrower of this Credit
Agreement and each of the other Credit Documents executed and delivered
in connection herewith and the performance of the obligations of such
Borrower hereunder and thereunder and the consummation by such Borrower
of the transactions contemplated hereby and thereby: (i) are within the
corporate or limited liability company powers of such Borrower; (ii) are
duly authorized by the Board of Directors or similar managing body of
such Borrower; (iii) are not in contravention of the terms of the
organizational documents of such Borrower or of any indenture, contract,
lease, agreement, instrument or other commitment to which such Borrower
is a party or by which such Borrower or any of its properties are bound;
(iv) do not require the consent, registration or approval of any
Governmental Authority or any other Person (except such as have been
duly obtained, made or given, and are in full force and effect); (v) do
not contravene any statute, law, ordinance, regulation, rule, order or
other governmental restriction applicable to or binding upon such
Borrower; and (vi) will not, except as contemplated herein for the
benefit of the Agent on behalf of the Lenders, result in the imposition
of any Liens upon any property of such Borrower under any existing
indenture, mortgage, deed of trust, loan or credit agreement or other
material agreement or instrument to which such Borrower is a party or by
which it or any of its property may be bound or affected.
6.5 ENFORCEABILITY.
The Credit Agreement and all of the other Credit Documents are the
legal, valid and binding obligations of such Borrower, and with respect
to those Credit Documents executed and delivered by any Subsidiary, of
each such Subsidiary, and are enforceable against such Borrower and such
Subsidiaries, as the case may be, in accordance with their terms except
as such enforceability may be limited by (i) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally and (ii) general principles
of equity.
6.6 FINANCIAL DATA.
Such Borrower has furnished to the Lenders the following financial
statements (the "Financials"): (i) the consolidated balance sheet of
such Borrower as of, and consolidated statements of income, members'
equity and cash flows for the fiscal year ended, March 31, 1999 audited
by independent certified public accountants and (ii) the unaudited
consolidated balance sheet of such Borrower as of, and consolidated
statement of income for the period ended, July 31, 1999 prepared by the
chief financial officer of the Company. The Financials are and the
historical financial statements to be furnished to the Lenders in
accordance with Section 7.1 below will be in accordance with the books
and records of the Borrowers, except as provided in Section 7.1, and
fairly present the financial condition of each of the Borrowers at the
dates thereof and the results of operations for the periods indicated
(subject, in the case of unaudited financial statements, to normal year-
end and audit adjustments and the absence of statements of members'
equity and cash flows and footnotes). Such financial statements have
been and will be prepared in conformity with GAAP consistently applied
throughout the periods involved, except as provided in Section 7.1 or as
otherwise disclosed in such financial statements. Since March 31, 1999
(and after the delivery of the annual audited statements in accordance
with Section 7.1(a), from the date of the most recently delivered annual
audited financial statements), there has been no development or event
which has had or could reasonably be expected to have a Material Adverse
Effect.
6.7 LOCATIONS OF OFFICES, RECORDS AND INVENTORY.
The Borrowers' principal places of business and chief executive
offices are set forth in SCHEDULE 6.7 hereto, and the books and records
of the Borrowers and all chattel paper and all records of accounts are
located at the principal places of business and chief executive offices
of the Borrowers. There is no jurisdiction in which any Borrower or any
of its Subsidiaries has any Collateral (except for vehicles, Inventory
held for shipment by third Persons, Inventory in transit, Inventory held
for processing by third Persons, or immaterial quantities of assets,
equipment or Inventory) other than those jurisdictions listed on
SCHEDULE 6.7. SCHEDULE 6.7 is a true, correct and complete list of (i)
the legal names and addresses of each warehouseman, filler, processor
and packer at which Inventory is stored, (ii) the address of the chief
executive offices of the Borrowers and each of their Subsidiaries and
(iii) the address of all offices where records and books of account of
the Borrowers and each of their Subsidiaries are kept. None of the
receipts received by any of the Borrowers from any warehouseman, filler,
processor or packer states that the goods covered thereby are to be
delivered to bearer or to the order of a named person or to a named
person and such named person's assigns.
6.8 FICTITIOUS BUSINESS NAMES.
Neither such Borrower nor any of its Subsidiaries has used any
corporate or fictitious name during the five (5) years preceding the
date hereof, other than the name shown on its or such Subsidiary's
articles or certificate of incorporation or certification of formation
and as set forth on SCHEDULE 6.8.
6.9 SUBSIDIARIES.
The only Subsidiaries of the Borrowers are those listed on SCHEDULE
6.9 attached hereto. The Borrowers are the record and beneficial owner
of all of the shares of Capital Stock of each of the Subsidiaries listed
on SCHEDULE 6.9 as being owned by the Borrowers, there are no proxies,
irrevocable or otherwise, with respect to such shares, and no equity
securities of any of the Subsidiaries are or may become required to be
issued by reason of any options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of any
Capital Stock of any Subsidiary, and there are no contracts,
commitments, understandings or arrangements by which any Subsidiary is
or may become bound to issue additional shares of its Capital Stock or
securities convertible into or exchangeable for such shares. All of
such shares so owned by the Borrowers are owned by them free and clear
of any Liens other than Permitted Liens.
6.10 NO JUDGMENTS OR LITIGATION.
Except as set forth on SCHEDULE 6.10, no judgments, orders, writs
or decrees are outstanding against such Borrower or any of its
Subsidiaries nor is there now pending or, to the best of such Borrower's
knowledge after diligent inquiry, threatened any litigation, contested
claim, investigation, arbitration, or governmental proceeding by or
against such Borrower or any of its Subsidiaries except judgments and
pending or threatened litigation, contested claims, investigations,
arbitrations and governmental proceedings which could not reasonably be
expected to have a Material Adverse Effect.
6.11 NO DEFAULTS.
Neither such Borrower nor any of its Subsidiaries is in default
under any term of any indenture, contract, lease, agreement, instrument
or other commitment to which any of them is a party or by which any of
them is bound which default has had or could be reasonably expected to
have a Material Adverse Effect.
6.12 NO EMPLOYEE DISPUTES.
There are no controversies pending or, to the best of such
Borrower's knowledge after diligent inquiry, threatened between such
Borrower or any of its Subsidiaries and any of their respective
employees, other than those arising in the ordinary course of business
which could not, in the aggregate, have a Material Adverse Effect.
6.13 COMPLIANCE WITH LAW.
Neither such Borrower nor any of its Subsidiaries has violated or
failed to comply with any statute, law, ordinance, regulation, rule or
order of any foreign, federal, state or local government, or any other
Governmental Authority or any self regulatory organization, or any
judgment, decree or order of any court, applicable to its business or
operations except where the aggregate of all such violations or failures
to comply would not have a Material Adverse Effect. The conduct of the
business of such Borrower and each of the Subsidiaries is in conformity
with all securities, commodities, energy, public utility, zoning,
building code, health, OSHA and environmental requirements and all other
foreign, federal, state and local governmental and regulatory
requirements and requirements of any self regulatory organizations,
except where such non-conformities could not reasonably be expected to
have a Material Adverse Effect. Neither such Borrower nor any of its
Subsidiaries has received any notice to the effect that, or otherwise
been advised that, it is not in compliance with, and neither such
Borrower nor any of its Subsidiaries has any reason to anticipate that
any currently existing circumstances are likely to result in the
violation of any such statute, law, ordinance, regulation, rule,
judgment, decree or order which failure or violation could reasonably be
expected to have a Material Adverse Effect.
6.14 COMPLIANCE WITH PACA.
Neither such Borrower nor any of its Subsidiaries has violated or
failed to comply with PACA, except for any violation or failure which
could not reasonably be expected to have a Material Adverse Effect.
6.15 ERISA.
None of such Borrower, any Subsidiary of such Borrower or any
Controlled ERISA Affiliate maintains or contributes to any Benefit Plan
other than those listed on SCHEDULE 6.15. Each Benefit Plan has been and
is being maintained and funded in accordance with its terms and in
compliance in all material respects with all provisions of ERISA and the
Internal Revenue Code applicable thereto. Such Borrower, each of its
Subsidiaries and each Controlled ERISA Affiliate has fulfilled all
obligations related to the minimum funding standards of ERISA and the
Internal Revenue Code for each Benefit Plan, is in compliance in all
material respects with the currently applicable provisions of ERISA and
of the Internal Revenue Code and has not incurred any liability (other
than routine liability for premiums) under Title IV of ERISA. No
Termination Event has occurred nor has any other event occurred that may
result in such a Termination Event which could reasonably be expected to
have a Material Adverse Effect. No event or events have occurred in
connection with which such Borrower, any of its Subsidiaries, any
Controlled ERISA Affiliate, any fiduciary of a Benefit Plan or any
Benefit Plan, directly or indirectly, would be subject to any material
liability, individually or in the aggregate, under ERISA, the Internal
Revenue Code or any other law, regulation or governmental order or under
any agreement, instrument, statute, rule of law or regulation pursuant
to or under which any such entity has agreed to indemnify or is required
to indemnify any person against liability incurred under, or for a
violation or failure to satisfy the requirements of, any such statute,
regulation or order. No ERISA Affiliate (excluding for purposes hereof
any ERISA Affiliate which is a Controlled ERISA Affiliate) has incurred
or to the best knowledge of such Borrower and its Subsidiaries, could
reasonably be expected to incur, any liability under ERISA, the Internal
Revenue Code, or any other applicable law that has had or could
reasonably be expected to have a Material Adverse Effect.
6.16 COMPLIANCE WITH ENVIRONMENTAL LAWS.
Except as disclosed on SCHEDULE 6.16 attached hereto, (a) the
operations of such Borrower and each of its Subsidiaries comply with all
applicable federal, state or local environmental, health and safety
statutes, regulations, directions, ordinances, criteria or guidelines
except where such failure to comply could not reasonably be expected to
have a Material Adverse Effect and (b) to Borrower's knowledge, none of
the operations of such Borrower or any of its Subsidiaries is the
subject of any judicial or administrative proceeding alleging the
violation of any federal, state or local environmental, health or safety
statute, regulation, direction, ordinance, criteria or guidelines except
where such proceeding could not reasonably be expected to have a
Material Adverse Effect. Except as disclosed on SCHEDULE 6.16, to
Borrower's knowledge, none of the operations of such Borrower or any of
its Subsidiaries is the subject of any federal or state investigation
evaluating whether such Borrower or any of its Subsidiaries disposed any
hazardous or toxic waste, substance or constituent or other substance at
any site that may require remedial action, or any federal or state
investigation evaluating whether any remedial action is needed to
respond to a release of any hazardous or toxic waste, substance or
constituent, or other substance into the environment where it is
reasonably likely that the Borrower's share of the cost of remediation
or clean-up would exceed $250,000. Except as disclosed on
SCHEDULE 6.16, neither such Borrower nor any of its Subsidiaries have
filed any notice under CERCLA 103(c), 42 U.S.C. 9603(c) or its
equivalent order, or any other federal or state law indicating past or
present treatment, storage or disposal of a hazardous waste or reporting
an unpermitted spill or release of a hazardous or toxic waste, substance
or constituent that remains uncorrected where it is reasonably likely
that the Borrower's share of the cost of remediation or clean-up would
exceed $250,000. Except as disclosed on SCHEDULE 6.16, neither such
Borrower nor any of its Subsidiaries have any contingent liability of
which such Borrower has knowledge or reasonably should have knowledge in
connection with any release of any hazardous or toxic waste, substance
or constituent, nor has such Borrower or any of its Subsidiaries
received any notice, letter or other indication of potential liability
arising from the disposal of any hazardous or toxic waste, substance or
constituent, except where such potential liability could not reasonably
be expected to have a Material Adverse Effect.
6.17 USE OF PROCEEDS.
All proceeds of the Loans will be used only in accordance with
SECTION 7.13.
6.18 INTELLECTUAL PROPERTY.
Such Borrower and its Subsidiaries possess adequate assets,
licenses, patents, patent applications, copyrights, service marks,
trademarks and tradenames to continue to conduct its business as
heretofore conducted by it. SCHEDULE 6.18 attached hereto sets forth
(a) all of the federal, state and foreign registrations of trademarks,
service marks and trade names of such Borrower and its Subsidiaries, and
all pending applications for any such registrations, (b) all of the
patents and registered copyrights of such Borrower and its Subsidiaries
and all pending applications therefor and (c) all other trademarks,
service marks and trade names owned by or licensed to and used by such
Borrower or any of its Subsidiaries in connection with their businesses
and the loss of which would have a Material Adverse Effect
(collectively, the "Proprietary Rights"). Such Borrower and its
Subsidiaries are collectively the owners of each of the trademarks
listed on SCHEDULE 6.18 as indicated on such schedule, and no other
Person has the right to use any of such marks in commerce either in the
identical form or, to the knowledge of such Borrower and its
Subsidiaries, in such near resemblance thereto as may be likely to cause
confusion or to cause mistake or to deceive. Each of the trademarks
listed on SCHEDULE 6.18 and identified as a "U.S." registered trademark
is a federally registered trademark of such Borrower or its Subsidiaries
having the registration number and issue date set forth on SCHEDULE
6.18. The Proprietary Rights listed on SCHEDULE 6.18 are all those used
in the businesses of such Borrower and its Subsidiaries loss of which
would have a Material Adverse Effect. Except as disclosed on SCHEDULE
6.18, no person has a right to receive any royalty or similar payment in
respect of any Proprietary Rights pursuant to any contractual
arrangements entered into by such Borrower, or any of its Subsidiaries,
and, to the knowledge of such Borrower and its Subsidiaries, no person
otherwise has a right to receive any royalty or similar payment in
respect of any such Proprietary Rights except as disclosed on SCHEDULE
6.18. Except as disclosed on SCHEDULE 6.18, neither such Borrower nor
any of its Subsidiaries has granted any license or sold or otherwise
transferred any interest in any of the Proprietary Rights to any other
person. To the knowledge of such Borrower and its Subsidiaries, the use
of each of the Proprietary Rights by such Borrower and its Subsidiaries
is not infringing upon or otherwise violating the rights of any third
party in or to such Proprietary Rights, and no proceeding has been
instituted against or notice received by such Borrower or any of its
Subsidiaries that are presently outstanding alleging that the use of any
of the Proprietary Rights infringes upon or otherwise violates the
rights of any third party in or to any of the Proprietary Rights.
Neither such Borrower nor any of its Subsidiaries have given notice to
any Person that it is infringing on any of the Proprietary Rights and to
the best of such Borrower's knowledge, no Person is infringing on any of
the Proprietary Rights. All of the Proprietary Rights of such Borrower
and its Subsidiaries are valid and enforceable rights of such Borrower
and its Subsidiaries and will not cease to be valid and in full force
and effect by reason of the execution and delivery of this Credit
Agreement or the Credit Documents or the consummation of the
transactions contemplated hereby or thereby.
6.19 LICENSES AND PERMITS.
Such Borrower and each of its Subsidiaries have obtained and hold
in full force and effect, all material franchises, licenses, leases,
permits, certificates, authorizations, qualifications, easements, rights
of way and other rights and approvals which are necessary to the
operation of their businesses as presently conducted. Neither of such
Borrower nor any of its Subsidiaries is in violation of the terms of any
such franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, right or approval in any such
case which could not reasonably be expected to have a Material Adverse
Effect.
6.20 TITLE TO PROPERTY.
Such Borrower has good and marketable title to all of its owned
property (including without limitation, all real and other property in
each case as reflected in the Financial Statements delivered to the
Agent hereunder), other than properties disposed of in the ordinary
course of business or in any manner otherwise permitted under this
Credit Agreement since the date of the most recent audited consolidated
balance sheet of such Borrower, and in each case subject to no Liens
other than Permitted Liens.
6.21 LABOR MATTERS.
There is (a) no material unfair labor practice complaint pending
against such Borrower or any of its Subsidiaries or, to the best
knowledge of such Borrower, threatened against any of them, before the
National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements that
has or could reasonably be expected to have a Material Adverse Effect is
so pending against such Borrower or any of its Subsidiaries or, to the
best knowledge of such Borrower, threatened against any of them, (b) no
strike, labor dispute, slowdown or stoppage pending against either of
such Borrower or any of its Subsidiaries or, to the best knowledge of
such Borrower, threatened against any of them that has or could
reasonably be expected to have a Material Adverse Effect, and (c) no
union representation question with respect to the employees of such
Borrower or any Subsidiaries and no union organizing activity that has
or could reasonably be expected to have a Material Adverse Effect.
6.22 INVESTMENT COMPANY.
Neither such Borrower nor any of its Subsidiaries is (a) an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, (b) a "holding company" or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (c) subject to any
other law which purports to regulate or restrict its ability to borrow
money or to consummate the transactions contemplated by this Credit
Agreement or the other Credit Documents or to perform its obligations
hereunder or thereunder.
6.23 MARGIN SECURITY.
Such Borrower does not own any margin stock and no portion of the
proceeds of any Loans or Letters of Credit shall be used by the
Borrowers for the purpose of purchasing or carrying any "margin stock"
(as defined in Regulation U of the Board of Governors of the Federal
Reserve System) or for any other purpose which violates the provisions
or Regulation T, U or X of said Board of Governors or for any other
purpose in violation of any applicable statute or regulation, or of the
terms and conditions of this Credit Agreement.
6.24 NO EVENT OF DEFAULT.
No Default or Event of Default has occurred and is continuing.
6.25 TAXES AND TAX RETURNS.
Each Borrower has filed, or caused to be filed, all material tax
returns (federal, state, local and foreign) required to be filed and
paid all amounts of taxes shown thereon to be due (including interest
and penalties) and has paid all other material taxes, fees, assessments
and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for
such taxes (a) that are not yet delinquent or (b) that are being
contested in good faith and by proper proceedings, and against which
adequate reserves are being maintained in accordance with GAAP. None of
the Borrowers is aware of any proposed material tax assessments against
it or any other Borrower.
6.26 NO OTHER INDEBTEDNESS.
Such Borrower has no Indebtedness that is senior, pari passu or
subordinated in right of payment to their Indebtedness to the Lenders
hereunder, except for Permitted Indebtedness.
6.27 STATUS OF ACCOUNTS.
Each Account is based on an actual and bona fide sale and delivery
of goods or rendition of services to customers, made by such Borrower in
the ordinary course of its business; the goods and inventory being sold
and the Accounts created are its exclusive property and are not and
shall not be subject to any Lien, consignment arrangement, encumbrance,
security interest or financing statement whatsoever, other than the
Permitted Liens; and such Borrower's customers have accepted the goods
or services, owe and are obligated to pay the full amounts stated in the
invoices according to their terms, without any dispute, offset, defense,
counterclaim or contra (including, but not limited to, claims arising
under PACA) that could reasonably be expected to have, when aggregated
with any such other disputes, offsets, defenses, counterclaims or
contras, a Material Adverse Effect. Such Borrower confirms to the
Lenders that any and all taxes or fees relating to its business, its
sales, the Accounts or the goods relating thereto, are its sole
responsibility and that same will be paid by such Borrower when due
(unless duly contested and adequately reserved for) and that none of
said taxes or fees is or will become a lien on or claim against the
Accounts.
6.28 REPRESENTATIONS AND WARRANTIES.
Each of the representations and warranties made in the Operative
Documents by each Borrower and its Subsidiaries and, to the knowledge of
each such Borrower and its Subsidiaries, the other parties thereto, was
or will be true and correct in all material respects as of when made.
6.29 MATERIAL CONTRACTS.
SCHEDULE 6.29 sets forth a true, correct and complete list of all
the Material Contracts currently in effect. None of the Material
Contracts contains provisions the performance or nonperformance of which
have or could reasonably be expected to have a Material Adverse Effect.
All of the Material Contracts are in full force and effect, and no
material defaults currently exist thereunder.
6.30 SURVIVAL OF REPRESENTATIONS.
All representations made by such Borrower in this Credit Agreement
and in any other Credit Document shall survive the execution and
delivery hereof and thereof.
6.31 AFFILIATE TRANSACTIONS.
Except as set forth on SCHEDULE 6.31, neither such Borrower nor any
of its Subsidiaries is a party to or bound by any agreement or
arrangement (whether oral or written) to which any Affiliate of such
Borrower or Subsidiary is a party except (a) in the ordinary course of
and pursuant to the reasonable requirements of such Borrower's or such
Subsidiary's business and (b) upon fair and reasonable terms no less
favorable to such Borrower and such Subsidiary than it could obtain in a
comparable arm's-length transaction with an unaffiliated Person.
6.32 TRADE SUPPLIERS.
The three primary suppliers (in dollar volume of purchases) of raw
materials to the Company and its Subsidiaries as of the date hereof are
Crown Cork & Seal Company, Inc., Ball Corporation and Silgan Containers
Manufacturing Corporation.
6.33 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Borrowers or any of their respective
Subsidiaries in writing to the Agent, any Lender, or the Independent
Accountant for purposes of or in connection with this Credit Agreement
or any Credit Documents, or any transaction contemplated hereby or
thereby is or will be true and accurate in all material respects on the
date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information not misleading at such time.
6.34 YEAR 2000 ISSUE.
Any reprogramming and related testing required to permit the
Borrowers' and their Subsidiaries' main computer systems to function in
a manner adequate for the conduct of their respective businesses in and
following the year 2000 will be completed in all material respects prior
to December 31, 1999 (that is, the Borrowers and their Subsidiaries will
be "YEAR 2000 COMPLIANT"), and the cost to the Borrowers and their
Subsidiaries of such reprogramming and testing will not result in a
Default or Event of Default or have a Material Adverse Effect. Except
for such reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the
Borrowers and their Subsidiaries are and, with ordinary course upgrading
and maintenance will continue for the term of the Credit Agreement to
be, adequate for the conduct of their respective businesses.
6.35 WALLA WALLA IRB.
The lien in favor of the trustee for the Port of Walla Walla Public
Corporation Bonds applies only to the continuous pressure cooker located
at the Waunakee, Wisconsin facility of the Company.
ARTICLE VII
AFFIRMATIVE COVENANTS
Until termination of this Credit Agreement and the Commitments
hereunder and payment and satisfaction of all Obligations due or to
become due hereunder, each Borrower agrees that, unless the Required
Lenders shall have otherwise consented in writing:
7.1 FINANCIAL INFORMATION.
The Company will furnish to the Lenders the following information
within the following time periods:
(a) within one hundred and twenty (120) days after the close
of the fiscal year of the Company, the audited consolidated balance
sheet and consolidated statements of income, members' equity and
cash flow of the Company and its consolidated Subsidiaries, for
such year, each in reasonable detail, each setting forth in
comparative form the corresponding figures for the preceding year,
prepared in accordance with GAAP, and accompanied by a report and
unqualified opinion of Ernst & Young LLP or other Independent
Accountant selected by the Company and approved by the Required
Lenders;
(b) within sixty (60) days after the end of each of the first
three (3) fiscal quarters of the Company, the unaudited
consolidated balance sheet and consolidated statement of income
and, beginning December 31, 1999, a consolidated statement of cash
flow, of the Company and its consolidated Subsidiaries, in the form
regularly prepared by the Company and consistent with the
Financials, together with a certificate of the chief financial
officer, controller or treasurer of the Company stating that such
financial statements fairly present the financial condition of the
Company and its consolidated Subsidiaries at the dates thereof and
the results of their operations for the periods indicated (subject
to normal year-end and audit adjustments and the absence of
statements of members' equity and footnotes) and that such
financial statements have been prepared in conformity with GAAP
consistently applied throughout the periods involved except as
otherwise disclosed in such financial statements;
(c) within thirty (30) days after the end of each fiscal
month of the Company, a copy of the internal Company-prepared
operating income analysis for such month and for the period from
the beginning of the current fiscal year to the end of such month,
in reasonable detail, and beginning June 30, 2000, setting forth in
comparative form the corresponding analysis for the same month and
same year-to-date period in the preceding fiscal year, in the form
regularly prepared by the Company, certified by the chief financial
officer, controller or treasurer of the Company as being a true and
correct copy;
(d) at the time of delivery of the quarterly financial
statements of the Company pursuant to paragraph (b) above and the
annual financial statements pursuant to paragraph (a) above, a
certificate, executed by the chief financial officer, controller or
treasurer of the Company, in substantially the form of EXHIBIT I
attached hereto (the "Compliance Certificate"), and stating that
such officer has caused this Credit Agreement to be reviewed and
has no knowledge of any default by the Company in the performance
or observance of any of the provisions of this Credit Agreement,
during such quarter or at the end of such year, or, if such officer
has such knowledge, specifying each default and the nature thereof,
and showing the calculation of the Applicable Percentage for the
applicable periods and compliance by the Company as of the date of
such statement with the financial covenants set forth in Article
VIII hereof and the other applicable covenants set forth in EXHIBIT
I;
(e) not later than the 15th day of each month, a borrowing
base certificate (the "Revolving Credit Borrowing Base
Certificate") in substantially the form of EXHIBIT J-1 hereto, duly
completed and certified by the Company's chief executive officer or
chief financial officer, detailing the Borrowers' Eligible Accounts
Receivable as of the end of the immediately preceding month and
Eligible Inventory as of the most recent date of determination
which shall be determined not less frequently than monthly. In
addition, on the 15th day of each month (or if such day is not a
Business Day, then on the next succeeding Business Day), the
Company shall furnish a written report to the Lenders setting forth
(i) the accounts receivable aged trial balance at the immediately
preceding month end for each account debtor, aged by due date; such
aging reports shall indicate which Accounts are current, up to 30,
30 to 60 and over 60 days past due and shall list the names of all
applicable account debtors, (ii) a schedule of Inventory owned by
each Borrower and (iii) a monthly accounts payable listing or open
item listing including a report as to all claims arising under PACA
owing by the Borrowers or their Subsidiaries and a report as to all
customer accruals owing by the Borrowers, with such listings and
reports to be in form satisfactory to the Agent. The Agent may,
but shall not be required to, rely on each Revolving Credit
Borrowing Base Certificate delivered hereunder as accurately
setting forth the available Revolving Credit Borrowing Base for all
purposes of this Credit Agreement until such time as a new
Revolving Credit Borrowing Base Certificate is delivered to the
Agent in accordance herewith; Revolving Credit Borrowing Base
Certificates may be prepared and submitted to the Lenders on a more
frequent basis than monthly, PROVIDED that such certificate
complies with the requirements set forth elsewhere herein;
(f) [intentionally omitted];
(g) promptly upon receipt thereof, copies of the portions
relevant to the Borrowers of all management letters and other
material reports which are prepared by its Independent Accountants
in connection with any audit of the Company's financial statements
by such Accountants;
(h) as soon as practicable but, in any event, within ten (10)
Business Days after the issuance thereof, copies of all regular and
periodic reports which the Company may be required to file with the
Securities and Exchange Commission or any similar or corresponding
governmental commission, department or agency substituted therefor,
or any similar or corresponding Governmental Authority;
(i) no later than thirty (30) days after the end of the
Company's fiscal year during each year when this Credit Agreement
is in effect, a business plan for the current fiscal year of the
Company which includes a projected consolidated balance sheet and
statement of income for such fiscal year and a projected
consolidated statement of cash flows for such fiscal year and
projected consolidated balance sheets, statements of income and
statements of cash flows on a monthly basis for such fiscal year
and projected monthly loan usage and excess availability under the
Revolving Credit Borrowing Base for such fiscal year; PROVIDED that
the parties acknowledge that the information in the business plan
is not compiled or presented in accordance with GAAP and may not
necessarily be presented on a basis consistent with the Company's
financial statements to be delivered pursuant to paragraphs (a) and
(b) above;
(j) promptly and in any event within three (3) Business Days
after becoming aware of the occurrence of a Default or Event of
Default, a certificate of the chief executive officer or chief
financial officer of the Company specifying the nature thereof and
the Borrowers' proposed response thereto, each in reasonable
detail; and
(k) with reasonable promptness, such other data, reports or
information as the Agent or any of the Lenders may reasonably
request.
7.2 INVENTORY.
Within thirty (30) days after the end of each month, upon the
request of the Agent from time to time, the Borrowers will provide to
the Agent written statements listing items of Inventory in reasonable
detail as requested by the Agent. The Borrowers will conduct annually a
physical count of their Inventory and a copy of such count will be
promptly supplied to the Agent accompanied by a report of the value
(valued at average cost) of such Inventory; PROVIDED that the Borrowers
will conduct such a physical count at such other times and as of such
dates as the Agent shall reasonably request but not more than one
physical count in any twelve month period in addition to the annual
physical count referred to above. The perpetual inventory system of the
Borrowers shall be satisfactory in all material respects to the Agent by
no later than December 31, 1999.
7.3 CORPORATE EXISTENCE.
Each Borrower and each of its Subsidiaries (a) subject to Section
9.4 hereof, will maintain their corporate or limited liability company
existence, will maintain in full force and effect all material licenses,
bonds, franchise, leases, trademarks and qualifications to do business,
(b) will obtain or maintain patents, contracts and other rights
necessary to the profitable conduct of their businesses, (c) will
continue in, and limit their operations to, the same general lines of
business as that presently conducted by them and (d) will comply with
all applicable laws and regulations of any federal, state or local
Governmental Authority, except where noncompliance could not reasonably
be expected to have a Material Adverse Effect.
7.4 ERISA.
The Borrowers will deliver to the Agent, at the Borrowers' expense,
the following information at the times specified below:
(a) within ten (10) Business Days after any Borrower, any
Subsidiary of any Borrower or any Controlled ERISA Affiliate knows
or has reason to know that a material Termination Event has
occurred, a written statement of the chief financial officer of the
Company describing such Termination Event and the action, if any,
which the Borrowers or other such entities have taken, are taking
or propose to take with respect thereto, and when known, any action
taken or threatened by the Internal Revenue Service, DOL or PBGC
with respect thereto;
(b) within ten (10) Business Days after any Borrower, any
Subsidiary of any Borrower or any Controlled ERISA Affiliate knows
or has reason to know that a prohibited transaction (as defined in
Section 406 of ERISA and Section 4975 of the Internal Revenue Code)
has occurred, a statement of the chief financial officer of the
Company describing such transaction and the action which the
Borrowers or other such entities have taken, are taking or propose
to take with respect thereto;
(c) within thirty (30) Business Days after the filing thereof
with the DOL, Internal Revenue Service or PBGC, copies of each
annual report (form 5500 series), including all schedules and
attachments thereto, filed with respect to each Benefit Plan of the
Borrowers, their Subsidiaries or any Controlled ERISA Affiliate;
(d) within thirty (30) Business Days after receipt by any
Borrower, any Subsidiary of any Borrower or any Controlled ERISA
Affiliate of each actuarial report for any Benefit Plan or
Multiemployer Plan of the Borrowers, their Subsidiaries or any
Controlled ERISA Affiliate and each annual report for any such
Multiemployer Plan, copies of each such report;
(e) within three (3) Business Days after the filing thereof
with the Internal Revenue Service, a copy of each funding waiver
request filed with respect to any Benefit Plan of the Borrowers,
their Subsidiaries or any Controlled ERISA Affiliate and all
communications received by any Borrower, any Subsidiary of any
Borrower or any Controlled ERISA Affiliate with respect to such
request;
(f) within ten (10) Business Days upon the occurrence
thereof, notification of any increase in the benefits of any
existing Benefit Plan of the Borrowers, their Subsidiaries or any
Controlled ERISA Affiliate or the establishment of any new Benefit
Plan of the Borrowers, their Subsidiaries or any Controlled ERISA
Affiliate or the commencement of contributions to any Benefit Plan
to which any Borrower, any Subsidiary of any Borrower or any
Controlled ERISA Affiliate was not previously contributing;
(g) within three (3) Business Days after receipt by any
Borrower, any Subsidiary of any Borrower or any Controlled ERISA
Affiliate of the PBGC's intention to terminate a Benefit Plan or to
have a trustee appointed to administer a Benefit Plan, copies of
each such notice;
(h) within ten (10) Business Days after receipt by any
Borrower, any Subsidiary of any Borrower or any Controlled ERISA
Affiliate of any favorable or unfavorable determination letter from
the Internal Revenue Service regarding the qualification of a
Benefit Plan of the Borrowers, their Subsidiaries or any Controlled
ERISA Affiliate under SECTION 401(A) of the Internal Revenue Code,
copies of each such letter;
(i) within ten (10) Business Days after receipt by any
Borrower, any Subsidiary of any Borrower or any Controlled ERISA
Affiliate of a notice regarding the imposition of withdrawal
liability, copies of each such notice;
(j) within ten (10) Business Days after any Borrower, any
Subsidiary of any Borrower or any Controlled ERISA Affiliate fail
to make a required installment or any other required payment under
SECTION 412 of the Internal Revenue Code on or before the due date
for such installment or payment, a notification of such failure;
(k) within three (3) Business Days after any Borrower, any
Subsidiary of any Borrower or any Controlled ERISA Affiliate know
(a) a Multiemployer Plan of the Borrowers, their Subsidiaries or
any Controlled ERISA Affiliate has been terminated, (b) the
administrator or plan sponsor of a Multiemployer Plan of the
Borrowers, their Subsidiaries or any Controlled ERISA Affiliate
intends to terminate any such Multiemployer Plan, or (c) the PBGC
has instituted or will institute proceedings under SECTION 4042 of
ERISA to terminate a Multiemployer Plan of the Borrowers, their
Subsidiaries or any Controlled ERISA Affiliate, a written statement
setting forth any such event or information; and
(l) within three (3) Business Days after any Borrower, any
Subsidiary of any Borrower or any Controlled ERISA Affiliate know
that an ERISA Affiliate (excluding for purposes hereof any ERISA
Affiliate which is a Controlled ERISA Affiliate) has incurred or to
the best knowledge of such Borrower and its Subsidiaries, could
reasonably be expected to incur, any liability under ERISA, the
Internal Revenue Code, or any other law applicable to Benefit Plans
that has had or could reasonably be expected to have a Material
Adverse Effect, a statement of the chief financial officer of the
Company describing such transaction and the action which the
Borrowers or other such entities have taken, are taking or propose
to take with respect thereto.
For purposes of this SECTION 7.4, any Borrower, any Subsidiary of
any Borrower and any Controlled ERISA Affiliate shall be deemed to know
all facts known by the administrator of any Benefit Plan of which such
entity is the plan sponsor.
The Borrowers will establish, maintain and operate all Benefit
Plans of the Borrowers, their Subsidiaries or any Controlled ERISA
Affiliate to comply in all material respects with the provisions of
ERISA, the Internal Revenue Code, and all other applicable laws, and the
regulations and interpretations thereunder other than to the extent that
the Borrowers are in good faith contesting by appropriate proceedings
the validity or implication of any such provision, law, rule, regulation
or interpretation.
7.5 PROCEEDINGS OR ADVERSE CHANGES.
The Borrowers will as soon as practicable, and in any event within
thirty (30) Business Days after any Borrower learns of the following,
give written notice to the Agent of (i) any proceeding(s) being
instituted or threatened in writing to be instituted by or against any
Borrower or any of its Subsidiaries in any federal, state, local or
foreign court or before any commission or other regulatory body
(federal, state, local or foreign) and (ii) any claims filed with
respect to the Borrowers under PACA, which, in either case, has or could
reasonably be expected to have a Material Adverse Effect. The Borrowers
will as soon as possible, and in any event within five (5) Business Days
after any Borrower learns of the following, give written notice to the
Agent of any Material Adverse Change. Provision of any such notice by
the Borrowers will not constitute a waiver or excuse of any Default or
Event of Default occurring as a result of such changes or events.
7.6 ENVIRONMENTAL MATTERS.
Each Borrower will conduct its business and the businesses of each
of the Subsidiaries so as to comply in all material respects with all
environmental laws, regulations, directions and ordinances in all
jurisdictions in which any of them is or may at any time be doing
business including, without limitation, environmental land use,
occupational safety or health laws, regulations, directions, ordinances,
requirements or permits in all jurisdictions in which any of them is or
may at any time be doing business, except to the extent that any
Borrower or any of its Subsidiaries are contesting, in good faith by
appropriate legal proceedings, any such law, regulation, direction,
ordinance or interpretation thereof or application thereof; provided,
further, that each Borrower and each of the Subsidiaries will comply
with the order of any court or other governmental body of the applicable
jurisdiction relating to such laws unless such Borrower or the
Subsidiaries shall currently be prosecuting an appeal or proceedings for
review and shall have secured a stay of enforcement or execution or
other arrangement postponing enforcement or execution pending such
appeal or proceedings for review. If any Borrower or any of its
Subsidiaries shall (a) receive notice that any violation of any federal,
state or local environmental law, regulation, direction or ordinance may
have been committed or is about to be committed by such Borrower or any
of its Subsidiaries except where such violation could not reasonably be
expected to have a Material Adverse Effect, (b) receive notice that any
administrative or judicial complaint or order has been filed or is about
to be filed against such Borrower or any of its Subsidiaries alleging
violations of any federal, state or local environmental law, regulation,
direction or ordinance requiring such Borrower or any of its
Subsidiaries to take any action in connection with the release of toxic
or hazardous substances into the environment where the cost of taking
any such action is reasonably likely to exceed $250,000 or (c) receive
any notice from a federal, state, or local governmental agency or
private party alleging that such Borrower or any of its Subsidiaries may
be liable or responsible for costs associated with a response to or
cleanup of a release of a toxic or hazardous substance into the
environment or any damages caused thereby except where such liability
could not reasonably be expected to have a Material Adverse Effect, the
Borrowers will provide the Agent with a copy of such notice within forty-
five (45) days after the receipt thereof by the applicable Borrower or
any of its Subsidiaries. Within forty-five (45) days after any Borrower
learns of the enactment or promulgation of any federal, state or local
environmental law, regulation, direction, ordinance, criteria or
guideline which could reasonably have a Material Adverse Effect, such
Borrower will provide the Agent with notice thereof. Each Borrower will
promptly take all actions necessary to prevent the imposition of any
Liens on any of its properties arising out of or related to any
environmental matters. At the time that the Agent learns of any
environmental condition or occurrence at any property of the Borrowers,
which environmental condition or occurrence has or could reasonably be
expected to have a Material Adverse Effect, the Agent may request, and
at the sole cost and expense of the Borrowers, the Borrowers will
retain, an environmental consulting firm, satisfactory to the Agent in
its commercially reasonable judgment, to conduct an environmental review
and audit of such affected property and promptly provide to the Agent
and each Lender a copy of any reports delivered in connection therewith.
7.7 BOOKS AND RECORDS; INSPECTION.
Each Borrower will, and will cause each of its Subsidiaries to,
maintain books and records pertaining to the Collateral in such detail,
form and scope as is consistent with good business practice. Each
Borrower agrees that the Agent or its agents may enter upon the premises
of each Borrower or any of its Subsidiaries at any time and from time to
time, during normal business hours, and at any time at all on and after
the occurrence of an Event of Default which continues beyond the
expiration of any grace or cure period applicable thereto, and which has
not otherwise been waived by the Agent, for the purpose of (a) enabling
the Agent's internal auditors to conduct quarterly field examinations at
such Borrower's expense (such expense to include a per diem of $650.00
per person and out-of-pocket expenses), (b) inspecting the Collateral,
(c) inspecting and/or copying (at Borrowers' expense) any and all
records pertaining thereto, (d) discussing the affairs, finances and
business of any Borrower with any officers and employees of any
Borrower, (e) discussing the affairs, finances and business of any
Borrower with the Independent Accountant, but only so long as the Agent
has provided prior notice to the Company and the discussions with the
Independent Accountant are reasonable in scope and frequency and (f)
verifying Eligible Accounts Receivable and/or Eligible Inventory. The
Lenders, in the reasonable discretion of the Agent, may accompany the
Agent at their sole expense in connection with the foregoing
inspections. Each Borrower agrees to afford the Agent thirty (30) days
prior written notice of any change in the location of any Collateral
(other than Inventory held for shipment by third Persons, Inventory in
transit, Inventory held for processing by third Persons or immaterial
quantities of assets, equipment or Inventory) or in the location of its
chief executive office or place of business from the locations specified
in SCHEDULE 6.7, and to execute in advance of such change, cause to be
filed and/or delivered to the Agent any financing statements or other
documents required by the Agent, all in form and substance satisfactory
to the Agent. Each Borrower agrees to furnish any Lender with such
other information regarding its business affairs and financial condition
as such Lender may reasonably request from time to time.
7.8 COLLATERAL RECORDS.
Each Borrower will, and will cause each of the Subsidiaries to,
execute and deliver to the Agent, from time to time, solely for the
Agent's convenience in maintaining a record of the Collateral, such
written statements and schedules as the Agent may reasonably require,
including without limitation those described in SECTION 7.1 of this
Credit Agreement, designating, identifying or describing the Collateral
pledged to the Lenders hereunder. Each Borrower's or any Subsidiary's
failure, however, to promptly give the Agent such statements or
schedules shall not affect, diminish, modify or otherwise limit the
Lenders' security interests in the Collateral. Such Borrower agrees to
maintain such books and records regarding Accounts and the other
Collateral as the Agent may reasonably require, and agrees that such
books and records will reflect the Lenders' interest in the Accounts and
such other Collateral.
7.9 SECURITY INTERESTS.
Each Borrower will defend the Collateral against all claims and
demands of all Persons at any time claiming the same or any interest
therein. Each Borrower agrees to comply with the requirements of all
state and federal laws in order to grant to the Lenders valid and
perfected first security interest in the Collateral subject only to
Permitted Liens. The Agent is hereby authorized by each Borrower to
file any financing statements covering the Collateral whether or not any
Borrower's signature appears thereon. Each Borrower agrees to do
whatever the Agent may reasonably request, from time to time, by way of:
filing notices of liens, financing statements, fixture filings and
amendments, renewals and continuations thereof; cooperating with the
Agent's custodians; keeping stock records; obtaining waivers from
landlords and mortgagees and from warehousemen, fillers, processors and
packers and their respective landlords and mortgagees; paying claims,
which might if unpaid, become a Lien (other than a Permitted Lien) on
the Collateral; assigning its rights to the payment of Accounts pursuant
to the Assignment of Claims Act of 1940, as amended (31 U.S.C. 3727
et. seq.) (the failure of which to so assign will permit the Agent to
exclude such accounts from the Borrowing Base); and performing such
further acts as the Agent may reasonably require in order to effect the
purposes of this Credit Agreement and the other Credit Documents. Any
and all fees, costs and expenses of whatever kind and nature (including
any Taxes, reasonable attorneys' fees or costs for insurance of any
kind), which the Agent may incur with respect to the Collateral or the
Obligations: in filing public notices; in preparing or filing documents;
making title examinations or rendering opinions; in protecting,
maintaining, or preserving the Collateral or its interest therein; in
enforcing or foreclosing the Liens hereunder, whether through judicial
procedures or otherwise; or in defending or prosecuting any actions or
proceedings arising out of or relating to its transactions with any
Borrower or any of its Subsidiaries under this Credit Agreement or any
other Credit Document, will be borne and paid by the Borrowers. If same
are not promptly paid by the Borrowers, the Agent may pay same on the
Borrowers' behalf, and the amount thereof shall be an Obligation secured
hereby and due to the Agent on demand.
7.10 INSURANCE; COLLATERAL LOSS.
Each Borrower will, and will cause each of the Subsidiaries to,
maintain third party liability insurance and replacement value property
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts and covering such risks as are
consistent with industry practices. All policies covering the
Collateral are to name the Borrowers and the Agent as additional
insureds on liability policies and loss payees in case of Property loss,
as their interests may appear, and are to contain such other provisions
as the Agent may reasonably require to fully protect the Agent's
interest in the Collateral and to any payments to be made under such
policies. True copies of all original insurance policies or
certificates of insurance evidencing such insurance covering the
Collateral are to be delivered to the Agent on or prior to the Closing
Date, premium prepaid, with the loss payable endorsement in the Agent's
favor, and shall provide for not less than ten (10) days prior written
notice to the Agent, of the exercise of any right of cancellation. In
the event any Borrower or any of its Subsidiaries fail to respond in a
timely and appropriate manner with respect to collecting under any
insurance policies required to be maintained under this SECTION 7.10,
the Agent shall have the right, in the name of the Agent, any Borrower
or any Subsidiary, to file claims under such insurance policies, to
receive and give acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to
effect the collection, compromise or settlement of any claims under any
such insurance policies. Each Borrower will provide written notice to
the Lenders of the occurrence of any of the following events within five
(5) Business Days after the occurrence of such event: any asset or
property owned or used by any Borrower or any of its Subsidiaries
constituting Collateral or on which Collateral is located is (i)
materially damaged or destroyed, or suffers any other loss or (ii) is
condemned, confiscated or otherwise taken, in whole or in part, or the
use thereof is otherwise diminished so as to render impracticable or
unreasonable the use of such asset or property for the purpose to which
such asset or property were used immediately prior to such condemnation,
confiscation or taking, by exercise of the powers of condemnation or
eminent domain or otherwise, and in either case the amount of the
damage, destruction, loss or diminution in value of the Collateral is in
excess of $2,000,000 (any such damage, destruction, loss or diminution
in value of the Collateral is referred to herein as a "Collateral
Loss"). Each Borrower will diligently file and prosecute its claim or
claims for any award or payment in connection with a Collateral Loss.
In the event of a Collateral Loss, the Borrowers will pay to the Agent,
promptly upon receipt thereof, any and all insurance proceeds and
payments received by any Borrower or any of its Subsidiaries on account
of damage, destruction or loss of all or any portion of the Collateral.
The Agent may, at its election and in its sole discretion, upon
consultation with the Lenders, either (a) apply the proceeds realized
from Collateral Losses to payment of accrued and unpaid interest or
outstanding principal of the Term Loans or the Revolving Loans, as set
forth in Section 2.3(b) or (b) pay such proceeds to the Borrowers to be
used to repair, replace or rebuild the asset or property or portion
thereof that was the subject of the Collateral Loss. After the
occurrence and during the continuance of an Event of Default, (i) no
settlement on account of any such Collateral Loss shall be made without
the consent of the Lenders and (ii) the Agent may participate in any
such proceedings and the Borrowers will deliver to the Agent such
documents as may be requested by the Agent to permit such participation
and will consult with the Agent, its attorneys and agents in the making
and prosecution of such claim or claims. Each Borrower hereby
irrevocably authorizes and appoints the Agent its attorney-in-fact,
after the occurrence and continuance of an Event of Default, to collect
and receive for any such award or payment and to file and prosecute such
claim or claims, which power of attorney shall be irrevocable and shall
be deemed to be coupled with an interest, and each Borrower shall, upon
demand of the Agent, make, execute and deliver any and all assignments
and other instruments sufficient for the purpose of assigning any such
award or payment to the Agent for the benefit of the Lenders, free and
clear of any encumbrances of any kind or nature whatsoever.
7.11 TAXES.
Each Borrower will, and will cause each of the Subsidiaries to,
pay, when due and in any event prior to delinquency, all Taxes lawfully
levied or assessed against any Borrower, any Subsidiary or any of the
Collateral; PROVIDED, HOWEVER, that unless such Taxes have become a
federal tax or ERISA Lien on any of the assets of any Borrower or any
Subsidiary, no such Tax need be paid if the same is being contested in
good faith, by appropriate proceedings promptly instituted and
diligently conducted and if an adequate reserve or other appropriate
provision shall have been made therefor as required in order to be in
conformity with GAAP.
7.12 COMPLIANCE WITH LAWS.
Each Borrower will, and will cause each of the Subsidiaries to,
comply with all acts, rules, regulations, orders, and ordinances of any
legislative, administrative or judicial body or official applicable to
the Collateral or any part thereof, or to the operation of its business,
except where the failure to so comply could not reasonably be expected
to have a Material Adverse Effect.
7.13 USE OF PROCEEDS.
Subject to the terms and conditions hereof, (i) the proceeds of any
Revolving Loans made hereunder shall be used by the Borrowers solely for
the refinancing of existing Indebtedness, working capital, letters of
credit, Permitted Acquisitions, the CBII $28.4 Million Distribution,
related fees and expenses and for other general corporate purposes and
(ii) the proceeds of any Term Loans made hereunder shall be used by the
Borrowers solely for the payment of the CBII $50 Million Distribution,
Permitted Acquisitions, capital expenditures, and for other general
corporate purposes; PROVIDED, HOWEVER, that in any event, no portion of
the proceeds of any such advances shall be used by the Borrowers for the
purpose of purchasing or carrying any "margin stock" (as defined in
Regulation U of the Board of Governors of the Federal Reserve System) or
for any other purpose which violates the provisions or Regulation T, U
or X of said Board of Governors or for any other purpose in violation of
any applicable statute or regulation, or of the terms and conditions of
this Credit Agreement.
7.14 FISCAL YEAR.
Each Borrower agrees that it will give the Agent at least forty-
five (45) days' prior written notice of any change in its fiscal year
from a year ending March 31.
7.15 NOTIFICATION OF CERTAIN EVENTS.
Each Borrower agrees that it will promptly notify the Agent of the
occurrence of any of the following events:
(a) any Material Contract of any Borrower or any of its
Subsidiaries is terminated or amended in any material adverse
respect or any new Material Contract is entered into (in which
event each Borrower shall provide the Agent with a copy of such
Material Contract); or
(b) any of the terms upon which suppliers to any Borrower or
any of its Subsidiaries do business with any Borrower or any
Subsidiary are changed or amended in any respect which has or could
reasonably be expected to have a Material Adverse Effect; or
(c) any order, judgment or decree in excess of $2,500,000
shall have been entered against any Borrower or any of its
Subsidiaries or any of their respective properties or assets, or
(d) any written notification of violation of any law or
regulation or any inquiry with respect thereto shall have been
received by any Borrower or any of its Subsidiaries from any local,
state, federal or foreign Governmental Authority or agency which
violation could reasonably be expected to have a Material Adverse
Effect.
7.16 ADDITIONAL BORROWERS.
Upon any Person becoming a direct or indirect U.S. Subsidiary of
the Company, the Borrowers will provide the Agent with written notice
thereof setting forth information in reasonable detail describing all of
the assets of such Person and shall (a) cause such Person to execute a
Joinder Agreement in substantially the same form as EXHIBIT K hereto,
(b) cause such Person to pledge all of its assets of the type included
in the Collateral to the Agent pursuant to a security agreement in
substantially the form of the Security Agreement and otherwise in a form
acceptable to the Agent, (c) cause such Person to execute Term Loan
Notes and Revolving Notes in favor of the Lenders and (d) deliver such
other documentation as the Agent may reasonably request in connection
with the foregoing, including, without limitation, appropriate UCC-1
financing statements, Acknowledgment Agreements, certified resolutions
and other organizational and authorizing documents of such Person and
favorable opinions of counsel to such Person (which shall cover, among
other things, the legality, validity, binding effect and enforceability
of the documentation referred to above), all in form, content and scope
reasonably satisfactory to the Agent.
7.17 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.
In furtherance of the continuing assignment and security interest
in the Accounts of each Borrower granted pursuant to the Security
Agreement, upon the creation of Accounts, each Borrower will execute and
deliver to the Agent in such form and manner as the Agent may require,
solely for its convenience in maintaining records of collateral, such
confirmatory schedules of Accounts, and other appropriate reports
designating, identifying and describing the Accounts as the Agent may
require. In addition, upon the Agent's reasonable request, each
Borrower will provide the Agent with copies of agreements with, or
purchase orders from, the customers of each Borrower and its
Subsidiaries, and copies of invoices to customers, proof of shipment or
delivery and such other documentation and information relating to said
Accounts and other collateral as the Agent may require. Failure to
provide the Agent with any of the foregoing shall in no way affect,
diminish, modify or otherwise limit the security interests granted
herein. Each Borrower hereby authorizes the Agent to regard such
Borrower's or any Subsidiary's printed name or rubber stamp signature on
assignment schedules or invoices as the equivalent of a manual signature
by such Borrower's or such Subsidiary's authorized officers or agents.
7.18 COLLECTION OF ACCOUNTS.
(a) Unless Availability shall fall below $25,000,000 and subject
to SECTION 7.18(B) below, each Borrower shall have the right to collect
and receive all amounts owing on the Accounts and the other Collateral;
such privilege shall terminate automatically, however, without notice to
the Borrowers which is hereby expressly waived by the Borrowers, if
Availability shall fall below $25,000,000 and from and after such time,
the Agent shall be entitled to collect and receive all amounts owing on
the Accounts and all other amounts for the Lenders' benefit and on the
Lenders' behalf (but at the Borrowers' expense) pursuant to cash
management arrangements satisfactory to the Agent. Notwithstanding the
foregoing, if after the institution of any such cash management
arrangements Availability shall equal or exceed $25,000,000 at all times
for two (2) consecutive fiscal quarters, then such cash management
arrangements imposed by the Agent shall terminate and the Borrowers
shall be entitled to resume the collection and receipt of all amounts
owing on the Accounts and the other Collateral, subject to the
maintenance of such level of Availability in accordance with the
immediately preceding sentence.
(b) Unless an Event of Default shall have occurred and be
continuing and subject to SECTION 7.18(A) above, each Borrower may and
will enforce, collect and receive all amounts owing on the Accounts, for
the Lenders' benefit and on the Lenders' behalf (but at the Borrowers'
expense); such privilege shall terminate automatically, however, without
notice to the Borrowers which is hereby expressly waived by the
Borrowers, upon the occurrence of any Event of Default which continues
beyond the expiration of any applicable grace or cure period, or which
has not otherwise been waived by the Required Lenders and from and after
such time, the Agent shall be entitled to enforce, collect and receive
all amounts owing on the Accounts and all other amounts for the Lenders'
benefit and on the Lenders' behalf (but at the Borrowers' expense)
pursuant to cash management arrangements satisfactory to the Agent and
in accordance with the Security Agreement.
(c) Any checks, cash, notes or other instruments or property
received by any Borrower or any of its Subsidiaries with respect to any
Accounts shall be held by such Borrower or such Subsidiary in trust for
the benefit of the Lenders, separate from such Borrower's or
Subsidiary's own property and funds, and immediately turned over to the
Agent or deposited in lockbox accounts under the dominion and control of
the Agent, with proper assignments or endorsements. No checks, drafts
or other instruments received by the Agent shall constitute final
payment unless and until such instruments have actually been collected.
The Agent on behalf of the Lenders shall have sole dominion and control
over the bank accounts of the Borrowers subject to the limited rights of
deposit and withdrawal granted to the Borrowers pursuant to the lockbox
letters delivered to the lockbox banks.
7.19 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.
Each Borrower will notify the Agent promptly of any matters
materially affecting the value, enforceability or collectibility of any
Account, and of all material customer disputes, offsets, defenses,
counterclaims, returns and rejections, and all reclaimed or repossessed
merchandise or goods, provided, however, that such notice shall only be
required as to any such matter that affects Accounts outstanding at any
one time from any account debtor, which affected Accounts have a value
greater than $500,000. Each Borrower will issue credit memoranda
promptly (with duplicates to the Agent upon its request for same) upon
accepting returns or granting allowances, and may continue to do so
until the occurrence of an Event of Default which continues beyond the
expiration of the applicable grace or cure period, or which has not
otherwise been waived by the Required Lenders. After the occurrence and
during the continuance of an Event of Default, each Borrower agrees that
all returned, reclaimed or repossessed merchandise or goods shall be set
aside by such Borrower, marked with the Lenders' name and held by such
Borrower for the Lenders' account as owner and assignee.
7.20 ACKNOWLEDGMENT AGREEMENTS.
Each Borrower will assist the Agent in obtaining executed
Acknowledgment Agreements from each of the warehousemen, processors,
packers, fillers, landlords and mortgagees with whom such Borrower
conducts business from time to time. The Borrowers shall use reasonable
commercial best efforts to obtain executed Acknowledgment Agreements for
their leased Inventory locations aggregating at least 90% of all of the
Borrowers' Inventory located at all such leased Inventory locations by
December 31, 1999.
7.21 TRADEMARKS.
Each Borrower will do and cause to be done all things necessary to
preserve and keep in full force and effect all registrations of
trademarks, service marks and other marks, trade names or other trade
rights which registrations are of value to the Company and continue to
be used by the Company.
7.22 MAINTENANCE OF PROPERTY.
Each Borrower will, and will cause each of the Subsidiaries to,
keep all property necessary to its respective business in good working
order and condition (ordinary wear and tear excepted) in accordance with
their past operating practices and not to commit or suffer any waste
with respect to any of its properties, except for properties which
either individually or in the aggregate are not material.
7.23 INTEREST RATE PROTECTION.
The Borrowers may enter into Hedging Agreements, in form and
substance reasonably acceptable to the Agent, with one or more Lenders
or other financial institutions reasonably acceptable to the Agent; such
Hedging Agreements shall be deemed to be in form and substance
reasonably acceptable to the Agent, unless the Agent shall determine
that any such proposed Hedging Agreement is inconsistent with market
practices.
7.24 REVISIONS OR UPDATES TO SCHEDULES.
If any of the information or disclosures provided on any of
SCHEDULES 6.7, 6.8, 6.9, 6.15, 6.18 OR 6.29, originally attached hereto
become outdated or incorrect in any material respect, the Borrowers
shall deliver to the Agent and the Lenders as part of the compliance
certificate required pursuant to SECTION 7.1(D) (or earlier if the
Borrowers so elect) such revision or updates to such Schedule(s) as may
be necessary or appropriate to update or correct such Schedule(s) which
revisions shall be effective from the date accepted in writing by the
Agent, such acceptance not to be unreasonably withheld or delayed;
PROVIDED, that no such revisions or updates to any such Schedule(s)
shall be deemed to have cured any breach of warranty or
misrepresentation occurring prior to the delivery of such revision or
update by reason of the inaccuracy or incompleteness of any such
Schedule(s) at the time such warranty or representation previously was
made or deemed to be made.
7.25 YEAR 2000 COMPLIANCE.
The Borrowers shall take all commercially reasonable action
necessary to permit the Borrowers' computer based systems to effectively
process data including dates on and after January 1, 2000. At the
request of the Agent, the Borrowers shall provide the Lenders with
information reasonably acceptable to the Agent concerning the Borrowers'
efforts to become Year 2000 Compliant.
7.26 COMPLIANCE WITH PACA.
Unless the failure to do so would not have a Material Adverse
Effect, each of the Borrowers shall:
(a) Comply with all applicable provisions of PACA, including,
without limitation, those governing trust formation and prompt
repayment.
(b) Maintain written records pertaining to perishable
agricultural commodities and by-products in its possession to which
a constructive trust under PACA is applicable.
All terms used in this SECTION 7.26 and defined in PACA shall have the
meanings ascribed to such terms therein.
7.27 COVENANTS RELATING TO FOOD SECURITY ACT.
Unless the failure to do so would not have a Material Adverse
Effect, each Borrower shall:
(a) Promptly provide the Agent with a copy of any notice
received by such Borrower with respect to a security interest
created by a seller of farm products.
(b) With respect to any farm products produced in a state
with a central filing system, register with the secretary of state
of such state prior to the purchase of such farm products.
All terms used in this SECTION 7.27 and defined in the Food Security Act
shall have the meanings ascribed to such terms therein.
7.28 PAYMENT FOR PERISHABLE GOODS.
(a) Each Borrower shall pay, not later than one Business Day prior
to the date required for payment therein, any outstanding invoices for
perishable agricultural commodities purchased from any vendor other than
an Affiliate; PROVIDED, HOWEVER, that in the event that any such invoice
requires payment upon delivery, payment shall be made on such date of
delivery, PROVIDED, FURTHER, however that any such invoices may be paid
at a later date up to thirty (30) days after delivery of such
commodities so long as such Borrower has provided evidence satisfactory
to the Agent of prior course of dealing with any existing or current
vendor and for all vendors carried out in accordance with standard
industry practices or such Borrower has obtained a waiver of the
vendors' rights under PACA.
(b) Each Borrower shall pay, in the event that written
notification other than on an invoice is received from any vendor of
perishable agricultural commodities of its intent to enforce its rights
under PACA, or to establish a federal statutory lien or trust under the
Food Security Act, the related invoice within one Business Day of
receipt and promptly notify the Agent of such receipt; PROVIDED,
HOWEVER, that such invoice may remain unpaid if, and only so long as,
(i) appropriate legal or administrative action has been commenced and is
being diligently pursued or defended by such Borrower, (ii) the ability
of the vendor to pursue any rights or enforce any liens or trusts
provided under PACA has been stayed or otherwise legally prohibited
during the pendency of such action and (iii) the Agent shall have
established a reserve against the Revolving Credit Borrowing Base in an
amount at least equal to the amount claimed to be due by such vendor
under the relevant invoice.
ARTICLE VIII
FINANCIAL COVENANTS
Until termination of this Credit Agreement and the Commitments
hereunder and payment and satisfaction of all Obligations due or to
become due hereunder, each Borrower agrees that, unless the Required
Lenders shall have otherwise consented in writing:
8.1 LEVERAGE RATIO.
The Borrowers shall, commencing with the fiscal quarter ending
December 31, 1999, maintain a Leverage Ratio of no greater than (i) 4.00
to 1.0 for the first fiscal quarter of each fiscal year, (ii) 5.25 to
1.0 for the second and third fiscal quarters of each fiscal year and
(iii) 4.00 to 1.0 for the fourth fiscal quarter of each fiscal year.
8.2 MINIMUM CONSOLIDATED TANGIBLE NET WORTH.
The Borrowers shall at all times maintain Consolidated Tangible Net
Worth of not less than 80% of Consolidated Tangible Net Worth as of
August 31, 1999; PROVIDED, HOWEVER, that such required amount shall be
reduced by (a) the amount of the CBII $50 Million Distribution so long
as such distribution is made within one year of the Closing Date and (b)
the amount of the CBII $28.4 Million Distribution.
8.3 CAPITAL EXPENDITURES.
The Borrowers shall not make Consolidated Capital Expenditures in
excess of $25,000,000 during any fiscal year (computed on a non-
cumulative basis); PROVIDED, HOWEVER, that (a) the amount expended in
any fiscal year for any Permitted Acquisition shall not reduce the
Capital Expenditure limit for such fiscal year and (b) the proceeds of
any property loss under any insurance policy applied to replace or
rebuild any such affected property shall not be included in the
calculation of Consolidated Capital Expenditures for the purpose of
determining compliance with this Section 8.3.
ARTICLE IX
NEGATIVE COVENANTS
Until termination of the Credit Agreement and the Commitments
hereunder and payment and satisfaction of all Obligations due or to
become due hereunder, each Borrower agrees that, unless the Required
Lenders shall have otherwise consented in writing, it will not, and will
not permit any of the Subsidiaries to:
9.1 RESTRICTIONS ON LIENS.
Mortgage, assign, pledge or otherwise permit any Lien (whether as a
result of a purchase money or title retention transaction, or other
security interest, or otherwise) to exist on any of its assets or
properties, whether real, personal or mixed, whether now owned or
hereafter acquired, except for Permitted Liens.
9.2 RESTRICTIONS ON ADDITIONAL INDEBTEDNESS.
Incur or create any Indebtedness other than Permitted Indebtedness.
9.3 RESTRICTIONS ON SALE OF ASSETS.
Sell, lease, assign, transfer or otherwise dispose of any assets
(including the Capital Stock of any Subsidiary of the Company) other
than (a) sales of Inventory in the ordinary course of business, (b) sale-
leaseback transactions permitted by SECTION 9.13, (c) sales or other
dispositions in the ordinary course of business of assets or properties
that are obsolete or that are no longer used or useful in the conduct of
such Borrower's or Subsidiary's business, (d) sales of property listed
on SCHEDULE 1.1F and (e) sales in the ordinary course of business of
assets or properties (other than Inventory) used in such Borrower's or
Subsidiary's business that are worn out or in need of replacement and
that are replaced with assets of reasonably equivalent value or utility.
9.4 NO CORPORATE CHANGES.
(a) Merge or consolidate with any Person, PROVIDED, HOWEVER, that
the Company and its Subsidiaries may merge or consolidate with and into
each other (so long as if such merger or consolidation involves the
Company, the Company is the surviving entity) and the Company may engage
in Permitted Acquisitions or (b) alter or modify any Borrower's or any
Subsidiary's Articles or Certificate of Incorporation or other
equivalent organizational document or form of organization (other than
in connection with an Equity Issuance permitted hereunder) or (c) alter
or modify any legal names, mailing addresses, principal places of
business, structure, status or existence unless the same shall have been
notified to the Agent in writing at least ten (10) Business Days prior
to such alteration or modification or (d) enter into or engage in any
business, operation or activity materially different from that presently
being conducted by the Borrowers.
9.5 NO GUARANTEES.
Assume, guarantee, endorse, or otherwise become liable upon the
obligations of any other Person, including, without limitation, any
Subsidiary or Affiliate of any Borrower, except (a) by the endorsement
of negotiable instruments in the ordinary course of business, (b) by the
giving of indemnities in connection with the sale of Inventory or other
asset dispositions permitted hereunder and (c) in connection with the
incurrence of Permitted Indebtedness.
9.6 NO RESTRICTED PAYMENTS.
Make a Restricted Payment, other than (a) the payment of dividends
from any Subsidiary to any Borrower, (b) the making of the CBII
Distributions, (c) cash dividends, distributions or payments to make tax
sharing payments in accordance with the CBII tax sharing arrangements as
described in SCHEDULE 9.6 hereto, (d) cash dividends, distributions or
payments for corporate overhead allocated to the Company and its
Subsidiaries in the ordinary course of business and (e) other cash
dividends and distributions to be paid with respect to any fiscal
quarter of the Company on or after the related Calculation Date so long
as the Fixed Charge Coverage Ratio calculated for such quarter is at
least 1.0 to 1.0 (after giving effect to the dividends and/or
distributions to be paid for such quarter pursuant to this clause (e))
and no Event of Default shall exist immediately prior to or after the
making of such dividends and/or distributions.
9.7 NO INVESTMENTS.
Make any Investment other than Permitted Investments.
9.8 NO AFFILIATE TRANSACTIONS.
Enter into any transaction with, including, without limitation, the
purchase, sale or exchange of property or the rendering of any service
to any Subsidiary or Affiliate of any Borrower except (a) in the
ordinary course of and pursuant to the reasonable requirements of such
Borrower's business and upon fair and reasonable terms no less favorable
to such Borrower than could be obtained in a comparable arm's-length
transaction with an unaffiliated Person and (b) as permitted under
SECTION 9.6.
9.9 NO PROHIBITED TRANSACTIONS UNDER ERISA.
(a) Engage, or permit any Controlled ERISA Affiliate to
engage, in any prohibited transaction which could result in a civil
penalty or excise tax described in Section 406 of ERISA or Section
4975 of the Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption has not been
previously obtained from the DOL;
(b) permit to exist with respect to any Benefit Plan of the
Borrowers, their Subsidiaries or any Controlled ERISA Affiliate any
accumulated funding deficiency (as defined in SECTIONS 302 of ERISA
and 412 of the Internal Revenue Code), whether or not waived;
(c) fail, or permit any Controlled ERISA Affiliate to fail,
to pay timely required contributions or annual installments due
with respect to any waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Controlled ERISA Affiliate to
terminate, any Benefit Plan where such event would result in any
material liability of the Borrower, any Subsidiary of any Borrower
or any Controlled ERISA Affiliate under Title IV of ERISA;
(e) fail, or permit any Controlled ERISA Affiliate to fail to
make any required contribution or payment to any Multiemployer
Plan;
(f) fail, or permit any Controlled ERISA Affiliate to fail,
to pay any required installment or any other payment required under
SECTION 412 of the Internal Revenue Code on or before the due date
for such installment or other payment;
(g) amend, or permit any Controlled ERISA Affiliate to amend,
a Benefit Plan resulting in an increase in current liability for
the plan year such that either of the Borrowers, any Subsidiary of
any Borrower or any Controlled ERISA Affiliate is required to
provide security to such Benefit Plan under SECTION 401(A)(29) of
the Internal Revenue Code;
(h) withdraw, or permit any Controlled ERISA Affiliate to
withdraw, from any Multiemployer Plan where such withdrawal may
result in any material liability of any such entity under Title IV
of ERISA; or
(i) allow any representation made in SECTION 6.15 to be
untrue at any time during the term of this Agreement.
9.10 NO ADDITIONAL BANK ACCOUNTS.
Open, maintain or otherwise have any checking, savings or other
accounts at any bank or other financial institution, or any other
account where money is or may be deposited or maintained with any
Person, other than the accounts set forth on SCHEDULE 9.10 hereto and,
after the Closing Date, such other accounts so long as each such account
(other than payroll and xxxxx cash accounts maintained as zero balance
accounts and other similar bank accounts with limited or no activity and
balances not exceeding $10,000) is subject to a tri-party lockbox or
other blocked account agreement satisfactory to the Agent. All such
checking, savings or other accounts of the Borrowers shall be under the
sole dominion and control of the Agent in accordance with the Security
Agreement. All payroll and xxxxx cash accounts shall be maintained as
zero balance accounts.
9.11 AMENDMENTS OF MATERIAL CONTRACTS.
Without the prior written consent of the Agent, amend, modify,
cancel or terminate or permit the amendment, modification, cancellation
or termination of any of the Material Contracts if such amendment,
modification, cancellation or termination has or could reasonably be
expected to have a Material Adverse Effect.
9.12 ADDITIONAL NEGATIVE PLEDGES.
(a) Create or otherwise cause to exist or become effective, or
permit any of the Subsidiaries to create or otherwise cause to exist or
become effective, directly or indirectly, (i) any prohibition or
restriction (including any agreement to provide equal and ratable
security to any other Person in the event a Lien is granted to or for
the benefit of the Agent and the Lenders) on the creation or existence
of any Lien upon the assets of any Borrower or the Subsidiaries, other
than Permitted Liens or (ii) any Contractual Obligation which may
restrict or inhibit the Agent's rights or ability to sell or otherwise
dispose of the Collateral or any part thereof after the occurrence of an
Event of Default, or
(b) Suffer to exist or permit any of the Subsidiaries to suffer to
exist, directly or indirectly, (i) any prohibition or restriction
(including any agreement to provide equal and ratable security to any
other Person in the event a Lien is granted to or for the benefit of the
Agent and the Lenders) on the creation or existence of any Lien upon the
assets of any Borrower or the Subsidiaries, other than Permitted Liens
or (ii) any Contractual Obligation which may restrict or inhibit the
Agent's rights or ability to sell or otherwise dispose of the Collateral
or any part thereof after the occurrence of an Event of Default, which
prohibition, restriction or Contractual Obligation is more restrictive
than those in effect on the Closing Date.
9.13 SALE AND LEASEBACK.
Enter into any arrangement, directly or indirectly, whereby the
Company or any Subsidiary shall sell or transfer any property owned by
it to a Person (other than the Company or any Subsidiary) in order then
or thereafter to lease such property or lease other property which the
Company or any Subsidiary intends to use for substantially the same
purpose as the property being sold or transferred. Notwithstanding the
foregoing provisions of this SECTION 9.13, the Company may sell or
transfer any property owned by it as described in the preceding sentence
PROVIDED that the aggregate current market value of all assets so sold
or transferred (in each case determined at the time of such sale or
transfer) shall not at any time exceed $2,500,000.
9.14 LICENSES, ETC.
Enter into licenses of, or otherwise restrict the use of, any
patents, trademarks or copyrights which would prevent the Company or any
Subsidiary from selling, transferring, encumbering or otherwise
disposing of any such patent, trademark or copyright.
9.15 LIMITATIONS.
Create, nor will it permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause, incur, assume, suffer or permit
to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of any such Person to (a) pay dividends or
make any other distribution on any of such Person's Capital Stock, (b)
pay any Indebtedness owed to the Borrowers, (c) make loans or advances
to any other Borrower or (d) transfer any of its property to any other
Borrower, except for encumbrances or restrictions existing under or by
reason of (i) customary non-assignment provisions in any lease governing
a leasehold interest, (ii) any agreement or other instrument of a Person
existing at the time it becomes a Subsidiary of a Borrower; PROVIDED
that such encumbrance or restriction is not applicable to any other
Person, or any property of any other Person, other than such Person
becoming a Subsidiary of a Borrower and was not entered into in
contemplation of such Person becoming a Subsidiary of a Borrower and
(iii) this Credit Agreement and the other Credit Documents.
9.16 OPERATING LEASE OBLIGATIONS.
Enter into or permit any Subsidiary to enter into, assume or permit
to exist any obligations for the payment of rent under operating leases
which in the aggregate for all such Persons would exceed $10,000,000 in
any fiscal year.
9.17 ISSUANCE OF STOCK.
Sell or issue or permit any Subsidiary to sell or issue stock
having a preference over the common stock of any such Person.
ARTICLE X
POWERS
10.1 APPOINTMENT AS ATTORNEY-IN-FACT.
Each Borrower hereby irrevocably authorizes and appoints the Agent,
or any Person or agent the Agent may designate, as such Borrower's
attorney-in-fact, at the Borrowers' cost and expense, to exercise,
subject to the limitations set forth in SECTION 10.2, all of the
following powers, which being coupled with an interest, shall be
irrevocable until all of the Obligations to the Lenders have been paid
and satisfied in full and all of the Commitments have been terminated:
(a) To receive, take, endorse, sign, assign and deliver, all
in the name of the Agent, the Lenders or such Borrower, as the case
may be, any and all checks, notes, drafts, and other documents or
instruments relating to the Collateral;
(b) To receive, open and dispose of all mail addressed to
such Borrower and to notify postal authorities to change the
address for delivery thereof to such address as the Agent may
designate;
(c) To request at any time from customers indebted on
Accounts, in the name of such Borrower or a third party designee of
the Agent, information concerning the Accounts and the amounts
owing thereon;
(d) To give customers indebted on Accounts notice of the
Lenders' interest therein, and/or to instruct such customers to
make payment directly to the Agent for such Borrower's account;
(e) To take or bring, in the name of the Agent, the Lenders
or such Borrower, all steps, actions, suits or proceedings deemed
by the Agent necessary or desirable to enforce or effect collection
of the Accounts; and
(f) To file, record and register any or all of the Lenders'
security interest in intellectual property of the Borrowers with
the United States Patent and Trademark Office.
10.2 LIMITATION ON EXERCISE OF POWER.
Notwithstanding anything hereinabove to the contrary, the powers
set forth in subparagraphs (b), (d) and (e) above may only be exercised
by the Agent on and after the occurrence of an Event of Default which
has not otherwise been waived by the Agent. The powers set forth in
subparagraphs (a), (c) and (f) above may be exercised by the Agent at
any time.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
11.1 EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an
"EVENT OF DEFAULT" hereunder:
(a) failure of any Borrower to pay (i) any interest or Fees
hereunder within one (1) Business Day of when due hereunder, in
each case whether at stated maturity, by acceleration, or
otherwise, (ii) any principal of the Loans or the Letter of Credit
Obligations hereunder within one (1) Business Day of when due
hereunder, whether at stated maturity, by acceleration or otherwise
or (iii) any expenses hereunder within thirty (30) days after
receipt by the Borrowers from the Agent or any applicable Lender of
notice that such expenses are payable;
(b) any representation or warranty of a Borrower, contained
in this Credit Agreement, the other Credit Documents or any other
agreement, document, instrument or certificate among any Borrower,
the Agent and the Lenders or executed by any Borrower in favor of
the Agent or the Lenders shall prove untrue in any material respect
on or as of the date it was made or was deemed to have been made;
(c) failure of any Borrower to perform, comply with or
observe any term, covenant or agreement applicable to it contained
in SECTION 7.1(J), SECTION 7.5, ARTICLE VIII or ARTICLE IX ;
(d) failure of any Borrower to perform, comply with or
observe any term, covenant or agreement applicable to it contained
in SECTION 7.7 and such failure is not cured within two (2)
Business Days after such Borrower shall have received notice
thereof from the Agent or any Lender;
(e) failure to comply with any other covenant contained in
this Credit Agreement, the other Credit Documents or any other
agreement, document, instrument or certificate among any Borrower,
the Agent and the Lenders or executed by any Borrower in favor of
the Agent or the Lenders and, in the event such breach or failure
to comply is capable of cure, such breach or failure to comply is
not cured within thirty (30) days after the Borrower becomes aware
of its occurrence;
(f) except as permitted in SECTION 9.4, dissolution,
liquidation, winding up or cessation of the business of any
Borrower or any Subsidiary, or the failure of any Borrower or any
Subsidiary to meet its debts generally as they mature, or the
calling of a meeting by any Borrower of any Borrower's or any
Subsidiary's creditors for purposes of compromising any Borrower's
or any Subsidiary's debts, or the admission by any Borrower of its
inability to pay its debts as they become due;
(g) the commencement by or against any Borrower or any
Subsidiary of any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings with respect to
it under any federal or state law and, in the event any such
proceeding is commenced against any Borrower or any Subsidiary,
such proceeding is not dismissed within sixty (60) days;
(h) the occurrence of a Change in Control;
(i) the occurrence of a default or event of default (in each
case which shall continue beyond the expiration of any applicable
grace periods) under, or the occurrence of any event that results
in or would permit the acceleration of the maturity of any note,
agreement or instrument evidencing any other Indebtedness of any
Borrower or any of its Subsidiaries and the aggregate principal
amount of all such other Indebtedness with respect to which a
default or an event of default has occurred, or the maturity of
which is accelerated or permitted to be accelerated, exceeds
$5,000,000.
(j) any covenant, agreement or obligation of any Borrower
contained in or evidenced by any of the Credit Documents shall
cease to be enforceable in accordance with its terms, or any party
(other than the Agent or the Lenders) to any Credit Document shall
deny or disaffirm its obligations under any of the Credit
Documents, or any Credit Document shall be canceled, terminated,
revoked or rescinded without the express prior written consent of
the Agent, or any action or proceeding shall have been commenced by
any Person (other than the Agent or any Lender) seeking to cancel,
revoke, rescind or disaffirm the obligations of any Borrower under
any Credit Document, or any court or other Governmental Authority
shall issue a judgment, order, decree or ruling to the effect that
any of the obligations of any Borrower to any Credit Document are
illegal, invalid or unenforceable;
(k) [intentionally omitted];
(l) one or more judgments or decrees shall be entered against
one or more of the Borrowers or any Subsidiary in the amount of
$2,500,000 or more in the aggregate (to the extent not paid or
covered by insurance (i) provided by a carrier who has acknowledged
coverage and has the ability to perform or (ii) as determined by
the Agent in its reasonable discretion) and any such judgments or
decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within thirty (30) days from the entry thereof; or
(m) any Termination Event with respect to a Benefit Plan
shall have occurred and be continuing thirty (30) days after notice
thereof shall have been given to the Company by the Agent or any
Lender, and the current value of such Benefit Plan's benefits
guaranteed under Title IV of ERISA as of the end of that thirty
(30) day period exceeds the then current value of such Benefit
Plan's assets allocable to such benefits by more than $2,500,000
(or in the case of a Termination Event involving the withdrawal of
a substantial employer, the withdrawing employer's proportionate
share of such excess exceeds such amount).
11.2 ACCELERATION.
After the occurrence and during the continuance of an Event of
Default, and at any time thereafter, at the direction of the Required
Lenders, the Agent shall, upon the written or telecopied request of the
Required Lenders, and by delivery of written notice to the Borrowers
from the Agent, take any or all of the following actions, without
prejudice to the rights of the Agent, any Lender or the holder of any
Note to enforce its claims against any Borrower: (a) declare all
Obligations to be immediately due and payable (except with respect to
any Event of Default set forth in SECTION 11.1(G) in which case all
Commitments shall terminate and all Obligations shall automatically
become immediately due and payable without the necessity of any notice
or other demand) without presentment, demand, protest or any other
action or obligation of the Agent or any Lender, (b) immediately
terminate this Credit Agreement and the Commitments hereunder; and (c)
enforce any and all rights and interests created and existing under the
Credit Documents or arising under applicable law, including, without
limitation, all rights and remedies existing under the Security
Documents and all rights of setoff. The enumeration of the foregoing
rights is not intended to be exhaustive and the exercise of any right
shall not preclude the exercise of any other rights, all of which shall
be cumulative.
In addition, upon demand by the Agent or the Required Lenders upon
the occurrence of any Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite
Lenders (in accordance with the voting requirements of Section 14.10),
the Borrowers shall deposit with the Agent for the benefit of the
Lenders with respect to each Letter of Credit then outstanding, promptly
upon such demand, cash or Cash Equivalents in an amount equal to the
greatest amount for which such Letter of Credit may be drawn. Such
deposit shall be held by the Agent for the benefit of the Issuing Bank
and the other Lenders as security for, and to provide for the payment
of, outstanding Letters of Credit.
ARTICLE XII
TERMINATION
Except as otherwise provided in ARTICLE XI of this Credit
Agreement, the Commitments made hereunder shall terminate on the
Maturity Date and all then outstanding Loans shall be immediately due
and payable in full and all outstanding Letters of Credit shall
immediately terminate. Unless sooner demanded, all Obligations shall
become due and payable as of any termination hereunder or under ARTICLE
XI and, pending a final accounting, the Agent may withhold any balances
in the Borrowers' Loan accounts, in an amount sufficient, in the Agent's
sole discretion, to cover all of the Obligations, whether absolute or
contingent, unless supplied with a satisfactory indemnity to cover all
of such Obligations. All of the Agent's and the Lenders' rights, liens
and security interests shall continue after any termination until all
Obligations have been paid and satisfied in full.
ARTICLE XIII
THE AGENT
13.1 APPOINTMENT OF AGENT.
(a) Each Lender hereby designates First Union as Agent to act
as herein specified. Each Lender hereby irrevocably authorizes,
and each holder of any Note or participation in any Letter of
Credit by the acceptance of a Note or participation shall be deemed
irrevocably to authorize, the Agent to take such action on its
behalf under the provisions of this Credit Agreement and the Notes
and any other instruments and agreements referred to herein and to
exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the
Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Agent shall hold all Collateral
and all payments of principal, interest, Fees, charges and expenses
received pursuant to this Credit Agreement or any other Credit
Document for the ratable benefit of the Lenders. The Agent may
perform any of its duties hereunder by or through its agents or
employees.
(b) The provisions of this ARTICLE XIII are solely for the
benefit of the Agent and the Lenders, and none of the Borrowers
shall have any rights as a third party beneficiary of any of the
provisions hereof (other than SECTION 13.9). In performing its
functions and duties under this Credit Agreement, the Agent shall
act solely as agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation toward or relationship
of agency or trust with or for any Borrower.
13.2 NATURE OF DUTIES OF AGENT.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Credit Agreement. Neither the Agent nor any
of its officers, directors, employees or agents shall be liable for any
action taken or omitted by it as such hereunder or in connection
herewith, unless caused by its or their gross negligence or willful
misconduct. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of this
Credit Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Credit Agreement, expressed or implied, is intended to
or shall be so construed as to impose upon the Agent any obligations in
respect of this Credit Agreement except as expressly set forth herein.
13.3 LACK OF RELIANCE ON AGENT.
(a) Independently and without reliance upon the Agent, each
Lender, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the
financial or other condition and affairs of each Borrower in
connection with the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the
creditworthiness of each Borrower, and, except as expressly
provided in this Credit Agreement, the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with
respect thereto, whether coming into its possession before the
making of the Revolving Loans or at any time or times thereafter.
(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties
herein or in any document, certificate or other writing delivered
in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, priority or
sufficiency of this Credit Agreement or the Notes or the financial
or other condition of any Borrower. The Agent shall not be
required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this
Credit Agreement or the Notes, or the financial condition of any
Borrower, or the existence or possible existence of any Default or
Event of Default, unless specifically requested to do so in writing
by any Lender.
13.4 CERTAIN RIGHTS OF THE AGENT.
The Agent shall have the right to request instructions from the
Required Lenders or, as required, each of the Lenders. If the Agent
shall request instructions from the Required Lenders or each of the
Lenders, as the case may be, with respect to any act or action
(including the failure to act) in connection with this Credit Agreement,
the Agent shall be entitled to refrain from such act or taking such
action unless and until the Agent shall have received instructions from
the Required Lenders or each of the Lenders, as the case may be, and the
Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender shall have any
right of action whatsoever against the Agent as a result of the Agent
acting or refraining from acting hereunder in accordance with the
instructions of the Required Lenders or each of the Lenders, as the case
may be.
13.5 RELIANCE BY AGENT.
The Agent shall be entitled to rely, and shall be fully protected
in relying, upon any note, writing, resolution, notice, statement,
certificate, telex teletype or telecopier message, cablegram, radiogram,
order or other documentary, teletransmission or telephone message
believed by it to be genuine and correct and to have been signed, sent
or made by the proper person. The Agent may consult with legal counsel
(including counsel for the Borrowers with respect to matters concerning
the Borrowers), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
13.6 INDEMNIFICATION OF AGENT.
To the extent the Agent is not reimbursed and indemnified by the
Borrowers, each Lender will reimburse and indemnify the Agent, in
proportion to its respective Commitment, for and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against the Agent in
performing its duties hereunder, in any way relating to or arising out
of this Credit Agreement, PROVIDED that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct.
13.7 THE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to lend under this Credit Agreement,
the Loans made by it and the Notes issued to it, its participation in
Letters of Credit issued hereunder, and all of its rights and
obligations as a Lender hereunder and under the other Credit Documents,
the Agent shall have the same rights and powers hereunder as any other
Lender or holder of a Note or participation interests and may exercise
the same as though it was not performing the duties specified herein;
and the terms "Lenders", "Required Lenders", "holders of Notes", or any
similar terms shall, unless the context clearly otherwise indicates,
include the Agent in its individual capacity. The Agent may accept
deposits from, lend money to, acquire equity interests in, and generally
engage in any kind of banking, trust, financial advisory or other
business with the Borrowers or any Affiliate of the Borrowers as if it
were not performing the duties specified herein, and may accept fees and
other consideration from the Borrowers for services in connection with
this Credit Agreement and otherwise without having to account for the
same with the Lenders.
13.8 HOLDERS OF NOTES.
The Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Agent.
Any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is the holder
of any Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in
exchange therefor.
13.9 SUCCESSOR AGENT.
(a) The Agent may, upon five (5) Business Days' notice to the
Lenders and the Borrowers, resign at any time (effective upon the
appointment of a successor Agent pursuant to the provisions of this
SECTION 13.9(A)) by giving written notice thereof to the Lenders
and the Borrowers. Upon any such resignation, the Required Lenders
shall have the right, upon five (5) days' notice, to appoint a
successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such
appointment, within thirty (30) days after the retiring Agent's
giving of notice of resignation, then, upon five (5) days' notice ,
the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a bank or a trust company or other
financial institution which maintains an office in the United
States, or a commercial bank organized under the laws of the United
States of America or of any State thereof, or any affiliate of such
bank or trust company or other financial institution which is
engaged in the banking business, having a combined capital and
surplus of at least $500,000,000. Notwithstanding anything herein
to the contrary, so long as no Event of Default shall have occurred
and be continuing, any successor Agent (whether appointed by the
Required Lenders or the Agent) shall have been approved in writing
by the Company (such approval not to be unreasonably withheld).
(b) Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Credit
Agreement. After any retiring Agent's resignation hereunder as
Agent, the provisions of this ARTICLE XIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Credit Agreement.
13.10 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs the Agent to enter
into the Security Documents for the benefit of the Lenders. Each
Lender authorizes and directs the Agent to make such changes to the
form Acknowledgment Agreement attached hereto as EXHIBIT A as the
Agent deems necessary in order to obtain any Acknowledgment
Agreement from any landlord, warehouseman, filler, packer or
processor of any Borrower. Each Lender also authorizes and directs
the Agent to review and approve all agreements regarding lockboxes
and lockbox accounts and blocked accounts (including the related
lockbox or blocked account agreements) on such terms as the Agent
deems necessary. Each Lender hereby agrees, and each holder of any
Note by the acceptance thereof will be deemed to agree, that,
except as otherwise set forth herein, any action taken by the
Required Lenders or each of the Lenders, as applicable, in
accordance with the provisions of this Credit Agreement or the
Security Documents, and the exercise by the Required Lenders or
each of the Lenders, as applicable, of the powers set forth herein
or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the
Lenders. The Agent is hereby authorized on behalf of all of the
Lenders, without the necessity of any notice to or further consent
from any Lender, from time to time prior to an Event of Default, to
take any action with respect to any Collateral or Security Document
which may be necessary or appropriate to perfect and maintain
perfected the security interest in and liens upon the Collateral
granted pursuant to the Security Documents.
(b) The Lenders hereby authorize the Agent, at its option and
in its discretion, to release any Lien granted to or held by the
Agent upon any Collateral (i) upon termination of the Commitments
and payment in cash and satisfaction of all of the Obligations
(including the Letter of Credit Obligations) at any time arising
under or in respect of this Credit Agreement or the Credit
Documents or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or disposed of upon receipt of the
proceeds of such sale by the Agent if the applicable Borrower
certifies to the Agent that the sale or disposition is made in
compliance with SECTION 9.3 (and the Agent may rely conclusively on
any such certificate, without further inquiry) or (iii) if
approved, authorized or ratified in writing by the Required
Lenders, unless such release is required to be approved by all of
the Lenders hereunder. Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this SECTION
13.10(B).
(c) Upon any sale and transfer of Collateral which is
expressly permitted pursuant to the terms of this Credit Agreement,
or consented to in writing by the Required Lenders or all of the
Lenders, as applicable, and upon at least five (5) Business Days'
prior written request by the applicable Borrower, the Agent shall
(and is hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the
Liens granted to the Agent for the benefit of the Lenders herein or
pursuant hereto upon the Collateral that was sold or transferred;
PROVIDED that (i) the Agent shall not be required to execute any
such document on terms which, in the Agent's opinion, would expose
the Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse
or warranty and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or
obligations of such Borrower or any Subsidiary in respect of) all
interests retained by such Borrower or any Subsidiary, including
(without limitation) the proceeds of the sale, all of which shall
continue to constitute part of the Collateral. In the event of any
sale or transfer of Collateral, or any foreclosure with respect to
any of the Collateral, the Agent shall be authorized to deduct all
of the expenses reasonably incurred by the Agent from the proceeds
of any such sale, transfer or foreclosure.
(d) The Agent shall have no obligation whatsoever to the
Lenders or to any other Person to assure that the Collateral exists
or is owned by the Borrowers or any Subsidiary or is cared for,
protected or insured or that the liens granted to the Agent herein
or pursuant hereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise or to continue exercising at
all or in any manner or under any duty of care, disclosure or
fidelity any of the rights, authorities and powers granted or
available to the Agent in this SECTION 13.10 or in any of the
Security Documents, it being understood and agreed that in respect
of the Collateral, or any act, omission or event related thereto,
the Agent may act in any manner it may deem appropriate, in its
sole discretion, given the Agent's own interest in the Collateral
as one of the Lenders and that the Agent shall have no duty or
liability whatsoever to the Lenders, except for its gross
negligence or willful misconduct.
13.11 ACTIONS WITH RESPECT TO DEFAULTS.
In addition to the Agent's right to take actions on its own accord
as permitted under this Credit Agreement, the Agent shall take such
action with respect to a Default or Event of Default as shall be
directed by the Required Lenders or all of the Lenders, as the case may
be; PROVIDED that, until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event
of Default as it shall deem advisable and in the best interests of the
Lenders.
13.12 DELIVERY OF INFORMATION.
The Agent shall not be required to deliver to any Lender originals
or copies of any documents, instruments, notices, communications or
other information received by the Agent from the Borrowers, any
Subsidiary, the Required Lenders, any Lender or any other Person under
or in connection with this Credit Agreement or any other Credit Document
except (a) as specifically provided in this Credit Agreement or any
other Credit Document and (b) as specifically requested from time to
time in writing by any Lender with respect to a specific document
instrument, notice or other written communication received by and in the
possession of the Agent at the time of receipt of such request and then
only in accordance with such specific request.
ARTICLE XIV
MISCELLANEOUS
14.1 WAIVERS.
Each Borrower hereby waives due diligence, demand, presentment and
protest and any notices thereof as well as notice of nonpayment. No
delay or omission of the Agent or the Lenders to exercise any right or
remedy hereunder, whether before or after the happening of any Event of
Default, shall impair any such right or shall operate as a waiver
thereof or as a waiver of any such Event of Default. No single or
partial exercise by the Agent or the Lenders of any right or remedy
shall preclude any other or further exercise thereof, or preclude any
other right or remedy.
14.2 JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER, THE AGENT
AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE CREDIT
DOCUMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR
THERETO.
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or
proceeding with respect to this Credit Agreement or any other
Credit Document shall be brought in the courts of the State of
North Carolina in Mecklenburg County or of the United States for
the Western District of North Carolina, and, by execution and
delivery of this Credit Agreement, each of the Borrowers hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of
such courts. Each of the Borrowers further irrevocably consents to
the service of process out 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 it at the address
set out for notices pursuant to SECTION 14.5, such service to
become effective three (3) days after such mailing. 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 to otherwise proceed against any Borrower in any
other jurisdiction.
(b) Each of the Borrowers hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and
hereby further irrevocably waives and agrees not to plead or claim
in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
14.4 ARBITRATION.
(a) Notwithstanding the provisions of SECTION 14.3 to the
contrary, upon demand of any party hereto, whether made before or
after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this
Credit Agreement and other Credit Documents ("Disputes") between or
among parties to this Credit Agreement shall be resolved by binding
arbitration as provided herein. Institution of a judicial
proceeding by a party does not waive the right of that party to
demand arbitration hereunder. Disputes may include, without
limitation, tort claims, counterclaims, disputes as to whether a
matter is subject to arbitration, claims brought as class actions,
claims arising from Credit Documents executed in the future, or
claims arising out of or connected with the transaction reflected
by this Credit Agreement.
Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration
Rules") of the American Arbitration Association (the "AAA") and
Title 9 of the U.S. Code. All arbitration hearings shall be
conducted in Charlotte, North Carolina. A hearing shall begin
within ninety (90) days of demand for arbitration and all hearings
shall be concluded within one hundred twenty (120) days of demand
for arbitration. These time limitations may not be extended unless
a party shows cause for extension and then no more than a total
extension of sixty (60) days. The expedited procedures set forth
in Rule 51 ET SEQ. of the Arbitration Rules shall be applicable to
claims of less than $1,000,000. All applicable statutes of
limitation shall apply to any Dispute. The panel from which all
arbitrators are selected shall be comprised of licensed attorneys
selected from the Commercial Financial Dispute Arbitration Panel of
the AAA. The single arbitrator selected for expedited procedure
shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will
be conducted or if such person is not available to serve, the
single arbitrator may be a licensed attorney. The parties hereto
do not waive applicable Federal or state substantive law except as
provided herein. A judgment upon the award may be entered in any
court having jurisdiction. Notwithstanding the foregoing, this
arbitration provision does not apply to disputes under or related
to Hedging Agreements.
(b) Notwithstanding the preceding binding arbitration
provisions, the Agent, the Lenders and the Borrowers agree to
preserve, without diminution, certain remedies that the Agent on
behalf of the Lenders may employ or exercise freely, independently
or in connection with an arbitration proceeding or after an
arbitration action is brought. The Agent on behalf of the Lenders
shall have the right to proceed in any court of proper jurisdiction
or by self-help to exercise or prosecute the following remedies, as
applicable (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted
under Credit Documents or under applicable law or by judicial
foreclosure and sale, including a proceeding to confirm the sale;
(ii) all rights of self-help including peaceful occupation of real
property and collection of rents, setoff, and peaceful possession
of personal property; (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary
bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment. Any claim or controversy with regard to
the Agent's entitlement on behalf of the Lenders to exercise such
remedies is a Dispute. Preservation of these remedies does not
limit the power of an arbitrator to grant similar remedies that may
be requested by a party in a Dispute.
(c) The parties hereto agree that they shall not have a
remedy of punitive or exemplary damages against the other in any
Dispute and hereby waive any right or claim to punitive or
exemplary damages they have now or which may arise in the future in
connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.
(d) By execution and delivery of this Credit Agreement, each
of the parties hereto accepts, for itself and in connection with
its properties, generally and unconditionally, the non-exclusive
jurisdiction relating to any arbitration proceedings conducted
under the Arbitration Rules in Charlotte, North Carolina and
irrevocably agrees to be bound by any final judgment rendered
thereby in connection with this Credit Agreement from which no
appeal has been taken or is available.
14.5 NOTICES.
Except as otherwise provided herein, all notices and
correspondences hereunder shall be in writing and sent by certified or
registered mail return receipt requested, or by overnight delivery
service, with all charges prepaid, if to the Agent, then to First Union
National Bank, One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx, XX0,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Xxxxx Xxxx, Vice
President, if to the Borrowers, then to Borrowers at Xxxxxxxx Processed
Foods, L.L.C., 000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxxxxx, Xxxxxxxxx 00000,
Attention: Vice President and Chief Financial Officer, with copies to
each of the Vice President & Treasurer and Senior Vice President &
General Counsel of CBII, at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx
00000, and to any Lender, at the address set forth on Schedule 1.1A
hereto, or by facsimile transmission, promptly confirmed in writing sent
by first class mail, if to the Agent, at (000) 000-0000 and if to the
Borrowers at (000) 000-0000 and (000) 000-0000 and if to any Lender at
the facsimile number set forth on Schedule 1.1A hereto. All such
notices and correspondence shall be deemed given (i) if sent by
certified or registered mail, three (3) Business Days after being
postmarked, (ii) if sent by overnight delivery service, when received at
the above stated addresses or when delivery is refused and (iii) if sent
by facsimile transmission, when receipt of such transmission is
acknowledged; PROVIDED that notices to the Agent shall not be effective
until received.
14.6 ASSIGNABILITY.
(a) No Borrower shall have the right to assign this Credit
Agreement or any interest therein except with the prior written
consent of the Lenders.
(b) Notwithstanding subsection (c) of this SECTION 14.6,
nothing herein shall restrict, prevent or prohibit any Lender from
(i) pledging its Loans hereunder to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve
Bank or (ii) granting assignments or participations in such
Lender's Loans and/or Commitments hereunder to its parent company
and/or to any affiliate of such Lender or to any existing Lender or
affiliate thereof. Any Lender may make, carry or transfer Loans
at, to or for the account of, any of its branch offices or the
office of an affiliate of such Lender except to the extent such
transfer would result in increased costs to the Borrowers.
(c) Each Lender may, with the consent of the Agent and the
Company (such consent not to be unreasonably withheld or delayed),
but without the consent of any other Lender, assign to one or more
banks or other financial institutions all or a portion of its
rights and obligations under this Credit Agreement and the Notes;
PROVIDED that (i) for each such assignment, the parties thereto
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 or Notes subject to such
assignment and a processing and recordation fee of $3,500 to be
paid by the assignee, (ii) no such assignment shall be for less
than $5,000,000 or, if less, the entire remaining Commitments of
such Lender, (iii) if such assignee is a Foreign Lender, all of the
requirements of Section 2.7(b) shall have been satisfied as a
condition to such assignment and (iv) each such assignment shall be
of a uniform, and not a varying, percentage of all rights and
obligations under and in respect of both the Revolving Credit
Commitment and Term Loan Commitment of such Lender and all Loans of
such Lender. Upon such execution and delivery of the Assignment
and Acceptance to the Agent, from and after the date specified as
the effective date in the Assignment and Acceptance (the
"Acceptance Date"), (x) the assignee thereunder shall be a party
hereto, and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and
Acceptance, such assignee shall have the rights and obligations of
a Lender hereunder and (y) the assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its
rights (other than any rights it may have pursuant to SECTION 14.8
which will survive) and be released from its obligations under this
Credit 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 Credit Agreement, such Lender
shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance,
the assignee thereunder confirms and agrees as follows: (i) other
than as provided in such Assignment and Acceptance, the assigning
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 Credit Agreement
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the Notes or any
other instrument or document furnished pursuant hereto, (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the
Borrowers or the performance or observance by the Borrowers of any
of its obligations under this Credit Agreement or any other
instrument or document furnished pursuant hereto, (iii) such
assignee confirms that it has received a copy of this Credit
Agreement, together with copies of the financial statements
referred to in SECTION 7.1 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 assigning 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 Credit Agreement, (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Credit 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 Credit Agreement are
required to be performed by it as a Lender.
(e) The Agent shall maintain at its address referred to in
SECTION 14.5 a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitments 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 and
binding for all purposes, absent 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 Agreement. The Register and copies of each Assignment and
Acceptance 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, together with the Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of EXHIBIT B
hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt
notice thereof to the Borrowers. Within five (5) Business Days
after its receipt of such notice, the Borrowers shall execute and
deliver to the Agent in exchange for the surrendered Note or Notes
(which the assigning Lender agrees to promptly deliver to the
Company) a new Note or Notes to the order of the assignee in an
amount equal to the Commitment or Commitments assumed by it
pursuant to such Assignment and Acceptance and, if the assigning
Lender has retained a Commitment or Commitments hereunder, a new
Note or Notes to the order of the assigning Lender in an amount
equal to the Commitment or Commitments retained by it hereunder.
Such new Note or Notes shall re-evidence the indebtedness
outstanding under the old Notes or Notes and shall be in an
aggregate principal amount equal to the aggregate principal amount
of such surrendered Note or Notes, shall be dated the Closing Date
and shall otherwise be in substantially the form of the Note or
Notes subject to such assignments.
(g) Each Lender may sell participations (without the consent
of the Agent, the Borrowers or any other Lender) to one or more
parties in or to any portion of its rights and obligations under
this Credit Agreement (including, without limitation, any portion
of its Commitments, the Loans owing to it and the Note or Notes
held by it); PROVIDED that (i) such Lender shall retain for itself
at least $10,000,000 of its Commitments and Loans, (ii) such
Lender's obligations under this Credit Agreement (including,
without limitation, its Commitments to the Borrowers hereunder)
shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iv) such Lender shall remain the holder of any such
Note for all purposes of this Credit Agreement, (v) 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 Credit Agreement and (vi) such Lender
shall not transfer, grant, assign or sell any participation under
which the participant shall have rights to approve any amendment or
waiver of this Credit Agreement except to the extent such amendment
or waiver would (A) extend the final maturity date or the date for
the payments of any installment of fees or principal or interest of
any Loans or Letter of Credit reimbursement obligations in which
such participant is participating, (B) reduce the amount of any
installment of principal of the Loans or Letter of Credit
reimbursement obligations in which such participant is
participating, (C) except as otherwise expressly provided in this
Credit Agreement, reduce the interest rate applicable to the Loans
or Letter of Credit reimbursement obligations in which such
participant is participating, or (D) except as otherwise expressly
provided in this Credit Agreement, reduce any Fees payable
hereunder.
(h) Each Lender agrees that, without the prior written
consent of the Borrowers and the Agent, it will not make any
assignment or sell a participation hereunder in any manner or under
any circumstances that would require registration or qualification
of, or filings in respect of, any Loan, Note or other Obligation
under the securities laws of the United States of America or of any
jurisdiction.
(i) In connection with the efforts of any Lender to assign
its rights or obligations or to participate interests, such Lender
may disclose any information in its possession regarding the
Borrowers.
14.7 INFORMATION.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential any information furnished or made available to it by the
Borrowers pursuant to this Credit Agreement that is marked confidential;
PROVIDED that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any
affiliate of any Lending Party, or any officer, director, employee,
agent, or advisor of any Lending Party or affiliate of any Lending
Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required
by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory
agency or authority; provided, however, that, to the extent permitted by
law, the affected Lending Party shall provide prior written notice to
the affected Borrower of any such request or demand, (f) that is or
becomes available to the public or that is or becomes available to any
Lending Party other than as a result of a disclosure by any Lending
Party prohibited by this Credit Agreement, (g) in connection with any
litigation to which such Lending Party or any of its affiliates may be a
party, (h) to the extent necessary in connection with the exercise of
any remedy under this Credit Agreement or any other Credit Document, (i)
subject to provisions substantially similar to those contained in this
SECTION 14.7, to any actual or proposed participant or assignee and (j)
to GOLD SHEETS and other similar bank trade publications; such
information to consist of deal terms and other information approved by
the Company and customarily found in such publications.
14.8 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Borrowers agree to pay all reasonable out-of-pocket costs and
expenses of (a) the Agent in connection with (i) the negotiation,
preparation, execution and delivery of this Credit Agreement and the
other Credit Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees and expenses
of special external counsel to the Agent and the fees and expenses of
special external counsel for the Agent in connection with collateral
issues but excluding any amounts for services rendered by internal
counsel) and (ii) any amendment, waiver or consent relating hereto and
thereto including, without limitation, any such amendments, waivers or
consents resulting from or related to any work-out, re-negotiation or
restructure relating to the performance by the Borrowers under this
Credit Agreement and (b) the Agent and the Lenders in connection with
enforcement of the Credit Documents and the documents and instruments
referred to therein, including but not limited to, any work-out, re-
negotiation or restructure relating to the performance by the Borrowers
under this Credit Agreement, including, without limitation, in
connection with any such enforcement, the reasonable fees and
disbursements of counsel for the Agent and each of the Lenders
(including the allocated costs of internal counsel). The Borrowers
shall indemnify, defend and hold harmless the Agent, the Issuing Bank
and each of the Lenders and their respective directors, officers,
agents, employees and counsel from and against (x) any and all losses,
claims, damages, liabilities, deficiencies, judgments or expenses
incurred by any of them (except to the extent that it is finally
judicially determined to have resulted from their own gross negligence
or willful misconduct) arising out of or by reason of any litigation,
investigation, claim or proceeding which arises out of or is in any way
related to (i) this Credit Agreement, any Letter of Credit or the
transactions contemplated thereby, (ii) any actual or proposed use by
any Borrower of the proceeds of the Loans or (iii) the Agent's, the
Issuing Bank's or the Lenders' entering into this Credit Agreement, the
other Credit Documents or any other agreements and documents relating
hereto, including, without limitation, amounts paid in settlement, court
costs and the fees and disbursements of counsel incurred in connection
with any such litigation, investigation, claim or proceeding or any
advice rendered in connection with any of the foregoing and (y) any such
losses, claims, damages, liabilities, deficiencies, judgments or
expenses incurred in connection with any remedial or other action taken
by any Borrower or any of the Lenders in connection with compliance by
any Borrower or any of its Subsidiaries, or any of their respective
properties, with any federal, state or local environmental laws, acts,
rules, regulations, orders, directions, ordinances, criteria or
guidelines. If and to the extent that the obligations of any Borrower
hereunder are unenforceable for any reason, such Borrower hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. The Borrowers'
obligations under this SECTION 14.8 shall survive any termination of
this Credit Agreement and the other Credit Documents and the payment in
full of the Obligations, and are in addition to, and not in substitution
of, any other of their Obligations set forth in this Credit Agreement.
In addition, the Borrowers shall, upon demand, pay to the Agent and any
Lender all costs and expenses (including the reasonable fees and
disbursements of counsel and other professionals) paid or incurred by
the Agent, the Issuing Bank or such Lender in (A) enforcing or defending
its rights under or in respect of this Credit Agreement, the other
Credit Documents or any other document or instrument now or hereafter
executed and delivered in connection herewith against any Borrower (or,
in the case of the Agent, against any Lender, except to the extent that
the claim or liability giving rise to such enforcement or defense is
finally judicially determined to have resulted from the Agent's own
gross negligence or willful misconduct), (B) in collecting the Loans,
(C) in foreclosing or otherwise collecting upon the Collateral or any
part thereof and (D) obtaining any legal, accounting or other advice in
connection with any of the foregoing.
14.9 ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS.
This Credit Agreement along with the other Credit Documents and the
Fee Letter constitutes the entire agreement among the Borrowers, the
Agent and the Lenders, supersedes any prior agreements among them, and
shall bind and benefit the Borrowers and the Lenders and their
respective successors and permitted assigns.
14.10 AMENDMENTS, ETC.
Neither the amendment or waiver of any provision of this Credit
Agreement or any other Credit Document, nor the consent to any departure
by any Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, or if the
Lenders shall not be parties thereto, by the parties thereto and
consented to by the Required Lenders, and each such amendment, waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED that no amendment, waiver or
consent shall unless in writing and signed by all the Lenders, do any of
the following: (a) increase the Commitments of the Lenders or subject
the Lenders to any additional obligations, (b) except as otherwise
expressly provided in this Credit Agreement, reduce the principal of, or
interest on, any Note or any Letter of Credit reimbursement obligations
or any fees hereunder, (c) postpone any date fixed for any payment or
mandatory prepayment in respect of principal of, or interest on, any
Note or any Letter of Credit reimbursement obligations or any fees
hereunder, (d) change the percentage of the Commitments, or any minimum
requirement necessary for the Lenders or the Required Lenders to take
any action hereunder, (e) amend or waive SECTION 2.8, SECTION 2.9,
SECTION 13.6 or this SECTION 14.10, or change the definition of Required
Lenders, (f) except as otherwise expressly provided in this Credit
Agreement, and other than in connection with the financing, refinancing,
sale or other disposition of any asset of the Borrowers permitted under
this Credit Agreement, release any Liens in favor of the Lenders on any
material portion of the Collateral, (g) except as expressly permitted
hereunder, increase the advance rates used to calculate the Revolving
Credit Borrowing Base, the Distribution Term Loan Borrowing Base or the
Non-Distribution Term Loan Borrowing Base or (h) terminate, waive or
modify any indemnification obligations of any Borrower under the Credit
Agreement or any other Credit Document and, PROVIDED, FURTHER, that no
amendment, waiver or consent affecting the rights or duties of the Agent
or the Issuing Bank under any Credit Document shall in any event be
effective, unless in writing and signed by the Agent and/or the Issuing
Bank, as applicable, in addition to the Lenders required hereinabove to
take such action. Notwithstanding any of the foregoing to the contrary,
the consent of the Borrowers shall not be required for any amendment,
modification or waiver of the provisions of ARTICLE XIII (other than the
provisions of SECTION 13.9). In addition, the Borrowers and the Lenders
hereby authorize the Agent to modify this Credit Agreement by
unilaterally amending or supplementing SCHEDULE 1.1A from time to time
in the manner requested by the Borrowers, the Agent or any Lender in
order to reflect any assignments or transfers of the Loans as provided
for hereunder; PROVIDED, HOWEVER, that the Agent shall promptly deliver
a copy of any such modification to the Borrowers and each Lender.
14.11 NONLIABILITY OF AGENT AND LENDERS.
The relationship between any Borrower on the one hand and the
Lenders and the Agent on the other hand shall be solely that of borrower
and lender. Neither the Agent nor any Lender shall have any fiduciary
responsibilities to any Borrower. Neither the Agent nor any Lender
undertakes any responsibility to any Borrower to review or inform such
Borrower of any matter in connection with any phase of such Borrower's
business or operations.
14.12 INDEPENDENT NATURE OF LENDERS' RIGHTS.
The amounts payable at any time hereunder to each Lender under such
Lender's Note or Notes shall be a separate and independent debt.
14.13 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
14.14 EFFECTIVENESS.
This Credit Agreement shall become effective on the date on which
all of the parties have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Agent
pursuant to SECTION 14.5 or, in the case of the Lenders, shall have
given to the Agent written, telecopied or telex notice (actually
received) at such office that the same has been signed and mailed to it.
14.15 SEVERABILITY.
In case any provision in or obligation under this Credit Agreement
or the Notes or the other Credit Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.
14.16 HEADINGS DESCRIPTIVE.
The headings of the several sections and subsections of this Credit
Agreement, and the Table of Contents, are inserted for convenience only
and shall not in any way affect the meaning or construction of any
provision of this Credit Agreement.
14.17 MAXIMUM RATE.
Notwithstanding anything to the contrary contained elsewhere in
this Credit Agreement or in any other Credit Document, the Borrowers,
the Agent and the Lenders hereby agree that all agreements among them
under this Credit Agreement and the other Credit Documents, whether now
existing or hereafter arising and whether written or oral, are expressly
limited so that in no contingency or event whatsoever shall the amount
paid, or agreed to be paid, to the Agent or any Lender for the use,
forbearance, or detention of the money loaned to any Borrower and
evidenced hereby or thereby or for the performance or payment of any
covenant or obligation contained herein or therein, exceed the Highest
Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents
at the time performance of such provision shall be due shall exceed the
Highest Lawful Rate, then, automatically, the obligation to be fulfilled
shall be modified or reduced to the extent necessary to limit such
interest to the Highest Lawful Rate, and if from any such circumstance
any Lender should ever receive anything of value deemed interest by
applicable law which would exceed the Highest Lawful Rate, such
excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then
outstanding Obligations and not to the payment of interest, or if such
excessive interest exceeds the principal unpaid balance then outstanding
hereunder and such other then outstanding Obligations, such excess shall
be refunded to the applicable Borrower. All sums paid or agreed to be
paid to the Agent or any Lender for the use, forbearance, or detention
of the Obligations and other indebtedness of the Borrowers to the Agent
or any Lender shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the actual rate of
interest on account of all such indebtedness does not exceed the Highest
Lawful Rate throughout the entire term of such indebtedness. The terms
and provisions of this Section shall control every other provision of
this Credit Agreement and all agreements among the Borrowers, the Agent
and the Lenders.
14.18 RIGHT OF SETOFF.
In addition to and not in limitation of all rights of offset that
any Lender or other holder of a Note may have under applicable law,
each Lender or other holder of a Note shall, if any Event of Default
has occurred and is continuing and whether or not such Lender or such
holder has made any demand or the Obligations of any Borrower are
matured, have the right to appropriate and apply to the payment of the
Obligations of such Borrower all deposits (general or special, time or
demand, provisional or final) then or thereafter held by and other
indebtedness or property then or thereafter owing by such Lender or
other holder. Any amount received as a result of the exercise of such
rights shall be reallocated among the Lenders as set forth in SECTION
3.8.
14.19 CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several
liability hereunder in consideration of the financial accommodation
to be provided by the Lenders under this Credit Agreement, for the
mutual benefit, directly and indirectly, of each of the Borrowers
and in consideration of the undertakings of each of the Borrowers
to accept joint and several liability for the obligations of each
of them.
(b) Each of the Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Borrowers with respect to the payment and performance of all of the
Obligations, it being the intention of the parties hereto that all
the Obligations shall be the joint and several obligations of each
of the Borrowers without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail
to make any payment with respect to any of the Obligations as and
when due or to perform any of the Obligations in accordance with
the terms thereof, then in each such event, the other Borrowers
will make such payment with respect to, or perform, such
Obligation.
(d) The obligations of each Borrower under the provisions of
this SECTION 14.19 constitute full recourse obligations of such
Borrower, enforceable against it to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Credit Agreement or any other circumstances
whatsoever.
(e) Except as otherwise expressly provided herein, each
Borrower hereby waives notice of acceptance of its joint and
several liability, notice of any Loan made under this Credit
Agreement, notice of occurrence of any Event of Default, or of any
demand for any payment under this Credit Agreement, notice of any
action at any time taken or omitted by any Lender under or in
respect of any of the Obligations, any requirement of diligence
and, generally, all demands, notices and other formalities of every
kind in connection with this Credit Agreement. Each Borrower
hereby assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the Obligations,
the acceptance of any partial payment thereon, any waiver, consent
or other action or acquiescence by any Lender at any time or times
in respect of any default by any Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this
Credit Agreement, any and all other indulgences whatsoever by any
Lender in respect of any of the Obligations, and the taking,
addition, substitution or release, in whole or in part, at any time
or times, of any security for any of the Obligations or in part, at
any time or times, of any security for any of the Obligations or
the addition, substitution or release, in whole or in part, of any
Borrower. Without limiting the generality of the foregoing, each
Borrower assents to any other action or delay in acting or failure
to act on the part of any Lender, including, without limitation,
any failure strictly or diligently to assert any right or to pursue
any remedy or to comply fully with the applicable laws or
regulations thereunder which might, but for the provisions of this
SECTION 14.19, afford grounds for terminating, discharging or
relieving such Borrower, in whole or in part, from any of its
obligations under this SECTION 14.19, it being the intention of
each Borrower that, so long as any of the Obligations remain
unsatisfied, the obligations of such Borrower under this SECTION
14.19 shall not be discharged except by performance and then only
to the extent of such performance. The Obligations of each
Borrower under this SECTION 14.19 shall not be diminished or
rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with
respect to any Borrower or any Lender. The joint and several
liability of the Borrowers hereunder shall continue in full force
and effect notwithstanding any absorption, merger, amalgamation or
any other change whatsoever in the name, membership, constitution
or place of formation of any Borrower or any Lender.
(f) The provisions of this SECTION 14.19 are made for the
benefit of the Lenders and their respective successors and assigns,
and may be enforced by any such Person from time to time against
any of the Borrowers as often as occasion therefor may arise and
without requirement on the part of any Lender first to marshal any
of its claims or to exercise any of its rights against any of the
other Borrowers or to exhaust any remedies available to it against
any of the other Borrowers or to resort to any other source or
means of obtaining payment of any of the Obligations or to elect
any other remedy. The provisions of this SECTION 14.19 shall
remain in effect until all the Obligations shall have been paid in
full or otherwise fully satisfied. If at any time, any payment, or
any part thereof, made in respect of any of the Obligations, is
rescinded or must otherwise be restored or returned by any Lender
upon the insolvency, bankruptcy or reorganization of any of the
Borrowers, or otherwise, the provisions of this SECTION 14.19 will
forthwith be reinstated in effect, as though such payment had not
been made.
(g) Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents, to the extent the
joint obligations of a Borrower shall be adjudicated to be invalid
or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each
Borrower hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and
including, without limitation, the federal Bankruptcy Code).
(h) The Borrowers hereby agree, as among themselves, that if
any Borrower shall become an Excess Funding Borrower (as defined
below), each other Borrower shall, on demand of such Excess Funding
Borrower (but subject to the next sentence hereof and to subsection
(B) below), pay to such Excess Funding Borrower an amount equal to
such Borrower's Pro Rata Share (as defined below and determined,
for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Borrower) of such
Excess Payment (as defined below). The payment obligation of any
Borrower to any Excess Funding Borrower under this SECTION 14.19(H)
shall be subordinate and subject in right of payment to the prior
payment in full of the Obligations of such Borrower under the other
provisions of this Credit Agreement, and such Excess Funding
Borrower shall not exercise any right or remedy with respect to
such excess until payment and satisfaction in full of all of such
Obligations. For purposes hereof, (i) "Excess Funding Borrower"
shall mean, in respect of any Obligations arising under the other
provisions of this Credit Agreement (hereafter, the "Joint
Obligations"), a Borrower that has paid an amount in excess of its
Pro Rata Share of the Joint Obligations; (ii) "Excess Payment"
shall mean, in respect of any Joint Obligations, the amount paid by
an Excess Funding Borrower in excess of its Pro Rata Share of such
Joint Obligations; and (iii) "Pro Rata Share", for the purposes of
this SECTION 14.19(H), shall mean, for any Borrower, the ratio
(expressed as a percentage) of (A) the amount by which the
aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such
Borrower (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of such
Borrower hereunder) to (B) the amount by which the aggregate
present fair salable value of all assets and other properties of
such Borrower and all of the other Borrowers exceeds the amount of
all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such Borrower and the other Borrowers
hereunder) of such Borrower and all of the other Borrowers, all as
of the Closing Date (if any Borrower becomes a party hereto
subsequent to the Closing Date, then for the purposes of this
SECTION 14.19(H) such subsequent Borrower shall be deemed to have
been a Borrower as of the Closing Date and the information
pertaining to, and only pertaining to, such Borrower as of the date
such Borrower became a Borrower shall be deemed true as of the
Closing Date).
14.20 POWER OF ATTORNEY.
Each Subsidiary Borrower appoints each of the chief financial
officer and any vice president of the Company, (each of whom is a senior
officer of the Company) to be its attorneys ("its Attorneys") and in its
name and on its behalf and as its act and deed or otherwise to sign all
documents and carry out all such acts as are necessary or appropriate in
connection with executing any Notice of Borrowing, Notice of
Extension/Conversion or any Revolving Credit Borrowing Base Certificate,
any Distribution Term Loan Borrowing Base Certificate or any Non-
Distribution Term Loan Borrowing Base Certificate or any security
documents (the "Documents") in connection with this Credit Agreement,
provided that such Documents are in substantially the form provided
therefor in the applicable exhibits thereto. This Power of Attorney
shall be valid for the duration of the term of this Credit Agreement.
Each Subsidiary Borrower hereby undertakes to ratify everything which
either of its Attorneys shall do in order to execute the Documents
mentioned herein.
IN WITNESS WHEREOF the parties hereto have caused this Credit Agreement
to be executed and delivered by their proper and duly authorized
officers as of the date set forth above.
BORROWERS: XXXXXXXX PROCESSED FOODS, L.L.C.
By: /s/XXXXXX X. XXXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President and
Treasurer
AGENT AND LENDERS FIRST UNION NATIONAL BANK,
as Agent and as a Lender
By: /s/XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
and Director
LENDERS BANK OF AMERICA, N .A.
(f/k/a NationsBank, N.A.),
as a Lender
By: /s/XXXX X. XXXXXXXX
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN AG,
as a Lender
By: /s/XXXX XXX
Name: Xxxx Xxx
Title: Assistant Vice President
Erste Bank New York Branch
By: /s/XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: First Vice President
NATIONAL BANK OF CANADA,
as a Lender
By: /s/XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
and Manager
SIEMENS CREDIT CORPORATION,
as a Lender
By: /s/X. X. XXXXXX
Name: X. X. Xxxxxx
Title: Vice President
and Managing Director, ABL
GMAC COMMERCIAL CREDIT LLC,
as a Lender
By: /s/XXXXX XXXXXXXX
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
as a Lender
By: /s/XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: Managing Director
FIRSTAR BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/XXXXX X. XXXXXXXXX
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
CoBANK, ACB,
as a Lender
By: /s/XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
TRANSAMERICA BUSINESS CREDIT
CORPORATION,
as a Lender
By: /s/XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
SOVEREIGN BANK,
as a Lender
By: /s/XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
BANKBOSTON, N.A.,
as a Lender
By: /s/Xxxxx X. X'Xxxxxxx
Name: Xxxxx X. X'Xxxxxxx
Title: Managing Director
