EXHIBIT (T) - CREDIT AGREEMENT BETWEEN REGISTRANT AND TEXAS COMMERCE BANK
NATIONAL ASSOCIATION DATED OCTOBER 27, 1997
CREDIT AGREEMENT
This Credit Agreement (the "AGREEMENT") is made and entered into effective
October 27, 1997 (the "EFFECTIVE DATE") by and among:
GOLDEN EAGLE GROUP, INC. ("GOLDEN EAGLE GROUP"), XXXXX AMERICA, INC.
("Xxxxx"), WORLD TRADE TRANSPORT OF VIRGINIA, INC. ("WORLD TRADE"), WTT
CUSTOMS HOUSE BROKERAGE, INC. ("WTT"), COLUMBIA SHIPPING, INC. ("COLUMBIA
SHIPPING"), COLUMBIA SHIPPING, INC. (WEST) ("COLUMBIA WEST"), COLUMBIA
SHIPPING, INC. (CHICAGO) ("COLUMBIA CHICAGO") and FREIGHT EXPRESS
INTERNATIONAL, INC. ("FREIGHT" and which with Golden Eagle Group, Xxxxx,
World Trade, WTT, Columbia Shipping, Columbia West, and Columbia Chicago are
sometimes herein collectively called the "BORROWERS," and singly called a
"BORROWER");
DACOM LINE, INC. ("DACOM"), GOLDEN EAGLE INTERNATIONAL FORWARDING, INC.
("GOLDEN EAGLE INTERNATIONAL"), GOLDEN EAGLE CUSTOMS BROKERS, INC. ("GOLDEN
EAGLE CUSTOMS"), BRIDGEPORT SHIPPING LINES, INC. ("BRIDGEPORT"), COLUMBIA
SHIPPING, INC. (SFO) ("COLUMBIA SFO") and COLUMBIA SHIPPING GROUP, INC.
("COLUMBIA GROUP" and which with Dacom, Golden Eagle International, Golden
Eagle Customs and Bridgeport are sometimes herein collectively called the
"GUARANTORS," and singly called a Guarantor); and,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION (the "BANK").
RECITALS
Golden Eagle Group, Xxxxx, World Trade, WTT and the Bank entered into an
Amended and Restated Credit Agreement (the "PRIOR AGREEMENT") dated March 2,
1997, pursuant to the terms of which the Bank agreed to make certain loans to
Xxxxx, World Trade, and WTT. The Borrowers represent to the Bank that Golden
Eagle Group has entered into and will, effective contemporaneous with the
execution of this Agreement, consummate the Stock Purchase Agreement. The
Borrowers have requested the Bank to further increase the amount of the Loans to
enable the Borrowers to consummate the Stock Purchase Agreement and provide
working capital to the Borrowers. Conditioned on the terms of this Agreement,
the Bank is willing to increase the amount of and to make the Loans available
for the purposes herein set out to the Borrowers.
AGREEMENT
In consideration of the premises, for other good, fair and valuable
considerations, the receipt, adequacy and reasonable equivalency of which are
acknowledged, and for other valuable consideration, the parties agree as set out
herein.
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. For the purposes of this Agreement, unless the context
requires otherwise, the following terms shall have the respective meanings
ascribed to them in this Article or in the Sections referred to below:
"ACCOUNT DEBTORS" means all, and "ACCOUNT DEBTOR" means any account debtor,
customer or other obligor
1
with respect to any of the Accounts.
"ACCOUNTS," "CHATTEL PAPER," "CONTRACTS," "CONTRACT RIGHTS," "DOCUMENTS,"
"GENERAL INTANGIBLES," "GOODS," and "INSTRUMENTS" shall have the meanings
ascribed to such terms in the UCC, and shall mean the Accounts, Chattel Paper,
Contracts, Contract Rights, Documents, General Intangibles, Goods, and
Instruments of the Loan Parties in which the Bank is granted security interests
pursuant to the Loan Documents.
"ADVANCES" means all, and "ADVANCE" means any, of the disbursements by the Bank
of the sums loaned to the Borrowers pursuant to this Agreement.
"AFFILIATE" of any Person means any other Person which, directly or indirectly,
controls or is controlled by or is under common control with such Person and,
without limiting the generality of the foregoing, includes (i) any Person which
beneficially owns or holds five per cent or more of any class of Voting Shares
of such Person or five per cent or more of the equity interest in such Person,
(ii) any Person of which such Person beneficially owns or holds five per cent or
more of any class of Voting Shares or in which such Person beneficially owns or
holds five per cent or more of the equity interest in such Person and (iii) any
director, officer, member, manager or employee of such Person. For the purposes
of this definition, the term "CONTROL" (including, with correlative meanings,
the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), as used with respect
to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Shares or by contract or otherwise.
"AGREEMENT" means this Agreement, as it may, from time to time, be amended.
"APPLICABLE MARGIN" shall have the meaning ascribed to such term in Section 4.3.
"APPLICATION FOR LETTER OF CREDIT" shall have the meaning ascribed to such term
in Section 2.2.
"AVAILABILITY" means, at any time, with respect to the Loans, the Total
Commitment (as such amount may be reduced or increased in accordance with the
provisions of this Agreement), MINUS the sum, at such time, of (i) the unpaid
principal balance of, and accrued interest and fees on, the Loans, and (ii) the
Reserves established by the Bank pursuant to Section 2.3.
"BASE RATE" means the variable rate of interest announced from time to time by
the Bank as the prime rate, and thereafter entered in the minutes of the Bank's
Loan and Discount Committee, and used by the Bank as a general reference rate of
interest, but which rate of interest may not be the lowest rate charged by the
Bank on similar loans. Each change in the Base Rate shall become effective
without prior notice to the Borrowers automatically as of the opening of
business on the date of a change in the Base Rate. If the Bank shall, during the
term of this Agreement, abolish or abandon the practice of announcing or
publishing a "PRIME RATE," then the "PRIME RATE" used during the remaining term
of this Agreement shall be that interest rate or other general reference rate
then in effect and used by the Bank, which, from time to time, in the judgment
of the Bank, most effectively approximates the initial definition of the "PRIME
RATE."
"BOARD" means the Board of Governors of the Federal Reserve System of the U.S.
"BORROWERS" means all of, and "BORROWER" means any of, Golden Eagle Group,
Xxxxx, World Trade, WTT, Columbia Shipping, Columbia West, Columbia Chicago,
Freight and any other Consolidated Subsidiary of any of the Borrowers which the
Bank may require, at the time of its acquisition or formation
2
by a Borrower, become a Borrower hereunder.
"BORROWING BASE CERTIFICATE" means any of the certificates delivered by the
Borrowers to the Bank calculating the Borrowing Base pursuant to Section 2.3.
"BORROWING BASE" means the amount calculated pursuant to Section 2.3 to
determine Availability which the Borrowers shall be entitled to borrow as an
Advance.
"BORROWING DATE" means the Business Day specified in (i) any Notice of Revolving
Credit Advance, (ii) the Notice of Term Loan Advance, or (iii) the Application
for Letter of Credit, as a date on which the Borrowers request the Bank make an
Advance or issue a Letter of Credit.
"BORROWING" means any amount disbursed by the Bank to or on behalf of the
Borrowers under the Loan Documents, whether such amount advanced constitutes an
original disbursement of funds, the continuation of an amount outstanding,
amounts advanced and outstanding under a Letter of Credit (until such payment is
reimbursed in accordance with the applicable Application for Letter of Credit or
the Letter of Credit is returned to the Bank), or a disbursement of funds in
accordance with and to satisfy the Obligations.
"BUSINESS DAY" means a day on which the Bank is open for business, except for
Saturdays, Sundays and holidays recognized by the Bank.
"CAPITAL EXPENDITURE" means any expenditure by a Person for an asset which will
be used in a year or years subsequent to the year in which the expenditure is
made and which asset is properly classifiable in relevant financial statements
of such Person as equipment, real property, improvements, fixed assets, or a
similar type of capitalized asset in accordance with GAAP.
"CAPITAL LEASE" means, as of any date, any lease of property, real or personal,
which would be capitalized on a balance sheet of the lessee prepared as of such
date in accordance with GAAP, together with any other lease by such lessee which
is in substance a financing lease, including, without limitation, any lease
under which (i) such lessee has or will have an option to purchase the property
subject thereto at a nominal amount or at an amount less than a reasonable
estimate of the fair market value of such property as of the date such lease is
entered into, or (ii) the term of the lease approximates or exceeds the expected
useful life of the property leased thereunder.
"CASH FLOW" means, for any monthly period, for Golden Eagle Group and the
Consolidated Subsidiaries, annualized EBITDA for the preceding twelve (12)
months, LESS cash income taxes paid reduced by the proceeds received, if any,
from the letter of credit established pursuant to the Stock Purchase Agreement.
"CERTIFICATE OF COMPLIANCE" means any of the certificates delivered by the
Borrowers pursuant to Section 7.1.A.(5).
"CHANGE OF CONTROL" means (i) if any Person, or group of Persons acting together
shall acquire sufficient stock ownership of Golden Eagle Group or any of the
Consolidated Subsidiaries to permit such Person or group to elect a majority of
the Board of Directors of Golden Eagle Group or any of the Consolidated
Subsidiaries or otherwise control Golden Eagle Group or any of the Consolidated
Subsidiaries, (ii) if there shall occur any merger, consolidation or dissolution
of Golden Eagle Group or any of the Consolidated Subsidiaries with any other
Person, or (iii) if there shall occur any sale, lease or other disposition of
all or substantially all of the assets or capital stock of Golden Eagle Group or
any of the Consolidated Subsidiaries to any other Person.
3
"CODE" means the Internal Revenue Code of 1986, as amended from time to time.
"COLLATERAL DOCUMENTS" means all security agreements, guaranty agreements and
any other agreements or documents executed or delivered to secure the repayment
of the Obligations or any part thereof.
"COLLECTION AND FUNDING ACCOUNT" means the non-interest bearing cash collateral
account established with the Bank in the names of the Borrowers pursuant to
Section 2.4.
"COMMITMENT" means the obligation of the Bank to extend credit to the Borrowers
under this Agreement in an aggregate principal amount not to exceed the Total
Commitment.
"CONSOLIDATED SUBSIDIARIES" means Xxxxx, World Trade, WTT, Columbia Group,
Dacom, Golden Eagle International, Golden Eagle Customs, Bridgeport, Columbia
Shipping, Columbia West, Columbia Chicago, Columbia SFO, Freight and any other
Person, the capital stock of which is owned in its entirety by Golden Eagle
Group or a wholly owned direct subsidiary of Golden Eagle Group, and the term
"CONSOLIDATED SUBSIDIARY" means any of them.
"CONTRACT RATE" means each, as applicable, of the rates of interest described in
Section 4.4.
"CONTROLLED GROUP" means (i) the controlled group of corporations as defined in
"1563 of the Code, or (ii) the group of trades or businesses under common
control as defined in "414(c) of the Code, of which the Borrowers are or may
become a part.
"CURRENT ASSETS" means, as of any date, the current assets which would be
reflected on the balance sheet, prepared as of such date in accordance with
GAAP, of Golden Eagle Group and the Consolidated Subsidiaries on a consolidated
basis.
"CURRENT LIABILITIES" means, as of any date, the current liabilities which would
be reflected on the balance sheet, prepared as of such date in accordance with
GAAP, of Golden Eagle Group and the Consolidated Subsidiaries on a consolidated
basis.
"CURRENT RATIO" means, with respect to any Person for any period, Currents
Assets divided by Current Liabilities.
"DEBT COVERAGE RATIO" means Funded Debt divided by EBITDA.
"DEBT SERVICE EXPENSE" means, with respect to any Person for any period, the
aggregate of principal payments of all long-term Indebtedness (including,
without limitation, Subordinated Indebtedness) made by such Person during such
period in accordance with GAAP.
"DEBTOR LAWS" means all applicable liquidation, conservatorship, bankruptcy,
moratorium, arrangement, receivership, insolvency, reorganization or similar
laws, from time to time in effect, affecting the rights of creditors generally.
"DEFAULT" shall have the meaning ascribed to such term in Section 10.1.
4
"DIVIDENDS" means in respect of any corporation, including tax-option
corporations, (i) cash distributions or any other distributions (or the setting
aside of any amounts for any such purpose) on, or in respect of, any class of
capital stock of such corporation, except for distributions made solely in
shares of stock of the same class, and (ii) any and all funds, cash or other
payments made in respect of the redemption, repurchase or acquisition of such
stock and whether by reduction of capital or otherwise, unless such stock shall
be redeemed or acquired through the exchange of such stock with stock of the
same class. "DOLLARS" and the symbol "$" shall refer to currency of the U.S.
"EBITDA" means, for any monthly period of Golden Eagle Group and the
Consolidated Subsidiaries, the sum of the following for the preceding twelve
(12) months which would be reflected on the consolidated income statement of
Golden Eagle Group and the Consolidated Subsidiaries prepared in accordance with
GAAP, (i) net income; PLUS, (ii) income taxes; PLUS (iii) Capital Lease
payments; PLUS (iii) Interest Expense; PLUS, (iv) non-cash charges in respect of
depreciation and amortization.
"ELIGIBLE ACCOUNTS" has the meaning set out in Section 2.3.
"EMPLOYEE PLAN" means any, and "EMPLOYEE PLANS" means all, employee benefit or
other plans maintained, in whole or in part, for the employees of Golden Eagle
Group and the Consolidated Subsidiaries or any ERISA Affiliate, and covered by
Title IV of ERISA, or subject to the minimum funding standards under "412 of the
Code.
"ERISA AFFILIATE" means any Person which, together with the Borrower or any
subsidiary, would be treated as a single employer under the provisions of Title
I or Title IV of ERISA.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
together with all regulations issued pursuant thereto.
"EVENT OF DEFAULT" shall have the meaning ascribed to such term in Section 10.1.
"FACILITY FEES" shall have the meaning ascribed to such term in Section 4.13.
"FINANCIAL OFFICER" means, with respect to any Person, the President or chief
financial officer of such Person.
"FINANCIAL STATEMENTS" means all, and "FINANCIAL STATEMENT" means each, of the
balance sheets, income statements, stockholders statements, and statements of
cash flow and contingent liabilities of any Loan Party.
"FINANCING STATEMENT" means each UCC-1 financing statement sufficient for
purposes of perfecting the Bank's security interest in the Collateral pursuant
to the UCC.
"FISCAL YEAR" means the fiscal year of Golden Eagle Group for accounting
purposes ending each December 31.
"FIXED CHARGE COVERAGE RATIO" means Cash Flow divided by Fixed Charges.
"FIXED CHARGES" means, for any fiscal period of Golden Eagle Group and the
Consolidated Subsidiaries, the sum of the following which would be reflected on
the consolidated income statement prepared in
5
accordance with GAAP of Golden Eagle Group and the Consolidated Subsidiaries,
(i) Interest Expense, (ii) Capital Lease payments, (iii) scheduled payments of
principal on Indebtedness, (iv) non-financed Capital Expenditures and (v)
Dividends.
"FREE CASH FLOW" means, with respect to Golden Eagle Group and the Consolidated
Subsidiaries for any period, the amount, if any, by which Funds Flow From
Operations for such period exceeds the sum of (i) non-financed Capital
Expenditures, PLUS (ii) Dividends, PLUS (iii) Debt Service Expense for such
period, PLUS (iv) Capital Lease payments during such period, PLUS (v) changes in
working capital.
"FUNDED DEBT" means all interest bearing or discounted Indebtedness, including
Subordinated Indebtedness, other than accounts payable and other similar
obligations incurred in the ordinary course of business by Golden Eagle Group
and the Consolidated Subsidiaries and accruals and deferred income tax
liability.
"FUNDS FLOW FROM OPERATIONS" means Net Income PLUS depreciation and
amortization.
"GAAP" means those generally accepted accounting principles and practices which
are recognized as such by the American Institute of Certified Public Accountants
acting through its Accounting Principles Board or by the Financial Accounting
Standards Board ("FASB") or through other appropriate boards or committees
thereof and which are consistently applied for all periods after the Effective
Date so as to properly reflect the financial condition, and the results of
operations and cash flows, of Golden Eagle Group and the Consolidated
Subsidiaries, except that any accounting principle or practice required to be
changed by the Accounting Principles Board or FASB (or other appropriate board
or committee of the boards) in order to continue as a generally accepted
accounting principle or practice, may be so changed. In the event of a change in
GAAP, the Bank and the Borrowers will thereafter negotiate in good faith to
revise any covenants of this Agreement affected thereby in order to make such
covenants consistent with GAAP then in effect. If no agreement is reached, the
financial covenants shall be calculated based on GAAP before any change in GAAP.
"GOVERNMENTAL AUTHORITY" means any government (or any political subdivision or
jurisdiction thereof), court, bureau, agency or other governmental authority
having jurisdiction over any Loan Party or any Loan Party's business or
properties.
"GUARANTY AGREEMENT" means each guaranty agreement executed by a Guarantor
pursuant to Section 8.1.F for the benefit of the Bank.
"GUARANTY" means any contract, agreement or understanding of any Person pursuant
to which such Person guarantees, or in effect guarantees, any Indebtedness of
any other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, agreements: (i) To purchase such
Indebtedness or any property constituting security therefor; (ii) to advance or
supply funds (a) for the purchase or payment of such Indebtedness, or (b) to
maintain net worth or working capital or other balance sheet conditions, or
otherwise to advance or make available funds for the purchase or payment of such
Indebtedness; (iii) to purchase property, securities or service primarily for
the purpose of assuring the holder of such Indebtedness of the ability of the
Primary Obligor to make payment of the Indebtedness; or, (iv) otherwise to
assure the holder of the Indebtedness of the Primary Obligor against loss in
respect thereof. "GUARANTY" shall not include, however, the indorsement of
negotiable instruments or documents for deposit or collection by any Loan Party
in the ordinary course of business.
"INDEBTEDNESS" means, with respect to any Person, all indebtedness, obligations
and liabilities of such
6
Person, including, without limitation: (i) All liabilities which would be
reflected on a balance sheet of such Person prepared in accordance with GAAP;
(ii) all obligations of such Person in respect of any Guaranty; (iii) all
obligations, indebtedness and liabilities secured by any Lien or any security
interest on any property or assets of such Person; and, (iv) all preferred
stock, which is redeemable by the holder of such stock, of such Person valued at
the greater of its voluntary or involuntary liquidation preference plus accrued
and unpaid dividends.
"INTANGIBLE ASSETS" means those assets of any Person which are (i) deferred
assets, other than prepaid insurance and prepaid taxes, (ii) patents,
copyrights, trademarks, trade names, franchises, goodwill, experimental expenses
and other similar assets which would be classified as intangible assets on a
balance sheet of such Person, prepared in accordance with GAAP, (iii)
unamortized debt discount and expense, and (iv) assets located, and notes and
receivables due from obligors domiciled, outside of the U.S.
"INTEREST EXPENSE" means for any fiscal period of Golden Eagle Group and the
Consolidated Subsidiaries, the interest charges paid or accrued during such
period (including imputed interest on Capital Lease obligations, but excluding
amortization of debt discount and expense) on the Indebtedness of Golden Eagle
Group and the Consolidated Subsidiaries.
"INVESTMENT" means any investment in any period, whether by means of share
purchase, loan, advance, extension of credit, capital contribution or otherwise,
in or to a Person, the Guaranty of any Indebtedness of such Person, or the
subordination of any claim against such Person to other Indebtedness of such
Person.
"IRS" means the Internal Revenue Service, Department of the U.S. Treasury, an
agency of the U.S. government.
"LANDLORD AGREEMENT" means any agreement executed pursuant to the provisions
Section 8.1.E.
"LEASEHOLDS" means all, and "LEASEHOLD" means any, (i) of the leases described
in Schedule 8.1.E by which a Loan Party is entitled to occupy and use the
premises described therein, and (ii) any and all other leases, subleases,
licenses, concessions or other agreements, written or verbal, now or hereafter
in effect, which grant a possessory interest in and to, or the right to use, all
or any portion of the premises and any other leased real property.
"LETTERS OF CREDIT" means all, and "LETTER OF CREDIT" means any, of the letters
of credit issued by the Bank for the benefit of any of the Borrowers pursuant to
Section 2.2.
"LIEN" means any lien, mortgage, security interest, tax lien, pledge,
encumbrance, conditional sale or title retention arrangement, or any other
interest in property designed to secure the repayment of Indebtedness, whether
arising by agreement, under any statute or law, or otherwise.
"LOAN DOCUMENTS" means this Agreement, the Notes, including any renewals,
extensions and modifications thereof, each Guaranty Agreement, the Collateral
Documents and any agreements or documents executed or delivered pursuant to the
terms of this Agreement, and with respect to this Agreement, and such other
agreements and documents, any amendments or supplements thereto or modifications
thereof.
"LOAN PARTIES" means the Borrowers and the Guarantors, and the term "LOAN PARTY"
means any of them.
"LOANS" means the Revolving Credit Loans and the Term Loans, and the term "LOAN"
means any of them.
7
"MANDATORY PREPAYMENT" means an amount equal to fifty (50) per cent of Free Cash
Flow, if any, of Golden Eagle Group and the Consolidated Subsidiaries for each
semi-annual period commencing on each January 1 and ending on each June 30 and
commencing on each July 1 and ending on each December 31.
"MATERIAL ADVERSE EFFECT" means any material adverse effect on (i) the validity,
performance, or enforceability of any of the Loan Documents, (ii) the financial
condition or business operations of any Loan Party, and/or (iii) the ability of
any Loan Party to fulfill the Obligations.
"MAXIMUM RATE" and "MAXIMUM AMOUNT" respectively mean the maximum non-usurious
rate and the maximum non-usurious amount of interest permitted by applicable
laws that, at any time or from time to time, may be contracted for, taken,
reserved, charged or received on the Obligations under the laws which are
presently in effect of the U.S. and the State of Texas and applicable to the
holders of the Notes or, to the extent permitted by law, under such applicable
laws of the U.S. and the State of Texas which may hereafter be in effect and
which allow a higher maximum non-usurious interest rate than applicable laws now
allow.
"NET INCOME" or "NET LOSS" means, with respect to any Person for any period, the
aggregate income (or loss) of such Person for such period which shall be an
amount equal to net revenues and other proper items of income for such Person
less the aggregate for such Person of any and all expenses, and less Federal,
state and local income taxes, but excluding any extraordinary gains or losses or
any gains or losses from the sale or disposition of assets other than in the
ordinary course of business, all of the foregoing being computed and calculated
in accordance with GAAP.
"NOTES" means the Revolving Credit Note and the Term Note, together with any
renewals, extensions or modifications thereof.
"NOTICE OF REVOLVING CREDIT ADVANCE" shall have the meaning ascribed to such
term in Section 2.1.
"NOTICE OF TERM LOAN ADVANCE" shall have the meaning ascribed to such term in
Section 3.1.
"OBLIGATIONS" mean:
A. All present and future indebtedness, obligations and liabilities of any
Loan Party to the Bank arising pursuant to any of the Loan Documents,
regardless of whether such indebtedness, obligations and liabilities are
direct, indirect, fixed, contingent, joint, several, or joint and
several;
B. All costs incurred by the Bank to obtain, preserve, perfect and enforce
the Liens and security interests securing payment of such indebtedness,
liabilities and obligations, and to maintain, preserve and collect the
property in which the Bank has been granted a Lien to secure payment of
the Loans, or any part thereof, including but not limited to, taxes,
assessments, insurance premiums, repairs, reasonable attorneys' fees and
legal expenses, rent, storage charges, advertising costs, brokerage fees
and expenses of sale; and,
C. All other Indebtedness of whatever kind or character owing, or which may
hereafter become owing, by any Loan Party to the Bank, whether the
Indebtedness is direct or indirect, primary or secondary, fixed or
contingent, or arises out of or is evidenced by note, deed of trust,
open account, overdraft, indorsement, surety agreement, guaranty, or
otherwise, and it is specifically contemplated that any Loan Party may
hereafter become indebted to the Bank in further sum or sums; and,
8
D. All renewals, extensions and modifications of the Indebtedness referred
to in the foregoing clauses, or any part thereof.
"PBGC" means the Pension Benefit Guaranty Corporation, and any successor to all
or any of the Pension Benefit Guaranty Corporation's functions under ERISA.
"PENSION PLAN" means any Employee Plan which is subject to the provisions of
Title IV of ERISA.
"PERMITTED LIENS" means: (i) Liens granted to the Bank to secure the
Obligations; and, (ii) pledges or deposits made to secure payment of worker's
compensation insurance (or to participate in any fund in connection with
worker's compensation insurance), unemployment insurance, pensions or social
security programs; and, (iii) Liens imposed by mandatory provisions of law such
as for materialmen's, mechanics', warehousemen's and other like Liens arising in
the ordinary course of business securing Indebtedness the payment for which is
not yet due, or if same is due, it is being contested in good faith and as to
which a bond has been provided; and, (iv) Liens for taxes, assessments and
governmental charges or levies imposed upon a Person or upon such Person's
income or profits or property, if the same are not yet due and payable or if the
same are being contested in good faith and as to which adequate cash reserves
have been provided; and, (v) Liens arising from good faith deposits in
connection with tenders, leases, real estate bids or contracts (other than
contracts involving the borrowing of money), pledges or deposits to secure
public or statutory obligations and deposits to secure (or in lieu of) surety,
stay, appearance or customs bonds and deposits to secure the payment of taxes,
assessments, customs duties or other similar charges; and, (vi) encumbrances
consisting of zoning restrictions, easements, or other restrictions on the use
of real property, provided that such items do not impair the use of such
property for the purposes intended, and none of which is violated by existing or
proposed structures or land use.
"PERSON" shall include an individual, a corporation, non-profit corporation, a
professional association, a joint venture, a general partnership, a limited
partnership, a limited liability company, a limited liability partnership, a
trust, an unincorporated organization or a government or any agency or political
subdivision thereof.
"REGULATION G", "REGULATION U" and "REGULATION X" respectively mean Regulation
G, Regulation U and Regulation X promulgated by the Board, 12 C.F.R., Parts 207,
221, or 224, as applicable or any successor or other regulation hereafter
promulgated by the Board to replace the prior Regulation and having
substantially the same function.
"REGULATORY DEFECTS" means the failure by any Loan Party to comply with all
laws, statutes, orders, rules and regulations of any Governmental Authority, and
such failure to comply has a Material Adverse Effect.
"RENTALS" of any Person means, as of any date, the aggregate amount of the
obligations and liabilities, including future obligations and liabilities not
yet due and payable, of such Person to make payments under leases, subleases and
similar arrangements for the use of real, personal or mixed property, other than
leases which are Capital Leases.
"REPORTABLE EVENT" shall have the meaning ascribed to such term in Title IV of
ERISA.
"REQUIREMENTS" means (i) any and all present and future judicial decisions,
statutes, rulings, rules, regulations, orders, permits, certificates or
ordinances of any Governmental Authority in any manner applicable to the
Borrowers, and (ii) any and all contracts, written or oral, of any nature to
which the
9
Borrowers may be bound.
"RESPONSIBLE OFFICER" means, with respect to any Person, the chief executive
officer, the president, the chief financial officer or the controller, of such
Person.
"REVOLVING CREDIT COMMITMENT PERIOD" means the period beginning on the Effective
Date and ending on the earlier of (i) the Revolving Credit Commitment
Termination Date, or (ii) the date on which the obligations of the Bank to fund
Advances hereunder terminates after the occurrence of an Event of Default.
"REVOLVING CREDIT COMMITMENT TERMINATION DATE" means October 27, 1998, or if
such date is not a Business Day, then the Business Day preceding such date.
"REVOLVING CREDIT COMMITMENT" means $2,000,000.00.
"REVOLVING CREDIT LOANS" means the aggregate unpaid principal balance of all
Borrowing made under Section 2.1.
"REVOLVING CREDIT NOTE" shall have the meaning ascribed to such term in Section
4.1.
"REVOLVING LOAN CONTRACT RATE" means the rates of interest on the Loans
calculated as set out in Section 4.4.A.
"SECURITY AGREEMENT" means each first priority Security Agreement executed
pursuant to Section 5.1.A.
"SELLERS" means all of, and "SELLER" means any of, Xxxxxxxx X. Xxxxx, Xxxxxxx
XxXxxx, Xxx Xxxxxx, and the Trustee(s) of the Columbia Shipping Group Trust.
"SOLVENT" means, with respect to any Person on a particular date, that on such
date (i) the fair value of the property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent liabilities, of
such Person, (ii) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on the Person's Indebtedness as they become absolute and matured,
(iii) such Person is able to realize upon the Person's assets and pay the
Person's Indebtedness, contingent obligations and other commitments as they
mature in the normal course of business, (iv) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement dated October 27,
1997, among Golden Eagle Group, Columbia Group, the Seller Corporations therein
named, and the Sellers pursuant to the terms of which Golden Eagle Group has or
will purchase all of the outstanding and issued capital stock of Columbia Group.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of Golden Eagle Group or a
Consolidated Subsidiary
10
which expressly contains in the instruments evidencing the Indebtedness or in
the indenture or other similar instrument under which Indebtedness is issued
(which indenture or other similar instrument shall be binding on all holders of
the Indebtedness), subordination provisions (in form and substance satisfactory
to the Bank) substantially to the effect that the holders agree that the
Indebtedness evidenced by such instrument, any renewals or extensions thereof,
shall at all times and in all respects be subordinate and junior in right of
payment to the Obligations and is subject to a Subordination Agreement.
"SUBORDINATION AGREEMENT" means each Subordination Agreement executed pursuant
to Section 8.1.D.
"TANGIBLE NET WORTH" means, as of any date, the total shareholder's equity
(including capital stock, additional paid in capital and retained earnings after
deducting treasury stock) which would appear on a consolidated balance sheet of
Golden Eagle Group and the Consolidated Subsidiaries prepared as of such date in
accordance with GAAP, LESS the aggregate book value of Intangible Assets shown
on such consolidated balance sheet PLUS Subordinated Indebtedness shown on such
consolidated balance sheet.
"TERM COMMITMENT PERIOD" means the period beginning on the Effective Date and
ending on the earlier of (i) the Term Commitment Termination Date, or (ii) the
date on which the obligations of the Bank to fund Advances hereunder terminates
upon the occurrence of an Event of Default.
"TERM COMMITMENT TERMINATION DATE" means November 14, 1997.
"TERM COMMITTED SUM" means $3,833,333.00.
"TERM LOAN CONTRACT RATE" means the rates of interest on the Loans calculated as
set out in Section 4.4.B.
"TERM LOANS" means the aggregate unpaid principal balance of all Borrowing made
under Section 3.1.
"TERM MATURITY DATE" means October 27, 2002.
"TERM NOTE" shall have the meaning ascribed to such term in Section 4.2.
"TITLE DOCUMENTS" means any and all warehouse receipts, bills of lading or
similar documents of title relating to goods in which a Loan Party at any time
has an interest, whether now, or at any time or times hereafter, issued to the
Loan Party or the Bank by any Person, and whether covering Inventory or
otherwise.
"TOTAL COMMITMENT" means the total of the Revolving Credit Commitment and the
Term Committed Sum.
"TRANSACTIONS" shall have the meaning ascribed to such term in Section 9.1.B.
"UCC" means the Uniform Commercial Code in effect in the applicable jurisdiction
in which any of the Collateral is located and includes the Texas Business and
Commerce Code Annotated ""1.101-11.108 (Xxxxxx Supp. 1992), as amended.
"UNITED STATES" and "U.S." each means the United States of America.
"VOTING SHARES" of any corporation or limited liability company means shares,
membership certificates or interests of any class or classes, however
designated, having ordinary voting power for the election of at least a majority
of the members of the Board of Directors, or other governing bodies, of such
corporation
11
or limited liability company.
1.2 OTHER DEFINITIONS.
A. All terms defined in this Agreement shall have the above-defined
meanings when used in any of the Loan Documents, certificates, reports
or other documents made or delivered pursuant to this Agreement, unless
the context therein shall require otherwise.
B. Defined terms used herein in the singular shall import the plural and
vice versa.
C. The words "HEREOF," "HEREIN," "HEREUNDER" and similar terms when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
D. Unless specifically otherwise noted, references to statutes by Popular
Names are reference to the United States Code Annotated, including the
regulations promulgated thereunder, and all amendments thereof.
E. References to any obligations or liabilities of the "BORROWERS,
GUARANTORS AND LOAN PARTIES" or the "BORROWERS, GUARANTORS OR LOAN
Parties" shall refer to the joint and several obligations of such
Persons.
ARTICLE II
REVOLVING CREDIT LOANS AND LETTERS OF CREDIT
2.1 REVOLVING LOAN COMMITMENT. Subject to the terms and conditions of this
Agreement, the Bank agrees to lend to the Borrowers on a revolving basis, in one
or more Advances from time to time during the Revolving Credit Commitment
Period, an amount equal to the amounts requested by the Borrowers in each Notice
of Revolving Credit Advance in the form of Exhibit 2.1 attached hereto. The
Notice of Revolving Credit Advance shall specify (i) the aggregate amount of
such Borrowing, and (ii) the requested Borrowing Date of such Borrowing. The
Bank shall not be obligated to make Advances, however, (i) in an amount in
excess of the Revolving Credit Commitment, (ii) if an Event of Default shall
exist, and/or, (iii) to the extent, if any, the Advance, when taken together
with the total amount of the Obligations, including Letters of Credit, then
outstanding, would exceed Availability except as specifically permitted in
Section 2.3. Within the limits of this Article and during the Revolving Credit
Commitment Period, the Borrowers may borrow, repay and re-borrow in accordance
with the terms and conditions of this Agreement. The Bank may, but shall not be
required to, make or continue any Loan hereunder if a Default has occurred or if
there shall have occurred a breach of a covenant under any other agreement among
any Loan Party and the Bank.
2.2 LETTERS OF CREDIT. Subject to the terms and conditions of this Agreement,
the Bank agrees to issue, from time to time, during the Revolving Credit
Commitment Period, Letters of Credit on behalf of one or more of the Borrowers
in amounts equal to the amounts requested by Golden Eagle Group in each
Application for Letter of Credit. The Bank shall not be obligated to make
Letters of Credit, however, (i) if the total amounts of outstanding Letters of
Credit exceed or would exceed $500,000.00, (ii) if an Event of Default shall
exist, and/or, (iii) to the extent, if any, the Advance, when taken together
with the total amount of the Obligations, including Letters of Credit, then
outstanding, would exceed Availability except as specifically permitted in
Section 2.3.
A. Golden Eagle Group, for and on behalf of the Borrowers, shall execute
and deliver the Bank's then current Application for Letter of Credit.
12
B. To induce the Bank to issue and maintain Letters of Credit, the
Borrowers agree to pay or reimburse the Bank on the date when any draft
or draw request is presented under any Letter of Credit, the amount paid
or to be paid by the Bank. If the Borrowers have not reimbursed the Bank
for any drafts or draws paid or to be paid within twenty-four (24) hours
following the Bank's demand for reimbursement, the Bank is irrevocably
authorized to fund the Borrowers' reimbursement obligations as an
Advance pursuant to Section 2.1 if proceeds are available and the
proceeds of such Borrowing shall be in payment of the Borrowers' unpaid
reimbursement obligations. If an Advance cannot be made, then the
Borrowers' reimbursement obligation shall constitute a demand
obligation. The Borrowers' obligations under this Section are absolute
and unconditional under any and all circumstances and irrespective of
any set off, counterclaim, or defense to payment that the Borrowers may
have at any time against the Bank or any other Person. From the date
that a draw has occurred to the date paid, unpaid reimbursement amounts
shall accrue interest as set out in Section 4.4. No Letter of Credit
will be issued with a expiry date beyond the Revolving Credit Commitment
Termination Date.
C. Bank shall notify the Borrowers of the date and amount of any draft or
draw request presented for honor under any Letter of Credit, but failure
to give notice will not affect the Obligations of the Borrowers or any
other Loan Party. The Bank shall pay the requested amount upon
presentment of a draft or draw request unless presentment on its face
does not comply with the terms of the applicable Letter of Credit. When
making payment, the Bank may disregard, (i) any Default or Event of
Default that has occurred, and (ii) obligations under any other
agreement that have or have not been performed by the beneficiary of the
Letter of Credit or any other Person. The Bank is not responsible for,
and the Borrowers' reimbursement obligations for honored drafts and
draws will not be affected by, any matter or event whatsoever,
including, without limitation, the validity or genuineness of documents
or indorsements, even if the documents should in fact prove to be in any
respect invalid, fraudulent, or forged, or any dispute among Borrowers
and the beneficiary of any Letter of Credit, or any other Person to whom
any Letter of Credit may be transferred, or any claims whatsoever of the
Borrowers against any beneficiary of any Letter of Credit or its
transferee.
D. The Borrowers acknowledge that each Letter of Credit is deemed issued
upon delivery to the beneficiary or the Borrowers. If Golden Eagle Group
requests that any Letter of Credit be delivered to a Borrower rather
than the beneficiary, and the Borrower subsequently cancels that Letter
of Credit, the Borrower agrees to return the Letter of Credit to the
Bank together with the Borrowers' certification that the Letter of
Credit has never been delivered to its beneficiary. If any Letter of
Credit is delivered to its beneficiary under a Borrower's instructions,
the cancellation shall be ineffective without the Bank's receipt of the
beneficiary's written consent and the Letter of Credit.
E. Although this Agreement may be referenced in any Letter of Credit, the
terms of an agreement related thereto or other obligation to the
beneficiary of the Letter of Credit, such other agreements are not
incorporated into this Agreement in any manner.
2.3 BORROWING BASE. The aggregate principal amount at any time remaining
unpaid on the Revolving Credit Loans and the Term Loans will not be in excess of
the amount arrived at by the computation provided for in the following borrowing
formula (the "BORROWING BASE"), which will be calculated in a Borrowing Base
Certificate in the form of Exhibit 2.3 to determine Availability.
Notwithstanding the foregoing, for the period commencing on the Effective Date
and ending on October 16, 1998, the Borrowers may have outstanding Loans in
excess of the Borrowing Base not to exceed,
13
however, in the aggregate, $200,000.00. The Borrowing Base, the computation
thereof and Availability shall be eighty (80) per cent of the aggregate amount
of Eligible Accounts. The Bank retains the right to establish reasonable
reserves ("RESERVES") as it deems appropriate under the Total Commitment, based
on such factors as the Bank deems appropriate, including, but not limited to,
increases in dilution of Accounts or if the Borrowers shall fail to obtain
Landlord Agreements. The Borrowers acknowledge that the establishment of
Reserves will have the effect of limiting or restricting Advances. The term
"ELIGIBLE ACCOUNTS" means, at the time of any determination thereof, each
Account of Golden Eagle Group and the Consolidated Subsidiaries as to which the
following requirements have been fulfilled to the satisfaction of the Bank.
A. Golden Eagle Group or a Consolidated Subsidiary has lawful and absolute
title to the Account.
B. The Account is a valid, legally enforceable obligation of an Account
Debtor who is obligated under the Account for goods or services
previously delivered or rendered to the Person for which payment is due
within thirty (30) days of invoice date and the Account has not been
outstanding for more than one hundred twenty (120) days from invoice
date.
C. There has been excluded from the Account any portion that is subject to
any dispute, set off, counterclaim or other claim or defense on the part
of the Account Debtor or any claim on the part of the Account Debtor
denying liability under the Account.
X. Xxxxxx Eagle Group or a Consolidated Subsidiary has the full and
unqualified right to assign and grant a security interest in the Account
to the Bank as security for the Obligations.
E. The Account is evidenced by an invoice rendered to the Account Debtor
and the Account is not evidenced by any chattel paper, promissory note,
or other instrument.
F. The Account is subject to a fully perfected first priority security
interest and Lien in favor of the Bank pursuant to the Loan Documents,
prior to the rights of, and enforceable as such, against any other
Person.
G. The Account is not subject to any Lien in favor of any Person other than
the Lien of the Bank pursuant to the Loan Documents.
H. The Account arose from a transaction in the ordinary course of business
of Golden Eagle Group or a Consolidated Subsidiary.
I. An Eligible Account shall not include Accounts from an Account Debtor if
twenty (20) per cent or more of the dollar amounts of that Account
Debtor are more than one hundred twenty (120) days from invoice date
J. An Eligible Account shall not include Accounts from an Account Debtor to
the extent the Accounts from that Account Debtor exceeds ten (10) per
cent or more of the Eligible Accounts except for Accounts due from York,
Amoco, Aerospatiale, Forasol, Elf Aquitaine and such other Account
Debtors as may be specifically approved in writing by the Bank.
K. An Eligible Account shall not include any Account from any steamship or
like company which, under applicable law, has the right to set off
against the Account.
L. An Eligible Account shall not include any Account or portion of any
Account from U.S. Customs in excess of an aggregate of $500,000.00.
14
M. An Eligible Account shall not include any Account from any Affiliate.
N. No Account Debtor in respect of the Account is (i) primarily conducting
business in any jurisdiction located outside the U.S., except those
Accounts secured by letters of credit specifically approved by the Bank
and except for Account of Aerospatiale, Forasol, Elf Aquitaine, (ii) an
Affiliate of Golden Eagle Group or a Consolidated Subsidiary, (iii) any
Governmental Authority, domestic or foreign, or (iv) the subject of a
proceeding under any Debtor Laws.
O. An Eligible Account shall not include an Account from or among any of
the Loan Parties or an Account which arises out of a transaction in
which any Loan Party shall have provided any surety or guaranty bond to
the Account Debtor or other Person.
2.4 BORROWING PROCEDURE. Borrowers will maintain a joint bank account (the
"COLLECTION AND FUNDING ACCOUNT") into which account all Advances on the
Revolving Credits Loans will be deposited.
A. Advances on the Revolving Credit Loans shall be made pursuant to a
Notice of Revolving Credit Advance signed by a Responsible Officer of
Golden Eagle Group, specifying, (i) the aggregate amount of the
Borrowing, and (ii) the requested date of the Borrowing. Each Borrowing
shall be made on a Business Day. Borrowing shall be made in increments
of not less than $50,000.00. The Bank is entitled to rely and act upon
requests made or purportedly made by a Responsible Officer of Golden
Eagle Group. Borrowers shall be unconditionally and absolutely estopped
from denying (i) the authenticity and validity of any such transaction
so acted upon by the Bank once the Bank has made an Advance and has
deposited or transferred such funds as requested in any such Notice of
Revolving Credit Advance, and (ii) the Borrowers' liability and
responsibility therefor.
B. Each Notice of Revolving Credit Advance shall be irrevocable and binding
on the Borrowers. Borrowers covenant and agree to assume liability for
and to protect, indemnify and save the Bank harmless from any and all
liabilities, obligations, damages, penalties, claims, causes of action,
costs, charges and expenses, including attorneys' fees, which may be
imposed upon, incurred by or asserted against the Bank by reason of any
loss, damage or claim howsoever arising or incurred because of, out of
or in connection with (i) any action of the Bank pursuant to a Notice of
Revolving Credit Advance or any other request for an Advance under the
Revolving Credit Loans, (ii) the breach of any provisions of this
Agreement by any Loan Party, or (iii) the transfer of funds pursuant to
(i) and/or (ii) above.
C. After receiving a Notice of Revolving Credit Advance in the manner
provided herein, the Bank will, before 2:00 p.m. (Houston, Texas time)
on the requested Borrowing Date which shall not be earlier than the
first Business Day after a Borrowing is requested as specified in a
Notice of Revolving Credit Advance, deposit the Advance in immediately
available funds in the Collection and Funding Account.
D. If the Bank shall receive an Application for Letter of Credit in the
manner provided herein before 2:00 p.m. (Houston, Texas time) the Bank
shall, on the requested Borrowing Date which shall not be earlier than
the second Business Day after receipt, issue the Letter of Credit as
specified by Golden Eagle Group and deliver same as directed by the
Golden Eagle Group.
15
2.5 USE OF PROCEEDS. The proceeds of each Borrowing under the Revolving
Credit Commitment shall be used for the general working capital purposes of the
Borrowers in the ordinary course of business and for no other purposes.
2.6 COLLECTION AND FUNDING ACCOUNT. All payments made on Accounts will be
deposited into the Collection and Funding Account. The Borrowers will provide
written notification to each Account Debtor to remit all payments to the
Collection and Funding Account. Bank will transfer from the Collection and
Funding Account all collected amounts and deposit same to another account of the
Borrowers designated by Golden Eagle Group.
ARTICLE III
TERM LOANS
3.1 TERM LOANS. Subject to the terms and conditions of this Agreement, the
Bank agrees to lend to the Borrowers, in one Advance from time to time during
the Term Commitment Period, an amount equal to the amounts requested by the
Borrowers in a Notice of Term Loan Advance in the form of Exhibit 3.1 attached
hereto. The Notice of Term Loan Advance shall specify (i) the aggregate amount
of such Borrowing, and (ii) the requested Borrowing Date of such Borrowing. The
Bank shall not be obligated to make Term Loan Advances, however, (i) in an
amount in excess of the Term Committed Sum, (ii) if an Event of Default shall
exist, and/or, (iii) to the extent, if any, the Advance, when taken together
with the total amount of the Obligations, including Letters of Credit, then
outstanding, would exceed Availability except as specifically permitted in
Section 2.3.
3.2 BORROWING PROCEDURE. It is contemplated that the Borrowers will request
the Advance of the Term Committed Sum to pay a portion of the acquisition price
for the stock being acquired pursuant to the Stock Purchase Agreement. Upon the
making of a Term Loan Advance, the Borrowers must perfect in the Bank a valid
first priority lien on all Collateral, including the assets of the entities
whose stock is being acquired, directly or indirectly.
A. The Advance on the Term Loans shall be made pursuant to the Notice of
Term Loan Advance signed by a Responsible Officer of Golden Eagle Group,
specifying (i) the aggregate amount of the Borrowing, and (ii) the
requested Borrowing Date of the Borrowing. The Bank is entitled to rely
and act upon requests made or purportedly made by a Responsible Officer
of Golden Eagle Group. The Borrowers shall be unconditionally and
absolutely estopped from denying (i) the authenticity and validity of
any such transaction so acted upon by the Bank once the Bank has made
the Advance and has deposited, transferred or paid such funds as
requested in the Notice of Term Loan Advance, and (ii) the Borrowers'
liability and responsibility therefor.
B. The Notice of Term Loan Advance shall be irrevocable and bind ing on the
Borrowers. The Borrowers covenant and agree to assume liability for and
to protect, indemnify and save the Bank harmless from any and all
liabilities, obligations, damages, penalties, claims, causes of action,
costs, charges and expenses, including attorneys' fees, which may be
imposed upon, incurred by or asserted against the Bank by reason of any
loss, damage or claim howsoever arising or incurred because of, out of
or in connection with (i) any action of the Bank pursuant to the Notice
of Term Loan Advance, (ii) the breach of any provisions of this
Agreement by the Borrowers, or (iii) the transfer of funds pursuant to
(i) and/or (ii) above.
3.3 USE OF PROCEEDS. Borrowing under the Term Committed Sum will be used
solely in payment of a portion of the purchase price of the stock being acquired
pursuant to the Stock Purchase Agreement and for no other purposes.
16
3.4 CONDITIONS PRECEDENT. Borrowers shall, as conditions precedent to
receiving an Advance under the provisions hereof, deliver to the Bank, at the
time of the Notice of Term Loan Advance, the following:
A. True and correct final copies of the Stock Purchase Agreement duly
executed by each party thereto, together with true and correct final
copies of all documents mentioned or described in the Stock Purchase
Agreement, duly executed by the appropriate parties thereto.
B. Duly executed and filed UCC-1 Financing Statements to perfect the Bank's
first priority security interest in the Collateral, and searches of the
Office of the Secretary of States of Texas, New York, Colorado,
Illinois, Pennsylvania, Florida, Arizona, California and such other
jurisdictions as any of the Loan Parties is doing business or that the
Bank may require reflecting no other perfected Liens on the Collateral.
C. Financial and other information, including, but specifically not limited
to, audited financial statements, concerning the Persons being directly
or indirectly acquired pursuant to the Stock Purchase Agreement, and the
Stock Purchase Agreement, all of which must be in form, content and
detail as required by the Bank and in the sole and absolute discretion
of the Bank, satisfactory to the Bank.
D. A landlord's lien waiver on the Leasehold in New York, and other
Leaseholds when requested by the Bank, and a waiver of lien executed by
any mortgagee holding a Lien on the real property of which the Leasehold
is a part, both being in form and content satisfactory to the Bank. The
Bank will be provided with such title information as will be reasonably
necessary to determine the status of title to any such real property.
ARTICLE IV
NOTES
4.1 REVOLVING CREDIT NOTE. The Revolving Credit Advances made under Section
2.1 by the Bank shall be evidenced by the Revolving Credit Note executed by the
Borrowers, which shall (i) be dated the Effective Date, (ii) be in the amount of
the Revolving Credit Commitment, (iii) be payable to the order of the Bank at
the office of the Bank, (iv) bear interest in accordance with Section 4.4, and
(v) be in the form of Exhibit 4.1 attached hereto. Notwithstanding the principal
amount of the Revolving Credit Note as stated on the face thereof, the amount of
principal actually owing thereon, at any given time, shall be the aggregate of
all Revolving Credit Advances made to the Borrowers hereunder, less all payments
of principal actually received by the Bank. The records of the Bank evidencing
the date and amount of each Revolving Credit Advance, as well as the amount of
each payment made by the Borrowers, shall be rebuttably presumptive evidence of
the amounts owing and unpaid on the Revolving Credit Note. Borrowers shall
repay, and shall pay interest on, the unpaid principal amount of the Revolving
Credit Loans in accordance with the terms of the Revolving Credit Note and this
Agreement.
4.2 TERM NOTE. The Term Advance made under Section 3.1 by the Bank shall be
evidenced by the Term Note executed by the Borrowers, which shall (i) be dated
the Effective Date, (ii) be in the amount of the Term Committed Sum, (iii) be
payable to the order of the Bank at the office of the Bank, (iv) bear interest
in accordance with Section 4.4, and (v) be in the form of Exhibit 4.2 attached
hereto. Borrowers shall repay, and shall pay interest on, the unpaid principal
amount of the Term Loans in accordance with the terms of the Term Note and this
Agreement.
17
4.3 APPLICABLE MARGIN. With respect to Term Loans, the Applicable Margin
shall be determined as a function of the Debt Coverage Ratio and shall be
calculated as set forth below.
DEBT COVERAGE RATIO APPLICABLE MARGIN
Equal to or greater
than 1.50:1.00 0.50 %
Equal to or greater
than 1.00:1.00, but
less than 1.50:1.00 0.25 %
Less than 1.00:1.00 (-.25) %
The Debt Coverage Ratio shall be deemed to be 1.50:1.00 from the Effective
Date to and including December 31, 1997. Any change in the Applicable Margin
after December 31, 1997, shall be effective upon the date of delivery of,
(i) the annual audited Financial Statements to be delivered pursuant to
Section 7.1.A.(1), and (ii) thereafter shall be determined quarterly from
the Financial Statements of Golden Eagle Group and the Consolidated
Subsidiaries most recently delivered pursuant to Section 7.1.A.(4) at the
end of each fiscal quarter for the preceding consecutive twelve (12) month
period. If Golden Eagle Group shall fail to deliver any such Financial
Statements within the times specified in Section 7.1.A.(1) or Section
7.1.A.(4), the Debt Coverage Ratio shall be deemed to be 1.50:1.00 until the
delivery of such Financial Statements to the Bank.
4.4 INTEREST RATES. The unpaid principal of the Loans shall bear interest
from the date of Advance as follows:
A. Prior to Default, the Revolving Credit Loans shall bear interest at a
rate (the "REVOLVING LOAN CONTRACT RATE") per annum which shall, from
day to day, be an amount equal to the lesser of: (i) The Base Rate in
effect from day to day; or, (ii) the Maximum Rate.
B. Prior to Default, the Term Loans shall bear interest at a rate (the
"TERM LOAN CONTRACT RATE") per annum which shall, from day to day, be
an amount equal to the lesser of: (i) The Base Rate in effect from day
to day plus the Applicable Margin; or, (ii) the Maximum Rate.
C. Past due principal and interest on the Loans shall bear interest, to
the extent permitted by applicable law, at a rate per annum equal to
the lesser of: (i) The Maximum Rate; or, (ii) if no Maximum Rate
exists, then eighteen (18) per cent per annum.
D. Notwithstanding the terms of Section 4.4.A or Section 4.4.B, if on any
interest payment date, the Bank does not receive interest at the
applicable Contract Rate because the applicable Contract Rate exceeds or
has exceeded the Maximum Rate, then the Borrowers shall, upon the demand
of the Bank, pay to the Bank, in addition to interest otherwise required
hereunder, on each interest payment date thereafter, interest at the
Maximum Rate until the cumulative interest received by the Bank equals
the interest which would have been received at the applicable Contract
Rate. In no event, however, shall the Borrowers be required to pay, for
any appropriate computation period, interest at a rate exceeding the
Maximum Rate effective during such period.
4.5 MAXIMUM INTEREST. It is the intention of the parties to comply with all
applicable usury laws.
18
Accordingly, it is agreed that notwithstanding any provision apparently to the
contrary in the Loan Documents, no such provision shall require the payment or
permit the collection of interest in excess of the Maximum Amount or the Maximum
Rate. If any excess of interest in such respect is provided for, or shall be
adjudicated to be so provided for, in the Loan Documents, then in such event the
provisions of this Section shall govern and control and (i) no Loan Party liable
for the payment of any sums to become due under the Loan Documents shall be
obligated to pay the amount of such interest to the extent that it is in excess
of the Maximum Amount or the Maximum Rate, and (ii) any such excess which may
have been collected shall be first applied as a credit against the then unpaid
principal amount on the Notes and the excess, if any, refunded to the Borrowers
or such other Loan Party and the effective rate of interest shall be
automatically reduced to the Maximum Rate. Without limitation of the foregoing,
all calculations of the rate of interest contracted for, charged or received
under the Loan Documents which are made for the purpose of determining whether
such rate exceeds the Maximum Rate, shall be made, to the extent permitted by
applicable usury laws, by amortizing, prorating, allocating and spreading in
equal parts during the period of the full stated term of the Loans, all interest
at any time contracted for, charged or received by the holder or holders of the
Notes in connection with the Loans. The Bank notifies and discloses to the
Borrowers that, for purposes of TEX. REV. CIV. STAT. XXX. Art. 5069-1.04 (Xxxxxx
1989), as it may, from time to time, be amended, the "APPLICABLE RATE CEILING"
shall be the "INDICATED RATE" ceiling, from time to time, in effect as limited
by Art. 5069-1.04(b). To the extent provided by applicable law, however, the
Bank reserves the right to change the "APPLICABLE RATE CEILING," from time to
time, by further notice and disclosure to the Borrowers. The "HIGHEST
NON-USURIOUS RATE OF INTEREST PERMITTED BY APPLICABLE LAW" for purposes of this
Agreement and the Notes shall not be limited to the applicable rate ceiling
under Art. 5069-1.04 if federal laws or other state laws now or hereafter in
effect and applicable to this Agreement and the Notes (and the interest
contracted for, charged and collected hereunder or thereunder) shall permit a
higher rate of interest. The Loan Parties and the Bank agree that, except for
"15.10(b), the provisions of TEX. REV. CIV. STA. XXX. Art. 5069-15.01 ET.SEQ.
Xxxxxx (1987), as amended (regulating certain revolving credit loans and
revolving tri-party accounts) shall not apply to the Loan Documents.
4.6 PAYMENTS ON THE NOTES. The Notes will be paid and prepaid in accordance
with the terms set out in this Section.
A. The unpaid principal amount of the Revolving Credit Note, together with
all accrued but unpaid interest thereon, unpaid Facility Fees and
Letters of Credit Fees, if not, for any reason previously paid, shall be
due and payable on the Revolving Credit Commitment Termination Date.
Interest on the Revolving Credit Note shall be due and payable monthly
as it accrues, commencing on November 27, 1997, and continuing on the
same day of each month during the Revolving Credit Commitment Period and
on the Revolving Credit Commitment Termination Date.
B. The unpaid principal amount of the Term Note shall be due and payable
quarterly in consecutive installments of $191,667.00, commencing on
January 27, 1998, and continuing on each April 27, July 27, October 27
and January 27 thereafter, and in one final installment on the Term
Maturity Date, when the balance of all principal on the Term Note shall
be payable in full. Interest on the Term Note shall be due and payable
quarterly, as interest accrues, commencing on January 27, 1998, and
continuing on each April 27, July 27, October 27 and January 27
thereafter until the Term Maturity Date, when the balance of all accrued
and unpaid interest on the Term Note shall be payable in full.
C. In addition to the payments required under Section 4.6.A and Section
4.6.B, the Borrowers shall, from time to time, make prepayments of
principal and interest on the Notes, first of the
19
Revolving Credit Loans and secondly of the Term Loans, such that
Availability equals or exceeds zero at all times except as specifically
permitted in Section 2.3.
D. In addition to the payments required under Section 4.6.A, Section 4.6.B
and Section 4.6.C, the Borrowers shall, not later than each July 31 and
January 31, commencing with the period ending June 30, 1998, make a
Mandatory Prepayment for the prior period ended, such prepayment to be
applied as set forth in Section 4.8.
E. In addition to the payments required under Section 4.6.A, Section 4.6.B,
Section 4.6.C and Section 4.6.D, the Borrowers shall, not later than
three (3) days of, (i) the sale of any assets of the Borrowers
(excluding sales of assets in the ordinary course of business), (ii) the
completion of any debt or equity offerings or the realization of
proceeds of any prior debt or equity offerings, or (iii) a Change of
Control, make a prepayment of the Loans in an amount equal to one
hundred (100) per cent of the proceeds received or realized (net of
taxes due and any expenses of sale) by the Borrowers, or in the case of
a Change of Control, by the sellers of any Loan Party's stock, which
proceeds shall be applied as set forth in Section 4.8.
F. On the Revolving Credit Commitment Termination Date or upon the
occurrence of any Event of Default, the Borrowers shall provide to the
Bank cash collateral in an amount equal to the then-existing
outstanding amounts of Letters of Credit. The Bank agrees to return the
cash collateral to the Borrowers upon the subsequent payment in full of
all Obligations or the cure of the applicable Default.
4.7 CALCULATION OF INTEREST RATES. Interest on the unpaid principal of the
Notes shall be calculated on the basis of the actual days elapsed in a year
consisting of three hundred sixty (360) days.
4.8 PREPAYMENTS. The Borrowers may, upon prior notice to the Bank, make
prepayments on the Notes in whole at any time or in part, from time to time,
without premium or penalty, however:
A. Any prepayment of the Notes shall be made together with interest accrued
through the date of the prepayment on the principal amount prepaid; and,
B. If no Default shall have occurred, prepayments shall be applied (i)
first to the discharge of any expenses for which the Bank may be
entitled to receive reimbursement under any agreement with the
Borrowers, (ii) next to accrued interest on the Notes, (iii) next to the
reduction of installments of principal, in inverse order of maturity, on
the Term Note, and (iv) the balance remaining, if any, shall be applied
to the reduction of principal on the Revolving Credit Note.
C. If, however, a Default has occurred and is continuing at the time of a
prepayment, the Bank shall be entitled to apply the prepayment in any
manner the Bank shall deem appropriate.
4.9 LETTERS OF CREDIT FEES. At the time a Letter of Credit is issued, the
Borrowers agree to pay to the Bank fees for the issuing of Letters of Credit:
A. In a sum equal to the greater of one (1) per cent per annum of the face
amount of the Letter of Credit, and an annual fee of $350.00 for each
year or part year a Letter of Credit is outstanding.
B. The Borrowers additionally agree to pay promptly upon demand the amount
of any customary fees and expenses the Bank charges for amending letters
of credit, for honoring drafts and draw requests, and taking similar
action in connection with letters of credit.
20
4.10 MANNER AND APPLICATION OF PAYMENTS. All payments and prepayments of
principal of, and interest on, the Notes shall be made by the Borrowers to the
Bank before 2:00 p.m. (Houston, Texas time) in immediately available funds at
the Bank's office. Any payment or prepayment received by the Bank after 2:00
p.m. (Houston, Texas time), shall be deemed to have been received by the Bank on
the next succeeding Business Day.
4.11 RENEWALS OF NOTES. All renewals and rearrangements, if any, of the
Notes shall be deemed to be made pursuant to this Agreement, and accordingly,
shall be subject to the terms and provisions hereof. Each Loan Party shall be
deemed to have ratified, as of the date of such renewal or rearrangement, all of
the representations, covenants and agreements herein and in the Loan Documents
set forth.
4.12 TAXES.
A. Any and all payments by the Borrowers hereunder or under the Notes shall
be made free and clear of, and without deduction for, any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto ("TAXES"),
excluding taxes imposed upon the Bank's income, and franchise taxes
imposed upon the Bank by any Governmental Authority. If the Borrowers
shall be required by law to deduct any Taxes for which the Borrowers are
responsible under the preceding sentence from or in respect of any sum
payable hereunder or under any Note, (i) the sum payable shall be
increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section) the Bank receives an amount equal to the sum the
Bank would have received had no such deductions been made, (ii) the
Borrowers shall make such deductions, and (iii) the Borrowers shall pay
the full amount deducted to the relevant Governmental Authority or other
authority in accordance with applicable law.
B. Borrowers 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 under the Loan Documents or
from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or the other Loan Documents ("OTHER TAXES").
C. Each Loan Party indemnifies and agrees to hold the Bank harmless for
the full amount of Taxes and Other Taxes paid by the Bank or any
liability, including penalties and interest, arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted.
D. Upon request of the Bank and within thirty (30) days thereafter, the
Borrowers shall furnish to the Bank the original or a certified copy of
a receipt evidencing payment therefor.
E. Without prejudice to the survival of any other agreement, the agreements
and obligations of each Loan Party contained in this Section shall
survive the payment in full of the Obligations.
4.13 FACILITY FEES. Borrowers agree to pay to the Bank facility fees for the
granting of the Revolving Credit Loans computed at a rate per annum (based on a
360 day year) equal to one hundred twenty-five thousandths (.125) per cent on
the average daily un-borrowed amount of the Revolving Credit Commitment in
effect during the period for which payment is made. Commencing on December 31,
1997, the commitment fees shall be payable semi-annually, in arrears, on the
last day of each June and December during the Revolving Credit Commitment
Period, and on the Revolving Credit Commitment
21
Termination Date, within five (5) days of the Bank's demand therefor on the
Borrowers. Additionally, the Borrowers agree to pay to the Bank a facility fee
in the amount of $19,167.00, for the granting of the Term Loans which shall be
due and payable on the Effective Date.
ARTICLE V
COLLATERAL FOR LOANS
5.1 COLLATERAL FOR LOANS. The Loans shall be secured by the following
property of each of the Loan Parties (collectively, the "COLLATERAL") and Liens
in the Collateral shall be created by or in the Collateral Documents, including,
but not limited to, those described as follows:
A. Security Agreement in the form of Exhibit 5.1.A, creating a first
priority lien, mortgage and security interest in and upon all present
and future Accounts, General Intangibles, Instruments, margin accounts,
tax refunds, Chattel Paper, drafts, acceptances, Contracts and Contract
Rights, Documents, Title Documents, notes, and all other personal
property or interests in personal property, together with all
accessions to, substitutions for, and all replacements, products and
proceeds of the foregoing (including, without limitation, proceeds of
insurance policies insuring any of the foregoing), all books and
records (including, without limitation, customer lists, credit files,
computer programs, printouts and other computer materials and records)
pertaining to any of the foregoing, and all insurance policies insuring
any of the foregoing, whether now owned or hereafter acquired, and
wherever located.
5.2 FURTHER ASSURANCES. Each Loan Party shall make, execute or endorse, and
acknowledge and deliver or file or cause the same to be done, all vouchers,
invoices, notices, certifications and additional agreements, undertakings,
conveyances, deeds of trust, mortgages, transfers, assignments, Financing
Statements or other assurances, and take any and all such other action, as the
Bank may, from time to time, deem reasonably necessary or proper in connection
with any of the Loan Documents, or for better assuring and confirming unto the
Bank all or any part of the security for any of the Obligations, or for granting
to the Bank any security for the Obligations which the Bank reasonably may
request from time to time.
5.3 COLLATERAL DOCUMENTS. Each of the Collateral Documents will be duly
executed by the parties thereto. Each document, including, without limitation,
any Financing Statement, required by the Collateral Documents, under law or
requested by the Bank to be filed, registered or recorded in order to create, in
favor of and for the benefit of the Bank, a perfected first Lien on the
Collateral described therein, shall be properly filed, registered or recorded in
each jurisdiction in which the filing, registration or recordation thereof is so
required or requested. The Bank shall receive an acknowledgment copy, or other
evidence satisfactory to the Bank, of each such filing, registration or
recordation and satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto.
5.4 DESCRIPTION OF ASSETS. The Collateral Documents will contain a
description of the Collateral sufficient to grant to the Bank for the benefit of
the Bank perfected Liens therein pursuant to applicable law. Upon the filing of
the UCC-1's, the Bank will have, for the benefit of the Bank, perfected first
priority Liens in all Collateral.
5.5 OTHER LOANS. It is agreed that the Collateral given to secure the Loans
shall secure all Obligations, regardless of how same may arise and all
collateral given to secure any other obligations of each Loan Party shall
additionally secure the Obligations. Any Default shall constitute an event of
default in all Obligations and the Liens securing the payment of same.
22
ARTICLE VI
CUSTODY, INSPECTION, AND MAINTENANCE OF COLLATERAL
6.1 DISPOSITION. Borrowers will safeguard and protect all Collateral for the
Bank's general account and make no disposition thereof except in the ordinary
course of business.
6.2 INSPECTION. At all times, the Bank shall have full access to, and the
right to examine, check, inspect and make abstracts and copies from the books,
records, audits, correspondence and all other papers relating to the Collateral.
The Bank and the Bank's agents may enter upon any of the premises of the
Borrowers at any time during business hours and at any other reasonable time,
and from time to time, for the purpose of inspecting the Collateral and any and
all records pertaining thereto. On an annual basis, the Bank may, at the
Borrowers' expense make field examinations of the Borrowers' books, records,
Title Documents and Inventory. The costs of the field examinations will be
reimbursed to the Bank on receipt of a statement therefor.
6.3 AUTHORIZATION. Borrowers irrevocably authorize and direct all
accountants and auditors employed by the Borrowers to exhibit and deliver to the
Bank at any time during the term of this Agreement copies of any of the
Financial Statements, trial balances or other accounting records of any sort in
the accountant's or auditor's possession of the Borrowers, and to disclose to
the Bank any information they may have concerning the financial status and
business operations. Borrowers authorize all Governmental Authority to furnish
to the Bank copies of reports or examinations relating to the Borrowers, whether
made by the Borrowers or otherwise.
6.4 REPORTS. Borrowers will, immediately upon learning thereof, report to
the Bank all matters materially affecting the value, en forceability or
collectibility of any of the Collateral such as the reclamation, repossession or
return to the Borrowers of goods and claims or disputes asserted by any customer
or Account Debtor.
6.5 COMPLIANCE WITH LAW. Borrowers shall comply with all actions, rules,
regulations and orders of any Governmental Authority applicable to the
Collateral or any part thereof or to the operation of the business of the
Borrowers. Borrowers may, however, contest or dispute any actions, rules,
regulations, orders and directions of a Governmental Authority in any reasonable
manner, provided the Bank is satisfied that the contest or dispute does not
affect the Bank's Liens or have a Material Adverse Effect.
6.6 PROTECTION. At any time there shall be an Event of Default, the Bank may
take such steps as the Bank deems necessary to protect the Bank's interest in
and to preserve the Collateral, including the hiring of security guards or the
placing of other security protection measures as the Bank may deem appropriate.
The Bank may elect to employ and maintain at any of the Borrowers' premises a
custodian who shall have full authority to do all acts necessary to protect the
Bank's interest in the Collateral. The Bank may lease warehouse facilities to
which the Bank may move all or part of the Collateral. Borrowers agree to
cooperate fully with all of the Bank's efforts to preserve the Collateral and
will take such actions to preserve the Collateral as the Bank may direct. All of
the Bank's reasonable expenses of preserving the Collateral, including any
expenses relating to the bonding of a custodian, shall be charged to the
Borrowers' account and added to the Revolving Credit Note.
6.7 CREATION OF ACCOUNTS. Upon the Bank's request, the Borrowers will upon
the creation of Accounts, or at such intervals as the Bank may require, provide
the Bank with (i) confirmatory assignment schedules, (ii) copies of customer's
invoices, (iii) evidence of shipment or delivery, and (iv) such further
schedules, documents and/or information regarding the Accounts as the Bank may
require. The Bank shall have the right to confirm and verify all Accounts and do
whatever the Bank may deem necessary to
23
protect the Bank's interests. The items to be provided under this Section are to
be in forms satisfactory to the Bank and executed by the Borrowers and delivered
to the Bank, from time to time, solely for the Bank's convenience in maintaining
records of the Collateral. The failure to deliver any of such items to the Bank
shall not affect, terminate, modify or otherwise limit the Bank's Liens.
6.8 RIGHT TO RECEIVE. The Bank shall have the right to receive, endorse,
assign and/or deliver in the name of the Bank and the Borrowers, any and all
checks, drafts and other instruments for the payment of money relating to the
Accounts. Borrowers waive notice of presentment, protest and of non-payment of
any instrument so endorsed. Borrowers constitute the Bank or the Bank's designee
as the Borrowers' attorney with power to (i) endorse the Borrowers' names upon
any notes, acceptances, checks, drafts, money orders or other evidences of
payment or Collateral that may come into the Bank's possession; (ii) send
verifications of Accounts to any customer; (iii) notify the postal authorities
to change the address for delivery of mail addressed to the Borrowers to such
address as the Bank may designate; and, (iv) sign all Financing Statements or
any other documents or instruments deemed necessary or appropriate by the Bank
to preserve, collect, or perfect the Bank's interest in the Collateral and file
same. All acts of the attorney or designee are hereby ratified and approved, and
the attorney or designee shall not be liable for any acts of omission or
commission, or for any error of judgment or mistake of fact or law. This power
is coupled with an interest and is irrevocable while any of the Obligations
remain unpaid.
ARTICLE VII
COVENANTS
7.1 AFFIRMATIVE COVENANTS. Until the fulfillment of all Obligations, unless
the Bank shall otherwise consent in writing, each Loan Party, respectively as
indicated, will perform and comply with the following covenants:
A. Golden Eagle Group shall furnish to the Bank:
(1) As soon as possible, but in any event within one hundred twenty
(120) days after the end of each Fiscal Year, audited, consolidated
Financial Statements of Golden Eagle Group and the Consolidated
Subsidiaries consisting of statements of income, stockholder's equity
and cash flows for such Fiscal Year and a balance sheet as of the end
of such Fiscal Year, setting forth, in each case, in comparative form,
corresponding figures from the immediately preceding annual audit, and
if requested by the Bank the supporting schedules therefor, all in
reasonable detail and satisfactory in scope to the Bank, as fairly
presenting the financial position of Golden Eagle Group and the
Consolidated Subsidiaries as of the dates indicated in accordance with
GAAP, together with an opinion thereon, without qualifications or
exceptions, certified by independent certified public accountants
selected by the Borrowers and satisfactory to the Bank;
(2) As soon as possible, but in any event within one hundred twenty
(120) days after the end of each Fiscal Year, the auditors' management
report;
(3) As soon as possible, but in any event within thirty (30) days after
the end of each calendar month, a consolidated aging and listing of all
Accounts, Eligible Accounts, all accounts payable, agent report and a
steamship payable report for such month certified as being true and
correct by a Financial Officer of Golden Eagle Group;
(4) Within thirty (30) days after the end of each calendar month, a
consolidated balance sheet as of the end of such calendar month and the
related statement of income, all in reasonable detail and setting forth
in comparative form the amounts for such calendar month
24
and the Fiscal Year to date, and the amounts for the corresponding
periods in the prior year, prepared in a manner satisfactory to the
Bank and certified by a Financial Officer of Golden Eagle Group as
fairly presenting the consolidated financial position of Golden Eagle
Group and the Consolidated Subsidiaries as of the dates indicated,
subject to changes resulting from audit and normal year-end adjustment;
(5) On the Effective Date, the Borrowers will provide the Bank, (i) a
Certificate of Compliance in the form of Exhibit 7.1.A.(5), with a
proforma Borrowing Base Certificate for Golden Eagle Group and the
Consolidated Subsidiaries based on June 30, 1997, Financial Statements,
together supporting data regarding Eligible Accounts derived from each
Loan Party, signed by a Financial Officer of Golden Eagle Group
certifying that no Events of Default have occurred and the Loan Parties
are in compliance with the covenants set out in Section 7.2,
calculating the Borrowing Base. On November 15, 1997, the Borrowers
will provide the Bank, (i) a Certificate of Compliance in the form of
Exhibit 7.1.A.(5), with a Borrowing Base Certificate for Golden Eagle
Group and the Consolidated Subsidiaries based on September 30, 1997,
Financial Statements, together supporting data regarding Eligible
Accounts derived from each Loan Party, signed by a Financial Officer of
Golden Eagle Group certifying that no Events of Default have occurred
and the Loan Parties are in compliance with the covenants set out in
Section 7.2, calculating the Borrowing Base. Thereafter, within thirty
(30) days after the end of each calendar month, the Borrowers will
provide the Bank, (i) a Certificate of Compliance in the form of
Exhibit 7.1.A.(5), with an attached Borrowing Base Certificate,
together supporting data regarding Eligible Accounts derived from each
Loan Party, signed by a Financial Officer of Golden Eagle Group
certifying that no Events of Default have occurred and the Loan Parties
are in compliance with the covenants set out in Section 7.2,
calculating the Borrowing Base, and demonstrating compliance as at the
end of such month with the Availability requirements, and (ii) together
with such payment, if any, as may be necessary to bring the
Availability to zero except as specifically permitted in Section 2.3;
and,
(6) From time to time, such further information regarding the business,
affairs and financial condition of the Borrowers as the Bank may
request.
B. Borrowers shall furnish to the Bank, within forty-five (45) days after
the end of the first, second and third Fiscal quarter, a copy of the
Form 10Q filed with the Securities and Exchange Commission, and within
one hundred twenty (120) days of the end of each Fiscal Year, a copy of
the Form 10K filed with the Securities and Exchange Commission, each
certified by a Financial Officer of Golden Eagle Group as being true
and correct.
X. Xxxxxx Eagle Group shall furnish to the Bank, promptly when same is
being available, a copy of each Financial Statement, report, notice or
proxy statement sent by Golden Eagle Group to stockholders generally
and of each regular or periodic report, registration statement or
prospectus filed by the Borrowers with any securities exchange or the
Securities and Exchange Commission, and of any order issued by any
Governmental Authority in any proceeding to which any of the Borrowers
are a party. Golden Eagle Group will notify the Bank of changes in the
ownership of stock of Golden Eagle Group by any Insider, as defined in
the Securities Act of 1934, of any single change or aggregate change of
ownership of five (5) or more per cent of the outstanding or issued
shares of Golden Eagle Group.
D. Each Loan Party shall, promptly upon learning thereof: (i) inform the
Bank, in writing, of any material delay in the Loan Party's performance
of any obligations to any Account Debtor or of any assertion of any
claims, set offs or counterclaims by any Account Debtor; and, (ii)
furnish
25
to and inform the Bank of all material adverse information relating to
the financial condition of any Account Debtor.
E. Each Loan Party shall comply with all Requirements of any Governmental
Authority.
F. Each Loan Party shall act prudently and in accordance with customary
industry standards in managing or operating the Loan Party's assets,
properties, business and investments. Each Loan Party shall keep in
good working order and condition, ordinary wear and tear excepted, all
of the Loan Party's assets and properties which are necessary to the
conduct of the Loan Party's business. Each Loan Party shall obtain and
maintain at the Loan Party's expense, all governmental licenses,
authorizations, consents, permits and approvals as may be required to
enable the Loan Party to operate the Loan Party's business and to
comply with the Loan Party's obligations hereunder and under the other
Loan Documents.
G. Each Loan Party will maintain with financially sound, responsible and
reputable insurance companies, insurance against such risks, and in
such amounts (and with co-insurance and deductibles), as are usually
carried by owners of similar businesses and properties in the same
general areas in which the Loan Party operates, and at least in the
amounts and types presently carried by the Loan Party. Each Loan Party
will specifically maintain, (i) all insurance required by state
statutes for protection of employees against work-related injuries,
(ii) comprehensive general liability coverage in such amounts as are
appropriate for the operations of the Loan Party, and (iii) all other
insurance required by applicable law. All such policies shall be
non-cancelable without ten (10) days prior written notice to the Bank.
Each Loan Party shall cause the insurance policies or proper
certificates evidencing the same to be delivered to the Bank. If any
Loan Party shall fail to obtain insurance as herein provided, or to
keep the same in force, the Bank may obtain such insurance and pay the
premiums therefor and charge the Borrowers' account therefor, and such
expenses so paid shall be part of the Obligations.
H. Each Loan Party shall continue to be a corporation duly incorporated
and existing in good standing under the laws of the State of its
incorporation and each will continue to be duly licensed or qualified
in all jurisdictions wherein the character of the property owned or
leased by the Loan Party or the nature of the business transacted by
the Loan Party makes licensing or qualification necessary, and the
failure to do so would have a Material Adverse Effect.
I. From time to time each of the Loan Parties shall also furnish to the
Bank copies of income tax returns and such other information regarding
the business, affairs and financial condition of the Loan Party as the
Bank reasonably may request.
J. Each Loan Party shall pay and discharge all taxes, assessments and
governmental charges or levies including, but expressly not limited to,
income, excise and ad valorem taxes, prior to the date on which
penalties or liens attach thereto and become of public record, except
such taxes, if any, as are being contested in good faith and as to
which adequate reserves have been provided.
K. Each Loan Party shall promptly give notice in writing to the Bank of
(i) any IRS audit of the Loan Party, (ii) the filing or commencement of
any action, suit, or administrative proceeding against the Loan Party,
whether at law or in equity or by or before any Governmental Authority,
(iii) violations of any Requirement, or (iv) any Reportable Event, any
of which events (a) is material and is brought by or on behalf of any
Person, or in which injunctive or other equitable
26
relief is sought, and (b) it is probable (within the meaning of
Statement of Financial Accounting Standards No. 5 promulgated by FASB)
that there will be an adverse determination and which, if adversely
determined, would materially impair the ability of such Person to
perform its obligations under any of the Loan Documents to which it is
a party.
L. Each Loan Party shall furnish to the Bank immediately upon becoming
aware of the existence of any condition or event which constitutes a
Default or an Event of Default, or which, with notice or lapse of time,
would become a Default or an Event of Default, notice specifying the
nature and period of existence thereof and the action which the Loan
Party is taking or proposes to take with respect thereto.
M. Each Loan Party shall pay in full all expenses, including reasonable
legal expenses and attorney's fees, of the Bank which have been or may
be incurred by the Bank in connection with the preparation of the Loan
Documents, the lending hereunder, the collection or enforcement of the
Obligations and the recording and filing and re-recording and re-filing
of any such document.
7.2 FINANCIAL COVENANTS. Until the fulfillment of all Obligations unless the
Bank shall otherwise consent in writing, Golden Eagle Group and the Consolidated
Subsidiaries shall, on a consolidated basis, maintain the following financial
covenants calculated monthly for the immediately preceding twelve (12) months.
A. CURRENT RATIO. Golden Eagle Group and the Consolidated Subsidiaries
shall have, as of the Effective Date and thereafter maintain, a Current
Ratio of at least 1.20:1.00.
B. TANGIBLE NET WORTH. Golden Eagle Group and the Consolidated
Subsidiaries shall have, as of the Effective Date and shall thereafter
maintain, a Tangible Net Worth of at least the Tangible Net Worth of
Golden Eagle Group and the Consolidated Subsidiaries, including
specifically Columbia Group, LESS, $100,000.00. Thereafter, Tangible
Net Worth must increase semi-annually on each June 30 and December 31
by seventy-five (75) per cent of Net Income for the prior six (6) month
period plus the net amount of proceeds received from any equity
offering during such each period.
C. DEBT COVERAGE RATIO. Golden Eagle Group and the Consolidated
Subsidiaries shall have, as of the Effective Date and shall thereafter
maintain during each period, a Debt Coverage Ratio not exceeding
3.00:1.00 for the first twelve (12) months after the Effective Date, a
Debt Coverage Ratio not exceeding 1.75.0:1.00 for the second twelve
(12) months after the Effective Date, and a Debt Coverage Ratio not
exceeding 1.25:1.00 thereafter.
D. FIXED CHARGE COVERAGE RATIO. Golden Eagle Group and the Consolidated
Subsidiaries shall have, as of the Effective Date and shall thereafter
maintain, a Fixed Charge Coverage Ratio of at least 1.25:1.00.
E. CERTIFICATE OF COMPLIANCE. On the Effective Date and within thirty (30)
days after the end of each month, the Borrowers will provide to the
Bank a Certificate of Compliance in the form of Exhibit 7.2.E, signed
by a Financial Officer of Golded Eagle Group, (i) calculating or
stating the financial covenants set out in Section 7.2, (ii) certifying
that no Events of Default have occurred, and (iii) that Golden Eagle
Group and the Consolidated Subsidiaries are in compliance with the
covenants set out in this Section.
27
7.3 OTHER COVENANTS. Until the fulfillment of all Obligations, unless the
Bank shall otherwise consent in writing, the Loan Parties, respectively as
indicated, will perform and comply with the following covenants:
A. Golden Eagle Group and the Consolidated Subsidiaries will not create,
incur, assume or suffer to exist Indebtedness, except (i) the Loans;
(ii) current accounts payable and other current obligations (other than
for borrowed money) arising out of transactions in the ordinary course
of business; (iii) subject to Section 7.3.C, Indebtedness incurred in
connection with the acquisition of equipment or other assets and, (iv)
Subordinated Indebtedness not in excess of $1,083,333.00 created in
favor of the Sellers in connection with the Stock Purchase Agreement.
B. Golden Eagle Group and the Consolidated Subsidiaries will not pay any
Subordinated Indebtedness (except as permitted in the Subordination
Agreement), execute a Guaranty (except in favor of the Bank), or
create, incur, assume or suffer to exist any Lien, except a Permitted
Lien. Columbia Shipping is presently being audited by the IRS. Pursuant
to the term of the Stock Purchase Agreement, Golden Eagle Group will
receive a letter of credit from the Sellers to secure to Golden Eagle
Group that any tax assessment will be paid. The Borrowers will use the
proceeds of the letter of credit, if drafted, only for purposes of
paying any tax assessment made against Columbia Shipping.
X. Xxxxxx Eagle Group and the Consolidated Subsidiaries will not expend or
enter into the commitment to expend, whether by Capital Lease or
Capital Expenditure or for Rentals during any twelve (12) month period,
an amount in the aggregate exceeding $600,000.00, on a consolidated
basis, in the first twelve (12) months after the Effective Date, and an
amount in the aggregate exceeding $450,000.00, on a consolidated basis,
in any succeeding twelve (12) month period thereafter during the term
hereof.
D. No Loan Party will pay any Dividends, make any distribution on the Loan
Party's capital stock or purchase or retire any capital stock, dissolve
or liquidate, or become a party to any merger or consolidation, or
purchase, lease or otherwise acquire all or substantially all of the
assets or capital stock of any Person, or sell, transfer, lease or
otherwise dispose of all or any substantial part of the Loan Party's
properties, assets or business.
E. No Loan Party will amend its organizational documents, including but
not limited to, Articles or Certificate of Incorporation and bylaws.
F. No Loan Party will change its name, fiscal year or method of accounting
except as required by GAAP. A Loan Party may change its name if the
Borrowers have given the Bank sixty (60) days prior notice of such name
change and there shall have been taken such action as the Bank deems
necessary to continue the perfection of the Liens securing payment of
the Obligations.
X. Xxxxxx Eagle Group and the Consolidated Subsidiaries will not enter
into any transaction with any Affiliates, other than transactions in
the ordinary course of business and upon fair and reasonable terms not
materially less favorable than could be obtained in an arm's-length
transaction with a Person that was not an Affiliate. No assets of any
Loan Party will be transferred to any other Loan Party without the
express written consent of the Bank.
H. Golden Eagle Group and the Consolidated Subsidiaries will not engage in
any other line of business or business venture other than those
presently engaged or those which are directly related thereto, or
change any method of operation or manner of doing business in any
material respect.
28
I. Borrowers will not use proceeds of any Loan to acquire any security in
any transaction which is subject to "13 or "14 of the Securities
Exchange Act of 1934, including particularly (but without limitation)
"13(d) and "14(d) thereof.
J. No Loan Party will sell, assign, convey, exchange, lease or otherwise
dispose of any of the Loan Party's respective properties, rights,
assets or business, whether now owned or hereafter acquired, except in
the ordinary course of business and for a fair consideration.
7.4 ERISA COMPLIANCE. Golden Eagle Group and the Consolidated Subsidiaries
shall, and shall cause each ERISA Affiliate to:
A. At all times, make prompt payment of all contributions required under
all Employee Plans and required to meet the minimum funding standard
set forth in ERISA with respect to all Employee Plans;
B. With respect to any Pension Plan, not permit to exist any material
"ACCUMULATED FUNDING DEFICIENCY" (within the meaning of "302 of ERISA
and "412 of the Code), whether or not waived, with respect thereto;
C. Not engage in any transaction in connection with which the Borrower or
any ERISA Affiliate could be subject to either a material civil penalty
assessed pursuant to the provisions of "502 of ERISA or a material tax
imposed under the provisions of "4975 of the Code;
D. Not terminate any Pension Plan in a "DISTRESS TERMINATION" under "4041
of ERISA, or take any other action which could result in a material
liability of the Borrower or any ERISA Affiliate to the PBGC;
E. Not adopt an amendment to any Pension Plan requiring the provision of
security under "307 of ERISA or "40(a)(29) of the Code;
F. Upon request and within thirty (30) days thereafter, furnish to the
Bank each annual report/return (Form 5500 Series), as well as all
schedules and attachments required to be filed with the Department of
Labor and/or the IRS pursuant to ERISA, and the regulations promulgated
thereunder, in connection with each Employee Plan for each Employee
Plan year;
G. Notify the Bank immediately of any fact, including, but not limited to,
any Reportable Event arising in connection with any Employee Plan,
which might constitute grounds for termination thereof by the PBGC or
for the appointment by the appropriate U.S. District Court of a trustee
to administer an Employee Plan, together with a statement, if requested
by the Bank, as to the reason therefor and the action, if any, proposed
to be taken with respect thereto; and,
H. Furnish to the Bank, upon request, such additional information
concerning any Employee Plan as may be reasonably requested.
7.5 INDEMNITY. EACH LOAN PARTY, JOINTLY AND SEVERALLY, INDEMNIFY AND SHALL
SAVE, AND HOLD THE BANK AND THE BANK'S DIRECTORS, OFFICERS, ATTORNEYS, AND
EMPLOYEES (INDIVIDUALLY, AN
29
"INDEMNITEE" AND COLLECTIVELY, THE "INDEMNITEES") HARMLESS FROM AND AGAINST THE
FOLLOWING (EACH A "CLAIM"): (I) ANY AND ALL CLAIMS, DEMANDS, ACTIONS, OR CAUSES
OF ACTION THAT ARE ASSERTED AGAINST ANY INDEMNITEE BY ANY PERSON IF THE CLAIM,
DEMAND, ACTION, OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY RELATES TO A CLAIM,
DEMAND, ACTION, OR CAUSE OF ACTION THAT THE PERSON ASSERTS OR MAY ASSERT AGAINST
A LOAN PARTY (II) ANY AND ALL CLAIMS, DEMANDS, ACTIONS OR CAUSES OF ACTION THAT
ARE ASSERTED AGAINST ANY INDEMNITEE IF THE CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION DIRECTLY OR INDIRECTLY RELATES TO THE TOTAL COMMITMENT, THE USE OF
PROCEEDS OF THE LOANS, OR THE RELATIONSHIP OF A LOAN PARTY AND THE BANK UNDER
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED PURSUANT TO THIS AGREEMENT; (III)
ANY ADMINISTRATIVE OR INVESTIGATIVE PROCEEDING BY ANY GOVERNMENTAL AUTHORITY
DIRECTLY OR INDIRECTLY RELATED TO A CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
DESCRIBED IN CLAUSES (I) OR (II) ABOVE; AND, (IV) ANY AND ALL LIABILITIES,
LOSSES, COSTS OR EXPENSES (INCLUDING ATTORNEYS' FEES AND DISBURSEMENTS) THAT ANY
INDEMNITEE SUFFERS OR INCURS AS A RESULT OF ANY OF THE FOREGOING. If any claim
is asserted against any Indemnitee, the Indemnitee shall promptly notify the
Borrowers, but the failure to so promptly notify the Borrowers shall not affect
the Loan Parties' obligations under this Section unless such failure materially
prejudices the Loan Parties' right to participate in the contest of the Claim.
The obligations and liabilities of the Loan Parties to any Indemnitee under this
Section shall survive the expiration or termination of this Agreement and the
repayment of the Obligations.
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 INITIAL ADVANCES. The obligation of the Bank to make any Advance on the
Loans is subject to the conditions precedent that, on or before the date of the
initial Advance, the Bank shall have received the following:
A. As to the Revolving Credit Loans:
(1) The duly executed Revolving Credit Note.
(2) A duly executed Notice of Revolving Credit Advance.
(3) The duly executed Application for Letter of Credit, if the Advance
requested is for a Letter of Credit.
B. As to the Term Loans:
(1) The duly executed Term Note.
(2) The duly executed Notice of Term Loan Advance.
C. Each of the Collateral Documents duly executed by the parties thereto.
Each document, including, without limitation, any Financing Statement,
required by the Collateral Documents, under law or requested by the
Bank to be filed, registered or recorded in order to create, in favor
of the Bank, a perfected first priority Lien on the Collateral
described therein shall have been properly filed, registered or
recorded in each jurisdiction in which the filing, registration or
recordation thereof is so required or requested, the Bank shall have
received an acknowledgment copy, or other evidence satisfactory to the
Bank, of each such filing, registration or recordation and satisfactory
evidence of the payment of any necessary fee, tax or expense relating
thereto. The Bank shall have received the possession of any Collateral
for which possession is required to perfect a Lien.
30
D. A Subordination Agreement in the form of Exhibit 8.1.D, duly executed
by each of the Sellers.
E. A Landlord Agreement in the form of Exhibit 8.1.E, duly executed by the
landlord of the New York Leasehold and to the extent requested by the
Bank, any other landlord under any lease pursuant to which a Loan Party
possesses any Leasehold on which any portion of the Loan Party's
business is operated.
F. A Guaranty Agreement in the form of Exhibit 8.1.F duly executed by each
Guarantor in favor of the Bank.
G. Favorable opinions of legal counsel for the Loan Parties in form and
substance satisfactory to the Bank. Copies of the legal opinions
rendered by the Sellers' legal counsel in connection with the Stock
Purchase Agreement, together with a letter to the Bank authorizing and
permitting the Bank to rely thereon.
H. An Officers Certificate in the form of Exhibit 8.1.H certified by the
President and the Secretary of Golden Eagle Group, stating that (i) no
litigation is pending or threatened which would have a Material Adverse
Effect; (ii) no investigation or proceeding before any Governmental
Authority is continuing or threatened against Golden Eagle Group or a
Consolidated Subsidiary, or any officer, director or Affiliate of
Golden Eagle Group or a Consolidated Subsidiary with respect to this
Agreement, any Loan Documents or any of the Transactions which could
have a Material Adverse Effect; and, (iii) to the best knowledge and
belief of such Persons, after reasonable and due investigation and
review of matters pertinent to the subject matter of such certificate
(a) all of the representations and warranties contained herein and the
other Loan Documents are true and correct as of the date of the
Advance, and (b) no event has occurred and is continuing, or would
result from the Advance, which constitutes a Default or an Event of
Default. The Bank shall also receive either a summary and analysis of
all litigation in which Golden Eagle Group or a Consolidated Subsidiary
is involved or an opinion of counsel, in form and substance acceptable
to the Bank, to the effect that no litigation in which Golden Eagle
Group or a Consolidated Subsidiary is involved would, in the event of
an adverse determination, have a Material Adverse Effect.
I. Resolutions of each of the Loan Parties approving the execution,
delivery and performance of this Agreement, the other Loan Documents
and the transactions contemplated herein and therein, duly adopted by
each Loan Party's board of directors and accompanied by a certificate
of the Secretary of the Loan Party stating that the resolutions are
true and correct, have not been altered or repealed and are in full
force and effect. The resolutions shall certify the name of each
officer of the Loan Party authorized to sign the Loan Documents to be
executed by the Loan Party and the other documents or certificates to
be delivered by the Loan Party pursuant to the Loan Documents, together
with the true signa ture of each such officer. The Bank may
conclusively rely on the certificate until the Bank receives a further
certificate of the Secretary of the Loan Party canceling or amending
the prior certificate and submitting the name and signature of each
officer named in such further certificate.
J. A Certificate of Incorporation, Certificate of Existence and
Certificate of Account Status (or other similar instruments) for each
of the Loan Parties issued by the appropriate official of the state of
incorporation of each of the Loan Parties, and Certificates of
Qualification, Certificates of Authorization or other similar
instruments for each of the Loan Parties, issued by the
31
Secretary of State of each of the states wherein a Loan Party is
qualified to do business, each dated within ten (10) days of the
Effective Date.
K. A copy of the Articles or Certificate of Incorporation of each of the
Loan Parties and all amendments thereto, certified by the Secretary of
State of the state of the Loan Party's incorporation, and dated within
ten (10) days of Effective Date, and a copy of the bylaws of each of
the Loan Parties, and all amendments thereto, certified by the
Secretary of theLoan Party, as being true, correct and complete as of
the date of such certification.
L. Evidence satisfactory to the Bank that the insurance policies required
by this Agreement and the Collateral Documents are in force and effect
and that premiums therefore have been paid, and, if requested by the
Bank, the originals or copies of all such policies.
M. Such other information and documents as reasonably may be required by
the Bank and the Bank's counsel.
8.2 SUBSEQUENT ADVANCES. The obligation of the Bank to make any subsequent
Advance under this Agreement shall be subject to the following additional
conditions precedent:
A. As of the date of the making of such Advance, there shall not exist any
Default or Event of Default.
B. Each Loan Party shall have performed and complied with all agreements
and conditions contained herein and in each of the Loan Documents which
are required to be performed or complied with before or on the date of
such Advance.
C. As of the date of making such Advance, no change that would cause a
Material Adverse Effect shall have occurred.
D. In the case of any Borrowing, the Bank shall have received an
appropriate Notice of Revolving Credit Advance, Application for Letter
of Credit or Notice of Term Loan Advance dated as of the date of a
Borrowing signed by Golden Eagle Group.
E. The representations and warranties contained in each of the Loan
Documents shall be true in all respects on the date of making of such
Advance, with the same force and effect as though made on and as of
that date.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
9.1 REPRESENTATIONS AND WARRANTIES CONCERNING BORROWERS. The Loan Parties
represent and warrant the following matters concerning the Borrowers.
A. As to the respective Borrowers:
(1) Golden Eagle Group is a corporation duly incorporated and existing
in good standing under the laws of the State of Delaware. Golden Eagle
Group is duly licensed or qualified in all jurisdictions wherein the
character of the property owned or leased by Golden Eagle Group or the
nature of the business transacted by Golden Eagle Group makes licensing
or qualification necessary by foreign corporations and where failure to
become so licensed or qualified would have a Material Adverse Effect on
the financial condition of Golden Eagle Group.
32
(2) Xxxxx is a corporation duly incorporated and existing in good
standing under the laws of the State of Delaware. Xxxxx is duly
licensed or qualified in all jurisdictions wherein the character of the
property owned or leased by Xxxxx or the nature of the business
transacted by Xxxxx makes licensing or qualification necessary by
foreign corporations and where failure to become so licensed or
qualified would have a Material Adverse Effect on the financial
condition of Xxxxx.
(3) World Trade is a corporation duly incorporated and existing in good
standing under the laws of the Commonwealth of Virginia. World Trade is
duly licensed or qualified in all jurisdictions wherein the character
of the property owned or leased by World Trade or the nature of the
business transacted by World Trade makes licensing or qualification
necessary by foreign corporations and where failure to become so
licensed or qualified would have a Material Adverse Effect on the
financial condition of World Trade.
(4) WTT is a corporation duly incorporated and existing in good
standing under the laws of the Commonwealth of Virginia. WTT is duly
licensed or qualified in all jurisdictions wherein the character of the
property owned or leased by WTT or the nature of the business
transacted by WTT makes licensing or qualification necessary by foreign
corporations and where failure to become so licensed or qualified would
have a Material Adverse Effect on the financial condition of WTT.
(5) Columbia West is a corporation duly incorporated and existing in
good standing under the laws of the State of California. Columbia West
is duly licensed or qualified in all jurisdictions wherein the
character of the property owned or leased by Columbia West or the
nature of the business transacted by Columbia West makes licensing or
qualification necessary by foreign corporations and where failure to
become so licensed or qualified would have a Material Adverse Effect on
the financial condition of Columbia West.
(6) Columbia Chicago is a corporation duly incorporated and existing in
good standing under the laws of the State of Illinois. Columbia Chicago
is duly licensed or qualified in all jurisdictions wherein the
character of the property owned or leased by Columbia Chicago or the
nature of the business transacted by Columbia Chicago makes licensing
or qualification necessary by foreign corporations and where failure to
become so licensed or qualified would have a Material Adverse Effect on
the financial condition of Columbia Chicago.
(7) Freight Express is a corporation duly incorporated and existing in
good standing under the laws of the State of New York. Freight Express
is duly licensed or qualified in all jurisdictions wherein the
character of the property owned or leased by Freight Express or the
nature of the business transacted by Freight Express makes licensing or
qualification necessary by foreign corporations and where failure to
become so licensed or qualified would have a Material Adverse Effect on
the financial condition of Freight Express.
(8) Columbia New York is a corporation duly incorporated and existing
in good standing under the laws of the State of New York. Columbia New
York is duly licensed or qualified in all jurisdictions wherein the
character of the property owned or leased by Columbia New York or the
nature of the business transacted by Columbia New York makes licensing
or qualification necessary by foreign corporations and where failure to
become so licensed or qualified would have a Material Adverse Effect on
the financial condition of Columbia New York.
33
B. The execution of the Loan Documents and the performance of the
Obligations thereunder by each of the Borrowers (collectively, the
"TRANSACTIONS") have been duly authorized by all necessary corporate
action. Such actions will not (i) violate any provision of law, any
Borrower's Articles or Certificate of Incorporation or any Borrower's
bylaws, or (ii) result in the breach of or constitute a default under
any other agreement or instrument to which any Borrower is a party. No
consent of any Borrower's shareholders or any holder of Indebtedness of
any Borrower is required as a condition to the validity of this
Agreement.
C. The Loan Documents, when duly executed and delivered in accordance with
this Agreement, will constitute legal, valid and binding obligations of
each of the Borrowers in accordance with their respective terms.
X. Xxxxxx Eagle Group has furnished to the Bank an audited Fiscal Year-end
consolidated balance sheet as of December 31, 1996, an interim
consolidated balance sheet as of August 31, 1997, and related
statements of income, stockholders equity and cash flows of Golden
Eagle Group and the Consolidated Subsidiaries as of such dates. The
Financial Statements are true and correct and have been prepared in
accordance with GAAP throughout the periods involved. The balance
sheets fairly present the financial condition of Golden Eagle Group and
the Consolidated Subsidiaries as of the dates thereof, and the income
and surplus statements fairly present the results of the operations of
Golden Eagle Group and the Consolidated Subsidiaries for the periods
indicated. There have been no changes in the condition, financial or
otherwise, of Golden Eagle Group and the Consolidated Subsidiaries
since the dates of such Financial Statements which would have a
Material Adverse Effect.
E. Except as disclosed in the Financial Statements referenced in Section
9.1.D, the Borrowers have no (i) Investment in any other Person, or
(ii) agreements in effect providing for or relating to extensions of
credit in respect of which the Borrowers are or may become directly or
contingently obligated.
F. There is no material fact that the Borrowers have failed to disclose to
the Bank which could have a Material Adverse Effect. Neither the
Financial Statements referenced in Section 9.1.D, nor any certificate
or statement delivered herewith or heretofore by the Borrowers to the
Bank in connection with negotiations of the Loan Documents, contains
any untrue statement of a material fact or omits to state any material
fact necessary to keep the statements contained herein or therein from
being misleading.
G. Borrowers have good title to the assets pledged or given as Collateral
to secure the Loans as of the date that such pledge or lien is created,
free and clear of all Liens except the Permitted Liens.
H. Set forth in Schedule 9.1.H hereto is a complete and accurate list of
all shareholders of Golden Eagle Group owning or controlling ten (10)
per cent or more of the shares of Golden Eagle Group as of the
Effective Date and the number of shares of each class of capital stock
owned by each. All of the outstanding capital stock of each of the
Borrowers has been validly issued, is fully paid and non-assessable and
is owned by the shareholders free and clear of all Liens.
I. Each of the Borrowers is and, after consummation of this Agreement and
after giving effect to all Indebtedness incurred and the Liens in
connection herewith, will be Solvent.
34
J. Except as disclosed in writing to the Bank, none of the Borrowers is a
party to a transaction with any Affiliate. All Affiliate transactions
are in the ordinary course of business and upon fair and reasonable
terms not materially less favorable than could be obtained in an
arm's-length transaction with a Person that was not an Affiliate.
K. None of the Borrowers is in default in any material respect under any
contract, lease, loan agreement, indenture, mortgage, security
agreement or other material agreement or obligation to which the
Borrower is a party or by which the Borrower's property is bound.
L. Neither the business nor the property of any of the Borrowers are,
affected by any fire, explosion, accident, strike, lockout or other
labor dispute, drought, storm, hail, earthquake, embargo, act of God or
other casualty (whether or not covered by insurance), which could have
a Material Adverse Effect.
M. None of the Borrowers has, during the preceding five (5) years, been
known as or used any fictitious, assumed or trade names except as
disclosed in writing to the Bank. The principal office, chief executive
office and principal place of business of each of the Borrowers are at
the addresses set out in Schedule 9.1.M. Each of the Borrowers maintain
the its principal records and books at such respective address.
9.2 REPRESENTATIONS AND WARRANTIES CONCERNING THE GUARANTORS. The Loan
Parties represent and warrant the following matters concerning the Guarantors.
A. As to the respective Guarantors:
(1) Dacom Line is a corporation duly incorporated and existing in good
standing under the laws of the State of Texas. Dacom Line is duly
licensed or qualified in all jurisdictions wherein the character of the
property owned or leased by Dacom Line or the nature of the business
transacted by Dacom Line makes licensing or qualification necessary by
foreign corporations and where failure to become so licensed or
qualified would have a Material Adverse Effect on the financial
condition of Dacom Line.
(2) Golden Eagle International is a corporation duly incorporated and
existing in good standing under the laws of the State of Florida.
Golden Eagle International is duly licensed or qualified in all
jurisdictions wherein the character of the property owned or leased by
Golden Eagle International or the nature of the business transacted by
Golden Eagle International makes licensing or qualification necessary
by foreign corporations and where failure to become so licensed or
qualified would have a Material Adverse Effect on the financial
condition of Golden Eagle International.
(3) Golden Eagle Customs is a corporation duly incorporated and
existing in good standing under the laws of the State of Florida.
Golden Eagle Customs is duly licensed or qualified in all jurisdictions
wherein the character of the property owned or leased by Golden Eagle
Customs or the nature of the business transacted by Golden Eagle
Customs makes licensing or qualification necessary by foreign
corporations and where failure to become so licensed or qualified would
have a Material Adverse Effect on the financial condition of Golden
Eagle Customs.
(4) Bridgeport is a corporation duly incorporated and existing in good
standing under the laws of the State of Florida. Bridgeport is duly
licensed or qualified in all jurisdictions wherein
35
the character of the property owned or leased by Bridgeport or the
nature of the business transacted by Bridgeport makes licensing or
qualification necessary by foreign corporations and where failure to
become so licensed or qualified would have a Material Adverse Effect on
the financial condition of Bridgeport.
(5) Columbia SFO is a corporation duly incorporated and existing in
good standing under the laws of the State of California. Columbia SFO
is duly licensed or qualified in all jurisdictions wherein the
character of the property owned or leased by Columbia SFO or the nature
of the business transacted by Columbia SFO makes licensing or
qualification necessary by foreign corporations and where failure to
become so licensed or qualified would have a Material Adverse Effect on
the financial condition of Columbia SFO.
(6) Columbia Group is a corporation duly incorporated and existing in
good standing under the laws of the State of Delaware. Columbia Group
is duly licensed or qualified in all jurisdictions wherein the
character of the property owned or leased by Columbia Group or the
nature of the business transacted by Columbia Group makes licensing or
qualification necessary by foreign corporations and where failure to
become so licensed or qualified would have a Material Adverse Effect on
the financial condition of Columbia Group.
B. The execution of the Loan Documents and the performance of the
Obligations thereunder by each of the Guarantors have been duly
authorized by all necessary corporate action. Such actions will not (i)
violate any provision of law or the respective Articles or Certificate
of Incorporation or bylaws of each Guarantor, or (ii) result in the
breach of or constitute a default under any other agreement or
instrument to which any Guarantor is a party. No consent of the
shareholders of any Guarantor or of any holder of Indebtedness of any
Guarantor York is required as a condition to the validity of this
Agreement.
C. The Loan Documents, when duly executed and delivered in accordance with
this Agreement, will constitute legal, valid and binding obligations of
each Guarantor in accordance with their respective terms.
D. Each Guarantor has furnished to the Bank current year-end Financial
Statements which fairly present the financial condition of the
Guarantor as of the date thereof. There have been no Material Adverse
Change in the condition, financial or otherwise, of any Guarantor since
the date of the respective Financial Statements.
E. Except as disclosed in the Financial Statements referenced in Section
9.2.D, none of the Guarantors has any (i) Investment in any other
Person, or (ii) agreements in effect providing for or relating to
extensions of credit in respect of which any of the Guarantors is or
may become directly or contingently obligated.
F. There is no material fact that any Guarantor has failed to disclose to
the Bank which could have a Material Adverse Effect on the Guarantor.
Neither the Financial Statements referenced in Section 9.2.D, nor any
certificate or statement delivered herewith or heretofore by any
Guarantor to the Bank in connection with negotiations of the Loan
Documents, contains any untrue statement of a material fact or omits to
state any material fact necessary to keep the statements contained
herein or therein from being misleading.
G. Each Guarantor has good title to the assets pledged or given as
Collateral to secure the Loans as of the date that such pledge or lien
is created, free and clear of all Liens except the Permitted Liens.
36
H. Golden Eagle Group is, directly or indirectly, the sole shareholder of
each of the other Loan Parties. All of the outstanding capital stock of
all of the other Loan Parties have been validly issued, are fully paid
and non-assessable and are owned free and clear of all Liens.
I. Each of the Guarantors is and, after consummation of this Agreement and
after giving effect to all Indebtedness incurred and the Liens in
connection herewith, will be Solvent.
J. Except as disclosed in writing to the Bank, none of the Guarantors is a
party to a transaction with any Affiliate. All such transactions are in
the ordinary course of business and upon fair and reasonable terms not
materially less favorable than could be obtained in an arm's-length
transaction with a Person that was not an Affiliate.
K. None of the Guarantors is in default in any material respect under any
contract, lease, loan agreement, indenture, mortgage, security
agreement or other material agreement or obligation to which such
Person is a party or by which any of such Person's properties is bound.
L. Neither the business nor the properties of any Guarantor are affected
by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or other
casualty (whether or not covered by insurance), which could have a
Material Adverse Effect.
M. None of the Guarantors has, during the preceding five (5) years, been
known as or used any corporate, fictitious, assumed or trade names
except as disclosed in writing to the Bank. The principal office, chief
executive office and principal place of business of each Guarantor is
as set out in Schedule 9.1.M. Each Guarantor maintains its principal
records and books at its respective address.
9.3 REGULATORY MATTERS. Each Loan Party represents and warrants that as of
the Effective Date, no Regulatory Defects exist, and specifically the following
matters.
A. The proceeds of the Loans will be used by the Borrowers solely for the
purposes herein set out and for no other purpose whatsoever. None of
such proceeds will be used for the purpose of purchasing or carrying
any "MARGIN STOCK" as defined in Regulation U, Regulation X, or
Regulation G, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
"MARGIN STOCK" or for any other purpose which might constitute this
transaction a "PURPOSE CREDIT" within the meaning of such Regulation U,
Regulation X, or Regulation G. None of the Borrowers are engaged in the
business of extending credit for the purpose of purchasing or carrying
margin stocks. Neither the Borrowers nor any Person acting on behalf of
the Borrowers has taken or will take any action which might cause the
Notes or any of the other Loan Documents, including this Agreement, to
violate Regulation U, Regulation X, or Regulation G or any other
regulations of the board of governors of the Federal Reserve System or
to violate "8 of the Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereafter be in effect.
B. No Loan Party or any Person having "CONTROL" (as that term is defined
in 12 U.S.C. "375(b)(5) or in regulations promulgated pursuant thereto)
of a Loan Party, is an "EXECUTIVE OFFICER," "DIRECTOR," or "PRINCIPAL
SHAREHOLDER" (as those terms are defined in 12 U.S.C. "375(b) or in
regulations promulgated pursuant thereto) of the Bank, of a bank
holding company of which the
37
Bank is a subsidiary, or of any subsidiary of a bank holding company of
which the Bank is a subsidiary, or of any bank at which the Bank
maintains a "CORRESPONDENT ACCOUNT" (as such term is defined in such
statute or regulations), or of any bank which maintains a correspondent
account with the Bank.
C. There are no suits or proceedings pending, or to the knowledge of any
Loan Party, threatened, in any court or before any Governmental
Authority against or affecting a Loan Party which, if adversely
determined, would have a Material Adverse Effect.
D. Each Loan Party has filed all U.S. tax returns and all state and
foreign tax returns which are required to be filed. The returns
properly reflect the U.S. income tax, foreign tax and/or state taxes of
the Loan Party for the period covered thereby. Each Loan Party has
paid, or made provisions for the payment of, all taxes which have
become due pursuant to the returns or pursuant to any assessment
received by the Loan Party, except such taxes, if any, as are being
contested in good faith and as to which, adequate reserves have been
provided. Except for Columbia Shipping, no Federal income tax returns
of any Loan Party have been audited by the IRS. No Loan Party has, as
of the Effective Date, requested or been granted any extension of time
to file any Federal, state, local or foreign tax return. None of the
Borrowers is a party to or has any obligation under any tax sharing
agreement.
E. (i) No Reportable Event has occurred and is continuing with respect to
any Employee Plan; (ii) PBGC has not instituted proceedings to
terminate any Employee Plan; (iii) neither the Borrowers, any member of
the Controlled Group, nor any duly-appointed administrator of an
Employee Plan have (a) incurred any liability to PBGC with respect to
any Employee Plan other than for premiums not yet due or payable, or
(b) instituted or intends to institute proceedings to terminate any
Employee Plan under "4041 or "4041A of ERISA or withdraw from any
Multi-Employer Plan (as that term is defined in "3(37) of ERISA); and,
(iv) each Employee Plan has been maintained and funded in all material
respects in accordance with its terms and with all provisions of ERISA
applicable thereto.
F. None of the Borrowers are subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940, the Interstate Commerce Act (as any of
the preceding acts have been amended), or any other law (other than
Regulation X) which regulates the incurring by the Borrowers of
Indebtedness, including but not limited to laws relating to common
contract carriers or the sale of electricity, gas, steam, water, or
other public utility services.
G. Each of the Borrowers has complied with, and will continue to comply
with, the provisions of the Fair Labor Standards Act of 1938, 29 U.S.C.
""200 ET.SEQ., as amended from time to time (the "FLSA"), including
specifically, but without limitation, 29 U.S.C. "215(a). This
representation and warranty, and each reconfirmation thereof, shall
constitute assurance from the Borrowers, given as of the Effective Date
and as of the date of each re-confirmation, that the Borrowers have
complied with the requirements of the FLSA, in general, and 29 U.S.C.
"215(a)(1), thereof, in particular.
H. No Loan Party has been accused of being in violation of Title IX, of
the Organized Crime Control Act of 1970, entitled "RACKETEER INFLUENCED
AND CORRUPT ORGANIZATIONS" (RICO), 18 U.S.C. ""1961 ET.SEQ.
9.4 REPRESENTATIONS REGARDING ACCOUNTS. Borrowers make the following
representations and
38
warranties which shall be deemed to be incorporated by reference in each Notice
of Revolving Credit Advance and shall be deemed repeated and confirmed with
respect to each item of Collateral as it is created or otherwise acquired by the
Borrowers.
A. Each Account Debtor named in an Eligible Account or on an invoice is,
to the best of the Borrowers' knowledge, Solvent and will continue to
be fully able to pay in full when due all Accounts on which the Account
Debtor is obligated.
B. Each Eligible Account shall be a good and valid account representing an
undisputed bona fide indebtedness incurred by the Account Debtor
therein named, for a fixed sum as set forth in the invoice relating
thereto with respect to an absolute sale and delivery upon the
satisfied terms of goods sold by the Borrowers, or work, labor and/or
services therefor rendered by the Borrowers.
C. No Eligible Account is or shall be subject to any defense, set off,
counterclaim, discount or allowances except as may be stated in the
copy of the invoice delivered to the Bank.
D. No note, trade acceptance, draft or other instrument or chattel paper
has been or will be received with respect to merchandise giving rise to
any Eligible Account unless the same is assigned and delivered to the
Bank.
9.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All represen tations and
warranties by a Loan Party shall survive delivery of the Loan Documents. Any
investigation at any time made by or on behalf of the Bank shall not diminish
the Bank's right to rely on the representations and warranties made by any Loan
Party.
ARTICLE X
DEFAULTS AND REMEDIES
10.1 EVENTS OF DEFAULT. Borrowers shall be in Default hereunder if any one
of the following shall occur:
A. If any installment of principal or interest on either of the Notes,
shall not be paid when due and payable, or if there shall occur a
failure to pay, when due, any Obligations owed to the Bank.
B. If any representation, statement, warranty or certification made by a
Loan Party in the Loan Documents, or furnished to the Bank in
connection with the Loans, shall prove to have been incorrect in any
material respect at the time of making or issuance thereof.
C. If there shall occur any one of the following events (each an "EVENT OF
DEFAULT"), and if the event shall continue uncured after ten (10) days
from the earlier to occur of (i) the date such event becomes known to
any Loan Party, or (ii) the date the Bank shall have given notice to
the Borrowers that such event has occurred; provided, however, the Bank
shall not be required to give notice of any such failure or event:
(1) If any Loan Party shall fail to comply with any of the covenants
and agreements set forth in Section 7.1 (other than Section 7.1.G);
and/or,
(2) Both the following events shall occur: (i) Either (a) process shall
have been instituted to terminate, or a notice of termination shall
have been filed with respect to, any Employee Plan
39
(other than a Multi-Employer Plan as that term is defined in "3(37) of
ERISA) by the Borrowers, any ERISA Affiliate, any subsidiary, any
member of the Controlled Group, PBGC or any representative of any
thereof, or any such Employee Plan shall be terminated in any such case
under "4041 or "4042 of ERISA, or (b) a Reportable Event, the
occurrence of which would cause the imposition of a lien under "4068 of
ERISA, shall have occurred with respect to any Employee Plan (other
than a Multi-Employer Plan as that term is defined in "3(37) of ERISA)
and be continuing for a period of sixty (60) days; and, (ii) the sum of
the estimated liability to PBGC under "4062 of ERISA and the currently
payable obligations of the Borrowers or any ERISA Affiliate to fund
liabilities (in excess of amounts required to be paid to satisfy the
minimum funding standard of "412 of the Code) under the Employee Plan
or Employee Plans subject to such event shall exceed ten (10) per cent
of Tangible Net Worth at such time; and/or,
(3) Any or all of the following events (each an "EVENT OF DEFAULT")
shall occur with respect to any Multi-Employer Plan (as that term is
defined in "3(37) of ERISA) to which the Borrowers or any ERISA
Affiliate contributes or contributed on behalf of its employees: (i)
the Borrowers or any ERISA Affiliate incurs a withdrawal liability
under "4201 of ERISA; (ii) any such plan is "IN REORGANIZATION" as that
term is defined in "4241 of ERISA; or, (iii) any such Employee Plan is
terminated under "4041A of ERISA and the Bank determines in good faith
that the aggregate liability likely to be incurred by theBorrowers or
any ERISA Affiliate, as a result of all or any of the events specified
in subsections (i), (ii) and (iii) above occurring, shall have a
Material Adverse Effect.
D. If any event shall occur which would constitute a Default under Section
7.1.G, Section 7.2, Section 7.3 or Section 7.5.
E. If there shall occur any change in the condition (financial or
otherwise) of any Loan Party which, in the opinion of the Bank, has a
Material Adverse Effect.
F. If any of the Loan Documents shall cease to be legal, valid and binding
agreements enforceable against any Loan Party executing the same in
accordance with the respective terms thereof or shall in any manner be
terminated or become or be declared ineffective or inoperative or shall
in any manner whatsoever cease to give or provide the Liens, security
interests, rights, titles, interests, remedies, powers or privileges
intended to be created thereby.
G. If there shall occur a failure by any Loan Party in the observance or
performance of any other provision of the Loan Documents. The
provisions of this Agreement shall control in the event that any
provision of any other Loan Document is in conflict with the provisions
of any other instrument executed pursuant hereto and all of such
provisions in such other instruments shall be deemed to be cumulative
of the provisions hereof to the extent such provisions are not
inconsistent herewith.
H. If there shall occur a failure beyond any period of grace, if any, by
any Loan Party in the payment, when due, of the interest on or the
principal of any Indebtedness.
I. If there shall be any change in the ownership of the Voting Shares of
the Borrowers or if there shall be any other Change of Control of the
Borrowers.
40
J. If any Loan Party shall:
(1) Apply for, consent to or acquiesce in the appointment of a
receiver, trustee or liquidator of such Person, or of such Person's
property; and/or,
(2) Admit in writing such Person's inability to pay debts as they
mature; and/or,
(3) Make a general assignment for the benefit of creditors; and/or,
(4) Be adjudicated to be bankrupt or insolvent by any court having
jurisdiction; and/or,
(5) File a voluntary petition in bankruptcy or a petition or answer
seeking reorganization, composition, readjustment, an arrangement or
similar relief with creditors under any present or future Debtor Laws
or file an answer admitting the material allegations of a petition
filed against such Person in bankruptcy, reorganization or insolvency
proceeding, or corporate action shall be taken for the purpose of
effecting any of the foregoing; and/or,
(6) Have a receiver or trustee or assignee in bankruptcy or insolvency
appointed for such Person or such Person's property without such
Person's application or consent.
K. If an involuntary petition or complaint shall be filed against any Loan
Party seeking bankruptcy or reorganization of such Person or the
appointment of a receiver, custodian, trustee, intervenor or liquidator
of such Person, or of all or substantially all of such Person's assets,
and such petition or complaint shall not have been dismissed within
sixty (60) days of the filing thereof; or, if an order, order for
relief, judgment or decree shall be entered by any court of competent
jurisdiction or other competent authority approving a petition or
complaint seeking reorganization of a Loan Party or appointing a
receiver, custodian, trustee, intervenor or liquidator of such Person,
or of all or substantially all of such Person's assets.
L. If the Bank is served with, or becomes subject to, a court order,
injunction or other process or decree restraining or seeking to
restrain the Bank from paying any amount under any Letter of Credit
and, (i) either (a) a drawing has occurred under the Letter of Credit
for which the Borrowers have refused to reimburse the Bank for payment,
or (b) the expiration date of the Letter of Credit has occurred but the
right of any beneficiary thereunder to draw under the Letter of Credit
has been extended past the expiration date in connection with the
pendency of the related court action or proceeding, and (ii) the
Borrowers have failed to deposit with the Bank cash collateral in an
amount equal to the Bank's obligations under the Letter of Credit.
10.2 REMEDIES. Upon the occurrence of an Event of Default, and in any such
event, the obligation of the Bank to extend credit to the Borrowers pursuant
hereto shall immediately terminate. If a Default shall occur, the Bank may, at
the Bank's option, without notice to any Loan Party, declare the principal of
and interest accrued on the Obligations to be forthwith due and payable,
whereupon the same shall become due and payable without any presentment, demand,
protest, notice of protest, notice of intent to accelerate the maturity of the
Obligations, notice of acceleration of the maturity of the Obligations or notice
of any kind, all of which are hereby waived, and thereafter, the Bank may
exercise all remedies available to the Bank as provided in any of the Loan
Documents and at law or in equity. None of the provisions contained in any of
the Loan Documents shall, or shall be deemed to, give the Bank the right to
exercise control over the assets, including, without limitation, real property,
affairs, or management of any Loan Party. The rights of the Bank are limited to
the exercise the remedies provided in this Agreement and the other Loan
Documents.
41
10.3 NOTICE OF DEFAULT. Upon becoming aware of the existence of any
condition or event which constitutes a Default or an Event of Default, each Loan
Party shall immediately furnish to the Bank notice specifying the nature and
period of existence thereof and the action taken or proposed to be taken with
respect thereto.
10.4 OTHER NOTICES. Each Loan Party shall promptly notify the Bank of, (i)
any change in such Person's financial condition or business which would have a
Material Adverse Effect, (ii) any default under any agreement, contract or other
instrument of which such Person is a party or by which any of such Person's
properties are bound, or any acceleration of the maturity of any Indebtedness,
any of which would have a Material Adverse Effect, (iii) any claim against or
affecting any Loan Party or any Loan Party's property which would have a
Material Adverse Effect, and (iv) the commencement of, and any determination in,
any litigation with any third party or any proceeding before any Governmental
Authority affecting any Loan Party which would have a Material Adverse Effect.
ARTICLE XI
MISCELLANEOUS
11.1 NOTICES. Any notice required or permitted to be given hereunder shall
be in writing, shall be addressed to the parties hereto at the respective
addresses set out below, which may be changed by the giving of written notice to
that effect pursuant hereto, and shall be deemed effectively given if (i)
delivered personally, or (ii) upon being deposited with the U.S. Postal Service,
postage prepaid, certified mail, return receipt requested:
If to any of the
Borrowers or the Guarantors: Golden Eagle Group, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
If to Bank: Texas Commerce Bank National Association
000 Xxxx 00xx Xxxxxx
Xxxxxxx, Xxxxx 00000
11.2 SEVERABILITY. In the event any one or more of the provisions contained
in the Loan Documents should be held to be invalid, illegal or unenforceable in
any respect, the validity, enforceability and legality of the remaining
provisions contained in the Loan Documents shall not in any manner be affected
thereby and shall be enforceable in accordance with their terms.
11.3 CAPTIONS. The captions, headings, and arrangements used in this
Agreement are for convenience only and do not in any manner affect, limit,
amplify, or modify the terms and provisions hereof.
11.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Borrowers, any ERISA Affiliate, the other Loan Parties and the Bank and shall
inure to the benefit of the Borrowers, any ERISA Affiliate, the other Loan
Parties and the Bank and the successors and assigns of the Bank. No Loan Party
may, without the prior consent of the Bank, assign any rights, powers, duties or
obliga tions hereunder.
11.5 PARTICIPATION. Each Loan Party recognizes and agrees that the Bank may,
from time to time, assign to one or more banks or other entities all or any part
of, or may grant a participation to one or more banks or other entities, in or
to all or any part of, the Loans, the Notes and the Bank's rights in respect of
the Loan Documents. Borrowers shall have no obligation for any costs incurred by
the Bank in the participation of the Loans.
42
11.6 NON-LIABILITY OF BANK. The relationship among the Loan Parties and the
Bank is, and shall at all times remain, solely that of debtors and creditor. The
Bank does not undertake or assume any responsibility or duty to any Person to
review, inspect, supervise, pass judgment upon, or inform any Person of any
matter in connection with any phase of such Person's business, operations, or
condition, financial or otherwise. Each Person shall rely entirely upon such
Person's own judgment with respect to such matters. Any review, inspection,
supervision, exercise of judgment, or information supplied to any Person by the
Bank in connection with any such matter is for the protection of the Bank, and
no Person is entitled to rely thereon.
11.7 FINANCING STATEMENTS. Any carbon, photographic or other reproduction of
any Financing Statement signed by any Loan Party is sufficient as a financing
statement for all purposes, including, without limitation, filing in any state
pursuant to the provisions of the UCC.
11.8 LIST OF EXHIBITS. The following Exhibits are attached hereto and made a
part hereof for all purposes:
Exhibit 2.1 Notice of Revolving Credit Advance
Exhibit 2.3 Borrowing Base Certificate
Exhibit 3.1 Notice of Term Loan Advance
Exhibit 4.1 Revolving Credit Note
Exhibit 4.2 Term Note
Exhibit 5.1.A Security Agreement
Exhibit 7.1.A.(5) Certificate of Compliance
Exhibit 8.1.D Subordination Agreement
Exhibit 8.1.E Landlord Agreement
Exhibit 8.1.F Guaranty Agreement
Exhibit 8.1.H Officers Certificate
Schedule 9.1.H Ten (10) per cent or more Shareholders of Golden
Eagle Group
Schedule 8.1.E Leaseholds
Schedule 9.1.M Principal Offices
11.9 MODIFICATION. All modifications, consents, amendments or waivers of any
provision of any Loan Document, or consent to any departure by any Loan Party
therefrom, shall be effective only if the same shall be in writing and agreed to
by the Bank and then shall be effective only in the specific instance and for
the purpose for which given.
11.10 WAIVER. The acceptance by the Bank of any partial payment on the
Obligations shall not be deemed to be a waiver of any Event of Default then
existing. No waiver by the Bank of any Event of Default shall be deemed to be a
waiver of any other then existing or subsequent Event of Default, or Default. No
delay or omission by the Bank in exercising any right under the Loan Documents
shall impair that right or be construed as a waiver thereof or any acquiescence
therein, or shall any single or partial exercise of any right preclude other or
further exercise thereof or the exercise of any other right under the Loan
Documents or otherwise. The rights of the Bank hereunder and under the Loan
Documents shall be in addition to all other rights provided by law.
43
11.11 GOVERNING LAW. THIS AGREEMENT AND THE LOAN DOCUMENTS HAVE BEEN
PREPARED, ARE BEING EXECUTED AND DELIVERED, AND ARE INTENDED TO BE PERFORMED IN
THE STATE OF TEXAS, AND THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT
GIVING EFFECT TO THE CONFLICTS-OF-LAW RULES AND PRINCIPLES OF THE STATE OF
TEXAS, AND THE APPLICABLE LAWS OF THE U.S. SHALL GOVERN THE VALIDITY,
CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND ALL OF THE
LOAN DOCUMENTS.
11.12 CHOICE OF FORUM, SERVICE OF PROCESS AND JURISDICTION. Any suit, action
or proceeding against any Loan Party with respect to the Loan Documents, or the
enforcement of any judgment entered by any court in respect thereof, shall be
brought in the courts of the State of Texas, Xxxxxx County, Texas, or in the
U.S. courts located in Southern District of Texas as the Bank, in the Bank's
sole discretion, may elect. The Bank and each of the Loan Parties submit to the
non-exclusive jurisdiction of such courts for the purpose of any such suit,
action or proceeding.
A. The Bank and each of the Loan Parties irrevocably waive, in connection
with any such suit, action or proceeding, any objection, including,
without limitation, any objection to the laying of venue or based on the
grounds of forum non conveniens, which it may now or hereafter have to
the bringing of any such action or proceeding in such respective
jurisdictions.
B. The Bank and each of the Loan Parties irrevocably consent to the service
of process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to each such Person, as the case may be, at its
address set forth in Section 11.1.
C. Nothing herein shall affect the right of any party to serve process in
any other manner permitted by law.
11.13 AGENCY. Nothing herein contained shall be construed to constitute any
Loan Party as the Bank's agent for any purpose whatsoever.
11.14 NO THIRD PARTY BENEFICIARY. The parties do not intend for this
Agreement to inure to the benefit of any third party, or for this Agreement to
be construed to make or render the Bank liable to any mechanic, materialman,
supplier, contractor, subcontractor, purchaser or lessee of any property owned
by any Loan Party for debts or claims accruing to any such Persons against a
Loan Party. The Bank does not, by anything herein or in any of the other Loan
Documents, assume any Indebtedness of any Loan Party under any contract or
agreement assigned to the Bank, and the Bank shall not be responsible in any
manner for the performance by a Loan Party of any of the terms and conditions
thereof.
11.15 PAYMENT OF EXPENSES. Borrowers shall pay all expenses, charges, costs
and fees provided for in this Agreement or relating to the Loans or the
Collateral, including fees, charges, and taxes in connection with recording or
filing any of the Loan Documents, title insurance premiums and charges, fees of
any consultants, fees and expenses of the Bank's counsel (which attorneys may be
employees of the Bank), fees and expenses of the Bank's special counsel, which
may include fees billed for law clerks, paralegals and other persons not
admitted to the Bar but performing services under the supervision of an
attorney, printing, photocopying and duplicating expenses, air freight charges,
escrow fees, costs of surveys, premiums of insurance policies and surety bonds
and fees for any appraisal, market or feasibility study required by the Bank.
All such expenses, charges, costs and fees shall be the Borrowers' obligations
regardless of whether or not the Borrowers have requested and met the conditions
for the Loans. This obligation
44
on the part of the Borrowers shall survive the execution and delivery of the
Loan Documents and the repayment of the Obligations. Borrowers authorize the
Bank, in its discretion, to pay such expenses, charges, costs and fees at any
time by a disbursement of the Loans.
11.16 CONFLICTS. If there shall exist any conflict among this Agreement and
any of the other Loan Documents, the provisions of this Agreement shall control.
11.17 DECEPTIVE TRADE PRACTICES ACT. Each Loan Party acknowledges that the
Borrowers are each a "BUSINESS CONSUMER" as defined under the Deceptive Trade
Practices-Consumer Protection Act, Subchapter E of Chapter 17 of the Texas
Business and Commerce Code, a law that gives consumers special rights and
protections. Each Loan Party acknowledges that the Deceptive Trade
Practices-Consumer Protection Act is not applicable to the Transactions.
11.18 ENTIRETY. The Loan Documents embody the entire agreement among the
parties and supersede all prior agreements and understandings, if any, relating
to the subject matter hereof and thereof. Any previous agreement among the
parties hereto with respect to the Transactions is superseded by the Loan
Documents. Except as expressly provided herein or the Loan Documents (other than
this Agreement), nothing in this Agreement or in the other Loan Documents,
expressed or implied, is intended to confer upon any party, other than the
parties hereto, any rights, remedies, obligations or liabilities under or by
reason of this Agreement or the other Loan Documents.
11.19 MULTIPLE COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
A CREDIT AGREEMENT IN WHICH THE AMOUNT INVOLVED EXCEEDS $50,000 IN VALUE IS NOT
ENFORCEABLE UNLESS THE AGREEMENT IS IN WRITING AND SIGNED BY THE PARTY TO BE
BOUND OR BY THAT PARTY'S AUTHORIZED REPRESENTATIVE. THE RIGHTS AND OBLIGATIONS
OF BORROWERS, THE OTHER LOAN PARTIES AND THE BANK SHALL BE DETERMINED SOLELY
FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS. ANY PRIOR ORAL AGREEMENTS
AMONG THE PARTIES ARE SUPERSEDED BY AND MERGED INTO THOSE WRITINGS. THIS
AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS (AS SAME MAY, FROM TIME TO TIME,
BE AMENDED IN WRITING) EXECUTED BY BORROWERS, ANY OTHER LOAN PARTY OR THE BANK
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES. THIS
PARAGRAPH IS INCLUDED IN THIS AGREEMENT UNDER "26.02 OF THE TEXAS BUSINESS AND
COMMERCE CODE, AS AMENDED FROM TIME TO TIME.
In witness whereof, the parties have duly executed this Agreement on the day
and year hereinabove first set forth.
GOLDEN EAGLE GROUP, INC. XXXXX AMERICA, INC.
BY: BY:
XXXXXXX X. XXXXXX, PRESIDENT XXXXXXX X. XXXXXX, PRESIDENT
WORLD TRADE TRANSPORT OF WTT CUSTOMS HOUSE BROKERAGE, INC.
VIRGINIA, INC.
45
BY: BY:
XXXXXXX X. XXXXXX XXXXXXX X. XXXXXX
CHIEF EXECUTIVE OFFICER CHIEF EXECUTIVE OFFICER
COLUMBIA SHIPPING, INC. COLUMBIA SHIPPING, INC. (WEST)
BY: BY:
XXXXXXX X. XXXXXX, PRESIDENT XXXXXXX X. XXXXXX, PRESIDENT
COLUMBIA SHIPPING, INC. FREIGHT EXPRESS
(CHICAGO) INTERNATIONAL, INC.
BY: BY:
XXXXXXX X. XXXXXX, PRESIDENT XXXXXXX X. XXXXXX, PRESIDENT
DACOM LINE, INC. GOLDEN EAGLE INTERNATIONAL
FORWARDING, INC.
BY: BY:
XXXXXXX X. XXXXXX, PRESIDENT XXXXXXX X. XXXXXX, PRESIDENT
(SIGNATURES CONTINUE ON NEXT PAGE)
46
(CONTINUED SIGNATURES TO CREDIT AGREEMENT)
OCTOBER 27, 1997
GOLDEN EAGLE GROUP, INC., XXXXX AMERICA, INC.,
WORLD TRADE TRANSPORT OF VIRGINIA, INC.,
WTT CUSTOMS HOUSE BROKERAGE, INC., and
COLUMBIA SHIPPING GROUP, INC. ("BORROWERS")
DACOM LINE, INC., GOLDEN EAGLE INTERNATIONAL FORWARDING, INC.,
GOLDEN EAGLE CUSTOMS BROKERS, INC., BRIDGEPORT SHIPPING LINES, INC.,
COLUMBIA SHIPPING, INC., COLUMBIA SHIPPING, INC. (WEST),
COLUMBIA SHIPPING, INC. (CHICAGO), COLUMBIA SHIPPING, INC. (SFO)
and FREIGHT EXPRESS INTERNATIONAL, INC. ("GUARANTORS")
TEXAS COMMERCE BANK NATIONAL ASSOCIATION ("BANK")
GOLDEN EAGLE CUSTOMS BRIDGEPORT SHIPPING LINES, INC.
BROKERS, INC.
BY: BY:
XXXXXXX X. XXXXXX, PRESIDENT XXXXXXX X. XXXXXX, PRESIDENT
COLUMBIA SHIPPING GROUP, INC. COLUMBIA SHIPPING, INC. (SFO)
BY: BY:
XXXXXXX X. XXXXXX, PRESIDENT XXXXXXX X. XXXXXX, PRESIDENT
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
BY:
XXXXXXXXX XXXXXX
VICE PRESIDENT
47
Exhibit 2.1
Notice of Revolving Credit Advance
Exhibit 2.3
Borrowing Base Certificate
Exhibit 3.1
Notice of Term Loan Advance
Exhibit 4.1
Revolving Credit Note
Exhibit 4.2
Term Note
Exhibit 5.1.A
Security Agreement
Exhibit 7.1.A.(5)
Certificate of Compliance
Exhibit 8.1.D
Subordination Agreement
Exhibit 8.1.E
Landlord Agreement
Exhibit 8.1.F
Guaranty Agreement
Exhibit 8.1.H
Officers Certificate
Schedule 9.1.H
Ten (10) per cent or more Shareholders of Golden Eagle Group
Compagnie XXXXX et Gerance de Armenent
Schedule 8.1.E
Leaseholds
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
000 Xxxx Xxxxx Xxxxx
Xxxxxx Xxx, Xxxxx 00000
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
00 Xxxxxx Xxxxx, Xxxxxxxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
000-00 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
000-00 000xx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
000 Xxxxxx Xxxxxx
Xx Xxxxxxxx, Xxxxxxxxxx 00000
0000-00 Xxxxx Xxxxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
(vacating the premises by November 31, 1997)
0000 X. Xxxxx Xxx.
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
000 Xxxxxx Xxxxx Xxxxxxxxx, #0
Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
00000 X.X. 000 Xxxx
Xxxxxx, Xxxxxxx 00000
0000 X. Xxx Xxxx
Xxxxxxx, Xxxxxxx 00000
0000 Xxxxxx Xx., #000
Xxxxxx, Xxxxxxxx 00000
Schedule 9.1.M
Principal Offices
NAME OF LOAN PARTY PRINCIPAL OFFICE
------------------ ----------------
Golden Eagle Group 000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Xxxxx 000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
World Trade 00 Xxxxxx Xxxxx, Xxxxxxxxxx Xxxxx
Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
WTT 00 Xxxxxx Xxxxx, Xxxxxxxxxx Xxxxx
Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Columbia Shipping 000-00 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Columbia West 000 Xxxxxx Xxxxxx
Xx Xxxxxxxx, Xxxxxxxxxx 00000
Columbia Chicago 0000-00 Xxxxx Xxxxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
Freight 000-00 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Dacom 000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Golden Eagle International 000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Golden Eagle Customs 000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Bridgeport 000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Columbia SFO 000 Xxxxxx Xxxxx Xxxxxxxxx, #0
Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Columbia Group 000-00 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
