REVOLVING CREDIT AGREEMENT
DATED AS OF APRIL 10, 1998
BY AND AMONG
CERTIFIED GROCERS OF CALIFORNIA, LTD.
THE LENDERS NAMED HEREIN
AND
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH,
AS AGENT
Exhibit 4.17
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT is entered into as of April 10, 1998, by
and among CERTIFIED GROCERS OF CALIFORNIA, LTD., a California corporation
operating primarily on a cooperative basis (the "Borrower"), the Lenders (as
defined below), COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH, not in its individual capacity, but solely in its
capacity as the Agent.
RECITALS
The Borrower desires to obtain from the Lenders a revolving credit facility in
the aggregate principal amount of up to One Hundred Million Dollars
($100,000,000) outstanding at any time, for the limited purposes as more
particularly described below; and
The Lenders have agreed to make such credit available to the Borrower, but only
upon the terms and subject to the conditions hereinafter set forth and in
reliance on the representations and warranties set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants hereinafter set forth, and intending to be legally bound, the parties
hereto agree as follows:
SECTION 1. DEFINITIONS.
1.1 DEFINED TERMS. As used herein, the following terms have the following
meanings:
"Adjusted LIBOR" means, for each Interest Period in respect of LIBOR Loans
comprising part of the same Borrowing, an interest rate per annum (rounded
upward to the nearest 1/16th of one percent (0.0625%)) determined pursuant to
the following formula:
LIBOR
Adjusted LIBOR = ------------------------------------
1.00 - Eurodollar Reserve Percentage
The Adjusted LIBOR shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Adjusted Tangible Net Worth" means, as measured at any date of
determination, on a consolidated basis, an amount equal to the sum of (a) the
aggregate value of the shareholders' equity of the Borrower and its
Subsidiaries, plus (b) the aggregate value of Patron Required Deposits then on
deposit, plus (c) the aggregate book value of the principal amount of all
Patronage Dividend Certificates that are first payable after the Maturity Date,
minus (d) the aggregate value of all intangible assets of the Borrower and its
Subsidiaries.
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"Adjustment Date" means the second Business Day following receipt by the
Agent of each delivery of the financial statements required to be delivered by
the Borrower pursuant to SECTIONS 6.1(a) or (b) and the corresponding Compliance
Certificate required by SECTION 6.1(d).
"Affiliate" means, with respect to any Person, each other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person (excluding any trustee under, or any committee with
responsibility for administering, any Pension Plan or Employee Benefit Plan). A
Person shall be deemed to be "controlled by" another Person if such other Person
possesses, directly or indirectly, power (i) to vote fifteen percent (15.0%) or
more of the securities (on a fully diluted basis) having ordinary voting power
for the election of directors, managing general partners or managing members or
(ii) to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise. A member-patron or associate-patron of
the Borrower shall not be deemed to be an Affiliate of the Borrower solely
because a person that is an Affiliate of such member-patron or associate-patron
is director of the Borrower.
"Agent" means Rabobank, not when acting in its individual capacity, but
solely when acting in its capacity as the administrative agent under this
Agreement or any of the other Loan Documents, and any successor administrative
agent.
"Agent's Payment Office" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with SECTION 12.6.
"Agent-Related Persons" means the Agent and any successor agent, appointed
to the terms hereof, together with their respective Affiliates, and the
officers, directors, employees and attorneys-in-fact of such Persons.
"Aggregate Commitments" means the combined Commitments of the Lenders in
the aggregate principal amount of One Hundred Million Dollars ($100,000,000), as
such may be reduced from time to time pursuant to this Agreement.
"Agreement" means this Revolving Credit Agreement, including all
amendments, modifications and supplements hereto and all appendices, exhibits
and schedules to any of the foregoing, and shall refer to the Agreement as the
same may be in effect from time to time.
"Applicable Commitment Fee Percentage" means the percentage rate per annum
used to calculate from time to time the commitment fees payable pursuant to
SECTION 2.9(b) of this Agreement, in accordance with the table below:
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====================================================================================
COMMITMENT FEE FOR
LEVERAGE RATIO REVOLVING LOANS
------------------------------------------------------------------------------------
Greater than 3.00:1.00 0.25%
------------------------------------------------------------------------------------
Greater than 2.75:1.00, but less than or equal to 3.00:1.00 0.225%
Greater than 2.50:1.00, but less than or equal to 2.75:1.00 0.20%
Greater than 2.25:1.00, but less than or equal to 2.50:1.00 0.175%
Greater than 2.00:1.00, but less than or equal to 2.25:1.00 0.15%
------------------------------------------------------------------------------------
Less than or equal to 2.00:1.00 0.125%
====================================================================================
From the Closing Date to the second Adjustment Date, the Applicable Margin shall
be 0.225%.
Upon each Adjustment Date (after the initial Adjustment Date), the Applicable
Commitment Fee Percentage shall be determined in accordance with the above
table, based on the Leverage Ratio as of the date of the financial statements
and the corresponding Compliance Certificate delivered to the Agent with respect
to such Adjustment Date. If the above table indicates that an adjustment to the
existing Applicable Commitment Fee Percentage is required, the effective date
for such adjustment shall be the respective Adjustment Date (which adjustments
shall remain effective until the next Adjustment Date after which the Borrower
delivers to the Agent quarterly or annual financial statements and a
corresponding Compliance Certificate evidencing that the Applicable Commitment
Fee Percentage, in accordance with the above table, is to be further adjusted).
Notwithstanding the foregoing, in no event shall the Borrower be entitled to a
decrease in the Applicable Commitment Fee Percentage if an Event of Default has
occurred and is continuing.
"Applicable Margin" means the percentage determined on the Funding Date for
such LIBOR Loan or the issuing date for such Letter of Credit, in accordance
with the table below:
===================================================================================
LEVERAGE RATIO APPLICABLE MARGIN
-----------------------------------------------------------------------------------
Greater than 3.0:1.00 0.90%
-----------------------------------------------------------------------------------
Greater than 2.75:1.00, but less than or equal to 3.00:1.00 0.825%
-----------------------------------------------------------------------------------
Greater than 2.50:1.00, but less than or equal to 2.75:1.00 0.685%
-----------------------------------------------------------------------------------
Greater than 2.25:1.00, but less than or equal to 2.50:1.00 0.575%
-----------------------------------------------------------------------------------
Greater than 2.00:1.00, but less than or equal to 2.25:1.00 0.475%
-----------------------------------------------------------------------------------
Less than or equal to 2.00:1.00 0.375%
===================================================================================
From the Closing Date to the second Adjustment Date, the Applicable Margin shall
be 0.825%.
Upon each Adjustment Date (after the initial Adjustment Date), the Applicable
Margin for all LIBOR Loans and Letters of Credit shall be determined in
accordance with the above table, based on the Leverage Ratio as of the date of
the financial statements and the corresponding Compliance Certificate delivered
to the Agent with respect to such Adjustment Date. If the above table indicates
that an adjustment to the existing Applicable Margin for all LIBOR Loans and
Letters of Credit is required, the effective date for such adjustment shall be
the respective Adjustment Date (which adjustments shall remain effective until
the next Adjustment Date after which the Borrower delivers to the Agent
quarterly or annual financial statements and a corresponding Compliance
Certificate evidencing that the Applicable Margin for all LIBOR Loans and
Letters of Credit, in accordance
3
with the above table, is to be further adjusted). Notwithstanding the foregoing,
in no event shall the Borrower be entitled to a decrease in the Applicable
Margin applicable to LIBOR Loans or Letters of Credit if an Event of Default has
occurred and is continuing.
"Asset Sale" means the sale by the Borrower or any of its Subsidiaries, or
by any successor in interest (including a debtor in possession or trustee under
the Bankruptcy Code) to any Person other than the Borrower or any of its wholly-
owned Subsidiaries of (i) the outstanding Stock or similar equity interests (in
the case of Persons other than corporations) of any Subsidiary of the Borrower,
(ii) all or substantially all of the assets of any division or line of business
of the Borrower or any of its Subsidiaries, or (iii) any other assets
(including, without limitation, any assets that do not constitute substantially
all of the assets of any division or line of business of the Borrower or any of
its Subsidiaries); provided that the term "Asset Sale" shall not include (y) any
sale of capital assets of the Borrower or any of its Subsidiaries to the extent
such sale constitutes the sale of obsolete, obsolescent or worn out capital
assets, or capital assets that the Borrower reasonably determines are no longer
required in the operation of the business of the Borrower and its Subsidiaries,
and (z) the sale in the ordinary course of business of personal property held
for resale or lease in the ordinary course of business of the Borrower or any of
its Subsidiaries or liquidation sales of any discontinued, discounted or
obsolete inventory, conducted in the ordinary course of business by the Borrower
or any of its Subsidiaries.
"Assignee" has the meaning set forth in SECTION 11.2(a) of this Agreement.
"Assignment and Acceptance" has the meaning specified in SECTION 11.2(a) of
this Agreement.
"Attorney Costs" means, in respect of any matter and at the election of the
Person incurring such fees and disbursements, (i) the reasonable fees and
disbursements of any law firm or other external counsel and (ii) the reasonably
allocated cost of internal legal services and all disbursements of internal
counsel.
"Bankruptcy Code" means the Bankruptcy Code of 1978, as amended, as
codified under Title 11 of the United States Code, and the Bankruptcy Rules
promulgated thereunder, as the same may be in effect from time to time.
"Base Rate" means for any day, the higher of (i) the per annum rate of
interest announced by Rabobank in New York City from time to time as its base
rate, each change in such fluctuating interest rate to take effect
simultaneously with the corresponding change in such base rate, but in no event
in excess of the maximum interest rate permitted by applicable law and (ii) one-
half percent (0.50%) per annum above Rabobank's Federal Funds Rate for overnight
funds. Each change in the Base Rate shall result in a corresponding change in
the interest rate charged on any Base Rate Loan. Rabobank's base rate is a rate
set by Rabobank based upon various factors, including Rabobank's costs and
desired return, general economic conditions and other factors, and is neither
directly tied to an external rate of interest or index nor necessarily the
lowest or best rate of interest actually charged by Rabobank at any given time
to any customer or particular class of customers for any particular credit
extension. Rabobank may make commercial or other loans at rates of interest at,
4
above or below its base rate.
"Base Rate Loans" means any and all of the Loans bearing interest at the
Base Rate.
"Base Rate Revolving Loan" means a Loan funded pursuant to SECTION 2.1.1(e)
of this Agreement bearing interest at the Base Rate.
"Board of Directors" means the board of directors of the Borrower or any
committee of the board of directors of the Borrower authorized with respect to
any particular matter to exercise the power of the board of directors of the
Borrower.
"Borrowing" means a borrowing under this Agreement consisting of Loans made
to the Borrower on the same day by the Lenders pursuant to SECTION 2.
"Borrowing Notice" means a notice given by the Borrower to the Agent in
accordance with SECTION 2.5, substantially in the form of EXHIBIT C.
"Business Day" means any day which is not a Saturday, Sunday or a legal
holiday under the laws of the States of New York or California or is not a day
on which banking institutions located in the States of New York or California
are authorized or required by law or other governmental action to close; except
that if any determination of a "Business Day" shall relate to a LIBOR Loan, the
term "Business Day" shall in addition exclude any day which is not a Eurodollar
Banking Day.
"Capital Expenditures" means all payments made for any fixed assets or
improvements or for replacements, substitutions or additions thereto, that have
a useful life of more than one (1) year and which are required to be capitalized
under GAAP, including such expenditures financed with Capital Lease Obligations.
"Capital Lease" means, as to any Person, any lease of any Property by such
Person as lessee that is, or should be in accordance with Financing Accounting
Standards Board Statement No. 13, classified and accounted for as a "capital
lease" on the balance sheet of such Person prepared in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Capital Lease, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP,
would appear on a balance sheet of such lessee in respect of such Capital Lease
or otherwise be disclosed in a note to such balance sheet.
"Cash Equivalents" means any of the following instruments: certificates of
deposit, bankers acceptance or eurodollar certificates issued by major United
States commercial banks or their international banking facilities or major
foreign banks with assets of not less than $100,000,000, prime commercial paper,
corporate notes, bonds and preferred stock listed on a national securities
exchange, municipal bonds rated A or better by Xxxxx'x or S&P, direct
obligations of the United States of America or its agencies, and obligations
guaranteed by the United States of America.
"Change of Control" means the occurrence after the date of this Agreement
of: (i) any
5
Person, or two or more Persons acting in concert, acquiring
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of the Borrower (or other securities
convertible into such securities) representing greater than twenty percent
(20.0%) of the combined voting power of all securities of the Borrower entitled
to vote in the election of directors; or (ii) any Person, or two or more Persons
acting in concert, acquiring by contract or otherwise, or entering into a
contract or arrangement which, upon consummation, will result in its or their
acquisition of, or control over, securities of the Borrower (or other securities
convertible into such securities) representing greater than twenty percent
(20.0%) of the combined voting power of all securities of the Borrower entitled
to vote in the election of directors.
"Charges" means all federal, state, county, city, municipal, local, foreign
or other governmental taxes, levies, assessments, charges or claims, in each
case then due and payable by the Borrower or any of its Subsidiaries, upon or
relating to (a) the Loans hereunder, (b) any of their employees, payroll, income
or gross receipts, (c) any of their ownership or use of any of their respective
assets, or (d) any other aspect of their respective businesses.
"Closing" means the time at which each of the conditions precedent set
forth in SECTION 4 to the making of the first Loan hereunder shall have been
duly and completely satisfied by the Borrower or waived by all Lenders in their
sole and absolute discretion.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended, the Treasury
Regulations adopted thereunder and the Treasury Regulations proposed thereunder,
as the same may be in effect from time to time.
"Commitment" means, as to each Lender, the amount set forth on SCHEDULE 1.0
next to such Lender's name, as such may be amended from time to time in
accordance with this Agreement.
"Compliance Certificate" means a certificate signed by a Responsible
Person, substantially in the form set forth in EXHIBIT D, with such changes
therein as the Agent from time to time reasonably may request for the purpose of
having such certificate disclose the matters certified therein and the method of
computation thereof.
"Confidential Booklet" has the meaning set forth in SECTION 5.5 below.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation of another
Person, including, without limitation, any such obligation directly or
indirectly guaranteed, endorsed (other than for collection or deposit in the
ordinary course of business), co-made or discounted or sold with recourse by
that Person, or in respect of which that Person is otherwise directly or
indirectly liable, including, without limitation, any such obligation for which
that Person is in effect liable through any agreement (contingent or otherwise)
to purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the
6
payment or discharge of such obligation (whether in the form of loans, advances,
capital stock purchases, capital contributions or otherwise), or to maintain the
solvency of the obligor of such obligation, or to make payment for any products,
materials or supplies or for any transportation, services or lease regardless of
the non-delivery or non-furnishing thereof, in any such case if the purpose or
intent of such agreement is to provide assurance that such obligation will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof. The leasing by the Borrower, as lessee,
of real or personal property that the Borrower in turn subleases to a member-
patron of the Borrower shall not be a Contingent Obligation for purposes of this
Agreement. The amount of any Contingent Obligation of any Person shall be deemed
to be an amount equal to the maximum amount of such Person's liability with
respect to the stated or determinable amount of the primary obligation for which
such Contingent Obligation is incurred or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder).
"Contracts" has the meaning set forth in SECTION 5.7 of this Agreement.
"Conversion/Continuation Notice" means a notice given by the Borrower to
the Agent in accordance with SECTION 2.6, substantially in the form of EXHIBIT
E, with appropriate insertions.
"Designated Deposit Account" means demand deposit account no. 0000000000
maintained by the Borrower in the State of California with Union Bank of
California or such other financial institution as the Borrower from time to time
shall designate by written notice to the Agent.
"Discounted Value" of any Class B Shares means, as of any date of
determination, an amount equal to eighty percent (80.0%) of the aggregate
present value on such date of all payments that are included in the Redemption
Schedule of such Class B Shares, using an annual discount rate equal to the
annual interest rate then applicable for one-month LIBOR Loans under this
Agreement.
"Dollars" and "$" means the lawful money of the United States of America.
"Due Inquiry" means any and all inquiry, investigation and analysis which a
prudent Person would undertake and complete with diligence with the intent of
coming to as complete an understanding as reasonably possible of facts or
circumstances, and shall include, but shall not be limited to, a review of
relevant records in such Person's possession and inquiry of appropriate
employees, officers and directors.
"EBITDAP" means, as measured at any date of determination, for any period,
an amount equal to the sum of (a) net income (before extraordinary non-cash
items and non-cash items in respect of discontinued operations), plus (b)
Interest Expense, plus (c) provisions for income taxes, plus (d) depreciation,
plus (e) amortization of intangible assets, plus (f) other non-cash expenses,
plus (g) Patronage Dividends, plus (h) prepayment premiums actually paid in
connection with the repayment and termination of the Existing Debt, each as
measured for such period.
"Eligible Assignee" means (a) a commercial bank organized under the laws of
the United
7
States, or any State thereof, and having combined capital and surplus of
$100,000,000; (b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development ("OECD"), or a political subdivision of any such country, and having
a combined capital and surplus of $100,000,000; provided, however, that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD or the Cayman
Islands; (c) the central bank of any country which is a member of the OECD; (d)
a finance company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business
and having a combined capital and surplus of $100,000,000; (e) an insurance
company organized under the laws of the United States, or any state thereof, and
having a combined capital and surplus of $100,000,000; (f) any Lender party to
this Agreement; (g) any Affiliate of a Lender, and (h) any other Person approved
by the Agent and the Borrower, such approval not to be unreasonably withheld;
provided, however, that an Affiliate of the Borrower shall not qualify as an
Eligible Assignee.
"Employee Benefit Plan" means any Pension Plan and any employee welfare
benefit plan, as defined in Section 3(1) of ERISA, that is maintained for the
employees of the Borrower or any ERISA Affiliate of the Borrower.
"Environmental Laws" has the meaning set forth in SECTION 5.19 below.
"Environmental Complaint" has the meaning set forth in SECTION 5.19 below.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, as the same may be in effect from time to time, and any successor
statute, and the regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means, as applied to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which that Person
is a member and which is under common control within the meaning of the
regulations promulgated under Section 414 of the Code.
"Eurodollar Banking Day" means any day on which dealings in dollar deposits
are conducted by and among banks in the London Interbank Market.
"Eurodollar Reserve Percentage" means the reserve percentage, if any,
(expressed as a decimal, rounded upward to the nearest 1/100th of one percent
(0.01%)) in effect on the date LIBOR for such Interest Period is determined
(whether or not applicable to any Lender) under regulations issued from time to
time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities") having a term comparable to such Interest Period.
"Event of Default" means the occurrence of any of the events set forth in
SECTION 9.1.
8
"Existing Debt" has the meaning set forth in SECTION 4.1(m).
"Federal Funds Rate" means, for any period, the rate at which Rabobank, as
a state licensed branch of a foreign bank, in its sole discretion, can acquire
federal funds in the New York City interbank federal funds market or other
funding sources available to Rabobank, through brokers of recognized standing,
for a period and in an amount comparable to the period and amount requested by
the Borrower.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System and any successor thereto.
"Fee Letter" means the side letter dated the date of this Agreement, from
the Borrower in favor of Rabobank, whereby the Borrower agrees to pay to
Rabobank the fees contemplated therein.
"Fiscal Quarter" means each fiscal quarter of the Borrower ending on or
about the last day of each November, February, May and August.
"Fiscal Year" means each fiscal year of the Borrower ending on the Saturday
nearest August 31 of each calendar year.
"Fixed Charge Coverage Ratio" means, as measured at any date of
determination on a rolling four (4) Fiscal Quarter basis, on a consolidated
basis for the Borrower and its Subsidiaries, the ratio of (a) EBITDAP to (b) the
sum of Interest Expense, plus current maturities of Total Funded Debt (excluding
current payments on Loans outstanding hereunder).
"Funding Date" means with respect to any proposed Borrowing hereunder, the
date funds are advanced to the Borrower for any Loan.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other Persons as may be approved by the significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means (a) any federal, state, county, municipal or
foreign government, or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau, commission, department,
instrumentality or public body, (c) any court or administrative tribunal or (d)
with respect to any Person, any arbitration tribunal or other non-governmental
authority to whose jurisdiction that Person has consented.
"Grocers Capital Company" means Grocers Capital Company, a California
corporation, and its Subsidiaries.
"Guarantor" in the singular and "Guarantors" in the plural shall mean all
Subsidiaries of the Borrower other than (a) Grocers Capital Company, (b) the
Insurance Subsidiaries and (c) any other Subsidiaries with total assets of not
greater than $30,000.
9
"Guaranty" when used in the singular and "Guaranties" when used in the
plural means any and all guaranties dated as of even date herewith, executed by
each of the Guarantors in favor of the Agent and the Lenders, substantially in
the form of EXHIBIT B, and any and all amendments thereto.
"Hazardous Materials" means, without limitation, any flammable explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic
substances or related materials defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section
9601, et seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Section 6901, et seq.) and in the regulations adopted and
publications promulgated pursuant thereto, or any other federal, state or local
governmental law, ordinance, rule or regulation.
"Indebtedness" means, as to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money, including, without limitation in
the case of the Borrower, all of such indebtedness outstanding under this
Agreement and any of the other Loan Documents, (b) all Capital Lease Obligations
of such Person, (c) to the extent of the outstanding indebtedness thereunder,
any obligation of such Person that is evidenced by a promissory note or other
instrument representing an extension of credit to such Person, whether or not
for borrowed money, (d) any obligation of such Person for the deferred purchase
price of Property or services (other than trade or other accounts payable in the
ordinary course of business in accordance with customary industry terms), (e)
any obligation of such Person of the nature described in clauses (a), (b), (c)
or (d), above, that is secured by a Lien on assets of such Person and which is
non-recourse to the credit of such Person, but only to the extent of the fair
market value of the assets so subject to the Lien, (f) obligations of such
Person arising under acceptance facilities or under facilities for the discount
of accounts receivable of such Person, (g) any obligation of such Person to
reimburse the issuer of any letter of credit issued for the account of such
Person upon which a draw has been made, (h) all obligations of such Person to a
counterparty under any Rate Contract, (i) all Contingent Obligations of such
Person, and (j) all Off Balance Sheet Liabilities; provided that Patron Required
Deposits and any other deposits made by patrons of the Borrower in the ordinary
course of business shall not constitute Indebtedness.
"Indenture" has the meaning set forth in SECTION 5.21 hereof.
"Insolvency Proceeding" means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors, in each of case (a) and (b) undertaken under federal, state or
foreign law, including the Bankruptcy Code.
"Insurance Subsidiaries" means (a) Grocers & Merchants Insurance Services,
a California corporation, (b) Springfield Insurance Company, a California
corporation, (c) Springfield Insurance Co. Limited, a Bermuda corporation, and
(d) any of their Subsidiaries.
"Interest Differential" means, with respect to any prepayment of a LIBOR
Loan on a day
10
other than an Interest Payment Date on which such LIBOR Loan matures, the
difference between (a) the per annum interest rate payable with respect to such
LIBOR Loan as of the date of the prepayment and (b) the Adjusted LIBOR on, or as
near as practicable to, the date of the prepayment for a LIBOR Loan commencing
on such date and ending on the last day of the applicable Interest Period. The
determination of the Interest Differential by the Agent shall constitute a
rebuttable presumption of the accuracy thereof.
"Interest Expense" has the meaning customarily given such term in
accordance with GAAP.
"Interest Payment Date" means, (a) with respect to any LIBOR Loan, the last
day of each Interest Period applicable to such Loan, and (b) with respect to
Base Rate Loans, the last Business Day of each calendar month and each date a
Base Rate Loan is converted into a LIBOR Loan; provided, however, that if any
Interest Period for a LIBOR Loan exceeds three (3) months, interest shall also
be paid on the date which falls three (3) months after the beginning of such
Interest Period.
"Interest Period" means, as to any LIBOR Loan, the period commencing on the
date of such LIBOR Loan and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day) in the calendar
month that is one (1), two (2), three (3) or six (6) months thereafter, in each
case as the Borrower may elect; provided, however, that (x) no Interest Period
with respect to a LIBOR Loan shall end later than the Maturity Date, (y) if an
Interest Period would end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day, and (z) interest
shall accrue from and including the first Business Day of an Interest Period to,
but excluding, the last Business Day of such Interest Period.
"Interest Rate Determination Date" means the second Business Day prior to
the first day of the related Interest Period for a LIBOR Loan.
"Investment" means, when used in connection with any Person, any investment
by or of that Person, whether by means of purchase or other acquisition of Stock
or other securities of any other Person or by means of loan or advance (other
than advances to employees for moving or travel expenses, drawing accounts and
similar expenditures in the ordinary course of business), capital contribution,
guaranty or other debt or equity participation or interest, or otherwise, in any
other Person, including any partnership and joint venture interests of such
Person in any other Person.
"Investment Company Act" means the Investment Company Act of 1940, as
amended (15 U.S.C. (S) 80a-1 et seq.), as the same may be in effect from time to
time, or any successor statute thereto.
"IRS" means the Internal Revenue Service and any successor thereto.
"Issuing Bank" means Rabobank or such other Lender as shall replace
Rabobank, with the consent of Requisite Lenders, as the Lender designated to
issue Letters of Credit for the account of the Borrower pursuant to the terms
and conditions of this Agreement.
"Xxxx Xxxxxxx Debt" means the unsecured Indebtedness of the Borrower in the
principal
11
amount not to exceed $80,000,000, evidenced by the Note Purchase Agreement dated
as of March 15, 1998, between the Borrower, Xxxx Xxxxxxx Mutual Life Insurance
Company and certain other Persons.
"Lenders" means the financial institutions which have executed signature
pages to this Agreement and such other Assignee financial institutions as shall
hereafter execute and deliver an Assignment and Acceptance with respect to all
or any portion of the Commitments and the Loans advanced and maintained pursuant
to the Commitments, in each case pursuant to and in accordance with SECTION
11.2.
"Lending Office" means, with respect to any Lender, the office or offices
of such Lender specified as its "Domestic Lending Office" opposite its name on
the applicable signature page hereto, or such other office or offices of such
Lender as it may from time to time specify in accordance with SECTION 12.6 of
this Agreement.
"Letter of Credit" has the meaning set forth in SECTION 2.1.1(g).
"Letter of Credit Application" means an application given by the Borrower
to the Issuing Bank in the Issuing Bank's standard form, with appropriate
insertions.
"Letter of Credit Commitment" means an amount equal to Ten Million Dollars
($10,000,000), which amount is a sublimit of, and not in addition to, the
Aggregate Commitments of the Lenders, as such may be reduced from time to time
pursuant to this Agreement.
"Letter of Credit Undrawn Amount" means the stated but undrawn amount of
any issued and outstanding Letters of Credit.
"Leverage Ratio" means, as measured at any date of determination on a
rolling four (4) Fiscal Quarter basis, calculated on a consolidated basis for
the Borrower and its Subsidiaries, the ratio of (a) Total Debt to (b) EBITDAP.
"LIBOR" means, with respect to any LIBOR Loan, the London Inter-Bank
Offered Rate (determined solely by the Agent) at which United States Dollar
deposits are offered to Rabobank by prime banks in London, England at or about
11:00 a.m., London time, on the Interest Rate Determination Date with respect to
such LIBOR Loan in an aggregate amount approximately equal to the amount of such
LIBOR Loan and for a period of time comparable to the number of days in the
applicable Interest Period. The determination of LIBOR by the Agent shall be
conclusive in the absence of manifest error.
"LIBOR Loan" means any and all of the Loans funded pursuant to SECTION
2.1.1(e) of this Agreement bearing interest at a rate determined on the basis of
Adjusted LIBOR.
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment
for security, security interest, encumbrance, xxxx, xxxx or charge of any kind,
whether voluntarily incurred or arising by operation of law or otherwise,
affecting any Property, including any agreement to grant or right to acquire any
of the foregoing, any conditional sale or other title retention agreement, any
12
lease in the nature of a security interest, and the filing of or agreement to
file or deliver any financing statement (other than a precautionary financing
statement with respect to a lease that is not in the nature of a security
interest) under the UCC or comparable law of any jurisdiction.
"Loan" in the singular and "Loans" when used in the plural means any and
all of the loans advanced to the Borrower under the Revolving Credit Facility.
"Loan Documents" means this Agreement, the Notes, the Guaranties, all
Letters of Credit, any Letter of Credit Applications, any Rate Contract between
the Borrower and any Lender, and any and all other agreements, guaranties,
documents and instruments heretofore, now or hereafter executed by, on behalf of
or for the benefit of the Borrower or any of its Subsidiaries and delivered to
the Agent or the Lenders pursuant to or in connection with this Agreement, the
Loans or the transactions contemplated hereby, together with all amendments,
modifications, supplements and renewals thereto or thereof.
"Material Adverse Change" means a change in the assets, condition
(financial or otherwise), or business prospects or operations of the Borrower or
any of its Subsidiaries which has, either individually or in the aggregate, a
Material Adverse Effect.
"Material Adverse Effect" means any set of circumstances or events which
(a) has or could reasonably be expected to have any material adverse effect upon
the validity or enforceability of the Borrower's obligation to repay the Loans
or make any other payment required under any Loan Document, (b) is or could
reasonably be expected to be material and adverse to the condition (financial or
otherwise) or business operations of the Borrower and its Subsidiaries, taken as
a whole, or to the ability of the Borrower and its Subsidiaries, taken a whole,
to repay the Loans or make any other payment required under the Loan Documents,
(c) materially impairs or could reasonably be expected to materially impair the
ability of the Borrower and its Subsidiaries, taken as a whole, to perform their
material Obligations, or (d) materially impairs or could reasonably be expected
to materially impair the ability of the Agent or any Lender to enforce any of
its legal remedies pursuant to the Loan Documents.
"Maturity Date" means April 10, 2003, or, if such date is not a Business
Day, the next preceding Business Day.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which the Borrower or any ERISA Affiliate of
the Borrower is making, or is obligated to make, contributions or has made, or
been obligated to make, contributions within the preceding five (5) years.
"Note" when used in the singular and "Notes" when used in the plural means
any and all of the Revolving Notes.
"Obligations" means all loans, advances, debts, liabilities and obligations
for monetary amounts owing by the Borrower to the Lenders or the Agent, whether
due or to become due, matured or unmatured, liquidated or unliquidated,
contingent or non-contingent, and all covenants
13
and duties regarding such amounts, of any kind or nature, present or future,
whether or not evidenced by any note, agreement or other instrument, arising
under any of the Loan Documents. This term includes, without limitation, all
principal, interest (including interest that accrues after the commencement
against the Borrower or any of its Subsidiaries of a proceeding under the
Bankruptcy Code), fees, including, without limitation, any and all arrangement
fees, closing fees, prepayment fees, commitment fees, advisory fees, agent fees
and any and all other fees, expenses, costs or other sums (including Attorney
Costs) chargeable to the Borrower under any of the Loan Documents.
"Off Balance Sheet Liabilities" means, with respect to the Borrower and its
Subsidiaries, (i) any repurchase obligation or other liability of the Borrower
or any of its Subsidiaries with respect to accounts or notes receivable
permitted to be sold by the Borrower or such Subsidiary pursuant to this
Agreement, (ii) any repurchase obligation or other liability of the Borrower or
any of its Subsidiaries with respect to Property leased by such Person pursuant
to an operating lease, and (iii) obligations arising with respect to any other
transaction which is the functional equivalent of, or takes the place of
borrowing but which does not constitute, a liability on the financial statements
of the Borrower; provided, however, that Off Balance Sheet Liabilities shall not
include (a) operating leases which require no payments or a nominal payment by
or due from such Person at the scheduled termination of such operating lease or
pursuant to a required purchase by such Person of the leased property or (b)
"trac" leases of trucks, tractors, trailers or other over-the-road equipment.
"Overadvance" has the meaning set forth in SECTION 2.1.1(d) and SECTION
2.1.3(a).
"Patronage Dividend Certificates" means "patronage dividend certificates"
as defined in Article I, Section 5A of the Bylaws of the Borrower as in effect
on the Closing Date.
"Patronage Dividends" means patronage dividends actually made by the
Borrower to its patrons pursuant to Article VII of the Bylaws of the Borrower as
in effect on the Closing Date.
"Patron Required Deposits" means subordinated deposits required to be made
by patrons of the Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
thereto.
"Pension Plan" means any employee pension benefit plan, as defined in
Section 3(2) of ERISA, that is maintained for the employees of the Borrower or
any ERISA Affiliate of the Borrower, other than a Multiemployer Plan.
"Permitted Liens" has the meaning set forth in SECTION 7.1.
"Permitted Right of Others" means a right of others consisting of (a) an
interest (other than a legal or equitable co-ownership interest in any material
Property, an option or right to acquire a legal or equitable co-ownership
interest in any material Property and any interest of a ground lessor under a
ground lease) that does not materially impair the value or use of any material
Property for the purposes for which it is or may reasonably be expected to be
held, (b) an option or right to
14
acquire a Lien that would be a Permitted Lien, and (c) the reversionary interest
of a lessor under a lease of Property.
"Person" means any individual, sole proprietorship, partnership, joint
venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or Governmental Authority.
"Potential Event of Default" means a condition or event which, after notice
or lapse of time or both, would constitute an Event of Default.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.
"Pro Rata Share" means, for any Lender, the proportion such Lender's
Commitment has to the Aggregate Commitments.
"Public Utility Holding Company Act" means the Public Utility Holding
Company Act of 1935, as amended (15 U.S.C. (S) 79 et seq.) as the same shall be
in effect from time to time, and any successor statute thereto.
"Rabobank" means Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
"Rabobank Nederland", New York Branch.
"Rate Contract" means any interest rate or currency cap or swap, or other
agreement or arrangement designed to provide protection against fluctuations in
interest or currency exchange rates.
"Redemption Schedule" of Class B Shares means the schedule of payments that
the Borrower reasonably estimates it would be expected to make, under its
redemption policy for Class B Shares as in effect on the Closing Date, in order
to redeem completely such Class B Shares, assuming (i) such redemptions were
made on the last day of each Fiscal Year of the Borrower and (ii) no more Class
B Shares were issued after such date.
"Regulation D" means Regulation D adopted by the Federal Reserve Board (12
C.F.R. Part 204) and any other regulation in substance substituted therefor.
"Regulations G, T, U and X" means, collectively, Regulations G, T, U and X
adopted by the Federal Reserve Board (12 C.F.R. Parts 207, 220, 221 and 224,
respectively) and any other regulation in substance substituted therefor.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule, regulation, guideline or determination of an arbitrator
or of a Governmental Authority, in each case applicable to or binding upon the
Person or any of its Property or to which the Person or any of its Property is
subject.
"Requisite Lenders" means any combination of Lenders whose combined Pro
Rata Share
15
(and voting interest with respect thereto) of all amounts outstanding under this
Agreement, or, in the event there are no amounts outstanding, the Aggregate
Commitments, is greater than fifty-one percent (51.0%) of all such amounts
outstanding or the Aggregate Commitments, as the case may be.
"Responsible Person" means, as to the Borrower, any of the chief executive
officer, president, chief financial officer, treasurer, corporate controller or
any other officer of the Borrower appointed by resolution of the Board of
Directors of the Borrower and acceptable to Requisite Lenders, in each case
having authority to request Loans hereunder.
"Revolving Credit Availability" has the meaning set forth in SECTION 2.1.1.
"Revolving Credit Facility" means the One Hundred Million Dollar
($100,000,000) revolving credit facility described in SECTION 2.1.1 to be
provided by the Lenders to the Borrower according to each Lender's Pro Rata
Share.
"Revolving Loan" means a Loan advanced to the Borrower under the Revolving
Credit Facility pursuant to SECTION 2.1.1 by the Lenders based on their
Commitments according to their respective Pro Rata Shares percentages, which
Revolving Loan may be in the form of either a Base Rate Revolving Loan or a
LIBOR Loan.
"Revolving Note" when used in the singular and "Revolving Notes" when used
in the plural means any and all promissory notes dated the date of issuance,
executed by the Borrower, and payable to the order of each Lender in the stated
principal amount of such Lender's Commitment, substantially in the form of
EXHIBIT A-1, and any and all replacements, extensions, substitutions and
renewals thereof or therefor.
"Rights of Others" means, as to any Property in which a Person has an
interest, (a) any legal or equitable right, title or other interest (other than
a Lien) held by any other Person in or with respect to that Property, and (b)
any option or right held by any other Person to acquire any such right, title or
other interest in or with respect to that Property.
"SEC" means the Securities and Exchange Commission and any successor
thereto.
"Solvent" has the meaning set forth in SECTION 5.8.
"Stock" means all shares, options, warrants, interests, participation or
other equivalents (regardless of how designated) of or in a corporation or
equivalent entity, whether voting or nonvoting, including, without limitation,
common stock, preferred stock, or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended).
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture or other
business entity of which more than fifty percent (50.0%) of the voting stock or
other voting equity interests (in the case of Persons other than
16
corporations) is owned or controlled directly or indirectly by such Person, or a
combination thereof.
"Termination Event" means (a) a "reportable event" described in Section
4043 of ERISA and the regulations issued thereunder (other than a reportable
event not subject to the provision for 30-day notice to the PBGC under such
regulations), or (b) the withdrawal of the Borrower or any of its ERISA
Affiliates from a Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a
notice of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA, or (d) the institution
of proceedings to terminate a Pension Plan by the PBGC, or (e) any other event
or condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan.
"Total Debt" means, as measured as any date of determination, the sum of
(a) Total Funded Debt plus (b) the unpaid amount of all Patronage Dividend
Certificates that mature on or before the Maturity Date.
"Total Funded Debt" means, as measured at any date of determination, on a
consolidated basis, the total amount of all Indebtedness of (a) the Borrower and
each of its Subsidiaries (other than Grocers Capital Company) or (b) of any
other Person for and as to which the Borrower or any of its Subsidiaries (other
than Grocers Capital Company) is contingently liable, including in each case,
without limitation with respect to the Borrower, any such Subsidiary (other than
Grocers Capital Company) or any such other Person, all Capital Lease
Obligations, the undrawn face amount of all letters of credit (including the
Letters of Credit), all subordinated debt and the aggregate principal amounts of
all Loans outstanding hereunder; provided, however, that Total Funded Debt (i)
shall include the scheduled lease payments for the year following such date on
Contingent Obligations permitted under SECTION 7.3(g) (excluding "percentage
rent" or other contingent rent and payments to be made by the lessee for
property taxes, insurance, utilities, common area maintenance charges and the
like), and (ii) shall not include the value of Patronage Dividend Certificates.
"UCC" means the Uniform Commercial Code as the same may, from time to time,
be in effect in the State of New York.
"Working Capital" means the excess of (a) the consolidated current assets
of the Borrower and its Subsidiaries over (b) the consolidated current
liabilities (other than those under this Agreement) of the Borrower and its
Subsidiaries.
"Year 2000 Issues" has the meaning set forth in SECTION 5.20.
"Year 2000 Plan" has the meaning set forth in SECTION 5.20.
1.2 ACCOUNTING TERMS. Any accounting term used in this Agreement shall
have, unless otherwise specifically provided herein, the meaning customarily
given such term in accordance with GAAP, and all financial data required to be
submitted by this Agreement shall be prepared and computed, unless otherwise
specifically provided herein, in accordance with GAAP. That certain
17
terms or computations are explicitly modified by the phrase "in accordance with
GAAP" shall in no way be construed to limit the foregoing. In the event that
GAAP changes during the term of this Agreement such that the covenants contained
in SECTION 8 would then be calculated in a different manner or with different
components, (a) the parties hereto agree to amend this Agreement in such
respects as are necessary to conform those covenants as criteria for evaluating
the Borrower's financial condition to substantially the same criteria as were
effective prior to such change in GAAP and (b) the Borrower shall be deemed to
be in compliance with the covenants contained in the aforesaid subsections
during the sixty (60) day period following any such change in GAAP if and to the
extent that the Borrower would have been in compliance therewith under GAAP as
in effect immediately prior to such change.
1.3 OTHER TERMS. All other undefined terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings provided for by
the UCC to the extent the same are used or defined therein. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the exhibits and schedules hereto, all of which
are by this reference incorporated into this Agreement, as the same may from
time to time be amended, modified or supplemented, and not to any particular
section, subsection or clause contained in this Agreement. The term "including"
shall not be limiting or exclusive, unless specifically indicated to the
contrary. The term "or" is disjunctive; the term "and" is conjunctive. The term
"shall" is mandatory; the term "may" is permissive. Wherever from the context
it appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, feminine and neuter.
1.4 PERFORMANCE; TIME. Whenever any performance obligation hereunder
(other than a payment obligation) shall be stated to be due or required to be
satisfied on a day other than a Business Day, such performance shall be made or
satisfied on the next succeeding Business Day unless otherwise indicated. In
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including"; the words "to" and "until"
each mean "to but excluding", and the word "through" means "to and including."
If any provision of this Agreement refers to any action taken or to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be interpreted to encompass any and all means, direct or indirect, of taking, or
not taking, such action.
1.5 LAWS. References to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
1.6 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
18
1.7 SCHEDULES AND EXHIBITS. Any reference to a "Section," "Subsection,"
"Exhibit" or "Schedule" shall refer to the relevant Section or Subsection of or
Exhibit or Schedule to this Agreement, unless specifically indicated to the
contrary.
SECTION 2. THE CREDIT - AMOUNT AND TERMS.
2.1 AMOUNTS AND TERMS OF COMMITMENTS.
2.1.1 REVOLVING CREDIT FACILITY. Upon the terms, subject to the
conditions and in reliance upon the representations and warranties of the
Borrower set forth in this Agreement, and subject further to SECTION 2.1.2(d),
each of the Lenders hereby severally agrees to make Revolving Loans of
immediately available funds to the Borrower, on a revolving basis, from the
Closing until the Business Day immediately preceding the Maturity Date, in an
aggregate principal amount outstanding not to exceed at any time the lesser of
(a) an amount equal to such Lender's Commitment and (b) an amount equal to such
Lender's Pro Rata Share of (i) the Aggregate Commitments of all the Lenders less
(ii) the Letter of Credit Undrawn Amount (the "Revolving Credit Availability").
(a) LIMITATION ON EACH LENDER'S OBLIGATION. With respect to any
Borrowing of Revolving Loans requested by the Borrower pursuant to a complying
Borrowing Notice delivered to the Agent pursuant to SECTION 2.5 of this
Agreement, each Lender's obligation to advance funds in the form of Loans to the
Borrower shall be limited to an amount equal to such Lender's Pro Rata Share of
such Borrowing (obtained by multiplying the Borrowing amount by such Lender's
Pro Rata Share).
(b) FUNDING OF LOANS TO AGENT. Following the Agent's receipt of a
complying Borrowing Notice and the Agent's determination that the conditions
precedent to a requested Borrowing set forth in SECTION 4 of this Agreement have
been duly satisfied, the Agent shall promptly notify each Lender having a
Commitment of (i) the amount of the requested Borrowing and such Lender's Pro
Rata Share thereof and (ii) the requested Funding Date, which (1) if a LIBOR
Loan is requested, shall be no earlier than the third Business Day following the
date on which the Agent receives the Borrower Notice and, (2) if a Base Rate
Loan is requested, shall be the same Business Day. Not later than 12:00 noon,
San Francisco, California time, on the requested Funding Date, each Lender
having a Commitment shall advance its Loan to the Agent at the Agent's Payment
Office in immediately available funds. No Lender shall have any liability to
the Borrower for the failure of such Lender to advance funds for any Loan, nor
shall the Borrower shall have any right to enforce any obligation of a Lender to
fund any Loan, unless and until each condition precedent to the applicable
Borrowing has been duly satisfied or has been waived in writing by Requisite
Lenders. The Agent's determination that the conditions precedent to any
Borrowing have been duly satisfied shall be conclusive and binding on all
Lenders for purposes of determining when Lenders shall be obligated to advance
funds to the Agent.
(c) DISBURSEMENT OF LOANS TO BORROWER. On the requested Funding Date,
the Agent shall disburse in immediately available funds to the Designated
Deposit Account an amount equal to the Loans advanced by the Lenders to the
Agent's Payment Office with respect
19
to such Borrowing.
(d) OVERADVANCES. If at any time and for any reason (i) the aggregate
principal amount of the Revolving Loans then outstanding, plus the Letter of
Credit Undrawn Amount shall exceed the Revolving Credit Availability or (ii) the
Letter of Credit Undrawn Amount shall exceed the Letter of Credit Commitment
(the amount of such excess, if any, in each case being an "Overadvance"), the
Borrower shall immediately repay the full amount of such Overadvance, together
with all interest accrued thereon; provided, that in the case of an Overadvance
relating to the Letter of Credit Commitment, such amount shall be held as cash
collateral for undrawn Letters of Credit, and shall immediately be returned to
the Borrower if Letters of Credit in an amount sufficient to eliminate such
Overadvance expire undrawn.
(e) GENERAL PROVISIONS RELATING TO REVOLVING LOANS. Each Revolving
Loan made by a Lender hereunder shall, at the Borrower's option in accordance
with the terms of this Agreement, be either in the form of a Base Rate Loan (a
"Base Rate Revolving Loan") or a LIBOR Loan; provided, however, that in no event
shall the Borrower maintains at any time LIBOR Loans having more than seven (7)
different Interest Periods. The Borrower shall repay the principal amount of
the Revolving Loans in the amounts and in the manner set forth in SECTION 2.3 of
this Agreement and pay interest accrued on the Revolving Loans at the rates and
in the manner set forth in SECTION 2.4 of this Agreement. Amounts borrowed by
the Borrower under the Aggregate Commitments may be repaid and, prior to the
Maturity Date and subject to the applicable terms and conditions precedent to
Borrowings hereunder, re-borrowed.
(f) PERMITTED USES OF REVOLVING LOAN PROCEEDS. The Borrower shall use
the Revolving Loan proceeds only for the purposes of funding working capital and
general corporate needs.
(g) LETTER OF CREDIT SUBLIMIT UNDER REVOLVING CREDIT FACILITY. Without
limiting the generality of the foregoing, each Lender severally agrees that a
Responsible Person of the Borrower may, by delivery of notice to the Agent in
accordance with SECTION 2.5, also request the Issuing Bank to issue one or more
standby or documentary letters of credit under the Letter of Credit Commitment
for the account of the Borrower, which letters of credit shall be in the
standard form of the Issuing Bank (each a "Letter of Credit"); in which event,
after satisfaction by the Borrower of all conditions precedent set forth in
SECTION 4.2, the Issuing Bank shall issue such Letters of Credit subject to and
in accordance with SECTION 2.1.2; provided, however, nothing contained in this
Agreement shall under any circumstance be deemed to require the Issuing Bank to
issue any Letter of Credit which, taking into account the issuance of such
Letter of Credit, would either (i) cause the Letter of Credit Undrawn Amount to
exceed the Letter of Credit Commitment or (ii) cause the aggregate principal
amount of the Revolving Loans then outstanding, plus the Letter of Credit
Undrawn Amount to exceed the Revolving Credit Availability.
20
2.1.2 LETTER OF CREDIT SUBFACILITY.
(a) Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of the Borrower set forth
herein, at any time and from time to time from the Closing through the Business
Day immediately prior to the Maturity Date, after satisfaction of all conditions
precedent set forth in SECTION 4.2, the Issuing Bank shall issue for the account
of the Borrower Letters of Credit, provided that a request shall have been made
for each Letter of Credit by a Responsible Person of the Borrower delivering to
the Agent a Borrowing Notice, duly executed with appropriate insertions and as
otherwise required by SECTION 2.5, together with a duly executed Letter of
Credit Application, with appropriate insertions (which Borrowing Notice and
Letter of Credit Application shall have been received by the Issuing Bank prior
to 10:00 a.m., San Francisco, California time, three (3) Business Days prior to
the requested issuing date). No Letter of Credit shall have an expiration date
that is later than one hundred twenty (120) days after the Maturity Date or one
(1) year after the issuance of such Letter of Credit (or any renewal thereof),
whichever is earlier.
(b) Upon issuance of each Letter of Credit, each Lender shall be
deemed to have purchased a participation from the Issuing Bank equal to such
Lender's Pro Rata Share of the original stated amount of such Letter of Credit.
Nothing contained in this Agreement shall under any circumstance be deemed to
require any Lender to participate in the issuance of any Letter of Credit which,
taking into account such Lender's participation in such Letter of Credit, when
added to the aggregate of such Lender's participation in all other issued and
undrawn Letters of Credit, exceeds such Lender's Pro Rata Share of the Letter of
Credit Commitment.
(c) Unless otherwise expressly provided therein, each beneficiary
named by the Borrower with respect to a Letter of Credit issued hereunder shall
be permitted to make full or partial draws under such Letter of Credit. Upon
the making of any draw under a Letter of Credit by such beneficiary, the full
amount of such draw shall be immediately due and payable by the Borrower to the
Issuing Bank. The Issuing Bank shall immediately give written notification of
the amount of such draw to the Agent, each Lender and the Borrower and to the
extent that the Issuing Bank has not been immediately reimbursed by the Borrower
for any payment required to be made by the Issuing Bank under such Letter of
Credit (and all commissions incurred but unpaid in connection therewith), each
Lender shall, according to its Pro Rata Share of such Letter of Credit,
reimburse the Issuing Bank immediately upon written demand for the amount of
such payment (and such unpaid commissions). The obligation of each Lender to so
reimburse the Issuing Bank shall be absolute and unconditional and shall not be
affected by the occurrence of a Potential Event of Default or Event of Default
or any other occurrence or event. Any such reimbursement shall not relieve or
otherwise limit or impair the obligation of the Borrower to reimburse the
Lenders for the amount of any payment made by the Issuing Bank under any Letter
of Credit.
(d) Without limiting the generality of the preceding subsections of
this SECTION 2.1.2, in the event the Borrower shall fail to reimburse
immediately the Issuing Bank for any honor of a draw on any Letter of Credit as
confirmed by the Issuing Bank's written notice and demand for payment from each
Lender of its ratable participation amount pursuant to SECTION 2.1.2(c), each
Lender shall be deemed to have made, without further notice to the Borrower,
21
a Base Rate Loan in the principal amount equal to such Lender's Pro Rata Share
of the amount drawn under such Letter of Credit (plus any unpaid commission);
and, for this purpose, the conditions precedent set forth in SECTION 4.2 shall
not apply. Any Base Rate Loan deemed to be advanced after the Maturity Date,
shall be immediately due and payable. The proceeds of such Base Rate Loans shall
be applied to reimburse the Issuing Bank for such payment required to be made by
the Issuing Bank under the Letter of Credit. In the event that any Base Rate
Loan shall be deemed to be made to the Borrower pursuant to this SECTION
2.1.2(d), such Base Rate Loan shall be deemed to have been made as of the date
of the honor of the draw under the respective Letter of Credit and interest
shall accrue thereon at the same rate as provided for other Base Rate Loans
under this Agreement. In the event that the Issuing Bank does not receive the
proceeds of any Base Rate Loans made pursuant to this subsection by 12:00 noon,
San Francisco, California time, on the date that the draw on the Letter of
Credit is honored, the Lender whose funds are delayed shall pay interest to the
Issuing Bank on the amount not received at the Federal Funds Rate from the date
of such honor until the date on which the Issuing Bank receives such proceeds by
12:00 noon.
(e) (i) The Issuing Bank may resign as Issuing Bank by giving
notice to the Agent, the Lenders and the Borrower, and such resignation shall be
effective thirty (30) days after the giving of such notice, and as to any Letter
of Credit outstanding upon the then current expiry date on such Letter of
Credit. If the Issuing Bank shall resign as the Issuing Bank under this
Agreement, Requisite Lenders shall appoint a successor Issuing Bank from among
the Lenders, with the consent of such successor.
(ii) If an Issuing Bank has resigned and no successor
Issuing Bank is appointed prior to thirty (30) days after such resignation, then
until an appointment of a successor Issuing Bank is made, in the event of a
request by the Borrower for the issuance of a Letter of Credit under this
SECTION 2.1.2, each Lender shall issue its own Letter of Credit in an amount
equal to such Lender's Pro Rata Share of the amount of such requested Letter of
Credit upon the terms and conditions set forth in SECTIONS 2.1.1 and 2.1.2, with
such changes as are appropriate to apply to an individual Lender issuing a
Letter of Credit without participation. In the event of an unreimbursed draw on
a Letter of Credit issued pursuant to the provisions of this SECTION
2.1.2(e)(ii), each Lender which has honored such a draw shall be deemed to have
made a Base Rate Loan to reimburse itself for the draw under such Letter of
Credit.
(iii) With respect to any Letter of Credit issued under
SECTION 2.1.2(e)(ii), the reference to "Issuing Bank" in SECTION 2.8(d) shall be
to each Lender issuing a Letter of Credit and all fees due (including the fee
payable to the Issuing Bank) under SECTION 2.8(b) shall be payable to the
Lenders according to their respective Pro Rata Shares of the Aggregate
Commitments.
(iv) Upon the acceptance of its appointment as a successor
Issuing Bank hereunder, such successor Issuing Bank shall succeed to all the
rights, powers and duties of the retiring Issuing Bank with respect to any
Letters of Credit issued subsequent to such acceptance, and the term "Issuing
Bank" shall mean such successor issuing bank with regard to such subsequently
issued Letters of Credit. Whether or not a successor Issuing Bank is appointed,
the retiring Issuing Bank shall retain all the rights, powers and duties of an
Issuing Bank with respect
22
to any Letters of Credit previously issued by such retiring Issuing Bank, and
the term "Issuing Bank" shall mean such retiring Issuing Bank with respect to
such previously issued Letters of Credit.
(f) The obligation of the Borrower to reimburse the Lenders for
drawings made under the Letters of Credit shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement and such Letters of Credit, under all circumstances whatsoever,
including the following circumstances:
(i) Any lack of validity or enforceability of any Letter of Credit,
the obligation supported by such Letter of Credit or any other agreement or
instrument relating thereto (collectively, the "Related LC Documents");
(ii) Any amendment or waiver of or any consent to or departure from
all or any of the Related LC Documents;
(iii) The existence of any claim, set-off, defense or other rights
which the Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Persons or entities for whom any such
beneficiary or any such transferee may be acting), the Lenders, the Agent or any
other Person, whether in connection with the Loan Documents, the Related LC
Documents or any unrelated transaction;
(iv) Any breach of contract or other dispute between the Borrower
and any beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom such beneficiary or any such transferee may be acting), the
Lenders, the Agent or any other Person;
(v) Any draft, statement or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect
whatsoever; or
(vi) Any delay, extension of time, renewal, compromise or other
indulgence or modification granted or agreed to by the Issuing Bank, with or
without notice to or approval by the Borrower in respect of any of the
Borrower's Indebtedness under this Agreement.
(g) The Borrower assumes all risks of the acts or omissions of any
beneficiary and any transferee of each Letter of Credit; provided, however, this
assumption with respect to the Agent and the Lenders, including the Issuing
Bank, is not intended to, and shall not, preclude the Borrower's pursuing such
rights and remedies as it may have against any such beneficiary or transferee of
a Letter of Credit at law or under any other agreement. Neither the Agent nor
any Lender, including the Issuing Bank, nor any of their officers or directors
shall be liable or responsible for, without limitation: (1) the use which may be
made of any Letter of Credit or for any acts or omissions of any beneficiary and
any transferee of any Letter of Credit in connection therewith; or (2) the
validity, sufficiency or genuineness of documents, or of any endorsement(s)
thereon, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged. In furtherance and not in
limitation of the foregoing, the Issuing Bank may accept documents that appear
on their face to be in order, without responsibility
23
for further investigation, regardless of any notice or information to the
contrary.
(h) Subject to the laws, customs and practices of the trade in the
area where the beneficiary is located and to the extent not otherwise
inconsistent with the provisions of this SECTION 2.1.2, each Letter of Credit
will be subject to, and performance under each Letter of Credit by the Issuing
Bank, its correspondents, and the beneficiary will be governed by, UCC Article 5
and the "Uniform Customs and Practice for Documentary Credit (1993 Revision),
International Chamber of Commerce, Publication No. 500," or by any later Uniform
Customs and Practice fixed by later Congresses of the International Chamber of
Commerce as in effect on the date the Letter of Credit is issued; provided,
however, that to the extent any conflict exists between UCC Article 5 and such
Uniform Customs and Practices then in effect, UCC Article 5 shall control.
2.2 NOTES.
(a) REVOLVING NOTES. The Revolving Loans made by each Lender shall be
evidenced by separate Revolving Notes executed by the Borrower and made payable
to the order of such Lender in the stated principal amount equal to its
Commitment.
(b) NOTATIONS IN LENDERS' BOOKS AND RECORDS. Each Lender shall make
notations in its books and records regarding the date, amount and maturity of
each Loan made by it and the amount of each repayment or prepayment of principal
and payment of interest made by the Borrower with respect to such Loan. Each
Lender is irrevocably authorized by the Borrower to endorse its Note and each
Lender's record shall constitute a rebuttable presumption as to the matters set
forth therein; provided, however, that the failure of a Lender to make, or an
error in making, such a notation with respect to any Loan shall not limit or
otherwise affect the Obligations of the Borrower hereunder or under any such
Note to such Lender.
2.3 REPAYMENT OF THE LOANS. Subject to the terms of this Agreement
relating to the acceleration of maturities by the Lenders, the Borrower shall
repay the Lenders the entire outstanding principal amount of the Revolving Loans
and all other unpaid amounts outstanding under the Revolving Credit Facility on
the Maturity Date.
2.4 PAYMENT OF INTEREST ON THE LOANS.
(a) INTEREST RATES. Subject to SECTION 2.4(d) of this Agreement, each
Loan shall bear interest on the outstanding principal amount thereof from the
date when made, continued or converted until paid in full at a rate per annum
equal to the Base Rate with respect to Base Rate Loans, the Adjusted LIBOR plus
the Applicable Margin with respect to LIBOR Loans.
(b) INTEREST PAYMENT DATES. Interest on each Loan shall be paid in
arrears on each Interest Payment Date. Interest shall also be paid on the date
of any prepayment of any Loans pursuant to this Agreement for the portion of the
Loans so prepaid and upon payment (including prepayment) in full thereof.
(c) INTEREST UPON EVENTS OF DEFAULT. Upon the occurrence of an Event
24
of Default and so long as such Event of Default shall continue, including after
acceleration (whether before or after entry of judgment), the Borrower shall, at
the option of Requisite Lenders, pay interest on the principal amount of each
Loan then outstanding at a rate per annum which is determined by adding two
percent (2.0%) to the interest rate otherwise applicable to such Loan.
(d) LIMITATIONS ON INTEREST RATES. Notwithstanding any provision in
this Agreement, the Notes or any of the other Loan Documents, the total
liability for payments in the nature of interest shall not exceed the applicable
limits imposed by any applicable federal or state interest rate laws. If any
payments in the nature of interest, additional interest and other charges made
hereunder or under any of the Loan Documents are held to be in excess of the
applicable limits imposed by any applicable federal or state law, the amount
held to be in excess shall be considered payment of principal under the Notes
and the indebtedness evidenced thereby shall be reduced by such amount in the
inverse order of maturity so that the total liability for payments in the nature
of interest, additional interest and other charges shall not exceed the
applicable limits imposed by any applicable federal or state interest rate laws.
2.5 PROCEDURE FOR THE BORROWING OF LOANS.
(a) Each Borrowing of Loans shall be made upon the Borrower's
irrevocable written notice delivered to the Agent in the form of a Borrowing
Notice, executed by a Responsible Person of the Borrower, with appropriate
insertions (which Borrowing Notice must be received by the Agent (i) prior to
10:00 a.m., San Francisco, California time, three (3) Business Days prior to
the requested Funding Date, in the case of LIBOR Loans, and (ii) prior to 10:00
a.m., San Francisco, California time on the requested Funding Date, in the case
of Base Rate Loans), specifying:
(i) the amount of the Borrowing, which shall be in a minimum amount
of One Million Dollars ($1,000,000) or any integral multiple of One Hundred
Thousand Dollars ($100,000) in excess thereof;
(ii) the requested Funding Date, which shall be a Business Day;
(iii) whether the Borrowing is to be comprised of LIBOR Loans or Base
Rate Loans; and
(iv) the duration of the Interest Period applicable to any such
LIBOR Loans included in such notice. If the Borrowing Notice shall fail to
specify the duration of the Interest Period for any Borrowing comprised of LIBOR
Loans, such Interest Period shall be deemed to be one (1) month.
(b) Upon receipt of the Borrowing Notice, the Agent will promptly
notify each Lender of the amount of such Lender's Pro Rata Share of the
requested Borrowing.
(c) Each Lender will make the amount of its Pro Rata Share of the
Borrowing available to the Agent for the account of the Borrower at the Agent's
Payment Office by
25
1:00 p.m., San Francisco, California time, on the Funding Date requested by the
Borrower in funds immediately available to the Agent. The proceeds of all such
Loans will then be made available to the Borrower on the Funding Date by the
Agent by wire transfer to the Designated Deposit Account. No Borrowing of Loans
shall be deemed made to the Borrower, and no interest shall accrue on any such
Borrowing, until the related funds have been deposited in the Designated Deposit
Account.
(d) Unless all Lenders shall otherwise consent, during the existence
of a Potential Event of Default or Event of Default, the Borrower may not elect
to have a Loan made as a LIBOR Loan.
2.6 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Borrower may upon irrevocable written notice from the
Borrower to the Agent:
(i) elect to convert on any Business Day, Base Rate Loans in an
amount equal to One Million Dollars ($1,000,000) or any integral multiple of One
Hundred Thousand Dollars ($100,000) in excess thereof, into LIBOR Loans; or
(ii) elect to convert on any Interest Payment Date any LIBOR Loans
maturing on such Interest Payment Date into Base Rate Loans; or
(iii) elect to continue on any Interest Payment Date any
LIBOR Loans maturing on such Interest Payment Date (or any part thereof in an
amount equal to One Million Dollars ($1,000,000) or any integral multiple of One
Hundred Thousand Dollars ($100,000) in excess thereof).
(b) The Borrower shall deliver a Conversion/Continuation Notice in
accordance with SECTION 12.6 of this Agreement to be received by the Agent (i)
prior to 10:00 a.m., San Francisco, California time, at least three (3) Business
Days in advance of the conversion date or continuation date, if any Loans are to
be converted into or continued as LIBOR Loans; and (ii) prior to 10:00 a.m., San
Francisco, California time on the conversion date, if any Loans are to be
converted into Base Rate Loans; specifying:
(i) the proposed Conversion Date or Continuation Date;
(ii) the aggregate amount of Loans to be converted or
continued;
(iii) the nature of the proposed conversion or continuation;
and
(iv) the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to any
LIBOR Loans, the Borrower shall have failed to have given due notice to the
Agent of the Borrower's selection of a new Interest Period to be applicable to
such LIBOR Loans, the Borrower shall be deemed to have elected to convert such
LIBOR Loans into Base Rate Loans.
26
(d) Upon receipt of a Conversion/Continuation Notice, the Agent will
promptly notify each Lender thereof, or, if no timely notice is provided by the
Borrower, the Agent will promptly notify each Lender of the details of any
automatic conversion. All conversions and continuations shall be made according
to each Lender's applicable Pro Rata Share of the outstanding principal amounts
of the Loans with respect to which the notice was given.
(e) Unless all Lenders shall otherwise consent, during the existence
of a Potential Event of Default or an Event of Default, the Borrower may not
elect to have a Loan converted into or continued as a LIBOR Loan.
2.7 VOLUNTARY REDUCTION IN AGGREGATE COMMITMENTS. Subject to this SECTION
2.7 and SECTION 3.5, the Borrower may, at any time and from time to time, elect
to permanently reduce the Aggregate Commitments by delivering to the Agent
written notice thereof (a "Reduction Notice"). The Reduction Notice shall (a)
specify the date and amount of such reduction and (b) in the event such proposed
reduction in the Aggregate Commitments would, pursuant to this Agreement, give
rise to the requirement that the Borrower prepays any of the Loans in order to
comply with the Revolving Credit Availability, then such notice shall (i) state
whether such prepayment is to be applied to Base Rate Loans or LIBOR Loans, or
any combination thereof, and (ii) if such prepayment consists solely of Base
Rate Loans, the Reduction Notice shall be delivered to the Agent at least one
(1) Business Day prior to the effective date for such proposed reduction in the
Aggregate Commitments, or, if such prepayment (or any portion thereof) consists
of LIBOR Rate Loans, the Reduction Notice shall be delivered to the Agent at
least three (3) Business Days prior to the effective date for such proposed
reduction in the Aggregate Commitments. Such notice shall be irrevocable and
the Agent shall promptly notify each Lender thereof and of such Lender's Pro
Rata Share of such reduction in the Aggregate Commitments and, as applicable,
prepayment of Loans. Any prepayment of Loans required to be made by the Borrower
pursuant to a reduction in the Aggregate Commitments shall be due and payable on
the effective date for such reduction, together with accrued interest to such
date on the principal amount prepaid and any amounts required pursuant to
SECTION 3.5 of this Agreement, but otherwise without premium or penalty.
Notwithstanding anything to the contrary, any prepayments pursuant to this
SECTION 2.7 shall be applied first to any Base Rate Loans then outstanding and
then to LIBOR Loans with the shortest Interest Periods remaining.
2.8 FEES.
(a) COMMITMENT FEE FOR PROVIDING COMMITMENTS. In consideration of the
Lenders' agreement to commit to make the Revolving Loans available to the
Borrower as contemplated by this Agreement, the Borrower agrees to pay to the
Agent from time to time, on behalf of and for the ratable benefit of the Lenders
according to their respective Pro Rata Shares of the Aggregate Commitments, a
commitment fee in an amount equal to the Applicable Commitment Fee Percentage
for Revolving Loans multiplied by the average daily difference between the
Aggregate Commitments and (i) the sum of the aggregate outstanding principal
amount of Revolving Loans plus (ii) the Letter of Credit Undrawn Amount, due and
payable quarterly in arrears on the last Business Day of each March, June,
September and December, with the final such payment due and payable on the
Maturity Date.
27
(b) LETTERS OF CREDIT FEES AND COMMISSIONS.
(i) The Borrower shall pay to the Issuing Bank for the account of
each Lender according to its Pro Rata Share a letter of credit participation fee
equal to the number of days between the date of such issuance through the expiry
date of such Letter of Credit, (1) multiplied by the face amount of such Letter
of Credit, (2) multiplied by the Applicable Margin, and (3) divided by 360. Such
participation fees will be payable by the Borrower to the Issuing Bank in
arrears on the last day of each Fiscal Quarter during which each Letter of
Credit is issued and undrawn and on the expiry date for each standby Letter of
Credit, and such amounts received by the Issuing Bank shall promptly be paid to
the Agent for distribution to the Lenders.
(ii) Issuance fees for sight documentary Letters of Credit, in
accordance with the then current standard schedule of such fees of the Issuing
Bank, will be paid by the Borrower upon issuance and the aggregate of such fees
received by the Issuing Bank during any Fiscal Quarter will be distributed by
the Issuing Bank to the Agent for distribution to the Lenders promptly upon the
Issuing Bank's receipt thereof.
(iii) The Borrower shall pay to the Issuing Bank, upon demand, all
standard charges of the Issuing Bank in connection with the issuance, extension,
renewal, modification, cancellation or negotiation of any Letter of Credit,
which amounts shall include, without limitation, the issuance fee set forth in
the Fee Letter. No fees or commissions paid in respect of any Letter of Credit
shall be refundable.
2.9 CALCULATION OF INTEREST AND FEES. Interest on all LIBOR Loans shall
be computed on the basis of a 360-day year and the actual number of days
elapsed. Interest on all Base Rate Loans shall be computed on the basis of a
365-day year and the actual number of days elapsed. All fees payable hereunder
shall be computed on the basis of a 360-day year and actual days elapsed. In
computing interest on any Loan, the date of the making of such Loan shall be
included and the date of payment shall be excluded; provided, however, that if
any Loan is repaid on the same day on which it is made, such day shall be
included in computing interest on such Loan. Each change in the interest rate
of the Base Rate Loans based on changes in the Base Rate and each change in the
interest rate of LIBOR Loans based on changes in the Eurodollar Reserve
Percentage shall be effective on the effective date of such change and to the
extent of such change. The Agent shall give the Borrower prompt notice of any
such change in the Base Rate or Eurodollar Reserve Percentage; provided,
however, that any failure by the Agent to provide the Borrower with notice
hereunder shall not affect the Lenders' right to make changes in the interest
rate of the Base Rate Loans based on changes in the Base Rate or changes in the
interest rate of LIBOR Loans based on changes in the Eurodollar Reserve
Percentage.
2.10 PAYMENTS. All repayments or prepayments of principal and all payments
of interest, fees, costs, expenses and other sums chargeable to the Borrower
under this Agreement, the Notes or any of the other Loan Documents shall be in
lawful money of the United States of America in immediately available funds and
delivered to the Agent, on behalf and for the benefit of the Lenders, not later
than 11:00 a.m., San Francisco, California time, on the date due at the Agent's
Payment Office.
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2.11 PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be made under
this Agreement, the Notes or any of the other Loan Documents shall be stated to
be due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall in such case be
included in the computation of the payment of interest thereon.
2.12 APPLICATION OF PAYMENTS. Except as otherwise expressly provided in
this Agreement or in any other Loan Document, all payments, when received by the
Lenders or the Agent, on behalf of Lenders, shall be applied in the following
order: (a) then due and payable fees, costs and expenses of the Agent and the
Lenders; (b) then due and payable interest payments on Revolving Credit Loans;
and (c) then due and payable principal payments on Revolving Credit Loans. In
addition, each Lender is authorized to, and at its sole option may, for the
benefit of the Lenders and the Agent, make advances on behalf of the Borrower
for payment of any and all fees, expenses, charges, costs, principal and
interest incurred hereunder or under the other Loan Documents. To the extent
permitted by law, all amounts advanced by any Lender hereunder or under other
provisions of the Loan Documents shall accrue interest thereon at the Base Rate.
2.13 DISTRIBUTION OF PAYMENTS. The Agent shall immediately distribute to
each Lender, at such address as each Lender shall designate, such Lender's
interest in all repayments and prepayments of principal and all payments of
interest, loan fees, commitment fees and other fees, expenses and costs received
by the Agent on the same day and in the same type of funds as payment was
received. In the event the Agent does not distribute such payments on the same
day received, such payment shall accrue interest at the Federal Funds Rate,
which shall be payable by the Agent. The Agent shall indemnify and hold the
Borrower harmless from any claim for interest by any Lender under this SECTION
2.13.
2.14 AGENT'S RIGHT TO ASSUME FUNDS AVAILABLE FOR LOANS. Unless the Agent
shall have been notified by any Lender no later than the Business Day prior to
the respective Funding Date of any Loan that such Lender does not intend to make
available to the Agent immediately available funds equal to such Lender's Pro
Rata Share of the total principal amount of such Loan, the Agent may assume that
such Lender has advanced funds in the amount of such Loan to the Agent on the
applicable Funding Date and the Agent may, in reliance upon such assumption,
make available to the Borrower corresponding funds. The Agent agrees to give
prompt notice to the Borrower in the event it advances funds on behalf of a
Lender under this SECTION 2.14; provided, that failure to give such notice shall
in no way limit, restrict or otherwise affect the Borrower's obligations or the
Agent's or any Lender's rights or remedies under this Agreement and the other
Loan Documents. If the Agent has made funds available to the Borrower based on
such assumption and such Loan is not in fact made available to the Agent by such
Lender, the Agent shall be entitled to recover the corresponding amount of such
Loan on demand from such Lender. If such Lender does not promptly pay such
corresponding amount upon the Agent's demand, the Agent shall notify the
Borrower and the Borrower shall repay such Loan to the Agent. The Agent also
shall be entitled to recover from such Lender interest on such Loan in respect
of each day from the date such Loan was made by the Agent to the Borrower to the
date such corresponding amount is recovered by the Agent at the Federal Funds
Rate, and the Agent shall indemnify and hold harmless the Borrower
29
from any claim for such interest.
2.15 AGENT'S RIGHT TO ASSUME PAYMENTS WILL BE MADE BY THE BORROWER. Unless
the Agent shall have been notified by the Borrower prior to the date on which
any payment to be made by the Borrower hereunder is due that the Borrower does
not intend to remit such payment, the Agent may, in its discretion, assume that
the Borrower has remitted such payment when so due and the Agent may, in its
discretion and in reliance upon such assumption, make available to each Lender
on such payment date an amount equal to such Lender's Pro Rata Share of such
assumed payment. If the Borrower has not in fact remitted such payment to the
Agent, each Lender shall forthwith on demand repay to the Agent the amount of
such assumed payment made available to such Lender, together with interest
thereon in respect of each date from and including the date such amount was made
available by the Agent to such Lender to the date such amount is repaid to the
Agent at the Federal Funds Rate.
SECTION 3. TAXES, YIELD PROTECTION AND ILLEGALITY.
3.1 TAXES.
(a) Subject to SECTION 3.1(h) of this Agreement, any and all payments
by the Borrower to the Lenders or the Agent under this Agreement shall be made
free and clear of, and without deduction or withholding for, any and all present
or future taxes, fees, duties, levies, imposts, non-income tax deductions, non-
income tax charges or non-income tax withholdings, whatsoever imposed by any
Governmental Authority, excluding, in the case of each Lender and the Agent,
such taxes as are imposed on or measured by the net income of any Lender or the
Agent by any jurisdiction under the laws of which such Lender or the Agent, as
the case may be, is organized or maintains a Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
(b) In addition, the Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "Other Taxes").
(c) Subject to SECTION 3.1(a) and 3.1(h) of this Agreement, if any
Taxes or Other Taxes are directly asserted or imposed against any Lender or the
Agent, the Borrower shall indemnify and hold harmless such Lender and the Agent
for the full amount of the Taxes or Other Taxes (including any Taxes or Other
Taxes asserted or imposed by any jurisdiction on amounts payable under this
SECTION 3.1) paid by such Lender or the Agent and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted or imposed. Payment under this indemnification shall be made
within thirty (30) days from the date such Lender or the Agent makes written
demand therefor (provided that the Borrower shall have the right to contest in
good faith any such Taxes or Other Taxes through appropriate proceedings). Any
Lender in its discretion also may, but shall not be obligated to, pay such Taxes
or Other Taxes and the Borrower will promptly pay,
30
within fifteen (15) days after written demand therefor by such Lender or the
Agent, such additional amounts (including any penalties, interest or expenses)
as is necessary in order that the net amount received by such Lender after the
payment of such Taxes or Other Taxes (including any Taxes on such additional
amount) shall equal the amount such Lender would have received had not such
Taxes or Other Taxes been asserted or imposed.
(d) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then, subject to SECTION 3.1(h) of this Agreement:
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this SECTION 3.1) such Lender or the Agent, as the case may
be, receives an amount equal to the sum it would have received had no such
deduction or withholding been made;
(ii) The Borrower shall make such deduction or withholding;
(iii) The Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law; and
(iv) To the extent that the amount paid by the Borrower to the
relevant taxation or other authority results in an excess payment or credit to a
Lender or the Agent on account of such Taxes or Other Taxes, such Lender or the
Agent shall promptly refund such excess amount to the Borrower.
(e) Within thirty (30) days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower, upon the Agent's request, shall
furnish to the Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to the Agent.
(f) If the Borrower fails to pay any Taxes or Other Taxes when due to
the appropriate taxing authority or fails to furnish to the Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Agent and the Lenders for any incremental Taxes or Other Taxes, interest or
penalties that may become payable by the Agent and any such Lenders as a result
of any such failure.
(g) Each of the Agent and any Lender which is a foreign Person (i.e.,
a Person other than a United States Person for United States Federal income tax
purposes) agrees that:
(i) in the case of any Lender which is a "bank" within the meaning
of Section 881(c)(3)(a) of the Code,
(1) it shall, no later than the Closing Date (or, in the case of
a Lender which becomes a party hereto pursuant to SECTION 11.2 of this Agreement
after the Closing Date, the date upon which such Lender becomes a party hereto)
deliver to the Borrower
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through the Agent two (2) accurate and complete signed originals of IRS Form
4224 or any successor thereto ("Form 4224"), or two (2) accurate and complete
signed originals of IRS Form 1001 or any successor thereto ("Form 1001"), as
appropriate, in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees under this
Agreement free from withholding of United States Federal income tax;
(2) if at any time the Agent or such Lender makes any changes
necessitating a new Form 4224 or Form 1001, it shall within thirty (30) days
after such change becomes effective deliver to the Borrower through the Agent in
replacement for, or in addition to, the forms previously delivered by it
hereunder, two (2) accurate and complete signed originals of Form 4224; or two
(2) accurate and complete signed originals of Form 1001, as appropriate, in each
case indicating that such Lender is on the date of delivery thereof entitled to
receive payments of principal, interest and fees under this Agreement free from
withholding of United States Federal income tax;
(ii) in the case of any Lender other than a Lender described in clause
(i) above,
(1) it shall, no later than the Closing Date (or, in the case of a
Lender which becomes a party hereto pursuant to SECTION 11.2 of this Agreement
after the Closing Date, the date upon which Lender becomes a party hereto)
deliver to the Borrower through the Agent two (2) accurate and complete signed
originals of a certificate substantially in the form of EXHIBIT E hereto (any
such certificate, a "Non-Bank Lender Tax Certificate") and two (2) accurate and
complete signed originals of IRS Form W-8 or any successor thereto ("Form W-8")
certifying to such Lender's legal entitlement (assuming compliance by the
Borrower with the terms of this Agreement) to an exemption whereby such Lender
is on the date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United States
Federal income tax;
(2) if at any time the Agent or such Lender makes any changes
necessitating a new Form W-8, it shall within thirty (30) days after such change
becomes effective deliver to the Borrower through the Agent in replacement for,
or in addition to, the forms previously delivered by it hereunder, two (2)
accurate and complete signed originals of Form W-8 certifying to such Lender's
legal entitlement (assuming compliance by the Borrower with the terms of this
Agreement) to an exemption whereby such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees under this
Agreement free from withholding of United States Federal income tax;
(iii) it shall, before or within thirty (30) days after the occurrence of
any event (including the passing of time but excluding any event mentioned in
(i) or (ii), above) requiring a change in or renewal of the most recent Form
4224, Form 1001 or Form W-8 previously delivered by such Lender, deliver to the
Borrower through the Agent two (2) accurate and complete original signed copies
of Form 4224, Form 1001 or Form W-8 in replacement for the forms previously
delivered by such Lender; and
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(iv) it shall, promptly upon any Lender's or the Agent's reasonable
request to that effect, deliver to such Lender or the Agent (as the case may be)
such other forms or similar documentation as may be required from time to time
by any applicable law, treaty, rule or regulation in order to establish such
Lender's tax status for withholding purposes.
(h) The Borrower will not be required to pay any additional amounts in
respect of United States Federal income tax pursuant to SECTION 3.1(d) of this
Agreement to the Agent or any Lender for the account of any Lending Office of
such Lender:
(i) if the obligation to pay such additional amounts would not have
arisen but for a failure by such Lender to comply with its obligations under
SECTION 3.1(g) of this Agreement in respect of such Lending Office; or
(ii) if such Lender shall have delivered to the Borrower a Form 4224,
Form 1001 or Form W-8 in respect of such Lending Office pursuant to SECTION
3.1(g) of this Agreement, and such Lender shall not at any time be entitled to
exemption from deduction or withholding of United States Federal income tax in
respect of payments by the Borrower hereunder for the account of such Lending
Office for any reason other than a change in United States law or regulations or
in the official interpretation of such law or regulations by any Governmental
Authority charged with the interpretation or administration thereof (whether or
not having the force of law) after the date of delivery of such form.
(i) If, at any time, the Borrower requests any Lender to deliver any
forms or other documentation in addition to those required pursuant to SECTION
3.1(g)(iv) of this Agreement, then the Borrower shall, on demand of such Lender
through the Agent, reimburse such Lender for any costs and expenses (including
Attorney Costs) reasonably incurred by such Lender in the preparation or
delivery of such forms or other documentation.
(j) If the Borrower is required to pay additional amounts to any Lender or
the Agent pursuant to SECTION 3.1(d) of this Agreement, then such Lender shall
use its reasonable best efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by such Lender which may thereafter accrue
if such change in the judgment of such Lender is not otherwise disadvantageous
to such Lender.
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3.2 ILLEGALITY.
(a) If any Lender shall determine that the introduction of any
Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its Lending Office to make LIBOR Loans, then, on notice
thereof by such Lender to the Borrower through the Agent, the obligation of such
Lender to make LIBOR Loans shall be suspended until such Lender shall have
notified the Agent and the Borrower that the circumstances giving rise to such
determination no longer exists.
(b) If any Lender shall determine that it is unlawful to maintain any
LIBOR Loan, the Borrower shall prepay in full all LIBOR Loans of that Lender
then outstanding, together with interest accrued thereon, either on the last day
of the Interest Period thereof if such Lender may lawfully continue to maintain
such LIBOR Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such LIBOR Loans, together with any amounts required to be
paid in connection therewith pursuant to SECTION 3.5 of this Agreement.
(c) If the Borrower is required to prepay any LIBOR Loan immediately
as provided in SECTION 3.2(b) of this Agreement, then, on the date such
prepayment is required, unless such prepayment is actually made with funds from
another source, the Borrower shall be deemed to have borrowed from the affected
Lender the amount of such prepayment as a Base Rate Loan.
(d) Before giving any notice to the Agent pursuant to this SECTION
3.2, the affected Lender shall designate a different Lending Office with respect
to its LIBOR Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of such Lender, be
illegal or otherwise disadvantageous to such Lender.
3.3 INCREASED COSTS. If any Lender shall determine that, due to either
(a) the introduction of or any change (other than any change by way of
imposition of or increase in the Eurodollar Reserve Percentage included in the
calculation of Adjusted LIBOR) in or in the interpretation of any Requirement of
Law or (b) the compliance with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining any LIBOR Loans, then the Borrower shall be liable for,
and shall from time to time, upon demand therefor by such Lender, pay to such
Lender such additional amounts as are sufficient to compensate such Lender for
such increased costs; provided that the Borrower shall not be obligated to pay
any such additional amounts attributable to periods prior to the date that is
ninety (90) days prior to the date of demand by a Lender, unless such increased
costs are attributable to an earlier period due to retroactive application of
such introduction, change or compliance, in which case the Borrower shall be
obligated to pay any such additional amounts from the retroactive application
date. Each Lender will promptly notify the Borrower and the Agent of any event
of which it has knowledge occurring after the date hereof, which will entitle
such Lender to compensation pursuant to this SECTION 3.3.
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3.4 INABILITY TO DETERMINE RATES. If the Agent shall have determined that
for any reason adequate and reasonable means do not exist for ascertaining the
LIBOR for any requested Interest Period with respect to a proposed LIBOR Loan or
that the LIBOR applicable for any requested Interest Period with respect to a
proposed LIBOR Loan does not adequately and fairly reflect the cost to the
Lenders of funding such Loan, the Agent will forthwith give notice of such
determination to the Borrower and each Lender. Thereafter, the obligation of
the Lenders to make or maintain LIBOR Loans, as the case may be, hereunder shall
be suspended until the Agent, upon the instruction of Requisite Lenders, revokes
such notice in writing. Upon receipt of such notice, the Borrower may revoke
any Borrowing Notice or Conversion/Continuation Notice then submitted by it. If
the Borrower does not revoke such notice, the Lenders shall make, convert or
continue the Loans, as proposed by the Borrower, in the amount specified in the
applicable notice submitted by the Borrower, but such Loans shall be made or
continued as or converted to Base Rate Loans instead of LIBOR Loans, as the case
may be.
3.5 PREPAYMENT OF LIBOR LOANS. In the event that the Borrower prepays or
is required to prepay any LIBOR Loan by acceleration or otherwise or fail to
draw down or convert to a LIBOR Loan after giving notice thereof, the Borrower
agrees to reimburse each Lender for its expenses and funding losses due to such
prepayment or failure to draw. The Borrower and the Lenders hereby agree that
such expenses and funding losses shall consist of the sum of the discounted
monthly differences for each month during the applicable or requested Interest
Period, calculated as follows for each such month:
(a) principal amount of such LIBOR Loan times (number of days between
the date of prepayment and the last day in the applicable Interest Period
divided by 360), times the applicable Interest Differential; plus
(b) all actual out-of-pocket expenses (other than those taken into
account in the calculation of the Interest Differential) incurred by the Lenders
and the Agent (excluding allocations of any expense internal to the Lenders and
the Agent) and reasonably attributable to such payment or prepayment; provided
that no prepayment fee shall be payable (and no credit or rebate shall be
required) if the product of the foregoing formula is not a positive number.
3.6 CAPITAL REQUIREMENTS. If any Lender shall determine that any change
after the date of this Agreement in any law, rule, regulation or guideline
adopted pursuant to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards," or the
adoption after the date hereof of any other Requirement of Law regarding capital
adequacy, or any change after the date of this Agreement in any of the foregoing
or in the enforcement or interpretation or administration of any of the
foregoing by any Governmental Authority charged with the enforcement or
interpretation or administration thereof, or compliance by any Lender (or any
Lending Office of Lender) or compliance by such Lender's holding company with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such Governmental Authority, has the effect of reducing the
rate of return on such Lender's capital or on the capital of such Lender's
holding company, if any, as a consequence of the maintaining of any of its
Commitments or the making or maintaining of any Loan under this Agreement to a
level below that which such Lender
35
or such Lender's holding company could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's policies and the
policies of such Lender's holding company with respect to capital adequacy) by
an amount deemed to be material, then, upon written demand by such Lender, the
Borrower shall pay to such Lender, from time to time such additional amount or
amounts as will compensate such Lender or such Lender's holding company for any
such reduction suffered; provided that the Borrower shall not be obligated to
pay any such additional amounts attributable to periods prior to the date that
is ninety (90) days prior to the date of demand by a Lender, unless such reduced
rate of return is attributable to an earlier period due to retroactive
application of such adoption, change or compliance, in which case the Borrower
shall be obligated to pay any such additional amounts from the retroactive
application date. Without affecting its rights under this SECTION 3.6 or any
other provision of this Agreement, such Lender agrees that if there is any
increase in any cost to or reduction in any amount receivable by such Lender
with respect to which the Borrower would be obligated to compensate such Lender
pursuant to this SECTION 3.6, such Lender shall give the Borrower thirty (30)
days notice thereof and shall use reasonable efforts to select an alternative
Lending Office which would not result in any such increase in any cost to or
reduction in any amount receivable by such Lender; provided, however, that such
Lender shall not be obligated to select an alternative Lending Office if such
Lender determines that (a) as a result of such selection such Lender would be in
violation of any Requirement of Law, or would incur additional costs or
expenses, or (b) such selection would be inadvisable for regulatory reasons.
3.7 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation pursuant to this SECTION 3 shall deliver to the Borrower (with a
copy to the Agent) a certificate setting forth in reasonable detail the amount
payable and the basis therefor to such Lender hereunder, accompanied by any
statements, invoices, or demands in the case of jurisdictions or Governmental
Authorities asserting or imposing a Tax, Other Tax or other amounts owed, with
any confidential information, including amounts, redacted. Such certificate
shall constitute a rebuttable presumption as to the matters set forth therein.
3.8 REMOVAL OF A LENDER. In the event that any Lender (a) gives notice
under SECTION 3.2(a) or 3.2(b) of its inability to make or maintain LIBOR Loans
as a result of any condition described in such Sections which is not generally
applicable to all Lenders, and such inability continues for thirty (30) Business
Days or more, or (b) demands payment under SECTION 3.3 or 3.6 of any material
amount, then the Borrower may, within forty-five (45) days of such notice or
demand, remove such Lender as a party to this Agreement by either:
(a) requiring such Lender to execute and deliver an Assignment and
Acceptance, with respect to its entire Commitment to a willing Eligible Assignee
designated by the Borrower and acceptable to the Agent, in which event all
provisions of SECTION 11.2(a) and (b) shall apply (except that the Borrower
shall pay the processing fee required pursuant to SECTION 11.2(a)); or
(b) reducing the Aggregate Commitments pursuant to, and in accordance
with, SECTION 2.7 by an amount equal to such Lender's Commitment, whereupon the
Commitment of such Lender shall be irrevocably terminated in whole (which shall
include the termination in whole of the obligation of such Lender to make Loans
to the Borrower).
36
Such Lender shall consummate such Assignment and Acceptance, or the Borrower
shall make such reduction in the Aggregate Commitments, in accordance with such
terms within a reasonable time from the date the Borrower shall have designated
an Eligible Assignee or given notice of the reduction of the Aggregate
Commitments, and whereupon such Lender shall no longer be a party hereto or have
any obligations or rights hereunder (except rights which, pursuant to the
provisions of this Agreement, survive the termination of this Agreement and the
repayment of the Notes), and, if applicable, the Eligible Assignee shall succeed
to such obligations and rights pursuant to SECTION 11.2.
SECTION 4. CONDITIONS PRECEDENT TO LOANS.
4.1 FIRST LOAN. The obligation of each Lender to make the first Loan
hereunder is subject to the satisfaction of the following conditions precedent:
(a) CORPORATE DOCUMENTS. The Lenders shall have received, in form and
substance satisfactory to the Lenders and their respective counsel, a
certificate of the secretary of the Borrower and each Guarantor dated as of the
Closing Date and certifying that the following items are attached thereto, are
true, complete and accurate and that the Lenders may conclusively rely on such
certificate unless and until such entity shall have delivered to the Agent a
further certificate amending such prior certificate:
(i) A certified copy of the records of all actions taken by the
Borrower and each Guarantor, including all resolutions of such entity
authorizing or relating to the execution, delivery of the Loan Documents to
which it is a party and the consummation of the transactions contemplated hereby
and thereby;
(ii) A certified copy of the certificate or articles of
incorporation, bylaws and shareholder agreements of the Borrower and each
Guarantor and any other charter or formation documents of the Borrower and each
Guarantor certified by a Responsible Person of the Borrower or such Guarantor,
as the case may be, as being in full force and effect;
(iii) Certificate of the Secretary of State of each of the States
set forth on SCHEDULE 5.1 dated as of a date close to the Closing Date stating
that the Borrower and each Guarantor is a corporation in good legal standing
under the laws of States indicated on such Schedule as applicable thereto;
(iv) Certificates of the Franchise Tax Board of the States set
forth on SCHEDULE 5.1, dated as of a date close to the Closing Date, stating
that the Borrower and each Guarantor is in good standing under the laws of the
States listed on such Schedule as applicable thereto;
(v) Certificates of incumbency together with specimen signatures
with respect to the authorized representatives of the Borrower and each
Guarantor; and
(vi) Such other documents relating to the Borrower, each Guarantor
37
and their Subsidiaries as the Lenders reasonably may request.
(b) CREDIT DOCUMENTS. The Agent shall have received, for the benefit
of the Lenders, in form and substance satisfactory to the Lenders, the following
dated as of the Closing Date:
(i) NOTES. Separate Notes, duly executed by the Borrower to each
of the Lenders in the stated principal amount of such Lender's Commitment.
(ii) GUARANTIES. Guaranties, duly executed by each Guarantor for
the benefit of the Agent and the Lenders.
(iii) BORROWING NOTICE. If a Borrowing will occur on the Closing
Date, a Borrowing Notice duly executed and delivered by a Responsible Person of
the Borrower requesting Loans to be funded at Closing.
(iv) BRINGDOWN CERTIFICATE. If the date of execution of this
Agreement precedes the Closing Date, a certificate, dated as of the Closing
Date, of a Responsible Person to the effect that (i) the representations and
warranties of the Borrower contained in SECTION 5 are true, accurate and
complete in all material respects as of the Closing as though made on such date
(except to the extent such representations and warranties specifically relate to
an earlier date, in which case they shall be true, accurate and complete in all
material respects as of such earlier date) and (ii) no Event of Default or
Potential Event of Default under this Agreement has occurred and is continuing.
(v) COMPLIANCE CERTIFICATE. A Compliance Certificate dated the
Closing Date and measured as of November 29, 1997, duly executed and delivered
by a Responsible Person, with appropriate insertions.
(c) OPINIONS OF COUNSEL. The Agent shall have received originally
executed legal opinions of counsel to the Borrower and the Guarantors in form
and substance satisfactory to the Lenders and their respective counsel, dated
the Closing Date and addressed to the Agent and the Lenders.
(d) UCC SEARCHES. The Lenders shall have received certified copies,
dated close to the Closing Date, of requests for copies or information (Form
UCC-3 or equivalent), or certificates, dated close to the Closing Date,
satisfactory to the Lenders, of a UCC Reporter Service, listing all effective
financing statements which name the Borrower or any of its Subsidiaries as
debtor and which are filed in the appropriate offices in the States in which are
located the chief executive offices or any offices or facilities of any of them,
together with copies of such financing statements, and accompanied by written
evidence (including UCC termination statements) satisfactory to the Lenders that
the Liens indicated in any such financing statements are either permitted under
SECTION 7.1 of this Agreement or have been terminated or released. By way of
clarification, and not limitation of the foregoing, the Borrower shall deliver
UCC termination statements for all Liens granted by the Borrower or any of its
Subsidiaries that secure the Existing
38
Debt.
(e) INSURANCE. The Agent shall have received from the Borrower, in
form and substance satisfactory to the Lenders, certificates, binders and other
instruments or documents evidencing the insurance coverage and limits maintained
by the Borrower, in each case in compliance with the requirements of SECTION 6.3
of this Agreement.
(f) FINANCIAL STATEMENTS; PROJECTIONS. The Agent shall have received
(i) audited consolidated financial statements of the Borrower and its
consolidated Subsidiaries dated as of August 30, 1997, showing financial results
substantially in conformance with those presented to the Lenders previously,
(ii) company-prepared consolidated financial statements of the Borrower and its
consolidated Subsidiaries for the Fiscal Quarter ended November 29, 1997, and
(iii) company-prepared financial projections for the Borrower and their
consolidated Subsidiaries for the Fiscal Years ending August 30, 1998, through
August 31, 2002, to include projected income statements, balance sheets,
statement of cash flows and schedule of planned capital expenditures, in each
case for the upcoming Fiscal Year and including a substantive description of
each of the material underlying assumptions used in preparing such consolidated
financial forecasts, in form and detail reasonably satisfactory to the Lenders;
(g) NO MATERIAL ADVERSE CHANGE. There shall have occurred no Material
Adverse Change, as reasonably determined by Lenders, since November 29, 1997.
(h) NO LITIGATION. Except as disclosed and described in the Schedules
hereto, there shall not have been instituted or threatened any material
litigation or proceeding in any court or administrative forum or before any
arbitrator to which the Borrower or any of its Subsidiaries are, or are
threatened with becoming, a party, which the Lenders have reasonably determined,
after consultation with counsel, to pose a reasonable likelihood of resulting in
a Material Adverse Effect.
(i) CONSENTS. The Agent shall have received written evidence
reasonably satisfactory to the Lenders that all government and third party
approvals and consents necessary to the making or maintenance of the Loans
hereunder and the carrying on of the business of the Borrower has been obtained.
(j) ACCURATE INFORMATION. The information provided to the Agent or
the Lenders by or on behalf of the Borrower and its Subsidiaries, as well as the
representations and warranties of the various parties as contained in the Loan
Documents shall be true, accurate and complete in all material respects and the
projections shall have been prepared on a basis consistent with the historical
financial statements, and shall have been based on the good faith estimates and
assumptions of management of the Borrower, and the Borrower has no reason to
believe that such estimates and assumptions are not reasonable..
(k) FEE LETTER. Rabobank shall have received the Fee Letter dated as
of the Closing Date, duly executed by the Borrower, together with the fees and
any other items required pursuant to the Fee Letter.
39
(l) FEES AND COSTS. The Agent shall have received an amount equal to
the aggregate of the Agent's good faith estimate of all fees (including Attorney
Costs), costs, expenses and other disbursements incurred by the Agent in
connection with the Closing of the transactions contemplated under this
Agreement and each of the other Loan Documents, which payment shall be subject
to post-Closing adjustment following receipt by Agent of all final invoices.
(m) TERMINATION OF EXISTING DEBT. The Agent shall have received
written evidence satisfactory to the Lenders in their sole discretion that the
Borrower's existing Indebtedness disclosed on SCHEDULE 7.3 (other than Patronage
Dividend Certificates) (the "Existing Debt") has been, or shall with the
proceeds of the first Loan be, terminated and paid in full, and all Liens
securing such Existing Debt have been, or upon the making of the first Loan
shall be, terminated or released.
(n) XXXX XXXXXXX DEBT. The Agent shall have received a copy of the
fully executed Note Purchase Agreement evidencing the Xxxx Xxxxxxx Debt.
(o) OTHER DOCUMENTS. The Lenders shall have received such other
instruments, documents, information and items from the Borrower as reasonably
requested by the Lenders.
4.2 ALL LOANS. Unless waived in writing by Requisite Lenders, the
obligation of the Lenders to make any Loan is subject to the satisfaction of the
following further conditions precedent:
(a) PERFORMANCE OF AGREEMENTS. The Borrower shall have performed all
of its agreements under the Loan Documents and each of the other Loan Documents
to be performed on or before such Funding Date.
(b) NO EVENT OF DEFAULT OR POTENTIAL EVENT OF DEFAULT. No event shall
have occurred and be continuing or would result from the making of any Loans on
such Funding Date which constitutes an Event of Default or Potential Event of
Default.
(c) REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained in the Loan Documents shall be true, accurate and complete
in all material respects with the same effect as though such representations and
warranties had been made on and as of such Funding Date (except to the extent
such representations and warranties specifically relate to an earlier date, in
which case they shall be true, accurate and complete in all material respects as
of such earlier date). Any Schedules referred to in any representations and
warranties shall be deemed to be amended upon receipt by the Agent of written
notice thereof.
(d) OTHER DOCUMENTS. The Agent shall have received such other
instruments and documents as it may have reasonably requested from the Borrower
in connection with the Loans to be made on such date.
SECTION 5. BORROWER'S REPRESENTATIONS AND WARRANTIES.
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The Borrower hereby warrants and represents to the Agent and each Lender
for itself and each of its Subsidiaries as follows and agrees that each of said
representations and warranties shall be deemed to survive until full, complete
and indefeasible payment and performance of the Obligations and shall apply anew
to each Borrowing hereunder:
5.1 EXISTENCE AND POWER. The Borrower and each of its Subsidiaries are
corporations duly organized and validly existing in good standing under the laws
of the respective jurisdictions of incorporation and are duly qualified and
licensed as a foreign corporation and authorized to do business in each
jurisdiction where their respective ownership of Property or conduct of business
requires such qualification and where the failure to so qualify would with
reasonable likelihood result in a Material Adverse Effect, and in each
jurisdiction where the Borrower or any of its Subsidiaries maintain an office (a
list of all such States is set forth on SCHEDULE 5.1); the Borrower and each of
its Subsidiaries have the corporate power and authority, rights and franchises
to own their respective Property and assets and to carry on their respective
businesses as now conducted; the Borrower and each of its Subsidiaries have the
corporate power and authority to execute, deliver and perform the terms of the
Loan Documents to which they are a party and all other instruments and documents
contemplated hereby or thereby.
5.2 LOAN DOCUMENTS AND NOTES AUTHORIZED; BINDING OBLIGATIONS. The
execution, delivery and performance of this Agreement and each of the other Loan
Documents to which the Borrower or any of its Subsidiaries is a party and the
execution, delivery and payment of the Notes have been duly authorized by all
necessary and proper corporate action on the part of the Borrower or such
Subsidiary, as the case may be. The Loan Documents to which the Borrower or any
of its Subsidiaries a party constitute legally valid and binding obligations of
the Borrower and such Subsidiaries enforceable against the Borrower and such
Subsidiaries in accordance with their respective terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws affecting the
enforcement of creditors' rights generally.
5.3 NO CONFLICT. The execution, delivery and performance of this
Agreement and each of the other Loan Documents and the execution, delivery and
payment of the Notes will not contravene any provision of the Borrower's
certificate or articles of incorporation or bylaws or other charter documents,
or any of its Subsidiaries' charter documents; will not contravene, conflict
with or violate any applicable law or regulation, or any order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority; will
not violate or result in the breach of, or constitute a default under any
Contracts (as defined in SECTION 5.7) other than as set forth on SCHEDULE 5.7.
The Borrower and each of its Subsidiaries are not in violation or breach of or
default under any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or any contract, agreement, lease, license,
indenture or other instrument to which they are a party, the non-compliance
with, the violation or breach of or the default under which would with
reasonable likelihood result in a Material Adverse Effect.
5.4 SUBSIDIARIES; CAPITAL STRUCTURE. SCHEDULE 5.4 sets forth and
identifies all Subsidiaries of the Borrower as of the Closing Date, together
with the jurisdiction of organization, and the authorized and issued Stock of
each such Subsidiary, by class and number, and the holders (including the
Borrower) of the authorized and issued Stock of each Subsidiary of the Borrower
and
41
the percentage of each class legally owned or to be owned by such holders
(including the Borrower) as of the Closing Date and on a fully diluted basis.
SCHEDULE 5.4 further sets forth as of the Closing Date the authorized and issued
Stock of the Borrower by class and number. Except as set forth in the Bylaws of
the Borrower in effect as of the Closing Date, there are no options, warrants,
rights to purchase or similar rights, or plans to issue any of the foregoing,
covering the Stock of the Borrower or any of its Subsidiaries.
5.5 FINANCIAL CONDITION. The Borrower's financial statements as of August
31, 1997, copies of which heretofore has been delivered to the Agent by the
Borrower, and all other financial statements and other data submitted in writing
by the Borrower to the Agent or any Lender in connection with the request for
credit granted by this Agreement, are true, accurate and complete in all
material respects, and said financial statements and other data fairly present
the consolidated financial condition of the Borrower as of the date thereof, and
have been prepared in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes. There has been no Material Adverse
Change since November 29, 1997, except as described in the Confidential
Information Booklet dated February 1998 (the "Confidential Booklet") heretofore
provided to the Lenders. The financial projections contained in the
Confidential Booklet have been prepared on a basis consistent with the
historical financial statements described above, except as described therein,
and are based on the good faith estimates and assumptions of management of the
Borrower, and the Borrower has no reason to believe that such estimates and
assumptions are not reasonable.
5.6 LITIGATION. Except as set forth on SCHEDULE 5.6, there are no claims,
actions, suits, proceedings or other litigation pending or, to the best of the
Borrower's knowledge, after Due Inquiry, threatened against the Borrower or any
of its Subsidiaries at law or in equity before any Governmental Authority or, to
the best of the Borrower's knowledge, after Due Inquiry, any investigation by
any Governmental Authority of the Borrower's or any of its Subsidiaries'
affairs, Properties or assets, which has a reasonable likelihood of resulting in
a Material Adverse Effect, and which is not provided for or disclosed in the
financial statements delivered to the Agent pursuant to SECTION 5.5.
5.7 CONSENTS AND APPROVALS. Except as set forth on SCHEDULE 5.7, no
approval, authorization or consent of any trustee or holder of any indebtedness
or obligation of the Borrower or of any other Person under any material
agreement, contract, lease or license or similar document or instrument to which
the Borrower or any of its Subsidiaries is a party or by which the Borrower or
any such Subsidiary is bound (collectively, "Contracts"), is required to be
obtained by the Borrower or any such Subsidiary in order to make or consummate
the transactions contemplated under the Loan Documents. Except as further set
forth in SCHEDULE 5.7, all material consents and approvals of, filings and
registrations with, and other actions in respect of, all Governmental
Authorities required to be obtained by the Borrower or any of its Subsidiaries
in order to make or consummate the transactions contemplated under the Loan
Documents have been, or prior to the time when required will have been,
obtained, given, filed or taken and are or will be in full force and effect.
5.8 SOLVENCY. As of the Closing Date and after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents,
including all of the Loans made
42
and to be made hereunder, and thereafter, the Borrower is Solvent and each of
its Subsidiaries is Solvent. For purposes of this Agreement, "Solvent" means
that (a) the fair market value of the Person's assets will be in excess of the
amount that will be required to be paid on or in respect of the existing debts
and other liabilities (including contingent liabilities, but excluding in the
case of any Guarantor the contingent liability evidenced by its Guaranty) of the
Person as they mature; (b) the Person shall not have unreasonably small capital
to carry on its business as conducted or as proposed to be conducted; (c) the
Person does not intend to or believe that it will incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of
cash to be received by it and the amounts to be payable on or in respect of its
obligations); (d) the Person does not intend to hinder, delay or defraud either
present or future creditors; and (e) the Person will have received fair
consideration and reasonably equivalent value in exchange for incurring its
Obligations under the Loan Documents.
5.9 EMPLOYMENT AND LABOR AGREEMENTS. Except as set forth on SCHEDULE 5.9,
there are no employment agreements covering senior management of the Borrower or
any of its Subsidiaries and there are no collective bargaining agreements or
other labor agreements covering any employees of the Borrower or any such
Subsidiary. A true and complete copy of each such agreement has been furnished
to the Agent.
5.10 AGREEMENTS WITH AFFILIATES AND OTHER AGREEMENTS. Except as disclosed
on SCHEDULE 5.10, neither the Borrower nor any of its Subsidiaries has entered
into and, as of the Closing Date does not contemplate entering into, any
material agreement or contract with any Affiliate of the Borrower other than the
employment agreements disclosed on SCHEDULE 5.9, except for (a) transactions
among the Borrower and any Guarantor, (b) transactions on terms no less
favorable to the Borrower or its Subsidiaries than would be obtainable in an
arm's length transaction with a person not an Affiliate of the Borrower that is
reasonably comparable to the Affiliate transaction, based on the totality of the
circumstances, and (c) transactions in accordance with the practices of the
Borrower or its Affiliates, as the case may be, in effect as of the Closing
Date. Neither the Borrower nor any of its Subsidiaries is a party to or is bound
by any Contract or is subject to any restriction under its respective charter or
formation documents, which has a reasonable likelihood of resulting in a
Material Adverse Effect.
5.11 ERISA. All Employee Benefit Plans of the Borrower are listed on
SCHEDULE 5.11. All Pension Plans of the Borrower, including terminated Pension
Plans, that are intended to be qualified under Section 401(a) of the Code have
been determined by the IRS to be qualified. All Pension Plans of the Borrower
existing as of the date hereof continue to be so qualified. No "reportable
event" (as defined in Section 4043 of ERISA) has occurred and is continuing with
respect to any Pension Plan of the Borrower for which the thirty-day notice
requirement may not be waived other than those of which the appropriate
Governmental Authority has been notified. All Employee Benefit Plans of the
Borrower have been operated in all material respects in accordance with their
terms and applicable law, including ERISA, and no "prohibited transaction" (as
defined in ERISA and the Code) that would result in any material liability to
the Borrower or any of its Subsidiaries has occurred with respect to any such
Employee Benefit Plan.
5.12 LABOR MATTERS. There are no strikes or other labor disputes against
the Borrower
43
or any of its Subsidiaries or, to the best of the Borrower's knowledge, after
Due Inquiry, threatened against the Borrower or any of its Subsidiaries, which
has a reasonable likelihood of resulting in a Material Adverse Effect. Hours
worked by and payment made to employees of the Borrower or, to the best of the
Borrower's knowledge, after Due Inquiry, or any of its Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable law
dealing with such matters which would have a reasonable likelihood of resulting
in a Material Adverse Effect. All payments due from the Borrower on account of
employee health and welfare insurance which would with reasonable likelihood
result in a Material Adverse Effect if not paid have been paid or, if not due,
accrued as a liability on the books of the Borrower.
5.13 MARGIN REGULATIONS. The Borrower does not own any "margin security,"
as that term is defined in Regulations G and U of the Federal Reserve Board, and
the proceeds of the Loans under this Agreement will be used only for the
purposes contemplated hereunder. None of the Loans will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which
might cause any of the Loans under this Agreement to be considered a "purpose
credit" within the meaning of Regulations G, T, U and X. The Borrower will not
take or permit any agent acting on its behalf to take any action which might
cause this Agreement or any document or instrument delivered pursuant hereto to
violate any regulation of the Federal Reserve Board.
5.14 TAXES. All material federal, state, local and foreign tax returns,
reports and statements required to be filed by the Borrower and, to the best of
the Borrower's knowledge, after Due Inquiry, by any of its Subsidiaries have
been filed with the appropriate Governmental Authorities and all Charges and
other impositions shown thereon to be due and payable by the Borrower or such
Subsidiary have been paid prior to the date on which any fine, penalty, interest
or late charge may be added thereto for nonpayment thereof, or any such fine,
penalty, interest, late charge or loss has been paid, or the Borrower or such
Subsidiary is contesting its liability therefor in good faith and has fully
reserved all such amounts in the financial statements provided to the Agent
pursuant to SECTION 6.1. The Borrower and each of its Subsidiaries has paid
when due and payable all material Charges upon the books of the Borrower or such
Subsidiary except as permitted pursuant to SECTION 6.4. Proper and accurate
amounts have been withheld by the Borrower and each of its Subsidiaries from its
employees for all periods in full and complete compliance with the tax, social
security and unemployment withholding provisions of applicable federal, state,
local and foreign law and such withholdings have been timely paid to the
respective Governmental Authorities. The Borrower and each of its Subsidiaries
has not executed or filed with the IRS or any other Governmental Authority any
agreement or other document extending, or having the effect of extending, the
period for assessment or collection of any Charges.
5.15 TRADEMARKS, PATENTS, COPYRIGHTS AND LICENSES. The Borrower and each
of its Subsidiaries possess and either own, or have the right to use to the
extent required, all necessary trademarks, trade names, copyrights, patents,
patent rights and licenses which are material to the conduct of their respective
businesses as now operated, and each such trademark, trade name, copyright,
patent and patent right owned as of the Closing Date is listed, together with
applicable federal, state or foreign application and registration numbers, on
SCHEDULE 5.15. The Borrower and
44
each of its Subsidiaries conduct their respective businesses without
infringement or, to the best of the Borrower's knowledge, after Due Inquiry,
claim of infringement of any trademark, trade name, trade secret, service xxxx,
patent, copyright, license or other intellectual property Right of Others,
except where such infringement or claim of infringement would not with
reasonable likelihood result in a Material Adverse Effect. There is no
infringement or, to the best of the Borrower's knowledge, after Due Inquiry,
claim of infringement by others of any material trademark, trade name, trade
secret, service xxxx, patent, copyright, license or other intellectual property
right of the Borrower or any of its Subsidiaries.
5.16 NO BROKERS. No broker or finder acting on behalf of the Borrower
brought about the obtaining, making or closing of this Agreement or the credit
made available by the Lenders to the Borrower pursuant to this Agreement, and
neither the Borrower nor any Affiliate of the Borrower has any obligation to pay
any Person in respect of any finder's or brokerage fees in connection with the
credit facilities contemplated by this Agreement.
5.17 FULL DISCLOSURE. As of the Closing Date, no information contained in
this Agreement, the other Loan Documents or, to the best of the Borrower's
knowledge, any other documents or written materials furnished by or on behalf of
the Borrower to the Agent or any Lender pursuant to the terms of this Agreement
or any of the other Loan Documents contains any untrue or inaccurate statement
of a material fact or omits to state a material fact necessary to make the
statement contained herein or therein not misleading in light of the
circumstances under which made.
5.18 OTHER REGULATIONS. The Borrower is not: (a) a "public utility
company" or a "holding company," or an "affiliate" or a "subsidiary company" of
a "holding company," or an "affiliate" of such a "subsidiary company," as such
terms are defined in the Public Utility Holding Company Act or (b) an
"investment company," or an "affiliated person" of, or a "promoter" or
"principal underwriter" for, an "investment company," as such terms are defined
in the Investment Company Act. The making of the Loans hereunder and the
application of the proceeds and repayment thereof by the Borrower and the
performance of the transactions contemplated by this Agreement and the other
Loan Documents will not violate any provision of the Investment Company Act, or
any rule, regulation or order issued by the SEC thereunder.
5.19 HAZARDOUS MATERIALS. Neither the Borrower nor any of its Subsidiaries
has used Hazardous Materials on or affecting any premises at which the Borrower
or any of its Subsidiaries has a place of business (collectively and singly the
"premises") in any manner which violates federal, state or local laws,
ordinances, statutes, rules, regulations or judgments governing the use,
storage, treatment, handling, manufacture, transportation or disposal of
Hazardous Materials ("Environmental Laws"), which would with reasonable
likelihood result in a Material Adverse Effect. The Borrower has never received
any written notice ("Environmental Complaint") of any violations of
Environmental Laws (and, within five (5) days of receipt of any Environmental
Complaint the Borrower shall give the Agent a copy thereof), and to the best of
the Borrower's knowledge, after Due Inquiry, there have been no actions
commenced or threatened by any party for noncompliance with any Environmental
Laws.
5.20 YEAR 2000 ISSUES. The Borrower and each of its Subsidiaries has
adopted a plan (the
45
"Year 2000 Plan") which adequately addresses, in the reasonable judgment of
senior management of the Borrower, the operational and financial issues ("Year
2000 Issues") arising from data in the Borrower's management information and
computer systems respecting dates prior to, on or after January 1, 2000. The
Year 2000 Plan is in process of implementation and, as a result thereof, Year
2000 Issues do not present a reasonable likelihood of resulting in a Material
Adverse Effect.
5.21 PATRONAGE DIVIDEND CERTIFICATES. All Patronage Dividend Certificates
issued as of the Closing Date are and shall remain, and all subsequently issued
Patronage Dividend Certificates shall be and remain, subordinate in right of
payment to the Indebtedness of the Borrower evidenced by this Agreement and the
other Loan Documents on terms no less favorable to the holders of "Senior
Indebtedness" under and as defined in the Indenture between the Borrower and
First Interstate Bank of California, as Trustee, relating to $3,000,000
Subordinated Patronage Dividend Certificates Due December 15, 2002 (the
"Indenture").
SECTION 6. BORROWER'S AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that, so long as any of the Commitments
shall be available and until the full, complete and indefeasible payment and
performance of the Obligations, unless Requisite Lenders shall otherwise consent
in writing, the Borrower shall, and shall cause each of its Subsidiaries, to do
all of the following:
6.1 RECORDS AND REPORTS. Maintain a system of accounting administered in
accordance with sound business practices to permit preparation of financial
statements in conformity with GAAP, and deliver each of the following to the
Agent:
(a) QUARTERLY FINANCIAL STATEMENTS. As soon as practicable and in any
event within forty-five (45) days after the end of each Fiscal Quarter (other
than the last Fiscal Quarter in a Fiscal Year), a consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such period and
the related consolidated statements of income, stockholders' equity and cash
flows of the Borrower and its Subsidiaries for such Fiscal Quarter, setting
forth, in the case of the balance sheet, in comparative form the figures as of
the end of the preceding Fiscal Year and, in the case of the statements of
income and cash flows, in comparative form the consolidated figures for the
corresponding periods of the previous Fiscal Year, all in reasonable detail and
certified by a Responsible Person that they (i) are complete and fairly present
the financial condition of the Borrower as at the dates indicated and the
results of its operations and cash flow for the periods indicated; (ii) disclose
all liabilities that are required to be reflected or reserved against under
GAAP, whether liquidated or unliquidated, fixed or contingent; and (iii) have
been prepared in accordance with GAAP, subject to changes resulting from audit
and normal year-end adjustments; provided, however, that delivery within the
time period specified above of copies of the Borrower's Quarterly Report on Form
10-Q prepared in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the requirements
of this SECTION 6.1(a);
(b) ANNUAL AUDITED FINANCIAL STATEMENTS. As soon as practicable and
in any event within ninety days (90) days after the end of each Fiscal Year, a
consolidated balance
46
sheet of the Borrower and its consolidated Subsidiaries as at the end of such
Fiscal Year and the related consolidated statements of income, stockholders'
equity and cash flows of the Borrower and its consolidated Subsidiaries for such
Fiscal Year, setting forth in each case in comparative form the consolidated
figures for the previous Fiscal Year, all in reasonable detail and (i) in the
case of such consolidated financial statements, accompanied by a report thereon
of Deloitte & Touche, LLP, or other independent public accountants of recognized
national standing selected by the Borrower and reasonably satisfactory to
Requisite Lenders, which report shall not contain a disclaimer of opinion, shall
not express doubts about the ability of the Borrower or its Subsidiaries to
continue as a going concern, shall not be limited because of a restricted or
limited examination by such accountant of any material portion of the Borrower's
and its consolidated Subsidiaries' records, or otherwise be subject to a
qualification which the Requisite Lenders reasonably determine is material and
adverse, and shall state that such consolidated financial statements present
fairly the financial position of the Borrower, as at the dates indicated and the
results of operations and changes in financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior years
(except as otherwise stated therein) and that the examination by such auditors
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards; provided, however, that
delivery within the time period specified above of copies of the Borrower's
Annual Report on Form 10-K prepared in compliance with the requirements therefor
and filed with the Securities and Exchange Commission shall be deemed to satisfy
the requirements of this SECTION 6.1(b).
(c) CERTAIN FILINGS AND OTHER INFORMATION. Promptly after the sending
or filing thereof, copies of all reports or filings which the Borrower or any of
its Subsidiaries sends to any of their securities holders, the Securities and
Exchange Commission or any securities exchange on which the Borrower's or any of
its Subsidiaries' securities are listed or traded and any and all press releases
which the Borrower or any of its Subsidiaries issues or, as reasonably requested
by the Agent or the Lenders, other information (whether or not publicly filed);
(d) COMPLIANCE CERTIFICATES. As soon as practicable and in any event
within forty-five (45) days after the end of each Fiscal Quarter (other than the
last Fiscal Quarter in a Fiscal Year) and ninety (90) days after the end of each
Fiscal Year, a Compliance Certificate dated as of the last day of such period,
duly executed by a Responsible Person;
(e) FINANCIAL FORECASTS. No later than seventy-five (75) days
following the close of each Fiscal Year, a consolidated projected income
statement and any other protections prepared in the ordinary course of the
Borrower's business, in each case for the upcoming Fiscal Year and including a
substantive description of each of the material underlying assumptions used in
preparing such consolidated projected income statement or other projections in
form and detail reasonably satisfactory to the Lenders;
(f) AUDITORS' LETTERS. Promptly upon receipt thereof, copies of all
material reports submitted to the Borrower by their independent public
accountants in connection with each annual, interim or special audit of the
financial statements of the Borrower or its Subsidiaries made by such
accountants, including, without limitation, the comment letter submitted by such
accountants to management in connection with their annual audit;
47
(g) NOTICES. Promptly upon any Responsible Person of the Borrower
obtaining actual knowledge (i) of any condition or event which constitutes an
Event of Default or Potential Event of Default under this Agreement, (ii) that
any Person has given any notice or taken any other action with respect to a
claimed default or event or condition of the type referred to in SECTION 9.1(c)
of this Agreement, (iii) of the institution of any litigation or investigation
by any Governmental Authority involving an alleged liability (regardless of
whether insured) of the Borrower or any of its Subsidiaries equal to or greater
than $1,000,000 or any adverse judgment in any litigation involving a potential
liability of the Borrower or any of its Subsidiaries equal to or greater than
$1,000,000, (iv) of a Material Adverse Change, (v) of any action or event which
has a reasonable likelihood of resulting in a Material Adverse Effect, (vi) of
the change of the executive office or the principal place of business of the
Borrower or any of its Subsidiaries (other than Subsidiaries not engaged in
business and with total assets of less than $10,000) or of the location of the
Borrower's or any of its Subsidiary's (other than Subsidiaries not engaged in
business and with total assets of less than $10,000) books and records, (vii) of
any change in the name of the Borrower or any of its Subsidiaries, or (viii) of
any change in the Borrower's certified accountant or any resignation, or
decision not to stand for re-election, by any member of its Board of Directors,
a certificate of a Responsible Person specifying the notice given or action
taken by such Person and the nature of such claimed default, Event of Default,
Potential Event of Default, event or condition and what action has been taken,
is being taken and is proposed to be taken with respect thereto;
(h) TERMINATION EVENTS; PROHIBITED TRANSACTIONS. Promptly upon
becoming aware of the occurrence of any (i) Termination Event in connection with
any Pension Plan or (ii) "prohibited transaction" (as such term is defined in
ERISA and the Code) in connection with any Employee Benefit Plan or any trust
created thereunder, a written notice specifying the nature thereof, what action
has been taken, is being taken or is proposed to be taken with respect thereto,
and, when known, any action taken or threatened by the IRS or the PBGC with
respect thereto;
(i) ERISA. With reasonable promptness, copies of (i) all notices
received by the Borrower or any of its ERISA Affiliates of the PBGC's intent to
terminate any Pension Plan or to have a trustee appointed to administer any
Pension Plan, (ii) each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by the Borrower or any of its ERISA Affiliates with the
IRS with respect to each Pension Plan covering employees of the Borrower or any
of its Subsidiaries, and (iii) all notices received by the Borrower or any of
its ERISA Affiliates from a Multiemployer Plan sponsor concerning the imposition
or amount of withdrawal liability pursuant to Section 4202 of ERISA;
(j) PENSION PLANS. Promptly upon receipt, any challenge by the IRS to
the qualification under Section 401 or 501 of the Code of any Pension Plan;
(k) TAX RETURNS. Upon the request of the Agent or Requisite Lenders,
copies of all federal, state, local and foreign tax returns and reports in
respect of income, franchise or other taxes on or measured by income (excluding
sales, use or like taxes) filed by or on behalf of the Borrower; and
(l) OTHER INFORMATION. With reasonable promptness, such other
48
information and data, including, without limitation, lists of Property and
accounts, agreements with insurers and reports, as from time to time may be
reasonably requested by the Agent or Requisite Lenders.
All financial statements to be delivered by the Borrower to the Agent
pursuant to this SECTION 6.1 will present fairly the financial condition of the
Borrower and its Subsidiaries taken as a whole as of the date thereof; will
disclose all liabilities of the Borrower and its consolidated Subsidiaries that
are required to be reflected or reserved against under GAAP, whether liquidated
or unliquidated, fixed or contingent; and will have been prepared in accordance
with GAAP. All tax returns submitted to the Agent will, to the best of the
Borrower's knowledge, be true and correct. The Borrower hereby agrees that each
time it submits a financial statement or tax return to the Agent, the Borrower
shall be deemed to represent and warrant to the Lenders that such financial
statement or tax return complies with all of the preceding requirements set
forth in this paragraph, as appropriate.
6.2 CORPORATE RIGHTS; FACILITIES; CONDUCT OF BUSINESS.
(a) MAINTENANCE OF EXISTENCE AND RIGHTS. Maintain and preserve in
full force and effect its corporate existence and all rights, licenses, leases,
qualifications, privileges, franchises and other authority adequate for the
conduct of its business except where the lapsing of any of the foregoing would
not with reasonable likelihood have a Material Adverse Effect;
(b) MAINTENANCE OF PROPERTIES. Maintain, preserve and protect its
material properties, assets, equipment and facilities in good order and working
repair and condition (taking into consideration ordinary wear and tear) and from
time to time make, or cause to be made, all needful and proper repairs, renewals
and replacements thereto;
(c) MAINTENANCE OF INTELLECTUAL PROPERTY. Maintain, preserve and
protect all of its rights to enjoy and use material trademarks, trade names,
service marks, patents, copyrights, licenses, leases, franchise agreements and
franchise registrations; and
(d) MAINTENANCE OF BUSINESS. Conduct its business in an orderly
manner without voluntary interruption.
6.3 INSURANCE. Maintain with financially sound and reputable companies,
reasonably satisfactory to the Agent, such insurance in such amounts and subject
to such deductibles and other terms as is usual in the businesses conducted and
previously conducted by the Borrower or its Subsidiaries, covering, without
limitation, product liability, fire, theft, public liability, personal injury,
property damage, worker's compensation and extended coverage insurance covering
the Borrower's and such Subsidiaries' respective Property and assets, as well as
business interruption and hazard insurance. The Borrower shall, if so requested
by the Agent or Requisite Lenders, deliver to the Agent, as often as the Agent
may reasonably request, schedules identifying all insurance then in effect and
certificates evidencing such insurance.
6.4 TAXES AND OTHER LIABILITIES. Promptly pay and discharge all Charges
when due and
49
payable, except (a) such as may be paid thereafter without penalty or (b) such
as may be contested in good faith by appropriate proceedings and for which an
adequate reserve has been established and is maintained in accordance with GAAP.
6.5 INSPECTION RIGHTS; ASSISTANCE. Upon reasonable notice, from time to
time during normal business hours and without unreasonably interfering with the
Borrower's normal business activities, permit the Agent or any Lender, at its
own expense except as provided in the following sentence, or any agent,
representative or employee thereof, to examine and make copies of and abstracts
from the financial records and books of account of, and visit the Properties of,
the Borrower and to discuss the affairs, finances and accounts of the Borrower
with any of its executive officers to the extent any of the foregoing may be
relevant to the Borrower's obligations under the Loan Documents. If an Event of
Default or Potential Event of Default has occurred, the Borrower shall be
obligated to reimburse the Agent's and any Lender's reasonable out of pocket
expenses connected with any such inspection and examination of the Borrower.
6.6 COMPLIANCE WITH LAWS. Exercise all due diligence in order to comply
in all material respects with the requirements of all applicable laws, rules,
regulations, orders, writs, judgments, decrees, determinations and awards of any
Governmental Authority, non-compliance with which would have a reasonable
likelihood of resulting in a Material Adverse Effect; provided, however, that
the Borrower may contest any act, regulation, order, decree or direction in any
reasonable manner which shall not, in the reasonable opinion of Requisite
Lenders, adversely affect the Lenders' rights hereunder.
6.7 MATERIAL AGREEMENTS. Comply in all respects with the terms of each
agreement to which it is a party, except where all instances of any failure to
so comply would not, in the aggregate, be reasonably likely to result in a
Material Adverse Effect.
6.8 ENVIRONMENTAL CONDITION, INVESTIGATIONS AND INDEMNIFICATION.
(a) Use its properties and assets in such a manner as to comply with
all Environmental Laws and shall not use its properties and assets for the
disposal of, or to produce, store, handle, treat, release, or transport, any
Hazardous Materials other than in accordance with Environmental Laws, such that
there would not be a reasonable likelihood of the occurrence of a Material
Adverse Effect; take reasonable efforts to ensure that (i) none of its
properties or assets will be designated or identified in any manner pursuant to
any Environmental Laws as a Hazardous Materials disposal site, or a candidate
for closure pursuant to any Environmental Laws and (ii) no Lien arising under
any Environmental Laws will attach to any revenues or to any real or personal
property owned by the Borrower or its Subsidiaries.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions necessary to clean up and
remove all Hazardous Materials on or affecting the premises, whether caused by
the Borrower or a third party, in accordance with all Environmental Laws, and in
accordance with the orders and directives of all federal, state, and local
governmental authorities.
50
6.9 YEAR 2000 ISSUES. Take all action reasonably necessary and
appropriate to implement the Year 2000 Plan such that there will not exist a
reasonable likelihood that Year 2000 Issues will result in a Material Adverse
Effect.
6.10 ADDITIONAL GUARANTORS. In the event that the Borrower acquires any
additional Subsidiary with assets in excess of $30,000, or any existing
Subsidiary acquires total assets in excess of $30,000, the Borrower shall cause
such Subsidiary to execute a Guaranty.
6.11 FURTHER ASSURANCES. Execute, deliver and perform (in addition to the
obligations and documents which this Agreement expressly requires the Borrower
or its Subsidiaries to execute, deliver and perform) any and all further acts or
documents which the Agent or Requisite Lenders may reasonably require to give
full effect to the purposes of this Agreement or any of the other Loan
Documents. Without limiting the generality of the foregoing, upon the request
of the Agent or Requisite Lenders, the Borrower agrees to update from the
Closing Date the Schedules hereto, and affirm the accuracy of such Schedules as
of the date of such update, whereupon, with the concurrence of Requisite
Lenders, such updated Schedules shall be substituted for the preexisting
Schedules and all references in this Agreement to the Closing Date shall refer
to the date of such updated Schedules.
SECTION 7. BORROWER'S NEGATIVE COVENANTS.
So long as any of the Commitments shall be available and until full,
complete and indefeasible payment and performance of the Obligations, unless
Requisite Lenders shall otherwise consent in writing, the Borrower covenants and
agrees as follows:
7.1 LIENS; NEGATIVE PLEDGES. The Borrower shall not, and shall not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien or
Right of Others of any nature upon or with respect to any of their respective
Property, whether now or hereafter owned, leased or acquired, except
(collectively, the "Permitted Liens"):
(a) Existing Liens disclosed on SCHEDULE 7.1, other than those Liens
shown as items 3.a), b) and c) on such Schedule, provided that the obligations
secured thereby are not increased;
(b) Purchase money Liens on any Property acquired or held by the
Borrower or any of its Subsidiaries in the ordinary course of business, securing
Indebtedness incurred or assumed for the purpose of financing all or any part of
the cost of acquiring such Property; provided that (i) any such Lien attaches to
such Property concurrently with, or within twenty (20) days after, the
acquisition thereof, (ii) such Lien attaches solely to the Property so acquired
in such transaction, (iii) such Indebtedness is incurred to finance Capital
Expenditures, and (iv) the aggregate amount of Indebtedness secured by such
Liens does not exceed $20,000,000 at any time;
(c) Liens for taxes and other Charges if payment shall not at the time
be required to be made in accordance with SECTION 6.4 of this Agreement;
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(d) Liens in respect of pledges or deposits (i) under workers'
compensation laws, unemployment insurance and other types of social security or
similar legislation, (ii) under mechanic's and materialmen's lien laws in the
ordinary course of business, (iii) in connection with surety, appeal and similar
bonds incidental to the conduct of litigation, (iii) incidental to the conduct
of the business of the Borrower or any of its Subsidiaries and which were not
incurred in connection with the borrowing of money or the obtaining of advances
or credit, or (v) securing obligations contested in good faith; provided that
the Liens permitted by this SECTION 7.1(e) do not in the aggregate materially
detract from the value of the assets or Property of or materially impair the use
thereof in the operation of the businesses of the Borrower or any of its
Subsidiaries taken as a whole;
(e) Permitted Rights of Others;
(f) Easements, rights of way restrictions, minor defects or other
irregularities in title or other similar charges or encumbrances not interfering
in any material way with the ordinary course of the Borrower's or any of its
Subsidiaries' businesses;
(g) Liens relating to Capital Leases;
(h) Bankers' liens in the nature of rights of set-off arising in the
ordinary course of business of the Borrower or any of its Subsidiaries; and
(i) Liens existing on real property or equipment owned by a Person
that is acquired by or merged into the Borrower or any of its Subsidiaries (and
not created in anticipation thereof), so long as (i) such Liens encumber only
specific real property or equipment of such acquired or merged Person and (ii)
the aggregate amount of Indebtedness secured by such Liens does not exceed
$5,000,000 at any time;
(j) Liens on any assets of Grocers Capital Company or any of the
Insurance Subsidiaries;
(k) A Lien to secure the Indebtedness described in SECTION 7.3(i), in
the form of cash collateral in an amount not to exceed the face amount of such
Indebtedness; and
(l) Extensions or renewals of any Lien described in this SECTION
7.1.
7.2 INVESTMENTS. The Borrower shall not, and shall not permit any of its
Subsidiaries to, make or suffer to exist any Investment or enter into any
agreement to make any Investment, except:
(a) Investments in the Borrower's Subsidiaries and other Investments
existing on the Closing Date, in each case as disclosed on SCHEDULE 7.2(a);
(b) Investments hereafter made in any Guarantor;
(c) Investments in Cash Equivalents;
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(d) Investments received in the settlement of any debt owing to the
Borrower or any of its Subsidiaries, where such debt was incurred in the
ordinary course of business;
(e) Investments hereafter made in Grocers Capital Company to the
extent necessary to comply with that certain Second Amended and Restated
Operating Agreement dated as of April 22, 1994, between the Borrower and Grocers
Capital Company, provided that the Borrower assigns to the Agent for the benefit
of the Lenders a note evidencing any such Investment, which assignment shall
secure the Indebtedness evidenced by this Agreement and the Notes on a pari
passu basis with the Xxxx Xxxxxxx Debt pursuant to an intercreditor agreement in
form and substance satisfactory to the Requisite Lenders in their sole
discretion;
(f) Investments by Grocers Capital Company or any of the
Insurance Subsidiaries in the ordinary course of business;
(g) Investments by the Borrower in member-patrons of the Borrower as
may be approved by the Board of Directors of the Borrower; and
(h) Investments in capital stock of Persons engaged in the same
business as Borrower (or a business reasonably related thereto);
provided, however, at no time shall the aggregate initial value (as determined
in accordance with GAAP but without regard for any write-up or write-down of the
initial value) of outstanding Investments permitted under clauses (g) and (h),
above, exceed $20,000,000; provided further, however, that the Borrower shall
not, and shall not permit any of its Subsidiaries to, make any such Investments
if as of the date of any such Investment and after giving effect to such
Investment the Borrower and its consolidated Subsidiaries would fail to comply
with all covenants under SECTION 8, as measured as of such date.
7.3 LIMITATIONS ON INDEBTEDNESS; CONTINGENT OBLIGATIONS. The Borrower
shall not, and shall not permit any of its Subsidiaries to, create, incur,
assume, guarantee, agree to purchase or repurchase, permit the conversion of its
Stock into, or provide funds in respect of, or otherwise become or be or remain
liable with respect to, any Indebtedness (other than Indebtedness of the
Borrower or its Subsidiaries in favor of the Lenders and the Agent arising under
this Agreement, the Notes and the other Loan Documents) except:
(a) the Xxxx Xxxxxxx Debt;
(b) Indebtedness secured by Permitted Liens pursuant to SECTION
7.1(b), (g) and (i);
(c) Indebtedness incurred by Grocers Capital Company consisting
of a working capital credit facility at any time in an aggregate amount not to
exceed $10,000,000, and any Contingent Obligations of Grocers Capital Company
with respect to Indebtedness of another Person;
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(d) Indebtedness consisting of Patronage Dividend Certificates, so
long as the subordination provisions relating thereto are no less favorable to
the Lenders than under the Indenture;
(e) Indebtedness consisting of "daylight overdrafts" at the bank
holding the Designated Deposit Account;
(f) Indebtedness incurred by the Borrower or any of its Subsidiaries
in the form of Contingent Obligations with respect to Indebtedness of another
Person, including, without limitation, in the form of guaranties of leases of
real property or equipment entered into by member-patrons of the Borrower,
existing on the Closing Date, as disclosed on SCHEDULE 7.3;
(g) Indebtedness (in addition to the Indebtedness permitted pursuant
to SECTION 7.3(f)) incurred by the Borrower or any of its Subsidiaries in the
form of guaranties of leases of real property or equipment entered into by
patrons of the Borrower in the ordinary course of their businesses;
(h) Indebtedness in the form of any Rate Contract entered in the
ordinary course of business in an amount not to exceed the aggregate amount of
the related Indebtedness; and
(i) The letter of credit no. 0000000 issued by Bankers Trust Company
for the benefit of Milchwerke Mittelelbe GMBH Hoher Weg 3, as further described
in SCHEDULE 7.3, without any extension thereof.
7.4 EMPLOYEE LOANS AND EXECUTIVE COMPENSATION. The Borrower shall not
make or accrue, or permit any of its Subsidiaries to make or accrue, any loans
or other advances of money to any officer or employee of any of them, other than
reimbursable advances, relocation loans and other similar loans and advances
incurred in the ordinary course of the Borrower's business.
7.5 RESTRICTION ON FUNDAMENTAL CHANGES. The Borrower shall not, and shall
not permit any of its Subsidiaries to enter into, any transaction of merger or
consolidation, directly or indirectly, whether by operation of law or otherwise,
or liquidate, wind up or dissolve themselves (or suffer any liquidation or
dissolution), engage in any Asset Sales, suffer to occur a Change of Control;
provided, however, that (a) any of its Subsidiaries may be merged into the
Borrower or any wholly-owned Subsidiary of the Borrower, provided that no Event
of Default or Potential Event of Default has occurred and is continuing or would
result from such merger and the Borrower, if a party to such merger, is the
surviving entity, (b) the Borrower may sell assets (including Stock of a
Subsidiary of the Borrower) if such assets were acquired by the Borrower with
the intent and purpose of transferring such assets to a member-patron of the
Borrower, provided that the Borrower gives the Agent prior written notice of
such intent and purpose, (c) the Borrower may sell Investments permitted under
SECTION 7.2(c) in the ordinary course of business, (d) the Borrower or any
Subsidiary may sell any asset that was acquired by the Borrower or the
Subsidiary subsequent to the Closing Date if such asset is leased back to the
Borrower or the Subsidiary within 180 days after such sale, and (e) the Borrower
and its Subsidiaries may engage in Asset Sales in any Fiscal Year of assets
having a book value in an aggregate amount not to exceed $10,000,000.
54
7.6 DIVIDENDS. The Borrower and its Subsidiaries may not declare, make,
pay or set apart any funds for the payment of any dividends or any other
distribution with respect to their Stock or to their shareholders on the basis
of their status as shareholders, make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
retirement or other acquisition of their Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof to their
shareholders on the basis of their status as shareholders, either directly or
indirectly, whether in cash or property or obligations of the Borrower or such
Subsidiary, except (a) Patronage Dividends, (b) redemption by the Borrower of
its Class A Shares and Class B Shares as required by the Bylaws of the Company
as in effect on the Closing Date, (c) dividends or other distributions made by a
Subsidiary of the Borrower to the Borrower or to a Guarantor, and (d) purchase
of Class B Shares of the Borrower for a price equal to or less than the
Discounted Value of the Class B Shares; provided that the Requisite Lenders
shall have first approved such purchase (which shall not be unreasonably
withheld or delayed).
7.7 TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into or be a party to any agreement or
transaction with any Affiliate of the Borrower, except (a) in the ordinary
course of and pursuant to the reasonable requirements of the Borrower's or its
Subsidiaries' businesses and upon fair and reasonable terms that are approved by
the respective Board of Directors, fully disclosed to the Agent and no less
favorable to the Borrower or its Subsidiaries, as the case may be, than would
obtain in a comparable arm's-length transaction with a Person not an Affiliate
of the Borrower and (b) such other agreements or transactions in accordance with
the practices of the Borrower or its Affiliates, as the case may be, in effect
as of the Closing Date.
7.8 MAINTENANCE OF BUSINESS. The Borrower shall not, and shall not permit
any of its Subsidiaries to, engage in any business materially different than the
businesses currently engaged in by the Borrower or such Subsidiary.
7.9 EVENTS OF DEFAULT. The Borrower shall not take or omit to take any
action, which act or omission would, with the lapse of time, or otherwise
constitute a Potential Event of Default or Event of Default under any of the
Loan Documents.
7.10 ERISA. If the Borrower or any ERISA Affiliate of a Borrower incurs
any obligation to contribute to any Pension Plan, then the Borrower shall not
(i) terminate, or permit such ERISA Affiliate to terminate, any Pension Plan so
as to result in any liability that would have a reasonable likelihood of
resulting in a Material Adverse Effect or (ii) make or permit such ERISA
Affiliate to make a complete or partial withdrawal (within the meaning of
Section 4201 of ERISA) from any Multiemployer Plan so as to result in any
liability that would have a reasonable likelihood of resulting in a Material
Adverse Effect.
7.11 NO USE OF ANY LENDER'S NAME. Except as required by law, the Borrower
shall not, and shall not permit any of its Subsidiaries to, use or authorize
others to use, any Lender's name or marks in any publication or public medium,
including, without limitation, any prospectus, without such Lender's advance
written authorization and neither the Borrower nor any Lender shall use or
authorize others to use the other party's name in any press release or
advertisement without the other
55
party's advance written consent.
7.12 NEGATIVE PLEDGE CLAUSES. The Borrower shall not enter into or cause,
suffer or permit to exist any agreement with any Person (other than, with
respect to clause (i), below, the Agent and the Lenders pursuant to this
Agreement and the holders of the Xxxx Xxxxxxx Debt) which prohibits or limits
the ability of the Borrower or its Subsidiaries (other than Grocers Capital
Company): (i) to create, incur, assume or suffer to exist any Lien upon any of
its Property, assets or revenues, whether now owned or hereafter acquired;
provided, however, that the Borrower or its Subsidiaries may enter into such an
agreement in connection with Property acquired with the proceeds of purchase
money Indebtedness or any Capital Lease permitted by this Agreement when such
prohibition or limitation by its terms is effective only against the assets
subject to such Lien; and (ii) to make payments to the Borrower by way of
dividends, advances, reimbursement or otherwise.
7.13 PREPAYMENT OR MODIFICATION OF INDEBTEDNESS. The Borrower shall not,
without the prior written consent of Requisite Lenders, (a) make any prepayment
of any Indebtedness (other than Indebtedness of the Borrower or its Subsidiaries
in favor of the Lenders and the Agent arising under this Agreement, the Notes
and the other Loan Documents), or (b) modify or amend, or agree to any
modification or amendment of, the terms of any agreement or instrument
evidencing such other Indebtedness (including, without limitation, any
indentures relating to the issuance of Patronage Dividend Certificates) which is
in any way adverse to the interests of the Lenders and the Agent under this
Agreement and the Loan Documents.
SECTION 8. FINANCIAL COVENANTS OF BORROWER.
The Borrower covenants and agrees that so long as any Obligations shall be
outstanding or any Commitment shall be available, unless Requisite Lenders
otherwise shall consent in writing, the Borrower and its consolidated
Subsidiaries shall maintain all of the following financial covenants. The
Borrower agrees and understands that (except as expressly provided herein) all
covenants under this SECTION 8 shall be subject to compliance as measured as of
the last day of each Fiscal Quarter.
8.1 MINIMUM ADJUSTED TANGIBLE NET WORTH. Maintain Adjusted Tangible Net
Worth equal to an amount not less than the sum of (a) $80,000,000 plus (b) an
amount equal to one hundred percent (100.0%) of the Patronage Dividend
Certificates issued after the Closing Date that are first payable after the
Maturity Date plus (c) an amount equal to fifty percent (50.0%) of each prior
Fiscal Year's retained net income of the Borrower and its Subsidiaries (after
payment of Patronage Dividends made or distributed with respect to such Fiscal
Year) commencing with the Fiscal Year ending on August 29, 1998, minus (d) the
aggregate amount paid to purchase Class B Shares pursuant to SECTION 7.6(d).
8.2 MINIMUM WORKING CAPITAL. Maintain Working Capital in an amount equal
to not less than $50,000,000.
8.3 MINIMUM FIXED CHARGE COVERAGE RATIO. Maintain a Fixed Charge Coverage
Ratio as measured on a rolling four (4) Fiscal Quarter basis of not less than
1.80:1.00.
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8.4 MAXIMUM RATIO OF TOTAL FUNDED DEBT TO EBITDAP. Maintain as at the end
of each Fiscal Quarter the ratio of Total Funded Debt to EBITDAP as measured on
a rolling four (4) Fiscal Quarter basis not to exceed 4.0:1.00.
SECTION 9. EVENTS OF DEFAULT AND REMEDIES.
9.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following
shall constitute an Event of Default:
(a) INSTALLMENTS OF PRINCIPAL. The Borrower shall fail to pay any
installment of principal under this Agreement or any of the Notes on the date
such installment shall become due and payable; or
(b) OTHER PAYMENTS. The Borrower shall fail to pay any installment of
interest on any Loan or any of the other Obligations of the Borrower to the
Lenders or the Agent arising under this Agreement, the Notes or any of the other
Loan Documents when and as the same shall become due and payable, whether by
acceleration or otherwise and such failure shall not have been cured to
Requisite Lenders' satisfaction within three (3) Business Days; or
(c) CROSS DEFAULTS. The Borrower or any of its Subsidiaries shall
after any required notice thereunder and after the expiration of applicable
grace periods (i) default in the repayment of any principal of or the payment of
any interest on any Indebtedness exceeding in the aggregate a principal amount
of $5,000,000 , or (ii) breach or violate any term or provision of any
promissory note, loan agreement, mortgage, indenture or other evidence of such
Indebtedness pursuant to which amounts outstanding in the aggregate exceed
$5,000,000, and such failure continues after the applicable grace or notice
period, if any, if the effect of such breach is to permit the acceleration of
such Indebtedness (or any Contingent Obligation to become payable or any
collateral in respect thereof to be demanded (whether or not waived by the note
holder or obligee)); or
(d) REPRESENTATIONS AND WARRANTIES. Any representation or warranty
made by or on behalf of the Borrower in this Agreement or any statement or
certificate at any time given in writing pursuant hereto or in connection
herewith shall be false, misleading or incomplete in any material respect when
made; or
(e) SPECIFIC DEFAULTS. The Borrower shall fail or neglect to perform,
keep or observe any of the covenants contained in SECTIONS 7 OR 8 of this
Agreement; or
(f) OTHER DEFAULTS. Subject to SECTIONS 9.1(a), (b) and (e) of this
Agreement, the Borrower or any of its Subsidiaries shall fail or neglect to
perform, keep or observe any covenant or provision of this Agreement or of any
of the other Loan Documents or any other document or agreement executed by the
Borrower or its Subsidiaries in connection therewith and the same has not been
cured to Requisite Lenders' satisfaction within thirty (30) calendar days after
the Borrower shall become aware thereof, whether by written notice from the
Agent or any Lender or otherwise or should reasonably have become aware thereof;
or
57
(g) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Borrower or any of its
Subsidiaries (i) shall cease or fail to be Solvent, or generally shall fail to
pay, or admit in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) shall voluntarily liquidate, dissolve or cease to conduct its
business in the ordinary course (except for entities without material assets or
revenues); (iii) shall commence any Insolvency Proceeding with respect to
itself; or (iv) shall take any action to effectuate or authorize any of the
foregoing; or
(h) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency
Proceeding shall be commenced or filed against the Borrower or any of its
Subsidiaries, or any writ, judgment, warrant of attachment, execution or similar
process shall be issued or levied against a substantial part of the Borrower's
or any of its Subsidiaries' Properties, and any such proceeding or petition
shall not be dismissed, or such writ, judgment, warrant of attachment, execution
or similar process shall not be released, vacated or fully bonded within sixty
(60) days after commencement, filing or levy; (ii) if the Borrower or any of its
Subsidiaries shall admit the material allegations of a petition against it in
any Insolvency Proceeding, or an order for relief (or similar order under non-
U.S. law) is ordered in any Insolvency Proceeding; or (iii) the Borrower or any
of its Subsidiaries shall acquiesce in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent therefor),
or other similar Person for itself or a substantial portion of its Property or
business; or
(i) MONETARY JUDGMENTS. There shall be a money judgment, writ or
warrant of attachment or similar process entered or filed against the Borrower
or any of its Subsidiaries which is not fully covered by insurance (subject to
reasonable deductibles) and remains unvacated, unbonded, unstayed or unpaid or
undischarged for more than thirty (30) days (whether or not consecutive) or in
any event later than five (5) Business Days prior to the date of any proposed
sale thereunder, which, together with all such other unvacated, unbonded,
unstayed, unpaid and undischarged judgments or attachments against the Borrower
and any of its Subsidiaries exceeds in the aggregate $2,500,000; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or
decree shall be rendered against the Borrower which has a reasonable likelihood
of resulting in a Material Adverse Effect, and there shall be any period of
thirty (30) consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(k) INVALIDITY OF LOAN DOCUMENTS. Any material provision of the Loan
Documents, for any reason other than the satisfaction in full of the Obligations
thereunder, shall cease to be, or shall be asserted by the Borrower not to be, a
legal, valid and binding obligation of the Borrower or its applicable
Subsidiaries, enforceable in accordance with its terms, and such occurrence has
not been cured to Requisite Lenders' satisfaction within five (5) Business Days
after the Borrower shall have received notice of such failure from the Agent or
any Lender or within thirty (30) days of when a Responsible Person shall have
become aware thereof (whichever period is less); or
58
(l) CHANGE OF CONTROL. There shall occur any Change of Control;
or
(m) SUSPENSION OF BUSINESS OPERATIONS. If the Borrower or any of its
Subsidiaries shall, other than in the ordinary course of business (as determined
by past practices), suspend all or any part of its operations material to the
conduct of the business of the Borrower or such Subsidiary for a period of more
than sixty (60) consecutive days, which suspension in the good faith judgment of
the Agent would with reasonable likelihood be expected to have a Material
Adverse Effect; or
(n) MATERIAL ADVERSE CHANGE. There shall have been a Material Adverse
Change or any event which would be reasonably likely to result in a Material
Adverse Effect, in the reasonable determination of Requisite Lenders.
9.2 WAIVER OF DEFAULT. Any Event of Default may be waived only with the
written consent of Requisite Lenders; except that any Event of Default under any
of SECTIONS 9.1(a), 9.1(b), 9.1(g) and 9.1(h) of this Agreement may only be
waived with the written consent of all Lenders. Any Event of Default so waived
shall be deemed to have been cured and not to be continuing; but no such waiver
shall be deemed a continuing waiver or shall extend to or affect any subsequent
like default or impair any rights arising therefrom.
9.3 REMEDIES. Upon the occurrence and continuance of any Event of Default
or Potential Event of Default, the Lenders shall have no further obligation to
advance money or extend credit to or for the benefit of the Borrower. In
addition, upon the occurrence and during the continuance of an Event of
Default, the Lenders or the Agent, on behalf of the Lenders, may, at the option
of Requisite Lenders, do any one or more of the following, all of which are
hereby authorized by the Borrower:
(a) Declare all or any of the Obligations of the Borrower under this
Agreement, the Notes, the other Loan Documents and any other instrument executed
by the Borrower pursuant to the Loan Documents to be immediately due and
payable, and upon such declaration such Obligations so declared due and payable
shall immediately become due and payable; provided that if such Event of Default
is under part (g) or (h) of SECTION 9.1 of this Agreement, then all of the
Obligations shall become immediately due and payable forthwith without the
requirement of any notice or other action by the Lenders or the Agent;
(b) Terminate this Agreement as to any future liability or obligation
of the Lenders; provided that if such Event of Default is under part (g) or (h)
of SECTION 9.1 of this Agreement, then all future liability and obligations of
the Lenders shall immediately terminate without the request or notice or other
action by the Lenders or the Agent.
(c) To the extent permitted by laws applicable to the making of
dividends or distributions to equity holders, but without regard to any negative
effect on the Borrower's tax status, require the Borrower to cause each of its
Subsidiaries to dividend to the Borrower all cash flow;
59
(d) Exercise in addition to all other rights and remedies granted
hereunder, any and all rights and remedies granted under the Loan Documents or
otherwise available at law or in equity; and
(e) Demand that the Borrower (i) deposit cash with the Agent in an
amount equal to the amount of any Letter of Credit Undrawn Amount remaining
undrawn, as collateral security for the repayment of any future drawings under
such Letters of Credit, and the Borrower shall forthwith deposit and pay such
amounts, and (ii) pay in advance all Letter of Credit fees and commissions
scheduled or payable over the remaining term of each Letter of Credit.
9.4 SET-OFF.
(a) RIGHTS OF SET-OFF. Subject to SECTION 9.4(b) below, during the
continuance of an Event of Default, any deposits or other sums credited by or
due from any Lender to the Borrower may be set off against the Obligations and
any and all other liabilities, direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, of the Borrower to the
Lenders.
(b) REQUISITE LENDERS' CONSENT TO SET-OFF REQUIRED. Each Lender
agrees that it shall not, and that it shall not attempt to, exercise any right
of set-off, banker's lien or similar remedy against any of the Property of the
Borrower without the prior written consent of the Agent or Requisite Lenders.
9.5 SHARING OF PAYMENTS. If, other than as expressly provided elsewhere
herein, any Lender shall receive from the Borrower or any other source
whatsoever on account of the Loans made by it any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, bankers' lien,
counterclaim, cross-action, enforcement of any claim evidenced by this Agreement
or any of the other Loan Documents or by proof thereof in any case under the
Bankruptcy Code or similar proceeding or otherwise) which is in excess of its
respective Pro Rata Share of payments on account of the Loans obtained by all
Lenders with respect to such Loans, such Lender shall forthwith (a) notify the
Agent of such fact and (b) make such dispositions and arrangements with each
other Lender with respect to such excess, either by way of distribution until
the amount of such excess has been exhausted, assignment of claims, subrogation
or otherwise, as shall result in each such Lender receiving in respect of the
amounts due such Lender, under this Agreement its ratable share of such
payments; provided, however, that if all or any part of such excess payment is
thereafter recovered from such Lender, such disposition and arrangements shall
be rescinded and the amount restored to the extent of such recovery, but without
interest.
9.6 RIGHTS AND REMEDIES CUMULATIVE. The Lenders' and the Agent's rights
and remedies under this Agreement shall be cumulative. The Lenders and the
Agent shall have all other rights and remedies not inconsistent herewith as
provided at law or in equity. No exercise by any Lender or the Agent of one
right or remedy shall be deemed an election. No delay by any Lender or the
Agent shall constitute a waiver, election or acquiescence by such party.
SECTION 10. AGENT.
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10.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby irrevocably
appoints, designates and authorizes Rabobank as the Agent under this Agreement
and under each of the other Loan Documents and irrevocably authorizes the Agent
to take such action on its behalf under and subject to the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to it by the terms of this Agreement or
any other Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Agent have or be deemed to have any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
10.2 DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
10.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct), or (b) be responsible in any manner to
any Lender for any recital, statement, representation or warranty made by the
Borrower or any Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Borrower or any
other party to any Loan Document to perform their obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the Properties, books or records of the Borrower or any
of its Affiliates.
10.4 RELIANCE BY AGENT.
(a) The Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel directed to the Agent (including counsel to the
Borrower), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of Requisite Lenders or all the Lenders where so required
as it deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by
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it by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
Requisite Lenders or all the Lenders where so required and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
(b) For purposes of determining compliance with the conditions
precedent specified in SECTION 4, each Lender that has executed this Agreement
or shall hereafter execute and deliver an Assignment and Acceptance in
accordance with SECTION 11.2(a) of this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with each document or
other matter either sent by the Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to Lender, unless an officer of the
Agent responsible for the transactions contemplated by the Loan Documents shall
have received notice from such Lender prior to the initial Borrowing specifying
its objection thereto and either such objection shall not have been withdrawn by
notice to the Agent to that effect or such Lender shall not have made available
to Agent such Lender's ratable portion of such Borrowing.
10.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Potential Event of Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Agent on behalf and for the benefit of the Lenders,
unless the Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Potential Event of Default
or Event of Default and stating that such notice is a "notice of default." In
the event that the Agent receives such a notice, the Agent shall give notice
thereof to the Lenders. The Agent shall take such action with respect to such
Potential Event of Default or Event of Default as shall be requested by
Requisite Lenders in accordance with this SECTION 10; provided, however, that
unless and until the Agent shall have received any such request, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Potential Event of Default or Event of Default as
it shall deem in the best interest of the Lenders.
10.6 NON-RELIANCE. Each Lender expressly acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it and that no
act by the Agent hereafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or warranty by the
Agent to any Lender. Each Lender confirms to the Agent that it has not relied,
and will not hereafter rely, on the Agent to check or inquire on such Lender's
behalf into the adequacy, accuracy or completeness of any information provided
by the Borrower or any other Person under or in connection with the Loan
Documents or the transactions herein contemplated (whether or not the
information has been or is hereafter distributed to such Lender by the Agent).
Each Lender represents to the Agent that it has, independently and without
reliance upon the Agent and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower, and all applicable bank regulatory laws
relating to the transactions contemplated thereby, and made its own decision to
enter into this Agreement and extend credit to the Borrower under and pursuant
to this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agent and based on such documents and
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information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into the possession
of any Agent-Related Persons. The Agent shall not be responsible to any Lender
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any other Loan Document or
for any representations or warranties, recitals r statements made herein or
therein or made in any written or oral statements, or in any financial or other
statements, instruments, reports or certificates or any other documents
furnished or made by the Agent to the Lenders or by or on behalf of the Borrower
to the Agent or any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of the Borrower or any other Person liable for the payment of any
Obligations, nor shall the Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or as to the existence or possible existence of any Event
of Default or Potential Event of Default.
10.7 INDEMNIFICATION. Whether or not the transactions contemplated hereby
shall be consummated, the Lenders shall indemnify upon demand all Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Borrower and
without limiting the obligation of the Borrower to do so), ratably from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind
whatsoever which may at any time (including at any time following the repayment
of the Loans and the termination or resignation of the related Agent) be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by any such Person under or in connection with any of
the foregoing; provided, however, that no Lender shall be liable for the payment
to Agent-Related Persons of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse
the Agent upon demand for its ratable share of any costs or other out-of-pocket
expenses (including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower. Without limiting the generality of the foregoing, if the IRS
or any other Governmental Authority of the United States of America or other
jurisdiction asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered, was not properly executed, or because such Lender
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failed to notify the Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason), such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this SECTION 10.7, together with all costs and
expenses (including Attorney Costs). The obligation of the Lenders in this
SECTION 10.7 shall survive the payment of all Obligations.
10.8 AGENT IN INDIVIDUAL CAPACITY. Rabobank and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower and its Affiliates as
though Rabobank were not the Agent hereunder and without notice to or consent of
the Lenders. With respect to its Loans, Rabobank shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not the Agent, and the terms "Lender" and "Lenders" shall include
Rabobank in its individual capacity.
10.9 SUCCESSOR AGENT. The Agent may, and at the request of Requisite
Lenders shall, resign as the Agent upon thirty (30) days' notice to the Borrower
and the Lenders. If the Agent shall resign as Agent under this Agreement,
Requisite Lenders shall appoint from among the Lenders a successor agent for the
Lenders. If no successor agent is appointed prior to the effective date of the
resignation of the Agent, the Agent may appoint, after consulting with the
Lenders and the Borrower, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this SECTION 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is thirty (30) days following a retiring
Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Agent hereunder until such time, if any, as Requisite Lenders
appoint a successor agent as provided for above.
SECTION 11. AMENDMENTS AND WAIVERS; ASSIGNMENTS, PARTICIPATION, ETC.
11.1 AMENDMENTS AND WAIVERS. No amendment, modification or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Borrower therefrom, shall be effective unless
the same shall be in writing and signed by Requisite Lenders and acknowledged by
the Agent, and then such waiver shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all Lenders
and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to SECTION 9.3 of this Agreement) or subject any
Lender to any additional obligations;
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(b) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due to the Lenders (or any of them) hereunder or
under any Loan Document;
(c) reduce the principal of, or the rate of interest specified herein
on any Loan, or of any fees or other amounts payable hereunder or under any Loan
Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which shall be required for the Lenders or
any of them to take any action hereunder;
(e) amend this SECTION 11.1;
and, provided further, that no amendment, modification, waiver or consent shall,
unless in writing and signed by the Agent in addition to Requisite Lenders or
all Lenders, as the case may be, affect the rights or duties of the Agent under
this Agreement or any other Loan Document.
11.2 ASSIGNMENTS, PARTICIPATION, ETC.
(a) Any Lender may, with the written consent executed by the Borrower
(at all times other than during the existence of an Event of Default in which
event the Borrower's consent shall not be required) and the Agent (and written
notice to each other Lender), which consents shall not be unreasonably withheld
or delayed, at any time assign and delegate to one or more Eligible Assignees
(provided that no written consent of the Borrower, the Issuing Bank or the Agent
shall be required in connection with any assignment and delegation by such
Lender to an Affiliate of such Lender which Affiliate is controlled by or under
common control with such Lender) (each an "Assignee") all, or any ratable part
of all, of the Loans, the Commitments and the other rights and obligations of
such Lender hereunder, in a minimum amount of the aggregate Commitments of
$5,000,000; provided, however, that the Borrower and the Agent may continue to
deal solely and directly with such Lender in connection with the interest so
assigned to an Assignee until (a) written notice of such assignment, together
with payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Agent by such Lender and
the Assignee; (b) such Lender and its Assignee shall have delivered to the
Borrower and the Agent an Assignment and Acceptance in the form of EXHIBIT F
("Assignment and Acceptance") together with any Note or Notes subject to such
assignment; and (c) the assignor Lender or Assignee has paid to the Agent a
processing fee of $3,000; provided that no processing fee shall be charged for
any assignment to a Lender or an Affiliate of a Lender, and further provided
that the Borrower shall not pay any fees or costs in connection with such
assignment.
(b) From and after the date that the Agent notifies the assigning
Lender that it has received an executed Assignment and Acceptance and payment of
the above-referenced processing fee, (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assigning
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be
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released from its obligations under the Loan Documents; provided, however, that
the assigning Lender shall not relinquish its rights to indemnification pursuant
to SECTION 12.5 of this Agreement, such rights to indemnification shall survive
the assignment and the assigning Lender shall retain such rights co-extensively
with the other Indemnitees.
(c) Within five (5) Business Days after its receipt of notice by the
Agent that it has received an executed Assignment and Acceptance and payment of
the processing fee, the Borrower shall execute and deliver to the Agent new
Notes on the same terms and conditions as the original Notes evidencing such
Assignee's assigned Loans and Commitments and, if the assignor Lender has
retained a portion of its Loans and its Commitments, replacement Notes in the
principal amount of the Loans retained by the assignor Lender (such Notes to be
in exchange for, but not in payment of, the Notes held by such Lender).
Immediately upon each Assignor, Lender or its Assignee's making its processing
fee payment under the Assignment and Acceptance, this Agreement shall be deemed
to be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitments allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
(d) Any Lender may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Borrower and not reasonably known after Due
Inquiry by such Lender to be an active competitor of the Borrower (a
"Participant") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "Originating Lender")
hereunder and under the other Loan Documents in a minimum amount of $5,000,000;
provided, however, that (i) the Originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) the Borrower
and the Agent shall continue to deal solely and directly with the Originating
Lender in connection with the Originating Lender's rights and obligations under
this Agreement and the other Loan Documents, and (iv) no Lender shall transfer
or grant any participating interest under which the Participant shall have
rights to approve any amendment to, or any consent or waiver with respect to,
this Agreement or any other Loan Documents, except to the extent such amendment,
consent or waiver would require unanimous consent of Lenders as described in
clauses (a), (c) and (d) of the first proviso to SECTION 11.1 of this Agreement.
In the case of any such participation, the Participant shall be entitled to the
benefit of SECTIONS 3.1, 3.3, 3.6, 11.1 of this Agreement (but solely with
respect to those matters set forth in clauses (a), (c) and (d) thereof requiring
the consent of all Lenders), and 12.3 as though it were also a Lender hereunder,
and if amounts outstanding under this Agreement are due and unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall be deemed to have the right of set-
off in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interests
were owing directly to it as a Lender under this Agreement.
(e) Each Lender agrees to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all information identified
as "confidential" by the Borrower and provided to it by the Borrower, or by the
Agent on the Borrower's behalf, in
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connection with this Agreement or any other Loan Document, and neither it nor
any of its Affiliates shall use, or disclose any such information for any
purpose or in any manner other than pursuant to the terms contemplated by this
Agreement; except to the extent such information (i) was or becomes generally
available to the public other than as a result of a disclosure by such Lender,
or (ii) was or becomes available on a non-confidential basis from a source other
than the Borrower, provided that such source is not bound by a confidentiality
agreement with the Borrower known to Lender; provided, however, that any Lender
may disclose such information (a) at the request or pursuant to any requirement
of any Governmental Authority to which such Lender is subject or in connection
with an examination of such Lender by any such authority; (b) pursuant to
subpoena or other court process; (c) when otherwise required to do so in
accordance with the provisions of any applicable Requirement of Law; and (d) to
such Lender's independent auditors and other professional advisors, provided
that such auditors and professional advisors shall be required to similarly
protect the confidentiality of such information. Notwithstanding the foregoing,
the Borrower authorizes each Lender to disclose to any Participant or Assignee
(each, a "Transferee") and to any prospective Transferee, such financial and
other information in such Lender's possession concerning the Borrower which has
been delivered to the Agent or the Lenders pursuant to this Agreement or which
has been delivered to the Agent or the Lenders by the Borrower in connection
with the Lenders' credit evaluation of the Borrower prior to entering into this
Agreement; provided that, unless otherwise agreed in writing in advance by the
Borrower, such Transferee agrees in writing to such Lender and the Borrower to
keep such information confidential to the same extent required of Lenders
hereunder.
(f) Notwithstanding any other provision contained in this Agreement or
any other Loan Document to the contrary, any Lender may assign all or any
portion of the Loans or Notes held by it to any Federal Reserve Bank or the
United States Treasury as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank, provided that any payment in respect of
such assigned Loans or Notes made by the Borrower to or for the account of the
assigning or pledging Lender in accordance with the terms of this Agreement
shall satisfy the Borrower's obligations hereunder in respect to such assigned
Loans or Notes to the extent of such payment. No such assignment shall release
the assigning Lender from its obligations hereunder.
SECTION 12. MISCELLANEOUS.
12.1 NO WAIVER BY AGENT OR LENDERS. No failure or delay on the part of the
Agent or any Lender in the exercise of any power, right or privilege under this
Agreement, the Notes or any of the other Loan Documents shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.
12.2 ENTIRE AGREEMENT; CONSTRUCTION.
(a) This Agreement, the Notes and each of the other Loan Documents
dated as of the date hereof, taken together, constitute and contain the entire
agreement among the
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Borrower, the Lenders and the Agent and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications among the
parties, whether written or oral, respecting the subject matter hereof.
(b) This Agreement is the result of negotiations between and has been
reviewed by the Borrower, the Lenders executing this Agreement as of the Closing
Date and the Agent and their respective counsel; accordingly, this Agreement
shall be deemed to be the product of the parties hereto, and no ambiguity shall
be construed in favor of or against the Borrower, the Lenders or the Agent. The
Borrower, the Lenders and the Agent each severally agree that they intend the
literal words of this Agreement and the other Loan Documents and that no parole
evidence shall be necessary or appropriate to establish the Borrower's, any
Lender's or the Agent's actual intentions.
12.3 INDEMNIFICATION. To the fullest extent permitted by law, the Borrower
agrees to protect, indemnify, defend and hold harmless the Agent, each Lender
and each of their respective directors, officers, employees and agents and any
Person who controls any of them within the meaning of the federal, state and
foreign securities laws (each an "Indemnitee" and collectively, the
"Indemnitees") from and against any liabilities, losses, obligations, damages,
penalties, expenses or costs of any kind or nature and from any suits,
judgments, claims or demands (including, without limitation, in respect of or
for reasonable fees and other disbursements of counsel for and consultants of
such Indemnitees in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitees shall be designated a party
thereto) based on any federal, state, local or foreign law or other statutory
regulation, including, without limitation, securities, environmental and
commercial law or other statutory regulation, which arises under common law or
at equitable cause or on contract or otherwise on account of or in connection
with any matter or thing or any action or failure to act by the Indemnitees, or
any of them, arising out of or relating to the Loan Documents or any agreement
or instrument contemplated by the Loan Documents, except to the extent such
liability arises from the willful misconduct or gross negligence of any of the
Indemnitees (collectively, the "Indemnified Matters"). Upon receiving knowledge
of any suit, claim, demand or any other matter asserted by any Person that the
Agent or any Lender believes is covered by this indemnity, the Agent or such
Lender shall give the Borrower notice of the matter and an opportunity to defend
it, at the Borrower's sole cost and expense, with legal counsel reasonably
satisfactory to the Agent and the Lenders. The Agent or the Lenders may also
require the Borrower to defend the matter. The obligations of the Borrower
under this SECTION 12.5 shall survive the payment and performance of the
Obligations and the termination of this Agreement. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in this SECTION 12.5
may be unenforceable because it is violative of any law or public policy, the
Borrower shall contribute the maximum portion which it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees.
12.4 NOTICES.
(a) All notices, requests and other communications provided for
hereunder shall be in writing (including, unless the context expressly otherwise
provides, by facsimile transmission, provided that any matter transmitted by the
Borrower by facsimile (i) shall be
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confirmed by receipt of electronic confirmation, and (ii) shall be followed
promptly by a hard copy original thereof) and mailed, faxed or delivered, to the
address or facsimile number specified for notices on the applicable signature
page hereof; or, as directed to the Borrower or the Agent, to such other address
as shall be designated by such party in a written notice to the other parties,
and as directed to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, be effective when delivered for overnight
(next day) delivery, or if delivered, upon delivery, except that notices
pursuant to SECTIONS 2 or 10 of this Agreement and notices transmitted by
facsimile machine shall not be effective until actually received by the Agent.
(c) The Borrower and the Lenders acknowledge and agree that any
agreement of the parties to receive certain notices by telephone and facsimile
is for their mutual benefit and convenience. Any party shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by any
other party to give such notice and the party relying on such authorization
shall not have any liability to any other Person on account of any action taken
or not taken by such party in reliance upon such telephonic or facsimile notice.
The obligation of the Borrower to repay the Loans shall not be affected in any
way or to any extent by any failure by the Agent to receive written confirmation
of any telephonic or facsimile notice or the receipt by the Agent of a
confirmation which is at variance with the terms understood by the Agent to be
contained in the telephonic or facsimile notice.
12.5 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Lender shall
notify the Agent in writing of any changes in the address to which notices to
such Lender should be directed, of addresses of its Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
12.6 COUNTERPARTS. This Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. Each such agreement
shall become effective upon the execution of a counterpart hereof or thereof by
each of the parties hereto or thereto, delivery of each such counterpart to the
Agent, and notification thereof by the Agent has been received by the Borrower
and the Lenders.
12.7 COSTS AND EXPENSES. The Borrower shall, whether or not the
transactions contemplated hereby shall be consummated, and in addition to costs
and expenses required to be paid at Closing under SECTION 4.1 of this Agreement:
(a) pay or reimburse Rabobank (including in its capacity as the Agent)
within thirty (30) days after demand for all costs and expenses incurred by
Rabobank (including in its capacity as the Agent) in connection with the
preparation, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any other Loan Document and any other documents
prepared in
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connection herewith (including any commitment letter and related documents
preceding this Agreement) or therewith, and the consummation of the transactions
contemplated hereby and thereby, including the reasonable Attorney Costs
incurred by Rabobank as to any amendments, supplements, waivers or modifications
(including in its capacity as the Agent) with respect hereto and thereto;
(b) pay or reimburse the Agent and each Lender within thirty (30) days
after demand for all costs and expenses incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
(including in connection with any "workout" or restructuring regarding the
Loans, and including in any Insolvency Proceeding or appellate proceeding) under
this Agreement, any other Loan Document, and any such other documents, including
Attorney Costs incurred by the Agent and any Lender; and
(c) pay or reimburse Rabobank (including in its capacity as the Agent)
within thirty (30) days after demand for all reasonable audit, environmental
inspection and review, search and filing, registration and recording, costs,
fees and expenses, incurred or sustained by Rabobank (including in its capacity
Agent) in connection with the matters referred to under clauses (a) and (b) of
this SECTION 12.9 of this Agreement.
12.8 RELIANCE BY LENDERS. All covenants, agreements, representations and
warranties made herein by the Borrower shall, notwithstanding any investigation
by the Lenders or the Agent be deemed to be material to and to have been relied
upon by the Lenders.
12.9 NO SET-OFFS BY BORROWER. All sums payable by the Borrower pursuant
to this Agreement, the Notes or any of the other Loan Documents shall be payable
without notice or demand and shall be payable in United States Dollars without
set-off or reduction of any manner whatsoever; provided, however, that
notwithstanding the requirement that all payments be made without set-off or
reduction, if any invoice by the Agent for interest, loan fees or letter of
credit commissions incorrectly states that the Borrower owes an amount greater
than the amount actually due, the Borrower pays the amount due on such invoice
and then such error is corrected by Agent or determined as having been made by a
court having jurisdiction pursuant to the terms of this Agreement, then the
Borrower may apply the amount of such overpayment toward future payments due
hereunder or, in the event no further payments will fall due hereunder, recover
such overpayment from the Lenders.
12.10 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agent and each Lender.
12.11 HEADINGS. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
12.12 SEVERABILITY. Whenever possible, each provision of this Agreement,
the Notes and
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each of the other Loan Documents shall be interpreted in such a manner as to be
valid, legal and enforceable under the applicable law of any jurisdiction.
Without limiting the generality of the foregoing sentence, in case any provision
of this Agreement, the Notes or any of the other Loan Documents shall be
invalid, illegal or unenforceable under the applicable law of any jurisdiction,
the validity, legality and enforceability of the remaining provisions, or of
such provision in any other jurisdiction, shall not in any way be affected or
impaired thereby.
12.13 NO THIRD PARTIES BENEFITED. This Agreement is made and entered
into for the sole protection and legal benefit of the Borrower, the Lenders and
the Agent, and their permitted successors and assigns, and except as otherwise
expressly provided in this Agreement, no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
Neither the Agent nor any Lender shall have any obligation to any Person not a
party to this Agreement or other Loan Documents.
12.14 RELATIONSHIP OF PARTIES. The relationship between the Borrower,
on the one hand, and the Lenders and the Agent, on the other, is, and at all
times shall remain, solely that of a borrower and lenders. Neither the Lenders
nor the Agent shall under any circumstances be construed to be partners or joint
venturers of the Borrower or any of its Affiliates; nor shall the Lenders nor
the Agent under any circumstances be deemed to be in a relationship of
confidence or trust or a fiduciary relationship with the Borrower or any of its
Affiliates, or to owe any fiduciary duty to the Borrower or any of its
Affiliates. The Lenders and the Agent do not undertake or assume any
responsibility or duty to the Borrower or any of its Affiliates to select,
review, inspect, supervise, pass judgment upon or otherwise inform the Borrower
or any of its Affiliates of any matter in connection with its or their Property,
any security held by the Agent or any Lender or the operations of the Borrower
or any of its Affiliates. The Borrower and each of their Affiliates shall rely
entirely on their own judgment with respect to such matters, and any review,
inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by any Lender or the Agent in connection with such matters
is solely for the protection of the Lenders and the Agent and neither the
Borrower nor any of its Affiliates is entitled to rely thereon.
12.15 TIME. Time is of the essence as to each term or provision of this
Agreement and each of the other Loan Documents.
12.16 WAIVER OF PUNITIVE DAMAGES. Notwithstanding anything to the contrary
contained in this Agreement, the Borrower hereby agrees that it shall not seek
from the Lenders or the Agent punitive damages under any theory of liability.
12.17 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY
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APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
12.18 PERSONAL JURISDICTION. THE BORROWER, THE AGENT, EACH LENDER AND
ALL ASSIGNEES AND PARTICIPANTS HEREBY IRREVOCABLY AGREE THAT ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OF THE
AGREEMENTS, DOCUMENTS OR INSTRUMENTS DELIVERED IN CONNECTION HEREWITH MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA, LOCATED IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, AS THE AGENT MAY
ELECT, AND, BY EXECUTION AND DELIVERY HEREOF, ACCEPTS AND CONSENTS TO, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS AND AGREES THAT SUCH JURISDICTION SHALL BE
EXCLUSIVE, UNLESS WAIVED BY THE AGENT IN WRITING, WITH RESPECT TO ANY ACTION OR
PROCEEDING BROUGHT HEREUNDER BY THE BORROWER AGAINST THE AGENT OR ANY LENDER.
THE PARTIES HEREBY WAIVE, TO THE FULL EXTENT PERMITTED BY LAW, ANY RIGHT TO STAY
OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS
OF FORUM NON CONVENIENS.
12.19 WAIVER OF JURY TRIAL. THE BORROWER, EACH LENDER AND THE AGENT,
HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO
ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.
WITNESS the due execution of this Revolving Credit Agreement by the
respective duly authorized officers of the undersigned as of the date first
written above.
BORROWER CERTIFIED GROCERS OF CALIFORNIA, LTD.,
a California corporation
By:________________________________
Xxxxx X. Xxxxxxxx
Treasurer
Notices to Borrower to be sent to:
CERTIFIED GROCERS OF CALIFORNIA, LTD.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer and
Corporate Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
72
With a copy to:
SHEPPARD, MULLIN, XXXXXXX & HAMPTON LLP
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. XxXxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AGENT COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH,
as the Agent and as a Lender
By:______________________________
Xxxxxxxx X. Xxxxx
Vice President
By:______________________________
Name:____________________________
Title:___________________________
Payment Office and Domestic Lending Office:
RABOBANK NEDERLAND
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Services Department
Wiring Instructions:
Bank of New York
ABA No. 000000000
A/C Rabobank New York
A/C No. 000 0000000
Re: Certified Grocers of California, Ltd.
Notices to be sent to:
Rabobank Nederland
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Finance Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Rabobank Nederland
Four Embarcadero Center, Suite 3200
73
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Godward llp
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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