EXHIBIT 2.7
CREDIT FACILITY AGREEMENT
BETWEEN
AMBASSADORS INTERNATIONAL, INC.
AND
AMBASSADORS GROUP, INC.
EFFECTIVE AS OF __________, 200_
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CREDIT FACILITY AGREEMENT
This Credit Facility Agreement (the "Agreement") is effective as of the
__th day of _______, 200_ by and between Ambassadors International Inc., a
Delaware corporation (the "Lender"), and Ambassadors Group, Inc., a Delaware
corporation (the "Borrower"). Lender and Borrower are collectively referred to
hereinafter as the "Parties".
RECITALS
WHEREAS, Lender currently owns all of the issued and outstanding capital
stock of Borrower; and,
WHEREAS, the Board of Directors of Lender has determined that it is
appropriate and desirable to separate the business of the parties (the
"Separation") and to distribute all of the shares of Borrower common stock pro
rata to the holders of Lender common stock (the "Distribution"), all on the
terms and conditions contemplated by a Master Separation and Distribution
Agreement dated _____________, 200_ (the "Separation Agreement");
WHEREAS, in connection with the Separation and Distribution, the parties
wish to make certain agreements regarding monies loaned by Lender to Borrower.
NOW, THEREFORE, in consideration of the mutual covenants and promises set
forth herein, the sufficiency of which is hereby acknowledged, the Parties agree
as follows:
1. BORROWING; AMOUNT.
Pursuant to this Agreement, the Lender agrees to make loans to Borrower
(a "Borrowing"), at any time and from time to time on and after the date hereof
and until August 31, 2003 (the "Maturity Date") in an aggregate amount not to
exceed $20,000,000.00 ("Lender's Commitment"). The Borrower may borrow, pay or
prepay amount up to the Lender's Commitment prior to the Maturity Date as set
forth herein.
2. BORROWING PROCEDURE.
In order to request a loan, the Borrower shall hand deliver or telecopy
to the Lender a written request not later than 10:30 a.m., New York City time,
three business days prior a proposed Borrowing. If the Borrower does not specify
an interest period for the Borrowing, then the Borrower will have deemed to have
selected an interest period ending immediately prior to the Maturity Date. The
Borrower may not select a Borrowing if the interest period requested in
connection therewith would end after the Maturity Date.
3. REPAYMENT OF LOANS; EVIDENCE OF DEBT.
The Borrower agrees that the outstanding principal balance of each
Borrowing shall be payable on the Maturity Date. Each Borrowing shall bear
interest on the outstanding principal thereof in accordance with Section 4. The
Lender may maintain an account or accounts evidencing the indebtedness of the
Borrower and the principal amount and interest due and payable under such loan
and the amount of any sum received from the Borrower in payment therefor. The
entries made in such account by the Lender shall, to the extent permitted by
applicable law, be prima facie evidence of the amount and existence of a
Borrowing. The Borrower agrees that upon notice by the Lender, after the initial
Borrowing, to the Borrower to the effect that a promissory note or other
evidence of indebtedness is required, the Borrower shall promptly execute and
deliver to the Lender a promissory note or notes, payable to the order of the
Lender.
4. INTEREST ON LOANS; DEFAULT INTEREST.
A Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed) at the prime interest rate as reported in the Wall
Street Journal one business day after the request for a Borrowing is received by
the Lender. Unless otherwise specified, interest on each Borrowing shall be due
and payable on the Maturity Date. If the Borrower shall default in the payment
of principal of or any interest on any Borrowing or any other amount becoming
due hereunder, the Borrower shall on demand from time to time from the Lender
pay interest, to the extent permitted by law, on such defaulted amount up to the
date of actual payment at a rate of ten (10%) percent per annum (computed on the
basis of actual number of days elapsed).
5. PREPAYMENT.
The Borrower shall have the right at any time and from time to time to
prepay any Borrowing, in whole or in part, upon giving telecopy notice to the
Lender prior to or on the same business day of prepayment. Each notice of
prepayment from the Borrower shall specify the prepayment date and the principal
amount of each Borrowing to be prepaid. Each notice of prepayment shall be
irrevocable and shall commit the Borrower to prepay such Borrowing (or portion
thereof) by the date stated therein. Prepayment under this Section 5 need not
include accrued interest on the principal amount being prepaid.
6. INDEMNITY.
The Borrower shall indemnify the Lender against any out-of-pocket loss or
expense which the Lender may sustain or incur as a consequence of (a) any
default by the Borrower in payment or prepayment of the principal amount of any
Borrowing or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, whether by scheduled maturity, acceleration,
irrevocable notice of prepayment or otherwise) or (b) the occurrence of any
Event of Default.
7. TAXES.
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Any and all payments by the Borrower hereunder shall be made, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto imposed by the United States or any political subdivision or taxing
authority thereof, excluding taxes imposed on Lender's (or any transferee's or
assignee's, including a participation holder's (any such entity a "Transferee"))
net income and franchise taxes imposed on the Lender (or Transferee) by the
United States or any political subdivision or taxing authority thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Lender (or any Transferee), (i) the sum payable shall be
increased by the amount necessary so that after making all required deductions
such Lender (or Transferee) (as the case may be) shall receive an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxing authority or other Governmental Authority
in accordance with applicable law. In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement imposed by the United States or any political subdivision or
taxing authority thereof (hereinafter referred to as "Other Taxes").
8. REPRESENTATIONS AND WARRANTIES.
The Borrower warrants and represents to the Lender as follows:
8.01 ORGANIZATION; POWERS. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted and as
proposed to be conducted, (c) is qualified to do business in every jurisdiction
where such qualification is required, except where the failure so to qualify
would not result in a material adverse effect, and (d) has the corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and to borrow funds hereunder.
8.02 AUTHORIZATION. The execution, delivery and performance by the
Borrower of this Agreement and the Borrowings by it hereunder (collectively, the
"Transactions") (a) have been duly authorized by all requisite corporate actions
and (b) will not (i) violate (A) any provision of any law, statute, rule or
regulation or of its certificate of incorporation or other constitutive
documents or by-laws, (B) any order of any governmental authority or (C) any
provision of any indenture, agreement or other instrument to which it is a party
or by which it or any of its property is or may be bound, (ii) be in conflict
with, result in a breach of or constitute (alone or with notice or lapse of time
or both) a default under any such indenture, agreement or other instrument or
(iii) result in the creation or imposition of any lien upon any of its property
or assets.
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8.03 ENFORCEABILITY. This Agreement has been duly executed and delivered
by the Borrower and constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms.
8.04 GOVERNMENTAL APPROVALS. No action, consent or approval of,
registration or filing with or any other action by any governmental authority is
or will be required in connection with the Transactions.
9. DEFAULT PROVISIONS.
The occurrence of one or more of the following events shall constitute an
"Event of Default" of this entire Agreement:
9.01 Failure by the Borrower to pay amounts due, on or before the
Maturity Date as specified herein or in any instrument evidencing the Borrowing,
which failure has not been cured within 30 days of the Borrower's receipt of
written notice thereof.
9.02 The institution by the Borrower of bankruptcy proceedings to be
adjudicated a bankrupt or insolvent or the consent by it to the institution of
bankruptcy or insolvency proceedings against it or the cessation of the primary
business activity of the Company which has not been cured within ten business
days.
9.03 The entry of a decree or order by a court having appropriate
jurisdiction adjudging the Borrower bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Borrower
under the Federal Bankruptcy Act or any other applicable federal or state law,
or appointing a receiver, liquidator, assignee or trustee over any substantial
portion of the Borrower's property, or ordering the winding up or liquidation of
the Borrower's affairs, and the continuance of any such decree or order unstayed
and in effect for a period of sixty (60) consecutive days.
9.04 The institution by the Borrower of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under the Federal Bankruptcy Act or
any other applicable federal or state law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator, assignee or
trustee of the Borrower.
9.05 Any default in the obligation of the Borrower for borrowed money,
other than this Agreement, which shall continue for a period of sixty (60) days,
or any event that results in acceleration of the maturity of any indebtedness of
the Borrower under any note, indenture, contract, or agreement.
9.06 Any representation or statement made or furnished to the Lender by
the Borrower or on the Borrower's behalf is false or misleading in any material
respect.
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10. DISPUTE RESOLUTION.
Resolution of any and all disputes arising from or in connection with
this Agreement shall be exclusively governed by and settled in accordance with
the provisions of Section 4.6 of the Separation Agreement.
11. MISCELLANEOUS.
11.1 AMENDMENT AND EXECUTION. The Boards of Directors of the Lender and
the Borrower may mutually agree to amend the provisions of this Agreement at any
time or times, for any reason, either prospectively or retroactively, to such
extent and in such manner as the Boards mutually deem advisable. Each Board may
delegate its amendment power, in whole or in part, to one or more Persons or
committees as it deems advisable. No change or amendment will be made to this
Agreement, except by an instrument in writing signed by authorized individuals.
This Agreement and amendments hereto shall be in writing and executed on behalf
of the Lender and the Borrower by their respective duly authorized officers and
representatives.
11.2 COUNTERPARTS. This Agreement, including any attachments hereto and
the other documents referred to herein, may be executed via facsimile or
otherwise in counterparts, each of which shall be deemed to be an original but
all of which shall constitute one and the same agreement.
11.3 EFFECTIVENESS. All covenants and agreements of the parties contained
in this Agreement shall be subject to and conditioned upon the Distribution
becoming effective.
11.4 EFFECT IF SEPARATION AND/OR DISTRIBUTION DOES NOT OCCUR. If the
Separation and/or Distribution does not occur, then all actions and events that
are, under this Agreement, to be taken or occur effective as of the Separation
Date and/or Distribution Date, or otherwise in connection with the Separation
and/or Distribution, shall not be taken or occur except to the extent
specifically agreed by the Borrower and the Lender.
11.5 TERMINATION. This Agreement may be terminated and the Distribution
abandoned at any time prior to the Time of Distribution by and in the sole
discretion of the Lender's Board of Directors without the approval of the
Borrower or of the Lender's shareholders. In the event of such termination, no
party will have any liability of any kind to any other party on account of such
termination.
11.6 BINDING EFFECT; ASSIGNMENT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives and successors, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement. Except as herein
specifically provided to the contrary, neither party may assign this Agreement
or any rights or obligations hereunder, without the prior written consent of the
other party, and any such assignment
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shall be void; provided, however, either party (or its permitted successive
assignees or transferees hereunder) may assign or transfer this Agreement as a
whole without consent to an entity that succeeds to all or substantially all of
the business or assets of such party to which this Agreement relates.
11.7 PERFORMANCE. Each party hereto will cause to be performed, and
hereby guarantees the performance of all actions, agreements and obligations set
forth herein to be performed by any subsidiary or any member of such party.
11.8 ADDITIONAL ASSURANCES. Except as may be specifically provided herein
to the contrary, the provisions of this Agreement shall be self-operative and
shall not require further agreement by the parties; provided, however, at the
request of either party, the other party shall execute such additional
instruments and take such additional acts as are reasonable, and as the
requesting party may reasonably deem necessary, to effectuate this Agreement.
11.9 ENTIRE AGREEMENT. This Agreement, the Separation Agreement, all
other Transaction Agreements, including any annexes, schedules and exhibits
hereto or thereto, and other agreements and documents referred to herein and
therein, will together constitute the entire agreement between the parties with
respect to the subject matter hereof and thereof and shall supersede all prior
negotiations, agreements and understandings of the parties of any nature,
whether oral or written, with respect to such subject matter.
11.10 DESCRIPTIVE HEADINGS. The headings contained in this Agreement, in
any Exhibit or Schedule hereto and in the table of contents to this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. When a reference is made in this Agreement to
an Article or a Section, Exhibit or Schedule, such reference shall be to an
Article or Section of, or an Exhibit or Schedule to, this Agreement unless
otherwise indicated.
11.11 GENDER AND NUMBER. Whenever the context of this Agreement requires,
the gender of all words herein shall include the masculine, feminine and neuter,
and the number of all words herein shall include the singular and plural.
11.12 SEVERABILITY. The parties hereto have negotiated and prepared the
terms of this Agreement in good faith with the intent that each and every one of
the terms, covenants and conditions herein be binding upon and inure to the
benefit of the respective parties. Accordingly, if any one or more of the terms,
provisions, promises, covenants or conditions of this Agreement or the
application thereof to any person or circumstance shall be adjudged to any
extent invalid, unenforceable, void or voidable for any reason whatsoever by a
court of competent jurisdiction, such provision shall be as narrowly construed
as possible, and each and all of the remaining terms, provisions, promises,
covenants and conditions of this Agreement or their application to other persons
or circumstances shall not be affected thereby and shall be valid and
enforceable to the fullest extent permitted by law. To the extent this Agreement
is in violation of applicable law, then the parties agree to negotiate in good
faith to amend the Agreement, to the extent possible consistent
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with its purposes, to conform to law and effect the original intent of the
parties.
11.13 SURVIVAL OF AGREEMENTS. Except as otherwise contemplated by this
Agreement, all covenants and agreements of the parties contained in this
Agreement shall remain in full force and effect and shall survive the time of
Distribution.
11.14 GOVERNING LAW. This Agreement shall be construed in accordance with
and all Disputes hereunder shall be governed by the laws of the State of
California. The Superior Court of Los Angeles County and/or the United States
District Court for the Southern District of California shall have jurisdiction
and venue over all Disputes between the parties that are permitted to be brought
in a court of law pursuant to Section 10 above.
11.15 NOTICES. Any notice, demand, offer, request or other communication
required or permitted to be given by either party pursuant to the terms of this
Agreement shall be in writing and shall be deemed effectively given the earlier
of (i) when received, (ii) when delivered personally, (iii) one business day
after being delivered by facsimile (with receipt of appropriate confirmation),
(iv) one business bay after being deposited with a nationally recognized
overnight courier service or (v) four days after being deposited in the U.S.
mail, First Class with postage prepaid, and addressed to:
If to the Lender:
Ambassadors International, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Richman, Mann, Chizever, Philips & Xxxxxx
0000 Xxxxxxxx Xxxx., Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile: 000 000-0000
If to Borrower:
Ambassadors Group, Inc.
Xxxxxx X. Xxxxxxxxxx Building
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
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With a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Richman, Mann, Chizever, Philips & Xxxxxx
0000 Xxxxxxxx Xxxx., Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile: 000 000-0000
The parties may substitute a different address or facsimile number, from
time to time, if such substitute is provided to the intended notice recipient in
writing by notice given in the manner provided in this section.
11.16 WAIVERS; REMEDIES. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder will operate as a waiver
thereof, nor will any waiver on the part of any party hereto of any right, power
or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder, nor will 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 hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which the parties may otherwise have at law or equity.
11.17 FORCE MAJEURE. Neither party shall be liable or deemed to be in
default for any delay or failure in performance under this Agreement or other
interruption of service deemed to result, directly or indirectly, from acts of
God, civil or military authority, acts of public enemy, war, accidents,
explosions, earthquakes, floods, failure of transportation, strikes or other
work interruptions by either party's employees, or any other similar cause
beyond the reasonable control of either party unless such delay or failure in
performance is expressly addressed elsewhere in this Agreement.
IN WITNESS WHEREOF, the Parties hereby execute this Agreement as of the
date first written above.
AMBASSADORS INTERNATIONAL, INC.
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Name
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Signature
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Title
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AMBASSADORS GROUP, INC.
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Name
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Signature
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Title
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