EXHIBIT 10.11
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
Dated as of August 15, 1997
TABLE OF CONTENTS
Page
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Article I. DEFINITIONS AND ACCOUNTING TERMS..................... 1
Section 1.01 Defined Terms........................................ 1
Section 1.02 Accounting Terms..................................... 8
Article II. AMOUNT AND TERMS OF THE LOANS........................ 9
Section 2.01 Revolving Credit..................................... 9
Section 2.02 Reduction of Commitment.............................. 10
Section 2.03 Term Loan............................................ 10
Section 2.04 Notice and Manner of Borrowing....................... 11
Section 2.05 Non-Receipt of Funds by Agent........................ 11
Section 2.06 Conversions and Renewals............................. 12
Section 2.07 Interest............................................. 13
Section 2.08 Interest Rate Determination.......................... 15
Section 2.09 Commitment and Other Fees............................ 15
Section 2.10 Notes................................................ 15
Section 2.11 Prepayments.......................................... 16
Section 2.12 Method of Payment.................................... 16
Section 2.13 Use of Proceeds...................................... 16
Section 2.14 Illegality........................................... 17
Section 2.15 Disaster............................................. 17
Section 2.16 Increased Cost....................................... 18
Section 2.17 Risk-Based Capital................................... 18
Section 2.18 Funding Loss Indemnification......................... 19
Article III. CONDITIONS PRECEDENT................................. 20
Section 3.01 Conditions Precedent to Initial Revolving Credit Loan 20
Section 3.02 Conditions Precedent to All Revolving Credit Loans... 22
Section 3.03 Conditions Precedent to the Term Loan................ 22
Article IV. REPRESENTATIONS AND WARRANTIES....................... 23
Section 4.01 Incorporation, Good Standing, and Due Qualification.. 23
Section 4.02 Corporate Power and Authority........................ 23
Section 4.03 Legally Enforceable Agreement........................ 24
Section 4.04 Financial Statements................................. 24
Section 4.05 Labor Disputes and Acts of God....................... 24
Section 4.06 Other Agreements..................................... 24
Section 4.07 Litigation........................................... 25
Section 4.08 No Defaults on Outstanding Judgments or Orders....... 25
Section 4.09 Ownership and Liens.................................. 25
Section 4.10 Subsidiaries and Ownership of Stock.................. 25
Section 4.11 ERISA................................................ 25
Section 4.12 Operation of Business................................ 26
Section 4.13 Taxes................................................ 26
Section 4.14 Debt................................................. 26
Section 4.15 Environment.......................................... 26
Section 4.16 Margin Stock......................................... 27
Article V. AFFIRMATIVE COVENANTS................................ 28
Section 5.01 Maintenance of Existence............................. 28
Section 5.02 Maintenance of Records............................... 28
Section 5.03 Maintenance of Properties............................ 28
Section 5.04 Conduct of Business.................................. 28
Section 5.05 Maintenance of Insurance............................. 28
Section 5.06 Compliance With Laws................................. 28
Section 5.07 Right of Inspection.................................. 28
Section 5.08 Reporting Requirements............................... 29
Section 5.09 Environment.......................................... 31
Section 5.10 Payments............................................. 31
Section 5.11 Inactive Subsidiaries................................ 31
Article VI. NEGATIVE COVENANTS................................... 31
Section 6.01 Liens................................................ 31
Section 6.02 Debt................................................. 33
Section 6.03 Mergers, Etc. ....................................... 33
Section 6.04 Leases............................................... 34
Section 6.05 Sale and Leaseback................................... 34
Section 6.06 Dividends............................................ 34
Section 6.07 Sale of Assets....................................... 34
Section 6.08 Investments.......................................... 35
Section 6.09 Guaranties, Etc. .................................... 35
Section 6.10 Transactions With Affiliates and Foreign Subsidiaries 36
Article VII. FINANCIAL COVENANTS.................................. 36
Section 7.01 Capital Expenditures................................. 37
Section 7.02 Current Ratio........................................ 37
Section 7.03 Profit............................................... 37
Section 7.04 Total Funded Debt to Pro Forma EBITDA................ 37
Section 7.05 Fixed Charge Coverage Ratio.......................... 37
Section 7.06 EBITDA............................................... 37
Article VIII. EVENTS OF DEFAULT.................................... 38
Section 8.01 Events of Default.................................... 38
Article IX. AGENCY PROVISIONS.................................... 41
Section 9.01 Authorization and Action............................. 41
Section 9.02 Liability of Agent................................... 42
Section 9.03 Rights of Agent as a Bank............................ 42
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Section 9.04 Independent Credit Decisions.......................... 42
Section 9.05 Indemnification....................................... 43
Section 9.06 Successor Agent....................................... 43
Section 9.07 Sharing of Payments, Etc. ............................ 43
Section 9.08 Agent Sale or Assignment.............................. 44
Article X. MISCELLANEOUS......................................... 45
Section 10.01 Amendments, Etc. ..................................... 45
Section 10.02 Notices, Etc. ........................................ 45
Section 10.03 No Waiver............................................. 46
Section 10.04 Successors and Assigns................................ 46
Section 10.05 Costs, Expenses, and Taxes............................ 46
Section 10.06 Integration........................................... 46
Section 10.07 Indemnity............................................. 46
Section 10.08 Governing Law......................................... 47
Section 10.09 Severability of Provisions............................ 47
Section 10.10 Counterparts.......................................... 47
Section 10.11 Headings.............................................. 47
Section 10.12 Jury Trial Waiver; Jurisdiction, Etc. ................ 47
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REVOLVING CREDIT AND TERM LOAN AGREEMENT dated as of August 15, 1997 among
XXXXX INTERNATIONAL, INC., a Delaware corporation with its chief executive
office at 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 (the "Borrower"),
and FLEET BANK, N.A., a National Banking Association with an office at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 and Banco Popular De Puerto Rico, a
corporation organized under the laws of the Commonwealth of Puerto Rico, with an
office at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, and Xxxxxx Xxxxx Bank, a
Virginia banking corporation, with an office at 00000 Xxxx Xxxxxx, Xxxxxxx, XX
00000 (individually a "Bank" and collectively the "Banks"), and Fleet Bank, as
agent for the Banks hereunder (in such capacity the "Agent") and Manhattan
International Limousine Network Ltd., a New York corporation with its chief
executive office at 00-00 00xx Xxxxxx, Xxxx Xxxxxx Xxxx, XX 00000; International
Limousine Network Ltd., a New York corporation with its chief executive office
at 00-00 00xx Xxxxxx, Xxxx Xxxxxx Xxxx, XX 00000; Xxxxx Limousine NY, Inc., a
New York corporation with its chief executive office at 00-00 00xx Xxxxxx, Xxxx
Xxxxxx Xxxx, XX 00000; Xxxxx Limousine S.F., Inc., a Delaware corporation with
its chief executive office at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx Xxx Xxxxxxxxx, XX
00000; Xxxxx Limousine L.A., Inc., a Delaware corporation with its chief
executive office at 0000 Xxxxxxx Xxxxxxx, Xxxxxx Xxxx, XX 00000; Xxxxx Limousine
D.C., Inc., a Delaware corporation with its chief executive office at 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000; Xxxxx Limousine Corporation, a Delaware
corporation with its chief executive office at 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
XX 00000; Xxxxx Licensing, Inc., a Delaware corporation with its chief
executive office at 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx X.X. 00000; Xxxxx
Services, Inc., a Delaware corporation with its chief executive office at 0000
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000; and Xxxxx Limousine Florida,
Inc., a Delaware corporation with its chief executive office at 0000 Xxxxxxxxx
Xxxx, Xxxx Xxxx Xxxxx, XX 00000; each a "Guarantor" and collectively the
"Guarantors". The parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (terms defined in the singular to have the
same meaning when used in the plural and vice versa):
"Affiliate" means any Person (1) which directly or indirectly controls, or
is controlled by, or is under common control with, the Borrower or a Subsidiary;
(2) which directly or indirectly beneficially owns or holds five percent (5%) or
more of any class of voting stock of the Borrower or any Subsidiary; or (3) of
which fifteen percent (15%) or more of the voting stock is directly or
indirectly beneficially owned or held by the Borrower or a Subsidiary. 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 the ownership of voting securities, by contract or otherwise.
"Adjusted EBITDA" means with respect to a Permitted Acquisition, the sum of
(1) EBITDA of the most recent four fiscal quarters of the acquired company's
financial statements (prepared in accordance with GAAP) plus (2) any non
recurring compensation or other costs that will not be incurred by Borrower
after the acquisition date in connection with the operation of the acquired
company (determined in accordance with the Securities and Exchange Commission's
regulations covering the preparation of pro forma financial statements). In
submitting Adjusted EBITDA, Borrower will provide a detailed schedule of all of
its calculations with respect thereto in form reasonably satisfactory to Agent.
Borrower will also provide Agent with copies of all financial statements which
were utilized as the basis for said calculations.
"Agreement" means this Revolving Credit and Term Loan Agreement, as
amended, supplemented, or modified from time to time.
"Business Day" means any day other than a Saturday, Sunday, or other day on
which commercial banks in New York are authorized or required to close under the
laws of such State(s) and, if the applicable day relates to LIBOR Loan, LIBOR
Interest Period, or notice with respect to a LIBOR Loan, a day on which dealings
in Dollar deposits are also carried on in the London interbank market and banks
are open for business in London.
"Capital Lease" means all leases which have been or should be capitalized
on the books of the lessee in accordance with GAAP.
"Closing Date" shall mean August 15, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations and published interpretations thereof.
"Collateral" means all property which is subject or is to be subject to the
Lien granted by the Security Agreement.
"Commitment" means each Bank's obligation to make Loans to the Borrower
pursuant to Section 2.01 in the amount referred to therein.
"Commonly Controlled Entity" means an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
414(b) or 414(c) of the Code.
"Conversion" Date shall mean two (2) years from the Closing Date.
"Debt" means (1) indebtedness or liability for borrowed money; (2)
obligations evidenced by bonds, debentures, notes, or other similar instruments;
(3) obligations for the deferred purchase price of property or services
(including trade obligations); (4) obligations as lessee under Capital Leases;
(5) current liabilities in respect of unfunded vested benefits under Plans
covered by ERISA; (6) obligations under letters of credit; (7)
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obligations under acceptance facilities; (8) all guaranties, endorsements (other
than for collection or deposit in the ordinary course of business), and other
contingent obligations to purchase, to provide funds for payment, to supply
funds to invest in any Person or entity, or otherwise to assure a creditor
against loss; (9) notes issued to sellers in connection with Permitted
Acquisitions; and (10) obligations secured by any Liens, whether or not the
obligations have been assumed, excluding vehicle financing obligations assumed
only in conjunction with Permitted Acquisitions and which are to be refinanced.
"Default Rate" means the rate set forth in Section 2.07 as the rate
applicable in the event of the occurrence of an Event of Default.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Earn Out Provisions" means those payment obligations incurred in
connection with Permitted Acquisitions which are calculated based upon the
future performance of the acquired entity.
"EBITDA" means income from continuing operations before the payment of
interest and taxes plus depreciation and amortization determined in accordance
with GAAP.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereof.
"Eurocurrency Reserve Requirement" means, for any LIBOR Loan for any
Interest Period therefor, the daily average of the stated maximum rate
(expressed as a decimal) at which reserves (including any marginal,
supplemental, or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the Federal Reserve System
in New York City with deposits exceeding one billion Dollars against
"Eurocurrency liabilities" (as such term is used in Regulation D) but without
benefit or credit of proration, exemptions, or offsets that might otherwise be
available from time to time under Regulation D. Without limiting the effect of
the foregoing, the Eurocurrency Reserve Requirement shall reflect any other
reserves required to be maintained against (1) any category of liabilities that
includes deposits by reference to which the LIBOR Interest Rate for LIBOR Loans
is to be determined; or (2) any category of extension of credit or other assets
that include LIBOR Loans.
"Event of Default" means any of the events specified in Section 8.01,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Facility Amount" shall have the meaning set forth in Section 2.01.
"Foreign Subsidiary" means a Subsidiary which was incorporated in a
jurisdiction other than a state within the United States of America.
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"GAAP" means generally accepted accounting principles in the United States.
"Guarantor" means each of Manhattan International Limousine Network Ltd.,
International Limousine Network Ltd., Xxxxx Limousine, NY, Inc., Xxxxx Limousine
S.F., Inc., Xxxxx Limousine, L.A., Inc., Xxxxx Limousine D.C., Inc., Xxxxx
Limousine Corporation, Xxxxx Licensing, Inc., Xxxxx Services, Inc., and Xxxxx
Limousine Florida, Inc., collectively the "Guarantors".
"Guaranty" means the Guaranty in substantially the form of Exhibit B to be
delivered by each Guarantor under the terms of this Agreement.
"Interest Period" means with respect to any LIBOR Loan, the period
commencing on the date such Loan is made and ending, as the Borrower may select
(limited to one, three or six month periods), pursuant to Section 2.04, on the
numerically corresponding day in the first, third or sixth calendar month
thereafter, except that each such Interest Period that commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) No Interest Period may extend beyond the Conversion Date;
(2) No Interest Period may extend beyond a principal repayment date for the
Term Loan unless, after giving effect thereto, the aggregate principal amount of
the LIBOR Loans owed to each Bank having Interest Periods that end after such
principal repayment date shall be equal to or less than the principal amount to
be outstanding under the Term Loan of such Bank after such principal repayment
date; and
(3) If an Interest Period would end on a day that is not a Business Day,
such Interest Period shall be extended to the next Business Day unless, in the
case of a LIBOR Loan, such Business Day would fall in the next calendar month,
in which event such Interest Period shall end on the immediately preceding
Business Day.
"Initial Public Offering" means that public offering described in a certain
S-1 Registration Statement filed with the Securities and Exchange Commission,
Registration No. 333-22651.
"Lending Office" means, with respect to any Bank, for each type of Loan,
the Lending Office of such Bank (or of an affiliate of such Bank) designated for
such type of Loan on the signature pages hereof or such other office of such
Bank (or of an affiliate of such Bank) as that Bank may from time to time
specify to the Borrower and the Agent as the office at which its Loans of such
type are to be made and maintained.
"LIBOR Interest Rate" means, for each LIBOR Loan, the rate per annum
(rounded upward, if necessary, to the nearest 1/32 of 1%) determined by the
Agent to be equal to
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the quotient of (1) the London Interbank Offered Rate for such LIBOR Loan for
such Interest Period divided by (2) one minus the Eurocurrency Reserve
Requirement for such Interest Period.
"LIBOR Loan" means any Loan when and to the extent that the interest rate
therefor is determined by reference to the LIBOR Interest Rate.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing).
"Loan(s)" means the Revolving Credit Loans or the Term Loans or any or all
of them as the context may require.
"Loan Document(s)" means this Agreement, the Notes, the Security
Agreements, the Guarantees and the LOC Documents.
"LOC Obligations" shall have the meaning set forth in Section 2.01 hereof.
"LOC Documents" shall have the meaning set forth in Section 2.01 hereof.
"London Interbank Offered Rate" ("LIBOR") means, as applicable to any LIBOR
Loan, the rate per annum (rounded upward, if necessary, to the nearest 1/32 of
one percent) as determined on the basis of the offered rates for deposits in
Dollars, for a period of time comparable to such LIBOR Loan which appears on the
Telerate page 3750 as of 11:00 a.m. London time on the day that is two London
Banking Days preceding the first day of such LIBOR Loan; provided, however, if
the rate described above does not appear on the Dow Xxxxx Markets Telerate
System on any applicable interest determination date, the LIBOR rate shall be
the rate (rounded upwards as described above, if necessary) for deposits in
dollars for a period substantially equal to the interest period on the Reuters
Page 'LIBO'(or such other page as may replace the LIBO Page on that service for
the purpose of displaying such rates), as of 11:00 a.m. (London Time), on the
day that is two (2) London Banking Days prior to the beginning of such interest
period. "Banking Day" shall mean, in respect of any city, any date on which
commercial banks are open for business in that city.
If both the Telerate and Reuters system are unavailable, then the rate for
that date will be determined on the basis of the offered rates for deposits in
Dollars for a period of time comparable to such LIBOR Loan which are offered by
four major banks in the London interbank market at approximately 11:00 a.m.
London time, on the day that is two (2) London Banking Days preceding the first
day of such LIBOR Loan as selected by the Agent. The principal London office of
each of the four major London banks will be requested to provide a quotation of
its U.S. dollar deposit offered rate. If at least two such
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quotations are provided, the rate for that date will be arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate
for that date will be determined on the basis of the rates quoted for loans in
U.S dollars to leading European banks for a period of time comparable to such
LIBOR Loan offered by major banks in New York City at approximately 11:00 a.m.,
New York City time, on the day that its two London Banking Days preceding the
first day of such LIBOR Loan. In the event that Bank is unable to obtain any
such quotation as provided above, it will be deemed that LIBOR pursuant to a
LIBOR Loan cannot be determined.
"Majority Banks" means at any time the Bank or Banks holding at least
sixty-six and two thirds percent (66 2/3%) of the then aggregate unpaid
principal amount of the Notes held by the Banks, or, if no such principal amount
is then outstanding, the Bank or Banks having at least sixty-six and two thirds
percent (66 2/3%) of the aggregate Commitments.
"Multiemployer Plan" means a Plan described in Section 4001 (a)(3) of
ERISA.
"Note(s)" means the promissory notes described in Section 2.10 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means those liens permitted pursuant to Section 6.01
hereof.
"Permitted Acquisition" prior to the Conversion Date means acquisition of
the stock or assets of companies incorporated within a state in the United
States of America and engaged in the chauffeured vehicle service industry as
follows:
(1) Acquisition must be completed prior to the Conversion Date, and
(2) Borrower shall have furnished Agent with a Compliance Certificate
satisfactory to Agent showing:
(a) That the ratio of Total Funded Debt to Pro Forma EBITDA, does not
exceed 2:00 to 1:00 at the date of acquisition. Such ratio will include the
effects on Total Funded Debt and Pro Forma EBITDA for the acquisition.
(b) The maximum purchase price of acquisitions, (excluding such
portion of the purchase price as is payable in stock, Earn Out Provisions,
assumption of permitted Debt and further excluding acquisitions occurring prior
to the closing date of this Agreement but including prepayment or reimbursement
of any notes issued in connection with such acquisition), shall not exceed Seven
Million Five Hundred Thousand Dollars ($7,500,000) individually nor aggregate
more than Fifteen Million Dollars ($15,000,000) during any rolling twelve month
period without prior written consent of the Majority Banks, such consent not to
be unreasonably withheld or delayed, and
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(c) Compliance with all financial covenants on a pre-acquisition basis
and pro forma basis after giving effect to the acquisition.
(3) All Debt issued to the acquired company and its shareholders must be
within the definition of Subordinated Debt excluding up to an aggregate of Two
Million Five Hundred Thousand Dollars ($2,500,000) of notes issued to sellers of
acquired companies and also excluding obligations under any Earn Out Provision.
"Permitted Acquisition" subsequent to the Conversion Date means any
acquisition not otherwise prohibited under this Agreement, sub-sections (1) and
(2) above being no longer applicable.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.
"Plan" means any pension plan which is covered by Title IV of ERISA and in
respect of which the Borrower or a Commonly Controlled Entity is an "employer"
as defined in Section 3(5) of ERISA.
"Prime Loan" means any Loan when and to the extent that the Interest rate
therefor is determined by reference to the Prime Rate.
"Prime Rate" means the variable per annum rate of interest so designated
from time to time by Fleet National Bank as its prime rate. The Prime Rate is a
referenced rate and does not necessarily represent the lowest or best rate
charged to any customer.
"Principal Office" means the Bank's office at 0000 Xxxxxx xx xxx Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
"Pro Forma EBITDA" means the sum of (1) the EBITDA of the most recent four
fiscal quarters of the Borrower on a consolidated (excluding Foreign
Subsidiaries) basis plus (2) the Adjusted EBITDA of all acquired companies not
already included in clause 1 above.
"Prohibited Transaction" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Code.
"Reference Bank" means Fleet Bank, N.A.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as amended or supplemented from time to time.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
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"Revolving Credit Loans" shall have the meaning assigned to such term in
Section 2.01.
"Security Agreement(s)" means the Security Agreements of even date herewith
among the Borrower, each Subsidiary and each Guarantor under the terms of this
Agreement.
"Subordinated Debt" means indebtedness which is at all times fully
subordinated both in payment and liquidation priority (including but not limited
to lien priority and, whether before or after any liquidation of the assets of
Borrower), to the indebtedness to the Banks and each of them upon terms and
conditions and evidenced by agreements all satisfactory to Agent, in its sole
reasonable discretion, which agreement shall include but not be limited to
provisions permitting payment prior to default but prohibiting payments to any
subordinated debt holder after the occurrence of an Event of Default and further
providing that any such subordinated debt holder shall not be entitled to
exercise any rights of any kind whatsoever against Borrower or any Guarantor
until the expiration of one hundred eighty (180) days after the giving of
written notice to Agent of the holder's intent to exercise such rights.
"Subsidiary" means, as to the Borrower, a corporation of which shares of
stock having ordinary voting power (other than stock having such power only by
reason of the happening of a contingency) to elect a majority of the board
directors or other managers of such corporation are at the time owned, or the
management of which is otherwise controlled, directly, or indirectly through one
or more intermediaries, or both, by the Borrower including but not limited to
those currently existing Subsidiaries all as listed on Schedule I.
"Term Loans" shall have the meaning assigned to such term in Section 2.03.
"Total Funded Debt" means (1) the Revolving Credit Loans or the Term Loans,
whichever is applicable, (2) indebtedness or liability for borrowed money, (3)
obligations evidenced by bonds, debentures, notes or other similar instruments,
(4) obligations as lessee under Capital Leases but excluding vehicle financing
obligations assumed only in connection with Permitted Acquisitions which are to
be refinanced and (5) notes issued to sellers in connection with Permitted
Acquisitions.
SECTION 1.02 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP consistent with those
applied in the preparation of the financial statements referred to in Section
4.04, and all financial data submitted pursuant to this Agreement shall be
prepared in accordance with such principles.
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ARTICLE II.
AMOUNT AND TERMS OF THE LOANS
SECTION 2.01 REVOLVING CREDIT. Each Bank severally agrees, on the terms and
conditions hereinafter set forth, to make loans (the "Revolving Credit Loans")
to the Borrower from time to time during the period from the date of this
Agreement up to but not including the Conversion Date in an aggregate principal
amount not to exceed at any time outstanding the amount set opposite such Bank's
name below, as such amount may be reduced pursuant to Section 2.02 (such Bank's
"Commitment").
Name of Bank Amount
------------ ------
Fleet Bank, N.A. $18,000,000.00
Banco Popular De $ 5,000,000.00
Puerto Rico
George Xxxxx Bank $ 2,000,000.00
_____________________
Total $25,000,000 (The "Facility Amount")
Each Revolving Credit Loan which shall not utilize the Commitment in full
shall be in an amount not less than One Hundred Thousand Dollars ($100,000),
provided that each LIBOR Loan shall be in an amount not less than Two Hundred
Fifty Thousand Dollars ($250,000). Each Loan made in respect of the Revolving
Credit Loans (including the issuance of Letters of Credit) shall be made by each
Bank in the proportion which that Bank's Commitment bears to the total amount of
all the Banks' Commitments. Within the limits of the Commitment, the Borrower
may borrow, repay pursuant to Section 2.11, and reborrow under this Section
2.01. On such terms and conditions, the Loans may be outstanding as Prime Loans
or LIBOR Loans. Each type of Revolving Credit Loan shall be made and maintained
at such Bank's Lending Office for such type of Loan. The failure of any Bank to
make any requested Revolving Credit or Term Loan to be made by it on the date
specified for such Loan shall not relieve any other Bank of its obligation (if
any) to make such Loan on such date, but no Bank shall be responsible for the
failure of any other Bank to make such Loans to be made by such other Bank. It
is understood and agreed that the Commitment of Agent shall not at any time
exceed Eighteen Million Dollars ($18,000,000).
As part of the Revolving Credit Loans, and subject to all terms and
conditions of this Agreement and to such other agreements as Agent may require
in connection with letters of credit (the "LOC Documents"), Agent (on behalf of
all Banks pro rata based on each Bank's Commitment) may issue at any time prior
to the Conversion Date up to One Million Five Hundred Thousand Dollars
($1,500,000) in letters of credit on behalf of Borrower, any Subsidiary, or any
Guarantor (the "LOC Obligations").
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With respect to LOC Obligations:
(1) The total face amount of any such letters of credit shall reduce
the (a) Facility Amount for purposes of computing the amount of available
borrowing under the Revolving Credit Loans as well as (b) Bank's Commitments for
purposes of computing the commitment fee on the unused portion referred to in
Section 2.09 hereof.
(2) No letter of credit shall have an expiry date beyond the final
maturity of the Term Loans.
(3) Letters of credit shall be issued in minimum original face amounts
of One Hundred Thousand Dollars ($100,000).
(4) The request for the issuance of a letter of credit shall be
submitted to Agent at least five (5) Business Days prior to the request date of
issuance.
(5) If the Borrower or party on whose behalf a letter of credit was
issued shall fail to reimburse the Agent in connection with any draw as provided
in the LOC Documents, the unreimbursed amount of such drawing shall bear
interest at the Prime Rate plus three percent (3%).
(6) The Borrower shall pay to the Agent, for the ratable benefits of
Banks, a commission of one percent (1%) per annum on the average daily maximum
amount available to be drawn under each letter of credit from the date of
issuance to the expiry date. Said commission shall be payable quarterly in
arrears.
(7) In addition to the fees payable pursuant to subsection (6) above,
the Borrower shall pay to the Agent for its own account without sharing by the
other Banks the customary charges from time to time of the Agent with respect to
the issuance, amendment, transfer, administration, cancellation and conversion
of, and drawings under, such letters of credit.
SECTION 2.02 REDUCTION OF COMMITMENT. The Borrower shall have the right,
upon at least ten (10) Business Days' notice to the Agent, to terminate in whole
or reduce in part the unused portion of the Commitment, provided that each
partial reduction shall be in the amount of at least One Million Dollars
($1,000,000), and provided further that no reduction shall be permitted if,
after giving effect thereto, and to any prepayment made therewith, the
outstanding and unpaid principal amount of the Loans shall exceed the
Commitment. Any reduction in part of the unused portion of the Commitments shall
be made in the proportion that each Bank's Commitment bears to the total amount
of all Bank's Commitments. The Commitments, once reduced or terminated, may not
be reinstated.
SECTION 2.03 TERM LOAN. Each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make a loan (the "Term Loans") to the
Borrower
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on the Conversion Date in a principal amount equal to the total amount of
Revolving Credit Loans outstanding to such Bank on the Conversion Date, said
loans to be for the sole purpose of repaying the Revolving Credit Loans. Each
type of Loan shall be made and maintained at such Bank's Lending Office for such
type of Loan.
SECTION 2.04 NOTICE AND MANNER OF BORROWING. The Borrower may give the
Agent notice of any Revolving Credit Loans under this Agreement, on the day of
borrowing as to each Prime Loan, and at least three (3) Business Days before
each LIBOR Loan, specifying: (1) the date of such Loan; (2) the amount of such
Loan; (3) the type of Loan; (4) the purpose of such Loan; and (5) in the case of
a LIBOR Loan, the duration of the Interest Period applicable thereto. The Agent
shall promptly notify each Bank of each such notice. Not later than 12:00 P.M.
prevailing time in New York on the date of such Revolving Credit Loans, each
Bank will make available to the Agent at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 immediately available funds, such Bank's pro rata share of such
Revolving Credit Loans. After the Agent's receipt of such funds, not later than
3:30 P.M. on the date of such Revolving Credit Loans and upon fulfillment of the
applicable conditions set forth in Article III, the Agent will make such
Revolving Credit Loans available to the Borrower in immediately available funds
by crediting the amount thereof to the Borrower's account with the Agent. The
Borrower shall give the Agent notice of the Term Loan under this Agreement, at
least twenty (20) Business Days before each such Term Loan if all or a portion
of such Loan is a Prime Loan, and at least twenty (20) Business Days before each
such Term Loan if all or a portion of such Loan is a LIBOR Loan, specifying: (1)
the amount of the Loan; (2) the portion of such Term Loan that will be a Prime
or LIBOR Loan; and (3) in the case all or a portion of such Term Loan is a LIBOR
Loan, the duration of the Interest Period applicable thereto. The Agent shall
promptly notify each Bank of such notice. Not later than 12:00 P.M. prevailing
time in New York on the date of such Term Loans, each Bank will make available
to the Agent at 1185 Avenue of the Americas, Xxx Xxxx, Xxx Xxxx 00000 in
immediately available funds, such Bank's pro rata share of such Term Loans.
After the Agent's receipt of such funds, not later than 3:30 P.M. prevailing
time in New York on the date of the Term Loans and upon fulfillment of the
applicable conditions set forth in Article III, the Agent will make such Term
Loans available to the Borrower and the proceeds of the Term Loans shall be
applied to the extent required to the payment in full of the then outstanding
Revolving Credit Loans of each Bank.
SECTION 2.05 NON-RECEIPT OF FUNDS BY AGENT. Unless the Agent shall have
received notice from a Bank prior to the date on which such Bank is to provide
funds to the Agent for a Loan to be made by such Bank that such Bank will not
make available to the Agent such funds, the Agent may assume that such Bank has
made such funds available to the Agent on the date of such Loan in accordance
with Section 2.04 and the Agent in its sole discretion may, but shall not be
obligated to, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent such Bank shall not
have so made such funds available to the Agent, such Bank agrees to repay to the
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at the customary
rate
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set by the Agent for the correction of errors among banks for three Business
Days and thereafter at the Prime Rate. If such Bank shall repay to the Agent
such corresponding amount, such amount so repaid shall constitute such Bank's
Loan for purposes of this Agreement. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent shall
promptly notify each other Bank, and each other Bank shall immediately pay its
pro rata share of such corresponding amount to the Agent provided however that
no Bank shall be required to exceed the amount of its Commitment hereunder. To
the extent that any such amount exceeds the Bank's Commitments hereunder, said
excess shall be immediately repaid to Agent by Borrower. Notwithstanding the
foregoing, Agent shall make reasonable attempts to replace the Bank which failed
to pay such corresponding amount, provided however that Agent shall not be
obligated to find such a replacement.
Unless the Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Banks hereunder that the Borrower will
not make such payment in full, the Agent may assume that the Borrower has made
such payment in full to the Agent on such date and the Agent in its sole
discretion may, but shall not be obligated to, in reliance upon such assumption,
cause to be distributed to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Borrower shall not have so
made such payment in full to the Agent, each Bank shall repay to the Agent
forthwith on demand such amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Agent, at the customary rate
set by the Agent for the correction of errors among banks for three Business
Days and thereafter at the Prime Rate.
SECTION 2.06 CONVERSIONS AND RENEWALS. The Borrower may elect from
time to time to convert all or a part of one type of Loan into another type of
Loan or to renew all or part of a Loan by giving the Agent notice at least three
(3) Business Days before conversion into a Prime Loan, and at least three (3)
Business Days before the conversion into or renewal of a LIBOR Loan, specifying:
(1) the renewal or conversion date; (2) the amount of the Loan to be converted
or renewed; (3) in the case of conversions, the type of Loan to be converted
into; and (4) in the case of renewals of or a conversion into LIBOR Loans, the
duration of the Interest Period applicable thereto; provided that (a) the
minimum principal amount of each Loan outstanding after a renewal or conversion
shall be One Hundred Thousand Dollars ($100,000) in the case of Prime Loans, and
Two Hundred and Fifty Thousand Dollars ($250,000) in the case of LIBOR Loans;
and (b) LIBOR Loans can be converted only on the last day of the Interest Period
for such Loan. The Agent shall promptly notify each Bank of each such notice.
All conversions and renewals shall be made in the proportion that each Bank's
Loan bears to the total amount of all the Banks' Loans. All notices given under
this Section 2.06 shall be irrevocable and shall be given not later than 12:00
P.M. prevailing time in New York on the day which is not less than the number of
Business Days specified above for such notice. If the Borrower shall fail to
give the Agent the notice as specified above for the renewal or conversion of a
LIBOR Loan prior to the end of the Interest Period with respect thereto, such
LIBOR Loan shall automatically be converted into a Prime Loan on the last day of
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the Interest Period for such Loan. A maximum of five LIBOR Loans may be
outstanding at any one time.
SECTION 2.07 INTEREST. The Borrower shall pay interest to the Agent for the
account of each Bank on the outstanding and unpaid principal amount of that
Bank's Revolving Credit Loans made under this Agreement at a rate per annum as
follows:
(1) For a Prime Loan at a rate equal to the Prime Rate; and
(2) For a LIBOR Loan at a rate equal to the LIBOR Interest Rate plus Two
Percent (2%).
The Borrower shall pay interest to the Agent for the account of each Bank
on the outstanding and unpaid principal amount of that Bank's Term Loan made
under this Agreement at a rate per annum based upon the ratio of Total Funded
Debt to Pro Forma EBITDA on the Conversion Date as follows:
Ratio of Total Funded
Debt to Pro Forma EBITDA LIBOR Interest Rate PLUS Prime Interest Rate PLUS
------------------------ ------------------------ ------------------------
Less than or equal to 1:00 2.25% .25%
to 1:00
Greater than 1:00 to 1:00 2.50% .50%
but less than or equal
to 1:50 to 1:00
Greater than 1:50 to 1:00 2.75% .75%
but less than or equal to
2:20 to 1:00
At the Conversion Date, a fixed rate option may, subject to availability be
offered. If offered, it will be subject to yield protection language relating to
changes in reserve requirements, prepayment premiums, applicable law, taxes and
other factors. Such fixed rate option interest would be payable monthly and be
subject to all other terms of this Agreement. Borrower shall select an option
with respect to interest on the Term Loan pursuant to Section 2.04 hereof.
Any change in the interest rate based on the Prime Rate resulting from a
change in the Prime Rate shall be effective as of the opening of business on the
day on which such change in the Prime Rate becomes effective.
Interest on each Prime Loan shall be calculated on the basis of a year of
360 days for the actual number of days elapsed. Interest on each LIBOR Loan
shall be calculated on the basis of a year of 360 days for the actual number of
days elapsed.
-13-
Interest on the Loans shall be paid in immediately available funds to the
Agent at its Principal Office for the account of the applicable Lending Office
of each Bank as follows:
(1) For each Prime Loan on the first day of each month commencing the first
such date after such Loan and continuing on the first day of each successive
month thereafter until all Revolving Credit Loans and all Term Loans have been
paid in full.
(2) For each LIBOR Loan, on the first day of each month commencing on the
first such date after such Loan (as well as at maturity) and continuing on the
first day of each successive month thereafter until all Revolving Credit Loans
and all Term Loans have been paid in full.
Agent may collect and Borrower will pay a late charge (to be shared pari
passu with all Banks) not to exceed five (5) percent of any installment of
principal or interest, or of any other amount due to the Agent which is not paid
or reimbursed by the Borrower within ten (10) days of the due date thereof to
defray the cost and extra expense involved in handling such delinquent payment
and the increased risk of non-collection.
Upon the occurrence and continuance of an Event of Default, or after
maturity, the interest rate for all Loans shall be 2% per annum in excess of the
interest rate in effect at the time of the Event of Default or maturity (the
"Default Rate") provided, however, said Default Rate shall not apply if such
Event of Default has been waived by the Agent, in writing.
All agreements between Borrower, Guarantors and Subsidiaries and Banks
and/or Agent are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid for
the use or the forbearance of the indebtedness evidenced hereby exceed the
maximum permissible under applicable law. As used herein, the term "applicable
law" shall mean the law in effect as of the date hereof provided, however, that
in the event there is a change in the law which results in a higher permissible
rate of interest, then said Agreements shall be governed by such new law as of
its effective date. In this regard, it is expressly agreed that it is the intent
of all parties hereto in the execution, delivery and acceptance of said
Agreements to contract in strict compliance with the laws of the State of New
York from time to time in effect. If, under or from any circumstances
whatsoever, fulfillment of any provision hereof or of any of the Loan Documents
at the time of performance of such provision shall be due, shall involve
transcending the limit of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to limits of such
validity, and if under or from circumstances whatsoever Agents, Banks or any of
them should ever receive as interest and amount which would exceed the highest
lawful rate, such amount which would be excessive interest shall be applied to
the reduction of the principal balance evidenced hereby and not to the payment
of interest. This provision shall control every other provision of all
agreements between Borrower, Guarantors, Subsidiaries, Agents and Banks.
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SECTION 2.08 INTEREST RATE DETERMINATION. The Agent shall give
prompt notice to the Borrower and the Banks of the applicable interest rate
determined by the Agent pursuant to the terms of this Agreement.
SECTION 2.09 COMMITMENT AND OTHER FEES. The Borrower agrees to pay to
the Agent for the account of each Bank a commitment fee on the average daily
unused portion of such Bank's Commitment from the date of this Agreement until
the Conversion Date at the rate of 0.375% per annum, payable on the last day of
each quarter during the term of such Bank's Commitment, the first such payment
to be due on September 30, 1997 and the final such payment to be due on the
Conversion Date. Upon receipt of any commitment fees, the Agent will promptly
thereafter cause to be distributed such payments to the Banks in the proportion
that each Bank's unused Commitment bears to the total of all the Banks' unused
Commitments. In addition thereto, a fee of .5% of the Total Facility shall be
payable at Closing, to be shared pari passu by all Banks.
SECTION 2.10 NOTES. All Revolving Credit Loans made by each Bank under
this Agreement shall be evidenced by, and repaid with interest in accordance
with, a single promissory note of the Borrower in substantially the form of
Exhibit A, duly completed, dated the date of this Agreement, and payable to such
Bank for the account of its applicable Lending Office, such Note to represent
the obligation of the Borrower to repay the Revolving Credit Loans, as the case
may be. Each Bank is hereby authorized by the Borrower to endorse on the
schedule attached to the Note held by it the amount and type of each Revolving
Credit Loan and each renewal, conversion, and payment of principal amount
received by such Bank for the account of its applicable Lending Office on
account of its Revolving Credit Loans, which endorsement shall, in the absence
of manifest error, be conclusive as to the outstanding balance of the Revolving
Credit Loans made by such Bank; provided, however, that the failure to make such
notation with respect to any Revolving Credit Loan or renewal, conversion, or
payment shall not limit or otherwise affect the obligations of the Borrower
under this Agreement or the Note held by such Bank.
All Revolving Credit Loans shall be repaid on the Conversion Date,
subject to Section 2.03 hereof. The proceeds of the Term Loans shall be applied
to the extent required to the payment in full of the then outstanding Revolving
Credit Loans, provided that all accrued interest shall be paid, and, if the then
outstanding aggregate principal amount of the Revolving Credit Loans exceeds the
principal amount of the Term Loan, the amount of the excess shall also be paid.
On and after the Conversion Date, the unpaid principal amount of the Term
Loan shall be repaid in sixty (60) consecutive monthly installments of principal
(plus accrued interest), each in an amount equal to one and two thirds percent
(1.66%) of the original principal amount of such Term Loan. The first such
installment shall be due on the first day of the first full month following the
Conversion Date with subsequent installments on the first day of each successive
month thereafter to and including August 16, 2004; provided, however, that the
last such installment shall be in the amount necessary to
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repay in full the unpaid principal amount of such Term Loan, plus all accrued
interest, if any, and such other amounts as may be payable thereon.
SECTION 2.11 PREPAYMENTS. The Borrower may, upon at least three (3)
Business Days' notice to the Agent in the case of Prime Loans and at least three
(3) Business Days' notice to the Agent in the case of LIBOR Loans, prepay the
Notes in whole or in part with accrued interest to the date of such prepayment
on the amount prepaid, provided that (1) each partial payment shall be in a
principal amount of not less than Five Hundred Thousand Dollars ($500,000); (2)
LIBOR Loans may be prepaid only on the last day of the Interest Period for such
Loans and upon terms set forth in Section 2.18 hereof; and (3) in the case of
the Term Notes, prepayments shall be applied to the principal installments of
the Term Notes in the inverse order of their maturities. Upon receipt of any
such prepayments, the Agent will promptly thereafter cause to be distributed
such prepayment to each Bank for the account of its applicable Lending Office in
the proportion that each such Bank's Loan to which the prepayment applies bears
to the total amount of all the Banks' Loans to which the prepayment applies.
SECTION 2.12 METHOD OF PAYMENT. The Borrower shall make each payment
under this Agreement and under the Notes not later than 12:00 P.M. prevailing
time in New York on the date when due in lawful money of the United States to
the Agent at its Principal Office for the account of the applicable Lending
Office of each Bank in immediately available funds. The Agent will promptly
thereafter cause to be distributed (1) such payments of principal and interest
in like funds to each Bank for the account of its applicable Lending Office in
the proportion that such Bank's Loans to which the payment applies bears to the
total amount of all Banks' Loans to which the payment applies and (2) other fees
payable to any Bank to be applied in accordance with the terms of this
Agreement. The Borrower hereby authorizes each Bank, if and to the extent
payment is not made when due under this Agreement or under the Notes, to charge
from time to time against any account of the Borrower with such Bank any amount
as due. Whenever any payment to be made under this Agreement or under the Notes
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall be
included in the computation of the payment of interest and the commitment fee,
as the case may be, except, in the case of a LIBOR Loan, if the result of such
extension would be to extend such payment into another calendar month, such
payment shall be made on the immediately preceding Business Day.
SECTION 2.13 USE OF PROCEEDS. The proceeds of the Loan hereunder shall be
used by the Borrower
(1) To finance Permitted Acquisitions of companies engaged in the
chauffeured vehicle service industry;
(2) To provide for up to Five Million Dollars ($5,000,000) of Working
Capital inclusive of transaction fees and expenses; and
-16-
(3) To prepay or reimburse the Borrower's prepayment of up to Four
Million Seven Hundred Forty Thousand Dollars ($4,740,000) in notes issued in
connection with an acquisition of Manhattan International Limousine Network Ltd.
The Borrower will not, directly or indirectly, use any part of such
proceeds for the purpose of purchasing or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
or to extend credit to any Person for the purpose of purchasing or carrying any
such margin stock, or for any purpose which violates, or is inconsistent with,
Regulation X of such Board of Governors.
SECTION 2.14 ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any Bank determines that any applicable law, rule, or regulation,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or compliance by such
Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank, or comparable
agency shall make it unlawful or impossible for such Bank (or its Lending
Office) to maintain or fund its LIBOR Loans, then upon notice to the Borrower
(with a copy to the Agent) by such Bank the outstanding principal amount of all
LIBOR Loans, together with interest accrued thereon, and any other amounts
payable to each Bank under this Agreement shall be converted to a Prime Loan (a)
immediately upon demand of such Bank if such change or compliance with such
request, in the judgment of such Bank, requires immediate repayment, or (b) at
the expiration of the last Interest Period to expire before the effective date
of any such change or request.
SECTION 2.15 DISASTER. Notwithstanding anything to the contrary herein:
(1) If the Agent determines (which determination shall be conclusive)
that quotations of interest rates for the relevant deposits referred to in the
definition of LIBOR Interest Rate, as the case may be, are not being provided in
the relevant amounts or for the relative maturities for purposes of determining
the rate of interest on a LIBOR Loan as provided in this Agreement; or
(2) If the Majority Banks determine (which determination shall be
conclusive) that the relevant rates of interest referred to in the definition of
LIBOR Interest Rate, upon the basis of which the rate of interest for any such
type of Loan is to be determined do not accurately cover the cost to the Banks
of making or maintaining such type of Loans; then the Agent shall forthwith give
notice thereof to the Borrower, whereupon (a) the obligation of the Banks to
make LIBOR Loans, shall be suspended until the Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, and (b) the
outstanding principal amount of each LIBOR Loan, as the case may be, together
with accrued interest thereon, on the last day of the then current Interest
Period applicable to such Loan, shall be converted to a Prime Loan.
-17-
SECTION 2.16 INCREASED COST. From time to time upon notice to the
Borrower from a Bank (with a copy to the Agent) the Borrower shall pay to the
Agent for the account of the applicable Bank such amounts as any Bank may
determine to be necessary to compensate such Bank for any costs incurred by such
Bank which such Bank determines are attributable to its making or maintaining
any LIBOR Loans hereunder or its obligation to make any such Loans hereunder, or
any reduction in any amount receivable by such Bank under this Agreement or its
Note in respect of any such Loans or such obligation (such increases in costs
and reductions in amounts receivable being herein called "Additional Costs"),
resulting from any change after the date of this Agreement in U.S. federal,
state, municipal, or foreign laws or regulations (including Regulation D), or
the adoption or making after such date of any interpretations, directives, or
requirements applying to a class of banks including such Bank of or under U.S.
federal, state, municipal, 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 thereof ("Regulatory Change"), which:
(1) changes the basis of taxation of any amounts payable to such Bank under this
Agreement or its Note in respect of any of such Loans (other than taxes imposed
on the overall net income of such Bank or of its Lending Office for any of such
Loans by the jurisdiction where the Principal Office or such Lending Office is
located); or (2) imposes or modifies any reserve, special deposit, compulsory
loan, or similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of, such Bank (including
any of such Loans or any deposits referred to in the definition of LIBOR
Interest Rate); or (3) imposes any other condition affecting this Agreement or
its Note (or any of such extensions of credit or liabilities). Each Bank will
notify the Borrower (with a copy to the Agent) of any event occurring after the
date of this Agreement which will entitle such Bank to compensation pursuant to
this Section 2.16 as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation.
Determinations by any Bank for purposes of this Section 2.16 of the effect
of any Regulatory Change on its costs of making or maintaining Loans or on
amounts receivable by it in respect of Loans, and of the additional amounts
required to compensate any such Bank in respect of any Additional Costs, shall
be conclusive, provided that such determinations are made on a reasonable basis.
SECTION 2.17 RISK-BASED CAPITAL. In the event that any Bank determines
that (1) compliance with any judicial, administrative, or other governmental
interpretation of any law or regulation or (2) compliance by such Bank or any
corporation controlling such Bank with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law)
has the effect of requiring an increase in the amount of capital required or
expected to be maintained by such Bank or any corporation controlling such Bank,
and such Bank determines that such increase is based upon its obligations
hereunder, and other similar obligations, the Borrower shall pay to the Agent,
for the account of the applicable Bank, such additional amount as shall be
certified by the Bank to be the amount allocable to such Bank's obligations to
the Borrower hereunder. Such Bank will notify the Borrower (with a copy to the
Agent) of any event occurring after the date of this Agreement that will entitle
such Bank to compensation pursuant to this
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Section 2.17 as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation.
Determinations by any Bank for purposes of this Section 2.17 of the
effect of any increase in the amount of capital required to be maintained by
such Bank and of the amount allocable to such Bank's obligations to the Borrower
hereunder shall be conclusive, provided that such determinations are made on a
reasonable basis.
SECTION 2.18 FUNDING LOSS INDEMNIFICATION. Upon notice to the Borrower
from a Bank (with a copy to the Agent) the Borrower shall pay to the Agent for
the account of the applicable Bank, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost, or expense incurred as a result of:
(1) Any payment of a LIBOR Loan by the Borrower on a date other than the
last day of the Interest Period for such Loan including, but not
limited to acceleration of the Loans by the Agent pursuant to Section
8.01; or
(2) Any failure by the Borrower to borrow or convert, as the case may be,
a LIBOR Loan on the date for borrowing or conversion, as the case may
be, specified in the relevant notice under Section 2.04 or 2.06, as
the case may be.
If, at any time (i) the interest rate on any loan is a fixed rate, and (ii)
Agent in its sole discretion should determine that current market conditions can
accommodate a prepayment request, Borrower shall have the right at any time and
from time to time to prepay the loan in whole (but not in part), and Borrower
shall pay to Agent a yield maintenance fee in an amount computed as follows:
The current rate for United States Treasury securities (bills on a discounted
basis shall be converted to a bond equivalent) with a maturity date closest to
the maturity date of the term chosen pursuant to the fixed rate election as to
which the prepayment is made, shall be subtracted from the "cost of funds"
component of the fixed rate in effect at the time of prepayment. If the result
is zero or a negative number, there shall be no yield maintenance fee. If the
result is a positive number, then the resulting percentage shall be multiplied
by the amount of the principal balance being prepaid. The resulting amount
shall be divided by 360 and multiplied by the number of days remaining in the
designated term and using the above-referenced United States Treasury security
rate and the number of days remaining in the term chosen pursuant to the fixed
rate election as to which the prepayment is made. The resulting amount shall be
the yield maintenance fee due to Agent upon prepayment of the fixed rate loan.
Each reference in this paragraph to "fixed rate" election shall mean the
election by Borrower of a LIBOR Loan or with respect to the Term Loan, a fixed
rate loan.
If by reason of an Event of Default Agent elects to declare any fixed rate
loan to be immediately due and payable, then any yield maintenance fee with
respect to said fixed rate loan shall become due and payable in the same manner
as though Borrower had exercised such right of prepayment.
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ARTICLE III.
CONDITIONS PRECEDENT
SECTION 3.01 CONDITIONS PRECEDENT TO INITIAL REVOLVING CREDIT LOAN. The
obligation of each Bank to make its initial Revolving Credit Loan to the
Borrower is subject to the conditions precedent that the Agent shall have
received on or before the day of such Revolving Credit Loan each of the
following, in form and substance satisfactory to the Agent and its counsel and
(except for the Notes) in sufficient copies for each Bank:
(1) NOTES. The Note of each Bank duly executed by the Borrower;
(2) SECURITY AGREEMENT. Security Agreements duly executed by the Borrower,
Subsidiaries and Guarantors respectively, together with (a) acknowledgment
copies of the Financing Statements (Form UCC-1) duly filed under the Uniform
Commercial Code of all jurisdictions necessary or, in the opinion of any of the
Banks, desirable to perfect the security interest created by the Security
Agreements; and (b) certified copies of Requests for Copies or Information (Form
UCC-11) identifying all of the financing statements on file with respect to the
Borrower, Subsidiaries and Guarantors in all jurisdictions referred to under
(a), including the Financing Statements filed by Agent against the Borrower,
Subsidiaries or Guarantors indicating that no party claims an interest in any of
the Collateral (other than the Banks);
(3) EVIDENCE OF ALL CORPORATE ACTION BY THE BORROWER. Certified (as of the
date of this Agreement) copies of all corporate action taken by the Borrower,
including resolutions of its Board of Directors, authorizing the execution,
delivery and performance of the Loan Documents to which it is a party and each
other document to be delivered pursuant to this Agreement;
(4) INCUMBENCY AND SIGNATURE CERTIFICATE OF BORROWER. A certificate (dated
as of the date of this Agreement) of the Secretary of the Borrower certifying
the names and true signatures of the officers of the Borrower authorized to sign
the Loan Documents to which it is a party and the other documents to be
delivered by the Borrower under this agreement;
(5) OPINION OF COUNSEL FOR BORROWER AND GUARANTORS AND SUBSIDIARIES. A
favorable opinion of Xxxxxx, XxXxxxxxx & Fish, LLP, counsel for the Borrower and
Guarantors and Subsidiaries, in substantially the form of Exhibit C, and as to
such other matters as the Bank may reasonably request;
(6) GUARANTY. A Guaranty duly executed by each Guarantor;
(7) EVIDENCE OF ALL CORPORATE ACTION BY GUARANTORS. Certified (as of the
date of this Agreement) copies of all corporate action taken by the Guarantors,
including
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resolutions of their Boards of Directors, authorizing the execution, delivery,
and performance of the Guarantees;
(8) INCUMBENCY AND SIGNATURE CERTIFICATES OF GUARANTORS. A certificate
(dated as of the date of this Agreement) of the Secretary of each Guarantor
certifying the names and true signatures of the officers of such Guarantor
authorized to sign the Loan Documents to which it is a party and the other
documents to be delivered by the Guarantor under this agreement;
(9) EVIDENCE OF ALL CORPORATE ACTION BY THE SUBSIDIARIES. Certified (as
of the date of this Agreement) copies of all corporate action taken by the
Subsidiaries, including resolutions of their Boards of Directors, authorizing
the execution, delivery and performance of the Loan Documents to which they are
a party and each other document to be delivered pursuant to this Agreement;
(10) INCUMBENCY AND SIGNATURE CERTIFICATE OF SUBSIDIARIES. A certificate
(dated as of the date of this Agreement) of the Secretary of each Subsidiary
certifying the names and true signatures of the officers of such Subsidiary
authorized to sign the Loan Documents to which it is a party and the other
documents to be delivered by the Subsidiary under this Agreement;
(11) INITIAL PUBLIC OFFERING. Evidence of the consummation of the Initial
Public Offering with minimum net proceeds to Borrower of Thirty Million Dollars
($30,000,000).
(12) EVIDENCE OF CONSUMMATION OF THE PLAN OF RECAPITALIZATION. Evidence of
consummation of the plan of recapitalization upon substantially the same terms
as described in the prospectus included in, and forming a part of, the
Registration Statement on Form S-1 (Registration No. 333-22651) filed by
Borrower with the Securities and Exchange Commission (the "Recapitalization").
(13) MANHATTAN INTERNATIONAL LIMOUSINE NETWORK LTD. Evidence of the
consummation of acquisition of Manhattan International Limousine Network Ltd.
and its affiliate, including management or consulting contracts contemplated in
connection therewith.
(14) PAYMENT OF INDEBTEDNESS; AMOUNT OF DEBT. Evidence satisfactory to
Agent of the satisfaction of certain indebtedness in connection with the Initial
Public Offering and the Recapitalization, together with releases and
terminations relating thereto and accompanied by evidence that the remaining
Total Funded Debt does not exceed Three Million Dollars ($3,000,000) excluding
indebtedness to Manhattan International Limousine Network Ltd. and further
accompanied by a detailed schedule thereof.
(15) PAYMENT OF FEES. Payment of all fees to be paid to Agent.
(16) LITIGATION. Evidence of resolution of the litigation or progress
towards such resolution listed on Schedule II in a manner satisfactory to Agent.
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(17) OTHER DOCUMENTS. Such other documents as are listed in the Closing
Agenda annexed hereto as Exhibit D.
SECTION 3.02 CONDITIONS PRECEDENT TO ALL REVOLVING CREDIT LOANS. The
obligation of each Bank to make each Revolving Credit Loan (including the
initial Revolving Credit Loan) shall be subject to the further conditions
precedent that on the date of such Loan:
(1) The following statements shall be true and the Agent shall have
received a certificate signed by a duly authorized officer of Borrower dated the
date of such Revolving Credit Loan, stating that
(a) The representations and warranties contained in Article IV of this
Agreement are correct on and as of the date of such Loans as though made on and
as of such date; and
(b) No Default or Event of Default has occurred and is continuing, or
would result from such Loans; and
(2) Payment of all fees to be paid to Agent.
(3) As to any Permitted Acquisitions, the Compliance Certificate as
described in the definition of Permitted Acquisitions.
(4) A Certificate of Solvency providing that, as to Borrower, each
Subsidiary (exclusive of non-operating Subsidiaries) and each Guarantor on a pre
and pro forma basis at fair value, the assets of each company exceed the
liabilities of each company, none of the companies are engaged in businesses or
transactions or are about to engage in businesses or transactions for which any
property remaining with such company was an unreasonably small capital and that
none of the companies intended to incur or believed that it would incur debts
beyond its ability to pay as such debts mature.
(5) The Agent shall have received such other approvals, opinions, or
documents as any Bank through the Agent may reasonably request.
SECTION 3.03 CONDITIONS PRECEDENT TO THE TERM LOAN. The obligation of
each Bank to make its Term Loan shall be subject to the conditions precedent
that the Agent shall have received on or before the day of such Term Loan all of
the documents required by Sections 3.01 and 3.02 and each of the following, in
form and substance satisfactory to the Agent and its counsel;
(1) OPINION OF COUNSEL FOR BORROWER. A favorable opinion of Xxxxxx,
XxXxxxxxx & Fish, LLP, counsel for the Borrower, or other counsel for the
Borrower satisfactory to the Agent, dated the date of the Term Loans, in
substantially the form of Exhibit C;
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(2) OFFICER'S CERTIFICATE, ETC. The following statements shall be true
and the Agent shall have received a certificate signed by a duly authorized
officer of the Borrower dated the date of the Term Loans stating that:
(a) The representations and warranties contained in Article IV of this
Agreement are correct on and as of the date of the Term Loans as though made on
and as of such date; and
(b) No Default or Event or Default has occurred and is continuing, or
would result from the Term Loans; and
(3) ADDITIONAL DOCUMENTATION. The Agent shall have received such other
approvals, opinions, or documents as any Bank through the Agent may reasonably
request.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
For purposes of this Article IV, "Subsidiaries" includes but is not limited
to Foreign Subsidiaries. The Borrower represents and warrants to each Bank
that:
SECTION 4.01 INCORPORATION, GOOD STANDING, AND DUE QUALIFICATION. The
Borrower, each of its Subsidiaries, and each Guarantor each is a corporation
duly incorporated, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority to own
its assets and to transact the business in which it is now engaged or proposed
to be engaged in; and is duly qualified as a foreign corporation and in good
standing under the laws of each other jurisdiction in which such qualification
is required, except where the failure to be so qualified would not have a
material adverse effect upon such corporation.
SECTION 4.02 CORPORATE POWER AND AUTHORITY. The execution, delivery, and
performance by the Borrower and each Guarantor and each Subsidiary of the Loan
Documents to which each is a party have been duly authorized by all necessary
corporate action and do not and will not (1) require any consent or approval of
the stockholders of such corporation; (2) contravene such corporation's charter
or bylaws; (3) violate any provision of any law, rule, regulation (including,
without limitation, Regulations U and X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree, determination, or
award presently in effect having applicability to such corporation; (4) result
in a breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease, or instrument to which such corporation
is a party or by which it or its properties may be bound or affected; (5) result
in, or require, the creation or imposition of any Lien, upon or with respect to
any of the properties now owned or hereafter acquired by such corporation; and
(6) cause such corporation to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination, or award
or any such indenture, agreement, lease, or instrument.
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SECTION 4.03 LEGALLY ENFORCEABLE AGREEMENT. This Agreement is, and each
of the other Loan Documents when delivered under this Agreement will be legal,
valid, and binding obligations of the Borrower or the Guarantor or the
Subsidiary, as the case may be, enforceable against the Borrower or each
Guarantor or each Subsidiary, as the case may be, in accordance with their
respective terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency, and other similar laws affecting creditors'
rights generally.
SECTION 4.04 FINANCIAL STATEMENTS. The consolidated balance sheet of the
Borrower and certain of its Subsidiaries as at November 30, 1996, November 30,
1995 and November 30, 1994, and the related consolidated statements of
operations of the Borrower and certain of its Subsidiaries for the fiscal years
then ended, and the accompanying footnotes, together with the report thereon, of
Coopers & Xxxxxxx LLP independent certified public accountants, and the interim
consolidated balance sheet of the Borrower and certain of its Subsidiaries as at
May 31, 1997, and the related consolidated statements of operations for the
period then ended, copies of which have been furnished to each Bank, fairly
present the financial condition of the Borrower and such Subsidiaries as at such
dates and the results of the operations of the Borrower and such Subsidiaries
for the periods covered by such statements, all in accordance with GAAP
consistently applied (subject to year-end adjustments in the case of the interim
financial statements), and since May 31, 1997, there has been no material
adverse change in the condition (financial or otherwise), business, or
operations of the Borrower or any such Subsidiary. There are no liabilities of
the Borrower or any such Subsidiary, fixed or contingent, which are material but
are not reflected in the financial statements or in the notes thereto, other
than liabilities arising in the ordinary course of business since May 31, 1997.
No information, exhibit, or report (as updated or modified by any update,
amendment or supplement thereto) furnished by the Borrower to any Bank in
connection with the negotiation of this Agreement contained as of the date of
any such information, exhibit or report any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statement
contained therein not materially misleading.
SECTION 4.05 LABOR DISPUTES AND ACTS OF GOD. Neither the business nor
the properties of the Borrower or any Subsidiary or the Guarantor are affected
by any fire, explosion, accident, strike, lockout, or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or of the public enemy, or
other casualty (whether or not covered by insurance), materially and adversely
affecting such business or properties of the Borrower, the Subsidiaries and the
Guarantors, taken as a whole.
SECTION 4.06 OTHER AGREEMENTS. Neither the Borrower nor any Subsidiary
nor the Guarantor is a party to any indenture, loan, or credit agreement, or to
any lease or other agreement or instrument or subject to any charter or
corporate restriction which could have a material adverse effect on the business
or properties of the Borrower, Subsidiaries and the Guarantors, taken as a
whole, or the ability of the Borrower or Guarantor to carry out its obligations
under the Loan Documents to which it is a party. Neither the Borrower nor any
Subsidiary nor any Guarantor is in default in any respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or
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conditions contained in any agreement or instrument material to its business to
which it is a party which could have a material adverse effect on the business
and properties of the Borrower, the Subsidiaries and the Guarantors, taken as a
whole.
SECTION 4.07 LITIGATION. There is no pending or, to the knowledge of
Borrower, any Guarantor, or any Subsidiary, threatened action or proceeding
against or affecting the Borrower or any of its Subsidiaries or the Guarantor
before any court, governmental agency, or arbitrator, which may, in any one case
or in the aggregate, materially adversely affect the financial condition,
properties, or business of the Borrower, the Subsidiaries and the Guarantors,
taken as a whole, or the ability of the Borrower and the Guarantors to perform
their obligations under the Loan Documents to which they are a party.
SECTION 4.08 NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. Except as
set forth on Schedule 4.08, the Borrower, the Subsidiaries and the Guarantors
have satisfied all judgments, and neither the Borrower nor any Subsidiary nor
any Guarantor have received written notice that any of them is in default with
respect to any judgment, writ, injunction, decree, rule, or regulation of any
court, arbitrator, or federal, state, municipal, or other governmental
authority, commission, board, bureau, agency, or instrumentality, domestic or
foreign.
SECTION 4.09 OWNERSHIP AND LIENS. The Borrower, each Subsidiary and each
Guarantor have title to, or valid leasehold interests in, all of their
properties and assets, real and personal, including the properties and assets
and leasehold interest reflected in the financial statements referred to in
Section 4.04 (other than any properties or assets disposed of in the ordinary
course of business), and none of the properties and assets owned by the Borrower
or any Subsidiary and none of their leasehold interests is subject to any Lien,
except such as may be permitted pursuant to Section 6.01 of this, Agreement.
SECTION 4.10 SUBSIDIARIES AND OWNERSHIP OF STOCK. Set forth in Exhibit E
is a complete and accurate list of the Subsidiaries of the Borrower, showing the
jurisdiction of incorporation of each and showing the percentage of the
Borrower's ownership of the outstanding stock of each Subsidiary. All of the
outstanding capital stock of each such Subsidiary has been validly issued, is
fully paid and nonassessable, and is owned by the Borrower free and clear of all
Liens.
SECTION 4.11 ERISA. The Borrower, each Subsidiary and each Guarantor are
in compliance in all material respects with all applicable provisions of ERISA.
Neither a Reportable Event nor a Prohibited Transaction has occurred and is
continuing with respect to any Plan; no notice of intent to terminate a Plan has
been filed, nor has any Plan been terminated; no circumstances exist which
constitute grounds entitling the PBGC to institute proceedings to terminate, or
appoint a trustee to administer, a Plan, nor has the PBGC instituted any such
proceedings; neither the Borrower nor any Commonly Controlled Entity has
completely or partially withdrawn from a Multiemployer Plan; the Borrower and
each Commonly Controlled Entity have met their minimum funding requirements
under ERISA with respect to all of their Plans and the present value of all
vested benefits under each Plan does not exceed the fair market value of all
Plan assets allocable to such benefits,
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as determined on the most recent valuation date of the Plan and in accordance
with the provisions of ERISA; and neither the Borrower nor any Commonly
Controlled Entity has incurred any liability to the PBGC under ERISA.
SECTION 4.12 OPERATION OF BUSINESS. The Borrower, the Subsidiaries and
the Guarantors each possess all licenses, permits, franchises, patents,
copyrights, trademarks, and trade names, or rights thereto, to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted and the Borrower and each of its Subsidiaries and the Guarantors
are not in violation of any valid rights of others with respect to any of the
foregoing, except where the failure to do so for any such violation would not
have a material adverse effect on the business and properties of the Borrower,
the Subsidiaries and the Guarantors, taken as a whole.
SECTION 4.13 TAXES. The Borrower, the Subsidiaries and the Guarantors
have filed all tax returns (federal, state, and local) required to be filed and
have paid all taxes, assessments, and governmental charges and levies known and
determined thereon to be due, including interest and penalties. The federal
income tax liabilities of the Borrower and its Subsidiaries, to the extent
audited by the Internal Revenue Service, have been finally determined and
satisfied. Manhattan International Limousine Network Ltd. is presently
undergoing an Internal Revenue Service audit for the fiscal years ending
September 30, 1994 and September 30, 1995.
SECTION 4.14 DEBT. Exhibit F is a complete and correct list of all credit
agreements, indentures, purchase agreements, guaranties, Capital Leases, and
other investments, agreements, and arrangements presently in effect providing
for or relating to extensions of credit (including agreements and arrangements
for the issuance of letters of credit or for acceptance financing) in respect of
which the Borrower or any Subsidiary is in any manner directly or contingently
obligated; and the maximum principal or face amounts of the credit in question,
outstanding or to be outstanding, are correctly stated, and all Liens of any
nature given or agreed to be given as security therefor are correctly described
or indicated in such Exhibit.
SECTION 4.15 ENVIRONMENT. The Borrower and each Subsidiary and each
Guarantor have duly compiled with, and their businesses, operations, assets,
equipment, property, leaseholds, or other facilities are in compliance with, the
provisions of all federal, state, and local environmental, health, and safety
laws, codes and ordinances and all rules and regulations promulgated thereunder,
except where failure to do so would not have a material adverse effect on the
business and properties of the Borrower, the Subsidiaries and the Guarantors
taken as a whole. The Borrower and each Subsidiary have been issued and will
maintain all required federal, state, and local permits, licenses, certificates,
and approvals, except where failure to do so would not have a material adverse
effect on the business and properties of the Borrower, the Subsidiaries and the
Guarantors taken as a whole, relating to (1) air emissions; (2) discharges to
surface water or groundwater; (3) noise emissions; (4) solid or liquid waste
disposal; (5) the use, generation, storage, transportation, or disposal of toxic
or hazardous substances or wastes (intended hereby and hereafter to include any
and all such materials listed in any
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federal, state, or local law, code, or ordinance and all rules and regulations
promulgated thereunder as hazardous or potentially hazardous); or (6) other
environmental, health, or safety matters. Neither the Borrower nor any
Subsidiary has received notice of, or knows of, or suspects facts which might
constitute any violations of any federal, state, or local environmental, health,
or safety laws, codes or ordinances and any rules or regulations promulgated
thereunder with respect to its businesses, operations, assets, equipment,
property, leaseholds, or other facilities. Except in accordance with a valid
governmental permit, license, certificate or approval, there has been no
emission, spill, release, or discharge into or upon (1) the air; (2) soils, or
any improvements located thereon; (3) surface water or groundwater; or (4) the
sewer, septic system or waste treatment, storage or disposal system servicing
the premises, of any toxic or hazardous substances or wastes at or from the
premises; and accordingly the premises of the Borrower and its Subsidiaries are
free of all such toxic or hazardous substances or wastes; except where failure
to do so would not have a material adverse effect on the business and properties
of the Borrower, the Subsidiaries and the Guarantors taken as a whole. There
has been no complaint, order, directive, claim, citation, or notice by any
governmental authority or any person or entity with respect to (1) air
emissions; (2) spills, releases, or discharges to soils or improvements located
thereon, surface water, groundwater or the sewer, septic system or waste
treatment, storage or disposal systems servicing the premises; (3) noise
emissions; (4) solid or liquid waste disposal; (5) the use, generation, storage,
transportation, or disposal of toxic or hazardous substances or waste; or (6)
other environmental, health, or safety matters affecting the Borrower or its
business, operations, assets, equipment, property, leaseholds, or other
facilities, except where failure to do so would not have a material adverse
effect on the business and properties of the Borrower, the Subsidiaries and the
Guarantors taken as a whole. Neither the Borrower nor its Subsidiaries have any
indebtedness, obligation, or liability, absolute or contingent, matured or not
matured, with respect to the storage, treatment, cleanup, or disposal of any
solid wastes, hazardous wastes, or other toxic or hazardous substances
(including without limitation any such indebtedness, obligation, or liability
with respect to any current regulation, law, or statute regarding such storage,
treatment, cleanup, or disposal). Set forth in Schedule IV is a list of all
real property owned or leased by the Borrower and its Subsidiaries at any time
since January 1, 1990, wherever located, and a brief description of the business
conducted at such location.
SECTION 4.16 MARGIN STOCK. Neither Borrower nor any Subsidiary nor any
Guarantor is engaged principally in, or have as an important activity in, the
business of extending credit for the purpose of purchasing or carrying of any
"margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System, "BGFRS"), nor will any part of the proceeds of loans
made under this Agreement be used, now or ultimately, to purchase or carry such
stock or extend such credit or violate in any way Regulations G, T, U, or X, of
the BGFRS.
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ARTICLE V.
AFFIRMATIVE COVENANTS
For purposes of this Article V, "Subsidiaries" includes but is not
limited to Foreign Subsidiaries unless otherwise indicated. So long as any Note
shall remain unpaid or any Bank shall have any Commitment under this Agreement,
the Borrower and each Guarantor and each Subsidiary will:
SECTION 5.01 MAINTENANCE OF EXISTENCE. Preserve and maintain its
corporate existence and good standing in the jurisdiction of its incorporation,
and qualify and remain qualified, as a foreign corporation in each jurisdiction
in which such qualification is required, except where the failure to be so
qualified would not have a material adverse effect on the business and
properties of the Borrower and the Guarantors taken as a whole.
SECTION 5.02 MAINTENANCE OF RECORDS. Keep adequate records and books
of account, in which complete entries will be made in accordance with GAAP
consistently applied, reflecting all financial transactions.
SECTION 5.03 MAINTENANCE OF PROPERTIES. Maintain and preserve, and
cause each Subsidiary to maintain and preserve, all of its properties (tangible
and intangible) necessary or useful in the proper conduct of its business in
good working order and condition, ordinary wear and tear excepted.
SECTION 5.04 CONDUCT OF BUSINESS. Continue to engage in a business of
the same general type as conducted by it on the date of this Agreement.
SECTION 5.05 MAINTENANCE OF INSURANCE. Maintain insurance with
financially sound and reputable insurance companies or associations in such
amounts and covering such risks as are usually carried by companies engaged in
the same or a similar business and similarly situated, which insurance may
provide for reasonable deductibility from coverage thereof.
SECTION 5.06 COMPLIANCE WITH LAWS. Comply in all respects with all
applicable laws, rules, regulations, and orders, such compliance to include,
without limitation, paying before the same become delinquent all taxes,
assessments, governmental charges imposed upon it or upon its property except
where the failure to comply would have a material adverse effect on business and
properties of the Borrower, the Subsidiaries and the Guarantors taken as a
whole.
SECTION 5.07 RIGHT OF INSPECTION. At any reasonable time and from time
to time, permit any Bank or any agent or representative thereof to examine and
make copies of and abstracts from the records and books of account of, and visit
the properties of, the Borrower and any Subsidiary, and to discuss the affairs,
finances, and accounts of the Borrower and any Subsidiary with any of their
respective officers and directors and the
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Borrower's independent accountants. Agent shall be entitled to conduct one
field exam, the cost of which shall be borne by Borrower up to Twenty Thousand
Dollars ($20,000) provided however that, upon the occurrence of an Event of
Default, there shall be no limitation upon the amount of field exams or upon the
amount of cost which shall be borne by Borrower.
SECTION 5.08 REPORTING REQUIREMENTS. Furnish to each of the Agents:
(1) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any event
within fifty (50) days after the end of each of the first three quarters of each
fiscal year of the Borrower, consolidated and consolidating balance sheets of
the Borrower and its Subsidiaries as of the end of such quarter, consolidated
and consolidating statements of operations of the Borrower and its Subsidiaries
for the period commencing at the end of the previous fiscal year and ending with
the end of such quarter, and consolidated statements of cash flows of the
Borrower and its Subsidiaries for the portion of the fiscal year ended with the
last day of such quarter, all prepared in accordance with GAAP consistently
applied and certified by the chief financial officer of the Borrower (subject to
year-end adjustments):
(2) ANNUAL AUDITED FINANCIAL STATEMENTS. As soon as available and in any
event within ninety (90) days after the end of each fiscal year of the Borrower,
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such fiscal year, consolidated and consolidating
statements of operations of the Borrower and its Subsidiaries for such fiscal
year, and consolidated statements of cash flows of the Borrower and its
Subsidiaries for such fiscal year, all prepared in accordance with GAAP
consistently applied and as to the consolidated statements accompanied by an
audit report thereon by Coopers & Xxxxxxx LLP or other independent accountants
selected by the Borrower and reasonably acceptable to the Agent;
(3) MANAGEMENT LETTERS. Promptly upon receipt thereof, copies of any
reports submitted by independent accountants in connection with examination of
the financial statements of the Borrower or any Subsidiary or any Guarantor made
by such accountants;
(4) CERTIFICATE OF NO DEFAULT. Simultaneously with the reports to be
furnished pursuant to Section 5.08(1) and (2) above a certificate of the chief
financial officer of the Borrower (a) certifying that to the best of his
knowledge no Default or Event of Default has occurred and is continuing, or if a
Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof and the action which is proposed to be taken with respect
thereto; and (b) with computations demonstrating compliance with the covenants
contained in Article VII;
(5) ACCOUNTANT'S REPORT. DELETED;
(6) NOTICE OF LITIGATION. Promptly after the commencement thereof (or as
to existing litigation, in the event of a change in status), notice of all
actions, suits, and
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proceedings before any court or governmental department, commission, board,
bureau, agency, or instrumentality, domestic or foreign, affecting the Borrower
or any Subsidiary or Guarantor which, if determined adversely to the Borrower or
such Subsidiary or Guarantor, could have a material adverse effect on the
business and properties of the Borrower, the Subsidiaries and the Guarantors,
taken as a whole;
(7) NOTICE OF DEFAULTS AND EVENTS OF DEFAULT. As soon as possible and in
any event within ten (10) days after the occurrence of each Default or Event
of Default, a written notice setting forth the details of such Default or Event
of Default and the action which is proposed to be taken by the Borrower with
respect thereto, including but not limited to any event of default to any other
party;
(8) ERISA REPORTS. As soon as possible, and in any event within thirty
(30) days after the Borrower knows or has reason to know that any circumstances
exist that constitute grounds entitling the PBGC to institute proceedings to
terminate a Plan subject to ERISA with respect to the Borrower or any Commonly
Controlled Entity, and promptly but in any event within two (2) Business Days of
receipt by the Borrower or any Commonly Controlled Entity of notice that the
PBGC intends to terminate a Plan or appoint a trustee to administer the same,
and promptly but in any event within five (5) Business Days of the receipt of
notice concerning the imposition of withdrawal liability with respect to the
Borrower or any Commonly Controlled Entity, the Borrower will deliver to each
Bank a certificate of the chief financial officer of the Borrower setting forth
all relevant details and the action which the Borrower proposes to take with
respect thereto;
(9) REPORTS TO OTHER CREDITORS. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other party pursuant to the
terms of any indenture, loan, credit, or similar agreement and not otherwise
required to be furnished to the Agent pursuant to any other clause of this
Section 5.08;
(10) PROXY STATEMENTS, ETC. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements, and reports which
the Borrower or any Subsidiary or any Guarantor sends to its stockholders, and
copies of all regular, periodic, and special reports, and all registration
statements (other than on Form S-8) which the Borrower or any Subsidiary or any
Guarantor files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national securities
exchange; and
(11) NEW SUBSIDIARY. Promptly notify the Agent of the formation of any
new Subsidiary, cause such new Subsidiary (excluding Foreign Subsidiaries) to
become a Guarantor hereunder, cause all of its outstanding shares to be pledged
and to furnish a Security Agreement along with such additional documents as have
been furnished by existing Guarantors. Notwithstanding the exclusion of any
Foreign Subsidiaries from the requirement that it become a Guarantor, Borrower
and/or any Subsidiary shall pledge all outstanding shares of stock of any new
Foreign Subsidiary in the same manner as was pledged the shares of Xxxxx UK
Limited.
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(12) GENERAL INFORMATION. Such other information respecting the condition
or operations, financial or otherwise, of the Borrower or any Subsidiary and any
Guarantor as any Bank may from time to time reasonably request.
SECTION 5.09 ENVIRONMENT. Be and remain in compliance with the
provisions of all federal, state, and local environmental, health, and safety
laws, codes and ordinances, and all rules and regulations issued thereunder,
except where the failure to comply would not have a material adverse effect on
the business and properties of the Borrower, the Subsidiaries and the Guarantors
taken as a whole; notify the Agent immediately of any notice of a hazardous
discharge or environmental complaint received from any governmental agency or
any other party; notify the Agent immediately of any hazardous discharge from or
affecting its premises; immediately contain and remove the same, in compliance
with all applicable laws; promptly pay any fine or penalty assessed in
connection therewith; permit any Bank to inspect the premises, and to inspect
all books, correspondence, and records pertaining thereto; and at such Bank's
and at the Agent's reasonable request, and at the Borrower's expense, provide a
report of a qualified environmental engineer, reasonably satisfactory in scope,
form, and content to the Agent, and such other and further assurances reasonably
satisfactory to the Agent that the condition has been corrected.
SECTION 5.10 PAYMENTS. Promptly pay all debt, including but not
limited to debt to operators and licensees in accordance with its terms unless
contested in good faith and appropriate reserves have been created therefor.
SECTION 5.11 INACTIVE SUBSIDIARIES. Promptly notify the Agent in the
event of activation of any inactive Subsidiary and cause such Subsidiary
(excluding Foreign Subsidiaries) to become a Guarantor hereunder.
ARTICLE VI.
NEGATIVE COVENANTS
So long as any Note shall remain unpaid or any Bank shall have any
Commitment under this Agreement, the Borrower and each Subsidiary (excluding
Foreign Subsidiaries unless specifically indicated) and each Guarantor will not:
SECTION 6.01 LIENS. Create, incur, assume, or suffer to exist, or
permit any Subsidiary to create, incur, assume, or suffer to exist, any Lien,
upon or with respect to any of its properties, including but not limited to,
certain owned real estate in Long Island City, New York and Alexandria,
Virginia, now owned or hereafter acquired, except as hereinafter set forth
("Permitted Liens").
(1) Liens in favor of all the Banks pursuant to the Security Agreement;
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(2) Liens for taxes or assessments or other government charges or levies if
not yet due and payable or, if due and payable, if they are not past due for
more than thirty (30) days or if they are being contested in good faith by
appropriate proceedings and for which appropriate reserves are maintained;
provided that the Borrower shall pay any obligations giving rise to such lien
immediately upon the commencement of proceedings to foreclose said lien unless
same shall be stayed or a surety bond satisfactory to the Agent is delivered to
the Agent;
(3) Liens imposed by law, such as mechanics', materialmen's, landlords',
warehousemen's, and carriers' Liens, and other similar Liens, securing
obligations incurred in the ordinary course of business which are not past due
for more than thirty (30) days or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(4) Lien's under workers' compensation, unemployment insurance, Social
Security, or similar legislation;
(5) Liens, deposits, or pledges to secure the performance of bids, tenders,
contracts (other than contracts for the payment of money), leases (permitted
under the terms of this Agreement), public or statutory obligations, surety,
stay, appeal, indemnity, performance or other similar bonds, or other similar
obligations arising in the ordinary course of business;
(6) Judgment and other similar Liens arising in connection with court
proceedings, provided the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings;
(7) Easements, rights-of-way, restrictions, and other similar encumbrances
which, in the aggregate, do not materially interfere with the occupation, use,
and enjoyment by the Borrower or any Subsidiary of the property or assets
encumbered thereby in the normal course of its business or materially impair the
value of the property subject thereto;
(8) Purchase money Liens for permitted capital expenditures and operating
leases and Liens on equipment, vehicles, and real property assumed in connection
with any Permitted Acquisition; provided that
(a) Any property subject to any of the foregoing is acquired by the
Borrower or any Subsidiary in the ordinary course of its respective business and
the Lien on any such property attaches to such asset concurrently or within
ninety (90) days after the acquisition thereof;
(b) Each such Lien shall attach only to the property so acquired and
fixed improvements thereon; and
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(c) DELETED
(d) The Debt secured by such Lien is permitted by the provisions of
Section 6.02, and the related expenditure is permitted under Section 7.01;
(9) Liens set forth on Exhibit G ; and
(10) Capital leases permitted by Section 6.02(7).
SECTION 6.02 DEBT. Create, incur, assume, or suffer to exist, or
permit any Subsidiary to create, incur, assume, or suffer to exist, any Debt,
except:
(1) Debt of the Borrower under this Agreement or the Notes;
(2) Debt described in Exhibit F, but no renewals, extensions, or
refinancing thereof;
(3) Debt of the Borrower and each Subsidiary and each Guarantor
subordinated on terms satisfactory to the Majority Banks to the Borrower's,
Subsidiaries' and Guarantors' respective obligations under this Agreement and
the Notes;
(4) Accounts payable to trade creditors for goods or services and accrued
liabilities incurred in the ordinary course of business;
(5) Debt of the Borrower or any Subsidiary secured by purchase money Liens
permitted by Section 6.01(8);
(6) Debt or other obligations incurred in connection with Earn Out
Provisions.
(7) Debt incurred in connection with Capital Leases but not to exceed Two
Million Dollars ($2,000,000);
(8) Up to Two Million Five Hundred Thousand Dollars ($2,500,000) of
unsecured notes issued to sellers of companies in Permitted Acquisitions; and
(9) Up to One Million Dollars ($1,000,000) in other unsecured Debt.
SECTION 6.03 MERGERS, ETC. Wind up, liquidate or dissolve itself,
reorganize, merge or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, any Person, or acquire all or substantially all
of the assets or the business of any Person, or permit any Subsidiary to do so,
except (1) that any Subsidiary may merge into or transfer assets to the Borrower
and (2) that any Subsidiary may merge into or consolidate with or transfer
assets to any other Subsidiary so long as said Subsidiary is a Guarantor, and
(3) Permitted Acquisitions
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made (a) by the Borrower where the Borrower is the surviving entity or (b) by
any Subsidiary regardless of whether the Subsidiary is the surviving entity, if
in either case the assets or stock acquired represents no more than 40% of the
total assets of the Borrower on a consolidated basis.
SECTION 6.04 LEASES. Create, incur, assume, or suffer to exist, or
permit any Subsidiary to create, incur, assume, or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal property,
except (1) Capital Leases permitted by Section 6.01(10); (2) leases existing on
the date of this Agreement and any extensions or renewals thereof; (3) leases
(other than Capital Leases) which do not in the aggregate require the Borrower
and its Subsidiaries on a consolidated basis to make payments (including taxes,
insurance, maintenance, and similar expenses which the Borrower or any
Subsidiary is required to pay under the terms of any lease) in any fiscal year
of the Borrower in excess of Three Million Dollars ($3,000,000); and (4) leases
between the Borrower and any Subsidiary or between any Subsidiaries so long as
any such Subsidiary is a Guarantor hereunder.
SECTION 6.05 SALE AND LEASEBACK. Sell, transfer, or otherwise dispose
of, or permit any Subsidiary or Guarantor to sell, transfer, or otherwise
dispose of, any real or personal property to any Person and thereafter directly
or indirectly lease back the same or similar property.
SECTION 6.06 DIVIDENDS. Declare or pay any dividends; or purchase,
redeem, retire, or otherwise acquire for value any of its capital stock now or
hereafter outstanding, or make any distribution of assets to its stockholders as
such whether in cash, assets, or in obligations of the Borrower; or allocate or
otherwise set apart any sum for the payment of any dividend or distribution on,
or for the purchase, redemption, or retirement of any shares of its capital
stock; or make any other distribution by reduction of capital or otherwise in
respect of any shares of its capital stock; or permit any of its Subsidiaries or
Guarantors to purchase or otherwise acquire for value any stock of the Borrower
or another Subsidiary, except that the Borrower may (1) declare and deliver
dividends and make distributions payable solely in common stock of the Borrower;
(2) purchase or otherwise acquire shares of its capital stock by exchange for or
out of the proceeds received from a substantially concurrent issue of new shares
of its capital stock; (3) redeem shares of its capital stock in connection with
the Recapitalization; or (4) repurchase shares with cash up to Two Hundred Fifty
Thousand Dollars ($250,000) per annum; or (5) accept shares in connection with
the issuance of stock, and except that any Subsidiary or Guarantors may issue
cash dividends to Borrower.
SECTION 6.07 SALE OF ASSETS. Except as permitted in Section 6.10,
sell, lease, assign, transfer, or otherwise dispose of, or permit any Subsidiary
to sell, lease, assign, transfer, or otherwise dispose of, any of its now owned
or hereafter acquired assets (including, without limitation, shares of stock and
indebtedness of Subsidiaries, receivables, and leasehold interests), except: (1)
inventory disposed of in the ordinary course of business; (2) the sale or other
disposition of assets no longer used or useful in the conduct of its business
and the sale or other disposition of vehicles; or (3) that any
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Subsidiary may sell, lease, assign, or otherwise transfer its assets to the
Borrower; or (4) sale of notes, accounts, etc. for collection in the ordinary
course of business; or (5) sale of real property owned by Manhattan
International Limousine Network Ltd. in Long Island City, New York.
SECTION 6.08 INVESTMENTS. Make, or permit any Subsidiary to make, any
loan or advance to any Person, or purchase or otherwise acquire, or permit any
Subsidiary to purchase or otherwise acquire, any capital stock, assets,
obligations, or other securities of, make any capital contribution to, or
otherwise invest in or acquire any interest in any Person, or participate as a
partner or joint venturer with any other Person, except:
(1) Investments in readily marketable, direct obligations the United
States of America or obligations guaranteed by the United States of America
which mature no later than one year from the date of the investment;
(2) Dollar denominated Certificate of Deposits issued by a domestic
commercial bank having capital and surplus in excess of One Billion Dollars
($1,000,000,000) (rated investment grade or better by Xxxxx'x or S&P's);
(3) Prime (A-1, P-1 rated) commercial paper;
(4) Permitted Acquisitions;
(5) Loans and advances to employees and officers not to exceed Five Hundred
Thousand $500,000 in the aggregate at any time;
(6) Non-cash loans and advances related to stock options;
(7) The purchase of the common stock of CLI Fleet Inc., provided it meets
the criteria for Permitted Acquisitions;
(8) Tax exempt municipal notes (rated MIG 2 or better), bonds and floating
rate bonds (rated AA or better); and
(9) Investments in Foreign Subsidiaries of any form, direct or indirect,
which in addition to the One Million Dollars ($1,000,000) presently invested,
shall not exceed Two Million Dollars ($2,000,000).
SECTION 6.09 GUARANTIES, ETC. Assume, guarantee, endorse, or otherwise
become directly or contingently responsible or liable, or permit any Subsidiary
to assume, guarantee, endorse, or otherwise become directly or contingently
responsible or liable (including, but not limited to, an agreement to purchase
any obligation, stock, assets, goods, or services, or to supply or advance any
funds, assets, goods, or services, or an agreement to maintain or cause such
Person to maintain a minimum working capital or net worth or otherwise to assure
the creditors of any Person against loss), for obligations of any Person,
(including Foreign Subsidiaries) except (i) guaranties by endorsement of
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negotiable instruments for deposit or collection, (ii) similar transactions in
the ordinary course of business (iii) Earn Out Provisions, and (iv) guarantees
of independent operator motor vehicle obligations assumed in connection with
Permitted Acquisitions (and including Manhattan International Limousine Network
Ltd.) not to exceed Two Million Five Hundred Thousand Dollars ($2,500,000) in
the aggregate.
SECTION 6.10 TRANSACTIONS WITH AFFILIATES AND FOREIGN SUBSIDIARIES.
(1) Enter into any transaction, including, without limitation, the
purchase, sale, or exchange of property or the rendering of any service, with
any Affiliate, or permit any Subsidiary to enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate, except in the ordinary course
of and pursuant to the reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.
(2) Except as otherwise permitted by Section 6.06 and 6.08, transfer
property of any kind whatsoever and whether by sale, assignment, loans,
advances, distributions or otherwise to any Affiliate (excluding compensation of
officers and directors) or Subsidiary which is not a Guarantor, except under the
terms of the Recapitalization and except (as limited in Section 6.10(3) hereof)
for intercompany transfers with respect to services provided in the ordinary
course and purchase price payments in connection with the business of Foreign
Subsidiaries.
(3) Permit any intercompany accounts owing from any Foreign Subsidiary
to Borrower or any Subsidiary with respect to services provided in the ordinary
course to exceed an aggregate amount in excess of Five Hundred Thousand Dollars
($500,000).
SECTION 6.11 MATERIAL ALTERATION. Materially
alter the nature of its business.
SECTION 6.12 USE OF LOAN PROCEEDS. Use any portion of the Loan
Proceeds for a purpose other than that specifically set forth in Section 2.13
hereof.
ARTICLE VII.
FINANCIAL COVENANTS
Unless otherwise specifically stated all Financial Covenants hereinafter
set forth shall be tested on a consolidated basis (but not including Foreign
Subsidiaries) as of the end of each fiscal quarter of the Borrower.
So long as any Note shall remain unpaid or any Bank shall have any
Commitment under this Agreement:
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SECTION 7.01 CAPITAL EXPENDITURES. The Borrower will not make any
expenditures for fixed or capital assets (including Capitalized Leases and
software development costs but excluding assets acquired as part of a Permitted
Acquisition) if, after giving effect thereto, the aggregate of all such
expenditures made by the Borrower would exceed:
Fiscal Year Annual Dollar Limit
FYE 11/30/97 $2,000,000
FYE 11/30/98 $2,000,000
FYE 11/30/99 $1,500,000
FYE 11/30/00 $1,500,000
Thereafter $1,750,000
To the extent the Annual Dollar Limit for any one fiscal year is not
expended, seventy-five percent (75%) of the unused portion may be added to the
Annual Dollar Limit for the next fiscal year; provided, however, that such
additional portion (even if not used) may not be carried over to the following
year.
SECTION 7.02 CURRENT RATIO. The Borrower will not permit the ratio of
current assets to current liabilities to be less than 1.15 to 1.00.
SECTION 7.03 PROFIT. Borrower shall show a net income for each fiscal
year.
SECTION 7.04 TOTAL FUNDED DEBT TO PRO FORMA EBITDA. For the most
recent four fiscal quarters, Borrower will not permit the ratio of Total Funded
Debt (inclusive of Capitalized Leases and seller notes) to Pro Forma EBITDA to
be greater than 2.20 to 1.00.
SECTION 7.05 FIXED CHARGE COVERAGE RATIO. For the most recent four
fiscal quarters, Borrower will not permit the ratio of Pro Forma EBITDA minus
cash taxes paid minus capital expenditures paid (including software development
costs but excluding payments for assets acquired as part of a Permitted
Acquisition), minus any Earn Out Provisions paid, to the current portion of
Total Funded Debt plus interest expense to be less than:
2.00 to 1.00 at any time from Closing Date to the first anniversary of the
Closing Date, and
1.50 to 1.00 at any time thereafter.
SECTION 7.06 EBITDA. Borrower will not permit Pro Forma EBITDA for each
fiscal quarter from the Closing Date to the Conversion Date to fall below the
respective amounts as set forth below:
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Quarter Ended 2/28 $1,600,000
Quarter Ended 5/31 $1,900,000
Quarter Ended 8/31 $1,900,000
Quarter Ended 11/30 $2,600,000
and, during any fiscal quarter thereafter as set forth below:
Quarter Ended 2/28 $2,000,000
Quarter Ended 5/31 $2,400,000
Quarter Ended 8/31 $2,400,000
Quarter Ended 11/30 $3,200,000
In the event a Permitted Acquisition is made during any fiscal quarter set
forth above, the amount for such quarter and any subsequent quarter shall be
increased by eighty (80%) percent of the Adjusted EBITDA for the acquired
company divided by four (4); provided, however, if, due to seasonality or other
reasons, the actual adjusted EBITDA for the corresponding fiscal quarter is less
than the quotient of the division referred to above, then the increase may be
limited to eighty per cent (80%) of the actual adjusted EBITDA.
ARTICLE VIII.
EVENTS OF DEFAULT
SECTION 8.01 EVENTS OF DEFAULT. For purposes of this Section,
Subsidiaries includes Foreign Subsidiaries unless specifically indicated. If
any of the following events shall occur:
(1) The Borrower shall fail to pay the principal of any Note when due and
payable;
(2) The Borrower shall fail to pay interest on any Note or the amount of a
commitment or other fee within five (5) Business Days after the due date
thereof;
(3) Any representation or warranty made or deemed made by the Borrower or
any Subsidiary in this Agreement or the Security Agreement or by the Guarantor
in the Guaranty or which is contained in any certificate, document, opinion, or
financial or other statement furnished (as updated or modified by any update,
amendment or supplement thereto) at any time under or in connection with any
Loan Document shall prove to have been incorrect, incomplete, or misleading in
any material respect on or as of the date made or deemed made;
(4) The Borrower or any Guarantor or any Subsidiary (to the extent said
Article applies to such Subsidiary) shall fail to perform or observe any term,
covenant, or agreement contained in Articles V and the expiration of 20 days
thereafter;
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(5) The Borrower or any Guarantor or any Subsidiary (to the extent said
Article applies to such Subsidiary) shall fail to perform or observe any term,
covenant, or agreement contained in Article VI;
(6) The Borrower or any Guarantor or any Subsidiary (to the extent said
Article applies to such Subsidiary) shall fail to observe any term, covenant or
agreement contained in Article VII;
(7) The Borrower or any of its Subsidiaries or the Guarantor shall (a)
fail to pay any indebtedness for borrowed money (other than the Notes) of the
Borrower or such Subsidiary or the Guarantor, as the case may be, or any
interest or premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise); or (b) fail to perform or
observe any term, covenant, or condition on its part to be performed or observed
under any agreement or instrument relating to any such indebtedness, when
required to be performed or observed, if the effect of such failure to perform
or observe is to accelerate the maturity of such indebtedness, or any such
indebtedness shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof, provided that the amount of such indebtedness exceeds Two
Hundred and Fifty Thousand Dollars ($250,000);
(8) The Borrower or any of its Subsidiaries or any Guarantor (a) shall
generally not pay, or shall be unable to pay, or shall admit in writing its
inability to pay its debts as such debts become due; or (b) shall make an
assignment for the benefit of creditors, or petition or apply to any tribunal
for the appointment of a custodian, receiver, or trustee for it or a substantial
part of its assets; or (c) shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution, or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect; or (d)
shall have had any such petition or application filed or any such proceeding
commenced against it in which an order for relief is entered or an adjudication
or appointment is made, and which remains undismissed for a period of sixty (60)
days or more; or (e) shall take any corporate action indicating its consent to,
approval of, or acquiescence in any such petition, application, proceeding, or
order for relief or the appointment of a custodian, receiver, or trustee for all
or any substantial part of its properties; or (f) shall suffer any such
custodianship, receivership, or trusteeship to continue undischarged;
(9) One or more judgments, decrees, or orders for the payment of money in
excess of Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate shall
be rendered against the Borrower or any of its Subsidiaries, and such judgments,
decrees, or orders shall continue unsatisfied and in effect for a period of
sixty (60) consecutive days without being vacated, discharged, satisfied, or
stayed or bonded pending appeal;
(10) Each Security Agreement shall at any time after its execution and
delivery and for any reason cease (a) to create a valid and perfected first
priority security interest in and to the property purported to be subject to
such Security Agreement, other than property which is subject to a Permitted
Lien; or (b) to be in full force and effect or shall
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be declared null and void, or the validity or enforceability thereof shall be
contested by the Borrower or any Subsidiary or any Guarantor, or the Borrower or
any Subsidiary or any Guarantor shall deny it has any further liability or
obligation under the Security Agreement, or the Borrower or any Subsidiary or
any Guarantor shall fail to perform any of its material obligations under the
Security Agreement;
(11) Any Guaranty shall at any time after its execution and delivery and
for any reason cease to be in full force and effect or shall be declared null
and void, or the validity or enforceability thereof shall be contested by any
Guarantor or the Guarantor shall deny it has any further liability or obligation
under, or shall fail to perform its material obligations under, the Guaranty;
(12) Any of the following events shall occur or exist with respect to the
Borrower and any Commonly Controlled Entity under ERISA: any Reportable Event
shall occur; complete or partial withdrawal from any Multiemployer Plan shall
take place; any Prohibited Transaction shall occur; a notice of intent to
terminate a Plan shall be filed, or a Plan shall be terminated; or circumstances
shall exist which constitute grounds entitling the PBGC to institute proceedings
to terminate a Plan, or the PBGC shall institute such proceedings; and in each
case above, such event or condition, together with all other events or
conditions, if any, could subject the Borrower to any material tax, penalty, or
other liability;
(13) If any Bank receives its first notice of a hazardous discharge or an
environmental complaint from a source other than the Borrower (such Bank to
immediately notify the Agent thereof) and such Bank does not receive notice
(which may be given in oral form, provided same is followed with all due
dispatch by written notice given to such Bank and the Agent by Certified Mail,
Return Receipt Requested) of such hazardous discharge or environmental complaint
from the Borrower within twenty-four (24) hours of the time such Bank first
receives said notice from a source other than the Borrower; or if any federal,
state, or local agency asserts or creates a Lien upon any or all of the assets,
equipment, property, leaseholds or other facilities of the Borrower by reason of
the occurrence of a hazardous discharge or an environmental complaint; or if any
federal, state, or local agency asserts a claim against the Borrower and/or its
assets, equipment, property, leaseholds, or other facilities for damages or
cleanup costs relating to a hazardous discharge or an environmental complaint;
provided, however, that such claim shall not constitute a default if, within
five (5) Business Days of the occurrence giving rise to the claim (a) the
Borrower can prove to the satisfaction of the Majority Banks that the Borrower
has commenced and is diligently pursuing either: (i) a cure or correction of the
event which constitutes the basis for the claim, and continues diligently to
pursue such cure or correction to completion or (ii) proceedings for an
injunction, a restraining order or other appropriate emergent relief preventing
such agency or agencies from asserting such claim, which relief is granted
within ten (10) Business Days of the occurrence giving rise to the claim and the
injunction, order, or emergent relief is not thereafter resolved or reversed on
appeal; and (b) in either of the foregoing events, the Borrower has posted a
bond, letter of credit, or other security satisfactory in form, substance, and
amount to both
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the Majority Banks and the agency or entity asserting the claim to secure the
proper and complete cure or correction of the event which constitutes the basis
for the claim:
then, and in any such event, the Agent shall at the request of, or may, with the
consent of, the Majority Banks, by notice to the Borrower, (1) declare the
Banks' obligation to make Loans to be terminated, whereupon the same shall
forthwith terminate; and (2) declare the outstanding Notes, all interest
thereon, and all other amounts payable under this Agreement to be forthwith due
and payable, whereupon the Notes, all such interest, and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest,
or further notice of any kind, all of which are hereby expressly waived by the
Borrower.
Upon the occurrence and during the continuance of any Event of Default,
each Bank is hereby authorized at any time and from time to time, without notice
to the Borrower (any such notice being expressly waived by the Borrower), to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Bank to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement or the Bank's Note or any other Loan Document, irrespective of whether
or not the Agent or such Bank shall have made any demand under this Agreement or
such Bank's Note or such other Loan Document and although such obligations may
be unmatured. Each Bank agrees promptly to notify the Borrower (with a copy to
the Agent) after any such setoff and application, provided that the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of each Bank under this Section 8.01 are in addition to other rights
and remedies (including, without limitation, other rights of setoff) which each
such Bank may have.
ARTICLE IX.
AGENCY PROVISIONS
SECTION 9.01 AUTHORIZATION AND ACTION. Each Bank hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto. The duties of the Agent shall be mechanical and administrative in
nature and the Agent shall not by reason of this Agreement be a trustee or
fiduciary for any Bank. The Agent shall have no duties or responsibilities
except those expressly set forth herein. Agent shall furnish each Bank with
copies of any financial reports received by Agent pursuant to paragraphs
5.08(1), 5.08(2), 5.08(4) and 5.08(7), promptly after receipt thereof by Agent.
As to any matters not expressly provided for by this Agreement (including,
without limitation, enforcement or collection of the Notes), the Agent shall not
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
so refraining from acting) upon the instructions of the Majority Banks, and such
instructions shall be binding upon all Banks and all holders of Notes;
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provided, however, that the Agent shall not be required to take any action which
exposes the Agent to personal liability or which is contrary to this Agreement
or applicable law.
SECTION 9.02 LIABILITY OF AGENT. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement in
the absence of its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent (1) may treat the payee
of any Note as the holder thereof until the Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
the Agent; (2) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants, or experts; (3)
makes no warranty or representation to any Bank and shall not be responsible to
any Bank for any statements, warranties, or representations made in or in
connection with this Agreement; (4) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants, or
conditions of this Agreement on the part of the Borrower, or to inspect the
property (including the books and records) of the Borrower; (5) shall not be
responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, perfection, sufficiency, or value of this Agreement
or any other instrument or document furnished pursuant thereto; and (6) shall
incur no liability under or in respect of this Agreement by acting upon any
notice, consent, certificate, or other instrument or writing (which may be sent
by telegram, telex, or facsimile transmission) believed by it to be genuine and
signed or sent by the proper party or parties.
SECTION 9.03 RIGHTS OF AGENT AS A BANK. With respect to its Commitment,
the Loans made by it and the Note issued to it, the Agent shall have the same
rights and powers under this Agreement as any other Bank and may exercise the
same as though it were not the Agent; and the term "Bank" or "Banks" shall,
unless otherwise expressly indicated, include the Agent in its individual
capacity. The Agent and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person who may do business
with or own securities of the Borrower or any Subsidiary, all as if the Agent
were not the Agent and without any duty to account therefor to the Banks.
SECTION 9.04 INDEPENDENT CREDIT DECISIONS. Each Bank acknowledges that
it has, independently and without reliance upon the Agent or any other Bank and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement. Except for notices, reports and other
documents and information expressly required to be furnished to the Banks by the
Agent hereunder, the Agent shall have no duty or responsibility to provide any
Bank with any credit or other information concerning the
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affairs, financial condition or business of the Borrower or any of its
Subsidiaries (or any of their Affiliates) which may come into the possession of
the Agent or any of its Affiliates.
SECTION 9.05 INDEMNIFICATION. The Banks agree to indemnify the Agent (to
the extent not reimbursed by the Borrower), ratably according to the respective
amounts of their Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by the Agent under this
Agreement, provided that no Bank shall be liable for any portion of any of the
foregoing resulting from the Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank agrees to reimburse the Agent (to
the extent not reimbursed by the Borrower) promptly upon demand for its ratable
share of any out-of-pocket expenses (including reasonable counsel fees) incurred
by the Agent in connection with the preparation, administration, or enforcement
of, or legal advice in respect of rights or responsibilities under, this
Agreement.
SECTION 9.06 SUCCESSOR AGENT. The Agent may resign at any time by giving
at least 60 days' prior written notice thereof to the Banks and the Borrower and
may be removed at any time with or without cause by the Majority Banks. Upon any
such resignation or removal, the Majority Banks shall have the right to appoint
a successor Agent. If no successor Agent shall have been so appointed by the
Majority Banks, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Majority Banks'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least One Billion Dollars
($1,000,000,000). Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
SECTION 9.07 SHARING OF PAYMENTS, ETC. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) on account of the Note held by it in excess of its ratable
share of payments on account of the Notes obtained by all the Banks, such Bank
shall purchase from the other Banks such participations in the Notes held by
them as shall be necessary to cause such purchasing Bank to share the excess
payment ratably with each of the other Banks, provided, however, that if all or
any portion of such excess payment is thereafter recovered from such purchasing
Bank, such purchase from each Bank shall be rescinded and each Bank shall repay
to the purchasing Bank the purchase price to the extent of such recovery
together with an amount equal to such Bank's ratable share (according to the
proportion of (1) the amount of such Bank's required repayment to (2) the total
amount
-43-
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Borrower agrees that any Bank so purchasing a participation from another Bank
pursuant to this Section 9.07 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of setoff) with respect
to such participation as fully as if such Bank were the direct creditor of the
Borrower in the amount of such participation.
SECTION 9.08 AGENT SALE OR ASSIGNMENT. Agent shall have the unrestricted
right at any time or from time to time, and without Borrower's or any
Guarantor's or any Subsidiary's and any Bank's consent, to assign all or any
portion of its rights and obligations hereunder to one or more banks or other
financial institutions (each, an "Assignee"), and Borrower and each Guarantor
and each Subsidiary agrees that it shall execute, or cause to be executed, such
documents, including without limitation, amendments to this Agreement and to any
other documents, instruments and agreements executed in connection herewith as
Agent shall deem necessary to effect the foregoing. In addition, at the request
of Agent and any such Assignee, Borrower shall issue one or more new promissory
notes, as applicable, to any such Assignee and, if Agent has retained any of its
rights and obligations hereunder following such assignment, to Agent, which new
promissory notes shall be issued in replacement of, but not in discharge of, the
liability evidenced by the promissory note held by Agent prior to such
assignment and shall reflect the amount of the respective commitments and loans
held by such Assignee and Agent after giving effect to such assignment. Upon the
execution and delivery of appropriate assignment documentation, amendments and
any other documentation required by Agent in connection with such assignment,
and the payment by Assignee of the purchase price agreed to by Agent, and such
Assignee, such Assignee shall be party to this Agreement and shall have all of
the rights and obligations of a Bank hereunder (and under any and all other
guaranties, documents, instruments and agreements executed in connection
herewith) to the extent that such rights and obligations have been assigned by
Agent pursuant to the assignment documentation between Agent and such Assignee,
and Agent shall be released from its obligations hereunder and thereunder to a
corresponding extent.
Agent shall have the unrestricted right at any time and from time to time,
and without the consent of or notice to Borrower or any Guarantor or any
Subsidiary or any Bank, to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in Agent's
obligation to lend hereunder and/or any or all of the Loans held by Agent
hereunder. In the event any such grant by Agent of a participating interest to
a Participant, whether or not upon notice to Borrower, Agent shall remain
responsible for the performance of its obligation hereunder and Borrower shall
continue to deal solely and directly with Agent in connection with Agent's
rights and obligations hereunder.
Agent may furnish any information concerning Borrower in its possession
from time to time to prospective Assignees and Participants, provided that Agent
shall require any such prospective Assignee or Participant to agree in writing
to maintain the confidentiality of such information. Except for the rights of
Agent as aforesaid, no Bank shall have the
-44-
right to assign all or any portion of any of the loans held by such Bank
hereunder or to sell or to grant any participation interest therein of any kind
without prior written consent of Agent.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01 AMENDMENTS, ETC. No amendment, modification, termination,
or waiver of any provision of any Loan Document to which the Borrower is a
party, nor consent to any departure by the Borrower from any Loan Document to
which it is a party, shall in any event be effective unless the same shall be in
writing and signed by the Majority Banks, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given, provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Banks, do any of the following: (1)
waive any of the conditions precedent specified in Article III; (2) increase the
Commitments of the Banks or subject the Banks to any additional obligations; (3)
reduce the principal of, or interest on, the Notes or any fees hereunder; (4)
postpone any date fixed for any payment of principal of, or interest on, the
Notes or any fees hereunder; (5) change the Facility Amount; (6) release any
Collateral; (7) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes or the number of Banks which shall be
required for the Banks or any of them to take action hereunder; (8) waive any
Event of Default arising and continuing under Section 8.01(1) or 8.01(2) hereof;
or (9) amend, modify or waive any provision of this Section 10.01, and provided
further than no amendment, waiver, or consent shall, unless in writing and
signed by the Agent in addition to the Banks required above to take such action,
affect the rights or duties of the Agent under any of the Loan Documents.
SECTION 10.02 NOTICES, ETC. All notices and other communications provided
for under this Agreement and under the other Loan Documents to which the
Borrower is a party shall be in writing and mailed or transmitted or delivered,
if to the Borrower, or any Guarantor or Subsidiary, at its address at 0000
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention Xxxxxxx X. Xxxxxxxxxx,
with a copy to Xxxxx X. Xxxxxxxx; with a copy to Xxxxxx, XxXxxxxxx & Fish, LLP,
Xxx Xxxxxxxxxxxxx Xxxxx Xxxxxx Xxxxxxxxxxxxx 00000, attention: Xxxxx X. Xxxxxx,
Esq.; if to Fleet Bank, N.A. at its address at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, XX 00000, Attention Xxxxxxxxx Xxxxxxx, with a copy to Herrick, Feinstein,
LLP, 0 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxxx; if to
Banco Popular De Puerto Rico at its address at 0 Xxxx 00xx Xxxxxx Xxx Xxxx, XX
00000, Attention: Xxxxxxxx X. Xxxxxxx, with a copy to Xxxxxx Xxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxx X. Xxxxxxxx, Esq.; if to Xxxxxx
Xxxxx Bank at its address at 00000 Xxxx Xxxxxx, Xxxxxxx, XX 00000, Attention:
Xxxxxx Xxxxxxx, with a copy to Ober, Kaler, Xxxxxx & Xxxxxxx, 0000 X Xxxxxx, XX,
Xxxxxxxxxx X.X. 00000, attention: Xxxxxxx X. Xxxxxx, Esq., and if to the Agent,
at its address at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000, Attention:
Xxxxxxxxx Xxxxxxx, with a copy to Herrick, Feinstein, LLP, 0 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention Xxxxxxx Xxxxxxx; or, as to each party, at such
other address as shall be designated by such party
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in a written notice to all other parties complying as to delivery with the terms
of this Section 10.02. Except as is otherwise provided in this Agreement, all
such notices and communications shall be effective when received.
SECTION 10.03 NO WAIVER. No failure or delay on the part of any Bank or
the Agent in exercising any right, power, or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power, or remedy preclude any other or further exercise thereof or the exercise
of any other right, power, or remedy hereunder. The rights and remedies provided
herein are cumulative, and are not exclusive of any other rights, powers,
privileges, or remedies, now or hereafter existing, at law or in equity or
otherwise.
SECTION 10.04 SUCCESSORS AND ASSIGNS. The Agreement shall be binding upon
and inure to the benefit of the Borrower, each Bank and the Agent and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights under any Loan Document to which the Borrower is a
party without the prior written consent of all the Banks.
SECTION 10.05 COSTS, EXPENSES, AND TAXES. The Borrower agrees to pay on
demand all costs and expenses incurred by the Agent and each Bank in connection
with the preparation, execution, delivery, filing, and administration of the
Loan Documents, and of any amendment, modification, or supplement to the Loan
Documents, including, without limitation, the fees and out-of-pocket expenses of
counsel for the Agent, incurred in connection with advising the Agent or any of
the Banks as to their rights and responsibilities hereunder. The Borrower also
agrees to pay all such costs and expenses, including court costs and reasonable
attorneys fees, incurred in connection with enforcement of the Loan Documents,
or any amendment, modification, or supplement thereto, whether by negotiation,
legal proceedings, or otherwise. In addition, the Borrower shall pay any and all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing, and recording of any of the Loan Documents
and the other documents to be delivered under any such Loan Documents, and
agrees to hold the Agent and each of the Banks harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or failing
to pay such taxes and fees. This provision shall survive termination of this
Agreement.
SECTION 10.06 INTEGRATION. This Agreement and the Loan Documents contain
the entire agreement between the parties relating to the subject matter hereof
and supersede all oral statements and prior writings with respect thereto.
SECTION 10.07 INDEMNITY. The Borrower, each Subsidiary and each Guarantor
hereby agrees to defend, indemnify, and hold Agent and each Bank harmless from
and against any and all claims, damages, judgments, penalties, costs, and
expenses (including reasonable attorney fees and court costs now or hereafter
arising from the aforesaid enforcement of this clause) arising directly or
indirectly from the activities of the Borrower, or any Subsidiaries or any
Guarantor, their predecessors in interest, or third parties with whom any of
them has a contractual relationship, or arising directly or indirectly from the
-46-
violation of any environmental protection, health, or safety law, whether such
claims are asserted by any governmental agency or any other person or arising
from this Agreement or the loans made hereunder except for those caused by
Agent's negligence or willful misconduct. This indemnity shall survive
termination of this Agreement.
SECTION 10.08 GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 10.09 SEVERABILITY OF PROVISIONS. Any provision of any Loan
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 10.10 COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.
SECTION 10.11 HEADINGS. Article and Section headings in the Loan
Documents are included in such Loan Documents for the convenience of reference
only and shall not constitute a part of the applicable Loan Documents for any
other purpose.
SECTION 10.12 JURY TRIAL WAIVER; JURISDICTION, ETC. THE BORROWER AND EACH
GUARANTOR AND SUBSIDIARY HEREBY WAIVE TRIAL BY JURY IN ANY ACTION/ PROCEEDING,
CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING
OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS. NO OFFICER
OF ANY BANK OR OF THE AGENT HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS
PROVISION. BORROWER HEREBY FURTHER AGREES THAT THE FOLLOWING COURTS:
State Court - Any state or local court of the State of New York
Federal Court - United States District Court for the Southern District of
New York
or at the option of Agent, any court in which Agent shall initiate legal or
equitable proceedings and which has subject matter jurisdiction over the matter
in controversy, shall have jurisdiction to hear and determine any claims or
disputes between Borrower and Agent pertaining directly or indirectly to this
Agreement or to any matter arising in connection with this Agreement. Borrower
expressly submits and consents in advance to such jurisdiction in any action or
proceeding commenced in such courts, hereby waiving personal service of the
summons and complaint, or other process of papers issued therein, and agreeing
that service of such summons and complaint, or other process or papers, may be
made by registered or certified mail addressed to Borrower at the address set
forth herein. Should Borrower fail to appear or answer any summons, complaint,
process or papers so served within thirty (30) days after the mailing thereof,
it shall be
-47-
deemed in default and an order and/or judgment may be entered against it as
demanded or prayed for in such summons, complaint, process or papers. Agent may
have rights against Borrower, now or in the future, in its capacity as secured
party, creditor, or in any other capacities. Such rights may include the right
to deprive Borrower of or affect the use of or possession or enjoyment of
Borrower's property; and in the event Agent deems it necessary to exercise any
of such rights prior to the rendition of a final judgment against Borrower, or
otherwise, Borrower may be entitled to notice and/or hearing under the
Constitution of the United States and/or State of New York, New York statutes
(to determine whether or not Agent has a probable cause to sustain the validity
of Agent's claim), or the right to notice and/or hearing under other applicable
state or federal laws pertaining to prejudgment remedies prior to the exercise
by Agent of any such rights. Borrower expressly waives any such right to
prejudgment remedy notice or hearing to which Borrower may be entitled;
provided, however, that this waiver shall not include a waiver of such rights as
Borrower shall have to prior notice of the proposed disposition of Collateral by
Agent. Specifically and without limiting the generality of the foregoing,
Borrower recognizes that in certain instances Agent has and shall continue to
have an absolute right to effect collection of any of the Receivables or
Collateral with respect to which Agent holds a security interest without the
necessity of according to Borrower any prior notice or hearing. This shall be a
continuing waiver and remain in full force and effect so long as Borrower is
obligated to Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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XXXXX INTERNATIONAL, INC.
________________________________
By: Xxxxx X. Xxxxxxxx
Title: Vice President
MANHATTAN INTERNATIONAL LIMOUSINE
NETWORK LTD.
________________________________
By: Xxxxx X. Xxxxxxxx
Title: Vice President
INTERNATIONAL LIMOUSINE NETWORK LTD.
________________________________
By: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXX LIMOUSINE NY, INC.
________________________________
By: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXX LIMOUSINE S.F., INC.
________________________________
By: Xxxxx X. Xxxxxxxx
Title: Vice President
-49-
XXXXX LIMOUSINE L.A., INC.
_______________________________
By: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXX LIMOUSINE D.C., INC.
_______________________________
By: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXX LIMOUSINE CORPORATION
_______________________________
By: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXX LICENSING, INC.
_______________________________
By: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXX SERVICES, INC.
_______________________________
By: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXX LIMOUSINE FLORIDA, INC.
_______________________________
By: Xxxxx X. Xxxxxxxx
Title: Vice President
-50-
Principal Office and Lending Office
for Prime Loans:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Lending Office for LIBOR Loans:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
FLEET BANK, N.A.
_______________________________
By: Xxxxxxxxx Xxxxxxx
Title: Vice President
Principal Office and Lending Office for Prime
Loans:
0 Xxxx 00xx Xxxxxx,
Xxx Xxxx, XX 00000
Lending Office for LIBOR Loans:
0 Xxxx 00xx Xxxxxx,
Xxx Xxxx, XX 00000
BANCO POPULAR DE PUERTO RICO
_______________________________
By:
Title:
-51-
Principal Office and Lending Office for
Prime Loans:
00000 Xxxx Xxxxxx,
Xxxxxxx, XX 00000
Lending Office for LIBOR Loans
00000 Xxxx Xxxxxx,
Xxxxxxx, XX 00000
XXXXXX XXXXX BANK
_______________________________
By:
Title:
Principal Office and Lending Office
for Prime Loans:
0000 Xxxxxx xx xxx Xxxxxxxx,
Xxx Xxxx, XX 00000
Lending Office for LIBOR Loans:
0000 Xxxxxx xx xxx Xxxxxxxx,
Xxx Xxxx, XX 00000
FLEET BANK, N.A., as Agent
_______________________________
By: Xxxxxxxxx Xxxxxxx
Title: Vice President
-52-
Exhibit A
REVOLVING TO TERM PROMISSORY NOTE
$18,000,000 August 15, 1997
FOR VALUE RECEIVED, the undersigned, Xxxxx International, Inc., a
Delaware corporation with its chief executive office at 0000 Xxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000 (the "Borrower") HEREBY PROMISES TO PAY to the
order of Fleet Bank, N.A. (the "Bank") to Fleet Bank, N.A., a national banking
association, at its office at 1185 Avenue of the Americas, Xxx Xxxx, Xxx Xxxx
00000 for the account of the applicable Lending Office of the Bank, in lawful
money of the United States and in immediately available funds, on the Conversion
Date, the principal amount of Eighteen Million Dollars ($18,000,000) or the
aggregate unpaid principal amount of all Revolving Credit Loans made to the
Borrower by the Bank pursuant to the Revolving Credit and Term Loan Agreement
and outstanding on the Conversion Date, whichever is less.
Interest only, upon the interest rates set forth and upon all other terms
and conditions set forth in the Revolving Credit and Term Loan Agreement with
respect to Revolving Credit Loans, shall be paid from the date of this
Promissory Note through the Conversion Date. So long as Borrower meets all
terms and conditions set forth in the Revolving Credit and Term Loan Agreement
as a condition precedent to conversion, this Promissory Note shall convert from
a Revolving Promissory Note to a Term Loan Promissory Note which Term Loan
Promissory Note shall be repayable upon all terms and conditions set forth with
respect to the Term Loan in the Revolving Credit and Term Loan Agreement,
including but not limited to, a maturity date which shall be five years from the
date of the Conversion Date.
The Bank is hereby authorized by the Borrower to endorse on the schedule
attached to the Note held by it the amount and type of each Revolving Credit
Loan and each renewal, conversion, and payment of principal amount received by
the Bank for the account of the applicable Lending Office on account of its
Revolving Credit Loans, which endorsement shall, in the absence of manifest
error, be conclusive as to the outstanding balance of the Revolving Credit Loans
made by the Bank; provided, however, that the failure to make such notation with
respect to any Revolving Credit loan or renewal, conversion, or payment shall
not limit or otherwise affect the obligations of the Borrower hereunder.
This Note is the Note referred to in, and is entitled to the benefits of,
the Revolving Credit and Term Loan Agreement, dated as of August 15, 1997,
between the Borrower, the Bank and certain other banks parties thereto; (the
Revolving Credit and Term loan Agreement"). Terms used herein which are defined
in the Revolving Credit and Term Loan Agreement shall have their defined
meanings when used herein. The
-1-
Revolving Credit and Term Loan Agreement, among other things, contains
provisions for acceleration of the maturity of this Note upon the happening of
certain stated events and also for prepayments on account of principal hereof
prior to the maturity of this Note upon the terms and conditions specified in
the Revolving Credit and Term Loan Agreement.
This Note shall be governed by laws of the State of New York.
Xxxxx International, Inc.
______________________________
By: Xxxxx X. Xxxxxxxx
Its: Vice President
-2-
Exhibit A-1 (For Banks other than Fleet Bank, N.A.)
REVOLVING TO TERM PROMISSORY NOTE
$18,000,000.00 August 15, 1997
FOR VALUE RECEIVED, the undersigned, Xxxxx International, Inc., a
Delaware corporation with its chief executive office at 0000 Xxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000 (the "Borrower") HEREBY PROMISES TO PAY to the
order of ___________________________________________ (the "Bank") to Fleet Bank,
N.A., a national banking association, at its office at 1185 Avenue of the
Americas, Xxx Xxxx, Xxx Xxxx 00000 as Agent for the account of the applicable
Lending Office of the Bank, in lawful money of the United States and in
immediately available funds, on the Conversion Date, the principal amount of
Eighteen Million Dollars ($18,000,000) or the aggregate unpaid principal amount
of all Revolving Credit Loans made to the Borrower by the Bank pursuant to the
Revolving Credit and Term Loan Agreement and outstanding on the Conversion Date,
whichever is less.
Interest only, upon the interest rates set forth and upon all other terms
and conditions set forth in the Revolving Credit and Term Loan Agreement with
respect to Revolving Credit Loans, shall be paid from the date of this
Promissory Note through the Conversion Date. So long as Borrower meets all
terms and conditions set forth in the Revolving Credit and Term Loan Agreement
as a condition precedent to conversion, this Promissory Note shall convert from
a Revolving Promissory Note to a Term Loan Promissory Note which Term Loan
Promissory Note shall be repayable upon all terms and conditions set forth with
respect to the Term Loan in the Revolving Credit and Term Loan Agreement,
including but not limited to, a maturity date which shall be five years from the
date of the Conversion Date.
The Bank is hereby authorized by the Borrower to endorse on the schedule
attached to the Note held by it the amount and type of each Revolving Credit
Loan and each renewal, conversion, and payment of principal amount received by
the Bank for the account of the applicable Lending Office on account of its
Revolving Credit Loans, which endorsement shall, in the absence of manifest
error, be conclusive as to the outstanding balance of the Revolving Credit Loans
made by the Bank; provided, however, that the failure to make such notation with
respect to any Revolving Credit loan or renewal, conversion, or payment shall
not limit or otherwise affect the obligations of the Borrower hereunder.
This Note is the Note referred to in, and is entitled to the benefits of,
the Revolving Credit and Term Loan Agreement, dated as of August 15, 1997,
between the Borrower, the Bank and certain other banks parties thereto; (the
Revolving Credit and Term loan Agreement"). Terms used herein which are defined
in the Revolving Credit and
-1-
Term Loan Agreement shall have their defined meanings when used herein. The
Revolving Credit and Term Loan Agreement, among other things, contains
provisions for acceleration of the maturity of this Note upon the happening of
certain stated events and also for prepayments on account of principal hereof
prior to the maturity of this Note upon the terms and conditions specified in
the Revolving Credit and Term Loan Agreement.
This Note shall be governed by laws of the State of New York provided
that, as to the maximum rate of interest which may be charged or collected, if
the laws applicable to the Bank permitted to charge or collect a higher rate
than the laws of the State of New York, such laws applicable to the Bank shall
apply to the Bank under this Note.
Xxxxx International, Inc.
_____________________________
By: Xxxxx X. Xxxxxxxx
Its: Vice President
-2-
