_________________________________________________________________
CREDIT AGREEMENT
by and among
DELTA BEVERAGE GROUP, INC.,
as Borrower,
NATIONSBANK, N.A.,
as Agent and as Lender
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
December 16, 1996
_________________________________________________________________
Exhibit 4.2
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Terms
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Rules of Interpretation . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE II The Revolving Credit Facility
2.1. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.2. Payment of Interest . . . . . . . . . . . . . . . . . . . . . . . 31
2.3. Payment of Principal. . . . . . . . . . . . . . . . . . . . . . . 31
2.4. Manner of Payment . . . . . . . . . . . . . . . . . . . . . . . . 31
2.5. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.6. Pro Rata Payments . . . . . . . . . . . . . . . . . . . . . . . . 32
2.7. Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.8. Conversions and Elections of Subsequent Interest Periods. . . . . 33
2.9. Increase and Decrease in Amounts. . . . . . . . . . . . . . . . . 33
2.10. Facility Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.11. Deficiency Advances . . . . . . . . . . . . . . . . . . . . . . . 34
2.12. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.13. Swing Line. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE III Letters of Credit
3.1. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . 37
3.2. Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.3. Letter of Credit Facility Fees. . . . . . . . . . . . . . . . . . 41
3.4. Administrative Fees . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE IV Security
4.1. Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.2. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . 42
4.3. Information Regarding Collateral. . . . . . . . . . . . . . . . . 42
ARTICLE V Yield Protection and Illegality
5.1. Additional Costs. . . . . . . . . . . . . . . . . . . . . . . . . 44
5.2. Suspension of Loans . . . . . . . . . . . . . . . . . . . . . . . 45
5.3. Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.4. Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.5. Alternate Loan and Lender . . . . . . . . . . . . . . . . . . . . 47
5.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VI Conditions to Making Loans and Issuing Letters of Credit
Page 2 Exhibit 4.2
6.1. Conditions of Initial Advance . . . . . . . . . . . . . . . . . . 50
6.2. Conditions of Loans and Letter of Credit. . . . . . . . . . . . . 53
ARTICLE VII Representations and Warranties
7.1. Organization and Authority. . . . . . . . . . . . . . . . . . . . 55
7.2. Loan Documents. . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.3. Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.4. Subsidiaries and Stockholders . . . . . . . . . . . . . . . . . . 56
7.5. Ownership Interests . . . . . . . . . . . . . . . . . . . . . . . 56
7.6. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . 57
7.7. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . 57
7.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.9. Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . 58
7.10. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.11. Margin Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.12. Investment Company. . . . . . . . . . . . . . . . . . . . . . . . 59
7.13. Patents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.14. No Untrue Statement . . . . . . . . . . . . . . . . . . . . . . . 59
7.15. No Consents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 59
7.16. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . 60
7.17. No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.18. Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . 61
7.19. Employment Matters. . . . . . . . . . . . . . . . . . . . . . . . 61
7.20. RICO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE VIII Affirmative Covenants
8.1. Financial Reports, Etc. . . . . . . . . . . . . . . . . . . . . . 63
8.2. Maintain Properties . . . . . . . . . . . . . . . . . . . . . . . 65
8.3. Existence, Qualification, Etc.. . . . . . . . . . . . . . . . . . 65
8.4. Regulations and Taxes . . . . . . . . . . . . . . . . . . . . . . 65
8.5. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.6. True Books. . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.7. Right of Inspection . . . . . . . . . . . . . . . . . . . . . . . 66
8.8. Observe all Laws. . . . . . . . . . . . . . . . . . . . . . . . . 66
8.9. Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . 66
8.10. Covenants Extending to Other Persons. . . . . . . . . . . . . . . 66
8.11. Officer's Knowledge of Default. . . . . . . . . . . . . . . . . . 66
8.12. Suits or Other Proceedings. . . . . . . . . . . . . . . . . . . . 66
8.13. Notice of Discharge of Hazardous Material or Environmental
Complaint . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.14. Environmental Compliance. . . . . . . . . . . . . . . . . . . . . 67
8.15. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.16. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . 67
8.17. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . 68
8.18. Continued Operations. . . . . . . . . . . . . . . . . . . . . . . 69
8.19. New Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . 69
Page 3 Exhibit 4.2
ARTICLE IX Negative Covenants
9.1. Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . 72
9.2. Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.3. Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . . 73
9.4. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.5. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.6. Transfer of Assets. . . . . . . . . . . . . . . . . . . . . . . . 75
9.7. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.8. Merger or Consolidation . . . . . . . . . . . . . . . . . . . . . 76
9.9. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . 76
9.10. Transactions with Affiliates. . . . . . . . . . . . . . . . . . . 76
9.11. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . 77
9.12. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
9.13. Dissolution, etc. . . . . . . . . . . . . . . . . . . . . . . . . 78
9.14. Limitations on Sales and Leasebacks . . . . . . . . . . . . . . . 78
9.15. Change in Control . . . . . . . . . . . . . . . . . . . . . . . . 78
9.16. Rate Hedging Obligations. . . . . . . . . . . . . . . . . . . . . 78
9.17. Negative Pledge Clauses . . . . . . . . . . . . . . . . . . . . . 78
9.18. Reimbursement of Expenses . . . . . . . . . . . . . . . . . . . . 78
9.19. Prepayments, Etc. of Indebtedness . . . . . . . . . . . . . . . 78
ARTICLE X Events of Default and Acceleration
10.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 80
10.2. Agent to Act. . . . . . . . . . . . . . . . . . . . . . . . . . . 83
10.3. Cumulative Rights . . . . . . . . . . . . . . . . . . . . . . . . 83
10.4. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
10.5. Allocation of Proceeds. . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE XI The Agent
11.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.2. Attorneys-in-fact . . . . . . . . . . . . . . . . . . . . . . . . 86
11.3. Limitation on Liability . . . . . . . . . . . . . . . . . . . . . 86
11.4. Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.5. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . 87
11.6. No Representations. . . . . . . . . . . . . . . . . . . . . . . . 87
11.7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.8. Lender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.9. Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
11.10. Sharing of Payments, etc. . . . . . . . . . . . . . . . . . . . . 89
11.11. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
ARTICLE XII Miscellaneous
12.1. Assignments and Participations. . . . . . . . . . . . . . . . . . 91
12.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
12.3. Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Page 4 Exhibit 4.2
12.4. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
12.5. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
12.6. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
12.7. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 96
12.8. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
12.9. Indemnification; Limitation of Liability. . . . . . . . . . . . . 97
12.10. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 98
12.11. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 98
12.12. Agreement Controls. . . . . . . . . . . . . . . . . . . . . . . . 98
12.13. Usury Savings Clause. . . . . . . . . . . . . . . . . . . . . . . 98
12.14. Governing Law; Waiver of Jury Trial . . . . . . . . . . . . . . . 99
EXHIBIT A APPLICABLE COMMITMENT PERCENTAGES. . . . . . . . . . . . . .A-1
EXHIBIT B FORM OF ASSIGNMENT AND ACCEPTANCE. . . . . . . . . . . . . .B-1
EXHIBIT C NOTICE OF APPOINTMENT (OR REVOCATION)
OF AUTHORIZED REPRESENTATIVE . . . . . . . . . . . . . . . .C-1
EXHIBIT D-1 FORM OF BORROWING NOTICE . . . . . . . . . . . . . . . . . D1-1
EXHIBIT D-2 FORM OF BORROWING NOTICE -- SWING LINE
LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . D2-1
EXHIBIT E FORM OF INTEREST RATE SELECTION NOTICE . . . . . . . . . . .E-1
EXHIBIT F-1 FORM OF REVOLVING NOTE . . . . . . . . . . . . . . . . . . F1-1
EXHIBIT F-2 FORM OF SWING LINE NOTE. . . . . . . . . . . . . . . . . . F2-1
EXHIBIT G FORM OF OPINION. . . . . . . . . . . . . . . . . . . . . . .G-1
EXHIBIT H COMPLIANCE CERTIFICATE . . . . . . . . . . . . . . . . . . .H-1
EXHIBIT I GUARANTY AND SURETYSHIP AGREEMENT
(SUBSIDIARIES) . . . . . . . . . . . . . . . . . . . . . . .I-1
EXHIBIT J-1 SECURITY AGREEMENT - ACCOUNTS AND
INVENTORY (BORROWER). . . . . . . . . . . . . . . . . . . . J1-1
EXHIBIT J-2 SECURITY AGREEMENT - ACCOUNTS AND
INVENTORY (GUARANTORS). . . . . . . . . . . . . . . . . . . J2-1
EXHIBIT K FORM OF BORROWING BASE CERTIFICATE . . . . . . . . . . . . .K-1
EXHIBIT L STOCK PLEDGE AGREEMENT . . . . . . . . . . . . . . . . . . .L-1
Page 5 Exhibit 4.2
Schedule 4.3 Information Regarding Collateral . . . . . . . . . . . . . .S-1
Schedule 7.4 Subsidiaries and Investments in
Other Persons. . . . . . . . . . . . . . . . . . . . . . . .S-2
Schedule 7.6 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . .S-3
Schedule 7.7 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . .S-4
Schedule 7.8 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . .S-5
Schedule 7.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . . .S-6
Schedule 8.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . .S-7
Page 6 Exhibit 4.2
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 16, 1996 (the "Agreement"),
is made by and among DELTA BEVERAGE GROUP, INC., a Delaware corporation
having its principal place of business in Memphis, Tennessee (the
"Borrower"); NATIONSBANK, N.A., a national banking association organized and
existing under the laws of the United States, in its capacity as a Lender
("NationsBank"); and each other financial institution executing and
delivering a signature page hereto and each other financial institution which
may hereafter execute and deliver an instrument of assignment with respect to
this Agreement pursuant to SECTION 12.1 (hereinafter such financial
institutions may be referred to individually as a "Lender" or collectively as
the "Lenders"), and NATIONSBANK, N.A., a national banking association
organized and existing under the laws of the United States, in its capacity
as agent for the Lenders (in such capacity, and together with any successor
agent appointed in accordance with the terms of SECTION 11.9, the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make available to
the Borrower a revolving credit facility of up to $30,000,000, the proceeds
of which are to be used for general corporate purposes, including (i) the
refinancing of the outstanding principal balance of the Existing Indebtedness
owing by the Borrower, (ii) the funding of costs and expenses incurred in
such refinancing of the Borrower's indebtedness and (iii) working capital;
which facility shall include a letter of credit facility of up to
$10,000,000 for the issuance of standby and commercial letters of credit and
a swing line facility of up to $2,500,000; and
WHEREAS, the Lenders are willing to make such revolving credit, letter of
credit and swing line facilities available to the Borrower upon the terms and
conditions set forth herein;
NOW, THEREFORE, the Borrower, the Agent and the Lenders hereby agree as
follows:
Page 7 Exhibit 4.2
ARTICLE VII
DEFINITIONS AND TERMS
7.1. DEFINITIONS. For the purposes of this Agreement, in addition to the
definitions set forth above, the following terms shall have the respective
meanings set forth below:
"Acquisition" means the acquisition of (i) a controlling equity
interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest
at the time it becomes exercisable by the holder thereof), whether by
purchase of such equity interest or upon exercise of an option or warrant
for, or conversion of securities into, such equity interest, or (ii) assets
of another Person which constitute any material part of the assets of such
Person or of a line or lines of business conducted by such Person.
"Advance" means a borrowing under the Revolving Credit Facility
consisting of a Base Rate Loan or a Eurodollar Rate Loan.
"Affiliate" means any Person (i) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under
common control with the Borrower; or (ii) which beneficially owns or holds
10% or more of any class of the outstanding voting stock (or in the case of
a Person which is not a corporation, 10% or more of the equity interest) of
the Borrower; or 10% or more of any class of the outstanding voting stock
(or in the case of a Person which is not a corporation, 10% or more of the
equity interest) of which is beneficially owned or held by the Borrower;
PROVIDED, however, at the time the Borrower registers any security issued
by it pursuant to the Securities Act of 1933, as amended, the figure "10%"
used in this definition shall automatically change to "5%" without further
action. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting stock, by
contract or otherwise.
"Applicable Commitment Percentage" means, with respect to each Lender
at any time, a fraction, the numerator of which shall be such Lender's
Revolving Credit Commitment and the denominator of which shall be the Total
Revolving Credit Commitment, which Applicable Commitment Percentage for
each Lender as of the Closing Date is as set forth in EXHIBIT A; PROVIDED
that the Applicable Commitment Percentage of each Lender shall be increased
or decreased to reflect any assignments to or by such Lender effected in
accordance with SECTION 12.1.
"Applicable Margin" means that percent per annum set forth below,
which shall be based upon the Consolidated Leverage Ratio for the
Four-Quarter Period most recently ended as specified below:
Page 8 Exhibit 4.2
Applicable
Margin
------
Consolidated
Senior Leverage Base Eurodollar
Ratio Rate Rate
--------------- ---- ----------
(a) Greater than 4.5:1.0 0.50% 2.00%
(b) Less than or equal to
4.5:1.0 but greater than
4.0:1.0 0.25% 1.75%
(c) Less than or equal to
4.0:1.0 but greater than
3.5:1.0 0.00% 1.50%
(d) Less than or equal to
3.5:1.0 but greater than
3.0:1.0 0.00% 1.25%
(e) Less than or equal to
3.0:1.0 0.00% 1.00%
The Applicable Margin shall be established at the end of each fiscal
quarter of the Borrower (each, a "Determination Date"). Any change in the
Applicable Margin following each Determination Date shall be determined based
upon the computations set forth in the certificate furnished to the Agent
pursuant to SECTION 8.1(A)(II) and SECTION 8.1(B)(II), subject to review and
approval of such computations by the Agent, and shall be effective commencing
on the date following the date such certificate is received and reviewed by
the Agent, but not later than 5 Business Days after receipt thereof (or, if
earlier, the date such certificate was required to be delivered) until the
date following the date on which a new certificate is delivered or is
required to be delivered, whichever shall first occur; PROVIDED however, if
the Borrower shall fail to deliver any such certificate within the time
period required by SECTION 8.1, then the Applicable Margin shall be 0.50% for
Base Rate Loans and 2.00% for Eurodollar Loans until the appropriate
certificate is so delivered. From the Closing Date to the first
Determination Date, the Applicable Margin shall be 0.50% for Base Rate Loans
and 2.00% for Eurodollar Loans.
"Applicable Unused Fee" means that percent per annum set forth
below, which shall be based upon the Consolidated Leverage Ratio for the
Four-Quarter Period most recently ended as specified below:
Page 9 Exhibit 4.2
Consolidated Applicable
Senior Leverage Unused
Ratio Fee
--------------- -------
(a) Greater than 4.5:1.0 .50%
(b) Less than or equal to
4.5:1.0 but greater than
4.0:1.0 .50%
(c) Less than or equal to
4.0:1.0 but greater than
3.5:1.0 .375%
(d) Less than or equal to
3.5:1.0 but greater than
3.0:1.0 .3125%
(e) Less than or equal to
3.0:1.0 .25%
The Applicable Unused Fee shall be established at the end of each fiscal
quarter of the Borrower (the "Determination Date"). Any change in the
Applicable Unused Fee following each Determination Date shall be determined
based upon the computations set forth in the certificate furnished to the
Agent pursuant to SECTION 8.1(A)(II) and SECTION 8.1(B)(II), subject to
review and approval of such computations by the Agent and shall be effective
commencing on the date following the date such certificate is received and
reviewed by the Agent, but not later than 5 Business Days after receipt
thereof (or, if earlier, the date such certificate was required to be
delivered) until the date following the date on which a new certificate is
delivered or is required to be delivered, whichever shall first occur;
PROVIDED however, if the Borrower shall fail to deliver any such certificate
within the time period required by SECTION 8.1, then the Applicable Unused
Fee shall be .50% until the appropriate certificate is so delivered. From
the Closing Date to the first Determination Date, the Applicable Unused Fee
shall be 0.50%.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of Credit.
"Assignment and Acceptance" shall mean an Assignment and Acceptance
in the form of EXHIBIT B (with blanks appropriately filled in) delivered to
the Agent in connection with an assignment of a Lender's interest under this
Agreement pursuant to SECTION 12.1.
Page 10 Exhibit 4.2
"Authorized Representative" means any of the President or any Vice
President of the Borrower or, with respect to financial matters, the Vice
President of Finance or the chief financial officer of the Borrower, or any
other Person expressly designated by the Board of Directors of the Borrower
(or the appropriate committee thereof) as an Authorized Representative of the
Borrower, as set forth from time to time in a certificate in the form of
EXHIBIT C.
"Base Rate" means the per annum rate of interest equal to the sum of
(x) the greater of (i) the Prime Rate or (ii) the Federal Funds Effective
Rate plus one-half of one percent (1/2%), PLUS (y) the Applicable Margin. Any
change in the Base Rate resulting from a change in the Prime Rate or the
Federal Funds Effective Rate shall become effective as of 12:01 A.M. of the
Business Day on which each such change occurs. The Base Rate is a reference
rate used by Agent in determining interest rates on certain loans and is not
intended to be the lowest rate of interest charged on any extension of credit
to any debtor.
"Base Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Base Rate.
"Base Rate Refunding Loan" means either (i) a Base Rate Loan or
Swing Line Loan made to satisfy Reimbursement Obligations arising from a
drawing under a Letter of Credit or (ii) a Base Rate Loan made to pay
NationsBank in respect of Swing Line Outstandings.
"Board" means the Board of Governors of the Federal Reserve System
(or any successor body).
"Borrower's Account" means a demand deposit account with the Agent,
which may be maintained at one or more offices of the Agent or an agent of
the Agent.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility or a Swing Line Loan, in the forms of EXHIBITS D-1 AND D-2,
respectively.
"Borrowing Base" means, as of the date of determination thereof, the
sum of (i) the amount of Eligible Receivables multiplied by 0.80, plus (ii)
the amount of Eligible Inventory multiplied by 0.50.
"Borrowing Base Certificate" means a certificate, duly completed by
an Authorized Officer, substantially in the form of EXHIBIT K attached hereto.
"Business Day" means, (i) with respect to any Base Rate Loan, any
day which is not a Saturday, Sunday or a day on which banks in the States of
New York and North Carolina are authorized or obligated by law, executive
order or governmental decree to be closed, and (ii) with respect to any
Eurodollar Rate Loan, any day which is a Business Day, as described above,
and on which the relevant international financial markets are open for the
transaction of business contemplated by this Agreement in London, England,
New York, New York and Charlotte, North Carolina.
Page 11 Exhibit 4.2
"Capital Expenditures" means, with respect to the Borrower and its
Subsidiaries, for any period the SUM of (without duplication) (i) all
expenditures (whether paid in cash or accrued as liabilities) by the Borrower
or any Subsidiary during such period for items that would be classified as
"property, plant or equipment" or comparable items on the consolidated
balance sheet of the Borrower and its Subsidiaries, including without
limitation all transactional costs incurred in connection with such
expenditures provided the same have been capitalized, excluding, however, the
amount of any Capital Expenditures paid for with proceeds of casualty
insurance as evidenced in writing and submitted to the Agent together with
any compliance certificate delivered pursuant to SECTION 9.1(a) or (b), and
(ii) with respect to any Capital Lease entered into by the Borrower or its
Subsidiaries during such period, the present value of the lease payments due
under such Capital Lease over the term of such Capital Lease applying a
discount rate equal to the interest rate provided in such lease (or in the
absence of a stated interest rate, that rate used in the preparation of the
financial statements described in SECTION 9.1(a)), all the foregoing in
accordance with GAAP applied on a Consistent Basis.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time including
Statement No. 13 of the Financial Accounting Standards Board and any
successor thereof.
"Change of Control" means, at any time:
(i) any "person" or "group" (each as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) other than Persons owned directly or
indirectly by Pohlad Companies, either (A) becomes the "beneficial
owner" (as defined in Rule 13d-3 of the Exchange Act ), directly or
indirectly, of Voting Stock of the Borrower (or securities convertible
into or exchangeable for such Voting Stock) representing 30% or more
of the combined voting power of all Voting Stock of the Borrower (on a
fully diluted basis) or (B) otherwise has the ability, directly or
indirectly, to elect a majority of the board of directors of the
Borrower;
(ii) during any period of up to 24 consecutive months, commencing
on the Closing Date, individuals who at the beginning of such 24-month
period were directors of the Borrower shall cease for any reason
(other than the death, disability or retirement of an officer of the
Borrower that is serving as a director at such time so long as another
officer of the Borrower replaces such Person as a director) to
constitute a majority of the board of directors of the Borrower; or
(iii) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation thereof, will result
in its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence on the management or policies of
the Borrower.
Page 12 Exhibit 4.2
"Closing Date" means the date as of which this Agreement is executed by
the Borrower, the Lenders and the Agent and on which the conditions set forth
in SECTION 6.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
"Collateral" means, collectively, all property of the Borrower, any
Subsidiary or any other Person in which the Agent or any Lender is granted a
Lien as security for all or any portion of the Obligations under any Security
Instrument.
"Consistent Basis" in reference to the application of GAAP means the
accounting principles observed in the period referred to are comparable in
all material respects to those applied in the preparation of the audited
financial statements of the Borrower referred to in SECTION 7.6(a).
"Consolidated EBITDA" means, with respect to the Borrower and its
Subsidiaries for any Four-Quarter Period ending on the date of computation
thereof, the SUM of, without duplication, (i) Consolidated Net Income, (ii)
interest expense, both cash and non-cash,(iii) taxes on income, (iv)
amortization, and (v) depreciation, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Consolidated Indebtedness" means all Indebtedness for Money Borrowed of
the Borrower and its Subsidiaries, all determined on a consolidated basis.
"Consolidated Interest Coverage Ratio" means, with respect to the
Borrower and its Subsidiaries, as of the date of computation thereof, the
ratio (for the Four-Quarter Period ending on (or most recently ended prior
to) such date) of (i) Consolidated EBITDA to (ii) Consolidated Interest
Expense.
"Consolidated Interest Expense" means, with respect to any period of
computation thereof, cash interest expense of the Borrower and its
Subsidiaries on a consolidated basis, including the portion of any payments
made in connection with Capital Leases allocable to interest expense, all
determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Leverage Ratio" means, as of the date of computation
thereof, the ratio of (i) Consolidated Indebtedness (determined as at such
date) to (ii) Consolidated EBITDA (for the Four-Quarter Period ending on (or
most recently ended prior to) such date).
"Consolidated Senior Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) Consolidated Senior Indebtedness
(determined as at such date) to (ii) Consolidated EBITDA (for the
Four-Quarter Period ending on (or most recently ended prior to) such date).
"Consolidated Net Income" means, for any period of computation thereof,
the gross revenues from operations of the Borrower and its Subsidiaries
(including
Page 13 Exhibit 4.2
payments received by the Borrower and its Subsidiaries of (i) interest
income, and (ii) dividends and distributions made in the ordinary course of
their businesses by Persons in which investment is permitted pursuant to this
Agreement and not related to an extraordinary event), less all operating and
non-operating expenses of the Borrower and its Subsidiaries including taxes
on income, all determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis; but excluding (for all purposes other than
compliance with SECTION 9.1(a) hereof) as income: (i) net gains on the sale,
conversion or other disposition of capital assets, (ii) net gains on the
acquisition, retirement, sale or other disposition of capital stock and other
securities of the Borrower or its Subsidiaries, (iii) net gains on the
collection of proceeds of life insurance policies, (iv) any write-up of any
asset, and (v) any other net gain or credit of an extraordinary nature as
determined in accordance with GAAP applied on a Consistent Basis.
"Consolidated Net Worth" means, as of any date on which the amount
thereof is to be determined, Consolidated Shareholders' Equity minus (without
duplication of deductions in respect of items already deducted in arriving at
surplus and retained earnings) all reserves (other than contingency reserves
not allocated to any particular purpose), including without limitation
reserves for depreciation, depletion, amortization, obsolescence, deferred
income taxes, insurance and inventory valuation, all as determined on a
consolidated basis in accordance with GAAP applied on a Consistent Basis.
"Consolidated Senior Indebtedness" means all Indebtedness for Money
Borrowed of the Borrower and its Subsidiaries, excluding any Indebtedness
evidenced by the Subordinated Notes and any other Indebtedness for Money
Borrowed of Borrower or any of its Subsidiaries subordinated to the
Obligations of the Borrower and its Subsidiaries under this Agreement upon
terms and conditions satisfactory to the Agent, all determined in accordance
with GAAP applied on a consistent basis.
"Consolidated Shareholders' Equity" means, as of any date on which the
amount thereof is to be determined, the sum of the following in respect of
the Borrower and its Subsidiaries (determined on a consolidated basis and
excluding any upward adjustment after the Closing Date due to revaluation of
assets): (i) the amount of issued and outstanding share capital, plus (ii)
the amount of additional paid-in capital and retained earnings (or, in the
case of a deficit, minus the amount of such deficit), plus (iii) the amount
of any foreign currency translation adjustment (if positive, or, if negative,
minus the amount of such translation adjustment), minus (iv) the amount of
any treasury stock, all as determined in accordance with GAAP applied on a
Consistent Basis.
"Contingent Obligation" of any Person means all contingent liabilities
required (or which, upon the creation or incurring thereof, would be
required) to be included in the financial statements (including footnotes) of
such Person in accordance with GAAP applied on a Consistent Basis, including
Statement No. 5 of the Financial Accounting Standards Board, all Rate Hedging
Obligations and any obligation of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation of any other
Person (the "primary obligor") in any manner, whether directly or indirectly,
including obligations of such Person however incurred:
Page 14 Exhibit 4.2
(1) to purchase such Indebtedness or other obligation or any
property or assets constituting security therefor;
(2) to advance or supply funds in any manner (i) for the
purchase or payment of such Indebtedness or other obligation, or
(ii) to maintain a minimum working capital, net worth or other balance
sheet condition or any income statement condition of the primary
obligor;
(3) to grant or convey any lien, security interest, pledge,
charge or other encumbrance on any property or assets of such Person
to secure payment of such Indebtedness or other obligation;
(4) to lease property or to purchase securities or other
property or services primarily for the purpose of assuring the owner
or holder of such Indebtedness or obligation of the ability of the
primary obligor to make payment of such Indebtedness or other
obligation; or
(5) otherwise to assure the owner of the Indebtedness or such
obligation of the primary obligor against loss in respect thereof.
"Default" means any event or condition which, with the giving or receipt
of notice or lapse of time or both, would constitute an Event of Default
hereunder.
"Defaulting Lender" means, as of any date, with respect to any Lender, a
Lender who at such date has failed to make any Loan or fund its purchase of
any Participation as required pursuant to this Agreement.
"Default Rate" means (i) with respect to each Eurodollar Rate Loan,
until the end of the Interest Period applicable thereto, a rate of two
percent (2%) above the Eurodollar Rate applicable to such Loan, and
thereafter at a rate of interest per annum which shall be two percent (2%)
above the Base Rate, (ii) with respect to Base Rate Loans, at a rate of
interest per annum which shall be two percent (2%) above the Base Rate and
(iii) in any case, the maximum rate permitted by applicable law, if lower.
"Dollars" and the symbol "$" means dollars constituting legal tender for
the payment of public and private debts in the United States of America.
"Eligible Inventory" means liquids, syrups, chemicals, aluminum, glass
and plastic goods, both as raw material or finished product, in any stage of
the production process of Borrower or its Subsidiaries. The Agent shall
determine, in the reasonable exercise of its discretion, which Inventory
shall constitute Eligible Inventory; provided, however, that the Agent shall
give the Borrower 90 days notice prior to changing what shall constitute
Eligible Inventory.
"Eligible Receivables" means those Receivables of the Borrower or its
Subsidiaries which are not more than sixty (60) days past due. The Agent
shall determine, in the reasonable exercise of its discretion, which
Receivables shall
Page 15 Exhibit 4.2
constitute Eligible Receivables; provided, however, that the Agent shall give
the Borrower 90 days notice prior to changing what shall constitute Eligible
Inventory.
"Eligible Securities" means the following obligations and any other
obligations previously approved in writing by the Agent:
(a) Government Securities;
(b) obligations of any corporation organized under the laws of
any state of the United States of America or under the laws of any
other nation, payable in the United States of America, expressed to
mature not later than 92 days following the date of issuance thereof
and rated in an investment grade rating category by S&P and Xxxxx'x;
(c) interest bearing demand or time deposits issued by any
Lender or certificates of deposit maturing within one year from the
date of issuance thereof and issued by a bank or trust company
organized under the laws of the United States or of any state thereof
having capital surplus and undivided profits aggregating at least
$400,000,000 and being rated "A-3" or better by S&P or "A" or better
by Xxxxx'x;
(d) Repurchase Agreements;
(e) Municipal Obligations;
(f) Pre-Refunded Municipal Obligations;
(g) shares of mutual funds which invest in obligations described
in paragraphs (a) through (f) above, the shares of which mutual funds
are at all times rated "AAA" by S&P;
(h) tax-exempt or taxable adjustable rate preferred stock issued
by a Person having a rating of its long term unsecured debt of "A" or
better by S&P or "A-3" or better by Xxxxx'x; and
(i) asset-backed remarketed certificates of participation
representing a fractional undivided interest in the assets of a trust,
which certificates are rated at least "A-1" by S&P and "P-1" by
Xxxxx'x.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (i) is maintained for employees of the
Borrower or any of its ERISA Affiliates or is assumed by the Borrower or any
of its ERISA Affiliates in connection with any Acquisition or (ii) has at any
time been maintained for the employees of the Borrower or any current or
former ERISA Affiliate (excluding in any event, however, any labor union
sponsored plan).
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and
Page 16 Exhibit 4.2
Recovery Act, the Toxic Substances Control Act, as amended, the Clean Air
Act, as amended, the Clean Water Act, as amended, any other "Superfund" or
"Superlien" law or any other federal, or applicable state or local statute,
law, ordinance, code, rule, regulation, order or decree regulating, relating
to, or imposing liability or standards of conduct concerning, any Hazardous
Material.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any Person or trade
or business which is a member of a group which is under common control with
the Borrower, who together with the Borrower, is treated as a single employer
within the meaning of Section 414(b) and (c) of the Code.
"Eurodollar Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means the interest rate per annum calculated according
to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
--------------------------------
Rate 1- Eurodollar Reserve Percentage Margin
"Eurodollar Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D or any successor regulation, as the maximum reserve requirement
(including any basic, supplemental, emergency, special, or marginal reserves)
applicable with respect to Eurocurrency liabilities as that term is defined
in Regulation D (or against any other category of liabilities that includes
deposits by reference to which the interest rate of Eurodollar Rate Loans is
determined), whether or not the Agent or any Lender has any Eurocurrency
liabilities subject to such requirements, without benefits of credits or
proration, exceptions or offsets that may be available from time to time to
the Agent or any Lender. The Eurodollar Rate shall be adjusted automatically
on and as of the effective date of any change in the Eurodollar Reserve
Percentage.
"Event of Default" means any of the occurrences set forth as such in
SECTION 10.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
"Existing Facility" means the revolving credit facility pursuant to that
certain Credit Agreement, dated September 23, 1993 by and among the Borrower
and the financial institutions party thereto from time to time.
"Existing Indebtedness" means, collectively, the Indebtedness of the
Borrower and its Subsidiaries arising under the Existing Facility and the
1993 Senior Notes.
Page 17 Exhibit 4.2
"Facility Guaranty" means each Guaranty and Suretyship Agreement between
one or more Guarantors and the Agent for the benefit of the Lenders,
delivered pursuant to SECTION 8.19, as the same may be amended, modified or
supplemented.
"Facility Termination Date" means the date on which the Revolving Credit
Termination Date shall have occurred, no Letters of Credit shall remain
outstanding and the Borrower shall have fully, finally and irrevocably paid
and satisfied all Obligations.
"Federal Funds Effective Rate" means, for any day, the rate per annum
(rounded upward to the nearest 1/100th of 1%) 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 on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, PROVIDED that (a) if such day is not a Business Day, the
Federal Funds Effective Rate for such day shall be such rate on such
transactions on the next preceding Business Day, and (b) if no such rate is
so published on such next succeeding Business Day, the Federal Funds
Effective Rate for such day shall be the average rate quoted to the Agent on
such day on such transaction as determined by the Agent.
"Fiscal Year" means the twelve month fiscal period of the Borrower and
its Subsidiaries commencing on January 1st of each calendar year and ending
on December 31st of each calendar year.
"Foreign Benefit Law" means any applicable statute, law, ordinance,
code, rule, regulation, order or decree of any foreign nation or any
province, state, territory, protectorate or other political subdivision
thereof regulating, relating to, or imposing liability or standards of
conduct concerning, any Employee Benefit Plan.
"Four-Quarter Period" means a period of four full consecutive fiscal
quarters of the Borrower and its Subsidiaries, taken together as one
accounting period.
"Franchise Agreements" means each of the Franchise Agreements entered
into by the Borrower or any of its Subsidiaries, regarding the production,
bottling and distribution by the Borrower or any of its Subsidiaries of
beverage-related products.
"GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles, being those principles of accounting set
forth in pronouncements of the Financial Accounting Standards Board, the
American Institute of Certified Public Accountants or which have other
substantial authoritative support and are applicable in the circumstances as
of the date of a report.
"Government Securities" means direct obligations of, or obligations the
timely payment of principal and interest on which are fully and
unconditionally guaranteed by, the United States of America.
"Governmental Authority" shall mean any Federal, state, municipal,
national or other governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
officer exercising
Page 18 Exhibit 4.2
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to any government or any court, in each case whether associated
with a state of the United States, the United States, or a foreign entity or
government.
"Guarantors" means, at any date, the Subsidiaries of the Borrower who
are required to be parties to a Facility Guaranty at such date, PROVIDED,
however, Louisiana will be considered a Guarantor only upon the acquisition
directly or indirectly by the Borrower and/or by one or more of the
Borrower's Subsidiaries of 100% of Louisiana's voting stock or 100% of all
equity interests in Louisiana.
"Hazardous Material" means and includes any hazardous, toxic or
dangerous waste, substance or material, the generation, handling, storage,
disposal, treatment or emission of which is subject to any Environmental Law.
"Indebtedness" means with respect to any Person, without duplication,
all Indebtedness for Money Borrowed, all indebtedness of such Person for the
acquisition of property or arising under Rate Hedging Obligations, all
indebtedness secured by any Lien on the property of such Person whether or
not such indebtedness is assumed (except unperfected Liens incurred in the
ordinary course of business and not in connection with the borrowing of
money), all liability of such Person by way of endorsements (other than for
collection or deposit in the ordinary course of business), all Contingent
Obligations, that portion of obligations with respect to Capital Leases and
other items which in accordance with GAAP is required to be classified as a
liability on a balance sheet; but excluding all accounts payable in the
ordinary course of business so long as payment therefor is due within one
year; provided that in no event shall the term Indebtedness include capital
stock, surplus and retained earnings, minority interests in the common stock
of subsidiaries of such Person, lease obligations (other than pursuant to
Capital Leases), reserves for deferred income taxes and investment credits,
other deferred credits or reserves, and deferred compensation obligations.
"Indebtedness for Money Borrowed" means with respect to any Person,
without duplication, all indebtedness in respect of money borrowed,
including without limitation all Capital Leases and the deferred purchase
price of any property or asset, evidenced by a promissory note, bond,
debenture or similar written obligation for the payment of money (including
conditional sales or similar title retention agreements), other than trade
payables incurred in the ordinary course of business.
"Interbank Offered Rate" means, with respect to any Eurodollar Rate Loan
for the Interest Period applicable thereto, the average (rounded upward to
the nearest one-sixteenth (1/16) of one percent) per annum rate of interest
determined by the office of the Agent (each such determination to be
conclusive and binding) as of two Business Days prior to the first day of
such Interest Period, as the effective rate at which deposits in immediately
available funds in Dollars are being, have been, or would be offered or
quoted by the Agent to major banks in the applicable interbank market for
Eurodollar deposits at any time during the Business Day which is the second
Business Day immediately preceding the first day of such Interest Period, for
a term comparable to such Interest Period and in the amount of the
Page 19 Exhibit 4.2
Eurodollar Rate Loan. If no such offers or quotes are generally available for
such amount, then the Agent shall be entitled to determine the Eurodollar
Rate by estimating in its reasonable judgment the per annum rate (as
described above) that would be applicable if such quote or offers were
generally available.
"Interest Period" means, for each Eurodollar Rate Loan, a period
commencing on the date such Eurodollar Rate Loan is made or converted and
ending, at the Borrower's option, on the date one, two, three or six months
thereafter as notified to the Agent by the Authorized Representative three
(3) Business Days prior to the beginning of such Interest Period; PROVIDED,
that,
(i) if the Authorized Representative fails to notify the
Agent of the length of an Interest Period three (3) Business Days
prior to the first day of such Interest Period, the Loan for which
such Interest Period was to be determined shall be deemed to be a Base
Rate Loan as of the first day thereof;
(ii) if an Interest Period for a Eurodollar Rate Loan would
end on a day which is not a Business Day, such Interest Period shall
be extended to the next Business Day (unless such extension would
cause the applicable Interest Period to end in the succeeding calendar
month, in which case such Interest Period shall end on the next
preceding Business Day);
(iii) any Interest Period which begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(iv) no Interest Period shall extend past the Stated
Termination Date; and
(v) there shall not be more than Five (5) Interest Periods
in effect on any day.
"Interest Rate Selection Notice" means the written notice delivered by
an Authorized Representative in connection with the election of a subsequent
Interest Period for any Eurodollar Rate Loan or the conversion of any
Eurodollar Rate Loan into a Base Rate Loan or the conversion of any Base Rate
Loan into a Eurodollar Rate Loan , in the form of EXHIBIT E.
"Inventory" means any and all goods, merchandise and other personal
property, including, without limitation, goods in transit, wheresoever
located and whether now owned or hereafter acquired by either Borrower or any
of its Subsidiaries which is or may at any time be held for sale or lease,
furnished under any contract of service or held as raw materials,
work-in-process, or supplies or materials used or consumed in the Borrower's
or its Subsidiaries' business, including, without limitation, all such
property the sale of other disposition of which has given rise to Receivables
and which has been returned to or repossessed or stopped in transit by the
Borrower or its Subsidiaries.
Page 20 Exhibit 4.2
"Issuing Bank" means initially NationsBank and thereafter any Lender
which is successor to NationsBank as issuer of Letters of Credit under
ARTICLE III.
"Joint Venture Agreement" means, that certain Joint Venture Agreement,
dated September 3, 1992, by and between the Borrower and Poydras Street
Investors LLC, a Louisiana limited liability company, as amended from time to
time.
"LC Account Agreement" means the LC Account Agreement dated as of the
date hereof between the Borrower and the Agent, as amended, modified or
supplemented from time to time.
"Lending Office" means, as to each Lender, the Lending Office of such
Lender designated on the signature pages hereof or in an Assignment and
Acceptance or such other office of such Lender (or of an affiliate of such
Lender) as such Lender may from time to time specify to the Authorized
Representative and the Agent as the office by which its Loans are to be made
and maintained.
"Letter of Credit" means a standby or commercial letter of credit issued
by the Issuing Bank for the account of the Borrower in favor of a Person
advancing credit or securing an obligation on behalf of the Borrower.
"Letter of Credit Commitment" means, with respect to each Lender, the
obligation of such Lender to acquire Participations in respect of Letters of
Credit and Reimbursement Obligations up to an aggregate amount at any one
time outstanding equal to such Lender's Applicable Commitment Percentage of
the Total Letter of Credit Commitment as the same may be increased or
decreased from time to time pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in ARTICLE III
hereof providing for the issuance by the Issuing Bank for the account of the
Borrower of Letters of Credit in an aggregate stated amount at any time
outstanding not exceeding the Total Letter of Credit Commitment.
"Letter of Credit Outstandings" means, as of any date of determination,
the aggregate amount remaining undrawn under all Letters of Credit plus
Reimbursement Obligations then outstanding.
"Lien" means any interest in property securing any obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but
not limited to the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt or
a lease, consignment or bailment for security purposes. For the purposes of
this Agreement, the Borrower and any Subsidiary shall be deemed to be the
owner of any property which it has acquired or holds subject to a conditional
sale agreement, financing lease, or other arrangement pursuant to which title
to the property has been retained by or vested in some other Person for
security purposes.
Page 21 Exhibit 4.2
"Loan" or "Loans" means any borrowing pursuant to an Advance under the
Revolving Credit Facility in accordance with ARTICLE II.
"Loan Documents" means this Agreement, the Notes, the Security
Instruments, the Facility Guaranties, the LC Account Agreement, the
Applications and Agreements for Letter of Credit, the Borrowing Base
Certificate and all other instruments and documents heretofore or hereafter
executed or delivered to or in favor of any Lender or the Agent in connection
with the Loans made and transactions contemplated under this Agreement, as
the same may be amended, supplemented or replaced from the time to time.
"Louisiana" means the Pepsi-Cola/7UP Beverage Group of Louisiana.
"Management Agreement" means, that certain Management Agreement, by and
between the Borrower and Pohlad Companies, providing for the services of the
Borrower's Chief Executive Officer and Chief Financial Officer, as amended
from time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
business, properties, operations or condition, financial or otherwise, of the
Borrower or any of its Subsidiaries, (ii) the ability of the Borrower or any
of its Subsidiaries to pay or perform its respective obligations, liabilities
and indebtedness under the Loan Documents as such payment or performance
becomes due in accordance with the terms thereof, or (iii) the rights, powers
and remedies of the Agent or any Lender under any Loan Document or the
validity, legality or enforceability thereof (including for purposes of
clauses (ii) and (iii) the imposition of burdensome conditions thereon).
"Xxxxx'x" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making,
or is accruing an obligation to make, contributions or has made, or been
obligated to make, contributions within the preceding six (6) Fiscal Years.
"Municipal Obligations" means general obligations issued by, and
supported by the full taxing authority of, any state of the United States of
America or of any municipal corporation or other public body organized under
the laws of any such state which are rated in the highest investment rating
category by both S&P and Xxxxx'x.
"NCMI" means NationsBanc Capital Markets, Inc. and its successors.
"1993 Senior Notes" means the private placement notes issued September
23, 1993 pursuant to a Senior Note Agreement dated September 23, 1993 and
entered into by and among the Borrower and the financial institutions party
thereto from time to time.
Page 22 Exhibit 4.2
"Notes" means, collectively, the promissory notes of the Borrower
evidencing Loans executed and delivered to the Lenders substantially in the
form of EXHIBIT F-1, and the promissory note of the Borrower evidencing
Swing Line Loans executed and delivered to NationsBank substantially in the
form of EXHIBIT F-2.
"Obligations" means the obligations, liabilities and Indebtedness of
the Borrower with respect to (i) the principal and interest on the Loans as
evidenced by the Notes, (ii) the Reimbursement Obligations and otherwise in
respect of the Letters of Credit, (iii) all liabilities of Borrower to any
Lender which arise under a Swap Agreement, and (iv) the payment and
performance of all other obligations, liabilities and Indebtedness of the
Borrower to the Lenders, the Agent or NCMI hereunder, under any one or more
of the other Loan Documents or with respect to the Loans.
"Outstandings" means, collectively, at any date, the Letter of Credit
Outstandings, Swing Line Outstandings and Revolving Credit Outstandings on
such date.
"Participation" means, (i) with respect to any Lender (other than the
Issuing Bank) and a Letter of Credit, the extension of credit represented
by the participation of such Lender hereunder in the liability of the
Issuing Bank in respect of a Letter of Credit issued by the Issuing Bank in
accordance with the terms hereof and (ii) with respect to any Lender (other
than NationsBank) and a Swing Line Loan, the extension of credit
represented by the participation of such Lender hereunder in the liability
of NationsBank in respect of a Swing Line Loan made by NationsBank in
accordance with the terms hereof.
"Partnership Interests" shall have the meaning therefor provided in
the Pledge Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, which is
subject to the provisions of Title IV of ERISA or Section 412 of the Code
and which (i) is maintained for employees of the Borrower or any of its
ERISA Affiliates or is assumed by the Borrower or any of its ERISA
Affiliates in connection with any Acquisition or (ii) has at any time been
maintained for the employees of the Borrower or any current or former ERISA
Affiliate.
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a government or
agency or political subdivision thereof.
"Pledge Agreements" means any Stock Pledge Agreement or Collateral
Assignment of Partnership Interests delivered to the Agent pursuant to
Section 8.19(c) as hereafter amended, supplemented or replaced from time to
time.
"Pledged Stock" has the meaning given to such term in the Pledge
Agreement.
Page 23 Exhibit 4.2
"Pre-Refunded Municipal Obligations" means obligations of any state of
the United States of America or of any municipal corporation or other
public body organized under the laws of any such state which are rated,
based on the escrow, in the highest investment rating category by both S&P
and Xxxxx'x and which have been irrevocably called for redemption and
advance refunded through the deposit in escrow of Government Securities or
other debt securities which are (i) not callable at the option of the
issuer thereof prior to maturity, (ii) irrevocably pledged solely to the
payment of all principal and interest on such obligations as the same
becomes due and (iii) in a principal amount and bear such rate or rates of
interest as shall be sufficient to pay in full all principal of, interest,
and premium, if any, on such obligations as the same becomes due as
verified by a nationally recognized firm of certified public accountants.
"Prime Rate" means the rate of interest per annum announced publicly
by the Agent as its prime rate from time to time. The Prime Rate is not
necessarily the best or the lowest rate of interest offered by the Agent.
"Principal Office" means the office of the Agent at NationsBank, N.A.,
Xxxxxxxxxxxx Xxxxxx, 00xx Xxxxx, XX0 000-00-00, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, Attention: Agency Services, or such other office and address as the
Agent may from time to time designate.
"Rate Hedging Obligations" means any and all obligations of the
Borrower or any Subsidiary, whether absolute or contingent and howsoever
and wheresoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefor),
under (i) any and all agreements, devices or arrangements designed to
protect at least one of the parties thereto from the fluctuations of
interest rates, exchange rates or forward rates applicable to such party's
assets, liabilities or exchange transactions, including, but not limited
to, Dollar-denominated or cross-currency interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options,
puts, warrants and those commonly known as interest rate "swap" agreements;
and (ii) any and all cancellations, buybacks, reversals, terminations or
assignments of any of the foregoing.
"Receivables" means any right to payment for goods sold or leased or
for services rendered which is not evidenced by an instrument or chattel
paper, whether or not it has been earned by performance.
"Regulation D" means Regulation D of the Board as the same may be
amended or supplemented from time to time.
"Regulatory Change" means any change effective after the Closing Date
in United States federal or state laws or regulations (including
Regulation D and capital adequacy regulations) or foreign laws or
regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks, which
includes any of the Lenders, under any United States federal or state or
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
Page 24 Exhibit 4.2
thereof or compliance by any Lender with any request or directive
regarding capital adequacy, including those relating to "highly leveraged
transactions," whether or not having the force of law, and whether or not
failure to comply therewith would be unlawful and whether or not published
or proposed prior to the date hereof.
"Reimbursement Obligation" shall mean at any time, the obligation of
the Borrower with respect to any Letter of Credit to reimburse the Issuing
Bank and the Lenders to the extent of their respective Participations
(including by the receipt by the Issuing Bank of proceeds of Loans pursuant
to SECTION 3.2) for amounts theretofore paid by the Issuing Bank pursuant
to a drawing under such Letter of Credit.
"Repurchase Agreement" means a repurchase agreement entered into with
any financial institution whose debt obligations or commercial paper are
rated "A" by either of S&P or Xxxxx'x or "A-1" by S&P or "P-1" by Xxxxx'x.
"Required Lenders" means, as of any date, Lenders, with the exclusion
of any Defaulting Lenders, on such date having Credit Exposures (as defined
below) aggregating at least 51% of the aggregate Credit Exposures of all
such Lenders, other than Defaulting Lenders, on such date. For purposes of
the preceding sentence, the amount of the "CREDIT EXPOSURE" of each such
Lender (excluding Defaulting Lenders) shall be equal to the aggregate
principal amount of the Loans owing to such Lender plus the aggregate
unutilized amounts of such Lender's Revolving Credit Commitment (without
regard to any Swing Line Outstandings) plus the amount of such Lender's
Applicable Commitment Percentage of Letter of Credit Outstandings provided
that, (i) if any Lender shall have failed to pay to the Issuing Bank its
Applicable Commitment Percentage of any drawing under any Letter of Credit
resulting in an outstanding Reimbursement Obligation, such Lender's Credit
Exposure attributable to Letters of Credit and Reimbursement Obligations
shall be deemed to be held by the Issuing Bank for purposes of this
definition and (ii) if any Lender shall have failed to pay to NationsBank
its Applicable Commitment Percentage of any Swing Line Loan, such Lender's
Credit Exposure attributable to all Swing Line Outstandings shall be deemed
to be held by NationsBank for purposes of this definition.
"Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of
Borrower or any of its Subsidiaries (other than those payable or
distributable solely to the Borrower and pro rata distributions to minority
shareholders of Louisiana) now or hereafter outstanding, except a dividend
payable solely in shares of a class of stock to the holders of that class;
(b) any redemption, conversion, exchange, retirement or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares
of any class of stock of Borrower or any of its Subsidiaries (other than
those payable or distributable solely to the Borrower and pro rata
distributions to minority shareholders of Louisiana) now or hereafter
outstanding; (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 of its Subsidiaries now or hereafter
outstanding; and (d) any issuance and sale of capital stock of any
Subsidiary
Page 25 Exhibit 4.2
of the Borrower (or any option, warrant or right to acquire such
stock) other than to the Borrower.
"Revolving Credit Commitment" means, with respect to each Lender, the
obligation of such Lender to make Loans to the Borrower up to an aggregate
principal amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Revolving Credit Commitment.
"Revolving Credit Facility" means the facility described in ARTICLE II
hereof providing for Loans to the Borrower by the Lenders in the aggregate
principal amount of the Total Revolving Credit Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Loans then outstanding
and all interest accrued thereon.
"Revolving Credit Termination Date" means (i) the Stated Termination
Date, or (ii) such earlier date of termination of Lenders' obligations
pursuant to SECTION 10.1 upon the occurrence of an Event of Default, or
(iii) such date as the Borrower may voluntarily and permanently terminate
the Revolving Credit Facility by payment in full of all Revolving Credit
Outstandings, Swing Line Outstandings and Letter of Credit Outstandings and
cancellation of all Letters of Credit.
"S&P" means Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx.
"Security Agreements" means, collectively (or individually as the
context may indicate), (i) that certain Security Agreement dated as of the
date hereof by the Borrower to the Agent for the benefit of the Agent and
the Lenders, and (ii) any additional Security Agreement delivered to the
Agent pursuant to SECTION 8.19, as hereafter modified, amended or
supplemented from time to time.
"Security Instruments" means, collectively, the Pledge Agreements, the
Security Agreements, and all other agreements, instruments and other
documents, whether now existing or hereafter in effect, pursuant to which
the Borrower or any Subsidiary shall grant or convey to the Agent or the
Lenders a Lien in property as security for all or any portion of the
Obligations, as any of them may be amended, modified or supplemented from
time to time.
"Shareholders' Agreement" means, that certain Amended and Restated
Shareholders' Agreement, dated as of September 23, 1993, by and among the
Borrower and its shareholders, as further amended from time to time.
"Single Employer Plan" means any employee pension benefit plan covered
by Title IV of ERISA in respect of which the Borrower or any Subsidiary is
an "employer" as described in Section 4001(b) of ERISA and which is not a
Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at the
time of determination:
Page 26 Exhibit 4.2
(i) the fair value of its assets (both at fair valuation
and at present fair saleable value on an orderly basis) is in excess
of the total amount of its liabilities, including Contingent
Obligations; and
(ii) it is then able and expects to be able to pay its debts
as they mature; and
(iii) it has capital sufficient to carry on its business
as conducted and as proposed to be conducted.
"Stated Termination Date" means December 16, 2001.
"Subordinated Notes" means the 11% Subordinated Notes issued by the
Borrower under a Note Exchange Agreement dated as of September 23, 1993 by
and among the Borrower and the financial institutions party thereto from
time to time, in the aggregate principal amount of approximately
$37,200,000.
"Subsidiary" means any corporation or other entity in which more than
50% of its outstanding voting stock or more than 50% of all equity
interests is owned directly or indirectly by the Borrower and/or by one or
more of the Borrower's Subsidiaries PROVIDED, however, with respect to
SECTION 8.19 only, Louisiana will be considered a Subsidiary only upon the
acquisition directly or indirectly by the Borrower and/or by one or more of
the Borrower's Subsidiaries of 100% of Louisiana's voting stock or 100% of
all equity interests in Louisiana.
"Swap Agreement" means one or more agreements between the Borrower and
any Person with respect to Indebtedness evidenced by any or all of the
Notes, on terms mutually acceptable to Borrower and such Person and
approved by each of the Lenders, which agreements create Rate Hedging
Obligations; PROVIDED, HOWEVER, that no such approval of the Lenders shall
be required to the extent such agreements are entered into between the
Borrower and any Lender.
"Swing Line" means the revolving line of credit established by
NationsBank in favor of the Borrower pursuant to SECTION 2.13.
"Swing Line Loans" means loans made by NationsBank to the Borrower
pursuant to SECTION 2.13.
"Swing Line Outstandings" means, as of any date of determination, the
aggregate principal amount of all Swing Line Loans then outstanding.
"Termination Event" means: (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (unless the
notice requirement has been waived by applicable regulation); or (ii) the
withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan
during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA or was deemed such under Section 4068(f) of
ERISA; or (iii) the termination of a Pension Plan, the filing of a notice
of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA; or (iv) the
Page 27 Exhibit 4.2
institution of proceedings to terminate a Pension Plan by the PBGC; or
(v) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; or (vi) the partial or complete
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
Plan; or (vii) the imposition of a Lien pursuant to Section 412 of the
Code or Section 302 of ERISA; or (viii) any event or condition which
results in the reorganization or insolvency of a Multiemployer Plan under
Section 4241 or Section 4245 of ERISA, respectively; or (ix) any event or
condition which results in the termination of a Multiemployer Plan under
Section 4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Letter of Credit Commitment" means an amount not to exceed
$10,000,000.
"Total Revolving Credit Commitment" means a principal amount equal to
$30,000,000, as reduced from time to time in accordance with SECTION 2.6.
"Unsecured Notes Offering" means the public or private placement of
$120,000,000 in Senior Unsecured Notes on terms acceptable to the Agent.
"Voting Stock" means shares of capital stock issued by a corporation,
or equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
1.2. RULES OF INTERPRETATION.
(a) All accounting terms not specifically defined herein shall have
the meanings assigned to such terms and shall be interpreted in accordance
with GAAP applied on a Consistent Basis.
(b) Each term defined in Article 1 or 9 of the North Carolina Uniform
Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code of
another jurisdiction is controlling, in which case such terms shall have
the meaning given in the Uniform Commercial Code of the applicable
jurisdiction.
(c) The headings, subheadings and table of contents used herein or in
any other Loan Document are solely for convenience of reference and shall
not constitute a part of any such document or affect the meaning,
construction or effect of any provision thereof.
(d) Except as otherwise expressly provided, references herein to
articles, sections, paragraphs, clauses, annexes, appendices, exhibits and
schedules are references to articles, sections, paragraphs, clauses,
annexes, appendices, exhibits and schedules in or to this Agreement.
Page 28 Exhibit 4.2
(e) All definitions set forth herein or in any other Loan Document
shall apply to the singular as well as the plural form of such defined
term, and all references to the masculine gender shall include reference to
the feminine or neuter gender, and VICE VERSA, as the context may require.
(f) When used herein or in any other Loan Document, words such as
"hereunder", "hereto", "hereof" and "herein" and other words of like import
shall, unless the context clearly indicates to the contrary, refer to the
whole of the applicable document and not to any particular article,
section, subsection, paragraph or clause thereof.
(g) References to "including" means including without limiting the
generality of any description preceding such term, and for purposes hereof
the rule of EJUSDEM GENERIS shall not be applicable to limit a general
statement, followed by or referable to an enumeration of specific matters,
to matters similar to those specifically mentioned.
(h) All dates and times of day specified herein shall refer to such
dates and times at Charlotte, North Carolina.
(i) Each of the parties to the Loan Documents and their counsel have
reviewed and revised, or requested (or had the opportunity to request)
revisions to, the Loan Documents, and any rule of construction that
ambiguities are to be resolved against the drafting party shall be
inapplicable in the construing and interpretation of the Loan Documents and
all exhibits, schedules and appendices thereto.
(j) Any reference to an officer of the Borrower or any other Person
by reference to the title of such officer shall be deemed to refer to each
other officer of such Person, however titled, exercising the same or
substantially similar functions.
(k) All references to any agreement or document as amended, modified
or supplemented, or words of similar effect, shall mean such document or
agreement, as the case may be, as amended, modified or supplemented from
time to time only as and to the extent permitted therein and in the Loan
Documents.
Page 29 Exhibit 4.2
ARTICLE II
THE REVOLVING CREDIT FACILITY
8.1. LOANS.
(a) COMMITMENT. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances to the Borrower under
the Revolving Credit Facility from time to time from the Closing Date until the
Revolving Credit Termination Date on a pro rata basis as to the total borrowing
requested by the Borrower on any day determined by such Lender's Applicable
Commitment Percentage up to but not exceeding the Revolving Credit Commitment of
such Lender, PROVIDED, however, that the Lenders will not be required and shall
have no obligation to make any such Advance (i) so long as a Default or an Event
of Default has occurred and is continuing or (ii) if the Agent has accelerated
the maturity of any of the Notes as a result of an Event of Default; PROVIDED
further, however, that immediately after giving effect to each such Advance, the
principal amount of Revolving Credit Outstandings plus Letter of Credit
Outstandings plus Swing Line Outstandings shall not exceed the lesser of the
Total Revolving Credit Commitment or the Borrowing Base. Within such limits,
the Borrower may borrow, repay and reborrow under the Revolving Credit Facility
on a Business Day from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolving Credit Termination Date; PROVIDED,
however, that (y) no Loan that is a Eurodollar Rate Loan shall be made which has
an Interest Period that extends beyond the Stated Termination Date and (z) each
Loan that is a Eurodollar Rate Loan may, subject to the provisions of
SECTION 2.7, be repaid only on the last day of the Interest Period with respect
thereto unless such payment is accompanied by the additional payment, if any,
required by SECTION 5.4.
(b) AMOUNTS. Except as otherwise permitted by the Lenders from time
to time, the aggregate unpaid principal amount of the Revolving Credit
Outstandings plus Letter of Credit Outstandings plus Swing Line Outstandings
shall not exceed at any time the lesser of the Total Revolving Credit Commitment
or the Borrowing Base, and, in the event there shall be outstanding any such
excess, the Borrower shall immediately make such payments and prepayments as
shall be necessary to comply with this restriction. Each Loan hereunder, other
than Base Rate Refunding Loans, and each conversion under SECTION 2.8, shall be
in an amount of at least $1,000,000 and, if greater than $1,000,000 an integral
multiple of $100,000.
(c) ADVANCES. (i) An Authorized Representative shall give the Agent
(1) at least three (3) Business Days' irrevocable written notice by
telefacsimile transmission of a Borrowing Notice or Interest Rate Selection
Notice (as applicable) with appropriate insertions, effective upon receipt, of
each Loan that is a Eurodollar Rate Loan (whether representing an additional
borrowing hereunder or the conversion of a borrowing hereunder from Base Rate
Loans to Eurodollar Rate Loans) prior to 11:00 A.M. and (2) irrevocable written
notice by telefacsimile transmission of a Borrowing Notice or Interest Rate
Selection Notice (as applicable) with appropriate insertions, effective upon
receipt, of each Loan (other than Base Rate Refunding Loans to the extent the
same are effected without notice pursuant to SECTION 2.1(c)(iv)) that is a Base
Rate Loan (whether representing an additional borrowing hereunder or the
conversion of borrowing hereunder from Eurodollar Rate Loans to Base Rate Loans)
prior to 11:00 A.M. on the day of such proposed Loan. Each such
Page 30 Exhibit 4.2
notice shall specify the amount of the borrowing, the type of Loan (Base Rate
or Eurodollar Rate), the date of borrowing and, if a Eurodollar Rate Loan,
the Interest Period to be used in the computation of interest. Notice of
receipt of such Borrowing Notice or Interest Rate Selection Notice, as the
case may be, together with the amount of each Lender's portion of an Advance
requested thereunder, shall be provided by the Agent to each Lender by
telefacsimile transmission with reasonable promptness, but (provided the
Agent shall have received such notice by 11:00 A.M.) not later than 1:00 P.M.
on the same day as the Agent's receipt of such notice.
(ii) Not later than 2:00 P.M. on the date specified for each borrowing
under this SECTION 2.1, each Lender shall, pursuant to the terms and subject to
the conditions of this Agreement, make the amount of the Advance or Advances to
be made by it on such day available by wire transfer to the Agent in the amount
of its pro rata share, determined according to such Lender's Applicable
Commitment Percentage of the Loan or Loans to be made on such day. Such wire
transfer shall be directed to the Agent at the Principal Office and shall be in
the form of Dollars constituting immediately available funds. The amount so
received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower on the same day by delivery of the
proceeds thereof to the Borrower's Account or otherwise as shall be directed in
the applicable Borrowing Notice by the Authorized Representative.
(iii) The Borrower shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to convert the Loans in
accordance with SECTION 2.8. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, PROVIDED, HOWEVER, there shall not be outstanding
at any one time Eurodollar Rate Loans having more than five (5) different
Interest Periods. If the Agent does not receive a Borrowing Notice or an
Interest Rate Selection Notice giving notice of election of the duration of an
Interest Period or of conversion of any Loan to or continuation of a Loan as a
Eurodollar Rate Loan by the time prescribed by SECTION 2.1(c) OR 2.8, the
Borrower shall be deemed to have elected to convert such Loan to (or continue
such Loan as) a Base Rate Loan until the Borrower notifies the Agent in
accordance with SECTION 2.8.
(iv) Notwithstanding the foregoing, if a drawing is made under any Letter
of Credit, such drawing is honored by the Issuing Bank prior to the Stated
Termination Date, and the Borrower shall not immediately upon demand fully
reimburse the Issuing Bank in respect of such drawing, (A) provided that the
conditions to making a Loan as herein provided shall then be satisfied, the
Reimbursement Obligation arising from such drawing shall be paid to the Issuing
Bank by the Agent without the requirement of notice to or from the Borrower from
immediately available funds which shall be advanced as a Base Rate Refunding
Loan by each Lender under the Revolving Credit Facility in an amount equal to
such Lender's Applicable Commitment Percentage of such Reimbursement Obligation,
and (B) if the conditions to making a Loan as herein provided shall not then be
satisfied, each of the Lenders shall fund by payment to the Agent (for the
benefit of the Issuing Bank) in immediately available funds the purchase from
the Issuing Bank of their respective Participations in the related Reimbursement
Obligation based on their respective Applicable Commitment Percentages of the
Total Letter of Credit Commitment. If a drawing is presented under any Letter
of Credit in accordance with the terms thereof and the Borrower shall not
immediately upon demand fully reimburse the Issuing Bank in respect thereof,
then notice of such drawing or payment shall be provided promptly by the Issuing
Bank to the
Page 31 Exhibit 4.2
Agent and the Agent shall provide notice to each Lender by telephone or
telefacsimile transmission. If notice to the Lenders of a drawing under any
Letter of Credit is given by the Agent at or before 12:00 noon on any
Business Day, each Lender shall, pursuant to the conditions specified in this
SECTION 2.1(c)(iv), either make a Base Rate Refunding Loan or fund the
purchase of its Participation in the amount of such Lender's Applicable
Commitment Percentage of such drawing or payment and shall pay such amount to
the Agent for the account of the Issuing Bank at the Principal Office in
Dollars and in immediately available funds before 2:30 P.M. on the same
Business Day. If notice to the Lenders of a drawing under a Letter of Credit
is given by the Agent after 12:00 noon on any Business Day, each Lender
shall, pursuant to the conditions specified in this SECTION 2.1(c)(iv),
either make a Base Rate Refunding Loan or fund the purchase of its
Participation in the amount of such Lender's Applicable Commitment Percentage
of such drawing or payment and shall pay such amount to the Agent for the
account of the Issuing Bank at the Principal Office in Dollars and in
immediately available funds before 12:00 noon on the next following Business
Day. Any such Base Rate Refunding Loan shall be advanced as, and shall
continue as, a Base Rate Loan unless and until the Borrower converts such
Base Rate Loan in accordance with the terms of SECTION 2.8.
8.2. PAYMENT OF INTEREST. (a) The Borrower shall pay interest to the Agent
for the account of each Lender on the outstanding and unpaid principal amount of
each Loan made by such Lender for the period commencing on the date of such Loan
until such Loan shall be due at the then applicable Base Rate for Base Rate
Loans or applicable Eurodollar Rate for Eurodollar Rate Loans, as designated by
the Authorized Representative pursuant to SECTION 2.1; PROVIDED, however, that
if any amount shall not be paid when due (at maturity, by acceleration or
otherwise), all amounts outstanding hereunder shall bear interest thereafter at
the Default Rate.
(b) Interest on each Loan shall be computed on the basis of a year of
360 days and calculated in each case for the actual number of days elapsed.
Interest on each Loan shall be paid (i) quarterly in arrears on the last
Business Day of each March, June, September and December, commencing
December 31, 1996 for each Base Rate Loan, (ii) on the last day of the
applicable Interest Period for each Eurodollar Rate Loan and, if such Interest
Period extends for more than three (3) months, at intervals of three (3) months
after the first day of such Interest Period, and (iii) upon payment in full of
the principal amount of such Loan.
8.3. PAYMENT OF PRINCIPAL. The principal amount of each Loan shall be due
and payable to the Agent for the benefit of each Lender in full on the Revolving
Credit Termination Date, or earlier as specifically provided herein. The
principal amount of any Base Rate Loan may be prepaid in whole or in part at any
time. The principal amount of any Eurodollar Rate Loan may be prepaid only at
the end of the applicable Interest Period unless the Borrower shall pay to the
Agent for the account of the Lenders the additional amount, if any, required
under SECTION 5.4. Except as provided in SECTION 2.7, all prepayments of Loans
made by the Borrower shall be in the amount of $1,000,000 or such greater amount
which is an integral multiple of $200,000 or the amount equal to all Revolving
Credit Outstandings, or such other amount as necessary to comply with
SECTION 2.1(b) or SECTION 2.8.
Page 32 Exhibit 4.2
8.4. MANNER OF PAYMENT. (a) Each payment of principal (including any
prepayment) and payment of interest and fees, and any other amount required to
be paid to the Lenders with respect to the Loans, shall be made to the Agent at
the Principal Office, for the account of each Lender, in Dollars and in
immediately available funds before 12:30 P.M. on the date such payment is due.
The Agent may, but shall not be obligated to, debit the amount of any such
payment which is not made by such time to any ordinary deposit account, if any,
of the Borrower with the Agent.
(b) The Agent shall deem any payment made by or on behalf of the
Borrower hereunder that is not made both in Dollars and in immediately
available funds and prior to 12:30 P.M. to be a non-conforming payment. Any
such payment shall not be deemed to be received by the Agent until the later
of (i) the time such funds become available funds and (ii) the next Business
Day. Any non-conforming payment may constitute or become a Default or Event
of Default. Interest shall continue to accrue on any principal as to which a
non-conforming payment is made until the later of (x) the date such funds
become available funds or (y) the next Business Day at the Default Rate from
the date such amount was due and payable.
(c) In the event that any payment hereunder or under the Notes
becomes due and payable on a day other than a Business Day, then such due date
shall be extended to the next succeeding Business Day unless provided otherwise
under clause (ii) of the definition of "Interest Period"; PROVIDED that interest
shall continue to accrue during the period of any such extension and PROVIDED
further, that in no event shall any such due date be extended beyond the
Revolving Credit Termination Date.
8.5. NOTES. Loans made by each Lender shall be evidenced by the Note
payable to the order of such Lender in the respective amount of its Applicable
Commitment Percentage of the Revolving Credit Commitment, which Note shall be
dated the Closing Date or a later date pursuant to an Assignment and Acceptance
and shall be duly completed, executed and delivered by the Borrower.
8.6. PRO RATA PAYMENTS. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Loans and the fees
described in SECTION 2.10 shall be made to the Agent for the account of the
Lenders pro rata based on their Applicable Commitment Percentages, (b) all
payments to be made by the Borrower for the account of each of the Lenders on
account of principal, interest and fees, shall be made without diminution,
setoff, recoupment or counterclaim, and (c) the Agent will promptly distribute
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from the Borrower.
8.7. REDUCTIONS. The Borrower shall, by notice from an Authorized
Representative, have the right from time to time but not more frequently than
once each calendar month, upon not less than five (5) Business Days' written
notice to the Agent, effective upon receipt, to reduce the Total Revolving
Credit Commitment. The Agent shall give each Lender, within one (1) Business Day
of receipt of such notice, telefacsimile notice, or telephonic notice (confirmed
in writing), of such reduction. Each such reduction shall be in the aggregate
amount of $5,000,000 or such greater amount which is in an integral multiple of
$1,000,000 or the entire remaining Total Revolving Credit Commitment, and shall
permanently reduce the Total Revolving Credit Commitment; provided, however,
that
Page 33 Exhibit 4.2
reductions may be in such lesser amounts as shall be required under the
Indenture dated December 17, 1996 between the Borrower and Norwest Bank
Minnesota, National Association. Each reduction of the Total Revolving
Credit Commitment shall be accompanied by payment of the Loans to the extent
that the principal amount of Revolving Credit Outstandings plus Letter of
Credit Outstandings plus Swing Line Outstandings exceeds the lesser of the
Total Revolving Credit Commitment or the Borrowing Base after giving effect
to such reduction, together with accrued and unpaid interest on the amounts
prepaid. No such reduction shall result in the payment of any Eurodollar
Rate Loan other than on the last day of the Interest Period of such
Eurodollar Rate Loan unless such prepayment is accompanied by amounts due, if
any, under SECTION 5.4.
8.8. CONVERSIONS AND ELECTIONS OF SUBSEQUENT INTEREST PERIODS. Provided
that no Default or Event of Default shall have occurred and be continuing and
subject to the limitations set forth below and in ARTICLE V, the Borrower may:
(a) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Agent on or before 11:00 A.M. on any
Business Day, convert all or a part of Eurodollar Rate Loans to Base Rate Loans
on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Agent on or before 11:00 A.M. three (3)
Business Days' prior to the date of such election or conversion:
(i) elect a subsequent Interest Period for all or a portion of
Eurodollar Rate Loans to begin on the last day of the then current
Interest Period for such Eurodollar Rate Loans; and
(ii) convert Base Rate Loans to Eurodollar Rate Loans on any
Business Day.
Each election and conversion pursuant to this SECTION 2.8 shall be subject
to the limitations on Eurodollar Rate Loans set forth in the definition of
"Interest Period" herein and in SECTIONS 2.1, 2.3 and ARTICLE V. Notice of
receipt of each such notice of election or conversion shall be provided by the
Agent to each Lender by telefacsimile transmission with reasonable promptness,
but (provided the Agent shall have received such notice by 11:00 A.M.) not later
than 2:00 P.M. on the same Business Day as the Agent's receipt of such notice.
All such continuations or conversions of Loans shall be effected pro rata based
on the Applicable Commitment Percentages of the Lenders.
8.9. INCREASE AND DECREASE IN AMOUNTS. The amount of the Total Revolving
Credit Commitment which shall be available to the Borrower as Advances shall be
reduced by the aggregate amount of Outstanding Letters of Credit and Outstanding
Swing Line Loans.
8.10. FACILITY FEES.
(a) UNUSED FEE. For the period beginning on the Closing Date and
ending on the Revolving Credit Termination Date, the Borrower agrees to pay to
the Agent, for the
Page 34 Exhibit 4.2
pro rata benefit of the Lenders based on their Applicable Commitment
Percentages, an unused fee equal to the Applicable Unused Fee multiplied by
the average daily amount by which the Total Revolving Credit Commitment
without giving effect to commitments evidenced by Swing Line Outstandings
exceeds the sum of (i) Revolving Credit Outstandings without giving effect to
Swing Line Outstandings plus (ii) Letter of Credit Outstandings. Such fees
shall be due in arrears on the last Business Day of each March, June,
September and December commencing December 31, 1996 to and on the Revolving
Credit Termination Date. Upon the occurrence and during the continuation of
an Event of Default, the Unused Fee shall be one percent (1%) per annum.
Notwithstanding the foregoing, so long as any Lender fails to make available
any portion of its Revolving Credit Commitment when requested, such Lender
shall not be entitled to receive payment of its pro rata share of such fee
until such Lender shall make available such portion. Such fee shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed.
(b) AGENT FEE. The Borrower agrees to pay to the Agent, for its own
account as Agent for the Lenders under the Revolving Credit Facility an annual
agent fee as provided in that certain Fee Letter dated October 29, 1996. Such
agent fee shall be due on the Closing Date and annually thereafter, on the
anniversary of such Closing Date.
8.11. DEFICIENCY ADVANCES. No Lender shall be responsible for any default
of any other Lender in respect to such other Lender's obligation to make any
Loan or fund its purchase of any Participation hereunder nor shall the Revolving
Credit Commitment of any Lender hereunder be increased as a result of such
default of any other Lender. Without limiting the generality of the foregoing,
in the event any Lender shall fail to advance funds to the Borrower as herein
provided, the Agent may in its discretion, but shall not be obligated to,
advance under the Note in its favor as a Lender all or any portion of such
amount or amounts (each, a "Deficiency Advance") and shall thereafter be
entitled to payments of principal of and interest on such Deficiency Advance in
the same manner and at the same interest rate or rates to which such other
Lender would have been entitled had it made such advance under its Note;
provided that, upon payment to the Agent from such other Lender of the entire
outstanding amount of each such Deficiency Advance, together with accrued and
unpaid interest thereon, from the most recent date or dates interest was paid to
the Agent by the Borrower on each Loan comprising the Deficiency Advance at the
interest rate per annum for overnight borrowing by the Agent from the Federal
Reserve Bank, then such payment shall be credited against the applicable Note of
the Agent in full payment of such Deficiency Advance and the Borrower shall be
deemed to have borrowed the amount of such Deficiency Advance from such other
Lender as of the most recent date or dates, as the case may be, upon which any
payments of interest were made by the Borrower thereon.
8.12. USE OF PROCEEDS. The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Borrower for general
working capital needs and other corporate purposes including (i) the refinancing
of the outstanding principal balance of Existing Indebtedness owing by the
Borrower and (ii) the funding of costs and expenses incurred in such refinancing
of the Borrower's indebtedness.
8.13. SWING LINE. (a) Notwithstanding any other provision of this Agreement
to the contrary, in order to administer the Revolving Credit Facility in an
efficient manner and to minimize the transfer of funds between the Agent and the
Lenders, NationsBank shall make
Page 35 Exhibit 4.2
available Swing Line Loans to the Borrower prior to the Revolving Credit
Termination Date. NationsBank shall not make any Swing Line Loan pursuant
hereto (i) if to the actual knowledge of NationsBank the Borrower is not in
compliance with all the conditions to the making of Loans set forth in this
Agreement, (ii) if after giving effect to such Swing Line Loan, the Swing
Line Outstandings exceed $2,500,000, or (iii) if after giving effect to such
Swing Line Loan, the sum of the Swing Line Outstandings, Revolving Credit
Outstandings and Letter of Credit Outstandings exceeds the lesser of the
Total Revolving Credit Commitment or the Borrowing Base. Swing Line Loans
shall be limited to either Base Rate Loans or to Loans bearing interest at an
otherwise mutually agreed upon rate of interest. The Company may borrow,
repay and reborrow under this SECTION 2.13. Borrowings under the Swing Line
shall be made in the minimum amount of $50,000 or, if greater, in amounts
which are integral multiples of $10,000, or in the amount necessary to effect
a Base Rate Refunding Loan, upon written request by telefacsimile
transmission, effective upon receipt, by an Authorized Representative of the
Borrower made to NationsBank not later than 2:00 P.M. on the Business Day of
the requested borrowing. Each such Borrowing Notice shall specify the amount
of the borrowing and the date of borrowing, and shall be in the form of
EXHIBIT D-2, with appropriate insertions. Each repayment of a Swing Line
Loan shall be in an amount which is an integral multiple of $10,000 or the
aggregate amount of all Swing Line Outstandings. If the Borrower instructs
NationsBank to debit any demand deposit account of the Borrower in the amount
of any payment with respect to a Swing Line Loan, or NationsBank otherwise
receives repayment, after 2:00 P.M. on a Business Day, such payment shall be
deemed received on the next Business Day.
(b) Swing Line Loans shall bear interest at either the Base Rate or at an
otherwise mutually agreed upon rate of interest, the interest payable on Swing
Line Loans is solely for the account of NationsBank, and all accrued and unpaid
interest on Swing Line Loans shall be payable on the dates and in the manner
provided in SECTIONS 2.2(b) AND 2.4 with respect to interest on Base Rate Loans.
Swing Line Loans made by NationsBank shall be evidenced by a Note payable to the
order of NationsBank in the amount of the Swing Line Commitment, which Note
shall be dated the Closing Date or a later date pursuant to an Assignment and
Acceptance and shall be duly completed, executed and delivered by the Borrower.
(c) Upon the making of a Swing Line Loan, each Lender shall be deemed to
have purchased from NationsBank a Participation therein in an amount equal to
that Lender's Applicable Commitment Percentage of such Swing Line Loan. Upon
demand made by NationsBank, each Lender shall, according to its Applicable
Commitment Percentage of such Swing Line Loan, promptly provide to NationsBank
its purchase price therefor in an amount equal to its Participation therein.
Any Advance made by a Lender pursuant to demand of NationsBank of the purchase
price of its Participation the conditions to making Loans shall be satisfied, a
Base Rate Refunding Loan under SECTION 2.1 until the Borrower converts such Base
Rate Loan in accordance with the terms of SECTION 2.8, and (ii) in all other
cases, the funding by each Lender of the purchase price of its Participation in
such Swing Line Loan. The obligation of each Lender to so provide its purchase
price to NationsBank shall be absolute and unconditional and shall not be
affected by the occurrence of an Event of Default or any other occurrence or
event. The Borrower, at its option and subject to the terms hereof, may request
an Advance pursuant to SECTION 2.1 in an amount sufficient to repay Swing Line
Outstandings on any date and the Agent shall provide from the proceeds of such
Advance to NationsBank the amount necessary to repay such Swing Line
Out-
Page 36 Exhibit 4.2
standings (which NationsBank shall then apply to such repayment) and credit
any balance of the Advance in immediately available funds in the manner
directed by the Borrower pursuant to SECTION 2.1(c)(ii). The proceeds of
such Advances shall be paid to NationsBank for application to the Swing Line
Outstandings and the Lenders shall then be deemed to have made Loans in the
amount of such Advances. The Swing Line shall continue in effect until the
Revolving Credit Termination Date, at which time all Swing Line Outstandings
and accrued interest thereon shall be due and payable in full. Upon the
occurrence and during the continuation of a Default or Event of Default,
NationsBank shall not be required to make any Swing Line Loans.
Page 37 Exhibit 4.2
ARTICLE IX
LETTERS OF CREDIT
9.1. LETTERS OF CREDIT. The Issuing Bank agrees, subject to the terms and
conditions of this Agreement, upon request of the Borrower to issue from time to
time for the account of the Borrower Letters of Credit upon delivery to the
Issuing Bank of an Application and Agreement for Letter of Credit relating
thereto in form and content acceptable to the Issuing Bank; PROVIDED, that (i)
the Letter of Credit Outstandings shall not exceed the Total Letter of Credit
Commitment and (ii) no Letter of Credit shall be issued if, after giving effect
thereto, Letter of Credit Outstandings plus Revolving Credit Outstandings plus
Swing Line Outstandings shall exceed the lesser of the Total Revolving Credit
Commitment or the Borrowing Base. No Letter of Credit shall have an expiry date
(including all rights of the Borrower or any beneficiary named in such Letter of
Credit to require renewal) or payment date occurring later than the earlier to
occur of (x)(i) in the case of standby Letters of Credit, one year after the
date of its issuance and (ii) in the case of commercial Letters of Credit, 120
days after the date of its issuance or (y) the Stated Termination Date.
9.2. REIMBURSEMENT.
(a) The Borrower hereby unconditionally agrees to pay to the Issuing
Bank immediately on demand at the Principal Office all amounts required to pay
all drafts drawn or purporting to be drawn under the Letters of Credit and all
reasonable expenses incurred by the Issuing Bank in connection with the Letters
of Credit, and in any event and without demand to place in possession of the
Issuing Bank (which shall include Advances under the Revolving Credit Facility
if permitted by SECTION 2.1 and Swing Line Loans if permitted by SECTION 2.13)
sufficient funds to pay all debts and liabilities arising under any Letter of
Credit. The Issuing Bank agrees to give the Borrower prompt notice of any
request for a draw under a Letter of Credit. The Issuing Bank may charge any
account the Borrower may have with it for any and all amounts the Issuing Bank
pays under a Letter of Credit, plus charges and reasonable expenses as from time
to time agreed to by the Issuing Bank and the Borrower; provided that to the
extent permitted by SECTION 2.1(c)(iv) and SECTION 2.13, amounts shall be paid
pursuant to Advances under the Revolving Credit Facility or, if the Borrower
shall elect, by Swing Line Loans. The Borrower agrees to pay the Issuing Bank
interest on any Reimbursement Obligations not paid when due hereunder at the
Base Rate plus two percent (2.0%), or the maximum rate permitted by applicable
law, if lower, such rate to be calculated on the basis of a year of 360 days for
actual days elapsed.
(b) In accordance with the provisions of SECTION 2.1(c), the Issuing
Bank shall notify the Agent of any drawing under any Letter of Credit promptly
following the receipt by the Issuing Bank of such drawing.
(c) Notwithstanding the occurrence or continuation of a Default or
Event of Default, each Lender (other than the Issuing Bank) shall automatically
acquire on the date of issuance thereof, a Participation in the liability of the
Issuing Bank in respect of each Letter of Credit in an amount equal to such
Lender's Applicable Commitment Percentage of such liability, and to the extent
that the Borrower is obligated to pay the Issuing Bank under SECTION 3.2(a),
each Lender (other than the Issuing Bank) thereby shall absolutely,
Page 38 Exhibit 4.2
unconditionally and irrevocably assume, and shall be unconditionally obligated
to pay to the Issuing Bank as hereinafter described, its Applicable Commitment
Percentage of the liability of the Issuing Bank under such Letter of Credit.
(i) Each Lender (including the Issuing Bank in its capacity as a
Lender) shall, subject to the terms and conditions of ARTICLE II, pay to
the Agent for the account of the Issuing Bank at the Principal Office in
Dollars and in immediately available funds, an amount equal to its
Applicable Commitment Percentage of any drawing under a Letter of Credit,
such funds to be provided in the manner described in SECTION 2.1(c)(iv).
(ii) Simultaneously with the making of each payment by a Lender
to the Issuing Bank pursuant to SECTION 2.1(c)(iv)(B), such Lender shall,
automatically and without any further action on the part of the Issuing
Bank or such Lender, acquire a Participation in an amount equal to such
payment (excluding the portion thereof constituting interest accrued prior
to the date the Lender made its payment) in the related Reimbursement
Obligation of the Borrower. The Reimbursement Obligations of the Borrower
shall be immediately due and payable whether by Advances made in accordance
with SECTION 2.1(c)(iv), Swing Line Loans made in accordance with SECTION
2.13, or otherwise.
(iii) Each Lender's obligation to make payment to the Agent for
the account of the Issuing Bank pursuant to SECTION 2.1(c)(iv) and this
SECTION 3.2(c), and the right of the Issuing Bank to receive the same,
shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever, including without limitation the occurrence or
continuation of a Default or Event of Default, and shall be made without
any offset, abatement, withholding or reduction whatsoever. If any Lender
is obligated to pay but does not pay amounts to the Agent for the account
of the Issuing Bank in full upon such request as required by SECTION
2.1(c)(iv) or this SECTION 3.2(c), such Lender shall, on demand, pay to the
Agent for the account of the Issuing Bank interest on the unpaid amount for
each day during the period commencing on the date of notice given to such
Lender pursuant to SECTION 2.1(c) until such Lender pays such amount to the
Agent for the account of the Issuing Bank in full at the interest rate per
annum for overnight borrowing by the Agent from the Federal Reserve Bank.
(iv) In the event the Lenders have purchased Participations in
any Reimbursement Obligation as set forth in clause (ii) above, then at any
time payment (in fully collected, immediately available funds) of such
Reimbursement Obligation, in whole or in part, is received by Issuing Bank
from the Borrower, Issuing Bank shall promptly pay to each Lender an amount
equal to its Applicable Commitment Percentage of such payment from the
Borrower.
(d) Promptly following the end of each calendar quarter, the Issuing
Bank shall deliver to the Agent a notice describing the aggregate undrawn amount
of all Letters of Credit at the end of such quarter. Upon the request of any
Lender from time to time, the Issuing Bank shall deliver to the Agent, and the
Agent shall deliver to such Lender, any other information reasonably requested
by such Lender with respect to each Letter of Credit outstanding.
Page 39 Exhibit 4.2
(e) The issuance by the Issuing Bank of each Letter of Credit shall,
in addition to the conditions precedent set forth in ARTICLE VI, be subject to
the conditions that such Letter of Credit be in such form and contain such terms
as shall be reasonably satisfactory to the Issuing Bank consistent with the then
current practices and procedures of the Issuing Bank with respect to similar
letters of credit, and the Borrower shall have executed and delivered such other
instruments and agreements relating to such Letters of Credit as the Issuing
Bank shall have reasonably requested consistent with such practices and
procedures. All Letters of Credit shall be issued pursuant to and subject to
the Uniform Customs and Practice for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500 and all subsequent
amendments and revisions thereto.
(f) The Borrower agrees that Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of Credit,
any drafts or other documents otherwise in order which may be signed or issued
by an administrator, executor, trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver, attorney in fact or
other legal representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents.
(g) Without limiting the generality of the provisions of SECTION
12.9, the Borrower hereby agrees to indemnify and hold harmless the Issuing
Bank, each other Lender and the Agent from and against any and all claims and
damages, losses, liabilities, reasonable costs and expenses which the Issuing
Bank, such other Lender or the Agent may incur (or which may be claimed against
the Issuing Bank, such other Lender or the Agent) by any Person by reason of or
in connection with the issuance or transfer of or payment or failure to pay
under any Letter of Credit; provided that the Borrower shall not be required to
indemnify the Issuing Bank, any other Lender or the Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, (i) caused by the willful misconduct or gross negligence of the party to
be indemnified or (ii) caused by the failure of the Issuing Bank to pay under
any Letter of Credit after the presentation to it of a request for payment
strictly complying with the terms and conditions of such Letter of Credit,
unless such payment is prohibited by any law, regulation, court order or decree.
The indemnification and hold harmless provisions of this SECTION 3.2(g) shall
survive repayment of the Obligations, occurrence of the Revolving Credit
Termination Date and expiration or termination of this Agreement.
(h) Without limiting Borrower's rights as set forth in SECTION
3.2(g), the obligation of the Borrower to immediately reimburse the Issuing Bank
for drawings made under Letters of Credit and the Issuing Bank's right to
receive such payment shall be absolute, unconditional and irrevocable, and that
such obligations of the Borrower shall be performed strictly in accordance with
the terms of this Agreement and such Letters of Credit and the related
Applications and Agreement for any Letter of Credit, under all circumstances
whatsoever, including the following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, the obligation supported by the Letter of Credit or any other
agreement or instrument relating thereto (collectively, the "Related LC
Documents");
(i) any amendment or waiver of or any consent to or departure
from all or any of the Related LC Documents;
Page 40 Exhibit 4.2
(i) the existence of any claim, setoff, defense (other than the
defense of payment in accordance with the terms of this Agreement) or other
rights which the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any persons or entities for whom
any such beneficiary or any such transferee may be acting), the Agent, the
Lenders or any other Person, whether in connection with the Loan Documents,
the Related LC Documents or any unrelated transaction;
(ii) any breach of contract or other dispute between the Borrower
and any beneficiary or any transferee of a Letter of Credit (or any persons
or entities for whom such beneficiary or any such transferee may be
acting), the Agent, the Lenders or any other Person;
(j) any draft, statement or any other document presented under
the 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;
(i) any delay, extension of time, renewal, compromise or other
indulgence or modification granted or agreed to by the Agent, with or
without notice to or approval by the Borrower in respect of any of
Borrower's Obligations under this Agreement; or
(ii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
9.3. LETTER OF CREDIT FACILITY FEES. The Borrower shall pay to the Agent,
for the pro rata benefit of the Lenders based on their Applicable Commitment
Percentages, a fee on the aggregate amount available to be drawn on each
outstanding Letter of Credit at a rate per annum equal to the Applicable Margin
for Eurodollar Rate Loans less one eighth of one percent (0.125%). In addition,
the Borrower shall pay to the Issuing Bank a fronting fee for each Letter of
Credit equal to one eighth percent (0.125%) per annum on the aggregate amount
available to be drawn on each such Letter of Credit. Such fees shall be due
with respect to each Letter of Credit quarterly in advance on the first day of
each April, July, October and January, the first such payment to be made on the
first such date occurring after the date of issuance of a Letter of Credit. The
fees described in this SECTION 3.3 shall be calculated on the basis of a year of
360 days for the actual number of days elapsed.
9.4. ADMINISTRATIVE FEES. The Borrower shall pay to the Issuing Bank such
administrative fee and other fees, if any, in connection with the Letters of
Credit in such amounts and at such times as the Issuing Bank and the Borrower
shall agree from time to time.
Page 41 Exhibit 4.2
ARTICLE X
SECURITY
10.1. SECURITY. As security for the full and timely payment and performance
of all Obligations, the Borrower and each of its Subsidiaries shall on or before
the Closing Date do or cause to be done all things necessary in the opinion of
the Agent and its counsel to grant to the Agent for the benefit of the Lenders a
duly perfected first priority security interest in all Collateral subject to no
prior Lien or other encumbrance or restriction on transfer other than as
permitted under SECTION 9.4. Upon Acquisition of a one hundred percent (100%)
equity interest in Louisiana, Borrower will or will cause Louisiana, as the case
may be to execute, by its duly authorized officers each of the Facility
Guaranty, the Security Agreement and the Pledge Agreement.
10.2. FURTHER ASSURANCES. At the request of the Agent, the Borrower will or
will cause its Subsidiaries, as the case may be to execute, by its duly
authorized officers, alone or with the Agent, any certificate, instrument,
statement or document, or to procure any such certificate, instrument, statement
or document, or to take such other action (and pay all connected costs) which
the Agent reasonably deems necessary from time to time to create, continue or
preserve the liens and security interests in Collateral (and the perfection and
priority thereof) of the Agent contemplated hereby and by the other Loan
Documents.
10.3. INFORMATION REGARDING COLLATERAL. The Borrower represents, warrants
and covenants that (i) the chief executive office of the Borrower and each other
Person providing Collateral pursuant to a Security Instrument (each, a
"Grantor") at the Closing Date is located at the address or addresses specified
on SCHEDULE 4.3, and (ii) SCHEDULE 4.3 contains a true and complete list of (a)
the name and address of each Grantor and of each other Person that has effected
any merger or consolidation with a Grantor or contributed or transferred to a
Grantor any property constituting Collateral at any time since January 1, 1992
(excluding Persons making sales in the ordinary course of their businesses to a
Grantor of property constituting inventory in the hands of such seller), (b)
each location of the chief executive office of each Grantor at any time since
January 1, 1992, (c) each location in which goods constituting Collateral are or
have been located since January 1, 1992 (together with the name of each owner of
the property located at such address if not the applicable Grantor, and a
summary description of the relationship between the applicable Grantor and such
Person), and (d) each trade name used by any Grantor since January 1, 1992 and
the purposes for which it was used. Borrower shall not change, and shall not
permit any other Grantor to change, the location of its chief executive office
or any location specified in clause (c) of the immediately preceding sentence,
or use or permit any other Grantor to use, any additional trade name, except
upon giving not less than thirty (30) days' prior written notice to the Agent
and taking or causing to be taken all such action at Borrower's or such other
Grantor's expense as may be reasonably requested by the Agent to perfect or
maintain the perfection of the Lien of the Agent in Collateral.
Page 42 Exhibit 4.2
ARTICLE XI
YIELD PROTECTION AND ILLEGALITY
11.1. ADDITIONAL COSTS. (a) The Borrower shall promptly pay to the Agent
for the account of a Lender from time to time, without duplication, such amounts
as such Lender may reasonably determine to be necessary to compensate it for any
costs incurred by such Lender which it determines are attributable to its making
or maintaining any Loan or its obligation to make any Loans, or the issuance or
maintenance by the Issuing Bank of or any other Lender's Participation in any
Letter of Credit issued or Swing Line Loan extended hereunder, or any reduction
in any amount receivable by such Lender under this Agreement or the Notes in
respect of any of such Loans or the Letters of Credit, including reductions in
the rate of return on a Lender's capital (such increases in costs and reductions
in amounts receivable and returns being herein called "Additional Costs"),
resulting from any Regulatory Change which: (i) changes the basis of taxation of
any amounts payable to such Lender under this Agreement or the Notes in respect
of any of such Loans or the Letters of Credit (other than taxes imposed on or
measured by the income, revenues or assets); or (ii) imposes or modifies any
reserve, special deposit, or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, such
Lender (other than any such reserve, deposit or requirement reflected in the
Prime Rate, Federal Funds Effective Rate or the Interbank Offered Rate, in each
case computed in accordance with the respective definitions of such terms set
forth in SECTION 1.1); or (iii) has or would have the effect of reducing the
rate of return on capital of any such Lender to a level below that which the
Lender could have achieved but for such Regulatory Change (taking into
consideration such Lender's policies with respect to capital adequacy); or
(iv) imposes any other condition adversely affecting the Agent or the Lenders
under this Agreement, the Notes or the issuance or maintenance of, or any
Lender's Participation in, the Letters of Credit or Swing Line Loans (or any of
such extensions of credit or liabilities). Each Lender will notify the
Authorized Representative and the Agent of any event occurring after the Closing
Date which would entitle it to compensation pursuant to this SECTION 5.1(a) as
promptly as practicable after it obtains knowledge thereof and determines to
request 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 Lender
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
the Lender which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined as provided in this Agreement or a category
of extensions of credit or other assets of any Lender which includes Eurodollar
Rate Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if the Lender so
elects by notice to the other Lenders, the obligation hereunder of such Lender
to make, and to convert Base Rate Loans into, Eurodollar Rate Loans that are the
subject of such restrictions shall be suspended until the date such Regulatory
Change ceases to be in effect and the Borrower shall, on the last day(s) of the
then current Interest Period(s) for outstanding Eurodollar Rate Loans convert
such Eurodollar Rate Loans into Base Rate Loans; PROVIDED, HOWEVER, that the
suspension of such obligation and the conversion of any Eurodollar Rate Loans
into Base Rate Loans shall apply only to any Lender who is affected by such
restrictions and who has provided such notice to the other Lenders, and the
obligation of the other Lenders to
Page 43 Exhibit 4.2
make, and to convert Base Rate Loans into, Eurodollar Rate Loans shall not be
affected by such restrictions. In the event that the obligation of some, but
not all, of the Lenders to make, or to convert Base Rate Loans into,
Eurodollar Rate Loans is suspended, then any request by the Borrower during
the pendency of such suspension for a Eurodollar Rate Loan shall be deemed a
request for such Eurodollar Rate Loan from the Lender(s) not subject to such
suspension and for a Base Rate Loan from the Lender(s) who are subject to
such suspension, in each case in the respective amounts based on the Lenders'
respective Applicable Commitment Percentages.
(c) Determinations by any Lender for purposes of this SECTION 5.1 of
the effect of any Regulatory Change on its costs of making or maintaining, or
being committed to make Loans, or by the Issuing Bank of the effect of any
Regulatory Change on its costs in connection with the issuance or maintenance
of, or any other Lender's Participation in, any Letter of Credit issued or Swing
Line Loan extended hereunder, or the effect of any Regulatory Change on amounts
receivable by any Lender in respect of Loans or Letters of Credit, and of the
additional amounts required to compensate the Lender in respect of any
Additional Costs, shall be made taking into account such Lender's policies, or
the policies of the parent corporation of such Lender, as to the allocation of
capital, costs and other items and shall be conclusive absent manifest error.
The Lender requesting such compensation shall furnish to the Authorized
Representative and the Agent an explanation of the Regulatory Change and
calculations, in reasonable detail, setting forth such Lender's determination of
any such Additional Costs. A Lender shall not be entitled to seek compensation
of such Additional Cost if such Additional Cost arose more than one hundred
eighty (180) days prior to the giving of notice of the incurrence of such Cost.
11.2. SUSPENSION OF LOANS. Anything herein to the contrary notwithstanding,
if, on or prior to the determination of any interest rate for any Eurodollar
Rate Loan for any Interest Period, the Agent determines (which determination
made on a reasonable basis shall be conclusive absent manifest error) that:
(a) quotations of interest rates for the relevant deposits referred
to in the definition of "Eurodollar Rate" in SECTION 1.1 are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining the rate of interest for such Eurodollar Rate Loan
as provided in this Agreement; or
(b) the relevant rates of interest referred to in the definition of
"Interbank Offered Rate" in SECTION 1.1 upon the basis of which the
Eurodollar Rate for such Interest Period is to be determined do not
adequately reflect the cost to the Lenders of making or maintaining such
Eurodollar Rate Loan for such Interest Period;
then the Agent shall give the Authorized Representative prompt notice thereof,
and so long as such condition remains in effect, the Lenders shall be under no
obligation to make Eurodollar Rate Loans that are subject to such condition, or
to convert Base Rate Loans into Eurodollar Rate Loans, and the Borrower shall on
the last day(s) of the then current Interest Period(s) for outstanding
Eurodollar Rate Loans, as applicable, convert such Eurodollar Rate Loans into
another Eurodollar Rate Loan if such Eurodollar Rate Loan is not subject to the
same or similar condition, or Base Rate Loans, if available hereunder. The
Agent shall give the Authorized Representative notice describing in reasonable
detail any event or condition described in this SECTION 5.2 promptly following
the determination by
Page 44 Exhibit 4.2
the Agent that the availability of Eurodollar Rate Loans is, or is to be,
suspended as a result thereof.
11.3. ILLEGALITY. Notwithstanding any other provision of this Agreement, in
the event that it becomes unlawful for any Lender to honor its obligation to
make or maintain Eurodollar Rate Loans hereunder, then such Lender shall
promptly notify the Borrower thereof (with a copy to the Agent) and such
Lender's obligation to make or continue Eurodollar Rate Loans, or to convert
Base Rate Loans into Eurodollar Rate Loans, shall be suspended until such time
as such Lender may again make and maintain Eurodollar Rate Loans, and such
Lender's outstanding Eurodollar Rate Loans shall be converted into Base Rate
Loans in accordance with SECTIONS 2.8 or earlier if required by applicable law.
The conversion of any Eurodollar Rate Loans into Base Rate Loans shall apply
only to any Lender who is affected by such restrictions and who has provided the
notice described above, and the obligation of the other Lenders to make, and to
convert Base Rate Loans into, Eurodollar Rate Loans shall not be affected by
such restrictions. In the event that the obligation of some, but not all, of
the Lenders to make, or to convert Base Rate Loans into, Eurodollar Rate Loans
is so suspended, then any request by the Borrower during the pendency of such
suspension for a Eurodollar Rate Loan shall be deemed a request for such
Eurodollar Rate Loan from the Lender(s) not subject to such suspension and for a
Base Rate Loan from the Lender(s) who are subject to such suspension, in each
case in the respective amounts based on the Lenders' respective Applicable
Commitment Percentages.
11.4. COMPENSATION. The Borrower shall promptly pay to each Lender, upon
the request of such Lender, such amount or amounts as shall be sufficient (in
the reasonable determination of Lender) to compensate it for any loss, cost or
expense incurred by it as a result of:
(a) any payment, prepayment or conversion of a Eurodollar Rate Loan
on a date other than the last day of the Interest Period for such
Eurodollar Rate Loan, including without limitation any conversion required
pursuant to SECTIONS 5.1, 5.2 OR 5.3; or
(b) any failure by the Borrower to borrow or convert a Eurodollar
Rate Loan on the date for such borrowing or conversion specified in the
relevant Borrowing Notice or Interest Rate Selection Notice under ARTICLE
II hereof;
such compensation to include, without limitation, an amount equal to the excess,
if any, of (i) the amount of interest which would have accrued on the principal
amount so paid, prepaid or converted or not borrowed for the period from the
date of such payment, prepayment or conversion or failure to borrow or convert
to the last day of the then current Interest Period for such Loan (or, in the
case of a failure to borrow or convert, the Interest Period for such Loan which
would have commenced on the date scheduled for such borrowing or conversion) at
the applicable rate of interest for such Eurodollar Rate Loan provided for
herein over (ii) the Interbank Offered Rate (as reasonably determined by the
Agent) for Dollar deposits of amounts comparable to such principal amount and
maturities comparable to such period. A determination of a Lender as to the
amounts payable pursuant to this SECTION 5.4 shall be conclusive, provided that
such determinations are made on a reasonable basis. The Lender requesting
compensation under this SECTION 5.4 shall
Page 45 Exhibit 4.2
promptly furnish to the Authorized Representative and the Agent calculations
in reasonable detail setting forth such Lender's determination of the amount
of such compensation.
11.5. ALTERNATE LOAN AND LENDER. In the event any Lender suspends the
making of any Eurodollar Rate Loan pursuant to this ARTICLE V (herein a
"Restricted Lender"), the Restricted Lender's Commitment Percentage of any
Eurodollar Rate Loan shall bear interest at the Base Rate or the Eurodollar Rate
for which the suspension does not apply, as selected by Borrower, until the
Restricted Lender once again makes available the applicable Eurodollar Rate
Loan. Notwithstanding the provisions of SECTION 2.2(b), interest shall be
payable to the Restricted Lender at the time and manner as paid to those Lenders
making available Eurodollar Rate Loans.
11.6. TAXES. (a) All payments by the Borrower of principal of, and interest
on, the Loans and all other amounts payable hereunder shall be made free and
clear of and without deduction for any present or future excise, stamp or other
taxes, fees, duties, levies, imposts, charges, deductions, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, but excluding
(i) franchise taxes, (ii) any taxes (other than withholding taxes) that would
not be imposed but for a connection between a Lender or the Agent and the
jurisdiction imposing such taxes (other than a connection arising solely by
virtue of the activities of such Lender or the Agent pursuant to or in respect
of this Agreement or any other Loan Document), (iii) any taxes imposed on or
measured by any Lender's assets, net income, receipts or branch profits, and
(iv) any taxes arising after the Closing Date solely as a result of or
attributable to a Lender changing its designated lending office after the date
such Lender becomes a party hereto (such non-excluded items being collectively
called "Taxes"). In the event that any withholding or deduction from any
payment to be made by the Borrower hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then the Borrower will
(x) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
(y) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(z) pay to the Agent for the account of each Lender such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Lender will equal the full amount such Lender would have
received had no such withholding or deduction been required.
(b) Prior to the date that any Lender or participant organized under the
laws of a jurisdiction outside the United States becomes a party hereto, such
Person shall deliver to the Borrower and the Agent such certificates, documents
or other evidence, as required by the Code or Treasury Regulations issued
pursuant thereto, properly completed, currently effective and duly executed by
such Lender or participant establishing that payments to it hereunder and under
the Notes are (i) not subject to United States Federal backup withholding tax
and (ii) not subject to United States
Page 46 Exhibit 4.2
Federal withholding tax under the Code because such payment is either
effectively connected with the conduct by such Lender or participant of a
trade or business in the United States or totally exempt from United States
Federal withholding tax by reason of the application of the provisions of a
treaty to which the United States is a party or such Lender is otherwise
exempt.
(c) If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lender, the required receipts or other required documentary evidence,
the Borrower shall indemnify the Lenders for any incremental Taxes, interest or
penalties that may become payable by any Lender as a result of any such failure.
For purposes of this SECTION 5.6, a distribution hereunder by the Agent or any
Lender to or for the account of any Lender shall be deemed a payment by or on
behalf of the Borrower.
Page 47 Exhibit 4.2
ARTICLE XII
CONDITIONS TO MAKING LOANS AND ISSUING LETTERS OF CREDIT
12.1. CONDITIONS OF INITIAL ADVANCE. The obligation of the Lenders to make
the initial Advance under the Revolving Credit Facility, and of the Issuing Bank
to issue any Letter of Credit, and of NationsBank to make any Swing Line Loan,
is subject to the conditions precedent that:
(a) the Agent shall have received on the Closing Date, in form and
substance satisfactory to the Agent and Lenders, the following:
(i) executed originals of each of this Agreement, the
Notes, the Security Instruments, the LC Account Agreement and the
other Loan Documents, together with all schedules and exhibits
thereto;
(ii) the favorable written opinion or opinions with respect
to the Loan Documents and the transactions contemplated thereby of
counsel to the Borrower dated the Closing Date, addressed to the Agent
and the Lenders and satisfactory to Xxxxx Xxxxx Mulliss & Xxxxx,
L.L.P., special counsel to the Agent, substantially in the form of
EXHIBIT G;
(iii) resolutions of the board of directors or other
appropriate governing body (or of the appropriate committee thereof)
of the Borrower certified by its secretary or assistant secretary as
of the Closing Date, approving and adopting the Loan Documents to be
executed by the Borrower, and authorizing the execution and delivery
thereof;
(iv) specimen signatures of officers of the Borrower
executing the Loan Documents on behalf of the Borrower, certified by
the secretary or assistant secretary of the Borrower;
(v) the charter documents of the Borrower certified as of a
recent date by the Secretary of State of its state of organization;
(vi) the bylaws of the Borrower certified as of the Closing
Date as true and correct by its secretary or assistant secretary;
(vii) certificates issued as of a recent date by the
Secretaries of State of the respective jurisdictions of formation of
the Borrower as to the due existence and good standing of the
Borrower;
(viii) appropriate certificates of qualification to do
business, good standing and, where appropriate, authority to conduct
business under assumed name, issued in respect of the Borrower as of a
recent date by the Secretary of State or comparable official of each
jurisdiction in which the failure to be qualified to do business or
authorized so to conduct business could have a Material Adverse
Effect;
Page 48 Exhibit 4.2
(ix) notice of appointment of the initial Authorized
Representative(s);
(x) certificate of an Authorized Representative dated the
Closing Date demonstrating compliance with the financial covenants
contained in SECTIONS 9.1(a) through 9.1(c) as of the Closing Date,
substantially in the form of EXHIBIT H;
(xi) evidence of all insurance required by the Loan
Documents;
(xii) an initial Borrowing Notice, if any, and, if
elected by the Borrower, an Interest Rate Selection Notice;
(xiii) an initial Borrowing Base Certificate evidencing
the existence of a Borrowing Base of at least $10,000,000;
(xiv) evidence of the filing of Uniform Commercial Code
financing statements reflecting the filing in all places required by
applicable law to perfect the Liens of the Agent under the Security
Instruments as a first priority Lien as to items of Collateral in
which a security interest may be perfected by the filing of financing
statements, and such other documents and/or evidence of other actions
as may be necessary under applicable law to perfect the Liens of the
Agent under the Security Instruments as a first priority Lien in and
to such other Collateral as the Agent may require;
(xv) payment of all fees payable by the Borrower on the
Closing Date to the Agent, NCMI and the Lenders have been paid in
full, as described in a fee letter from the Borrower to the Agent;
(xvi) Uniform Commercial Code search results showing
only those Liens as are acceptable to the Lenders;
(xvii) copies of the consolidated financial statements of
the Borrower, as audited by independent public accountants of
recognized national standing and prepared in conformity with GAAP, for
the fiscal years ending on December 31, 1993, December 31, 1994 and
December 31, 1995;
(xviii) copies of the quarterly financial statements of
the Borrower for the fiscal quarter ending on September 30, 1996;
(xix) copies of the financial projections of the
Borrower, prepared in conformity with GAAP, for the five (5) Fiscal
Years subsequent to the Closing Date;
(xx) copies of the Franchise Agreements, the Joint Venture
Agreement, the Management Agreement and the Shareholders' Agreement,
as executed by the Borrower;
Page 49 Exhibit 4.2
(xxi) copies of a field examination, including an aging
report, of the receivables, inventory, payables, and control systems
related thereto, of the Borrower;
(xxii) evidence of a one hundred percent (100%) placement
of the Unsecured Notes Offering;
(xxiii) evidence of (x) the redemption by the Borrower of
the 1993 Senior Notes, and (y) payment in full by the Borrower of its
obligations outstanding under the Existing Facility;
(xxiv) a landlord waiver and consent for each of the
premises owned by a Person other than the Borrower, where any
Inventory (as defined in the Security Agreement) is being kept on
behalf of the Borrower;
(xxv) authorization by Pohlad Companies of the execution
and delivery by Borrower of the Loan Documents and the transactions
contemplated thereby;
(xxvi) such other documents, instruments, certificates
and opinions as the Agent or any Lender may reasonably request on or
prior to the Closing Date in connection with the consummation of the
transactions contemplated hereby; and
(b) In the good faith judgment of the Agent and the Lenders:
(i) there shall not have occurred or become known to the
Agent or the Lenders any event, condition, situation or status since
the earlier of (x) December 31, 1995, or (y) the date of the
information contained in the financial and business projections,
budgets, pro forma data and forecasts concerning the Borrower
delivered to the Agent prior to the Closing Date that has had or could
reasonably be expected to result in a Material Adverse Effect;
(ii) no litigation, action, suit, investigation or other
arbitral, administrative or judicial proceeding shall be pending or
threatened which could reasonably be likely to result in a Material
Adverse Effect; and
(iii) the Borrower shall have received all approvals,
consents and waivers, and shall have made or given all necessary
filings and notices as shall be required to consummate the
transactions contemplated hereby without the occurrence of any default
under, conflict with or violation of (A) any applicable law, rule,
regulation, order or decree of any Governmental Authority or arbitral
authority or (B) any agreement, document or instrument to which any of
the Borrower is a party or by which any of them or their properties is
bound.
12.2. CONDITIONS OF LOANS AND LETTER OF CREDIT. The obligations of the
Lenders to make any Loans, and the Issuing Bank to issue Letters of Credit and
NationsBank to make
Page 50 Exhibit 4.2
Swing Line Loans, hereunder on or subsequent to the Closing Date are subject
to the satisfaction of the following conditions:
(a) the Agent or, in the case of Swing Line Loans, NationsBank shall
have received a Borrowing Notice if required by ARTICLE II;
(b) the representations and warranties of the Borrower and the
Subsidiaries set forth in ARTICLE VII and in each of the other Loan
Documents shall be true and correct in all material respects on and as of
the date of such Advance, Swing Line Loan or Letter of Credit issuance or
renewal, with the same effect as though such representations and warranties
had been made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date and
except that the financial statements referred to in SECTION 7.6(a) shall be
deemed to be those financial statements most recently delivered to the
Agent and the Lenders pursuant to SECTION 8.1 from the date financial
statements are delivered to the Agent and the Lenders in accordance with
such Section;
(c) in the case of the issuance of a Letter of Credit, the Borrower
shall have executed and delivered to the Issuing Bank an Application and
Agreement for Letter of Credit in form and content acceptable to the
Issuing Bank together with such other instruments and documents as it shall
request;
(d) at the time of (and after giving effect to) each Advance, Swing
Line Loan or the issuance of a Letter of Credit, no Default or Event of
Default specified in ARTICLE X shall have occurred and be continuing; and
(e) immediately after giving effect to:
(i) a Loan, the aggregate principal balance of all outstanding
Loans for each Lender shall not exceed the lesser of such
Lender's Revolving Credit Commitment or the amount obtained by
multiplying such Lender's Applicable Commitment Percentage by the
Borrowing Base;
(ii) a Letter of Credit or renewal thereof, the aggregate
principal balance of all outstanding Participations in Letters of
Credit and Reimbursement Obligations (or in the case of the
Issuing Bank, its remaining interest after deduction of all
Participations in Letters of Credit and Reimbursement Obligations
of other Lenders) for each Lender and in the aggregate shall not
exceed, respectively, (X) such Lender's Letter of Credit
Commitment or (Y) the Total Letter of Credit Commitment;
(iii) a Swing Line Loan, the Swing Line Outstandings shall not
exceed $2,500,000; and
(iv) a Loan, Swing Line Loan or a Letter of Credit or renewal
thereof, the sum of Letter of Credit Outstandings plus Revolving
Credit Outstandings plus Swing Line Outstandings shall not
exceed the lesser of the Total Revolving Credit Commitment or the
Borrowing Base.
Page 51 Exhibit 4.2
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants with respect to itself and to its
Subsidiaries (which representations and warranties shall survive the delivery of
the documents mentioned herein and the making of Loans), that:
7.1. ORGANIZATION AND AUTHORITY.
(a) The Borrower and each Subsidiary is a corporation or partnership
duly organized and validly existing under the laws of the jurisdiction of
its formation;
(b) The Borrower and each Subsidiary (x) has the requisite power and
authority to own its properties and assets and to carry on its business as
now being conducted and as contemplated in the Loan Documents, and (y) is
qualified to do business in every jurisdiction in which failure so to
qualify would have a Material Adverse Effect;
(c) The Borrower has the power and authority to execute, deliver and
perform this Agreement and the Notes, and to borrow hereunder, and to
execute, deliver and perform each of the other Loan Documents to which it
is a party;
(d)The Borrower and each of its Subsidiaries has the power and
authority to execute, deliver and perform the Facility Guaranty, the
Security Instruments and each of the other Loan Documents to which it is a
party; and
(e) When executed and delivered, each of the Loan Documents to which
the Borrower or any of its Subsidiaries is a party will be the legal, valid
and binding obligation or agreement, as the case may be, of the Borrower or
such Subsidiaries, enforceable against the Borrower or such Subsidiaries in
accordance with its terms, subject to the effect of any applicable
bankruptcy, moratorium, insolvency, reorganization or other similar law
affecting the enforceability of creditors' rights generally and to the
effect of general principles of equity (whether considered in a proceeding
at law or in equity);
13.2. LOAN DOCUMENTS. The execution, delivery and performance by the
Borrower and its Subsidiaries of each of the Loan Documents to which it is a
party:
(a) have been duly authorized by all requisite corporate action
(including any required shareholder approval) of the Borrower and each
Subsidiary required for the lawful execution, delivery and performance
thereof;
(b) do not violate any provisions of (i) applicable law, rule or
regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority binding
on the Borrower or any Subsidiary or its properties, or (iii) the charter
documents or bylaws of the Borrower or any Subsidiary;
Page 52 Exhibit 4.2
(c) does not and will not be in conflict with, result in a breach of
or constitute an event of default, or an event which, with notice or lapse
of time or both, would constitute an event of default, under any contract,
Franchise Agreement, indenture, agreement or other instrument or document
to which the Borrower or any Subsidiary is a party, or by which the
properties or assets of the Borrower or any Subsidiary are bound; and
(d) does not and will not result in the creation or imposition of any
Lien upon any of the properties or assets of the Borrower or any Subsidiary
except any Liens in favor of the Agent and the Lenders created by the
Security Instruments;
13.3. SOLVENCY. The Borrower and each of its Subsidiaries is Solvent after
giving effect to the transactions contemplated by the Loan Documents;
13.4. SUBSIDIARIES AND STOCKHOLDERS. The Borrower has no Subsidiaries other
than those Persons listed as Subsidiaries in SCHEDULE 7.4 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
SECTION 8.19; SCHEDULE 7.4 states as of the date hereof the organizational form
of each entity, the authorized and issued capitalization of each Subsidiary
listed thereon, the number of shares or other equity interests of each class of
capital stock or interest issued and outstanding of each such Subsidiary and the
number and/or percentage of outstanding shares or other equity interest
(including options, warrants and other rights to acquire any interest) of each
such class of capital stock or other equity interest owned by Borrower or by any
such Subsidiary; the outstanding shares or other equity interests of each such
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable; and Borrower and each such Subsidiary owns beneficially and of
record all the shares and other interests it is listed as owning in SCHEDULE
7.4, free and clear of any Lien;
13.5. OWNERSHIP INTERESTS. Borrower owns no interest in any Person other
than the Persons listed in SCHEDULE 7.4, equity investments in Persons not
constituting Subsidiaries permitted under SECTION 9.7 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
SECTION 8.19;
13.6. FINANCIAL CONDITION.
(a) The Borrower has heretofore furnished to each Lender audited
consolidated balance sheets of the Borrower and its Subsidiaries as at
December 31, 1993, December 31, 1994 and December 31, 1995 and the notes
thereto and the related consolidated statements of income, stockholders'
equity and cash flows for the Fiscal Years then ended as examined and
certified by Xxxxxx Xxxxxxxx, LLP, and unaudited consolidated interim
financial statements of the Borrower and its Subsidiaries consisting of
consolidated balance sheets and related consolidated statements of income,
stockholders' equity and cash flows, in each case without notes, for and as
of the end of the nine (9) month period ending September 30, 1996. Except
as set forth therein, such financial statements (including the notes
thereto) present fairly the financial condition of the Borrower and its
Subsidiaries as of the end of such Fiscal Years and nine (9) month period
and results of their operations and the changes in its stockholders' equity
for the Fiscal Year and interim period
Page 53 Exhibit 4.2
then ended, all in conformity with GAAP applied on a Consistent Basis,
subject however, in the case of unaudited interim statements to year end
audit adjustments;
(b) since December 31, 1995, there has been no material adverse
change in the condition, financial or otherwise, of the Borrower or any of
its Subsidiaries or in the businesses, properties, performance, prospects
or operations of the Borrower or its Subsidiaries, nor have such businesses
or properties been materially adversely affected as a result of any fire,
explosion, earthquake, accident, strike, lockout, combination of workers,
flood, embargo or act of God; and
(c) except as set forth in the financial statements referred to in
SECTION 7.6(a) or in SCHEDULE 7.6 or permitted by SECTION 9.5, neither
Borrower nor any Subsidiary has incurred, other than in the ordinary course
of business, any material Indebtedness, Contingent Obligation or other
commitment or liability which remains outstanding or unsatisfied;
13.7. TITLE TO PROPERTIES. The Borrower and each of its Subsidiaries has
good and marketable title to all its real and personal properties, subject to no
transfer restrictions or Liens of any kind, except for the transfer restrictions
and Liens described in SCHEDULE 7.7 and Liens permitted by SECTION 9.4;
13.8. TAXES. Except as set forth in SCHEDULE 7.8, the Borrower and each of
its Subsidiaries has filed or caused to be filed all federal, state and local
tax returns which are required to be filed by it and, except for taxes and
assessments being contested in good faith by appropriate proceedings diligently
conducted and against which reserves reflected in the financial statements
described in SECTION 7.6(a) and satisfactory to the Borrower's independent
certified public accountants have been established, have paid or caused to be
paid all taxes as shown on said returns or on any assessment received by it, to
the extent that such taxes have become due;
13.9. OTHER AGREEMENTS. Neither the Borrower nor any Subsidiary is
(a) a party to or subject to any judgment, order, decree, agreement,
lease or instrument, or subject to other restrictions, which individually
or in the aggregate could reasonably be expected to have a Material Adverse
Effect; or
(b) in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement or
instrument including, without limitation, any Franchise Agreement or other
agreement for the production, distribution and sale of beverages, to which
the Borrower or any Subsidiary is a party, which default has, or if not
remedied within any applicable grace period could reasonably be likely to
have, a Material Adverse Effect;
13.10. LITIGATION. Except as set forth in SCHEDULE 7.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of the Borrower, threatened by or against the Borrower or any
Subsidiary or affecting the Borrower or any Subsidiary or any properties or
rights of the Borrower or any Subsidiary, which could reasonably be likely to
have a Material Adverse Effect;
Page 54 Exhibit 4.2
13.11. MARGIN STOCK. The proceeds of the borrowings made hereunder will be
used by the Borrower only for the purposes expressly authorized herein. None of
such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute any of the Loans
under this Agreement a "purpose credit" within the meaning of said Regulation U
or Regulation X (12 C.F.R. Part 224) of the Board. Neither the Borrower nor any
agent acting in its behalf has taken or will take any action which might cause
this Agreement or any of the documents or instruments delivered pursuant hereto
to violate any regulation of the Board or to violate the Securities Exchange Act
of 1934, as amended, or the Securities Act of 1933, as amended, or any state
securities laws, in each case as in effect on the date hereof;
13.12. INVESTMENT COMPANY. Neither the Borrower nor any Subsidiary is an
"investment company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (15 U.S.C. Section 80a-1, et seq.).
The application of the proceeds of the Loans and repayment thereof by the
Borrower and the performance by the Borrower and its Subsidiaries of the
transactions contemplated by the Loan Documents will not violate any provision
of said Act, or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder, in each case as in effect on the date hereof;
13.13. PATENTS, ETC. The Borrower and each of its Subsidiaries owns or has
the right to use, under valid license agreements or otherwise, all material
patents, licenses, franchises, trademarks, trademark rights, trade names, trade
name rights, trade secrets and copyrights necessary to or used in the conduct of
its businesses as now conducted and as contemplated by the Loan Documents,
without known conflict with any patent, license, franchise, trademark, trade
secret, trade name, copyright, other proprietary right of any other Person;
13.14. NO UNTRUE STATEMENT. Neither (a) this Agreement nor any other Loan
Document or certificate or document executed and delivered by or on behalf of
the Borrower or any of its Subsidiaries in accordance with or pursuant to any
Loan Document nor (b) any statement, representation, or warranty provided to the
Agent in connection with the negotiation or preparation of the Loan Documents
contains any misrepresentation or untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstance under which it was
made, in order to make any such warranty, representation or statement contained
therein not misleading;
13.15. NO CONSENTS, ETC. Neither the respective businesses or properties of
the Borrower or any Subsidiary, nor any relationship between the Borrower or any
Subsidiary and any other Person, nor any circumstance in connection with the
execution, delivery and performance of the Loan Documents and the transactions
contemplated thereby, is such as to require a consent, approval or authorization
of, or filing, registration or qualification with, any Governmental Authority or
any other Person on the part of the Borrower or any Subsidiary as a condition to
the execution, delivery and performance of, or consummation of the transactions
contemplated by the Loan Documents, which, if not obtained or effected, would be
reasonably likely to have a Material Adverse Effect, or if so, such consent,
approval, authorization, filing, registration or qualification has been duly
obtained or effected, as the case may be;
Page 55 Exhibit 4.2
13.16. EMPLOYEE BENEFIT PLANS.
(a) The Borrower and each ERISA Affiliate is in compliance with all
applicable provisions of ERISA and the regulations and published
interpretations thereunder and in compliance with all Foreign Benefit Laws
with respect to all Employee Benefit Plans except for any required
amendments for which the remedial amendment period as defined in Section
401(b) of the Code has not yet expired. Each Employee Benefit Plan that is
intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified, and each
trust related to such plan has been determined to be exempt under Section
501(a) of the Code. No material liability has been incurred by the
Borrower or any ERISA Affiliate which remains unsatisfied for any taxes or
penalties with respect to any Employee Benefit Plan or any Multiemployer
Plan;
(b) Neither the Borrower nor any ERISA Affiliate has (i) engaged in a
nonexempt prohibited transaction described in Section 4975 of the Code or
Section 406 of ERISA affecting any of the Employee Benefit Plans or the
trusts created thereunder which could subject any such Employee Benefit
Plan or trust to a material tax or penalty on prohibited transactions
imposed under Internal Revenue Code Section 4975 or ERISA, (ii) incurred
any accumulated funding deficiency with respect to any Employee Benefit
Plan, whether or not waived, or any other liability to the PBGC which
remains outstanding other than the payment of premiums and there are no
premium payments which are due and unpaid, (iii) failed to make a required
contribution or payment to a Multiemployer Plan, or (iv) failed to make a
required installment or other required payment under Section 412 of the
Code, Section 302 of ERISA or the terms of such Employee Benefit Plan;
(c) No Termination Event has occurred or is reasonably expected to
occur with respect to any Pension Plan or Multiemployer Plan, and neither
the Borrower nor any ERISA Affiliate has incurred any unpaid withdrawal
liability with respect to any Multiemployer Plan;
(d) The present value of all vested accrued benefits under each
Employee Benefit Plan which is subject to Title IV of ERISA, did not, as of
the most recent valuation date for each such plan, exceed the then current
value of the assets of such Employee Benefit Plan allocable to such
benefits;
(e) To the best of the Borrower's knowledge, each Employee Benefit
Plan subject to Title IV of ERISA, maintained by the Borrower or any ERISA
Affiliate, has been administered in accordance with its terms in all
material respects and is in compliance in all material respects with all
applicable requirements of ERISA and other applicable laws, regulations and
rules;
(f) The consummation of the Loans and the issuance of the Letters of
Credit provided for herein will not involve any prohibited transaction
under ERISA which is not subject to a statutory or administrative
exemption; and
Page 56 Exhibit 4.2
(g) No material proceeding, claim, lawsuit and/or investigation exists
or, to the best knowledge of the Borrower after due inquiry, is threatened
concerning or involving any Employee Benefit Plan;
13.17. NO DEFAULT. As of the date hereof, there does not exist any Default
or Event of Default hereunder;
13.18. HAZARDOUS MATERIALS. The Borrower and each Subsidiary is in
compliance with all applicable Environmental Laws in all material respects.
Neither the Borrower nor any Subsidiary has been notified of any action, suit,
proceeding or investigation which, and neither the Borrower nor any Subsidiary
is aware of any facts which, (i) calls into question, or could reasonably be
expected to call into question, compliance by the Borrower or any Subsidiary
with any Environmental Laws, (ii) which seeks, or could reasonably be expected
to form the basis of a meritorious proceeding, to suspend, revoke or terminate
any license, permit or approval necessary for the generation, handling, storage,
treatment or disposal of any Hazardous Material, or (iii) seeks to cause, or
could reasonably be expected to form the basis of a meritorious proceeding to
cause, any property of the Borrower or any Subsidiary to be subject to any
restrictions on ownership, use, occupancy or transferability under any
Environmental Law;
13.19. EMPLOYMENT MATTERS. (a) There are no strikes, work stoppages,
election or decertification petitions or proceedings, unfair labor charges,
equal opportunity proceedings, or other material labor/employee related
controversies or proceedings pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any Subsidiary or between the Borrower or any
Subsidiary and any of its employees, other than employee grievances arising in
the ordinary course of business which could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; and
(b) Except to the extent a failure to maintain compliance would not have a
Material Adverse Effect, the Borrower and each Subsidiary is in compliance in
all respects with all applicable laws, rules and regulations pertaining to labor
or employment matters, including without limitation those pertaining to wages,
hours, occupational safety and taxation and there is neither pending or
threatened any litigation, administrative proceeding nor, to the knowledge of
the Borrower, any investigation, in respect of such matters which, if decided
adversely, could reasonably be likely, individually or in the aggregate, to have
a Material Adverse Effect; and
13.20. RICO. Neither the Borrower nor any Subsidiary is engaged in or has
engaged in any course of conduct that could subject any of their respective
properties to any Lien, seizure or other forfeiture under any criminal law,
racketeer influenced and corrupt organizations law, civil or criminal, or other
similar laws.
Page 57 Exhibit 4.2
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and where applicable will cause
each Subsidiary to:
14.1. FINANCIAL REPORTS, ETC. (a) As soon as practical and in any event
within 90 days after the end of each Fiscal Year of the Borrower, deliver or
cause to be delivered to the Agent and each Lender (i) a consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such Fiscal Year,
and the notes thereto, and the related consolidated statements of income,
stockholders' equity and cash flows, and the respective notes thereto, for such
Fiscal Year, setting forth comparative financial statements for the preceding
Fiscal Year, all prepared in accordance with GAAP applied on a Consistent Basis
and containing, with respect to the consolidated financial statements, opinions
of Xxxxxx Xxxxxxxx, LLP, or other such independent certified public accountants
selected by the Borrower and approved by the Agent, which are unqualified as to
the scope of the audit performed and as to the "going concern" status of the
Borrower and without any exception not acceptable to the Lenders, and (ii) a
certificate of an Authorized Representative demonstrating compliance with
SECTIONS 9.1(a) through 9.1(c) and 9.3, which certificate shall be in the form
of EXHIBIT H;
(b) as soon as practical and in any event within 45 days after the
end of each fiscal quarter (except the last fiscal quarter of the Fiscal Year),
deliver to the Agent and each Lender (i) a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal quarter, and the
related consolidated statements of income, stockholders' equity and cash flows
for such fiscal quarter and for the period from the beginning of the then
current Fiscal Year through the end of such reporting period, and accompanied by
a certificate of an Authorized Representative to the effect that such financial
statements present fairly the financial position of the Borrower and its
Subsidiaries as of the end of such fiscal period and the results of their
operations and the changes in their financial position for such fiscal period,
in conformity with the standards set forth in SECTION 7.6(a) with respect to
interim financial statements, and (ii) a certificate of an Authorized
Representative containing computations for such quarter comparable to that
required pursuant to SECTION 8.1(a)(ii);
(c) together with each delivery of the financial statements required by
SECTION 8.1(a)(i), deliver to the Agent and each Lender a letter from the
Borrower's accountants specified in SECTION 8.1(a)(i) stating that in performing
the audit necessary to render an opinion on the financial statements delivered
under SECTION 8.1(a)(i), they obtained no knowledge of any Default or Event of
Default by the Borrower in the fulfillment of the terms and provisions of this
Agreement insofar as they relate to financial matters (which at the date of such
statement remains uncured); or if the accountants have obtained knowledge of
such Default or Event of Default, a statement specifying the nature and period
of existence thereof;
(d) promptly upon their becoming available to the Borrower, the Borrower
shall deliver to the Agent and each Lender a copy of (i) all regular or special
reports or effective registration statements which Borrower or any Subsidiary
shall file with the Securities and
Page 58 Exhibit 4.2
Exchange Commission (or any successor thereto) or any securities exchange,
(ii) any proxy statement distributed by the Borrower or any Subsidiary to its
shareholders, bondholders or the financial community in general, and (iii)
any management letter or other report submitted to the Borrower or any
Subsidiary by independent accountants in connection with any annual, interim
or special audit of the Borrower or any Subsidiary;
(e) not later than the last Business Day of each Fiscal Year, deliver to
the Agent and each Lender a capital and operating expense budget and
consolidated financial projections for the Borrower and its Subsidiaries for the
next Fiscal Year, prepared in accordance with GAAP applied on a Consistent
Basis;
(f) as soon as practicable and in any event within 10 days following the
end of each calendar month, deliver to the Agent and each Lender (i) a summary
accounts receivable aging report in form and detail substantially similar to
that furnished to the Agent prior to the Closing Date and (ii) a Borrowing Base
Certificate, substantially in the form of EXHIBIT K attached hereto; and
(g) promptly, from time to time, deliver or cause to be delivered to the
Agent and each Lender such other information regarding Borrower's and any
Subsidiary's operations, business affairs and financial condition as the Agent
or such Lender may reasonably request;
The Agent and the Lenders are hereby authorized to deliver a copy of any
such financial or other information delivered hereunder to the Lenders (or any
affiliate of any Lender) or to the Agent, to any Governmental Authority having
jurisdiction over the Agent or any of the Lenders pursuant to any written
request therefor or in the ordinary course of examination of loan files, or to
any other Person who shall acquire or consider the assignment of, or acquisition
of any participation interest in, any Obligation permitted by this Agreement;
14.2. MAINTAIN PROPERTIES. Maintain all properties necessary to its
operations in good working order and condition, make all needed repairs,
replacements and renewals to such properties, and maintain free from Liens all
trademarks, Franchise Agreements, trade names, patents, copyrights, trade
secrets, know-how, and other intellectual property and proprietary information
(or adequate licenses thereto), in each case as are reasonably necessary to
conduct its business as currently conducted or as contemplated hereby, all in
accordance with customary and prudent business practices;
14.3. EXISTENCE, QUALIFICATION, ETC. Except as otherwise expressly
permitted under SECTION 9.8, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material rights
and franchises, and maintain its license or qualification to do business as a
foreign corporation and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary;
14.4. REGULATIONS AND TAXES. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of its
properties except liabilities being contested
Page 59 Exhibit 4.2
in good faith by appropriate proceedings diligently conducted and against
which adequate reserves acceptable to the Borrower's independent certified
public accountants have been established unless and until any Lien resulting
therefrom attaches to any of its property and becomes enforceable against its
creditors;
14.5. INSURANCE. (a) Keep all of its insurable properties adequately
insured at all times with responsible insurance carriers against loss or damage
by fire and other hazards to the extent and in the manner acceptable to the
Agent and otherwise as required by the Security Instruments, (b) maintain
general public liability insurance at all times with responsible insurance
carriers against liability on account of damage to persons and property and (c)
maintain insurance under all applicable workers' compensation laws (or in the
alternative, maintain required reserves if self-insured for workers'
compensation purposes) and against loss by reason of business interruption, such
policies of insurance to have such limits, deductibles, exclusions, co-insurance
and other provisions providing coverages acceptable to the Agent, such insurance
policies to be in form reasonably satisfactory to the Agent. Each of the
policies of insurance described in this SECTION 8.5 shall provide that the
insurer shall give the Agent not less than thirty (30) days' prior written
notice before any such policy shall be terminated, lapse or be altered in any
manner. Attached hereto as SCHEDULE 8.5 is a summary of insurance currently
carried by the Borrower and its Subsidiaries which has been determined by the
Agent to be acceptable;
14.6. TRUE BOOKS. Keep true books of record and account in which full, true
and correct entries will be made of all of its dealings and transactions, and
set up on its books such reserves as may be required by GAAP with respect to
doubtful accounts and all taxes, assessments, charges, levies and claims and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements;
14.7. RIGHT OF INSPECTION. Permit any Person designated by the Agent
(including any Lender) to visit and inspect any of the properties, corporate
books and financial reports of the Borrower or any Subsidiary and to discuss its
affairs, finances and accounts with its principal officers and independent
certified public accountants, all at reasonable times, at reasonable intervals
and with reasonable prior notice;
14.8. OBSERVE ALL LAWS. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business;
14.9. GOVERNMENTAL LICENSES. Obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents;
14.10. COVENANTS EXTENDING TO OTHER PERSONS. Cause each of its Subsidiaries
to do with respect to itself, its business and its assets, each of the things
required of the Borrower in SECTIONS 9.2 through 9.9 and 9.19 inclusive;
14.11. OFFICER'S KNOWLEDGE OF DEFAULT. Upon any officer of the Borrower
obtaining knowledge of any Default or Event of Default hereunder or under any
other obligation of the Borrower or any Subsidiary to any Lender, or any event,
development or occurrence
Page 60 Exhibit 4.2
which could reasonably be expected to have a Material Adverse Effect, cause
such officer or an Authorized Representative to promptly notify the Agent of
the nature thereof, the period of existence thereof, and what action the
Borrower or such Subsidiary proposes to take with respect thereto;
14.12. SUITS OR OTHER PROCEEDINGS. Upon any officer of the Borrower
obtaining knowledge of any litigation or other proceedings being instituted
against the Borrower or any Subsidiary, or any attachment, levy, execution or
other process being instituted against any assets of the Borrower or any
Subsidiary, making a claim or claims in an aggregate amount greater than
$500,000 not otherwise covered by insurance, promptly deliver to the Agent
written notice thereof stating the nature and status of such litigation,
dispute, proceeding, levy, execution or other process;
14.13. NOTICE OF DISCHARGE OF HAZARDOUS MATERIAL OR ENVIRONMENTAL COMPLAINT.
Promptly provide to the Agent true, accurate and complete copies of any and all
notices, complaints, orders, directives, claims, or citations received by the
Borrower or any Subsidiary relating to any (a) violation or alleged violation by
the Borrower or any Subsidiary of any applicable Environmental Law; (b) release
or threatened release by the Borrower or any Subsidiary, or at any facility or
property owned or leased or operated by the Borrower or any Subsidiary, of any
Hazardous Material, except where occurring legally; or (c) liability or alleged
liability of the Borrower or any Subsidiary for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous Materials;
14.14. ENVIRONMENTAL COMPLIANCE. If the Borrower or any Subsidiary shall
receive any letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or and Subsidiary has violated any Environmental Law
or is liable for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials which violation or liability could have a
Material Adverse Effect on the Borrower or its Subsidiaries, the Borrower shall,
within the time period permitted by the applicable Environmental Law or the
Governmental Authority responsible for enforcing such Environmental Law, remove
or remedy, or cause the applicable Subsidiary to remove or remedy, such
violation or release or satisfy such liability;
14.15. INDEMNIFICATION. Without limiting the generality of SECTION 12.9,
the Borrower hereby agrees to indemnify and hold the Agent, the Lenders and
NCMI, and their respective officers, directors, employees and agents, harmless
from and against any and all claims, losses, penalties, liabilities, damages and
expenses (including assessment and cleanup costs and reasonable attorneys' fees
and disbursements) arising directly or indirectly from, out of or by reason of
(a) the violation of any Environmental Law by the Borrower or any Subsidiary or
with respect to any property owned, operated or leased by the Borrower or any
Subsidiary or (b) the handling, storage, treatment, emission or disposal of any
Hazardous Materials by or on behalf of the Borrower or any Subsidiary or on or
with respect to property owned or leased or operated by the Borrower or any
Subsidiary. The provisions of this SECTION 8.15 shall survive the Facility
Termination Date and expiration or termination of this Agreement;
14.16. FURTHER ASSURANCES. At the Borrower's cost and expense, upon request
of the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents, certificates,
financing and continuation statements, and
Page 61 Exhibit 4.2
do and cause to be done such further acts that may be reasonably necessary or
advisable in the reasonable opinion of the Agent to carry out the provisions
and purposes of this Agreement, the Security Instruments and the other Loan
Documents;
14.17. EMPLOYEE BENEFIT PLANS.
(a) With reasonable promptness, and in any event within thirty (30) days
thereof, give notice to the Agent of (a) the establishment of any new
Pension Plan (which notice shall include a copy of such plan), (b) the
commencement of contributions to any Employee Benefit Plan to which the
Borrower or any of its ERISA Affiliates was not previously contributing,
(c) any material increase in the benefits of any existing Employee Benefit
Plan, (d) each funding waiver request filed with respect to any Employee
Benefit Plan and all communications received or sent by the Borrower or any
ERISA Affiliate with respect to such request and (e) the failure of the
Borrower or any ERISA Affiliate to make a required installment or payment
under Section 302 of ERISA or Section 412 of the Code by the due date;
(b) Promptly and in any event within fifteen (15) days of becoming aware
of the occurrence or forthcoming occurrence of any (a) Termination Event or
(b) nonexempt "prohibited transaction," as such term is defined in Section
406 of ERISA or Section 4975 of the Code, in connection with any Pension
Plan or any trust created thereunder, deliver to the Agent a notice
specifying the nature thereof, what action the Borrower or any ERISA
Affiliate has taken, is taking or proposes to take with respect thereto
and, when known, any action taken or threatened by the Internal Revenue
Service, the Department of Labor or the PBGC with respect thereto; and
(c) With reasonable promptness but in any event within fifteen (15) days
for purposes of clauses (a), (b) and (c), deliver to the Agent copies of
(a) any unfavorable determination letter from the Internal Revenue Service
regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code, (b) all notices received by the Borrower or any ERISA
Affiliate of the PBGC's intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (c) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by
the Borrower or any ERISA Affiliate with the Internal Revenue Service with
respect to each Pension Plan and (d) all notices received by the Borrower
or any ERISA Affiliate from a Multiemployer Plan sponsor concerning the
imposition or amount of withdrawal liability pursuant to Section 4202 of
ERISA. The Borrower will notify the Agent in writing within five (5)
Business Days of the Borrower or any ERISA Affiliate obtaining knowledge or
reason to know that the Borrower or any ERISA Affiliate has filed or
intends to file a notice of intent to terminate any Pension Plan under a
distress termination within the meaning of Section 4041(c) of ERISA;
14.18. CONTINUED OPERATIONS. Continue at all times to conduct its business
and engage principally in the same line or lines of business substantially as
heretofore conducted;
14.19. NEW SUBSIDIARIES. Simultaneously with the acquisition or creation of
any Subsidiary, cause to be delivered to the Agent for the benefit of the
Lenders each of the following:
Page 62 Exhibit 4.2
(a) a Facility Guaranty executed by such Subsidiary substantially in
the form of EXHIBIT I;
(b) a Security Agreement of such Subsidiary substantially in the form
of EXHIBIT J-2, together with such Uniform Commercial Code financing
statements on Form UCC-1 or otherwise duly executed by such Subsidiary as
"Debtor" and naming the Agent for the benefit of the Lenders as "Secured
Party", in form, substance and number sufficient in the reasonable opinion
of the Agent and its special counsel to be filed in all Uniform Commercial
Code filing offices in all jurisdictions in which filing is necessary or
advisable to perfect in favor of the Agent for the benefit of the Lenders
the Lien on Collateral conferred under such Security Instrument to the
extent such Lien may be perfected by Uniform Commercial Code filing;
(c) if such Subsidiary is a corporation or is a partnership that has
issued certificates evidencing ownership of Partnership Interests, (A) the
Pledged Stock or, if applicable, certificates of ownership of such
Partnership Interests, together with duly executed stock powers or powers
of assignment in blank affixed thereto, and (B) if such Collateral shall be
owned by a Subsidiary who has not then executed and delivered to the Agent
a Security Instrument from the owner of such Collateral granting a Lien to
the Agent in such Collateral, a Security Agreement or a Pledge Agreement
(as appropriate) substantially similar in form and content to that executed
and delivered by the Borrower as of the Closing Date, with appropriate
revisions as to the identity of the pledgor and securing the obligations of
such pledgor under its Facility Guaranty;
(d) if such Subsidiary is a partnership not described in clause (c)
immediately above, (A) the certificate of the Registrar of such partnership
with respect to the registration of the Lien on Partnership Interests, and
(B) if such Collateral shall be owned by a Subsidiary who has not then
executed and delivered to the Agent a Security Instrument from the owner of
such Collateral granting a Lien to the Agent in such Collateral, a Pledge
Agreement substantially similar in form and content to that executed and
delivered by the Borrower as of the Closing Date, with appropriate
revisions as to the identity of the pledgor and securing the obligations of
such pledgor under its Facility Guaranty;
(e) a supplement to the appropriate schedule attached to the
appropriate Security Instruments listing the additional Collateral,
certified as true, correct and complete by the Authorized Representative
(provided that the failure to deliver such supplement shall not impair the
rights conferred under the Security Instruments in after acquired
Collateral);
(f) an opinion of counsel to the Subsidiary dated as of the date of
delivery of the Facility Guaranty and other Loan Documents provided for in
this SECTION 8.19 and addressed to the Agent and the Lenders, in form and
substance reasonably acceptable to the Agent (which opinion may include
assumptions and qualifications of similar effect to those contained in the
opinions of counsel delivered pursuant to SECTION 6.1(a)), to the effect
that:
Page 63 Exhibit 4.2
(A) such Subsidiary is duly organized, validly existing and in
good standing in the jurisdiction of its formation, has the requisite
power and authority to own its properties and conduct its business as
then owned and then conducted and proposed to be conducted, and is
duly qualified to transact business and is in good standing as a
foreign corporation or partnership in each other jurisdiction in which
the character of the properties owned or leased, or the business
carried on by it, requires such qualification and the failure to be so
qualified would reasonably be likely to result in a Material Adverse
Effect;
(B) the execution, delivery and performance of the Facility
Guaranty and other Loan Documents described in this SECTION 8.19 to
which such Subsidiary is a signatory have been duly authorized by all
requisite corporate or partnership action (including any required
shareholder or partner approval), each of such agreements has been
duly executed and delivered and constitutes the valid and binding
agreement of such Subsidiary, enforceable against such Subsidiary in
accordance with its terms, subject to the effect of any applicable
bankruptcy, moratorium, insolvency, reorganization or other similar
law affecting the enforceability of creditors' rights generally and to
the effect of general principles of equity (whether considered in a
proceeding at law or in equity); and
(C) the Uniform Commercial Code financing statements on Form
UCC-1 delivered to the Agent by the Subsidiary in connection with the
delivery of the Security Instruments of such Subsidiary have been duly
executed by the Subsidiary and are in form, substance and number
sufficient for filing in all Uniform Commercial Code filing offices in
all jurisdictions in which filing is necessary to perfect in favor of
the Agent for the benefit of the Lenders the Lien on Collateral
conferred under such Security Instruments to the extent such Lien may
be perfected by Uniform Commercial Code filing;
(g) current copies of the charter documents, including partnership
agreements and certificate of limited partnership, if applicable, and
bylaws of such Subsidiary, minutes of duly called and conducted meetings
(or duly effected consent actions) of the Board of Directors, partners, or
appropriate committees thereof (and, if required by such charter documents,
bylaws or by applicable law, of the shareholders) of such Subsidiary
authorizing the actions and the execution and delivery of documents
described in this SECTION 8.19.
Page 64 Exhibit 4.2
ARTICLE IX
NEGATIVE COVENANTS
Until the Obligations have been paid and satisfied in full, no Letters of
Credit remain outstanding and this Agreement has been terminated in accordance
with the terms hereof, unless the Required Lenders shall otherwise consent in
writing, the Borrower will not, nor will it permit any Subsidiary to:
15.1. FINANCIAL COVENANTS.
(a) CONSOLIDATED NET WORTH. Permit Consolidated Net Worth to be less
than (i) $50,000,000 as at the Closing Date and (ii) as at the last day of the
succeeding fiscal quarter and each succeeding fiscal quarter thereafter of
Borrower and until (but excluding) the last day of the next following fiscal
quarter of Borrower the sum of (A) the amount of Consolidated Net Worth to be
maintained pursuant to this Section 9.1(a) as at the end of the immediately
preceding fiscal quarter, plus (B) 50% of Consolidated Net Income for such
period (but not any portion of loss), plus (C) 100% of the net cash proceeds of
any issuance by the Borrower or any of its Subsidiaries of any equity interests
in Borrower or such Subsidiary during such period;
(b) CONSOLIDATED LEVERAGE RATIO. Permit Consolidated Leverage Ratio
to be in excess of 7.00:1.00 through December 31, 1998; to be in excess of
6.50:1.00 from January 1, 1999 through December 31, 2000; and to be in excess of
6.00:1.00 for any period thereafter;
(c) CONSOLIDATED INTEREST COVERAGE RATIO. Permit Consolidated
Interest Coverage Ratio to be less than 1.25:1.00 through December 31, 1997; and
to be less than 1.50:1.00 thereafter.
15.2. ACQUISITIONS. Enter into any agreement, contract, binding commitment
or other arrangement providing for any Acquisition, or take any action to
solicit the tender of securities or proxies in respect thereof in order to
effect any Acquisition, unless (i) the Person to be (or whose assets are to be)
acquired does not oppose such Acquisition and the line or lines of business of
the Person to be acquired are substantially the same as one or more line or
lines of business conducted by the Borrower and its Subsidiaries, and the
Borrower or any of its Subsidiaries acquires a one hundred percent (100%)
ownership interest in such Person to be acquired, (ii) no Default or Event of
Default shall have occurred and be continuing either immediately prior to or
immediately after giving effect to such Acquisition, and the Borrower shall have
furnished to the Agent (A) pro forma historical financial statements as of the
end of the most recently completed Fiscal Year of the Borrower and most recent
interim fiscal quarter, if applicable giving effect to such Acquisition and (B)
a certificate in the form of EXHIBIT H prepared on a historical pro forma basis
giving effect to such Acquisition, which certificate shall demonstrate that no
Default or Event of Default would exist immediately after giving effect thereto,
and (iii) the Person acquired shall be a wholly-owned Subsidiary, or be merged
into the Borrower or Louisiana, immediately upon consummation of the Acquisition
(or if assets are being acquired, the acquiror shall be the Borrower or a
wholly-owned Subsidiary);
Page 65 Exhibit 4.2
15.3. CAPITAL EXPENDITURES. Make or become committed to make Capital
Expenditures, with the exclusion of any Capital Expenditures pursuant to any
Acquisitions permitted under SECTION 9.2, which exceed in the aggregate
$15,000,000 in any Fiscal Year of the Borrower on a noncumulative basis, with
the effect that amounts not expended in any Fiscal Year may not be carried
forward to a subsequent period.
15.4. LIENS. Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to any property or assets now
owned or hereafter acquired by the Borrower or any Subsidiary, other than
(a) Liens created under the Security Instruments in favor of the Agent
and the Lenders, and otherwise existing as of the date hereof and as set
forth in SCHEDULE 7.7;
(b) Liens imposed by law for taxes, assessments or charges of any
Governmental Authority for claims not yet due or which are being contested
in good faith by appropriate proceedings diligently conducted, which,
except as expressly so specified on SCHEDULE 7.7, are inferior in respect
of the Collateral to the Liens conferred under the Security Instruments,
and with respect to which adequate reserves or other appropriate provisions
are being maintained in accordance with GAAP and which Liens are not yet
enforceable against other creditors;
(c) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law or created in the
ordinary course of business and in existence less than 90 days from the
date of creation thereof for amounts not yet due or which are being
contested in good faith by appropriate proceedings diligently conducted and
with respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP and which Liens are not yet
enforceable against other creditors;
(d) Liens incurred or deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and other
types of social security benefits or to secure the performance of tenders,
bids, leases, contracts (other than for the repayment of Indebtedness),
statutory obligations and other similar obligations or arising as a result
of progress payments under government contracts;
(e) easements (including reciprocal easement agreements and utility
agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded), which do not interfere materially
with the ordinary conduct of the business of the Borrower or any Subsidiary
and which do not materially detract from the value of the property to which
they attach or materially impair the use thereof to the Borrower or any
Subsidiary; and
(f) purchase money Liens (x) to secure Indebtedness permitted under
SECTION 9.5(f) and incurred to purchase fixed assets, provided such
Indebtedness represents not less than 75% of the purchase price of such
assets as of the date of purchase thereof and no property other than the
assets so purchased secures such
Page 66 Exhibit 4.2
Indebtedness, and (y) to secure existing purchase money Indebtedness
described on SCHEDULE 7.6 which may be refinanced pursuant to
SECTION 9.5(a);
15.5. INDEBTEDNESS. Incur, create, assume or permit to exist any
Indebtedness of the Borrower or any Subsidiary, howsoever evidenced, except:
(a) Indebtedness existing as of the Closing Date as set forth in
SCHEDULE 7.6; provided, none of the instruments and agreements evidencing
or governing such Indebtedness shall be amended, modified or supplemented
after the Closing Date to change any terms of subordination, repayment or
rights of conversion, put, exchange or other rights from such terms and
rights as in effect on the Closing Date; provided, further, that the
Borrower may refinance existing Indebtedness on terms acceptable to the
Agent in its sole discretion;
(b) Indebtedness owing to the Agent or any Lender in connection with
this Agreement, any Note or other Loan Document;
(c) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(d) Indebtedness arising from Rate Hedging Obligations permitted under
SECTION 9.16;
(e) unsecured intercompany Indebtedness from loans and advances made
by the Borrower or any Guarantor to the Borrower or any Guarantor, provided
that such intercompany Indebtedness is evidenced by a promissory note or
similar written instrument acceptable to the Agent which provides that such
Indebtedness is subordinated to obligations, liabilities and undertakings
of the holder or owner thereof under the Loan Documents on terms acceptable
to the Agent, provided, further, that the Borrower will not, nor will it
permit any Subsidiary to permit to exist any Indebtedness from loans and
advances made by the Borrower or any Subsidiary to Louisiana, except
(i) Indebtedness to Louisiana existing as of the Closing Date as set forth
in SCHEDULE 7.6, and (ii) up to an additional $10,000,000 of outstanding
Indebtedness of Louisiana;
(f) purchase money Indebtedness described in SECTION 9.4(f) not to
exceed an aggregate outstanding amount at any time of $2,500,000;
(g) up to $5,000,000 of unsecured Indebtedness of Louisiana; and
(h) Liens on property existing immediately prior to the time of any
Acquisition thereof (and not created in anticipation or contemplation of
such Acquisition or the financing of such Acquisition) and securing
Indebtedness of the Person so acquired; provided, that such Lien does not
extend to or cover any property other than such item of property and any
improvements on such item.
15.6. TRANSFER OF ASSETS. Sell, lease, transfer or otherwise dispose of any
assets of Borrower or any Subsidiary other than (a) dispositions of inventory in
the ordinary course of business, (b) dispositions of property that is
substantially worn, damaged, obsolete or, in
Page 67 Exhibit 4.2
the judgment of the Borrower, no longer best used or useful in its business
or that of any Subsidiary, (c) transfers of assets necessary to give effect
to merger or consolidation transactions permitted by SECTION 9.8, and (d) the
disposition of Eligible Securities in the ordinary course of management of
the investment portfolio of the Borrower and its Subsidiaries;
15.7. INVESTMENTS. Purchase, own, invest in or otherwise acquire, directly
or indirectly, any stock or other securities, or make or permit to exist any
interest whatsoever in any other Person or permit to exist any loans or advances
to any Person, except that Borrower may maintain investments or invest in:
(a) securities of any Person acquired in an Acquisition permitted
hereunder;
(b) Eligible Securities;
(c) investments existing as of the date hereof and as set forth in
SCHEDULE 7.4;
(d) accounts receivable arising and trade credit granted in the
ordinary course of business and any securities received in satisfaction or
partial satisfaction thereof in connection with accounts of financially
troubled Persons to the extent reasonably necessary in order to prevent or
limit loss;
(e) investments in Subsidiaries which are Guarantors; and
(f) intercompany Indebtedness permitted in SECTION 9.5(e).
15.8. MERGER OR CONSOLIDATION. (a) Consolidate with or merge into any
other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise
dispose of all or a substantial part of its assets (other than sales
permitted under SECTION 9.6; PROVIDED, HOWEVER, (i) any Subsidiary of the
Borrower may merge or transfer all or substantially all of its assets into or
consolidate with the Borrower or any wholly-owned Subsidiary of the Borrower,
and (ii) any other Person may merge into or consolidate with the Borrower or
any wholly-owned Subsidiary and any Subsidiary may merge into or consolidate
with any other Person in order to consummate an Acquisition permitted by
SECTION 9.2, PROVIDED FURTHER, that any resulting or surviving entity shall
execute and deliver such agreements and other documents, including a Facility
Guaranty and Security Agreement, and take such other action as the Agent may
require to evidence or confirm its express assumption of the obligations and
liabilities of its predecessor entities under the Loan Documents;
15.9. RESTRICTED PAYMENTS. Make any Restricted Payment or apply or set
apart any of their assets therefor or agree to do any of the foregoing; permit
management fees to any Person (including the Pohlad Companies) to exceed
$750,000 in the aggregate for the Borrower and its Subsidiaries on a
consolidated basis in any Fiscal Year (management fees not expended in any
Fiscal Year may not be carried forward to a subsequent period);
Page 68 Exhibit 4.2
15.10.TRANSACTIONS WITH AFFILIATES. Other than transactions permitted under
SECTIONS 9.7 and 9.8 and the Management Agreement, enter into any transaction
after the Closing Date, including, without limitation, the purchase, sale, lease
or exchange of property, real or personal, or the rendering of any service, with
any Affiliate of the Borrower, including Louisiana, except (a) that such Persons
may render services to the Borrower or its Subsidiaries for compensation at the
same rates generally paid by Persons engaged in the same or similar businesses
for the same or similar services, (b) that the Borrower or any Subsidiary may
render services to such Persons for compensation at the same rates generally
charged by the Borrower or such Subsidiary and (c) in either case in the
ordinary course of business and pursuant to the reasonable requirements of the
Borrower's (or any Subsidiary's) business consistent with past practice of the
Borrower and its Subsidiaries and upon fair and reasonable terms no less
favorable to the Borrower (or any Subsidiary) than would be obtained in a
comparable arm's-length transaction with a Person not an Affiliate;
15.11.COMPLIANCE WITH ERISA. With respect to any Pension Plan, Employee
Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which would result
in a liability on the part of the Borrower or any ERISA Affiliate to the
PBGC; or
(b) permit the present value of all benefit liabilities under all
Pension Plans to exceed the current value of the assets of such Pension
Plans allocable to such benefit liabilities; or
(c) permit any accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Code) with respect to any Pension Plan,
whether or not waived; or
(d) fail to make any contribution or payment to any Multiemployer Plan
which the Borrower or any ERISA Affiliate may be required to make under any
agreement relating to such Multiemployer Plan, or any law pertaining
thereto; or
(e) engage, or permit any Borrower or any ERISA Affiliate to engage,
in any prohibited transaction under Section 406 of ERISA or Sections 4975
of the Code for which a civil penalty pursuant to Section 502(I) of ERISA
or a tax pursuant to Section 4975 of the Code may be imposed; or
(f) permit the establishment of any Employee Benefit Plan providing
post-retirement welfare benefits or establish or amend any Employee Benefit
Plan which establishment or amendment could result in liability to the
Borrower or any ERISA Affiliate or increase the obligation of the Borrower
or any ERISA Affiliate to a Multiemployer Plan; or
(g) fail, or permit the Borrower or any ERISA Affiliate to fail, to
establish, maintain and operate each Employee Benefit Plan in compliance in
all material respects with the provisions of ERISA, the Code, all
applicable Foreign Benefit Laws and all other applicable laws and the
regulations and interpretations thereof;
15.12.FISCAL YEAR. Change its Fiscal Year;
Page 69 Exhibit 4.2
15.13.DISSOLUTION, ETC. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a merger or
consolidation permitted pursuant to SECTION 9.8;
15.14.LIMITATIONS ON SALES AND LEASEBACKS. Enter into any arrangement with
any Person providing for the leasing by the Borrower or any Subsidiary of real
or personal property, whether now owned or hereafter acquired in a related
transaction or series1 of related transactions, which has been or is to be sold
or transferred by the Borrower or any Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or any
Subsidiary;
15.15.CHANGE IN CONTROL. Cause, suffer or permit to exist or occur any
Change of Control;
15.16. RATE HEDGING OBLIGATIONS. Incur any Rate Hedging Obligations or
enter into any agreements, arrangements, devices or instruments relating to Rate
Hedging Obligations, except pursuant to Swap Agreements in an aggregate notional
amount not to exceed at any time 50% of the Total Revolving Credit Commitment
and the amounts outstanding at such time under the Unsecured Notes Offering or
as otherwise agreed by the Borrower and the Agent.
15.17. NEGATIVE PLEDGE CLAUSES. Enter into or cause, suffer or permit to
exist any agreement with any Person other than the Agent and the Lenders
pursuant to this Agreement or any other Loan Documents which prohibits or limits
the ability of any of the Borrower or any Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, PROVIDED that the Borrower and any Subsidiary
may enter into such an agreement in connection with property subject to any Lien
permitted by this Agreement and not released after the date hereof, when such
prohibition or limitation is by its terms effective only against the assets
subject to such Lien;
15.18. REIMBURSEMENT OF EXPENSES. Reimburse any stockholder, officer,
director, employee or agent of the Borrower or any Subsidiary for any expenses
incurred by such Person other than reasonable expenses incurred for or on behalf
of the Borrower or any Subsidiary in the ordinary course of business;
15.19. PREPAYMENTS, ETC. OF INDEBTEDNESS. (a) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness, other than the payment by a Subsidiary to the Borrower of
Indebtedness of such Subsidiary; or
(b) amend, modify or change in any manner any term or condition of any
Indebtedness described in SECTION 9.5(a) or any lease so that the terms and
conditions thereof are less favorable to the Agent and the Lenders than the
terms of such Indebtedness or leases as of the Closing Date.
Page 70 Exhibit 4.2
ARTICLE X
EVENTS OF DEFAULT AND ACCELERATION
16.1. EVENTS OF DEFAULT. (A) If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment of the
principal of any Loan, Swing Line Loan, Reimbursement Obligation or other
Obligation, when and as the same shall be due and payable whether pursuant
to any provision of ARTICLE II or ARTICLE III, at maturity, by acceleration
or otherwise; or
(b) if default shall be made in the due and punctual payment of any
amount of interest or fee on any Loan, Swing Line Loan, Reimbursement
Obligation or other Obligation or of any fees or other amounts payable to
any of the Lenders or the Agent on the date on which the same shall be due
and payable; or
(c) if default shall be made in the performance or observance of any
covenant set forth in SECTION 8.7, 8.11, 8.12, 8.19 or ARTICLE IX;
(d) if a default shall be made in the performance or observance of,
or shall occur under, any covenant, agreement or provision contained in
this Agreement or the Notes (other than as described in clauses (a), (b) or
(c) above) and such default shall continue for 30 or more days after the
earlier of receipt of notice of such default by the Authorized
Representative from the Agent, or if a default shall be made in the
performance or observance of, or shall occur under, any covenant, agreement
or provision contained in any of the other Loan Documents (beyond any
applicable grace period, if any, contained therein) or in any instrument or
document evidencing or creating any obligation, guaranty, or Lien in favor
of the Agent or any of the Lenders or delivered to the Agent or any of the
Lenders in connection with or pursuant to this Agreement or any of the
Obligations, or if any Loan Document ceases to be in full force and effect
(other than by reason of any action by the Agent), or if without the
written consent of the Lenders, this Agreement or any other Loan Document
shall be disaffirmed or shall terminate, be terminable or be terminated or
become void or unenforceable for any reason whatsoever (other than in
accordance with its terms in the absence of default or by reason of any
action by the Lenders or the Agent); or
(e) if there shall occur (i) a default, which is not waived, in the
payment of any principal, interest, premium or other amount with respect to
any Indebtedness (other than the Loans and other Obligations) of the
Borrower or any Subsidiary in an amount not less than $250,000 in the
aggregate outstanding, or (ii) any other event of default as specified in
any agreement or instrument under or pursuant to which any such
Indebtedness or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by the Borrower or any Subsidiary, and such
default or event of default shall continue unwaived for more than the
period of grace, if any,
Page 71 Exhibit 4.2
therein specified, or such default or event of default shall permit the
holder of any such Indebtedness (or any agent or trustee acting on behalf
of one or more holders) to accelerate the maturity thereof; or
(f) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report or
statement at any time furnished to the Agent or any Lender by or on behalf
of the Borrower or any Subsidiary pursuant to or in connection with any
Loan Document, or otherwise, shall be false or misleading in any material
respect when given; or
(g) if the Borrower or any Subsidiary shall be unable to pay its
debts generally as they become due; file a petition to take advantage of
any insolvency statute; make an assignment for the benefit of its
creditors; commence a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or any
substantial part of its property; file a petition or answer seeking
liquidation, reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee, liquidator or
conservator of the Borrower or any Subsidiary or of the whole or any
substantial part of its properties and such order, judgment or decree
continues unstayed and in effect for a period of sixty (60) days, or
approve a petition filed against the Borrower or any Subsidiary seeking
liquidation, reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state, which petition is not dismissed
within sixty (60) days; or if, under the provisions of any other law for
the relief or aid of debtors, a court of competent jurisdiction shall
assume custody or control of the Borrower or any Subsidiary or of the whole
or any substantial part of its properties, which control is not
relinquished within sixty (60) days; or if there is commenced against the
Borrower or any Subsidiary any proceeding or petition seeking
reorganization, arrangement or similar relief under the federal bankruptcy
laws or any other applicable law or statute of the United States of America
or any state which proceeding or petition remains undismissed for a period
of sixty (60) days; or if the Borrower or any Subsidiary takes any action
to indicate its consent to or approval of any such proceeding or petition;
or
(i) if (i) one or more judgments or orders where the amount not
covered by insurance (or the amount as to which the insurer denies
liability) is in excess of $250,000 is rendered against the Borrower or any
Subsidiary, or (ii) there is any attachment, injunction or execution
against any of the Borrower's or Subsidiaries' properties for any amount in
excess of $250,000 in the aggregate; and such judgment, attachment,
injunction or execution remains unpaid, unstayed, undischarged, unbonded or
undismissed for a period of thirty (30) days; or
(j) if the Borrower or any Subsidiary shall, other than in the
ordinary course of business (as determined by past practices), suspend all
or any part of its operations material to the conduct of the business of
the Borrower or such Subsidiary for a period of more than 60 days; or
Page 72 Exhibit 4.2
(k) if the Borrower or any Subsidiary shall breach any of the material
terms or conditions of any agreement under which any Rate Hedging
Obligations permitted hereby is created and such breach shall continue
beyond any grace period, if any, relating thereto pursuant to the terms of
such agreement, or if the Borrower or any Subsidiary shall disaffirm or
seek to disaffirm any such agreement or any of its obligations thereunder;
or
(l) if the Borrower or any Subsidiary shall fail to observe or
perform, in the sole judgment of the Lenders, any material provision or
covenant of any of any Franchise Agreements.
(B) then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall have not been waived,
(i) either or both of the following actions may be taken:
(i) the Agent, with the consent of the Required Lenders, may, and at
the direction of the Required Lenders shall, declare any obligation of
the Lenders to make further Loans and NationsBank to make Swing Line
Loans and the Issuing Bank to issue additional Letters of Credit
terminated, whereupon the obligation of each Lender to make further
Loans, of NationsBank to make further Swing Line Loans, and of the
Issuing Bank to issue additional Letters of Credit, hereunder shall
terminate immediately, and (ii) the Agent shall at the direction of
the Required Lenders, at their option, declare by notice to the
Borrower any or all of the Obligations to be immediately due and
payable, and the same, including all interest accrued thereon and all
other obligations of the Borrower to the Agent and the Lenders, shall
forthwith become immediately due and payable without presentment,
demand, protest, notice or other formality of any kind, all of which
are hereby expressly waived, anything contained herein or in any
instrument evidencing the Obligations to the contrary notwithstanding;
PROVIDED, however, that notwithstanding the above, if there shall
occur an Event of Default under clause (g) or (h) above, then the
obligation of the Lenders to make Loans, of NationsBank to make Swing
Line Loans, and of the Issuing Bank to issue Letters of Credit
hereunder shall automatically terminate and any and all of the
Obligations shall be immediately due and payable without the necessity
of any action by the Agent or the Required Lenders or notice to the
Agent or the Lenders;
(ii) the Borrower shall, upon demand of the Agent or the Required
Lenders, deposit cash with the Agent in an amount equal to the amount
of any Letter of Credit Outstandings, as collateral security for the
repayment of any future drawings or payments under such Letters of
Credit, and such amounts shall be held by the Agent pursuant to the
terms of the LC Account Agreement; and
(iii) the Agent and each of the Lenders shall have all of the
rights and remedies available under the Loan Documents or under any
applicable law.
Page 73 Exhibit 4.2
16.2. AGENT TO ACT. In case any one or more Events of Default shall occur
and not have been waived, the Agent may, and at the direction of the Required
Lenders shall, proceed to protect and enforce their rights or remedies either by
suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
16.3. CUMULATIVE RIGHTS. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
16.4. NO WAIVER. No course of dealing between the Borrower and any Lender
or the Agent or any failure or delay on the part of any Lender or the Agent in
exercising any rights or remedies under any Loan Document or otherwise available
to it shall operate as a waiver of any rights or remedies and no single or
partial exercise of any rights or remedies shall operate as a waiver or preclude
the exercise of any other rights or remedies hereunder or of the same right or
remedy on a future occasion.
16.5. ALLOCATION OF PROCEEDS. If an Event of Default has
occurred and not been waived, and the maturity of the Notes has been accelerated
pursuant to ARTICLE X hereof, all payments received by the Agent hereunder, in
respect of any principal of or interest on the Obligations or any other amounts
payable by the Borrower hereunder, shall be applied by the Agent in the
following order:
(a) amounts due to the Lenders pursuant to SECTIONS 2.10, 3.3, 3.4
AND 12.5;
(b) amounts due to the Agent pursuant to SECTION 11.11;
(c) payments of interest on Loans, Swing Line Loans and Reimbursement
Obligations, to be applied for the ratable benefit of the Lenders (with
amounts payable in respect of Swing Line Outstandings being included in
such calculation and paid to NationsBank);
(d) payments of principal of Loans, Swing Line Loans and
Reimbursement Obligations, to be applied for the ratable benefit of the
Lenders (with amounts payable in respect of Swing Line Outstandings being
included in such calculation and paid to NationsBank);
(e) payments of cash amounts to the Agent in respect of outstanding
Letters of Credit pursuant to SECTION 10.1(b);
(f) amounts due to the Lenders pursuant to SECTIONS 3.2(g), 8.15 and
12.9;
(g) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the Lenders;
Page 74 Exhibit 4.2
(h) amounts due to any of the Lenders in respect of Obligations
consisting of liabilities under any Swap Agreement with any of the Lenders
on a pro rata basis according to the amounts owed; and
(i) any surplus remaining after application as provided for herein,
to the Borrower or otherwise as may be required by applicable law.
Page 75 Exhibit 4.2
ARTICLE XVII
THE AGENT
17.1. APPOINTMENT. Each Lender hereby irrevocably designates and appoints
NationsBank as the Agent for the Lenders under this Agreement, and each of the
Lenders hereby irrevocably authorizes NationsBank as the Agent for such Lender,
to take such action on its behalf under the provisions of this Agreement and
the other Loan Documents and to exercise such powers as are expressly delegated
to the Agent by the terms of this Agreement and such other Loan Documents,
together with such other powers as are reasonably incidental thereto. The
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any of the Lenders, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. So long as NationsBank is the sole Lender
under this Agreement, the term "Agent" shall mean NationsBank as such sole
Lender.
17.2. ATTORNEYS-IN-FACT. The Agent may execute any of its duties under the
Loan Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The
Agent shall not be responsible for the negligence, gross negligence or willful
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
17.3. LIMITATION ON LIABILITY. Neither the Agent nor any of its officers,
directors, employees, agents or attorneys-in-fact shall be liable to the
Lenders for any action lawfully taken or omitted to be taken by it or them
under or in connection with the Loan Documents except for its or their own
gross negligence or willful misconduct. Neither the Agent nor any of its
affiliates shall be responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower, any
Subsidiary or any officer or representative thereof contained in any Loan
Document, or in any certificate, report, statement or other document referred
to or provided for in or received by the Agent under or in connection with any
Loan Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any Loan Document, or for any failure of the
Borrower or any Subsidiary to perform its obligations under any Loan Document,
or for any recitals, statements, representations or warranties made, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
any collateral. The Agent shall not be under any obligation to any of the
Lenders to ascertain or to inquire as to the observance or performance of any
of the terms, covenants or conditions of any Loan Document on the part of the
Borrower or any Subsidiary or to inspect the properties, books or records of
the Borrower or its Subsidiaries.
17.4. RELIANCE. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent
certificate, affidavit, letter, cablegram, telegram, telefacsimile or telex
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes unless an Assignment and Acceptance
shall have been filed with and
Page 76 Exhibit 4.2
accepted by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under the Loan Documents unless it shall first
receive advice or concurrence of the Lenders or the Required Lenders as
provided in this Agreement or it shall first be indemnified to its satisfaction
by the Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. The Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under the Loan Documents in accordance with a request of the Required Lenders,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all present and future holders of the Notes.
17.5. NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
the Agent has received notice from a Lender, the Authorized Representative or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall promptly give notice
thereof to the Lenders. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable in the best interests of the Lenders.
17.6. NO REPRESENTATIONS. Each Lender expressly acknowledges that neither
the Agent nor any of its affiliates has made any representations or warranties
to it and that no act by the Agent hereafter taken, including any review of the
affairs of the Borrower, its Subsidiaries or any other guarantor, shall be
deemed to constitute any representation or warranty by the Agent to any Lender.
Each Lender represents to the Agent that it has, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the financial condition, creditworthiness, affairs, status
and nature of the Borrower and each Subsidiary and made its own decision to
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under the Loan Documents and to make such
investigation as it deems necessary to inform itself as to the status and
affairs, financial or otherwise, of the Borrower and its Subsidiaries. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower or its
Subsidiaries which may come into the possession of the Agent or any of its
affiliates.
17.7. INDEMNIFICATION. Each of the Lenders agree to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Borrower or any
Subsidiary and without limiting any obligations of the Borrower or any
Subsidiary to do so), ratably according to the respective principal amount of
the Notes held by them (or, if no Notes are outstanding, ratably in accordance
with their respective Applicable Commitment Percentages as then in effect) from
and against any and all liabilities, obligations, losses (excluding any losses
suffered by the Agent as a result of Borrower's failure to pay any fee owing to
the
Page 77 Exhibit 4.2
Agent), damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may at any time (including
without limitation at any time following the payment of the Notes) be imposed
on, incurred by or asserted against the Agent in any way relating to or arising
out of any Loan Document or any other document contemplated by or referred to
therein or the transactions contemplated thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. The agreements in this subsection shall survive the
Facility Termination Date and the termination of this Agreement.
17.8. LENDER. The Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower
and its Subsidiaries as though it were not the Agent hereunder. With respect
to its Loans made or renewed by it and any Note issued to it, the Agent shall
have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not the Agent, and the terms "Lender" and
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity.
17.9. RESIGNATION. If the Agent shall resign as Agent under this
Agreement, then the Required Lenders may appoint, with the consent, so long as
there shall not have occurred and be continuing a Default or Event of Default,
of the Borrower, which consent shall not be unreasonably withheld, a successor
Agent for the Lenders, which successor Agent shall be a commercial bank
organized under the laws of the United States or any state thereof, having a
combined surplus and capital of not less than $500,000,000, whereupon such
successor Agent shall succeed to the rights, powers and duties of the former
Agent and the obligations of the former Agent shall be terminated and canceled,
without any other or further act or deed on the part of such former Agent or
any of the parties to this Agreement; PROVIDED, however, that the former
Agent's resignation shall not become effective until such successor Agent has
been appointed and has succeeded of record to all right, title and interest in
any collateral held by the Agent; PROVIDED, FURTHER, that if the Required
Lenders and, if applicable, the Borrower cannot agree as to a successor Agent
within ninety (90) days after such resignation, the Agent shall appoint a
successor Agent which satisfies the criteria set forth above in this SECTION
11.9 for a successor Agent and the parties hereto agree to execute whatever
documents are necessary to effect such action under this Agreement or any other
document executed pursuant to this Agreement; PROVIDED, however that in such
event all provisions of the Loan Documents, shall remain in full force and
effect. After any retiring Agent's resignation hereunder as Agent, the
provisions of this ARTICLE XI shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
17.10. SHARING OF PAYMENTS, ETC. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to its Obligations (other than pursuant
to ARTICLE V) which results in its receiving more than its pro rata share of
the aggregate payments with respect to all of the Obligations (other than any
payment expressly provided hereunder to be distributed on other than a pro rata
basis and payments pursuant to ARTICLE V), then (a) such Lender shall be deemed
to have simultaneously purchased from the other Lenders a share in their
Obligations so that
Page 78 Exhibit 4.2
the amount of the Obligations held by each of the Lenders shall be pro rata and
(b) such other adjustments shall be made from time to time as shall be
equitable to insure that the Lenders share such payments ratably; PROVIDED,
however, that for purposes of this SECTION 11.10 the term "pro rata" shall be
determined with respect to both the Revolving Credit Commitment of each Lender
and the lesser of the Total Revolving Credit Commitment and the Borrowing Base
after subtraction in each case of amounts, if any, by which any such Lender has
not funded its share of the outstanding Loans and Obligations. If all or any
portion of any such excess payment is thereafter recovered from the Lender
which received the same, the purchase provided in this SECTION 11.10 shall be
rescinded to the extent of such recovery, without interest. The Borrower
expressly consents to the foregoing arrangements and agrees that each Lender so
purchasing a portion of the other Lenders' Obligations may exercise all rights
of payment (including, without limitation, all rights of set-off, banker's lien
or counterclaim) with respect to such portion as fully as if such Lender were
the direct holder of such portion.
17.11. FEES. The Borrower agrees to pay to the Agent, for its individual
account, an annual Agent's fee as from time to time agreed to by the Borrower
and Agent in writing.
Page 79 Exhibit 4.2
ARTICLE XVIII
MISCELLANEOUS
18.1. ASSIGNMENTS AND PARTICIPATIONS. (a) At any time after the Closing
Date each Lender may, with the prior consent of the Agent and (so long as no
Default or Event of Default shall have occurred and be continuing) the
Borrower, which consents shall not be unreasonably withheld, assign to one or
more banks or financial institutions all or a portion of its rights and
obligations under the Loan Documents (including, without limitation, all or a
portion of any Note payable to its order); PROVIDED, that (i) each such
assignment shall be of a constant and not a varying percentage of all of the
assigning Lender's rights and obligations under the Revolving Credit Facility
and Letter of Credit Facility, (ii) for each assignment involving the issuance
and transfer of a Note, the assigning Lender shall execute an Assignment and
Acceptance and the Borrower hereby agrees to execute a replacement Note to give
effect to the assignment, (iii) the amount of Revolving Credit Commitment and
Letter of Credit Commitment which shall be assigned is a minimum of $5,000,000,
and, if greater, an amount which is an integral multiple of $1,000,000, (iv)
such assignee shall have an office located in the United States, and (v) no
consent of the Borrower or the Agent shall be required in connection with any
assignment by a Lender to another Lender or to an affiliate of any Lender.
Upon such execution, delivery, approval and acceptance, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder or under any such Note have been assigned or negotiated
to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and a holder of such Note and (y) the
assignor thereunder shall, to the extent that rights and obligations hereunder
or under such Note have been assigned or negotiated by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement. Any Lender who makes an assignment shall pay
to the Agent a one-time administrative fee of $3,500 which fee shall not be
reimbursed by the Borrower.
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) the assignment made under
such Assignment and Acceptance is made under such Assignment and Acceptance
without recourse; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or its Subsidiaries or the performance or observance by the
Borrower or its Subsidiaries of any of its obligations under any Loan Document
or any other instrument or Document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the financial statements delivered pursuant to SECTION 7.6(a) or
SECTION 8.1, as the case may be, and such other Loan Documents and other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under any Loan Document; (v)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto; and (vi) such assignee agrees that
it xxxx
Xxxx 80 Exhibit 4.2
perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Lender and
a holder of such Notes.
(c) The Agent shall maintain at its address referred to herein a copy of
each Assignment and Acceptance delivered to and accepted by it.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, the Agent shall give prompt notice thereof to Borrower.
(e) Nothing herein shall prohibit any Lender from pledging or assigning,
without notice to or consent of the Borrower and without the payment of the
administrative fee referred to in SECTION 12.1(a), any Note to any Federal
Reserve Bank in accordance with applicable law.
(f) Each Lender may sell participations at its expense to one or more
banks or other entities as to all or a portion of its rights and obligations
under this Agreement; PROVIDED, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any Note issued to it
for the purpose of this Agreement, (iv) such participations shall be in a
minimum amount of $5,000,000 and, if greater, an amount which is an integral
multiple of $1,000,000 and shall include an allocable portion of such Lender's
Participation, (v) Borrower, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and with regard to any and all
payments to be made under this Agreement; PROVIDED, that the participation
agreement between a Lender and its participants may provide that such Lender
will obtain the approval of such participant prior to such Lender's agreeing to
any amendment or waiver of any provisions of any Loan Document which would (A)
extend the maturity of any Note, (B) reduce the interest rates hereunder or (C)
increase the Revolving Credit Commitment or Letter of Credit Commitment of the
Lender granting the participation, and (vi) the sale of any such participations
which require Borrower to file a registration statement with the United States
Securities and Exchange Commission or under the securities regulations or laws
of any state shall not be permitted.
(g) The Borrower may not assign, nor shall it cause, suffer or permit any
of its Subsidiaries to assign any rights, powers, duties or obligations under
this Agreement or the other Loan Documents without the prior written consent of
all the Lenders.
18.2. NOTICES. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such address, telefacsimile
number or telex number as may from time to time be specified by such party in
written notice to the other parties hereto or otherwise received, in the case
of notice by telegram, telefacsimile or telex, respectively (where the receipt
of such message is verified by return), or (iii) on the fifth Business Day
after the day on which mailed, if sent prepaid by certified or registered mail,
return receipt requested, in each case delivered, transmitted or mailed, as the
case may be, to the address, telex number or telefacsimile number, as
appropriate, set forth below or such other address or number as such party
shall specify by notice hereunder:
Page 81 Exhibit 4.2
(a) if to the Borrower:
Delta Beverage Group, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxxx and Xxxxxx, P.A.
0000 XXX Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(b) if to the Agent:
NationsBank, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx, Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
NationsBank, N.A.
000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. X'Xxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(c) if to the Lenders:
At the addresses set forth on the signature pages hereof and on
the signature page of each Assignment and Acceptance;
(d) if to any Subsidiary of Borrower, at the address set forth on the
signature page of the Facility Guaranty or Security Instrument
executed by such Subsidiary, as the case may be.
18.3. SETOFF. The Borrower agrees that the Agent and each Lender shall
have a lien for all the Obligations of the Borrower upon all deposits or
deposit accounts, of any kind,
Page 82 Exhibit 4.2
or any interest in any deposits or deposit accounts thereof, now or hereafter
pledged, mortgaged, transferred or assigned to the Agent or such Lender or
otherwise in the possession or control of the Agent or such Lender (other than
for safekeeping) for any purpose for the account or benefit of the Borrower and
including any balance of any deposit account or of any credit of the Borrower
with the Agent or such Lender, whether now existing or hereafter established,
hereby authorizing the Agent and each Lender at any time or times with or
without prior notice to apply such balances or any part thereof to such of the
Obligations of the Borrower to the Lenders then past due and in such amounts as
they may elect, and whether or not the collateral or the responsibility of
other Persons primarily, secondarily or otherwise liable may be deemed
adequate. For the purposes of this paragraph, all remittances and property
shall be deemed to be in the possession of the Agent or such Lender as soon as
the same may be put in transit to it by mail or carrier or by other bailee.
18.4. SURVIVAL. All covenants, agreements, representations and warranties
made herein shall survive the making by the Lenders of the Loans and the
issuance of the Letters of Credit and the execution and delivery to the Lenders
of this Agreement and the Notes and shall continue in full force and effect so
long as any of Obligations remain outstanding or any Lender has any commitment
hereunder or the Borrower has continuing obligations hereunder unless otherwise
provided herein. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and agreements by
or on behalf of the Borrower which are contained in the Loan Documents shall
inure to the benefit of the successors and permitted assigns of the Lenders or
any of them.
18.5. EXPENSES. The Borrower agrees (a) to pay or reimburse the Agent for
all its reasonable out-of-pocket costs and expenses incurred in connection with
the preparation, negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents (including due diligence expenses
and travel expenses relating to closing), and the consummation of the
transactions contemplated thereby, including the reasonable fees and
disbursements of counsel to the Agent, (b) to pay or reimburse the Agent and
the Lenders for all their costs and expenses incurred in connection with the
enforcement or preservation of any rights under the Loan Documents, including
the reasonable fees and disbursements of their counsel and any payments in
indemnification or otherwise payable by the Lenders to the Agent pursuant to
the Loan Documents, and (c) to pay, indemnify and hold the Agent and the
Lenders harmless from any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any failure to pay or delay in
paying, documentary, stamp, excise and other similar taxes, if any, which may
be payable or determined to be payable in connection with the execution and
delivery of any of the Loan Documents, or consummation of any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
any Loan Document.
18.6. AMENDMENTS. No amendment, modification or waiver of any provision of
any Loan Document and no consent by the Lenders to any departure therefrom by
the Borrower or any of its Subsidiaries shall be effective unless such
amendment, modification or waiver shall be in writing and signed by the Agent,
shall have been approved by the Required Lenders through their written consent,
and the same shall then be effective only for the period and on the conditions
and for the specific instances and purposes specified in such writing;
PROVIDED, however, that, no such amendment, modification or waiver
Page 83 Exhibit 4.2
(i) which increases or decreases the Total Revolving Credit
Commitment, which changes, extends or waives any provision of SECTION
3.6, SECTION 12.9 or this SECTION 12.6, the amount of or the due date
of any scheduled installment of or the rate of interest payable on any
Obligation, which changes the definition of "Required Lenders", which
permits an assignment by the Borrower or any Subsidiary of its
Obligations under any Loan Document, which reduces the required
consent of Lenders provided hereunder, which increases, decreases
(other than pursuant to the express terms hereof) or extends (other
than pursuant to the express terms hereof) the Revolving Credit
Commitment or Letter of Credit Commitment of any Lender, or which
waives any condition to the making of any Loan, shall be effective
unless in writing and signed by each of the Lenders;
(ii) which releases Collateral or the guaranty obligation under
any Facility Guaranty or Security Instrument (other than pursuant to
the express terms hereof or thereof) shall be effective unless with
the written consent of each of the Lenders; or
(iii) which affects the rights, privileges or obligations of
NationsBank as provider of Swing Line Loans, shall be effective unless
signed in writing by NationsBank;
(iv) which affects the rights, privileges or obligations of the
Issuing Bank as issuer of Letters of Credit, shall be effective unless
signed in writing by the Issuing Bank;
Notwithstanding any provision of the other Loan Documents to the contrary, as
between the Agent and the Lenders, execution by the Agent shall not be deemed
conclusive evidence that the Agent has obtained the written consent of the
Required Lenders. No notice to or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances, except as otherwise expressly provided herein. No delay
or omission on any Lender's or the Agent's part in exercising any right, remedy
or option shall operate as a waiver of such or any other right, remedy or
option or of any Default or Event of Default.
18.7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
18.8. TERMINATION. The termination of this Agreement shall not affect any
rights of the Borrower, the Lenders or the Agent or any obligation of the
Borrower, the Lenders or the Agent, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Agent for the benefit of
the Lenders under the Loan Documents shall continue in full force and effect,
notwithstanding the termination of this Agreement, until all of the Obligations
have been paid in full after the
Page 84 Exhibit 4.2
termination hereof (other than Obligations in the nature of continuing
indemnities or expense reimbursement obligations not yet due and payable, which
shall continue) or the Borrower has furnished the Lenders and the Agent with an
indemnification satisfactory to the Agent and each Lender with respect thereto.
All representations, warranties, covenants, waivers and agreements contained
herein shall survive termination hereof until payment in full of the
Obligations unless otherwise provided herein. Notwithstanding the foregoing, if
after receipt of any payment of all or any part of the Obligations, any Lender
is for any reason compelled to surrender such payment to any Person because
such payment is determined to be void or voidable as a preference,
impermissible setoff, a diversion of trust funds or for any other reason, this
Agreement shall continue in full force and the Borrower shall be liable to, and
shall indemnify and hold the Agent or such Lender harmless for, the amount of
such payment surrendered until the Agent or such Lender shall have been finally
and irrevocably paid in full. The provisions of the foregoing sentence shall
be and remain effective notwithstanding any contrary action which may have been
taken by the Agent or the Lenders in reliance upon such payment, and any such
contrary action so taken shall be without prejudice to the Agent or the
Lenders' rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
18.9. INDEMNIFICATION; LIMITATION OF LIABILITY. In consideration of the
execution and delivery of this Agreement by the Agent and each Lender and the
extension of credit under the Loans, the Borrower hereby indemnifies,
exonerates and holds the Agent, NCMI and each Lender and each of their
respective affiliates, officers, directors, employees, agents and advisors
(collectively, the "Indemnified Parties") free and harmless from and against
any and all claims, actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable attorneys'
fees and disbursements (collectively, the "Indemnified Liabilities") that may
be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of, or in connection
with the execution, delivery, enforcement, performance or administration of
this Agreement and the other Loan Documents, or any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of
any Loan (including any Swing Line Loan) or Letter of Credit, whether or not
such action is brought against the Agent or any Lender, the shareholders or
creditors of the Agent or any Lender or an Indemnified Party or an Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated herein are consummated, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct, and if and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law. The
Borrower agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to it, any of its
Subsidiaries, or any security holders or creditors thereof arising out of,
related to or in connection with the transactions contemplated herein, except
to the extent that such liability is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct; provided, however, in no event
shall any Indemnified Party be liable for consequential, indirect or special,
as opposed to direct, damages.
Page 85 Exhibit 4.2
18.10. SEVERABILITY. If any provision of this Agreement or the other Loan
Documents shall be determined to be illegal or invalid as to one or more of the
parties hereto, then such provision shall remain in effect with respect to all
parties, if any, as to whom such provision is neither illegal nor invalid, and
in any event all other provisions hereof shall remain effective and binding on
the parties hereto.
18.11. ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, commitments and other communications between or among the
parties, both oral and written, with respect thereto.
18.12. AGREEMENT CONTROLS. In the event that any term of any of the Loan
Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
18.13. USURY SAVINGS CLAUSE. Notwithstanding any other provision herein,
the aggregate interest rate charged under any of the Notes, including all
charges or fees in connection therewith deemed in the nature of interest under
applicable law shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined below), the outstanding amount of the Loans made hereunder
shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at
all times been in effect. In addition, if when the Loans made hereunder are
repaid in full the total interest due hereunder (taking into account the
increase provided for above) is less than the total amount of interest which
would have been due hereunder if the stated rates of interest set forth in this
Agreement had at all times been in effect, then to the extent permitted by law,
the Borrower shall pay to the Agent an amount equal to the difference between
the amount of interest paid and the amount of interest which would have been
paid if the Highest Lawful Rate had at all times been in effect.
Notwithstanding the foregoing, it is the intention of the Lenders and the
Borrower to conform strictly to any applicable usury laws. Accordingly, if any
Lender contracts for, charges, or receives any consideration which constitutes
interest in excess of the Highest Lawful Rate, then any such excess shall be
canceled automatically and, if previously paid, shall at such Lender's option
be applied to the outstanding amount of the Loans made hereunder or be refunded
to the Borrower. As used in this paragraph, the term "Highest Lawful Rate"
means the maximum lawful interest rate, if any, that at any time or from time
to time may be contracted for, charged, or received under the laws applicable
to such Lender which are presently in effect or, to the extent allowed by law,
under such applicable laws which may hereafter be in effect and which allow a
higher maximum nonusurious interest rate than applicable laws now allow.
18.14. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE
SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE GOVERNED BY
THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH
Page 86 Exhibit 4.2
CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN
SUCH STATE.
(a) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS
THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY
STATE OR FEDERAL COURT SITTING IN THE STATE OF NORTH CAROLINA, UNITED
STATES OF AMERICA AND, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND
ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND
THE BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO
THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(b) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE BORROWER PROVIDED IN
SECTION 12.2, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF NORTH CAROLINA.
(c) NOTHING CONTAINED IN SUBSECTIONS (a) OR (b) HEREOF SHALL PRECLUDE
THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS OF ANY
JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S PROPERTY OR ASSETS
MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF
ANY SUCH JURISDICTION, THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH
SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF JURISDICTION OVER
IT AND ITS PROPERTY BY ANY SUCH OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW.
(d) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE
DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE AGENT AND THE LENDERS
HEREBY AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
Page 87 Exhibit 4.2
JURY AND HEREBY IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR
PROCEEDING.
[Signatures on following pages]
Page 88 Exhibit 4.2
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
made, executed and delivered by their duly authorized officers as of the day
and year first above written.
DELTA BEVERAGE GROUP, INC.
WITNESS:
/s/ illegible
--------------------- By: /S/ XXXX X. XXXXXXXX
--------------------------------
Name: Xxxx X. Xxxxxxxx
_____________________ Title: Vice President & CFO
NATIONSBANK, N.A.,
as Agent for the Lenders
WITNESS:
/s/ illegible
--------------------- By: /S/ M. XXXX XXXXXXX
-------------------------------
Name: M. Xxxx Xxxxxxx
_____________________ Title: Vice President
Page 89 Exhibit 4.2
NATIONSBANK, N.A.,
as Lender
By: /S/ M. XXXX XXXXXXX
---------------------------------
Name: M. Xxxx Xxxxxxx
Title: Vice President
Lending Office:
NationsBank, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
NationsBank, N.A.
Charlotte, North Carolina
ABA #000000000
Account No.: 136621-22506
Reference: Delta Beverage Group
Attention: Xxxxxxxx Xxxxxx
Corporate Credit Support
Page 90 Exhibit 4.2
EXHIBIT A
Applicable Commitment Percentages
Lender Revolving Applicable
------ Credit Commitment
Commitment Percentage
----------- ----------
NationsBank, N.A. $30,000,000 100%
Total $30,000,000 100%
Page 91 Exhibit 4.2
EXHIBIT B
Form of Assignment and Acceptance
DATED _______________, ____
Reference is hereby made to the Credit Agreement dated as of December __,
1996 (the "Agreement") among Delta Beverage Group, Inc., a Delaware
corporation (the "Borrower"), the Lenders (as defined in the Agreement), and
NationsBank, N.A., as Agent for the Lenders (the "Agent"). Unless otherwise
defined herein, terms defined in the Agreement are used herein with the same
meanings.
________________________ (the "Assignor") and _________________________
(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a
_______%(1) interest in and to all of the Assignor's rights and obligations
under the Agreement as of the Effective Date (as defined below), including,
without limitation, such percentage interest in the Loans owing to the
Assignor on the Effective Date, and evidenced by the Note held by the
Assignor.
2. The Assignor (i) represents and warrants that, as of the date
hereof, (A) the aggregate principal amount of Loans owing to it (without
giving effect to the assignments thereof which have not yet become effective)
is $__________ under a Note dated ____________, 19__ in the principal amount
of $_________ and (B) the aggregate principal amount of the Participations
purchased by it (without giving effect to the assignments thereof which have
not yet become effective) is $_________; (ii) represents and warrants that it
is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim;
(iii) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Agreement or any of the Loan Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Agreement or any of the Loan Documents or any other instrument or document
furnished pursuant thereto; (iv) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower or any of its Subsidiaries of any of their obligations under any of
the Loan Documents or any other instrument or document furnished pursuant
thereto; and (v) attaches hereto the Note referred to in paragraph 1 above
and requests that the Agent exchange such Note for replacement Notes as
follows: a Note dated _____________, 19__ in the principal amount of
$________________, payable to the order of the Assignor, and a Note, dated
____________________________ 19__, in the principal amount of
$_________________ payable to the order of the Assignee.
______________________________
Specify percentage in no more than 4 decimal points.
Page 92 Exhibit 4.2
3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
SECTION 8.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor, or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Agreement; (iii) appoints and authorizes the Agent to take such
actions on its behalf and to exercise such powers under the Loan Documents as
are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto; (iv) will perform all of the obligations
which by the terms of the Agreement are required to be performed by the
Lender; and (v) specifies as its address for notices the office set forth
beneath its name on the signature pages hereof.
4. The effective date for this Assignment and Acceptance shall be
_____________________________ (the "Effective Date"). Following the
execution of this Assignment and Acceptance, it will be delivered to the
Agent for acceptance and recording by the Agent.
5. Upon such acceptance and recording, as of the Effective Date,
(i) the Assignee shall be a party to the Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations
of a Lender thereunder and under the Loan Documents; and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Agreement and the
other Loan Documents.
6. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments under the Agreement and
Note in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest, commitment fees and letter
of credit fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the
Agreement and the Notes for periods prior to the Effective Date directly
between themselves.
Page 93 Exhibit 4.2
7. This Assignment and Acceptance shall be governed by and
construed in accordance with, the laws of the State of North Carolina.
[NAME OF ASSIGNOR]
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
Notice Address:
------------------------
------------------------
------------------------
After the Effective Date
Outstanding Loans: $
----------------
Outstanding LC
Participations: $
----------------
Outstanding Swing Line
Loan Participations: $
----------------
[NAME OF ASSIGNEE]
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
Notice Address/Lending Office
------------------------
------------------------
------------------------
Wire transfer Instructions:
------------------------
------------------------
------------------------
After the Effective Date
Outstanding Loans: $
----------------
Outstanding LC
Participations: $
----------------
Outstanding Swing Line
Loan Participations: $
----------------
Page 94 Exhibit 4.2
Accepted this ____ day of _______, 19___
NATIONSBANK, N.A., as Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Acknowledged and Consented to:
DELTA BEVERAGE GROUP, INC.
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
Page 95 Exhibit 4.2
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized
Representative
Reference is hereby made to the Credit Agreement dated as of
December __, 1996 (the "Agreement") among Delta Beverage Group, Inc., a
Delaware corporation (the "Borrower"), the Lenders (as defined in the
Agreement), and NationsBank, N.A., as Agent for the Lenders (the "Agent").
Capitalized terms used but not defined herein shall have the respective
meanings therefor set forth in the Agreement.
[____________________________], a [_______________] corporation
hereby nominates, constitutes and appoints each individual named below as
its Authorized Representative under the Loan Documents, and hereby represents
and warrants that (i) set forth opposite each such individual's name is a
true and correct statement of such individual's office (to which such
individual has been duly elected or appointed), a genuine specimen signature
of such individual and an address for the giving of notice, and (ii) each
such individual has been duly authorized by [________________] to act as
Authorized Representative under the Loan Documents:
Name and Address Office Specimen Signature
_________________ ________________ __________________
_________________
_________________
_________________ ________________ __________________
_________________
_________________
[________________] hereby revokes (effective upon receipt hereof by the
Agent) the prior appointment of ________________ as an Authorized
Representative.
This the ___ day of __________________, 19__.
[___________________________]
By:__________________________
Name:________________________
Title:_______________________
Page 96 Exhibit 4.2
EXHIBIT D-1
Form of Borrowing Notice
To: NationsBank, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telefacsimile: (000) 000-0000
Reference is hereby made to the Credit Agreement dated as of
December __, 1996 (the "Agreement") among Delta Beverage Group, Inc., a
Delaware corporation (the "Borrower"), the Lenders (as defined in the
Agreement), and NationsBank, N.A., as Agent for the Lenders (the "Agent").
Capitalized terms used but not defined herein shall have the respective
meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives
notice to the Agent that Loans of the type and amount set forth below be made
on the date indicated:
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
----------- --------- --------- ---------------
Base Rate Loan ------ --------- ------------
Eurodollar Rate Loan ------ --------- ------------
------------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $1,000,000 or if greater an integral multiple of $100,000,
unless a Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
The Borrower hereby requests that the proceeds of Loans described in
this Borrowing Notice be made available to the Borrower as follows: [INSERT
TRANSMITTAL INSTRUCTIONS].
The undersigned hereby certifies that:
1. No Default or Event of Default exists either now or after
giving effect to the borrowing described herein;
2. All the representations and warranties set forth in ARTICLE VII
of the Agreement and in the Loan Documents (other than those expressly stated
to refer to a particular date) are true and correct as of the date hereof
except that the reference to the financial statements in SECTION 7.6(A) of
the Agreement are to those financial statements most recently delivered to
you pursuant to SECTION 8.1 of the Agreement and attached hereto
Page 97 Exhibit 4.2
are any changes to the Schedules referred to in connection with such
representations and warranties; and.
3. All conditions contained in the Agreement to the making of any
Loan requested hereby have been met or satisfied in full.
DELTA BEVERAGE GROUP, INC.
BY:
------------------------------------
Authorized Representative
DATE:
----------------------------------
Page 98 Exhibit 4.2
EXHIBIT D-2
Form of Borrowing Notice--Swing Line Loans
To: NationsBank, N.A.
000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. X'Xxxxx
Telefacsimile: (000) 000-0000
Reference is hereby made to the Credit Agreement dated as of
December __, 1996 (the "Agreement") among Delta Beverage Group, Inc., a
Delaware corporation (the "Borrower"), the Lenders (as defined in the
Agreement), and NationsBank, N.A., as Agent for the Lenders (the "Agent").
Capitalized terms used but not defined herein shall have the respective
meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives
notice to NationsBank that a Swing Line Loan of the amount set forth below be
made on the date indicated:
Amount(1) Date of Loan
--------- ------------
--------- ------------
------------------------
(1) Must be $50,000 or if greater an integral multiple of $10,000.
The Borrower hereby requests that the proceeds of Swing Line Loan
described in this Borrowing Notice be made available to the Borrower as
follows: [INSERT TRANSMITTAL INSTRUCTIONS].
The undersigned hereby certifies that:
1. No Default or Event of Default exists either now or after
giving effect to the borrowing described herein;
2. All the representations and warranties set forth in ARTICLE VII
of the Agreement and in the Loan Documents (other than those expressly stated
to refer to a particular date) are true and correct as of the date hereof
except that the reference to the financial statements in SECTION 7.6(A) of
the Agreement are to those financial statements most recently delivered to
you pursuant to SECTION 8.1 of the Agreement and attached hereto are any
changes to the Schedules referred to in connection with such representations
and warranties; and
3. All conditions contained in the Agreement to the making of any
Swing Line Loan requested hereby have been met or satisfied in full .
Page 99 Exhibit 4.2
DELTA BEVERAGE GROUP, INC.
BY:
------------------------------------
Authorized Representative
DATE:
----------------------------------
Page 100 Exhibit 4.2
EXHIBIT E
Form of Interest Rate Selection Notice
To: NationsBank, N.A., as Agent
Xxxxxxxxxxxx Xxxxxx, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telefacsimile: (000) 000-0000
Reference is hereby made to the Credit Agreement dated as of
December __, 1996 (the "Agreement") among Delta Beverage Group, Inc., a
Delaware corporation (the "Borrower"), the Lenders (as defined in the
Agreement), and NationsBank, N.A., as Agent for the Lenders (the "Agent").
Capitalized terms used but not defined herein shall have the respective
meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives
notice to the Agent of the following selection of a type of Loan and Interest
Period:
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
----------- --------- --------- ---------------
Base Rate Loan ------ --------- ------------
Eurodollar Rate Loan ------ --------- ------------
------------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $1,000,000 or if greater an integral multiple of $100,000,
unless a Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan.
DELTA BEVERAGE GROUP, INC.
BY:
------------------------------------
Authorized Representative
DATE:
----------------------------------
Page 101 Exhibit 4.2
EXHIBIT F-1
Form of Note
Promissory Note
(Revolving Loan)
$______________ _________, ______________
______ __, 199_
FOR VALUE RECEIVED, DELTA BEVERAGE GROUP, INC., a Delaware
corporation having its principal place of business located in Memphis,
Tennessee (the "Borrower"), hereby promises to pay to the order of
________________________________ (the "Lender"), in its individual capacity,
at the offices of NATIONSBANK, N.A., as Agent for the Lenders (the "Agent"),
located at One Independence Center, 000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (or at such other place or places as the
Agent may designate in writing) at the times set forth in the Credit
Agreement dated as of December __, 1996, among the Borrower, the financial
institutions party thereto (collectively, the "Lenders") and the Agent (the
"Agreement" -- all capitalized terms not otherwise defined herein shall have
the respective meanings set forth in the Agreement), in lawful money of the
United States of America, in immediately available funds, the principal
amount of ___________ DOLLARS ($__________) or, if less than such principal
amount, the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower pursuant to the Agreement on the Revolving Credit Termination
Date and to pay interest from the date hereof on the unpaid principal amount
thereof, in like money, at said office, on the dates and at the rates
provided in ARTICLE II of the Agreement. All or any portion of the principal
amount of Loans may be prepaid or required to be prepaid as provided in the
Agreement.
If payment of all sums due hereunder is accelerated under the terms
of the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and
accrued but unpaid interest shall bear interest which shall be payable on
demand at the rates per annum set forth in the proviso to SECTION 2.2 (A) of
the Agreement. Further, in the event of such acceleration, this Note shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Borrower.
In the event any amount evidenced by this Note is not paid when due
at any stated or accelerated maturity, the Borrower agrees to pay, in
addition to the principal and interest, all costs of collection, including
reasonable attorneys' fees, and interest due hereunder thereon at the rates
set forth above.
Interest hereunder shall be computed as provided in the Agreement.
This Note is one of the Notes in the aggregate principal amount of
$30,000,000 referred to in the Agreement and is issued pursuant to and
entitled to the benefits and security of the Agreement to which reference is
hereby made for a more complete statement of the terms and conditions upon
which the Loans evidenced hereby were or are made and
Page 102 Exhibit 4.2
are to be repaid. This Note is subject to certain restrictions on transfer
or assignment as provided in the Agreement.
All Persons bound on this obligation, whether primarily or
secondarily liable as principals, sureties, guarantors, endorsers or
otherwise, hereby waive to the full extent permitted by law the benefits of
all provisions of law for stay or delay of execution or sale of property or
other satisfaction of judgment against any of them on account of liability
hereon until judgment be obtained and execution issues against any other of
them and returned satisfied or until it can be shown that the maker or any
other party hereto had no property available for the satisfaction of the debt
evidenced by this instrument, or until any other proceedings can be had
against any of them, also their right, if any, to require the holder hereof
to hold as security for this Note any collateral deposited by any of said
Persons as security. Protest, notice of protest, notice of dishonor,
diligence or any other formality are hereby waived by all parties bound
hereon.
IN WITNESS WHEREOF, the Borrower has caused this Note to be made,
executed and delivered by its duly authorized representative as of the date
and year first above written, all pursuant to authority duly granted.
DELTA BEVERAGE GROUP, INC.
WITNESS:
By:
---------------------------------- --------------------------------
Name:
---------------------------------- ------------------------------
Title:
-----------------------------
Page 103 Exhibit 4.2
EXHIBIT F-2
Form of Note
Promissory Note
(Swing Line Loan)
$______________ _________, ______________
______ __, 199_
FOR VALUE RECEIVED, DELTA BEVERAGE GROUP, INC., a Delaware
corporation having its principal place of business located in Memphis,
Tennessee (the "Borrower"), hereby promises to pay to the order of
NATIONSBANK, N.A. ("NationsBank"), in its individual capacity, at the office
of NationsBank located at One Independence Center, 15th Floor, 000 Xxxxx
Xxxxx Xxxxxx, XX0-000-00-00, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (or at such
other place or places as NationsBank may designate in writing) at the times
set forth in the Credit Agreement dated as of December __, 1996, among the
Borrower, the financial institutions party thereto (collectively, the
"Lenders") and NationsBank, as Agent (the "Agreement" -- all capitalized
terms not otherwise defined herein shall have the respective meanings set
forth in the Agreement), in lawful money of the United States of America, in
immediately available funds, the principal amount of TWO MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($2,500,000.00) or, if less than such principal
amount, the aggregate unpaid principal amount of all Swing Line Loans made by
NationsBank to the Borrower pursuant to the Agreement on the Revolving Credit
Termination Date and to pay interest from the date hereof on the unpaid
principal amount thereof, in like money, at said office, on the dates and at
the rates provided in ARTICLE II of the Agreement. All or any portion of the
principal amount of Swing Line Loans may be prepaid or required to be prepaid
as provided in the Agreement.
If payment of all sums due hereunder is accelerated under the terms
of the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and
accrued but unpaid interest shall bear interest which shall be payable on
demand at the rates per annum set forth in the proviso to SECTION 2.2 (A) of
the Agreement. Further, in the event of such acceleration, this Note shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Borrower.
In the event any amount evidenced by this Note is not paid when due
at any stated or accelerated maturity, the Borrower agrees to pay, in
addition to the principal and interest, all costs of collection, including
reasonable attorneys' fees, and interest due hereunder thereon at the rates
set forth above.
Interest hereunder shall be computed as provided in the Agreement.
This Note is the Note evidencing the Swing Line Loans referred to in
the Agreement and is issued pursuant to and entitled to the benefits and
security of the Agreement to which reference is hereby made for a more
complete statement of the terms and conditions upon
Page 104 Exhibit 4.2
which the Swing Line Loans evidenced hereby were or are made and are to be
repaid. This Note is subject to certain restrictions on transfer or
assignment as provided in the Agreement.
All Persons bound on this obligation, whether primarily or
secondarily liable as principals, sureties, guarantors, endorsers or
otherwise, hereby waive to the full extent permitted by law the benefits of
all provisions of law for stay or delay of execution or sale of property or
other satisfaction of judgment against any of them on account of liability
hereon until judgment be obtained and execution issues against any other of
them and returned satisfied or until it can be shown that the maker or any
other party hereto had no property available for the satisfaction of the debt
evidenced by this instrument, or until any other proceedings can be had
against any of them, also their right, if any, to require the holder hereof
to hold as security for this Note any collateral deposited by any of said
Persons as security. Protest, notice of protest, notice of dishonor,
diligence or any other formality are hereby waived by all parties bound
hereon.
IN WITNESS WHEREOF, the Borrower has caused this Note to be made,
executed and delivered by its duly authorized representative as of the date
and year first above written, all pursuant to authority duly granted.
DELTA BEVERAGE GROUP, INC.
WITNESS:
By:
---------------------------------- --------------------------------
Name:
---------------------------------- ------------------------------
Title:
-----------------------------
Page 105 Exhibit 4.2
EXHIBIT G
Form of Opinion of Borrower's Counsel
_____________ ___, 199_
NationsBank,N.A.,
as Agent and
Each of the Lenders Party to the
Credit Agreement Referenced Below
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
RE: $30,000,000 REVOLVING CREDIT AND LETTER OF CREDIT FACILITIES AMONG
NATIONSBANK, N.A., AS AGENT, THE LENDERS PARTY THERETO AND DELTA BEVERAGE
GROUP, INC.
Ladies and Gentlemen:
We have acted as counsel to Delta Beverage Group, Inc., a Delaware
corporation (the "Borrower"), and the Guarantors in connection with the
Revolving Credit Facility in the aggregate principal amount of $30,000,000,
including a $10,000,000 Letter of Credit Facility, and a $2,500,000 Swing Line,
each being made available to the Borrower by you on this date pursuant to the
Credit Agreement of even date herewith among you, the Lenders party thereto and
the Borrower (the "Credit Agreement"), and the other transactions contemplated
under the Credit Agreement.
This opinion is being delivered in accordance with the conditions set forth
in SECTION 6.1 of the Credit Agreement. All capitalized terms not otherwise
defined herein shall have the meanings provided therefor in the Credit
Agreement.
As such counsel, we have reviewed the following documents:
1. the Credit Agreement;
2. the Notes;
3. the Facility Guaranty;
Page 106 Exhibit 4.2
4. the following Security Instruments: the Pledge Agreement, the Security
Agreement (Borrower) and the Security Agreement (Guarantors); and
5. the Financing Statements (as hereinafter defined).
The documents described in items 1 through 5 immediately above are referred
to herein as the "Loan Documents".
For purposes of the opinions expressed below, we have assumed that all
natural persons executing the Loan Documents have legal capacity to do so; that
all signatures (other than those of representatives of the Borrower and the
Guarantors on the Loan Documents) on all documents submitted to us are genuine;
that all documents submitted to us as originals (other than the Loan Documents)
are authentic; and that all documents submitted to us as certified copies or
photocopies conform to the originals of such documents, which themselves are
authentic.
In addition, for purposes of giving this opinion, we have examined such
corporate records of the Borrower and the Guarantors, certificates of public
officials, certificates of appropriate officials of the Borrower and the
Guarantors, and such other documents, and have made such inquiries as we have
deemed appropriate.
Based upon and subject to the foregoing, it is our opinion that:
1. The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation and is duly qualified
to transact business as a foreign corporation and is in good standing in
___________________ and in all other jurisdictions in which the nature of its
business requires such qualification. The Borrower has full corporate power and
authority to own its assets and conduct the businesses in which it is now
engaged and as are expressly contemplated by the Loan Documents, and has full
corporate power and authority to enter into each of the Loan Documents to which
it is a party and to perform its obligations thereunder.
2. Each of the Loan Documents to which the Borrower is a party has been
duly authorized by the Board of Directors of the Borrower (and by any required
shareholder action), has been duly executed and delivered by the Borrower, and
constitutes the legal, valid and binding obligation, agreement, instrument or
conveyance, as the case may be, of the Borrower, enforceable against the
Borrower in accordance with its respective terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization and
other similar laws relating to or affecting creditors' rights generally and by
the application of general equitable principles (whether considered in
proceedings at law or in equity).
3. Each Guarantor is a corporation duly organized, validly existing and
in good standing under the laws of its respective state of formation and is
duly qualified to transact business as a foreign entity and is in good
standing in all jurisdictions in which the nature of its business requires
such qualification. Each Guarantor has full corporate power and authority to
own its assets and conduct the businesses in which it is now engaged and as
expressly contemplated in the Loan Documents, and has full corporate power
and authority
Page 107 Exhibit 4.2
to enter into each of the Loan Documents to which it is a party and to perform
its obligations thereunder.
4. Each of the Loan Documents to which each Guarantor is a party has been
duly authorized by the Board of Directors of such Guarantor(and by any required
shareholder action), has been duly executed and delivered by such Guarantor, and
constitutes the legal, valid and binding obligation, agreement or instrument, as
the case may be, of such Guarantor, enforceable against such Guarantor in
accordance with its respective terms, except as the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization and other
similar laws relating to or affecting creditors' rights generally and by the
application of general equitable principles (whether considered in proceedings
at law or in equity).
5. Neither the execution or delivery of, nor performance by the Borrower or
any Guarantor of its obligations under, the Loan Documents (a) does or will
conflict with, violate or constitute a breach of (i) the charter or bylaws of
the Borrower or any Guarantor, (ii) any laws, rules or regulations applicable to
the Borrower or any Guarantor, or (iii) any contract, agreement, indenture,
lease, instrument, other document, judgment, writ, determination, order, decree
or arbitral award to which the Borrower or any Subsidiary is a party or by which
the Borrower or any Subsidiary or any of their properties is bound, (b) requires
the prior consent of, notice to, license from or filing with any Governmental
Authority which has not been duly obtained or made on or prior to the date
hereof, or (c) does or will result in the creation or imposition of any lien,
pledge, charge or encumbrance of any nature upon or with respect to any of the
properties of the Borrower or any Subsidiary, except for the Liens in your favor
expressly created pursuant to the Loan Documents.
6. There is no pending or, to the best of our knowledge, threatened,
action, suit, investigation or proceeding (including, without limitation, any
action, suit, investigation, or proceeding under any environmental or labor
law), nor is there any basis therefor, before or by any court, or governmental
department, commission, board, bureau, instrumentality, agency or arbitral
authority, (i) which calls into question the validity or enforceability of any
of the Loan Documents, or the titles to their respective offices or authority of
any officers of the Borrower or any Guarantor or (ii) an adverse result in which
would reasonably be likely to have a Material Adverse Effect.
7. Neither the Borrower nor any Subsidiary is subject to any charter,
bylaw or other corporate restrictions nor, to the best of our knowledge, is the
Borrower or any Subsidiary party to or bound by any contract or agreement which
(i) materially and adversely affects its business, properties or condition
(financial or otherwise), or (ii) restricts, limits, or prohibits performance of
any of their respective obligations pursuant to the terms of the Loan Documents.
8. To the best of our knowledge after due inquiry, neither the Borrower
nor any Subsidiary (i) is in default (which default has not been waived) under
any agreement, document or instrument to which it is a party or by which it or
any of its assets is bound or (ii) is in violation of any law, rule, regulation,
judgment, writ, determination, order, decree or arbitral award to which the
Borrower or any Subsidiary is a party or by which the Borrower or any Subsidiary
or any of their respective properties is bound, which default or
Page 108 Exhibit 4.2
violation, as the case may be, would constitute an Event of Default under the
Credit Agreement or otherwise could reasonably be likely to have a Material
Adverse Effect.
9. None of the transactions contemplated by the Credit Agreement,
including, without limitation, the use of the proceeds of the Loans provided for
in the Loan Documents, will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, any regulations issued pursuant
thereto, or regulations G, T, U or X of the Board of Governors of the Federal
Reserve System.
10. Once value has been given to the Borrower by the Lenders and assuming
the Agent, for the benefit of the Lenders, has taken possession of the
certificates representing all of the Pledged Stock, as more fully described in
SCHEDULE A hereto, and the stock powers related thereto, for value in good faith
and without notice of an adverse claim, so long as the Agent, for the benefit of
the Lenders, maintains continuous and uninterrupted possession of the
certificates representing the Pledged Stock, the Pledge Agreement will create a
valid and perfected security interest in favor of the Agent, for the benefit of
the Lenders, in the Pledged Stock, subject to no other security interest, lien,
encumbrance or adverse claim (other than restrictions on transfer imposed by
applicable securities laws) and no filings or recordations are necessary to
perfect the security interests created by the Pledge Agreement in the Pledged
Stock. Such security interest will have priority over any other consensual
security interests in the Pledged Stock.
11. All of the shares of Pledged Stock are duly authorized, validly
issued, fully paid and nonassessable, and free of any preemptive rights. The
Certificates listed on SCHEDULE A hereto are now the sole evidence of the shares
of Pledged Stock and sufficient to permit the sale or transfer of the shares of
Pledged Stock by you in accordance with the terms of the Pledge Agreement,
subject to applicable federal and state securities law.
12. The Security Agreement (Borrower) and Security Agreement (Guarantors)
is effective to create a valid security interest in favor of the Agent for the
benefit of the Lenders in the Collateral described therein. The Uniform
Commercial Code Financing Statements on Form UCC-1 described on SCHEDULE B
attached hereto (collectively, the "Financing Statements") have been duly
executed and delivered to the Agent and are in form, number and content
sufficient (together with the tender of necessary filing fees) for filing with
the respective filing offices described on SCHEDULE B with the effect that, upon
such filing, the Agent shall have a duly perfected security interest in the
Collateral described in the Security Agreement (Borrower) and Security Agreement
(Guarantors) to the extent that a security interest in such Collateral can be
perfected by the filing of financing statements under the Uniform Commercial
Code as in effect in the appropriate jurisdictions.
Our opinions contained herein are rendered solely in connection with the
transactions contemplated under the Loan Documents and may not be relied upon in
any manner by any Person other than the addressees hereof, any successor or
assignee of any addressee (including successive assignees) and any Person who
shall acquire a participation interest in the interest of any Lender
(collectively, the "Reliance Parties"), or by any Reliance Party for any other
purpose. Our opinions herein shall not be quoted or otherwise included,
summarized or referred to in any publication or document, in whole or in part,
for any purposes whatsoever, or furnished to any Person other than a Reliance
Party (or a Person considering whether to become a Reliance Party), except as
may be required of any Reliance
Page 109 Exhibit 4.2
Party by applicable law or regulation or in accordance with any auditing or
oversight function or request of regulatory agencies to which a Reliance
Party is subject.
Very truly yours,
Page 110 Exhibit 4.2
EXHIBIT H
Compliance Certificate
As of ________, ____
To: NationsBank, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telefacsimile: (000) 000-0000
Reference is hereby made to the Credit Agreement dated as of December __,
1996 (the "Agreement") among Delta Beverage Group, Inc. (the "Borrower"), the
lenders party thereto from time to time and NationsBank, N.A. as Agent (the
"Agent") for such lenders. Capitalized terms used but not defined herein shall
have the respective meanings therefor set forth in the Agreement. The Borrower
through its Authorized Representative hereby certifies to you as of the date set
forth above (the "Determination Date") as follows:
1. Calculations:
A. Consolidated Net Worth as of the Determination Date was $____________.
Required: Not less than $____________, calculated as follows:
(i) From and including the Closing Date to and including
_______,___, $50,000,000.
(ii) Thereafter:
(i) the minimum amount of
Consolidated Net
Worth required to be
maintained during the
immediately preceding
fiscal quarter
$__________
(ii) Consolidated Net Income
earned during the immediately
preceding fiscal quarter but
not any portion of loss($_______)
times .50 $__________
(iii) the net cash proceeds of
any issuance by the Borrower
Page 111 Exhibit 4.2
or any of its Subsidiaries
of any equity interest in
the Borrower or such
Subsidiaries for such period $__________
(iv) (i) + (ii) + (iii)
$_________
[See Section 9.1(a) of the Agreement].
B. Consolidated Leverage Ratio as of the Determination Date was ____ to
1.00, calculated as follows:
(a) Consolidated Indebtedness
as of the Determination
Date: $__________
(b) Consolidated EBITDA (for the
Four Quarter Period ending on
(or most recently ended
prior to) the Determination
Date): $__________
(c) (a) divided by (b) __________
Required: Less than or equal to (i) 7.00 to 1.00 through December
31, 1997, (ii) 6.50 to 1.00 through December 31, 1999,
and (iii) 6.00 to 1.00 thereafter. [See Section 9.1(b)
of the Agreement]
C. Consolidated Interest Coverage Ratio as of the Determination Date was
____ to 1.00 calculated as follows:
(a) Consolidated EBITDA (for
the Four Quarter Period
ending on (or most recently
ended prior to) the Deter-
mination Date): $__________
(b) Consolidated Interest
Expense (for the Four Quarter
Period ending on (or most
recently ended prior to)
the Determination Date): $__________
Page 112 Exhibit 4.2
(c) (a) divided by (b) __________
Required: In excess of or equal to (i) 1.25 to 1.00 through
December 31, 1997, and (ii) 1.50 to 1.00 thereafter.
D. Consolidated Senior Leverage Ratio as of the Deter-
mination Date was ____ to 1.00 calculated as follows:
(a) Consolidated Senior Indebted-
ness as of the Determination
Date: $__________
(b) Consolidated EBITDA (for the
Four Quarter Period ending on
(or most recently ended prior
to) the Determination Date): $__________
(c) (a) divided by (b) __________
2. No Default
A. To the best knowledge of the undersigned, during the fiscal quarter
ended as of the date set forth above, (a) no Default or Event of
Default specified in the Agreement has occurred or (b) the following
Default or Event of Default has occurred:
___________________________________________________
___________________________________________________
___________________________________________________
B. The Borrower proposes to take the following action with respect to any
such Default or Event of Default described above:_____________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(NOTE, if no Default or Event of Default has occurred, insert
"Not Applicable").
The undersigned Authorized Representative hereby certifies that the
information set forth above is true, correct and complete as of the date hereof.
Page 113 Exhibit 4.2
IN WITNESS WHEREOF, I have executed this Certificate this ___ day of
_________, 19____.
DELTA BEVERAGE GROUP, INC.
By:______________________________
Authorized Representative
Page 114 Exhibit 4.2
EXHIBIT I
GUARANTY AND SURETYSHIP AGREEMENT
(Subsidiaries)
THIS GUARANTY AND SURETYSHIP AGREEMENT, dated as of _______, 199_ (the
"Guaranty"), is made by EACH OF THE UNDERSIGNED SUBSIDIARIES OF DELTA BEVERAGE
GROUP, INC. (each a "Guarantor" and, collectively, the "Guarantor") to
NATIONSBANK, N.A., a national banking association, as Agent (the "Agent"), the
Issuing Bank (as defined in the Agreement referenced below), and the Lenders (as
defined below). Except as otherwise defined herein, terms used herein and
defined in the Agreement referred to below shall be used herein as so defined.
W I T N E S S E T H:
-------------------
WHEREAS, Delta Beverage Group, Inc. (the "Borrower"), the Lenders party
thereto (the "Lenders"; together with the Agent and the Issuing Bank, the
"Secured Parties") and the Agent have entered into a Credit Agreement dated as
of the date hereof (as at any time amended, amended and restated, modified or
supplemented, the "Agreement"); and
WHEREAS, each of the Guarantors is a Subsidiary of the Borrower; and
WHEREAS, the financial success of the Guarantors is dependant upon the
prosperity of the Borrower and each of the Guarantors will materially benefit
from the Loans made to the Borrower pursuant to the Agreement and the Letters of
Credit to be issued thereunder;
NOW, THEREFORE, in consideration of the premises and in order to induce the
Agent and the Lenders to enter into the Agreement and to make the Loans pursuant
to the Agreement and to induce the Issuing Bank to issue the Letters of Credit,
the Guarantors hereby agree as follows:
1. GUARANTY AND SURETY. Each of the Guarantors does hereby, absolutely
and unconditionally, jointly and severally, for the benefit of the Secured
Parties, guarantee and become surety for the full and timely payment when due
(whether by acceleration or otherwise) (including amounts which, but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code (or
any successor statute), would become due) of:
A. all indebtedness, obligations and liabilities (direct, by way of
guarantee or otherwise) of the Borrower, now or hereafter existing, under
or in connection with the Agreement, any other Loan Document and any other
instruments evidencing any of the foregoing, and whether of principal,
interest (including interest which, but for the filing of a petition in
bankruptcy with respect to the Borrower, would accrue), fees, expenses or
otherwise; and
Page 115 Exhibit 4.2
B. all other indebtedness, obligations and liabilities of the
Borrower under written financing arrangements stated by the Guarantors and
the Secured Parties to be guaranteed hereby;
in each case whether direct or indirect, joint or several, absolute or
contingent, liquidated or unliquidated, now or hereafter existing, extended,
renewed, replaced, refinanced or restructured, whether or not from time to time
decreased or extinguished and later increased, created or incurred (all
indebtedness, obligations and liabilities of the Borrower described in this
Section 1 are collectively referred to as the "Secured Obligations"); PROVIDED,
HOWEVER, that the liability of any Guarantor with respect to the Secured
Obligations shall not exceed at any time the Maximum Amount (as hereinafter
defined) for such Guarantor less the amounts, if any, collected by or on behalf
of the Secured Parties from such Guarantor pursuant to any other Loan Documents
executed by such Guarantor. The "Maximum Amount" with respect to a Guarantor
means 95% of (a) the fair salable value of the assets of such Guarantor
(including the fair salable value of the amounts received or receivable by such
Guarantor pursuant to the terms of Section 7 hereof) as of the date hereof minus
(b) the total liabilities of such Guarantor (including contingent liabilities,
but excluding liabilities of such Guarantor under this Guaranty and the other
Loan Documents executed by such Guarantor) as of the date hereof; PROVIDED,
HOWEVER, that if the calculation of the Maximum Amount with respect to such
Guarantor in the manner provided above as of the date payment is required of
such Guarantor pursuant to this Guaranty would result in a greater positive
number, then the Maximum Amount shall be deemed to be such greater positive
number.
2. GUARANTY OF PAYMENT. This is a guaranty of payment and not merely of
collection. In the event of any default by the original obligor in payment or
otherwise on any of the Secured Obligations, the Guarantors will pay all or any
portion of the Secured Obligations due or thereafter becoming due, whether by
acceleration or otherwise, without offset of any kind whatsoever, without the
Secured Parties first being required to make demand upon the original obligor or
pursue any of their rights against the original obligor, or against any other
Person, including other guarantors (whether or not party to this Guaranty); and
without being required to liquidate or realize on any collateral security. In
any right of action accruing to the Secured Parties, the Secured Parties may
elect to proceed against (a) any Guarantor or Guarantors together with the
original obligor; (b) any Guarantor or Guarantors and the original obligor
individually; (c) any Guarantor or Guarantors only without having first
commenced any action against the original obligor or any other Guarantor or
Guarantors.
3. RIGHT TO DEAL WITH SECURED OBLIGATIONS. Subject to the terms and
conditions of the Agreement, the Agent, for the benefit of the Lenders and the
Issuing Bank, without notice to any of the Guarantors, may deal with any Secured
Obligations and any collateral security therefor in such manner as it may deem
advisable and may renew or extend the Secured Obligations or any part thereof;
accept partial payment, or settle, release, compound, or compromise the same;
demand additional collateral security therefor, and substitute or release the
same; and may compromise or settle with or release and discharge from liability
any of the Guarantors or any other guarantor of any Secured Obligation, or any
other Person liable to the Secured Parties for all or any portion of the
obligations of any original obligor; all without impairing the liability of each
of the Guarantors hereunder.
Page 116 Exhibit 4.2
4. WAIVER OF SUBROGATION. Each Guarantor hereby unconditionally waives
with respect to this Guaranty any right of subrogation, indemnity, reimbursement
or contribution from the Borrower.
5. OTHER WAIVERS. Each Guarantor hereby unconditionally waives with
respect to this Guaranty: (a) notice of acceptance of this Guaranty by the
Secured Parties and any notice of the incurring by the Borrower or any other
Guarantor of any Secured Obligation; (b) presentment for payment, notice of
nonpayment, demand, protest, notice of protest and notice of dishonor or default
to any party including the Borrower and the Guarantors; (c) all other notices to
which the Borrower and the Guarantors may be entitled but which may legally be
waived; (d) demand for payments as a condition of liability under this Guaranty;
(e) any disability of the original obligor or defense available to the original
obligor, including absence or cessation of the original obligor's liability for
any reason whatsoever; (f) any defense or circumstances which might otherwise
constitute a legal or equitable discharge of a guarantor or surety; and (g) all
rights under any state or federal statute dealing with or affecting the rights
of creditors.
6. SUBORDINATION. Each Guarantor hereby unconditionally subordinates all
present and future debts, liabilities or obligations of the Borrower to such
Guarantor to the Secured Obligations, and all amounts due under such debts,
liabilities, or obligations shall be collected and paid over to the Agent, on
behalf of the Secured Parties on account of the Secured Obligations. Each
Guarantor, at the request of the Agent on behalf of the Secured Parties, shall
execute such further documents in favor of the Agent for the benefit of the
Secured Parties to further evidence and support the purpose of this Section 6.
Notwithstanding the foregoing, prior to the occurrence of an Event of Default
(as defined herein), each Guarantor shall be entitled to receive payments from
the Borrower with respect to the provision of services rendered to the Borrower
on a basis no more favorable to the Guarantor than would be obtained in a
comparable arm's length transaction with a Person not affiliated with or related
to the Borrower.
7. CONTRIBUTION. If any Guarantor makes a payment in respect of the
Secured Obligations, it shall have the rights of contribution set forth below
against the other Guarantors; PROVIDED, HOWEVER, that such Guarantor shall not
enforce its right of contribution until all of the Secured Obligations shall
have been paid in full. If any Guarantor makes a payment in respect of the
Secured Obligations which is smaller in proportion to its tangible net worth
(with respect to each Guarantor, as determined in the most recent audit
conducted pursuant to the Agreement, its "Net Worth") than the payments made by
the other Guarantors are in proportion to their respective Net Worth, the
Guarantor making such proportionately smaller payment shall, when permitted by
the preceding sentence, pay to the other Guarantors an amount such that the net
payments made by the Guarantors in respect of the Secured Obligations shall be
shared among the Guarantors pro rata in proportion to their respective Net
Worth. Notwithstanding anything to the contrary contained in this Section 7, no
liability that shall accrue pursuant to this Section 7 shall be paid nor shall
it be deemed owed until all of the Secured Obligations shall be paid in full.
Each Guarantor waives any other rights of contribution available under any other
applicable law, statute or agreement.
8. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby affirms,
repeats and ratifies to the Secured Parties that each of the representations and
warranties contained in
Page 117 Exhibit 4.2
the Agreement and made by the Borrower with respect to the Guarantors is true
and correct.
9. COVENANTS. Each Guarantor hereby repeats and ratifies each of the
covenants set forth in ARTICLES VIII and IX of the Agreement; and affirms that
it will perform each of the covenants set forth in ARTICLES VIII and IX of the
Agreement.
10. NO WAIVER BY SECURED PARTIES. No failure or delay on the part of the
Secured Parties in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof, or the exercise of any other right, power or privilege. Failure by the
Secured Parties to insist upon strict performance hereof shall not constitute a
relinquishment of their right to demand strict performance at another time.
Receipt by the Secured Parties of any payment by any person on any Secured
Obligation, with knowledge of a default on any Secured Obligation or of a breach
of this Guaranty, or both, shall not be construed as a waiver of the default or
breach.
11. CONTINUING GUARANTY; TERMINATION. THIS GUARANTY IS A CONTINUING
GUARANTY AND SHALL CONTINUE IN FULL FORCE AND EFFECT UNTIL SUCH TIME AS ALL
SECURED OBLIGATIONS SHALL HAVE BEEN PAID IN FULL AND THE SECURED PARTIES SHALL
BE UNDER NO FURTHER OBLIGATION TO LEND OR ADVANCE FUNDS TO THE BORROWER
CONSTITUTING SECURED OBLIGATIONS.
12. BENEFITS OF AGREEMENT. This Guaranty is freely assignable and
transferable by the Secured Parties to any assignee and transferee of any
Secured Obligation; however, the duties and obligations of the Guarantors may
not be delegated or transferred by the Guarantors without the written consent of
the Agent. The rights and privileges of the Secured Parties shall inure to the
benefit of their successors and assigns, and the duties and obligations of the
Guarantors shall bind their respective successors and assigns.
13. EXPENSES; INDEMNITY. The Guarantors will upon demand pay to the
Secured Parties the amount of any and all reasonable expenses, including the
reasonable fees and expenses of their counsel and of any experts and agents,
which they may reasonably incur in connection with enforcement of this Guaranty
or the failure by the Guarantors to perform or observe any of the provisions
hereof. The Guarantors agree to indemnify and hold harmless the Secured Parties
from and against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, growing out
of or resulting from this Guaranty or the exercise by the Secured Parties of any
right or remedy granted to it hereunder or the Agreement, in the absence of
gross negligence or willful misconduct on the part of the Secured Parties. If
and to the extent that the obligations of any of the Guarantors under this
Section 13 are unenforceable for any reason, the Guarantors hereby agree to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
14. AMENDMENTS, WAIVERS AND CONSENTS. No amendment or waiver of any
provision of this Guaranty or consent to any departure by any of the Guarantors
herefrom shall in any event be effective unless the same shall be in writing and
signed by each Guarantor and the Agent on behalf of the Secured Parties, and
then such amendment,
Page 118 Exhibit 4.2
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
15. ADDRESSES FOR NOTICES. All notices and other communications provided
for hereunder shall be in writing (including telecopy communication) and shall
be sent by registered or certified mail, return receipt requested, or first
class express mail or overnight courier, or by telecopy, in all cases with
charges prepaid, and shall be effective when delivered against a receipt
therefor or when telecopy transmission is confirmed, as the case may be. All
notices shall be sent to the applicable party at the address stated on the
signature page hereof, as set forth in the Agreement, or in accordance with the
last unrevoked written direction from such party to the other parties hereto.
16. INTERPRETATION; PARTIAL INVALIDITY. Whenever possible each provision
of this Guaranty shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Guaranty.
17. MISCELLANEOUS; REMEDIES CUMULATIVE. Unless the context of this
Guaranty otherwise clearly requires, references to the plural include the
singular, the singular the plural and the part the whole and "or" has the
inclusive meaning represented by the phrase "and/or." The section headings used
herein are for convenience of reference only and shall not define, limit or
extend the provisions of this Guaranty. All remedies hereunder are cumulative
and are not exclusive of any other rights and remedies of the Secured Parties
provided by law or under the Agreement, the other Loan Documents or other
applicable agreements or instruments. The making of the Loans and issuance of
the Letters of Credit to the Borrower pursuant to the Agreement shall be
conclusively presumed to have been made or extended, respectively, in reliance
upon the obligations of the Guarantors incurred pursuant to this Guaranty.
18. GOVERNING LAW. This Guaranty shall in all respects be governed by the
law of the State of North Carolina. Each of the Guarantors hereby (i) submits
to the jurisdiction and venue of the state and federal courts of North Carolina
for the purposes of resolving disputes hereunder or under any of the other Loan
Documents to which it is a party or for the purpose of collection, and (ii)
waives trial by jury in connection with any such litigation.
19. REPAYMENT OR RECOVERY. If claim is ever made upon the Secured Parties
for repayment or recovery of any amount or amounts received in payment or on
account of any of the Secured Obligations and the Secured Parties repay all or
part of said amount by reason of (a) any judgment, decree or order of any court
or administrative body having jurisdiction over such payee or any of its
property, or (b) any settlement or compromise of any such claim effected by such
Secured Parties with any such claimant (including the original obligor), then
and in such event each Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon it, notwithstanding any
revocation hereof or the cancellation of any Notes or other instrument
evidencing any Secured Obligation or any security therefor, and each Guarantor
shall be and remain liable to the Secured Parties for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by the Secured Parties.
Page 119 Exhibit 4.2
20. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of an Event of Default (as defined herein), each of the Guarantors
agrees that the Agent, for the benefit of the Secured Parties, shall have a lien
for all the liabilities of such Guarantor upon all deposits or deposit accounts,
of any kind, or any interest in any deposits or deposit accounts thereof, now or
hereafter pledged, mortgaged, transferred or assigned to the Agent or otherwise
in the possession or control of the Agent, (other than for safekeeping) for any
purpose for the account or benefit of such Guarantor and including any balance
of any deposit account or of any credit of the Guarantor with the Agent, whether
now existing or hereafter established, hereby authorizing the Agent, for the
benefit of the Secured Parties, at any time or times with or without prior
notice to apply such balances or any part thereof to such of the liabilities of
such Guarantor to the Secured Parties then past due and in such amounts as it
may elect, and whether or not the Collateral or the responsibility of other
Persons primarily, secondarily or otherwise liable may be deemed adequate. For
the purposes of this paragraph, all remittances and property shall be deemed to
be in the possession of the Agent as soon as the same may be put in transit to
it by mail or carrier or by other bailee.
21. EVENTS OF DEFAULT. The following shall constitute Events of Default
("Events of Default") under this Guaranty:
A. The occurrence of an Event of Default (as defined in the
Agreement); or
B. Failure by any of the Guarantors to perform, observe or comply
with any term, covenant, condition or provision contained in this Guaranty
within 30 days after notice thereof by the Agent; or
C. Any warranty, representation or other written statement made by
any Guarantor herein or in any instrument furnished by any Guarantor to the
Secured Parties pursuant to this Guaranty shall be false or misleading in
any material respect on the date as of which it is made.
22. AGREEMENT CONTROLS. In the event that any term of this Guaranty
conflicts with any term of the Agreement, then the terms of the Agreement shall
control.
Page 120 Exhibit 4.2
IN WITNESS WHEREOF, each Guarantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
Witness: [_________________________]
_______________________
By:_______________________________________________
Name:_____________________________________________
_______________________ Title:____________________________________________
Address:
Telecopy No:
Page 121 Exhibit 4.2
EXHIBIT J-1
SECURITY AGREEMENT - ACCOUNTS AND INVENTORY
(BORROWER)
THIS SECURITY AGREEMENT, made and entered into as of December__, 1996, by
DELTA BEVERAGE GROUP, INC., a Delaware corporation (herein called the
"Borrower"), to NATIONSBANK, N.A., a national banking association, as Agent (the
"Agent"), the Issuing Bank (as defined in the Agreement referenced below) and
the Lenders (as defined below). Except as otherwise defined herein, terms used
herein and defined in the Agreement referred to below, shall be used herein as
so defined.
W I T N E S S E T H:
-------------------
WHEREAS, the Borrower, the Lenders party thereto (the "Lenders"; together
with the Agent and the Issuing Bank, the "Secured Parties") have entered into a
Credit Agreement of even date herewith (herein called the "Agreement"), pursuant
to which the Lenders have agreed to make Loans to the Borrower and the Issuing
Bank has agreed to issue Letters of Credit on behalf of the Borrower in the
total aggregate amount of up to $30,000,000; and
WHEREAS, the Lenders are not willing to make the Loans as described above
and the Issuing Bank is not willing to issue the Letters of Credit unless the
Borrower secures the indebtedness evidenced by the Notes by the Collateral of
the Borrower hereinafter described;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and promises herein contained, the parties hereto agree as follows:
1. GRANT OF SECURITY INTEREST. As collateral security for the payment of
all indebtedness of the Borrower evidenced by the Notes, as the same may be
extended, amended or substituted, and payment of all of the Borrower's
liabilities and Obligations under the Agreement, the other Loan Documents and
the Notes (the "Liabilities"), Borrower hereby pledges and assigns to the Agent,
for the benefit of the Secured Parties, and hereby grants to the Agent, for the
benefit of the Secured Parties, a continuing security interest in, all of
Borrower's right, title and interest in, to and under the following property,
wherever located, whether now or hereafter existing (all of such property being
referred to collectively as the "Collateral"):
"Inventory" of Borrower, which means and includes all
Inventory (as such term is defined in the Uniform Commercial
Code applicable to the perfection of such inventory).
"Receivables" of Borrower, which means and includes all
trade accounts receivable, any notes, bills, acceptances,
choses in action, chattel paper, instruments, documents and
other forms of obligations at any time owing to the
Borrower, all relating to such trade accounts receivable,
the proceeds thereof and all of Borrower's rights with
respect to any goods or services
Page 122 Exhibit 4.2
represented thereby, whether or not delivered or performed,
together with all customer lists, books and records, ledger
and account cards, computer tapes, software, disks, printouts
and records, whether now in existence of hereafter created,
relating to Receivables. "Account Debtor" means any person
who is or who may become obligated to the Borrower under or
on account of a Receivable.
2. SECURITY FOR OBLIGATIONS. This Security Agreement (and the
Collateral) secures the prompt payment in full and performance when due of all
the Obligations. In addition, all advances, charges, costs and expenses,
including reasonable attorney's fees, incurred or paid by the Agent, for the
benefit of the Secured Parties, in exercising or enforcing any right, power or
remedy conferred by this Security Agreement, shall become a part of the
Obligations secured hereby.
3. BORROWER REMAINS LIABLE. Anything herein to the contrary
notwithstanding:
(a) the Borrower shall remain liable under all Receivables and other
Collateral to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Security Agreement had
not been executed;
(b) the exercise by the Agent or the other Secured Parties of any
rights hereunder shall not release the Borrower from any of its duties or
obligations under any of the Collateral; and
(c) neither the Agent, nor the other Secured Parties shall have any
obligation or liability under any Collateral by reason of this Security
Agreement, nor shall they be obligated to perform any of the obligations or
duties of the Borrower thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
4. SECURITY INTEREST ABSOLUTE. All rights and security interests of the
Agent, for the benefit of the Secured Parties, granted hereunder, and all
obligations of the Borrower hereunder, shall be absolute and unconditional,
irrespective of, and shall not be impaired or affected by:
(a) any lack of validity or enforceability of the Agreement, this
Security Agreement or any other Loan Document;
(b) any change in the corporate existence, structure or ownership of
the Borrower, or any bankruptcy or insolvency proceeding affecting the
Borrower or any property of the Borrower or any resulting release or
discharge of any Obligation contained in the Agreement, this Security
Agreement or any other Loan Document;
(c) the failure of the Secured Parties:
(i) to assert any claim or demand or to enforce any right or
remedy against the Borrower or any other Person under the provisions
of the
Page 123 Exhibit 4.2
Agreement, this Security Agreement or any other Loan Document or under
any applicable law, or
(ii) to exercise any right or remedy against any Collateral;
(d) any change in the time, manner, or place of payment of, or in any
other term of, all or any Obligations, or any other amendment,
modification, or waiver of, or any consent to or any departure from, the
Agreement, this Security Agreement, any other Loan Document or any other
Instrument relating to any thereof;
(e) any increase, reduction, limitation, impairment or termination of
the Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, irregularity, compromise, unenforceability, or lack
of genuineness of, or any other event or occurrence affecting, any of the
Obligations (and the Borrower hereby waives any right to or claim of any
such defense or set-off, counterclaim, recoupment or termination);
(f) any sale, exchange, release, surrender or non-perfection of any
of the Collateral or any other collateral, or any release or amendment or
waiver of, or any consent to or any departure from, any guaranty held by
the Secured Parties securing or guaranteeing all or any of the Obligations;
(g) any defense, set-off or counterclaim which may at any time be
available to or be asserted by the Borrower against the Secured Parties; or
(h) any other circumstances which might otherwise constitute a
suretyship or other defense available to, or a legal or equitable discharge
of, the Borrower.
5. PROTECTION OF COLLATERAL. The Agent may from time to time, at its
option, perform any act which the Borrower agrees hereunder to perform and which
the Borrower shall fail to perform after being requested in writing to so
perform and the Agent may from time to time take any other action which the
Agent reasonably deems necessary for the maintenance, preservation or protection
of any of the Collateral or of the security interests therein.
6. AGENT HAS NO DUTY. The powers conferred on the Agent hereunder are
solely to protect the Secured Parties' interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for duties imposed
by the U.C.C. upon secured creditors (unless otherwise modified hereby), the
Agent and the other Secured Parties shall have no duty as to any Collateral or
responsibility for taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
7. MAINTENANCE OF SECURITY INTEREST. The Borrower will, from time to
time, upon the request of the Agent, deliver specific assignments of Collateral,
together with such other instruments and documents, financing statements,
amendments thereto, assignments or other writings as the Agent may reasonably
request to carry out the terms of this Security Agreement or to protect or
enforce the Secured Parties' security interest in the Collateral.
Page 124 Exhibit 4.2
With respect to any and all Collateral to be secured and conveyed under
this Security Agreement, the Borrower agrees to do and cause to be done all
things necessary to perfect and keep in full force the security interest granted
in favor of the Secured Parties, including, but not limited to, the prompt
payment of all fees and expenses incurred in connection with any filings made to
perfect a security interest in the Collateral.
The Borrower agrees to make appropriate entries upon its financial
statements and its books and records disclosing the Secured Parties' security
interest in the Collateral.
8. COLLATERAL.
(a) INSPECTION AND VERIFICATION OF COLLATERAL. Any of the Agent's
officers, employees or agents shall have the right, at any time or times
hereafter, in the Agent's name or in the name of the Borrower, to verify
the validity, amount or any other matter relating to Receivables by mail,
telephone, telegraph or otherwise. The Agent (by any of its officers,
employees and/or agents) shall have the right, at any time or times during
Borrower's usual business hours and upon prior reasonable notice to the
Borrower, to inspect the Collateral, all records related thereto (and to
make extracts from such records), and the premises upon which any of the
Collateral is located, to discuss Borrower's business affairs and finances
with any Person, and to verify the amount, quality, quantity, value and
condition of, or any other matter relating to, the Collateral.
(b) RECORDS OF COLLATERAL. Borrower shall keep accurate and complete
records of the Collateral, and, upon request by the Agent, Borrower shall
deliver to the Agent, in form and substance acceptable to the Agent, a
detailed aged trial balance and records of all then existing Receivables of
Borrower specifying the names, addresses, face value, dates of invoices for
each Account Debtor and any other relevant information and, upon demand,
copies of proof of delivery and the original copy of all documents,
including, without limitation, repayment histories and present status
reports, relating to the Receivables and such other matters and information
relating to the status of then existing Receivables as the Agent shall
reasonably request.
(c) NOTICE REGARDING DISPUTED RECEIVABLES. In the event any amounts
due and owing in excess of $100,000 are in dispute between any Account
Debtor and the Borrower relating to Receivables, the Borrower shall provide
the Agent with written notice thereof within 30 days of becoming aware of
the dispute explaining in detail the reason for the dispute, all claims
related thereto and the amount in controversy.
(d) CHANGE OF NAME, ETC. The Borrower hereby covenants and agrees
that it will not change its name, identity or corporate structure in any
manner which might make any financing or continuation statement filed
hereunder seriously misleading within the meaning of Section 9-402(7) of
the U.C.C. (or any other then applicable provision of the U.C.C.) unless
the Borrower shall have given the Agent at least ninety (90) days' prior
written notice thereof and shall have taken all action (or made
arrangements to take such action substantially simultaneously with such
change if it is impossible to take such action in advance) necessary or
reasonably requested by
Page 125 Exhibit 4.2
the Agent to amend such financing statement or continuation statement so
that it is not seriously misleading.
9. WARRANTIES REGARDING COLLATERAL.
(a) The Borrower warrants and represents that it is and will continue
to be the owner of the Collateral, now owned and upon the acquisition of
the same, free and clear of all encumbrances and security interest, other
than the security interest in favor of the Secured Parties hereunder and
Liens expressly permitted by the Agreement, and that it will defend the
Collateral and any products and proceeds thereof against all claims and
demands of all persons at any time claiming the same or any interest
therein adverse to the Secured Parties.
(b) The Borrower will not sell, exchange, lease, mortgage, encumber,
pledge (except as permitted herein), or otherwise dispose of the
Collateral, except in the ordinary course of business, without the prior
written consent of the Agent or as otherwise provided in the Agreement.
(c) The chief place of business and chief executive office of the
Borrower is located at 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx. As of the
date hereof, the Collateral owned by the Borrower is kept at the Borrower's
chief executive office and at the other locations specified in SCHEDULE 1
attached hereto and incorporated herein by reference. Records pertaining
to the Collateral are kept at the same such locations.
(d) The execution and delivery of this Security Agreement, together
with the filing of the UCC-1 Financing Statements identified in SCHEDULE 2
attached hereto and incorporated herein by reference (each of which
Financing Statements is in proper form, and has been duly executed by the
Borrower and delivered to the Agent for the benefit of the Secured Parties)
will create a valid, enforceable and perfected security interest in all the
Collateral securing the Obligations, which security interest will be a
first priority security interest.
(e) The Borrower has not, since January 1, 1992, transacted business,
and does not transact business, under any names or trade names other than
as identified on SCHEDULE 3 attached hereto.
10. WARRANTIES AND REPRESENTATIONS CONCERNING COLLATERAL. With respect to
the Collateral, Borrower warrants and represents to the Secured Parties that the
Secured Parties may rely on all statements, representations and records made by
Borrower, unless otherwise indicated in writing by Borrower, that:
(a) The Receivables are genuine, are in all respects what they
purport to be, are not evidenced by a judgment and, if evidenced by an
instrument or document, are only evidenced by one original instrument or
document;
(b) The Collateral has not been pledged to any Person other than to
the Secured Parties under this Security Agreement;
Page 126 Exhibit 4.2
(c) To the best of Borrower's knowledge, there are no facts, events
or occurrences which in any way impair the validity or enforcement of the
Receivables or tend to reduce the amount payable thereunder;
(d) Borrower has no knowledge of any fact or circumstance which would
impair the validity or collectibility of any Receivable;
(e) To the best of Borrower's knowledge, there are no proceedings or
actions which are threatened or pending which might result in any material
adverse change in its financial condition;
(f) To the best of Borrower's knowledge, there are no setoffs,
counterclaims or disputes existing or asserted with respect to any
Receivable and Borrower has not made any agreement with any Account Debtor
thereunder for any deduction therefrom, all of which discounts or
allowances are reflected in the calculation of the face value of each
respective invoice related thereto;
(g) Receivables relating to Account Debtors represent bona fide
transactions completed for services rendered and/or goods delivered, and,
unless otherwise noted, are not known by the Borrower to be in dispute; and
(h) To the best of Borrower's knowledge without any inquiry, all
Account Debtors under any Receivable (i) had the capacity to contract at
the time any contract or other document giving rise to the Receivable was
executed and (ii) are Solvent.
11. REMEDIES. All obligations of Borrower to the Secured Parties pursuant
to the Agreement may, at the option of the Secured Parties, be declared and
become immediately due and owing, if any representation or warranty of Borrower
made herein or pursuant hereto should prove untrue or misleading in any respect
or if Borrower violates any covenant or agreement contained herein which
violation remains unremedied for 30 days after notice thereof by the Agent, or
upon the occurrence of any Event of Default (as defined in the Agreement) and
the expiration of any applicable grace periods. Upon and after an Event of
Default, the Secured Parties shall have the following rights and remedies, the
exercise of any of which shall not operate to limit the availability of any
others:
(a) All of the rights and remedies of a secured party under the
Uniform Commercial Code of the state where such rights and remedies are
asserted, or under other applicable law, all of which rights and remedies
shall be cumulative, and none of which shall be exclusive, to the extent
permitted by law, in addition to any other rights and remedies contained in
this Security Agreement, the Agreement and in all of the other Loan
Documents;
(b) The right to open Borrower's mail addressed to Borrower in care
of the Agent and collect any and all amounts due to the Borrower from
Account Debtors;
(c) The right to (i) demand payment of the Receivables; (ii) enforce
payment of the Receivables, by legal proceedings or otherwise; (iii)
exercise all of Borrower's rights and remedies with respect to the
collection of the Receivables; (iv)
Page 127 Exhibit 4.2
settle, adjust, compromise, extend or renew the Receivables; (v) settle,
adjust or compromise any legal proceedings brought to collect the
Receivables; (vi) if permitted by applicable law, sell or assign the
Collateral, upon such terms, for such amounts and at such time or times as
the Agent, on behalf of the Secured Parties, deems advisable;
(vii) discharge and release the Receivables; (viii) take control, in any
manner, of any item of payment of or proceeds derived from the disposition
of any Collateral; (ix) prepare, file and sign Borrower' name on a Proof of
Claim in Bankruptcy or similar document against any Account Debtor;
(x) prepare file and sign Borrower's name on any notice of lien, assignment
or satisfaction of lien, or similar document in connection with the
Collateral; (xi) endorse the name of the Borrower upon any chattel paper,
document, instrument, invoice, freight xxxx, xxxx of lading or similar
document or agreement relating to the Collateral; (xii) use Borrower's
stationery and sign the name of the Borrower to verifications of the
Receivables, and notices thereof to Account Debtors; and (xiii) use the
information recorded on or contained in any data processing equipment and
computer hardware and software relating to the Receivables, to which the
Borrower has access;
(d) The right, through self-help or the assistance of a court, to
take possession of all Collateral, to the extent permitted by law. All
monies, or any part thereof, received by the Secured Parties under this
paragraph from time to time shall be applied by the Secured Parties to the
Liabilities secured hereby and those owing under the Notes;
(e) The right to sell or to otherwise dispose of all or any
Collateral in its then condition, at public or private sale or sales, with
such notice as may be required by law, in lots or in bulk, for cash or on
credit, all as the Agent, in its sole discretion, may deem advisable; such
sales may be adjourned from time to time with or without notice. The Agent
shall have the right to conduct such sales on Borrower's premises or
elsewhere and shall have the right to use Borrower's premises without
charge for such sales for such time or times as they may see fit. To the
extent not inconsistent with the provisions under any of the Franchise
Agreements, the Agent is hereby granted a license or other right to use,
without charge, Borrower's labels, patents, copyrights, rights of use of
any name, trade secrets, trade names, trademarks and advertising matter, or
any property of a similar nature, as it pertains to the Collateral, in
advertising for sale and selling any Collateral and Borrower's rights under
all licenses and all franchise agreements, with the exception of any rights
under the Franchise Agreements, shall inure to the Agent's benefit, for
the benefit of the Secured Parties. The Agent, on behalf of the Secured
Parties, shall have the right to sell, lease or otherwise dispose of the
Collateral, or any part thereof, for cash, credit or any combination
thereof, and any of the Secured Parties may purchase all or any part of the
Collateral at public or, if permitted by law, private sale and, in lieu of
actual payment of such purchase price, may set off the amount of such price
against the Liabilities of the Borrower under the Agreement. The proceeds
realized from the sale of any Collateral shall be applied to (i) the
reasonable costs and expenses, including the reasonable fees and expenses
of the Secured Parties' attorneys, incurred by the Secured Parties for
collection and for acquisition, completion, protection, sale and delivery
of the Collateral; (ii) interest due upon the indebtedness due under the
Notes; (iii) the principal of the indebtedness due under
Page 128 Exhibit 4.2
the Notes; and (iv) all other Obligations. If any deficiency shall arise,
the Borrower shall remain liable to the Secured Parties therefor; and
(f) The rights and remedies provided to the Secured Parties under the
Agreement and under any other Loan Documents.
12. WAIVER. Neither the failure nor any delay on the part of the Secured
Parties to exercise any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise of any other right,
power or privilege of the Secured Parties.
13. GENERAL. The descriptive section headings herein have been inserted
for convenience only and shall not be deemed to limit or otherwise offset the
construction of any provision hereof.
14. GOVERNING LAW. This Security Agreement shall be construed and its
performance governed in accordance with the laws of the State of North Carolina,
including to the extent applicable, the Uniform Commercial Code of that State.
15. BENEFITS. This Security Agreement is freely assignable and
transferrable by the Secured Parties to any assignee and transferee of any
Secured Obligation, however, the duties and obligations of the Borrower may not
be delegated or transferred without the written consent of the Agent. The
rights and privileges of the Secured Parties shall inure to the benefit of their
successors and assigns, and the duties and obligations of the Borrower shall
bind its successors and assigns.
16. NOTICES. All notices and other communication provided for hereunder
shall be in the manner and to the addresses as set forth in the Agreement.
Page 129 Exhibit 4.2
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed by authority duly given as of the day and year first above
written.
WITNESS: DELTA BEVERAGE GROUP, INC.
____________________ By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
WITNESS: NATIONSBANK, N.A., as Agent
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Page 130 Exhibit 4.2
