1
EXHIBIT 10.1
AMENDED AND RESTATED
CREDIT AGREEMENT
among
RICHMONT MARKETING SPECIALISTS INC.
as Borrower,
THE CHASE MANHATTAN BANK,
as Agent,
and
the banks named herein
18 December 1997
[LOGO] CHASE
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TABLE OF CONTENTS
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ARTICLE 1 - Definitions........................................................1
Section 1.1 Definitions..............................................1
Section 1.2 Other Definitional Provisions...........................18
Section 1.3 Accounting Terms and Determinations.....................18
Section 1.4 Time of Day.............................................19
ARTICLE 2 - Revolving Credit Facility.........................................19
Section 2.1 Commitments.............................................19
Section 2.2 Notes...................................................19
Section 2.3 Repayment of Loans......................................19
Section 2.4 Use of Proceeds.........................................19
Section 2.5 Commitment Fee..........................................19
Section 2.6 Termination or Reduction of Commitments.................20
Section 2.7 Letters of Credit.......................................20
(a) Commitment to Issue.....................................20
(b) Letter of Credit Request Procedure......................20
(c) Letter of Credit Fees...................................21
(d) Funding of Drawings.....................................21
(e) Reimbursements..........................................21
(f) Reimbursement Obligations Absolute......................22
(g) Issuer Responsibility...................................22
ARTICLE 3 - Interest and Fees.................................................23
Section 3.1 Interest Rate...........................................23
Section 3.2 Determinations of Margins and Fees......................23
(a) "Base Margin"...........................................23
(b) "Commitment Fee Rate"...................................23
(c) "Libor Rate Margin".....................................24
Section 3.3 Payment Dates...........................................25
Section 3.4 Default Interest........................................25
Section 3.5 Conversions and Continuations of Accounts...............25
Section 3.6 Computations............................................25
ARTICLE 4 - Administrative Matters............................................25
Section 4.1 Borrowing Procedure.....................................25
(a) Formal Borrowing Request................................25
(b) Automatic Borrowing.....................................26
Section 4.2 Minimum Amounts.........................................26
Section 4.3 Certain Notices.........................................26
Section 4.4 Prepayments.............................................27
(a) Mandatory...............................................27
(b) Control of Cash and Application to Obligations..........27
Section 4.5 Method of Payment.......................................29
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TABLE OF CONTENTS
(continued)
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Section 4.6 Weekly Settlement Among Banks; Pro Rata Treatment.......29
Section 4.7 Sharing of Payments.....................................30
Section 4.8 Non-Receipt of Funds by the Agent.......................31
Section 4.9 Withholding Taxes.......................................31
Section 4.10 Withholding Tax Exemption...............................32
Section 4.11 Participation and Settlement Obligations Absolute;
Failure to Fund Participation or Settlement.............32
ARTICLE 5 - Yield Protection and Illegality...................................33
Section 5.1 Additional Costs........................................33
Section 5.2 Limitation on Libor Accounts............................34
Section 5.3 Illegality..............................................35
Section 5.4 Treatment of Affected Loans.............................35
Section 5.5 Compensation............................................36
Section 5.6 Capital Adequacy........................................36
Section 5.7 Replacement of a Bank...................................37
ARTICLE 6 - Conditions Precedent..............................................37
Section 6.1 Initial Loan and Letter of Credit.......................37
(a) Resolutions; Authority..................................37
(b) Incumbency Certificate..................................38
(c) Organizational Documents................................38
(d) Bylaws..................................................38
(e) Governmental Certificates...............................38
(f) Notes...................................................38
(g) Acknowledgment..........................................38
(h) Collateral Documents and Collateral.....................38
(i) Termination of Liens; Subordinations....................39
(j) Insurance Policies......................................39
(k) Opinion of Counsel......................................39
(l) Attorneys' Fees and Expenses............................39
(m) Account Agreement.......................................39
(n) Closing Fee.............................................39
(o) Prior Agreement Outstandings............................39
(p) Transactions............................................39
(q) Transaction Documents...................................39
Section 6.2 All Loans and Letters of Credit.........................40
(a) No Default..............................................40
(b) Representations and Warranties..........................40
(c) Additional Documentation................................40
ARTICLE 7 - Representations and Warranties....................................40
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TABLE OF CONTENTS
(continued)
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Section 7.1 Corporate Existence.....................................40
Section 7.2 Financial Statements....................................41
Section 7.3 Corporate Action; No Breach.............................41
Section 7.4 Operation of Business...................................41
Section 7.5 Litigation and Judgments................................41
Section 7.6 Rights in Properties; Liens.............................41
Section 7.7 Enforceability..........................................42
Section 7.8 Approvals...............................................42
Section 7.9 Debt....................................................42
Section 7.10 Taxes...................................................42
Section 7.11 Margin Securities.......................................42
Section 7.12 ERISA...................................................43
Section 7.13 Disclosure..............................................43
Section 7.14 Subsidiaries; Borrower Capitalization...................43
Section 7.15 Agreements..............................................43
Section 7.16 Compliance with Laws....................................44
Section 7.17 Investment Company Act..................................44
Section 7.18 Public Utility Holding Company Act......................44
Section 7.19 Environmental Matters...................................44
Section 7.20 Deposit and Brokerage Accounts..........................45
Section 7.21 Solvency................................................45
Section 7.22 Perishable Agricultural Commodities Act.................45
Section 7.23 Packers and Stockyards Act..............................45
Section 7.24 Common Enterprise. ....................................46
Section 7.25 Transaction Documents...................................46
ARTICLE 8 - Positive Covenants................................................46
Section 8.1 Reporting Requirements..................................46
(a) Annual Financial Statements.............................46
(b) Monthly Financial Statements............................46
(c) Quarterly Financial Statements..........................47
(d) Compliance Certificate..................................47
(e) Borrowing Base Report...................................47
(f) Receivable Reporting....................................47
(g) Projections.............................................47
(h) Management Letters......................................48
(i) Notice of Litigation....................................48
(j) Notice of Default.......................................48
(k) ERISA Reports...........................................48
(l) Notice of Material Adverse Effect.......................48
(m) Proxy Statements, Etc...................................48
(n) General Information.....................................49
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TABLE OF CONTENTS
(continued)
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Section 8.2 Maintenance of Existence; Conduct of Business...........49
Section 8.3 Maintenance of Properties...............................49
Section 8.4 Taxes and Claims........................................49
Section 8.5 Insurance...............................................49
Section 8.6 Inspection Rights.......................................49
Section 8.7 Keeping Books and Records...............................50
Section 8.8 Compliance with Laws....................................50
Section 8.9 Compliance with Agreements..............................50
Section 8.10 Further Assurances and Collateral Matters...............50
(a) Further Assurance and Exceptions to Perfection..........50
(b) Subsidiary Creation or Acquisition......................51
Section 8.11 ERISA...................................................51
ARTICLE 9 - Negative Covenants................................................51
Section 9.1 Debt....................................................51
Section 9.2 Limitation on Liens and Restrictions on
Subsidiaries............................................53
Section 9.3 Mergers, Etc............................................55
Section 9.4 Restricted Junior Payments..............................57
Section 9.5 Investments.............................................58
Section 9.6 Limitation on Issuance of Capital Stock.................59
Section 9.7 Transactions With Affiliates............................60
Section 9.8 Disposition of Assets...................................60
Section 9.9 Sale and Leaseback......................................60
Section 9.10 Lines of Business.......................................61
Section 9.11 Prepayment of Debt......................................61
Section 9.12 Atlas Acquisition Documents; Purchase Agreements........61
Section 9.13 Modifications to Senior Subordinated Note
Documents...............................................61
Section 9.14 Designation of Senior Debt..............................61
ARTICLE 10 - Financial Covenants..............................................62
Section 10.1 Debt Service Ratio......................................62
Section 10.2 Interest Coverage.......................................62
Section 10.3 Capital Expenditure Limits..............................63
ARTICLE 11 - Default..........................................................63
Section 11.1 Events of Default.......................................63
Section 11.2 Remedies................................................66
(a) Acceleration............................................66
(b) Termination of Commitments..............................66
(c) Judgment................................................67
(d) Foreclosure.............................................67
(e) Rights..................................................67
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TABLE OF CONTENTS
(continued)
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Section 11.3 Cash Collateral.........................................67
Section 11.4 Performance by the Agent................................67
Section 11.5 Setoff..................................................68
Section 11.6 Continuance of Default..................................68
ARTICLE 12 - The Agent........................................................68
Section 12.1 Appointment, Powers and Immunities......................68
Section 12.2 Rights of Agent as a Bank...............................69
Section 12.3 Defaults................................................69
Section 12.4 Indemnification.........................................69
Section 12.5 Independent Credit Decisions............................70
Section 12.6 Several Commitments.....................................70
Section 12.7 Successor Agent.........................................71
Section 12.8 Authorized Actions......................................71
Section 12.9 Administrative Fee. ...................................71
ARTICLE 13 - Miscellaneous....................................................71
Section 13.1 Expenses................................................71
Section 13.2 Indemnification.........................................72
Section 13.3 Limitation of Liability.................................73
Section 13.4 No Duty.................................................73
Section 13.5 No Fiduciary Relationship...............................73
Section 13.6 Equitable Relief........................................73
Section 13.7 No Waiver; Cumulative Remedies..........................73
Section 13.8 Successors and Assigns..................................74
Section 13.9 Survival................................................76
Section 13.10 Entire Agreement; Amendment and Restatement;
Waivers of Claims; Release of Additional Guaranty.......76
Section 13.11 Amendments..............................................77
Section 13.12 Maximum Interest Rate...................................77
Section 13.13 Notices.................................................78
Section 13.14 Governing Law, Etc......................................78
Section 13.15 Counterparts............................................78
Section 13.16 Severability............................................79
Section 13.17 Headings................................................79
Section 13.18 Non-Application of Chapter 346 of Texas Finance
Code....................................................79
Section 13.19 Construction............................................79
Section 13.20 Independence of Covenants...............................79
Section 13.21 WAIVER OF JURY TRIAL....................................79
Section 13.22 Confidentiality.........................................79
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INDEX TO EXHIBITS
Exhibit Description of Exhibit
------- ----------------------
"A" Note
"B" Compliance Certificate
"C" Borrowing Base Report
"D" Subsidiary Joinder Agreement
"E" Assignment and Acceptance
INDEX TO SCHEDULES
Schedule Description of Schedule
-------- -----------------------
1.1(a) Lockbox Agreements and Accounts
7.14 List of Subsidiaries; List of Borrower Shareholders
9.1 Debt
9.2 Existing Liens
9.5 Existing Investments
9.7 Permitted Affiliate Transactions
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement"), dated as of
December 18, 1997, is among RICHMONT MARKETING SPECIALISTS INC., a corporation
duly organized and validly existing under the laws of the State of Delaware
("Borrower"), each of the banks or other lending institutions which is or which
may from time to time become a signatory hereto or any successor or assignee
thereof pursuant to Section 13.8 hereof (individually, a "Bank" and,
collectively, the "Banks"), and THE CHASE MANHATTAN BANK, individually as a Bank
and as agent for itself and the other Banks (in its capacity as agent, together
with its successors in such capacity, the "Agent").
R E C I T A L S:
Borrower and The Chase Manhattan Bank, as agent and individually as the
only bank, have previously entered into that certain Credit Agreement dated as
of October 14, 1997 (as the same has been amended, herein referred to as the
"Prior Agreement"). Borrower and The Chase Manhattan Bank now desire to enter
into this Agreement to amend and restate the Prior Agreement in its entirety.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. As used in this Agreement, the following terms
have the following meanings:
"Account" means either a Base Rate Account or a Libor Account.
"Additional Costs" has the meaning specified in Section 5.1 hereof.
"Adjusted Libor Rate" means, for any Libor Account for any Interest Period
therefor, the rate per annum determined by the Agent to be equal to the Libor
Rate for such Libor Account for such Interest Period divided by 1 minus the
Reserve Requirement for such Libor Account for such Interest Period.
"Adjustment Date" has the meaning specified in Section 3.2 hereof.
"Affiliate" means, as to any Person, any other Person (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, such Person; (b) that directly or indirectly
beneficially owns or holds ten percent (10%) or more of any
AMENDED AND RESTATED CREDIT AGREEMENT - Page 1
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class of voting stock of such Person; or (c) ten percent (10%) or more of the
voting stock of which is directly or indirectly beneficially owned or held by
the Person in question. The term "control" means the possession, directly or
indirectly, of the power to direct or cause direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise; provided, however, in no event shall the Agent or any
Bank be deemed an Affiliate of the Borrower or any Subsidiaries.
"Agent" has the meaning set forth in the introductory paragraph of this
Agreement.
"Agreement" has the meaning set forth in the introductory paragraph of
this Agreement.
"Applicable Lending Office" means for each Bank and each Type of Account,
the lending office of such Bank (or of an Affiliate of such Bank) designated for
such Account below its name on the signature pages hereof or such other office
of such Bank (or of an Affiliate of such Bank) as such Bank may from time to
time specify to the Borrower and the Agent as the office by which its Loans
subject to Accounts of such Type are to be made and maintained.
"Applicable Rate" has the meaning specified in Section 3.1 hereof.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Bank and its assignee and accepted by the Agent pursuant to Section
13.8 hereof, in substantially the form of Exhibit "E" hereto.
"Atlas Acquisition" means the acquisition by MSSC Carolina, Inc. of all
the capital stock of Atlas Marketing Company, Inc., a North Carolina
corporation.
"Atlas Acquisition Documents" means the stock purchase agreements entered
into in connection with the Atlas Acquisition, all documentation executed
pursuant to the terms thereof and all other documentation executed and delivered
to consummate the Atlas Acquisition, as the same may be amended or otherwise
modified; excluding, however, the Loan Documents, Senior Subordinated Note
Documents and the other Transaction Documents.
"Atlas Companies" means Atlas Marketing Company, Inc. and the Subsidiaries
directly or indirectly owned by Atlas Marketing Company, Inc.
"Available Cash" has the meaning specified in Section 4.4 (b).
"Bank" has the meaning set forth in the introductory paragraph of this
Agreement.
"Base Margin" has the meaning specified in Section 3.2 hereof.
"Base Rate" means, for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate
(computed on the basis of the actual
AMENDED AND RESTATED CREDIT AGREEMENT - Page 2
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number of days elapsed over a year of 365 or 366 days, as the case may be) in
effect on such day, (b) the Federal Funds Effective Rate (computed on the basis
of the actual number of days elapsed over a 360-day year) in effect for such day
plus one half percent (1/2%), or (c) the Base CD Rate in effect for such day
plus one percent (1%). For purposes of this Agreement, any change in the Base
Rate due to a change in the Prime Rate, Federal Funds Effective Rate or the Base
CD Rate shall be effective on the effective date of such change in the Prime
Rate, Federal Funds Effective Rate or the Base CD Rate, respectively. If for any
reason the Agent shall have determined (which determination shall be conclusive
and binding, absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate or Base CD Rate, or both, 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 (b) or (c), or both, as appropriate, until the circumstances giving rise
to such inability no longer exist. As used in this definition, the following
terms shall have the following meanings:
"Assessment Rate" shall mean the annual assessment rate (net of
refunds and rounded upwards, if necessary, to the next 1/16 of 1%)
estimated by the Agent (in good faith, but in no event in excess of
statutory or regulatory maximums) to be payable by the Agent to the
Federal Deposit Insurance Corporation (or any successor) for insurance by
such Corporation (or such successor) of time deposits made in Dollars at
the Agent's domestic offices during the current calendar year.
"Base CD Rate" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the
Assessment Rate.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank, or its successor
financial institution, at the Principal Office as it prime rate in effect
at such time. Without notice to the Borrower or any other Person, the
Prime Rate shall change automatically from time to time as and in the
amount by which said prime rate shall fluctuate, with each such change to
be effective as of the date of each change in such prime rate. THE PRIME
RATE IS A REFERENCE RATE AND DOES NOT NECESSARILY REPRESENT THE LOWEST OR
BEST RATE ACTUALLY CHARGED BY THE CHASE MANHATTAN BANK OR SUCH SUCCESSOR
FINANCIAL INSTITUTION TO ANY OF ITS CUSTOMERS. THE CHASE MANHATTAN BANK OR
SUCH SUCCESSOR FINANCIAL INSTITUTION MAY MAKE COMMERCIAL LOANS OR OTHER
LOANS AT RATES OF INTEREST AT, ABOVE AND BELOW THE PRIME RATE.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum reserve percentage
(including without limitation, any marginal, special, emergency or
supplemental reserves) expressed as a decimal, established by the Board of
Governors of the Federal Reserve System of the United States or any
banking authority to which The Chase Manhattan Bank is subject with
respect to the Base CD Rate
AMENDED AND RESTATED CREDIT AGREEMENT - Page 3
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for new negotiable non-personal time deposits in Dollars of over One
Hundred Thousand Dollars ($100,000) with maturities approximately equal to
three months. Statutory Reserves shall be adjusted automatically on and as
of the effective date of any change in any applicable reserve percentage.
"Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported as
being in effect on such day (or, if such day shall not be a Business Day,
the next preceding Business Day) by the Board of Governors of the Federal
Reserve System of the United States through the public information
telephone line of the Federal Reserve Bank of New York (which rate will,
under the current practices of such Board of Governors, be published in
Federal Reserve Statistical Release H.15(519) during the week following
such day), or, if such rate shall not be so reported on such day or such
next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 a.m. on such day
(or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Agent from three New York City negotiable certificate
of deposit dealers of recognized standing selected by the Agent.
"Base Rate Account" means a portion of a Loan that bears interest at a
rate based upon the Base Rate.
"Borrower" has the meaning set forth in the introductory paragraph of this
Agreement.
"Borrower Security Agreement" means the security agreement between the
Borrower and Agent for the benefit of itself and the Banks, in substantially the
form of Exhibit "E" to the Prior Agreement, as the same may be amended or
otherwise modified.
"Borrowing Availability" means, at any date of determination, the amount
by which the lesser of the Commitments or the Borrowing Base exceed the
Outstanding Revolving Credit.
"Borrowing Base" means, at any time and calculated without duplication
based on the Borrowing Base Report most recently delivered at such time pursuant
to Section 8.1(e), an amount equal to the product of:
(a) the sum of (i) aggregate amount of Eligible Accounts minus (ii)
the aggregate amount of all of the Borrower's and the Subsidiaries' cash
collections on Receivables which have not been applied to the Receivables
as of the date of the preparation of the Borrowing Base Report; multiplied
by
(b) the applicable Advance Percent. The term "Advance Percent"
means:
AMENDED AND RESTATED CREDIT AGREEMENT - Page 4
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(i) with respect to the Eligible Accounts of any Atlas
Company, eighty percent (80%); and
(ii) with respect to the Eligible Accounts of Borrower and any
Granting Subsidiary other than an Atlas Company (the "Existing
Companies"), either
(x) fifty percent (50%) or
(y) eighty percent (80%) if, in the case of this clause (y)
only, Agent provides written notice to the Borrower that it
has determined (at the Borrower's request but in the Agent's
sole discretion) that the Agent is satisfied with the
Receivables systems of the Existing Companies and that the
average dilution percentage for all Receivables of the
Existing Companies is no greater than ten percent (10%) for a
ninety (90) day period prior to the delivery of such notice
and no Default exists as of the date of the delivery of such
notice; or
(iii) in the case of either clauses (i) or (ii) of this
definition, such other percent as the Agent may, at any time
hereafter, determine is necessary to protect its interests, such
determination to be made in the Agent's judgment, in good faith and
based on information which, in its judgment, supports such
determination.
Any change in the Advance Percent shall be effective on the date Borrower
receives Agent's written notice of such change.
"Borrowing Base Report" means a report in substantially the form of
Exhibit "C" hereto properly completed and executed by the chief executive
officer, treasurer or chief financial officer of the Borrower.
"Business Day" means (a) any day excluding Saturday, Sunday and any day
which either is a legal holiday under the laws of the States of New York or
Texas or is a day on which banking institutions located in any such States are
closed, and (b), with respect to all borrowings, payments, Conversions,
Continuations, Interest Periods, and notices in connection with Loans subject to
Libor Accounts, any day which is a Business Day described in clause (a) above
and which is also a day on which dealings in Dollar deposits are carried out in
the London interbank market.
"Calculated EBITDA" has the meaning specified in subsection 9.3 (b) (iii).
"Calculation Period" has the meaning specified in Section 3.2 hereof.
"Capital Expenditures" means, for any period, all expenditures of the
Borrower and the Subsidiaries which are classified as capital expenditures in
accordance with GAAP including all such expenditures associated with Capital
Lease Obligations.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 5
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"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Closing Date" means December 19, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" means the property in which Liens have been granted pursuant
to the Borrower Security Agreement and the Subsidiary Security Agreement,
whether such Liens are now existing or hereafter arise.
"Commitment" means, as to each Bank, the obligation of such Bank to make
advances of funds and purchase participation interests in (or with respect to
the Agent as a Bank, hold other interests in) Letters of Credit in an aggregate
principal amount at any one time outstanding up to but not exceeding the amount
set forth opposite the name of such Bank on the signature pages hereto under the
heading "Commitment" or, if applicable, in its most recent Assignment and
Acceptance. The Commitment of a Bank and the Commitments of all the Banks may be
reduced or terminated pursuant to Section 2.6 or Section 11.2 hereof. The
aggregate amount of the Commitments of all Banks is Twenty-Five Million Dollars
($25,000,000).
"Commitment Fee Rate" means the per annum rate determined in accordance
with Section 3.2 hereof.
"Commitment Percentage" means, as to any Bank, the percentage equivalent
of a fraction the numerator of which is the amount of such Bank's Commitment and
the denominator of which is the aggregate amount of the Commitments for all of
the Banks.
"Compliance Certificate" means a certificate in substantially the form of
Exhibit "B" hereto, properly completed and executed by the chief executive
officer, treasurer or chief financial officer of the Borrower.
"Concentration Account" shall mean a deposit account established at the
Agent by the Borrower and controlled by the Agent for the benefit of the Banks
in which all funds received through the Lockbox Accounts shall be deposited.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.5 or Article 5 hereof of a Libor Account as a
Libor Account from one Interest Period to the next Interest Period.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 6
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"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 3.5 or Article 5 hereof of one Type of Account into the
other Type of Account.
"Debt" means as to any Person at any time (without duplication): (a) all
obligations of such Person for borrowed money, including, without limitation,
any notes payable to the seller in connection with any acquisition and the
Loans; (b) all obligations of such Person evidenced by bonds, notes, debentures,
or other similar instruments; (c) all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts payable
of such Person arising in the ordinary course of business that are not past due
by more than ninety (90) days or that are being contested in good faith by
appropriate proceedings diligently pursued and for which adequate reserves have
been established; (d) all Capital Lease Obligations of such Person; (e) all Debt
or other obligations of others Guaranteed by such Person; (f) all obligations
secured by a Lien existing on property owned by such Person, whether or not the
obligations secured thereby have been assumed by such Person or are non-recourse
to the credit of such Person; (g) all reimbursement obligations of such Person
(whether contingent or otherwise) in respect of letters of credit, bankers'
acceptances, surety or other bonds and similar instruments (including those
outstanding with respect to Letters of Credit); (h) all liabilities of such
Person in respect of unfunded vested benefits under any Plan; (i) all
liabilities of such Person under Hedging Agreements; and (j) all obligations of
such Person, contingent or otherwise, for the payment of money under any
noncompete, consulting or similar agreement entered into with the seller of a
Target or any other similar arrangements providing for the deferred payment of
the purchase price for a Permitted Acquisition or an acquisition consummated
prior to the date hereof.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of any Loan, any
Reimbursement Obligation, or any other amount payable by the Borrower under any
Loan Document which is not paid when due (whether at stated maturity, by
acceleration, or otherwise), a rate per annum during the period commencing on
the due date until such amount is paid in full equal to the sum of two percent
(2%) plus the Applicable Rate for Base Rate Accounts under the Loans as in
effect from time to time (provided, that if such amount in default is principal
of a Loan subject to a Libor Account and the due date is a day other than the
last day of an Interest Period therefor, the "Default Rate" for such principal
shall be, for the period from and including the due date and to but excluding
the last day of the Interest Period therefor, two percent (2%) plus the interest
rate for such Loan for such Interest Period as provided in Section 3.1 hereof,
and, thereafter, the rate provided for above in this definition).
"Disbursement Accounts" means the controlled disbursement accounts of
Borrower which are designated by the Agent in writing as "Disbursement
Accounts".
"Dollars" and "$" mean lawful money of the United States of America.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 7
15
"EBITDA" means, for any period and any Person, the total of the following
each calculated without duplication for such Person on a consolidated basis for
such period: (a) Net Income; plus (b) any provision for (or less any benefit
from) income or franchise taxes included in determining Net Income; plus (c)
interest expense deducted in determining Net Income; plus (d) amortization and
depreciation expense deducted in determining Net Income; plus (e) other noncash
charges deducted in determining consolidated net income and not already deducted
in accordance with clauses (b) and (c) of the definition of Net Income.
"Eligible Account" means an account of the Borrower or a Granting
Subsidiary created from the performance of services by Borrower or the
applicable Granting Subsidiary in the ordinary course of business (herein a
"Receivable") which at all times comply with all of the following requirements:
(i) The Receivable and the transaction giving rise thereto, each
comply with all applicable laws, rules, and regulations, including,
without limitation, usury laws;
(ii) The Receivable has been billed and invoiced in a timely fashion
and in the normal course of business and has not been outstanding for more
than one hundred twenty (120) days past the original date of invoice;
(iii) The Receivable arises from an enforceable contract and the
Borrower or applicable Granting Subsidiary is not in default of the terms
thereof;
(iv) The services reflected on the applicable invoice have been
completely performed by the Borrower or the applicable Granting Subsidiary
and the applicable account debtor has not objected to such account
debtor's liability thereon;
(v) The Borrower or the applicable Granting Subsidiary has good and
indefeasible title to the Receivable and the Receivable is not subject to
any Lien except Liens in favor of the Agent;
(vi) The Receivable is subject to a first priority, perfected Lien
in favor of the Agent and is payable to a Lockbox Account covered by a
blocked account agreement satisfactory to Agent or is otherwise collected
in a manner contemplated by Section 4.4(b);
(vii) The account debtor or other obligor thereunder is not
insolvent or the subject of any bankruptcy or insolvency proceeding and
has not made an assignment for the benefit of creditors, suspended normal
business operations, dissolved, liquidated, terminated its existence,
ceased to pay its debts as they become due, or suffered a receiver or
trustee to be appointed for any of its assets or affairs;
(viii) The Receivable is not evidenced by chattel paper or an
instrument;
AMENDED AND RESTATED CREDIT AGREEMENT - Page 8
16
(ix) The Borrower's or the applicable Granting Subsidiary's
performance of the contract to which the Receivable relates is not assured
by a performance, completion, or other bond;
(x) The Receivable is not owed by an Affiliate of the Borrower or
the applicable Granting Subsidiary or a director, officer, agent,
stockholder or employee of Borrower or the applicable Granting Subsidiary
or by Borrower to a Granting Subsidiary or by a Granting Subsidiary to
Borrower or by one Granting Subsidiary to another;
(xi) The Receivable is payable in Dollars by the account debtor or
other obligor thereunder;
(xii) The account debtor or other Person obligated on such
Receivable is domiciled in the United States of America or, if not so
domiciled, the Receivable is backed by a satisfactory letter of credit
that is issued or confirmed by a bank located in the United States of
America that is acceptable to the Agent;
(xiii) Not more than fifty percent (50%) of the aggregate amount of
the Receivables owed by the account debtor or other Person obligated
thereon and its Affiliates to the Borrower and the Granting Subsidiaries,
on an aggregate basis, are more than one hundred twenty (120) days past
due from the dates of their original invoices;
(xiv) The account debtor or other Person obligated thereon is not a
Government Authority unless the Federal Assignment of Claims Act of 1940,
as amended, or any similar state statute shall have been complied with to
the satisfaction of the Agent;
(xv) The Receivable has not been and is not required to be charged
or written off as uncollectible in accordance with GAAP;
(xvi) If the Receivable is owing by an account debtor for which the
Borrower or the applicable Granting Subsidiary must have filed a "Notice
of Business Activities Report" or similar report in a state or states
where failure to comply with such filing of notice precludes bringing suit
against the applicable account debtor, the Borrower or the applicable
Granting Subsidiary must have filed such requisite activities report or
other similar report and otherwise be in full compliance with such legal
requirement;
(xvii) The Receivable is not an Excluded Account. The term "Excluded
Account" means a Receivable that has been identified by the Agent (by a
notice to the Borrower) as being unacceptable for inclusion in the
Borrowing Base because the Agent has determined that the credit standing
of the applicable account debtor in relation to the amount of credit
extended has become unsatisfactory, the account debtor or other Person
obligated on such Receivable is not otherwise creditworthy or the Agent
might not otherwise be able to receive the full amount of the Receivable
within a reasonable period of time and at a
AMENDED AND RESTATED CREDIT AGREEMENT - Page 9
17
reasonable cost of collection if it sought to realize on its security
interest therein, such determination to be made in the Agent's judgment,
in good faith and based on information which, in its judgment, supports
such determination.
The amount of the Eligible Accounts owed by an account debtor or other Person to
the Borrower or the applicable Granting Subsidiary shall be reduced by the
amount of all "contra accounts" and other obligations owed by the Borrower or
the applicable Granting Subsidiary to such account debtor or other Person;
provided however, no reduction of the amount of Eligible Accounts shall be made
with respect to any funds of an account debtor or other Person held as market
development funds by Borrower or a Granting Subsidiary in an account in which
only such market development funds are held. The amount of the Eligible Accounts
owed by an account debtor or other Person shall be reduced by the amount thereof
which is subject to any setoff, counterclaim, defense, dispute, recoupment,
chargeback or other adjustment. The portion of any Receivable constituting
retainage that has been withheld by the account debtor or other obligor shall
not constitute an Eligible Account. If the aggregate amount of the Receivables
due from a single account debtor or other Person obligated thereon exceeds an
aggregate amount equal to ten percent (10%) of the aggregate of all Receivables
at the time of determination, the amount of the excess shall be subtracted from
all Eligible Accounts unless such excess is backed by a letter of credit
acceptable to the Agent or secured by credit insurance which has been assigned
to the Agent and which is issued on terms acceptable to the Agent.
Notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, no Receivables of any Subsidiary who has been sold or
substantially all of whose assets have been sold after the Closing Date or of
any Subsidiary created or acquired after the Closing Date shall be included
within Eligible Accounts, unless and until the Agent shall have conducted a
field examination (at the Borrower's cost and expense) of such Subsidiary's
books, records and operations in order to reasonably satisfy the Agent that the
Receivables of such Subsidiary generally satisfy the above-described standards
of eligibility.
"Environmental Laws" means any and all federal, state, and local laws,
regulations, and requirements pertaining to health, safety, or the environment,
as such laws, regulations, and requirements may be amended or supplemented from
time to time.
"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs, and expenses (including,
without limitation, all fees, disbursements and expenses of counsel, expert and
consulting fees and costs of investigation and feasibility studies), fines,
penalties, sanctions, and interest incurred as a result of any claim or demand,
by any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any Environmental Law,
permit, order or agreement with any Governmental Authority or other Person,
arising from environmental, health or safety conditions or the Release or
threatened Release of a Hazardous Material into the environment.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 10
18
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower or is under common control (within
the meaning of Section 414(c) of the Code) with the Borrower.
"Event of Default" has the meaning specified in Section 11.1 hereof.
"Federal Funds Effective Rate" shall mean, for any day, a rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for the day of such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fiscal Quarters" means the three (3)-month periods falling in each Fiscal
Year ending March 31, June 30, September 30, and December 31.
"Fiscal Year" means a twelve (12) month period ending December 31.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants and/or in statements of
the Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent basis" when the accounting principles
applied in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
"Governmental Authority" means any nation or government, any state or
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
"Granting Subsidiary" means any Subsidiary that has entered into the
Guaranty and the Subsidiary Security Agreement.
"Guarantee" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person or indemnifying such other Person from a liability or other
obligation and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to
AMENDED AND RESTATED CREDIT AGREEMENT - Page 11
19
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (b) entered into for the purpose
of assuring in any other manner the obligee of such Debt or other obligation of
the payment thereof or to protect the obligee against loss in respect thereof
(in whole or in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Guaranty" means the guaranty of the Subsidiaries in favor of the Agent
and the Banks, in substantially the form of Exhibit "D" to the Prior Agreement,
as the same may be amended or otherwise modified from time to time.
"Hazardous Material" means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law.
"Hedging Agreement" means any interest rate swap, interest rate caps,
interest rate collars or other similar agreements enabling a Person to fix or
limit its interest expense or pursuant to any foreign exchange, currency
hedging, commodity hedging or other agreement enabling a Person to limit the
market risk of holding currency or a commodity in either the cash or futures
markets.
"Indenture" means the Indenture dated December 19, 1997 among the
Borrower, the Subsidiaries and Texas Commerce Bank National Association, as
trustee, as the same exists on the Closing Date without giving effect to any
amendment or other modification thereto unless modified in accordance with
Section 9.13.
"Interest Coverage Ratio" means the ratio calculated in accordance with
Section 10.2 hereof.
"Interest Period" means with respect to any Libor Accounts, each period
commencing on the date such Account is established or Converted from a Base Rate
Account or the last day of the next preceding Interest Period with respect to
such Libor Account, and ending on the numerically corresponding day in the
first, second, third or sixth calendar month thereafter, as the Borrower may
select as provided in Section 3.5 or 4.1 hereof, except that each such Interest
Period which commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (a) each Interest
Period which would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day (or if such succeeding Business Day falls in
the next succeeding calendar month, on the next preceding Business Day); (b) any
Interest Period which would otherwise extend beyond the Termination Date shall
end on the Termination Date; (c) no more than five (5) Interest Periods shall be
in effect at the same time; and (d) no Interest Period for any Libor Account
shall have a duration of less than one (1) month and, if the Interest Period
would otherwise be a shorter period, the related Libor Account shall not be
available hereunder.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 12
20
"Letter of Credit Liabilities" means, at any time, the aggregate amount
available for drawing under all outstanding Letters of Credit and all
unreimbursed drawings under Letters of Credit.
"Letters of Credit" has the meaning specified in Section 2.7(a) hereof.
"Libor Account" means a portion of a Loan that bears interest at a rate
based upon the Adjusted Libor Rate.
"Libor Rate" means, for any Libor Account for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/16
of 1%) offered to the Agent at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) two Business Days prior to the first day of such
Interest Period by leading banks in the London interbank market of Dollar
deposits in immediately available funds having a term comparable to such
Interest Period and in an amount comparable to the principal amount of the Libor
Account applicable to the Agent to which such Interest Period relates. If the
Agent is not participating in a Libor Account during any Interest Period
therefor (pursuant to Section 5.4 hereof or for any other reason), the Adjusted
Libor Rate for such Account for such Interest Period shall be determined by
reference to the amount of the Accounts which the Agent would have made had it
been participating in such Account.
"Libor Rate Margin" has the meaning specified in Section 3.2 hereof.
"Lien" means any lien, mortgage, security interest, tax lien, financing
statement, pledge, charge, hypothecation, assignment, preference, priority, or
other encumbrance of any kind or nature whatsoever (including, without
limitation, any conditional sale or title retention agreement), whether arising
by contract, operation of law, or otherwise.
"Loans" means, as to any Bank, the advances made by such Bank pursuant to
Section 2.1 hereof.
"Loan Documents" means this Agreement, the Notes, the Borrower Security
Agreement, the the Guaranty, the Subsidiary Security Agreement, and all other
promissory notes, security agreements, deeds of trust, assignments, guaranties,
letters of credit, and other instruments, agreements and other documentation
executed and delivered pursuant to or in connection with this Agreement, as such
instruments, agreements and other documentation may be amended or otherwise
modified.
"Lockbox Accounts" shall mean the lockbox accounts described on Schedule
1.1(a) attached hereto and any other accounts established pursuant to the
Lockbox Agreements in which all funds received pursuant to the Lockbox
Agreements shall be deposited.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 13
21
"Lockbox Agreements" shall mean the lockbox or other agreements described
on Schedule 1.1(a) attached hereto and any lockbox or other agreement entered
into by the Borrower or a Granting Subsidiary, with the Agent, any Bank or any
other depository institution acceptable to the Agent, pursuant to which a
lockbox and deposit account shall be established for the Borrower or a Granting
Subsidiary into which payments on the Borrower's or such Granting Subsidiary's
accounts or other Collateral shall be sent and deposited, each in form and
substance satisfactory to the Agent, as the same may be amended or otherwise
modified.
"Lockbox Date" has the meaning specified in Section 4.4 (b).
"Material Adverse Effect" means (a) a material adverse effect on the
business, condition (financial or otherwise), operations or properties of the
Borrower and the Subsidiaries taken as a whole; or (b) a material adverse effect
on the ability of the Borrower and the Obligated Parties, taken as a whole, to
perform the obligations arising under the Loan Documents; or (c) a material
adverse effect on the validity, perfection, or priority of the Agent's Lien on
the Collateral or the ability of the Agent to enforce the Agent's Lien on the
Collateral (other than from a circumstance arising as a result of the fault of
the Agent or the release of any such Lien in accordance with the Loan Documents)
or of the ability of the Agent or any Bank to enforce a material provision of
the Loan Documents (other than from a circumstance arising as a result of the
fault of the Agent or any Bank). In determining whether any individual event
could reasonably be expected to result in a Material Adverse Effect,
notwithstanding that such event does not itself have such effect, a Material
Adverse Effect shall be deemed to have occurred if the cumulative effect of such
event and all other then existing events could reasonably be expected to result
in a Material Adverse Effect.
"Maximum Rate" means, at any time and with respect to any Bank, the
maximum rate of nonusurious interest under applicable law that such Bank may
charge the Borrower. The Maximum Rate shall be calculated in a manner that takes
into account any and all fees, payments, and other charges contracted for,
charged or received in connection with the Loan Documents that constitute
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to the Borrower at the time of such change in
the Maximum Rate. For purposes of determining the Maximum Rate under Texas law
if applicable, the applicable rate ceiling shall be the weekly ceiling described
in, and computed in accordance with, Article 5069, Vernon's Texas Civil
Statutes.
"Multiemployer Plan" means a multiemployer plan defined as such in Section
3(37) of ERISA to which contributions have been made by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Income" means, for any period and any Person, such Person's
consolidated net income (or loss), but excluding: (a) the income of any other
Person (other than its subsidiaries) in which such Person or any of it
subsidiaries has an ownership interest, unless received by such Person or its
subsidiary in a cash distribution; (b) any after-tax gains or losses
attributable to asset disposition;
AMENDED AND RESTATED CREDIT AGREEMENT - Page 14
22
(c) to the extent not included in clauses (a) and (b) above, any after-tax
extraordinary, non-cash or nonrecurring gains or losses; and (d) non-cash or
nonrecurring charges due to changes in accounting principles required by GAAP.
"Notes" means the promissory notes provided for by Section 2.2 hereof and
all amendments or other modifications thereof.
"Obligated Party" means the Granting Subsidiaries or any other Person
(exclusive of the Borrower) who is or becomes party to any agreement that
guarantees or secures payment and performance of the Obligations or any part
thereof.
"Obligation" means all obligations, indebtedness, and liabilities of the
Borrower to the Agent and the Banks, or any of them, arising pursuant to any of
the Loan Documents, pursuant to any Hedging Agreement entered into with the
Borrower or any Subsidiary or pursuant to any deposit, lockbox, cash management
or similar agreement entered into with the Borrower or any Subsidiary, whether
now existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several, including, without limitation, the obligation of the Borrower to repay
the Loans, the Reimbursement Obligations, interest on the Loans and
Reimbursement Obligations, and all fees, costs, and expenses (including
attorneys' fees) provided for in the Loan Documents, such Hedging Agreements or
such deposit and similar agreements.
"Outstanding Revolving Credit" means, at any time of determination, the
sum of (a) the aggregate amount of Loans then outstanding; plus (b) the
aggregate amount of Letter of Credit Liabilities (or when calculated with
respect to a Bank, including the Agent as a Bank, such Bank's participation or
other interest in such Letter of Credit Liabilities).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Permitted Acquisitions" shall mean acquisitions of all the shares or
other evidence of beneficial ownership of a Person or all or substantially all
of (a) such Person's assets or (b) the assets of a division or branch of such
Person, in all cases, in a transaction that satisfies all the applicable
criteria set out in subsection 9.3(b) hereof.
"Person" means any individual, corporation, business trust, association,
company, partnership, joint venture, Governmental Authority, or other entity.
"Plan" means any employee benefit plan established or maintained by the
Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Principal Office" means the principal office of the Agent, located at 000
Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000-0000.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 15
23
"Prior Agreement" has the meaning specified in the Recitals.
"Prohibited Transaction" means any transaction set forth in Section 406 or
407 of ERISA or Section 4975(c)(1) of the Code for which there does not exist a
statutory or administrative exemption.
"Purchase Agreement" means the documentation entered into by Borrower or a
Subsidiary which is intended to effect an acquisition of a Person or its assets.
"Purchase Price" means, as of any date of determination and with respect
to a proposed acquisition, the purchase price to be paid for the Target or its
assets, including all cash consideration paid (whether classified as purchase
price, noncompete or consulting payments or otherwise) and the Dollar value of
all other assets to be transferred by the purchaser in connection with such
acquisition to the seller (including any stock issued to the seller) all valued
in accordance with the applicable Purchase Agreement.
"Receivable" has the meaning specified in the definition of Eligible
Accounts.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means, with respect to any Bank, any change after the
date of this Agreement in United States federal, state, or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives, or requests applying to a class of banks
including such Bank of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Agent for any demand for payment or drawing under a Letter of
Credit.
"Release" means, as to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, disposal, disbursement, leaching, or migration of
Hazardous Materials into the indoor or outdoor environment or into or out of
property owned by such Person, including, without limitation, the movement of
Hazardous Materials through or in the air, soil, surface water, ground water, or
property in violation of Environmental Laws.
"Remedial Action" means all actions required to (a) cleanup, remove,
treat, or otherwise address Hazardous Materials in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release of Hazardous Materials so that they do not migrate or endanger
or threaten to endanger public health or welfare or the indoor or outdoor
environment, or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 16
24
"Required Banks" means Banks having (a) sixty-six and two-thirds percent
(66 2/3%) or more of the Commitments or (b) if all Commitments have terminated,
sixty-six and two-thirds percent (66 2/3%) or more of the outstanding principal
amount of the Loans and participations in the Letters of Credit.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA for which the 30-day notice requirement has not been waived by the PBGC.
"Reserve Requirement" means, for any Libor Account for any Interest Period
therefor, the aggregate of the maximum reserve percentage (including without
limitation, any marginal, special, emergency or supplemental reserves) expressed
as a decimal, established by the Board of Governors of the Federal Reserve
System of the United States and any other banking authority to which any Bank is
subject with respect to the Adjusted Libor Rate for Eurocurrency Liabilities (as
defined in Regulation D), including without limitation, those reserve
percentages imposed under Regulation D. Reserve Requirement shall be adjusted
automatically on and as of the effective date of any change in any applicable
reserve percentage. For purposes hereof, Libor Accounts shall be deemed to
constitute Eurocurrency Liabilities (as defined in Regulation D) and as such,
shall be deemed to be subject to such reserve requirements of Regulation D
without benefit of or credit for proration, exceptions or offsets which may be
available from time to time to any Bank under Regulation D. Without limiting the
effect of the foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks by reason of any
Regulatory Change against any category of liabilities which includes deposits by
reference to which the Adjusted Libor Rate is to be determined or any category
of extensions of credit or other assets which include Libor Accounts.
"Senior Subordinated Note Documents" means the Indenture, the Senior
Subordinated Notes and all note purchase agreements, exchange and registration
agreements, guaranties and other documentation executed and delivered pursuant
to or in connection with the Senior Subordinated Notes as the same exists on the
Closing Date without giving effect to any amendment or other modification
thereto unless modified in accordance with Section 9.13; excluding, however, the
Loan Documents and the Atlas Acquisition Documents.
"Senior Subordinated Notes" means the senior subordinated notes due 2007
issued by Borrower pursuant to the Indenture in an aggregate original principal
amount equal to One Hundred Million Dollars ($100,000,000), including all such
notes issued on substantially the same terms in exchange for the notes issued on
the Closing Date pursuant to the exchange and registration provisions of the
Senior Subordinated Note Documents.
"Subsidiary" means any corporation (or other entity) of which at least a
majority of the outstanding shares of stock (or other ownership interests)
having by the terms thereof ordinary voting power to elect a majority of the
board of directors (or similar governing body) of such corporation (or other
entity) (irrespective of whether or not at the time stock (or other ownership
interests) of any other class or classes of such corporation (or other entity)
shall have or might have
AMENDED AND RESTATED CREDIT AGREEMENT - Page 17
25
voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by the Borrower or one or more of the
Subsidiaries or by the Borrower and one or more of the Subsidiaries.
"Subsidiary Joinder Agreement" means an agreement which has been or will
be executed by a Subsidiary adding it as a party to the Guaranty and the
Subsidiary Security Agreement, in substantially the form of Exhibit "D" hereto,
as the same may be amended or otherwise modified.
"Subsidiary Security Agreement" means the security agreement among the
Granting Subsidiaries and the Agent for the benefit of itself and the Banks, in
substantially the form of Exhibit "G" to the Prior Agreement, as the same may be
amended or otherwise modified.
"Target" means a Person who is to be acquired or whose assets are to be
acquired in a transaction permitted by Section 9.3(b) hereto.
"Target Operating Cash Flow" has the meaning specified in subsection 9.3
(b) (iv).
"Termination Date" means October 14, 2002 or such earlier date on which
the Commitments terminate as provided in this Agreement.
"Transactions" means the Atlas Acquisition and the issuance of the Senior
Subordinated Notes on the Closing Date.
"Transaction Documents" means the Atlas Acquisition Documents, the Loan
Documents, the Senior Subordinated Note Documents and, when entered into, each
Purchase Agreement.
"Type" means either type of Account (i.e., either a Base Rate Account or
Libor Account).
"UCC" means the Uniform Commercial Code as in effect in the State of New
York.
"Wholly-Owned Subsidiary" means any Subsidiary that (i) is owned one
hundred percent (100%) by Borrower and/or Marketing Specialists Sales Company,
(ii) is organized under the laws of a state within the United States of America,
and (iii) is a Granting Subsidiary.
Section 1.2 Other Definitional Provisions. All definitions contained in
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article and Section references pertain to this Agreement. Terms
used herein that are defined in the UCC, unless otherwise defined herein, shall
have the meanings specified in the UCC.
Section 1.3 Accounting Terms and Determinations. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements
AMENDED AND RESTATED CREDIT AGREEMENT - Page 18
26
and certificates and reports as to financial matters required to be delivered to
the Agent and the Banks hereunder shall be prepared, in accordance with GAAP, on
a basis consistent with those used in the preparation of the financial
statements referred to in Section 7.2 hereof. All calculations made for the
purposes of determining compliance with the provisions of this Agreement shall
be made by application of GAAP, on a basis consistent with those used in the
preparation of the financial statements referred to in Section 7.2 hereof. To
enable the ready and consistent determination of compliance by the Borrower with
its obligations under this Agreement, the Borrower will not change the manner in
which either the last day of its Fiscal Year or the last days of the first three
Fiscal Quarters of its Fiscal Years is calculated. In the event any changes in
accounting principles required by GAAP or recommended by Borrower's certified
public accountants and implemented by Borrower occur and such changes result in
a change in the method of the calculation of financial covenants, standards or
terms under this Agreement, then the Borrower, the Agent and the Banks agree to
enter into negotiations in order to amend such provisions of this Agreement so
as to equitably reflect such changes with the desired result that the criteria
for evaluating such covenants, standards or terms shall be the same after such
changes as if such changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Agent, the Borrower and
the Required Banks, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such changes had
not occurred.
Section 1.4 Time of Day. Unless otherwise indicated, all references in
this Agreement to times of day shall be references to New York, New York time.
ARTICLE 2
Revolving Credit Facility
Section 2.1 Commitments. Subject to the terms and conditions of this
Agreement, each Bank severally agrees to make advances to the Borrower from time
to time from and including the Closing Date to but excluding the Termination
Date in an aggregate principal amount at any time outstanding up to but not
exceeding the amount of such Bank's Commitment as then in effect; provided,
however, (a) the Outstanding Revolving Credit applicable to a Bank (except, with
respect to the Agent as a Bank, as may otherwise result from the operation of
Section 4.6) shall not at any time exceed such Bank's Commitment and (b) the
Outstanding Revolving Credit shall not at any time exceed the lesser of (i) the
aggregate Commitments or (ii) the Borrowing Base. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, the Borrower
may borrow, prepay, and reborrow hereunder the amount of the Commitments and may
establish Base Rate Accounts and Libor Accounts thereunder and, until the
Termination Date, the Borrower may Continue Libor Accounts established under the
Loans or Convert Accounts established under the Loans of one Type into Accounts
of the other Type. Accounts of each Type under the Loans made by each Bank shall
be established and maintained at such Bank's Applicable Lending Office for Loans
of such Type.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 19
27
Section 2.2 Notes. The Loans made by a Bank shall be evidenced by a single
promissory note of the Borrower in substantially the form of Exhibit "A" hereto,
payable to the order of such Bank in a principal amount equal to its Commitment
and otherwise duly completed.
Section 2.3 Repayment of Loans. The Borrower shall pay to the Agent, for
the account of the Banks, the outstanding principal amount of all of the Loans
on the Termination Date.
Section 2.4 Use of Proceeds. The proceeds of the Loans shall be used by
the Borrower to finance the Borrower's and the Granting Subsidiaries' working
capital and capital expenditure requirements in the ordinary course of business,
including, without limitation, the satisfaction of Reimbursement Obligations in
accordance with subsection 2.7(b) hereof, to finance Permitted Acquisitions and
for other general corporate purposes.
Section 2.5 Commitment Fee. The Borrower agrees to pay to the Agent for
the account of each Bank a commitment fee on the daily average unused amount of
such Bank's Commitment for the period from and including the Closing Date to and
including the Termination Date, at a rate equal to the Commitment Fee Rate as
determined in accordance with subsection 3.2(b) hereof. Accrued commitment fees
under this Section 2.5 and any unpaid commitment fees accrued under Section 2.5
of the Prior Agreement shall be payable in arrears on the last day of each month
beginning December 31, 1997 and on the Termination Date.
Section 2.6 Termination or Reduction of Commitments. The Borrower shall
have the right to terminate fully or to reduce in part the unused portion of the
Commitments at any time and from time to time, provided that: (a) the Borrower
shall give the Agent at least three (3) Business Days notice of each such
termination or reduction as provided in Section 4.3 hereof; and (b) each partial
reduction shall be in an aggregate amount at least equal to One Million Dollars
($1,000,000) or a greater multiple of One Hundred Thousand Dollars ($100,000).
The Commitments may not be reinstated after they have been terminated or
reduced.
Section 2.7 Letters of Credit.
(a) Commitment to Issue. The Borrower may utilize the Commitments by
requesting that the Agent issue, and the Agent, subject to the terms and
conditions of this Agreement, shall issue, letters of credit for
Borrower's or one of the Subsidiaries' account (such letters of credit
being hereinafter referred to as the "Letters of Credit"); provided,
however, (i) the aggregate amount of outstanding Letter of Credit
Liabilities shall not at any time exceed Five Million Dollars
($5,000,000); (ii) the Outstanding Revolving Credit shall not at any time
exceed the lesser of (A) the aggregate Commitments or (B) the Borrowing
Base; and (iii) the Outstanding Revolving Credit applicable to a Bank
shall not at any time exceed such Bank's Commitment (except with respect
to the Agent as a Bank, as may otherwise result from the operation of
Section 4.6). Upon the date of issue of a Letter of Credit, the Agent
shall be deemed, without further action by any party hereto, to have sold
to each other Bank, and each other Bank shall be deemed, without further
action by any
AMENDED AND RESTATED CREDIT AGREEMENT - Page 20
28
party hereto, to have purchased from the Agent a participation to the
extent of such Bank's Commitment Percentage in such Letter of Credit and
the related Letter of Credit Liabilities.
(b) Letter of Credit Request Procedure. The Borrower shall give the
Agent at least three (3) Business Days irrevocable prior notice (effective
upon receipt) specifying the date of each Letter of Credit and the nature
of the transactions to be supported thereby. The Agent shall notify each
other Bank of the contents of the Letter of Credit and of such Bank's
Commitment Percentage of the amount of the proposed Letter of Credit in
accordance with Section 4.6. Each Letter of Credit shall have an
expiration date that does not extend beyond the earlier of (i) one (1)
year from the date of its issuance, provided that any Letter of Credit may
provide for the renewal of the expiration date thereof for additional
one-year periods (which shall in no event extend the expiration date
thereof beyond the date provided for in the next clause (ii)) or (ii) a
date which is thirty (30) days prior to the Termination Date. Each Letter
of Credit shall be payable in Dollars, must support a transaction entered
into in the ordinary course of the Borrower's business, must be
satisfactory in form and substance to the Agent, and shall be issued
pursuant to such documentation as the Agent may require, including,
without limitation, the Agent's standard form letter of credit request and
reimbursement agreement; provided, that, in the event of any conflict
between the terms of such agreement and the other Loan Documents, the
terms of the other Loan Documents shall control.
(c) Letter of Credit Fees. The Borrower will pay to the Agent for
the account of each Bank a letter of credit fee on such Bank's Commitment
Percentage of the amount available for drawings under each Letter of
Credit, such letter of credit fee (i) to be paid monthly in arrears on the
last day of each month following the date of the issuance of the Letter of
Credit and on last day of each month thereafter until the date of
expiration or termination thereof (each such date herein a "Payment Date")
and (ii) to be calculated for the period from and including one Payment
Date (or with respect to the first such payment, from and including the
date of issuance of the Letter of Credit) to and excluding the earlier of
the next Payment Date or the date of expiration or termination of the
Letter of Credit at a rate equal to the Libor Rate Margin per annum. After
receiving any payment of any letter of credit fees under this clause (c),
the Agent will promptly pay to each Bank the letter of credit fees then
due such Bank. With respect to each Letter of Credit, the Borrower will
also pay to the Agent for its account only and on the date of issuance of
such Letter of Credit, a fronting fee equal to Two Hundred Fifty Dollars
($250).
(d) Funding of Drawings. Upon receipt from the beneficiary of any
Letter of Credit of any demand for payment or other drawing under such
Letter of Credit, the Agent shall promptly notify the Borrower and, except
as may otherwise be required as a result of the operation of Section 4.6,
each Bank as to the amount to be paid as a result of such demand or
drawing and the respective payment date. Except as my otherwise be
required as a result of the operation of Section 4.6, not later than 11:00
a.m. on the applicable payment date, each Bank will make available to the
Agent, at the Principal Office, in
AMENDED AND RESTATED CREDIT AGREEMENT - Page 21
29
immediately available funds, an amount equal to such Bank's Commitment
Percentage of the amount to be paid as a result of such demand or drawing
even if the conditions to a Loan under Article 6 hereof have not been
satisfied.
(e) Reimbursements. The Borrower shall be irrevocably and
unconditionally obligated to immediately reimburse the Agent for any
amounts paid by the Agent upon any demand for payment or drawing under any
Letter of Credit, without (except as specifically set forth in this clause
(e)) presentment, demand, protest, or other formalities of any kind. All
payments on the Reimbursement Obligations shall be made: (i) if no Default
has occurred or the Agent otherwise elects, by Loans in the amount of such
Reimbursement Obligations being made automatically as Base Rate Accounts
or (ii) if a Default has occurred and the Agent has not made the election
under clause (i), by Borrower to the Agent at the Principal Office for the
account of the Agent in Dollars and in immediately available funds,
without setoff, deduction or counterclaim not later than 3:00 pm. on the
date of the corresponding payment under the Letter of Credit; provided,
that in the case of this clause (ii) only, Agent has provided notice to
Borrower prior to 12:00 noon on such day that such payment is due. In the
event such notice is received after 12:00 noon on a Business Day, such
payment shall be due not later than 3:00 p.m. on the next succeeding
Business Day. The Agent will pay to each Bank such Bank's Commitment
Percentage of all amounts received from the Borrower for application in
payment, in whole or in part, to the Reimbursement Obligation in respect
of any Letter of Credit, but only to the extent such Bank has made payment
to the Agent in respect of such Letter of Credit pursuant to clause (d) of
this Section 2.7 and subject to the operation of Section 4.6.
(f) Reimbursement Obligations Absolute. The Reimbursement
Obligations of the Borrower under this Agreement shall be absolute,
unconditional, and irrevocable, and shall be performed strictly in
accordance with the terms of the Loan Documents under all circumstances
whatsoever and the Borrower hereby waives any defense to the payment of
the Reimbursement Obligations based on any circumstance whatsoever,
including without limitation, in either case, the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit or any
other Loan Document; (ii) any amendment or waiver of or any consent to
departure from any Loan Document; (iii) the existence of any claim,
set-off, counterclaim, defense or other rights which the Borrower, any
Obligated Party, or any other Person may have at any time against any
beneficiary of any Letter of Credit, the Agent, any Bank, or any other
Person, whether in connection with any Loan Document or any unrelated
transaction; (iv) any statement, draft, or other documentation presented
under any Letter of Credit proving to be forged, fraudulent, invalid, or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever; (v) payment by the Agent under any
Letter of Credit against presentation of a draft or other document that
does not comply with the terms of such Letter of Credit; or (vi) any other
circumstance whatsoever, whether or not similar to any of the foregoing;
provided that Reimbursement Obligations with respect to a Letter of Credit
may be subject to avoidance by the Borrower if the Borrower proves in a
final nonappealable judgment that
AMENDED AND RESTATED CREDIT AGREEMENT - Page 22
30
it was damaged and that such damage arose directly from the Agent's
willful misconduct or gross negligence in determining whether the
documentation presented under the Letter of Credit in question complied
with the terms thereof.
(g) Issuer Responsibility. The Borrower assumes all risks of the
acts or omissions of any beneficiary of any Letter of Credit with respect
to its use of such Letter of Credit. Neither the Agent, any Bank nor any
of their respective officers or directors shall have any responsibility or
liability to the Borrower or any other Person for: (a) the failure of any
draft to bear any reference or adequate reference to any Letter of Credit,
or the failure of any documents to accompany any draft at negotiation, or
the failure of any Person to surrender or to take up any Letter of Credit
or to send documents apart from drafts as required by the terms of any
Letter of Credit, or the failure of any Person to note the amount of any
instrument on any Letter of Credit, each of which requirements, if
contained in any Letter of Credit itself, it is agreed may be waived by
the Agent; (b) errors, omissions, interruptions, or delays in transmission
or delivery of any messages; (c) the validity, sufficiency, or genuineness
of any draft or other document, or any endorsement(s) thereon, even if any
such draft, document or endorsement should in fact prove to be in any and
all respects invalid, insufficient, fraudulent, or forged or any statement
therein is untrue or inaccurate in any respect; (d) the payment by the
Agent to the beneficiary of any Letter of Credit against presentation of
any draft or other document that does not comply with the terms of the
Letter of Credit; or (e) any other circumstance whatsoever in making or
failing to make any payment under a Letter of Credit. Notwithstanding the
forgoing, the Borrower shall have a claim against the Agent, and the Agent
shall be liable to the Borrower, to the extent of any direct, but not
indirect, consequential or punitive, damages suffered by the Borrower
which the Borrower proves in a final nonappealable judgment were caused by
(i) the Agent's willful misconduct or gross negligence in determining
whether documents presented under any Letter of Credit complied with the
terms thereof or (ii) the Agent's willful failure to pay under any Letter
of Credit after presentation to it of documentation strictly complying
with the terms and conditions of such Letter of Credit. The Agent may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
ARTICLE 3
Interest and Fees
Section 3.1 Interest Rate. The Borrower shall pay to the Agent for the
account of each Bank interest on the unpaid principal amount of each Loan made
by such Bank for the period commencing on the date of such Loan to but excluding
the date such Loan is due, at a fluctuating rate per annum equal to the
Applicable Rate. The term "Applicable Rate" means (i) during the period that
Loans or portions thereof are subject to a Base Rate Account, the Base Rate plus
the Base Margin and (ii) during the period that Loans or portions thereof are
subject to a Libor Account, the Adjusted Libor Rate plus the Libor Rate Margin.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 23
31
Section 3.2 Determinations of Margins and Fees. The margins identified in
Section 3.1 and the fees payable under Section 2.5 hereof shall be defined and
determined as follows:
(a) "Base Margin" shall mean (i) during the period commencing on the
Closing Date and ending on but not including the first Adjustment Date (as
defined below), one quarter of one percent (.25%) per annum and (ii)
during each period, from and including one Adjustment Date to but
excluding the next Adjustment Date (herein a "Calculation Period"), the
percent per annum set forth in the table below in this Section 3.2 under
the heading "Base Margin", and opposite the Interest Coverage Ratio
calculated for the completed four (4) Fiscal Quarters (or portion thereof
since the Closing Date) which immediately preceded the beginning of the
applicable Calculation Period.
(b) "Commitment Fee Rate" shall mean (i) during the period
commencing on the Closing Date and ending on but not including the first
Adjustment Date (as defined below), three eights of one percent (.375%)
per annum; and (ii) during each Calculation Period, the percent per annum
set forth in the table below in this Section 3.2 under the heading
"Commitment Fee" opposite the Interest Coverage Ratio calculated for the
completed four (4) Fiscal Quarters (or portion thereof since the Closing
Date) which immediately preceded the beginning of the applicable
Calculation Period.
(c) "Libor Rate Margin" shall mean (i) during the period commencing
on the Closing Date and ending on but not including the first Adjustment
Date (as defined below), two percent (2.00%) per annum, and (ii) during
each Calculation Period, the percent per annum set forth in the table
below in this Section 3.2 under the heading "LIBOR Rate Margin", and
opposite the Interest Coverage Ratio calculated for the completed four (4)
Fiscal Quarters (or portion thereof since the Closing Date) which
immediately preceded the beginning of the applicable Calculation Period.
The following is the table referred to in clauses (a), (b) and (c) of this
Section 3.2:
----------------------------------------------------------------------
Interest Base Margin Libor Commitment
Coverage Ratio Margin Fee
----------------------------------------------------------------------
<=2.50:1 0.500% 2.25% 0.500%
----------------------------------------------------------------------
>2.50:1 <= 3.00:1 0.250% 2.00% 0.375%
----------------------------------------------------------------------
>3.00:1 <= 3.50:1 0.000% 1.75% 0.250%
----------------------------------------------------------------------
>3.50:1 <= 3.75:1 0.000% 1.50% 0.250%
----------------------------------------------------------------------
>3.75:1 <= 4.00:1 0.000% 1.25% 0.250%
----------------------------------------------------------------------
>4.00:1 0.000% 1.00% 0.250%
----------------------------------------------------------------------
AMENDED AND RESTATED CREDIT AGREEMENT - Page 24
32
Upon delivery of the Compliance Certificate pursuant to subsection 8.1(d)
hereof in connection with the financial statements of Borrower and the
Subsidiaries required to be delivered pursuant to subsection 8.1(c) hereof
commencing with such Compliance Certificate delivered at the end of the Fiscal
Quarter ending on March 31, 1998, the Base Margin, the Libor Rate Margin (for
Interest Periods commencing after the applicable Adjustment Date, as defined
below) and the Commitment Fee Rate shall automatically be adjusted in accordance
with the Interest Coverage Ratio set forth therein and the tables set forth
above, such automatic adjustment to take effect as of the first Business Day
after the receipt by the Agent of the related Compliance Certificate pursuant to
subsection 8.1(d) hereof. The term "Adjustment Date" shall mean each such
Business Day when such margins or fees change pursuant to the immediately prior
sentence or the next following sentence. If Borrower fails to deliver such
Compliance Certificate which so sets forth the Interest Coverage Ratio within
the period of time required by subsection 8.1(d) hereof or if any Event of
Default occurs and the Agent provides Borrower written notice: (i) the Base
Margin shall automatically be adjusted to one half percent (.50%) per annum;
(ii) the Libor Rate Margin (for Interest Periods commencing after the applicable
Adjustment Date) shall automatically be adjusted to two and one quarter percent
(2.25%) per annum; and (iii) the Commitment Fee Rate shall automatically be
adjusted to one-half percent (.50%), such automatic adjustments (a) to take
effect as of the first Business Day after the last day on which Borrower was
required to deliver the applicable Compliance Certificate in accordance with
subsection 8.1(d) hereof or in the case of an Event of Default, on the date the
written notice is given to Borrower and (b) to remain in effect until
subsequently adjusted in accordance herewith upon the delivery of such
Compliance Certificate or, in the case of an Event of Default, when such Event
of Default has been cured to the satisfaction of the Agent or waived by the
Required Banks.
Section 3.3 Payment Dates. Accrued interest on the Loans shall be due and
payable as follows: (i) on the last day of each month beginning December 31,
1997 and on the Termination Date; and (ii) in the case of Loans subject to Libor
Accounts and with respect to each such Account, in addition to the payments
required by clause (i) of this Section 3.3, on the last day of the Interest
Period with respect thereto.
Section 3.4 Default Interest. Notwithstanding the foregoing, the Borrower
will pay to the Agent for the account of each Bank interest at the applicable
Default Rate on any principal of any Loan made by such Bank, any Reimbursement
Obligation, and (to the fullest extent permitted by law) any other amount
payable by the Borrower under any Loan Document to or for the account of the
Agent or such Bank, that is not paid in full when due (whether at stated
maturity, by acceleration, or otherwise), for the period from and including the
due date thereof to but excluding the date the same is paid in full. Interest
payable at the Default Rate shall be payable from time to time on demand.
Section 3.5 Conversions and Continuations of Accounts. Subject to Section
4.2 hereof, the Borrower shall have the right from time to time to Convert all
or part of any Base Rate Account into a Libor Account or to Continue Libor
Accounts as Libor Accounts, provided that: (a) the Borrower shall give the Agent
notice of each such Conversion or Continuation as provided
AMENDED AND RESTATED CREDIT AGREEMENT - Page 25
33
in Section 4.3 hereof; (b) a Libor Account may only be Converted on the last day
of the Interest Period therefore; and (c) except for Conversions into Base Rate
Accounts, no Conversions or Continuations shall be made while a Default has
occurred and is continuing.
Section 3.6 Computations. All interest and fees (including the Commitment
Fee) will be computed on the basis of a year of 360 days and actual days elapsed
(including the first day but excluding the last day) occurring in the period for
which payable, unless in the case of interest such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis of a year
of 365 or 366 days, as the case may be.
ARTICLE 4
Administrative Matters
Section 4.1 Borrowing Procedure.
(a) Formal Borrowing Request. The Borrower shall give the Agent, and the
Agent will give the Banks, notice of each borrowing under the Commitments in
accordance with Section 4.3, but subject to Section 4.6 and subsections 2.7 (e)
and 4.1(b). Subject to the operation of Section 4.6, not later than 1:00 p.m. on
the date specified for each borrowing under the Commitment, each Bank will make
available the amount of the Loan to be made by it on such date to the Agent, at
the Principal Office, in immediately available funds, for the account of the
Borrower. The amounts received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower at Borrower's
direction by transferring the same, in immediately available funds by wire
transfer, automated clearinghouse debit or interbank transfer, to (a) one of the
Disbursement Accounts as directed by the Borrower or (b) any of the other bank
accounts described on Schedule 1.1(a) hereto or hereafter established in
accordance with the restrictions set forth in the Borrower Security Agreement or
the Subsidiary Security Agreement or (c) a Person or Persons designated by the
Borrower in writing.
(b) Automatic Borrowing. No notice of a request for Loan in accordance
with subsection 4.1(a) or Section 4.3 hereof shall be required to be presented
by the Borrower to the Agent if no Default exists and a check, checks or other
debit shall be presented for payment against a Disbursement Account on a
Business Day when funds are not otherwise available therein to honor such
debits. In such event, the Agent shall, subject to Section 4.6 and provided no
Default exists, promptly advise the Banks of the amount of the Loans necessary
to be credited to such Disbursement Account on such day to permit such debits to
be honored. Except as otherwise provided in Section 4.6 hereof and subject in
all cases to Section 2.1, not later than 3:00 p.m. on such day each Bank will
make available the amount of the Loan to be made by it on such date to the
Agent, at the Principal Office, in immediately available funds, for the account
of the Borrower. The amounts so received by Agent, shall, subject to the terms
and conditions of this Agreement, be made available to the Borrower by crediting
the same to the applicable Disbursement Account. Loans made under this
subsection 4.1(b) shall be made as Base Rate Accounts.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 26
34
Section 4.2 Minimum Amounts. Except for prepayments pursuant to Article 5
hereof and Loans made pursuant to subsections 2.7 (e) and 4.1(b), each Base Rate
Account and each prepayment of principal of a Loan shall be in an amount at
least equal to One Dollar ($1.00). Except for Conversions pursuant to Article 5
hereof, each Libor Account shall be in a minimum principal amount of One Million
Dollars ($1,000,000) or any larger amount in increments of Five Hundred Thousand
Dollars ($500,000).
Section 4.3 Certain Notices. Notices by the Borrower to the Agent of
terminations or reductions of Commitments, of borrowings and prepayments of
Loans and of Conversion and Continuations of Accounts shall be irrevocable and
shall be effective only if received by the Agent not later than (a) 1:00 p.m. on
the Business Day of any repayment of Loans, (b) 12:00 noon on the Business Day
of the requested borrowing under the Loans subject to Base Rate Accounts, or (c)
1:00 p.m. on the Business Day prior to the date of the relevant termination,
reduction, borrowing, Conversion, Continuation or other prepayment specified
below:
-------------------------------------------------------------------------------------------
Notice Number of Business Days Prior
-------------------------------------------------------------------------------------------
Termination or reduction of Commitments 3
-------------------------------------------------------------------------------------------
Prepayment or repayment of Loans subject to Base Rate
Accounts, or Conversions into Base Rate Accounts 1
-------------------------------------------------------------------------------------------
Borrowing, prepayment or repayment of Loans subject to Libor
Accounts, Conversions into or Continuations as Libor Accounts 3
-------------------------------------------------------------------------------------------
Any notices of the type described in this Section 4.3 which are received by the
Agent after the applicable time set forth above on a Business Day shall be
deemed to be received and shall be effective on the next Business Day. Each such
notice of termination or reduction shall specify the amount of the Commitments
to be terminated or reduced. Each such notice of borrowing, Conversion,
Continuation, or prepayment shall specify (a) the Accounts to be Converted or
Continued; (b) the amount (subject to Section 4.2 hereof) to be borrowed,
Converted, Continued or prepaid; (c) in the case of a Conversion, the Type of
Account to result from such Conversion; (d) in the case of a borrowing, the Type
of Account or Accounts to be applicable to such borrowing and the amounts
thereof; (e) in the event a Libor Account is selected, the duration of the
Interest Period therefor; and (f) the date of borrowing, Conversion,
Continuation, or prepayment (which shall be a Business Day). Except as may
otherwise be provided by Section 4.6, the Agent shall notify the Banks of the
contents of each such notice on the date of its receipt of the same or, if
received on or after the applicable time set forth above on a Business Day, on
the next Business Day. In the event the Borrower fails to select the Type of
Account or the duration of any Interest Period for any Libor Account, within the
time period and otherwise as provided in this Section 4.3, such Account (if
outstanding as a Libor Account) will be automatically Converted into a Base Rate
Account on the last day of the preceding Interest Period for such Account or (if
outstanding as a Base Rate Account) will remain as, or (if not then outstanding)
will be made as, a Base Rate Account. The Borrower may not borrow any Loans
subject to a Libor Account, Convert any Base
AMENDED AND RESTATED CREDIT AGREEMENT - Page 27
35
Rate Accounts into Libor Accounts, or Continue any Libor Account as a Libor
Account if the Applicable Rate for such Libor Accounts would exceed the Maximum
Rate or if a Default exists.
Section 4.4 Prepayments.
(a) Mandatory. If on any date the Outstanding Revolving Credit
exceeds the Borrowing Base, the Borrower shall, on or before 1:00 p.m. on
such date, prepay the outstanding Loans by the amount of the excess or if
no Loans are outstanding and the Outstanding Revolving Credit exceeds the
Borrowing Base, immediately pledge to the Agent cash or cash equivalents
in an amount equal to the excess as security for the Obligations.
(b) Control of Cash and Application to Obligations. Under the terms
of the Borrower Security Agreement and the Subsidiary Security Agreement,
Borrower and the Obligated Parties are required to instruct all customers
and other Persons making payment on Receivables and other Collateral to
make all payments thereon to a post office box or boxes established in
accordance with the Lockbox Agreements. Notwithstanding anything in the
Subsidiary Security Agreement to the contrary, if no Event of Default
exists no Atlas Company shall be required to instruct its customers and
other Persons making payment on Receivables and other Collateral to make
payments thereon to a post office box or boxes established in accordance
with a Lockbox Agreement until the date (the "Lockbox Date") which is
ninety (90) days after the date when the first Loan is made hereunder
after the Closing Date or, if earlier, the date when the first Letter of
Credit is issued after the Closing Date. On and at all times after the
Lockbox Date or the occurrence of an Event of Default, each Atlas Company
shall in accordance with the Subsidiary Security Agreement instruct all
customers and other Persons making payment on Receivables and other
Collateral to make all payments thereon to a post office box or boxes
established in accordance with the Lockbox Agreements. Prior to the
Lockbox Date or the occurrence of an Event of Default, each Atlas Company
shall causes all of the funds it receives as collection on its Receivables
or other Collateral to be deposited no less often than weekly into an
account of Atlas Marketing Company, Inc. which is governed by an agreement
of the type described in subsection 6.1 (m) and funds on deposit in such
account will be paid to the Agent on a daily basis by automated
clearinghouse debit for credit to the Concentration Account or by wire
transfer. The funds on deposit in the Lockbox Accounts are also required
under the terms of the Borrower Security Agreement and the Subsidiary
Security Agreement to be paid to the Agent on a daily basis by automated
clearinghouse debit for credit to the Concentration Account or by wire
transfer. The funds deposited into the Concentration Account (over which
Borrower shall have no control) or wire transferred to Agent from the
Lockbox Accounts or such account of Atlas Marketing Company, Inc. (the
"Available Cash") shall, be applied by the Agent for the benefit of the
Banks as follows:
(1) if no Event of Default exists, first, as a payment of the
outstanding principal amount of the Loans, second, as a payment of
accrued
AMENDED AND RESTATED CREDIT AGREEMENT - Page 28
36
and unpaid interest on the Loans, and third, to the repayment of any
other Obligations which are due and outstanding in connection with
the Loans, and if after the foregoing applications, Available Cash
remains available to be disbursed, the Agent shall deposit such
remaining amount to one of Borrower's Disbursement Accounts or
transfer such funds as the Borrower shall otherwise direct; or
(2) if an Event of Default exists, the Available Cash shall be
applied by the Agent for the benefit of the Banks to the Obligations
in accordance with Section 4.5 hereof.
(c) Optional. Subject to Section 4.2 hereof and the provisions of
this clause (c), Borrower may, at any time and from time to time without
premium or penalty upon prior notice to the Agent as specified in Section
4.3 hereof, prepay or repay any Loan in full or in part. Loans subject to
a Libor Account may be prepaid or repaid only on the last day of the
Interest Period applicable thereto unless (i) the Borrower pays to the
Agent for the account of the applicable Banks any amounts due under
Section 5.5 hereof as a result of such prepayment or repayment or (ii)
after giving effect to such prepayment or repayment the aggregate
principal amount of the Libor Accounts applicable to the Loan being
prepaid or repaid having Interest Periods that end after such payment date
shall be equal to or less than the principal amount of such Loan after
such prepayment or repayment.
Section 4.5 Method of Payment. Except as otherwise expressly provided
herein, all payments of principal, interest, and other amounts to be made by the
Borrower or any Obligated Party under the Loan Documents shall be made to the
Agent at the Principal Office for the account of each Bank's Applicable Lending
Office in Dollars and in immediately available funds, without setoff, deduction,
or counterclaim, not later than 1:00 p.m. on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). The Borrower and
each Obligated Party shall, at the time of making each such payment, specify to
the Agent the sums payable under the Loan Documents to which such payment is to
be applied (and in the event that the Borrower fails to so specify, or if an
Event of Default has occurred and is continuing, the Agent may hold such
payments as additional Collateral or apply such payment and any proceeds of any
Collateral to the Obligations in such order and manner as it may elect in its
sole discretion, subject to Section 4.6 hereof). Except as otherwise provided in
Section 4.6, each payment received by the Agent under any Loan Document for the
account of a Bank shall be paid to such Bank by 3:00 p.m. on the date the
payment is deemed made to the Agent in immediately available funds, for the
account of such Bank's Applicable Lending Office. Whenever any payment under any
Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of the payment of
interest and commitment fee, as the case may be.
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37
Section 4.6 Weekly Settlement Among Banks; Pro Rata Treatment.
Notwithstanding anything herein to the contrary, the arrangements between the
Agent and the Banks with respect to making and advancing the Loans and making
payments under Letters of Credit may, in the Agent's discretion, be handled on
the following basis: no less than once a week, the Agent will provide each Bank
on or before 11:00 a.m. on a Business Day with a statement showing, for the
period of time since the date of the most recent of such statements previously
provided, the aggregate principal amount of new Loans made to the Borrower by
the Agent as a Bank, the aggregate amount of drawings on Letters of Credit which
have not been reimbursed, the aggregate face amount of new Letters of Credit
issued for the account of the Borrower, the amount of remittances and payments
actually collected and applied by the Agent to reduce the outstanding principal
balance of the Loans and to reimburse Letter of Credit Liabilities during such
period and the outstanding principal balances of the Loans and the aggregate
Letter of Credit Liabilities outstanding at the end of such period. If as of the
date of the delivery of such statement, the Agent in its capacity as a Bank
holds an interest in the Loans and the unreimbursed Reimbursement Obligations
outstanding as of such statement date in excess of its pro rata share based on
its Commitment Percentage, each Bank shall be obligated to advance to the Agent
its pro-rata (based on such Bank's Commitment Percentage) or other share of such
excess so that after giving effect to all such advances, the Banks shall hold
the Loans and the unreimbursed Reimbursement Obligations outstanding as of such
statement date pro rata in accordance with their respective Commitment
Percentages. If as of the date of the delivery of such statement, the Agent in
its capacity as a Bank holds an interest in the Loans and the unreimbursed
Reimbursement Obligations outstanding as of such statement date in an amount
less than its pro rata share based on its Commitment Percentage, then the Agent
in its capacity as a Bank shall be obligated to advance to the other Banks such
amounts as will be necessary so that after giving effect thereto the Banks shall
hold the Loans and the unreimbursed Reimbursement Obligations outstanding as of
such statement date pro rata in accordance with their respective Commitment
Percentages. Advances made pursuant to this weekly settlement procedure by the
Agent or any Bank must be made on or before 3:00 p.m. on the date of the Bank's
receipt of such statement to the Agent at the Principal Office, in immediately
available funds. Until funded by the Banks in accordance with the forgoing, the
Agent as a Bank shall be entitled to any interest on amounts it advanced to or
on behalf of the Borrower as a result of the forgoing weekly settlement
procedures and interest and commitment fees shall be calculated and paid to give
effect to the actual amounts outstanding to each Bank. In between dates when the
statement by the Agent is delivered under this Section 4.6, repayments received
shall be applied to the Loans made by the Agent as a Bank. If as a result of the
foregoing such Loans are repaid in full, then to the extent any further amounts
are available for repayment on such day hereunder, Agent shall, on such day,
settle with the Banks in accordance with this Section 4.6. Except as a result of
the forgoing or to the extent otherwise provided herein: (a) each Loan shall be
made by the Banks, each payment of commitment fees under Section 2.5 and letter
of credit fees under subsection 2.7(c) hereof shall be made for the account of
the Banks, and each termination or reduction of the Commitments shall be applied
to the Commitments of the Banks, pro rata according to their respective
Commitment Percentages; (b) the making, Conversion, and Continuation of Accounts
of a particular Type (other than Conversions provided for by Section 5.4 hereof)
shall be made pro rata among the Banks holding Accounts of such Type according
to their respective Commitment Percentages; (c) each
AMENDED AND RESTATED CREDIT AGREEMENT - Page 30
38
payment and prepayment of principal of or interest on Loans or Reimbursement
Obligations by the Borrower shall be made to the Agent for the account of the
Agent or the Banks holding such Loans or Reimbursement Obligations (or
participation interests therein) pro rata in accordance with the respective
unpaid principal amounts of such Loans or participation interests held by the
Agent or such Banks; provided that as long as no default in the payment of
interest exists, payments of interest made when the Banks are holding different
Types of Accounts applicable to the same Loan and result of the application of
Section 5.4, shall be made to the Banks in accordance with the amount of
interest actually owed to each; (d) proceeds of Collateral shall be shared by
the Agent and the Banks pro rata in accordance with the respective unpaid
principal amounts of and interest on the Obligations then due the Agent and the
Banks; and (e) the Banks (other than the Agent) shall purchase from the Agent
participations in the Letters of Credit to the extent of their respective
Commitment Percentages. If at any time payment, in whole or in part, of any
amount distributed by the Agent hereunder is rescinded or must otherwise be
restored or returned by Agent as a preference, fraudulent conveyance or
otherwise under any bankruptcy, insolvency or similar law, then each Person
receiving any portion of such amount agrees, upon demand, to return the portion
of such amount it has received to the Agent.
Section 4.7 Sharing of Payments. If a Bank shall obtain payment of any
principal of or interest on any of the Obligations due to such Bank hereunder
directly (and not through the Agent) through the exercise of any right of
set-off, banker's lien, counterclaim or similar right, or otherwise, it shall
promptly purchase from the other Banks participations in the Obligations held by
the other Banks in such amounts, and make such other adjustments from time to
time as shall be equitable to the end that all the Banks shall share the benefit
of such payment pro rata in accordance with the unpaid principal of and interest
on the Obligations then due to each of them. To such end, all of the Banks shall
make appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if all or any portion of such excess payment is thereafter
rescinded or must otherwise be restored. The Borrower agrees, to the fullest
extent it may effectively do so under applicable law, that any Bank so
purchasing a participation in the Obligations held by the other Banks may
exercise all rights of set-off, banker's lien, counterclaim, or similar rights
with respect to such participation as fully as if such Bank were a direct holder
of Obligations in the amount of such participation. Nothing contained herein
shall require any Bank to exercise any such right or shall affect the right of
any Bank to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Borrower.
Section 4.8 Non-Receipt of Funds by the Agent. Unless the Agent shall have
been notified by a Bank or the Borrower (the "Payor") prior to the date on which
such Bank is to make payment to the Agent hereunder or the Borrower is to make a
payment to the Agent for the account of one or more of the Banks, as the case
may be (such payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend to make the
Required Payment to the Agent, the Agent may assume that the Required Payment
has been made and may, in reliance upon such assumption (but shall not be
required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, (a) the recipient of such payment shall, on demand, pay
AMENDED AND RESTATED CREDIT AGREEMENT - Page 31
39
to the Agent the amount made available to it together with interest thereon in
respect of the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to the Federal Funds Effective Rate for such period and (b) Agent shall be
entitled to offset against any and all sums to be paid to such recipient, the
amount calculated in accordance with the foregoing clause (a).
Section 4.9 Withholding Taxes. To the extent permitted by applicable law,
all payments by the Borrower of amounts payable under any Loan Document shall be
payable without deduction for or on account of any present or future taxes,
duties or other charges levied or imposed by the United States of America or by
the government of any jurisdiction outside the United States of America or by
any political subdivision or taxing authority of or in any of the foregoing
through withholding or deduction with respect to any such payments (but
excluding any tax imposed on or measured by the net income or profit of a Bank
pursuant to the laws of the jurisdiction in which it is organized or in which
the principal office or Applicable Lending Office of such Bank is located or any
subdivision thereof or therein). If any such taxes, duties or other charges are
so levied or imposed, the Borrower will make additional payments in such amounts
so that every net payment of amounts payable by it under any Loan Document,
after withholding or deduction for or on account of any such present or future
taxes, duties or other charges, will not be less than the amount provided for
herein or therein, provided that the Borrower may withhold to the extent
required by law and shall have no obligation to pay such additional amounts to
any Bank to the extent that such taxes, duties, or other charges are levied or
imposed by reason of the failure or inability of such Bank to comply with the
provisions of Section 4.10 hereof. The Borrower shall furnish promptly to the
Agent for distribution to each affected Bank, as the case may be, official
receipts evidencing any such withholding or reduction.
Section 4.10 Withholding Tax Exemption. Each Bank that is not incorporated
under the laws of the United States of America or a state thereof agrees that it
will deliver to the Borrower and the Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying in either case
that such Bank is entitled to receive payments from the Borrower under any Loan
Document without deduction or withholding of any United States federal income
taxes. Each Bank which so delivers a Form 1001 or 4224 further undertakes to
deliver to Borrower and the Agent two (2) additional copies of such form (or a
successor form) on or before the date such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Agent, in each case
certifying that such Bank is entitled to receive payments from the Borrower
under any Loan Document without deduction or withholding of any United States
federal income taxes, unless 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 Bank from duly completing and delivering any such
form with respect to it and such Bank advises the Borrower and the Agent that it
is not capable of receiving such payments without any deduction or withholding
of United States federal income tax.
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40
Section 4.11 Participation and Settlement Obligations Absolute; Failure to
Fund Participation or Settlement. The obligations of a Bank to fund its
participation in the Letters of Credit in accordance with the terms hereof and
settle with the Agent in accordance with Section 4.6 shall be absolute,
unconditional and irrevocable and shall be performed strictly in accordance with
the terms of the Loan Documents under all circumstances whatsoever, including
without limitation, the following circumstances: (a) any lack of validity of any
Loan Document; (b) the occurrence of any Default; (c) the existence of any
claim, set-off, counterclaim, defenses or other rights which such Bank, the
Borrower, any Obligated Party, or any other Person may have; (d) the occurrence
of any event that has or could reasonably be expected to have a Material Adverse
Effect; (e) the failure of any condition to a Loan or the issuance of a Letter
of Credit under Article 6 hereof to be satisfied; (f) the fact that after giving
effect to the funding of the participation or settlement the Outstanding
Revolving Credit may exceed the Borrowing Base; or (g) any other circumstance
whatsoever, whether or not similar to any of the foregoing; provided that, the
obligations of a Bank to fund its participation in a Letter of Credit or fund a
settlement under Section 4.6 may be subject to avoidance by a Bank if such Bank
proves in a final nonappealable judgment that it was damaged and that such
damage arose directly from the Agent's willful misconduct or gross negligence in
determining whether (i) the conditions set forth in Article 6 hereof to the
issuance of the Letter of Credit or the making of the Loan in question were
satisfied at the time of such issuance or Loan or (ii) with respect to a Letter
of Credit, the documentation presented under the Letter of Credit in question
complied with the terms thereof. If a Bank fails to fund its participation in a
Letter of Credit or fund a settlement under Section 4.6 as required hereby, such
Bank shall, subject to the foregoing proviso, remain obligated to pay to the
Agent the amount it failed to fund on demand together with interest thereon in
respect of the period commencing on the date such amount should have been funded
until the date the amount was actually funded to the Agent at a rate per annum
equal to the Federal Funds Effective Rate for such period and the Agent shall be
entitled to offset against any and all sums to be paid to such Bank hereunder
the amount due the Agent under this sentence.
ARTICLE 5
Yield Protection and Illegality
Section 5.1 Additional Costs.
(a) The Borrower shall pay directly to each Bank from time to time
such amounts as such Bank may reasonably determine to be necessary to
compensate it for any costs incurred by such Bank which such Bank
determines are attributable to its making or maintaining of any Loans
subject to Libor Accounts or Letters of Credit hereunder or its obligation
to make any of such Loans hereunder or issue or participate in any Letter
of Credit, or any reduction in any amount receivable by such Bank
hereunder in respect of any such Loans or Letters of Credit or such
obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any Regulatory
Change which:
AMENDED AND RESTATED CREDIT AGREEMENT - Page 33
41
(i) changes the basis of taxation of any amounts payable to
such Bank under this Agreement or its Notes in respect of any of
such Loans (other than franchise taxes and taxes imposed on the
overall net income of such Bank or its Applicable Lending Office for
any of such Loans by the United States of America or the
jurisdiction in which such Bank has its Principal Office or such
Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit, minimum
capital, capital ratio, or similar requirement relating to any
extensions of credit or other assets of, or any deposits with or
other liabilities or commitments of, such Bank (including any of
such Loans or any deposits referred to in the definition of "Libor
Rate" in Section 1.1 hereof but excluding any Reserve Requirement
already taken into account in calculating the Adjusted Libor Rate);
or
(iii) imposes any other condition affecting this Agreement or
the Notes or any of such extensions of credit or liabilities or
commitments.
Each Bank will notify the Borrower (with a copy to the Agent) of any event
occurring after the date of this Agreement which will entitle such Bank to
compensation pursuant to this subsection 5.1(a) as promptly as practicable
after it obtains knowledge thereof and determines to request such
compensation, and will designate a different Applicable Lending Office for
the Loans affected by such event if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the sole
opinion of such Bank, violate any law, rule, or regulation or be in any
way disadvantageous to such Bank. Each Bank will furnish the Borrower with
a certificate setting forth the basis and the amount of each request of
such Bank for compensation under this subsection 5.1(a). If any Bank
requests compensation from the Borrower under this subsection 5.1(a), the
Borrower may, by notice to such Bank (with a copy to the Agent) suspend
the obligation of such Bank to issue or participate in Letters of Credit
or to make Loans subject to Libor Accounts or Continue Libor Accounts as
Libor Accounts or Convert Base Rate Accounts into Libor Accounts until the
Regulatory Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 5.4 hereof shall be applicable with
respect to such Libor Accounts). A Bank may only request compensation
under this subsection 5.1(a) for Additional Costs which it incurred at any
time after the date six (6) months prior to the date the Bank requests
such compensation.
(b) Without limiting the effect of the foregoing provisions of this
Section 5.1, in the event that, by reason of any Regulatory Change, any
Bank either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Bank which includes deposits by reference to which the
interest rate on the Loans subject to Libor Accounts is determined as
provided in this Agreement or a category of extensions of credit or other
assets of such Bank which includes Loans subject to Libor Accounts or (ii)
becomes subject to restrictions on the
AMENDED AND RESTATED CREDIT AGREEMENT - Page 34
42
amount of such a category of liabilities or assets which it may hold,
then, if such Bank so elects by notice to the Borrower (with a copy to the
Agent), the obligation of such Bank to make Loans subject to Libor
Accounts or Continue Libor Accounts as Libor Accounts or Convert Base Rate
Accounts into Libor Accounts hereunder shall be suspended until the
Regulatory Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 5.4 hereof shall be applicable).
(c) Determinations and allocations by any Bank for purposes of this
Section 5.1 of the effect of any Regulatory Change on its costs of
maintaining its obligation to make Loans or issue or participate in
Letters of Credit or of making or maintaining Loans or issuing or
participating in Letters of Credit or on amounts receivable by it in
respect of Loans or Letters of Credit, and of the additional amounts
required to compensate such Bank in respect of any Additional Costs,
shall, absent manifest error, constitute prima facie evidence of the
accuracy thereof, provided that such determinations and allocations are
made on a reasonable basis. Additionally, each Bank shall, upon request by
the Borrower, take requested measures to mitigate the Additional Costs
which the Borrower is required to pay to any Bank if such measures can, in
the sole and absolute opinion of such Bank be taken without such Bank
suffering any economic, legal, regulatory or other disadvantage (provided,
however, that no such Bank shall be required to designate a funding office
that is not located in the United States of America).
Section 5.2 Limitation on Libor Accounts. Anything herein to the contrary
notwithstanding, if with respect to any Libor Accounts under a Loan for any
Interest Period therefor:
(a) The Agent determines (which determination shall be conclusive)
that quotations of interest rates for the relevant deposits referred to in
the definition of "Libor Rate" in Section 1.1 hereof are not being
provided in the relative amounts or for the relative maturities for
purposes of determining the rate of interest for the Loans subject to such
Libor Accounts as provided in this Agreement; or
(b) Required Banks determine (which determination shall be
conclusive) and notify the Agent that the relevant rates of interest
referred to in the definition of "Adjusted Libor Rate" in Section 1.1
hereof on the basis of which the rate of interest for such Loans for such
Interest Period is to be determined do not accurately reflect the cost to
the Banks of making or maintaining such Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant Libor Account and the relevant amounts or periods, and so long as such
condition remains in effect, the Banks shall be under no obligation to make
additional Loans subject to a Libor Account or to Convert Base Rate Accounts
into Libor Accounts and the Borrower shall, on the last day(s) of the then
current Interest Period (s) for the outstanding Libor Accounts, either prepay
the Loans subject to such Libor Accounts or Convert such Libor Accounts into
Base Rate Accounts in accordance with
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43
the terms of this Agreement. Determinations made under this Section 5.2 shall be
made on a reasonable basis.
Section 5.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to (a) honor its obligation to make Loans subject to a Libor
Account hereunder or (b) maintain Loans subject to a Libor Account hereunder,
then such Bank shall promptly notify the Borrower (with a copy to the Agent)
thereof and such Bank's obligation to make or maintain Loans subject to a Libor
Account and to Convert Base Rate Accounts into Libor Accounts hereunder shall be
suspended until such time as such Bank may again make and maintain Loans subject
to a Libor Account (in which case the provisions of Section 5.4 hereof shall be
applicable).
Section 5.4 Treatment of Affected Loans. If the Accounts applicable to a
Loan of any Bank (hereinafter called "Affected Accounts") are affected by
Section 5.1 or Section 5.3 hereof, the Bank's Affected Accounts shall be
automatically Converted into Base Rate Accounts on the last day(s) of the then
current Interest Period(s) (or, in the case of a Conversion required by
subsection 5.1(b) or Section 5.3 hereof, on such earlier date as such Bank may
specify to the Borrower with a copy to the Agent) and, unless and until such
Bank gives notice as provided below that the circumstances specified in Section
5.1 or 5.3 hereof which gave rise to such Conversion no longer exist: (a) to the
extent that such Bank's Affected Accounts have been so Converted, all payments
and prepayments of principal which would otherwise be applied to such Bank's
Affected Accounts shall be applied instead to its Base Rate Accounts; and (b)
all Accounts which would otherwise be established or Continued by such Bank as
Libor Accounts shall be made as or Converted into Base Rate Accounts and all
Accounts of such Bank which would otherwise be Converted into Libor Accounts
shall be Converted instead into (or shall remain as) Base Rate Accounts. If such
Bank gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 5.1 or 5.3 hereof which gave rise to the
Conversion of such Bank's Affected Accounts pursuant to this Section 5.4 no
longer exist (which such Bank agrees to do promptly upon such circumstances
ceasing to exist) at a time when Libor Accounts are outstanding, such Bank's
Base Rate Accounts shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Libor Accounts to the
extent necessary so that, after giving effect thereto, all Accounts held by the
Banks holding Libor Accounts and by such Bank are held pro rata (as to principal
amounts, Types, and Interest Periods) in accordance with their respective
Commitment Percentages.
Section 5.5 Compensation. The Borrower shall pay to the Agent for the
account of each Bank, upon the request of such Bank, such amount or amounts as
shall be sufficient (in the reasonable opinion of such Bank) to compensate it
for any loss, cost, or expense incurred by it as a result of:
(a) Any payment or prepayment of a Loan subject to a Libor Account
or Conversion of a Libor Account for any reason (including, without
limitation, the repayment of such a Loan held by the Agent as a Bank
resulting from the operation of Section 4.6 or
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44
the repayment of such a Loan resulting from the acceleration of the
outstanding Loans pursuant to subsection 11.2(a) hereof) on a date other
than the last day of an Interest Period for the applicable Libor Account;
or
(b) Any failure by the Borrower for any reason (including, without
limitation, the failure of any conditions precedent specified in Article 6
to be satisfied but excluding any failure by a Bank to honor its
obligations hereunder) to borrow or prepay a Loan subject to a Libor
Account, or Convert a Base Rate Account to a Libor Account on the date for
such borrowing, Conversion, or prepayment specified in the relevant notice
of borrowing, prepayment, or Conversion under this Agreement.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid or Converted
or not borrowed for the period from the date of such payment, Conversion, or
failure to borrow to the last day of the Interest Period for such Libor Account
(or, in the case of a failure to borrow, the Interest Period for such Libor
Account which would have commenced on the date specified for such borrowing) at
the applicable rate of interest for such Libor Account provided for herein over
(ii) the interest component of the amount such Bank would have bid in the London
interbank market for Dollar deposits of leading banks and amounts comparable to
such principal amount and with maturities comparable to such period.
Section 5.6 Capital Adequacy. If after the date hereof, any Bank shall
have determined that any Regulatory Change or any change in the compliance by
such Bank (or its parent) with any guideline, request, or directive regarding
capital adequacy (whether or not having the force of law) of any central bank or
other Governmental Authority has or would have the effect of reducing the rate
of return on such Bank's (or its parent's) capital as a consequence of its
obligations hereunder or the transactions contemplated hereby to a level below
that which such Bank (or its parent) could have achieved but for such Regulatory
Change or change in compliance by an amount deemed by such Bank to be material,
then from time to time, within ten (10) Business Days after demand by such Bank
(with a copy to the Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank (or its parent) for such
reduction. A certificate of such Bank claiming compensation under this Section
and setting forth the additional amount or amounts to be paid to it hereunder
shall constitute prima facie evidence of the accuracy thereof, provided that the
determination thereof is made on a reasonable basis. In determining such amount
or amounts, such Bank may use any reasonable averaging and attribution methods.
With respect to each demand by a Bank under this Section 5.6, no Bank shall have
the right to demand compensation for amounts attributable to any reduction in
such Bank's rate of return occurring at any time before the date which is six
(6) months prior to the date the Bank gives such demand for compensation to
Borrower.
Section 5.7 Replacement of a Bank. If (i) the obligation of a Bank (other
than the Agent as a Bank) to make or Continue Loans subject to Libor Accounts
has been suspended pursuant to Sections 5.2 or 5.3 or (ii) a Bank (other than
the Agent as a Bank) has demanded compensation
AMENDED AND RESTATED CREDIT AGREEMENT - Page 37
45
under Sections 5.1 or 5.6, the Borrower shall have the right to require such
Bank to assign to a Person selected by the Borrower and reasonably satisfactory
to the Agent (which may be one or more of the Banks) the Notes and participation
interests in the Letter of Credit Liabilities held by such Bank pursuant to the
terms of an appropriately completed Assignment and Acceptance in accordance with
subsection 13.8(b); provided that, neither the Agent nor any Bank shall have any
obligation to Borrower to find any such Person and in order for Borrower to
replace a Bank, the Borrower must require such replacement within three (3)
months of the date such obligations of the Bank were suspended or the date the
Bank demanded such compensation. Each Bank (other than the Agent as a Bank)
agrees to its replacement at the option of the Borrower pursuant to this Section
5.7; provided that the Person selected by Borrower shall purchase such Bank's
interest in the Obligations of the Borrower to such Bank for immediately
available funds in an aggregate amount equal to the aggregate unpaid principal
thereof, all unpaid interest accrued thereon, all unpaid commitment and letter
of credit fees accrued for the account of such Bank, any breakage costs incurred
by the selling Bank because of the prepayment of any Libor Accounts, all other
fees (if any) applicable thereto and all other amounts (including any amounts
due under Sections 5.1 or 5.6) then owing to such Bank hereunder or under any
other Loan Document.
ARTICLE 6
Conditions Precedent
Section 6.1 Initial Loan and Letter of Credit. The effectiveness of this
Agreement and the obligation of each Bank to make its initial Loan and the
obligation of the Agent to issue the initial Letter of Credit hereunder are
subject to the condition precedent that the Agent shall have received on or
before December 31, 1997 and on or before the day of any such Loan or Letter of
Credit all of the following, each dated (unless otherwise indicated) the date
hereof, in form and substance satisfactory to the Agent:
(a) Resolutions; Authority. Resolutions of the Board of Directors of
the Borrower and each Obligated Party certified by its Secretary or an
Assistant Secretary which authorize its execution, delivery, and
performance of the Transaction Documents to which it is or is to be a
party.
(b) Incumbency Certificate. A certificate of incumbency certified by
the Secretary or an Assistant Secretary of the Borrower and each Obligated
Party certifying (i) the names of its officers (A) who are authorized to
sign the Transaction Documents to which it is or is to be a party
(including the certificates contemplated herein) together with specimen
signatures of each such officer and (B) who will, until replaced by other
officers duly authorized for that purpose, act as its representative for
the purposes of signing documentation and giving notices and other
communications in connection with this Agreement and the transactions
contemplated hereby or (ii), if applicable, that its officers authorized
to sign the Transaction Documents have not changed from those officers
reflected in the incumbency certification delivered under the Prior
Agreement.
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46
(c) Organizational Documents. The articles of incorporation of the
Borrower and each Obligated Party certified by the Secretary of State of
the state of its incorporation and dated a current date or, if applicable,
a certificate of its Secretary or an Assistant Secretary certifying that
its articles of incorporation have not been amended or otherwise modified
since the delivery thereof pursuant to the Prior Agreement.
(d) Bylaws. The bylaws of the Borrower and each Obligated Party
certified by its Secretary or an Assistant Secretary or, if applicable, a
certificate of its Secretary or an Assistant Secretary certifying that its
bylaws have not been amended or otherwise modified since the delivery
thereof pursuant to the Prior Agreement.
(e) Governmental Certificates. Certificates of the appropriate
government officials of the state of incorporation of the Borrower and
each Obligated Party as to its existence and, to the extent applicable,
good standing and certificates of the appropriate government officials of
each state in which each Atlas Company is required to qualify to do
business and where failure to so qualify could reasonably be expected to
have a Material Adverse Effect, as to such Person's qualification to do
business and good standing in such state, all dated a current date.
(f) Notes. The Notes executed by the Borrower.
(g) Acknowledgment. The acknowledgment to this Agreement executed by
each Obligated Party.
(h) Collateral Documents and Collateral. A Subsidiary Joinder
Agreement executed by each Atlas Company; certificates representing the
capital stock of each Atlas Company together with undated stock powers
duly executed in blank; UCC, tax and judgment Lien search reports listing
all documentation on file against each Atlas Company in each jurisdiction
in which each Atlas Company has its principal place of business; and
executed documentation as the Agent may deem necessary to perfect or
protect its Liens, including, without limitation (but subject to Section
8.10): (i) intellectual property assignments; (ii) financing statements
under the UCC and other applicable documentation under the laws of any
jurisdiction with respect to the perfection of Liens; (iii) a lien
subordination from the landlord of Atlas Marketing Company, Inc.'s
principal office location containing such access agreements and
subordinations as the Agent may require; and (iv) waivers, subordinations
or acknowledgments from all other third parties who have possession or
control of any Collateral.
(i) Termination of Liens; Subordinations. Duly executed UCC-3
termination statements, mortgage releases and such other documentation as
shall be necessary to terminate or release all Liens other than those
permitted by Section 9.2 hereof.
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47
(j) Insurance Policies. Certificates of insurance summarizing the
insurance policies of Borrower and the Subsidiaries required by this
Agreement and reflecting the Agent as additional insured under such
policies and as loss payee with respect to all policies covering
Collateral.
(k) Opinion of Counsel. A favorable opinion of legal counsel to the
Borrower and the Obligated Parties as to such matters as the Agent may
reasonably request.
(l) Attorneys' Fees and Expenses. Evidence that the costs and
expenses (including attorneys' fees) referred to in Section 13.1, to the
extent incurred and invoiced, shall have been paid in full by the
Borrower.
(m) Account Agreement. An agreement from the institution where Atlas
Marketing Company, Inc. maintains its concentration account in form and
substance satisfactory to the Agent, pursuant to which such institution
recognizes the Agent's Lien in such account and agrees to transfer the
collected balances therein (or a lesser amount acceptable to the Agent) to
the Concentration Account on a daily basis.
(n) Closing Fee. A closing fee in the amount of One Hundred Twelve
Thousand Five Hundred Dollars ($112,500).
(o) Prior Agreement Outstandings. All outstanding principal and
accrued and unpaid interest outstanding under the Prior Agreement.
(p) Transactions. Evidence that all other conditions precedent to
the Transactions have been satisfied, that the Transactions shall have
occurred on or prior to the Closing Date and that Borrower shall have
otherwise received the gross proceeds of the Senior Subordinated Notes in
an amount not less than One Hundred Million Dollars ($100,000,000).
(q) Transaction Documents. Executed copies of all other Transaction
Documents not specifically listed above. All certificates and opinions
delivered in connection with such documents shall be addressed to the
Agent and the Banks or accompanied by a written authorization from the
Person delivering such certificate or opinion stating that the Agent and
the Banks may rely on such document as though it were addressed to it.
Section 6.2 All Loans and Letters of Credit. The obligation of each Bank
to make any Loan (including the initial Loan) and the obligation of the Agent to
issue any Letter of Credit (including the initial Letter of Credit) are subject
to the following additional conditions precedent:
(a) No Default. No Default shall have occurred and be continuing, or
would result from such Loan or Letter of Credit;
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48
(b) Representations and Warranties. All of the representations and
warranties contained in Article 7 hereof and in the other Loan Documents
shall be true and correct on and as of the date of such Loan or Letter of
Credit with the same force and effect as if such representations and
warranties had been made on and as of such date except to the extent that
such representations and warranties relate specifically to another date;
and
(c) Additional Documentation. The Agent shall have received such
additional approvals, opinions, or documents as the Agent may reasonably
request.
Each notice of borrowing by the Borrower hereunder, each request for a borrowing
under subsections 2.7(e) and 4.1(b), and each request for the issuance of a
Letter of Credit, shall constitute a representation and warranty by the Borrower
that the conditions precedent set forth in subsections 6.2(a) and (b) hereof
have been satisfied (both as of the date of such notice and, unless the Borrower
otherwise notifies the Agent prior to the date of such borrowing or Letter of
Credit, as of the date of such borrowing or Letter of Credit).
ARTICLE 7
Representations and Warranties
To induce the Agent and the Banks to enter into this Agreement, the
Borrower represents and warrants to the Agent and the Banks that:
Section 7.1 Corporate Existence. The Borrower and each Subsidiary (a) is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation; (b) has all requisite power and
authority to own its assets and carry on its business as now being or as
proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of its business makes such qualification
necessary and where failure to so qualify would have a Material Adverse Effect.
Borrower and each Obligated Party has the power and authority to execute,
deliver, and perform their respective obligations under the Transaction
Documents to which it is or may become a party.
Section 7.2 Financial Statements. The Borrower has delivered to the Agent
and the Banks (i) audited consolidated financial statements of the Borrower and
the Subsidiaries for the Fiscal Year ended December 31, 1996 and (ii) unaudited
consolidated financial statements of the Borrower and the Subsidiaries for the
ten (10) month period ended October 31, 1997. Such financial statements have
been prepared in accordance with GAAP (subject in the case of the unaudited
financial statements to audit adjustments and the fact that such financial
statements do not contain footnotes), and present fairly, on a consolidated and
consolidating basis, the financial condition of the Borrower and the
Subsidiaries as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. Neither the Borrower
nor any of the Subsidiaries has any material contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments, or unrealized or
anticipated losses from any unfavorable commitments
AMENDED AND RESTATED CREDIT AGREEMENT - Page 41
49
except as referred to or reflected in such financial statements. There has been
no Material Adverse Effect since the effective date of the audited consolidated
financial statements of the Borrower and the Subsidiaries for the Fiscal Year
ended December 31, 1996.
Section 7.3 Corporate Action; No Breach. The execution, delivery, and
performance by the Borrower and each Obligated Party of the Transaction
Documents to which each is or may become a party and compliance with the terms
and provisions hereof and thereof have been duly authorized by all requisite
action on the part of the Borrower and each Obligated Party and do not and will
not (a) violate or conflict with, or result in a breach of, or require any
consent under (i) the articles of incorporation or bylaws of the Borrower or any
Obligated Party, (ii) any applicable law, rule, or regulation or any order,
writ, injunction, or decree of any Governmental Authority or arbitrator, or
(iii) any agreement or instrument to which the Borrower or any Obligated Party
is a party or by which any of them or any of their property is bound or subject,
or (b) constitute a material default under any such agreement or instrument, or
result in the creation or imposition of any Lien (except as provided herein or
Liens in favor of Agent) upon any of the revenues or assets of the Borrower or
any Obligated Party.
Section 7.4 Operation of Business. The Borrower and each of the
Subsidiaries possess all licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, necessary to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted, and the Borrower and each of the Subsidiaries are not in
violation, in any material respect, of any valid rights of others with respect
to any of the foregoing.
Section 7.5 Litigation and Judgments. There is no action, suit,
investigation, or proceeding before or by any Governmental Authority or
arbitrator pending, or to the knowledge of the Borrower, threatened against or
affecting the Borrower or any Subsidiary that could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect. There
are no outstanding judgments against the Borrower or any Subsidiary.
Section 7.6 Rights in Properties; Liens. The Borrower and each Subsidiary
have good title to or valid leasehold interests in their respective properties
and assets, real and personal, including the properties, assets, and leasehold
interests reflected in the financial statements described in Section 7.2 hereto,
and none of the properties, assets, or leasehold interests of the Borrower or
any Subsidiary is subject to any Lien, except as permitted by Section 9.2
hereto.
Section 7.7 Enforceability. The Transaction Documents to which the
Borrower or any Obligated Party is party, when delivered, shall constitute the
legal, valid, and binding obligations of the Borrower or the Obligated Party, as
applicable, enforceable against Borrower or the applicable Obligated Party in
accordance with their respective terms, except as limited by bankruptcy,
insolvency, or other laws of general application relating to the enforcement of
creditors' rights and general principles of equity.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 42
50
Section 7.8 Approvals. No authorization, approval, or consent of, and no
filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by the Borrower or
any Obligated Party of the Transaction Documents to which each is or may become
a party or for the validity or enforceability thereof except for such
authorizations, approvals, consents, filings and registrations which have been
made or obtained.
Section 7.9 Debt. The Borrower and the Subsidiaries have no Debt, except
as permitted by Section 9.1 hereto. As of the Closing Date, the aggregate amount
of the Debt of the type described in items (a) and (j) of the definition of Debt
which is equal in right of payment to any unsecured portion of the Obligations
does not exceed a net present value of Eighty Million Dollars ($80,000,000).
None of the Debt of the type described in items (a) and (j) of the definition of
Debt is senior in right of payment to the Obligations nor is any such Debt
secured by any Lien (except as reflected on Schedule 9.2) or otherwise entitled
to any administrative or other priority in any liquidation or bankruptcy
proceedings of Borrower or any Subsidiary; provided that one hundred fifteen
(115) employees of Borrower or any Subsidiary who hold such Debt may be entitled
to the priority distribution under Section 507(a) (3) or 507 (a) (4) of the
United States Bankruptcy Code (11 U.S.C. ss. 507) to the extent, and only to the
extent as set forth in such Sections, as a result of their claims relating to
such Debt being characterized either as claims for wages, salaries or
contributions to employee benefit plans.
Section 7.10 Taxes. The Borrower and each Subsidiary have filed all
material tax returns (federal, state, and local) required to be filed, including
all income, franchise, employment, property, and sales tax returns, and have
paid all of their respective liabilities for taxes, assessments, governmental
charges, and other levies that are due and payable other than those being
contested in good faith by appropriate proceedings diligently pursued for which
adequate reserves have been established. Except as disclosed in writing to
Agent, the Borrower knows of no pending investigation of the Borrower or any
Subsidiary by any taxing authority or of any pending but unassessed tax
liability of the Borrower or any Subsidiary.
Section 7.11 Margin Securities. Neither the Borrower nor any Subsidiary is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations G, T, U, or X of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock.
Section 7.12 ERISA. The Borrower and each Subsidiary are in compliance in
all material respects with all applicable provisions of ERISA. Neither a
Reportable Event nor a Prohibited Transaction has occurred and is continuing
with respect to any Plan. No notice of intent to terminate a Plan has been
filed, nor has any Plan been terminated. No circumstances exist which constitute
grounds entitling the PBGC to institute proceedings to terminate, or appoint a
trustee to administer, a Plan, nor has the PBGC instituted any such proceedings.
Neither the Borrower nor
AMENDED AND RESTATED CREDIT AGREEMENT - Page 43
51
any ERISA Affiliate has completely or partially withdrawn from a Multiemployer
Plan. The Borrower and each ERISA Affiliate have met their minimum funding
requirements under ERISA with respect to all of their Plans. The present value
of all vested benefits under each Plan do not exceed the fair market value of
all Plan assets allocable to such benefits, as determined on the most recent
valuation date of the Plan and in accordance with ERISA. Neither the Borrower
nor any ERISA Affiliate has incurred any liability to the PBGC under ERISA in an
amount that will have a Material Adverse Effect.
Section 7.13 Disclosure. All factual information furnished by or on behalf
of the Borrower in writing to the Agent or any Bank (including, without
limitation, all information contained in the Transaction Documents) for purposes
of or in connection with this Agreement, the other Transaction Documents or any
transaction contemplated herein or therein is, and all other such factual
information hereafter furnished by or on behalf of the Borrower to the Agent or
any Bank, will be true and accurate in all material respects taken as a whole on
the date as of which such information is dated or certified and not incomplete
by omitting to state any fact necessary to make such information not misleading
in any material respect at such time.
Section 7.14 Subsidiaries; Borrower Capitalization. As of the Closing
Date, the Borrower has no Subsidiaries other than those listed on Schedule 7.14
hereto. As of the Closing Date, Schedule 7.14 sets forth the jurisdiction of
incorporation or organization of each such Subsidiary, the percentage of the
Borrower's ownership of the outstanding voting stock (or other ownership
interests) of each such Subsidiary and the authorized, issued and outstanding
capital stock of each Subsidiary and Borrower. As of the Closing Date, Schedule
7.14 identifies all owners of record of the Borrower's capital stock. MS
Acquisition Limited is controlled by Richmont Capital Partners I, L.P. All of
the outstanding capital stock of the Borrower and each Subsidiary has been
validly issued, is fully paid, and is nonassessable. Except as permitted to be
issued or created pursuant to the terms hereof or as reflected on Schedule 7.14,
there are no outstanding subscriptions, options, warrants, calls, or rights
(including preemptive rights) to acquire, and no outstanding securities or
instruments convertible into, capital stock of the Borrower or any Subsidiary.
Section 7.15 Agreements. Neither the Borrower nor any Subsidiary is a
party to any indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction that
could reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary is in default in any respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument to which it is a party other than
defaults which will not have a Material Adverse Effect.
Section 7.16 Compliance with Laws. Neither the Borrower nor any Subsidiary
is in violation of any law, rule, regulation, order, or decree of any
Governmental Authority or arbitrator other than violations which will not have a
Material Adverse Effect.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 44
52
Section 7.17 Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 7.18 Public Utility Holding Company Act. Neither the Borrower nor
any Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or a "public utility" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 7.19 Environmental Matters.
(a) The Borrower, each Subsidiary, and all of their respective
properties, assets, and operations are in compliance in all material
respects with all Environmental Laws. The Borrower is not aware of, nor
has the Borrower received notice of, any past, present, or future
conditions, events, activities, practices, or incidents which may
interfere with or prevent the material compliance or continued material
compliance of the Borrower and the Subsidiaries with all Environmental
Laws;
(b) The Borrower and each Subsidiary have obtained all permits,
licenses, and authorizations that are required under applicable
Environmental Laws the failure of which to obtain would result in a
Material Adverse Effect. All such permits are in good standing and the
Borrower and its Subsidiaries are in compliance in all material respects
with all of the terms and conditions of such permits;
(c) No Hazardous Materials exist on, about, or within or have been
used, generated, stored, transported, disposed of on, or Released from any
of the properties or assets of the Borrower or any Subsidiary except in
compliance in all material respects with Environmental Laws. The use which
the Borrower and the Subsidiaries make and intend to make of their
respective properties and assets will not result in the use, generation,
storage, transportation, accumulation, disposal, or Release of any
Hazardous Material on, in, or from any of their properties or assets
except in compliance in all material respects with Environmental Laws;
(d) Neither the Borrower nor any of the Subsidiaries nor any of
their respective currently or previously owned or leased properties or
operations is subject to any outstanding or, to the best of its knowledge,
threatened order from or agreement with any Governmental Authority or
subject to any judicial or administrative proceeding with respect to (i)
failure to comply with Environmental Laws, (ii) Remedial Action, or (iii)
any Environmental Liabilities arising from a Release or threatened
Release;
(e) There are no conditions or circumstances associated with the
currently or previously owned or leased properties or operations of the
Borrower or any of the Subsidiaries that could reasonably be expected to
give rise to any material Environmental Liabilities;
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53
(f) Neither the Borrower nor any of the Subsidiaries is a treatment,
storage, or disposal facility requiring a permit under the Resource
Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq., regulations
thereunder or any comparable provision of state law. The Borrower and the
Subsidiaries are in compliance with all applicable financial
responsibility requirements of all Environmental Laws in all material
respects;
(g) Neither the Borrower nor any of the Subsidiaries has filed or
failed to file any notice required under applicable Environmental Law
reporting a Release; and
(h) No Lien arising under any Environmental Law has attached to any
property or revenues of the Borrower or the Subsidiaries.
Section 7.20 Deposit and Brokerage Accounts. Schedule 1.1(a) sets forth as
of the Closing Date all lockbox agreements, deposit accounts and brokerage
accounts of the Borrower and the Subsidiaries.
Section 7.21 Solvency. As of and from and after the date of this Agreement
and after giving effect to the consummation of each Permitted Acquisition,
Borrower and each of the Subsidiaries individually and on a consolidated basis:
(a) owns and will own assets the fair saleable value of which are (i) greater
than the total amount of liabilities (including contingent liabilities) and (ii)
greater than the amount that will be required to pay the probable liabilities of
its then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to it; (b)
has capital that is not unreasonably small in relation to its business as
presently conducted or any contemplated or undertaken transaction; and (c) does
not intend to incur and does not believe that it will incur debts beyond its
ability to pay such debts as they become due.
Section 7.22 Perishable Agricultural Commodities Act. In the ordinary
course of its business, neither Borrower nor any Subsidiary purchases or sells
for its own account perishable agricultural commodities as that term is defined
in the Perishable Agricultural Commodities Act, as amended (7 U.S.C. ss. 499
e(c)) and the regulations promulgated thereunder nor does any such party
directly receive any proceeds from the sale of such commodities. As a result,
the statutory trust arising under such act for the benefit of unpaid cash
sellers does not attach to any property of the Borrower or any Subsidiary.
Section 7.23 Packers and Stockyards Act. In the ordinary course of its
business, neither Borrower nor any Subsidiary purchases, sells for its own
account or receives the proceeds from the sale of livestock as that term is
defined in the Packers and Stockyards Act, as amended (7 U.S.C. xx.xx. 181-229)
and the regulations thereunder. As a result, the statutory trust arising under
such act for the benefit of unpaid cash sellers does not attach to any property
of the Borrower or any Subsidiary.
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Section 7.24 Common Enterprise. Borrower and each Subsidiary is a member
of an affiliated group with each other such Person and the Borrower and the
Subsidiaries are collectively engaged in a common enterprise with one another.
Each of the Borrower and the Subsidiaries expects to derive substantial benefit
(and may reasonably be expected to derive substantial benefit), directly and
indirectly, from the Loans and Letters of Credit contemplated by this Agreement,
both in its separate capacity and as a member of such group.
Section 7.25 Transaction Documents. As of the Closing Date, Borrower has
delivered to Agent a complete and correct copy of the Transaction Documents, the
Transaction Documents are in full force and effect, have not been amended in any
material respect (except for such amendments disclosed to the Agent), no party
thereto has failed to perform any material obligation thereunder and no defenses
exist to the performance by the parties thereto of their obligations thereunder.
Each of the representations and warranties under the Transaction Documents are
true and correct in all material respects as of the date hereof and as of the
Closing Date.
ARTICLE 8
Positive Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Bank has any Commitment hereunder, the
Borrower will perform and observe the following positive covenants:
Section 8.1 Reporting Requirements. The Borrower will furnish to the Agent
and each Bank:
(a) Annual Financial Statements. As soon as available, and in any
event within one hundred twenty (120) days after the end of each Fiscal
Year of the Borrower, beginning with the Fiscal Year ending December 31,
1997, (i) a copy of the annual audit report of the Borrower and the
Subsidiaries for such Fiscal Year containing, on a consolidated basis,
balance sheets and statements of income, retained earnings, and cash flow
as at the end of such Fiscal Year and for the Fiscal Year then ended, in
each case setting forth in comparative form the figures for the preceding
Fiscal Year, all in reasonable detail and audited and certified on an
unqualified basis by independent certified public accountants of
recognized standing acceptable to the Agent, to the effect that such
report has been prepared in accordance with GAAP;
(b) Monthly Financial Statements. As soon as available, and in any
event within forty-five (45) days after the end of each month, a copy of
an unaudited financial report of the Borrower and the Subsidiaries as of
the end of such period and for the portion of the Fiscal Year then ended
containing, on a consolidated basis, balance sheets and statements of
income, retained earnings, and cash flow, all in reasonable detail
certified by the chief executive officer, treasurer or chief financial
officer of the Borrower to fairly present
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55
(subject to year-end audit adjustments) the financial condition and
results of operations of the Borrower and the Subsidiaries, on a
consolidated basis, at the date and for the periods indicated therein;
(c) Quarterly Financial Statements. As soon as available, and in any
event within forty-five (45) days after the end of each Fiscal Quarter, a
copy of an unaudited financial report of the Borrower and the Subsidiaries
as of the end of such period and for the portion of the Fiscal Year then
ended containing, on a consolidated and consolidating basis, balance
sheets and statements of income, retained earnings, and cash flow, in each
case setting forth in comparative form the figures for the corresponding
period of the preceding Fiscal Year, all in reasonable detail certified by
the chief executive officer, treasurer or chief financial officer of the
Borrower to have been prepared in accordance with GAAP (but excluding
footnotes) and to fairly present (subject to year-end audit adjustments)
the financial condition and results of operations of the Borrower and the
Subsidiaries, on a consolidated and consolidating basis, at the date and
for the periods indicated therein;
(d) Compliance Certificate. Within forty-five (45) days after the
end of each Fiscal Quarter of each Fiscal Year and accompanying the annual
financial statements delivered in accordance with Section 8.1(a), a
Compliance Certificate, together with the schedules thereto setting forth
the calculations supporting the computations therein;
(e) Borrowing Base Report. Within ten (10) Business Days of the last
day of each month or within ten (10) Business Days of any other date the
Agent may select in its discretion (based on a reasonable concern relating
to the amount or calculation of the Borrowing Base, the level of borrowing
hereunder or the financial condition of the Borrower or any Granting
Subsidiary) by written notice to the Borrower (each such day or date a
"Report Date"), a Borrowing Base Report together with the a Receivable
aging report, sales report summary, collections report and customer credit
report (reflecting all journal entries and adjustments) for the Borrower
and the Granting Subsidiaries as of the applicable Report Date;
(f) Receivable Reporting. If the Agent requests, the Borrower shall
furnish to the Agent on each Business Day, a Receivable aging report,
sales report summary, collections report and customer credit report
(reflecting all journal entries and adjustments) for the Borrower and the
Granting Subsidiaries as of the preceding Business Day prior to the date
of such reports (or the most recent preceding Business Day prior to the
date of the delivery of such reports for which Borrower is able to provide
such reports). For purposes of preparing the Receivables reports under
this clause (f), it shall be assumed that each Business Day ends at 2:00
p.m., with any other activity occurring on such Business Day after such
2:00 p.m. deadline to be deemed to have occurred on the next succeeding
Business Day;
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(g) Projections. As soon as available and in any event forty-five
(45) days after the beginning of each Fiscal Year of Borrower, Borrower
will deliver a forecasted consolidated balance sheet and statements of
income and cash flow of Borrower and the Subsidiaries on a Fiscal Quarter
by Fiscal Quarter basis, including the assumptions utilized in the
preparation of such projections (in narrative form) for the forthcoming
Fiscal Year and a proforma projection of the Borrower's compliance with
the financial covenants in this Agreement for the same period;
(h) Management Letters. Promptly upon receipt thereof, a copy of any
management letter or written report submitted to the Borrower or any
Subsidiary by independent certified public accountants with respect to the
business, condition (financial or otherwise), operations, prospects, or
properties of the Borrower or any Subsidiary;
(i) Notice of Litigation. Promptly after the commencement thereof,
notice of all actions, suits, and proceedings before any Governmental
Authority or arbitrator affecting the Borrower or any Subsidiary which, if
determined adversely to the Borrower or such Subsidiary, could reasonably
be expected to have a Material Adverse Effect;
(j) Notice of Default. As soon as possible and in any event within
five (5) Business Days after an officer of the Borrower has knowledge of
the occurrence of each Default, a written notice setting forth the details
of such Default and the action that the Borrower has taken and proposes to
take with respect thereto;
(k) ERISA Reports. If requested by the Agent, promptly after the
filing or receipt thereof, copies of all reports, including annual
reports, and notices which the Borrower or any Subsidiary files with or
receives from the PBGC or the U.S. Department of Labor under ERISA; and as
soon as possible and in any event within five (5) Business Days after the
Borrower or any Subsidiary knows or has reason to know that any Reportable
Event or Prohibited Transaction has occurred with respect to any Plan or
that the PBGC or the Borrower or any Subsidiary has instituted or will
institute proceedings under Title IV of ERISA to terminate any Plan, a
certificate of the chief financial officer of the Borrower setting forth
the details as to such Reportable Event or Prohibited Transaction or Plan
termination and the action that the Borrower proposes to take with respect
thereto;
(l) Notice of Material Adverse Effect. As soon as possible and in
any event within five (5) Business Days of the occurrence thereof, written
notice of any matter that could reasonably be expected to have a Material
Adverse Effect;
(m) Proxy Statements, Etc. As soon as available, one copy of each
financial statement, report, notice or proxy statement sent by the
Borrower or any Subsidiary to its stockholders generally and one copy of
each regular, periodic or special report, registration statement, or
prospectus filed by the Borrower or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any successor
agency; and
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57
(n) General Information. Promptly, such other information concerning
the Borrower or any Subsidiary as the Agent or any Bank may from time to
time reasonably request.
Section 8.2 Maintenance of Existence; Conduct of Business. Except as
otherwise permitted by Section 9.3, the Borrower will, and will cause each
Subsidiary to, preserve and maintain its corporate existence and all of its
leases, privileges, licenses, permits, franchises, qualifications, and rights
that are necessary or desirable in the ordinary conduct of its business. The
Borrower will, and will cause each Subsidiary to, conduct its business in an
orderly and efficient manner in accordance with good business practices.
Section 8.3 Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, maintain, keep, and preserve all of its material properties
necessary in the conduct of its business in good working order and condition
ordinary wear and tear excepted.
Section 8.4 Taxes and Claims. The Borrower will, and will cause each
Subsidiary to, pay or discharge at or before maturity or before becoming
delinquent (a) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (b) all lawful claims
for labor, material, and supplies, which, if unpaid, might become a Lien upon
any of its property; provided, however, that neither the Borrower nor any
Subsidiary shall be required to pay or discharge any tax, levy, assessment, or
governmental charge which is being contested in good faith by appropriate
proceedings diligently pursued, and for which adequate reserves have been
established in accordance with GAAP.
Section 8.5 Insurance. The Borrower will, and will cause each Subsidiary
to, maintain insurance with financially sound and reputable insurance companies
in such amounts and covering such risks as are usually carried by corporations
engaged in similar businesses and owning similar properties in the same general
areas in which the Borrower and the Subsidiaries operate, provided that in any
event the Borrower will maintain and cause each Subsidiary to maintain workmen's
compensation insurance, property insurance and comprehensive general liability
insurance reasonably satisfactory to the Agent. Each general liability insurance
policy shall name the Agent as additional insured, each insurance policy
covering Collateral shall name the Agent as loss payee and shall provide that
such policy will not be canceled or materially changed without thirty (30) days
prior written notice to the Agent.
Section 8.6 Inspection Rights; Receivable Verification. Borrower will, and
will cause each Subsidiary to, permit any authorized representative designated
by the Agent to (a) visit and inspect the Receivables records of the Borrower
and the Subsidiaries on the eleventh (11th) Business Day of each month, (b) make
extracts from such records and (c) discuss such records with the Borrower's and
the Subsidiaries' officers and employees. In addition, upon reasonable notice
(which may be telephonic notice), at any other reasonable time and as often as
the Agent may request, Borrower will, and will cause each Subsidiary to permit
any authorized representative designated by the Agent, together with any
authorized representatives of any Bank desiring to
AMENDED AND RESTATED CREDIT AGREEMENT - Page 50
58
accompany the Agent, to (a) visit and inspect the properties and financial
records of the Borrower and the Subsidiaries (including those records relating
to the existence and condition of the Receivables), (b) make extracts from such
financial records, and (c) discuss the affairs, finances and condition of the
Borrower and the Subsidiaries with its officers and employees and the Borrower's
independent public accountants. The Agent agrees that it shall schedule any
meeting with any such independent public accountant through the Borrower and a
financial officer of the Borrower shall have the right to be present at any such
meeting. The Agent shall also have the right to verify with any and all
customers of the Borrower and any Obligated Party the existence and condition of
the Receivables, as often as the Agent may require, without prior notice to or
consent of the Borrower or any Obligated Party and whether or not a Default
exists.
Section 8.7 Keeping Books and Records. The Borrower will, and will cause
each Subsidiary to, maintain proper books of record and account in which full,
true, and correct entries in conformity with GAAP shall be made of all dealings
and transactions in relation to its business and activities.
Section 8.8 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all applicable laws (including, without limitation,
all Environmental Laws), rules, regulations, orders, and decrees of any
Governmental Authority or arbitrator other than for such noncompliance that will
not have a Material Adverse Effect.
Section 8.9 Compliance with Agreements. The Borrower will, and will cause
each Subsidiary to, comply in all material respects with all agreements,
contracts, and instruments binding on it or affecting its properties or
business.
Section 8.10 Further Assurances and Collateral Matters.
(a) Further Assurance and Exceptions to Perfection. The Borrower
will, and will cause each Subsidiary to, execute and deliver such further
documentation and take such further action as may be requested by the
Agent to carry out the provisions and purposes of the Loan Documents and
to create, preserve, protect and perfect the Liens of the Agent for the
benefit of itself and the Banks in the Collateral; provided that prior to
the occurrence of a Default, neither Borrower nor any Granting Subsidiary
shall be required to:
(i) except as delivered in connection with the Prior Agreement
and as required by Section 6.1(h), obtain any landlord or mortgagee
waivers or subordinations;
(ii) execute or have filed any UCC Financing Statement fixture
filings; and
(iii) deliver any certificates of title evidencing equipment
of Borrower or a Granting Subsidiary with Agent's Lien noted
thereon.
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59
If a Default occurs, then Borrower shall take such action as the Agent may
request to perfect and protect the Liens of the Agent in all the
Collateral, including any or all of the actions described in clauses (i)
through (iii) of this Section 8.10 (a).
(b) Subsidiary Creation or Acquisition. Upon the creation or
acquisition of any Subsidiary, the Borrower shall (i) cause such
Subsidiary to execute and deliver to Agent a Subsidiary Joinder Agreement
and such other documentation as the Agent may request to cause such
Subsidiary to evidence, perfect or otherwise implement the guaranty and
security for the repayment of the Obligations contemplated by the Guaranty
and the Subsidiary Security Agreement; (ii) if Borrower owns such
Subsidiary directly, execute and deliver to the Agent an amendment to the
Borrower Security Agreement describing as collateral thereunder the stock
of or other ownership interests in the new Subsidiary and the Borrower
shall deliver the certificates representing such stock or other interests
to the Agent together with undated stock or other powers duly executed in
blank and (iii) if the new Subsidiary is not directly owned by the
Borrower, cause the Subsidiary who owns the new Subsidiary directly to
pledge the stock of such new Subsidiary to the Agent pursuant to an
amendment to the Subsidiary Security Agreement describing as collateral
thereunder the stock of or other ownership interests in the new Subsidiary
and to deliver the certificates representing such stock or other interests
to the Agent together with undated stock or other powers duly executed in
blank.
Section 8.11 ERISA. The Borrower will, and will cause each Subsidiary to,
comply with all minimum funding requirements and all other requirements of
ERISA, if applicable, so as not to give rise to any liability which will have a
Material Adverse Effect.
ARTICLE 9
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Bank has any Commitment hereunder, the
Borrower will perform and observe the following negative covenants:
Section 9.1 Debt. The Borrower will not, and will not permit any
Subsidiary to, incur, create, assume, or permit to exist any Debt, except:
(a) Debt to the Banks pursuant to the Loan Documents;
(b) Debt described on Schedule 9.1 hereto and any extensions,
renewals or refinancings of such existing Debt so long as (i) the
principal amount of such Debt after such renewal, extension or refinancing
shall not exceed the principal amount of such Debt which was outstanding
immediately prior to such renewal, extension or refinancing, (ii) such
Debt shall not be secured by any assets other than assets securing such
Debt, if any, prior to
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60
such renewal, extension or refinancing; and (iii) to the extent any such
Debt is subordinated to the Obligations, such Debt must be subordinated to
the Obligations on substantially the same terms; provided however, that
any Debt described on Schedule 9.1 which is secured by a Lien on
Receivables must be repaid (and the Lien securing the payment thereof
released) on or before June 30, 1998;
(c) Debt of a Wholly-Owned Subsidiary to Borrower or another
Wholly-Owned Subsidiary and Debt of Borrower to any Wholly-Owned
Subsidiary; provided that (i) the obligations of each obligor of such Debt
shall be subordinated in right of payment to such obligor's obligations
under the Loan Documents from and after such time as any portion of such
obligations shall become due and payable (whether at stated maturity, by
acceleration or otherwise) and (ii) the proceeds of such Debt shall be
used to finance the working capital requirements of such Subsidiary, to
finance a Permitted Acquisition or for other general corporate purposes;
(d) Guaranties incurred in the ordinary course of business with
respect to surety and appeal bonds, performance and return-of-money bonds
and other similar obligations;
(e) unsecured Debt for borrowed money or for the deferred payment of
purchase price incurred, in each case, to finance a Permitted Acquisition;
provided that (i) in no event shall the aggregate amount of such Debt
outstanding under this clause (e) at any time exceed Twenty-Five Million
Dollars ($25,000,000) and (ii) on the date of its incurrence, such Debt
shall be permitted by the Indenture (with Borrower providing Agent
evidence thereof);
(f) Debt (including Capital Lease Obligations) secured by purchase
money Liens permitted by Section 9.2(g) incurred after the Closing Date;
provided that (i) in no event shall the aggregate amount of such Debt
outstanding under this clause (f) at any time exceed Seven Million Five
Hundred Thousand Dollars ($7,500,000) and (ii) on the date of its
incurrence, such Debt shall be permitted by the Indenture (with Borrower
providing Agent evidence thereof);
(g) Debt constituting obligations to reimburse worker's compensation
insurance companies for claims paid by such companies on Borrower's or a
Subsidiaries' behalf in accordance with the policies issued to Borrower
and the Subsidiaries;
(h) Debt of Borrower under Hedging Agreements;
(i) Guarantees by Borrower or any Subsidiary of (i) Debt of another
Subsidiary permitted hereby, (ii) Debt of Borrower permitted hereby or
(iii) operating leases of another Subsidiary or Borrower entered into in
the ordinary course of business;
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61
(j) indemnifications entered into by Borrower or a Subsidiary in
connection with asset dispositions and acquisitions and in connection with
other transactions entered into in the ordinary course of business;
(k) Debt of any Person (or any of such Person's subsidiaries)
existing at the time such Person becomes a Subsidiary (or is merged into
or consolidated with the Borrower or any of the Subsidiaries), but only to
the extent that such Debt was not incurred in connection with, as a result
of or in contemplation of such Person becoming a Subsidiary (or being
merged into or consolidated with the Borrower or any Subsidiary);
provided, however, that (i) in no event shall the aggregate amount of such
Debt outstanding at any time exceed Five Hundred Thousand Dollars
($500,000); (ii) immediately after such acquired Person becomes a
Subsidiary (or is merged into or consolidated with the Borrower or any
Subsidiary), no Default has occurred and (iii) such Debt shall be
permitted by the Indenture (with Borrower providing Agent evidence
thereof);
(l) Debt evidenced by the Senior Subordinated Notes and any
refinancings or replacements of all or a portion of such Debt so long as
(i) the maturity of such refinancing or replacement Debt is after the
Termination Date, (ii) such refinancing or replacement Debt is
subordinated to the Obligations to the same or greater extent as the
Senior Subordinated Notes are so subordinated, (iii) the covenants
contained in any agreement evidencing such refinancing or replacement Debt
are not materially more onerous, taken as a whole, to the Borrower than
the covenants relating to the Senior Subordinated Notes, (iv) the
principal amount of such refinancing or replacement Debt shall not exceed
the principal amount of the Senior Subordinated Notes outstanding
immediately prior to such refinancing or replacement and (v) any such
refinancing or replacement Debt shall not be secured by any Liens; and
(m) Debt (the "Additional Debt"), in addition to the Debt described
in the forgoing clauses (a) through (l), which may be incurred if no
Default exists or would result therefrom; provided that (i) the aggregate
amount of the Additional Debt at any one time outstanding shall never
exceeding Two Million Dollars ($2,000,000) and (ii) on the date of its
incurrence, such Debt shall be permitted by the Indenture (with Borrower
providing Agent evidence thereof).
Section 9.2 Limitation on Liens and Restrictions on Subsidiaries. The
Borrower will not, and will not permit any Subsidiary to, incur, create, assume,
or permit to exist any Lien upon any of its property, whether now owned or
hereafter acquired, except the following, none of which shall encumber the
Collateral other than those Liens described in clauses (a), (b), (d), (e), (g),
(h) and (j):
(a) Liens disclosed on Schedule 9.2 hereto; provided that, all Liens
disclosed on Schedule 9.2 which encumber Receivables must be released on
or before June 30, 1998 and
AMENDED AND RESTATED CREDIT AGREEMENT - Page 54
62
any Liens reflected on Schedule 9.2 which are designated as to be released
at closing will not be permitted after the Closing Date;
(b) Liens in favor of the Agent for the benefit of itself and the
Banks pursuant to the Loan Documents;
(c) Encumbrances consisting of minor easements, zoning restrictions,
or other restrictions on the use of real property that do not
(individually or in the aggregate) materially affect the value of the
assets encumbered thereby or materially impair the ability of the Borrower
or the Subsidiaries to use such assets in their respective businesses, and
none of which is violated in any material respect by existing or proposed
structures or land use;
(d) Liens (other than Liens relating to Environmental Liabilities or
ERISA) for taxes, assessments, or other governmental charges that are not
delinquent or which are being contested in good faith and for which
adequate reserves have been established in accordance with GAAP;
(e) Liens of mechanics, materialmen, warehousemen, carriers,
landlords or other similar statutory Liens securing obligations that are
not yet due or are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established in accordance with GAAP and are incurred in the ordinary
course of business;
(f) Liens resulting from good faith deposits to secure payments of
workmen's compensation or other social security programs or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, contracts (other than for payment of Debt);
(g) Liens for purchase money obligations (including the rights of
lessors under capitalized leases) provided that: (i) the purchase of the
asset subject to any such Lien is not otherwise prohibited by Section 10.4
hereto; (ii) the Debt secured by any such Lien is permitted under Section
9.1 hereto; (iii) any such Lien encumbers only the asset so purchased;
(iv) the amount of such Lien does not exceed One Hundred percent (100%) of
the purchase price of the asset so purchased; and (v) no Event of Default
exists at the time the asset is so purchased;
(h) Any attachment or judgment Lien not constituting an Event of
Default;
(i) Liens against equipment arising from precautionary UCC financing
statement filings regarding operating leases entered into by Borrower and
the Subsidiaries in the ordinary course of business; and
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63
(j) Liens on fixed assets of a Person existing at the time such
Person becomes a Subsidiary (or such Person is merged into or consolidated
with the Borrower or any Subsidiary) in accordance with the provisions of
Section 9.3 hereof; provided, however, that such Liens (i) only secure the
Debt permitted by subsection 9.1(k) above, (ii) were in existence prior to
such acquired Person becoming a Subsidiary (or prior to the contemplation
of such merger or consolidation), (iii) do not cover any property other
than the property of such acquired Person which is subject to such Liens
prior to such acquired Person becoming a Subsidiary (or prior to the
contemplation of such merger or consolidation) and (iv) do not cover any
Receivables.
Neither Borrower nor any Subsidiary shall enter into or assume any agreement
(other than the Loan Documents and the Senior Subordinated Note Documents)
prohibiting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired unless such agreement permits
the granting of Liens to secure the Obligations; provided that, in connection
with any Debt permitted to be incurred under Section 9.1 which is used to
finance the acquisition of an asset and any Lien securing the payment thereof
permitted by this Section 9.2, Borrower or the Subsidiary may agree that it will
not permit any other Liens to encumber the asset so acquired. Except as provided
herein, Borrower will not and will not permit any Subsidiaries directly or
indirectly to create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any
Subsidiary to: (1) pay dividends or make any other distribution on any of such
Subsidiary's capital stock owned by Borrower or any Subsidiary; (2) subject to
subordination provisions, pay any Debt owed to Borrower or any Subsidiary; (3)
make loans or advances to Borrower or any Subsidiary; or (4) transfer any of its
property or assets to Borrower or any Subsidiary.
Section 9.3 Mergers, Etc. The Borrower will not, and will not permit any
Subsidiary to, become a party to a merger or consolidation, or purchase or
otherwise acquire all or a substantial part of the business or assets of any
Person or all or a substantial part of the assets of a division or branch of a
Person or any shares or other evidence of beneficial ownership of any Person, or
wind-up, dissolve, or liquidate itself; provided that, if no Default exists or
would result therefrom:
(a) Borrower and the Subsidiaries may enter into the transactions
permitted by Section 9.5;
(b) Borrower and any Wholly-Owned Subsidiary may acquire shares or
other evidence of beneficial ownership of any Person or all or a
substantial part of each such Person's assets or all or a substantial part
of the assets of a division or branch of each such Person, if:
(i) the Target is involved in the type of business activities
described in Section 9.10 and the proposed acquisition is supported
by the Target's Board of Directors;
AMENDED AND RESTATED CREDIT AGREEMENT - Page 56
64
(ii) if the proposed acquisition is an acquisition of the
stock of a Target, the acquisition will be structured so that the
Target will become a Wholly-Owned Subsidiary. If the proposed
acquisition is an acquisition of assets, the acquisition will be
structured so that Borrower or a Wholly-Owned Subsidiary will
acquire all or substantially all of (1) the assets of the Target or
(2) the assets of a division or branch of the Target;
(iii) the Purchase Price for the proposed acquisition does not
exceed Forty Million Dollars ($40,000,000), the sum of the Purchase
Prices paid for all Permitted Acquisitions consummated since the
Closing Date (excluding the Purchase Price paid for the Atlas
Acquisition) plus, without duplication, the Purchase Price of the
proposed acquisition (excluding the Atlas Acquisition) does not
exceed Sixty-Five Million Dollars ($65,000,000) and the Purchase
Price to be paid to acquire the Target or its assets does not exceed
an amount equal to the product obtained by multiplying by five and
one-half (5.5) the Calculated EBITDA of the Target or, as
applicable, the Calculated EBITDA of the Target attributable to such
assets acquired, calculated for the most recently completed twelve
(12) month period prior to the closing of the proposed acquisition.
The term "Calculated EBITDA" means, for any period, the sum of the
following, each calculated without duplication for the Target or the
applicable assets for such period: (1) EBITDA of the Target or, as
applicable, the EBITDA of the Target attributable to the assets
acquired; plus (2) all of those verifiable (as determined by
Borrower and approved by the Agent) non-recurring expenses which
have been deducted in calculating the Net Income included in such
EBITDA for such period and which will be eliminated in the future
upon the consummation of the proposed acquisition by the Borrower;
minus (3) all income or gains which have been added in calculating
such Net Income for such period and which will, in the Borrower's
determination (as approved by the Agent), be eliminated in the
future upon the consummation of the proposed acquisition by the
Borrower;
(iv) Borrower provides evidence satisfactory to the Agent that
(A) the acquisition and all transactions contemplated thereby are
permitted by the Indenture; (B) the average daily balances of the
sum of Borrower's and the Subsidiaries' cash, cash equivalents and
Borrowing Availability for the thirty (30) day period prior to the
date of the delivery of the notice required by clause (v) below and
calculated as if the acquisition occurred on the first (1st) day of
such period, shall equal or exceed Fifteen Million Dollars
($15,000,000); and (C) Borrower shall be in compliance with the
ratio of Operating Cash Flow to Debt Service required by Section
10.1 for the four (4) Fiscal Quarter period then most recently
ending calculated on a proforma basis by including in Debt Service
for such period the amount of the amortization of any Debt assumed
or incurred in connection therewith for the next twelve (12) months
following the date of calculation and including in Operating Cash
Flow the sum of the following for the most recently completed twelve
(12) month period
AMENDED AND RESTATED CREDIT AGREEMENT - Page 57
65
prior to the Closing of the proposed acquisition: (1) the Calculated
EBITDA of the Target or, as applicable, the assets acquired, minus
(2) any provision for (or plus any benefit from) income or franchise
taxes included in determining the Net Income included in such
Calculated EBITDA; minus (3) interest expense deducted in
determining such Net Income, minus (4) all expenditures of the
Target or applicable to the assets being acquired which are
classified as capital expenditures in accordance with GAAP during
the period for which such Net Income is calculated (the sum of the
forgoing clauses (1) through (4) calculated for any period, herein
the "Target Operating Cash Flow");
(v) Borrower shall have provided to the Agent and each Bank at
least seven (7) Business Days prior to the date that the proposed
acquisition is to be consummated (but no earlier than ten (10)
Business Days prior to such date) the following: (a) the name of the
Target; (b) a description of the nature of the Target's business;
and (c) a certificate of the chief financial officer, treasurer or
chief executive officer of the Borrower (1) certifying that no
Default exists or could reasonably be expected to occur as a result
of the proposed acquisition, and (2) demonstrating compliance with
the criteria set forth in clauses (iii) and (iv) of this subsection
9.3(b); and (d) any other information the Agent may reasonably
request; and
(vi) The obligations arising under subsection 8.10(b) shall be
fulfilled simultaneously with the closing of the acquisition in
question.
(c) Borrower may consummate the repurchases of stock, options and
warrants in accordance with subsection 9.4(iii) and (iv);
(d) any Subsidiary may merge or consolidate with Borrower (provided
Borrower is the surviving entity) or with any Wholly-Owned Subsidiary or,
in connection with a Permitted Acquisition, any other Person that, in each
case is or becomes, simultaneously with such transaction, a Wholly-Owned
Subsidiary;
(e) Borrower may merge or consolidate with another Person in
connection with a Permitted Acquisition if the Borrower is the surviving
entity; and
(f) a Subsidiary may wind-up, dissolve, or liquidate if all of its
assets have been transferred in accordance with the restrictions set forth
in Section 9.8.
Section 9.4 Restricted Junior Payments. Borrower will not and will not
permit any Subsidiary to directly or indirectly declare, order, pay, make or set
apart any sum for (a) any dividend or other distribution, direct or indirect, on
account of any shares of any class of stock of Borrower or any Subsidiary now or
hereafter outstanding; (b) any redemption, conversion, exchange, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
AMENDED AND RESTATED CREDIT AGREEMENT - Page 58
66
direct or indirect, of any shares of any class of stock of Borrower or any
Subsidiary now or hereafter outstanding; or (c) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of Borrower or any Subsidiaries now or
hereafter outstanding except:
(i) Subsidiaries may make, declare and pay dividends and make other
distributions with respect to their capital stock to the extent necessary
to permit Borrower or the Subsidiary who is the direct parent of such
Subsidiary to pay the Obligations and to permit Borrower and such parent
to pay expenses (including general corporate expenses and management fees
payable to Richmont Capital Partners I, L.P. in an amount not to exceed
Five Hundred Thousand Dollars ($500,000) in any Fiscal Year) and taxes
incurred in the ordinary course of business;
(ii) Borrower and the Subsidiaries may declare and pay dividends on
its common stock payable solely in shares of common stock;
(iii) Borrower or a Subsidiary may repurchase its common stock or
any warrants or options to purchase its common stock from its and the
Subsidiaries' officers and employees who received such stock or options
from an employee stock option or ownership plan established by Borrower or
a Subsidiary (including repurchases arising as a result of the death,
disability or termination of any such officers and employees); provided
that (a) the aggregate amount paid for such repurchases in any Fiscal Year
does not exceed Two Million Five Hundred Thousand Dollars ($2,500,000),
(b) no Default exists or would result therefrom, (c) the average daily
balances of the sum of Borrower's and the Subsidiaries' cash, cash
equivalents and the Borrowing Availability for the thirty (30) day period
prior to the date of the repurchase and calculated as if the repurchase
had occurred on the first (1st) day of such period, shall equal or exceed
Ten Million Dollars ($10,000,000), (d) the repurchase is permitted by the
Indenture and (e) Borrower shall have provided Agent evidence of its
compliance with clauses (c) and (d) preceding on the date of the proposed
repurchase; and
(iv) Borrower may set apart and pay on or before March 31, 1999 an
aggregate amount not to exceed Ten Million Dollars ($10,000,000) for the
acquisition of its common stock (in addition to the amounts repurchased
pursuant to Subsection 9.4 (iii)) if (a) no Default exists or would result
therefrom, (b) such acquisition is permitted by the Indenture (with
Borrower providing Agent evidence thereof on or prior to the date of each
such acquisition under this clause (iv)) and (c) the average daily
balances of the sum of Borrower's and the Subsidiaries' cash, cash
equivalents and the Borrowing Availability for the thirty (30) day period
prior to the date of the acquisition and calculated as if the acquisition
had occurred on the first (1st) day of such period, shall equal or exceed
Fifteen Million Dollars ($15,000,000).
AMENDED AND RESTATED CREDIT AGREEMENT - Page 59
67
Section 9.5 Investments. The Borrower will not, and will not permit any
Subsidiary to, make or permit to remain outstanding any advance, loan, extension
of credit, or capital contribution to or investment in any Person, or purchase
or own any stocks, bonds, notes, debentures, or other securities of any Person,
or be or become a joint venturer with or partner of any Person, except:
(a) Permitted Acquisitions;
(b) Borrower and the Subsidiaries may own stock of the Subsidiaries
existing on the Closing Date;
(c) Borrower and the Subsidiaries may make loans and entered into
Guarantees, in each case, as permitted by subsections 9.1(c) and 9.1(i);
(d) readily marketable direct obligations of the United States of
America or any agency thereof with maturities of one year or less from the
date of acquisition;
(e) fully insured certificates of deposit with maturities of one
year or less from the date of acquisition issued by any commercial bank
operating in the United States of America having capital and surplus in
excess of Fifty Million Dollars ($50,000,000);
(f) commercial paper, maturing not more than 90 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the
Borrower) organized and in existence under the laws of the United States
of America or any foreign country recognized by the United States of
America with a rating at the time as of which any investment therein is
made of "P-1" (or higher) according to Xxxxx'x Investors Service, Inc. or
"A-1" (or higher) according to Standard and Poor's Rating Service or
securities with maturities of six months or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision
or taxing authority thereof, and rated at least "A" by Standard and Poor's
Rating Service or "A" by Xxxxx'x Investors Service, Inc.;
(g) loans and advances to employees for business expenses incurred
in the ordinary course of business not to exceed Three Hundred Thousand
Dollars ($300,000) in the aggregate at any time outstanding;
(h) existing investments described on Schedule 9.5 hereto;
(i) if no Default exists, Borrower and the Subsidiaries may make
additional capital contributions to or investments in or purchase any
stocks, bonds, or other equity securities authorized to be issued under
Section 9.6 of a Wholly-Owned Subsidiary or a newly created Person
organized by Borrower or a Subsidiary that, immediately after such
investment or purchase, will be a Wholly-Owned Subsidiary if the
obligations under Section 8.10 shall be fulfilled, the aggregate amount of
such contributions and investments made
AMENDED AND RESTATED CREDIT AGREEMENT - Page 60
68
under the permissions of this clause (i) do not exceed One Hundred
Thousand Dollars ($100,000) during the entire term of this Agreement and
such contributions and investments are permitted by the Indenture (with
Borrower providing Agent evidence thereof on or prior to the date of such
contribution or investment);
(j) Borrower and the Subsidiaries may acquire and own any notes,
stocks, bonds, or other equity securities of any Person received in
connection with (i) the sale of assets permitted by subsection 9.8 (e),
(ii) the bankruptcy or reorganization of suppliers and customers and (iii)
the settlement of delinquent obligations of, and disputes with, customers
and suppliers arising in the ordinary course of business;
(k) Borrower and the Subsidiaries may make extensions of trade
credit in the ordinary course of business;
(l) any advance, loan or extension of credit by Borrower or any
Subsidiary which may arise in connection with the performance under
Hedging Agreements; and
(m) the purchase of up to eight (8) shares of common capital stock
issued by Bradford & Company Food Brokers, Inc.; provided that the
aggregate amount paid for the purchase of all such stock shall not exceed
One Hundred Thousand Dollars ($100,000).
Section 9.6 Limitation on Issuance of Capital Stock. The Borrower will not
permit any Subsidiary to, at any time issue, sell, assign, or otherwise dispose
of (a) any of its capital stock, (b) any securities exchangeable for or
convertible into or carrying any rights to acquire any of its capital stock, or
(c) any option, warrant, or other right to acquire any of its capital stock,
except Subsidiaries may issue stock to Borrower or their immediate Parent if
such stock is pledged to the Agent under the terms of the Borrower Security
Agreement or, as applicable, the Subsidiary Security Agreement.
Section 9.7 Transactions With Affiliates. The Borrower will not, and will
not permit any Subsidiary to, enter into any transaction, including, without
limitation, the purchase, sale, or exchange of property or the rendering of any
service, with any Affiliate of the Borrower or such Subsidiary, except in the
ordinary course of and pursuant to the reasonable requirements of the Borrower's
or such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arms-length transaction with a Person not an Affiliate of the
Borrower or such Subsidiary, except that (a) Borrower and the Subsidiaries may
enter into transactions with each other to the extent not otherwise prohibited
hereby, (b) Borrower and the Subsidiaries may enter into the transactions
described on Schedule 9.7, and (c) Borrower may pay management fees to Richmont
Capital Partners I, L.P. in an amount not to exceed Five Hundred Thousand
Dollars ($500,000) per Fiscal Year if (i) no Default exists or would result
therefrom, (ii) the average daily balances of the sum of Borrower's and the
Subsidiaries' cash, cash equivalents and the Borrowing Availability for the
thirty (30) day period prior to the payment of any portion of such fee and
calculated as if the actual amount of such fee so
AMENDED AND RESTATED CREDIT AGREEMENT - Page 61
69
paid had been paid on the first (1st) day of such period, shall equal or exceed
One Dollars ($1.00), (iii) such fees are permitted to be paid under the
Indenture, and (iv) Borrower shall have provided Agent evidence of its
compliance with the preceding clauses (ii) and (iii) on the date of each such
payment.
Section 9.8 Disposition of Assets. The Borrower will not, and will not
permit any Subsidiary to, sell, lease, assign, transfer, or otherwise dispose of
any of its assets, except (a) dispositions of inventory in the ordinary course
of business; (b) dispositions of assets reasonably and in good faith determined
by Borrower or such Subsidiary to be obsolete or no longer necessary to its
business; (c) licenses, sublicenses, leases and subleases of intellectual
property, general intangibles, or other property (other than Receivables), in
each case in the ordinary course of business, that do not materially interfere
with the business of Borrower and the Subsidiaries; (d) the sale, lease or other
disposition of assets of a Subsidiary to Borrower or a Wholly-Owned Subsidiary;
and (e) the disposition of assets (other than Receivables), in addition to those
set forth in clauses (a) through (d) above if all the following conditions are
satisfied: (i) the aggregate sale price of the assets disposed of in any Fiscal
Year does not exceed Five Hundred Thousand Dollars ($500,000); (ii) no Default
exists or would result therefrom; and (iii) the consideration received is at
least equal to the fair market value of such assets and is not required to be
utilized to purchase the Senior Subordinated Notes in accordance with the
Indenture.
Section 9.9 Sale and Leaseback. The Borrower will not, and will not permit
any Subsidiary to, enter into any arrangement with any Person pursuant to which
it leases from such Person real or personal property that has been or is to be
sold or transferred, directly or indirectly, by it to such Person.
Section 9.10 Lines of Business. The Borrower will not, and will not permit
any Subsidiary to, engage in any line or lines of business activity other than
the businesses in which they are engaged on the date hereof and any business
related, ancillary or complementary to such businesses.
Section 9.11 Prepayment of Debt. Borrower will not, and will not permit
any Subsidiary to prepay, optionally redeem or repurchase any Debt other than
the Obligations; provided that (i) Borrower may prepay the Debt required to be
prepaid pursuant to Section 9.1(a) and (ii) Borrower may prepay up to an
aggregate amount of One Million Dollars ($1,000,000) of Debt during the term of
this Agreement( other than the Debt described in the foregoing clause (a)) if
(i) no Default exists or would result therefrom, (ii) the average daily balances
of the sum of Borrower's and the Subsidiaries' cash, cash equivalents and the
Borrowing Availability for the thirty (30) day period prior to the date of the
repayment and calculated as if the repayment had occurred on the first (1st) day
of such period, shall equal or exceed Two Million Dollars ($2,000,000) and (iii)
Borrower shall have provided Agent evidence of its compliance with clause (ii)
preceding on the date of the proposed repayment.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 62
70
Section 9.12 Atlas Acquisition Documents; Purchase Agreements. Borrower
will not, and will not permit any Subsidiary to: (a) amend or modify the terms
and conditions of the indemnities and licenses furnished pursuant to any of the
Atlas Acquisition Documents or any of the Purchase Agreements such that after
giving effect thereto such indemnities or licenses shall be materially less
favorable to the interests of Borrower or the Obligated Parties or the Banks in
any material respect or (b) otherwise amend or modify the other terms and
conditions of any of the Atlas Acquisition Documents or any of the Purchase
Agreements except to the extent that any such amendment or modification could
not reasonably be expected to have an adverse effect on the interests of the
Agent and the Banks in any material respect.
Section 9.13 Modifications to Senior Subordinated Note Documents. Borrower
will not and will not permit any Subsidiaries to change or amend the terms of
the Senior Subordinated Note Documents, if the effect of such amendment is to:
(a) increase the interest rate on the Senior Subordinated Notes; (b) shorten the
time of payments of principal or interest due under the Senior Subordinated Note
Documents; (c) change any event of default or any covenant to a materially more
onerous or restrictive provision; (d) change the subordination provisions
thereof (or the subordination terms of any guaranty thereof) in a manner adverse
to Agent or any Bank as senior creditors or the interests of the Banks under
this Agreement or any other Loan Document in any respect; or (e) change or amend
any other term of any Senior Subordinated Note Document in a manner materially
adverse to Agent or any Bank as senior creditors or the interests of the Banks
under this Agreement or any other Loan Document in any respect.
Section 9.14 Designation of Senior Debt. Borrower will not designate any
Debt as "Designated Senior Indebtedness" under the terms of the Indenture.
ARTICLE 10
Financial Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Bank has any Commitment hereunder, the
Borrower will perform and observe the following financial covenants:
Section 10.1 Debt Service Ratio. Borrower shall not permit the ratio of
the Operating Cash Flow to Debt Service calculated as of the last day of each
Fiscal Quarter during the periods set forth below to be less than the ratio set
forth below for such period:
================================================================================
Period Amount
================================================================================
Closing Date through March 31, 1998 1.10 to 1.00
--------------------------------------------------------------------------------
April 1, 1998 through December 31, 1998 1.15 to 1.00
--------------------------------------------------------------------------------
AMENDED AND RESTATED CREDIT AGREEMENT - Page 63
71
--------------------------------------------------------------------------------
January 1, 1999 through Termination Date 1.25 to 1.00
================================================================================
The phrase "Operating Cash Flow" means, as of any Fiscal Quarter end and for the
period of calculation then ending (the "Subject Period"), the total of the
following calculated without duplication: (A), on a pro forma basis, the Target
Operating Cash Flow for each Prior Target or, as applicable, the Target
Operating Cash Flow attributable to the assets acquired from such Prior Target,
for any portion of such Subject Period occurring prior to the date of the
acquisition of such Prior Target or the related assets plus (B) the total of the
following for Borrower and the Subsidiaries calculated on a consolidated basis
without duplication for the four (4) Fiscal Quarter period (or portion thereof
since the Closing Date) then ending: (a) Net Income; plus (b) amortization and
depreciation expense deducted in determining Net Income; minus (c) all Capital
Expenditures. The phrase "Debt Service" means, as of any Fiscal Quarter end, the
aggregate amount of the amortization on the Borrower's and the Subsidiaries'
Debt scheduled for: (a) if calculated as of December 31, 1997, the period from
December 31, 1997 through March 31, 1998; (b) if calculated as of March 31,
1998, the period from March 31, 1998 through September 30,1998; (c) if
calculated as of June 30, 1998, the period from June 30, 1998 through March 31,
1999; and (d) if calculated as of any other Fiscal Quarter end, the four (4)
Fiscal Quarter period following such Fiscal Quarter end.
Section 10.2 Interest Coverage. Borrower shall not permit the ratio of (a)
the sum of the EBITDA of Borrower minus Capital Expenditures to (b) cash
interest expense, both calculated for the four (4) Fiscal Quarter period (or
portion thereof since the Closing Date) ending on the last day of each Fiscal
Quarter to be less than (i) 1.50 to 1.00 as of each Fiscal Quarter end prior to
January 1, 2000; (ii) 1.75 to 1.00 as of each Fiscal Quarter end after January
1, 2000 but prior to January 1, 2001; and (iii) 2.00 to 1.00 as of each Fiscal
Quarter end thereafter.
Section 10.3 Capital Expenditure Limits. Borrower shall not, and shall not
permit any Subsidiary to, make or incur Capital Expenditures during each period
set forth in the table below in excess of an aggregate amount equal to the
applicable Capital Expenditure Limit for such period. The term "Capital
Expenditure Limit" means for each period set forth in the table below, the sum
of (a) the Dollar amount set forth in the table below opposite the applicable
period (such Dollar amount as set forth for each such period herein the "Yearly
Limit") plus (b) the lesser of (i) One Hundred percent (100%) of the Yearly
Limit from the immediately preceding period which was not expended by Borrower
and Subsidiaries for Capital Expenditures in such preceding period or (ii) Four
Million Dollars ($4,000,000) (the amount calculated for any period under this
clause (b), herein the "Carryover Amount"). Any Carryover Amount carried into
either the 1998 or 1999 Fiscal Years may only used for the contemplated upgrade
of Borrower's and the Subsidiaries' computer system. In calculating compliance
with this Section 10.3, (a) Capital Expenditures made in a period shall first be
debited against the Yearly Limit for such period then debited against the
Carryover Amount carried into such period, if any, from the preceding period
pursuant to this Section 10.3, and (b) the aggregate amount of all payments due
under a Capital Lease Obligation
AMENDED AND RESTATED CREDIT AGREEMENT - Page 64
72
for the entire term thereof (excluding, however, the interest portion of
capitalized lease payments) shall be considered expended in full on the date
that the Capital Lease Obligation is entered into.
===============================================================
Period Amount
===============================================================
Closing Date through December 31, 1997 $ 1,000,000
---------------------------------------------------------------
January 1, 1998 through December 31, 1998 $ 7,500,000
---------------------------------------------------------------
January 1, 1999 through December 31, 1999 $ 7,500,000
---------------------------------------------------------------
Each Fiscal Year thereafter $ 5,000,000
===============================================================
ARTICLE 11
Default
Section 11.1 Events of Default. Each of the following shall be deemed an
"Event of Default":
(a) The Borrower shall fail to pay (i) when due any principal,
Reimbursement Obligation, interest or fees payable under any Loan Document
or any part thereof; and (ii) within five (5) Business Days after the date
Borrower receives written notice of the failure to pay when due any other
Obligation or any part thereof.
(b) Any representation, warranty or certification made or deemed
made by the Borrower or any Obligated Party (or any of their respective
officers) in any Loan Document or in any certificate, report, notice, or
financial statement furnished at any time in connection with any Loan
Document shall be false, misleading, or erroneous in any material respect
when made or deemed to have been made.
(c) The Borrower shall fail to perform, observe, or comply with any
covenant, agreement, or term contained in Article 9 or Article 10 of this
Agreement or Article IV of the Borrower Security Agreement or of any
section of the Lockbox Agreements. Any Granting Subsidiary shall fail to
perform, observe or comply with any covenant, agreement or term contained
in Article IV of the Subsidiary Security Agreement or of any section of
the Lockbox Agreements.
(d) The Borrower shall fail to perform, observe or comply with any
covenant, agreement or term contained in clauses (a) through (f), (i), (j)
and (l) of Section 8.1 of this Agreement. The Borrower shall fail to
perform, observe or comply with any covenant, agreement or term contained
in clauses (g) (h), (k), (m) and (n) of Section 8.1 of this Agreement and
such failure shall continue for five (5) Business Days.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 65
73
(e) The Borrower or any Obligated Party shall fail to perform,
observe, or comply with any other covenant, agreement, or term contained
in any Loan Document (other than covenants to pay the Obligations, the
covenants described in subsections 11.1(c) and (d)) and such failure shall
continue for a period of ten (10) Business Days after the earlier of (i)
the date the Agent or any Bank provides Borrower with notice thereof or
(ii) the date the Borrower should have notified the Agent thereof in
accordance with subsection 8.1(j) hereof.
(f) The Borrower, any Subsidiary, or any Obligated Party shall (i)
apply for or consent to the appointment of, or the taking of possession
by, a receiver, custodian, trustee, examiner, liquidator or the like of
itself or of all or a substantial part of its property, (ii) make a
general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the United States Bankruptcy Code (as now or
hereafter in effect, the "Bankruptcy Code"), (iv) institute any proceeding
or file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
winding-up, or composition or readjustment of debts, (v) fail to
controvert in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against it in an involuntary case under the Bankruptcy
Code, (vi) admit in writing its inability to, or be generally unable to
pay its debts as such debts become due, or (vii) take any corporate action
for the purpose of effecting any of the foregoing.
(g) A proceeding or case shall be commenced, without the
application, approval or consent of the Borrower, any Subsidiary, or any
Obligated Party, in any court of competent jurisdiction, seeking (i) its
reorganization, liquidation, dissolution, arrangement or winding-up, or
the composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the like of the
Borrower or such Subsidiary or Obligated Party or of all or any
substantial part of its property, or (iii) similar relief in respect of
the Borrower or such Subsidiary or Obligated Party under any law relating
to bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of
the foregoing shall be entered and continue unstayed and in effect, for a
period of sixty (60) or more days; or an order for relief against the
Borrower, any Subsidiary, or any Obligated Party shall be entered in an
involuntary case under the Bankruptcy Code.
(h) The Borrower, any Subsidiary, or any Obligated Party shall fail
to discharge within a period of thirty (30) days after the commencement
thereof any attachment, sequestration, forfeiture, or similar proceeding
or proceedings involving an aggregate amount in excess of Five Hundred
Thousand Dollars ($500,000) against any of its assets or properties.
(i) A final judgment or judgments for the payment of money in excess
of Five Hundred Thousand Dollars ($500,000) in the aggregate shall be
rendered by a court or
AMENDED AND RESTATED CREDIT AGREEMENT - Page 66
74
courts against the Borrower, any Subsidiaries, or any Obligated Party and
the same shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within
thirty (30) days from the date of entry thereof and the Borrower or the
relevant Subsidiary or Obligated Party shall not, within said period of
thirty (30) days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof
to be stayed during such appeal.
(j) The Borrower, any Subsidiary, or any Obligated Party shall fail
to pay when due any principal of or interest on any Debt if the aggregate
principal amount of the affected Debt equals or exceeds Five Hundred
Thousand Dollars ($500,000) (other than the Obligations), or the maturity
of any such Debt shall have been accelerated, or any such Debt shall have
been required to be prepaid prior to the stated maturity thereof or any
event shall have occurred with respect to any such Debt that permits any
holder or holders of such Debt or any Person acting on behalf of such
holder or holders to accelerate the maturity thereof or require any such
prepayment. Without limiting the generality of the foregoing, the
occurrence of an event of default under the terms of the Senior
Subordinated Note Documents.
(k) This Agreement shall cease to be in full force and effect or
shall be declared null and void or the validity or enforceability thereof
shall be contested or challenged by the Borrower, any Subsidiary, any
Obligated Party or the Borrower or any Obligated Party shall deny that it
has any further liability or obligation under any of the Loan Documents,
or any lien or security interest created by the Loan Documents shall for
any reason (other than the negligence of the Agent or the release thereof
in accordance with the Loan Documents) cease to be a valid, first priority
(other than as a result of the Liens permitted to have priority under
Section 9.2) perfected (other than as may result because of the provisions
of Section 8.10) security interest in and lien upon any of the Collateral
purported to be covered thereby.
(l) Any of the following events shall occur or exist with respect to
the Borrower or any ERISA Affiliate: (i) any Prohibited Transaction
involving any Plan; (ii) any Reportable Event with respect to any Plan;
(iii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan; (iv) any event or
circumstance that might constitute grounds entitling the PBGC to institute
proceedings under Section 4042 of ERISA for the termination of, or for the
appointment of a trustee to administer, any Plan, or the institution by
the PBGC of any such proceedings; or (v) complete or partial withdrawal
under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer Plan; and
in each case above, such event or condition, together with all other
events or conditions, if any, have subjected or could in the reasonable
opinion of Required Banks subject the Borrower to any tax, penalty, or
other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise
(or any combination thereof) which in the aggregate exceed or could
reasonably be expected to exceed Five Hundred Thousand Dollars ($500,000).
AMENDED AND RESTATED CREDIT AGREEMENT - Page 67
75
(m) Any Person or group (as defined in Section 13(d)(3) or 14(d)(2)
of the Exchange Act) other than one or more Richmont Affiliates shall
become the direct or indirect beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of more than 49% of the total voting power of all
classes of capital stock then outstanding of the Borrower entitled
(without regard to the occurrence of any contingency) to vote in elections
of directors of the Borrower. The term "Richmont Affiliate" means Richmont
Capital Partners I, L.P. or any other Person that directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is
under common control with Richmont Capital Partners I, L.P. or Xxxx Xxx
Inc.
(n) Either (1) one or more Richmont Affiliates (as defined in clause
(m) immediately above) cease to beneficially own and control, directly or
indirectly, at least fifty-one percent (51%) of the issued and outstanding
shares of capital stock of Borrower (determined on a fully diluted basis)
entitled (without regard to the occurrence of any contingency) to vote in
elections of directors of Borrower, or (2) one or more Richmont Affiliates
cease to have the power to elect a majority of the members of the board of
directors of Borrower.
(o) A change shall occur in the financial condition of the Borrower,
any of the Subsidiaries or in the value of the Collateral, which does, or
would reasonably be expected to, have a Material Adverse Effect.
Section 11.2 Remedies. If any Event of Default shall occur and be
continuing, the Agent may (and if directed by Required Banks, shall) do any one
or more of the following:
(a) Acceleration. By notice to the Borrower, declare all outstanding
principal of and accrued and unpaid interest on the Notes and all other
amounts payable by the Borrower under the Loan Documents immediately due
and payable, and the same shall thereupon become immediately due and
payable, without further notice, demand, presentment, notice of dishonor,
notice of acceleration, notice of intent to accelerate, protest, or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower.
(b) Termination of Commitments. Terminate the Commitments,
including, without limitation, the obligation of the Agent to issue
Letters of Credit, without notice to the Borrower.
(c) Judgment. Reduce any claim to judgment.
(d) Foreclosure. Foreclose or otherwise enforce any Lien granted to
the Agent for the benefit of itself and the Banks to secure payment and
performance of the Obligations in accordance with the terms of the Loan
Documents.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 68
76
(e) Rights. Exercise any and all rights and remedies afforded by the
laws of the State of New York or any other jurisdiction, by any of the
Loan Documents, by equity, or otherwise.
Provided, however, that upon the occurrence of an Event of Default under
subsections 11.1(f) or (g) hereof, the Commitments of all of the Banks shall
automatically terminate (including, without limitation, the obligation of the
Agent to issue Letters of Credit), and the outstanding principal of and accrued
and unpaid interest on the Notes and all other amounts payable by the Borrower
under the Loan Documents shall thereupon become immediately due and payable
without notice, demand, presentment, notice of dishonor, notice of acceleration,
notice of intent to accelerate, protest, or other formalities of any kind, all
of which are hereby expressly waived by the Borrower.
Section 11.3 Cash Collateral. If an Event of Default shall have occurred
and be continuing the Borrower shall, if requested by the Agent or Required
Banks, pledge to the Agent as security for the Obligations an amount in
immediately available funds equal to the then outstanding Letter of Credit
Liabilities, such funds to be held in a cash collateral account at the Agent
without any right of withdrawal by the Borrower.
Section 11.4 Performance by the Agent. If the Borrower shall fail to
perform any covenant or agreement in accordance with the terms of the Loan
Documents, the Agent may, at the direction of Required Banks, perform or attempt
to perform such covenant or agreement on behalf of the Borrower. In such event,
the Borrower shall, at the request of the Agent, promptly pay any amount
expended by the Agent or the Banks in connection with such performance or
attempted performance to the Agent at the Principal Office, together with
interest thereon at the applicable Default Rate from and including the date of
such expenditure to but excluding the date such expenditure is paid in full.
Notwithstanding the foregoing, it is expressly agreed that neither the Agent nor
any Bank shall have any liability or responsibility for the performance of any
obligation of the Borrower under any Loan Document. Under the terms of certain
of the agreements entered into in accordance with subsection 6.1(o), Agent may
be obligated to pay certain amounts to the financial institutions party thereto
from time to time, including without limitations, fees owed to such financial
institutions arising from their lock box and other deposit account services and
amounts sufficient to reimburse such financial institutions for the amount of
any item deposited in the related account which is returned unpaid. In the event
Agent is required to pay any such amounts, Agent shall notify the Borrower and
the Borrower shall promptly pay any amount so expended by Agent to the Agent at
the Principal Office, together with interest at the Default Rate from and
including the date of such expenditure to but excluding the date that such
expenditure is paid in full and if the Borrower fails to make such payment,
Agent shall have the option of automatically making a Loan in the amount so
expended as a Base Rate Account.
Section 11.5 Setoff. If an Event of Default shall have occurred and be
continuing, each Bank is hereby authorized at any time and from time to time,
without notice to the Borrower (any such notice being hereby expressly waived by
the Borrower), to set off and apply any and all deposits (general, time, demand,
provisional or final) at any time held and other indebtedness at any
AMENDED AND RESTATED CREDIT AGREEMENT - Page 69
77
time owing by such Bank to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under any Loan Document, irrespective of whether or not the Agent or such Bank
shall have made any demand under such Loan Documents and although such
obligations may be unmatured. Each Bank agrees promptly to notify the Borrower
(with a copy to the Agent) after any such setoff and application, provided that
the failure to give such notice shall not affect the validity of such setoff and
application. The rights and remedies of each Bank hereunder are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which such Bank may have.
Section 11.6 Continuance of Default. For purposes of all Loan Documents, a
Default shall be deemed to have continued and exist until the Agent shall have
actually received evidence satisfactory to the Agent that such Default shall
have been remedied.
ARTICLE 12
The Agent
Section 12.1 Appointment, Powers and Immunities. Each Bank hereby appoints
and authorizes The Chase Manhattan Bank to act as its agent hereunder and under
the other Loan Documents (and continues the agency created under the Prior
Agreement) with such powers as are specifically delegated to the Agent by the
terms of the Loan Documents, together with such other powers as are reasonably
incidental thereto. Neither the Agent nor any of its Affiliates, officers,
directors, employees, attorneys, or agents shall be liable for any action taken
or omitted to be taken by any of them hereunder or otherwise in connection with
any Transaction Document or any of the other Transaction Documents except for
its or their own gross negligence or willful misconduct. Without limiting the
generality of the preceding sentence, the Agent (i) may treat the payee of any
Note as the holder thereof until it receives written notice of the assignment or
transfer thereof signed by such payee and in form satisfactory to the Agent;
(ii) shall have no duties or responsibilities except those expressly set forth
in the Loan Documents, and shall not by reason of any Loan Document be a trustee
or fiduciary for any Bank; (iii) shall not be required to initiate any
litigation or collection proceedings under any Transaction Document except to
the extent requested by Required Banks; (iv) shall not be responsible to the
Banks for any recitals, statements, representations or warranties contained in
any Transaction Document, or any certificate or other documentation referred to
or provided for in, or received by any of them under, any Transaction Document,
or for the value, validity, effectiveness, enforceability, or sufficiency of any
Transaction Document or any other documentation referred to or provided for
therein or for any failure by any Person to perform any of its obligations
thereunder; (v) may consult with legal counsel (including counsel for the
Borrower), independent public accountants, and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants, or experts; and
(vi) shall incur no liability under or in respect of any Transaction Document by
acting upon any notice, consent, certificate, or other instrument or writing
believed by it to be genuine and signed or sent by the proper party or parties.
As to any matters not expressly provided for by any Loan Document, the Agent
shall in all cases be
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78
fully protected in acting, or in refraining from acting, hereunder in accordance
with instructions signed by Required Banks, and such instructions of Required
Banks and any action taken or failure to act pursuant thereto shall be binding
on all of the Banks; provided, however, that the Agent shall not be required to
take any action which exposes it to personal liability or which is contrary to
any Loan Document or applicable law.
Section 12.2 Rights of Agent as a Bank. With respect to its Commitment,
the Loans made by it and the Note issued to it, The Chase Manhattan Bank (and
any successor acting as Agent) in its capacity as a Bank hereunder shall have
the same rights and powers hereunder as any other Bank and may exercise the same
as though it were not acting as the Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to, act as trustee under
indentures of, provide merchant banking services to, and generally engage in any
kind of banking, trust, or other business with the Borrower, any Subsidiaries,
any Obligated Party, and any other Person who may do business with or own
securities of the Borrower, any Subsidiary, or any Obligated Party, all as if it
were not acting as the Agent and without any duty to account therefor to the
Banks.
Section 12.3 Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default (other than the non-payment of principal
of or interest on the Loans or of commitment fees) unless the Agent has received
notice from a Bank or the Borrower specifying such Default and stating that such
notice is a "Notice of Default." In the event that the Agent receives such a
notice of the occurrence of a Default, the Agent shall give prompt notice
thereof to the Banks (and shall give each Bank prompt notice of each such
non-payment). The Agent shall (subject to Section 12.1 hereof) take such action
with respect to such Default as shall be directed by Required Banks, provided
that unless and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default as it shall seem advisable and in the
best interest of the Banks.
Section 12.4 Indemnification. THE BANKS HEREBY AGREE TO INDEMNIFY THE
AGENT FROM AND HOLD THE AGENT HARMLESS AGAINST (TO THE EXTENT NOT REIMBURSED
UNDER SECTIONS 13.1 AND 13.2 HERETO, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE
BORROWER UNDER SECTIONS 13.1 AND 13.2 HERETO), RATABLY IN ACCORDANCE WITH THEIR
RESPECTIVE COMMITMENT PERCENTAGES, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES
(INCLUDING ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER
WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT IN ANY WAY
RELATING TO OR ARISING OUT OF ANY OF THE TRANSACTION DOCUMENTS OR ANY ACTION
TAKEN OR OMITTED TO BE TAKEN BY THE AGENT UNDER OR IN RESPECT OF ANY OF THE
TRANSACTION DOCUMENTS; PROVIDED, THAT NO BANK SHALL BE LIABLE FOR ANY PORTION OF
THE FOREGOING TO THE EXTENT CAUSED BY THE AGENT'S GROSS NEGLIGENCE
AMENDED AND RESTATED CREDIT AGREEMENT - Page 71
79
OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE EXPRESS
INTENTION OF THE BANKS THAT THE AGENT SHALL BE INDEMNIFIED HEREUNDER FROM AND
HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF THE
AGENT. WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION, EACH BANK AGREES TO
REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE (CALCULATED ON
THE BASIS OF THE COMMITMENT PERCENTAGES) OF ANY AND ALL OUT-OF-POCKET EXPENSES
(INCLUDING ATTORNEYS' FEES) INCURRED BY THE AGENT IN CONNECTION WITH THE
PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR
ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF,
OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THE TRANSACTION
DOCUMENTS, TO THE EXTENT THAT THE AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY
THE BORROWER.
Section 12.5 Independent Credit Decisions. Each Bank agrees that it has
independently and without reliance on the Agent or any other Bank, and based on
such documentation and information as it has deemed appropriate, made its own
credit analysis of the Borrower and decision to enter into any Loan Document and
that it will, independently and without reliance upon the Agent or any other
Bank, and based upon such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under any Transaction Document. Except as otherwise specifically
set forth herein, the Agent shall not be required to keep itself informed as to
the performance or observance by the Borrower or any Obligated Party of any
Transaction Document or to inspect the properties or books of the Borrower or
any Obligated Party. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent
hereunder or under the other Transaction Documents, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other financial
information concerning the affairs, financial condition or business of the
Borrower or any Obligated Party (or any of their Affiliates) which may come into
the possession of the Agent or any of its Affiliates.
Section 12.6 Several Commitments. The Commitments and other obligations of
the Banks under any Loan Document are several. The default by any Bank in making
a Loan in accordance with its Commitment shall not relieve the other Banks of
their obligations under any Loan Document. In the event of any default by any
Bank in making any Loan, each nondefaulting bank shall be obligated to make its
Loan but shall not be obligated to advance the amount which the defaulting Bank
was required to advance hereunder. No Bank shall be responsible for any act or
omission of any other Bank.
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Section 12.7 Successor Agent. Subject to the appointment and acceptance of
a successor Agent as provided below, the Agent may resign at any time by giving
notice thereof to the Banks and the Borrower and the Agent may be removed at any
time by Required Banks if it has breached its obligations under the Loan
Documents. Upon any such resignation or removal, Required Banks will have the
right to appoint a successor Agent with the Borrower's consent, which shall not
be unreasonably withheld. If no successor Agent shall have been so appointed by
Required Banks and shall have accepted such appointment within thirty (30) days
after the retiring Agent's giving of notice of resignation or the Required
Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of
the Banks, appoint a successor Agent approved by the Borrower, which approval
will not be unreasonably withheld, which shall be a commercial bank organized
under the laws of the United States of America or any State thereof and having
combined capital and surplus of at least One Hundred Million Dollars
($100,000,000). Upon the acceptance of its appointment as successor Agent, such
successor Agent shall thereupon succeed to and become vested with all rights,
powers, privileges, immunities, contractual obligation, and duties of the
resigning or removed Agent, including all obligations under any Letters of
Credit, and the resigning or removed Agent shall be discharged from its duties
and obligations under the Loan Documents, including, without limitation, its
obligations under all Letters of Credit. After any Agent's resignation or
removal as Agent, the provisions of this Article 12 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was the Agent.
Section 12.8 Authorized Actions. Agent is irrevocably authorized by the
Banks, without any further action by any Bank to (a) subordinate or release the
Liens granted to Agent to secure the Obligations with respect to any equipment
purchased after the Closing Date, to any purchase money Liens granted therein in
accordance with the permissions set out in Section 9.2 and (b) release the
Agent's Liens in Collateral (i) permitted to be sold or otherwise disposed of
hereunder and (ii) upon termination of the Commitments, collateralization of all
outstanding Letters of Credit, and payment and satisfaction of all other
non-contingent Obligations under the Loan Documents.
Section 12.9 Administrative Fee. The Borrower agrees to pay to the Agent
on the last day of each month beginning on December 31, 1997 and on the
Termination Date, an administrative fee equal to Two Thousand Dollars ($2,000).
ARTICLE 13
Miscellaneous
Section 13.1 Expenses. The Borrower hereby agrees to pay on demand: (a)
all costs and expenses of the Agent arising in connection with the preparation,
negotiation, execution, and delivery of the Transaction Documents, including,
without limitation, the fees and expenses of legal counsel for the Agent; (b)
all costs and expenses of the Agent arising in connection the preparation,
negotiation, execution and delivery of any and all amendments or other
modifications to the Transaction Documents, including, without limitation, the
fees and expenses of legal counsel for the Agent; (c) all fees, costs and
expenses of the Agent arising in connection with any Letter of Credit,
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81
including the Agent's customary fees for amendments, transfers and drawings on
Letters of Credit; (d) all costs and expenses of the Agent in connection with
any Default and the enforcement of any Transaction Document, including, without
limitation, the fees and expenses of legal counsel for the Agent; (e) all
reasonable fees, costs and expenses of any Bank (including legal fees and
expenses of counsel to any Bank) arising in connection with an Event of Default;
(f) all transfer, stamp, documentary, or other similar taxes, assessments, or
charges levied by any Governmental Authority in respect of any Transaction
Document; (e) all costs, expenses, assessments, and other charges incurred in
connection with any filing, registration, recording, or perfection of any
security interest or Lien contemplated by any Transaction Document; and (g) all
other costs and expenses incurred by the Agent in connection with any
Transaction Document, including, without limitation, all costs, expenses, and
other charges incurred in connection with any field examination, audit or
appraisal in respect of the Borrowing Base, the Collateral or the records of
Borrower and the Obligated Parties relating thereto.
Section 13.2 Indemnification. THE BORROWER SHALL INDEMNIFY THE AGENT AND
EACH BANK AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF THEM HARMLESS AGAINST,
ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS' FEES) TO WHICH ANY OF
THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A)
ANY BREACH BY THE BORROWER OR ANY OBLIGATED PARTY OF ANY REPRESENTATION,
WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE TRANSACTION
DOCUMENTS, (B) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR
CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF
THE PROPERTIES OR ASSETS OF THE BORROWER OR ANY SUBSIDIARY, (C) THE USE OR
PROPOSED USE OF ANY LETTER OF CREDIT OR ANY PAYMENT OR FAILURE TO PAY WITH
RESPECT TO ANY LETTER OF CREDIT, (D) ANY AND ALL TAXES, LEVIES, DEDUCTIONS, AND
CHARGES IMPOSED ON THE AGENT OR ANY BANK IN RESPECT OF ANY LETTER OF CREDIT, OR
(E) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING
RELATING TO ANY OF THE FOREGOING, THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY; PROVIDED THAT THE PERSON ENTITLED TO BE INDEMNIFIED UNDER
THIS SECTION SHALL NOT BE INDEMNIFIED FROM OR HELD HARMLESS AGAINST ANY LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS OR
EXPENSES (INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM ITS GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITING ANY PROVISION OF ANY LOAN
DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO
BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS
AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
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PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS'
FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF
SUCH PERSON.
Section 13.3 Limitation of Liability. None of the Agent, any Bank, or any
Affiliate, officer, director, employee, attorney, or agent thereof shall have
any liability with respect to, and the Borrower and, by the execution of the
Loan Documents, to which it is a party each Obligated Party, hereby waives,
releases, and agrees not to xxx any of them upon, any claim for any special,
indirect, incidental, consequential or punitive damages suffered or incurred by
the Borrower or any Obligated Party in connection with, arising out of, or in
any way related to any of the Transaction Documents, or any of the transactions
contemplated by any of the Transaction Documents.
Section 13.4 No Duty. Except as may otherwise be required by Section
13.22, all attorneys, accountants, appraisers, and other professional Persons
and consultants retained by the Agent or any Bank shall have the right to act
exclusively in the interest of the Agent and the Banks and shall have no duty of
disclosure, duty of loyalty, duty of care, or other duty or obligation of any
type or nature whatsoever to the Borrower, any Obligated Party, any of the
Borrower's shareholders or any other Person.
Section 13.5 No Fiduciary Relationship. The relationship between the
Borrower and the Obligated Parties on the one hand and the Agent and each Bank
on the other is solely that of debtor and creditor, and neither the Agent nor
any Bank has any fiduciary or other special relationship with the Borrower or
any Obligated Parties, and no term or condition of any of the Loan Documents
shall be construed so as to deem the relationship between the Borrower and the
Obligated Parties on the one hand and the Agent and each Bank on the other and
any Bank to be other than that of debtor and creditor.
Section 13.6 Equitable Relief. The Borrower recognizes that in the event
the Borrower or any Obligated Party fails to pay, perform, observe, or discharge
any or all of the obligations under the Loan Documents, any remedy at law may
prove to be inadequate relief to the Agent and the Banks. The Borrower therefore
agrees that the Agent and the Banks, if the Agent or the Required Banks so
request, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
Section 13.7 No Waiver; Cumulative Remedies. No failure on the part of the
Agent or any Bank to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under any Transaction
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under any Transaction Document
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege. The rights and remedies provided for in the
Transaction Documents are cumulative and not exclusive of any rights and
remedies provided by law.
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Section 13.8 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. The
Borrower may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of the Agent and all of the
Banks. Any Bank may sell participations to one or more banks or other
institutions in or to all or a portion of its rights and obligations under
the Loan Documents (including, without limitation, all or a portion of its
Commitment, the Loans owing to it and the Letter of Credit Liabilities
which it has made or in which it has a participating interest); provided,
however, that (i) such Bank's obligations under the Loan Documents
(including, without limitation, its Commitments) shall remain unchanged,
(ii) such Bank shall remain solely responsible to the Borrower for the
performance of such obligations, (iii) such Bank shall remain the holder
of its Notes and owner of its participation or other interests in Letter
of Credit Liabilities for all purposes of any Loan Document, (iv) the
Borrower shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under the Loan
Documents, and (v) such Bank shall not sell a participation that conveys
to the participant the right to vote or give or withhold consents under
any Loan Document, other than the right to vote upon or consent to (1) any
increase of such Bank's Commitments, (2) any reduction of the principal
amount of, or interest to be paid on, the Loans or other Obligations of
such Bank, (3) any reduction of any commitment fee, letter of credit fee,
or other amount payable to such Bank under any Loan Document, or (4) any
postponement of any date for the payment of any amount payable in respect
of the Loans or other Obligations of such Bank.
(b) The Borrower and each of the Banks agree that any Bank (the
"Assigning Bank") may at any time assign to one or more commercial banks,
savings and loan association, savings bank, finance company, insurance
company, pension fund, mutual fund, or other financial institution
(whether a corporation, partnership, or other entity) (herein an "Eligible
Assignee") all, or a proportionate part of all, of its rights and
obligations under the Loan Documents (including, without limitation, its
Commitments and Loans and participation interests) (each an "Assignee");
provided, however, that (i) each such assignment shall be of a consistent,
and not a varying, percentage of all of the assigning Bank's rights and
obligations under the Loan Documents, (ii) except in the case of an
assignment of all of a Bank's rights and obligations under the Loan
Documents, the amount of the Commitment of the assigning Bank being
assigned pursuant to each assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no
event be less than Five Million Dollars ($5,000,000), (iii) the parties to
each such assignment shall execute and deliver to the Agent for its
acceptance and recording in the Register (as defined below), an Assignment
and Acceptance, together with the Note subject to such assignment, and a
processing and recordation fee of Three Thousand Dollars ($3,000) payable
by the assignor or assignee (and not the Borrower); and (iv) the Borrower
and the Agent must consent to such assignment, which consent shall not be
unreasonably withheld, with such consents to be evidenced by the
Borrower's and the
AMENDED AND RESTATED CREDIT AGREEMENT - Page 76
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Agent's execution of the Assignment and Acceptance. Upon such execution,
delivery, acceptance, and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be
at least five (5) Business Days after the execution thereof, or, if so
specified in such Assignment and Acceptance, the date of acceptance
thereof by the Agent, (x) the assignee thereunder shall be a party hereto
as a "Bank" and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Bank hereunder and under the Loan Documents
and (y) the Bank that is an 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 and be released from its
obligations under the Loan Documents (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of a Bank's rights
and obligations under the Loan Documents, such Bank shall cease to be a
party thereto).
(c) The Agent shall maintain at its Principal Office 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 Banks and the
Commitments of, and principal amount of the Loans owing to and Letter of
Credit Liabilities participated in by, each Bank from time to time (the
"Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Agent, and
the Banks may treat each Person whose name is recorded in the Register as
a Bank hereunder for all purposes under the Loan Documents. The Register
shall be available for inspection by the Borrower or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
Assigning Bank and Assignee representing that it is an Eligible Assignee,
together with any Notes subject to such assignment, the Agent shall, if
such Assignment and Acceptance has been completed and is in substantially
the form of Exhibit "E" hereto, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register, and (iii)
give prompt written notice thereof to the Borrower. Within five (5)
Business Days after its receipt of such notice the Borrower, at its
expense, shall execute and deliver to the Agent in exchange for the
surrendered Note new Notes to the order of such Eligible Assignee in an
amount equal to the Commitment assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Bank has retained a Commitment, a
Note to the order of the assigning Bank in an amount equal to the
Commitment retained by it hereunder (each such promissory note shall
constitute a "Note" for purposes of the Loan Documents). Such new Notes
shall be in an aggregate principal amount of the surrendered Note, shall
be dated the effective date of such Assignment and Acceptance, and shall
otherwise be in substantially the form of Exhibit "A" hereto.
(e) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section, disclose
to the assignee or
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85
participant or proposed assignee or participant, any information relating
to the Borrower or any Subsidiary furnished to such Bank by or on behalf
of the Borrower or the Subsidiaries.
Section 13.9 Survival. All representations and warranties made in any Loan
Document or in any document, statement, or certificate furnished in connection
with any Loan Document shall survive the execution and delivery of the Loan
Documents and no investigation by the Agent or any Bank or any closing shall
affect the representations and warranties or the right of the Agent or any Bank
to rely upon them. Without prejudice to the survival of any other obligation of
the Borrower hereunder, the obligations of the Borrower under Article 5 hereof
and Sections 13.1 and 13.2 hereof shall survive repayment of the Notes and
termination of the Commitments and the Letters of Credit.
Section 13.10 Entire Agreement; Amendment and Restatement; Waivers of
Claims; Release of Additional Guaranty. THIS AGREEMENT, THE NOTES, AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF (INCLUDING THE PRIOR AGREEMENT) AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. This Agreement amends and
restates in its entirety the Prior Agreement. The execution of this Agreement,
the Notes and the other Loan Documents executed in connection herewith does not
extinguish the commitment under or the indebtedness outstanding in connection
with the Prior Agreement nor does it constitute a novation with respect to such
commitment or such indebtedness. The Borrower, Agent and the Banks ratify and
confirm each of the Loan Documents entered into prior to the Closing Date (but
excluding the Prior Agreement and the Additional Guaranty, as defined therein),
and agree that such Loan Documents continue to be legal, valid, binding and
enforceable in accordance with their respective terms. Borrower represents and
warrants that as of the Closing Date there are no claims or offsets against or
defenses or counterclaims to its obligations under the Prior Agreement or any of
the other Loan Documents. TO INDUCE THE BANKS AND AGENT TO ENTER INTO THIS
AGREEMENT, BORROWER WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS, DEFENSES OR
COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE CLOSING DATE AND
RELATING TO THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. Without limiting the generality of the foregoing and notwithstanding
any Loan Document to the contrary, Borrower, Agent and the Banks agree and
acknowledge that:
(i) the term "Credit Agreement" as used in each Loan Documents
means this Agreement;
(ii) the term "Guaranteed Indebtedness" as used in the
Guaranty includes the Obligations as defined herein; and
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(iii) the term "Obligations" as used in the Borrower Security
Agreement means the Obligations as defined herein.
Upon the effectiveness of this Agreement, the Agent and each Bank release
and discharge Xxxxxx X. Xxxxxxxx and Richmont Capital Partners I, L.P. from all
their respective obligations and liabilities owed to the Agent and any Bank
under the terms of the Additional Guaranty (as defined in the Prior Agreement)
and the Additional Guaranty is terminated and is of no further force or effect.
Section 13.11 Amendments. No amendment or waiver of any provision of any
Loan Document to which the Borrower is a party, nor any consent to any departure
by the Borrower therefrom, shall in any event be effective unless the same shall
be agreed or consented to by Required Banks and the Borrower, and each such
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 of the Banks and the
Borrower, do any of the following: (a) increase Commitments of the Banks; (b)
reduce the principal of, or interest on, the Notes, the Reimbursement
Obligations, or any fees or other amounts payable hereunder; (c) postpone any
date fixed for any payment of principal of, or interest on, the Notes, the
Reimbursement Obligations, or any fees or other amounts payable hereunder; (d)
waive or amend any of the conditions specified in Article 6 hereof; (e) change
the percentage of the Commitments or of the aggregate unpaid principal amount of
the Notes or the Letter of Credit Liabilities or the number of Banks which shall
be required for the Banks or any of them to take any action under any Loan
Document; (f) change any provision contained in this Section 13.11; or (g)
release any Collateral (except as specifically permitted by Section 12.8 or
release the Borrower or any Obligated Party from liability. Notwithstanding
anything to the contrary contained in this Section, no amendment waiver, or
consent shall be made with respect to Sections 2.7 or Article 12 hereof without
the prior written consent of the Agent.
Section 13.12 Maximum Interest Rate.
(a) No interest rate specified in any Loan Document shall at any
time exceed the Maximum Rate. If at any time the interest rate (the
"Contract Rate") for any Obligation shall exceed the Maximum Rate, thereby
causing the interest accruing on such Obligation to be limited to the
Maximum Rate, then any subsequent reduction in the Contract Rate for such
Obligation shall not reduce the rate of interest on such Obligation below
the Maximum Rate until the aggregate amount of interest accrued on such
Obligation equals the aggregate amount of interest which would have
accrued on such Obligation if the Contract Rate for such Obligation had at
all times been in effect.
(b) No provision of any Loan Document shall require the payment or
the collection of interest in excess of the maximum amount permitted by
applicable law. If any excess of interest in such respect is hereby
provided for, or shall be adjudicated to be so provided, in any Loan
Document or otherwise in connection with this loan transaction, the
AMENDED AND RESTATED CREDIT AGREEMENT - Page 79
87
provisions of this Section shall govern and prevail and neither the
Borrower nor the sureties, guarantors, successors, or assigns of the
Borrower shall be obligated to pay the excess amount of such interest or
any other excess sum paid for the use, forbearance, or detention of sums
loaned pursuant hereto. In the event any Bank ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of
the maximum amount permitted by applicable law shall be applied as a
payment and reduction of the principal of the Obligations; and, if the
principal of the Obligations has been paid in full, any remaining excess
shall forthwith be paid to the Borrower. In determining whether or not the
interest paid or payable exceeds the Maximum Rate, the Borrower and each
Bank shall, to the extent permitted by applicable law, (a) characterize
any non-principal payment as an expense, fee, or premium rather than as
interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the
Obligations so that interest for the entire term does not exceed the
Maximum Rate.
Section 13.13 Notices. All notices and other communications provided for
in any Loan Document to which the Borrower or any Obligated Party is a party
shall be given or made in writing and telecopied, mailed by certified mail
return receipt requested, or delivered to the intended recipient at the "Address
for Notices" specified below its name on the signature pages hereof and, if to
an Obligated Party, at the address for notices for Borrower; or, as to any party
at such other address as shall be designated by such party in a notice to each
other party given in accordance with this Section. Except as otherwise provided
in any Loan Document, all such communications shall be deemed to have been duly
given when transmitted by telecopy, subject to telephone confirmation of
receipt, or when personally delivered or, in the case of a mailed notice, three
(3) Business Days after being duly deposited in the mails, in each case given or
addressed as aforesaid; provided, however, notices to the Agent pursuant to
Section 2.7 or 4.3 hereof shall not be effective until received by the Agent.
Section 13.14 Governing Law, Etc. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
applicable laws of the United States of America. This Agreement shall be
performable for all purposes in New York City. Any action or proceeding against
the Borrower or any Obligated Party under or in connection with any of the Loan
Documents may be brought in any New York state or federal court in New York
City. The Borrower (and by its execution of the Loan Documents to which it is a
party, each Obligated Party) hereby irrevocably (a) submits to the nonexclusive
jurisdiction of such courts, and (b) waives any objection it may now or
hereafter have as to the venue of any such action or proceeding brought in any
such court or that any such court is an inconvenient forum. The Borrower (and by
its execution of the Loan Documents to which it is a party, each Obligated
Party) agrees that service of process upon it may be made by certified or
registered mail, return receipt requested, at its address specified or
determined in accordance with the provisions of Section 13.13. Nothing herein or
in any of the other Loan Documents shall affect the right of the Agent or any
Bank to serve process in any other manner permitted by law or shall limit the
right of the Agent or any Bank to bring any action or proceeding against the
Borrower, any Obligated Party or any of their respective
AMENDED AND RESTATED CREDIT AGREEMENT - Page 80
88
property in courts in other jurisdictions. Any action or proceeding by the
Borrower or any Obligated Party against the Agent or any Bank shall be brought
only in a court located in New York City.
Section 13.15 Counterparts. This Agreement may be executed in one or more
counterparts and on telecopy counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
Section 13.16 Severability. Any provision of any Loan Document held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of any Loan Document and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 13.17 Headings. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 13.18 Non-Application of Chapter 346 of Texas Finance Code. The
provisions of Chapter 346 of the Texas Finance Code are specifically declared by
the parties hereto not to be applicable to any Loan Documents or to the
transactions contemplated thereby.
Section 13.19 Construction. The Borrower, each Obligated Party (by its
execution of the Loan Documents to which its is a party) the Agent and each Bank
acknowledges that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review the Loan Documents with
its legal counsel and that the Loan Documents shall be construed as if jointly
drafted by the parties thereto.
Section 13.20 Independence of Covenants. All covenants under the Loan
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken or
such condition exists.
Section 13.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE AGENT OR ANY BANK IN THE NEGOTIATION, ADMINISTRATION, OR
ENFORCEMENT THEREOF.
Section 13.22 Confidentiality. Agent and each Bank (each a "Lending
Party") agrees to keep any Designated Information (as defined below) delivered
or made available by the Borrower
AMENDED AND RESTATED CREDIT AGREEMENT - Page 81
89
to it confidential from anyone other than Persons employed or retained by such
Lending Party who are, or are expected to be, engaged in evaluating, approving,
structuring or administering the credit facility provided herein; provided that
nothing herein shall prevent any Lending Party from disclosing such Designated
Information (a) to any other Lending Party, (b) to any other Person who agrees
to be bound by provisions substantially similar to those contained in this
Section if reasonably incidental to the administration of the credit facility
provided herein, (c) upon the order of any court
AMENDED AND RESTATED CREDIT AGREEMENT - Page 82
90
or administrative agency, (d) upon the request or demand of any regulatory
agency or authority, (e) which had been publicly disclosed other than as a
result of a disclosure by any Lending Party prohibited by this Agreement, (f) in
connection with any litigation to which such Lending Party or any of its
Affiliates may be a party to the extent such information is necessary in such
litigation, (g) to the extent necessary in connection with the exercise of any
remedy hereunder, (h) to such Lending Party's legal counsel and independent
auditors who are made aware of the provisions of this Section 13.22, (i) to any
Affiliate of such Lending Party solely in connection with this Agreement if such
party is made aware of the provisions of this Section 13.22; and (j) subject to
provisions substantially similar to those contained in this Section, to any
actual or proposed participant or assignee of any of its rights and obligations
under the Loan Documents in accordance with the terms hereof. The term
"Designated Information" means any information which has been designated by the
Borrower in writing as confidential.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
RICHMONT MARKETING SPECIALISTS INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
Vice President
Address for Notices:
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxxxxxx X. Xxxxxx
AMENDED AND RESTATED CREDIT AGREEMENT - Page 83
91
Commitment: THE CHASE MANHATTAN BANK,
individually as a Bank and as the Agent
$25,000,000.00
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President
Address for Notices:
Asset Based Lending
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Credit Deputy
Fax No.: 000-000-0000
Telephone No.: 000-000-0000
Lending Office for Base Rate
Accounts and Libor Accounts:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
AMENDED AND RESTATED CREDIT AGREEMENT - Page 84
92
ACKNOWLEDGMENT
The undersigned hereby consents and agrees to this Agreement and hereby
ratifies and confirms each of the Loan Documents to which it is a party entered
into prior to the Closing Date, and agrees that such Loan Documents continue to
be legal, valid, binding and enforceable in accordance with their respective
terms. The undersigned represents and warrants that as of the Closing Date,
there are no claims or offsets against or defenses or counterclaims to its
obligations under any Loan Document. TO INDUCE THE BANKS AND AGENT TO ENTER INTO
THIS AGREEMENT, EACH OF THE UNDERSIGNED WAIVES ANY AND ALL CLAIMS, OFFSETS,
DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE
CLOSING DATE AND RELATING TO THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. Without limiting the generality of the foregoing
and notwithstanding anything in any Loan Document to the contrary, the
undersigned agrees and acknowledges that (i) the term "Credit Agreement" as used
in each Loan Document to which it is a party means this Agreement; and (ii) the
term "Guaranteed Indebtedness" as used in its Guaranty includes the Obligations
as defined herein.
Witness due execution hereof by the undersigned as of the date first
written above.
MSSC CAROLINA, INC.
MARKETING SPECIALISTS SALES COMPANY
BROMAR, INC.
TOWER MARKETING, INC.
FERRO & ASSOCIATES, INC.
SERVICE ASSETS CORP.
BROKERAGE SERVICES, INC.
BATESTAS & CO.
XXXX XXXXXXX & ASSOCIATES, INC.
T-BAR BROKERAGE, INC.
T'NT NATIONAL CONVENIENCE STORE BROKERS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
Authorized Officer for all Debtors
AMENDED AND RESTATED CREDIT AGREEMENT - Page 85
93
INDEX TO EXHIBITS
Exhibit Description of Exhibit
------- ----------------------
"A" Note
"B" Compliance Certificate
"C" Borrowing Base Report
"D" Subsidiary Joinder Agreement
"E" Assignment and Acceptance
INDEX TO SCHEDULES
Schedule Description of Schedule
-------- -----------------------
1.1(a) Lockbox Agreements and Accounts
7.14 List of Subsidiaries; List of Borrower Shareholders
9.1 Debt
9.2 Existing Liens
9.5 Existing Investments
9.7 Permitted Affiliate Transactions
AMENDED AND RESTATED CREDIT AGREEMENT - Page 86
94
Schedule 1.1(a)
to
Richmond Marketing Specialists Inc.
Amended and Restated Credit Agreement
Lockbox Agreements and Accounts
A. Marketing Specialists Sales Company
Agreement Name Date Other Parties Account
-------------- ---- ------------- -------
1. Lockbox Agreement 01/28/97 NationsBank 3 7507 9923 1
B. Tower Marketing, Inc.
Agreement Name Date Other Parties Account
-------------- ---- ------------- -------
1. Lockbox Processing 08/23/94 NationsBank 00316020378
Agreement
C. Bromar, Inc.
Agreement Name Date Other Parties Account
-------------- ---- ------------- -------
1. Lockbox Agreement 03/18/97 Regalus West LLC;
Xxxxx Fargo Bank, N.A.
D. T-Bar Brokerage, Inc.
Agreement Name Date Other Parties Account
-------------- ---- ------------- -------
1. Lockbox Agreement 01/10/95 Texas Commerce Bank 00310027597
National Association
Schedule 1.1(a), Solo Page
95
Schedule 7.14
to
Richmond Marketing Specialists Inc.
Amended and Restated Credit Agreement
List of Subsidiaries; List of Borrower Shareholders
A. Richmont Marketing Specialists Inc.
1. Richmont Marketing Specialists Inc.
Principal Address: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Authorized Stock: 1,000,000
Issued and Outstanding Stock: 137,635, owned as follows:
Stockholders Number of Shares
------------ ----------------
Xxxxxx X. Xxxxxxxx 25,842
Xxxxxxx X. Xxxx 16,826
Xxxx X. Xxxxxx 6,193
Xxxxx X. Xxxxxx 6,193
MS Acquisition Limited 82,581
Richmont Marketing Specialists Inc. and its stockholders are parties to a
Company and Stockholders Agreement dated as of October 7, 1997, which
imposes certain restrictions upon the sale or transfer of the capital
stock of Richmont Marketing Specialists Inc.
Xxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxx and Xxxx X. Xxxxxx
have entered into an Amended and Restated Warrant Agreement with Xxxxxxx
X. Xxxxxxxx dated as of October 7, 1997, pursuant to which Xxxxxxxx may
purchase shares of Richmont Marketing Specialists Inc. from such
stockholders.
B. Wholly-owned Subsidiaries of Richmont Marketing Specialists Inc.
1. Marketing Specialists Sales Company
Principal Address: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Authorized Stock: 10,000,000
Issued and Outstanding Stock: 137,635
Schedule 7.14, Page 1 of 5
96
Marketing Specialists Sales Company is not party to any agreement
providing for options, rights, rights of conversion, redemption, purchase
or repurchase, rights of first refusal and similar rights relating to its
Capital Stock except the following:
(a) Potential equitable claim arising from lien on 100 shares of stock
of Marketing Specialists Sales Company, a Florida corporation and
former subsidiary of Marketing Specialists Sales Company, a Texas
corporation ("MSSC"), which was merged into MSSC effective as of
December 31, 1997, which shares were evidenced, prior to such
merger, by Share Certificate No. 3 issued in the name of MSSC;
(b) A first lien security interest held by Xxxxxxx Xxxxxxx in 9,333
shares of common stock of MSSC issued and held in treasury and a
second lien security interest in 3,112 shares of common stock of
MSSC issued and held in treasury pursuant to a Pledge Agreement
dated June 15, 1995; and
(c) A first lien security interest held by Xxxxxx X. Xxxxxx in 3,112
shares of common stock of MSSC issued and held in treasury (being
the same 3,112 shares of treasury stock subject to a second lien
security interest in favor of Xxxxxxx Xxxxxxx pursuant to a Pledge
Agreement dated June 15, 1995) by virtue of a Collateral Assignment
Agreement dated September 27, 1994, referenced in that certain
Agreement dated June 15, 1995 between H. Xxxxxxx Xxxxxxx and
Marketing Specialists Sales Company.
2. MSSC Carolina, Inc.
Principal Address: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Authorized Stock: 1,000 shares of Common Stock, $0.01 par
value per share
Issued and Outstanding Stock: 1,000 shares of Common Stock
MSSC Carolina, Inc. is not party to any agreement providing for options,
rights, rights of conversion, redemption, purchase or repurchase, rights
of first refusal and similar rights relating to its Capital Stock.
C. Wholly-owned Subsidiaries of Marketing Specialists Sales Company
1. Bromar, Inc., a California corporation
Principal Address: 000 X. Xxxxxxx Xxxxxx, Xxxxxx, XX 00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Authorized Stock: 2,000,000 shares of Common Stock, no
par value
Issued and Outstanding Stock: 1,000 shares of Common Stock
Schedule 7.14, Page 2 of 5
97
Bromar, Inc. is not party to any agreement providing for options, rights,
rights of conversion, redemption, purchase or repurchase, rights of first
refusal and similar rights relating to its Capital Stock.
2. Tower Marketing Inc., a Texas Corporation
Principal Address: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Location of Books and Records: same
Authorized Stock: 4,000,000 shares of Common Stock, $0.01
par value per share
1,000,000 shares of Preferred, $0.01
par value per share
Issued and Outstanding Stock: 1,000 shares of Common Stock
No shares of Preferred Stock
Tower Marketing, Inc. is not party to any agreement providing for options,
rights, rights of conversion, redemption, purchase or repurchase, rights
of first refusal and similar rights relating to its Capital Stock.
3. Ferro & Associates, Inc., a Louisiana corporation
Principal Address: 0000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxx 00000
Location of Books and Records: 0000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxx 00000
Authorized Stock: 8,000 shares of Class A Common, Voting
$7.50 par value
4,000 shares of Class B Common,
Nonvoting, $7.50 par value
Issued and Outstanding Stock: 8,000 Class A Common
2,472 Class B Common
D. Wholly-owned Subsidiaries of Bromar, Inc.
1. Service Assets Corp., a California corporation
Principal Address: 000 X. Xxxxxxx Xxxxxx, Xxxxxx, XX 00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Authorized Stock: 1,000,000 shares of Common Stock, $1.00
par value
Issued and Outstanding Stock: 500 shares of Common Stock
Service Assets Corp. is not party to any agreement providing for options,
rights, rights of conversion, redemption, purchase or repurchase, rights
of first refusal and similar rights relating to its capital stock.
Schedule 7.14, Page 3 of 5
98
2. Brokerage Services, Inc., a California corporation
Principal Address: 0000 X. Xxxxx Xxx., Xxxxx Xxx,
Xxxxxxxxxx 00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Authorized Stock: 1,000 shares of Common Stock, no par
value
Issued and Outstanding Stock: 100 shares of Common Stock
Brokerage Services, Inc. is not party to any agreement providing for
options, rights, rights of conversion, redemption, purchase or repurchase,
rights of first refusal and similar rights relating to its capital stock.
3. Batestas & Co., a Utah corporation
Principal Address: 1279 000 Xxxxx, Xxxxx X., Xxxx Xxxxxx
Xxxx, Xxxx 00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Authorized Stock: 150,000 shares of Class A Common Stock,
$1.00 par value
50,000 shares of Class B Common Stock,
$1.00 par value
Issued and Outstanding Stock: 150,000 shares of Class A Common Stock
Batestas & Co. is not party to any agreement providing for options,
rights, rights of conversion, redemption, purchase or repurchase, rights
of first refusal and similar rights relating to its capital stock.
4. Xxxx Xxxxxxx & Associates, Inc., an Arizona corporation
Principal Address: 0000 X. 00xx Xxxxxx, Xxxxxxx, Xxxxxxx
00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Authorized Stock: 1,000,000 shares of Common Stock, $1.00
par value
Issued and Outstanding Stock: 50,500 shares of Common Stock
Xxxx Xxxxxxx & Associates, Inc. is not party to any agreement providing
for options, rights, rights of conversion, redemption, purchase or
repurchase, rights of first refusal and similar rights relating to its
capital stock.
E. Wholly-owned Subsidiaries of Tower Marketing, Inc.
1. T-Bar Brokerage, Inc., a Texas corporation
Principal Address: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Authorized Stock: 100,000 shares of Common Stock, no par
value
Schedule 7.14, Page 4 of 5
99
Issued and Outstanding Stock: 4,161.5 shares of Common Stock
T-Bar Brokerage, Inc. is not party to any agreement providing for options,
rights, rights of conversion, redemption, purchase or repurchase, rights
of first refusal and similar rights relating to its capital stock except:
Potential equitable claim for lien on 17,587 shares of stock of
Metropolitan/Commercial, Inc., a Texas corporation and predecessor to
Metropolitan Marketing, Inc., a Texas corporation and former subsidiary of
Tower Marketing, Inc., which was merged into MSSC effective as of April
10, 1997, which shares were evidenced, prior to such merger, by Share
Certificate No. 6, referenced in Promissory Note dated March 1, 1998 in
the stated principal amount of $53,095.15 executed by
Metropolitan/Commercial, Inc. in favor of Xxx Xxxxx.
2. TNT National Convenience Store Brokers, Inc., a Texas corporation
Principal Address: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000
Location of Books and Records: same
Authorized Stock: 500,000 shares of Common Stock, $0.01
par value
Issued and Outstanding Stock: 10,000 shares of Common Stock
TNT National Convenience Store Brokers, Inc. is not party to any agreement
providing for options, rights, rights of conversion, redemption, purchase
or repurchase, rights of first refusal and similar rights relating to its
capital stock.
F. Wholly-owned Subsidiaries of MSSC Carolina, Inc.
1. Atlas Marketing Company
Principal Address: 0000 Xxxx Xxxxxx Xxxx. Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Location of Books and Record: same
Authorized Stock: 10,000,00, $0.01 par value
Issued and Outstanding Stock: 2,039,266.54
G. Wholly-owned Subsidiaries of Atlas Marketing Company, Inc.
1. Century Food Brokers of Hickory, Inc.
Principal Address: 0000 0xx Xxxxxx XX, Xxxxxxx
Xxxxx Xxxxxxxx 00000
Location of Books and Records: 0000 Xxxx Xxxxxx Xxxx. Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Authorized Stock: 10,000,00, $0.01 par value
Schedule 7.14, Page 5 of 5
100
Issued and Outstanding Stock: 200
Century Food Brokers of Hickory, Inc. is not party to any agreement
providing for options, rights, rights of conversion, redemption, purchase
or repurchase, rights of first refusal and similar rights relating to its
capital stock.
2. East Coast Food Brokerage, Inc.
Principal Address: 0000 Xxxxx Xxxx Xxxxx, Xxxxxxxxx
Xxxxx Xxxxxxxx 00000
Location of Books and Records: 0000 Xxxx Xxxxxx Xxxx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Authorized Stock: 5,000 shares of Common Stock, no par
value
Issued and Outstanding Stock: 1,000
East Coast Food Brokerage, Inc. is not party to any agreement providing
for options, rights, rights of conversion, redemption, purchase or
repurchase, rights of first refusal and similar rights relating to its
capital stock.
3. Ultimate Food Sales, Inc.
Principal Address: 000 X. Xxxxx Xxxxxx, Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx 00000
Location of Books and Records: 0000 Xxxx Xxxxxx Xxxx. Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Authorized Stock: 1,000 shares of Common Stock, $1.00 par
value
Issued and Outstanding Stock: 1,000 shares of common Stock
Ultimate Food Sales, Inc. is not part to any agreement providing for
options, rights, rights of conversion, redemption, purchase or repurchase,
rights of first refusal and similar rights relating to its capital stock.
4. Cumberland Food Brokers, Inc.
Principal Address: 0000 Xxxx Xxxxxx Xxxx. Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Location of Books and Record: same
Authorized Stock: 100,000 shares of Common Stock, $1.00
par value
Issued and Outstanding Stock: 1,000 shares
Cumberland Food Brokers, Inc. is not party to any agreement providing for
options, rights, rights of conversion, redemption, purchase or repurchase,
rights of refusal and similar rights relating to its capital stock.
5. Meatmaster Brokerage, Inc.
Schedule 7.14, Page 6 of 5
101
Principal Address: 00000 Xxxxxxx Xxxx, Xxxxx 0
Xxxxxxx, Xxxxxxxx 00000
Location of Books and Records: 0000 Xxxx Xxxxxx Xxxx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Authorized Stock: 4,000 shares, Class A $1.00 par value
common stock (voting) 1,000 shares,
Class B
$1.00 par value common stock
Issued and Outstanding Stock: 500 shares of Class A
Meatmaster Brokerage Inc. is not party to any agreement providing for
options, rights, rights of conversion, redemption, purchase or repurchase,
rights of first refusal and similar rights relating to its capital stock.
Schedule 7.14, Page 7 of 5
102
Schedule 9.1
to
Richmond Marketing Specialists Inc.
Amended and Restated Credit Agreement
Debt
Schedule 9.1, Cover Page
103
Schedule 9.2
to
Richmond Marketing Specialists Inc.
Amended and Restated Credit Agreement
Existing Liens
Schedule 9.2, Cover Page
104
Schedule 9.5
to
Richmond Marketing Specialists Inc.
Amended and Restated Credit Agreement
Existing Investments
1. Texas Stadium Bonds
2. Personal Seat License in the football stadium under construction in
Nashville, Tennessee
3. Two shares of common stock of Bradford & Company Food Brokers, Inc.
4. 167 shares of common stock of Uncle B's Bakery, Inc.
5. 5,000 shares of common stock of Innova Pure Water, Inc.
6. 120 shares of common stock of Xxxxx'x Liquid Gold
7. Seats at Xxxxxxx Stadium
8. Twelve and one-half percent (12 1/2%) interest in Trusted Brands, Inc.
Schedule 9.5, Solo Page
105
Schedule 9.7
to
Richmond Marketing Specialists Inc.
Amended and Restated Credit Agreement
Permitted Affiliate Transactions
1. Stockholders Agreement among the Borrower, MS Acquisition Limited, Xxxxxx
Xxxxxxxx, Xxxxxxx Xxxx, Xxxxx Xxxxxx and Xxxx Xxxxxx.
2. Lease Agreement with ABP Partner Ltd.
3. Payment of accrued but unpaid interest with respect to certain promissory
notes contributed to equity pursuant to the Additional Capital
Contribution Agreement, dated as of September 12, 1997, by and among
Xxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxx, Xxxx X. Xxxxxx, MS
Acquisition Limited and Marketing Specialists Sales Company.
Schedule 9.7, Solo Page
