LOAN AGREEMENT
Dated as of September 20, 2000
INTEGRATED BRANDS INC., a New Jersey corporation, having its principal
place of business at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000
("Integrated" or the "Borrower"), COOLBRANDS INTERNATIONAL INC., a Canadian
corporation, having its principal place of business at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 ("Coolbrands" or a "Guarantor"), KAYLA FOODS
INT'L (BARBADOS) INC., a Barbados corporation, having its principal place of
business at 00 Xxxx Xxxx, Xxxxxxxxxx, Xx. Xxxxxxx, Xxxxxxxx, XX ("Kayla"),
XXXXXXX'X, INC., a Delaware corporation, having its principal place of business
at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 ("Swensen's"), XXXXXXX'X
ICE CREAM COMPANY, a California corporation, having its principal place of
business at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 ("Ice Cream"), EP
ACQUISITION CORP., a Virginia corporation, having its principal place of
business at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 ("EP"), YOGEN FRUZ
ACQUISITIONS INC., a Nevada corporation, having its principal place of business
at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 ("Yogen Fruz"), XXXXXXX'X
INDUSTRIES, INC., an Illinois corporation, having its principal place of
business at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 ("Xxxxxxx"),
NORTHERN LIGHTS FROZEN DESSERTS, INC., a Utah corporation, having its principal
place of business at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000,
("Northern"), GOLDEN SWIRL MANAGEMENT COMPANY, a Utah corporation ("Golden"),
having its principal place of business at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx
Xxxx 00000 and I CAN'T BELIEVE ITS YOGURT, LTD., a Texas partnership, ("ICB"),
having its principal place of business at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx
Xxxx 00000, (Coolbrands, Kayla, Xxxxxxx'x, Ice Cream, EP, Yogen Fruz, Xxxxxxx,
Northern, Golden and ICB individually, a "Guarantor" and collectively, the
"Guarantors"), THE CHASE MANHATTAN BANK, as agent for the Lenders (as defined
below), a New York banking corporation, having an office at 0 XxxxxXxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxx 00000 (the "Agent") and THE CHASE MANHATTAN BANK, a New York
banking corporation, having an office at 0 XxxxxXxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx
00000 ("Chase" or a "Lender") hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquisition" means the merger of Eskimo into EP, pursuant to which Eskimo
becomes a direct, wholly owned Subsidiary of the Borrower pursuant to the
Acquisition Agreement.
"Acquisition Agreement" means that certain Agreement and Plan of Merger
Agreement among Coolbrands International Corp., EP Acquisition Corp. and Eskimo
Pie Corporation, dated as of May 3, 2000.
"Adjusted LIBOR Rate" means, with respect to any Eurodollar Loan for any
Interest Period, an interest rate per annum (rounded, if not already a whole
multiple of 1/100th of one (.01%) percent to the nearest 1/100th of one (.01%)
percent) equal to the product of (a) the LIBOR Rate and (b) Statutory Reserves.
"Affiliate" means, as to any Person (i) a Person which directly or
indirectly controls, or is controlled by, or is under common control with, such
Person; (ii) a Person which directly or indirectly beneficially owns or holds
five (5%) percent or more of any class of voting stock of, or five (5%) percent
or more of the equity interest in, such Person; or (iii) a Person five (5%)
percent or more of the voting stock of which, or five (5%) or more of the equity
interest of which, is directly or indirectly beneficially owned or held by such
Person. The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise.
"Agent" means The Chase Manhattan Bank, or such other Lender as may succeed
to the position of Agent, as provided in this Agreement.
"Agreement" means this Loan Agreement, as amended, supplemented or modified
from time to time.
"Applicable Margin" means the amount of basis points to be added to the
Adjusted LIBOR Rate or the Prime Rate, as applicable,
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as provided in Section 2.05 of this Agreement and as determined pursuant to
Section 2.09 of this Agreement.
"Assignment and Assumption Agreement" means the agreement by which a Lender
assigns all, but not a part, of its Pro Rata Share of the Term Loan, its Term
Loan Note and this Agreement to another Lender, as provided in Section 8.07 of
this Agreement.
"Board of Governors" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Business Day" means a day of the year on which banks are not required or
authorized to close in New York City, provided that, if the relevant day relates
to a Eurodollar Loan, an Interest Period, or notice with respect to a Eurodollar
Loan, the term "Business Day" shall mean a day on which dealings in dollar
deposits are also carried on in the London Interbank Market and banks are open
for business in London.
"Canadian Dollars" or "Canadian $" means lawful money of Canada.
"Capital Expenditures" means, as to any Person, the aggregate amount of any
expenditures (including purchase money Debt and the amount secured by purchase
money Liens) by such Person for assets (including fixed assets acquired under
Capital Leases) which it is contemplated will be used or usable in fiscal years
subsequent to the year of acquisition.
"Capital Lease" means a lease which has been or should be, in accordance
with GAAP, capitalized on the books of the lessee.
"Consolidated Capital Expenditures" means, as to Coolbrands and its
Consolidated Subsidiaries, the aggregate amount of Capital Expenditures made by
Coolbrands and its Consolidated Subsidiaries, computed and consolidated in
accordance with GAAP.
"Consolidated EBITDA" means, as to Coolbrands and its Consolidated
Subsidiaries, for any period, the EBITDA of Coolbrands and its Consolidated
Subsidiaries for such period, computed and consolidated in accordance with GAAP.
"Consolidated Funded Debt" means, as to Coolbrands and its Consolidated
Subsidiaries, the aggregate amount of the Funded Debt of Coolbrands and its
Consolidated Subsidiaries, computed and consolidated in accordance with GAAP.
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"Consolidated Senior Funded Debt" means, as to Coolbrands and its
Consolidated Subsidiaries, at any date, (i) Consolidated Funded Debt minus (ii)
Consolidated Subordinated Debt.
"Consolidated Subordinated Debt" means, as to Coolbrands and its
Consolidated Subsidiaries, the aggregate amount of the Subordinated Debt of
Coolbrands and its Consolidated Subsidiaries, computed and consolidated in
accordance with GAAP.
"Consolidated Subsidiaries" means, as to any Person, those Subsidiaries of
such Person which are consolidated with such Person in the financial statements
delivered pursuant to Section 5.01(b).
"Consolidated Total Assets" means, as to Coolbrands and its Consolidated
Subsidiaries, the aggregate net book value of the assets of Coolbrands and its
Consolidated Subsidiaries after all appropriate adjustments in accordance with
GAAP (including without limitation, reserves for doubtful receivables,
obsolescence, depreciation and amortization and excluding the amount of any
write-up or revaluation of any asset), computed and consolidated in accordance
with GAAP.
"Consolidated Total Liabilities" means, as to Coolbrands and its
Consolidated Subsidiaries, the aggregate amount of the liabilities of Coolbrands
and its Consolidated Subsidiaries, including all items which, in accordance with
GAAP would be included on the liability side of the balance sheet (other than
capital stock, capital surplus and retained earnings) computed and consolidated
in accordance with GAAP.
"Consolidated Unfunded Capital Expenditures" means Consolidated Capital
Expenditures funded other than by Debt.
"Credit Parties" means the Borrower, the Guarantors and any other Person
which is required to become a Guarantor pursuant to the provisions of Section
5.01(k) of this Agreement.
"Debt" means, as to any Person, all (i) indebtedness or liability of such
Person for borrowed money; (ii) indebtedness of such Person for the deferred
purchase price of property or services (including trade obligations); (iii)
obligations of such Person as a lessee under Capital Leases; (iv) current
liabilities of such Person in respect of unfunded vested benefits under any
Plan; (v) obligations of such Person in respect of letters of credit issued for
the account of such Person; (vi) obligations of such Person arising under
acceptance facilities; (vii) guaranties, endorsements (other than for collection
or deposit in the ordinary course of
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business) and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any other Person, or otherwise to assure a
creditor against loss; (viii) obligations secured by any Lien on property owned
by such Person whether or not the obligations have been assumed; (ix)
liabilities of such Person under interest rate protection agreements; (x)
liabilities of such Person under any preferred stock or other preferred equity
instrument which, at the option of the holder or upon the occurrence of one or
more events, is redeemable by such holder, or which, at the option of such
holder is convertible into Debt; (xi) indebtedness of any partnership of which
such Person is a general partner; and (xii) all other liabilities recorded as
such, or which should be recorded as such, on such Person's financial statements
in accordance with GAAP.
"Debt Service Coverage Ratio" means, as to Coolbrands and its Consolidated
Subsidiaries for any period, the ratio of (i) Consolidated EBITDA minus
Consolidated Unfunded Capital Expenditures to (ii) consolidated interest expense
(whether paid or accrued but without duplication) plus the current portion of
long term consolidated Debt. The Debt Service Coverage Ratio shall be measured
and tested at the end of each fiscal quarter and, in the case of Consolidated
EBITDA and consolidated interest expense, for a period covering the four (4)
fiscal quarters then ended.
"Default" means any of the events specified in Section 6.01 of this
Agreement, whether or not any requirement for notice or lapse of time or any
other condition has been satisfied.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Drawdown" means the request by the Borrower to the Agent for, and the
making by the Lenders of, the Term Loan.
"Drawdown Date" means the date on which the Term Loan is made by the
Lenders.
"Drawdown Period" means the period beginning on the date of this Agreement
and ending on November 30, 2000.
"EBITDA" means, as to Coolbrands and its Consolidated Subsidiaries for any
period, the sum of (i) net income (excluding extraordinary gains and
extraordinary losses) plus (ii) interest expense (whether paid or accrued but
without duplication) plus (iii) depreciation expense plus (iv) amortization of
intangible assets plus (v) federal, state and local income taxes (whether paid
or accrued but without duplication) minus (vi) the minority
5
interest in any Subsidiaries, in each case computed and consolidated in
accordance with GAAP.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, the regulations promulgated thereunder and the
published interpretations thereof as in effect from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
which together with any Credit Party would be treated, with such Person, as a
single employer under Section 4001 of ERISA.
"Eskimo" means Eskimo Pie Corporation, a Virginia corporation.
"Eurodollar Loan" means a Loan bearing interest at a rate based on the
Adjusted LIBOR Rate in accordance with the provisions of Article II hereof.
"Event of Default" means any of the events specified in Section 6.01 of
this Agreement, provided that any requirement for notice or lapse of time or any
other condition has been satisfied.
"Existing Credit Facility" means the Loan Agreement dated as of December
23, 1994 among the Borrower, certain guarantors (as named therein) and Chase, as
it may have been amended from time to time.
"Funded Debt" means, as to any Person, at any date, any Debt which is (i)
indebtedness or liability for borrowed money (including Subordinated Debt)
having an original maturity of one (1) year or more (including the current
portion thereof) or which is extendable at the option of the obligor to a date
more than one year from the date of such extension; (ii) indebtedness or
liability for the deferred purchase price of property (excluding trade
obligations); (iii) obligations as a lessee under Capital Leases; (iv) deferred
payment obligations to reimburse a letter of credit issuer for the amount of all
draws under letters of credit and trade acceptances; and (v) liabilities under
any preferred stock which, at the option of the holder or upon the occurrence of
one or more certain events, is redeemable by such holder, or which, at the
option of such holder is convertible into long term Debt.
"Funded Debt to EBITDA Ratio" means, as to Coolbrands and its Consolidated
Subsidiaries for any period, the ratio of (i) Consolidated Funded Debt (as of
the last day of such period) to (ii) Consolidated EBITDA for such period. The
Funded Debt to EBITDA Ratio shall be measured and tested at the end of each
fiscal
6
quarter and, in the case of Consolidated EBITDA, for a period covering the four
(4) fiscal quarters then ended.
"GAAP" means Generally Accepted Accounting Principles.
"Generally Accepted Accounting Principles" means those generally accepted
accounting principles and practices which are recognized as such by the Canadian
Institute of Chartered Accountants (the "Institute") acting through the
Accounting Standards Board (the "Board") or other appropriate boards or
committees thereof and which are consistently applied for all periods so as to
properly reflect the financial condition, operations and cash flows of a Person,
except that any accounting principle or practice required to be changed by the
Institute or the Board (or other appropriate board or committee) in order to
continue as a generally accepted accounting principle or practice may be so
changed. Any dispute or disagreement between the Borrower and the Agent relating
to the determination of Generally Accepted Accounting Principles shall, in the
absence of manifest error, be conclusively resolved for all purposes hereof by
the written opinion with respect thereto, delivered to the Agent, of the
independent accountants selected by Coolbrands and approved by the Agent for the
purpose of auditing the periodic financial statements of Coolbrands.
"Guarantor" or Guarantors" means one or more of the Guarantors, and any
other Person required to guarantee the obligations of the Borrower in accordance
with Section 5.01(k) of this Agreement.
"Guaranty" or "Guaranties" means the guaranty or guaranties executed and
delivered by the Guarantors pursuant to Section 3.01(h) or 5.01(k) or (n) of
this Agreement.
"Hazardous Materials" includes, without limit, any flammable explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic
substances, or related materials defined in the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended
(49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901 et. seq.), and in the regulations adopted and
publications promulgated pursuant thereto, or any other federal, state or local
environmental law, ordinance, rule or regulation.
"Highly Leveraged Transaction" means a financing transaction where the
Borrower or a Guarantor extends credit to, or invests in,
7
a business where such transaction involves the buyout, acquisition, or
recapitalization of an existing business and one of the following criteria is
met: (i) the transaction results in a Consolidated Total
Liabilities-to-Consolidated Total Assets leverage ratio higher than 75%, or (ii)
the transaction at least doubles the Borrower's Consolidated Total Liabilities
and results in a Consolidated Total Liabilities-to-Consolidated Total Assets
leverage ratio higher than 50%, or (iii) the transaction is designated as a
"highly leveraged transaction" by a syndication agent or a federal bank
regulatory agency. The Agent reserves the right from time to time to modify its
policies regarding the definition of "highly leveraged transactions".
"Interest Coverage Ratio" means, as to Coolbrands and its Consolidated
Subsidiaries for any period, the ratio of (i) Consolidated EBITDA minus
Consolidated Unfunded Capital Expenditures to (ii) consolidated interest expense
(whether paid or accrued but without duplication). The Interest Coverage Ratio
shall be measured and tested at the end of each fiscal quarter and, in the case
of Consolidated EBITDA and consolidated interest expense, for a period covering
the four (4) fiscal quarters then ended.
"Interest Determination Date" means the date on which an Alternate Base
Rate Loan is converted to a Eurodollar Loan and, in the case of a Eurodollar
Loan, the last day of its Interest Period.
"Interest Payment Date" means (i) as to each Eurodollar Loan, the last day
of each Interest Period and (ii) as to each Prime Rate Loan, the last Business
Day of each calendar month.
"Interest Period" means, as to any Eurodollar Loan, the period commencing
on the date of such Eurodollar Loan and ending on the numerically corresponding
day in the calendar month that is one, two or three months thereafter, as a
Borrower may elect (or, if there is no numerically corresponding day, on the
last Business Day of such month); provided, however, (i) no Interest Period
shall end later than the Maturity Date, (ii) if any Interest Period would end on
a day which shall not be a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day, (iii) no Interest Period representing a
portion of the principal of the Term Loan required to be paid in accordance with
Section 2.04(a) may be selected unless the outstanding Prime Rate Loans and
Eurodollar Loans for which the relevant Interest Periods end on or prior to the
date of such payment are in an aggregate amount which will be sufficient to make
such payment, (iv) interest shall accrue from and including the first day of
such
8
Interest Period to but excluding the date of payment of such interest and (vi)
no Interest Period of particular duration may be selected by a Borrower if the
Agent determines, in its sole discretion, that Eurodollar Loans with such
maturities are not generally available.
"Interest Rate Protection Agreement" means any interest rate protection
agreement, interest rate future, interest rate option, interest rate cap or
collar or other interest rate hedge arrangement, to or under which the Borrower
is a party or becomes a party.
"Investment" means any stock, evidence of Debt or other security of any
Person, any loan, advance, contribution of capital, extension of credit or
commitment therefor, including without limitation the guaranty of loans made to
others (except for current trade and customer accounts receivable in the
ordinary course of business and payable in accordance with customary trade terms
in the ordinary course of business) and any purchase of (i) any security of
another Person or (ii) any business or undertaking of any Person or any
commitment or option to make any such purchase, or any other investment.
"Lender" or "Lenders" means one or more of the lenders that are, or become,
lenders under, and parties to, this Agreement.
"LIBOR Rate" means the rate (rounded upwards, if not already a whole
multiple of 1/16th of one (1%) percent, to the next higher of 1/16th of one (1%)
percent) at which dollar deposits approximately equal in principal amount to the
requested Eurodollar Loan and for a maturity equal to the requested Interest
Period are offered in immediately available funds to the London office of the
Agent by leading banks in the London Interbank Market for Eurodollars at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever, including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing.
9
"Loan" or Loans" means the Term Loan and includes Prime Rate Loans and
Eurodollar Loans as the context may require.
"Loan Documents" means this Agreement, the Note(s), the Guaranties and any
other document executed or delivered pursuant to this Agreement.
"Material Adverse Change" means, as to any Person, (i) a material adverse
change in the financial condition, business, operations, properties, prospects
or results of operations of such Person or (ii) any event or occurrence which
could have a material adverse effect on the ability of such Person to perform
its obligations under the Loan Documents.
"Material Subsidiary" means any direct or indirect Subsidiary of Coolbrands
which represents more than five (5%) percent of the consolidated assets or
revenues of Coolbrands.
"Maturity Date" means November 1, 2005.
"Multiemployer Plan" means a Plan described in Section 4001(a)(3) of ERISA
which covers employees of the Borrower or any ERISA Affiliate.
"Net Proceeds of Sale" means, as to any Prepayment Event, the proceeds of
the sale of the assets subject to such Prepayment Event, less any brokers fees
or commissions, attorneys fees or other reasonable costs and expenses of such
sale.
"Note" or "Notes" means, as the context requires, one or more of the Term
Loan Notes.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" means a merger, consolidation, acquisition of stock
or assets, or other similar transaction where the Borrower or any Guarantor
acquires all or part of the business of another Person, provided that (i) the
Borrower or such Guarantor is the surviving corporate entity; (ii) the
acquisition is of more than fifty (50%) percent of the stock or assets of such
Person; (iii) the transaction has been approved by the board of directors or
other similar governing body of such Person; (iv) such Person, or the assets of
such Person, to be acquired shall be in a similar or related line of business of
the Borrower, such Guarantor or the food business; (v) the acquisition and the
financing of such transaction shall not result in such financing becoming a
Highly
10
Leveraged Transaction; and (vi) the Bank is provided with such information,
documents, certificates or other evidence of the foregoing as it may reasonably
request.
"Permitted Investments" means, (i) direct obligations of the United States
of America or any governmental agency thereof, or obligations guaranteed by the
United States of America, provided that such obligations mature within one year
from the date of acquisition thereof; (ii) time certificates of deposit having a
maturity of one year or less issued by any commercial bank organized and
existing under the laws of the United States or any state thereof provided that
not more than $500,000.00 shall be invested in such banks having aggregate
capital and surplus less than $100,000,000.00; (iii) money market mutual funds
having assets in excess of $2,500,000,000; (iv) commercial paper rated not less
than P-1 or A-1 or their equivalent by Xxxxx'x Investor Services, Inc. or
Standard & Poor's Corporation, respectively; (v) tax exempt securities rated
Prime 2 or better by Xxxxx'x Investor Services, Inc. or A-1 or better by
Standard & Poor's Corporation; (vi) loans or advances by the Borrower to a
Guarantor or by one Guarantor to another Guarantor; (vii) investments by any
Credit Party in the stock of, any Subsidiary (subject to compliance with Section
5.01(k) or this Agreement); (viii) stock or obligations issued in settlement of
claims of the Borrower or a Guarantor against any other Person by reason of the
bankruptcy, composition or readjustment of Debt, or reorganization of such
Person; (ix) loans or advances to employees of the Borrower, its Subsidiaries
and Affiliates in an aggregate amount outstanding at any time of not more than
$400,000.00; or (x) any other Investments not exceeding $100,000.00 in the
aggregate at any time.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, limited
liability company, joint venture or other entity or a federal, state or local
government, or a political subdivision thereof or any agency of such government
or subdivision.
"Plan" means any employee benefit plan established, maintained, or to which
contributions have been made by the Borrower or any ERISA Affiliate.
"Prepayment Event" means the sale (other than in the ordinary course of
business) of any assets of Eskimo.
"Prime Rate" means the rate per annum announced by the Agent from time to
time as its prime rate in effect at its principal
11
office on a 360-day basis; each change in the Prime Rate shall be effective on
the date such change is announced to become effective.
"Prime Rate Loan" means a Loan bearing interest at the Prime Rate.
"Prohibited Transaction" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time.
"Pro Rata Share" means, with respect to each Lender, its pro rata share of
the Term Loan, as set forth in Schedule 1.01 annexed hereto, as the same may be
modified by any assignment of all or any part of such Lender's pro rata share.
"Required Lenders" means those Lenders having, in the aggregate, sixty six
and two-thirds (66 2/3%) percent of the Term Loan then outstanding.
"Required Prepayment Amount" means one hundred (100%) percent of the Net
Proceeds of Sale.
"Regulation D" means Regulation D of the Board of Governors, as the same
may be amended and in effect from time to time.
"Regulation T" means Regulation T of the Board of Governors, as the same
may be amended and in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors, as the same
may be amended and in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors, as the same
may be amended and in effect from time to time.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"Senior Funded Debt to EBITDA Ratio" means, as to Coolbrands and its
Consolidated Subsidiaries for any period, the ratio of (i) Consolidated Senior
Funded Debt (as of the last day of such period) to (ii) Consolidated EBITDA for
such period. The Senior Funded Debt to EBITDA Ratio shall be measured and tested
at the end of each fiscal quarter and, in the case of Consolidated EBITDA, for a
period covering the four (4) fiscal quarters then ended.
"Xxxxx Group" means Xxxxxxx Xxxxx, Xxxxx Xxxxx and Xxxxx Xxxxx, and members
of their respective immediate families.
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"Serruya Group" means Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx and Xxxxx Xxxxxxx, and
members of their respective immediate families.
"Statutory Reserves" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including, without
limitation, any marginal, special, emergency, or supplemental reserves)
expressed as a decimal established by the Board of Governors or any other
banking authority to which the Agent is subject with respect to the Adjusted
LIBOR Rate for Eurocurrency Liabilities (as defined in Regulation D). Such
reserve percentages shall include, without limitation, those imposed under such
Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency
Liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration, exceptions or offsets
which may be available from time to time to the Agent under such Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"Subordinated Debt" means Debt of any Person, the repayment of which the
obligee has agreed in writing, on terms which have been approved by the Agent in
advance in writing, shall be subordinate and junior to the rights of the Agent
and the Lenders with respect to Debt owing from such Person to the Agent and the
Lenders.
"Subsidiary" means, as to any Person, any corporation, partnership, limited
liability company or joint venture whether now existing or hereafter organized
or acquired: (i) in the case of a corporation, of which a majority of the
securities having ordinary voting power for the election of directors (other
than securities having such power only by reason of the happening of a
contingency) are at the time owned by such Person and/or one or more
Subsidiaries of such Person or (ii) in the case of a partnership, limited
liability company or joint venture of which a majority of the partnership,
membership or other ownership interests are at the time owned by such Person
and/or one or more of its Subsidiaries.
"Term Loan" shall have the meaning assigned in Section 2.01 hereof.
"Term Loan Note" or "Term Loan Notes" means, as the context requires, one
or more of the promissory notes of the Borrower payable to the order of each
Lender, in substantially the form of Exhibit A annexed hereto, evidencing the
indebtedness of the Borrower to such Lender resulting from the Term Loan to be
made by the Lenders to the Borrower pursuant to the Agreement.
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"UCC" means the Uniform Commercial Code of the State of New York, as in
effect from time to time.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to and including".
SECTION 1.03. Accounting Terms; Construction. (a) Except as otherwise
herein specifically provided, each accounting term used herein shall have the
meaning given to it under GAAP.
(b) All references in this Agreement to "Sections" or "sub-sections" shall
be deemed, unless otherwise noted, to be references to the Sections or
sub-sections of this Agreement.
(c) All references in this Agreement to an "Exhibit" or "Exhibits" or to a
"Schedule" or "Schedules" shall be deemed, unless otherwise noted, to be
references to the Exhibits and Schedules annexed to this Agreement.
(d) All references to a Subsidiary shall be deemed, unless otherwise noted,
to be references to a Subsidiary of the Borrower or a Subsidiary of a Guarantor.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
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ARTICLE II
AMOUNT AND TERMS OF THE LOAN
SECTION 2.01. The Term Loan. The Lenders agree, severally but not jointly,
on the Drawdown Date, but in no event later than the end of the Drawdown Period,
on the terms and conditions of this Agreement and in reliance upon the
representations and warranties set forth in this Agreement, to lend to the
Borrower, each Lender's Pro-Rata Share of the principal amount of Thirty Million
($30,000,000.00) Dollars (the "Term Loan") and the Borrower agrees to borrow
such amount from the Lenders by executing and delivering to the Lenders the Term
Loan Notes. The Term Loan, or portions thereof, shall be a Prime Rate Loan or a
Eurodollar Loan (or a combination thereof) as the Borrower may request subject
to and in accordance with Section 2.02 hereof. The Term Loan shall be made in a
single Drawdown. Any Lender may at its option make any Eurodollar Loan by
causing a foreign branch or affiliate of such Lender to make such Loan, provided
that any exercise of such option shall not affect the obligation of the Borrower
to repay such Loan in accordance with the terms of such Lender's Term Loan Note.
SECTION 2.02. Notice of Drawdown; Notice of Term Loan Designations. (a) The
Borrower shall give the Bank irrevocable written telex, telephonic (immediately
confirmed in writing) or facsimile notice by 11:00 a.m. at least five (5)
Business Days prior to the requested Drawdown and Drawdown Date of the Term
Loan. Each Drawdown shall be available subject to compliance by the Borrower
with the provisions of Section 3.01 of this Agreement. The Lenders' obligation
to make the Term Loan available to the Borrower shall terminate at the end of
the Drawdown Period.
(b) The Borrower may elect to designate the Term Loan (or a portion
thereof) as a Prime Rate Loan or a Eurodollar Loan by so specifying in the
irrevocable notice given pursuant to this Section 2.02; provided, however, that
each Eurodollar Loan for any specific Interest Period shall be in the minimum
principal amount of $1,000,000.00 and in increased integral multiples of
$500,000.00.
(c) The Borrower shall give the Agent irrevocable written, telex,
telephonic (immediately confirmed in writing) or facsimile notice (i) prior to
10:00 a.m. on the day that is three (3) Business day prior to the requested date
of such Loan of each election to designate the Term Loan (or a portion thereof)
as a Eurodollar Loan (subject to availability) and (ii) prior to 11:00 a.m. on
the day of such Loan of each election to designate the Term Loan (or a portion
thereof) as a Prime Rate Loan, in each case specifying the date (which shall be
a Business Day) and the
15
aggregate principal amount of such Loan and, if any portion thereof is to
consist of one or more Eurodollar Loans, the respective principal amounts and
Interest Periods for each such Eurodollar Loan; provided that if the Borrower
shall request a Eurodollar Loan when such Loans are not available, fail to
specify the duration of the Interest Period with regard to a requested
Eurodollar Loan or fail to specify the type of Loan requested, the request shall
be deemed to be a request for a Prime Rate Loan.
(d) The Borrower may elect to continue Eurodollar Loans constituting the
Term Loan from one Interest Period into a subsequent Interest Period or convert
a Prime Rate Loan into a Eurodollar Loan (subject to availability) by giving the
Agent prior written, telex, telephonic (immediately confirmed in writing) or
facsimile irrevocable notice of its intention to do so in accordance with the
provisions of subsection (b) above. If no such election is made, or if an
election is made to continue a Eurodollar Loan at the end of its Interest Period
when such Loans are not available, such Eurodollar Loan shall automatically
convert into a Prime Rate Loan upon the expiration of such Interest Period.
SECTION 2.03. Term Loan Notes. The Term Loan shall be evidenced by the Term
Loan Notes of the Borrower. Each Term Loan Note shall mature on the Maturity
Date at which time the entire outstanding principal balance and all interest
thereon shall be due and payable. Each Term Loan Note shall be entitled to the
benefits and subject to the provisions of this Agreement.
SECTION 2.04. Repayment of Term Loan Note. (a) Mandatory Installment
Payments. The principal balance of the Term Loan shall be payable in sixty (60)
monthly installments, each due on the first Business Day of each month beginning
on December 1, 2000 and continuing on the first Business Day of each month
thereafter. Each of the first fifty nine (59) such monthly principal
installments shall be in the amount equal to one-hundred twentieth (1/120th) of
the original principal amount of the Term Loan and the sixtieth (60th) such
monthly principal installment shall be in an amount equal to the then
outstanding principal balance of the Term Loan.
(b) Mandatory Prepayment. (i) Within five (5) Business Days of the
occurrence of a Prepayment Event, the Borrower shall give written notice to the
Agent of such Prepayment Event, the assets sold and the amount of the Net
Proceeds of Sale. At such time the Borrower shall make a prepayment of the Term
Loan in an amount equal to the Required Prepayment Amount. Any mandatory
prepayment made pursuant to this Section 2.04(b)(i) shall be applied first to
all accrued but unpaid interest on the Term Loan and then to the
16
principal of the Term Loan. Any such prepayments shall be applied first to Prime
Rate Loans and then to Eurodollar Loans in the order of the nearest expiration
of their respective Interest Periods, provided, however, if at the time of any
such prepayment no Default or Event of Default exists, any amounts to be applied
to a Eurodollar Loan shall be held by the Agent in a cash collateral account,
for the benefit of the Lenders, as security for the Term Loan, and applied to
such Eurodollar Loan at the earlier of (x) a Default or an Event of Default or
(y) the expiration of the relevant Interest Period(s).
(ii) In the event that the Acquisition does not close by November
30, 2000, the Term Loan shall, without notice or demand from the Agent, become
immediately due and payable.
(c) Voluntary Prepayments. The Borrower may make voluntary prepayments of
the Term Loan as permitted by Section 2.08 of this Agreement.
(d) Application of Prepayments. All prepayments of the Term Loan (whether
made voluntarily or required by a Prepayment Event) shall be applied to
installments of the Term Loan in the inverse order of maturity. All principal
payments and prepayments on the Term Loan shall be made to the Agent for the pro
rata distribution to the Lenders.
SECTION 2.05. Payment of Interest on the Term Loan Notes. (a) In the case
of a Prime Rate Loan, interest shall be payable at a rate per annum (computed on
the basis of the actual number of days elapsed over a year of 360 days) equal at
all times to the Prime Rate plus the Applicable Margin. Such interest shall be
payable on each Interest Payment Date, commencing with the first Interest
Payment Date after the date of such Prime Rate Loan, on each Interest
Determination Date and on the Maturity Date. Any change in the rate of interest
on the Term Loan Notes due to a change in the Prime Rate shall take effect as of
the date of such change in the Prime Rate.
(b) In the case of a Eurodollar Loan, interest shall be payable at a rate
per annum (computed on the basis of the actual number of days elapsed over a
year of 360 days) equal to the Adjusted LIBOR Rate plus the Applicable Margin.
Such interest shall be payable on each Interest Payment Date, commencing with
the first Interest Payment Date after the date of such Eurodollar Loan, on each
Interest Determination Date and on the Maturity Date. In the event Eurodollar
Loans are available, the Agent shall determine the rate of interest applicable
to each requested Eurodollar Loan for the applicable Interest Period at 11:00
a.m., New York City
17
time, or as soon as practicable thereafter, two (2) Business Days prior to the
commencement of such Interest Period and shall notify the Borrower and the
Lenders of the rate of interest so determined. Such determination shall be
conclusive absent manifest error.
(c) All interest on the Term Loan Notes shall be paid to the Agent for the
pro rata distribution to the Lenders.
SECTION 2.06. Use of Proceeds. The proceeds of the Term Loan shall be used
by the Borrower exclusively (i) to finance the Acquisition, (ii) for general
corporate purposes, (iii) to repay any Eskimo Debt and (iv) to provide working
capital advances to Eskimo. No part of the proceeds of the Term Loan may be used
for any purpose that directly or indirectly violates or is inconsistent with,
the provisions of Regulation T, U or X.
SECTION 2.07. Conversion and Continuation of Loans. The Borrowers shall
have the right, at any time, on such notice to the Agent as is required pursuant
to Section 2.02, (i) to continue any Eurodollar Loan or portion thereof into a
subsequent Interest Period (subject to availability) or (ii) to convert a Prime
Rate Loan into a Eurodollar Loan (subject to availability), subject to the
following:
(a) if a Default or an Event of Default shall have occurred and be
continuing at the time of any proposed conversion or continuation only Prime
Rate Loans shall be available;
(b) in the case of a continuation or conversion of fewer than all Loans,
the aggregate principal amount of each Eurodollar Loan continued or into which a
Loan is converted shall be in the minimum principal amount of $1,000,000.00 and
in increased integral multiples of $500,000.00.
(c) each continuation or conversion shall be effected by each Lender
applying the proceeds of the new Loan to the Loan (or portion thereof) being
continued or converted;
(d) if the new Loan made as a result of a continuation or conversion shall
be a Eurodollar Loan, the Interest Period with respect thereto shall commence on
the date of continuation or conversion;
(e) each request for a Eurodollar Loan which shall fail to state an
applicable Interest Period and each request for a Eurodollar Loan made when such
Loans are not available shall be deemed to be a request for an Prime Rate Loan;
and
18
(f) in the event that the Borrower shall not give notice to continue a
Eurodollar Loan as provided above, such Loan shall automatically be converted
into an Prime Rate Loan at the expiration of the then current Interest Period.
SECTION 2.08. Prepayment. (a) The Borrower shall have the right at any time
and from time to time to prepay any Prime Rate Loan, in whole or in part,
without premium or penalty on one (1) Business day's prior telephonic notice to
the Agent (immediately confirmed in writing) of such prepayment provided,
however, that each such prepayment shall be on a Business Day and shall be in an
aggregate principal amount which is an integral multiple of $500,000.00.
(b) The Borrower shall have the right at any time and from time to time,
subject to the provisions hereof and of Section 2.10, to prepay any Eurodollar
Loan, in whole or in part upon at least one (1) Business Day prior irrevocable
written notice to the Bank; provided, however, that each such prepayment shall
be on a Business Day and shall be in an aggregate principal amount which is an
integral multiple of $500,000.00.
(c) The notice of prepayment under this Section 2.08 shall set forth the
prepayment date and the principal amount of the Loan being prepaid and shall be
irrevocable and shall commit the Borrower to prepay such Loan by the amount and
on the date stated therein. All prepayments shall be accompanied by accrued
interest on the principal amount being prepaid to the date of prepayment. Each
prepayment under this Section 2.08 shall be applied first towards unpaid
interest on the amount being prepaid and then towards the principal in whole or
partial prepayment of the Term Loan by the Borrower. In the absence of such
specification, amounts being prepaid shall be applied first to any Prime Rate
Loan then outstanding and then to Eurodollar Loans in the order of the
expiration of their respective Interest Periods. All partial prepayments of
Loans shall be applied to installments of principal of the Term Loan in the
inverse order of maturity.
SECTION 2.09. Applicable Margin. The Applicable Margin shall be determined
on the basis of Coolbrands' Funded Debt to EBITDA Ratio, as calculated based on
Coolbrands' consolidated financial statements for its most recent fiscal year or
quarter. The Agent shall determine the Applicable Margin within five (5)
Business Days after it has received the financial statements of Coolbrands' as
required by Section 5.01(b)(i) or (ii), as applicable. The Agent shall promptly
notify the Borrower and the Lenders of such determination, which shall be
conclusive, in the
19
absence of manifest error. The Applicable Margin shall be determined as follows:
(i) The initial Applicable Margin shall be 250 basis points for Eurodollar
Loans and 50 basis points for Prime Rate Loans, and shall be applicable until
five (5) days after delivery of Coolbrands' consolidated financial statements
for the fiscal year ending August 31, 2001 pursuant to Section 5.01(b) hereof.
Beginning five (5) days after delivery of Coolbrands' consolidated
financial statements for the fiscal year ending August 31, 2001, and for each
fiscal year or quarter thereafter, the Applicable Margin shall be determined in
accordance with the table set forth in Exhibit 2.09 annexed hereto.
The Applicable Margin for any Eurodollar Loan shall change during the term
of such Eurodollar Loan as a result of this Section 2.09.
In the event that the Borrower fails to deliver any financial statements
and the related certificate on the due date therefor set forth in Section
5.01(b)(i) or (ii) hereof, unless an Event of Default is declared as a result of
such failure, the Applicable Margin for Eurodollar Loans shall be 300 basis
points and the Applicable Margin for Prime Rate Loans shall be 100 basis points
until the Borrower delivers all required financial statements and certificates
at which time the Applicable Margins shall be redetermined as provided for in
this Section 2.09.
Upon the occurrence and during the continuance of a Default or an Event of
Default the Applicable Margins may, as a result of changes in Coolbrands' Funded
Debt to EBITDA Ratio, increase but will not decrease.
SECTION 2.10. Reimbursement by Borrower. (a) The Borrower shall reimburse
the Agent, on behalf of a Lender, upon the Agent's demand, for any loss, cost or
expense incurred or to be incurred by it (in such Lender's sole determination)
as a result of any prepayment or conversion (whether voluntarily or by
acceleration) of any Eurodollar Loan other than on the last day of the Interest
Period for such Loan, or if the Borrower fails to borrow a Eurodollar Loan (or
is not able to borrow because of an Event of Default or for any other reason
hereunder) after having given the irrevocable notice of borrowing required by
this Agreement. Such reimbursement shall include, but not be limited to, any
loss, cost or expense incurred by such Lender in obtaining, liquidating or
redeploying any funds used or to be used in making or maintaining the Eurodollar
Loan. The provisions of this Section 2.10 shall
20
survive repayment of the Loans and the termination of this Agreement.
SECTION 2.11. Statutory Reserves. It is understood that the cost to the
Lenders of making or maintaining Eurodollar Loans may fluctuate as a result of
the applicability of, or change in, Statutory Reserves. The Borrower agrees to
pay to the Agent, on behalf of the Lenders from time to time, as provided in
Section 2.12 below, such amounts as shall be necessary to compensate each Lender
for the portion of the cost of making or maintaining any Eurodollar Loans made
by it resulting from any such Statutory Reserves, or change therein, it being
understood that the rates of interest applicable to Eurodollar Loans hereunder
have been determined on the basis of Statutory Reserves in effect at the time of
determination of the Adjusted LIBOR Rate and that such rates do not reflect
costs imposed on such Lender in connection with any change to such Statutory
Reserves. Subject to the provisions of Section 2.10, the Borrower may prepay the
Loan in the event the provisions of this Section 2.11 are effected. The
provisions of this Section 2.11 shall survive repayment of the Loans and the
termination of this Agreement.
SECTION 2.12. Increased Costs. If, after the date of this Agreement, the
adoption of, or any change in, any applicable law, regulation, rule or
directive, or any interpretation thereof by any authority charged with the
administration or interpretation thereof:
(i) subjects any Lender to any tax with respect to the Loan, its Note
or on any amount paid or to be paid under or pursuant to this Agreement, the
Loan or its Note (other than any tax measured by or based upon the overall net
income of such Lender);
(ii) changes the basis of taxation of payments to a Lender of any
amounts payable hereunder (other than any tax measured by or based upon the
overall net income of such Lender);
(iii) imposes, modifies or deems applicable any reserve, capital
adequacy or deposit requirements against any assets held by, deposits with or
for the account of, or loans made by, a Lender; or
(iv) imposes on a Lender any other condition affecting the Loan, its
Note or this Agreement; and the result of any of the foregoing is to increase
the cost to such Lender of maintaining this Agreement or making the Loan, or to
reduce the amount of any payment (whether of principal, interest or otherwise)
receivable by
21
such Lender or to require such Lender to make any payment on or calculated by
reference to the gross amount of any sum received by it, in each case by an
amount which such Lender in its reasonable judgment deems material, then and in
any such case:
(a) the Lender shall promptly advise the Agent and the Borrower of such
event, together with the date thereof, the amount of such increased cost or
reduction or payment and the way in which such amount has been calculated; and
(b) the Borrower shall pay to such Lender, within ten (10) days after the
advice referred to in subsection (a) hereinabove, such an amount or amounts as
will compensate such Lender for such additional cost, reduction or payment for
so long as the same shall remain in effect.
The determination of a Lender as to additional amounts payable
pursuant to this Section 2.12 shall be conclusive evidence of such amounts
absent manifest error. The provisions of this Section 2.12 shall survive
repayment of the Loans and the termination of this Agreement.
SECTION 2.13. Capital Adequacy. If any Lender shall have reasonably
determined that the applicability of any law, rule, regulation or guideline, or
the adoption after the date hereof of any other law, rule, regulation or
guideline regarding capital adequacy, or any change in any of the foregoing or
in the interpretation or administration of any of the foregoing by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender (or any
lending office of such Lender) or such Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company, if any, as a consequence of its obligations
hereunder to a level below that which such Lender or such Lender's holding
company could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies and the policies of such Lender's
holding company with respect to capital adequacy) by an amount reasonably deemed
by such Lender to be material, then from time to time the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such Lender's holding company for any such reduction suffered. The provisions of
this Section 2.13 shall survive repayment of the Loans and the termination of
this Agreement.
22
SECTION 2.14. Change in Legality. (a) Notwithstanding anything to the
contrary contained elsewhere in this Agreement, if any change after the date
hereof in law, rule, regulation, guideline or order, or in the interpretation
thereof by any governmental authority charged with the administration thereof,
shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or
to give effect to its obligations as contemplated hereby with respect to a
Eurodollar Loan, then, by written notice to the Borrower and the Agent, such
Lender may:
(i) declare that it will not thereafter make Eurodollar Loans
hereunder, whereupon the Borrower shall be prohibited from requesting such
Eurodollar Loans from such Lender unless such declaration is subsequently
withdrawn; and
(ii) require that, subject to the provisions of Section 2.10, all
outstanding Eurodollar Loans made by such Lender be converted to an Prime
Rate Loan, whereupon all of such Eurodollar Loans shall be automatically
converted to a Prime Rate Loan as of the effective date of such notice as
provided in paragraph (b) below.
(b) For purposes of this Section 2.14, a notice to the Borrower by a
Lender pursuant to paragraph (a) above shall be effective, for the purposes of
paragraph (a) above, if lawful, and if any Eurodollar Loans shall then be
outstanding, on the last day of the then current Interest Period, otherwise,
such notice shall be effective on the date of receipt by the Borrower.
SECTION 2.15. Indemnity. The Borrower will indemnify the Lenders against
any loss or expense which any Lender may sustain or incur as a consequence of
any default in payment or prepayment of the principal amount of any Eurodollar
Loan or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, by notice of prepayment or otherwise), or the
occurrence of any Event of Default, including but not limited to any loss or
expense sustained or incurred in liquidating or re-employing deposits from third
parties acquired to affect or maintain such Loan or any part thereof. When
claiming under this Section 2.15, a Lender shall provide to the Borrower a
statement, signed by an officer of such Lender, explaining the amount of any
such loss or expense (including the calculation of such amount), which statement
shall, in the absence of manifest error, be conclusive with respect to the
parties hereto. The provisions of this Section 2.15 shall survive repayment of
the Term Loan and the termination of this Agreement.
23
SECTION 2.16. Change in LIBOR; Availability of Rates. In the event, and on
each occasion, that, on the day the interest rate for any Eurodollar Loan is to
be determined, the Agent shall have determined (which determination, absent
manifest error, shall be conclusive and binding upon the Borrower) that dollar
deposits in the amount of the principal amount of the requested Eurodollar Loan
are not generally available in the London Interbank Market, or that the rate at
which such dollar deposits are being offered will not adequately and fairly
reflect the cost to the Lenders of making or maintaining the principal amount of
such Eurodollar Loan during such Interest Period, such Eurodollar Loan shall be
unavailable. The Agent shall, as soon as practicable thereafter, given written,
telex or telephonic notice of such determination of unavailability to the
Borrower. Any request by the Borrower for an unavailable Eurodollar Loan shall
be deemed to have been a request for a Prime Rate Loan. After such notice shall
have been given and until the Agent shall have notified the Borrower that the
circumstances giving rise to such unavailability no longer exist, each
subsequent request for an unavailable Eurodollar Loan shall be deemed to be a
request for a Prime Rate Loan.
SECTION 2.17. Authorization to Debit Borrower's Account. The Agent is
hereby authorized to debit the Borrower's account maintained with the Agent for
(i) all scheduled payments of principal and/or interest under the Notes, (ii)
the Agent's fees and (iii) all other amounts due hereunder; all such debits to
be made on the days such payments are due in accordance with the terms hereof.
SECTION 2.18. Late Charges, Default Interest. (a) If the Borrower shall
default in the payment of any principal installment of or interest on the Loan
or any other amount becoming due hereunder, the Borrower shall pay interest, to
the extent permitted by law, on such defaulted amount up to the date of actual
payment (after as well as before judgment) at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 360 days) equal to two
(2%) percent in excess of the highest interest rate otherwise in effect with
respect to any type of Loan then outstanding, and if no Loan is then
outstanding, at a rate equal to the Prime Rate plus two (2%) percent.
(b) Upon the occurrence and during the continuation of an Event of Default,
the Borrower shall, at the demand of the Agent and the Required Lenders, each
pay interest on all amounts owing under the Notes and this Agreement (after as
well as before judgment) at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to two (2%) percent
in excess of the highest interest rate otherwise in effect
24
hereunder. The provisions of this Section 2.18 shall be read so as to require
the Borrower to pay the interest rates described in either (a) or (b), but not
both.
SECTION 2.19. Payments. All payments by the Borrower hereunder or under the
Notes shall be made in Dollars in immediately available funds at the office of
the Agent by 12:00 noon, New York City time on the date on which such payment
shall be due. Interest on the Notes shall accrue from and including the date of
each Loan to but excluding the date on which such Loan is paid in full or
refinanced with a Loan of a different type.
SECTION 2.20. Interest Adjustments. (a) If the provisions of this Agreement
or the Notes would at any time otherwise require payment by the Borrower to the
Lenders of any amount of interest in excess of the maximum amount then permitted
by applicable law the interest payments shall be reduced to the extent necessary
so that the Lenders shall not receive interest in excess of such maximum amount.
To the extent that, pursuant to the foregoing sentence, the Lenders shall
receive interest payments hereunder or under the Notes in an amount less than
the amount otherwise provided, such deficit (hereinafter called the "Interest
Deficit") will cumulate and will be carried forward (without interest) until the
termination of this Agreement. Interest otherwise payable to the Lenders
hereunder and under the Notes for any subsequent period shall be increased by
such maximum amount of the Interest Deficit that may be so added without causing
the Lenders to receive interest in excess of the maximum amount then permitted
by applicable law.
(b) The amount of the Interest Deficit relating to the Term Loan shall be
treated as a prepayment penalty and paid in full at the time of any optional or
voluntary prepayment by the Borrower of all or any part of the Term Loan. The
amount of the Interest Deficit relating to the Notes at the time of any complete
payment of the Notes at that time outstanding (other than an optional or
voluntary prepayment thereof) shall be canceled and not paid.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK]
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ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Making of the Term Loan. The
obligation of the Lenders to make the Term Loan contemplated by this Agreement
is subject to the condition precedent that the Agent and the Lenders shall have
received from the Borrower and the Guarantors on or before the Drawdown Date the
following, in form and substance satisfactory to the Agent and its counsel:
(a) The Term Loan Notes, each duly executed and payable to the order of the
applicable Lender.
(b) Certified (as of the date of this Agreement) copies of the resolutions
of the Board of Directors of the Borrower authorizing the Term Loan and
authorizing and approving this Agreement and the other Loan Documents and the
execution, delivery and performance thereof and certified copies of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and the other Loan Documents.
(c) Certified (as of the date of this Agreement) copies of the resolutions
of the Board of Directors of Coolbrands and the Board of Directors and the
shareholders of each of the other Guarantors which is a Material Subsidiary,
authorizing and approving this Agreement, their Guaranties and any other Loan
Document applicable to such Guarantors, and the execution, delivery and
performance thereof and certified copies of all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to
this Agreement, their Guaranties and the other Loan Documents.
(d) A certificate of the Secretary or an Assistant Secretary (attested to
by another officer) of the Borrower certifying: (i) the names and true
signatures of the officer or officers of the Borrower authorized to sign this
Agreement, the Notes and the other Loan Documents to be delivered hereunder on
behalf of the Borrower; and (ii) a copy of the Borrower's by-laws as complete
and correct on the date of this Agreement.
(e) A Certificate of the Secretary or an Assistant Secretary (attested to
by another officer) of Coolbrands and of each of the other Guarantors which is a
Material Subsidiary certifying (i) the names and true signatures of the officer
or officers of such Guarantors authorized to sign this Agreement, their
Guaranties and any other Loan Documents to be delivered hereunder on behalf of
26
such Guarantors; (ii) a copy of each of such Guarantors' by-laws as complete and
correct on the date of this Agreement; and (iii) the stock ownership of each of
such Guarantors (other than Coolbrands).
(f) Copies of the certificate of incorporation and all amendments thereto
of the Borrower, Coolbrands and each of the other Guarantors which is a Material
Subsidiary certified in each case by the Secretary of State (or equivalent
officer) of the state of incorporation of each of the Borrower, Coolbrands and
such Guarantors and a certificate of existence and good standing with respect to
the Borrower, Coolbrands and such Guarantors from the Secretary of State (or
equivalent officer) of the state of incorporation of the Borrower, Coolbrands
and such Guarantors and from the Secretary of State (or equivalent officer) of
any state in which the Borrower, Coolbrands or such Guarantors are authorized to
do business.
(g) An opinion of Blank, Rome, Tenzer, Greenblatt, LLP, counsel for the
Borrower and the Guarantors (with separate opinions from local counsel to
Coolbrands and Kayla) as to certain matters referred to in Article IV hereof and
as to such other matters as the Bank or its counsel may reasonably request.
(h) From each of the Guarantors, an executed Guaranty.
(i) From the Borrower, a copy of the consolidated and consolidating balance
sheets and income statements for the Borrower and its Consolidated Subsidiaries
for the nine (9) month period ended May 31, 2000, together with all supporting
schedules and certified by the Borrower's Chief Financial Officer, the review of
which shall be satisfactory to the Agent and the Lenders in all respects.
(j) From the Borrower, a copy of the consolidated and consolidating balance
sheets and income statements for the Borrower and its Consolidated Subsidiaries
for the fiscal period ending closest to any Drawdown Date (provided that
Coolbrands would be required to deliver such financial statements within the
time periods set forth in Section 5.01(b)), together with all supporting
schedules and certified by Coolbrands' Chief Financial Officer, the review of
which shall be satisfactory to the Agent and the Lenders in all respects.
(k) From Coolbrands, a copy of the Annual or Quarterly Information Form to
Shareholders for Coolbrands and its Consolidated Subsidiaries for its most
recent quarterly or year end reporting period, together with all supporting
schedules and certified by Coolbrands' Chief Financial Officer, the review of
27
which shall be satisfactory to the Agent and the Lenders in all respects.
(l) Evidence of (i) property damage insurance for all personal property of
the Borrower, Coolbrands and each of the other Guarantors which is a Material
Subsidiary, (ii) liability insurance, (iii) business interruption insurance and
(iv) such other insurance coverage which is usual and customary for businesses
of the type engaged in by the Borrower, Coolbrands and such Guarantors.
(m) A pro forma consolidated and consolidating balance sheet of Coolbrands
and its Consolidated Subsidiaries as of a recent date, (which shall give effect
to the Acquisition), prepared and certified by the Chief Executive Officer or
the Chief Financial Officer of Coolbrands and which shall be based upon the
respective financial statements of the Credit Parties for the fiscal quarter
ended May 31, 2000 and the financial statements of Eskimo for the fiscal quarter
ended June 30, 2000 and after giving effect to the transactions contemplated by
this Agreement and the Acquisition Agreement, subject to normal year end
adjustments and to the assumptions and qualifications stated therein, and the
review of which shall be satisfactory to the Agent and the Lenders in all
respects.
(n) Evidence that there shall not have occurred a Material Adverse Change
in the Borrower, Coolbrands, any Guarantor which is a Material Subsidiary or
Eskimo.
(o) Evidence that all material third party and governmental consents and
approvals necessary in connection with the transactions and the financings
contemplated by this Agreement and the Acquisition Agreement shall have been
obtained, including without limitation, all regulatory consents and approvals
with regard to the change of control of Eskimo occurring as a result of the
Acquisition.
(p) An executed copy of the Acquisition Agreement and of any other
agreements entered into or to be entered into by the Borrower, any Guarantor,
Eskimo or Eskimo's principals in connection with the Acquisition, the review of
all of which shall be satisfactory to the Agent and its counsel in all respects.
(q) Results of all due diligence checkings with regard to the Borrower,
Coolbrands, each of the Guarantors which is a Material Subsidiary and Eskimo,
including without limitation, trade checkings, customer checkings, bank
checkings, litigation checkings, judgment, tax and bankruptcy searches and lien
searches,
28
the review of which shall be satisfactory to the Agent in all respects.
(r) Copies of all material loan or credit agreements of the Borrower,
Coolbrands, any Guarantor which is a Material Subsidiary or Eskimo (to the
extent such agreements shall remain in effect following the Acquisition), the
review of which shall be satisfactory to the Agent in all respects.
(s) A schedule of all litigation as provided on Schedule 3.01(s) affecting
the Borrower, Coolbrands, a Guarantor which is a Material Subsidiary or Eskimo,
the review of which shall be reasonably satisfactory to the Agent in all
respects.
(t) Evidence satisfactory to the Agent that (i) Eskimo's shareholder rights
plan will have been terminated or not be otherwise in effect and applicable to
the Borrower, (ii) that amount of the Drawdown which is to be used to finance
the Acquisition will be transferred by Borrower to First Union National Bank,
Eskimo's transfer agent pursuant to the Exchange Agency Agreement dated as of
September 20, 2000 and (iii) the Acquisition is non-hostile in nature, all of
the foregoing to be in all respects satisfactory to the Agent and its counsel.
(u) Execution and delivery of an amendment to the Existing Credit Facility
which (i) allows for the entry into this Agreement and the transactions
contemplated hereby and (ii) conforms the affirmative, negative and financial
covenants of the Existing Credit Facility (and other related provisions) to the
corresponding provisions of this Agreement.
(v) Kayla shall have made a loan to the Borrower in the principal amount of
$7,500,000.00, repayable in five (5) years on a ten (10) year amortization and
on other terms and conditions satisfactory to the Agent, and which will have
been subordinated to the obligations of the Borrower to the Agent and the
Lenders, on terms and conditions satisfactory to the Agent.
(w) The following statements shall be true and the Agent shall have
received a certificate signed by the Chief Executive officer(s) or Chief
Financial Officer(s) of the Borrower, Coolbrands and each of the Guarantors
which is a Material Subsidiary dated the Drawdown Date, stating that:
(i) The representations and warranties contained in Article IV of this
Agreement and in the Loan Documents are true and correct on and as of such date;
and
29
(ii) No Default or Event of Default has occurred and is continuing, or
would result from the making of the Term Loan.
(x) All schedules, documents, exhibits, certificates and other information
provided to the Agent or any of the Lenders pursuant to or in connection with
this Agreement shall be reasonably satisfactory to the Agent and its counsel in
all respects.
(y) Payment of the Agent's fees and the facility fees due to the Lenders as
set forth in a separate letter agreement between the Borrower and the Agent, and
all fees and expenses of the Agent incurred in connection with the preparation
of this Agreement, and the other Loan Documents and in connection with the
transactions contemplated hereby, including the reasonable fees and
disbursements of counsel for the Agent.
(z) All legal matters incident to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory to Cullen and Xxxxxx,
counsel to the Agent.
(aa) Receipt by the Agent of such other approvals, opinions or documents as
the Agent or its counsel may reasonably request.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties. On the date hereof and on the
Drawdown Date, the Borrower and each of the Guarantors represent and warrant as
follows:
(a) Subsidiaries. On the date hereof and on the Drawdown Date, the only
Material Subsidiaries of the Borrower or a Guarantor are those set forth on
Schedule 4.01(a) annexed hereto, which Schedule accurately sets forth with
respect to each such Subsidiary, its name and address, any other addresses at
which it conducts business, its state of incorporation and each other
jurisdiction in which it is qualified to do business and the identity and share
holdings of its stockholders. Except as set forth on Schedule 4.01(a), all of
the issued and outstanding shares of each Material Subsidiary which are owned by
the Borrower or a Guarantor are owned by the Borrower or such Guarantor free and
clear of any mortgage, pledge, lien or encumbrance. Except for options and
similar grants given to employees, officers, directors and advisors in the
ordinary course of business, and except as disclosed in the audited consolidated
financial statements for Coolbrands and its Consolidated Subsidiaries for the
year ended August 31, 1999, there are not outstanding any warrants, options,
contracts or commitments of any kind entitling any Person to redeem, purchase or
otherwise acquire any shares of common or capital stock or other equity interest
of the Borrower, any Guarantor or any Material Subsidiary of the Borrower or a
Guarantor, nor are there outstanding any securities which are convertible into
or exchangeable for any shares of the common or capital stock of the Borrower,
any Guarantor or any Material Subsidiary of the Borrower or a Guarantor.
(b) Organization. The Borrower and each Guarantor are each a corporation
duly incorporated, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation and each has the corporate power to
own its assets and to transact the business in which it is presently engaged and
is duly qualified and is in good standing in all other jurisdictions where the
failure to so qualify or remain in good standing could result in a Material
Adverse Change in the Borrower or a Guarantor.
(c) Due Execution, etc. The execution, delivery and performance by the
Borrower and each Guarantor of the Loan Documents to which they are a party are
within the Borrower's and the Guarantors' corporate power and have been duly
authorized by
31
all necessary corporate action and do not and will not (i) require any consent
or approval of the stockholders of the Borrower or Guarantors other than those
which have been obtained; (ii) do not contravene the Borrower's or any of the
Guarantors' certificates of incorporation, charters or by-laws; (iii) violate
any provision of or any law, rule, regulation, contractual restriction, order,
writ, judgment, injunction, or decree, determination or award binding on or
affecting the Borrower or any Guarantor; (iv) result in a breach of or
constitute a default under any indenture or loan or credit agreement, or any
other agreement, lease or instrument to which the Borrower or any Guarantor is a
party or by which it or its properties may be bound or affected; and (v) result
in, or require, the creation or imposition of any Lien upon or with respect to
any of the properties now owned or hereafter acquired by the Borrower or any
Guarantor.
(d) No Authorization, etc. No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by the Borrower or
any Guarantor of any Loan Document to which it is a party, except
authorizations, approvals, actions, notices or filings which have been obtained,
taken or made, as the case may be.
(e) Validity of Loan Documents. The Loan Documents when delivered hereunder
will have been duly executed and delivered on behalf of the Borrower and each
Guarantor, as the case may be, and will be legal, valid and binding obligations
of the Borrower and each Guarantor, as the case may be, enforceable against the
Borrower or such Guarantor in accordance with their respective terms.
(f) Financial Statements. The consolidated financial statements of
Coolbrands and its Consolidated Subsidiaries (other than EP and Eskimo) for the
fiscal year ended August 31, 1999, and for the nine (9) month period ended May
31, 2000, copies of which have been furnished to the Bank, fairly present the
financial condition of Coolbrands and its Consolidated Subsidiaries as at such
dates and the results of operations of Coolbrands and its Consolidated
Subsidiaries for the periods ended on such date, all in accordance with GAAP,
and since August 31, 1999 there has been (i) no material increase in the
liabilities of any of Coolbrands and its Consolidated Subsidiaries other than as
disclosed in the financial statements of Coolbrands and its Consolidated
Subsidiaries for the third fiscal quarter of 2000 and (ii) except as provided in
Schedule 4.01(f), no Material Adverse Change in any of the Credit Parties.
32
(g) Litigation. Except as set forth in Schedule 3.01(t) or in consolidated
and consolidating financial statements of Coolbrands and its Consolidated
Subsidiaries for the fiscal quarter ended May 31, 2000, there is no pending or
threatened action, proceeding or investigation affecting the Borrower, any
Guarantor or any Subsidiary, before any court, governmental agency or
arbitrator, which may either in one case or in the aggregate, (i) result in a
Material Adverse Change in the Borrower, any Guarantor or any Subsidiary or (ii)
affect the Acquisition in any way.
(h) Tax Returns. The Borrower and each Guarantor have filed all federal,
state and local tax returns required to be filed and have paid all taxes,
assessments and governmental charges and levies that are reflected on such
returns as due, including interest and penalties, provided that neither
Integrated nor Yogen Fruz has filed its consolidated federal or state income tax
returns for the fiscal year ended August 31, 1999 which will be filed not later
than October 31, 2000 and the Borrower represents to the Agent and the Lenders
that any unpaid taxes, interest and penalties not accrued for on the August 31,
1999 financial statements will be less than $25,000.00, in the aggregate.
(i) Licenses, etc. The Borrower, each Guarantor and each Subsidiary own, or
are taking appropriate actions to secure the ownership of (and believe in good
faith that, prior to obtaining such ownership, they are entitled to use) or are
licensed to use all trademarks, tradenames, copyrights, technology, know-how and
processes (the "Intellectual Property") that, in the aggregate, are necessary
for the conduct of their business as currently conducted except for those of
which the failure to own or license could not have a Material Adverse Effect on
the Borrower, such Guarantor or such Subsidiary. To the best of the Borrower's
and the Guarantors' knowledge, no claim is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower or the
Guarantors know of any valid basis for any such claim other than claims which,
if adversely determined, would not have a Material Adverse Effect on the
Borrower, a Guarantor or such Subsidiary. The use of such Intellectual Property
does not infringe on the rights of any Person, except for such claims and
infringements that, in the aggregate, do not have a Material Adverse Effect on
the Borrower, a Guarantor or such Subsidiary.
(j) No Burdensome Agreement. Neither the Borrower nor any Guarantor is a
party to any indenture, loan or credit agreement or any other agreement, lease
or instrument or subject to any charter or corporate restriction which could
result in a Material Adverse
33
Change in the Borrower or any Guarantor and neither the Borrower nor any
Guarantor is in default of any such agreement.
(k) Margin Credit. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation T, U or X), and no proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock or in any other way which will cause
the Borrower to violate the provisions of Regulations T, U or X.
(l) Compliance with Law. The Borrower, each Guarantor and each Subsidiary
are in all material respects in compliance with all federal and state laws and
regulations in all jurisdictions where the failure to comply with such laws or
regulations could result in a Material Adverse Change in the Borrower, any of
the Guarantors or any Subsidiary.
(m) ERISA. The Borrower, each Guarantor, each Subsidiary and each ERISA
Affiliate are in compliance in all material respects with all applicable
provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction has
occurred and is continuing with respect to any Plan; no notice of intent to
terminate a Plan has been filed nor has any Plan been terminated; no
circumstances exist which constitute grounds under Section 4042 of ERISA
entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administrate, a Plan, nor has the PBGC instituted any such proceedings;
neither the Borrower, any Guarantor, any Subsidiary, nor any ERISA Affiliate has
completely or partially withdrawn under Sections 4201 or 4204 of ERISA from a
Multiemployer Plan; the Borrower, each Guarantor, each Subsidiary and each ERISA
Affiliate have met their minimum funding requirements under ERISA with respect
to all of their Plans and the present fair market value of all Plan assets
exceeds the present value of all vested benefits under each Plan, as determined
on the most recent valuation date of the Plan in accordance with the provisions
of ERISA for calculating the potential liability of the Borrower, any Guarantor,
any Subsidiary or any ERISA Affiliate to PBGC or the Plan under Title IV of
ERISA; and neither the Borrower, any Guarantor, any Subsidiary nor any ERISA
Affiliate has incurred any liability to the PBGC under ERISA.
(n) Hazardous Materials. Except as set forth on Schedule 4.01(n), the
Borrower, each Guarantor and each Subsidiary are in compliance in all material
respects with all federal, state or local laws, ordinances, rules, regulations
or policies governing Hazardous Materials and neither the Borrower, any
Guarantor nor any
34
Subsidiary has used Hazardous Materials on, from, or affecting any property now
owned or occupied by the Borrower, any Guarantor or any Subsidiary in any manner
which violates federal, state or local laws, ordinances, rules, regulations or
policies governing the use, storage, treatment, transportation, manufacture,
refinement, handling, production or disposal of Hazardous Materials, and that to
the best of the Borrower's, Guarantors' and Subsidiaries' knowledge, no prior
owner of any such property or any tenant, subtenant, prior tenant or prior
subtenant have used Hazardous Materials on, from or affecting such property in
any manner which violates federal, state or local laws, ordinances, rules,
regulations, or policies governing the use, storage, treatment, transportation,
manufacture, refinement, handling, production or disposal of Hazardous
Materials.
(o) Use of Proceeds. The proceeds of the Term Loan shall be used
exclusively for the purposes set forth in Section 2.06 hereof.
(p) Title to Assets; Liens. The Borrower and the Guarantors have good title
to the properties and assets used in connection with their respective business
and such properties and assets are not subject to any Lien other than those
described in Section 5.02(a) hereof.
(q) Casualty. Neither the business nor the properties of the Borrower, any
Guarantor or any Subsidiary are affected by any fire, explosion, accident,
strike, hail, earthquake, embargo, act of God or of the public enemy, or other
casualty (whether or not covered by insurance), which could result in a Material
Adverse Change in the Borrower, any Guarantor or any Subsidiary.
(r) Financial Advantage. The Guarantors acknowledge they have derived or
expect to derive a financial or other advantage from the Loans obtained by the
Borrower from the Bank.
(s) Credit Agreements. Schedule 4.01(s) is a complete and correct list of
all credit agreements, indentures, purchase agreements, guaranties, Capital
Leases, and other investments, agreements and arrangements presently in effect
providing for or relating to extensions of credit (including agreements and
arrangements for the issuance of letters of credit or for acceptance financing)
in respect of which the Borrower or any Guarantor is in any manner directly or
contingently obligated, and the maximum principal or face amounts of the credit
in question, outstanding or to be outstanding, are correctly stated, and all
Liens of any nature given or agreed to be given as security therefor are
correctly described or indicated in such Schedule.
35
(t) Solvency. Immediately after the consummation of the Acquisition and the
closing and funding of the Term Loan (and after giving effect to the application
of the proceeds thereof): (a)(i) the fair value of the assets of the Credit
Parties, on a consolidated basis, will exceed their debts and liabilities
(subordinated, contingent or otherwise); (ii) the present fair saleable value of
the property of the Credit Parties, on a consolidated basis, will be greater
than the amount required to pay the probable liability of their debts and other
liabilities (subordinated, contingent or otherwise) as such debts and other
liabilities mature; (iii) the Credit Parties, on a consolidated basis, will be
able to pay their debts and liabilities (subordinated, contingent or otherwise)
as such debts and liabilities mature; and (iv) the Credit Parties, on a
consolidated basis, will not have unreasonably small capital to conduct the
businesses in which they are engaged; (b)(i) the Borrower and each Guarantor
will be able to pay its debts and liabilities (subordinated, contingent or
otherwise) as such debts and liabilities mature; and (ii) the Borrower and each
Guarantor will not have unreasonably small capital to conduct the business in
which it is engaged; and (c) the Borrower and each Guarantor shall have a
positive net worth.
(u) Acquisition. The Borrower has heretofore delivered to the Agent a true,
correct and complete copy of the Acquisition Agreement and the Acquisition
Agreement sets forth the entire agreement among the parties thereto with respect
to the subject matter thereof. Except as set forth in Schedule 4.01(u), no party
to the Acquisition Agreement has waived the fulfillment of any material
condition precedent set forth therein to the consummation of the Acquisition, no
party has failed to perform any of its obligations thereunder or under any
instrument or document executed and delivered in connection therewith, and
nothing has come to the attention of the Borrower which would cause it to
believe that any of the representations or warranties of Eskimo contained in the
Acquisition Agreement were false or misleading when made or when reaffirmed on
the date hereof. No consent or approval, authorization or declaration of any
governmental authority, bureau or agency is or will be required in connection
with the Acquisition. Except as set forth in Schedule 4.01(u), neither the
execution and delivery of the Acquisition Agreement, nor the performance of the
Borrower's obligations thereunder, will violate any provision of law or will
conflict with or result in a breach of, or create (with or without the giving of
notice or lapse of time, or both) a default under, any agreement to which the
Borrower or any Guarantor is a party or by which it is bound or any of its
properties is affected. Upon the consummation of the Acquisition, the Borrower
will have acquired, and will have, valid, legal and
36
marketable title to the Eskimo stock to be acquired pursuant to the Acquisition
Agreement, free and clear of any Lien, except for the Liens created and granted
by the Loan Documents.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
37
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any amount shall remain
outstanding under the Term Loan Notes, the Borrower and each of the Guarantors
will, and will cause each Subsidiary to, unless the Agent and the Required
Lenders shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders, where the failure to so comply
could result in a Material Adverse Change in the Borrower, a Guarantor or any
Subsidiary.
(b) Reporting Requirements. Furnish to the Agent and the Lenders: (i)
Annual Financial Statements. As soon as available and in any event not later
than two (2) weeks after submission to the Toronto Stock Exchange or any other
Canadian regulatory agency or authority, a copy of the audited consolidated, and
management prepared consolidating, financial statements of Coolbrands and its
Consolidated Subsidiaries for each fiscal year, including balance sheets with
related statements of income and retained earnings and statements of cash flows,
all in reasonable detail and setting forth in comparative form the figures for
the previous fiscal year, together with an unqualified opinion on such
consolidated statements, prepared by independent certified public accountants
selected by Coolbrands and satisfactory to the Agent, all such financial
statements to be prepared in accordance with GAAP. All financial reporting shall
be made to the Agent and the Lenders in Canadian dollars and Coolbrands shall
provide the Agent with the conversion rates used and the method of conversion
used.
(ii) Quarterly Financial Statements. As soon as available and in any
event not later than two (2) weeks after submission to the Toronto Stock
Exchange or any other Canadian regulatory agency or authority, a copy of the
consolidated and consolidating financial statements of Coolbrands and its
Consolidated Subsidiaries for each of the first three fiscal quarters of each
fiscal year, including a balance sheet with related statements of income and
retained earnings and a statement of cash flows, all in reasonable detail and,
with respect to the consolidated statements only, setting forth in comparative
form the figures for the comparable quarter for the previous fiscal year,
certified by the Chief Financial Officer of Coolbrands, all such financial
statements to be prepared in accordance with GAAP. All financial reporting shall
be made to the Agent and the Lenders in Canadian
38
dollars and Coolbrands shall provide the Agent with the conversion rates used
and the method of conversion used.
(iii) Management Letters. Promptly upon receipt thereof, copies of any
reports submitted to the Borrower or any Guarantor by independent certified
public accountants in connection with examination of the financial statements of
the Borrower and each Guarantor made by such accountants.
(iv) Certificate of No Default. Simultaneously with the delivery of
the financial statements referred to in Section 5.01(b)(i) and (ii), a
certificate of the President or the Chief Financial Officer of Coolbrands and
the Borrower, (1) certifying that no Default or Event of Default has occurred
and is continuing, or if a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which is
proposed to be taken with respect thereto; and (2) with computations
demonstrating compliance with the covenants contained in Section 5.03.
(v) Accountant's Certificate. Simultaneously with the delivery of the
annual financial statements referred to in Section 5.01(b)(i), a certificate of
the independent certified public accountants who audited such statements to the
effect that, in making the examination necessary for the audit of such
statements, they have obtained no knowledge of any condition or event which
constitutes a Default or Event of Default, or if such accountants shall have
obtained knowledge of any such condition or event, they shall specify in such
certificate each such condition or event of which they have knowledge and the
nature and status thereof.
(vi) Notice of Litigation. Promptly after the commencement thereof,
notice of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency, or instrumentality, domestic or
foreign, affecting the Borrower, any Guarantor or any Subsidiary which seeks
recovery against the Borrower, a Guarantor or a Subsidiary (i) in an amount in
excess of $250,000.00 or (ii) if determined adversely to the Borrower, any
Guarantor or any such Subsidiary could result in a Material Adverse Change in
the Borrower, any Guarantor or any such Subsidiary and notice of any material
changes in any such proceedings previously reported to the Agent.
(vii) Notice of Defaults and Events of Default. As soon as possible
and in any event within five (5) days after the occurrence of each Default or
Event of Default, a written notice setting forth the details of such Default or
Event of Default and
39
the action which is proposed to be taken by the Borrower with respect thereto.
(viii) ERISA Reports. Promptly after the filing or receiving thereof,
copies of all reports, including annual reports, and notices which the Borrower,
any Guarantor or any Subsidiary, files with or receives from the PBGC or the
U.S. Department of Labor under ERISA; and as soon as possible after the Borrower
or any Guarantor knows or has reason to know that any Reportable Event or
Prohibited Transaction has occurred with respect to any Plan or that the PBGC or
the Borrower, any Guarantor or any such Subsidiary has instituted or will
institute proceedings under Title IV of ERISA to terminate any Plan, the
Borrower or such Guarantor will deliver to the Agent a certificate of the
President or the Chief Financial Officer of the Borrower or such Guarantor
setting forth details as to such Reportable Event or Prohibited Transaction or
Plan termination and the action the Borrower or such Guarantor proposes to take
with respect thereto.
(ix) Reports to Other Creditors. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other party pursuant
to the terms of any indenture, loan, or credit or similar agreement and not
otherwise required to be furnished to the Agent pursuant to any other clause of
this Section 5.01(b).
(x) Proxy Statements, Etc. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports which
the Borrower or any Guarantor sends to its stockholders, and copies of all
regular, periodic, and special reports, and all registration statements which
the Borrower or any Guarantor files with the Toronto Stock Exchange or any other
Canadian regulatory agency or authority which may be substituted therefor, or
with any United States national securities exchange.
(xi) Material Adverse Change. Promptly upon the occurrence thereof,
notify the Agent of any Material Adverse Change in the Borrower, any Guarantor
or any Subsidiary.
(xii) Environmental Notices. Promptly after the receipt thereof, a
copy of any claim, summons, charge or other notice to a Borrower, a Guarantor or
any Subsidiary of a Borrower or a Guarantor regarding compliance (or failure to
comply) with any federal, state or local laws governing Hazardous Materials.
(xiii) Notice of Subsidiaries. Promptly after any Person becomes a
Material Subsidiary of a Borrower or a Guarantor, notice to the Agent and the
Lenders of such Material Subsidiary.
40
(xiv) General Information. Such other information respecting the
condition or operations, financial or otherwise, of the Borrower, any Guarantor
or any Subsidiary as the Agent may from time to time reasonably request.
(c) Taxes; Claims. Pay and discharge all taxes, assessments and
governmental charges and all other charges and claims by other Persons upon it
or them, its or their income and its or their properties prior to the dates on
which such amounts are due or on which penalties are attached thereto, unless
and only to the extent that (i) such taxes or other claims shall be contested in
good faith and by appropriate proceedings by the Borrower, any Guarantor or any
Subsidiary, as the case may be, and (ii) there be adequate reserves therefor in
accordance with GAAP entered on the books of the Borrower, any Guarantor or any
Subsidiary.
(d) Corporate Existence. Preserve and maintain their corporate existence
and good standing in the jurisdiction of their incorporation and the rights,
privileges and franchises of the Borrower, each Guarantor and each Subsidiary in
each case where failure to so preserve or maintain could result in a Material
Adverse Change in the Borrower, such Guarantor or such Subsidiary.
(e) Maintenance of Properties and Insurance. (i) Keep the respective
properties and assets (tangible or intangible) that are useful and necessary in
its business, in good working order and condition, reasonable wear and tear
excepted; and (ii) maintain, and cause any Subsidiaries to maintain, insurance
with financially sound and reputable insurance companies or associations in such
amounts and covering such risks as are usually carried by companies engaged in
similar businesses and owning properties doing business in the same general
areas in which the Borrower, any Guarantors and any Subsidiaries operate.
(f) Books of Record and Account. Keep and cause any Subsidiaries to keep,
adequate records and proper books of record and account in which complete
entries will be made in a manner to enable the preparation of financial
statements in accordance with GAAP, reflecting all financial transactions of the
Borrower, the Guarantors and any Subsidiaries.
(g) Visitation. At any reasonable time, and from time to time, on
reasonable notice to the Borrower or an applicable Guarantor, permit the Agent
or any agents or representatives thereof, to examine and make copies of and
abstracts from the books and records of, and visit the properties of, the
Borrower or any Guarantor and to discuss the affairs, finances and accounts of
the Borrower or any Guarantor with any of the respective officers or
41
directors of the Borrower or such Guarantor or the Borrower's or such
Guarantor's independent accountants.
(h) Performance and Compliance with Other Agreements. Perform and comply
with each of the provisions of each and every agreement the failure to perform
or comply with which could result in a Material Adverse Change in the Borrower,
any Guarantor or any Subsidiary.
(i) Pension Funding. Comply with the following and cause each ERISA
Affiliate of the Borrower, any Guarantor or any Subsidiary to comply with the
following:
(i) engage solely in transactions which would not subject any of such
entities to either a civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed by Section 4975 of the Internal Revenue Code in either case in
an amount in excess of $25,000.00;
(ii) make full payment when due of all amounts which, under the
provisions of any Plan or ERISA, the Borrower, any Guarantor, any Subsidiary or
any ERISA Affiliate is required to pay as contributions thereto;
(iii) all applicable provisions of the Internal Revenue Code and the
regulations promulgated thereunder, including but not limited to Section 412
thereof, and all applicable rules, regulations and interpretations of the
Accounting Principles Board and the Financial Accounting Standards Board;
(iv) not fail to make any payments in an aggregate amount greater than
$25,000.00 to any Multiemployer Plan that the Borrower, any Guarantor, any
Subsidiary or any ERISA Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law pertaining thereto; or
(v) not take any action regarding any Plan which could result in the
occurrence of a Prohibited Transaction.
(j) Licenses. Maintain at all times all licenses or permits necessary to
the conduct of its business or as may be required by any governmental agency or
instrumentality thereof where the failure to obtain or maintain such licenses or
permits could result in a Material Adverse Change in the Borrower, any Guarantor
or any Subsidiary.
(k) Subsidiaries. Notify the Agent of the formation, acquisition, merger or
dissolution of any Material Subsidiary (or
42
of any existing Subsidiary becoming a Material Subsidiary) and cause any direct,
wholly owned Material Subsidiary of the Borrower or any Guarantor formed or
becoming such after the date of this Agreement to become a Guarantor of all
Debts and other obligations of the Borrower under this Agreement and become a
party to this Agreement.
(l) Agent's Administrative Fee. Pay to the Agent the annual administrative
fee and other fees set forth in a separate letter agreement between the Borrower
and the Agent.
(m) Interest Rate Protection Agreement. Within forty five (45) days of the
date of this Agreement, the Borrower shall enter into the Interest Rate
Protection Agreement with the Agent in a notional amount equal to 25% of the
original principal balance of the Term Loan on terms and conditions, and with a
tenor, satisfactory to the Agent.
(n) Eskimo. Not later than ten (10) days after the merger of Eskimo into
EP, cause Eskimo to (i) execute a joinder agreement pursuant to which Eskimo
becomes a party to, and bound by the provisions of this Agreement, (ii) executes
a Guaranty and (iii) delivers to the Agent copies of the documentation referred
to in Section 3.01(c), (e), (f) and (h).
SECTION 5.02. Negative Covenants. So long as any amount shall remain
outstanding under the Term Loan Notes, neither the Borrower nor any of the
Guarantors will, nor will they permit any Subsidiary to, without the written
consent of the Agent and the Required Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist, any Lien, upon or
with respect to any of its properties, now owned or hereafter acquired, except:
(i) Liens in favor of the Agent as a lender;
(ii) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(iii) Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due, or which are removed within twenty (20) days from the attachment of
such Lien, or which
43
are being contested in good faith by appropriate proceedings and for which
appropriate reserves have been established;
(iv) Liens under workers' compensation, unemployment insurance, Social
Security, or similar legislation;
(v) Liens, deposits, or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(vi) Liens described in Schedule 5.02(a), provided that no such Liens
shall be renewed, extended or refinanced; and
(vii) Judgment and other similar Liens arising in connection with
court proceedings (other than those described in Section 6.01(f));
(viii) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
Borrower's, a Guarantor's or a Subsidiary's occupation, use and enjoyment of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto; and
(ix) Purchase money Liens on any property hereafter acquired or the
assumption of any Lien on property existing at the time of such acquisition, or
a Lien incurred in connection with any conditional sale or other title retention
agreement or a Capital Lease, provided that:
(1) Any property subject to any of the foregoing is acquired by
the Borrower, any Guarantor or any Subsidiary in the ordinary course of its
respective business and the Lien on any such property is created
contemporaneously with, or is in existence at the time of, such acquisition;
(2) The obligation secured by any Lien so created, assumed, or
existing shall not exceed 100% of lesser of cost or fair market value of the
property acquired as of the time of the Borrower, any Guarantor or any
Subsidiary acquiring the same;
(3) Each such Lien shall attach only to the property so acquired
and fixed improvements thereon; and
44
(4) The obligation secured by such Lien is permitted by the
provisions of Section 5.02(b) and the related expenditure is permitted by the
provisions of Section 5.03(a).
(b) Debt. Create, incur, assume, or suffer to exist, any Debt, except:
(i) Debt of the Borrower under this Agreement or the Notes or any
other Debt owing from the Borrower or a Guarantor to the Agent as a lender;
(ii) Debt described in Schedule 5.02(b), provided that no such Debt
shall be renewed, extended or refinanced;
(iii) Subordinated Debt;
(iv) Accounts payable to trade creditors for goods or services and
current operating liabilities (other than for borrowed money), in each case
incurred in the ordinary course of business and paid within the specified time,
unless contested in good faith and by appropriate proceedings;
(v) Debt incurred in connection with Permitted Acquisitions, provided
such Debt (1) does not cause the Borrower to violate (on a pro-forma basis,
after giving effect to such Permitted Acquisition) any covenant in Section 5.03,
(2) result in the Term Loan or the subject Permitted Acquisition becoming a
Highly Leveraged Transaction or (3) otherwise result in a Default or Event of
Default;
(vi) Subordinated Debt between the Borrower and a Guarantor or between
Guarantors; and
(vii) Debt of the Borrower or any Guarantor secured by purchase money
Liens permitted by Section 5.02(a)(ix) or otherwise to finance Capital
Expenditures permitted by Section 5.03(c).
(c) Merger. Merge into, or consolidate with or into, or have merged into
it, any Person; and, for the purpose of this subsection (d), the acquisition or
sale by the Borrower or any Guarantor by lease, purchase or otherwise, of all,
or substantially all, of the common stock or the assets of any Person or of it
shall be deemed a merger of such Person with the Borrower or any Guarantor,
except for (i) the Acquisition, (ii) Permitted Acquisitions, (iii) mergers or
consolidations of the Borrower and any Guarantor, provided the Borrower is the
surviving entity and (iv) mergers or consolidations among the Credit Parties
other than the Borrower.
45
(d) Sale of Assets, Etc. Sell, assign, transfer, lease or otherwise dispose
of any assets (including a saleleaseback transaction) with or without recourse,
except for (i) inventory disposed of in the ordinary course of business, (ii)
the sale or other disposition of assets no longer used or useful in the conduct
of its business, and (iii) the sale of such assets which result in a Prepayment
Event.
(e) Investments, Etc. Make any Investment other than Permitted Investments.
(f) Transactions With Affiliates. Except for those transactions disclosed
on the audited consolidated financial statements for Coolbrands and its
Consolidated Subsidiaries for the fiscal year ended August 31, 1999 and except
for transactions in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower's, a Guarantor's or a Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower,
or the Guarantor or the Subsidiary than would be obtained in a comparable arm's
length transaction with a Person not an Affiliate, enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate.
(g) Prepayment of Outstanding Debt. Pay, in whole or in part, any
outstanding Debt having a maturity of one year or more (other than Debt owing to
the Agent) of the Borrower or any Guarantor, which by its terms is not then due
and payable.
(h) Guarantees. Guaranty, or in any other way become directly or
contingently obligated for any Debt of any other Person (including any
agreements relating to working capital maintenance, take or pay contracts or
similar arrangements) other than (i) the endorsement of negotiable instruments
for deposit in the ordinary course of business; (ii) guarantees existing on the
date hereof and set forth in Schedule 5.02(i) annexed hereto; (iii) guarantees
by the Borrower of Debt of a Guarantor if such Debt is permitted by Section
5.02(b); (iv) guarantees given in favor of the Agent.
(i) Change of Business. Materially alter the nature of its business.
(j) Fiscal Year. Change the ending date of its fiscal year from August 31.
(k) Accounting Policies. Change any accounting policies, except as
permitted by GAAP.
46
(l) Dividends, Etc. Declare or pay any dividends, purchase, redeem, retire
or otherwise acquire for value any of its capital stock now or hereafter
outstanding, or make any distribution of assets to its stockholders as such,
whether in cash, assets, or in obligations of the Borrower or any Guarantor; or
allocate or otherwise set apart any sum for the payment of any dividend or
distribution on, or for the purchase, redemption or retirement of any shares of
its capital stock, provided that any Subsidiary may pay dividends to its parent
corporation as long as such parent corporation is the Borrower or a Guarantor.
(m) Change in Ownership/Management. (i) Fail at any time to have the Xxxxx
Group and the Serruya Group own, in the aggregate, shares of stock enabling the
owners thereof to cast at least forty (40%) percent of the votes for the
election of directors of Coolbrands.
(ii) Fail to have a majority of the members of the board of directors
of Coolbrands be the nominees of either the Xxxxx Group or the Serruya Group.
(n) Hazardous Material. Cause any property owned or occupied by the
Borrower, any Guarantor or any Subsidiary to be used to generate, manufacture,
refine, transport, treat, store, handle, dispose, transfer, produce or process
Hazardous Materials, except in compliance with all applicable federal, state and
local laws or regulations; nor cause or permit, as a result of any intentional
or unintentional act or omission on the part of the Borrower, any Guarantor or
any Subsidiary or any tenant or subtenant, a release of Hazardous Materials onto
any property owned or occupied by the Borrower, any Guarantor or any Subsidiary
or onto any other property; nor fail to comply with all applicable federal,
state and local laws, ordinances, rules and regulations, whenever and by
whomever triggered; nor fail to obtain and comply with, any and all approvals,
registrations or permits required thereunder. The Borrower and the Guarantors
shall execute any documentation required by the Agent in connection with the
representations, warranties and covenants contained in this paragraph and
Section 4.01 of this Agreement.
SECTION 5.03. Financial Requirements. So long as any amount shall remain
outstanding under the Term Loan Notes:
(a) Consolidated Capital Expenditures. Coolbrands and its Consolidated
Subsidiaries will not make Consolidated Capital Expenditures in excess of
$3,000,000.00 in the aggregate during any fiscal year.
47
(b) Funded Debt to EBITDA Ratio. Coolbrands and its Consolidated
Subsidiaries will maintain at all times a Funded Debt to EBITDA Ratio of not
greater than 4.00 to 1.00.
(c) Interest Coverage Ratio. Coolbrands and its Consolidated Subsidiaries
will at all times maintain an Interest Coverage Ratio of not less than 3.00 to
1.00.
(d) Senior Funded Debt to EBITDA Ratio. Coolbrands and its Consolidated
Subsidiaries will maintain at all times a Senior Funded Debt to EBITDA Ratio of
not greater than 3.00 to 1.00.
(e) Debt Service Coverage Ratio). Coolbrands and its Consolidated
Subsidiaries will maintain at all times a Debt Service Coverage Ratio of not
less than (i) 1.25 to 1.00.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) The Borrower shall fail to pay (i) any installment of principal
of, or interest on, any Term Loan Note when due, or (ii) any fees or other
amounts owed in connection with this Agreement within five (5) days of the date
when due; or
(b) Any representation or warranty made by the Borrower or any
Guarantor herein or in the Loan Documents or which is contained in any
certificate, document, opinion, or financial or other statement furnished at any
time under or in connection with any Loan Document shall prove to have been
incorrect in any material respect when made; or
(c) The Borrower or any Guarantor shall fail to perform (i) any term,
covenant or agreement contained in Section 5.01 of this Agreement within fifteen
(15) days after notice of such failure has been given to the Borrower by the
Agent or (ii) any other term, covenant, or agreement contained in this Agreement
in any other Loan Document (other than the Notes); or
(d) The Borrower, any Guarantor, or any Subsidiary shall fail to pay
(i) any other Debt owing to the Agent or any Lender or (ii) one or more other
Debts in excess of $100,000.00 in principal amount in the aggregate (excluding
Debt evidenced by the Notes) of the Borrower, any Guarantor or any Subsidiary
(as the case may be), or any interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt; or any other default under
any agreement or instrument relating to any such Debt, or any other event shall
occur and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or
(e) The Borrower, any Guarantor or any Subsidiary shall generally not
pay its Debts as such Debts become due, or shall admit in writing its inability
to pay its Debts generally, or shall
49
make a general assignment for the benefit of creditors; or any proceeding shall
be instituted by or against the Borrower, any Guarantor or any Subsidiary
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its Debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property and if instituted against the
Borrower, any Guarantor or any Subsidiary shall remain undismissed for a period
of 90 days; or the Borrower, any Guarantor or any Subsidiary shall take any
action to authorize any of the actions set forth above in this subsection (e);
or
(f) Any judgment or order or combination of judgments or orders for
the payment of money, in excess of $500,000.00 in the aggregate, which sum shall
not be subject to full, complete and effective insurance coverage, shall be
rendered against the Borrower, any Guarantor or any Subsidiary and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(g) Any Guarantor shall fail to perform or observe any term or
provision of its Guaranty or any representation or warranty made by any
Guarantor in connection with such Guarantor's Guaranty shall prove to have been
incorrect in any material respect when made; or
(h) Any of the following events occur or exist with respect to the
Borrower, any Guarantor, any Subsidiary, or any ERISA Affiliate: (i) any
Prohibited Transaction involving any Plan; (ii) any Reportable Event with
respect to any Plan; (iii) the filing under Section 4041 of ERISA of a notice of
intent to terminate any Plan or the termination of any Plan; (iv) any event or
circumstance that might constitute grounds entitling the PBGC to institute
proceedings under Section 4042 of ERISA for the termination of, or for the
appointment of a trustee to administer, any Plan, or the institution of the PBGC
of any such proceedings; (v) complete or partial withdrawal under Section 4201
or 4204 of ERISA from a Multiemployer Plan or the reorganization insolvency, or
termination of any Multiemployer Plan; and in each case above, such event or
condition, together with all other events or conditions, if any, could in the
opinion of the Bank subject the Borrower, any Guarantor, any Subsidiary or any
ERISA Affiliate to
50
any tax, penalty, or other liability to a Plan, a Multiemployer Plan, the PBGC,
or otherwise (or any combination thereof) which in the aggregate exceeds or may
exceed $500,000.00.
(i) This Agreement or any other Loan Document, at any time after its
execution and delivery and for any reason, ceases to be in full force and effect
or shall be declared to be null and void, or the validity or enforceability of
any document or instrument delivered pursuant to this Agreement shall be
contested by the Borrower, any Guarantor or any party to such document or
instrument or the Borrower, any Guarantor or any party to such document or
instrument shall deny that it has any or further liability or obligation under
any such document or instrument; or
(j) An event of default specified in any Loan Document other than this
Agreement shall have occurred and be continuing.
SECTION 6.02. Remedies on Default. Upon the occurrence and continuance of
an Event of Default the Agent may, and upon demand by the Required Lenders
shall, by notice to the Borrower, (i) declare the Term Loan Notes, all interest
thereon and all other amounts payable under this Agreement to be forthwith due
and payable, whereupon the Term Loan Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower and (ii) proceed to enforce its rights whether by suit in
equity or by action at law, whether for specific performance of any covenant or
agreement contained in this Agreement or any other Loan Document, or in aid of
the exercise of any power granted in either this Agreement or any other Loan
Document or proceed to obtain judgment or any other relief whatsoever
appropriate to the enforcement of its rights, or proceed to enforce any other
legal or equitable right which the Agent may have by reason of the occurrence of
any Event of Default hereunder or under any Loan Document, provided, however,
upon the occurrence of an Event of Default referred to in Section 6.01(e), the
Term Loan Notes, all interest thereon and all other amounts payable under this
Agreement shall be immediately due and payable without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower. Any amounts collected pursuant to action taken under this
Section 6.02 shall be applied to the payment of, first, any costs incurred by
the Agent in taking such action, including but without limitation attorneys fees
and expenses, second, to payment of the accrued interest on the Term Loan Notes
and third, to payment of the unpaid principal of the Term Loan Notes.
51
SECTION 6.03. Remedies Cumulative. No remedy conferred upon or reserved to
the Agent hereunder or in any Loan Document is intended to be exclusive of any
other available remedy, but each and every such remedy shall be cumulative and
in addition to every other remedy given under this Agreement or any Loan
Document or now or hereafter existing at law or in equity. No delay or omission
to exercise any right or power accruing upon any Event of Default shall impair
any such right or power or shall be construed to be a waiver thereof, but any
such right and power may be exercised from time to time and as often as may be
deemed expedient. In order to entitle the Agent to exercise any remedy reserved
to it in this Article VI, it shall not be necessary to give any notice, other
than such notice as may be herein expressly required in this Agreement or in any
Loan Document.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
52
ARTICLE VII
THE AGENT; RELATIONS AMONG LENDERS AND BORROWER
SECTION 7.01. Appointment, Powers and Immunities of Agent. Each Lender
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under any other Loan Document with such powers as are specifically
delegated to the Agent by the terms of this Agreement and any other Loan
Document, together with such other powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and any other Loan Document, and shall not by reason of
this Agreement be a trustee or fiduciary for any Lender. The Agent shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties made by the Borrower or the Guarantors, or any officer or official of
the Borrower or Guarantors, or any of them, or any other Person contained in
this Agreement or any other Loan Document, or in any certificate or other
document or instrument referred to or provided for in, or received by any of
them under, this Agreement or any other Loan Document, or for the value,
legality, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or any other document or instrument
referred to or provided for herein or therein, except as explicitly provided
herein, or for the failure by the Borrower, the Guarantors, or any of them to
perform any of their or its respective obligations hereunder or thereunder. The
Agent may employ agents and attorneys-in-fact and shall not be responsible,
except as to money or securities received by it or its authorized agents, for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care. Except as otherwise explicitly provided herein, neither
the Agent nor any of its directors, officers, employees or agents shall be
liable or responsible to any Lender for any action taken or omitted to be taken
by it or them hereunder or under any other Loan Document or in connection
herewith or therewith, except for its or their own gross negligence or wilful
misconduct. The Borrower shall pay any fee agreed to by the Borrower and the
Agent with respect to the Agent's services hereunder.
SECTION 7.02. Reliance by Agent. The Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent with reasonable care. The Agent may deem and
treat each Lender as the holder of the Loan made
53
by it for all purposes hereof unless and until a notice of the permitted
transfer thereof satisfactory to the Agent and signed by such Lender shall have
been furnished to the Agent but the Agent shall not be required to deal with any
Person who has acquired a participation in any Loan from a Lender. As to any
matters not expressly provided for by this Agreement or any other Loan Document,
the Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by the Required
Lenders, and such instructions of the Required Lenders and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders and any
other holder of all or any portion of any Loan.
SECTION 7.03. Defaults. The Agent shall not be deemed to have knowledge of
the occurrence of a Default or Event of Default (other than the non-payment of
principal of or interest on the Loan or the non-payment of fees due hereunder)
unless the Agent has actual knowledge of such Default or Event of Default or has
received notice from a Lender or the Borrower specifying such Default or Event
of Default and stating that such notice is a "Notice of Default." In the event
that the Agent receives such a notice of, or otherwise has actual knowledge of
the occurrence of, a Default or Event of Default, the Agent shall give prompt
notice thereof to the Lenders (and shall give each Lender prompt notice of each
such non-payment). The Agent shall (subject to Section 7.08 and Section 8.01
hereof) take such action with respect to such Default or Event of Default which
is continuing as shall be directed by the Required Lenders; provided that,
unless and until the Agent shall have received such directions, the Agent may
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interest of
the Lenders; and provided further that the Agent shall not be required to take
any such action which it determines to be contrary to law.
SECTION 7.04. Rights of Agent as a Lender. With respect to the Loan made by
it, any Person which is the Agent in its capacity as a Lender hereunder shall
have the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include any Person
which is the Agent in its capacity as a Lender. The Agent or any Lender and
their respective Affiliates may (without having to account therefor to any other
Lender except as otherwise expressly provided in this Agreement) accept deposits
from, lend money to (on a secured or unsecured basis), and generally engage in
any kind of banking, trust or other business with, the Borrower, the Guarantors
or any of them (and any of their Affiliates); provided that no
54
payment or lien priority (other than purchase money liens on equipment being
financed by such Lender) shall be given to the Agent or to any Lender for any
other transaction without the express written approval of all of the other
Lenders. In the case of Chase, it may do so as if it were not acting as the
Agent, and the Agent may accept fees and other consideration from the Borrower,
the Guarantors or any of them for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders. Although the
Agent or a Lender or any of their respective Affiliates may in the course of
such relationships and relationships with other Persons acquire information
about the Borrower, the Guarantors, their Affiliates and such other Persons,
neither the Agent nor such Lender shall have any duty to the other Lenders or
the Agent to disclose such information to the other Lenders or the Agent except
as otherwise provided herein with respect to the occurrence of an Event of
Default.
SECTION 7.05. Indemnification of Agent. The Lenders agree to indemnify the
Agent and its directors, officers, employees, agents and Affiliates (the
"Indemnitees") (to the extent not reimbursed under Section 8.04 hereof or under
the applicable provisions of any other Loan Document, but without limiting the
obligations of the Borrower and Guarantors under Section 8.04 hereof or such
provisions), ratably in accordance with their Pro Rata Shares (without giving
effect to any participation in all or any portion of the Term Loan by them to
any other Person), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Indemnitees in any way relating to or arising out of this Agreement,
any other Loan Document or any other documents contemplated by or referred to
herein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which the Borrower and Guarantors are
obligated to pay under Section 8.04 hereof or under the applicable provisions of
any other Loan Document but excluding, unless a Default or Event of Default has
occurred, normal administrative costs and expenses incidental to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents or instruments; provided that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or wilful misconduct of an Indemnitee.
SECTION 7.06. Documents. It is the responsibility of the Borrower to
forward to each Lender, on or before the due dates set forth herein, a copy of
each report, notice (other than notices of borrowings and payments) or other
document required by this Agreement or any other Loan Document to be delivered
to the Agent.
55
The Agent is not responsible for forwarding such information to the Lenders.
SECTION 7.07. Non-Reliance on Agent and Other Lenders. Each Lender agrees
that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower, the Guarantors and
their Subsidiaries and its decision to enter into this Agreement and that it
will, independently and without reliance upon the 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 analysis and decisions in taking or not taking
action under this Agreement or any other Loan Document. The Agent shall not be
required to keep itself informed as to the performance or observance by the
Borrower or Guarantors of this Agreement or any other Loan Document or any other
document referred to or provided for herein or therein or to inspect the
properties or books of the Borrower, the Guarantors or any Subsidiary. Except
for notices, reports and other documents and information expressly required to
be furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to any other Lender to provide any Lender with any credit
or other information concerning the affairs, financial condition or business of
the Borrower, the Guarantors or any Subsidiary (or any of their Affiliates)
which may come into the possession of the Agent or of its Affiliates. The Agent
shall not be required to file this Agreement, any other Loan Document or any
document or instrument referred to herein or therein, or record or give notice
of this Agreement, any other Loan Document or any document or instrument
referred to herein or therein, to any Person.
SECTION 7.08. Failure of Agent to Act. Except for action expressly required
of the Agent hereunder, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Lenders under Section 7.05 hereof in respect of any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
SECTION 7.09. Resignation of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days
56
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a
Lender which has an office in New York, New York. The Required Lenders or the
retiring Agent, as the case may be, shall upon the appointment of a Successor
Agent promptly so notify the Borrower, the Guarantors and the other Lenders.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation as Agent, the provisions of this Article 7 and
Section 8.04 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Agent.
SECTION 7.10. Amendments Concerning Agency Function. The Agent shall not be
bound by any waiver, amendment, supplement or modification of this Agreement or
any other Loan Document which affects its rights or duties hereunder or
thereunder unless it shall have given its prior written consent thereto.
SECTION 7.11. Liability of Agent. The Agent shall not have any liabilities
or responsibilities to the Borrower, the Guarantors or any of them on account of
the failure of any Lender to perform its obligations hereunder or to any Lender
on account of the failure of the Borrower, the Guarantors or any of them to
perform their or its obligations hereunder or under any other Loan Document.
Nothing herein shall be read to relieve any obligation that the Agent may have
to the Borrower as a Lender hereunder.
SECTION 7.12. Transfer of Agency Function. Without the consent of the
Borrower, the Guarantors or any Lender, the Agent may at any time or from time
to time transfer its functions as Agent hereunder to any of its offices located
in the New York metropolitan area, provided that the Agent shall promptly notify
the Borrower, the Guarantors and the Lenders thereof.
SECTION 7.13. Withholding Taxes. Each Lender represents that it is entitled
to receive any payments to be made to it hereunder without the withholding of
any tax and will furnish to the Agent such forms, certifications, statements and
other documents as the Agent may request from time to time to evidence such
Lender's exemption from the withholding of any tax imposed by any jurisdiction
or to enable the Agent to comply with any applicable laws or regulations
relating thereto. Without limiting the effect of the foregoing, if any Lender is
not created or organized under the laws of the United States of America or any
state thereof, in
57
the event that the payment of interest by the Borrower is treated for U.S.
income tax purposes as derived in whole or in part from sources from within the
United States, such Lender will furnish to the Agent Form 4224 or Form 1001 of
the Internal Revenue Service, or such other forms, certifications, statements or
documents, duly executed and completed by such Lender as evidence of such
Lender's exemption from the withholding of United States tax with respect
thereto. The Agent shall not be obligated to make any payments hereunder to such
Lender in respect of any Loan until such Lender shall have furnished to the
Agent the requested form, certification, statement or document.
SECTION 7.14. Several Obligations and Rights of Lenders. The failure of any
Lender to make any Loan to be made by it on the date specified therefor shall
not relieve any other Lender of its obligation to make its Loan on such date,
but no Lender shall be responsible for the failure of any other Lender to make a
Loan to be made by such other Lender.
SECTION 7.15. Pro Rata Treatment of Loans, Etc. Except to the extent
otherwise provided, each prepayment and payment of principal of or interest on
Loans of a particular type and a particular Interest Period, if any, shall be
made to the Agent for the account of the Lenders holding Loans of such type and
Interest Period, if any, pro rata in accordance with the respective unpaid
principal amounts for such Loans of such Interest Period held by such Lenders.
SECTION 7.16. Sharing of Payments Among Lenders. If a Lender shall obtain
payment of any principal of or interest on any Loans any fee due hereunder, made
by it through the exercise of any right of setoff, banker's lien, counterclaim,
or any other means, it shall share such payment with the other Lenders and the
amount of such payment shall be applied to reduce the Loans of all the Lenders
pro rata in accordance with the unpaid principal on the Loans held by each of
them, and make such other adjustments from time to time as shall be equitable to
the end that all the Lenders shall share the benefit of such payment (net of any
expenses which may be incurred by such Lender in obtaining or preserving such
benefit) pro rata in accordance with the unpaid principal and interest on the
Loans held by each of them. To such end the Lenders shall make appropriate
adjustments among themselves if such payment is rescinded or must otherwise be
restored. The Borrower agrees that any Lender so purchasing a participation (or
direct interest) in the Loans made by the other Lenders may exercise all rights
of set off, banker's lien, counterclaim or similar rights with respect to such
participation (or direct interest). Nothing contained herein shall require any
Lender to exercise any such
58
right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness of
the Borrower. Notwithstanding the foregoing or any other provision of this
Agreement, no right or remedy of any Lender relating to any assets of the
Borrowers (including real property, improvements or fixtures) not covered by
this Agreement or the other Loan Documents shall in any way be affected by this
Agreement or otherwise with respect to any other indebtedness of the Borrower to
any of the Lenders.
SECTION 7.17. Non-receipt of Funds by Agent; Payments to Lenders. (a)
Unless the Agent shall have received notice from the Borrower prior to the date
on which any payment is due to the Lenders hereunder that the Borrower will not
make such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent in its sole discretion
may, but shall not be obligated to, in reliance upon such assumption, cause to
be distributed to each Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent that the Borrower shall not have so
made such payment in full to the Agent, such Lender agrees to repay to the Agent
on demand such amount and if for any reason the Agent does not receive such
amount from such Lender on the day of such demand, if such demand is made before
2:00 p.m. on such day, or on the next Business Day if demand is made after 2:00
p.m. on such day, such Lender shall repay to the Agent forthwith on demand such
amount distributed to such Lender together with interest thereon, for each day
from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Agent, at the customary rate set by the Agent
for the correction of errors among lenders for three (3) Business Days and
thereafter at the Prime Rate.
(b) If the Agent shall fail to pay any amounts owing by the Agent to a
Lender as promptly as may be required by this Agreement, the Agent shall pay to
such Lender, on its demand, interest on such delinquent amount at the customary
rate set by the Agent for the correction of errors among lenders for three (3)
Business Days and thereafter at the Prime Rate.
SECTION 7.18 Borrower Cooperation with Agent. (a) The Agent and Chase as a
Lender, reserve the right, at any time after the date of this Agreement, to
transfer all or any part of its Pro Rate Share of the Term Loan to one or more
other Lenders. The Agent may commence syndication efforts at any time after the
execution of this Agreement, and the Borrower and the Guarantors agree to
actively assist the Agent in completing a timely and orderly syndication
satisfactory to it. Such assistance shall include (i)
59
direct contact during the syndication between senior management and advisors of
the Borrower and the Guarantors, on the one hand, and the proposed Lenders, on
the other hand, (ii) assistance in the preparation of a confidential information
memorandum and other marketing materials to be used in connection with the
syndication, and (iii) the hosting, with the Agent, of one or more meetings of
prospective Lenders.
(b) It is understood and agreed that the Agent will, in consultation with
the Borrower and the Guarantors, manage all aspects of the syndication,
including selection of Lenders and determination of when the Agent will approach
potential Lenders, any naming rights, the final allocations of the Term Loan
among the Lenders and the amount and distribution of fees among the Lenders. To
assist the Agent in its syndication efforts, the Borrower and the Guarantors
agree to promptly prepare and provide to the Agent and the Lenders all such
information with respect to the Borrower, the Guarantors and any of their
subsidiaries, including financial information and projections (the
"Projections"), as they may reasonably request in connection with the
arrangement and syndication. The Borrower and the Guarantors hereby represent
and covenant that (i) all information other than the Projections (the
"Information") that has been or will be made available to any Lender or the
Agent by the Borrower, any of the Guarantors or any of their authorized
representatives is or will be, when furnished, complete and correct in all
material respects and does not or will not, when furnished, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not materially misleading in light of
the circumstances under which such statements are made, and (ii) the Projections
made available to any Lender or the Agent by the Borrower, any of the Guarantors
or any of their authorized representatives have been or will be prepared in good
faith based upon reasonable assumptions. The Borrower and the Guarantors agree
to supplement the Information and the Projections so that upon the transfer of
any part of the Term Loan, the representations in the preceding sentence remain
correct. The Borrower and the Guarantors understand that in arranging the
syndication, the Lenders and the Agent will be using and relying primarily on
the Information and the Projections without independent verification thereof.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
60
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be amended or modified only
by an instrument in writing signed by the Borrower, the Guarantors, the Agent
and the Required Lenders, and any provision of this Agreement may be waived by
the Borrower (if such provision requires performance by the Agent or the
Lenders) or by the Agent acting with the consent of the Required Lenders (if
such provision requires performance by the Borrower); provided that no
amendment, modification or waiver shall, unless by an instrument signed by all
of the Lenders or by the Agent acting with the consent of all of the Lenders:
(a) increase or extend the term of the Term Loan, (b) extend the date fixed for
the payment of principal of or interest on the Term Loan, (c) reduce the amount
of any payment of principal thereof or the rate at which interest is payable
thereon or any fee payable hereunder, (d) alter the terms of this Section 8.01,
(e) amend the definition of the term "Required Lenders", (f) change the fees
payable to any Lender except as otherwise provided herein, (g) permit the
Borrower to transfer or assign any of its obligations hereunder or under the
other Loan Documents, (h) amend the provisions of Article 7 hereof, (i) give any
payment priority to any Person (including any of the Lenders) over amounts due
in connection with the Term Loan, (j) release any Guarantors or Collateral or
(k) amend any provision of this Agreement or any other Loan Document which
requires the action of all Lenders. No failure on the part of the Agent or any
Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof or preclude any other or further exercise thereof or
the exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 8.02. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic communication) and
mailed, telegraphed, sent by facsimile or delivered, if to the Borrower or any
Guarantor, at the address of the Borrower set forth at the beginning of this
Agreement to the attention of Xxxx X. Xxxxxxx, President and Chief Financial
Officer, with a copy to (i) Xxxxxxx Xxxxx, X.X. Xxx 00, Xxxxxxxxxxx, Xxx Xxxx
00000 and (ii) Xxxxxxxx Xxxxxx, Esq., Blank, Rome, Tenzer, Greenblatt, LLP, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and if to the Agent, at the address
of the Agent set forth at the beginning of this Agreement to the attention of
Coolbrands International Inc. Relationship Manager, or, as to each party, at
such other address as shall be designated by such party
61
in a written notice complying as to delivery with the terms of this Section 7.02
to the other parties. All such notices and communications shall be effective
when mailed, telegraphed or delivered, except that notices shall not be
effective until received.
SECTION 8.03. No Waiver, Remedies. No failure on the part of the Agent to
exercise, and no delay in exercising, any right, power or remedy under any Loan
Document, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under any Loan Document preclude any other or further
exercise thereof or the exercise of any other right. The remedies provided in
the Loan Documents are cumulative and not exclusive of any remedies provided by
law.
SECTION 8.04. Costs, Expenses and Taxes. The Borrower agrees to pay on
demand all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery and administration of this Agreement, the Term
Loan Notes and any other Loan Documents, including, without limitation, the fees
and expenses of counsel for the Agent with respect thereto and with respect to
advising the Bank as to its rights and responsibilities under this Agreement,
and all costs and expenses, if any (including counsel fees and expenses), in
connection with the enforcement of this Agreement, the Term Loan Notes and any
other Loan Documents. The Borrower shall at all times protect, indemnify, defend
and save harmless the Agent from and against any and all claims, actions, suits
and other legal proceedings, and liabilities, obligations, losses, damages,
penalties, judgments, costs, expenses or disbursements which the Agent may, at
any time, sustain or incur by reason of or in consequence of or arising out of
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. The Borrower acknowledges that it is the
intention of the parties hereto that this Agreement shall be construed and
applied to protect and indemnify the Agent against any and all risks involved in
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, all of which risks are hereby assumed by the
Borrower, including, without limitation, any and all risks of the acts or
omissions, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority, provided that the Borrower shall not
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful misconduct. The Agent agrees to use
its best efforts to notify the Borrower before it incurs any expenses which are
reimbursable by the Borrower under this Section 8.04 if such expenses equal or
exceed $5,000.00, but
62
any failure of the Agent to so notify the Borrower will not relieve the Borrower
of its obligations hereunder. The provisions of this Section 8.04 shall survive
the payment of the Notes and the termination of this Agreement.
SECTION 8.05. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender, or any Affiliate of such Lender to or for the credit or the account of
the Borrower or the Guarantors against any and all of the obligations of the
Borrower or the Guarantors now or hereafter existing under this Agreement and
the Term Loan Notes, irrespective of whether or not the Agent shall have made
any demand under this Agreement or the Term Loan Notes and although such
obligations may be unmatured. The rights of the Agent and the Lenders under this
Section are in addition to all other rights and remedies (including, without
limitation, other rights of set-off) which they may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower, the Guarantors, the Agent and the
Lenders.
SECTION 8.07. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights or obligations under this Agreement without
the prior written consent of the Agent and all Lenders.
(b) Any Lender may at any time grant to one or more lenders or other
institutions (each a "Participant") participating interests in its Pro Rata
Share of the Term Loan. In the event of any such grant by a Lender of a
participating interest to a Participant, whether or not upon notice to the
Borrower or the Agent, such Lender shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement pursuant to which any
Lender may grant such a participating interest shall provide that such Lender
shall retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement. The
Borrower agrees that each Participant shall, to
63
the extent provided in its participation agreement, be entitled to the benefits
of this Article VIII hereof with respect to its participating interest. An
assignment or other transfer which is not permitted by subsection (c) or (d)
below shall be given effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this subsection (b).
(c) (i) Any Lender may at any time, with the express written consent of the
Agent, assign to one or more lenders or other institutions (each an "Assignee")
all, but not a part of its Pro Rata Share of the Term Loan, and of its rights
and obligations under this Agreement and its Note, and such Assignee shall
assume such rights and obligations, pursuant to an Assignment and Assumption
Agreement in substantially the form of Exhibit B hereto executed by such
Assignee and such transferor Lender, with the subscribed consent of the Agent,
and with, so long as no Default or Event of Default has occurred and is
continuing, (and subject to) the subscribed consent of the Borrower, which shall
not be unreasonably withheld. Upon execution and delivery of such instrument and
payment by such Assignee to such transferor Lender of an amount equal to the
purchase price agreed between such transferor Lender and such Assignee, such
Assignee shall be a Lender party to this Agreement and shall have all the rights
and obligations of a Lender hereunder, and the transferor Lender shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required.
(ii) Upon the consummation of any assignment pursuant to this
subsection (c), the transferor Lender, the Agent and the Borrower shall make
appropriate arrangements so that a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Lender shall pay to the
Agent an administrative fee for processing such assignment in the amount of
$3,500.00. If an Assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 7.13 hereof.
(d) Any Lender may at any time assign all or any portion of its rights
under this Agreement and its Notes to a Federal Reserve Bank. No such assignment
shall release the transferor Lender from its obligations hereunder.
SECTION 8.08. Further Assurances. The Borrower and each Guarantor agree at
any time and from time to time at its expense,
64
upon request of the Agent or its counsel, to promptly execute, deliver, or
obtain or cause to be executed, delivered or obtained any and all further
instruments and documents and to take or cause to be taken all such other action
the Agent may deem desirable in obtaining the full benefits of, this Agreement
or any other Loan Document.
SECTION 8.09. Section Headings, Severability, Entire Agreement. Section and
subsection headings have been inserted herein for convenience only and shall not
be construed as part of this Agreement. Every provision of this Agreement and
each Loan Document is intended to be severable; if any term or provision of this
Agreement, any Loan Document, or any other document delivered in connection
herewith shall be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions hereof or
thereof shall not in any way be affected or impaired thereby. All exhibits and
schedules to this Agreement shall be annexed hereto and shall be deemed to be
part of this Agreement. This Agreement and the exhibits and schedules attached
hereto embody the entire Agreement and understanding among the Borrower, the
Guarantors, the Agent and the Lender and supersede all prior agreements and
understandings relating to the subject matter hereof.
SECTION 8.10. Governing Law. This Agreement, the Term Loan Notes and all
other Loan Documents shall be governed by, and construed in accordance with, the
laws of the State of New York, without regard to principles of conflict of laws.
SECTION 8.11. WAIVER OF JURY TRIAL. THE BORROWER, EACH GUARANTOR, THE AGENT
AND THE LENDERS WAIVE ALL RIGHTS TO TRIAL BY JURY ON ANY CAUSE OF ACTION
DIRECTLY OR INDIRECTLY INVOLVING THE TERMS, COVENANTS OR CONDITIONS OF THIS
AGREEMENT OR ANY LOAN DOCUMENT.
SECTION 8.12. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
65
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
INTEGRATED BRANDS INC.
By /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
COOLBRANDS INTERNATIONAL INC.
By
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
KAYLA FOODS INT'L (BARBADOS) INC.
By
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
XXXXXXX'X, INC.
By
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
XXXXXXX'X ICE CREAM COMPANY
By
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
EP ACQUISITION CORP.
By
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
YOGEN FRUZ ACQUISITIONS INC.
By
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
INTEGRATED BRANDS INC.
By
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
COOLBRANDS INTERNATIONAL INC.
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
KAYLA FOODS INT'L (BARBADOS) INC.
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
XXXXXXX'X, INC.
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
XXXXXXX'X ICE CREAM COMPANY
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
EP ACQUISITION CORP.
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
YOGEN FRUZ ACQUISITIONS INC.
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
XXXXXXX'X INDUSTRIES, INC.
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
NORTHERN LIGHTS FROZEN DESSERTS, INC.
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
GOLDEN SWIRL MANAGEMENT COMPANY
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
I CAN'T BELIEVE ITS YOGURT, LTD.
By Kayla Foods, Inc.
General Partner
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
THE CHASE MANHATTAN BANK, AS AGENT
By
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK, AS LENDER
By
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
XXXXXXX'X INDUSTRIES, INC.
By
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
NORTHERN LIGHTS FROZEN DESSERTS, INC.
By
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
GOLDEN SWIRL MANAGEMENT COMPANY
By
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
I CAN'T BELIEVE ITS YOGURT, LTD.
By Kayla Foods, Inc.
General Partner
By
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
THE CHASE MANHATTAN BANK, AS AGENT
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK, AS LENDER
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
EXHIBIT A
TERM LOAN NOTE
Garden City, New York
$_____________ ____________, 2000
FOR VALUE RECEIVED, INTEGRATED BRANDS INC., a New Jersey corporation,
having its principal place of business at 0000 Xxxxxxx'x Xxxxxxxx Xxxxxxx,
Xxxxxxxxxx, Xxx Xxxx 00000 (the "Borrower") promises to pay to the order of THE
CHASE MANHATTAN BANK ("Lender") at the office of The Chase Manhattan Bank, as
Agent, located at 0 XxxxxXxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, the principal
amount of __________ MILLION ($_____________) DOLLARS, or, if less, the unpaid
principal amount of the Term Loan (as defined in the Agreement, as defined
below) made by the Lender to the Borrower pursuant to the Agreement.
The principal balance of this Note shall be payable in sixty (60) monthly
principal installments, due on the first Business Day of each month, commencing
on December 1, 2000, the first fifty nine (59) of such installments being in the
principal amount of $__________ and the sixtieth (60th) such installment being
in the remaining principal amount of this Note.
Borrower shall pay interest on the unpaid principal balance of this Note
from time to time outstanding, at said office at the rates of interest, at the
times and for the periods set forth in the Agreement.
All payments including prepayments on this Note shall be made in lawful
money of the United States of America in immediately available funds. Except as
otherwise provided in the Agreement, if a payment becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day, and interest shall be payable thereon at the rate
herein specified during such extension.
This Note is the Term Loan Note referred to in that certain Loan Agreement
among Borrower, certain Guarantors, the Agent and the Lenders dated as of
September _, 2000 (the "Agreement"), as such Agreement may be further amended
from time to time, and is subject to prepayment and its maturity is subject to
acceleration upon the terms contained in said Agreement. All capitalized terms
used in this Note and not defined herein shall have the meanings given them in
the Agreement.
If any action or proceeding be commenced to collect this Note or enforce
any of its provisions, Borrower further agrees to pay all costs and expenses of
such action or proceeding and attorneys' fees and expenses and further expressly
waives any and every right to interpose any counterclaim (other than mandatory
counterclaims) in any such action or proceeding. Borrower hereby submits to the
jurisdiction of the Supreme Court of the State of New York and agrees with Agent
and Lender that personal jurisdiction over Borrower shall rest with the Supreme
Court of the State of New York for purposes of any action on or related to this
Note, the liabilities hereunder, or the enforcement of either or all of the
same. Borrower hereby waives personal service by manual delivery and agrees that
service of process may be made by postpaid certified mail directed to Borrower
at Borrower's address designated in the Agreement or at such other address as
may be designated in writing by Borrower to the Agent in accordance with Section
8.02 of the Agreement, and that upon mailing of such process such service be
effective with the same effect as though personally served. Borrower hereby
expressly waives any and every right to a trial by jury in any action on or
related to this Note, the liabilities hereunder or the enforcement of either or
all of the same.
Lender may transfer this Note and may deliver the security or any part
thereof to the transferee or transferees in accordance with and subject to the
provisions of the Agreement, who shall thereupon become vested with all the
powers and rights above given to Lender in respect thereto, and Lender shall
thereafter be forever relieved and fully discharged from any liability or
responsibility in the matter. The failure of any holder of this Note to insist
upon strict performance of each and/or all of the terms and conditions hereof
shall not be construed or deemed to be a waiver of any such term or condition.
Borrower authorizes Lender to complete this Note as to any terms not set
forth herein at the time of delivery hereof.
Borrower and all endorsers and guarantors hereof waive presentment and
demand for payment, notice of non-payment, protest, and notice of protest.
This Note shall be construed in accordance with and governed by the laws of
the State of New York.
INTEGRATED BRANDS INC.
By
-------------------------------------
Name:
Title:
EXHIBIT B
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment") dated as of
__________________ among ___________________ (the "Assignor"), ________________
(the "Assignee") and THE CHASE MANHATTAN BANK, as Agent (the "Agent").
WITNESSETH
WHEREAS, this Assignment and Assumption Agreement (the "Assignment")
relates to the Loan Agreement dated as of September __, 2000 among Integrated
Brands Inc. (the "Borrower"), certain Guarantors, the Assignor as a Bank and the
Agent (as amended, the "Agreement"); and
WHEREAS, as provided under the Agreement, the Assignor has heretofore made
a Term Loan to the Borrower; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Agreement in respect of all or a portion of the Term
Loan and the Assignee proposes to accept assignment of such rights and assume
the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Agreement.
SECTION 2. Assignment. The Assignor hereby sells and assigns to the
Assignee, without recourse, and the Assignee hereby purchases and assumes from
the Assignor, a ____% interest in and to all of the Assignor's rights and
obligations as a Lender under the Agreement as of the Effective Date (as defined
below) including, without limitation, such percentage interest in (i) the Term
Loan owing to Assignor outstanding on the Effective Date and (ii) the Term Loan
Note held by the Assignor under the Agreement, together with the rights to
interest accruing from the Effective Date.
SECTION 3. Assignor Representations. The Assignor (i) represents and
warrants that as of the date hereof, the outstanding balance of its Term Loan,
unreduced by any assignments thereof which have not yet become effective, is
$___________; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Agreement or any other Loan Document or any other instrument or document
furnished pursuant thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Agreement, any other Loan Document or
any other instrument or document furnished pursuant thereto, other than that it
is the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim created by it;
(iii) makes no representation or warranty and assumes no responsibility with
respect to the solvency or financial condition of the Borrower or the
Guarantors, or the performance or observance by the Borrower or the Guarantors
of any of their obligations under the Agreement, any other Loan Document or any
other instrument or document furnished pursuant thereto; and (iv) confirms that
its Term Loan Note shall be exchanged as of the Effective Date for two Term Loan
Notes, each dated the Effective Date, to be delivered to the Assignor and the
Assignee, in an aggregate principal amount of $ __________ and $__________,
respectively.
SECTION 4. Assignee Representations. The Assignee (i) represents and
warrants that it is legally authorized to enter into this Assignment and
Assumption Agreement; (ii) confirms that it has received copies of the Agreement
and the other Loan Documents, together with copies of such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (iii) attaches
the forms prescribed by the Internal Revenue Service of the United States
certifying as to the Assignee's status for purposes of determining exemption
from United States withholding taxes with respect to all payments to be made to
the Assignee under the Agreement and the Notes or such other documents as are
necessary to indicate that all such payments are subject to such rates at a rate
reduced by an applicable tax treaty; (iv) agrees that it will, independently and
without reliance upon the Agent, the Assignor 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
the Agreement and the other Loan Documents; and (v) agrees that it will perform
in accordance with their terms all the obligations which by the terms of the
Agreement are required to be performed by it as a Lender.
SECTION 5. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in federal funds an amount equal to the outstanding principal of the
portion of the outstanding Term Loan being assigned. Each of the Assignor and
the Assignee hereby agrees that if either of them receives any amount under the
Agreement or any other Loan Document which is for the account of the other, it
shall receive the same for the account of such other party to the extent of such
other party's interest herein and shall promptly pay the same to the Agent on
behalf of such other party.
SECTION 6. Effectiveness. Subject to the remaining provisions of this
Section 6, the effective date for this Assignment and Assumption Agreement shall
be ___________, 19__ (the "Effective Date"). Following the execution of this
Assignment and Assumption Agreement, it will be delivered by the Assignor to the
Agent for acknowledgment and recording by the Agent. The Assignor agrees to pay
to the Agent, on or prior to the Effective Date, the $3,500.00 assignment fee
required by Section 8.07 of the Agreement. This Assignment and Assumption
Agreement shall become effective, as of the Effective Date, upon (i) its
execution by the Agent and (ii) if required by Section 8.07 of the Agreement,
the consent of the Borrower.
SECTION 7. Effect of Assignment. On and after the Effective Date, (i) the
Assignee shall be a party to the Agreement and the other Loan Documents to which
each Lender is a party and, to the extent provided in this Assignment and
Assumption Agreement, shall have the rights and obligations of a Lender and (ii)
the Assignor shall, to the extent provided in this Assignment and Assumption
Agreement, relinquish its rights and be released from its obligations under the
Agreement and the other Loan Documents to which it is a party.
SECTION 8. Payments. From and after the Effective Date, the Agent shall
make all payments in respect of the interest assigned hereby (including payments
of principal, interest and other amounts) to the Assignee.
SECTION 9. Governing Law. This Assignment and Assumption Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
SECTION 10. Counterparts. This Assignment and Assumption Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By:
------------------------------------
Name:
Title:
[ASSIGNEE]
By:
------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Agent
By:
------------------------------------
Name:
Title:
CONSENT OF BORROWER
Integrated Brands Inc., the Borrower under that certain Loan Agreement
dated as of September __, 2000 among the Borrower, certain Guarantors and The
Chase Manhattan Bank, as Agent and The Chase Manhattan Bank as lending bank, as
amended or supplemented from time to time (the "Agreement"), hereby consents to
the attached Assignment and Assumption Agreement and the transactions
contemplated thereby.
Date:_______________ INTEGRATED BRANDS INC.
By:
------------------------------------
Name:
Title:
EXHIBITS 2.09
APPLICABLE MARGIN PRICING GRID
------------------------------------------------------------------------
Funded Debt
to EBITDA Ratio LIBOR Applicable Prime Applicable
(US Dollars) Margin Margin
------------------------------------------------------------------------
Greater than 3.00 to 1.00 3.00% 1.00%
------------------------------------------------------------------------
Greater than 2.50 to 1.00 but less 2.75% 0.75%
than or equal to 3.00 to 1.00
------------------------------------------------------------------------
Greater than 2.00 to 1.00 but less 2.50% 0.50%
than or equal to 2.50 to 1.00
------------------------------------------------------------------------
Greater than 1.50 to 1.00 but less 2.25% 0.25
than or equal to 2.00 to 1.00
------------------------------------------------------------------------
Greater than 1.00 to 1.00 but less 2.00% 0
than or equal to 1.50 to 1.00
------------------------------------------------------------------------
Less than or equal to 1.00 to 1.00 1.75% 0
------------------------------------------------------------------------
SCHEDULE 1.01
PRO-RATA SHARES
Name of Lender Amount Percentage
-------------- -------------- ----------
The Chase Manhattan Bank $30,000,000.00 100%
SCHEDULE 3.01(s)
EXISTING LITIGATION
See Attachment
SCHEDULE 3.01(S)
LITIGATION
The following is a brief description of any material litigation affecting
Borrower and/or the Guarantors.
An action instituted in the Supreme Court of New York, County of Queens,
entitled Honeycrest Holdings Inc. v. Integrated Brands, Inc. f/k/a Steve's
Homemade Ice Cream, Ltd. Honeycrest Holdings Inc. ("Honeycrest") is the U.K.
licensee of Steve's Homemade Ice Cream, Inc. Honeycrest alleges that Borrower
breached the License Agreement by attempting to substitute another company in
place of Honeycrest. It also alleges that Borrower sold it poor quality ice
cream, failed to provide it with recipes and know-how and failed to develop new
flavors of frozen dessert products. The complaint seeks compensatory damages of
$30 million. Borrower has answered the complaint denying all of the claims
against it, and counterclaiming against Honeycrest for unpaid royalties, selling
substandard or damaged products, and diluting the value of the Borrower's
trademarks. The case is currently in the discovery stage. Based upon the facts
known to us as of this date, it is unlikely that this action would have a
significant effect upon the Borrower.
On June 12, 2000, Friendly Ice Cream Corporation instituted an action against
Borrower and Xxxxx Dairies, Inc. ("Xxxxx") in the United States District Court,
for the Eastern District of New York. The action claims infringement of various
of Plaintiff's trademark and trade dress rights in product names, packaging and
design involving its ice cream roll products, as well as false designation of
origin, unfair competition, injury to business reputation, dilution, deceptive
acts and practices, and breach of contract. Plaintiff seeks a permanent
injunction, damages for infringement and trebling of damages due to willful
infringement. Borrower and Xxxxx deny that they have infringed Plaintiff's
rights and deny all the operative allegations of Plaintiff's claims. Borrower
interpose counterclaims for a declaration of non-infringement of Plaintiff's
trademarks and trade dress. The case is in the discovery phase.
SCHEDULE 4.01(a)
SUBSIDIARIES
See Attachment
Page 1
INTEGRATED BRANDS INC. & SUBSIDIARIES
State of States Currently
Corporation Type of Company Incorporation Doing Business
-----------------------------------------------------------------------------
Integrated Brands Inc. Consumer Products NJ AL
AR
AZ
CA
CO
CT
DE
FL
GA
IL
IN
KS
KY
LA
ME
MD
MA
MI
MN
MS
MO
NC
ND
NV
NH
NJ
NM
NY
OH
OK
OR
PA
RI
SC
TN
TX
UT
VT
VA
WA
DC
YPL Foods Inc. DE Inactive
Page 2
Steve's Homemade Ice Consumer Products DE CA
Cream Corp. GA
IL
IN
MO
NJ
NY
OH
PA
TX
JH Acquisition Corp. DE Inactive
Steve's Gourmet Ice NY Inactive
Cream, Inc.
Steve's Homemade Ice FL Inactive
Cream of Florida,
Inc.
Heidi's Frozen Yogurt Consumer Products ???
Inc.
American Glace, Inc. Consumer Products NY MI
NY
Xxxxxxx'x Inc. Franchising DE
Swensen's Ice Cream Franchising CA AZ
Company
CA
CO
CT
FL
GA
IL
IN
KY
LA
MD
MA
MI
MN
MS
NC
NV
NJ
NM
NY
OH
PA
SC
Page 3
SD
TN
TX
VT
VA
WV
WI
Xxxxxxx'x Ice Cream Inactive
Operating Co. Inc.
Swensen's Real Estate Franchising CA
Corporation
Swensen's of Arizona Company Stores AZ AZ
Inc.
Swensen's Distributing DE Inactive
Swensen's DE Inactive
Manufacturing
Swensen's Operating AZ Inactive
Company Inc.
Xxxxxxx'x Ice Cream Company Stores NV
Company of Nevada
Xxxx of Florida Inc. FL Inactive
Xxxxxxx'x Ice Cream Franchising DE
Franchise Company
Inc.
Swensen's of Company Stores ??? NV
Las Vegas, Inc.
Schrafft's of Nevada, Company Stores NV NV
Inc.
(A) Maintain Corporate Entity
(B) Allows lease assignment to related entity for Metro Center. Approval of
lease assignment is required for Paradise Valley (Xxxxx Xxxxx'x Pizza &
Pasta)
Page 1
YOGEN FRUZ ACQUISITIONS, INC. & SUBSIDIARIES
State of States Currently
Corporation Type of Company Incorporation Doing Business
---------------------- ----------------- ------------- ----------------
Yogen Fruz Franchising NV
Acquisitions, Inc.
Kayla Foods, Inc. Food Service TX TX
I Can't Believe It's Franchising TX
Yogurt, LTD.
Golden Swirl Company Stores UT AZ
Management Company CA
NV
NM
UT
Golden Swirl Franchise Franchising DE
Company Inc.
Northern Lights Frozen Food Service UT CA
Desserts, Inc. UT
Xxxxxxx'x Industries, Franchising IL AR
Inc. CT
Page 2
FL
IL
IN
IA
KY
MA
MI
MN
MS
MO
NC
NV
NH
NY
OH
OK
PA
SC
SD
TN
TX
VA
DC
WV
WI
Xxxxxxx Malls, Inc. Franchising IL
Larry's Industries, Franchising FL FL
Inc.
Larry's Leasing, Inc. Franchising ??? Inactive
Xxxxxxx'x Stores of Franchising IL Inactive
Lake County, Inc.
Winston Malls, Inc. Franchising IL Inactive
Yogen Fruz USA Franchising DE
Franchise Company
Inc.
Page 3
Exchequer Acceptance Franchising IL
Corp.
Chums Holding Corp. Franchising TX FL
SC
Chums Franchising Franchising TX
Corp.
(A) Maintain Corporate Entity
SCHEDULE 4.01(s)
CREDIT AGREEMENTS
See Schedule 5.02(b)
SCHEDULE 4.01(u)
DISCLOSURE WITH RESPECT TO ACQUISITION AGREEMENT
None
SCHEDULE 5.02(a)
LIENS
None
SCHEDULE 5.02(b)
DEBT
Not more than $3,500,000.00 of Debt owing by Eskimo Pie Corporation to First
Union National Bank which will be repaid in full not later than October 13,
2000.
SCHEDULE 5.02(h)
GUARANTIES
None
FIRST AMENDMENT TO LOAN AGREEMENT
This First Amendment to Loan Agreement (the "Amendment"), dated as of
November 15, 2002, is among INTEGRATED BRANDS INC. (the "Borrower"), COOLBRANDS
INTERNATIONAL INC., a Canadian corporation, KAYLA FOODS INT'L (BARBADOS) INC., a
Barbados corporation, XXXXXXX'X, INC., a Delaware corporation, XXXXXXX'X ICE
CREAM COMPANY, a California corporation, EP ACQUISITION CORP., a Virginia
corporation, YOGEN FRUZ ACQUISITIONS INC., a Nevada corporation, XXXXXXX'X
INDUSTRIES, INC., an Illinois corporation, NORTHERN LIGHTS FROZEN DESSERTS,
INC., a Utah corporation, GOLDEN SWIRL MANAGEMENT COMPANY, a Utah corporation, I
CAN'T BELIEVE ITS YOGURT, LTD., a Texas partnership (a "Guarantor" and
collectively, the "Guarantors") and JPMORGAN CHASE BANK, formerly known as THE
CHASE MANHATTAN BANK, as the Agent and as Lender (the "Lender").
WHEREAS, the Borrower and the Lender entered into a Loan Agreement, dated
September 20, 2000 (the "Loan Agreement");
WHEREAS, the Lender, the Guarantors and the Borrower wish to amend the Loan
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
Section 1. Definitions. Terms used but not otherwise defined herein shall
have the respective meanings ascribed to such terms in the Loan Agreement.
Section 2. Amendment A. The Loan Agreement is amended by the deletion from
Section 5.03, Financial Terms, (a), Consolidated Capital Expenditures the amount
of "$3,000,000" and by the insertion in its place and stead of "$5,000,000".
B. Any reference in the Loan Agreement to "The Chase Manhattan Bank"
shall be deemed to mean "JPMorgan Chase Bank, formerly known as The Chase
Manhattan Bank".
Section 3. Representations. The Borrower and each Guarantor hereby
represents and warrants to the Lender that: (i) the representations and
warranties set forth in the Loan Agreement are true and correct on and as of the
date hereof as if made on and as of said date and as if each reference therein
to the Loan Agreement were a reference to the Loan Agreement as amended by this
Amendment and (ii) subject to the waiver contained herein, no Event of Default
specified in the Loan Agreement and no event, which, with the giving of notice
or lapse of time or both, would become such an Event of Default has occurred and
is continuing.
Section 4. Conditions. The amendments to the Loan Agreement set forth in
Section 2 shall become effective on the date first above written provided that
the Lender shall have
received in form and substance satisfactory to the Lender, (i) a counterpart of
this Amendment duly executed and delivered by the Borrower and each Guarantor
and (ii) the Borrower shall have paid to the Lender a fee of $1,500.
Section 5. Miscellaneous. Except as expressly provided in this Amendment,
the Loan Agreement shall remain unchanged and in full force and effect except
that each reference therein and in the Notes to "this Agreement", "hereof",
"herein" and similar terms referring to the Loan Agreement shall be deemed to
refer to the Loan Agreement as amended hereby. This Amendment (i) shall be
deemed to be effective on and as of the date first above written, (ii) shall be
governed by and construed in accordance with the laws of the State of New York,
and (iii) may be executed in counterparts, which taken together shall constitute
one and the same instrument and either of the parties hereto may execute this
Amendment by signing any such counterpart. Should any terms or provisions of the
Loan Agreement conflict with the terms and provisions contained in this
Amendment, the terms and provisions of this Amendment shall prevail.
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this First Amendment as of the day and year first
above written.
INTEGRATED BRANDS INC.
Address for Notices:
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000 By: /s/ Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000 ------------------------------------
Xxxx X. Xxxxxxx, President
COOLBRANDS INTERNATIONAL INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, President
KAYLA FOODS INT'L (BARBADOS) INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, President
2
XXXXXXX'X, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, President
XXXXXXX'X ICE CREAM COMPANY
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, President
EP ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, President
YOGEN FRUZ ACQUISITIONS INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, President
XXXXXXX'X INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, President
3
NORTHERN LIGHTS FROZEN DESSERTS, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, President
GOLDEN SWIRL MANAGEMENT COMPANY
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, President
I CAN'T BELIEVE ITS YOGURT, LTD.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, President
JPMORGAN CHASE BANK, formerly known as
Address for Notices: THE CHASE MANHATTAN BANK
0 Xxxxx Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000 By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx,
Xx., Vice President
4
SECOND AMENDMENT, JOINDER AND REAFFIRMATION
TO LOAN AGREEMENT AND GUARANTIES
SECOND AMENDMENT, JOINDER AND REAFFIRMATION TO LOAN AGREEMENT AND
GUARANTIES (this "Amendment"), dated March 25, 2005, among INTEGRATED
BRANDS INC., a New Jersey corporation, (the "Borrower"), each of the entities
listed on Exhibit A hereto (the "Original Guarantors" and each, an "Original
Guarantor"), each of the entities listed on Exhibit B hereto (the "Additional
Guarantors" and each, an "Additional Guarantor"; COOLBRANDS DAIRY INC., a
Delaware corporation ("Dairy"), and each of the entities listed on Exhibit C
hereto (the "Other Guaranty Parties"), JPMORGAN CHASE BANK, N.A. (f/k/a JPMorgan
Chase Bank), a national banking association, as agent (the "Agent") for the
Lenders (as defined in the Loan Agreement (as defined below)) and JPMORGAN CHASE
BANK, N.A. (f/k/a JPMorgan Chase Bank), a national banking association, as a
Lender (the "Lender") hereby agree as follows:
WITNESSETH
WHEREAS, the Borrower, the Original Guarantors, the Agent and the
Lender entered into a certain Loan Agreement dated as of September 20, 2000, as
amended by the First Amendment to Loan Agreement, dated as of November 15, 2002
(as so amended, the "Loan Agreement");
WHEREAS, Kayla and Coolbrands (as such terms are defined in the Loan
Agreement) each executed a General Guaranty dated September 20, 2000 and the
Original Guarantors (other than Kayla and Coolbrands) and the Other Guaranty
Parties executed a General Guaranty dated September 20, 2000 (the "All Other
Guarantors Guaranty");
WHEREAS, the Borrower has requested that the Lender make a new loan to
the Borrower (the "New Loan") pursuant to separate documentation, which loan is
to be used to finance an acquisition ("Acquisition") of certain assets of Kraft
Foods Global, Inc. by Dairy pursuant to the Asset Purchase Agreement (defined
herein), and which loan will be guaranteed by Dairy, the Original Guarantors,
the Additional Guarantors and the Other Guaranty Parties (the "New Loan
Guaranty"); and
WHEREAS, the Agent and the Lender have agreed to make the New Loan,
provided that, among other things, the Loan Agreement be amended as set forth in
this Amendment;
NOW, THEREFORE, in good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Original
Guarantors, the Additional Guarantors, Dairy, the Other Guaranty Parties, the
Agent and the Lender hereby agree as follows:
1. Definitions. Except as otherwise stated, capitalized terms defined
in the Loan Agreement and used herein without definition shall have the
respective meanings assigned to them in the Loan Agreement.
2. Amendments.
(a) The following definitions are hereby added to the Loan
Agreement, in alphabetical order:
"Additional Guarantors" has the meaning given to such term in the
Second Amendment.
"Dairy" has the meaning given to such term in the Second
Amendment.
"Group One Guarantors" means the Original Guarantors, Dairy, the
Additional Guarantors and any Guarantor who joins in the Loan Agreement pursuant
to Section 5.01(k) thereof.
"New Loan" has the meaning given to such term in the Second
Amendment.
"New Loan Guaranty" has the meaning given to such term in the
Second Amendment.
"Other Guaranty Parties" has the meaning given to such term in
the Second Amendment.
"Second Amendment" means the Second Amendment, Joinder and
Reaffirmation to Loan Agreement and Guaranties by and among the Borrower, the
Group One Guarantors, the Other Guaranty Parties, the Agent and the Lender,
dated March 21, 2005.
"Security Agreement" means the Security Agreement of even date
herewith made by Dairy in favor of the Lender (and the other "Secured Parties",
as defined therein), securing among other things, the obligations of Dairy under
the New Loan Guaranty and as a Group One Guarantor with respect to the Loan
Agreement and the Term Loan Note.
(b) The terms "Guarantor" and "Guarantors" as used in the Loan
Agreement shall be changed to "Group One Guarantor" and "Group One Guarantors",
respectively, throughout the Loan Agreement, except in Section 3.01(h) and in
any other place where the reference in question is specifically to a party to
one of the Guaranties.
(c) The terms "Guaranty" and "Guaranties" as used in the Loan
Agreement shall be amended to mean the guaranty or guaranties executed and
delivered by the Group One Guarantors and the Other Guaranty Parties (or by any
of them).
(d) The term "Loan Documents" in Section 1.01 shall be amended to
add the New Loan Guaranty and the Security Agreement to the documents comprised
by such term.
(e) The term "Permitted Acquisitions" appearing in Section 1.01
of the Loan Agreement is amended by adding the following proviso at the end
thereof: "; provided, however, that (x) the aggregate amount of consideration
paid in any form on account of Permitted Acquisitions shall not exceed
$10,000,000.00 (plus the consideration paid to acquire the "Acquired Assets"
under and as defined in a certain Asset Purchase Agreement by and between Kraft
Foods
2
Global, Inc. and Dairy dated as of December 22, 2004 [the "Asset Purchase
Agreement"]) for the period commencing on the date of the Second Amendment and
ending on the Maturity Date"
(f) Section 5.03(a) of the Loan Agreement shall be amended by
replacing the amount "$5,000,000.00" in the third line thereof with the amount
"$15,000,000.00".
(g) Section 5.03(b) of the Loan Agreement shall be amended by
replacing the number "4.00" in the third line thereof with the number "2.75".
(h) Section 5.03(d) of the Loan Agreement shall be deleted in its
entirety and replaced with the phrase "[Intentionally Omitted]".
(i) For purposes of determining compliance with the provisions of
Sections 5.01 and 5.02 of the Loan Agreement, (i) Americana Foods, L.P. shall
not be deemed to be a "Guarantor" or a "Subsidiary" under and as defined in the
Loan Agreement, and (ii) the Borrower's or Coolbrands guaranty of certain debt
of Americana Foods, L.P., as described on Exhibit D attached hereto, shall be
permitted Debt under the Loan Agreement.
3. Representations and Warranties. The Borrower, Dairy, each
Additional Guarantor and each Original Guarantor hereby represents and warrants
to the Lender that:
(a) No default or Event of Default has occurred and is continuing
under the Loan Agreement or any of the other Loan Documents.
(b) All of the representations and warranties in the Loan
Agreement remain true and correct in all material respects on and as of the date
of this Amendment.
(c) Coolbrands has heretofore furnished to the Bank the financial
statements required pursuant to Section 5.01(b)(i) of the Loan Agreement. Such
financial statements were prepared in conformity with GAAP, and present fairly
and accurately the financial condition of Coolbrands and its Subsidiaries as of
the dates of such financial statements; and between the date of the most recent
such statements and the date hereof, no Material Adverse Change has occurred
with respect to Coolbrands and its Subsidiaries.
(d) Dairy has heretofore furnished to the Bank a pro forma
balance sheet of Dairy which presents fairly and accurately the anticipated
financial condition of Dairy as of the closing date under the Asset Purchase
Agreement (other than changes in the normal course of the business being
acquired and subject to final allocation of the purchase price in connection
with the Acquisition) and between the date of delivery of such balance sheet and
the date hereof, no Material Adverse Change has occurred with respect to Dairy
as so presented nor do any of undersigned have any knowledge of any matter which
is likely to result in any Material Adverse Change in the financial condition of
Dairy on or prior to the closing date for the purchase and sale under the Asset
Acquisition Agreement (as defined in the Security Agreement).
(e) There is no obligation or liability, contingent or otherwise
of Coolbrands and its Subsidiaries (including Dairy), which is material in
amount and which is not reflected in the financial statements referred to in the
foregoing subsections (b), (c) and (d), as applicable.
3
(f) The Borrower is duly indebted under the Term Loan Note and
the Loan Agreement in the principal amount of $11,750,000 plus interest, without
defense, setoff or counterclaim of any kind whatsoever.
4. Joinder. (a) Each of Dairy and the Additional Guarantors hereby
agrees to become a Guarantor as set forth in Section 5.01(k) of the Loan
Agreement and, by executing and delivering this Amendment, does hereby join in
the Loan Agreement (as amended hereby) as a Guarantor and a Group One Guarantor,
and joins in the All Other Guarantors Guaranty, as an "undersigned" thereunder.
Each of Dairy and the Additional Guarantors hereby agrees to comply with, and be
bound by, all of the terms and conditions of the foregoing agreements and
documents in which it has joined, as if it was an original signatory thereto.
(b) Without limiting the foregoing, each of Dairy and the
Additional Guarantors hereby expressly consents to the terms and conditions of
Sections 8.10 (Governing Law) and Section 8.11 (Waiver of Jury Trial) of the
Loan Agreement (as amended hereby).
(c) Simultaneously herewith, each of Dairy and the Additional
Guarantors is delivering to the Agent a certificate signed by an officer
thereof, certifying and attaching true and accurate copies of its (i)
certificate of incorporation (or equivalent), (ii) by-laws, (iii) resolutions of
its board of directors approving the transactions contemplated hereby (including
the New Loan), (iv) a certificate of incumbency of their respective approved
signatories, and (v) a good standing certificate from the Secretary of the State
in which it was organized, as well as other documentation as the Agent may
reasonably request.
(d) All of the undersigned agree that the joinder contemplated by
this Section 4 shall be deemed to be, and is hereby made a part of, the Loan
Agreement and the Guaranty as if set forth therein in full.
5. Reaffirmation.
(a) All Loan Documents which refer to the Loan Agreement are
deemed amended hereby to be references to as the Loan Agreement as amended
hereby and as the same may hereafter be amended, extended, supplemented,
restated, joined in or otherwise modified or replaced. The Borrower and each
Group One Guarantor hereby reaffirm all of their respective obligations and
liabilities under the Loan Agreement, Guaranties and other Loan Documents to
which such Person is a party.
(b) The Other Guaranty Parties hereby reaffirm all of their
respective obligations and liabilities under the All Other Guarantors Guaranty.
6. Full Force and Effect. As expressly modified by this
Amendment, all of the terms and provisions of the Loan Agreement and the other
Loan Documents shall continue in full force and effect, and all parties hereto
shall be entitled to the benefits thereof. The agreements herein contained are
limited specifically to the matters set forth above and do not constitute
directly or by implication an amendment or waiver of any other provision of the
Loan Agreement, or any of the other Loan Documents which has not been expressly
amended or waived herein.
7. Incorporated Terms. The provisions of Sections 1.02, 1.03,
8.09, 8.10, 8.11 and 8.12 of the Loan Agreement are incorporated by reference,
mutatis mutandis, into this
4
Amendment to the extent this Amendment is construed as an agreement separate and
independent from the Loan Agreement and the other Loan Documents.
8. Amendment. This Amendment may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.
[Signatures appear on the following pages.]
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the date set forth above.
INTEGRATED BRANDS INC.
By:
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
KAYLA FOODS INT'L (BARBADOS) INC.
XXXXXXX'X ICE CREAM COMPANY
YOGEN FRUZ ACQUISITIONS [Inc.]
NORTHERN LIGHTS FROZEN DESSERTS, INC.
COOLBRANDS INTERNATIONAL, INC.
ESKIMO PIE CORPORATION
SUGAR CREEK FOODS INC.
XXXXXXX'X, INC.
EP ACQUISITION CORP.
XXXXXXX'X INDUSTRIES, INC.
GOLDEN SWIRL MANAGEMENT COMPANY
I CAN'T BELIEVE ITS YOGURT, LTD.
By Kayla Foods, Inc., its General Partner
JH ACQUISITION CORP.
STEVE'S HOMEMADE ICE CREAM CORP.
STEVE'S GOURMET ICE CREAM, INC.
STEVE'S HOMEMADE ICE CREAM OF FLORIDA, INC.
HEIDI'S FROZEN YOGURT, INC.
COOLBRANDS DAIRY, INC.
SWENSEN'S MANUFACTURING
SWENSEN'S OPERATING COMPANY, INC.
SWENSON'S ICE CREAM COMPANY OF NEVADA
XXXX OF FLORIDA INC.
XXXXXXX'X ICE CREAM FRANCHISE COMPANY INC.
AMERICAN GLACE, INC.
XXXXXXX'X ICE CREAM OPERATING CO.
SWENSEN'S REAL ESTATE CORPORATION
SWENSEN'S OF ARIZONA, INC.
SWENSON'S DISTRIBUTING
LARRY'S INDUSTRIES, INC.
SWENSEN'S LAS VEGAS, INC.
SCHRAFFT'S OF NEVADA, INC.
KAYLA FOODS, INC.
GOLDEN SWIRL FRANCHISE COMPANY
XXXXXXX MALLS, INC.
YOGEN FRUZ USA FRANCHISE COMPANY INC.
LARRY'S LEASING, INC.
XXXXXXX'X STORES OF LAKE COUNTY, INC.
WINSTON MALLS, INC.
EXCHEQUER ACCEPTANCE CORP.
CHURNS HOLDING CORP.
CHURN FRANCHISING CORP.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
ESKIMO PIE FROZEN DISTRIBUTION INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
2nd Amendment
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the date set forth above.
INTEGRATED BRANDS INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
KAYLA FOODS INT'L (BARBADOS) INC.
XXXXXXX'X ICE CREAM COMPANY
YOGEN FRUZ ACQUISITIONS [Inc.]
NORTHERN LIGHTS FROZEN DESSERTS, INC.
COOLBRANDS INTERNATIONAL, INC.
ESKIMO PIE CORPORATION
SUGAR CREEK FOODS INC.
XXXXXXX'X, INC.
EP ACQUISITION CORP.
XXXXXXX'X INDUSTRIES, INC.
GOLDEN SWIRL MANAGEMENT COMPANY
I CAN'T BELIEVE ITS YOGURT, LTD.
By Kayla Foods, Inc., its General Partner
JH ACQUISITION CORP.
STEVE'S HOMEMADE ICE CREAM CORP.
STEVE'S GOURMET ICE CREAM, INC.
STEVE'S HOMEMADE ICE CREAM OF FLORIDA, INC.
HEIDI'S FROZEN YOGURT, INC.
COOLBRANDS DAIRY, INC.
SWENSEN'S MANUFACTURING
SWENSEN'S OPERATING COMPANY, INC.
SWENSON'S ICE CREAM COMPANY OF NEVADA
XXXX OF FLORIDA INC.
XXXXXXX'X ICE CREAM FRANCHISE COMPANY INC.
AMERICAN GLACE, INC.
XXXXXXX'X ICE CREAM OPERATING CO.
SWENSEN'S REAL ESTATE CORPORATION
SWENSEN'S OF ARIZONA, INC.
SWENSON'S DISTRIBUTING
LARRY'S INDUSTRIES, INC.
SWENSEN'S LAS VEGAS, INC.
SCHRAFFT'S OF NEVADA, INC.
KAYLA FOODS, INC.
GOLDEN SWIRL FRANCHISE COMPANY
XXXXXXX MALLS, INC.
YOGEN FRUZ USA FRANCHISE COMPANY INC.
LARRY'S LEASING, INC.
XXXXXXX'X STORES OF LAKE COUNTY, INC.
WINSTON MALLS, INC.
EXCHEQUER ACCEPTANCE CORP.
CHURNS HOLDING CORP.
CHURN FRANCHISING CORP.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
ESKIMO PIE FROZEN DISTRIBUTION INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
2nd Amendment
JPMORGAN CHASE BANK, N.A., AS AGENT JPMORGAN CHASE BANK, N.A., AS LENDER
By: /s/ XXXXX X. X'XXXXXXXX By: /s/ XXXXX X. X'XXXXXXXX
---------------------------------- -----------------------------------
Name: XXXXX X. X'XXXXXXXX Name: XXXXX X. X'XXXXXXXX
Title: Senior Vice President/ Title: Senior Vice President/
Division Manager Division Manager
JPMorgan Chase Bank, N.A. JPMorgan Chase Bank, N.A.
Exhibit A
Original Guarantors
COOLBRANDS INTERNATIONAL INC., a Canadian corporation
KAYLA FOODS INT'L (BARBADOS) INC., a Barbados corporation
XXXXXXX'X, INC., a Delaware corporation
XXXXXXX'X ICE CREAM COMPANY, a California corporation
EP ACQUISITION CORP.
YOGEN FRUZ ACQUISITIONS INC., a Nevada corporation
XXXXXXX'X INDUSTRIES, INC.,
NORTHERN LIGHTS FROZEN DESSERTS, INC.
GOLDEN SWIRL MANAGEMENT COMPANY
I CAN'T BELIEVE ITS YOGURT, LTD.
8
Exhibit B
Additional Guarantors
SUGAR CREEK FOODS INC., a Virginia corporation
ESKIMO PIE FROZEN DISTRIBUTION INC, a Delaware corporation
ESKIMO PIE CORPORATION, a Delaware corporation
9
Exhibit C
Other Guaranty Parties
JH ACQUISITION CORP.
STEVE'S HOMEMADE ICE CREAM CORP.
STEVE'S GOURMET ICE CREAM, INC.
STEVE'S HOMEMADE ICE CREAM OF FLORIDA, INC.
HEIDI'S FROZEN YOGURT, INC.
AMERICAN GLACE, INC.
XXXXXXX'X ICE CREAM OPERATING CO., INC.
SWENSEN'S REAL ESTATE CORPORATION
SWENSEN'S OF ARIZONA INC.
SWENSON'S DISTRIBUTING
SWENSEN'S MANUFACTURING
SWENSEN'S OPERATING COMPANY INC.
SWENSON'S ICE CREAM COMPANY OF NEVADA
XXXX OF FLORIDA INC.
XXXXXXX'X ICE CREAM FRANCHISE COMPANY INC.
SWENSEN'S LAS VEGAS, INC.
SCHRAFFT'S OF NEVADA, INC.
KAYLA FOODS, INC.
GOLDEN SWIRL FRANCHISE COMPANY INC.
XXXXXXX MALLS, INC.
LARRY'S INDUSTRIES, INC.
LARRY'S LEASING, INC.
XXXXXXX'X STORES OF LAKE COUNTY, INC.
WINSTON MALLS, INC.
YOGEN FRUZ USA FRANCHISE COMPANY INC.
EXCHEQUER ACCEPTANCE CORP.
CHURNS HOLDING CORP.
CHURN FRANCHISING CORP.
10
Exhibit D
Permitted Debt
A guaranty, now or hereafter existing, made by Integrated Brands Inc. or
Coolbrands International Inc. to Regent Bank of 50% of the obligations of
American Foods L.P. to Regents Bank in connection with a mortgage loan in the
principal amount of up to $5,500,000 secured by premises owned by American
Foods, L.P. in Dallas, Texas
A guaranty, now or hereafter existing, made by Integrated Brands Inc. or
Coolbrands International Inc. to Regent Bank of 100% of the obligations of
American Foods L.P. to Regents Bank in connection with a Revolving Credit
Facility in an aggregate principal amount of up to $9,000,000.00.
11
WAIVER, THIRD AMENDMENT, JOINDER AND REAFFIRMATION
TO LOAN AGREEMENT, GUARANTIES AND SECURITY AGREEMENT
WAIVER, THIRD AMENDMENT, JOINDER AND REAFFIRMATION TO LOAN AGREEMENT,
GUARANTIES AND SECURITY AGREEMENT (this "Amendment"), dated as of August 31,
2005, among INTEGRATED BRANDS, INC., a New Jersey corporation, (the "Borrower"),
each of the Group One Guarantors (as defined in the Loan Agreement (as defined
below)) listed on Exhibit A hereto and each of the entities listed on Exhibit B
hereto (the "Other Guaranty Parties"), JPMORGAN CHASE BANK, N.A. (f/k/a JPMorgan
Chase Bank), a national banking association, as agent (the "Agent") for the
Lenders (as defined in the Loan Agreement) and JPMORGAN CHASE BANK, N.A. (f/k/a
JPMorgan Chase Bank), a national banking association, as a Lender (the
"Lender").
WITNESSETH
WHEREAS, the Borrower, certain of the Group One Guarantors, the Agent
and the Lender entered into a certain Loan Agreement dated as of September 20,
2000 (the "Original Loan Agreement"), as amended by the First Amendment to Loan
Agreement, dated as of November 15, 2002, and the Borrower, the Group One
Guarantors and the Other Guaranty Parties (together with the Group One
Guarantors, the "Guarantors") entered into a Second Amendment, Joinder and
Reaffirmation to Loan Agreement and Guaranties dated March 25, 2005 (the "Second
Amendment"; said Original Loan Agreement, as so amended through the Second
Amendment, the "Loan Agreement");
WHEREAS, (i) Kayla and Coolbrands (as such terms are defined in the
Loan Agreement) each executed a General Guaranty dated September 20, 2000 and a
Guaranty of Payment dated March 25, 2005, as amended by the 2005 Loan Amendment
(defined below; both such guaranties being, (collectively, the "Foreign Entity
Guaranties") and (ii) certain of the Group One Guarantors and the Other Guaranty
Parties executed a General Guaranty dated September 20, 2000 (the "All Other
Guarantors Guaranty") and, pursuant to the Second Amendment, Coolbrands Dairy,
Inc. joined in the All Other Guarantors Guaranty, and (iii) the Group One
Guarantors (except Kayla and Coolbrands) and the Other Guaranty Parties executed
a Guaranty of Payment dated March 25, 2005, as amended by the 2005 Loan
Amendment (the "2005 Domestic Entity Guaranty");
WHEREAS, Yogen Fruz Canada, Inc. ("Yogen") is executing a Guaranty of
Payment dated the date of this Amendment (the "Yogen Guaranty" and, together
with the Foreign Entity Guaranties, the All Other Guarantors Guaranty and the
2005 Domestic Entity Guaranty, the "Guaranties");
WHEREAS, concurrently herewith (i) the Borrower, the Group One
Guarantors, the Other Guaranty Parties, the Agent and the Lender are entering
into a Waiver, Seventh Amendment, Joinder and Reaffirmation to Loan Agreement,
Guaranties and Security Agreement (the "1994 Loan Amendment") with respect to
certain credit facilities extended to the Borrower by the Lender pursuant to a
Loan Agreement dated as of December 23, 1994 (as amended through the date
hereof, the "1994 Loan Agreement"), and (ii) the Borrower, the Group One
Guarantors, the Other Guaranty Parties and the Lender are entering into a
Waiver, First
Amendment and Reaffirmation to Note, Guaranties and Security Agreement (the
"2005 Loan Amendment" and together with the 1994 Loan Amendment, the "Other
Amendments") with respect to a loan made to the Borrower by the Lender and
evidenced by the Borrower's Promissory Note dated March 25, 2005 (the "2005
Note");
WHEREAS, certain Events of Default have occurred under the Loan
Agreement, which Events of Default are set forth on Schedule I to this Amendment
(the "Existing Events of Default"); and
WHEREAS, the Borrower and the Guarantors have requested that the Agent
and the Lender waive the Existing Events of Default; and the Agent and the
Lender are willing to waive the Existing Events of Default, but only on the
terms and conditions provided in this Amendment and in the Security Agreements
(as defined below);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Guarantors, the
Agent and the Lender hereby agree as follows, effective as of August 31, 2005:
1. Definitions. Except as otherwise stated, capitalized terms defined
in the Loan Agreement and used herein without definition shall have the
respective meanings assigned to them in the Loan Agreement.
2. Amendments.
(a) The following definitions are hereby added to the Loan
Agreement, in alphabetical order:
"Allowable Expenses" shall have the meaning given to such term in
Section 5.02(d).
"Account Party" shall have the meaning given to such term in
Section 5.04.
"Americana" shall mean Americana Foods, L.P.
"Applicable Margin" means (a) for Eurodollar Loans, for the
period commencing on August 31, 2005 and ending on the Maturity Date, 4.50%; and
(b) for Prime Rate Loans, for the period commencing August 31, 2005 and ending
on the Maturity Date, 2.50%.
"Applicable Percentage" shall have the meaning given to such term
in Section 5.02(d).
"Canadian Security Agreements" means, collectively, the Security
Agreement made by Coolbrands in favor of the Agent and the Lender and the
Security Agreement made by Yogen in favor of the Agent and the Lender, each of
even date herewith.
2
"Capital Stock" shall have the meaning given to such term in
Section 5.02(d).
"Cash Collateral" means the $10,000,000 deposit made by the
Borrower into a deposit account at the Lender on or before the date of the Third
Amendment, which deposit account shall be under the exclusive dominion and
control of the Lender. The Cash Collateral shall constitute a portion of the
"Collateral" under the 2005 New Security Agreement.
"Collateral" means collectively, the "Collateral" as defined in
the Dairy Security Agreement, in the Canadian Security Agreements and in the
2005 New Security Agreement.
"Dairy Security Agreement" means the Security Agreement dated
March 25, 2005 made by Dairy in favor of the Agent and the Lender.
"Depositary" shall have the meaning given to such term in Section
5.04 of this Agreement.
"Lockbox Accounts" shall have the meaning given to such term in
Section 5.04 of this Agreement.
"Lockbox Agreement" means collectively, the blocked account
control agreements among some or all of the Agent, the Lender, the Depositary
and each Account Party, in form acceptable to the Agent and the Depositary, with
respect to the Lockbox Accounts, as contemplated (and consistent with the terms
of) Section 5.04 of this Agreement.
"Net Proceeds" shall have the meaning given to such term in
Section 5.02(d).
"Permitted Dispositions" shall have the meaning given to such
term in Section 5.02(d).
"Security Agreements" means, collectively, the Dairy Security
Agreement, the Canadian Security Agreement and the 2005 New Security Agreement.
"Stock Sale" shall have the meaning given to such term in Section
5.02(d).
"Third Amendment" means the Waiver, Third Amendment, Joinder and
Reaffirmation to Loan Agreement, Guaranties and Security Agreement by and among
the Borrower, the Group One Guarantors, the Other Guaranty Parties, the Agent
and the Lender, dated as of August 30, 2005.
"2005 New Security Agreement" means the Security Agreement of
even date herewith made by the Borrower and the Group One Guarantors (other than
Dairy, Coolbrands and Yogen) in favor of the Agent (and the other "Secured
Parties", as defined therein), securing, among other things, the respective
obligations of the Borrower and the Group One Guarantors under this Agreement
and the other Loan Documents.
3
(b) The term "Loan Documents" in Section 1.01 of the Loan
Agreement is amended by (i) deleting the term "Security Agreement" and replacing
it with the term "Security Agreements" and (ii) adding the Lockbox Agreement and
the Yogen Guaranty.
(c) The term "Permitted Acquisitions" in Section 1.01 of the Loan
Agreement is deleted in its entirety and all references to such term in the Loan
Agreement are also deleted; it being understood that, from and after the date of
the Third Amendment, there shall be no Permitted Acquisitions under the Loan
Agreement, without the Lender's prior written consent which may be withheld in
the Lender's sole and absolute discretion.
(d) The term "Prime Rate Loan" in Section 1.01 of the Loan
Agreement is amended to read in its entirety as follows:
"Prime Rate Loan" shall mean a Loan bearing interest at the Prime
Rate plus the Applicable Margin.
(e) The term "Maturity Date" in Section 1.01 of the Loan
Agreement is amended to read in its entirety as follows:
'Maturity Date' means January 3, 2006."
(f) Section 2.04(a) of the Loan Agreement is deleted in its
entirety and is replaced with the following:
"(a) Mandatory Installment Payments. The principal balance of the
Term Loan shall be payable in sixty-two (62) monthly installments,
each due on the first Business day of each month beginning on December
1, 2000 and continuing on the first Business day of each month
thereafter. Each of the first sixty-one (61) of such monthly principal
installments shall be in the amount equal to l/120th of the original
principal amount of the Term Loan and the sixty-second (62nd) such
monthly principal installment shall be in the balloon payment amount
equal to the then outstanding principal balance of the Term Loan."
(g) Section 2.09 of the Loan Agreement is deleted in its
entirety.
(h) Section 4.01(f) of the Loan Agreement is deleted in its
entirety and replaced with the language in Section 3(c) of this Amendment.
(i) Section 4.01(g) of the Loan Agreement is amended to delete
the reference to May 31, 2000 and replace it with "May 31, 2005".
(j) Section 4.01(h) of the Loan Agreement is deleted in its
entirely and replaced with the following:
"(h) Tax Returns. The Borrower and each Guarantor have filed
all federal, state (or province) and local tax returns required to be
filed and have paid all taxes, assessments and governmental charges
4
and levies that are reflected on such returns, as due, including
interest and penalties."
(k) A new Section 4.01(v) is added to the Loan Agreement which
reads as follows:
"(v) The proper legal name of the Borrower and each of the Group
One Guarantors and the jurisdiction in which each such Person was
formed is as set forth on Exhibit A attached to the Third
Amendment and incorporated herein by this reference."
(l) Section 5.01(g) is amended to add the following sentence at
the end thereof:
"The cost incurred by the Agent on account of any of the foregoing
activities taken by any agent or representative of the Agent shall be
borne by the Borrower."
(m) A new Section 5.01(o) is added to the Loan Agreement which
reads as follows:
"(o) Other Reports. Use best efforts to provide the Agent
and the Lender, as soon as available and in no event later than
(i) the third Monday of each calendar month, commencing with
September 2005, consolidated financial information concerning
accounts receivable and inventory for such preceding calendar
month in the form of Exhibit 5.01(m)(i) and (ii) by Wednesday of
each calendar week, commencing on September 14, 2005, "flash
reports" in form of Exhibit 5.01(m)(ii) with respect to cash (on
a consolidated basis), accounts receivable, accounts payables,
sales and inventory with respect to the Borrower and Eskimo Pie
Frozen Distribution Inc., for the calendar week ending prior to
the immediately preceding calendar week. In addition, within 45
days after the end of each calendar month beginning with August
2005, the Borrower and the Guarantors shall use their best
efforts to provide the Agent and the Lender with information
concerning Consolidated EBITDA and accounts payable in such
calendar month, in the form of Exhibit 5.01(m)(iii)."
(n) Section 5.02(b) is amended by deleting therefrom clause (iii)
in its entirety and replacing it with the following:
"(iii) Subordinated Debt incurred on or prior to May 31,
2005."
(o) Section 5.02(d) is deleted in its entirety and is replaced
with the following:
5
"(d) Sale of Assets, Capital Stock, Etc. Except for a Stock
Sale (defined below) by Coolbrands, sell, assign, transfer, lease or
otherwise dispose of (including, without limitation, by way of any
sale-leaseback transaction) any assets or any Capital Stock of the
Borrower or of any Group One Guarantor (or any of their respective
Subsidiaries), including by way of a sale of treasury stock (or other
equity interests) or issuance of any new or additional shares of
capital stock (or other equity interests) including, without
limitation, options, warrants or other rights entitling the owner
thereof to acquire any such interests (capital stock (or other equity
interests), options, warrants and other such rights being,
collectively, "Capital Stock"), with or without recourse.
Notwithstanding the foregoing (i) sales of inventory in the ordinary
course of business, and (ii) the sale or other disposition of assets
no longer used or useful in the conduct of its business (provided that
the purchase price for such sale or other disposition shall not exceed
an aggregate amount of $500,000, for all such sales by the Borrower,
the Group One Guarantors and their respective Subsidiaries combined,
in any one calendar year) shall be permitted (sales or dispositions
permitted under clause (i) and (ii) being, collectively, "Permitted
Dispositions") and provided, further, that so long as the transaction
in question does not violate Section 5.02(f): (a) the Borrower, each
of the Group One Guarantors, and any of their respective Subsidiaries
may sell such Person's own Capital Stock or issue new Capital Stock in
itself (each a "Stock Sale"), and (b) the Borrower and each Group One
Guarantor (other than Coolbrands), or any of the Subsidiaries of the
Borrower or of any Group One Guarantor, may sell their own respective
assets, provided that in any such case (under either (a) or (b)) the
Applicable Percentage of Net Proceeds from any such asset sale or such
Stock Sale (other than a Stock Sale by Coolbrands of its own Capital
Stock, for which no payment will be required) are immediately paid
over to the Lender to be applied to reduce the principal balance of
any loan (whether or not made pursuant to this Agreement) made to the
Borrower, any Group One Guarantor or any of their respective
Subsidiaries by the Lender (or, upon payment in full of all such
loans, to cash collateralize any letter of credit reimbursement
obligation to the Lender of the Borrower, any Group One Guarantor or
any of their respective Subsidiaries). As used herein the term (A)
"Net Proceeds" shall mean with respect to any Group One Guarantor
(other than Coolbrands), the Borrower or any of the Subsidiaries of
the Borrower or of any Group One Guarantor, the gross sales price paid
in any form in respect of such Stock Sale or asset sale (other than a
Permitted Disposition), net of Allowable Expenses; (B) "Allowable
Expenses" shall mean the sum of (i) all reasonable fees and
out-of-pocket expenses paid by the Borrower, the applicable Group One
Guarantor or any of their responsive Subsidiaries, as applicable, to
third parties (other than any of their Affiliates) in connection with
such Stock Sale or asset sale, and (ii) the amount of all taxes paid
(or reasonably estimated to be payable) by the
6
Borrower, the applicable Group One Guarantor or any of their
respective Subsidiaries in connection with such Stock Sale or asset
sale; and (C) "Applicable Percentage" shall mean (I) 67%, in the case
of Dairy, and (II) 50% in the case of the Group One Guarantors (other
than Coolbrands and Dairy), the Borrower or any of the Subsidiaries of
the Borrower or any Group One Guarantor (other than Dairy).
Notwithstanding the language in the Second Amendment which effectively
excludes Americana as a Subsidiary for purposes of this Section
5.02(d), it is expressly agreed that the Borrower and the Guarantors
shall promptly pay to the Lender an amount equal to 50% of any
distribution on account of Net Proceeds (for this purpose calculated
as if Americana were to be treated as a Subsidiary) made to any of
them resulting from an asset sale (other than a Permitted Disposition;
for this purpose, such term will be deemed to apply to Americana as if
it were to be treated as a Subsidiary) or a Stock Sale by Americana,
for application by the Lender as set forth above with respect to Net
Proceeds."
(p) Section 5.02(m)(ii) of the Loan Agreement is deleted in its
entirety.
(q) Each of Sections 5.03 (a), (b), (c) and (e) of the Loan
Agreement is deleted in its entirety and is replaced with the following:
"Intentionally Omitted."
(r) A new Section 5.03(f) is added to the Loan Agreement which
reads as follows:
"(f) Liquidity. The Borrower and the Group One Guarantors
shall maintain cash and cash equivalents (including the Cash
Collateral) in an amount at least equal to an aggregate amount of
$20,000,000, as measured on a weekly basis and certified to the Agent
weekly by electronic mail sent by the Borrower's Chief Financial
Officer to Xxxxx.XXxxxxxxx@XXXxxxxx.xxx. Such certification shall be
accompanied by such other evidence of the liquid assets as the Agent
may request."
(s) A new Section 5.04 is added to the Loan Agreement which reads
as follows:
"5.04 Lockbox. Each of Eskimo Pie Frozen Distribution Inc.
and Eskimo Pie Corporation (including, without limitation, its Value
America and EP Food Services divisions) and the Borrower (each, an "Account
Party") shall: (a) on or before September 30, 2005, establish an account
(each such account being a "Lockbox Account") at JPMorgan Chase Bank, N.A.
(the "Depositary") in which all Accounts Receivable (as defined in the 2005
New Security Agreement) shall thereafter be deposited; (b) (x) in the case
of Eskimo Pie Frozen Distribution Inc. and the Borrower, on or before
September 30, 2005, and (y) in the case of Eskimo Pie Corporation by
October 31, 2005, advise all of
7
their respective Account Debtors (as defined in the 2005 New Security
Agreement) that they are required to make all payments in respect of
Accounts Receivable to the applicable Lockbox Account; and (c) on or before
September 30, 2005, enter into the Lockbox Agreements. The Lockbox
Agreements shall provide, among other things, (x) that unless and until an
Event of Default has occurred (i) resulting from a default in the payment
of any obligation of Borrower or any Guarantor to the Agent or the Lender
(including, without limitation any payment obligation under Section
5.02(d)), (ii) under Section 6.01(e) of this Agreement, (iii) resulting
from a default under Section 5.03(f), or (iv) resulting from a failure to
comply with Section 6(h) of the Seventh Amendment, (as defined in the "1994
Loan Amendment", which term is defined in the Third Amendment), the
Depositary shall honor (unless the Lender expressly directs otherwise in
writing) all withdrawal or other instructions from the applicable Account
Party concerning the Lockbox Account, and (y) that on and after the
occurrence and during the continuance of any such Event of Default, the
Agent or the Lender (and without the consent of the Borrower or any other
Account Party), shall have the exclusive right to give all withdrawal and
other instructions to the Depositary concerning any Lockbox Account. In
such event, neither the Borrower nor any other Account Party shall have any
right to cause any withdrawal or transfer of funds from any Lockbox
Account, unless the Lender expressly directs otherwise in writing. (For the
avoidance of doubt, the Borrower hereby confirms that (A) the term
"Accounts Receivable" includes amounts paid or payable to the Borrower by
Kraft Foods Global, Inc., pursuant to documentation made in connection with
the Acquisition (as defined in the Sixth Amendment), on account of sales of
Dairy's inventory, and (B) nothing in this Section 5.04 is intended to
limit any of the Agent's or the Lender's rights and remedies not pertaining
to the Lockbox Accounts by reason of the occurrence of an Event of Default
other than those enumerated in clauses (i) through (iv) above; the Lender
hereby confirming that only such enumerated items shall constitute a basis
for the Lender to exercise such control over any Lockbox Account.)"
(t) Sections 6.01(h) and (j) are amended by adding "; or" at the
end thereof (and deleting the period in each case).
(u) A new Section 6.01(k) is added to the Loan Agreement which
reads as follows:
"(k) Except as permitted under this Agreement, any Lien
granted pursuant to any of the Security Agreements shall for any
reason cease to be a valid and perfected first priority lien on and
security interest in the Collateral purported to be covered thereby;
or"
(v) Section 8.02 is amended to change the address for notices and
other communications to the Borrower and the Guarantors to be to the Attention
of Xxxxx X. Xxxxx, with a copy to Xxxx Xxxxx, Esq., Xxxxxxx Procter LLP, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx 00000.
8
3. Representations and Warranties. The Borrower and each Group One
Guarantor hereby represents and warrants to the Lender that:
(a) After giving effect to the waivers embodied in this
Amendment, there is no Event of Default under the Loan Agreement or the Loan
Documents, or any Default that shall become and Event of Default thereunder with
the passage of time, existing or continuing on the date hereof other than the
Existing Events of Default.
(b) Except for those representation and warranties under Sections
4.01 (a), (b), (f), (g), (h), and (s) which are to be brought down to date
pursuant to Section 6(j) of the 1994 Loan Amendment, as of the date of this
Amendment all of the representations and warranties in the Loan Agreement (as
modified by this Amendment) remain true and correct in all material respects on
and as of the date of this Amendment.
(c) Coolbrands has heretofore furnished to the Lender the
financial statements required pursuant to Section 5.01(b)(ii) of the Loan
Agreement for the fiscal quarter ended May 31, 2005. Such financial statements
were prepared in conformity with GAAP, and present fairly and accurately the
financial condition of Coolbrands and its Consolidated Subsidiaries as of the
dates of such financial statements; and between the date of the most recent such
statements and the date hereof, no Material Adverse Change has occurred with
respect to Coolbrands and its Consolidated Subsidiaries. In this connection, the
Lender is aware of the financial projections for Coolbrands and its Consolidated
Subsidiaries for the fiscal year ended August 31, 2005, the Lender having
received the same on June 29, 2005.
(d) There is no obligation or liability, contingent or otherwise
of Coolbrands and its Subsidiaries which is material in amount and which is not
reflected in the financial statements referred to in the foregoing subsection
(c).
(e) The Borrower is indebted under the Loan Agreement in the
amount of $10,250,000, without defense, setoff or counterclaim of any kind
whatsoever.
4. Waivers. Upon the effectiveness of this Amendment, the Lender and
the Agent hereby waive the Existing Events of Default. The waiver set forth in
the foregoing sentence is limited specifically to the Existing Events of Default
and does not constitute, directly or by implication, a waiver of any other
provision of the Loan Agreement or any of the other Loan Documents (before or
after the effectiveness of this Amendment), or of any other right, power, or
privilege of the Lender, or of any Default or Event of Default which may occur,
or may have occurred (other than the Existing Events of Default), before or
after the effectiveness of this Amendment, or otherwise.
5. Conditions of Effectiveness of this Amendment. This Amendment shall
be effective as of the date (or before September 2, 2005) when the following
have been received by the Agent and the Lender (or their counsel), all in form
and substance satisfactory to the Agent and the Lender (the "Effective Date"):
(a) Amendment. Counterparts of this Amendment and the Other
Amendments, duly executed by the Borrower, the Group One Guarantors and the
Other Guaranty Parties.
9
(b) Documents Required by the 1994 Loan Amendment. The documents
which are required to be received by Agent and the Lender (or their counsel)
under Section 5(b), 5(c), 5(d), 5(e) and 5(f) of the 1994 Loan Amendment.
6. Post Closing Undertaking: On or before September 30, 2005 (the
"Post-Closing Delivery Date"), all of the Post-Closing Documents (as defined in
the 1994 Loan Amendment) shall have been delivered to the Lender (or its
counsel), all in form and substance satisfactory to the Lender. The failure of
the Lender to receive any of the Post-Closing Documents on or prior to the
Post-Closing Delivery Date shall be an Event of Default under the Loan Agreement
and the other Loan Documents.
7. Joinder. (a) Yogen hereby agrees to become a Group One Guarantor
(referred to in the Loan Agreement prior to the Second Amendment as a
"Guarantor") as set forth in Section 5.01(k) of the Loan Agreement and, by
executing and delivering this Amendment, does hereby join in the Loan Agreement
(as amended hereby) as a Group One Guarantor. Yogen hereby agrees to comply
with, and be bound by, all of the terms and conditions of the Loan Agreement (as
amended hereby) as if it was an original signatory thereto.
(b) Without limiting the foregoing, Yogen hereby expressly
consents to the terms and conditions of Sections 8.10 (Governing Law) and
Section 8.11 (Waiver of Jury Trial) of the Loan Agreement (as amended hereby).
(c) All of the undersigned agree that the joinder contemplated by
this Section 7 shall be deemed to be, and is hereby made a part of, the Loan
Agreement,
8. Reaffirmation.
(a) All of the Loan Documents which refer to the Loan Agreement
are deemed amended hereby to be references to the Loan Agreement as amended
hereby and as the same may hereafter be amended, extended, supplemented,
restated, joined in or otherwise modified or replaced. The Borrower and each of
the Group One Guarantors hereby reaffirm all of their respective obligations and
liabilities under the Loan Agreement, the Guaranties, the Security Agreements
and other Loan Documents to which such Person is a party.
(b) The Other Guaranty Parties hereby reaffirm all of their
respective obligations and liabilities under the All Other Guarantors Guaranty.
9. Full Force and Effect. As expressly modified by this Amendment, all
of the terms and provisions of the Loan Agreement and the other Loan Documents
shall continue in full force and effect, and all parties hereto shall be
entitled to the benefits thereof. The agreements herein contained are limited
specifically to the matters set forth above and do not constitute directly or by
implication an amendment or waiver of any other provision of the Loan Agreement
or any of the other Loan Documents which has not been expressly amended or
waived herein.
10. Incorporated Terms. The provisions of Sections 1.02, 1.03, 8.09,
8.10, 8.11 and 8.12 of the Loan Agreement are incorporated by reference, mutatis
mutandis, into this
10
Amendment to the extent this Amendment is construed as an agreement separate and
independent from the Loan Agreement and the other Loan Documents.
11. Amendment. This Amendment may not be changed orally, but only by
an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
[Signatures appear on the following pages.]
11
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the date set forth above.
INTEGRATED BRANDS INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
ESKIMO PIE FROZEN DISTRIBUTION INC.
By:
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
YOGEN FRUZ CANADA INC.
By:
-------------------------------
Name:
Title:
KAYLA FOODS INT'L (BARBADOS) INC.
XXXXXXX'X ICE CREAM COMPANY
YOGEN FRUZ ACQUISITIONS INC.
NORTHERN LIGHTS FROZEN DESSERTS, INC.
COOLBRANDS INTERNATIONAL, INC.
ESKIMO PIE CORPORATION
SUGAR CREEK FOODS INC.
XXXXXXX'X, INC.
XXXXXXX'X INDUSTRIES, INC.
GOLDEN SWIRL MANAGEMENT COMPANY
I CAN'T BELIEVE ITS YOGURT, LTD.
By Kayla Foods, Inc., its General Partner
JH ACQUISITION CORP.
STEVE'S HOMEMADE ICE CREAM CORP.
STEVE'S GOURMET ICE CREAM, INC.
STEVE'S HOMEMADE ICE CREAM OF FLORIDA, INC.
HEIDI'S FROZEN YOGURT, INC.
COOLBRANDS DAIRY, INC.
SWENSEN'S MANUFACTURING
SWENSEN'S OPERATING COMPANY, INC.
SWENSON'S ICE CREAM COMPANY OF NEVADA
XXXX OF FLORIDA INC.
XXXXXXX'X ICE CREAM FRANCHISE COMPANY INC.
AMERICAN GLACE, INC.
XXXXXXX'X ICE CREAM OPERATING CO.
SWENSEN'S REAL ESTATE CORPORATION
SWENSEN'S OF ARIZONA, INC.
SWENSON'S DISTRIBUTING
LARRY'S INDUSTRIES, INC.
SWENSEN'S LAS VEGAS, INC.
SCHRAFFT'S OF NEVADA, INC.
KAYLA FOODS, INC.
GOLDEN SWIRL FRANCHISE COMPANY
XXXXXXX MALLS, INC.
YOGEN FRUZ USA FRANCHISE COMPANY INC.
LARRY'S LEASING, INC.
XXXXXXX'X STORES OF LAKE COUNTY, INC.
WINSTON MALLS, INC.
EXCHEQUER ACCEPTANCE CORP.
CHURNS HOLDING CORP.
CHURN FRANCHISING CORP.
YOGEN FRUZ CANADA INC.
By:
-------------------------------
Name: Xxxxx X. Xxxxx
Title: President
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the date set forth above.
INTEGRATED BRANDS INC.
By:
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
ESKIMO PIE FROZEN DISTRIBUTION INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
YOGEN FRUZ CANADA INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name:
Title:
KAYLA FOODS INT'L (BARBADOS) INC.
XXXXXXX'X ICE CREAM COMPANY
YOGEN FRUZ ACQUISITIONS INC.
NORTHERN LIGHTS FROZEN DESSERTS, INC.
COOLBRANDS INTERNATIONAL, INC.
ESKIMO PIE CORPORATION
SUGAR CREEK FOODS INC.
XXXXXXX'X, INC.
XXXXXXX'X INDUSTRIES, INC.
GOLDEN SWIRL MANAGEMENT COMPANY
I CAN'T BELIEVE ITS YOGURT, LTD.
By Kayla Foods, Inc., its General Partner
JH ACQUISITION CORP.
STEVE'S HOMEMADE ICE CREAM CORP.
STEVE'S GOURMET ICE CREAM, INC.
STEVE'S HOMEMADE ICE CREAM OF FLORIDA, INC.
HEIDI'S FROZEN YOGURT, INC.
COOLBRANDS DAIRY, INC.
SWENSEN'S MANUFACTURING
SWENSEN'S OPERATING COMPANY, INC.
SWENSON'S ICE CREAM COMPANY OF NEVADA
XXXX OF FLORIDA INC.
XXXXXXX'X ICE CREAM FRANCHISE COMPANY INC.
AMERICAN GLACE, INC.
XXXXXXX'X ICE CREAM OPERATING CO.
SWENSEN'S REAL ESTATE CORPORATION
SWENSEN'S OF ARIZONA, INC.
SWENSON'S DISTRIBUTING
LARRY'S INDUSTRIES, INC.
SWENSEN'S LAS VEGAS, INC.
SCHRAFFT'S OF NEVADA, INC.
KAYLA FOODS, INC.
GOLDEN SWIRL FRANCHISE COMPANY
XXXXXXX MALLS, INC.
YOGEN FRUZ USA FRANCHISE COMPANY INC.
LARRY'S LEASING, INC.
XXXXXXX'X STORES OF LAKE COUNTY, INC.
WINSTON MALLS, INC.
EXCHEQUER ACCEPTANCE CORP.
CHURNS HOLDING CORP.
CHURN FRANCHISING CORP.
YOGEN FRUZ CANADA INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: President
JPMORGAN CHASE BANK, N.A., AS AGENT JPMORGAN CHASE BANK, N.A., AS
LENDER
By: XXXXXXX X. XXXXXX By: XXXXXXX X. XXXXXX
------------------------------- -------------------------------
Name: XXXXXXX X. XXXXXX Name: XXXXXXX X. XXXXXX
Title: SVP Title: SVP
Exhibit A
Group One Guarantors
COOLBRANDS INTERNATIONAL INC., a Canadian corporation
KAYLA FOODS INT'L (BARBADOS) INC., a Barbados corporation
XXXXXXX'X, INC., a Delaware corporation
XXXXXXX'X ICE CREAM COMPANY, a California corporation
YOGEN FRUZ ACQUISITIONS INC., a Nevada corporation
XXXXXXX'X INDUSTRIES, INC., an Illinois corporation
NORTHERN LIGHTS FROZEN DESSERTS, INC., a Utah corporation
GOLDEN SWIRL MANAGEMENT COMPANY, a Utah corporation
I CAN'T BELIEVE ITS YOGURT, LTD., a Texas limited partnership
SUGAR CREEK FOODS INC., a Virginia corporation
ESKIMO PIE FROZEN DISTRIBUTION INC, a Delaware corporation
ESKIMO PIE CORPORATION, a Virginia corporation
COOLBRANDS DAIRY, INC., a Delaware corporation
YOGEN FRUZ CANADA INC., an Ontario Business Corporation
Exhibit B
Other Guaranty Parties
JH ACQUISITION CORP.
STEVE'S HOMEMADE ICE CREAM CORP.
STEVE'S GOURMET ICE CREAM, INC.
STEVE'S HOMEMADE ICE CREAM OF FLORIDA, INC.
HEIDI'S FROZEN YOGURT, INC.
AMERICAN GLACE, INC.
XXXXXXX'X ICE CREAM OPERATING CO., INC.
SWENSEN'S REAL ESTATE CORPORATION
SWENSEN'S OF ARIZONA INC.
SWENSON'S DISTRIBUTING
SWENSEN'S MANUFACTURING
SWENSEN'S OPERATING COMPANY INC.
SWENSON'S ICE CREAM COMPANY OF NEVADA
XXXX OF FLORIDA INC.
XXXXXXX'X ICE CREAM FRANCHISE COMPANY INC.
SWENSEN'S LAS VEGAS, INC.
SCHRAFFT'S OF NEVADA, INC.
KAYLA FOODS, INC.
GOLDEN SWIRL FRANCHISE COMPANY INC.
XXXXXXX MALLS, INC.
LARRY'S INDUSTRIES, INC.
LARRY'S LEASING, INC.
XXXXXXX'X STORES OF LAKE COUNTY, INC.
WINSTON MALLS, INC.
YOGEN FRUZ USA FRANCHISE COMPANY INC.
EXCHEQUER ACCEPTANCE CORP.
CHURNS HOLDING CORP.
CHURN FRANCHISING CORP.
Exhibit 5.01(m)(i)
Consolidated Financial Information Concerning
Accounts Receivable and Inventory
[Exhibit begins on the following page]
Exhibit 5.01(m)(ii)
Weekly Flash Report
[Exhibit begins on the following page]
Exhibit 5.01(m)(iii)
Consolidated EBITDA/AP Report
[Exhibit begins on the following page]
SCHEDULE 1
(1) The Borrower and the Group One Guarantors are not in compliance
with the covenant set forth in Section 5.03(b) of the Loan Agreement not be
permit the ratio of Funded Debt to EBITDA of Coolbrands and its Consolidated
Subsidiaries to be greater than 2.75 to 1.00 at any time;
(2) The Borrower and the Group One Guarantors are not in compliance
with the covenant set forth in Section 5.03(e) of the Loan Agreement not to
permit the Debt Service Coverage Ratio of Coolbrands and its Consolidated
Subsidiaries to be less than 1.25 to 1.0 at any time.
(3) Cross defaults to the foregoing covenants as they appear in the
1994 Loan Agreement and the 2005 Note.
TERM LOAN NOTE
Garden City, New York
$30,000,000.00 September 20, 2000
FOR VALUE RECEIVED, INTEGRATED BRANDS INC., a New Jersey corporation,
having its principal place of business at 0000 Xxxxxxx'x Xxxxxxxx Xxxxxxx,
Xxxxxxxxxx, Xxx Xxxx 00000 (the "Borrower") promises to pay to the order of THE
CHASE MANHATTAN BANK ("Lender") at the office of The Chase Manhattan Bank, as
Agent, located at 0 XxxxxXxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, the principal
amount of THIRTY MILLION ($30,000,000.00) DOLLARS, or, if less, the unpaid
principal amount of the Term Loan (as defined in the Agreement, as defined
below) made by the Lender to the Borrower pursuant to the Agreement.
The principal balance of this Note shall be payable in sixty (60) monthly
principal installments, due on the first Business Day of each month, commencing
on December 1, 2000, the first fifty nine (59) of such installments being in the
principal amount of $250,000.00 and the sixtieth (60th) such installment being
in the remaining principal amount of this Note.
Borrower shall pay interest on the unpaid principal balance of this Note
from time to time outstanding, at said office at the rates of interest, at the
times and for the periods set forth in the Agreement.
All payments including prepayments on this Note shall be made in lawful
money of the United States of America in immediately available funds. Except as
otherwise provided in the Agreement, if a payment becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day, and interest shall be payable thereon at the rate
herein specified during such extension.
This Note is the Term Loan Note referred to in that certain Loan Agreement
among Borrower, certain Guarantors, the Agent and the Lenders dated as of
September 20, 2000 (the "Agreement"), as such Agreement may be further amended
from time to time, and is subject to prepayment and its maturity is subject to
acceleration upon the terms contained in said Agreement. All capitalized terms
used in this Note and not defined herein shall have the meanings given them in
the Agreement.
If any action or proceeding be commenced to collect this Note or enforce
any of its provisions, Borrower further agrees to pay all costs and expenses of
such action or proceeding and attorneys'
fees and expenses and further expressly waives any and every right to interpose
any counterclaim (other than mandatory counterclaims) in any such action or
proceeding. Borrower hereby submits to the jurisdiction of the Supreme Court of
the State of New York and agrees with Agent and Lender that personal
jurisdiction over Borrower shall rest with the Supreme Court of the State of New
York for purposes of any action on or related to this Note, the liabilities
hereunder, or the enforcement of either or all of the same. Borrower hereby
waives personal service by manual delivery and agrees that service of process
may be made by postpaid certified mail directed to Borrower at Borrower's
address designated in the Agreement or at such other address as may be
designated in writing by Borrower to the Agent in accordance with Section 8.02
of the Agreement, and that upon mailing of such process such service be
effective with the same effect as though personally served. Borrower hereby
expressly waives any and every right to a trial by jury in any action on or
related to this Note, the liabilities hereunder or the enforcement of either or
all of the same.
Lender may transfer this Note and may deliver the security or any part
thereof to the transferee or transferees in accordance with and subject to the
provisions of the Agreement, who shall thereupon become vested with all the
powers and rights above given to Lender in respect thereto, and Lender shall
thereafter be forever relieved and fully discharged from any liability or
responsibility in the matter. The failure of any holder of this Note to insist
upon strict performance of each and/or all of the terms and conditions hereof
shall not be construed or deemed to be a waiver of any such term or condition.
Borrower authorizes Lender to complete this Note as to any terms not set
forth herein at the time of delivery hereof.
Borrower and all endorsers and guarantors hereof waive presentment and
demand for payment, notice of non-payment, protest, and notice of protest.
This Note shall be construed in accordance with and governed by the laws of
the State of New York.
INTEGRATED BRANDS INC.
By /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
Coolbrands
GENERAL GUARANTEE
0 XxxxxXxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000 September 20, 2000
(Banking Office)
FOR VALUE RECEIVED, and in consideration of loans made or to be made or
credit otherwise extended or to be extended by THE CHASE MANHATTAN BANK ("Chase"
or a "Lender"), or any other lenders (each, a "Lender" and collectively, the
"Lenders") through its or their agent, The Chase Manhattan Bank (the "Agent") to
or for the account of INTEGRATED BRANDS INC.(the "Borrower") from time to time
and at any time and for other good and valuable consideration and to induce the
Lenders, in their discretion, to make or commit to make such loans or extensions
of credit and to make or grant such renewals, extensions, releases of collateral
or relinquishments of legal rights as the one or more of the Lenders may deem
advisable, the undersigned (jointly and severally, if more than one guarantor,
whether executing the same instrument or separate instruments) absolutely and
unconditionally guarantees to the Agent and the Lenders the prompt payment when
due, whether by acceleration or otherwise, of all present or future obligations
and liabilities of any and all kinds of the Borrower to the Agent and the
Lenders and of all instruments of any nature evidencing or relating to any such
obligations and liabilities upon which the Borrower or one or more parties and
the Borrower is or may become liable to the Agent or the Lenders, whether
incurred by the Borrower as maker, indorser, drawer, acceptor, guarantor,
accommodation party, counterparty, purchaser, seller or otherwise, and whether
due or to become due, secured or unsecured, absolute or contingent, joint and/or
several, and howsoever or whensoever acquired by the Agent or any Lender (all of
which are referred to as the "Obligations"), and irrespective of the
genuineness, validity, regularity, discharge, release or enforceability of such
Obligations, or of any instrument evidencing any of the Obligations or of any
collateral therefor or of the existence or extent of such collateral or of the
obligations of the undersigned under this guarantee. The Obligations shall
include interest accruing thereon before or after the commencement of any
insolvency, bankruptcy or reorganization proceeding in respect of the Borrower
or any other guarantor of the Obligations whether or not such interest is an
allowable claim in any such proceeding and irrespective of the discharge or
release of the Borrower or any other guarantor in such proceeding.
The undersigned assents that the Agent and the Lenders may at any time and
from time to time, either before or after the maturity thereof, without notice
to or further consent of the undersigned,
extend the time of payment of, exchange, release, substitute or surrender any
collateral for, renew or extend any of, or change the amount of, the Obligations
or increase the interest rate thereon, and may also make any agreement with the
Borrower or with any other party to or person liable on any of the Obligations
or any guarantor of or hypothecator of collateral or other surety for such
Obligations or interested therein, for the extension, renewal, payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between the Bank and the
Borrower or any such other party or person, without in any way impairing or
affecting this guarantee.
The undersigned agrees that this guarantee shall not be impaired or
otherwise affected by any failure to call for, take, hold, protect or perfect,
continue the perfection of or enforce any security interest in or other lien
upon, any collateral for the Obligations, or by any failure to exercise, delay
in the exercising or waiver of, or forbearance with respect to, any right or
remedy available to the Bank with respect to the Obligations.
The undersigned acknowledges that it has derived or expects to derive a
financial or other benefit from each and every Obligation incurred by the
Borrower to the Bank.
The undersigned waives notice of the acceptance of this guarantee and of
the making of any such loans or extensions of credit or the incurrence of any
Obligation, presentment to or demand of payment from anyone whomsoever liable
upon any of the Obligations, protest, notice of presentment, non-payment or
protest and notice of any sale or other disposition of collateral security or
any default of any sort.
The undersigned agrees to pay all costs and expenses incurred by the Bank
incidental to or in any way relating to the enforcement of the Obligations or
the obligations of the undersigned hereunder or the protection of the rights of
the Bank hereunder or with respect to any of the Obligations, including, but not
limited to, reasonable attorneys' fees and expenses, whether or not litigation
is commenced.
This is a continuing guarantee and shall apply to all Obligations
notwithstanding that at any particular time any or all of the Obligations that
consist of revolving credit loans, line of credit loans or similar indebtedness
shall have been paid in full. This guarantee shall remain in full force and
effect and be binding upon the undersigned, and the undersigned's successors and
assigns, until written notice of its revocation shall actually be received
-2-
by the Bank. No such revocation shall release the undersigned or affect in any
manner the rights, remedies, powers, security interests and liens of the Bank
under this guarantee with respect to any of the Obligations which shall have
been created, contracted, assumed or incurred prior to actual receipt by the
Bank of such written notice of revocation and any renewals or extensions thereof
or any Obligations which shall have been created, contracted, assumed or
incurred after actual receipt of such written notice pursuant to any agreement
entered into by the Bank prior to actual receipt of such written notice and any
renewals or extensions thereof. Any such revocation by one of the undersigned
shall not affect the continuing liabilities hereunder of such of the undersigned
as do not give notice of revocation. If any of the present or future Obligations
are guaranteed by persons, partnerships, limited liability companies or
corporations in addition to the undersigned, the death, release or discharge in
whole or in part, or the bankruptcy, liquidation or dissolution of one or more
of them, shall not discharge or affect the liabilities of the undersigned under
this guarantee.
This guarantee shall continue to be effective, or shall be reinstated, as
the case may be, if at any time payment of all or any part of any payment of any
of the Obligations is rescinded or must be restored or returned by the Bank
whether under any insolvency, bankruptcy, receivership or reorganization
proceeding or otherwise.
This guarantee may be assigned by the Bank and its benefits shall inure to
the successors, indorsees and assigns of the Bank.
This guarantee is a guarantee of payment and not of collection, and the
Bank shall be under no obligation to take any action against the Borrower or any
other person liable with respect to any of the Obligations or resort to any
collateral security securing any of the Obligations or this guarantee as a
condition precedent to the undersigned being obligated to make payment and to
perform as agreed herein. The undersigned hereby waives any right to claim or
interpose any defense, counterclaim or offset of any nature and description
which it may have or which may exist between and among the Agent, any of the
Lenders, the Borrower and/or the undersigned or to seek injunctive relief.
Promptly upon the Agent's request, the undersigned agrees to furnish such
information to the Agent and to permit the Agent to inspect and make copies of
its books and records, as the Agent shall reasonably request from time to time.
-3-
The undersigned authorizes the Agent to date this guarantee and to complete
any blank space herein according to the terms upon which this guarantee was
given.
Any notice to the Agent shall be effective only upon receipt by the Agent
and if directed to the Agent at its banking office set forth above or any other
address hereafter specified by written notice from the Agent to the undersigned.
Until such time as the Agent and the Lenders shall have received payment in
full in cash in satisfaction of all of the Obligations, the undersigned waives
any right to be subrogated to the rights of the Agent and the Lenders with
respect to the Obligations, and the undersigned waives any right to and agrees
that it will not institute or take any action against the Borrower seeking
contribution, reimbursement or indemnification by the Borrower with respect to
any payments made by the undersigned to the Agent or any Lender hereunder.
Every provision of this guarantee is intended to be severable; if any term
or provision of this guarantee shall be invalid, illegal or unenforceable for
any reason whatsoever, the validity, legality or enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.
The obligation of each of the undersigned under this guarantee shall be
limited to an aggregate amount equal to the largest amount that would not render
its guarantee subject to avoidance under Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
bankruptcy Code or any comparable provision of any other federal or applicable
state law.
No failure on the part of the Agent or any Lender to exercise, and no delay
in exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Agent or any Lender of
any right, remedy or power hereunder preclude any other or future exercise
thereof or the exercise of any other right, remedy or power.
Each and every right, remedy and power hereby granted to the Agent or any
Lender or allowed it by law or other agreement shall be cumulative and not
exclusive of any other right, remedy or power, and may be exercised by the Agent
or such Lender at any time and from time to time.
This guarantee contains the entire agreement and understanding among the
Agent, the Lenders and the undersigned with respect to the subject matter hereof
and supersedes all prior agreements and understandings relating to the subject
matter hereof. This
-4-
guarantee may not be amended, and compliance with its terms may not be waived,
orally or by course of dealing, but only by a writing signed by an authorized
officer of the Agent.
Until cash payment in full of the Obligations, the liability of the
undersigned under this guarantee shall not be released.
IF THE UNDERSIGNED IS A CORPORATION:
The undersigned represents and warrants that the undersigned is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation; that the execution, delivery and performance
of this guarantee are within the undersigned's corporate powers and have been
duly authorized by all necessary action of its board of directors and
shareholders; and that each person executing this guarantee has the authority to
execute and deliver this guarantee on behalf of the undersigned.
IF THE UNDERSIGNED IS A LIMITED LIABILITY COMPANY:
The undersigned represents and warrants that the undersigned is a limited
liability company duly organized, validly existing and in good standing under
the laws of the state of its organization; that the execution, delivery and
performance of this guarantee are within the undersigned's company powers and
have been duly authorized by all necessary action of its members; and that each
person executing this guarantee has the authority to execute and deliver this
guarantee on behalf of the undersigned.
IF THE UNDERSIGNED IS A PARTNERSHIP:
The undersigned represents and warrants that the undersigned is a
partnership duly formed under the laws of the state of its formation; that the
execution, delivery and performance of this guarantee are within the
undersigned's partnership powers and have been duly authorized by all necessary
action of its partners and do not contravene the provisions of its partnership
agreement; and that each person executing this guarantee has the authority to
execute and deliver this guarantee on behalf of the undersigned.
Any and all payments by the undersigned hereunder shall be made free and
clear of and without deduction for any and all present or future taxes, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on any Lender's net income and franchise taxes imposed
on any Lender by any jurisdiction or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter
-5-
referred to as "Taxes"). If the undersigned shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder to any Lender, (i) the
sum payable shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this paragraph) such Lender shall receive an amount equal to the sum it
would have received had no such deductions been made, (ii) the undersigned shall
make such deductions and (iii) the undersigned shall pay the full amount
deducted to the relevant taxing authority or other governmental authority in
accordance with applicable law. The undersigned shall, jointly and severally,
pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise with
respect to, this guarantee (hereinafter referred to as "Other Taxes"). The
undersigned shall, jointly and severally, indemnify each Lender for the full
amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this paragraph) paid by such Lender
and any liability (including penalties, interest and reasonable out-of-pocket
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted by the relevant taxing
authority or other governmental authority. Such indemnification shall be made
within 30 days after the date a Lender makes written demand therefor, which
demand may be made after such Lender, in its sole discretion and at the sole
expense of the undersigned, determines not to challenge or contest such
assertion of Taxes or Other Taxes. If a Lender receives a refund in respect of
any Taxes or Other Taxes for which such Lender has received payment from the
undersigned hereunder it shall promptly notify the undersigned of such refund
and shall promptly upon receipt repay such refund to the undersigned, net of all
out-of-pocket expenses of such Lender and without interest; provided, however,
that the undersigned, upon the request of such Lender, agrees to return such
refund (plus penalties, interest or other charges) to such Lender in the event
such Lender is required to repay such refund. Within 30 days after the date of
any payment of Taxes or Other Taxes withheld by the undersigned in respect of
any payment to a Lender, the undersigned will furnish to the Agent the original
or a certified copy of a receipt evidencing payment thereof. Without prejudice
to the survival of any other agreement contained herein, the agreements and
obligations contained in this paragraph shall survive the termination of this
guarantee and the payment in full of the Obligations and the obligations of the
undersigned hereunder.
If for the purpose of obtaining judgment in any court it is necessary to
convert a sum due hereunder in one currency into another currency, the parties
hereto agree, to the fullest extent that they may effectively do so under
applicable law, that the rate of exchange used shall be the spot rate at which
in accordance with normal banking procedures the first currency could be
purchased in
-6-
New York City with such other currency by the person obtaining such judgment on
the business day preceding that on which final judgment is given. The parties
agree, to the fullest extent that they may effectively do so under applicable
law, that any payments made hereunder shall be made in the same currencies as
the Obligations are due and that any payment obligation (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment,
in any currency other than the relevant currency, except to the extent that such
tender or recovery shall result in the actual receipt by a Lender of the full
amount of the relevant currency expressed to be payable in respect of the
Obligations (it being assumed for purposes of this clause (i) that such Lender
will convert any amount tendered or recovered into the relevant currency on the
date of such tender or recovery), (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the relevant
currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the relevant currency so expressed to be payable and (iii)
shall not be affected by an unrelated judgment being obtained for any other sum
due under this guarantee. The provisions of this paragraph shall survive the
termination of this guarantee and the payment in full of the Obligations and the
obligations of the undersigned hereunder.
THIS GUARANTEE SHALL BE CONSTRUED AND INTERPRETED, AND ALL RIGHTS AND
OBLIGATIONS HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. THE
UNDERSIGNED SUBMITS TO THE JURISDICTION OF STATE AND FEDERAL COURTS LOCATED IN
THE CITY AND STATE OF NEW YORK IN PERSONAM AND AGREES THAT ALL ACTIONS AND
PROCEEDINGS RELATING DIRECTLY OR INDIRECTLY TO THIS GUARANTEE SHALL BE LITIGATED
ONLY IN SAID COURTS OR COURTS LOCATED ELSEWHERE AS THE AGENT MAY SELECT AND THAT
SUCH COURTS ARE CONVENIENT FORUMS. THE UNDERSIGNED WAIVES PERSONAL SERVICE UPON
IT AND CONSENTS TO SERVICE OF PROCESS OUT OF SAID COURTS BY MAILING A COPY
THEREOF TO IT BY REGISTERED OR CERTIFIED MAIL.
The undersigned agrees that a final judgment in any proceeding brought in
any of the courts specified in the immediately preceding paragraph shall be
conclusive and binding upon the undersigned and may be enforced in the courts of
the United States, the State of New York or any other courts to the jurisdiction
of which the undersigned is subject, by a suit upon judgment, provided that
service of process is effected on the undersigned in one of the manners
specified in the remainder of this paragraph. The undersigned each hereby
irrevocably designate Xxxx Xxxxxxx (the "Process Agent") with an office on the
date hereof at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000, to accept on
behalf of the undersigned and their property, service of copies of the summons
and complaint and any other process which may be served in any
-7-
proceeding. The undersigned shall deliver to the Agent evidence of such Process
Agent's acceptance of such appointment. If the Process Agent shall cease to act,
the undersigned agree that they shall irrevocably appoint without delay another
agent satisfactory to the Agent and shall deliver evidence of such Process
Agent's acceptance of such appointment to the Agent. Such service may be made by
mailing or delivering a copy of such process to the undersigned in care of the
Process Agent at the Process Agent's above address, and the undersigned hereby
irrevocably authorizes and directs the Process Agent to accept such service. The
undersigned also irrevocably waives personal service upon it and consents to the
service of any and all process in any proceeding by the mailing of copies of
such process to the at its address by registered or certified mail. The
undersigned hereby agrees that nothing in this guarantee shall affect the right
of the Agent to serve legal process in any other manner permitted by law or
affect the right of the Agent to bring any action or proceeding against the
undersigned or any property in the courts of any other jurisdiction. To the
extent that the undersigned has or hereafter may acquire any immunity from suit,
jurisdiction of any court or any legal process (whether through attachment prior
to judgment, attachment in aid of execution, execution of a judgment, or from
any other legal process or remedy) with respect to itself or its property, the
undersigned hereby irrevocably waives such immunity in respect of its
obligations under this Guaranty.
THE UNDERSIGNED, THE AGENT AND EACH LENDER WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY
CONNECTED TO THIS GUARANTEE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THE OBLIGATIONS.
IN WITNESS WHEREOF, this guarantee has been executed by the undersigned as
of the date first written above.
COOLBRANDS INTERNATIONAL INC. ADDRESS OF GUARANTOR
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
By: /s/ Xxxxx X. Xxxxx Canada L3R 9Y7
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
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Kayla
GENERAL GUARANTEE
0 XxxxxXxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000 September 20, 2000
(Banking Office)
FOR VALUE RECEIVED, and in consideration of loans made or to be made or
credit otherwise extended or to be extended by THE CHASE MANHATTAN BANK ("Chase"
or a "Lender"), or any other lenders (each, a "Lender" and collectively, the
"Lenders") through its or their agent, The Chase Manhattan Bank (the "Agent") to
or for the account of INTEGRATED BRANDS INC. (the "Borrower") from time to time
and at any time and for other good and valuable consideration and to induce the
Lenders, in their discretion, to make or commit to make such loans or extensions
of credit and to make or grant such renewals, extensions, releases of collateral
or relinquishments of legal rights as the one or more of the Lenders may deem
advisable, the undersigned (jointly and severally, if more than one guarantor,
whether executing the same instrument or separate instruments) absolutely and
unconditionally guarantees to the Agent and the Lenders the prompt payment when
due, whether by acceleration or otherwise, of all present or future obligations
and liabilities of any and all kinds of the Borrower to the Agent and the
Lenders and of all instruments of any nature evidencing or relating to any such
obligations and liabilities upon which the Borrower or one or more parties and
the Borrower is or may become liable to the Agent or the Lenders, whether
incurred by the Borrower as maker, indorser, drawer, acceptor, guarantor,
accommodation party, counterparty, purchaser, seller or otherwise, and whether
due or to become due, secured or unsecured, absolute or contingent, joint and/or
several, and howsoever or whensoever acquired by the Agent or any Lender (all of
which are referred to as the "Obligations"), and irrespective of the
genuineness, validity, regularity, discharge, release or enforceability of such
Obligations, or of any instrument evidencing any of the Obligations or of any
collateral therefor or of the existence or extent of such collateral or of the
obligations of the undersigned under this guarantee. The Obligations shall
include interest accruing thereon before or after the commencement of any
insolvency, bankruptcy or reorganization proceeding in respect of the Borrower
or any other guarantor of the Obligations whether or not such interest is an
allowable claim in any such proceeding and irrespective of the discharge or
release of the Borrower or any other guarantor in such proceeding.
The undersigned assents that the Agent and the Lenders may at any time and
from time to time, either before or after the maturity thereof, without notice
to or further consent of the undersigned,
extend the time of payment of, exchange, release, substitute or surrender any
collateral for, renew or extend any of, or change the amount of, the Obligations
or increase the interest rate thereon, and may also make any agreement with the
Borrower or with any other party to or person liable on any of the Obligations
or any guarantor of or hypothecator of collateral or other surety for such
Obligations or interested therein, for the extension, renewal, payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between the Bank and the
Borrower or any such other party or person, without in any way impairing or
affecting this guarantee.
The undersigned agrees that this guarantee shall not be impaired or
otherwise affected by any failure to call for, take, hold, protect or perfect,
continue the perfection of or enforce any security interest in or other lien
upon, any collateral for the Obligations, or by any failure to exercise, delay
in the exercising or waiver of, or forbearance with respect to, any right or
remedy available to the Bank with respect to the Obligations.
The undersigned acknowledges that it has derived or expects to derive a
financial or other benefit from each and every Obligation incurred by the
Borrower to the Bank.
The undersigned waives notice of the acceptance of this guarantee and of
the making of any such loans or extensions of credit or the incurrence of any
Obligation, presentment to or demand of payment from anyone whomsoever liable
upon any of the Obligations, protest, notice of presentment, non-payment or
protest and notice of any sale or other disposition of collateral security or
any default of any sort.
The undersigned agrees to pay all costs and expenses incurred by the Bank
incidental to or in any way relating to the enforcement of the Obligations or
the obligations of the undersigned hereunder or the protection of the rights of
the Bank hereunder or with respect to any of the Obligations, including, but not
limited to, reasonable attorneys' fees and expenses, whether or not litigation
is commenced.
This is a continuing guarantee and shall apply to all Obligations
notwithstanding that at any particular time any or all of the Obligations that
consist of revolving credit loans, line of credit loans or similar indebtedness
shall have been paid in full. This guarantee shall remain in full force and
effect and be binding upon the undersigned, and the undersigned's successors and
assigns, until written notice of its revocation shall actually be received
-2-
by the Bank. No such revocation shall release the undersigned or affect in any
manner the rights, remedies, powers, security interests and liens of the Bank
under this guarantee with respect to any of the Obligations which shall have
been created, contracted, assumed or incurred prior to actual receipt by the
Bank of such written notice of revocation and any renewals or extensions thereof
or any Obligations which shall have been created, contracted, assumed or
incurred after actual receipt of such written notice pursuant to any agreement
entered into by the Bank prior to actual receipt of such written notice and any
renewals or extensions thereof. Any such revocation by one of the undersigned
shall not affect the continuing liabilities hereunder of such of the undersigned
as do not give notice of revocation. If any of the present or future Obligations
are guaranteed by persons, partnerships, limited liability companies or
corporations in addition to the undersigned, the death, release or discharge in
whole or in part, or the bankruptcy, liquidation or dissolution of one or more
of them, shall not discharge or affect the liabilities of the undersigned under
this guarantee.
This guarantee shall continue to be effective, or shall be reinstated, as
the case may be, if at any time payment of all or any part of any payment of any
of the Obligations is rescinded or must be restored or returned by the Bank
whether under any insolvency, bankruptcy, receivership or reorganization
proceeding or otherwise.
This guarantee may be assigned by the Bank and its benefits shall inure to
the successors, indorsees and assigns of the Bank.
This guarantee is a guarantee of payment and not of collection, and the
Bank shall be under no obligation to take any action against the Borrower or any
other person liable with respect to any of the Obligations or resort to any
collateral security securing any of the Obligations or this guarantee as a
condition precedent to the undersigned being obligated to make payment and to
perform as agreed herein. The undersigned hereby waives any right to claim or
interpose any defense, counterclaim or offset of any nature and description
which it may have or which may exist between and among the Agent, any of the
Lenders, the Borrower and/or the undersigned or to seek injunctive relief.
Promptly upon the Agent's request, the undersigned agrees to furnish such
information to the Agent and to permit the Agent to inspect and make copies of
its books and records, as the Agent shall reasonably request from time to time.
-3-
The undersigned authorizes the Agent to date this guarantee and to complete
any blank space herein according to the terms upon which this guarantee was
given.
Any notice to the Agent shall be effective only upon receipt by the Agent
and if directed to the Agent at its banking office set forth above or any other
address hereafter specified by written notice from the Agent to the undersigned.
Until such time as the Agent and the Lenders shall have received payment in
full in cash in satisfaction of all of the Obligations, the undersigned waives
any right to be subrogated to the rights of the Agent and the Lenders with
respect to the Obligations, and the undersigned waives any right to and agrees
that it will not institute or take any action against the Borrower seeking
contribution, reimbursement or indemnification by the Borrower with respect to
any payments made by the undersigned to the Agent or any Lender hereunder.
Every provision of this guarantee is intended to be severable; if any term
or provision of this guarantee shall be invalid, illegal or unenforceable for
any reason whatsoever, the validity, legality or enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.
The obligation of each of the undersigned under this guarantee shall be
limited to an aggregate amount equal to the largest amount that would not render
its guarantee subject to avoidance under Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
bankruptcy Code or any comparable provision of any other federal or applicable
state law.
No failure on the part of the Agent or any Lender to exercise, and no delay
in exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Agent or any Lender of
any right, remedy or power hereunder preclude any other or future exercise
thereof or the exercise of any other right, remedy or power.
Each and every right, remedy and power hereby granted to the Agent or any
Lender or allowed it by law or other agreement shall be cumulative and not
exclusive of any other right, remedy or power, and may be exercised by the Agent
or such Lender at any time and from time to time.
This guarantee contains the entire agreement and understanding among the
Agent, the Lenders and the undersigned with respect to the subject matter hereof
and supersedes all prior agreements and understandings relating to the subject
matter hereof. This
-4-
guarantee may not be amended, and compliance with its terms may not be waived,
orally or by course of dealing, but only by a writing signed by an authorized
officer of the Agent.
Until cash payment in full of the Obligations, the liability of the
undersigned under this guarantee shall not be released.
IF THE UNDERSIGNED IS A CORPORATION:
The undersigned represents and warrants that the undersigned is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation; that the execution, delivery and performance
of this guarantee are within the undersigned's corporate powers and have been
duly authorized by all necessary action of its board of directors and
shareholders; and that each person executing this guarantee has the authority to
execute and deliver this guarantee on behalf of the undersigned.
IF THE UNDERSIGNED IS A LIMITED LIABILITY COMPANY:
The undersigned represents and warrants that the undersigned is a limited
liability company duly organized, validly existing and in good standing under
the laws of the state of its organization; that the execution, delivery and
performance of this guarantee are within the undersigned's company powers and
have been duly authorized by all necessary action of its members; and that each
person executing this guarantee has the authority to execute and deliver this
guarantee on behalf of the undersigned.
IF THE UNDERSIGNED IS A PARTNERSHIP:
The undersigned represents and warrants that the undersigned is a
partnership duly formed under the laws of the state of its formation; that the
execution, delivery and performance of this guarantee are within the
undersigned's partnership powers and have been duly authorized by all necessary
action of its partners and do not contravene the provisions of its partnership
agreement; and that each person executing this guarantee has the authority to
execute and deliver this guarantee on behalf of the undersigned.
Any and all payments by the undersigned hereunder shall be made free and
clear of and without deduction for any and all present or future taxes, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on any Lender's net income and franchise taxes imposed
on any Lender by any jurisdiction or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter
-5-
referred to as "Taxes"). If the undersigned shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder to any Lender, (i) the
sum payable shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this paragraph) such Lender shall receive an amount equal to the sum it
would have received had no such deductions been made, (ii) the undersigned shall
make such deductions and (iii) the undersigned shall pay the full amount
deducted to the relevant taxing authority or other governmental authority in
accordance with applicable law. The undersigned shall, jointly and severally,
pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise with
respect to, this guarantee (hereinafter referred to as "Other Taxes"). The
undersigned shall, jointly and severally, indemnify each Lender for the full
amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this paragraph) paid by such Lender
and any liability (including penalties, interest and reasonable out-of-pocket
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted by the relevant taxing
authority or other governmental authority. Such indemnification shall be made
within 30 days after the date a Lender makes written demand therefor, which
demand may be made after such Lender, in its sole discretion and at the sole
expense of the undersigned, determines not to challenge or contest such
assertion of Taxes or Other Taxes. If a Lender receives a refund in respect of
any Taxes or Other Taxes for which such Lender has received payment from the
undersigned hereunder it shall promptly notify the undersigned of such refund
and shall promptly upon receipt repay such refund to the undersigned, net of all
out-of-pocket expenses of such Lender and without interest; provided, however,
that the undersigned, upon the request of such Lender, agrees to return such
refund (plus penalties, interest or other charges) to such Lender in the event
such Lender is required to repay such refund. Within 30 days after the date of
any payment of Taxes or Other Taxes withheld by the undersigned in respect of
any payment to a Lender, the undersigned will furnish to the Agent the original
or a certified copy of a receipt evidencing payment thereof. Without prejudice
to the survival of any other agreement contained herein, the agreements and
obligations contained in this paragraph shall survive the termination of this
guarantee and the payment in full of the Obligations and the obligations of the
undersigned hereunder.
If for the purpose of obtaining judgment in any court it is necessary to
convert a sum due hereunder in one currency into another currency, the parties
hereto agree, to the fullest extent that they may effectively do so under
applicable law, that the rate of exchange used shall be the spot rate at which
in accordance with normal banking procedures the first currency could be
purchased in
-6-
New York City with such other currency by the person obtaining such judgment on
the business day preceding that on which final judgment is given. The parties
agree, to the fullest extent that they may effectively do so under applicable
law, that any payments made hereunder shall be made in the same currencies as
the Obligations are due and that any payment obligation (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment,
in any currency other than the relevant currency, except to the extent that such
tender or recovery shall result in the actual receipt by a Lender of the full
amount of the relevant currency expressed to be payable in respect of the
Obligations (it being assumed for purposes of this clause (i) that such Lender
will convert any amount tendered or recovered into the relevant currency on the
date of such tender or recovery), (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the relevant
currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the relevant currency so expressed to be payable and (iii)
shall not be affected by an unrelated judgment being obtained for any other sum
due under this guarantee. The provisions of this paragraph shall survive the
termination of this guarantee and the payment in full of the Obligations and the
obligations of the undersigned hereunder.
THIS GUARANTEE SHALL BE CONSTRUED AND INTERPRETED, AND ALL RIGHTS AND
OBLIGATIONS HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. THE
UNDERSIGNED SUBMITS TO THE JURISDICTION OF STATE AND FEDERAL COURTS LOCATED IN
THE CITY AND STATE OF NEW YORK IN PERSONAM AND AGREES THAT ALL ACTIONS AND
PROCEEDINGS RELATING DIRECTLY OR INDIRECTLY TO THIS GUARANTEE SHALL BE LITIGATED
ONLY IN SAID COURTS OR COURTS LOCATED ELSEWHERE AS THE AGENT MAY SELECT AND THAT
SUCH COURTS ARE CONVENIENT FORUMS. THE UNDERSIGNED WAIVES PERSONAL SERVICE UPON
IT AND CONSENTS TO SERVICE OF PROCESS OUT OF SAID COURTS BY MAILING A COPY
THEREOF TO IT BY REGISTERED OR CERTIFIED MAIL.
The undersigned agrees that a final judgment in any proceeding brought in
any of the courts specified in the immediately preceding paragraph shall be
conclusive and binding upon the undersigned and may be enforced in the courts of
the United States, the State of New York or any other courts to the jurisdiction
of which the undersigned is subject, by a suit upon judgment, provided that
service of process is effected on the undersigned in one of the manners
specified in the remainder of this paragraph. The undersigned each hereby
irrevocably designate Xxxx Xxxxxxx (the "Process Agent") with an office on the
date hereof at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000, to accept on
behalf of the undersigned and their property, service of copies of the summons
and complaint and any other process which may be served in any
-7-
proceeding. The undersigned shall deliver to the Agent evidence of such Process
Agent's acceptance of such appointment. If the Process Agent shall cease to act,
the undersigned agree that they shall irrevocably appoint without delay another
agent satisfactory to the Agent and shall deliver evidence of such Process
Agent's acceptance of such appointment to the Agent. Such service may be made by
mailing or delivering a copy of such process to the undersigned in care of the
Process Agent at the Process Agent's above address, and the undersigned hereby
irrevocably authorizes and directs the Process Agent to accept such service. The
undersigned also irrevocably waives personal service upon it and consents to the
service of any and all process in any proceeding by the mailing of copies of
such process to the at its address by registered or certified mail. The
undersigned hereby agrees that nothing in this guarantee shall affect the right
of the Agent to serve legal process in any other manner permitted by law or
affect the right of the Agent to bring any action or proceeding against the
undersigned or any property in the courts of any other jurisdiction. To the
extent that the undersigned has or hereafter may acquire any immunity from suit,
jurisdiction of any court or any legal process (whether through attachment prior
to judgment, attachment in aid of execution, execution of a judgment, or from
any other legal process or remedy) with respect to itself or its property, the
undersigned hereby irrevocably waives such immunity in respect of its
obligations under this Guaranty.
THE UNDERSIGNED, THE AGENT AND EACH LENDER WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY
CONNECTED TO THIS GUARANTEE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THE OBLIGATIONS.
IN WITNESS WHEREOF, this guarantee has been executed by the undersigned as
of the date first written above.
KAYLA FOODS INT'L ADDRESS OF GUARANTOR
(BARBADOS) INC. 00 Xxxx Xxxx
Xxxxxxxxxx, Xx. Xxxxxxx,
Xxxxxxxx W.I.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
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All Other Guarantors
GENERAL GUARANTEE
0 XxxxxXxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000 September 20, 2000
(Banking Office)
FOR VALUE RECEIVED, and in consideration of loans made or to be made or
credit otherwise extended or to be extended by THE CHASE MANHATTAN BANK ("Chase"
or a "Lender"), or any other lenders (each, a "Lender" and collectively, the
"Lenders") through its or their agent, The Chase Manhattan Bank (the "Agent") to
or for the account of INTEGRATED BRANDS INC. (the "Borrower") from time to time
and at any time and for other good and valuable consideration and to induce the
Lenders, in their discretion, to make or commit to make such loans or extensions
of credit and to make or grant such renewals, extensions, releases of collateral
or relinquishments of legal rights as the one or more of the Lenders may deem
advisable, the undersigned (jointly and severally, if more than one guarantor,
whether executing the same instrument or separate instruments) absolutely and
unconditionally guarantees to the Agent and the Lenders the prompt payment when
due, whether by acceleration or otherwise, of all present or future obligations
and liabilities of any and all kinds of the Borrower to the Agent and the
Lenders and of all instruments of any nature evidencing or relating to any such
obligations and liabilities upon which the Borrower or one or more parties and
the Borrower is or may become liable to the Agent or the Lenders, whether
incurred by the Borrower as maker, indorser, drawer, acceptor, guarantor,
accommodation party, counterparty, purchaser, seller or otherwise, and whether
due or to become due, secured or unsecured, absolute or contingent, joint and/or
several, and howsoever or whensoever acquired by the Agent or any Lender (all of
which are referred to as the "Obligations"), and irrespective of the
genuineness, validity, regularity, discharge, release or enforceability of such
Obligations, or of any instrument evidencing any of the Obligations or of any
collateral therefor or of the existence or extent of such collateral or of the
obligations of the undersigned under this guarantee. The Obligations shall
include interest accruing thereon before or after the commencement of any
insolvency, bankruptcy or reorganization proceeding in respect of the Borrower
or any other guarantor of the Obligations whether or not such interest is an
allowable claim in any such proceeding and irrespective of the discharge or
release of the Borrower or any other guarantor in such proceeding.
The undersigned assents that the Agent and the Lenders may at any time and
from time to time, either before or after the maturity thereof, without notice
to or further consent of the undersigned,
extend the time of payment of, exchange, release, substitute or surrender any
collateral for, renew or extend any of, or change the amount of, the Obligations
or increase the interest rate thereon, and may also make any agreement with the
Borrower or with any other party to or person liable on any of the Obligations
or any guarantor of or hypothecator of collateral or other surety for such
Obligations or interested therein, for the extension, renewal, payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between the Bank and the
Borrower or any such other party or person, without in any way impairing or
affecting this guarantee.
The undersigned agrees that this guarantee shall not be impaired or
otherwise affected by any failure to call for, take, hold, protect or perfect,
continue the perfection of or enforce any security interest in or other lien
upon, any collateral for the Obligations, or by any failure to exercise, delay
in the exercising or waiver of, or forbearance with respect to, any right or
remedy available to the Bank with respect to the Obligations.
The undersigned acknowledges that it has derived or expects to derive a
financial or other benefit from each and every Obligation incurred by the
Borrower to the Bank.
The undersigned waives notice of the acceptance of this guarantee and of
the making of any such loans or extensions of credit or the incurrence of any
Obligation, presentment to or demand of payment from anyone whomsoever liable
upon any of the Obligations, protest, notice of presentment, non-payment or
protest and notice of any sale or other disposition of collateral security or
any default of any sort.
The undersigned agrees to pay all costs and expenses incurred by the Bank
incidental to or in any way relating to the enforcement of the Obligations or
the obligations of the undersigned hereunder or the protection of the rights of
the Bank hereunder or with respect to any of the Obligations, including, but not
limited to, reasonable attorneys' fees and expenses, whether or not litigation
is commenced.
This is a continuing guarantee and shall apply to all Obligations
notwithstanding that at any particular time any or all of the Obligations that
consist of revolving credit loans, line of credit loans or similar indebtedness
shall have been paid in full. This guarantee shall remain in full force and
effect and be binding upon the undersigned, and the undersigned's successors and
assigns, until written notice of its revocation shall actually be received
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by the Bank. No such revocation shall release the undersigned or affect in any
manner the rights, remedies, powers, security interests and liens of the Bank
under this guarantee with respect to any of the Obligations which shall have
been created, contracted, assumed or incurred prior to actual receipt by the
Bank of such written notice of revocation and any renewals or extensions thereof
or any Obligations which shall have been created, contracted, assumed or
incurred after actual receipt of such written notice pursuant to any agreement
entered into by the Bank prior to actual receipt of such written notice and any
renewals or extensions thereof. Any such revocation by one of the undersigned
shall not affect the continuing liabilities hereunder of such of the undersigned
as do not give notice of revocation. If any of the present or future Obligations
are guaranteed by persons, partnerships, limited liability companies or
corporations in addition to the undersigned, the death, release or discharge in
whole or in part, or the bankruptcy, liquidation or dissolution of one or more
of them, shall not discharge or affect the liabilities of the undersigned under
this guarantee.
This guarantee shall continue to be effective, or shall be reinstated, as
the case may be, if at any time payment of all or any part of any payment of any
of the Obligations is rescinded or must be restored or returned by the Bank
whether under any insolvency, bankruptcy, receivership or reorganization
proceeding or otherwise.
This guarantee may be assigned by the Bank and its benefits shall inure to
the successors, indorsees and assigns of the Bank.
This guarantee is a guarantee of payment and not of collection, and the
Bank shall be under no obligation to take any action against the Borrower or any
other person liable with respect to any of the Obligations or resort to any
collateral security securing any of the Obligations or this guarantee as a
condition precedent to the undersigned being obligated to make payment and to
perform as agreed herein. The undersigned hereby waives any right to claim or
interpose any defense, counterclaim or offset of any nature and description
which it may have or which may exist between and among the Agent, any of the
Lenders, the Borrower and/or the undersigned or to seek injunctive relief.
Promptly upon the Agent's request, the undersigned agrees to furnish such
information to the Agent and to permit the Agent to inspect and make copies of
its books and records, as the Agent shall reasonably request from time to time.
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The undersigned authorizes the Agent to date this guarantee and to complete
any blank space herein according to the terms upon which this guarantee was
given.
Any notice to the Agent shall be effective only upon receipt by the Agent
and if directed to the Agent at its banking office set forth above or any other
address hereafter specified by written notice from the Agent to the undersigned.
Until such time as the Agent and the Lenders shall have received payment in
full in cash in satisfaction of all of the Obligations, the undersigned waives
any right to be subrogated to the rights of the Agent and the Lenders with
respect to the Obligations, and the undersigned waives any right to and agrees
that it will not institute or take any action against the Borrower seeking
contribution, reimbursement or indemnification by the Borrower with respect to
any payments made by the undersigned to the Agent or any Lender hereunder.
Every provision of this guarantee is intended to be severable; if any term
or provision of this guarantee shall be invalid, illegal or unenforceable for
any reason whatsoever, the validity, legality or enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.
The obligation of each of the undersigned under this guarantee shall be
limited to an aggregate amount equal to the largest amount that would not render
its guarantee subject to avoidance under Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
bankruptcy Code or any comparable provision of any other federal or applicable
state law.
No failure on the part of the Agent or any Lender to exercise, and no delay
in exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Agent or any Lender of
any right, remedy or power hereunder preclude any other or future exercise
thereof or the exercise of any other right, remedy or power.
Each and every right, remedy and power hereby granted to the Agent or any
Lender or allowed it by law or other agreement shall be cumulative and not
exclusive of any other right, remedy or power, and may be exercised by the Agent
or such Lender at any time and from time to time.
This guarantee contains the entire agreement and understanding among the
Agent, the Lenders and the undersigned with respect to the subject matter hereof
and supersedes all prior agreements and understandings relating to the subject
matter hereof. This
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guarantee may not be amended, and compliance with its terms may not be waived,
orally or by course of dealing, but only by a writing signed by an authorized
officer of the Agent.
Until cash payment in full of the Obligations, the liability of the
undersigned under this guarantee shall not be released.
IF THE UNDERSIGNED IS A CORPORATION:
The undersigned represents and warrants that the undersigned is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation; that the execution, delivery and performance
of this guarantee are within the undersigned's corporate powers and have been
duly authorized by all necessary action of its board of directors and
shareholders; and that each person executing this guarantee has the authority to
execute and deliver this guarantee on behalf of the undersigned.
IF THE UNDERSIGNED IS A LIMITED LIABILITY COMPANY:
The undersigned represents and warrants that the undersigned is a limited
liability company duly organized, validly existing and in good standing under
the laws of the state of its organization; that the execution, delivery and
performance of this guarantee are within the undersigned's company powers and
have been duly authorized by all necessary action of its members; and that each
person executing this guarantee has the authority to execute and deliver this
guarantee on behalf of the undersigned.
IF THE UNDERSIGNED IS A PARTNERSHIP:
The undersigned represents and warrants that the undersigned is a
partnership duly formed under the laws of the state of its formation; that the
execution, delivery and performance of this guarantee are within the
undersigned's partnership powers and have been duly authorized by all necessary
action of its partners and do not contravene the provisions of its partnership
agreement; and that each person executing this guarantee has the authority to
execute and deliver this guarantee on behalf of the undersigned.
THIS GUARANTEE SHALL BE CONSTRUED AND INTERPRETED, AND ALL RIGHTS AND
OBLIGATIONS HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. THE
UNDERSIGNED SUBMITS TO THE JURISDICTION OF STATE AND FEDERAL COURTS LOCATED IN
THE CITY AND STATE OF NEW YORK IN PERSONAM AND AGREES THAT ALL ACTIONS AND
PROCEEDINGS RELATING DIRECTLY OR INDIRECTLY TO THIS GUARANTEE SHALL BE
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LITIGATED ONLY IN SAID COURTS OR COURTS LOCATED ELSEWHERE AS THE AGENT MAY
SELECT AND THAT SUCH COURTS ARE CONVENIENT FORUMS. THE UNDERSIGNED WAIVES
PERSONAL SERVICE UPON IT AND CONSENTS TO SERVICE OF PROCESS OUT OF SAID COURTS
BY MAILING A COPY THEREOF TO IT BY REGISTERED OR CERTIFIED MAIL.
THE UNDERSIGNED, THE AGENT AND EACH LENDER WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY
CONNECTED TO THIS GUARANTEE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THE OBLIGATIONS.
The undersigned Xxxxx Xxxxx, the President of each of the corporations
and/or partnerships listed on Exhibit A annexed hereto, hereby executes this
General Guarantee on behalf of, and as the act of, each such corporation and/or
partnership.
/s/ Xxxxx X. Xxxxx
--------------------------------
Xxxxx X. Xxxxx
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