Exhibit 10.17
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U.S. $220,000,000
CREDIT AND SECURITY AGREEMENT
dated as of December 18, 2001,
by and among
MARINEMAX, INC.,
and its Subsidiaries,
as Borrowers
and
CERTAIN COMMERCIAL LENDING INSTITUTIONS
as the Lenders,
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent,
and
BANC OF AMERICA SPECIALTY FINANCE, INC.
as Collateral Agent and Documentation Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...................................................... 2
SECTION 1.01 Definitions............................................. 2
SECTION 1.02 Use of Defined Terms.................................... 23
SECTION 1.03 Cross References........................................ 23
SECTION 1.04 Accounting and Financial Determinations................. 23
ARTICLE II ADVANCES........................................................ 23
SECTION 2.01 Advances................................................ 23
SECTION 2.02 Procedure for Advances.................................. 25
SECTION 2.03 Promissory Notes........................................ 25
SECTION 2.04 Prepayment and Repayment of Advances.................... 25
SECTION 2.05 Interest on Advances.................................... 26
SECTION 2.06 Required Payments; Prepayments.......................... 27
SECTION 2.07 Manner of Payments...................................... 27
SECTION 2.08 Undrawn Commitment Fee.................................. 28
SECTION 2.09 Commitment Reduction Fee................................ 29
SECTION 2.10 Sharing of Payments..................................... 29
SECTION 2.11 Lenders' Right of Set-Off............................... 30
SECTION 2.12 Liability of the Real Estate Subsidiaries............... 30
ARTICLE III CONDITIONS PRECEDENT........................................... 30
SECTION 3.01 Conditions Precedent to Effectiveness................... 30
SECTION 3.02 Advance Requests........................................ 32
ARTICLE IV SECURITY INTEREST............................................... 33
SECTION 4.01 Security Interests in Collateral........................ 33
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SECTION 4.02 Excluded Property....................................... 33
SECTION 4.03 Duties Relating to Collateral........................... 33
SECTION 4.04 Concerning Documented Vessels........................... 34
SECTION 4.05 Insurance of Collateral................................. 36
SECTION 4.06 Further Assurances...................................... 36
ARTICLE V REPRESENTATIONS AND WARRANTIES................................... 37
SECTION 5.01 Organization and Qualification.......................... 37
SECTION 5.02 Due Authorization; Validity............................. 37
SECTION 5.03 Conflicting Agreements and Other Matters................ 37
SECTION 5.04 Financial Statements.................................... 38
SECTION 5.05 Litigation.............................................. 38
SECTION 5.06 Laws Regulating Incurrence of Debt...................... 38
SECTION 5.07 Licenses, Title to Property, Etc........................ 39
SECTION 5.08 Outstanding Debt and Liens.............................. 39
SECTION 5.09 Taxes................................................... 39
SECTION 5.10 Employee Benefits....................................... 39
SECTION 5.11 Environmental Laws...................................... 39
SECTION 5.12 Disclosure.............................................. 40
ARTICLE VI COVENANTS....................................................... 40
SECTION 6.01 Financial Covenants..................................... 40
SECTION 6.02 Debt; Operating Leases.................................. 40
SECTION 6.03 Contingent Liabilities.................................. 41
SECTION 6.04 Liens................................................... 42
SECTION 6.05 Amendment of Organizational Documents................... 42
SECTION 6.06 Laws, Licenses and Material Agreements.................. 42
SECTION 6.07 Disposition of Assets................................... 42
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SECTION 6.08 Mergers, Acquisitions, and Investments; Other New
Subsidiaries.......................................................... 43
SECTION 6.09 Insurance............................................... 44
SECTION 6.10 Inspection Rights....................................... 44
SECTION 6.11 Records; Changes in GAAP................................ 44
SECTION 6.12 Reporting Requirements.................................. 44
SECTION 6.13 Restricted Payments..................................... 46
SECTION 6.14 Limitations on Capital Expenditures..................... 47
SECTION 6.15 Transactions with Affiliates............................ 47
SECTION 6.16 No Transfers to Real Estate Subsidiaries................ 47
ARTICLE VII EVENTS OF DEFAULT.............................................. 47
SECTION 7.01 Events of Default....................................... 47
SECTION 7.02 Remedies Upon Event of Default.......................... 49
SECTION 7.03 Power of Attorney....................................... 50
SECTION 7.04 Cumulative Rights....................................... 51
SECTION 7.05 Performance by Lenders; Expenditures.................... 51
SECTION 7.06 Control................................................. 51
ARTICLE VIII THE AGENTS.................................................... 51
SECTION 8.01 Appointment of Agents................................... 51
SECTION 8.02 Agents' Reliance, Etc................................... 55
SECTION 8.03 Funding Reliance, Etc................................... 56
SECTION 8.04 Lender Credit Decision.................................. 56
SECTION 8.05 Indemnification......................................... 57
SECTION 8.06 Advances and Loans by Agents and Their Affiliates; Other
Agents and Affiliates................................................. 57
SECTION 8.07 Compensation of Agents.................................. 57
SECTION 8.08 Successor Agents........................................ 58
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ARTICLE IX MISCELLANEOUS.................................................. 59
SECTION 9.01 Amendments and Waivers.................................. 59
SECTION 9.02 Notices................................................. 59
SECTION 9.03 Parties in Interest..................................... 61
SECTION 9.04 Assignments and Participations.......................... 61
SECTION 9.05 Addition of Lenders..................................... 63
SECTION 9.06 Replacement of Lenders................................. 63
SECTION 9.07 Costs, Expenses and Taxes............................... 64
SECTION 9.08 Indemnification by Borrowers............................ 65
SECTION 9.09 Hazardous Waste Indemnification......................... 65
SECTION 9.10 Disclaimer of Warranty.................................. 65
SECTION 9.11 Rate Provision.......................................... 66
SECTION 9.12 Severability; Counterparts.............................. 66
SECTION 9.13 Governing Law........................................... 66
SECTION 9.14 Waiver of Jury Trial.................................... 66
SECTION 9.15 Entire Agreement........................................ 66
LIST OF EXHIBITS
Exhibit A Form of Advance Request
Exhibit B Form of Borrowing Base Certificate
Exhibit C Parameters for Field Audits
Exhibit D Existing Liens, Debt, and Contingent Liabilities
Exhibit E Existing Litigation
Exhibit F Existing Due on Sale Exposure
Exhibit G Form of Joinder Agreement
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CREDIT AND SECURITY AGREEMENT
THIS CREDIT AND SECURITY AGREEMENT (this "Agreement") is dated as of
December 18, 2001, among MARINEMAX, INC., a Delaware corporation (the
"Company"), MARINEMAX OF SOUTHEAST FLORIDA, LLC, a Delaware limited liability
company, MARINEMAX OF MINNESOTA, INC., a Minnesota corporation, MARINEMAX OF
SOUTHWEST FLORIDA, LLC, a Delaware limited liability company, MARINEMAX OF
CENTRAL FLORIDA, LLC, a Delaware limited liability company, MARINEMAX OF
SARASOTA, LLC, a Delaware limited liability company, MARINEMAX OF CALIFORNIA,
INC., a California corporation, MARINEMAX OF ARIZONA, INC., an Arizona
corporation, MARINEMAX MIDATLANTIC, LP, a Delaware limited partnership,
MARINEMAX MOTOR YACHTS, LLC, a Delaware limited liability company, MARINEMAX OF
LAS VEGAS, INC., a Delaware corporation, MARINEMAX OF NORTH CAROLINA, INC., a
North Carolina corporation, MARINEMAX OF OHIO, INC., a Delaware corporation,
MARINEMAX OF UTAH, INC., a Delaware corporation, MARINEMAX TX, L.P., a Delaware
limited partnership, MARINEMAX OF GEORGIA, INC., a Georgia corporation, XXXXXXX
BOAT COMPANY, a Florida corporation, XXXXXXX REALTY, L.L.C., a Delaware limited
liability company, C & N MARINE REALTY, L.L.C., a Delaware limited liability
company, GULFWIND SOUTH REALTY, L.L.C., a Delaware limited liability company,
XXXXXXXX'X REALTY, L.L.C., a Delaware limited liability company, XXXXXXXX'X
REALTY CALIFORNIA, L.L.C., a Delaware limited liability company, MARINA DRIVE
REALTY I, L.L.C., a Delaware limited liability company, MARINA DRIVE REALTY II,
L.L.C., a Delaware limited liability company, XXXXXX XXXXXX REALTY, L.L.C., a
Delaware limited liability company, XXXXX XX, L.L.C., a Delaware limited
liability company, MARINEMAX NEW JERSEY GP, INC., a Delaware corporation,
MARINEMAX NJ PARTNERS, INC., a Delaware corporation, MARINEMAX OF NEW JERSEY
HOLDINGS, INC., a Delaware corporation, MMX GP, LLC, a Delaware limited
liability company, MMX HOLDINGS, LLC, a Delaware limited liability company, MMX
INTERESTS, LLC, a Delaware limited liability company, MMX MEMBER, INC., a
Delaware corporation, MMX PARTNERS, INC., a Delaware corporation, MMX VENTURES,
LP, a Delaware limited partnership, 11502 XXXXX, INC., a Nevada corporation,
XXXXX XX, INC., a Nevada corporation, NEWCOAST FINANCIAL SERVICES, INC., a
Delaware corporation, MARINEMAX SERVICES, INC., a Delaware corporation,
MARINEMAX U.S.A., INC., a Nevada corporation (each of the Company and each of
such Persons other than the Company, singularly, a "Borrower," and the Company
and all of such Persons other than the Company, collectively, the "Borrowers"),
KEYBANK NATIONAL ASSOCIATION, a national banking association, both individually
(in such capacity, "KeyBank") and as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders (as hereinafter defined), BANC OF
AMERICA SPECIALTY FINANCE,
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INC., a North Carolina corporation, individually (in such capacity, "BOA"), as
collateral agent (in such capacity, the "Collateral Agent") and as documentation
agent (in such capacity, the "Documentation Agent") and the various other
financial institutions as are or may become parties hereto, including, as of the
date hereof, TRANSAMERICA COMMERCIAL FINANCE CORPORATION, a Delaware corporation
("Transamerica"), and DEUTSCHE FINANCIAL SERVICES CORPORATION, a Nevada
corporation ("Deutsche") (KeyBank, BOA, Transamerica, Deutsche, and such other
financial institutions, collectively, the "Lenders").
WITNESSETH:
WHEREAS, Borrowers have requested a revolving credit facility up to
$220,000,000 from Lenders, and Lenders have agreed to provide such revolving
credit facility on the terms set forth herein;
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01. DEFINITIONS. As used in this Agreement, the following capitalized
terms have the respective meanings indicated below (such meanings to be
applicable equally to both the singular and plural forms of such terms):
"Accounts" shall mean all accounts, accounts receivable, receivables,
amounts due or to become due under contracts (whether earned or to be earned by
further performance), all rights to the payment for goods or services sold or
leased, all Contracts in Transit, all rights to the payment or receipt of money
or other form of consideration of any kind, including all amounts payable by,
and rights and claims against, any manufacturer or vendor of Inventory, such as
volume purchase discounts, advertising rebates, price protection, warranty work,
incentives and credits, "accounts" as that term is defined in the Uniform
Commercial Code, guarantees, and the rights to receive payment thereunder, tax
refunds, insurance proceeds, contract rights, notes, drafts, chattel paper,
instruments, documents, bills, acceptances, choses in action, and all other
debts, obligations, and liabilities in whatever form now or hereafter owing to
any of the Borrowers, now existing or hereafter acquired or arising, or in which
any Borrower has or hereafter acquires any rights, and all cash and non-cash
proceeds of the foregoing (including all returned and repossessed goods and
rights of stoppage in transit and of recovering
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possession by proceedings including replevin and reclamation), together with all
customer lists, books and records, ledger and account cards, computer tapes,
disks, printouts and records, whether now existing or hereafter created,
relating to Accounts.
"Account Debtor" shall mean the Person obligated to pay an account,
instrument, document, chattel paper, general intangible, or similar obligation,
whether defined hereunder as an Account, a General Intangible, or otherwise.
"Acquisitions" shall mean any activity by which through purchases,
mergers, or acquisitions, the Borrowers shall expand their business.
"Advance" shall mean an advance made by Lenders to Borrowers pursuant
to Section 2.01 hereof.
"Advance Request" shall mean the Borrowers' request for an Advance
under this Agreement, which shall be in the form of Exhibit A to this Agreement
and shall have the legal effect set forth in Section 3.02 of this Agreement.
"Affiliate" shall mean a Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by or is under common
control with another Person.
"Agent" shall mean, without distinction, any one of the Administrative
Agent, the Collateral Agent, or the Documentation Agent, and "Agents" shall mean
all or more than one of them.
"Approved Manufacturer" shall mean a manufacturer or vendor whose
products are eligible for inclusion as Eligible New Inventory or Eligible Parts
Inventory in the Borrowing Base. All of the manufacturers and vendors from which
the Borrowers purchase Inventory and parts as of the date hereof and all
manufacturers and vendors hereafter added by the Borrowers shall be Approved
Manufacturers until such time as any such existing or new manufacturer or vendor
shall be disapproved for reasonable cause by written notice from the Required
Lenders.
"Approved Vendor" shall mean a particular manufacturer or distributor
supplying branded marine-related Inventory to the Borrowers that is being
financed with an Approved Vendor Financing.
"Approved Vendor Financing" shall mean a floorplan funding arrangement
for the Borrowers separate and apart from this Agreement:
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(a) consisting of a funding arrangement used by the Borrowers solely
to finance the acquisition of branded marine-related Inventory that the
Borrowers purchase from a particular Approved Vendor;
(b) provided or arranged by the Approved Vendor or a commercial
lender (including any Lender) either on an unsecured basis or secured solely by
a purchase money security interest in the Inventory purchased from the Approved
Vendor and financed under such funding arrangement;
(c) in an aggregate principal amount not to exceed the least of (1)
the cost (including freight) of the Inventory purchased from such Approved
Vendor, (2) the fair market value of the Inventory purchased from such Approved
Vendor, or (3) twenty million dollars ($20,000,000) at any time outstanding with
respect to all Approved Vendor Financings; and
(d) approved in advance by the Required Lenders in their reasonable
discretion as to both (1) the identity of the Approved Vendor, and (2) the terms
of the funding arrangement.
"Availability Reserve" shall mean, as of any date of determination, a
reserve in such amount as all of the Lenders may from time to time establish and
revise in good faith upon five (5) Business Days' prior written notice to the
Borrowers for the purpose of restricting availability under the Commitment by
reducing the effective rate of Advances against the Borrowing Base for one or
more asset categories or Borrowers, as the case may be, pursuant to (a) negative
unreconciled exceptions resulting from the most recent Field Audits or
Collateral inspections not resolved to the Lenders' reasonable satisfaction, or
(b) other information obtained by the Lenders that materially and adversely
affects the value or marketability of the Collateral. Without limiting the
generality of the foregoing, all of Lenders may, but shall not be required to,
(1) establish or revise any such reserve while the Borrowers are in an Event of
Default or material Default (but the establishment or revision of any such
reserve shall not be deemed a waiver by the Lenders of their other rights under
this Agreement and the Loan Documents in respect of such Event of Default or
material Default), or (2) establish or revise any such reserve in good faith in
accordance with the preceding sentence in the absence of an Event of Default or
material Default.
"Borrowers" shall mean the Company and the other Borrowers described in
the introduction to this Agreement, together with such other Persons as may
become Subsidiaries of the Company through Acquisitions or through the formation
of new Subsidiaries by the Borrowers.
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"Borrowing Base" shall mean the greatest amount that may be borrowed or
retained by the Borrowers in respect of the Commitment, which at any date of
calculation, shall be determined by applying the then applicable Availability
Reserve, if any, to the sum of the following determined on a consolidated basis
for all of the Borrowers (other than the Real Estate Subsidiaries):
(a) the sum of (1) one hundred percent (100%) of the original
invoice price (including freight charges, but excluding, to the extent that the
same are included in the Borrowing Base as Accounts, any earned volume purchase
rebates, earned advertising rebates, verifiable price protection, and earned
incentives, credits, or similar items) of Eligible New Inventory that is aged
not more than three hundred sixty-five (365) days from date of delivery to the
Borrowers, and (2) ninety percent (90%) of the original invoice price (including
freight charges, but excluding, to the extent that the same are included in the
Borrowing Base as Accounts, any earned volume purchase rebates, earned
advertising rebates, verifiable price protection, and earned incentives,
credits, or similar items) of Eligible New Inventory that is aged more than
three hundred sixty-five (365) days, but not more than seven hundred thirty
(730) days, from date of delivery to the Borrowers; provided, however, that (A)
the amount includable in the Borrowing Base on account of Loose Outboard Motors
in the Eligible New Inventory shall never exceed one million, five hundred
thousand dollars ($1,500,000), it being agreed that all Loose Outboard Motors
over such amount shall be included in the Borrowing Base only as Eligible Parts
Inventory; and (B) the amount includable in the Borrowing Base on account of
both the Eligible New Inventory of Hatteras Yachts and the Eligible Used
Inventory of Hatteras Yachts shall not exceed in the aggregate fifty million
dollars ($50,000,000);
(b) the sum of (1) eighty percent (80%) of NADA Wholesale Value of
Eligible Used Inventory that has been held by the Borrowers for not more than
one hundred eighty (180) days from the date of receipt, plus (2) seventy-two
percent (72%) of the NADA Wholesale Value of Eligible Used Inventory that has
been held by the Borrowers for more than one hundred eighty (180) days from the
date of receipt, but not more than three hundred sixty-five (365) days;
provided, however, that (A) the amount includable in the Borrowing Base on
account of Eligible Used Inventory shall never exceed twenty-five percent (25%)
of the aggregate funded amount of the outstanding Advances; and (B) the amount
includable in the Borrowing Base on account of both the Eligible New Inventory
of Hatteras Yachts and the Eligible Used Inventory of Hatteras Yachts shall not
exceed in the aggregate fifty million dollars ($50,000,000);
(c) eighty percent (80%) of the net book value of Eligible Accounts;
provided, however, that the amount includable in the Borrowing
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Base on account of Eligible Accounts shall never exceed twenty million dollars
($20,000,000); and
(d) the lesser of (1) eight million dollars ($8,000,000), or (2)
sixty percent (60%) of the cost (excluding freight charges) of Eligible Parts
Inventory net of any reserve required by GAAP for damaged, obsolete, or
slow-moving items in such inventory.
No Property of the Borrowers shall be included in the Borrowing Base if (1) the
Collateral Agent, for the benefit of the Lenders, does not have a first priority
security interest under the Uniform Commercial Code, to the extent applicable,
subject only to Permitted Liens, in such Property, (2) any other Person has a
Preferred Ship's Mortgage on a Documented Vessel included in the Borrowing Base
that has not been extinguished by payment in full and delivery of a written
satisfaction of such Preferred Ship's Mortgage, irrespective of whether such
satisfaction has been filed with the Coast Guard or whether such Preferred
Ship's Mortgage is a Permitted Lien, or (3) any other Person has a perfected
purchase money security interest in such Property, irrespective of whether such
purchase money security interest is a Permitted Lien.
"Borrowing Base Certificate" shall mean a certificate in the form of
Exhibit B hereto (as the form may be modified with the consent of the Required
Lenders from time to time), in form and detail satisfactory to the Required
Lenders setting forth the calculation of the Borrowing Base as of the date of
such certificate.
"Business Day" shall mean a day on which banks in Cleveland, Ohio are
open for business.
"Capital Lease" shall mean any capital lease or sublease, as defined in
accordance with GAAP.
"Change of Control" shall mean (a) that any "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act) (other than
the current and former directors and employees of the Company), (1) shall
become, or obtain rights (whether by means of warrants, options or otherwise) to
become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under
the Exchange Act), directly or indirectly, of more than thirty percent (30%) of
the outstanding common stock of the Company, or (2) shall obtain the power
(whether or not exercised) to elect a majority of the Company's directors; (b)
the board of directors of the Company shall cease to consist of a majority of
Continuing Directors; or (c) any "change of control" or similar term as defined
in any agreement governing any other Debt of the Borrowers.
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"Chattel Paper" shall mean a record or records (including, in the case
of Electronic Chattel Paper, record or records consisting of information stored
in an electronic medium) that evidence both a monetary obligation and a security
interest in specific goods, a security interest in specific goods and software
used in the goods, a security interest in specific goods and license of software
used in the goods, a lease of specific goods, or a lease of specific goods and
license of software used in the goods. In this definition, "monetary obligation"
shall mean a monetary obligation secured by the goods or owed under a lease of
the goods and includes a monetary obligation with respect to software used in
the goods. If a transaction is evidenced by records that include an instrument
or series of instruments, the group of records taken together constitutes
Chattel Paper.
"Collateral" shall have the meaning set forth in Section 4.01 hereof.
"Commitment" shall mean the several commitments of the Lenders to
establish for the Borrowers a revolving credit facility and to advance to the
Borrowers the aggregate sum of up to the Commitment Amount on the terms set
forth in this Agreement.
"Commitment Amount" shall mean two hundred twenty million dollars
($220,000,000), the maximum aggregate amount of the Commitment; provided,
however, that if the Borrowers exercise their right to reduce the Commitment in
part pursuant to Section 2.04 of this Agreement, then after the effective date
of such partial reduction the Commitment Amount shall be the original Commitment
Amount less all portions of the Commitment theretofore cancelled by the
Borrowers.
"Commitment Reduction Fee" shall mean the fee payable to the Lenders
upon any reduction or termination of the Commitment that becomes effective prior
to the first anniversary of the date of this Agreement, as determined in Section
2.09 hereof.
"Company" shall mean MarineMax, Inc., a Delaware corporation.
"Compliance Certificate" shall mean a certificate of an officer of
Company acceptable to the Required Lenders, and in form and substance
satisfactory to the Required Lenders, (a) certifying that such officer has no
knowledge that a material Default or Event of Default has occurred and is
continuing, or if a material Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action being taken or
proposed to be taken with respect thereto, and (b) setting forth detailed
calculations with respect to the covenants described in Section 6.01(a), (b),
and (c) hereof.
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"Contingent Liability" shall mean, as to any Person, any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Debt or obligation of another in any manner, whether
directly or indirectly, including without limitation any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or any security for the payment of
thereof, (b) to purchase Property or services for the purpose of assuring the
owner of such Debt of its payment, or (c) to maintain the solvency, working
capital, equity, cash flow, fixed charge or other coverage ratio, or any other
financial condition of the primary obligor so as to enable the primary obligor
to pay any Debt or to comply with any agreement relating to any Debt or
obligation.
"Continuing Directors" shall mean the directors of the Company on the
date of this Agreement, and each other director whose nomination for election to
the board of directors of the Company was recommended by at least fifty-one
percent (51%) of the then Continuing Directors.
"Contract in Transit" shall mean, at any date of calculation, an
Account of the Borrowers as to which a Retail Funding Source is the Account
Debtor and that shall have arisen from:
(a) the Borrowers' sale or sale and delivery of a Unit of Eligible
New Inventory or a Unit of Used Inventory to a customer in exchange for Retail
Paper; and
(b) the Borrowers' legally binding but unconsummated agreement with
a Retail Funding Source to sell such Retail Paper to the Retail Funding Source,
so that the Borrowers will receive the purchase price to be paid by the Retail
Funding Source when it closes on the purchase of the Retail Paper from the
Borrowers.
"Current Ratio" shall mean the ratio, calculated for the Borrowers on a
consolidated basis and in accordance with GAAP, of (a) cash plus liquid
investments plus Contracts in Transit plus Accounts plus Inventory plus prepaid
expenses to (b) current liabilities determined in accordance with GAAP less
balloon payments due on real estate loans which the Required Lenders in their
reasonable discretion expect to be refinanced.
"Customer Leases" shall mean all written and oral leases (including but
not limited to leases of boat slips and boat storage spaces) and rental
agreements (including extensions, renewals and subleases).
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"Debt" shall mean all obligations, contingent or otherwise, which in
accordance with GAAP should be classified on the balance sheet as liabilities,
and in any event including Capital Leases, Contingent Liabilities that are
required to be disclosed and quantified in notes to financial statements in
accordance with GAAP, and liabilities secured by any Lien on any Property,
regardless of whether such secured liability is with or without recourse.
"Default" shall mean any event specified in Section 7.01 hereof, for
which any requirement for the giving of notice or lapse of time has not yet been
satisfied.
"Default Rate" shall mean the rate of interest applicable during the
continuance of an Event of Default, which shall be a per annum rate equal to
Prime Rate plus three hundred (300) basis points (i.e. 3%), due and payable on
demand.
"Deposit Account" shall mean a demand, time savings, passbook, or
similar account maintained with a Lender. The term does not include Investment
Property or Account evidenced by an Instrument.
"Document" shall mean a document of title or a receipt of the type
described in Section 7-201(2) of the Uniform Commercial Code.
"Documentation of Vessels Act" shall mean the federal Documentation of
Vessels Act, 46 U.S.C. Sections 12101 et seq.
"Documented Vessel" shall mean any vessel included in Borrowers'
Inventory that has been documented with the Coast Guard in the manner
contemplated by the Documentation of Vessels Act.
"Electronic Chattel Paper" shall mean a type of Chattel Paper evidenced
by a record or records consisting of information stored in an electronic medium.
"Eligible Account" shall mean an Account of a Borrower that:
(a) constitutes amounts payable by a vendor or manufacturer of
Inventory for returns, earned volume purchase discounts, earned advertising
rebates, verifiable price protection, warranty work, earned incentives, credits
or similar items, constitutes a Contract in Transit or other sum due from a
Retail Funding Source, or is any other Account approved by the Required Lenders
from time to time;
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(b) is subject to a perfected, first priority Lien in favor of
Collateral Agent for the benefit of the Lenders, free from any other Lien;
(c) is not restricted by its terms so that it can not be assigned or
transferred by a Borrower or can be assigned or transferred only with the
consent of the Account Debtor or another Person and such consent has not been
obtained;
(d) has not remained unpaid more than (1) ninety (90) days past its
invoice date with respect to any Account due from a manufacturer, or (2) thirty
(30) days past the date of submission to the Retail Funding Source with respect
to any Contract in Transit or other Account for which a Retail Funding Source is
the Account Debtor;
(e) when aggregated with all other Accounts payable by such Account
Debtor, does not exceed five percent (5%) of total Accounts, unless the Required
Lenders have specifically approved the concentration level for such Account
Debtor; provided, however, that until otherwise disapproved in good faith by the
Required Lenders, Brunswick Corporation and its Subsidiaries and any Retail
Funding Source may exceed the five percent (5%) threshold;
(f) is not owing by an Account Debtor located or otherwise resident
outside the United States;
(g) is not payable by an Account Debtor who has suspended business,
has made an assignment for the benefit of creditors, is insolvent, or is the
subject of a voluntary or involuntary proceeding under any bankruptcy Law or
other Law for the relief of debtors;
(h) is not subject to any material condition, contingency,
allowance, defense, dispute, or any offset or counterclaim;
(i) otherwise constitutes collateral reasonably acceptable to the
Required Lenders for borrowing purposes; and
(j) is not classified as a discrepancy as a result of the audit
activities performed by the Collateral Agent from time to time as specified in
this Agreement.
"Eligible New Inventory" shall mean Inventory of the Borrowers that (a)
is subject to a perfected, first priority Lien in favor of Collateral Agent for
the benefit of the Lenders, free from any Lien other than Permitted Liens, (b)
is located at any Borrowers' facilities or is otherwise under the control of a
Borrower, (c) consists of complete Units of New Inventory purchased from
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Approved Manufacturers, (d) does not constitute Used Inventory or Eligible Parts
Inventory, (e) is not subject to a Contract in Transit, and (f) otherwise
constitutes collateral reasonably acceptable to the Required Lenders for
borrowing purposes.
"Eligible Parts Inventory" shall mean Inventory of the Borrowers that
(a) consists of parts and accessories for boats, motors (including Loose
Outboard Motors not included in the Borrowing Base as Eligible New Inventory),
and trailers purchased from Approved Manufacturers, (b) is subject to a
perfected, first priority Lien in favor of the Collateral Agent for the benefit
of the Lenders, free from any Lien other than Permitted Liens, (c) is located at
any of the Borrowers' facilities, (d) does not constitute Eligible New Inventory
or Used Inventory, and (e) otherwise constitutes collateral reasonably
acceptable to the Required Lenders for borrowing purposes.
"Eligible Used Inventory" shall mean Used Inventory of the Borrowers
that (a) consists of complete Units of Used Inventory, (b) is subject to a
perfected, first priority Lien in favor of the Collateral Agent for the benefit
of the Lenders, free from any Lien other than Permitted Liens, (c) is located at
the Borrowers' facilities or is otherwise under the control of a Borrower, (d)
does not constitute Eligible New Inventory or Eligible Parts Inventory, (e) is
not subject to a Contract in Transit, and (f) otherwise constitutes collateral
reasonably acceptable to the Required Lenders for borrowing purposes.
"Environmental Law" shall mean any Law or other authorization or
requirement of any Governmental Body relating to actual or threatened emissions,
discharges or releases of pollutants, contaminants, or hazardous or toxic
materials, or otherwise relating to pollution or the protection of the
environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and the rulings and regulations issued thereunder, as from time to
time in effect.
"Equipment" shall mean all goods of any Borrower other than Inventory,
including, without limitation, all equipment, machinery, furniture, furnishings,
fixtures, and motor vehicles, whether now owned or hereafter acquired, or in
which a Borrower has or hereafter acquires any rights, wherever located,
including without limitation supplies customarily classified as equipment, trade
fixtures, and all other tangible personal property utilized in the conduct of a
Borrower's business (regardless of whether the same is subject to Article 9 of
the Uniform Commercial Code or whether the same constitutes a "fixture"), parts,
supplies, apparatus, appliances, tools, patterns, molds, dies, blueprints,
fittings, and accessories related thereto, all replacements or substitutions
11
therefor, and improvements, accessories, and appurtenances thereto, and all cash
and non-cash proceeds of the foregoing (including insurance proceeds).
"Event of Default" shall mean any of the events specified in Section
7.01 of this Agreement, provided any requirement for the giving of notice or
lapse of time has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor statute.
"Excluded Property" shall have the meaning set forth in Section 4.02.
"Field Audit" shall mean a limited scope field audit of the accounting
records of the Borrowers to be performed by the Collateral Agent in accordance
with the parameters outlined in Exhibit C and Section 8.01(b)(4) of this
Agreement.
"Fixed Charges Coverage Ratio" shall mean, for any period, the ratio,
calculated for Borrowers on a consolidated basis and in accordance with GAAP for
such period, of (a) after-tax net income plus interest expense, depreciation,
amortization, and rent (including operating lease expense) less Maintenance
Capital Expenditures and dividends on common stock, to (b) net interest expense
plus principal amounts paid or scheduled to be paid on Total Funded Debt
(excluding principal payments on revolving loans owing hereunder and balloon
payments due on real estate loans which the Required Lenders in their reasonable
discretion expect to be refinanced), rent (including operating lease expense),
treasury stock acquisitions, and current maturities of Capital Leases.
"Funded Debt Ratio" shall mean, at any date of calculation, the ratio
of Total Funded Debt to Tangible Net Worth, as determined in accordance with
GAAP.
"GAAP" shall mean generally accepted accounting principles applied on a
consistent basis.
"General Intangibles" shall mean all "general intangibles" including
payment intangibles as that term is defined in the Uniform Commercial Code,
regardless of whether also included in other types of Collateral or constituting
proceeds of other Collateral, whether now owned or hereafter acquired or
arising, or in which any Borrower now has or hereafter acquires any rights,
including without limitation all causes of action, corporate or business
records, goodwill, Intellectual Property Collateral, permits, customer and
subscriber lists, computer programs, partnership interests (except in
Subsidiaries), claims
12
under guaranties, tax refund claims, rights and claims against carriers and
shippers, personal property leases, claims under insurance policies, rights to
indemnification, and all other intangible personal property of every kind and
nature other than Accounts.
"Governmental Body" shall mean any governmental official, or state,
commonwealth, federal, foreign, territorial, or other court or governmental
body, including any subdivision, agency, department, commission, board, bureau
or instrumentality.
"Hatteras Yachts" shall mean boats, vessels, and yachts manufactured by
Hatteras Yachts.
"Hazardous Materials" shall mean any substances or materials subject to
any Environmental Law, including without limitation materials listed in 49
C.F.R. Section 172.101, hazardous waste as defined in the Clean Water Act, 33
U.S.C. Sections 1251 et seq., the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq., the
Resource Conservation Recovery Act, 42 U.S.C. Sections 6901 et seq. or the
Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq., explosive or
radioactive materials, hazardous or toxic wastes or substances, petroleum or
petroleum distillates, asbestos or material containing asbestos, or any other
materials or substances designated as hazardous or toxic under any federal,
state or local Law.
"Improvements" shall mean: (a) all buildings, structures, improvements,
parking areas, landscaping, moorings, pilings, bulkheads, piers, docks, ramps,
non-moveable marina equipment, fixtures (including trade fixtures) and articles
of Property now or hereafter attached to or used or adapted for use in the
operation of the Premises, including, without limitation: (1) all heating, air
conditioning, and incinerating apparatus and equipment; and (2) all boilers,
engines, motors, dynamos, generating equipment, piping and plumbing fixtures,
racks, lifts, hoists, water heaters, ranges, cooking apparatus and mechanical
kitchen equipment, refrigerators, freezers, cooling, ventilating, sprinkling and
vacuum cleaning systems, fire extinguishing apparatus, gas and electric
fixtures, carpeting, floor coverings, underpadding, elevators, escalators,
partitions, mantels, built-in mirrors, window shades, blinds, draperies,
screens, storm sash, awnings, signs; and (b) all interest of any owner of the
Premises in any of such items hereafter at any time acquired under conditional
sale contract, chattel mortgage or other title retaining or security instrument.
"Indemnified Costs" shall have the meaning set forth in Section 8.05 of
this Agreement.
13
"Interest Payment Date" shall mean the fifteenth (15th) day of each
calendar month, commencing January 15, 2002.
"Instrument" shall mean a negotiable instrument or any other writing
that evidences a right to the payment of a monetary obligation, is not itself a
security agreement or lease, and is of a type that in ordinary course of
business is transferred by delivery with any necessary endorsement or
assignment.
"Intellectual Property Collateral" shall mean inventions, designs,
patents, patent applications, copyrights, copyright applications, trademarks,
service marks, trade names, trademark and service xxxx registrations and
applications, and including all income royalties, damages, and payments with
respect thereto (including without limitation damages for past or future
infringements thereof and the right to xxx or otherwise recover for any present
or future infringements thereof, together in each case with the goodwill of the
business connected with and symbolized by such trademark or service xxxx), but
only to the extent that a security interest may be perfected in any of the
foregoing by filing a financing statement under the Uniform Commercial Code.
"Inventory" shall mean any and all boats, vessels, motors, trailers,
and other goods held for sale or lease or furnished under contract for service,
or being processed for sale or lease or furnished under contract for service in
any Borrower's business and all "inventory" as that term is defined in the
Uniform Commercial Code, whether now owned or hereafter acquired, or in which
any Borrower has or hereafter acquires any rights; wherever located, and whether
or not in a Borrower's possession or held by others for a Borrower's account,
including without limitation parts, products, wares, materials, piece goods, raw
materials, work in process, finished merchandise, and supplies, goods,
incidentals, office supplies, packaging materials, and items of every nature and
description which might be used or consumed in the manufacture, packing,
shipping, advertising, selling, leasing, or furnishing of finished goods, or
otherwise used or consumed in any Borrower's business, all finished goods and
other tangible personal property now owned or hereafter acquired (including
acquisitions by return, repossession, or otherwise) and held for sale or lease
or furnished under contracts for service or used or consumed in any Borrower's
business, supplies customarily classified as inventory, all returned or
repossessed goods, all products of and accessions to Inventory and all documents
(including Documents) covering Inventory, and all cash and non-cash proceeds of
the foregoing (including insurance proceeds).
"Investment" shall mean any advance or capital contribution to or other
investment in any Person other than Borrowers (except Acquisitions and advances
to employees for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business).
14
"Investment Property" shall mean a security, whether certificated or
uncertificated, security entitlement, securities account, commodity contract, or
commodity account.
"Law" shall mean any law, regulation, order or decree of any
Governmental Body.
"Lenders" shall mean (a) KeyBank, BOA, Transamerica, and Deutsche, (b)
any Affiliate or Affiliates to which any of the institutions named in (a) above
shall assign its interests under this Agreement in the manner permitted by
Section 9.04, (c) any additional lenders hereafter admitted in accordance with
Section 9.05 of this Agreement, and (d) any replacement lenders hereafter
admitted in accordance with Section 9.06 of this Agreement.
"Leverage Ratio" shall mean, at any date of calculation, the ratio of
total Debt to Tangible Net Worth, as determined in accordance with GAAP.
"LIBOR" shall mean the one month London Interbank Offered Rate
published in the Eastern Edition of The Wall Street Journal on the next to last
Business Day of each calendar month; provided, however, that if in any calendar
month the Eastern Edition of The Wall Street Journal shall not be published on
the next to last Business Day, then for such calendar month "LIBOR" shall be the
rate per annum appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in dollars for a term of thirty (30)
days at approximately 11:00 a.m. (London time) on the next to last Business Day
of such calendar month.
"LIBOR Margin" shall mean the margin to be added to the LIBOR to arrive
at the LIBOR Rate, which shall vary from time to time based on the Pricing Tier
applicable to the Borrowers as specified in Section 2.05.
"LIBOR Rate" shall mean, for any calendar month, the Loan Rate equal to
the sum of (a) the applicable LIBOR determined as of the next to last Business
Day of the immediately preceding calendar month, and (b) the applicable LIBOR
Margin.
"License" shall mean any license, permit or other authorization by any
Governmental Body or third Person necessary or appropriate for any of the
Borrowers to own or operate their respective businesses or Property.
"Lien" shall mean any security interest, lien, pledge, encumbrance,
charge or adverse claim of any kind, including without limitation any
15
agreement to give or not to give any lien, or any conditional sale or other
title retention agreement.
"Litigation" shall mean any proceeding, claim or investigation by or
before any Governmental Body.
"Loan Documents" shall mean this Agreement and all Promissory Notes,
financing statements, Preferred Ship's Mortgages, certificates, instruments and
agreements delivered by any Borrower hereunder, as they are modified or extended
in accordance with their terms.
"Loan Rate" shall mean the rate of interest to be applicable from time
to time to the Advances, which shall be (a) the LIBOR Rate, or (b) the Default
Rate, as applicable.
"Loose Outboard Motors" shall mean new outboard motors included as
separate line items on Borrowers' records of Inventory because they are not
included as part of any particular boat and motor combination or any particular
boat, motor, and trailer combination.
"Maintenance Capital Expenditures" shall mean all capital expenditures
for the Borrowers except for (a) capital expenditures made in connection with
new facilities, and (b) capital expenditures made in connection with
Acquisitions, and (c) capital expenditures made in connection with additions to
or expansions of existing facilities.
"Material Adverse Change" shall mean a material and adverse change in
the Borrowers' financial condition, Property, or business operations, taken as a
whole.
"NADA Wholesale Value" shall mean the wholesale value published in the
most recent NADA Small Boat Appraisal Guide, but if no wholesale value is
available for the boat in such guide, then it shall be the wholesale value
published in the most recent BUC Used Boat Price Guide.
"New Inventory" shall mean Inventory of the Borrowers that (a) consists
of complete Units of new Inventory purchased from Approved Manufacturers, (b)
does not constitute Used Inventory or Eligible Parts Inventory, (c) is not
subject to a Contract in Transit, and (d) otherwise constitutes collateral
reasonably acceptable to the Required Lenders for borrowing purposes.
"Obligations" shall mean all obligations (monetary or otherwise) of the
Borrowers arising under or in connection with this Agreement, the Promissory
Notes and each other Loan Document.
16
"Operating Lease" shall mean any operating lease or sublease, as
defined in accordance with GAAP.
"Participant" shall have the meaning set forth in Section 9.04 of this
Agreement.
"Permitted Liens" shall mean:
(a) Liens securing payment of the Obligations, granted pursuant to
any Loan Document;
(b) the existing Liens identified in Exhibit D, to the extent that
they secure the indebtedness (and only the indebtedness) identified in such
Exhibit;
(c) Liens effected by or relating to Approved Vendor Financings,
Capital Leases and other Debt permitted under Section 6.02(c) and (d) hereof, to
the extent such Liens encumber only the Property of the Borrowers leased
thereunder or acquired with the proceeds thereof;
(d) Liens on Seller Collateral securing Seller Notes;
(e) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on the
Borrowers' books;
(f) Liens of carriers, warehousemen, mechanics, materialmen, and
landlords incurred in the ordinary course of business for sums not materially
overdue or being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on the Borrowers' books; provided, however, that Liens of landlords are
permitted only to the extent that (1) the same are subordinate to the Collateral
Agent's Lien on the Collateral for the benefit of the Lenders, or (2) the
Required Lenders shall have agreed in writing to waive subordination of such
landlord's Lien to the Collateral Agent's Lien on the Collateral for the benefit
of the Lenders;
(g) Liens incurred in the ordinary course of business in connection
with workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed
17
money) entered into in the ordinary course of business or to secure obligations
on surety or appeal bonds;
(h) judgment Liens in existence less than thirty (30) days after the
entry thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to the applicable deductible) by insurance
maintained with responsible insurance companies;
(i) Liens on Real Property Interests not created at the time when
there is any Event of Default under this Agreement;
(j) Liens inferior to the Lien of the Collateral Agent (for the
benefit of the Lenders) granted to parties providing financial derivative
products to the Borrowers (e.g., interest rate swaps or foreign exchange forward
contracts); and
(k) any other Lien which all of the Lenders may approve in their
reasonable discretion.
"Person" shall mean an individual, partnership, joint venture,
corporation, limited liability company, trust, Governmental Body, association,
unincorporated organization or other entity.
"Plan" shall mean any single employer plan, multiple employer plan or
multi-employer plan, within the meaning of ERISA, established by any of the
Borrowers, or otherwise maintained at any time for any of the Borrowers'
employees.
"Preferred Mortgage Act" shall mean the federal Preferred Mortgage Act,
46 U.S.C. Sections 31301 et seq.
"Preferred Ship's Mortgage" shall mean a preferred ship's mortgage on a
Documented Vessel filed with the Coast Guard in the manner contemplated by the
Preferred Mortgage Act.
"Premises" shall mean specific parcel or parcels of real estate.
"Pricing Tier" shall mean the agreed pricing tiers for the calculation
of LIBOR Margin and Undrawn Commitment Fees which are based on the Funded Debt
Ratio applicable to the Borrowers for the preceding calendar quarter, with such
pricing tier to be applicable throughout the immediately succeeding calendar
quarter, as follows:
18
Funded Debt Ratio for Funded Debt Ratio for
Calendar Quarters Calendar Quarters
Ending 12/31 and 3/31 Ending 6/30 and 9/30
Pricing Tier
-----------------------------------------------------------------------------------------------------
Pricing Tier 1 < or = 3.25 < or = 2.25
Pricing Tier 2 >3.25, but < or = 3.50 >2.25, but < or = 2.50
Pricing Tier 3 >3.50, but < or = 3.75 >2.50, but < or = 3.00
Pricing Tier 4 > 3.75 > 3.00
By way of example and not limitation, if the Funded Debt Ratio for the calendar
quarter ended September 30 is greater than 2.25 but less than or equal to 2.50,
then during the calendar quarter commencing on October 1 and ending on December
31, the Borrowers would be in Pricing Tier 2. If for any reason Borrowers fail
to provide the financial statements necessary to calculate the Funded Debt Ratio
within thirty (30) days after written notice from the Administrative Agent, the
Default Rate shall apply retroactively from the date when such necessary
financial statements originally were due (without reference to such written
notice from the Administrative Agent or such thirty-day period) until such
necessary financial statements are provided by Borrowers.
"Prime Rate" shall mean the rate of interest announced by KeyBank from
time to time as its prime rate, which rate is purely a discretionary benchmark
and not necessarily indicative of the best or lowest interest rate that KeyBank
is charging to any class of borrowers, and with such rate to change as and when
such prime rate changes.
"Pro Rata Percentage" shall mean, with respect to any Lender, a
fraction (expressed as a percentage), the numerator of which is the amount of
such Lender's Commitment and the denominator of which is the Commitments of all
of the Lenders. Without limiting the generality of the foregoing and subject to
the rights of the Lenders as set forth in Section 9.04 of this Agreement, the
initial Pro Rata Percentages of the Lenders are as set forth in Section 2.01 of
this Agreement.
"Promissory Notes" shall mean the Promissory Notes from the Borrowers
to the Lenders in the aggregate principal amount of the Commitment, with one
Promissory Note in an initial amount equal to each Lender's Pro Rata Percentage
of the Commitment being issued to each Lender, together with any
19
replacement promissory notes that hereafter shall be issued to the Lenders under
this Agreement.
"Property" shall mean all types of real, personal, tangible or
intangible property.
"Real Estate Subsidiaries" shall mean Xxxxxxx Boat Company, Xxxxxxx
Realty, L.L.C., Gulfwind South Realty, L.L.C., Xxxxxxxx'x Realty, L.L.C.,
Xxxxxxxx'x Realty California, L.L.C., C&N Marine Realty, L.L.C., Xxxxxx Xxxxxx
Realty, L.L.C., Marina Drive Realty I, L.L.C., and Marina Drive Realty II,
L.L.C., together with such other Persons as may become Real Estate Subsidiaries
of the Company through Acquisitions or through the formation of new Real Estate
Subsidiaries by the Borrowers.
"Real Property Interests" shall mean:
(a) all Improvements.
(b) all compensation, awards, damages, rights of action and
proceeds, including interest thereon and/or the proceeds of any policies of
insurance therefor, arising out of or relating to a (1) taking or damaging of
the Premises or Improvements thereon by reason of any public or private
improvement, condemnation proceeding (including change of grade), sale or
transfer in lieu of condemnation, or fire, earthquake or other casualty, or (2)
any injury to or decrease in the value of the Premises or the Improvements for
any reason whatsoever.
(c) proceeds of any insurance any time provided for the benefit of
or naming any holder of a mortgage loan encumbering the Premises and
Improvements,
(d) all refunds or rebates of taxes or assessments on the Premises.
(e) all Customer Leases now or hereafter affecting the Premises
including, without limitation, all rents, issues, profits and other revenues and
income therefrom and from the renting, leasing or bailment of Improvements, all
guaranties of tenants' performance under the Customer Leases and all rights and
claims of any kind against any tenant under the Customer Leases or in connection
with the termination or rejection of the Customer Leases in a bankruptcy or
insolvency proceeding.
(f) plans, specifications, contracts and agreements relating to the
design, construction or reconstruction of the Improvements; rights under
20
any payment, performance, or other bond in connection with the design,
construction or reconstruction of the Improvements; all landscaping and
construction materials, supplies, and equipment used or to be used or consumed
in connection with construction or reconstruction of the Improvements, whether
stored on the Premises or at some other location; and contracts, agreements, and
purchase orders with contractors, subcontractors, suppliers, and materialmen
incidental to the design, construction or reconstruction of the Improvements.
(g) all contracts, accounts, rights, claims or causes of action
pertaining to or affecting the Premises or the Improvements, including, without
limitation, all options or contracts to acquire other Property for use in
connection with operation or development of the Premises or Improvements,
management contracts, service or supply contracts, permits, licenses,
governmental franchises and certificates, and all commitments or agreements, now
or hereafter in existence, intended by the obligor thereof to provide proceeds
to satisfy any mortgage loan encumbered by the Premises and Improvements, or to
improve the Premises or Improvements, and the right to receive all proceeds due
under such commitments or agreements including refundable deposits and fees.
(h) all additions, accessions, replacements, substitutions, proceeds
and products of the real and personal property, tangible and intangible,
described in paragraphs (a) through (g) above.
(i) all books, records, surveys, reports and other documents related
to the Premises, the Improvements, the Customer Leases, or other items of
collateral described in paragraphs (a) through (h) above.
"Required Lenders" shall mean, at any time, any Lenders holding at
least sixty-six and two thirds percent (66-2/3%) of the sum of the Commitments,
or if the Commitments have been terminated, the then aggregate outstanding
principal amount of the Advances; provided, however, that "Required Lenders"
shall be one hundred percent (100%) of the Lenders with respect to any action
taken or proposed to be taken by the Lenders: (a) to increase the Commitment of
the Lenders or the Commitment Amount; (b) to reduce or waive payment of any
principal, interest, or fees payable to the Lenders (it being agreed, however,
that the Administrative Agent or the Collateral Agent, as applicable, without
the consent of any other Lender, may reduce or waive fees payable to the
Administrative Agent or the Collateral Agent, as applicable); (c) to modify or
waive compliance with any of the Borrowers' financial covenants, or to change
the manner in which such financial covenants are calculated; (d) to make any
material extension of scheduled maturities or times for payment; (e) to
establish or revise any Availability Reserve, to make changes in the Borrowing
Base, to
21
increase advance rates with respect to the Borrowing Base or to make changes in
the types of Collateral eligible for inclusion in the Borrowing Base; (f) to
release any Collateral or any Borrower, other than as specifically required by
the terms of the Loan Documents; (g) to sell, transfer, encumber, or release any
assets needing the consent of the Required Lenders under Section 6.07; (h) to
modify the legal entity structure of the Company; (i) to change the definition
of "Required Lenders"; or (j) to change the composition of the Lenders in a
manner which would dilute the voting rights of any Lender, except as otherwise
provided in Article IX of this Agreement.
"Restricted Payments" shall have the meaning set forth in Section 6.13.
"Retail Funding Source" shall mean a bank, a finance company, or
another retail funding source that purchases from the Borrowers Retail Paper
that the Borrowers originate in connection with their credit sales of Units to
customers.
"Retail Paper" shall mean Chattel Paper and other deferred payment
instruments arising from any Borrower's sale or lease of goods or provision of
services in the ordinary course of business, excluding drafts evidencing credit
card transactions.
"Rights" shall mean rights, remedies, powers and privileges.
"Seller Collateral" shall mean the Property of the Borrowers which may
be pledged as collateral security for any Seller Note, with such Property to
consist solely of (a) the name and goodwill of the target of the Acquisition,
(b) any dealership agreements that the target of the Acquisition may have
assigned to the Borrowers (whether by operation of law or otherwise) in
connection with the Acquisition, and (c) any other collateral approved by all
Lenders in their reasonable discretion.
"Seller Note" shall mean a promissory note from the Borrowers to any
seller of a boat dealership to the Borrowers in connection with an Acquisition,
with such promissory note to represent a portion of the purchase price payable
by the Borrowers for such Acquisition and to be either entirely unsecured or
secured only by a purchase money security interest in the Seller Collateral.
"Solvent" shall mean, with respect to any Person, that on such date (a)
the fair value of the Property of such Person is greater than the total amount
of liabilities (including Contingent Liabilities) of such Person, (b) 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 its
debts as they become absolute and matured, (c) such Person does not intend to,
and does
22
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (d) 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 an unreasonably
small capital.
"Subsidiary" shall mean, as to any Person, any corporation or limited
liability company, general partnership or limited partnership at least 50% of
whose securities having ordinary voting power (other than securities having such
power only by reason of the happening of a contingency) are owned by such
Person, or one or more Subsidiaries of that Person, or a combination thereof.
"Tangible Net Worth" shall mean, at any date of calculation, the
consolidated shareholders' equity of the Borrowers determined in accordance with
GAAP, minus items treated as intangible assets under GAAP, amounts owing by any
employee, officer or other Affiliate, other than draws to commissioned and
seasonally compensated employees and advances made for customary travel expenses
incurred in the conduct of the Borrowers' business, and any other asset that
cannot be identified as a tangible asset to the Required Lenders' reasonable
satisfaction.
"Taxes" shall mean all taxes, assessments, fees or other charges
imposed by any Law or Governmental Body, including penalties and interest.
"Termination Date" shall mean December 15, 2004; provided, however,
that upon the Company's request such date may be extended for two successive
periods of one year each with the prior written consent of all of the Lenders
for each such annual extension.
"Total Funded Debt" shall mean, at any date of calculation, (a) all
indebtedness of the Borrowers to the Lenders, plus (b) all other
interest-bearing liabilities of the Borrowers, plus (c) all Capital Leases of
the Borrowers, minus (d) amounts on deposit in Borrowers' unrestricted Deposit
Accounts with any of the Lenders, minus (e) overnight repurchase agreements
under which the Borrowers have invested their funds, and minus (f) uncleared
deposits to Borrowers' unrestricted Deposit Accounts with any of the Lenders.
"Undrawn Commitment Fee" shall mean the fee payable to the Lenders
under Section 2.08 of this Agreement.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect in the State of Georgia on the date of this Agreement.
23
"Unit" shall mean:
(a) with respect to New Inventory, a line item on the Borrowers'
records of Inventory consisting of any of: (1) a boat, motor, and trailer
combination package; (2) a boat (or vessel) and motor combination package: (3) a
boat and trailer combination package; (3) a boat (or vessel), without motor or
trailer; (4) a trailer, without boat or motor; or (5) a Loose Outboard Motor;
and
(b) with respect to Used Inventory, a line item on the Borrowers'
records of Inventory consisting of either: (1) a complete boat, motor, and
trailer package; or (2) with respect to boats and vessels not customarily sold
on trailers, a complete boat (or vessel) and motor package.
"Used Inventory" shall mean Inventory of the Borrowers that has been
(a) previously sold at retail, (b) registered or titled in any state or
jurisdiction, or registered as a Documented Vessel, (c) purchased or acquired by
the Borrowers from a source other than the manufacturer, or (d) Units of Used
Inventory originally acquired by Borrowers as Eligible New Inventory, but held
by the Borrowers for more than two (2) years from the date of delivery to the
Borrowers (and in the case of Inventory covered by this clause (d), then the
Borrowers shall be deemed to have held such Inventory as "Used Inventory" only
from such two year date onward).
1.02. USE OF DEFINED TERMS. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have the same meanings when used in each Promissory Note, Advance Request,
Loan Document, notice and other communication delivered from time to time in
connection with this Agreement or any other Loan Document.
1.03. CROSS REFERENCES. Unless otherwise specified, references in this
Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
1.04. ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder shall be made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared in accordance with GAAP as applied in
the preparation of the historical financial statements of the Borrowers referred
to in Section 5.04 of this Agreement.
24
ARTICLE II
ADVANCES
2.01. ADVANCES.
(a) Commitment for Revolving Credit. The Lenders severally agree,
subject to the terms and conditions set forth herein, to make Advances to the
Borrowers in respect of the Commitment from time to time until the Termination
Date. The following rules shall govern the amount of the Advances:
(1) The aggregate outstanding amount of such Advances
may equal but shall never exceed the lesser of (A) the Commitment
Amount, and (B) the Borrowing Base.
(2) In addition to the other restrictions set forth in
this Agreement (whether in the definition of "Borrowing Base" or
elsewhere): (A) the amount includable in the Borrowing Base on
account of Eligible Used Inventory shall never exceed twenty-five
percent (25%) of the aggregate funded amount of the outstanding
Advances; (B) the amount includable in the Borrowing Base on account
of Eligible Accounts shall never exceed twenty million dollars
($20,000,000); (C) the amount includable in the Borrowing Base on
account of both the Eligible New Inventory of Hatteras Yachts and
the Eligible Used Inventory of Hatteras Yachts shall not exceed in
the aggregate fifty million dollars ($50,000,000); (D) the amount
includable in the Borrowing Base on account of Loose Outboard Motors
in the Eligible New Inventory shall never exceed one million, five
hundred thousand dollars ($1,500,000); and (E) the amount includable
in the Borrowing Base on account of Eligible Parts Inventory shall
never exceed eight million dollars ($8,000,000).
(3) No Lender shall be permitted or required to make any
Advance in respect of the Commitment if, after giving effect
thereto, the principal amount of such Lender's total outstanding
Advances would exceed such Lender's Pro Rata Percentage of the
Commitment Amount.
Because the Commitment creates a revolving credit facility, the Borrowers may
borrow under the Commitment, repay such Advances without premium or penalty, and
reborrow prior to the Termination Date in accordance with this Agreement.
25
(b) Lenders and Pro Rata Percentages. Until such time as additional
or replacement Lenders are added in the manner contemplated by Section 9.05 or
Section 9.06 of this Agreement, the respective initial Pro Rata Percentages of
the initial Lenders in the Commitment shall be as follows:
Lender Pro Rata Percentage
------ -------------------
KeyBank 31.82%
BOA 31.82%
Transamerica 22.73%
Deutsche 13.63%
--------------
TOTAL 100.00%
Each Lender shall have the right to participate a portion of its Pro Rata
Percentage of the Advances and the Commitment and to assign their Pro Rata
Percentage in the Advances and the Commitment in the manner permitted by Section
9.04 of this Agreement.
(c) Use of Advances. The Borrowers may use the proceeds of Advances
to fund the Borrowers' acquisition of Inventory, for working capital purposes
and for other general corporate purposes of the Borrowers.
(d) Periodic Statements. The Administrative Agent will send the
Company statements from time to time listing the amount of each Advance. If
Borrowers do not agree with a statement, they must immediately notify the
Administrative Agent in writing of the objections. The Borrowers' failure to
notify the Administrative Agent of an objection within ten (10) Business Days
shall constitute an acceptance of the statement.
2.02. PROCEDURE FOR ADVANCES. By delivering a completed Advance Request
to the Administrative Agent on or before 10:00 a.m., Cleveland time, on a
Business Day, the Company may from time to time irrevocably request, on a
same-day basis, that an Advance be made in a minimum amount of one million
dollars ($1,000,000) and in integral multiples of one hundred thousand dollars
($100,000) above such minimum, or in the maximum unused or available amount of
the Commitment. The Administrative Agent shall provide notice of such Advance
Request to the Lenders, on or before 12:00 noon, Cleveland time, and before 3:00
p.m., Cleveland time, on such Business Day each Lender shall deposit with the
Agent same day funds in an amount equal to such Lender's Pro Rata Percentage of
the requested Advance. Such deposit will be made to an account which the
Administrative Agent shall specify from time to time by notice to the Lenders.
Subject to Section 8.03 of this Agreement, the Administrative Agent shall make
an Advance available to the Borrowers by wire transfer of same-day funds to the
accounts the Company shall have specified in its Advance Request. If an Advance
Request is delivered
26
to the Administrative Agent after 10:00 a.m., Cleveland time, then the
Administrative Agent and the Lenders shall be obligated to fund such Advance on
the next Business Day.
2.03. PROMISSORY NOTES. Each Lender's Advances under the Commitment
initially shall be evidenced by a Promissory Note payable to the order of such
Lender in a maximum principal amount equal to such Lender's Pro Rata Percentage
of the initial Commitment Amount. The principal amount outstanding under each
Lender's Promissory Note from time to time shall be the aggregate unpaid
principal amount of all Advances made by the Lender and shown by the records of
the Administrative Agent and the Lender.
2.04. PREPAYMENT AND REPAYMENT OF ADVANCES.
(a) The Borrowers may terminate the Commitment in whole or reduce
the Commitment in part upon thirty (30) days' prior written notice to the
Administrative Agent, and on the date so specified for termination or reduction
of the Commitment, all outstanding Advances in excess of the Commitment Amount
as so reduced, accrued interest, charges, any Commitment Reduction Fee, and
other amounts owing to the Lenders and the Agents will be due and payable in
full. The only effect of any partial reduction of the Commitment shall be to
reduce the Commitment Amount, it being specifically agreed that all of the other
terms of this Agreement and the Loan Documents shall remain in full force and
effect with respect to such reduced Commitment. Any termination of the
Commitment or reduction of the Commitment Amount by the Borrowers pursuant to
this Section shall be irrevocable.
(b) Each Borrower acknowledges and agrees that each is jointly,
severally and unconditionally liable for all Advances, accrued interest and
charges and all other amounts owing to the Lenders and the Agents under this
Agreement, regardless of which Borrower requested the financing or received the
funds and regardless of whether such Advances, accrued interest and charges and
other amounts owing to Lenders exist as of the date of this Agreement or should
arise hereafter. The Administrative Agent and the Lenders are authorized (in
their reasonable discretion) to demand payment and performance of obligations
hereunder from any entity executing this Agreement, in any order.
(c) The Administrative Agent or the Collateral Agent may from time
to time with the consent of the Required Lenders (except as otherwise provided
in this Agreement) modify, waive, or release the obligations of any Borrower,
release or impair any security for the performance of obligations of any
Borrower, or otherwise take or omit to take any action with respect to any
27
such Borrower, in every case without affecting the liability of any other
Borrower.
2.05. INTEREST ON ADVANCES.
(a) All Advances shall bear interest at the applicable Loan Rate in
effect from time to time, with the Loan Rate to be determined based upon the
LIBOR Margin applicable at the date of determination.
(b) The Loan Rate applicable at any time shall equal the sum of (1)
the LIBOR, and (2) the LIBOR Margin determined on the basis of the Borrowers'
Pricing Tier. The applicable LIBOR Margin for each Pricing Tier shall be as
follows:
Borrowers' Pricing Tier LIBOR Margin
----------------------- ------------
Pricing Tier 1 1.75%
Pricing Tier 2 1.90%
Pricing Tier 3 2.00%
Pricing Tier 4 2.60%
(c) Interest will be calculated on a simple interest basis for a
year of three hundred sixty (360) days, based on actual days elapsed.
(d) Notwithstanding any other provisions of this Section, during the
continuance of any Event of Default the Borrowers shall pay interest at the
Default Rate on (1) the unpaid principal balance of the Advances, and (2) to the
fullest extent permitted by Law, any interest, fee, or other amount payable
hereunder that is not paid when due.
2.06 REQUIRED PAYMENTS; PREPAYMENTS. The Borrowers shall make payments
of interest and principal to the Lenders as follows:
(a) Interest shall be payable on each Interest Payment Date.
(b) If at any time the outstanding amount of the Advances in respect
of the Commitment shall exceed the then applicable Borrowing Base, the Borrowers
immediately shall make such principal payments to the Lenders as shall be
required to reduce the outstanding balance of the Advances to an amount not
exceeding the then applicable Borrowing Base.
(c) The entire unpaid principal balance of the Advances, together
with accrued interest thereon, if not sooner paid as aforesaid, shall be due and
payable in full on the Termination Date.
28
The Borrowers shall have the right to prepay the Advances in whole or in part at
any time without premium or penalty.
2.07. MANNER OF PAYMENTS. All payments on account of interest and
principal of the Advances shall be made to the Administrative Agent on or before
12:00 noon, Cleveland time, on the Business Day on which such payment is due,
and on or before 3:00 p.m., Cleveland time, on such Business Day, the
Administrative Agent shall remit each such payment to the Lenders in accordance
with their Pro Rata Percentages of the Commitment. If any such payment is made
to the Administrative Agent after 12:00 noon, Cleveland time, and such payment
is not remitted to the Lenders by the Administrative Agent on or before 3:00
p.m., Cleveland time, on such Business Day, the Borrowers (and not the
Administrative Agent) shall be solely responsible for interest on such payment
until the next Business Day; provided, however, that if such payment were made
to the Administrative Agent on or before 3:00 p.m., then no additional interest
shall be due to the Administrative Agent in its capacity as a Lender. If any
payment is due on a date that is not a Business Day, the due date will be
extended to the next Business Day. The Administrative Agent, on behalf of the
Lenders may, at any time and without notice to Borrowers, apply monies received
in payment of Borrowers' obligations in such order of application as the
Administrative Agent shall determine. All payments shall be made in immediately
available United States dollars and without set-off, counterclaim or other
defense. The Borrowers specifically agree that they will not delay payment of
any obligations to Lenders, or assert any defense or set-off with respect to
said obligations, on account of a dispute between the Borrowers and the vendor
or manufacturer of any Inventory.
2.08 UNDRAWN COMMITMENT FEE. The Borrowers shall pay to the
Administrative Agent for the account of the Lenders an Undrawn Commitment Fee
calculated as follows:
(a) The portion of the Commitment on which the Undrawn Commitment
Fee shall be payable shall be as follows:
(1) For each of the calendar months beginning November 1
and ending April 30, the Undrawn Commitment Fee shall be payable on
the amount by which the Commitment Amount shall exceed the average
principal amount of Advances outstanding under the Commitment during
such calendar month.
(2) For each of the calendar months beginning May 1 and
ending October 31, the Undrawn Commitment Fee shall be payable on
the amount by which seventy percent (70%) of the Commitment Amount
shall exceed the average principal amount of Advances outstanding
29
under the Commitment during such calendar month. Notwithstanding the
foregoing:
(A) if for any three (3) Business Days during the period
of May 1 through July 31 of any year the aggregate principal amount
of the outstanding Advances shall exceed seventy percent (70%) of
the Commitment Amount, then the Undrawn Commitment Fee calculated
for the months of May, June, and July of that year and payable on
the Interest Payment Date in August shall be payable on the amount
by which the greatest aggregate principal amount of Advances
outstanding under the Commitment on any Business Day during such
three-month period shall exceed the average principal amount of
Advances outstanding under the Commitment during such three-month
period; and
(B) if for any three (3) Business Days during the period
of August 1 through October 31 of any year the aggregate principal
amount of the outstanding Advances shall exceed seventy percent
(70%) of the Commitment Amount, then the Undrawn Commitment Fee
calculated for the months of August, September, and October of that
year and payable on the Interest Payment Date in November shall be
payable on the amount by which the greatest aggregate principal
amount of Advances outstanding under the Commitment on any Business
Day during such three-month period shall exceed the average
principal amount of Advances outstanding under the Commitment during
such three-month period.
(b) For all months during which the interest on the Advances shall
be calculated on the basis of Pricing Tier 1, the rate at which such Undrawn
Commitment Fee shall be calculated shall be an annualized amount equal to ten
basis points (i.e. 0.10%). For all months during which the interest on the
Advances shall be calculated on the basis of Pricing Tier 2 or Pricing Tier 3,
the rate at which such Undrawn Commitment Fee shall be calculated shall be an
annualized amount equal to twenty basis points (i.e. 0.20%). For all months
during which the interest on the Advances shall be calculated on the basis of
Pricing Tier 4 or the Default Rate, the rate at which such Undrawn Commitment
Fee shall be calculated shall be an annualized amount equal to twenty-five basis
points (i.e. 0.25%). The calculation shall be performed on the basis of a three
hundred sixty (360) day year for actual days elapsed.
(c) The Undrawn Commitment Fee shall be calculated on a monthly
basis but shall be payable quarterly in arrears on the Interest Payment Dates in
February, May, August, and November.
30
2.09. COMMITMENT REDUCTION FEE. If the Borrowers shall terminate or
reduce the Commitment in whole or in part at any time or times prior to the
first anniversary of the date of this Agreement, at the effective date of each
such termination or reduction they shall pay to the Lenders a Commitment
Reduction Fee; provided, however, that the Borrowers shall not be required to
pay a Commitment Reduction Fee more than once on the same reduced portion of the
Commitment. Such Commitment Reduction Fee shall equal the Undrawn Commitment Fee
calculated in accordance with Section 2.08 for the time period from the
effective date of the reduction or termination to the first anniversary of the
date of this Agreement, using the reduced Commitment Amount after giving effect
to the reduction or termination as the outstanding principal amount of Advances
under the Commitment for such period. For purposes of such calculation, for the
entire period from the effective date of each reduction or termination to the
first anniversary of the date of this Agreement the Borrowers shall be deemed to
be in whatever Pricing Tier they were in at the effective date of the reduction
or termination.
2.10. SHARING OF PAYMENTS. If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Advance in excess of its Pro Rata Percentage of
payments then or theretofore obtained by all Lenders, such Lender shall purchase
from the other Lenders such participations in Advances made by them as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably with each of them; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Lender, the purchase shall be rescinded and each Lender which
has sold a participation to the purchasing Lender shall repay to the purchasing
Lender the purchase price to the ratable extent of such recovery together with
an amount equal to such selling Lender's ratable share [according to the
proportion of (a) the amount of such selling Lender's required repayment to the
purchasing Lender to (b) the total amount so recovered from the purchasing
Lender] of any interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered. Each Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section may, to the fullest extent permitted by Law, exercise all its rights of
payment with respect to such participation as fully as if such Lender were the
direct creditor of such Borrower in the amount of such participation. If under
any applicable bankruptcy, insolvency or other similar Law, any Lender receives
a secured claim in lieu of a setoff to which this Section applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders entitled under this
Section to share in the benefits of any recovery on such secured claim.
31
2.11. LENDERS' RIGHT OF SET-OFF. The Borrowers hereby grant the Lenders
a lien on, and a security interest in, the deposit balances, accounts, items,
trusts (as permitted by Law), certificates of deposit and monies of the
Borrowers in the possession of or on deposit with any of the Lenders, or any of
their Affiliates to secure, and as collateral for, the payment and performance
of the Obligations. The Lenders may at any time and from time to time after the
occurrence of an Event of Default, without demand or notice, appropriate and
set-off against and apply the same to the Obligations when and as due and
payable.
2.12. LIABILITY OF THE REAL ESTATE SUBSIDIARIES. The Real Estate
Subsidiaries are Borrowers under this Agreement. The Real Estate Subsidiaries
are not be required to grant the Collateral Agent a Lien on any of their
Property, but no Real Estate Subsidiary shall own any Property other than Real
Property Interests.
ARTICLE III
CONDITIONS PRECEDENT
3.01. CONDITIONS PRECEDENT TO EFFECTIVENESS. Unless waived by all of
the Lenders, the effectiveness of this Agreement is subject to fulfillment of
the following conditions precedent:
(a) The Lenders shall be satisfied, in their reasonable discretion,
with the Borrowers' financial condition, Property, business, affairs or
prospects as of the effective date.
(b) The Borrowers shall have executed and delivered to the
Administrative Agent and the Documentation Agent on behalf of the Lenders all of
Borrowers' Loan Documents, in form and substance satisfactory to the Lenders.
(c) The Borrowers shall have delivered such financing statements and
lien filings as the Collateral Agent or the Lenders shall request to record and
perfect the Liens granted to the Collateral Agent on behalf of the Lenders under
the Loan Documents. The Lenders shall have received such UCC and Lien search
reports as they shall deem appropriate to evidence that the Collateral Agent's
Liens on the Collateral are first priority Liens, subject only to Permitted
Liens.
(d) The Administrative Agent shall have received a certificate of a
duly authorized officer of the Company, certifying to the Administrative Agent
and the Lenders that (1) no Default or Event of Default exists to the best of
the
32
knowledge of the officer executing the certificate, (2) the representations and
warranties set forth in Article V hereof are true and correct in all material
respects, (3) the Borrowers have complied with all agreements and conditions to
be complied with by them under the Loan Documents by such date, and (4) there
has been no Material Adverse Change in the business, assets, or prospects of the
Borrowers considered as a whole.
(e) The Administrative Agent and the Documentation Agent shall have
received a certificate of the secretary, manager, member, or general partner, as
applicable, of each of the Borrowers, certifying (1) that attached copies of its
articles of incorporation, bylaws or other organizational documents are true and
complete, and in full force and effect, without amendment except as shown, (2)
that an attached copy of resolutions authorizing execution and delivery of the
Loan Documents is true and complete, and that such resolutions are in full force
and effect, were duly adopted, have not been amended, modified, or revoked, and
constitute all resolutions adopted with respect to this loan transaction, and
(3) to the incumbency, name and signature of each officer or representative
authorized to sign the Loan Documents on behalf of the entity. The Lenders may
conclusively rely on this certificate until they are otherwise notified by
Borrowers in writing.
(f) The Administrative Agent shall have received an opinion of
counsel to Borrowers, addressed to the Administrative Agent, the Collateral
Agent, and the Lenders, (1) to the effect that the Borrowers have full power and
authority to execute and deliver the Loan Documents; (2) to the effect that the
Loan Documents constitute the legal, valid and binding respective obligations of
the Borrowers, enforceable in accordance with their terms; and (3) as to such
other matters, and otherwise in form and substance, satisfactory to the Lenders.
(g) The Administrative Agent shall have received evidence of
insurance as required under Sections 4.05 and 6.09 hereof.
(h) Either the Administrative Agent or the Documentation Agent shall
have received evidence satisfactory to it and to the Lenders that the Borrowers
are duly organized, validly existing and in good standing in their respective
jurisdiction of organization, and are duly qualified and in good standing in all
other appropriate jurisdictions.
(i) Except to the extent that the same shall have been waived for
particular leased real property by the Required Lenders, the Collateral Agent
shall have received evidence satisfactory to the Required Lenders that every
landlord for leased real property occupied by the Borrowers has either (1)
waived any landlord's Lien with respect to any Collateral located on such
33
leased premises, or (2) subordinated any landlord's Lien to the Lien of the
Collateral Agent created under the Loan Documents for the benefit of the Lenders
and as security for the Obligations.
(j) There shall be no action, suit, investigation or proceeding
pending or threatened in any court or before any arbitrator or Governmental Body
that purports (1) to represent a Material Adverse Change, or (2) to materially
affect any transaction contemplated hereby or the ability of the Borrowers taken
as a whole to perform their respective obligations under the Loan Documents.
(k) The Lenders shall have received and reviewed such information
regarding litigation, tax, accounting, labor, insurance, pension liabilities
(actual or contingent), real estate leases, material contracts, debt agreements,
Property ownership, environmental matters, contingent liabilities and management
of the Borrowers as they have requested, and the results of such review shall be
satisfactory to the Lenders and their counsel.
All proceedings of the Borrowers taken in connection with the transactions
contemplated hereby, and all documents incidental thereto, shall be satisfactory
in form and substance to the Lenders. The Administrative Agent, the Collateral
Agent, and each Lender shall have received copies of all documents or other
evidence that it may reasonably request in connection with such transactions.
3.02. ADVANCE REQUESTS. Each Advance Request and each funding of an
Advance by the Lenders (including the disbursement of an Advance directly to an
Approved Manufacturer at the request of the Borrowers) shall constitute a
representation by Borrowers that on each of the dates of the request and
funding, the following are true:
(a) the representations and warranties contained in Article V hereof
are true and correct in all material respects on such date, as though made on
and as of such date;
(b) no event has occurred or exists, or would result from such
Advance, that could constitute a material Default or an Event of Default; and
(c) under the terms of this Agreement and the Loan Documents, the
Borrowing Base is adequate to support such Advance, after giving effect to the
restrictions set forth in this Agreement, and all other conditions precedent to
the Advance shall have been satisfied or waived by the Lenders.
34
The Lenders may condition any Advance upon the Administrative Agent's receipt,
in form and substance reasonably acceptable to the Administrative Agent, of such
other information as the Administrative Agent or the Required Lenders reasonably
may deem necessary or appropriate.
ARTICLE IV
SECURITY INTEREST
4.01. SECURITY INTERESTS IN COLLATERAL. As security for the
Obligations, the Borrowers (other than the Real Estate Subsidiaries) hereby
grant to the Collateral Agent for the benefit of the Lenders a continuing
security interest in and Lien on all of the Borrowers' Accounts, Chattel Paper,
Inventory, Equipment, General Intangibles, Investment Property, Instruments,
Deposit Accounts, and Documents, whether now owned or existing or hereafter
acquired or arising, wherever located, all insurance policies, insurance
proceeds, books and records relating to the foregoing, and all cash and non-cash
proceeds and products thereof, all exclusive of the Excluded Property
(collectively, the "Collateral").
4.02. EXCLUDED PROPERTY. The Collateral shall not include, however, any
of the following property of the Borrowers (collectively, the "Excluded
Property"):
(a) any Property of any of the Real Estate Subsidiaries;
(b) all Real Property Interests;
(c) any Accounts, Chattel Paper, General Intangibles, Investment
Property, or Instruments that by its terms can not be assigned or transferred by
a Borrower or can be assigned or transferred only with the consent of another
Person;
(d) all ownership interests in Subsidiaries, including any
Investment Property, membership interest, or partnership interests evidencing
such ownership interests in Subsidiaries, all Rights with respect to such
ownership interests, and all Rights in Subsidiaries; and
(e) Property of customers, including boats, motors and, trailers, in
Borrowers' possession (1) for repair, or (2) on consignment for sale, but only
to the extent that the same are not included (as Eligible Used Inventory or
otherwise) in the Borrowing Base, it being specifically agreed that such
Property is not to be included in the Borrowing Base.
35
4.03. DUTIES RELATING TO COLLATERAL. So long as this Agreement is in
effect or any amounts are owing to Lenders, the Borrowers agree that they shall:
(a) Keep accurate and complete records of the Collateral; keep all
books and records relating to the Collateral at Company's address specified
under or pursuant to Section 9.02 hereof; and provide at least thirty (30) days
advance written notice to the Collateral Agent of any change in the location of
any such books and records;
(b) Promptly report and pay all Taxes and other charges against the
Collateral; maintain a perfected, first priority Lien in favor of the Collateral
Agent on behalf of the Lenders in the Collateral, subject only to other
Permitted Liens; and discharge all other Liens that from time to time attach to
or are asserted against the Collateral;
(c) Pay all transportation and storage charges on the Collateral;
and pay all rents and other amounts, if any, for the use of premises on which
any of the Collateral is kept; and
(d) Take all actions appropriate for the collection and enforcement
of Accounts, and for the perfection of any liens securing Accounts; permit the
Administrative Agent upon reasonable request to contact Account Debtors to
verify information provided by Borrowers, and assist the Administrative Agent in
such verification process; and after a Default or Event of Default, not adjust,
settle or compromise the amount, payment or performance of any obligations
relating to Accounts, without the prior consent of the Required Lenders.
4.04. CONCERNING DOCUMENTED VESSELS. The parties acknowledge and agree
that certain of the vessels included in the Borrowers' Inventory from time to
time are of such a size and type as would qualify them to be Documented Vessels,
as to which Liens may be recorded with the Coast Guard in accordance with the
Preferred Mortgage Act. As a result of the foregoing, the Borrower and the
Lenders hereby agree as follows:
(a) The Borrowers will not, without the prior written consent of the
Collateral Agent, which consent shall not be unreasonably withheld: (1) allow
any new vessel that any Borrower has purchased directly from the manufacturer
thereof to become a Documented Vessel; or (2) allow any other vessel that any
Borrower has purchased or acquired from anyone that theretofore was not a
Documented Vessel to become a Documented Vessel unless, in either such case (A)
there shall be executed by such Borrower and recorded with the Coast Guard in
the manner contemplated by the Preferred
36
Mortgage Act, a Preferred Ship's Mortgage in favor of the Collateral Agent for
the benefit of the Lenders encumbering such Documented Vessel as collateral
security for the Obligations, and (B) such Preferred Ship's Mortgage in favor of
the Collateral Agent for the benefit of the Lenders creates a first priority
Lien on such Documented Vessel, subject only to Permitted Liens.
(b) If at any time the three (3) immediately preceding monthly
Borrowing Base Certificates shall reveal that the unpaid principal amount of
Advances under this Agreement plus accrued but unpaid interest thereon shall
equal or exceed ninety percent (90%) of the aggregate amount included in the
Borrowing Base in respect of Eligible New Inventory and Eligible Used Inventory
on such Borrowing Base Certificates, then the Collateral Agent on behalf of the
Lenders may request from the Borrowers in writing, and the Borrowers shall
provide to the Collateral Agent within five (5) Business Days of such request, a
written list of all Documented Vessels in the Eligible Used Inventory that are
included in the Borrowing Base (it being acknowledged that no such Documented
Vessel would be includable in the Borrowing Base if any Person other than the
Collateral Agent should have a Preferred Ship's Mortgage on such Documented
Vessel that had not been extinguished by payment in full and delivery of a
written satisfaction of such Preferred Ship's Mortgage, irrespective of whether
such satisfaction had been filed with the Coast Guard), and the value at which
each such Documented Vessel has been included in the Borrowing Base. Following
receipt of such list, the Required Lenders may, by written notice to the
Borrowers, require that the Borrowers (1) file with the Coast Guard in the
manner contemplated by the Documentation of Vessels Act such documentation as
shall be necessary to transfer record ownership of each such Documented Vessel
to a Borrower (to the extent such transfer theretofore shall not have been
made), and (2) execute and record with the Coast Guard in the manner
contemplated by the Preferred Mortgage Act a Preferred Ship's Mortgage in favor
of the Collateral Agent for the benefit of the Lenders encumbering each such
Documented Vessel as collateral security for the Obligations and creating in
favor of the Collateral Agent for the benefit of the Lenders a first priority
Lien on each such Documented Vessel, subject only to Permitted Liens. In lieu of
requiring the filing with respect to all Documented Vessels shown on such list
of (A) such documentation as shall be necessary to transfer record ownership to
the Borrowers, and (B) Preferred Ship's Mortgages in favor of the Collateral
Agent, the Required Lenders in their discretion may direct the Borrowers to make
such filings on only the particular Documented Vessels on such list that the
Required Lenders shall designate to the Borrowers in writing.
(c) If at any time the three (3) immediately preceding monthly
Borrowing Base Certificates shall reveal that the unpaid principal amount of
Advances under this Agreement plus accrued but unpaid interest thereon shall
37
equal or exceed ninety percent (90%) of the aggregate amount included in the
Borrowing Base in respect of Eligible New Inventory and Eligible Used Inventory
on such Borrowing Base Certificates, then the Collateral Agent on behalf of the
Lenders may request from the Borrowers in writing, and the Borrowers shall
provide to the Collateral Agent within five (5) Business Days of such request, a
written list of all vessels in the Eligible New Inventory and the Eligible Used
Inventory that have a value in the Borrowing Base of one million, five hundred
thousand dollars ($1,500,000) or more, and the value at which each such vessel
has been included in the Borrowing Base. Following receipt of such list, the
Required Lenders may, by written notice to the Borrowers, require that the
Borrowers: (1) file with the Coast Guard in the manner contemplated by the
Documentation of Vessels Act such documentation as shall be necessary to make
each vessel shown on such list a Documented Vessel (to the extent such filing
theretofore shall not have been made), and (2) execute and record with the Coast
Guard in the manner contemplated by the Preferred Mortgage Act a Preferred
Ship's Mortgage in favor of the Collateral Agent for the benefit of the Lenders
encumbering each such Documented Vessel as collateral security for the
Obligations, and creating in favor of the Collateral Agent for the benefit of
the Lenders a first priority Lien on such Documented Vessel, subject only to
Permitted Liens. In lieu of requiring the filing with respect to all vessels
shown on such list of (A) documentation of Borrowers' record ownership, and (B)
Preferred Ship's Mortgages in favor of the Collateral Agent, the Required
Lenders in their discretion may direct the Borrowers to make such filings on
only the particular vessels on such list that the Required Lenders shall
designate to the Borrowers in writing.
(d) Whenever the Borrowers shall certify to the Collateral Agent
that a Documented Vessel theretofore included in the Inventory and subject to a
Preferred Ship's Mortgage in favor of the Collateral Agent for the benefit of
the Lenders is to be sold to a customer, the Collateral Agent promptly shall
execute and deliver a satisfaction of such Preferred Ship's Mortgage upon
receipt of evidence of either (1) payment of the purchase price of such
Documented Vessel, or (2) the receipt of a Contract in Transit as to such
Documented Vessel, and, in either such case, the elimination of such Documented
Vessel from the Borrowing Base.
(e) All costs and expenses incurred in connection with the
documentation of Documented Vessels, the abstracting of Coast Guard records, and
the preparation and filing of Preferred Ship's Mortgages on Documented Vessels
shall be borne by the Borrowers.
4.05. INSURANCE OF COLLATERAL. Borrowers shall keep all tangible
Collateral (including, particularly, Inventory) insured for full value against
all insurable risks, on terms and with insurers reasonably acceptable to the
38
Administrative Agent, and with the Collateral Agent for the benefit of the
Lenders as the loss payee, assignee or additional insured, as appropriate. The
Company shall provide notice to the Administrative Agent in writing at least ten
(10) days before changing or canceling any policy. Each policy shall require the
insurer to give not less than thirty (30) days prior written notice to the
Administrative Agent of cancellation, and shall provide that the Collateral
Agent's interests on behalf of the Lenders will not be impaired by any act or
neglect of Borrowers or any other Person nor by any use of such Collateral or
the premises on which it is located for purposes more hazardous than are
permitted by the policy.
4.06. FURTHER ASSURANCES. The Borrowers shall execute such financing
statements and other instruments and agreements, and shall take such actions, as
the Collateral Agent on behalf of the Lenders shall request from time to time to
evidence or perfect any Lien granted under the Loan Documents. Unless prohibited
by Law, the Borrowers specifically authorize the Collateral Agent to execute and
file any financing statement, Preferred Ship's Mortgage required by Section
4.04, or other instrument or agreement on behalf of the Borrowers for the
foregoing purposes. Without limiting the generality of the foregoing, the
parties also agree that a copy of this Agreement, or any financing statement may
be filed as a financing statement in any appropriate jurisdiction, to the extent
permitted by Law.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Borrowers represent and warrant that the following are true and
correct:
5.01. ORGANIZATION AND QUALIFICATION.
(a) Each Borrower is an entity duly organized, validly existing, and
in good standing under the Laws of its state of organization. Each Borrower is
qualified to do business in all jurisdictions where the nature of its business
or Property require such qualification. As of the date of this Agreement, the
name listed for each Borrower at the beginning of this Agreement is the exact
name of each Borrower, and the jurisdiction under the Laws of which each
Borrower has been organized as set forth at the beginning of this Agreement is
the correct jurisdiction of organization.
(b) All of the Borrowers other than the Company are Subsidiaries of
the Company, and the Company has no Subsidiaries other than the Borrowers named
herein.
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5.02. DUE AUTHORIZATION; VALIDITY. The Board of Directors, managers,
members, or partners of the Borrowers as applicable, have duly authorized the
execution, delivery and performance of the Loan Documents. No consent of any
shareholders of those Borrowers that are corporations are required as a
prerequisite to the validity and enforceability of the Loan Documents as to such
corporate Borrowers. The Borrowers have full legal right, power and authority to
execute, deliver and perform under the Loan Documents. Such Loan Documents
constitute the legal, valid and binding obligations of the Borrowers,
enforceable in accordance with their terms (subject as to enforcement of
remedies to any applicable bankruptcy, reorganization, moratorium, or similar
Laws or principles of equity affecting creditors' rights generally).
5.03. CONFLICTING AGREEMENTS AND OTHER MATTERS. The execution or
delivery of any Loan Documents, and performance thereunder, do not conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien on any Property of any Borrower under, or require any
consent, approval or action by or notice to any Governmental Body or other
Person (other than consents already obtained) pursuant to, the articles of
incorporation, bylaws or other organizational documents of any Borrower, or any
Law or material agreement to which any Borrower, or any of their respective
Property is subject.
5.04. FINANCIAL STATEMENTS. The financial statements of the Borrowers
delivered to the Lenders fairly present the results of operation and the
financial condition of the Borrowers as of the dates and for the periods shown,
all in accordance with GAAP. Such financial statements (and notes thereto)
reflect all material liabilities, direct and contingent, of the Borrowers that
are required to be disclosed in accordance with GAAP. No Borrower has material
Contingent Liabilities, liabilities for Taxes, forward or long-term commitments,
or unrealized or anticipated losses from any unfavorable commitments that are
not reflected in such financial statements. Each Borrower is Solvent.
5.05. LITIGATION. Except as disclosed to the Lenders on Exhibit E
attached hereto, as of the date of this Agreement there is no Litigation pending
or, to the best of the Borrowers' knowledge, threatened against any Borrower on
the date hereof that involves a claim for damages or reasonably expected
potential liability of one million dollars ($1,000,000) or more. There is no
pending or, to the best of the Company's knowledge, threatened Litigation
against any Borrower that could result in a Material Adverse Change.
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5.06. LAWS REGULATING INCURRENCE OF DEBT.
(a) No proceeds of any Advance will be used directly or indirectly
to acquire any securities (other than common stock of the Company as permitted
by Section 6.13(d) of this Agreement), without the prior written consent of the
Required Lenders.
(b) No Advance will be used to purchase or carry margin stock (as
defined in applicable Federal Reserve regulations), nor to extend credit to
others to do so.
(c) No Borrower is subject to regulation under any Law that
prohibits or restricts its incurrence of Debt in any material respect, including
(1) the Public Utility Holding Company Act of 1935, as amended, (2) the Federal
Power Act, as amended.
(d) No Borrower is an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or an "investment advisor" within the meaning of the
Investment Advisors Act of 1940, as amended.
5.07. LICENSES, TITLE TO PROPERTY, ETC.
(a) Each Borrower: (1) possesses all material Licenses and is not in
violation thereof in any material respect; (2) has full power, authority and
legal right to own and operate its Property, and to conduct its business; and
(3) has good and indefeasible title (fee or leasehold, as applicable) to its
Property, subject to no Lien of any kind, except Permitted Liens.
(b) No Borrower is in violation of its articles of incorporation,
bylaws or other organizational documents, any award of any arbitrator, or any
Law or material agreement to which it or any of its Property is subject. No
business or Property of any Borrower or is affected by any strike, lock-out or
other labor dispute, material casualty, earthquake, embargo or act of God.
5.08. OUTSTANDING DEBT AND LIENS. No Borrower has any outstanding Debt,
Contingent Liability, or Lien on any of its assets, except as expressly
permitted hereunder.
5.09. TAXES. Each Borrower has filed all Tax returns and reports which
are required to be filed, and has paid all Taxes, to the extent due and payable.
All Tax liabilities of the Borrowers are adequately provided for on their books
(including interest and penalties) and adequate reserves have been established
therefor in accordance with GAAP. Except as disclosed to the Administrative
41
Agent, no taxing authority has notified any Borrower of any material deficiency
in a Tax return nor asserted any material Tax liability in excess of that
already paid or provided for in the Borrowers' Financial Statements.
5.10. EMPLOYEE BENEFITS. All employee benefits for employees of the
Borrowers are provided in accordance with all applicable Laws. Each Plan
satisfies the minimum funding standards under all applicable Laws, and has no
accumulated deficiency. No Borrower has incurred any withdrawal liability nor
engaged in any prohibited transaction with respect to a Plan. No Borrower has
failed to make any payment to a Plan as required under applicable Laws, and no
reportable event (as defined under ERISA) has occurred. No Borrower has received
any notice from any Governmental Body or administrator of any potential
termination of a Plan, and no circumstance or event exists that could constitute
grounds for the termination of or appointment of a trustee to administer any
Plan.
5.11. ENVIRONMENTAL LAWS. The Borrowers have delivered to the
Administrative Agent copies of all environmental studies and reports conducted
or received by any Borrower in connection with any of their respective Real
Property Interests, as reasonably requested by the Required Lenders. All
Licenses have been obtained or filed that are required under any Environmental
Laws, unless the failure to obtain or file same could not result in a Material
Adverse Change. No material amounts of Hazardous Materials are generated or
produced at or in connection with any Property or operations of any Borrower,
and no Hazardous Materials in any material amounts are released onto any
Property of any of them.
5.12. DISCLOSURE. The Borrowers have not made a material misstatement
of fact, or failed to disclose any fact necessary to make the facts disclosed
not misleading, to Lenders during the course of application for and negotiation
of this Agreement or the Loan Documents. There is nothing known to the Borrowers
that could materially adversely affect the Borrowers' financial condition,
Property or business operations, or that could result in a Material Adverse
Change, which is not set forth herein or in notices hereafter delivered to
Lenders.
ARTICLE VI
COVENANTS
So long as this Agreement is in effect or any amounts are owing to the
Lenders pursuant to this Agreement, the Borrowers jointly and severally agree as
follows:
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6.01. FINANCIAL COVENANTS.
(a) The Borrowers shall maintain, on a consolidated basis, a Current
Ratio of at least: (1) 1.15 to 1 for the calendar quarters ending June 30 and
September 30 of each year, and (2) 1.10 to 1 for the calendar quarters ending
December 31 and March 31 of each year.
(b) The Borrowers shall maintain, on a consolidated basis, a
Leverage Ratio of not more than (1) 4.00 to 1 for the calendar quarters ending
June 30 and September 30 of each year, and (2) 5.0 to 1 for the calendar
quarters ending December 31 and March 31 of each year.
(c) The Borrowers shall maintain, on a consolidated basis, a Fixed
Charges Coverage Ratio of at least 1.35 to 1, tested quarterly on the basis of a
rolling period of twelve (12) calendar months.
6.02. DEBT; OPERATING LEASES. Without the prior written consent of the
Required Lenders, which the Required Lenders shall give upon the exercise of
their reasonable discretion, the Borrowers shall not incur, assume, guarantee,
or be liable in any manner for any Debt without the consent of Required Lenders,
except:
(a) Debt under the Loan Documents;
(b) existing Debt shown on Exhibit D hereto;
(c) any Approved Vendor Financing;
(d) Capital Leases and Debt incurred to acquire equipment used in
the Borrowers' business (including refinancings thereof), in an amount not to
exceed the least of (1) the cost of such assets, (2) the fair market value of
such assets, or (3) five million dollars ($5,000,000) in the aggregate at any
time outstanding;
(e) Debt to parties providing financial derivative products to the
Borrowers (e.g., interest rate swaps or foreign exchange forward contracts);
(f) Debt under Seller Notes;
(g) other Debt subordinated to repayment of amounts owing hereunder
on terms satisfactory to the Required Lenders, and otherwise acceptable to the
Required Lenders in their reasonable discretion;
43
(h) trade payables, accrued expenses, and customer deposits incurred
and paid in the ordinary course of business of Borrowers, or incurred in the
ordinary course of business of any Person acquired, or the assets of whom are
acquired, as part of an Acquisition; and
(i) real estate mortgage Debt of the Borrowers (which may be
guaranteed by other Borrowers) incurred or guaranteed either (1) at a time when
there is no Event of Default under this Agreement, or (2) with the prior written
consent of the Required Lenders in the exercise of their reasonable discretion.
The Borrowers on a consolidated basis shall not enter into or be parties to
Operating Leases requiring total rental payments during any fiscal year during
the term of this Agreement in excess of eight million dollars ($8,000,000) in
the aggregate.
6.03. CONTINGENT LIABILITIES. None of the Borrowers shall incur, assume
or be liable in any manner for any Contingent Liabilities without the consent of
the Required Lenders, which consent shall not be unreasonably withheld, except
(a) those resulting from the endorsement of negotiable instruments for
collection in the ordinary course of business, (b) Contingent Liabilities of the
Borrowers relating to Debt secured solely by Real Property Interests of the
Borrowers, (c) the existing Contingent Liabilities shown on Exhibit D hereto,
(d) Contingent Liabilities of any of the Borrowers created in connection with an
Acquisition, as approved by the Required Lenders in their reasonable discretion,
and (e) Contingent Liabilities of any Borrower for the obligations of any other
Borrower.
6.04. LIENS. The Borrowers shall not create or suffer to exist any Lien
upon any of their respective Property without the consent of the Required
Lenders except for Permitted Liens.
6.05. AMENDMENT OF ORGANIZATIONAL DOCUMENTS. The Borrowers shall not
amend or modify, or permit the amendment or modification of, any of their
respective articles of incorporation, bylaws or other organizational documents
in any material respect (including particularly for the purpose of changing the
name of any Borrower), without the prior written consent of the Required
Lenders, which consent will not be unreasonably withheld.
44
6.06. LAWS, LICENSES AND MATERIAL AGREEMENTS.
(a) The Borrowers shall (1) obtain and comply in all material
respects with all applicable Laws and Licenses, and (2) maintain all Plans such
that the representation and warranty in Section 5.10 hereof is true at all
times.
(b) The Borrowers shall maintain and comply in all material respects
with all material agreements necessary or appropriate for their businesses and
Property; provided, however, that the Borrowers shall not be in breach of this
covenant if they have not and do not comply with due on sale clauses in the
mortgages and deeds of trust identified in Exhibit F hereto; provided further,
that if the holder of any such mortgage or deed of trust shall seek to enforce
any such due on sale clause, the Borrowers shall either (a) honor such demand
for payment, or (b) contest the same in good faith by appropriate proceedings
and establish appropriate reserves as to the amounts in controversy. Except as
permitted by the foregoing sentence, the Borrowers shall not take any action or
suffer to exist any circumstance that could violate materially, or constitute a
material breach under or grounds for termination of, any such material
agreement.
6.07. DISPOSITION OF ASSETS. No Borrower shall sell, transfer, encumber
or lease any of its assets without the consent of the Required Lenders, which
consent shall not be unreasonably withheld, except (a) sales or leases of
Inventory in the ordinary course of business, (b) dispositions of obsolete or
useless assets, (c) transfers of assets between Borrowers not violating Section
6.16, (d) dispositions of Retail Paper in the ordinary course of business, (e)
transfers or other dispositions of Real Property Interests at times when there
is no Event of Default, and (f) Permitted Liens. Upon any sale of Retail Paper
by any of the Borrowers in the ordinary course of business, the Collateral
Agent's Liens in such Retail Paper for the benefit of the Lenders shall be
automatically released, without any further action by the Lenders or the
Collateral Agent.
45
6.08. MERGERS, ACQUISITIONS, AND INVESTMENTS; OTHER NEW SUBSIDIARIES.
(a) The Company shall not merge into, or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, without
the Required Lenders' prior written consent (which consent shall not be
unreasonably withheld), except for mergers or consolidations of a wholly-owned
Subsidiary of Company with or into Company. The Borrowers shall not make any
Investment in excess of two million dollars ($2,000,000) in the aggregate at any
time outstanding in any Person (other than in the Borrowers), without the
Required Lenders' prior written consent (which consent shall not be unreasonably
withheld).
(b) The Lenders expressly acknowledge that it is Borrowers' growth
strategy to pursue strategic Acquisitions that are beneficial to their business.
As long as the Borrowers comply with their obligations under Section 6.08(c) and
there is no material Default or Event of Default either before or after giving
effect to any proposed Acquisition, the consent of the Lenders shall not be
required for any proposed Acquisition. None of the Acquisitions shall have the
effect of changing the nature of the business of the Borrowers as now conducted.
(c) Unless waived by the Required Lenders, the Borrowers shall
notify the Lenders in writing of any pending Acquisition at least thirty (30)
days prior to the scheduled closing. In connection with such notice, the
Borrowers shall provide the Lenders the information necessary to cause the newly
acquired company(ies) to become obligated to the Lenders as additional
Borrower(s) under the terms of this Agreement and the Loan Documents at the
closing of such Acquisition by delivering to the Administrative Agent a Joinder
Agreement in the form of Exhibit G to this Agreement. Such notice shall be
accompanied by a certificate of the Company's chief financial officer to the
effect that, upon closing, as illustrated by applicable pro forma financial
statements, the Borrowers will be in compliance with all terms and conditions of
this Agreement and the Loan Documents and such further certifications as the
Required Lenders reasonably may require.
(d) If any Borrower shall form any new Subsidiary, the Borrowers
shall cause each such new Subsidiary to become obligated as a Borrower under
this Agreement by delivering to the Administrative Agent a Joinder Agreement in
the form of Exhibit G to this Agreement. If the new Subsidiary owns only Real
Property Interests, it may be designated by the Borrowers to the Lenders in
writing as an additional Real Estate Subsidiary, in which case it will not be
required to grant the Collateral Agent for the benefit of the Lenders a security
interest in the Collateral. In all other cases such new
46
Borrower shall grant a first priority security interest in its Property
constituting Collateral to the Collateral Agent for the benefit of the Lenders.
6.09. INSURANCE. Except as otherwise required by Section 4.05 hereof, the
Borrowers shall (a) keep their insurable Property adequately insured at all
times by financially sound and reputable insurers to such extent and against
such risks, including fire and other risks insured against by extended coverage,
as is customary with companies similarly situated and in the same or similar
businesses, (b) maintain in full force and effect public liability and workers
compensation insurance, in amounts customary for such similar companies to cover
normal risks, by insurers satisfactory to the Administrative Agent, and (c)
maintain such other insurance as may be required by Law or reasonably requested
by the Administrative Agent. The Borrowers shall deliver evidence of renewal of
each insurance policy on or before the date of its expiration, and from time to
time shall deliver to the Administrative Agent, upon demand, evidence of the
maintenance of such insurance. The Borrowers shall deliver promptly to the
Administrative Agent copies of all reports provided to insurers by any of the
Borrowers.
6.10. INSPECTION RIGHTS. The Borrowers shall permit the Administrative
Agent or the Collateral Agent, upon behalf of the Lenders, upon reasonable
notice and during normal business hours: (a) to examine and make copies of and
abstracts from any of their books and records; (b) to inspect their Property;
and (c) to discuss their affairs with any of their directors, officers,
managerial employees or accountants, all as the Administrative Agent or the
Collateral Agent reasonably may request in order to perform their duties under
this Agreement. Any Lender, acting in its reasonable discretion, at its own
expense, upon reasonable notice and during normal business hours, may: (1)
examine and make copies of and abstracts from any of Borrowers' books and
records; (2) inspect Borrowers' Property; and (3) discuss Borrowers affairs with
any of Borrowers' directors, officers, managerial employees or accountants.
6.11. RECORDS; CHANGES IN GAAP. The Borrowers shall keep adequate books
and records in conformity with GAAP. Borrowers' records with respect to Accounts
(other than Contracts in Transit) shall be kept or shall be accumulated by
Borrowers on a centralized basis at the Company's headquarters. The Company
shall not change its fiscal year nor change, or permit any of its Subsidiaries
to change its method of financial accounting except in accordance with GAAP. In
connection with any change in accounting methods resulting from a change in
GAAP, the Borrowers and the Required Lenders shall make appropriate alterations
to the covenants set forth in Section 6.01 hereof, reflecting such change.
47
6.12. REPORTING REQUIREMENTS. The Borrowers shall furnish to the Lenders:
(a) By the fifteenth (15th) day of each calendar month, and at other
times at the reasonable request of the Administrative Agent, a Borrowing Base
Certificate prepared on a consolidated basis for the Borrowers as of the close
of business for the preceding Business Day and accompanied by detailed Inventory
and accounts receivable aging reports, in form and substance satisfactory to the
Required Lenders and certified as true and complete by an officer of Company;
(b) Within five (5) Business Days after any written request by the
Administrative Agent or the Collateral Agent, an accounts payable aging report.
(c) As soon as available and in any event within thirty (30) days
after the end of each fiscal quarter, a balance sheet and statement of income of
Borrowers for such fiscal quarter and for the portion of the fiscal year ending
with such fiscal quarter, prepared on a consolidated basis in accordance with
GAAP in reasonable detail, and certified by an officer of Company (in a manner
satisfactory to the Required Lenders) as fairly presenting the financial
condition and results of operations of the Borrowers, together with a Compliance
Certificate;
(d) As soon as available and in any event within one hundred twenty
(120) days after the end of each fiscal year of the Borrowers, an audited
balance sheet and statements of income and cash flows of the Borrowers for such
fiscal year, prepared on a consolidated basis in accordance with GAAP in
reasonable detail and accompanied by an unqualified opinion of independent
certified public accountants acceptable to the Required Lenders, together with a
Compliance Certificate;
(e) Promptly upon receipt thereof, copies of all material reports or
letters submitted to the Borrowers by any auditors or accountants in connection
with any annual, interim, or special audit;
(f) As soon as possible but at least thirty (30) days prior to the
commencement of each fiscal year, a monthly business plan of Borrowers for such
year, including a projected balance sheet and income statements, accompanied by
a statement of assumptions and certified by an officer of the Company in a
manner reasonably acceptable to the Required Lenders;
(g) Promptly upon the filing thereof, copies of all filings made
by the Borrowers with the Securities and Exchange Commission;
48
(h) As soon as possible and in any event within five (5) Business
Days after knowledge thereof by an officer of any of the Borrowers, a notice of
the occurrence of any material Default or Event of Default, setting forth the
details thereof, and the action being taken or proposed to be taken with respect
thereto;
(i) As soon as possible and in any event within five (5) Business
Days, notice of any Litigation pending against the Borrowers which, if
determined adversely, could result in liability of one million dollars
($1,000,000) or more or any Material Adverse Change, together with a statement
of an officer of Company describing the allegations of such Litigation, and the
action being taken or proposed to be taken with respect thereto;
(j) Promptly after filing or receipt thereof, copies of all reports
and notices that any of the Borrowers furnishes to or receives from any holder
of any Debt or Contingent Liability, in any such case relating to a material
breach, material default or event of default thereunder, or otherwise relating
to any event or circumstance that could result in a material Default or Event of
Default; and
(k) Promptly upon request, such information concerning the Borrowing
Base, Accounts, Inventory, the Borrowers' financial condition, Property,
business, affairs or prospects, and other matters, as the Required Lenders from
time to time reasonably may request.
6.13. RESTRICTED PAYMENTS. Without the prior written consent of the
Required Lenders, the Borrowers shall not declare or pay any dividends or make
any other payments on their capital stock or purchase, redeem, or otherwise
retire any equity securities or any warrant, option, or other right to acquire
such equity securities, or make any other payment or distribution (other than a
dividend payable solely in the Company's common shares), either direct or
indirect, to its shareholders (whether in respect of stock or in respect of
indebtedness) ("Restricted Payments") except for:
(a) payments between the Borrowers, except for any such payment that
would violation Section 6.16 of this Agreement;
(b) payments by any Subsidiary of any dividend or other distribution
to the Company or to another Subsidiary (other than a Real Estate Subsidiary) as
long as the Company does not distribute to shareholders any such dividend or
other distribution, except as otherwise permitted by this Section;
49
(c) payments of dividends to the owners of common stock not in
excess of ten percent (10%) of the Borrowers' consolidated net income after tax
for the immediately preceding fiscal year; and
(d) payments for stock redemptions or for retirement of warrants,
options, or other rights to acquire equity securities of the Borrowers not
exceeding ten million dollars ($10,000,000) in any fiscal year.
6.14. LIMITATIONS ON CAPITAL EXPENDITURES. The Borrowers shall not
without the prior written consent of the Required Lenders, which consent shall
not be unreasonably withheld, make:
(a) capital expenditures for leasehold improvements of more than two
million dollars ($2,000,000) in any year;
(b) other capital expenditures exceeding fifteen million dollars
($15,000,000) per year.
6.15. TRANSACTIONS WITH AFFILIATES. Except as permitted herein, no
Borrower shall enter into or be party to a transaction with an Affiliate (except
another Borrower), except on terms no less favorable than could be obtained on
an arm's-length basis with a Person that is not an Affiliate. No Borrower shall
make any loans or advances to any of its officers, shareholders or other
Affiliates (except another Borrower), except for draws for commissioned and
seasonally compensated employees and advances made for customary travel expenses
incurred in the conduct of the Borrower's business. No Borrower shall make any
loans or advances to any Subsidiary of the Company that is not a Borrower.
6.16. NO TRANSFERS TO REAL ESTATE SUBSIDIARIES. Except for payments of
rent and other amounts required to be paid under the Borrowers' leases with the
Real Estate Subsidiaries (all of which shall be reasonable), the Borrowers shall
not transfer any Property whatsoever (other than Real Property Interests) to the
Real Estate Subsidiaries without the prior written consent of the Required
Lenders.
ARTICLE VII
EVENTS OF DEFAULT
7.01. EVENTS OF DEFAULT. Each of the following shall be an "Event of
Default" hereunder, if the same shall occur for any reason whatsoever, whether
50
voluntary or involuntary, by operation of Law or otherwise, unless waived in
writing by the Required Lenders:
(a) Borrowers shall either (1) fail to pay any principal owing
hereunder when due (without any grace period); or (2) Borrowers shall fail to
pay any interest or other amounts payable under any Loan Documents within
fifteen (15) days after the due date therefor;
(b) Any material representation or warranty of any Borrower made in
connection with this Agreement or any transactions contemplated hereby shall be
incorrect or misleading in any material respect when given;
(c) Borrowers shall fail to perform or observe any other term or
covenant contained in any of their respective Loan Documents, and such Default
shall not be cured within thirty (30) days after the earlier of knowledge
thereof by an officer of Borrowers, or after written notice of the Default is
delivered by the Administrative Agent to the Company, but if the Default is
subject to cure (it being agreed that for this purpose Defaults under Sections
6.01(a), 6.01(b) and 6.01(c) are among the Defaults that are subject to cure)
and the cure is being diligently pursued by appropriate means at the end of such
thirty (30) days, then the Borrowers shall have an additional thirty (30) days
thereafter to complete the cure of the Default (which shall mean, in the case of
any Defaults under Sections 6.01(a), 6.01(b), and 6.01(c), that such financial
covenants will be tested as of the end of the calendar month next succeeding the
last month included in the original period with respect to which the cure of a
Default is required); provided, however, that if the same Default shall occur
more than two (2) times in any twelve (12) month period, then that Default no
longer shall be subject to cure during such twelve (12) month period without the
written consent of the Required Lenders.
(d) Any provision of any Loan Documents shall, for any reason, not
be valid and binding on any Borrower; any Borrower shall not have been Solvent
when it delivered this Agreement to Lenders; or any material breach, material
Default or event of default shall occur or exist under any Loan Documents after
any applicable grace period;
(e) Any of the following shall occur: (1) any Borrower shall make an
assignment for the benefit of creditors, be insolvent or unable to pay its debts
as they come due, or cease to be Solvent; (2) the Company ceases doing business
as a going concern; (3) any Borrower other than the Company shall cease doing
business as a going concern without the consent of the Required Lenders, which
consent shall not be unreasonably withheld; (4) any Borrower shall petition any
Governmental Body for the appointment of a trustee, receiver, or liquidator of
it or any of its assets, or shall commence any
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proceedings under any bankruptcy, reorganization, insolvency, moratorium,
liquidation or other debtor relief Laws; (5) any petition shall be filed, or any
such proceedings shall be commenced, against any Borrower under any such Laws
and the same is not dismissed or otherwise discharged within ninety (90) days,
or an order, judgment or decree shall be entered approving such petition or
appointing any trustee, receiver or liquidator for any Borrower, or any of their
assets; or (6) any final order, judgment, or decree shall be entered decreeing
the dissolution, split-up or divestiture of assets of any Borrower;
(f) Any lender(s) under any of the real estate Debt shown on Exhibit
F hereto shall declare such Debt due and payable prior to its stated maturity as
a result of breach of a due-on-sale clause, and such action shall result in a
Material Adverse Change; the Borrowers shall fail to make any payment when due
with respect to any other Debt or Contingent Liability of one million dollars
($1,000,000) or more in the aggregate, and such failure shall continue after any
applicable grace period; the Borrowers shall fail to observe any material term
or condition of any agreement relating to any other Debt or Contingent Liability
of one million dollars ($1,000,000) or more in the aggregate, and such failure
shall continue after any applicable grace period; or any such other Debt or
Contingent Liability of one million dollars ($1,000,000) or more in the
aggregate shall be declared to be due and payable, or required to be prepaid,
prior to the stated maturity thereof; provided, however, it shall not be an
Event of Default if the Borrowers shall fail to make any payment when due with
respect to any Debt to a manufacturer or vendor of Inventory if such Borrowers
are in good faith contesting the payment of such Debt and the aggregate amount
of all such contested Debt does not exceed two million, five hundred thousand
dollars ($2,500,000);
(g) The Borrowers shall have any final judgment(s) outstanding
against them for the payment of two million dollars ($2,000,000) or more in
excess of insurance, and such judgment(s) shall remain unstayed and unpaid for
over thirty (30) days;
(h) There shall be an issuance of an order of attachment against the
Borrowers or any material portion of their Property, or there shall be damage to
or destruction of a substantial part of the Borrowers' assets that is not
covered by insurance;
(i) Any investigation or proceeding shall be instituted against any
of the Borrowers under or with respect to any Environmental Laws that could
reasonably be expected to result in any penalty, fine, remediation costs or
other damages of two million dollars ($2,000,000) or more in excess of
insurance;
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(j) Company shall have any material change in its management,
without prior written consent of the Required Lenders, or there shall be a
Change of Control, without prior written consent of the Required Lenders; or
(k) The Required Lenders shall determine that there has been a
Material Adverse Change.
7.02. REMEDIES UPON EVENT OF DEFAULT. If an Event of Default described in
Section 7.01(e) hereof shall occur with respect to any Borrower all amounts
owing to the Lenders shall, to the extent permitted by applicable Law, become
immediately due and payable without any action by the Lenders, and without
diligence, presentment, demand, protest, notice of protest or intent to
accelerate, or notice of any other kind, all of which are hereby waived to the
fullest extent permitted by Law. If any other Event of Default shall occur and
be continuing, the Lenders may do any one or more of the following from time to
time:
(a) Cease making Advances under the Commitment;
(b) Declare all Advances, interest and other amounts owing to the
Lenders immediately due and payable, whereupon they shall be due and payable
without diligence, presentment, demand, protest, notice of protest or intent to
accelerate, or notice of any other kind, all of which are hereby waived to the
fullest extent permitted by Law;
(c) Terminate or reduce the Commitment; and/or
(d) Exercise any other Rights afforded under any agreement, by Law,
at equity or otherwise, including those Rights of a secured party under the
Uniform Commercial Code. Such Rights shall include the right to cancel any
unfunded Advances, to direct the Borrowers to return any Inventory to a vendor
or manufacturer thereof for credit or refund, to enter any of Borrowers'
premises with or without legal process, but without force, and/or to take
possession of and remove Collateral, and books and records relating to
Collateral. At the Collateral Agent's request during an Event of Default, the
Borrowers will assemble, prepare for removal and make available to the
Collateral Agent at a place to be designated by the Collateral Agent which is
reasonably convenient to both parties such items of Collateral as the Collateral
Agent may from time to time request. During the continuance of an Event of
Default, the Collateral Agent may take control of any funds generated by the
Collateral, notify Account Debtors to make payment to an account or location
designated by the Collateral Agent, and in the Collateral Agent's name or any
Borrower's name, demand, collect, receipt for, settle, compromise, xxx for,
repossess, accept returns of, foreclose or realize upon any Collateral,
including
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without limitation Accounts and related instruments and security therefor. The
Borrowers waive any and all rights that any of them may have to a notice prior
to seizure by any Lender of any Collateral. Ten (10) days' written notice of a
public sale date or the date after which a private sale may occur shall be a
reasonable notice. The Lenders shall not be charged with responsibility for the
accuracy or validity of any document or for the existence or value of any
Collateral, and shall not be liable for failure to collect any amounts owing on
an Account or instrument. The Borrowers waive all relief from all appraisement,
valuation, deficiency or exemption Laws now in force or hereafter enacted. The
Lenders shall not be required and Borrowers hereby waive any and all rights to
require the Lenders, (1) to prosecute or seek to enforce any remedies against
any particular Borrower and/or (2) to require the Lenders to seek to enforce or
resort to any remedies with respect to any security interests, liens or
encumbrances granted to Collateral Agent for the benefit of the Lenders by any
particular Borrower. The Lenders, in their discretion, may enforce this
Agreement against any Borrower or any Collateral of any Borrower. NO LENDER
SHALL BE LIABLE FOR ANY ACT OR OMISSION OF ITS OFFICERS, AGENTS OR EMPLOYEES,
ABSENT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
7.03. POWER OF ATTORNEY. The Borrowers hereby irrevocably appoint the
Administrative Agent, including any officer or employee of the Administrative
Agent as the Administrative Agent may designate, as the Borrowers' true and
lawful attorney-in-fact with power of substitution to do the following acts on
behalf of the Borrowers' during the continuance of any Event of Default: to
prepare, execute and deliver in the name of Borrowers security instruments (but
not expanding the definition of any Collateral), financing statements, lien
filings and certificates of title relating to Collateral; to endorse any
Borrower's name upon any notes, checks, drafts, money orders and other forms of
instruments made payable to any Borrower and relating to Collateral; and
generally to perform all acts and do all things necessary and proper in
connection with the transactions contemplated hereby or in discharge of the
powers hereby conferred, including the making of affidavits and the
acknowledgment of instruments as fully as if done by the Borrowers. The
foregoing powers are coupled with an interest and shall be irrevocable, as long
as the Commitment or any Obligations of Borrowers to the Lenders remain
outstanding.
7.04. CUMULATIVE RIGHTS. All Rights available to the Lenders under the
Loan Documents shall be cumulative of and in addition to all other Rights under
any other agreement, at Law or in equity. The acceptance by the Lenders at any
time and from time to time of partial payment of any amount owing under any Loan
Documents shall not be deemed to be a waiver of any Event of Default then
existing. No waiver by the Lenders of an Event of Default
54
shall be deemed to be a waiver of any Event of Default other than such Event of
Default. No delay or omission by the Lenders in exercising any Right under the
Loan Documents shall impair such Right or be construed as a waiver thereof or an
acquiescence therein, nor 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.
7.05. PERFORMANCE BY LENDERS; EXPENDITURES. Should any covenant of
Borrowers fail to be performed in accordance with the terms of the Loan
Documents, the Lenders may, at their option, attempt to perform such covenant on
behalf of Borrowers. It is expressly understood, however, that the Lenders do
not assume and shall never have any liability or responsibility for the
performance of any obligations of Borrowers. Any amounts expended or incurred by
any Lender in the performance of any such act or in the enforcement of this
Agreement (including reasonable attorneys' fees) shall constitute part of the
obligations secured hereunder, will bear interest at the Default Rate and will
be payable upon demand.
7.06. CONTROL. None of the provisions hereof shall be deemed to give the
Lenders any right to exercise control over the affairs and/or management of the
Borrowers, which the parties agree is retained by the Borrowers.
ARTICLE VIII
THE AGENTS
8.01. APPOINTMENT OF AGENTS.
(a) Each Lender hereby appoints KeyBank as the Administrative Agent
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement and the
Loan Documents as are delegated to the Administrative Agent by the terms hereof
or thereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement or the Loan Documents (including, without limitation, enforcement or
collection of the Promissory Notes), the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of the Promissory
Notes; provided, however, that the Administrative Agent shall not be required to
take any action that exposes the Administrative Agent to personal liability or
that is contrary to this Agreement, the Loan Documents or
55
applicable Law. The Administrative Agent agrees to give to each Lender prompt
notice of each notice given to it by the Borrowers pursuant to the terms of this
Agreement.
(b) Each Lender hereby appoints BOA as the Collateral Agent on the
following terms:
(1) Each Lender hereby authorizes the Collateral Agent to take
such action as agent on its behalf and to exercise such powers and
discretion under this Agreement and the Loan Documents as are delegated to
the Collateral Agent by the terms hereof or thereof, together with such
powers and discretion as are reasonably incidental thereto.
(2) The Collateral Agent shall be named as the secured party
holding the Lenders' security interests in the Collateral as security for
the Obligations.
(3) The following rules and procedures shall apply to
Collateral inspections by the Collateral Agent:
(A) If on the fifteenth (15th) day of any calendar month
the unpaid principal balance of Advances under this Agreement plus accrued
but unpaid interest thereon shall be less than eighty percent (80%) of the
portion of the Borrowing Base consisting of Eligible New Inventory and
Eligible Used Inventory, as reflected in the Borrowing Base Certificate
required to be delivered on that date, the Collateral Agent will during
the next thirty (30) days inspect Units having an aggregate value on the
Borrowers' books at least equal to twenty-five percent (25%) of the
portion of the Borrowing Base consisting of Eligible New Inventory and
Eligible Used Inventory described in such Borrowing Base Certificate.
(B) If on the fifteenth (15th) day of any calendar month
the unpaid principal balance of Advances under this Agreement plus accrued
but unpaid interest thereon shall be equal to or greater than eighty
percent (80%) of the portion of the Borrowing Base consisting of Eligible
New Inventory and Eligible Used Inventory, as reflected in the Borrowing
Base Certificate required to be delivered on that date, the Collateral
Agent will during the next thirty (30) days inspect Units having an
aggregate value on the Borrowers' books at least equal to fifty percent
(50%) of the portion of the Borrowing Base consisting of Eligible New
Inventory and Eligible Used Inventory described in the Borrowing Base
Certificate.
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(C) On at least a semi-annual basis, the Collateral
Agent will inspect all Eligible New Inventory and Eligible Used Inventory
at each location at which Eligible New Inventory and Eligible Used
Inventory are located.
(D) The Collateral Agent will not conduct any routine
inspection or inventory of Eligible Parts Inventory. If at any time the
unpaid principal balance of Advances under this Agreement plus accrued but
unpaid interest thereon shall be equal to or greater than one hundred
percent (100%) of the portion of the Borrowing Base consisting of Eligible
New Inventory and Eligible Used Inventory, as reflected on the most recent
Borrowing Base Certificate, the Collateral Agent may, at the request of
the Required Lenders and at the Borrowers' expense, engage a third-party
inventory company to test (by statistical sampling or otherwise) the
Borrowers' Eligible Parts Inventory described in such Borrowing Base
Certificate.
(E) The Collateral Agent will not conduct any routine
confirmation or inspection of Contracts in Transit. If at any time the
unpaid principal balance of Advances under this Agreement plus accrued but
unpaid interest thereon shall be equal to or greater than one hundred
percent (100%) of the portion of the Borrowing Base consisting of Eligible
New Inventory and Eligible Used Inventory, as reflected on the most recent
Borrowing Base Certificate, the Collateral Agent may, at the request of
the Required Lenders and at the Borrowers' expense, engage a third-party
auditor to confirm or inspect (by statistical sampling or otherwise) the
Borrowers' Contracts in Transit described in such Borrowing Base
Certificate.
(4) The Collateral Agent will visit the Company's headquarters
from time to time to conduct a Field Audit with a view toward assuring
that the Company's representations in the Borrowing Base Certificates are
reasonable and are presented using numbers derived in accordance with
GAAP. Such Field Audit may include or consist entirely of sampling of
invoices representing inventory purchases and Accounts. The frequency of
such Field Audits shall be as follows:
(A) If any two successive monthly Borrowing Base
Certificates shall reveal that the unpaid principal balance of Advances
under this Agreement plus accrued but unpaid interest thereon shall equal
or exceed ninety percent (90%) of the aggregate amount included in the
Borrowing Base in respect of Eligible New Inventory and Eligible Used
Inventory, such Field Audits shall be conducted on a quarterly basis until
such time as any two successive monthly Borrowing Base
57
Certificates shall reveal that the unpaid principal balance of Advances
under this Agreement plus accrued but unpaid interest thereon shall equal
less than ninety percent (90%) of the aggregate amount included in the
Borrowing Base in respect of Eligible New Inventory and Eligible Used
Inventory.
(B) If any two successive monthly Borrowing Base
Certificates shall reveal that the unpaid principal balance of Advances
under this Agreement plus accrued but unpaid interest thereon shall be
less than ninety percent (90%) of the aggregate amount included in the
Borrowing Base in respect of Eligible New Inventory and Eligible Used
Inventory but shall equal or exceed eighty percent (80%) of the aggregate
amount included in the Borrowing Base in respect of Eligible New Inventory
and Eligible Used Inventory, such Field Audits shall be conducted on a
semi-annual basis until such time as any two successive monthly Borrowing
Base Certificates shall reveal that the unpaid principal balance of
Advances under this Agreement plus accrued but unpaid interest thereon
shall equal less than eighty percent (80%) of the aggregate amount
included in the Borrowing Base in respect of Eligible New Inventory and
Eligible Used Inventory.
(C) In all cases not described in Section 8.01(b)(4)(A)
or Section 8.01(b)(4)(B) above, such Field Audits shall be conducted every
twelve (12) months after the preceding Field Audit.
(5) As to any matters not expressly provided for by this
Agreement or the Loan Documents (including, without limitation,
enforcement or collection of the Promissory Notes), the Collateral Agent
shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all
Lenders and all holders of Promissory Notes; provided, however, that the
Collateral Agent shall not be required to take any action that exposes the
Collateral Agent to personal liability or that is contrary to this
Agreement, the Loan Documents or applicable Law. The Collateral Agent
agrees to give to each Lender prompt notice of each notice given to it by
the Borrowers pursuant to the terms of this Agreement.
(6) The Collateral Agent will communicate the results of the
foregoing reviews to the Lenders within fifteen (15) Business Days of the
conclusion of the related field work.
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(7) From time to time at the request of the Required Lenders
made in the exercise of their reasonable discretion, but not more than
once in any twelve (12) month period in the absence of a material Default,
the Collateral Agent shall obtain at the Borrowers' expense such UCC, tax
lien, and judgment searches as the Required Lenders have requested.
(c) Each Lender hereby appoints BOA as the Documentation Agent and
authorizes the Documentation Agent to take such action as agent on its behalf
and to exercise such power and discretion under this Agreement and the Loan
Documents as are delegated to the Documentation Agent by the terms hereof or
thereof, together with such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement or the
Loan Documents (including, without limitation, enforcement or collection of the
Promissory Notes), the Documentation Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding upon all Lenders and all holders of the Promissory Notes; provided,
however, that the Documentation Agent shall not be required to take any action
that exposes the Documentation Agent to personal liability or that is contrary
to this Agreement, the Loan Documents or applicable Law. The Documentation Agent
agrees to give to each Lender prompt notice of each notice given to it by the
Borrowers pursuant to the terms of this Agreement. Notwithstanding the
foregoing, the Documentation Agent shall have no further duties and shall
perform no other services after the closing of the transactions contemplated by
this Agreement.
8.02. AGENTS' RELIANCE, ETC. An Agent, its directors, officers, agents or
employees shall not be liable for any action taken or omitted to be taken by it
or them under or in connection with this Agreement or any other Loan Document,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, each Agent: (a) may treat the
payee of any Promissory Note as the holder thereof until such Agent receives
conclusive evidence of a legally effective transfer in accordance with Section
9.04 of this Agreement; (b) may consult with legal counsel (including counsel
for the Borrowers), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement or any
other Loan Document; (d) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions
59
of this Agreement or any other Loan Document on the part of the Borrowers or to
inspect the Property (including the books and records) of the Borrowers;
provided, however, that the Collateral Agent has certain duties with respect to
the inspection of certain of the Collateral as set forth in Section 8.01(b) of
this Agreement; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, this Agreement or any other
Loan Document or any other instrument or document furnished pursuant hereto;
provided, however, that the Collateral Agent and the Documentation Agent (with
respect to the Documentation Agent, solely as to the period prior to the closing
of the transactions contemplated by this Agreement) have certain duties with
respect to filing and continuation of financing statements and Preferred Ship's
Mortgages (in certain cases) covering the Collateral; and (f) shall incur no
liability under or in respect of this Agreement or any other Loan Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram, electronic mail or telex) believed by it
to be genuine and signed or sent by the proper party or parties.
8.03. FUNDING RELIANCE, ETC. Unless the Administrative Agent shall have
been notified by telephone, confirmed in writing, by any Lender by 10:30 a.m.,
Cleveland time, at least one day prior to an Advance, that such Lender will not
make available the amount which would constitute its Pro Rata Percentage of such
Advance on the date specified therefor, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent and, in
reliance upon such assumption, make available to the Borrowers a corresponding
amount. If and to the extent that such Lender shall not have made such amount
available to the Administrative Agent, such Lender and the Borrowers severally
agree to repay the Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date the
Administrative Agent made such amount available to the Borrowers to the date
such amount is repaid to the Administrative Agent, at the interest rate
applicable at the time to Advances. Notwithstanding the foregoing, if the
Administrative Agent shall have been notified in any fashion by a Lender that
such Lender will not be making any particular Advance (irrespective of whether
under the circumstances the Administrative Agent would have been entitled, under
the first sentence of this Section, to assume that such Lender would be making
the Advance) or if a Lender has not deposited same day funds with the
Administrative Agent as required by Section 2.02, the Administrative Agent shall
not be required to make an Advance on behalf of such Lender. No Lender's
obligation to make an Advance shall be affected by any other Lender's failure to
make any Advance.
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8.04. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender and based
on the financial statements referred to in Section 5.04 and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
8.05. INDEMNIFICATION. The Lenders agree to indemnify each Agent (to the
extent not reimbursed by the Borrowers to the extent provided in the Loan
Documents), according to Pro Rata Percentages of each of them (or if no
Promissory Notes are at the time outstanding or if any Promissory Notes are held
by Persons that are not Lenders, according to the Pro Rata Percentages of their
Commitments), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against any Agent in any way relating to or arising out of this
Agreement or any other Loan Document or any action taken or omitted by any Agent
under this Agreement or any other Loan Document (collectively, the "Indemnified
Costs"); provided that no Lender shall be liable for any portion of the
Indemnified Costs resulting from an Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
each Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by such Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any other Loan Document, to the extent that such Agent is not reimbursed for
such expenses by the Borrowers to the extent provided in the Loan Documents. In
the case of any investigation, litigation or proceeding giving rise to any
Indemnified Costs, this Section 8.05 applies whether any such investigation,
litigation or proceeding is brought by an Agent, a Lender or a third party.
8.06. ADVANCES AND LOANS BY AGENTS AND THEIR AFFILIATES; OTHER AGENTS AND
AFFILIATES. If at any time any Lender is also an Agent hereunder, then, with
respect to its Commitment, the Advances made by it and the Promissory Note
issued to it, such Lender shall have the same rights, powers, obligations and
duties under this Agreement as any other Lender and may exercise the same as
though it were not an Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include such Lender in its individual capacity.
If at any time any Lender is also an Agent hereunder,
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such Lender and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, the Borrowers, any of their
Affiliates, and any Person who may do business with or own securities of the
Borrowers or any of their Affiliates, all as if such Lender were not an Agent
and without any duty to account therefor to the Lenders.
8.07. COMPENSATION OF AGENTS. Each Agent shall be entitled to certain
compensation for its services as follows:
(a) The Borrowers shall pay the Administrative Agent quarterly in
advance for each calendar quarter an Administrative Agent fee dependent upon the
Pricing Tier of the Borrowers for such calendar quarter, as follows:
Pricing Tier 1 $ 7,500 per calendar quarter
Pricing Tier 2 $ 7,500 per calendar quarter
Pricing Tier 3 $10,000 per calendar quarter
Pricing Tier 4 $12,500 per calendar quarter
(b) The Lenders will pay the Collateral Agent a fee of five hundred
dollars ($500) per month plus fifty-two dollars ($52) per location inspected,
other than the Company's headquarters location, and two dollars ($2) for each
Unit inspected in the manner contemplated by Section 8.01(b). The Collateral
Agent will xxxx the Administrative Agent on a quarterly basis for such services
and the Administrative Agent then will xxxx each Lender its Pro Rata Percentage
of such charges.
(c) The Borrowers will pay the Collateral Agent a fee of seven
hundred fifty dollars ($750) per day plus out of pocket expenses for (1) the
Field Audits contemplated by Section 8.01(b)(4), and (2) any additional Field
Audits that the Required Lenders, in their reasonable discretion, deem it
necessary for the Collateral Agent to conduct on behalf of the Lenders at the
Company's headquarters.
(d) The Documentation Agent's fee shall be five thousand dollars
($5,000), which shall be payable by the Borrowers at the closing of the
transactions contemplated by this Agreement. The Documentation Agent shall have
no further duties and shall perform no other services after the closing of the
transactions contemplated by this Agreement.
8.08. SUCCESSOR AGENTS. An Agent may resign at any time by giving at least
thirty (30) days' prior written notice thereof to the Lenders and the Borrowers
and may be removed at any time with or without cause by all of the Lenders other
than the Lender being removed. Upon any such resignation or
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removal, all of the Lenders (other than any Lender that has been removed as an
Agent) and the Borrowers, if not then in material Default, shall have the right
to appoint a successor Agent. If an Agent is being removed, the notice of
removal shall include the designation of a successor Agent approved by the other
Lenders and by the Borrowers if the Borrowers are not then in material Default.
If an Agent shall have given notice of its resignation and within thirty (30)
days after the giving of such notice no successor Agent shall have been so
appointed by the other Lenders and the Borrowers (or solely by the other Lenders
if the Borrowers are then in material Default) and shall have accepted such
appointment, then the retiring Agent may, on behalf of both the Lenders and the
Borrowers appoint a successor Agent to such Agent's capacity. In no event shall
the term of any Agent end until the successor Agent has been appointed and shall
have accepted such appointment. Any successor Agent shall be one of the Lenders
or a financial institution organized under the Laws of the U.S. (or any State
thereof) or a U.S. branch or agency of a commercial banking institution, in
either case having a combined capital and surplus of at least five hundred
million dollars ($500,000,000) or being a wholly owned subsidiary of a financial
institution that on a consolidated basis has combined capital and surplus of at
least five hundred million dollars ($500,000,000). Upon the successor Agent's
acceptance of any appointment as an Agent hereunder, such successor Agent shall
be entitled to receive from the retiring or removed Agent such documents of
transfer and assignment as such successor Agent reasonably may request, and
thereupon shall succeed to and become vested with all rights, powers, privileges
and duties of the retiring or removed Agent, and the retiring or removed Agent
shall be discharged from its duties and obligations under this Agreement. After
any Agent's resignation or removal hereunder as an Agent, the provisions of this
Article VIII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
9.01. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
any Loan Documents, nor consent to any departure by any Borrower therefrom,
shall be effective unless the same shall be in writing and signed by the
Required Lenders, or if so provided in this Agreement, by the Administrative
Agent or the Collateral Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. In the cases of any actions specified in clauses (a) through (h) of the
definition of "Required Lenders" and in any other case in which this Agreement
prescribes approval by all Lenders, no approval, waiver,
63
consent, or amendment shall be deemed given by the Lenders unless all of the
Lenders shall have approved such actions.
9.02. NOTICES. Unless otherwise provided herein, all notices, demands and
other communications under the Loan Documents shall be in writing and shall be
personally delivered, or sent by facsimile, national overnight courier service,
or certified mail (postage prepaid), to the following addresses:
(a) If to Borrowers:
MarineMax, Inc.
00000 X.X. 00 Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx XxXxxx
Fax: (000) 000-0000
64
with a copy to:
Xxxxxx X. Xxxx, Esq.
Xxxxxxxxx Xxxxxxx, LLP
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
(b) If to KeyBank as the Administrative Agent or a Lender:
KeyBank National Association
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Mail Code OH-01-02-0920
Xxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. xxx Xxxxx
Senior Vice President
with a copy to:
Xxxxxxx Xxxxxxx, Esq.
Sr. Vice Pres. & Assoc. General Counsel
Mail Code OH-01-27-0200
KeyBank National Association
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
(c) If to BOA as the Collateral Agent or as a Lender:
Banc of America Specialty Finance, Inc.
1355 Windward Concourse
Mail Code GA7-903-04-21
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxxx Xxxxxxxx
Senior Vice President
with a copy to:
Xxxx X. Xxxxx, Xx., Esq.
Bank of America Corporation
0000 Xxxxxxxxx Xxxx.
Xxxxxxxx 000, 0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
65
Fax: (000) 000-0000
66
(d) If to Transamerica:
Transamerica Commercial Finance Corporation
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxx Xxxxxxxxx
(e) If to Deutsche:
Deutsche Financial Services Corporation
0000 Xxxxxxxxx Xxxxx #000
Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Vice President Credit
with a copy to:
Deutsche Financial Services Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: General Counsel
or to such other address as any party shall hereafter designate in written
notice to the other party. All notices, demands and other communications will be
effective when so personally delivered or sent by facsimile, one (1) Business
Day after being sent by national overnight courier service, or five (5) days
after being so mailed; provided, however, that notices to the Lenders pursuant
to Article II hereof shall only be effective when received.
9.03. PARTIES IN INTEREST. The Loan Documents shall bind and inure to the
benefit of the parties hereto, and their successors and assigns. The Borrowers
may not assign or transfer any of their Rights or obligations hereunder (whether
voluntarily or by operation of Law), without the prior written consent of all of
the Lenders. Lenders may assign or participate their rights and obligations
under this Agreement as provided in Section 9.04.
9.04. ASSIGNMENTS AND PARTICIPATIONS.
(a) Assignments. No Lender shall have the right to assign its
interest in the Advances or the Commitment; provided, however, that any Lender
may at any time, without the consent of the Borrowers or the other Lenders,
assign all, but not less than all, of its Advances and Commitments to
67
one or more Affiliates. Although the assignees under this Section shall become
Lenders, no such assignment to Affiliates shall relieve the assigning Lender of
its obligations under this Agreement.
(b) Participations.
(1) Any Lender may at any time, without the consent of the
Borrowers or the other Lenders, sell or otherwise transfer to one or more
of its Affiliates all or any part of its participating interests in any of
the Advances, Commitments, or other interests of such Lender hereunder.
(2) Any Lender may at any time, with the consent of the
Company, which shall not be unreasonably withheld, sell to one or more
commercial banks, finance companies, funds, or other Persons that are not
Affiliates of the Lender, participating interests in any of the Advances,
Commitments, or other interests of such Lender hereunder; provided,
however, that:
(A) the amount of the participating interest sold to
such Person that is not an Affiliate of the Lender shall not exceed thirty
percent (30%) of such Lender's Pro Rata Percentage of the Commitment;
(B) unless otherwise agreed by all of the Lenders, any
Lender that serves as the Administrative Agent or the Collateral Agent
must hold for its own account, net of any such approved participations to
Persons other than Affiliates, at least twenty five percent (25%) of the
aggregate Advances and Commitment under this Agreement.
(3) No participation contemplated in this Section 9.04 shall
relieve such Lender from its Commitments or its other obligations
hereunder or under any other Loan Document. Such Lender shall remain
solely responsible for the performance of its Commitments and such other
obligations.
(4) The Borrowers and the Administrative Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and each of the other
Loan Documents and shall not deal with the Person (whether or not an
Affiliate of the Lender) purchasing or otherwise acquiring such
participation (a "Participant"); and
(5) No Participant shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other
68
Loan Document, except that such Lender may agree with any Participant that
such Lender will not, without such Participant's consent, agree to extend
the due date of any Advances under this Agreement.
9.05 ADDITION OF LENDERS. If the Borrowers shall request an increase in
the Commitment Amount and all of the existing Lenders approve the increase of
the Commitment Amount but do not want to commit for such increase for their own
accounts, then, with the approval of all Lenders, new Lenders may be admitted
under this Agreement. The aggregate amount of the Commitments of such new
Lenders shall not exceed the lesser of (a) the addition to the Commitment
Amount, or (b) the portion of the addition to the Commitment Amount that the
existing Lenders do not want to take for their own accounts. At the time when
any such new Lenders are added, each existing Lender shall assign to the Lenders
a portion of its outstanding Advances that shall result in the new Lender's
having a portion of the outstanding Advances that is the same as its Pro Rata
Percentage of the Commitment Amount, as increased.
9.06 REPLACEMENT OF LENDERS.
(a) If any Lender defaults in the performance of its obligations
under this Agreement, the Borrowers, with the consent of all of the Lenders
other than the defaulting Lender, shall have the right to replace the defaulting
Lender.
(b) If the Borrowers (if not in material Default) and all of the
other Lenders shall desire to replace any Lender, they may, upon thirty (30)
days prior written notice to the Lender and with or without cause, replace such
Lender with another Lender selected and approved by the Borrowers (if not in
material Default) and all such other Lenders and named in such notice to the
Lender being replaced. If such replacement shall occur prior to the first
anniversary of the date of this Agreement, the Borrowers, if they shall have
supported such replacement, or the other Lenders (based on their respective Pro
Rata Percentages, but calculated as hereinafter provided), if the Borrowers
shall not have supported such replacement (by virtue of the fact that the
Borrowers were in material Default) shall pay to the replaced Lender a
Commitment Reduction Fee from the effective date of such Lender's replacement to
the first anniversary of the date of this Agreement on the full amount of such
replaced Lender's Pro Rata Percentage of the Commitment. In addition, the
Borrowers, if they shall have supported such replacement, or the other Lenders
(based on their respective Pro Rata Percentages, but calculated as hereinafter
provided), if the Borrowers shall not have supported such replacement (by virtue
of the fact that the Borrowers were in material Default) shall pay to the
replaced Lender all costs, expenses, and reasonable attorneys' fees that the
replaced Lender incurs in connection with assigning to the
69
replacement Lender without recourse its interests as a Lender under the Loan
Documents. Any payments required to be made by the other Lenders to the replaced
Lender shall be apportioned among the other Lenders based on their respective
Pro Rata Percentages, so that each other Lender's share of the amounts payable
by the Lenders under this Section shall equal that fraction of the total of
which (1) the numerator is such other Lender's Pro Rata Percentage, and (2) the
denominator is the total Pro Rata Percentages of all such other Lenders.
(c) If any Lender replaced under this Section shall have been an
Agent (other than the Documentation Agent, which has no duties after the date of
this Agreement), then such Agent shall be deemed removed at the effective date
of such Lender's replacement, and the procedure for selection of a successor
Agent shall be as set forth in Section 8.08 of this Agreement.
9.07. COSTS, EXPENSES AND TAXES.
(a) Expenses for Initial Closing. The expenses for the documentation
and closing of the transaction contemplated hereby shall be borne as follows:
(1) the legal fees and expenses of counsel to the
Documentation Agent will be payable as follows: (A) the initial $65,000
will be billed to the Company, and (B) any amount in excess of $65,000
will be shared equally among the Lenders, with each Lender paying twenty
five percent (25%) of such expense.
(2) Except for the Documentation Agent, each party which
chooses to engage counsel on its own behalf in connection with the
documentation and closing of the transactions contemplated by this
Agreement shall be responsible for its own legal expenses.
(3) Travel expenses associated with closing and due diligence
are for the account of each individual Lender.
(b) Other Expenses. Other expenses incurred in connection with the
transactions contemplated by this Agreement or the other Loan Documents shall be
borne as follows:
(1) Borrowers, jointly and severally, agree to pay on demand
(A) all costs and expenses (including reasonable attorneys' fees) of the
Administrative Agent or the Collateral Agent in connection with any
extension, modification, waiver or release of any Loan Documents or any
Collateral, and (B) all costs and expenses of the Lenders incurred in
70
any work-out or enforcement of any Loan Documents, including reasonable
attorneys' fees and the costs and expenses of environmental or other
consultants.
(2) Borrowers shall pay any stamp, debt, recordation,
withholding and other Taxes payable in connection with any Loan Documents
or payments thereunder (other than Taxes on the overall net income of any
Lender), and agrees to save the Lenders harmless from and against all
liabilities relating to any Taxes.
All payments by Borrowers shall be made free and clear of and without deduction
for any Taxes of any nature now or hereafter existing.
9.08. INDEMNIFICATION BY BORROWERS. BORROWERS, JOINTLY AND SEVERALLY,
AGREE TO INDEMNIFY, DEFEND AND HOLD HARMLESS LENDERS, THEIR AFFILIATES, AND ALL
OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS, SUCCESSORS,
ATTORNEYS AND ASSIGNS, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, COSTS, EXPENSES
AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON,
INCURRED BY OR ASSERTED AGAINST ANY OF THEM IN ANY WAY RELATING TO OR ARISING
OUT OF ANY LOAN DOCUMENTS, ANY TRANSACTION RELATED HERETO OR THERETO, OR ANY
ACT, OMISSION OR TRANSACTION OF THE BORROWERS OR ANY OF THEIR AFFILIATES, OR ANY
OF THEIR DIRECTORS, OFFICERS, AGENTS, EMPLOYEES OR REPRESENTATIVES; PROVIDED,
HOWEVER, THAT BORROWERS SHALL NOT INDEMNIFY, DEFEND AND HOLD HARMLESS ANY
INDEMNIFIED PERSON FOR LOSSES OR DAMAGES THAT BORROWERS PROVE WERE CAUSED BY
SUCH PERSON'S WILLFUL MISCONDUCT, GROSS NEGLIGENCE OR OTHER NEGLIGENCE. THE
LENDERS SHALL NOT BE LIABLE TO THE BORROWERS FOR ANY CONSEQUENTIAL DAMAGES. This
indemnity shall survive repayment of the Obligations to the Lenders.
9.09. HAZARDOUS WASTE INDEMNIFICATION. The Borrowers, jointly and
severally, shall indemnify and hold harmless the Lenders, their Affiliates, and
all of their directors, officers, employees, representatives, agents,
successors, attorneys and assigns, from and against any loss, damage, cost,
expense or liability directly or indirectly arising out of or attributable to
the use, generation, manufacture, treatment, production, storage, release,
threatened release, discharge, disposal or presence of any Hazardous Materials
on, under or about the Borrowers' real property or operations or real property
leased to the Borrowers, including but not limited to attorneys' fees (including
the reasonable estimate of the allocated cost of in-house counsel and staff).
This indemnity shall survive repayment of the Obligations to the Lenders.
71
9.10. DISCLAIMER OF WARRANTY. BORROWERS ACKNOWLEDGE THAT LENDERS HAVE MADE
NO EXPRESS OR IMPLIED WARRANTIES WITH RESPECT TO ANY INVENTORY OR OTHER
COLLATERAL, INCLUDING ANY WARRANTY OF MERCHANTABILITY. BORROWERS IRREVOCABLY
WAIVE ANY CLAIMS AGAINST LENDERS WITH RESPECT TO THE INVENTORY AND OTHER
COLLATERAL WHETHER FOR BREACH OF WARRANTY OR OTHERWISE. Any such claims shall
not alter, diminish or otherwise impair Borrowers' liabilities or obligations to
the Lenders under the Loan Documents. The Lenders do not assume any obligations
of Borrowers relating to the Inventory, any Accounts, any contract obligations,
or any other obligations or duties arising from the Collateral.
9.11. RATE PROVISION. It is not the intention of any party to any Loan
Document to make an agreement violative of the Laws of any applicable
jurisdiction relating to usury. In no event shall Borrowers be obligated to pay
any amount in excess of the maximum amount of interest permitted under
applicable Law. If from any circumstance any Lender ever shall receive anything
of value deemed excess interest under applicable Law, an amount equal to such
excess shall be applied to the reduction of the principal amount of outstanding
Advances and any remainder shall be refunded to the payor.
9.12. SEVERABILITY; COUNTERPARTS. If any provision of any Loan Documents
is held to be illegal, invalid or unenforceable under present or future Laws
during the term thereof, such provision shall be fully severable, and the Loan
Documents shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part thereof. This Agreement and
the other Loan Documents may be executed in any number of counterparts.
9.13. GOVERNING LAW. This Agreement and the other Loan Documents shall be
governed by and construed in accordance with the Laws of the State of Georgia.
The state and federal courts located in Atlanta, Georgia, including the U.S.
District Court for the Northern District of Georgia, shall have jurisdiction to
determine any claim or dispute pertaining to this Agreement. The parties
expressly submit and consent to such jurisdiction, and waive any claim of
inconvenient forum.
9.14. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY THE LAWS OF
ANY FORUM STATE, THE PARTIES HERETO WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY
DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR
ANY RELATED MATTERS.
72
9.15. ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, this Credit and Security Agreement has been executed
and delivered by the parties as of the day and year first above written.
"BORROWERS"
MARINEMAX, INC., a Delaware corporation
/s/ Xxxxxxx X. XxXxxx
By:________________________________
Xxxxxxx X. XxXxxx
Vice President and Chief Financial
Officer
MARINEMAX OF SOUTHEAST FLORIDA, LLC, a
Delaware limited liability company
/s/ Xxxxxxx X. XxXxxx
By:________________________________
Xxxxxxx X. XxXxxx
Manager
MARINEMAX OF MINNESOTA, INC., a Minnesota
corporation
/s/ Xxxxxxx X. XxXxxx
By:________________________________
Xxxxxxx X. XxXxxx
Vice President
00
XXXXXXXXX XX XXXXXXXXX XXXXXXX, LLC, a
Delaware limited liability company
/s/ Xxxxxxx X. XxXxxx
By:________________________________
Xxxxxxx X. XxXxxx
Manager
MARINEMAX OF CENTRAL FLORIDA, LLC, a
Delaware limited liability company
/s/ Xxxxxxx X. XxXxxx
By:________________________________
Xxxxxxx X. XxXxxx
Manager
MARINEMAX OF SARASOTA, LLC, a Delaware
limited liability company
/s/ Xxxxxxx X. XxXxxx
By:________________________________
Xxxxxxx X. XxXxxx
Manager
MARINEMAX OF CALIFORNIA, INC., a California
corporation
/s/ Xxxxxxx X. XxXxxx
By:________________________________
Xxxxxxx X. XxXxxx
Assistant Vice President
74
MARINEMAX OF ARIZONA, INC., an Arizona
corporation
By: /s/ Xxxxxxx X. XxXxxx
________________________________
Xxxxxxx X. XxXxxx
Vice President
MARINEMAX MIDATLANTIC, LP, a Delaware
limited partnership
By: MarineMax New Jersey GP, Inc., its
general partner
By: /s/ Xxxxxxx X. XxXxxx
__________________________
Xxxxxxx X. XxXxxx
Vice President
MARINEMAX MOTOR YACHTS, LLC, a Delaware
limited liability company
By: /s/ Xxxxxxx X. XxXxxx
________________________________
Xxxxxxx X. XxXxxx
Manager
MARINEMAX OF LAS VEGAS, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. XxXxxx
________________________________
Xxxxxxx X. XxXxxx
Treasurer
75
MARINEMAX OF NORTH CAROLINA, INC., a North
Carolina corporation
By: /s/ Xxxxxxx X. XxXxxx
________________________________
Xxxxxxx X. XxXxxx
Vice President
MARINEMAX OF OHIO, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. XxXxxx
________________________________
Xxxxxxx X. XxXxxx
Vice President
MARINEMAX OF UTAH, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. XxXxxx
________________________________
Xxxxxxx X. XxXxxx
Vice President
MARINEMAX TX, L.P., a Delaware limited
partnership
By: Xxxxx XX, L.L.C., its general partner
By: 11502 Xxxxx, Inc, its sole member
By: /s/ Xxxx X. Xxxxx
__________________________
Xxxx X. Xxxxx
Secretary
76
MARINEMAX OF GEORGIA, INC., a Georgia
corporation
By: /s/ Xxxxxxx X. XxXxxx
________________________________
Xxxxxxx X. XxXxxx
Vice President
XXXXXXX BOAT COMPANY, a Florida corporation
By: /s/ Xxxxxxx X. XxXxxx
________________________________
Xxxxxxx X. XxXxxx
Vice President
XXXXXXX REALTY, L.L.C., a Delaware limited
liability company
By: MarineMax, Inc., its sole member
By: /s/ Xxxxxxx X. XxXxxx
__________________________
Xxxxxxx X. XxXxxx
Vice President and Chief
Financial Officer
C & N MARINE REALTY, L.L.C., a Delaware
limited liability company
By: MarineMax, Inc., its sole member
By: /s/ Xxxxxxx X. XxXxxx
__________________________
Xxxxxxx X. XxXxxx
Vice President and Chief
Financial Officer
77
GULFWIND SOUTH REALTY, L.L.C., a Delaware
limited liability company
By: MarineMax, Inc., its sole member
By: /s/ Xxxxxxx X. XxXxxx
__________________________
Xxxxxxx X. XxXxxx
Vice President and Chief
Financial Officer
XXXXXXXX'X REALTY, L.L.C., a Delaware
limited liability company
By: MarineMax, Inc., its sole member
By: /s/ Xxxxxxx X. XxXxxx
__________________________
Xxxxxxx X. XxXxxx
Vice President and Chief
Financial Officer
XXXXXXXX'X REALTY CALIFORNIA, L.L.C., a
Delaware limited liability company
By: MarineMax, Inc., its sole member
By: /s/ Xxxxxxx X. XxXxxx
__________________________
Xxxxxxx X. XxXxxx
Vice President and Chief
Financial Officer
78
MARINA DRIVE REALTY I, L.L.C., a Delaware
limited liability company
By: MarineMax, Inc., its sole member
By: /s/ Xxxxxxx X. XxXxxx
__________________________
Xxxxxxx X. XxXxxx
Vice President and Chief
Financial Officer
MARINA DRIVE REALTY II, L.L.C., a Delaware
limited liability company
By: MarineMax, Inc., its sole member
By: /s/ Xxxxxxx X. XxXxxx
__________________________
Xxxxxxx X. XxXxxx
Vice President and Chief
Financial Officer
XXXXXX XXXXXX REALTY, L.L.C., a Delaware
limited liability company
By: MarineMax, Inc., its sole member
By: /s/ Xxxxxxx X. XxXxxx
__________________________
Xxxxxxx X. XxXxxx
Vice President and Chief
Financial Officer
79
XXXXX XX, L.L.C., a Delaware limited
liability company
By: 11502 Xxxxx, Inc., its sole member
By: /s/ Xxxx X. Xxxxx
--------------------------
Xxxx X. Xxxxx
Secretary
MARINEMAX NEW JERSEY GP, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Xxxxxxx X. XxXxxx
Vice President
MARINEMAX NJ PARTNERS, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Xxxxxxx X. XxXxxx
Vice President
MARINEMAX OF NEW JERSEY HOLDINGS, INC., a
Delaware corporation
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Xxxxxxx X. XxXxxx
Vice President
80
MMX GP, LLC, a Delaware limited liability
company
By: /s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
Authorized Representative
MMX HOLDINGS, LLC, a Delaware limited
liability company
By: /s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
Authorized Representative
MMX INTERESTS, LLC, a Delaware limited
liability company
By: /s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
Authorized Representative
MMX MEMBER, INC., a Delaware corporation
By: /s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
Authorized Representative
81
MMX PARTNERS, INC., a Delaware corporation
By: /s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
Authorized Representative
MMX VENTURES, LP, a Delaware limited
partnership
By: MMX GP, L.L.C., its general partner
By: /s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
Authorized Representative
11502 XXXXX, INC., a Nevada corporation
By: /s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
Secretary
XXXXX XX, INC., a Nevada corporation
By: /s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
Secretary
82
NEWCOAST FINANCIAL SERVICES, INC., a
Delaware corporation
By: /s/ Xxxxxxx X. XxXxxx
________________________________
Xxxxxxx X. XxXxxx
Vice President
MARINEMAX SERVICES, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. XxXxxx
________________________________
Xxxxxxx X. XxXxxx
Vice President
MARINEMAX U.S.A., INC., a Nevada corporation
By: /s/ Xxxx X. Xxxxx
________________________________
Xxxx X. Xxxxx
Secretary
83
"ADMINISTRATIVE AGENT"
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxx X. xxx Xxxxx
----------------------------------
Name: Xxxxx X. xxx Xxxxx
--------------------------
Title: SVP
------------------------
STATE OF OHIO
COUNTY OF Cuyahoga
---------------
The foregoing instrument was acknowledged before me this 19th day of December,
----
2001, by Xxxxx X. xxx Xxxxx as the of
------------------------------- ---------------------------
KEYBANK NATIONAL ASSOCIATION, a national banking association, on behalf of the
association. He [ ] is personally known to me or [X] has produced
Drivers License as identification.
------------------------------
/s/ Xxxxxx X. Xxxxx-Xxxxxxxx
------------------------------------
Signature of Notary Public (NOTARY SEAL)
Print Name: Xxxxxx X. Xxxxx-Xxxxxxxx
------------------------
Notary Public - State of Ohio
-----------
My Commission Expires: 11-25-03
--------------
Commission No:
----------------------
84
"COLLATERAL AGENT" AND
"DOCUMENTATION AGENT"
BANC OF AMERICA SPECIALTY
FINANCE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------------
Title: Senior Vice President
------------------------
STATE OF Georgia
----------------
COUNTY OF Xxxxxx
---------------
The foregoing instrument was acknowledged before me this 20th day of December,
----
2001, by Xxxxxxx X. Xxxxxxxx as the Senior Vice President of
------------------------------- ---------------------------
BANC OF AMERICA SPECIALTY FINANCE, INC., a North Carolina Corporation, on behalf
of the Corporation. He [ ] is personally known to me or [X] has produced
drivers license as identification.
------------------------------
/s/ Xxxxx X. Xxxxxx
------------------------------------
Signature of Notary Public (NOTARY SEAL)
Print Name: Xxxxx X. Xxxxxx
------------------------
Notary Public - State of
-----------
My Commission Expires:
--------------
Commission No:
----------------------
85
"LENDERS"
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxx X. xxx Xxxxx
___________________________________
Name: Xxxxx X. xxx Xxxxx
___________________________
Title: SVP
_________________________
STATE OF OHIO
COUNTY OF CUYAHOGA
The foregoing instrument was acknowledged before me this 19th day of December,
2001, by Xxxxx X. xxx Xxxxx as the ___________________________ of KEYBANK
NATIONAL ASSOCIATION, a national banking association, on behalf of the
association. He [ ] is personally known to me or [x] has produced license as
identification.
/s/ Xxxxxx X. Xxxxx-Xxxxxxxx
____________________________________
Signature of Notary Public (NOTARY SEAL)
Print Name: ________________________
Notary Public - State of ___________
My Commission Expires:______________
Commission No:______________________
86
BANC OF AMERICA SPECIALTY
FINANCE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxxx X. Xxxxxxxx
__________________________
Title: Senior Vice President
__________________________
STATE OF GEORGIA
COUNTY OF XXXXXX
The foregoing instrument was acknowledged before me this 20th day of December,
2001, by Xxxxxxx X. Xxxxxxxx as the Senior Vice President of BANC OF AMERICA
SPECIALTY FINANCE, INC. a North Carolina Corporation, on behalf of the
Corporation. He [ ] is personally known to me or [ ] has produced
________________________________________ as identification.
/s/ Xxxxx X. Xxxxxx
____________________________________
Signature of Notary Public (NOTARY SEAL)
Print Name: Xxxxx X. Xxxxxx
________________________
Notary Public - State of ___________
My Commission Expires:______________
Commission No:______________________
87
TRANSAMERICA COMMERCIAL
FINANCE CORPORATION
By: /s/ Xxxxxxxx Xxxx
_______________________________
Xxxxxxxx Xxxx
Vice President
STATE OF ILLINOIS
COUNTY OF XXXX
_____
The foregoing instrument was acknowledged before me this 20th day of December,
----
2001, by Xxxxxxxx Xxxx as the Vice President of TRANSAMERICA COMMERCIAL FINANCE
CORPORATION, a Delaware corporation, on behalf of the corporation. She [ ]is
personally known to me or [X] has produced ______________________________ as
identification.
/s/ Xxx X. Xxxxxxxx
____________________________________
Signature of Notary Public (NOTARY SEAL)
Print Name: Xxx X. Xxxxxxxx
________________________
Notary Public - State of Illinois
___________
My Commission Expires: 3/20/04
______________
Commission No:______________________
88
DEUTSCHE FINANCIAL
SERVICES CORPORATION
By: /s/ Xxxxx XxxXxxxxxx
_________________________________
Name: Xxxxx XxxXxxxxxx
Title: Marine Channel President
STATE OF MICHIGAN
COUNTY OF OAKLAND
The foregoing instrument was acknowledged before me this 19th day of December,
2001, by Xxxxx XxxXxxxxxx as the Marine Channel President of DEUTSCHE FINANCIAL
SERVICES CORPORATION, a Nevada corporation, on behalf of the corporation. He [X]
is personally known to me or [ ] has produced ______________________________ as
identification.
/s/ Xxxxxxxxx Xxxxx
____________________________________
Signature of Notary Public (NOTARY SEAL)
Print Name: Xxxxxxxxx Xxxxx
________________________
Notary Public - State of Michigan
___________
My Commission Expires: 8-3-2004
______________
Commission No: N/A
______________________
89
