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CREDIT AGREEMENT
dated as of
December 19, 1997
between
CANANDAIGUA BRANDS, INC.
The SUBSIDIARY GUARANTORS Party Hereto
The LENDERS Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
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$325,000,000
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TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms....................................... 1
Section 1.02. Classification Of Loans And Borrowings.............. 30
Section 1.03. Terms Generally..................................... 30
Section 1.04. Accounting Terms; Gaap.............................. 30
ARTICLE II
THE CREDITS
SECTION 2.01. THE COMMITMENTS..................................... 31
SECTION 2.03. REQUESTS FOR SYNDICATED BORROWINGS.................. 34
SECTION 2.04. COMPETITIVE BID PROCEDURE........................... 35
SECTION 2.05. SWINGLINE LOANS..................................... 38
SECTION 2.06. LETTERS OF CREDIT................................... 40
SECTION 2.07. FUNDING OF BORROWINGS............................... 45
SECTION 2.08. INTEREST ELECTIONS.................................. 46
SECTION 2.09. TERMINATION AND REDUCTION OF THE COMMITMENTS........ 48
SECTION 2.10. REPAYMENT OF LOANS; EVIDENCE OF DEBT................ 49
SECTION 2.11. PREPAYMENT OF LOANS................................. 52
SECTION 2.12. FEES ........................................... 57
SECTION 2.13. INTEREST ........................................... 58
SECTION 2.14. ALTERNATE RATE OF INTEREST.......................... 60
SECTION 2.15. INCREASED COSTS..................................... 61
SECTION 2.16. BREAK FUNDING PAYMENTS.............................. 62
SECTION 2.17. TAXES ........................................... 63
SECTION 2.18. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING
OF SET-OFFS, ETC............................... 64
SECTION 2.19. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS...... 67
ARTICLE III
GUARANTEE
SECTION 3.01 GUARANTEE ........................................... 68
SECTION 3.02 OBLIGATIONS UNCONDITIONAL............................ 68
SECTION 3.03 REINSTATEMENT........................................ 75
SECTION 3.04 SUBROGATION.......................................... 75
SECTION 3.05 REMEDIES ........................................... 75
SECTION 3.06 CONTINUING GUARANTEE................................. 76
SECTION 3.07 LIMITATION ON GUARANTEE OBLIGATIONS.................. 76
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. ORGANIZATION; POWERS................................ 76
SECTION 4.02. AUTHORIZATION; ENFORCEABILITY....................... 76
SECTION 4.03. GOVERNMENTAL APPROVALS; NO CONFLICTS................ 77
SECTION 4.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE..... 77
SECTION 4.05. PROPERTIES.......................................... 77
SECTION 4.06. LITIGATION ......................................... 78
SECTION 4.07. ENVIRONMENTAL MATTERS............................... 78
SECTION 4.08. COMPLIANCE WITH LAWS AND AGREEMENTS................. 80
SECTION 4.09. INVESTMENT AND HOLDING COMPANY STATUS............... 81
SECTION 4.10. TAXES ........................................... 81
SECTION 4.11. ERISA ........................................... 81
SECTION 4.12. DISCLOSURE.......................................... 81
SECTION 4.13. USE OF CREDIT....................................... 81
SECTION 4.14. MATERIAL AGREEMENTS AND LIENS....................... 82
SECTION 4.15. CAPITALIZATION...................................... 82
SECTION 4.16. SUBSIDIARIES AND INVESTMENTS, ETC................... 83
SECTION 4.17. REAL PROPERTY....................................... 84
ARTICLE V
CONDITIONS
SECTION 5.01. EFFECTIVE DATE...................................... 84
SECTION 5.02. SPECIAL CONDITIONS FOR TRANCHE II TERM LOAN
BORROWINGS..................................... 88
SECTION 5.03. EACH CREDIT EVENT................................... 89
ARTICLE VI
AFFIRMATIVE COVENANTS
SECTION 6.01. FINANCIAL STATEMENTS AND OTHER INFORMATION.......... 89
SECTION 6.02. NOTICES OF MATERIAL EVENTS.......................... 91
SECTION 6.03. EXISTENCE; CONDUCT OF BUSINESS...................... 92
SECTION 6.04. PAYMENT OF OBLIGATIONS.............................. 92
SECTION 6.05. MAINTENANCE OF PROPERTIES; INSURANCE................ 92
SECTION 6.06. BOOKS AND RECORDS; INSPECTION RIGHTS................ 92
SECTION 6.07. COMPLIANCE WITH LAWS................................ 92
SECTION 6.08. USE OF PROCEEDS AND LETTERS OF CREDIT............... 93
SECTION 6.09. CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES......... 93
ARTICLE VII
NEGATIVE COVENANTS
SECTION 7.01. INDEBTEDNESS........................................ 94
SECTION 7.02. LIENS ........................................... 95
SECTION 7.03. FUNDAMENTAL CHANGES................................. 96
SECTION 7.04. INVESTMENTS......................................... 99
SECTION 7.05. RESTRICTED PAYMENTS.................................100
SECTION 7.06. TRANSACTIONS WITH AFFILIATES........................102
SECTION 7.07. CERTAIN RESTRICTIONS ON SUBSIDIARIES................102
SECTION 7.08. CERTAIN FINANCIAL COVENANTS.........................103
SECTION 7.09. SUBORDINATED INDEBTEDNESS...........................104
SECTION 7.10. MODIFICATIONS OF CERTIFICATE OF INCORPORATION.......106
SECTION 7.11. INVENTORY LOCATED IN OFF-PREMISES WAREHOUSES........106
ARTICLE VIII
EVENTS OF DEFAULT............................106
ARTICLE IX
THE ADMINISTRATIVE AGENT.........................110
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES ............................................113
SECTION 10.02. WAIVERS; AMENDMENTS.................................113
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER..................115
SECTION 10.04. SUCCESSORS AND ASSIGNS..............................116
SECTION 10.05. SURVIVAL............................................119
SECTION 10.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS............120
SECTION 10.07. SEVERABILITY........................................120
SECTION 10.08. RIGHT OF SETOFF.....................................120
SECTION 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO
SERVICE OF PROCESS.............................121
SECTION 10.10. WAIVER OF JURY TRIAL................................122
SECTION 10.11. HEADINGS............................................122
SECTION 10.12. TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY...122
SCHEDULE I - Commitments
SCHEDULE II - Material Agreements and Liens
SCHEDULE III - Litigation and Environmental Matters
SCHEDULE IV - Subsidiaries and Investments
SCHEDULE V - Stock Options
SCHEDULE VI - Real Property
SCHEDULE VII - Life Insurance Agreements
EXHIBIT A - Form of Assignment and Acceptance
EXHIBIT B - Form of Security Agreement
EXHIBIT C - Form of Guarantee Assumption Agreement
EXHIBIT D - Forms of Opinions of Counsel to the Obligors
EXHIBIT E - Form of Opinion of Special New York Counsel to The Chase Manhattan
Bank
CREDIT AGREEMENT dated as of December 19, 1997, between CANANDAIGUA BRANDS,
INC. (formerly known as Canandaigua Wine Company, Inc.), the SUBSIDIARY
GUARANTORS party hereto, the LENDERS party hereto, and THE CHASE MANHATTAN BANK,
as Administrative Agent.
The Borrower (as hereinafter defined) has requested that the Lenders (as so
defined) extend credit (by means of loans and letters of credit) to it in an
aggregate principal amount not exceeding $325,000,000 at any one time
outstanding (which amount may, in the circumstances herein provided be increased
to $525,000,000), to refinance certain existing indebtedness and to finance the
ongoing working capital requirements and other general corporate purposes
(including certain acquisitions) of the Borrower and its subsidiaries. The
Lenders are prepared to extend such credit upon the terms and conditions hereof
and, accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following terms
have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"ACQUISITION" means an acquisition by the Borrower or any of its
Subsidiaries of a business and the related assets of any Person (whether by way
of purchase of assets or stock, including any tender for outstanding shares of
stock, by merger or consolidation, by acceptance of a contribution of capital
from another Person, or otherwise).
"ADJUSTED CASH FLOW" means, for any period (the "CALCULATION PERIOD"), the
sum, for the Borrower and its Consolidated Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP), of the
following: (a) Operating Cash Flow for the calculation period MINUS (b) Capital
Expenditures made during the calculation period (excluding Capital Expenditures
made from the proceeds of Indebtedness other than Indebtedness hereunder).
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
MULTIPLIED BY (b) the Statutory Reserve Rate.
"ADJUSTMENT AMOUNT" means, for any period, for the Borrower and its
Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), the amount of any income or expense
included in the determination of net operating income for such period as a
result of changes in the LIFO Reserve.
"ADMINISTRATIVE AGENT" means Chase, in its capacity as administrative agent
for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day PLUS 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE PERCENTAGE" means (a) with respect to any Tranche I Revolving
Lender for purposes of Sections 2.05 and 2.06, the percentage of the total
Revolving Commitments represented by such Lender's Tranche I Revolving
Commitments, (b) with respect to any Tranche II Revolving Lender for purposes of
Sections 2.05 and 2.06, the percentage of the total Revolving Commitments
represented by such Lender's Tranche II Revolving Commitments, (c) with respect
to any Lender in respect of any indemnity claim under Section 10.03(c) arising
out of an action or omission of the Administrative Agent under this Agreement
relating to Letters of Credit or Swingline Loans, the percentage of the total
Revolving Commitments or Loans hereunder represented by the aggregate amount of
such Lender's Revolving Commitment or Loans hereunder and (d) with respect to
any Lender in respect of any indemnity claim under Section 10.03(c) arising out
of an action or omission of the Administrative Agent under this Agreement (other
than one relating to Letters of Credit or Swingline Loans), the percentage of
the total Commitments or Loans of all Classes hereunder represented by the
aggregate amount of such Lender's Commitments or Loans of all Classes hereunder.
"APPLICABLE RATE" means, for any day, with respect to any ABR Loan
(including any Swingline ABR Loan), Eurodollar Syndicated Loan or Swingline FFBR
Loan, or with respect to the facility fees payable hereunder, as the case may
be, the applicable rate per annum set forth below under the caption "ABR Spread"
(in the case of ABR Loans), "Fixed Rate Revolving Spread" (in the case of
Eurodollar Syndicated Revolving Loans or Swingline FFBR Loans), "Fixed Rate Term
Loan Spread" (in the case of Eurodollar Syndicated Term Loans) or "Facility Fee
Rate", respectively, based upon the Debt Ratio as of the most recent
determination date; PROVIDED that until delivery of the consolidated financial
statements specified below for the fiscal year of the Borrower ending February
28, 1998, the "Applicable Rate" shall be the applicable rate per annum set forth
below in Category 4:
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Fixed Rate Fixed Rate
ABR Revolving Term Loan Facility
DEBT RATIO: Spread Spread Spread Fee Rate
- --------------------------------------------------------------------------------
CATEGORY 1
> 4.25x .000 .900 1.250 .350
- --------------------------------------------------------------------------------
CATEGORY 2
<= 4.25x and .000 .700 1.000 .300
> 4.00x
- --------------------------------------------------------------------------------
CATEGORY 3
<= 4.00x and .000 .600 .875 .275
> 3.50x
- --------------------------------------------------------------------------------
CATEGORY 4
<= 3.50x and .000 .500 .750 .250
> 3.00x
- --------------------------------------------------------------------------------
CATEGORY 5
<= 3.00x and .000 .425 .625 .200
> 2.50x
- --------------------------------------------------------------------------------
CATEGORY 6
<= 2.50x and .000 .325 .500 .175
> 2.00x
- --------------------------------------------------------------------------------
CATEGORY 7
<= 2.00x .000 .250 .400 .150
================================================================================
For purposes of the foregoing, (i) the Debt Ratio shall be determined as of the
end of each fiscal quarter of the Borrower's fiscal year based upon the
Borrower's consolidated financial statements delivered pursuant to Section
6.01(a) or (b) and (ii) each change in the Applicable Rate resulting from a
change in the Debt Ratio shall be effective during the period commencing on and
including the date three Business Days after delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change; PROVIDED that the Debt Ratio shall be deemed to be in Category 1 (A) at
any time that an Event of Default has occurred and is continuing and (B) if the
Borrower fails to deliver the consolidated financial statements required to be
delivered by it pursuant to Section 6.01(a) or (b), during the period from the
expiration of the time for delivery thereof until such consolidated financial
statements are delivered.
Notwithstanding the foregoing, the "Applicable Rate" for any Tranche II
Term Loan of any Series shall be the respective rates specified in the Tranche
II Term Loan Agreement for such Series.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"BOARD" means the Board of Governors of the Federal Reserve System of the
United States of America.
"BORROWER" means Canandaigua Brands, Inc. (formerly known as Canandaigua
Wine Company, Inc.), a Delaware corporation.
"BORROWING" means (a) Syndicated Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, (b) a Competitive Loan or group
of Competitive Loans of the same Type made on the same date and as to which a
single Interest Period is in effect or (c) a Swingline Loan.
"BORROWING REQUEST" means a request by the Borrower for a Syndicated
Borrowing in accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; PROVIDED that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" means, for any period, expenditures (including the
aggregate amount of Capital Lease Obligations incurred during such period) made
by the Borrower or any of its Consolidated Subsidiaries to acquire or construct
fixed assets, plant and equipment (including renewals, improvements and
replacements, but excluding repairs) during such period computed in accordance
with GAAP. Notwithstanding the foregoing, no Acquisition permitted pursuant to
Section 7.03(d) shall be treated as a Capital Expenditure.
"CAPITAL LEASE" of any Person means any lease of (or other arrangement
conveying the right to use) real or personal Property, or a combination thereof,
which obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under any Capital Lease, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
"CASUALTY EVENT" means, with respect to any Property of any Person, any
loss of or damage to, or any condemnation or other taking of, such Property for
which such Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation.
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender or either Issuing
Lender (or, for purposes of Section 2.15(b), by any lending office of such
Lender or by such Lender's or such Issuing Lender's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"CHASE" means The Chase Manhattan Bank.
"CLASS", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Tranche I Revolving
Loans, Tranche II Revolving Loans, Tranche I Term Loans, Tranche II Term Loans,
Competitive Loans or Swingline Loans and, when used in reference to any
Commitment, refers to whether such Commitment is a Tranche I Revolving
Commitment, Tranche II Revolving Commitment, Tranche I Term Loan Commitment or
Tranche II Term Loan Commitment.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL ACCOUNT" has the meaning assigned to such term in Section 4.01
of the Security Agreement.
"COMMITMENT" means a Tranche I Revolving Commitment, a Tranche II Revolving
Commitment, Tranche I Term Loan Commitment or Tranche II Term Loan Commitment,
or any combination thereof (as the context requires).
"COMPETITIVE BID" means an offer by a Lender to make a Competitive Loan in
accordance with Section 2.04.
"COMPETITIVE BID RATE" means, with respect to any Competitive Bid, the
Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.
"COMPETITIVE BID REQUEST" means a request by the Borrower for Competitive
Bids in accordance with Section 2.04.
"COMPETITIVE LOAN" means a Loan made pursuant to Section 2.04.
"CONSOLIDATED SUBSIDIARY" means, for any Person, each Subsidiary of such
Person (whether now existing or hereafter created or acquired) the financial
statements of which shall be (or should have been) consolidated with the
financial statements of such Person in accordance with GAAP.
"CONSOLIDATED TANGIBLE ASSETS" means, as at any date, the total assets of
the Borrower and its Consolidated Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP) that would be shown as
tangible assets on a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries after eliminating all amounts properly attributable to
minority interests, if any, in the stock and surplus of Subsidiaries. For
purposes hereof, "TANGIBLE ASSETS" means all assets of the Borrower and its
Consolidated Subsidiaries other than assets that should be classified as
intangibles including goodwill, minority interests, research and development
costs, trademarks, trade names, copyrights, patents and franchises, unamortized
debt discount and expense, all reserves and any write-up in the book value of
assets resulting from a revaluation thereof subsequent to December 31, 1996.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"DEBT INCURRENCE" means the incurrence by the Borrower or any of its
Subsidiaries after the Effective Date of any Subordinated Indebtedness.
"DEBT RATIO" means, as at the last day of any fiscal quarter of the
Borrower (the "DAY OF DETERMINATION"), the ratio of (a) the average of the
aggregate amounts of Indebtedness of the Borrower and its Consolidated
Subsidiaries (determined on a consolidated basis, without duplication, in
accordance with GAAP) as at such day and as at the last days of each of the
three immediately preceding fiscal quarters to (b) Operating Cash Flow for the
period of four consecutive fiscal quarters ending on such day of determination.
Notwithstanding the foregoing, Indebtedness as at the last day of each fiscal
quarter included in the determination of average Indebtedness pursuant to clause
(a) above shall be determined under the assumption that any prepayment of Term
Loans hereunder from the proceeds of any Equity Issuance at any time during any
such fiscal quarter included in the calculation thereof shall have been made in
the first such fiscal quarter.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule III.
"DISPOSITION" means any sale, assignment, transfer or other disposition of
any Property (whether now owned or hereafter acquired) by the Borrower or any of
its Subsidiaries to any other Person excluding (a) any sale, assignment,
transfer or other disposition of any Property sold or disposed of in the
ordinary course of business and on ordinary business terms and (b) any Sale and
Leaseback Transaction.
"DOLLARS" or "$" refers to lawful money of the United States of America.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 5.01 are satisfied (or waived in accordance with Section 10.02).
"EMPLOYEE STOCK PURCHASE PLAN" means the Canandaigua Brands, Inc. 1989
Employee Stock Purchase Plan.
"ENVIRONMENTAL CLAIM" means, with respect to any Person, (a) any written or
oral notice, claim, demand or other communication (collectively, a "CLAIM") by
any other Person alleging or asserting such Person's liability for investigatory
costs, cleanup costs, governmental response costs, damages to natural resources
or other Property, personal injuries, fines or penalties arising out of, based
on or resulting from (i) the presence, or Release into the environment, of any
Hazardous Material at any location, whether or not owned by such Person, or (ii)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law. The term "Environmental Claim" shall include, without
limitation, any claim by any governmental authority for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"EQUITY ISSUANCE" means (a) any issuance or sale by the Borrower or any of
its Subsidiaries after the Effective Date of (i) any of its capital stock, (ii)
any warrants or options exercisable in respect of its capital stock or (iii) any
other security or instrument representing an equity interest (or the right to
obtain any equity interest) in the Borrower or any of its Subsidiaries or (b)
the receipt by the Borrower or any of its Subsidiaries after the Effective Date
of any capital contribution (whether or not evidenced by any equity security
issued by the recipient of such contribution); PROVIDED that Equity Issuance
shall not include (x) any such issuance or sale by any Subsidiary of the
Borrower to the Borrower or any Wholly- Owned Subsidiary of the Borrower or (y)
any capital contribution by the Borrower or any Wholly-Owned Subsidiary of the
Borrower to any Subsidiary of the Borrower.
"EQUITY RIGHTS" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind for
the issuance or sale by such Person of, or securities convertible into, any
additional shares of capital stock of any class of such Person, or partnership
or other ownership interests of any type in such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"EURODOLLAR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate (or, in the case of
a Competitive Loan, the LIBO Rate).
"EVENT OF DEFAULT" has the meaning assigned to such term in Article VIII.
"EXCESS CASH FLOW" means, for any fiscal year, the sum of (a) Adjusted Cash
Flow for such fiscal year (determined without regard to the Adjustment Amount)
MINUS (b) Fixed Charges for such fiscal year PLUS (c) the sum (if positive), or
MINUS the sum (if negative), of the aggregate amount of "change in operating
assets and liabilities, net of effects from purchases of businesses" as set
forth on the consolidated statements of cash flows for the Borrower and its
Subsidiaries for such fiscal year, excluding, however, any portion of such
amount attributable to non-cash adjustments (other than any non-cash adjustments
related to Acquisitions) PLUS (d) the aggregate amount (if positive), or MINUS
the aggregate amount (if negative), of "(repayment of) proceeds from notes
payable, short-term borrowings" as set forth on the consolidated statements of
cash flows for the Borrower and its Subsidiaries for such fiscal year (excluding
the repayment of short-term borrowings from the proceeds of an Equity Issuance
or Debt Incurrence).
"EXCLUDED ENTITIES" means, collectively, Inactive Subsidiaries, Joint
Venture Entities and Foreign Subsidiaries.
"EXCLUDED TAXES" means, with respect to the Administrative Agent, any
Lender, either Issuing Lender or any other recipient of any payment to be made
by or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement or is attributable to such Foreign Lender's failure or
inability to comply with Section 2.17(e), except to the extent that such Foreign
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.17(a).
"EXISTING CREDIT AGREEMENT" means the Third Amended and Restated Credit
Agreement dated as of September 1, 1995 between the Borrower, the Banks party
thereto and Chase, as Administrative Agent, as in effect on the date hereof.
"FFBR", when used in reference to any Swingline Loan, refers to whether
such Loan bears interest at a rate determined by reference to the Federal Funds
Base Rate.
"FEDERAL FUNDS BASE RATE" means, for any Interest Period for any Swingline
Loan, the rate per annum (rounded upwards, if necessary to the nearest 1/100 of
1%) determined by the Swingline Lender to be equal to the rate charged to the
Swingline Lender on Federal funds transactions for such Interest Period with
members of the Federal Reserve System arranged by Federal funds brokers on such
day.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.
"FIRST CHICAGO" means The First National Bank of Chicago.
"FIXED CHARGES" means, for any period, the sum, for the Borrower and its
Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all payments of
principal of Indebtedness scheduled to be made during such period PLUS (b) all
Interest Expense for such period PLUS (c) the aggregate amount of federal and
state taxes paid during such period to the extent that net operating income for
such period pursuant to clause (a) of the definition of "Operating Cash Flow" in
this Section has been calculated before giving effect to such taxes PLUS (d) the
aggregate amount of Restricted Payments made pursuant to Section 7.05 (other
than pursuant to clause (a)(i) thereof) during such period.
"FIXED CHARGES RATIO" means, as at any date, the ratio of (a) Adjusted Cash
Flow for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date to (b) Fixed Charges for such period.
"FIXED RATE" means, with respect to any Competitive Loan (other than a
Eurodollar Competitive Loan), the fixed rate of interest per annum specified by
the Lender making such Competitive Loan in its related Competitive Bid.
"FIXED RATE LOAN" means a Competitive Loan bearing interest at a Fixed
Rate.
"FOREIGN LENDER" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"FOREIGN SUBSIDIARIES" means any Subsidiary organized under the laws of any
country other than the United States of America, or a State thereof, which (if
such Subsidiary were to become a Subsidiary Guarantor hereunder) the Borrower
and the Administrative Agent have determined would result in adverse tax
consequences under Section 956 of the Code. For purposes hereof, it is agreed
that as of the date hereof each of Canandaigua World Sales Limited and BB
Servicios, S.A. de C.V. are "Foreign Subsidiaries".
"GAAP" means generally accepted accounting principles in the United States
of America.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease Property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; PROVIDED, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"GUARANTEE ASSUMPTION AGREEMENT" means a Guarantee Assumption Agreement
substantially in the form of Exhibit C by an entity that, pursuant to Section
6.09(a) is required to become a "Subsidiary Guarantor" hereunder in favor of the
Administrative Agent.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"INACTIVE SUBSIDIARY" means, as at any date, any Subsidiary of the Borrower
that, as at the end of and for the quarterly accounting period ending on or most
recently ended prior to such date, shall have less than $100,000 in assets and
less than $100,000 in gross revenues.
"INCENTIVE STOCK OPTION PLAN" means the Canandaigua Brands, Inc. Incentive
Stock Option Plan dated June 23, 1997.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
Property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of Property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
Property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INTEREST COVERAGE RATIO" means, as at any date of determination thereof,
the ratio of (a) Operating Cash Flow for the period of four fiscal quarters
ending on or most recently ended prior to such date to (b) Interest Expense for
such period.
"INTEREST ELECTION REQUEST" means a request by the Borrower to convert or
continue a Syndicated Borrowing in accordance with Section 2.08.
"INTEREST EXPENSE" means, for any period, the sum, for the Borrower and its
Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness (including the interest component of any payments in
respect of Capital Lease Obligations) accrued or capitalized during such period
(whether or not actually paid during such period) PLUS (b) the net amounts
payable (or MINUS the net amounts receivable) under Interest Rate Protection
Agreements accrued during such period (whether or not actually paid or received
during such period) MINUS (c) all interest income during such period.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Syndicated Loan,
each Quarterly Date, (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months' duration after the first day of such
Interest Period, (c) with respect to any Fixed Rate Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and any
other dates that are specified in the applicable Competitive Bid Request as
Interest Payment Dates with respect to such Borrowing and (d) with respect to
any Swingline Loan, the day that such Loan is required to be repaid.
"INTEREST PERIOD" means (a) with respect to any Eurodollar Syndicated
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect, (b) with respect to any
Eurodollar Competitive Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the calendar month
that is one, two, three or six months thereafter, as specified in the applicable
Competitive Bid Request, (c) with respect to any Fixed Rate Borrowing, the
period (which shall not be more than 90 days) commencing on the date of such
Borrowing and ending on the date specified in the applicable Competitive Bid
Request, and (d) with respect to any Swingline FFBR Borrowing, the period
commencing on the date of such Borrowing and ending on the date that is not
earlier than one day and not later than fifteen days after such Swingline Loan
is made, as the Borrower may elect; PROVIDED, that
(i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing
only, 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 and
(ii) any Interest Period pertaining to a Eurodollar Borrowing
that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business
Day of the last calendar month of such Interest Period.
For purposes hereof, the date of a Borrowing initially shall be the date on
which such Borrowing is made and, in the case of a Syndicated Borrowing,
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"INTEREST RATE PROTECTION AGREEMENT" means any Hedging Agreement that
consists of an interest rate protection agreement or other interest rate hedging
arrangement providing for the transfer or mitigation of interest risks either
generally or under specific contingencies.
"INVESTMENT" means, for any Person: (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement to make any such acquisition (including any "short
sale" or any sale of any securities at a time when such securities are not owned
by the Person entering into such sale); (b) the making of any deposit with, or
advance, loan or other extension of credit to, any other Person (including the
purchase of Property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such Property to such Person), but
excluding any such advance, loan or extension of credit having a term not
exceeding 120 days arising in connection with the sale of inventory or supplies
by such Person in the ordinary course of business; (c) the entering into of any
Guarantee of, or other contingent obligation with respect to, Indebtedness or
other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person; or (d) the entering
into of any Hedging Agreement.
"ISSUING LENDER" means (i) Chase, in its capacity as the issuer of Letters
of Credit (other then the Qingdao Letter of Credit) hereunder and (ii) First
Chicago, in its capacity as the issuer of the Qingdao Letter of Credit
hereunder, and their respective successors in such capacity as provided in
Section 2.06(j).
"JOINT VENTURE ENTITY" means, collectively, (i) any Subsidiary of the
Borrower that is not a Wholly-Owned Subsidiary and (ii) any Subsidiary of any
Joint Venture Entity described in the foregoing clause (i), PROVIDED that in any
event, until such time (if ever) as it shall become a Wholly-Owned Subsidiary,
Polyphenolics, LLC shall be deemed to be a "Joint Venture Entity".
"LC DISBURSEMENT" means a payment made by an Issuing Lender pursuant to a
Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time PLUS (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Lender of any Class at any
time shall be its Applicable Percentage of such Class of the total LC Exposure
at such time.
"LENDERS" means the Persons listed on Schedule I and any other Person that
shall have become a party hereto pursuant to an Assignment and Acceptance, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Acceptance. Unless the context otherwise requires, the term "Lenders"
includes the Swingline Lender.
"LETTER OF CREDIT" means any letter of credit issued pursuant to this
Agreement.
"LETTER OF CREDIT DOCUMENTS" means, with respect to any Letter of Credit,
collectively, any application therefor and any other agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for (a) the rights and
obligations of the parties concerned or at risk with respect to such Letter of
Credit or (b) any collateral security for any of such obligations.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Jones Markets
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period.
In the event that such rate is not available at such time for any reason,
then the LIBO Rate with respect to such Eurodollar Borrowing for such Interest
Period shall be the rate (rounded upwards, if necessary, to the next 1/16 of 1%)
at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of Chase in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, Capital Lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"LIFO RESERVE" means, for any period, for the Borrower and its Subsidiaries
(determined on a consolidated basis without duplication in accordance with
GAAP), the reserve established as at the end of such period by the Borrower to
reflect the difference, if any, between (a) the cost of inventory using the
last-in first-out method of accounting therefor and (b) the cost of inventory
using the first-in first-out method of accounting therefor.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Letter of Credit
Documents, the Security Documents and the Tranche II Agreements.
"LOANS" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"LONG-TERM STOCK INCENTIVE PLAN" means the Canandaigua Brands, Inc. Long-
Term Stock Incentive Plan dated June 23, 1997.
"MARGIN" means, with respect to any Competitive Loan bearing interest at a
rate based on the LIBO Rate, the marginal rate of interest, if any, to be added
to or subtracted from the LIBO Rate to determine the rate of interest applicable
to such Loan, as specified by the Lender making such Loan in its related
Competitive Bid.
"MARGIN STOCK" means "margin stock" within the meaning of Regulations G, T,
U and X of the Board.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and its Subsidiaries taken as a whole, (b) the legal ability or
financial capacity of any Obligor to perform any of its obligations under this
Agreement or any of the other Loan Documents to which it is a party or (c) the
rights of or benefits available to the Lenders under this Agreement or any of
the other Loan Documents. Material Adverse Effect shall also include, for
purposes of Section 4.07, any material adverse effect upon the operation of any
of the facilities owned, operated or leased by the Borrower or any of its
Subsidiaries.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Borrower and its Subsidiaries in an aggregate
principal amount exceeding $500,000. For purposes of determining Material
Indebtedness, the "PRINCIPAL AMOUNT" of the obligations of any Person in respect
of any Hedging Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that such Person would be required to
pay if such Hedging Agreement were terminated at such time.
"MATURITY DATE" means the Quarterly Date falling on or nearest to June 1,
2003.
"MORTGAGES" means, collectively, the respective Deeds of Trust and
Mortgages executed and delivered by the Borrower and its Subsidiaries pursuant
to the Existing Credit Agreement (or pursuant to earlier restatements thereof or
pursuant to the original Credit Agreement dated as of September 30, 1991),
covering the properties of the respective Obligors identified in Parts A and B
of Schedule VI, in each case as such Deeds of Trust and Mortgages have been
heretofore modified, as such Deeds of Trust and Mortgages shall be modified
pursuant to instruments of Modification and Confirmation executed and delivered
pursuant to Section 5.01(g), and as such Deeds of Trust and Mortgages shall be
further modified and supplemented and in effect from time to time.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET AVAILABLE PROCEEDS" means:
(i) in the case of any Disposition, the amount of Net Cash
Payments received in connection with such Disposition;
(ii) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation
received by the Borrower and its Subsidiaries in respect of such
Casualty Event net of (A) reasonable expenses incurred by the Borrower
and its Subsidiaries in connection therewith and (B) contractually
required repayments of Indebtedness (other than Indebtedness to the
Lenders hereunder) to the extent secured by a Lien on such Property
and any income and transfer taxes payable by the Borrower or any of
its Subsidiaries in respect of such Casualty Event;
(iii) in the case of any Equity Issuance, the aggregate amount of
all cash received by the Borrower and its Subsidiaries in respect of
such Equity Issuance (net of reasonable expenses incurred by the
Borrower and its Subsidiaries in connection therewith); and
(iv) in the case of any Debt Incurrence, the aggregate amount of
all cash received by the Borrower and its Subsidiaries in respect of
such Debt Incurrence (net of (x) reasonable expenses incurred by the
Borrower and its Subsidiaries in connection therewith and (y) cash
proceeds so received and applied to refinance other Subordinated
Indebtedness as contemplated by Section 7.09).
"NET CASH PAYMENTS" means, with respect to any Disposition, the aggregate
amount of all cash payments received by the Borrower and its Subsidiaries
directly or indirectly in connection with such Disposition; PROVIDED that (a)
Net Cash Payments shall be net of (i) the amount of any legal, title and
recording tax expenses, commissions and other fees and expenses paid by the
Borrower and its Subsidiaries in connection with such Disposition and (ii) any
Federal, state and local income or other taxes estimated to be payable by the
Borrower and its Subsidiaries as a result of such Disposition (but only to the
extent that such estimated taxes are in fact paid to the relevant Federal, state
or local governmental authority within three months of the date of such
Disposition) and (b) Net Cash Payments shall be net of any repayments by the
Borrower or any of its Subsidiaries of Indebtedness to the extent that (i) such
Indebtedness is secured by a Lien on the Property that is the subject of such
Disposition and (ii) the transferee of (or holder of a Lien on) such Property
requires that such Indebtedness be repaid as a condition to the purchase of such
Property.
"NOTES" means promissory notes from time to time executed and delivered
pursuant to Section 2.10(f).
"OBLIGOR" means the Borrower and each Subsidiary Guarantor.
"OFF-PREMISES WAREHOUSES" means all warehouses and other bailment
facilities owned and operated by Persons other than any Obligor that are not
located on Property owned or leased by any Obligor and in which inventory is
maintained from time to time.
"OPERATING CASH FLOW" means, for any period, the sum, for the Borrower and
its Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) net operating income
(calculated before income taxes, interest income, Interest Expense,
extraordinary and unusual items and income or loss attributable to equity in
Affiliates) for such period PLUS (b) depreciation and amortization (to the
extent deducted in determining net operating income) for such period PLUS (c)
the Adjustment Amount for such period, if such Adjustment Amount is expense (or
MINUS the Adjustment Amount for such period, if such Adjustment Amount is
income).
Notwithstanding the foregoing, if during any period for which Operating
Cash Flow is being determined the Borrower or any of its Subsidiaries shall have
consummated any Acquisition or Disposition then, for all purposes of this
Agreement (other than for purposes of determining Excess Cash Flow), Operating
Cash Flow shall be determined on a PRO FORMA basis as if such Acquisition or
Disposition had been made or consummated on the first day of such period.
"OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or Property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 6.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
bankers' and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 6.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VIII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real Property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected Property or interfere
with the ordinary conduct of business of the Borrower or any Subsidiary;
PROVIDED that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from Standard & Poor's Ratings Group or
from Moody's Investors Services, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of (x) any commercial bank
organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of
not less than $500,000,000 or (y) any Lender hereunder; and
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) of this definition and
entered into with a financial institution satisfying the criteria described
in clause (c) of this definition.
"PERSON" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"PLAN" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"PRIME RATE" means the rate of interest per annum publicly announced from
time to time by Chase as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.
"PROPERTY" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"QINGDAO LETTER OF CREDIT" means Letter of Credit No. 04021104 issued by
First Chicago to Qingdao Brewery, 56 Dengzhou Road, Qingdao, People's Republic
of China, as such Letter of Credit shall, subject to the provisions of Sections
2.06(b) and 2.06(l), be modified, renewed and reissued from time to time.
"QINGDAO LETTER OF CREDIT LIMIT" means (i) as of the Effective Date,
$553,407, and (ii) as of the date of any modification or renewal or reissuance
of the Qingdao Letter of Credit, the amount specified by First Chicago, as an
Issuing Lender, to the Administrative Agent and the Borrower at the time of such
modification, renewal or reissuance as the new "Qingdao Letter of Credit Limit"
for purposes of this Agreement.
"QUARTERLY DATES" means the 1st day of March, June, September and December
in each year, the first of which shall be the first such day after the date
hereof; PROVIDED that if any such day is not a Business Day, then such Quarterly
Date shall be the next succeeding Business Day.
"REGISTER" has the meaning set forth in Section 10.04.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Hazardous Materials through
ambient air, soil, surface water, ground water, wetlands, land or subsurface
strata.
"REQUIRED LENDERS" means, at any time, Lenders having Revolving Exposures,
Term Loans and unused Commitments representing at least 66-2/3% of the sum of
the total Revolving Exposures, outstanding Term Loans and unused Commitments at
such time; PROVIDED that, for purposes of declaring the Loans to be due and
payable pursuant to Article VIII, and for all purposes after the Loans become
due and payable pursuant to Article VIII or the Revolving Commitments expire or
terminate, the outstanding Competitive Loans of the Lenders shall be included in
their respective Revolving Exposures in determining the Required Lenders. The
"Required Lenders" of a particular Class of Loans means Lenders having Revolving
Exposures, Term Loans and unused Commitments of such Class representing at least
66-2/3% of the sum of the total Revolving Exposures, Term Loans and unused
Commitments of such Class at such time.
"RESTRICTED PAYMENT" means any dividend or other distribution (whether in
cash, securities or other Property) with respect to any shares of any class of
capital stock of the Borrower or any of its Subsidiaries, or any payment
(whether in cash, securities or other Property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
the Borrower or any option, warrant or other right to acquire any such shares of
capital stock of the Borrower.
"REVOLVING AVAILABILITY PERIOD" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Revolving Commitments.
"REVOLVING COMMITMENTS" means, collectively, the Tranche I Revolving
Commitments and the Tranche II Revolving Commitments.
"REVOLVING EXPOSURE" means, collectively, the Tranche I Revolving Exposure
and the Tranche II Revolving Exposure.
"REVOLVING LENDERS" means, collectively, the Tranche I Revolving Lenders
and the Tranche II Revolving Lenders.
"REVOLVING LOANS" means, collectively, the Tranche I Revolving Loans and
the Tranche II Revolving Loans.
"SALE AND LEASEBACK TRANSACTION" means a transaction or series of
transactions pursuant to which the Borrower or any Subsidiary shall sell or
transfer to any Person (other than the Borrower or a Subsidiary) any Property,
whether now owned or hereafter acquired, and, as part of the same transaction or
series of transactions, the Borrower or any Subsidiary shall rent or lease as
lessee, or similarly acquire the right to possession or use of, such Property or
one or more Properties which it intends to use for the same purpose or purposes
as such Property, and in circumstances that give rise to a Capital Lease
Obligation of the Borrower or one or more of its Subsidiaries.
"SECURITY AGREEMENT" means a Security Agreement substantially in the form
of Exhibit B between the Borrower, the Subsidiary Guarantors and the
Administrative Agent.
"SECURITY DOCUMENTS" means, collectively, the Security Agreement, the
Mortgages and all Uniform Commercial Code financing statements required by the
Security Agreement or the Mortgages to be filed with respect to the security
interests in personal Property and fixtures created pursuant to the Security
Agreement or the Mortgages.
"SENIOR DEBT RATIO" means, as at the last day of any fiscal quarter of the
Borrower (the "DAY OF DETERMINATION"), the ratio of (a) the average of the
aggregate amounts of Indebtedness (other than any Subordinated Indebtedness) of
the Borrower and its Consolidated Subsidiaries (determined on a consolidated
basis, without duplication, in accordance with GAAP) as at such day and as at
the last days of each of the three immediately preceding fiscal quarters to (b)
Operating Cash Flow for the period of four consecutive fiscal quarters ending on
such day of determination. Notwithstanding the foregoing, Indebtedness as at the
last day of each fiscal quarter included in the determination of average
Indebtedness pursuant to clause (a) above shall be determined under the
assumption that any prepayment of Term Loans hereunder from the proceeds of any
Equity Issuance or Debt Incurrence at any time during any such fiscal quarter
included in the calculation thereof shall have been made in the first such
fiscal quarter.
"SENIOR SUBORDINATED NOTE GUARANTEES" means, collectively, the Guarantees,
pursuant to Section 1014 or Article 14 of the Senior Subordinated Note
Indenture, by each Subsidiary Guarantor of the punctual payment and performance
when due of all of the Borrower's Indenture Obligations (as defined in the
Senior Subordinated Note Indenture).
"SENIOR SUBORDINATED NOTES" means the Borrower's Senior Subordinated Notes
due 2003 issued pursuant to the Senior Subordinated Note Indenture.
"SENIOR SUBORDINATED NOTE INDENTURE" means, collectively, (a) the Indenture
dated as of December 27, 1993 between the Borrower, the Subsidiary Guarantors
and Chase (as successor by merger to Chemical Bank), as trustee, and (b) the
Indenture dated as of October 29, 1996 between the Borrower, the Subsidiary
Guarantors and Harris Trust and Savings Bank, as trustee.
"SERIES" has the meaning set forth in Section 2.01(c).
"STATUTORY RESERVE RATE" 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 any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"SUBORDINATED INDEBTEDNESS" means, collectively, (a) Indebtedness of the
Borrower in respect of the Senior Subordinated Notes and (b) other Indebtedness
incurred in accordance with the provisions of Section 7.09.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Unless otherwise specified,
"Subsidiary" means a Subsidiary of the Borrower.
"SUBSIDIARY GUARANTOR" means each of the Subsidiaries of the Borrower
identified under the caption "SUBSIDIARY GUARANTORS" on the signature pages
hereto and each Subsidiary of the Borrower that becomes a "Subsidiary Guarantor"
after the date hereof pursuant to Section 6.09(a).
"SWINGLINE EXPOSURE" means, at any time, the aggregate principal amount of
all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender of any Class at any time shall be its Applicable Percentage of such Class
of the total Swingline Exposure at such time.
"SWINGLINE LENDER" means Chase, in its capacity as Lender of Swingline
Loans hereunder, or such other Lender as the Borrower may from time to time
select as the Swingline Lender hereunder pursuant to Section 2.05(e).
"SWINGLINE LOAN" means a Loan made pursuant to Section 2.05.
"SYNDICATED LOANS" means, collectively, the Tranche I Revolving Loans,
Tranche II Revolving Loans, Tranche I Term Loans and Tranche II Term Loans.
"TAXES" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"TERM LOAN COMMITMENTS" means, collectively, the Tranche I Term Loan
Commitments and Tranche II Term Loan Commitments.
"TERM LOAN LENDERS" means, collectively, the Tranche I Term Loan Lenders
and Tranche II Term Loan Lenders.
"TERM LOAN PRINCIPAL PAYMENT DATES" means, collectively, the Tranche I Term
Loan Principal Payment Dates and Tranche II Term Loan Principal Payment Dates,
as applicable.
"TERM LOANS" means, collectively, the Tranche I Term Loans and the Tranche
II Term Loans.
"TRANCHE I REVOLVING COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make Tranche I Revolving Loans and to
acquire participations in Letters of Credit and Swingline Loans hereunder,
expressed as an amount representing the maximum aggregate amount of such
Lender's Tranche I Revolving Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.09 or 2.11 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender's Tranche I
Revolving Commitment is set forth on Schedule I, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Tranche I
Revolving Commitment, as applicable. The initial aggregate amount of the
Lenders' Tranche I Revolving Commitments is $185,000,000.
"TRANCHE I REVOLVING EXPOSURE" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Tranche I
Revolving Loans and its Tranche I Revolving LC Exposure and Tranche I Revolving
Swingline Exposure at such time.
"TRANCHE I REVOLVING LENDERS" means a Lender with a Tranche I Revolving
Commitment or, if the Tranche I Revolving Commitments have terminated or
expired, a Lender with Tranche I Revolving Exposure.
"TRANCHE I REVOLVING LOAN" means a Loan made pursuant to Section 2.01(a),
which may be ABR Loans and/or Eurodollar Loans.
"TRANCHE I TERM LOAN COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche I Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche I Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.09 or 2.11
and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 10.04. The initial amount of each Lender's
Tranche I Term Loan Commitment is set forth on Schedule I, or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed its Tranche I
Term Loan Commitment, as applicable. The initial aggregate amount of the
Lenders' Tranche I Term Loan Commitments is $140,000,000.
"TRANCHE I TERM LOAN LENDER" means a Lender with a Tranche I Term Loan
Commitment or an outstanding Tranche I Term Loan.
"TRANCHE I TERM LOAN PRINCIPAL PAYMENT DATES" means the Quarterly Dates
falling on or nearest to March 1, June 1, September 1 and December 1 of each
year, commencing with March 1, 1998, through and including June 1, 2003.
"TRANCHE I TERM LOANS" means a Loan made pursuant to Section 2.01(b), which
may be ABR Loans and/or Eurodollar Loans.
"TRANCHE II AGREEMENTS" means, collectively, the Tranche II Revolving
Agreements and the Tranche II Term Loan Agreements.
"TRANCHE II COMMITMENTS" means, collectively, the Tranche II Revolving
Commitments and the Tranche II Term Loan Commitments.
"TRANCHE II LOANS" means, collectively, the Tranche II Revolving Loans and
the Tranche II Term Loans.
"TRANCHE II REVOLVING AGREEMENT" means, with respect to any Series of
Tranche II Revolving Loans, an agreement between the Borrower and one or more
Lenders pursuant to which each such Lenders agrees to become obligated in
respect of a Tranche II Revolving Commitment of such Series hereunder.
"TRANCHE II REVOLVING COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make Tranche II Revolving Loans and to
acquire participations in Letters of Credit and Swingline Loans hereunder,
expressed as an amount representing the maximum aggregate amount of such
Lender's Tranche II Revolving Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.09 or 2.11 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender's Tranche II
Revolving Commitment shall be determined in accordance with the provisions of
Section 2.01(c).
"TRANCHE II REVOLVING EXPOSURE" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Tranche II
Revolving Loans and its Tranche II Revolving LC Exposure and Tranche II
Revolving Swingline Exposure at such time.
"TRANCHE II REVOLVING LENDERS" means a Lender with a Tranche II Revolving
Commitment or, if the Tranche II Revolving Commitments have terminated or
expired, a Lender with Tranche II Revolving Exposure.
"TRANCHE II REVOLVING LOAN" means a "Tranche II Revolving Loan" provided
for by Section 2.01(c), which may be ABR Loans and/or Eurodollar Loans.
"TRANCHE II TERM LOAN AGREEMENT" means, with respect to any Series of
Tranche II Term Loans, an agreement between the Borrower and one or more Lenders
pursuant to which each such Lenders agrees to become obligated in respect of a
Tranche II Term Loan Commitment of such Series hereunder.
"TRANCHE II TERM LOAN AVAILABILITY PERIOD" means the period from and
including the Effective Date to and including the Tranche II Term Loan
Commitment Termination Date.
"TRANCHE II TERM LOAN COMMITMENT" of any Series means, with respect to each
Lender, the commitment, if any, of such Lender to make one or more Tranche II
Term Loans of such Series, as such commitment may be (a) reduced from time to
time pursuant to Section 2.09 or 2.11 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 10.04. The
initial amount of each Lender's Tranche II Term Loan Commitment of any Series
will be specified in the Tranche II Term Loan Agreement for such Series, or will
be set forth in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Tranche II Term Loan Commitment of such Series, as
applicable.
"TRANCHE II TERM LOAN COMMITMENT TERMINATION DATE" means, December 29, 2000
or, if such day is not a Business Day, the next preceding Business Day.
"TRANCHE II TERM LOAN LENDER" means, in respect of any Series of Tranche II
Term Loans, a Lender with a Tranche II Term Loan Commitment of such Series or,
if the Tranche II Term Loan Commitments of such Series have terminated or
expired, a Lender with outstanding Tranche II Term Loans of such Series.
"TRANCHE II TERM LOAN PRINCIPAL PAYMENT DATES" means, for any Series of
Tranche II Term Loans, the dates specified in the Tranche II Term Loan Agreement
for such Series as the dates upon which payments of principal in respect of the
Tranche II Term Loans of such Series are to be made.
"TRANCHE II TERM LOANS" means the "Tranche II Term Loans" provided for by
Section 2.01(c), which may be ABR Loans and/or Eurodollar Loans.
"TRANSACTIONS" means the execution, delivery and performance by each
Obligor of this Agreement and the other Loan Documents to which such Obligor is
intended to be a party, the borrowing of Loans, the use of the proceeds thereof
and the issuance of Letters of Credit hereunder.
"TYPE", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate or,
in the case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.
"WHOLLY-OWNED SUBSIDIARY" means, with respect to any Person, any
corporation, partnership or other entity of which all of the equity securities
or other ownership interests (other than, in the case of a corporation,
directors' qualifying shares) are directly or indirectly owned or controlled by
such Person or one or more Wholly-Owned Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person. For purposes hereof, BB
Servicios, S.A. de C.V. shall be deemed to be a Wholly-Owned Subsidiary so long
as the direct or indirect ownership interest of the Borrower therein shall not
fall below that indicated on Schedule IV.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Tranche I
Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Tranche I Revolving Loan"); each Series of Tranche II Term
Loans shall be deemed a separate Class of Loans hereunder. Borrowings also may
be classified and referred to by Class (e.g., a "Tranche I Revolving Borrowing")
or by Type (e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a
"Eurodollar Tranche I Revolving Borrowing"); and each Series of Tranche II Term
Loan Borrowings and Tranche II Term Loan Commitments shall be deemed a separate
Borrowing and Commitment hereunder. Swingline ABR Loans and Swingline FFBC Loans
shall be deemed to be Loans of the same Class but different Types.
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "Property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01. THE COMMITMENTS.
(a) TRANCHE I REVOLVING LOANS. Subject to the terms and conditions set
forth herein, each Lender agrees to make Tranche I Revolving Loans to the
Borrower from time to time during the Revolving Availability Period in an
aggregate principal amount that will not result in (i) such Lender's Tranche I
Revolving Exposure exceeding such Lender's Tranche I Revolving Commitment or
(ii) the sum of the total Tranche I Revolving Exposures PLUS the aggregate
principal amount of outstanding Competitive Loans exceeding the total Tranche I
Revolving Commitments. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Tranche I Revolving Loans.
(b) TRANCHE I TERM LOANS. Subject to the terms and conditions set forth
herein, each Lender agrees to make one or more Tranche I Term Loans to the
Borrower on the Effective Date in a principal amount equal to its Tranche I Term
Loan Commitment. Amounts repaid in respect of Tranche I Term Loans may not be
reborrowed.
(c) TRANCHE II LOANS. In addition to borrowings of Tranche I Revolving
Loans and Tranche I Term Loans, at any time and from time to time on or before
the Tranche II Term Loan Commitment Termination Date, the Borrower may request
that the Lenders offer to enter into commitments to make additional revolving
loans (which shall be "Tranche II Revolving Loans") or additional term loans
(which shall be "Tranche II Term Loans") to the Borrower hereunder (it being
understood that such offer may be made by any financial institution that is to
become a Lender hereunder in connection with the making of such offer under this
paragraph (c), so long as the Administrative Agent shall have consented to such
financial institution being a Lender hereunder, it being understood that such
consent shall not be unreasonably withheld). In the event that one or more of
the Lenders offer, in their sole discretion, to enter into such commitments, and
such Lenders and the Borrower agree as to the amount of such commitments that
shall be allocated to the respective Lenders making such offers, as to the fees
(if any) to be payable by the Borrower in connection therewith and the
Applicable Rate and (in the case of Tranche II Term Loans) the amortization
relating thereto, the Borrower, the Administrative Agent and such Lenders shall
execute and deliver a Tranche II Revolving Loan Agreement or Tranche II Term
Loan Agreement, as applicable, and such Lenders shall become obligated to make
Tranche II Revolving Loans or Tranche II Term Loans, as applicable, under this
Agreement in an amount equal to the amount of their respective Tranche II
Revolving Commitments and Tranche II Term Loan Commitments, as applicable, as
specified in such Agreement. The Tranche II Loans to be made pursuant to any
Tranche II Agreement in response to any such request by the Borrower shall be
deemed to be a separate "SERIES" of Tranche II Revolving Loans or Tranche II
Term Loans, as applicable, for all purposes of this Agreement.
Anything herein to the contrary notwithstanding, (i) the minimum aggregate
principal amount of Tranche II Commitments entered into pursuant to any such
request (and, accordingly, the minimum aggregate principal amount of any Series
of Tranche II Loans) shall be $50,000,000, (ii) the aggregate outstanding
principal amount of Tranche II Loans of all Series, together with the aggregate
unutilized Tranche II Commitments of all Series, shall not exceed $200,000,000
at any time, PROVIDED that the Borrower may not make any request for Tranche II
Commitments hereunder after December 31, 1999 to the extent that, after giving
effect to any Tranche II Commitments issued in response to such request, the
aggregate outstanding principal amount of Tranche II Loans and unutilized
Tranche II Commitments would exceed $100,000,000, (iii) no single Lender (and
its Affiliates) may have Commitments and Loans (including Incremental
Commitments and Incremental Loans) aggregating more than 20% of the total
outstanding Commitments and Loans of all Classes (other than Competitive Loans),
(iv) the Tranche II Term Loan Commitments of any Series shall terminate on the
earlier of the Tranche II Term Loan Commitment Termination Date and the date
three months after the date of the respective Tranche II Term Loan Agreement for
such Series and (v) in no event shall the Tranche II Term Loan Agreement for any
Series of Tranche II Term Loans provide for the final maturity of the Tranche II
Term Loans of such Series to be later than June 1, 2003, nor shall such
Agreement provide for amortization of the Tranche II Term Loans of such Series
at a rate faster (i.e. earlier) than the rate of amortization of the Tranche I
Term Loans (the determination of whether or not such amortization is faster to
be made by the Administrative Agent).
Following agreement by the Borrower and one or more of the Lenders as
provided above, subject to the terms and conditions set forth herein:
(x) each Tranche II Revolving Lender of any Series agrees to make
Tranche II Revolving Loans of such Series to the Borrower from time to time
during the Revolving Availability Period, in an aggregate principal amount
up to but not exceeding the amount of the Tranche II Revolving Commitment
of such Series of such Tranche II Revolving Lender; within the foregoing
limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Tranche II Revolving Loans of any
Series as the Borrower shall from time to time select; and
(y) each Tranche II Term Loan Lender of any Series agrees to make
Tranche II Term Loans of such Series to the Borrower from time to time
during the period from and including the earlier of the Tranche II Term
Loan Commitment Termination Date and the date three months after the date
of the respective Tranche II Term Loan Agreement for such Series, in an
aggregate principal amount up to but not exceeding the amount of the
Tranche II Term Loan Commitment of such Series of such Tranche II Term Loan
Lender.
SECTION 2.02. LOANS AND BORROWINGS.
(a) OBLIGATION OF LENDERS. Each Syndicated Loan shall be made as part of a
Borrowing consisting of Loans of the same Class and Type made by the Lenders
ratably in accordance with their respective Commitments of the applicable Class.
Each Competitive Loan shall be made in accordance with the procedures set forth
in Section 2.04. The failure of any Lender to make any Loan required to be made
by it shall not relieve any other Lender of its obligations hereunder; PROVIDED
that the Commitments and Competitive Bids of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) TYPE OF LOANS. Subject to Section 2.14, (i) each Syndicated Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may
request in accordance herewith, and (ii) each Competitive Borrowing shall be
comprised entirely of Eurodollar Loans or Fixed Rate Loans as the Borrower may
request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or 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 this Agreement.
(c) MINIMUM AMOUNTS. At the commencement of each Interest Period for any
Eurodollar Syndicated Borrowing, such Borrowing shall be in an aggregate amount
of $3,000,000 or a larger multiple of $100,000. At the time that each ABR
Syndicated Borrowing is made, such Borrowing shall be in an aggregate amount
equal to $3,000,000 or a larger multiple of $100,000; PROVIDED that an ABR
Syndicated Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Commitments of the applicable Class or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.06(f). Each Tranche II Term Loan Borrowing shall be in an aggregate
amount equal to $50,000,000 or a larger multiple of $100,000 (PROVIDED that a
Tranche II Term Loan Borrowing may be in an aggregate amount that is equal to
the entire unused balance of the total Tranche II Term Loan Commitments). Each
Competitive Borrowing shall be in an aggregate amount equal to $10,000,000 or a
larger multiple of $5,000,000. Each Swingline Loan shall be in an amount equal
to $500,000 or a larger multiple of $100,000. Borrowings of more than one Type
and Class may be outstanding at the same time; PROVIDED that there shall not at
any time be more than a total of twenty (20) Eurodollar Syndicated Borrowings,
Competitive Borrowings and Swingline Borrowings outstanding.
(d) CONVERSION OR CONTINUATION OF EURODOLLAR LOANS. Notwithstanding any
other provision of this Agreement, the Borrower shall not be entitled to
request, or to elect to convert to or continue as a Syndicated Eurodollar
Borrowing: (i) any Revolving Borrowing or Competitive Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date; (ii)
any Term Loan Borrowing of any Class if the Interest Period requested with
respect thereto would end after the Maturity Date for the Term Loans of such
Class; or (iii) any Term Loan of any Class if the Interest Period therefor would
commence before and end after any Term Loan Principal Payment Date for such
Class unless, after giving effect thereto, the aggregate principal amount of the
Term Loans of such Class having Interest Periods that end after such Term Loan
Principal Payment Date shall be equal to or less than the aggregate principal
amount of the Term Loans of such Class permitted to be outstanding after giving
effect to the payments of principal required to be made on such Term Loan
Principal Payment Date.
SECTION 2.03. REQUESTS FOR SYNDICATED BORROWINGS. To request a Syndicated
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Syndicated Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Syndicated Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of the
proposed Borrowing; PROVIDED that any such notice of an ABR Revolving Borrowing
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.06(f) may be given not later than 10:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) whether the requested Borrowing is to be a Tranche I Revolving
Borrowing, Tranche II Revolving Borrowing, Tranche I Term Loan Borrowing or
Tranche II Term Loan Borrowing (including, if applicable, the respective
Series of Tranche II Term Loans to which such Borrowing relates);
(ii) the aggregate amount of the requested Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.07.
If no election as to the Type of Syndicated Borrowing is specified, then the
requested Syndicated Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Syndicated Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. COMPETITIVE BID PROCEDURE.
(a) REQUESTS FOR BIDS BY BORROWER. Subject to the terms and conditions set
forth herein, from time to time during the Revolving Availability Period the
Borrower may request Competitive Bids and may (but shall not have any obligation
to) accept Competitive Bids and borrow Competitive Loans; PROVIDED that the sum
of the total Revolving Exposures PLUS the aggregate principal amount of
outstanding Competitive Loans at any time shall not exceed the total Revolving
Commitments. To request Competitive Bids, the Borrower shall notify the
Administrative Agent of such request by telephone, in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, four Business Days
before the date of the proposed Borrowing and, in the case of a Fixed Rate
Borrowing, not later than 10:00 a.m., New York City time, one Business Day
before the date of the proposed Borrowing; PROVIDED that the Borrower may submit
up to (but not more than) three Competitive Bid Requests on the same day, but a
Competitive Bid Request shall not be made within five Business Days after the
date of any previous Competitive Bid Request, unless any and all such previous
Competitive Bid Requests shall have been withdrawn or all Competitive Bids
received in response thereto rejected. Each such telephonic Competitive Bid
Request shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Competitive Bid Request in a form approved by
the Administrative Agent and signed by the Borrower. Each such telephonic and
written Competitive Bid Request shall specify the following information in
compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be a Eurodollar Borrowing or a
Fixed Rate Borrowing;
(iv) the Interest Period to be applicable to such Borrowing, which
shall be a period contemplated by the definition of the term "Interest
Period"; and
(v) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.07.
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Revolving Lenders of the
details thereof by telecopy, inviting the Revolving Lenders to submit
Competitive Bids.
(b) MAKING OF BIDS BY LENDERS. Each Revolving Lender may (but shall not
have any obligation to) make one or more Competitive Bids to the Borrower in
response to a Competitive Bid Request. Each Competitive Bid by a Revolving
Lender must be in a form approved by the Administrative Agent and must be
received by the Administrative Agent by telecopy, in the case of a Eurodollar
Competitive Borrowing, not later than 9:30 a.m., New York City time, three
Business Days before the proposed date of such Competitive Borrowing, and in the
case of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on
the proposed date of such Competitive Borrowing. Competitive Bids that do not
conform substantially to the form approved by the Administrative Agent may be
rejected by the Administrative Agent, and the Administrative Agent shall notify
the applicable Lender as promptly as practicable. Each Competitive Bid shall
specify (i) the principal amount (which shall be $5,000,000 or a larger multiple
of $1,000,000 and which may equal the entire principal amount of the Competitive
Borrowing requested by the Borrower) of the Competitive Loan or Loans that the
Lender is willing to make, (ii) the Competitive Bid Rate or Rates at which the
Lender is prepared to make such Loan or Loans (expressed as a percentage rate
per annum in the form of a decimal to no more than four decimal places) and
(iii) the Interest Period applicable to each such Loan and the last day thereof.
(c) NOTIFICATION OF BIDS BY ADMINISTRATIVE AGENT. The Administrative Agent
shall promptly notify the Borrower by telecopy of the Competitive Bid Rate and
the principal amount specified in each Competitive Bid and the identity of the
Lender that shall have made such Competitive Bid.
(d) ACCEPTANCE OF BIDS BY BORROWER. Subject only to the provisions of this
paragraph, the Borrower may accept or reject any Competitive Bid. The Borrower
shall notify the Administrative Agent by telephone, confirmed by telecopy in a
form approved by the Administrative Agent, whether and to what extent it has
decided to accept or reject each Competitive Bid, in the case of a Eurodollar
Competitive Borrowing, not later than 10:30 a.m., New York City time, three
Business Days before the date of the proposed Competitive Borrowing, and in the
case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York City time,
on the proposed date of the Competitive Borrowing; PROVIDED, that (i) the
failure of the Borrower to give such notice shall be deemed to be a rejection of
each Competitive Bid, (ii) the Borrower shall not accept a Competitive Bid made
at a particular Competitive Bid Rate if the Borrower rejects a Competitive Bid
made at a lower Competitive Bid Rate, (iii) the aggregate amount of the
Competitive Bids accepted by the Borrower shall not exceed the aggregate amount
of the requested Competitive Borrowing specified in the related Competitive Bid
Request, (iv) to the extent necessary to comply with clause (iii) of this
proviso, the Borrower may accept Competitive Bids at the same Competitive Bid
Rate in part, which acceptance, in the case of multiple Competitive Bids at such
Competitive Bid Rate, shall be made pro rata in accordance with the amount of
each such Competitive Bid, and (v) except pursuant to clause (iv) of this
proviso, no Competitive Bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in a principal amount of $5,000,000 or a larger multiple of
$1,000,000; PROVIDED FURTHER that if a Competitive Loan must be in an amount
less than $5,000,000 because of the provisions of clause (iv) of the first
proviso of this paragraph, such Competitive Loan may be in an amount of
$1,000,000 or any multiple thereof, and in calculating the pro rata allocation
of acceptances of portions of multiple Competitive Bids at a particular
Competitive Bid Rate pursuant to such clause (iv) the amounts shall be rounded
to multiples of $1,000,000 in a manner determined by the Borrower. A notice
given by the Borrower pursuant to this paragraph shall be irrevocable.
(e) NOTIFICATION OF ACCEPTANCES BY ADMINISTRATIVE AGENT. The Administrative
Agent shall promptly notify each bidding Lender by telecopy whether or not its
Competitive Bid has been accepted (and, if so, the amount and Competitive Bid
Rate so accepted), and each successful bidder will thereupon become bound,
subject to the terms and conditions hereof, to make the Competitive Loan in
respect of which its Competitive Bid has been accepted.
(f) BIDS BY ADMINISTRATIVE AGENT. If the Administrative Agent shall elect
to submit a Competitive Bid in its capacity as a Lender, it shall submit such
Competitive Bid directly to the Borrower at least one quarter of an hour earlier
than the time by which the other Lenders are required to submit their
Competitive Bids to the Administrative Agent pursuant to paragraph (b) of this
Section.
SECTION 2.05. SWINGLINE LOANS.
(a) AGREEMENT TO MAKE SWINGLINE LOANS. Subject to the terms and conditions
set forth herein, the Swingline Lender agrees to make Swingline Loans to the
Borrower from time to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding Swingline Loans exceeding
$20,000,000 or (ii) total Revolving Exposure PLUS the aggregate principal amount
of outstanding Competitive Loans exceeding the total Revolving Commitments;
PROVIDED that the Swingline Lender shall not be required to make a Swingline
Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Swingline Loans.
(b) INTEREST RATES. Swingline Loans shall be ABR Loans or FFBR Loans, as
selected by the Borrower, except that the Swingline Lender and the Borrower may
agree that the interest rate in respect of a Swingline Loan made by such
Swingline Lender, for a period ending on the date that is not earlier than one
day and not later than fifteen days after such Swingline Loan is made, be at an
alternative rate of interest (and with such applicable margins and prepayment
premiums) as may from time to time be offered by the Swingline Lender to the
Borrower in its sole discretion; PROVIDED that upon any sale pursuant to Section
2.05(d) of participations in any Swingline Loan the interest on which is
determined by reference to the Federal Funds Base Rate or any such alternative
rate, such Swingline Loans shall automatically be converted into an ABR Loan.
(c) NOTICE OF SWINGLINE LOANS BY BORROWER. To request a Swingline Loan, the
Borrower shall notify the Administrative Agent of such request by telephone
(confirmed by telecopy), not later than 12:00 noon, New York City time, on the
day of a proposed Swingline Loan. Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day), amount and
type of the requested Swingline Loan. The Administrative Agent will promptly
advise the Swingline Lender of any such notice received from the Borrower. The
Swingline Lender shall make each Swingline Loan available to the Borrower by
means of a credit to the general deposit account of the Borrower with the
Swingline Lender (or, in the case of a Swingline Loan made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(f), by
remittance to the respective Issuing Lender) by 3:00 p.m., New York City time,
on the requested date of such Swingline Loan.
(d) PARTICIPATIONS BY LENDERS IN SWINGLINE LOANS. The Swingline Lender may
by written notice given to the Administrative Agent not later than 10:00 a.m.,
New York City time, on any Business Day require the Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans
outstanding. Such notice to the Administrative Agent shall specify the aggregate
amount of Swingline Loans in which Lenders will participate. Promptly upon
receipt of such notice, the Administrative Agent will give notice thereof to
each Lender, specifying in such notice such Lender's Applicable Percentage of
such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above in this paragraph, to pay to
the Administrative Agent, for the account of the Swingline Lender, such Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Lender acknowledges
and agrees that its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as
provided in Section 2.07 with respect to Loans made by such Lender (and Section
2.07 shall apply, MUTATIS MUTANDIS, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Lenders. The Administrative Agent shall
notify the Borrower of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the Swingline Lender.
Any amounts received by the Swingline Lender from the Borrower (or other party
on behalf of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.
(e) REPLACEMENT OF SWINGLINE LENDER. The Borrower may at any time, and from
time to time, request that the then-current Swingline Lender be replaced with
another Lender hereunder designated by the Borrower and satisfactory to the
Administrative Agent. Any such replacement shall be effected pursuant to a
written instrument, in form and substance satisfactory to the Administrative
Agent, under which such new Lender agrees to become the "Swingline Lender"
hereunder, and the predecessor Swingline Lender is relieved of all of its
obligations hereunder as the "Swingline Lender", PROVIDED that in no event shall
any such replacement occur unless the principal of and interest on all of the
Swingline Loans of the predecessor Swingline Lender shall have been paid in
full.
SECTION 2.06. LETTERS OF CREDIT.
(a) GENERAL. Subject to the terms and conditions set forth herein, in
addition to the Loans provided for in Section 2.01, the Borrower may request
Chase, as an Issuing Lender, to issue, at any time and from time to time during
the Revolving Availability Period, Letters of Credit for its own account in such
form as is acceptable to such Issuing Lender in its reasonable determination. In
addition, First Chicago, as an Issuing Lender, has issued the Qingdao Letter of
Credit for the account of the Borrower. Letters of Credit issued hereunder shall
constitute utilization of the Revolving Commitments.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION. To request the
issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the respective Issuing Lender) to the applicable Issuing Lender and
the Administrative Agent (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (d) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the respective Issuing Lender, the Borrower
also shall submit a letter of credit application on such Issuing Lender's
standard form in connection with any request for a Letter of Credit. In the
event of any inconsistency between the terms and conditions of this Agreement
and the terms and conditions of any form of letter of credit application or
other agreement submitted by the Borrower to, or entered into by the Borrower
with, an Issuing Lender relating to any Letter of Credit, the terms and
conditions of this Agreement shall control. Upon any modification or renewal or
reissuance by First Chicago, as an Issuing Lender, of the Qingdao Letter of
Credit, First Chicago shall forthwith notify the Administrative Agent and the
Borrower of the new Qingdao Letter of Credit Limit for purposes of this
Agreement.
(c) LIMITATIONS ON AMOUNTS. A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension (i)
the aggregate LC Exposure of Chase, as an Issuing Lender (determined for these
purposes without giving effect to the participations therein of the Revolving
Lenders pursuant to paragraph (e) of this Section), shall not exceed
$20,000,000, (ii) the aggregate LC Exposure of First Chicago, as an Issuing
Lender (determined for these purposes without giving effect to the
participations therein of the Revolving Lenders pursuant to paragraph (e) of
this Section), shall not exceed the Qingdao Letter of Credit Limit and (iii) the
sum of the total Revolving Exposures PLUS the aggregate principal amount of
outstanding Competitive Loans shall not exceed the total Revolving Commitments.
(d) EXPIRATION DATE. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date twelve months after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, twelve months after the then-current expiration date of such
Letter of Credit, so long as such renewal or extension occurs within three
months of such then-current expiration date) and (ii) the date that is five
Business Days prior to the Maturity Date.
(e) PARTICIPATIONS. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) by either Issuing Lender,
and without any further action on the part of such Issuing Lender or the
Lenders, such Issuing Lender hereby grants to each Lender, and each Lender
hereby acquires from such Issuing Lender, a participation in such Letter of
Credit equal to such Lender's Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit. Each Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this paragraph
in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.
In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the respective Issuing Lender, such Lender's Applicable
Percentage of each LC Disbursement made by an Issuing Lender promptly upon the
request of such Issuing Lender at any time from the time of such LC Disbursement
until such LC Disbursement is reimbursed by the Borrower or at any time after
any reimbursement payment is required to be refunded to the Borrower for any
reason. Each such payment shall be made in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall
apply, MUTATIS MUTANDIS, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the respective Issuing Lender the
amounts so received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to the next
following paragraph, the Administrative Agent shall distribute such payment to
respective Issuing Lender or, to the extent that the Lenders have made payments
pursuant to this paragraph to reimburse such Issuing Lender, then to such
Lenders and such Issuing Lender as their interests may appear. Any payment made
by a Lender pursuant to this paragraph to reimburse an Issuing Lender for any LC
Disbursement shall not constitute a Loan and shall not relieve the Borrower of
its obligation to reimburse such LC Disbursement.
(f) REIMBURSEMENT. If an Issuing Lender shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such Issuing Lender
in respect of such LC Disbursement by paying to the Administrative Agent an
amount equal to such LC Disbursement not later than 12:00 noon, New York City
time, on (i) the Business Day that the Borrower receives notice of such LC
Disbursement, if such notice is received prior to 10:00 a.m., New York City
time, or (ii) the Business Day immediately following the day that the Borrower
receives such notice, if such notice is not received prior to such time,
PROVIDED that, if such LC Disbursement is not less than $100,000, the Borrower
may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.03 or 2.05 that such payment be financed with an ABR
Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent
so financed, the Borrower's obligation to make such payment shall be discharged
and replaced by the resulting ABR Revolving Borrowing or Swingline Loan.
If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Revolving Lender of the applicable LC Disbursement, the
payment then due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof.
(g) OBLIGATIONS ABSOLUTE. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (f) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the respective Issuing Lender under a Letter of Credit
against presentation of a draft or other document that does not comply strictly
with the terms of such Letter of Credit, and (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
Neither the Administrative Agent, the Lenders nor either Issuing Lender,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
by the respective Issuing Lender or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the respective Issuing
Lender; PROVIDED that the foregoing shall not be construed to excuse an Issuing
Lender from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by the Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by such Issuing Lender's negligence or wilful
misconduct when determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that:
(i) an Issuing Lender may accept documents that appear on their face
to be in substantial compliance with the terms of a Letter of Credit
without responsibility for further investigation, regardless of any notice
or information to the contrary, and may make payment upon presentation of
documents that appear on their face to be in substantial compliance with
the terms of such Letter of Credit;
(ii) an Issuing Lender shall have the right, in its sole discretion,
to decline to accept such documents and to make such payment if such
documents are not in strict compliance with the terms of such Letter of
Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by an Issuing Lender when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof
(and the parties hereto hereby waive, to the extent permitted by applicable
law, any standard of care inconsistent with the foregoing).
(h) DISBURSEMENT PROCEDURES. The Issuing Lender for any Letter of Credit
shall, within a reasonable time following its receipt thereof, examine all
documents purporting to represent a demand for payment under such Letter of
Credit. Such Issuing Lender shall promptly after such examination notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether such Issuing Lender has made or will make an
LC Disbursement thereunder; PROVIDED that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse such
Issuing Lender and the Lenders with respect to any such LC Disbursement.
(i) INTERIM INTEREST. If the Issuing Lender for any Letter of Credit shall
make any LC Disbursement, then, unless the Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses such
LC Disbursement, at the rate per annum then applicable to ABR Syndicated Loans;
PROVIDED that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (f) of this Section, then Section 2.13(e) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of such
Issuing Lender, except that interest accrued on and after the date of payment by
any Lender pursuant to paragraph (f) of this Section to reimburse such Issuing
Lender shall be for the account of such Lender to the extent of such payment.
(j) REPLACEMENT OF AN ISSUING LENDER. Either Issuing Lender may be replaced
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Lender and the successor Issuing Lender. The Administrative
Agent shall notify the Lenders of any such replacement of an Issuing Lender. At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Lender pursuant to
Section 2.12(b). From and after the effective date of any such replacement, (i)
the successor Issuing Lender shall have all the rights and obligations of the
replaced Issuing Lender under this Agreement with respect to Letters of Credit
to be issued by it thereafter and (ii) references herein to the term "Issuing
Lender" shall be deemed to include such successor or any previous Issuing
Lender, or such successor and all previous Issuing Lenders, as the context shall
require. After the replacement of an Issuing Lender hereunder, the replaced
Issuing Lender shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Lender under this Agreement with respect to
Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(k) CASH COLLATERALIZATION. If either (i) an Event of Default shall occur
and be continuing and the Borrower receives notice from the Administrative Agent
or the Required Lenders (or, if the maturity of the Loans has been accelerated,
Lenders with LC Exposure representing at least 66-2/3% of the total LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, or (ii) the
Borrower shall be required to provide cover for LC Exposure pursuant to Section
2.11(d), the Borrower shall immediately deposit into the Collateral Account an
amount in cash equal to, in the case of an Event of Default, the LC Exposure as
of such date PLUS any accrued and unpaid interest thereon and, in the case of
cover pursuant to Section 2.11(d), the amount required under Section 2.11(d);
PROVIDED that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower described in clause (h) or (i) of
Article VIII. Such deposit shall be held by the Administrative Agent as
collateral in the first instance for the LC Exposure under this Agreement and
thereafter for the payment of the "Secured Obligations" under and as defined in
the Security Agreement.
(l) QINGDAO LETTER OF CREDIT. Anything herein to the contrary
notwithstanding, the amount of the Qingdao Letter of Credit for all purposes of
this Agreement and the other Loan Documents (including, without limitation, the
usage of the Revolving Commitments hereunder, the calculation of fees under
Section 2.12 and the obligation of the Revolving Lenders to participate in
Letters of Credit arising upon drawings thereunder) shall be deemed to be equal
to the Qingdao Letter of Credit Limit and any LC Exposure arising in respect of
the Qingdao Letter of Credit in excess of the Qingdao Letter of Credit Limit
shall be solely for the account of First Chicago, as an Issuing Lender, and no
other Lender shall be obligated to participate in such excess amount, nor shall
such excess amount be entitled to the benefits of the Security Documents.
(m) EXISTING LETTERS OF CREDIT. Pursuant to Section 2.04 of the Existing
Credit Agreement, Chase, as an "Issuing Bank" thereunder, has issued various
"Revolving Letters of Credit" under and as defined in the Existing Credit
Agreement and First Chicago, as an "Issuing Bank" thereunder, has issued the
"Qingdao Letter of Credit" under and as defined in the Existing Credit
Agreement. On the Effective Date, subject to the satisfaction of the conditions
to effectiveness of the obligations of the Lenders hereunder set forth in
Article V, each of such "Revolving Letters of Credit" and the "Qingdao Letter of
Credit" under the Existing Credit Agreement shall automatically, and without any
action on the part of any Person, become a Letter of Credit hereunder.
SECTION 2.07. FUNDING OF BORROWINGS.
(a) FUNDING BY LENDERS. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders;
PROVIDED that Swingline Loans shall be made as provided in Section 2.05. The
Administrative Agent will make such Loans available to the Borrower by promptly
remitting the amounts so received, in like funds, to an account of the Borrower
designated by the Borrower in the applicable Borrowing Request or Competitive
Bid Request; PROVIDED that ABR Revolving Borrowings made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(f) shall be
remitted by the Administrative Agent to the respective Issuing Lender.
(b) PRESUMPTION BY ADMINISTRATIVE AGENT. Unless the Administrative Agent
shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the Federal Funds
Effective Rate or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.08. INTEREST ELECTIONS.
(a) ELECTIONS BY BORROWER FOR SYNDICATED BORROWINGS. Each Syndicated
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Syndicated Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Syndicated Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing. This Section shall
not apply to Competitive Borrowings or Swingline Borrowings, which may not be
converted or continued.
(b) NOTICE OF ELECTIONS. To make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Syndicated Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by
the Borrower.
(c) INFORMATION IN ELECTION NOTICES. Each telephonic and written Interest
Election Request shall specify the following information in compliance with
Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
(including, if applicable, the respective Series of Tranche II Term Loans
to which such Interest Election Request relates) and, if different options
are being elected with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) of this
paragraph shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) NOTICE BY ADMINISTRATIVE AGENT TO LENDERS. Promptly following receipt
of an Interest Election Request, the Administrative Agent shall advise each
Lender of the details thereof and of such Lender's portion of each resulting
Borrowing.
(e) PRESUMPTION IF NO NOTICE. If the Borrower fails to deliver a timely
Interest Election Request with respect to a Eurodollar Syndicated Borrowing
prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Syndicated Borrowing. Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is continuing
and the Administrative Agent, at the request of the Required Lenders, so
notifies the Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Syndicated Borrowing may be converted to or continued as a
Eurodollar Syndicated Borrowing and (ii) unless repaid, each Eurodollar
Syndicated Borrowing shall be converted to an ABR Syndicated Borrowing at the
end of the Interest Period applicable thereto.
SECTION 2.09. TERMINATION AND REDUCTION OF THE COMMITMENTS.
(a) SCHEDULED TERMINATION. Unless previously terminated, (i) the Tranche I
Term Loan Commitments shall terminate on the close of business on the Effective
Date, (ii) the Tranche II Term Loan Commitments of each Series shall terminate
on the Tranche II Term Loan Commitment Termination Date and (iii) the Revolving
Commitments shall terminate on the Maturity Date.
(b) VOLUNTARY TERMINATION OR REDUCTION. The Borrower may at any time
terminate, or from time to time reduce, the Commitments of any Class (including
the Commitments of any Series of Tranche II Term Loans); PROVIDED that (i) each
reduction of the Commitments of any Class pursuant to this Section shall be in
an amount that is $3,000,000 or a larger multiple of $100,000 and (ii) the
Borrower shall not terminate or reduce the Revolving Commitments of any Class
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.11, the sum of the total Revolving Exposures of such Class PLUS
the aggregate principal amount of outstanding Competitive Loans of such Class
would exceed the total Revolving Commitments of such Class.
(c) NOTICE OF TERMINATION OR REDUCTION. The Borrower shall notify the
Administrative Agent of any election to terminate or reduce the Commitments of
any Class under paragraph (b) of this Section at least three Business Days prior
to the effective date of such termination or reduction, specifying such election
and the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable;
PROVIDED that a notice of termination of the Revolving Commitments of any Class
delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied.
(d) EFFECT OF TERMINATION OR REDUCTION. Any termination or reduction of the
Commitments of any Class shall be permanent. Each reduction of the Commitments
of any Class shall be made ratably among the Lenders in accordance with their
respective Commitments of such Class.
SECTION 2.10. REPAYMENT OF LOANS; EVIDENCE OF DEBT.
(a) REPAYMENT. The Borrower hereby unconditionally promises to pay the
Loans outstanding hereunder as follows:
(i) to the Administrative Agent for the account of each Lender the
outstanding principal amount of each Revolving Loan of such Lender on the
Maturity Date,
(ii) to the Administrative Agent for the account of each Lender the
outstanding principal amount of each Tranche I Term Loan of such Lender on
each Tranche I Principal Payment Date set forth below in an amount equal to
the principal amount set forth opposite such Tranche I Principal Payment
Date:
PRINCIPAL PAYMENT DATE PRINCIPAL AMOUNT
March 1, 1998 $6,000,000
June 1, 1998 $6,000,000
September 1, 1998 $6,000,000
December 1, 1998 $6,000,000
March 1, 1999 $6,000,000
June 1, 1999 $6,000,000
September 1, 1999 $6,000,000
December 1, 1999 $6,000,000
March 1, 2000 $6,000,000
June 1, 2000 $6,000,000
September 1, 2000 $6,000,000
December 1, 2000 $6,000,000
March 1, 2001 $6,000,000
June 1, 2001 $6,000,000
September 1, 2001 $6,000,000
December 1, 2001 $6,000,000
March 1, 2002 $6,000,000
June 1, 2002 $6,000,000
September 1, 2002 $6,000,000
December 1, 2002 $6,000,000
March 1, 2003 $10,000,000
June 1, 2003 $10,000,000
(iii) to the Administrative Agent for the account of each Tranche II
Term Loan Lender of any Series the outstanding principal amount of each
Tranche II Term Loan of such Lender of such Series on the respective
Tranche II Term Loan Principal Payments Dates for the Tranche II Term Loans
of such Series,
(iv) to the Administrative Agent for the account of the respective
Lender the then unpaid principal amount of each Competitive Loan of such
Lender on the last day of the Interest Period applicable to such Loan, and
(v) to the Swingline Lender the then unpaid principal amount of each
Swingline Loan on the earliest of (A) the Maturity Date, (B) the fifteenth
day after such Loan is made (but not earlier than one Business Day after
such Swingline Loan is made) and (C) in the case of any Swingline FFBR
Loan, the last day of the Interest Period for such Loan; PROVIDED that (i)
if any such day is not a Business Day, then the Borrower shall pay such
Swingline Loan on the next preceding Business Day and (ii) on each date
that a Revolving Borrowing or Competitive Borrowing is made, the Borrower
shall repay all Swingline ABR Loans then outstanding.
(b) MANNER OF PAYMENT. Prior to any repayment or prepayment of any
Borrowings of any Class hereunder, the Borrower shall select the Borrowing or
Borrowings of such Class to be paid and shall notify the Administrative Agent by
telephone (confirmed by telecopy) of such selection not later than 11:00 a.m.,
New York City time, three Business Days before the scheduled date of such
payment; PROVIDED that each payment of Borrowings of any Class shall be applied
to pay any outstanding ABR Borrowings of such Class before any other Borrowings
of such Class. If the Borrower fails to make a timely selection of the Borrowing
or Borrowings to be repaid or prepaid, such payment shall be applied, first, to
pay any outstanding ABR Borrowings of the applicable Class and, second, to other
Borrowings of such Class in the order of the remaining duration of their
respective Interest Periods (the Borrowing with the shortest remaining Interest
Period to be paid first), and for these purposes, Competitive Bid Loans shall be
deemed to be in the same Class as Tranche I Revolving Loans. Each payment of a
Borrowing shall be applied ratably to the Loans included in such Borrowing.
(c) MAINTENANCE OF LOAN ACCOUNTS BY LENDERS. Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
Anything herein to the contrary notwithstanding, the Tranche I Term Loans
made by each Lender shall be divided into two portions which shall be accounted
for separately on the books of such Lender. The first of such portions (the
"MORTGAGE PORTION") shall be in a principal amount equal to 2/140 of the amount
of such Lender's Tranche I Term Loan Commitment and shall be secured by all of
the collateral security provided for pursuant to the Security Documents
(including, without limitation, the Mortgages covering real property of the
Obligors in New York) and the second of such portions (the "NON-MORTGAGE
PORTION") shall be in a principal amount equal to 138/140 of the amount of such
Lender's Tranche I Term Loan Commitment and shall be secured by all of the
collateral security provided for pursuant to the Security Documents (excluding,
however, the Mortgages covering real property of the Obligors in New York).
Anything in this Agreement to the contrary notwithstanding, all payments and
prepayments of the Tranche I Term Loans hereunder shall be deemed to be applied
first to Non-Mortgage Portion (until the same shall have been paid in full) and
last to the Mortgage Portion.
(d) MAINTENANCE OF LOAN ACCOUNTS BY ADMINISTRATIVE AGENT. The
Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Class and Type thereof (including, in
the case of Incremental Facility Loans, the respective Series thereof) and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender's share thereof. The
Administrative Agent shall account for the Mortgage Portions and Non- Mortgage
Portions of the Tranche I Term Loans, as described in paragraph (c) above.
(e) EFFECT OF LOAN ACCOUNTS. The entries made in the accounts maintained
pursuant to paragraph (c) or (d) of this Section shall be PRIMA FACIE evidence
of the existence and amounts of the obligations recorded therein; PROVIDED that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this Agreement.
(f) PROMISSORY NOTES. Any Lender may request that Loans of any Class made
by it be evidenced by a promissory note. In such event, the Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 10.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.11. PREPAYMENT OF LOANS.
(a) OPTIONAL PREPAYMENTS. The Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to the
requirements of this Section, PROVIDED that (i) the aggregate principal amount
of any prepayment on any date pursuant to this paragraph shall be at least equal
to $5,000,000 and (ii) the Borrower shall not have the right to prepay any
Competitive Loan without the prior consent of the Lender thereof. Any prepayment
of a Term Loan Borrowing of any Class pursuant to this paragraph shall be
applied to reduce the scheduled repayments of the Term Loan Borrowings of such
Class in reverse chronological order.
(b) MANDATORY PREPAYMENTS -- REVOLVING LOANS. The Borrower will from time
to time prior to the Maturity Date prepay the Revolving Loans in such amounts as
shall be necessary so that, for a period of at least 30 consecutive days at any
time during the two fiscal quarters of the Borrower ending on May 31 and August
31 of each fiscal year, the total Revolving Exposures shall not exceed
$60,000,000.
(c) MANDATORY PREPAYMENTS -- ALL LOANS. The Borrower will make prepayments
of the Loans hereunder as follows:
(i) CASUALTY EVENTS. Upon the date 180 days following the receipt by
the Borrower of the proceeds of insurance, condemnation award or other
compensation in respect of any Casualty Event affecting any Property of the
Borrower or any of its Subsidiaries (or upon such earlier date as the
Borrower or such Subsidiary, as the case may be, shall have determined not
to repair or replace the Property affected by such Casualty Event), the
Borrower shall prepay the Loans in an aggregate amount, if any, equal to
100% of the Net Available Proceeds of such Casualty Event not theretofore
applied to the repair or replacement of such Property, such prepayment to
be effected in the manner and to the extent specified in clause (vi) below.
Notwithstanding the foregoing, in the event that a Casualty Event shall
occur with respect to Property covered by any Mortgage, the Borrower shall,
if required by the terms of such Mortgage, prepay the Loans on the dates,
and in the amounts, of the required prepayments specified in accordance
with such Mortgage. Nothing in this paragraph shall be deemed to limit any
obligation of the Borrower or any of its Subsidiaries pursuant to any of
the Security Documents to remit to a collateral or similar account
maintained by the Administrative Agent pursuant to any of the Security
Documents the proceeds of insurance, condemnation award or other
compensation received in respect of any Casualty Event.
(ii) EQUITY ISSUANCE. On or prior to the date 90 days after any Equity
Issuance, the Borrower shall prepay the Loans in an aggregate amount equal
to 50% of the Net Available Proceeds thereof, such prepayment to be
effected in the manner and to the extent specified in clause (vi) below,
PROVIDED that, notwithstanding the foregoing, the Borrower shall not be
required to make a prepayment under this clause (ii) (x) from the first
$1,500,000 Net Available Proceeds during any fiscal year received from the
issuance or sale of capital stock in connection with the Employee Stock
Purchase Plan, the Long-Term Stock Incentive Plan or the Incentive Stock
Option Plan or (y) to the extent that
(A) the Borrower advises the Administrative Agent at the time of
the relevant Equity Issuance that it intends to use such Net Available
Proceeds to finance one or more Acquisitions pursuant to Section
7.03(d),
(B) such Net Available Proceeds are held by the Borrower in a
segregated investment or other account (or, alternatively, applied to
the prepayment of Revolving Loans), until so used to finance one or
more Acquisitions as contemplated above, and
(C) such Net Available Proceeds are in fact so applied to such
Acquisition(s) within 90 days of such Equity Issuance (it being
understood that, in the event Net Available Proceeds from more than
one Equity Issuance are held by the Borrower, or have been applied to
the prepayment of Revolving Loans, such Net Available Proceeds shall
be deemed to be utilized in the same order in which such Equity
Issuances occurred and, accordingly, any such Net Available Proceeds
so held or applied to the prepayment of Revolving Loans for more than
90 days shall be forthwith applied to the prepayment of Loans as
provided above),
it being understood that, if the Borrower does not so advise the
Administrative Agent that it intends to use such Net Available Proceeds to
finance one or more Acquisitions, or does not in fact apply such Net
Available Proceeds to one or more Acquisitions within the time periods
specified above, the Borrower shall immediately prepay the Loans in an
amount equal to the amount specified above.
(iii) EXCESS CASH FLOW. Not later than the date 90 days after the end
of each fiscal year of the Borrower ending on or after February 28, 1999
(unless the Debt Ratio is less than or equal to 3.00 to 1 as of the last
day thereof), the Borrower shall prepay the Loans in an aggregate amount
equal to (A) 50% of Excess Cash Flow for such fiscal year MINUS (B) the
aggregate amount of prepayments of Term Loans made during such fiscal year
pursuant to Section 2.11(a) and, after the payment in full of the Term
Loans, the aggregate amount of voluntary reductions of the Revolving
Commitments made during such fiscal year pursuant to Section 2.09(b), such
prepayment to be effected in the manner and to the extent specified in
clause (vi) of this Section.
(iv) SALE OF ASSETS. Without limiting the obligation of the Borrower
to obtain the consent of the Required Lenders to any Disposition not
otherwise permitted hereunder, in the event that the Net Available Proceeds
of any Disposition (herein, the "CURRENT DISPOSITION"), and of all prior
Dispositions as to which a prepayment has not yet been made under this
paragraph, shall exceed $15,000,000 then, no later than 180 days after the
occurrence of the Current Disposition, the Borrower will deliver to the
Lenders a statement, certified by a Financial Officer of the Borrower, in
form and detail satisfactory to the Administrative Agent, of the amount of
the Net Available Proceeds of the Current Disposition and of all such prior
Dispositions and will prepay the Loans in an aggregate amount equal to 100%
of the Net Available Proceeds of the Current Disposition and such prior
Dispositions, such prepayment to be effected in the manner and to the
extent specified in clause (vi) below, PROVIDED that, notwithstanding the
foregoing, the Borrower shall not be required to make a prepayment under
this clause (iv) to the extent that
(A) the Borrower advises the Administrative Agent at the time of
the relevant Disposition that it intends to use such Net Available
Proceeds to finance one or more Acquisitions pursuant to Section
7.03(d), or otherwise to reinvest the proceeds thereof into the
business of the Borrower and its Subsidiaries,
(B) such Net Available Proceeds are held by the Borrower in a
segregated investment or other account (or, alternatively, applied to
the prepayment of Revolving Loans), until so used to finance one or
more Acquisitions or to make such reinvestment as contemplated above,
and
(C) such Net Available Proceeds are in fact so applied to such
Acquisition(s) or reinvestment within 180 days of such Disposition (it
being understood that, in the event Net Available Proceeds from more
than one Disposition are held by the Borrower, or have been applied to
the prepayment of Revolving Loans, such Net Available Proceeds shall
be deemed to be utilized in the same order in which such Dispositions
occurred and, accordingly, any such Net Available Proceeds so held or
applied to the prepayment of Revolving Loans for more than 180 days
shall be forthwith applied to the prepayment of Loans as provided
above),
it being understood that, if the Borrower does not so advise the
Administrative Agent that it intends to use such Net Available Proceeds to
finance one or more Acquisitions or make such reinvestment, or does not in
fact apply such Net Available Proceeds to one or more Acquisitions or
reinvestments within the time periods specified above, the Borrower shall
immediately prepay the Loans in an amount equal to the amount specified
above.
Notwithstanding the foregoing, to the extent that the amount of the
required prepayment on any date is not greater than $10,000,000, the
Borrower shall not be required to make any prepayment of a Eurodollar or
Competitive Borrowing until the expiration(s) of the then-current Interest
Periods.
(v) DEBT INCURRENCE. Without limiting the obligation of the Borrower
to obtain the consent of the Required Lenders to any Debt Incurrence not
permitted hereunder, on or prior to the date 90 days after the date of any
Debt Incurrence, the Borrower shall prepay the Loans in an aggregate amount
equal to the portion of the Net Available Proceeds thereof that exceeds (in
the aggregate for all Debt Incurrences after the date hereof) $50,000,000,
such prepayment to be effected in the manner and to the extent specified in
clause (vi) below, PROVIDED that, notwithstanding the foregoing, the
Borrower shall not be required to make a prepayment under this clause (v)
to the extent that
(A) the Borrower advises the Administrative Agent at the time of
the relevant Debt Incurrence that it intends to use such Net Available
Proceeds to finance one or more Acquisitions pursuant to Section
7.03(d),
(B) such Net Available Proceeds are held by the Borrower in a
segregated investment or other account (or, alternatively, applied to
the prepayment of Revolving Loans), until so used to finance one or
more Acquisitions as contemplated above, and
(C) such Net Available Proceeds are in fact so applied to such
Acquisition(s) within 90 days of such Debt Incurrence (it being
understood that, in the event Net Available Proceeds from more than
one Debt Incurrence are held by the Borrower, or have been applied to
the prepayment of Revolving Loans, such Net Available Proceeds shall
be deemed to be utilized in the same order in which such Debt
Incurrence occurred and, accordingly, any such Net Available Proceeds
so held or applied to the prepayment of Revolving Loans for more than
90 days shall be forthwith applied to the prepayment of Loans as
provided above),
it being understood that, if the Borrower does not so advise the
Administrative Agent that it intends to use such Net Available Proceeds to
finance one or more Acquisitions, or does not in fact apply such Net
Available Proceeds to one or more Acquisitions within the time periods
specified above, the Borrower shall immediately prepay the Loans in an
amount equal to the amount specified above.
(vi) APPLICATION. Prepayments described in this Section 2.11(c) shall
be applied as follows:
FIRST, the amount of any such prepayment shall be applied to the
Term Loans allocated ratably among the Classes of Term Loans in
accordance with the respective outstanding principal amounts thereof,
each such prepayment of the Term Loans of any Class to be applied to
reduce the scheduled repayments of the Term Loan Borrowings of such
Class in reverse chronological order, and
SECOND, after the payment in full of the Term Loans, to prepay
Revolving Loans (without reduction of Revolving Commitments),
allocated ratably between Classes of Revolving Loans (and, to the
extent that there are at the time any unused Tranche II Term Loan
Commitments of any Series, such Commitments shall be concurrently
reduced in an amount equal to such prepayment of Revolving Loans).
(d) MANDATORY PREPAYMENTS -- CHANGE OF CONTROL. In the event that the
Borrower shall be required pursuant to the provisions of any instrument
evidencing or governing any Subordinated Indebtedness to redeem, or make an
offer to redeem or repurchase, all or any portion of such Subordinated
Indebtedness as a result of a change of control (however defined), then,
concurrently with the occurrence of the event giving rise to such change of
control, the Borrower shall prepay the Loans (and/or provide cover for LC
Exposure as specified in Section 2.06(k)) in full, and the Commitments shall be
automatically reduced to zero.
(e) NOTICES, ETC. The Borrower shall notify the Administrative Agent (and,
in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Syndicated Borrowing or a Competitive Bid Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before the
date of prepayment, (ii) in the case of prepayment of an ABR Syndicated
Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before the date of prepayment or (iii) in the case of prepayment of a Swingline
Loan, not later than 12:00 noon, New York City time, on the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date and
the principal amount of each Borrowing or portion thereof to be prepaid;
PROVIDED that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Revolving Commitments as contemplated
by Section 2.09, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09. Promptly following
receipt of any such notice relating to a Syndicated Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an aggregate principal amount at
least equal to $5,000,000, except as necessary to apply fully the required
amount of a mandatory prepayments. Each prepayment of a Syndicated Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent required by
Section 2.13.
SECTION 2.12. FEES.
(a) FACILITY FEES. The Borrower agrees to pay to the Administrative Agent
for the account of each Revolving Lender a facility fee, which shall accrue at
the Applicable Rate on the greater of (i) the daily average amount of the
Revolving Commitment of each Class of such Lender (whether used or unused) and
(ii) such Lender's aggregate Revolving Exposure of such Class, such fee to
accrue during the period from and including the date hereof to but excluding the
date such Revolving Commitment shall have terminated and the date the Revolving
Exposure shall have been reduced to zero.
Accrued facility fees shall be payable on each Quarterly Date and on the
date the relevant Commitments have terminated and the relevant Revolving
Exposure reduced to zero, commencing on the first such date to occur after the
date hereof; PROVIDED that any facility fees accruing after the date on which
interest on Loans of the respective Class shall be payable on demand shall
similarly be payable on demand. All facility fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) LETTER OF CREDIT FEES. The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Revolving Lender a participation
fee with respect to its participations in Letters of Credit, which shall accrue
at a rate per annum equal to the Applicable Rate applicable to interest on
Eurodollar Revolving Loans on the average daily amount of such Lender's LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender's respective Revolving
Commitments terminate and the date on which such Lender ceases to have any LC
Exposure, and (ii) to Chase, as an Issuing Lender, a fronting fee, which shall
accrue at the rate of 0.125% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements and to the Qingdao Letter of Credit) during the period from and
including the Effective Date to but excluding the date on which there ceases to
be any LC Exposure, and to each Issuing Lender, such Issuing Lender's standard
fees with respect to the issuance, amendment, renewal or extension of any Letter
of Credit or processing of drawings thereunder. Participation fees and fronting
fees accrued through and including each Quarterly Date shall be payable on the
third Business Day following such Quarterly Date, commencing on the first such
date to occur after the Effective Date; PROVIDED that all such fees shall be
payable on the date on which the respective Revolving Commitments terminate and
any such fees accruing after the date on which the respective Revolving
Commitments terminate shall be payable on demand. Any other fees payable to
either Issuing Lender pursuant to this paragraph shall be payable within 10 days
after demand. All participation fees and fronting fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
(c) ADMINISTRATIVE AGENT FEES. The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent.
(d) PAYMENT OF FEES. All fees payable hereunder shall be paid on the dates
due, in immediately available funds, to the Administrative Agent (or to the
respective Issuing Lender, in the case of fees payable to it) for distribution,
in the case of facility fees and participation fees, to the Lenders entitled
thereto. Fees paid shall not be refundable under any circumstances.
SECTION 2.13. INTEREST.
(a) ABR BORROWINGS. The Loans comprising each ABR Borrowing (other than in
respect of Swingline Loans, as to which paragraph (d) below shall apply) shall
bear interest at a rate per annum equal to the Alternate Base Rate PLUS the
Applicable Rate.
(b) EURODOLLAR BORROWINGS. The Loans comprising each Eurodollar Borrowing
shall bear interest at a rate per annum equal to (i) in the case of a Eurodollar
Syndicated Loan, the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing PLUS the Applicable Rate, or (ii) in the case of a Eurodollar
Competitive Loan, the LIBO Rate for the Interest Period in effect for such
Borrowing PLUS (or MINUS, as applicable) the Margin applicable to such Loan.
(c) FIXED RATE BORROWINGS. Each Fixed Rate Loan shall bear interest at a
rate per annum equal to the Fixed Rate applicable to such Loan.
(d) SWINGLINE BORROWINGS. Each ABR Borrowing constituting a Swingline Loan
shall bear interest at a rate per annum equal to the Alternate Base Rate PLUS
the Applicable Rate. Each Swingline Borrowing the interest on which is
determined by reference to the Federal Funds Base Rate for any Interest Period
therefor shall bear interest at a rate per annum, for each day during such
Interest Period, equal to the Federal Funds Base Rate for such period PLUS the
then-applicable "Facility Fee Rate" specified in the definition of "Applicable
Rate" in Section 1.01 PLUS the Applicable Rate PLUS .50%. Each Swingline
Borrowing the interest on which is determined at an alternate rate of interest
as contemplated in Section 2.05(b), shall bear interest at the respective
alternate rate of interest so agreed for the period so contemplated by Section
2.05(b).
(e) DEFAULT INTEREST. Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration,
by mandatory prepayment or otherwise, such overdue amount shall bear interest,
after as well as before judgment, at a rate per annum equal to (i) in the case
of overdue principal of any Loan, 2% PLUS the rate otherwise applicable to such
Loan as provided above or (ii) in the case of any other amount, 2% PLUS the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
(f) PAYMENT OF INTEREST. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and, in the case of
Revolving Loans of any Class, upon termination of the Revolving Commitments of
such Class; PROVIDED that (i) interest accrued pursuant to paragraph (e) of this
Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior
to the Maturity Date), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Syndicated Borrowing prior to
the end of the current Interest Period therefor, accrued interest on such
Borrowing shall be payable on the effective date of such conversion.
(g) COMPUTATION. All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.14. ALTERNATE RATE OF INTEREST. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period; or
(b) if such Borrowing is of a particular Class of Loans (including of
a particular Series of Tranche II Term Loans), the Administrative Agent is
advised by the Required Lenders of such Class (or, in the case of a
Eurodollar Competitive Loan, the Lender that is required to make such Loan)
that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders (or Lender) of making or maintaining their Loans (or its Loan)
included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Syndicated Borrowing to, or
continuation of any Syndicated Borrowing as, a Eurodollar Syndicated Borrowing
shall be ineffective, (ii) if any Borrowing Request requests a Eurodollar
Syndicated Borrowing, such Borrowing shall be made as an ABR Syndicated
Borrowing and (iii) any request by the Borrower for a Eurodollar Competitive
Borrowing shall be ineffective; PROVIDED that if the circumstances giving rise
to such notice do not affect all the Lenders, then requests by the Borrower for
Eurodollar Competitive Borrowings may be made to Lenders that are not affected
thereby.
SECTION 2.15. INCREASED COSTS.
(a) INCREASED COSTS GENERALLY. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or either Issuing Lender; or
(ii) impose on any Lender or either Issuing Lender or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans or Fixed Rate Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or such Issuing Lender of participating in, issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable
by such Lender or such Issuing Lender hereunder (whether of principal, interest
or otherwise), then the Borrower will pay to such Lender or such Issuing Lender,
as the case may be, such additional amount or amounts as will compensate such
Lender or such Issuing Lender, as the case may be, for such additional costs
incurred or reduction suffered.
(b) CAPITAL REQUIREMENTS. If any Lender or either Issuing Lender determines
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's or such Issuing Lender's
capital or on the capital of such Lender's or such Issuing Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by such Issuing Lender, to a level below that which such Lender or
such Issuing Lender or such Lender's or such Issuing Lender's holding company
could have achieved but for such Change in Law (taking into consideration such
Lender's or such Issuing Lender's policies and the policies of such Lender's or
such Issuing Lender's holding company with respect to capital adequacy), then
from time to time the Borrower will pay to such Lender or such Issuing Lender,
as the case may be, such additional amount or amounts as will compensate such
Lender or such Issuing Lender or such Lender's or such Issuing Lender's holding
company for any such reduction suffered.
(c) CERTIFICATES FROM LENDERS. A certificate of a Lender or either Issuing
Lender setting forth the amount or amounts necessary to compensate such Lender
or such Issuing Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such Lender or
such Issuing Lender, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) DELAY IN REQUESTS. Failure or delay on the part of any Lender or either
Issuing Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender's or such Issuing Lender's right to demand
such compensation; PROVIDED that the Borrower shall not be required to
compensate a Lender or an Issuing Lender pursuant to this Section for any
increased costs or reductions incurred more than six months prior to the date
that such Lender or such Issuing Lender, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender's or such Issuing Lender's intention to claim compensation
therefor; PROVIDED FURTHER that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect thereof.
(e) COMPETITIVE BID LOANS. Notwithstanding the foregoing provisions of this
Section, a Lender shall not be entitled to compensation pursuant to this Section
in respect of any Competitive Loan if the Change in Law that would otherwise
entitle it to such compensation shall have been publicly announced prior to
submission of the Competitive Bid pursuant to which such Loan was made.
SECTION 2.16. BREAK FUNDING PAYMENTS. In the event of (a) the payment of
any principal of any Eurodollar Loan, Fixed Rate Loan or Swingline FFBR Loan
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (b) the conversion of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto, (c) the
failure to borrow, convert, continue or prepay any Syndicated Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice is permitted to be revocable under Section 2.11(e) and is revoked in
accordance herewith), (d) the failure to borrow any Competitive Loan after
accepting the Competitive Bid to make such Loan, or (e) the assignment of any
Eurodollar Loan or Fixed Rate Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event.
In the case of a Eurodollar Loan, the loss to any Lender attributable to
any such event shall be deemed to include an amount determined by such Lender to
be equal to the excess, if any, of (i) the amount of interest that such Lender
would pay for a deposit equal to the principal amount of such Loan for the
period from the date of such payment, conversion, failure or assignment to the
last day of the then current Interest Period for such Loan (or, in the case of a
failure to borrow, convert or continue, the duration of the Interest Period that
would have resulted from such borrowing, conversion or continuation) if the
interest rate payable on such deposit were equal to the Adjusted LIBO Rate for
such Interest Period, OVER (ii) the amount of interest that such Lender would
earn on such principal amount for such period if such Lender were to invest such
principal amount for such period at the interest rate that would be bid by such
Lender (or an affiliate of such Lender) for dollar deposits from other banks in
the eurodollar market at the commencement of such period.
In the case of a Swingline FFBR Loan, the loss to the Swingline Lender
attributable to any such event shall be deemed to include an amount determined
by the Swingline Lender to be equal to the excess, if any, of (i) the Federal
Funds Base Rate for the period commencing on the date of such payment to but not
including the last day of the Interest Period for such Swingline FFBR Loan, OVER
(ii) the Federal Funds Base Rate for such Interest Period.
A certificate of any Lender setting forth any amount or amounts that such
Lender is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
SECTION 2.17. TAXES.
(a) PAYMENTS FREE OF TAXES. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; PROVIDED that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Lender (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) PAYMENT OF OTHER TAXES BY BORROWER. In addition, the Borrower shall pay
any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
(c) INDEMNIFICATION BY BORROWER. The Borrower shall indemnify the
Administrative Agent, each Lender and each Issuing Lender, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or such Issuing Lender, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or an Issuing Lender, or by the Administrative Agent on its
own behalf or on behalf of a Lender or an Issuing Lender, shall be conclusive
absent manifest error.
(d) RECEIPT FOR PAYMENTS. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) FOREIGN LENDERS. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate.
SECTION 2.18. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS,
ETC.
(a) PAYMENTS BY OBLIGORS. Each Obligor shall make each payment required to
be made by it hereunder (whether of principal, interest, fees or reimbursement
of LC Disbursements, or under Section 2.15, 2.16 or 2.17, or otherwise) or under
any other Loan Document (except to the extent otherwise provided therein) prior
to 12:00 noon, New York City time, on the date when due, in immediately
available funds, without set-off or counterclaim. Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at 270 Park Avenue, New York, New York,
except as otherwise expressly provided in the relevant Loan Document, and except
payments to be made directly to an Issuing Lender or the Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17 and 10.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day and, in the case of any payment accruing interest, interest thereon
shall be payable for the period of such extension. All payments hereunder or
under any other Loan Document (except to the extent otherwise provided therein)
shall be made in dollars.
(b) APPLICATION IF PAYMENTS INSUFFICIENT. If at any time insufficient funds
are received by and available to the Administrative Agent to pay fully all
amounts of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, to pay interest and fees then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, to pay
principal and unreimbursed LC Disbursements then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
(c) PRO RATA TREATMENT. Except to the extent otherwise provided herein: (i)
each Syndicated Borrowing of a particular Class shall be made from the relevant
Lenders, each payment of facility fee under Section 2.12 shall be made for
account of the relevant Lenders, and each termination or reduction of the amount
of the Commitments of a particular Class under Section 2.09 shall be applied to
the respective Commitments of such Class of the relevant Lenders, pro rata
according to the amounts of their respective Commitments of such Class; (ii)
Syndicated Borrowings of any Class shall be allocated pro rata among the
relevant Lenders according to the amounts of their respective Commitments of
such Class (in the case of the making of Syndicated Loans) or their respective
Loans of such Class; (iii) Syndicated Eurodollar Loans of any Class having the
same Interest Period shall be allocated pro rata among the relevant Lenders
according to the amounts of their Commitments or such Class (in the case of the
making of Loans) or their respective Loans of such Class (in the case of
conversions and continuations of Loans); (iv) each payment or prepayment of
principal of Revolving Loans or Term Loans of a particular Class by the Borrower
shall be made for account of the relevant Lenders pro rata in accordance with
the respective unpaid principal amounts of the Syndicated Loans of such Class
held by them; and (v) each payment of interest on Loans of any Class by the
Borrower shall be made for account of the relevant Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to
the respective Lenders.
(d) SHARING OF PAYMENTS BY LENDERS. If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Syndicated Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Syndicated Loans and
participations in LC Disbursements and Swingline Loans and accrued interest
thereon then due than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Syndicated Loans and participations in LC Disbursements
and Swingline Loans of other Lenders to the extent necessary so that the benefit
of all such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective
Syndicated Loans and participations in LC Disbursements and Swingline Loans;
PROVIDED that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by any Obligor pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each Obligor
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Obligor rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Obligor in the amount of such participation.
(e) PRESUMPTIONS OF PAYMENT. Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders or an Issuing Lender
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
such Issuing Lender, as the case may be, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or such
Issuing Lender, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or such Issuing Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Effective Rate.
(f) CERTAIN DEDUCTIONS BY ADMINISTRATIVE AGENT. If any Lender shall fail to
make any payment required to be made by it pursuant to Section 2.05(c), 2.06(e)
or (f), 2.07(b) or 2.18(e), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
(g) EXERCISES OF REMEDIES BY LENDERS. Anything in this Agreement to the
contrary notwithstanding (including Section 10.08), each Lender hereby agrees
with each other Lender that no Lender shall take any action to protect or
enforce its rights arising out of this Agreement (including, without limitation,
exercising any rights of off-set) without first obtaining the prior written
consent of the Administrative Agent or the Required Lenders, it being the intent
of the Lenders that any such action to protect or enforce rights under this
Agreement shall be taken in concert and at the direction or with the consent of
the Administrative Agent or the Required Lenders and not individually by a
single Lender.
SECTION 2.19. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) DESIGNATION OF DIFFERENT LENDING OFFICE. If any Lender requests
compensation under Section 2.15, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.17, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) REPLACEMENT OF LENDERS. If any Lender requests compensation under
Section 2.15, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.17, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 10.04), all its interests, rights and obligations under
this Agreement (other than any outstanding Competitive Loans held by it) to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, each Issuing Lender and the
Swingline Lender), which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans (other than Competitive Loans) and participations in LC
Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.15 or payments required
to be made pursuant to Section 2.17, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
ARTICLE III
GUARANTEE
SECTION 3.01 GUARANTEE. The Subsidiary Guarantors hereby jointly and
severally guarantee to each Lender and the Administrative Agent and their
respective successors and assigns the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of the principal of and
interest on the Loans made by the Lenders to the Borrower, all indebtedness of
the Borrower to any of the Lenders (or any affiliate thereof) in respect of
Hedging Agreements, and all other amounts from time to time owing to the Lenders
or the Administrative Agent by the Borrower under this Agreement and by any
Obligor under any of the other Loan Documents, in each case strictly in
accordance with the terms hereof and thereof (such obligations being herein
collectively called the "GUARANTEED OBLIGATIONS"). The Subsidiary Guarantors
hereby further jointly and severally agree that if the Borrower shall fail to
pay in full when due (whether at stated maturity, by acceleration or otherwise)
any of the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay
the same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.
SECTION 3.02 OBLIGATIONS UNCONDITIONAL. The obligations of the Subsidiary
Guarantors under Section 3.01 are absolute and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or enforceability
of the obligations of the Borrower under this Agreement or any other agreement
or instrument referred to herein or therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section that the obligations of the Subsidiary
Guarantors hereunder shall be absolute and unconditional, joint and several,
under any and all circumstances. In full recognition and in furtherance of the
foregoing, each Subsidiary Guarantor agrees that:
(a) Without affecting the enforceability or effectiveness of Section
3.01 in accordance with its terms and without affecting, limiting,
reducing, discharging or terminating the liability of such Subsidiary
Guarantor, or the rights, remedies, powers and privileges of the
Administrative Agent and the Lenders under this Agreement or any other
agreement or instrument referred to herein or therein, the Administrative
Agent and the Lenders may, at any time and from time to time and without
notice or demand of any kind or nature whatsoever:
(i) amend, supplement, modify, extend, renew, waive, accelerate
or otherwise change the time for payment or performance of, or the
terms of, all or any part of the Guaranteed Obligations (including any
increase or decrease in the rate or rates of interest on all or any
part of the Guaranteed Obligations);
(ii) amend, supplement, modify, extend, renew, waive or otherwise
change, or enter into or give, any Loan Document or any agreement,
security document, guarantee, approval, consent or other instrument
with respect to all or any part of the Guaranteed Obligations, any
Loan Document or any such other instrument or any term or provision of
the foregoing (it being understood that this clause (ii) shall not be
deemed to constitute a consent by any Subsidiary Guarantor to any such
amendment with respect to any Loan Document to which it is a party);
(iii) accept or enter into new or additional agreements, security
documents, guarantees (including letters of credit) or other
instruments in addition to, in exchange for or relative to any Loan
Document, all or any part of the Guaranteed Obligations or any
collateral now or in the future serving as security for the Guaranteed
Obligations;
(iv) accept or receive (including from any other Subsidiary
Guarantor) partial payments or performance on the Guaranteed
Obligations (whether as a result of the exercise of any right, remedy,
power or privilege or otherwise);
(v) accept, receive and hold any additional collateral for all or
any part of the Guaranteed Obligations (including from any other
Guarantor);
(vi) release, reconvey, terminate, waive, abandon, allow to lapse
or expire, fail to perfect, subordinate, exchange, substitute,
transfer, foreclose upon or enforce any collateral, security documents
or guarantees (including Letters of Credit or the obligations of any
other Subsidiary Guarantor) for or relative to all or any part of the
Guaranteed Obligations;
(vii) apply any collateral or the proceeds of any collateral or
guarantee (including any Letter of Credit or the obligations of any
other Subsidiary Guarantor) to all or any part of the Guaranteed
Obligations in such manner and extent as the Administrative Agent or
any Lender may in its discretion determine;
(viii) release any Person (including any other Subsidiary
Guarantor) from any personal liability with respect to all or any part
of the Guaranteed Obligations;
(ix) settle, compromise, release, liquidate or enforce upon such
terms and in such manner as the Administrative Agent or the Lenders
may determine or as applicable law may dictate all or any part of the
Guaranteed Obligations or any collateral on or guarantee (including
any Letter of Credit issued with respect to) of all or any part of the
Guaranteed Obligations;
(x) consent to the merger or consolidation of, the sale of
substantial assets by, or other restructuring or termination of the
corporate existence of the Borrower or any other Person (including any
other Subsidiary Guarantor);
(xi) proceed against the Borrower, such or any other Subsidiary
Guarantor or any other guarantor of (including any issuer of any
letter of credit issued with respect to) all or any part of the
Guaranteed Obligations or any collateral provided by any Person and
exercise the right, remedies, powers and privileges of the
Administrative Agent and the Lenders under this Agreement or any other
agreement or instrument referred to herein or therein, or otherwise in
such order and such manner as the Administrative Agent or any Lender
may, in its discretion, determine, without any necessity to proceed
upon or against or exhaust any collateral, right, remedy, power or
privilege before proceeding to call upon or otherwise enforce Section
3.01 as to any Subsidiary Guarantor;
(xii) foreclose upon any deed of trust, mortgage or other
instrument creating or granting liens on any interest in real property
by judicial or nonjudicial sale or by deed in lieu of foreclosure, bid
any amount or make no bid in any foreclosure sale or make any other
election of remedies with respect to such liens or exercise any right
of set-off;
(xiii) obtain the appointment of a receiver with respect to any
collateral for all or any part of the Guaranteed Obligations and apply
the proceeds of such receivership as the Administrative Agent or any
Lender may in its discretion determine (it being agreed that nothing
in this clause (xiii) shall be deemed to make the Administrative Agent
or any Lender a party in possession in contemplation of law, except at
its option);
(xiv) enter into such other transactions or business dealings
with any other Subsidiary Guarantor, the Borrower, any Subsidiary or
Affiliate of the Borrower or any other guarantor of all or any part of
the Guaranteed Obligations as the Administrative Agent or any Lender
may desire; and
(xv) do all or any combination of the actions set forth in this
Section.
(b) The enforceability and effectiveness of this Article and the
liability of the Subsidiary Guarantors, and the rights remedies, powers and
privileges of the Administrative Agent and the Lenders, under this
Agreement or any other agreement or instrument referred to herein or
therein, shall not be affected, limited, reduced, discharged or terminated,
and each Subsidiary Guarantor hereby expressly waives any defense now or in
the future arising, by reason of:
(i) the illegality, invalidity, irregularity, authenticity, or
unenforceability of all or any part of the Guaranteed Obligations,
this Agreement or any other agreement or instrument referred to herein
or therein, or any agreement, security document, guarantee or other
instrument relative to all or any part of the Guaranteed Obligations;
(ii) any disability or other defense of the Borrower or any other
Subsidiary Guarantor with respect to all or any part of the Guaranteed
Obligations or any other guarantor of all or any part of the
Guaranteed Obligations (including any issuer of any letters of
credit), including the effect of any statute of limitations that may
bar the enforcement of all or any part of the Guaranteed Obligations
or the obligations of any such other guarantor;
(iii) the illegality, invalidity, irregularity, authenticity or
unenforceability of any security or guarantee (including any letter of
credit) for all or any part of the Guaranteed Obligations or the lack
of perfection or continuing perfection or failure of the priority of
any lien on any collateral for all or any part of the Guaranteed
Obligations;
(iv) the cessation, for any cause whatsoever, of the liability of
the Borrower or any other Subsidiary Guarantor (other than subject to
Section 3.05, by reason of the full payment and performance of all
Guaranteed Obligations);
(v) any failure of the Administrative Agent or any Lender to
marshall assets in favor of the Borrower or any other Person
(including any other Subsidiary Guarantor), to exhaust any collateral
for all or any part of the Guaranteed Obligations, to pursue or
exhaust any right, remedy, power or privilege it may have against any
other Subsidiary Guarantor, the Borrower, any other guarantor, all or
any part of the Guaranteed Obligations (including either Issuing
Lender in respect of Letters of Credit) or any other Person or to take
any action whatsoever to mitigate or reduce such or any other
Subsidiary Guarantor's liability under this Article, neither the
Administrative Agent nor any Lender being under any obligation to take
any such action notwithstanding the fact that all or any part of the
Guaranteed Obligations may be due and payable and that the Borrower
may be in default of its obligations under this Agreement or any other
agreement or instrument referred to herein or therein;
(vi) any failure of the Administrative Agent or any Lender to
give notice after any Default of sale or other disposition of any
collateral (including any notice of any judicial or nonjudicial
foreclosure or sale of any interest in real property serving as
collateral for all or any part of the Guaranteed Obligations) for all
or any part of the Guaranteed Obligations to the Borrower, any
Subsidiary Guarantor or any other Person or any defect in, or any
failure by any Subsidiary Guarantor or any other Person to receive,
any notice that may be given in connection with any sale or
disposition of any collateral;
(vii) any failure of the Administrative Agent or any Lender to
comply with applicable laws in connection with the sale or other
disposition of any collateral for all or any part of the Guaranteed
Obligations, including any failure to conduct a commercially
reasonable sale or other disposition of any collateral for all or any
part of the Guaranteed Obligations;
(viii) any judicial or nonjudicial foreclosure or sale of, or
other election of remedies with respect to, any interest in real
property or other collateral serving as security for all or any part
of the Guaranteed Obligations, even though such foreclosure, sale or
election of remedies may impair the subrogation rights of any
Subsidiary Guarantor or may preclude any Subsidiary Guarantor from
obtaining reimbursement, contribution, indemnification or other
recovery from any other Subsidiary Guarantor, the Borrower any other
guarantor or any other Person and even though the Borrower may not, as
a result of such foreclosure, sale or election of remedies, be liable
for any deficiency;
(ix) any benefits the Borrower, any Subsidiary Guarantor or any
other guarantor may otherwise derive from Sections 580(a), 580(b),
580(d) or 726 of the California Code of Civil Procedure or any
comparable provisions of the laws of any other jurisdiction;
(x) any act or omission of the Administrative Agent, any Lender
or any other person that directly or indirectly results in or aids the
discharge or release of the Borrower or any other Subsidiary
Guarantor, of all or any part of the Guaranteed Obligations or any
security or guarantee (including any letter of credit) for all or any
part of the Guaranteed Obligations by operation of law or otherwise;
(xi) any law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other respects more
burdensome than that of the principal or which reduces a surety's
principal obligation;
(xii) the possibility that the obligations of the Borrower to the
Administrative Agent and the Lenders may at any time and from time to
time exceed the aggregate liability of the Subsidiary Guarantors under
this Article;
(xiii) any counterclaim, set-off or other claim which the
Borrower or any other Subsidiary Guarantor has or alleges to have with
respect to all or any part of the Guaranteed Obligations;
(xiv) any failure of the Administrative Agent or any Lender to
file or enforce a claim in any bankruptcy or other proceeding with
respect to any Person;
(xv) the election by the Administrative Agent or any Lender, in a
bankruptcy proceeding of any Person, of the application or
nonapplication of Section 1111(b)(2) of the United States Bankruptcy
Code;
(xvi) any extension of credit or the grant of any lien under
Section 364 of the United States Bankruptcy Code;
(xvii) any use of cash collateral under Section 363 of the United
States Bankruptcy Code;
(xviii) any agreement or stipulation with respect to the
provision of adequate protection in any bankruptcy proceeding of any
Person;
(xix) the avoidance of any lien in favor of the Administrative
Agent or any Lender for any reason;
(xx) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced
by or against any Person, including any discharge of, or bar or stay
against collecting, all or any part of the Guaranteed Obligations (or
any interest on all or any part of the Guaranteed Obligations) in or
as a result of any such proceeding;
(xxi) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or
guarantor, including by reason of Sections 2809, 2810, 2819, 2839,
2845, 2850, 2899, 3275 and 3433 of the California Civil Code, and any
future judicial decisions or legislation or of any comparable
provisions of the laws of any other jurisdiction; or
(xxiii) diligence, presentment, demand of payment, protest and
all notices whatsoever.
(c) Each Subsidiary Guarantor represents and warrants to the
Administrative Agent that it has established adequate means of obtaining
financial and other information pertaining to the business, operations and
condition (financial and otherwise) of the Borrower and its properties on a
continuing basis and that such Subsidiary Guarantor is now and will in the
future remain fully familiar with the business, operations and condition
(financial and otherwise) of the Borrower and its properties. Each
Subsidiary Guarantor further represents and warrants that it has reviewed
and approved this Agreement and the related Loan Documents and is fully
familiar with the transactions contemplated by such Loan Documents and that
it will in the future remain fully familiar with such transaction and with
any new Loan Documents and the transaction contemplated by such Loan
Documents. Each Subsidiary Guarantor hereby expressly waives and
relinquishes any duty on the part of the Administrative Agent or the
Lenders (should any such duty exist) to disclose to such or any other
Subsidiary Guarantor any matter of fact or other information related to the
business, operations or condition (financial or otherwise) of the Borrower
or its properties or to any Loan Documents or the transactions undertaken
pursuant to, or contemplated by, such Loan Documents, whether now or in the
future known by the Administrative Agent or any Lender.
SECTION 3.03 REINSTATEMENT. The obligations of the Subsidiary Guarantors
under this Article shall be automatically reinstated if and to the extent that
for any reason any payment by or on behalf of the Borrower in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise and the Subsidiary Guarantors jointly
and severally agree that they will indemnify the Administrative Agent and each
Lender on demand for all reasonable costs and expenses (including, without
limitation, fees of counsel) incurred by the Administrative Agent or such Lender
in connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
SECTION 3.04 SUBROGATION. Each Subsidiary Guarantor hereby waives all
rights of subrogation or contribution, whether arising by contract or operation
of law (including, without limitation, any such right arising under the Federal
Bankruptcy Code) or otherwise by reason of any payment by it pursuant to the
provisions of this Article and further agrees with the Borrower for the benefit
of each of its creditors (including, without limitation, each Lender and the
Administrative Agent) that any such payment by it shall, to the fullest extent
permitted by law, constitute a dividend on the common stock of such Subsidiary
Guarantor owned by the Borrower or a return of capital paid by such Subsidiary
Guarantor to the Borrower and, otherwise, an investment in the equity capital of
the Borrower by such Subsidiary Guarantor. Each Subsidiary Guarantor understands
that, by reason of the foregoing provisions of this Section, the exercise by the
Administrative Agent or any Lender of the rights, remedies, powers and
privileges that it has under this Article and under the other Loan Documents
will result in nonreimbursable liabilities under this Agreement. Nevertheless,
each Subsidiary Guarantor hereby authorizes and empowers the Administrative
Agent and the Lenders to exercise, in its or their sole discretion, any
combination of such rights, remedies, powers and privileges as they, in their
sole discretion, shall deem appropriate.
SECTION 3.05 REMEDIES. The Subsidiary Guarantors jointly and severally
agree that, as between the Subsidiary Guarantors and the Lenders, the
obligations of the Borrower under this Agreement may be declared to be forthwith
due and payable as provided in Article VIII (and shall be deemed to have become
automatically due and payable in the circumstances provided in Article VIII) for
purposes of Section 3.01 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Borrower) shall forthwith become due and payable by the Subsidiary Guarantors
for purposes of Section 3.01.
SECTION 3.06 CONTINUING GUARANTEE. The guarantee in this Article is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
SECTION 3.07 LIMITATION ON GUARANTEE OBLIGATIONS. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 3.01 would otherwise be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under Section 3.01, then, notwithstanding any
other provision hereof to the contrary, the amount of such liability shall,
without any further action by such Subsidiary Guarantor, any Lender, the
Administrative Agent or any other Person, be automatically limited and reduced
to the highest amount which is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 4.01. ORGANIZATION; POWERS. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 4.02. AUTHORIZATION; ENFORCEABILITY. The Transactions are within
each Obligor's corporate powers and have been duly authorized by all necessary
corporate and, if required, by all necessary shareholder action. This Agreement
has been duly executed and delivered by each Obligor and constitutes, and each
of the other Loan Documents to which it is a party when executed and delivered
by such Obligor will constitute, a legal, valid and binding obligation of such
Obligor, enforceable against each Obligor in accordance with its terms, except
as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors' rights and (b) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 4.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except for (i) such as have been
obtained or made and are in full force and effect and (ii) filings and
recordings in respect of the Liens created pursuant to the Security Documents,
(b) will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any of its Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon the Borrower or
any of its Subsidiaries or assets, or give rise to a right thereunder to require
any payment to be made by any such Person, and (d) except for the Liens created
pursuant to the Security Documents, will not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 4.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders' equity and cash flows (i)
as of and for the fiscal year ended February 28, 1997, reported on by Arthur
Andersen LLP, independent public accountants, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended August 31, 1997, certified by
its chief financial officer. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of the Borrower and its Consolidated Subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to year-end audit adjustments and
the absence of footnotes in the case of the statements referred to in clause
(ii) of the first sentence of this paragraph.
(b) Since February 28, 1997, there has been no material adverse change in
the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and its Consolidated Subsidiaries, taken as a whole.
SECTION 4.05. PROPERTIES.
(a) Each of the Borrower and its Subsidiaries has good title to, or valid
leasehold interests in, all its real and personal Properties material to its
business, subject only to Liens permitted by Section 7.02 and except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such Properties for their intended
purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 4.06. LITIGATION.
(a) There are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority now pending against or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect (other than
the Disclosed Matters) or (ii) that involve this Agreement or the Transactions.
(b) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 4.07. ENVIRONMENTAL MATTERS. Each of the Borrower and its
Subsidiaries has obtained all environmental, health and safety permits, licenses
and other authorizations required under all Environmental Laws to carry on its
business as now being or as proposed to be conducted, except as set forth in
Schedule III hereto and except to the extent failure to have any such permit,
license or authorization would not (either individually or in the aggregate)
have a Material Adverse Effect. Each of such permits, licenses and
authorizations is in full force and effect and each of the Borrower and its
Subsidiaries is in compliance with the terms and conditions thereof, and is also
in compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except as set forth in Schedule III hereto
and except to the extent failure to comply therewith would not (either
individually or in the aggregate) have a Material Adverse Effect.
In addition, except as set forth in Schedule III:
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by the Borrower or any of its Subsidiaries to have any
environmental, health or safety permit, license or other authorization
required under any Environmental Law in connection with the conduct of the
business of the Borrower or any of its Subsidiaries or with respect to any
generation, treatment, storage, recycling, transportation, discharge or
disposal, or any Release of any Hazardous Materials generated by the
Borrower or any of its Subsidiaries, in each case in circumstances which
may reasonably be expected to have a Material Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries owns, operates or
leases a treatment, storage or disposal facility requiring a permit under
the Resource Conservation and Recovery Act of 1976, as amended, or under
any comparable state or local statute; and
(i) no polychlorinated biphenyls (PCB's) are or have been present
at any site or facility now or previously owned, operated or leased by
the Borrower or any of its Subsidiaries;
(ii) no asbestos or asbestos-containing materials is or has been
present at any site or facility now or previously owned, operated or
leased by the Borrower or any of its Subsidiaries;
(iii) there are no underground storage tanks or surface
impoundments for Hazardous Materials, active or abandoned, at any site
or facility now or previously owned, operated or leased by the
Borrower or any of its Subsidiaries;
(iv) no Hazardous Materials have been Released at, on or under
any site or facility now or previously owned, operated or leased by
the Borrower or any of its Subsidiaries in a reportable quantity
established by statute, ordinance, rule, regulation or order; and
(v) no Hazardous Materials have been otherwise Released at, on or
under any site or facility now or previously owned, operated or leased
by the Borrower or any of its Subsidiaries;
that, in the case of any of clauses (i) through (v) above, may reasonably
be expected to have a Material Adverse Effect.
(c) Neither the Borrower nor any of its Subsidiaries has transported
or arranged for the transportation of any Hazardous Material to any
location that is listed on the National Priorities List ("NPL") under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), listed for possible inclusion on the NPL by
the Environmental Protection Agency in the Comprehensive Environmental
Response and Liability Information System, as provided for by 40 C.F.R.
Section 300.5 ("CERCLIS"), or on any similar state or local list or that is
the subject of Federal, state or local enforcement actions or other
investigations that may lead to Environmental Claims in a material amount
against the Borrower or any of its Subsidiaries.
(d) No oral or written notification of a Release of a Hazardous
Material has been filed by or on behalf of the Borrower or any of its
Subsidiaries and no site or facility now or previously owned, operated or
leased by the Borrower or any of its Subsidiaries is listed or proposed for
listing on the NPL, CERCLIS or any similar state list of sites requiring
investigation or clean-up.
(e) No Liens have arisen under or pursuant to any Environmental Laws
on any site or facility owned, operated or leased by the Borrower or any of
its Subsidiaries, and no government action has been taken or is in process
that could subject any such site or facility to such Liens and neither the
Borrower nor any of its Subsidiaries would be required to place any notice
or restriction relating to the presence of Hazardous Materials at any site
or facility owned by it in any deed to the real Property on which such site
or facility is located.
(f) All environmental investigations, studies, audits, tests, reviews
or other analyses conducted by or that are in the possession of the
Borrower or any of its Subsidiaries in relation to facts, circumstances or
conditions at or affecting any site or facility now or previously owned,
operated or leased by the Borrower or any of its Subsidiaries and that
could result in a Material Adverse Effect have been made available to the
Lenders.
SECTION 4.08. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the Borrower and
its Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its Property and all indentures,
agreements and other instruments binding upon it or its Property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 4.09. INVESTMENT AND HOLDING COMPANY STATUS. Neither the Borrower
nor any of its Subsidiaries is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 4.10. TAXES. Each of the Borrower and its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which such Person has set aside on its books adequate
reserves or (b) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.11. ERISA. The Borrower and its ERISA Affiliates have fulfilled
their respective obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and are in compliance in all material
respects with the presently applicable provisions of ERISA and the Code, and
have not incurred any liability to the PBGC or any Plan or Multiemployer Plan
(other than to make contributions, pay annual PBGC premiums or pay out benefits
in the ordinary course of business).
SECTION 4.12. DISCLOSURE. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of the Obligors to the Lender in
connection with the negotiation of this Agreement and the other Loan Documents
or delivered hereunder or thereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
SECTION 4.13. USE OF CREDIT. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of
any extension of credit hereunder will be used to buy or carry any Margin Stock.
SECTION 4.14. MATERIAL AGREEMENTS AND LIENS.
(a) Part A of Schedule II is a complete and correct list of each credit
agreement, loan agreement, indenture, purchase agreement, guarantee, letter of
credit or other arrangement providing for or otherwise relating to any
Indebtedness or any extension of credit (or commitment for any extension of
credit) to, or guarantee by, the Borrower or any of its Subsidiaries outstanding
on the date hereof the aggregate principal or face amount of which equals or
exceeds (or may equal or exceed) $200,000, and the aggregate principal or face
amount outstanding or that may become outstanding under each such arrangement is
correctly described in Part A of Schedule II.
(b) Part B of Schedule II is a complete and correct list of each Lien
securing Indebtedness of any Person outstanding on the date hereof the aggregate
principal or face amount of which equals or exceeds (or may equal or exceed)
$250,000 and covering any Property of the Borrower or any of its Subsidiaries,
and the aggregate Indebtedness secured (or that may be secured) by each such
Lien and the Property covered by each such Lien is correctly described in Part B
of Schedule II.
SECTION 4.15. CAPITALIZATION. The authorized capital stock of the Borrower
consists, as at November 30, 1997, of an aggregate of 81,000,000 shares
consisting of (i) 60,000,000 shares of Class A common stock, par value $.01 per
share, of which 15,377,187 shares are duly and validly issued and outstanding
and 2,199,320 shares are issued and held in treasury, each of which shares is
fully paid and nonassessable, (ii) 20,000,000 shares of Class B common stock,
par value $.01 per share, of which 3,330,458 shares are duly and validly issued
and outstanding and 625,725 shares are issued and held in treasury, each of
which shares is fully paid and nonassessable and (iii) 1,000,000 shares of
preferred stock, par value $.01 per share, none of which are issued or are
outstanding.
As at November 30, 1997, 12.13% of such issued and outstanding shares of
Class A common stock and 85.22% of such issued and outstanding shares of Class B
common stock are owned beneficially and of record by (i) Marvin Sands, his
spouse, his children or his grandchildren, (ii) trusts which are for the benefit
of Marvin Sands, his spouse, his children or his grandchildren or Andrew Stern,
which trusts are under the control of Marvin Sands, his spouse, his children or
his grandchildren or (iii) partnerships which are controlled by (and a majority
in interest of the partnership interests in which are owned by) Marvin Sands,
his spouse, his children, his grandchildren, by a trust referred to in the
foregoing clause (ii) or by a partnership that satisfies the conditions of this
clause (iii). The percentage of Class A common stock set forth above does not
include shares of Class A common stock (i) that may be acquired by Marvin Sands
or his children through the exercise of any stock options or (ii) issuable
pursuant to the conversion feature of the Class B common stock owned
beneficially and of record by any of the persons, trusts and partnerships
referred to in the foregoing clauses (i), (ii) and (iii).
As of the date hereof, (x) except for conversion rights associated with the
Class B common stock, purchase rights associated with the Employee Stock
Purchase Plan, options associated with the Long-Term Stock Incentive Plan and
options listed on Schedule V hereto, there are no outstanding Equity Rights with
respect to the Borrower and (y) there are no outstanding obligations of the
Borrower or any of its Subsidiaries to repurchase, redeem, or otherwise acquire
any shares of capital stock of the Borrower nor, are there any outstanding
obligations of the Borrower or any of its Subsidiaries to make payments to any
Person, such as "phantom stock" payments, where the amount thereof is calculated
with reference to the fair market value or equity value of the Borrower or any
Subsidiary. The Borrower has heretofore delivered to the Administrative Agent a
complete and correct copy of the Employee Stock Purchase Plan, the Long-Term
Stock Incentive Plan and the Incentive Stock Option Plan, each as in effect on
the date hereof.
SECTION 4.16. SUBSIDIARIES AND INVESTMENTS, ETC.
(a) Set forth in Part A of Schedule IV is a complete and correct list of
all of the Subsidiaries of the Borrower as of the date hereof, together with,
for each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and
(iii) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Part A of Schedule IV, (x) each of the
Borrower and its Subsidiaries owns, free and clear of Liens (other than Liens
created pursuant to the Security Documents), and has the unencumbered right to
vote, all outstanding ownership interests in each Person shown to be held by it
in Part A of Schedule IV, (y) all of the issued and outstanding capital stock of
each such Person organized as a corporation is validly issued, fully paid and
nonassessable and (z) there are no outstanding Equity Rights with respect to
such Person.
(b) Set forth in Part B of Schedule IV is a complete and correct list of
all Investments (other than Investments disclosed in Part A of Schedule IV and
other than Investments of the types referred to in clauses (b), (c), (e) or (g)
of Section 7.04) held by the Borrower or any of its Subsidiaries in any Person
on the date hereof and, for each such Investment, (x) the identity of the Person
or Persons holding such Investment and (y) the nature of such Investment. Except
as disclosed in Part B of Schedule IV, each of the Borrower and its Subsidiaries
owns, free and clear of all Liens (other than Liens created pursuant to the
Security Documents), all such Investments.
(c) None of the Subsidiaries of the Borrower is, on the date hereof,
subject to any indenture, agreement, instrument or other arrangement of the type
described in Section 7.07 (and not permitted by clauses (i) through (v) of said
Section).
SECTION 4.17. REAL PROPERTY. Except with respect to leased space which does
not cost in excess of $25,000 per month in rental expense, set forth in Schedule
VI is a list, as of the date of this Agreement, of all the real Property
interests held by the Borrower and its Subsidiaries, indicating in each case
whether the respective Property is owned or leased, the identity of the owner or
lessee and the location of the respective Property.
ARTICLE V
CONDITIONS
SECTION 5.01. EFFECTIVE DATE. The obligations of the Lenders to make Loans
and of the Issuing Lenders to issue Letters of Credit hereunder shall not become
effective until the date on which the Administrative Agent shall have received
each of the following documents, each of which shall be satisfactory to the
Administrative Agent (and to the extent specified below, to each Lender) in form
and substance (or such condition shall have been waived in accordance with
Section 10.02):
(a) EXECUTED COUNTERPARTS. From each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement.
(b) OPINION OF COUNSEL TO THE OBLIGORS. Favorable written opinions
(addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of (i) Nixon, Hargrave, Devans & Doyle LLP, counsel for the
Obligors, substantially in the form of Exhibit D-1, (ii) Landels, Ripley
and Diamond, LLP, special California counsel for the Obligors,
substantially in the form of Exhibit D-2 and (iii) Fulton, Hubbard &
Hubbard, special Kentucky counsel for the Obligors, substantially in the
form of Exhibit D-3, and in each case covering such other matters relating
to the Obligors, this Agreement, any other Loan Document or the
Transactions as the Required Lenders shall reasonably request (and each
Obligor hereby requests each such counsel to deliver such opinion to the
Lenders).
(c) OPINION OF SPECIAL NEW YORK COUNSEL TO CHASE. An opinion, dated
the Effective Date, of Milbank, Tweed, Hadley & McCloy, special New York
counsel to Chase, substantially in the form of Exhibit E (and Chase hereby
instructs such counsel to deliver such opinion to the Lenders).
(d) CORPORATE DOCUMENTS. Such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each Obligor, the
authorization of the Transactions and any other legal matters relating to
the Obligors, this Agreement or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.
(e) OFFICER'S CERTIFICATE. A certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of the
Borrower, confirming compliance with the conditions set forth in the
lettered clauses of the first sentence of Section 5.03.
(f) SECURITY AGREEMENT. The Security Agreement, duly executed and
delivered by the Borrower, the Subsidiary Guarantors and the Administrative
Agent and the certificates identified under the name of such Obligor in
Annex 1 thereto, in each case accompanied by undated stock powers executed
in blank. In addition, each Obligor shall have taken such other action
(including, without limitation, delivering to the Administrative Agent, for
filing, appropriately completed and duly executed copies of Uniform
Commercial Code financing statements) as the Administrative Agent shall
have requested in order to perfect the security interests created pursuant
to the Security Agreement.
(g) MORTGAGES; TITLE INSURANCE; ETC.. The following documents each of
which shall be executed (and, where appropriate, acknowledged) by Persons
satisfactory to the Administrative Agent:
(i) with respect to each Mortgage, an instrument of Modification
and Confirmation pursuant to which such Mortgage shall have been
amended in form and substance satisfactory to the Administrative Agent
to spread the Lien thereof to secure the obligations under this
Agreement, in each case duly executed, acknowledged and delivered by
the respective parties thereto, in recordable form (in such number of
copies as the Administrative Agent shall have requested); and
(ii) mortgagee down-date continuation reports for existing title
policies issued pursuant to the Existing Credit Agreement, subject
only to such exceptions as are satisfactory to each Lender and, to the
extent necessary under applicable law, for filing in the appropriate
county land offices, Uniform Commercial Code financing statements
covering fixtures, in each case appropriately completed and duly
executed.
In addition, the Borrower shall have paid to the respective title companies
all expenses of such title companies in connection with the issuance of the
down-date continuation reports and in addition shall have paid to such
title companies an amount equal to the recording and stamp taxes payable in
connection with recording the respective instruments of Modification and
Confirmation in the appropriate county land offices.
(h) INSURANCE. Certificates of insurance evidencing the existence of
all insurance required to be maintained by the Borrower pursuant to Section
6.05(b) and the designation of the Administrative Agent as the loss payee
or additional named insured, as the case may be, thereunder to the extent
required by Section 6.05(b), such certificates to be in such form and
contain such information as is specified in Section 6.05(b). In addition,
the Borrower shall have delivered (i) a certificate of a Financial Officer
of the Borrower setting forth the insurance obtained by it in accordance
with the requirements of Section 6.05(b) and stating that such insurance is
in full force and effect and that all premiums then due and payable thereon
have been paid and (ii) a written report, dated reasonably near the
Effective Date, of Johnson & Higgins and Accordia of the South, Inc., or
any other firm of independent insurance brokers of nationally recognized
standing, as to such insurance and stating that, in their opinion, such
insurance adequately protects the interests of the Administrative Agent and
the Lenders and is in compliance with the provisions of Section 6.05(b).
(i) ENVIRONMENTAL MATTERS. An environmental risk questionnaire with
respect to each of the existing sites and facilities that are owned,
operated or leased by the Borrower or any of its Subsidiaries and covered
by environmental surveys and assessments delivered pursuant to the Existing
Credit Agreement, and such environmental questionnaire (containing such
inquiries with respect to environmental matters as shall have been
requested by any Lender), and the responses thereto, shall be in form and
substance satisfactory to the Administrative Agent. In addition if
requested by any Lender, the Borrower shall have provided to the
Administrative Agent an environmental assessment prepared by a firm of
environmental consultants (familiar with the identification of toxic and
hazardous substances), in form and substance satisfactory to the
Administrative Agent, based upon physical on-site inspections by such firm
of the existing sites and facilities owned, operated or leased by the
Borrower or any of its Subsidiaries, as well as a historical review of the
uses of such sites and facilities and of the business and operations of the
Borrower or any of its Subsidiaries (including any former Subsidiaries or
divisions of the Borrower or any of its Subsidiaries that have been
disposed prior to the date of the assessment and with respect to which the
Borrower or any of its Subsidiaries may have retained liability for
Environmental Claims).
(j) SOLVENCY ANALYSIS. A certificate from the chief financial officer
of the Borrower to the effect that, as of the Effective Date and after
giving effect to the initial extension of credit hereunder and to the other
transactions contemplated hereby, (i) the aggregate value of all Properties
of the Borrower and its Subsidiaries at their present fair saleable value
(I.E., the amount which may be realized within a reasonable time,
considered to be six months to one year, either through collection or sale
at the regular market value, conceiving the latter as the amount which
could be obtained for the Property in question within such period by a
capable and diligent business person from an interested buyer who is
willing to purchase under ordinary selling conditions), exceeds the amount
of all the debts and liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities) of the Borrower and its
Subsidiaries, (ii) the Borrower and its Subsidiaries will not, on a
consolidated basis, have an unreasonably small capital with which to
conduct their business operations as heretofore conducted and (iii) the
Borrower and its Subsidiaries will have, on a consolidated basis,
sufficient cash flow to enable them to pay their debts as they mature.
(k) REPAYMENT OF EXISTING CREDIT AGREEMENT. Evidence that the
principal of and interest on, and all other amounts owing in respect of,
the Indebtedness (other than in respect of letters of credit which, as
provided in Section 2.06(l) are to become Letters of Credit hereunder)
under the Existing Credit Agreement shall have been (or shall be
simultaneously) paid in full, that any commitments to extend credit
thereunder shall have been (or shall be simultaneously) canceled or
terminated and that all Guarantees in respect of, and all Liens securing,
any such Indebtedness shall have been assigned or transferred to the
Administrative Agent hereunder (or arrangements for such assignment or
transfer satisfactory to the Administrative Agent shall have been made).
(l) OTHER DOCUMENTS. Such other documents as the Administrative Agent
or any Lender or special New York counsel to Chase may reasonably request.
The obligation of any Lender to make its initial extension of credit
hereunder is also subject to the payment by the Borrower of such fees as the
Borrower shall have agreed to pay to any Lender or the Administrative Agent in
connection herewith, including the reasonable fees and expenses of Milbank,
Tweed, Hadley & McCloy, special New York counsel to Chase, in connection with
the negotiation, preparation, execution and delivery of this Agreement and the
other Loan Documents and the extensions of credit hereunder (to the extent that
statements for such fees and expenses have been delivered to the Borrower).
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Lenders to issue Letters of Credit hereunder shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to Section
10.02) on or prior to 3:00 p.m., New York City time, on December 31, 1997 (and,
in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time).
SECTION 5.02. SPECIAL CONDITIONS FOR TRANCHE II TERM LOAN BORROWINGS. The
obligation of each Lender to make a Tranche II Term Loan of any Series on the
occasion of any Tranche II Term Loan Borrowing is subject to the satisfaction of
the following additional conditions:
(a) TRANCHE II TERM LOAN AGREEMENT. Each of the Tranche II Term Loan
Lenders in respect of such Series, the Borrower and the Administrative
Agent shall have executed the Tranche II Term Loan Agreement for such
Series pursuant to which such Lenders agree to become obligated in respect
of a Tranche II Term Loan Commitment hereunder.
(b) USE OF PROCEEDS. The Borrower shall have delivered to the
Administrative Agent a certificate specifying in reasonable detail the
proposed use of the proceeds of such Tranche II Term Loan Borrowing (which
use shall comply with the requirements of Section 6.08).
(c) PRO FORMA COMPLIANCE. The Borrower shall have delivered to the
Administrative Agent a certificate of a Financial Officer of the Borrower
setting forth calculations in form and detail (including assumptions)
satisfactory to the Administrative Agent demonstrating pro forma compliance
with Section 7.08 for (i) the four consecutive fiscal quarters most
recently ended prior to the proposed date of the Tranche II Term Loan
Borrowing and (ii) the current fiscal quarter and each of the next three
succeeding fiscal quarters (in each case on a pro forma basis under the
assumption that such Tranche II Term Loan Borrowing and any related
Acquisition from the proceeds of such Borrowing had been effected on the
first day(s) of such respective period(s)).
(d) OTHER DOCUMENTS. The Administrative Agent shall have received such
other documents in connection with such Borrower as the Administrative
Agent or any of the Tranche II Term Loan Lenders of such Series or special
New York counsel to Chase may reasonably request.
SECTION 5.03. EACH CREDIT EVENT. The obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of each Issuing Lender to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:
(a) the representations and warranties of the Borrower set forth in
this Agreement, and of each Obligor in each of the other Loan Documents to
which it is a party, shall be true and correct on and as of the date of
such Borrowing or the date of issuance, amendment, renewal or extension of
such Letter of Credit, as applicable; and
(b) at the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in the preceding
sentence.
ARTICLE VI
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
SECTION 6.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower will
furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the Borrower,
the audited consolidated balance sheets and related statements of
operations, stockholders' equity and cash flows of the Borrower and its
Consolidated Subsidiaries as of the end of and for such year, setting forth
in each case in comparative form the figures for the previous fiscal year,
all reported on by Arthur Andersen LLP or other independent public
accountants of recognized national standing (without a "going concern" or
like qualification or exception and without any qualification or exception
as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its Consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, the consolidated balance
sheet and related statements of operations, stockholders' equity and cash
flows of the Borrower and its Consolidated Subsidiaries as of the end of
and for such fiscal quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for (or,
in the case of the balance sheet, as of the end of) the corresponding
period or periods of the previous fiscal year, all certified by a Financial
Officer of the Borrower as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate of a Financial Officer of
the Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth
calculations in form and detail satisfactory to the Administrative Agent
demonstrating compliance with Sections 7.01(g), 7.04(i), 7.04(j) and 7.08,
(iii) setting forth a calculation of the Debt Ratio as at the end of the
respective fiscal period (and indicating which Category of Applicable Rate
shall become effective upon the delivery of such financial statements as
contemplated by the definition of the term "Applicable Rate" in Section
1.01) and (iv) stating whether any change in GAAP or in the application
thereof has occurred since the date of the audited financial statements
referred to in Section 4.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements
accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) of this Section, (i) a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the extent
required by accounting rules or guidelines) and (ii) a calculation setting
forth the amount of Excess Cash Flow for the relevant period for which such
Excess Cash Flow is to be calculated under Section 2.11(c)(iii);
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Borrower or any of its Subsidiaries with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally or to holders of
Subordinated Indebtedness generally, as the case may be; and
(f) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any of its Subsidiaries, or compliance with the terms of this
Agreement and the other Loan Documents, as the Administrative Agent or any
Lender may reasonably request.
SECTION 6.02. NOTICES OF MATERIAL EVENTS. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any of its Affiliates that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate
amount exceeding $1,000,000;
(d) the assertion of any Environmental Claim by any Person against, or
with respect to the activities of, the Borrower or any of its Subsidiaries
and any alleged violation of or non-compliance with any Environmental Laws
or any permits, licenses or authorizations, other than any Environmental
Claim or alleged violation that, if adversely determined, would not (either
individually or in the aggregate) have a Material Adverse Effect; and
(e) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 6.03. EXISTENCE; CONDUCT OF BUSINESS. The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; PROVIDED that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 7.03.
SECTION 6.04. PAYMENT OF OBLIGATIONS. The Borrower will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 6.05. MAINTENANCE OF PROPERTIES; INSURANCE. The Borrower will, and
will cause each of its Subsidiaries to, (a) keep and maintain all Property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.
SECTION 6.06. BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
SECTION 6.07. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations and orders of
any Governmental Authority applicable to it or its Property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 6.08. USE OF PROCEEDS AND LETTERS OF CREDIT. The proceeds of the
Tranche I Revolving Loans will be used solely to (a) repay on the Effective Date
Indebtedness owing under the Existing Credit Agreement, (b) provide working
capital for the Borrower and its Subsidiaries, (c) make Acquisitions permitted
under Section 7.03, (d) pay the expenses relating to the consummation of the
transactions contemplated hereby and (e) to provide funds for the other general
corporate purposes (including Capital Expenditures) of the Borrower and its
Subsidiaries, PROVIDED that, as provided in Section 7.03(d), the Borrower will
not use more than $50,000,000 of the proceeds of the Tranche I Revolving Loans
to fund any such transaction and/or pay any related fees or expenses referred to
in said Section. The proceeds of the Tranche I Term Loans will be used solely to
repay on the Effective Date Indebtedness owing under the Existing Credit
Agreement. The proceeds of the Tranche II Revolving Loans will be used solely to
provide working capital for the Borrower and its Subsidiaries. The proceeds of
the Tranche II Term Loans will be used solely in connection with Acquisitions
permitted under Section 7.03 (excluding, however, the acquisition of vineyard
properties), PROVIDED that an aggregate of up to $50,000,000 of the proceeds of
all Tranche II Term Loan Borrowings may be used for general corporate purposes
of the Borrower. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations G, U and X. Letters of Credit
will be issued only to support general corporate purposes of the Borrower and
its Subsidiaries.
SECTION 6.09. CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES.
(a) SUBSIDIARY GUARANTORS. The Borrower will take such action, and will
cause each of its Subsidiaries to take such action, from time to time as shall
be necessary to ensure that all Subsidiaries of the Borrower (other then
Excluded Entities) are "Subsidiary Guarantors" hereunder. Without limiting the
generality of the foregoing, in the event that the Borrower or any of its
Subsidiaries shall acquire or form any new Subsidiary after the date hereof that
the Borrower or the respective Subsidiary anticipates will not be an Excluded
Entity (or, in the event that any Excluded Entity shall cease to be an Excluded
Entity), the Borrower or the respective Subsidiary will cause such new
Subsidiary (or such Excluded Entity which ceases to be an Excluded Entity) to
(i) become a "Subsidiary Guarantor" hereunder, and an "Obligor" under
the Security Agreement pursuant to a Guarantee Assumption Agreement,
(ii) take such action (including delivering such shares of stock,
executing and delivering such Uniform Commercial Code financing statements)
as shall be necessary to create and perfect valid and enforceable first
priority Liens on substantially all of the personal Property of such new
Subsidiary as collateral security for the obligations of such new
Subsidiary hereunder and
(iii) deliver such proof of corporate action, incumbency of officers,
opinions of counsel and other documents as is consistent with those
delivered by each Obligor pursuant to Section 5.01 on the Effective Date or
as the Administrative Agent shall have requested.
(b) OWNERSHIP OF SUBSIDIARIES. The Borrower will, and will cause each of
its Subsidiaries to, take such action from time to time as shall be necessary to
ensure that each of its Subsidiaries (other than Joint Venture Entities and
Inactive Subsidiaries) is a Wholly- Owned Subsidiary. In the event that any
additional shares of stock shall be issued by any Subsidiary, the respective
Obligor agrees forthwith to deliver to the Administrative Agent pursuant to the
Security Agreement the certificates evidencing such shares of stock, accompanied
by undated stock powers executed in blank and to take such other action as the
Administrative Agent shall request to perfect the security interest created
therein pursuant to the Security Agreement, PROVIDED that, notwithstanding the
foregoing, the Obligors shall not be required to pledge more than 66-2/3% of the
outstanding shares of voting stock of any Foreign Subsidiary.
ARTICLE VII
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, the Borrower covenants and agrees with the Lenders that:
SECTION 7.01. INDEBTEDNESS. The Borrower will not, nor will it permit any
of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in Part A
of Schedule II (or, to the extent not meeting the minimum thresholds for
required listing on said Schedule II pursuant to Section 4.14, in an
aggregate amount not exceeding $1,000,000), PROVIDED that in any event the
principal of and interest on, and all other amounts owing in respect of
Indebtedness under the Existing Credit Agreement (other than in respect of
letters of credit which, as provided in Section 2.06(l) are to become
Letters of Credit hereunder) shall be repaid in full on the Effective Date;
(c) Subordinated Indebtedness;
(d) Indebtedness of any Subsidiary to the Borrower or any other
Subsidiary;
(e) Guarantees by the Borrower of Indebtedness of any Subsidiary and
by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary;
(f) Guarantees by the Borrower or by any Subsidiary of Indebtedness of
any Person (other than the Borrower or any of its Subsidiaries); PROVIDED
that the aggregate principal amount of Indebtedness in respect of all such
Guarantees shall not exceed $25,000,000 at any time outstanding; and
(g) other Indebtedness (including Capital Lease Obligations) of the
Borrower and its Subsidiaries, PROVIDED that at the time of the creation,
incurrence or assumption thereof and at any time after giving effect
thereto the aggregate principal amount of such Indebtedness shall not
exceed $40,000,000.
SECTION 7.02. LIENS. The Borrower will not, nor will it permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
Property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) Liens created pursuant to the Security Documents (and, prior to
the Effective Date, Liens securing Indebtedness under the Existing Credit
Agreement);
(b) Permitted Encumbrances;
(c) any Lien on any Property or asset of the Borrower or any of its
Subsidiaries existing on the date hereof and set forth in Part B of
Schedule II (or, to the extent not meeting the minimum thresholds for
required listing on said Schedule II pursuant to Section 4.14, in an
aggregate amount not exceeding $500,000); PROVIDED that (i) no such Lien
shall extend to any other Property or asset of the Borrower or any of its
Subsidiaries and (ii) any such Lien shall secure only those obligations
which it secures on the date hereof and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
(d) any Lien upon tangible personal Property acquired after the date
hereof by the Borrower or any of its Subsidiaries, which Lien either (A)
existed on such Property before the time of its acquisition and was not
created in anticipation thereof, or (B) was created solely for the purpose
of securing Indebtedness permitted under Section 7.02(e) representing, or
incurred to finance, refinance or refund, the cost of such Property;
PROVIDED that (i) such Lien is not created in contemplation of or in
connection with such acquisition, (ii) such Lien shall not apply to any
other Property or assets of the Borrower or any Subsidiary and (iii) such
Lien shall secure only those obligations which it secures on the date of
such acquisition and extensions, renewals and replacements thereof
permitted under clause (e) below; and
(e) any extension, renewal or replacement of the foregoing, provided,
however, that the Liens permitted hereunder shall not be spread to cover
any additional Indebtedness or Property (other than a substitution of like
Property).
SECTION 7.03. FUNDAMENTAL CHANGES. The Borrower will not, nor will it
permit any of its Subsidiaries to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution). The Borrower will not, nor will it
permit any of its Subsidiaries to, acquire any business or Property from, or
capital stock of, or be a party to any acquisition of, any Person except
purchases of inventory and other Property to be sold or used in the ordinary
course of business, Investments permitted under Section 7.04 and Capital
Expenditures. The Borrower will not, nor will it permit any of its Subsidiaries
to, convey, sell, lease, transfer or otherwise dispose of, in one transaction or
a series of transactions, any part of its business or Property, whether now
owned or hereafter acquired (including, without limitation, receivables and
lease-hold interests, but excluding sales and other dispositions of (i) any
inventory or other Property sold or disposed of in the ordinary course of
business and on ordinary business terms and (ii) other Property so long as the
amount of such other Property sold in any single fiscal year by the Borrower and
its Subsidiaries shall have a fair market value not in excess of 3% of the
Consolidated Tangible Assets as at the first day of such fiscal year).
Notwithstanding the foregoing provisions of this Section:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into: (i) the Borrower if the Borrower shall be the continuing or
surviving corporation or (ii) any Wholly-Owned Subsidiary; PROVIDED that in
any such transaction, the Wholly-Owned Subsidiary shall be the continuing
or surviving corporation;
(b) any such Subsidiary may sell, lease, transfer or otherwise dispose
of any or all of its Property (upon voluntary liquidation or otherwise) to
the Borrower or a Wholly-Owned Subsidiary of the Borrower;
(c) the Borrower or any Subsidiary of the Borrower may merge or
consolidate with any other Person if (i) in the case of a merger or
consolidation of the Borrower, the Borrower is the surviving corporation
and, in any other case, the surviving corporation is a Wholly-Owned
Subsidiary of the Borrower and (ii) after giving effect thereto no Default
would exist hereunder;
(d) the Borrower may (either directly, or indirectly through its
Wholly-Owned Subsidiaries) acquire the business or Property from, or
capital stock of, or enter into a joint venture with, or be a party to an
Acquisition of another Person, so long as at the time thereof and after
giving effect thereto, no Default or Event of Default shall have occurred
and be continuing hereunder and the Borrower shall have delivered to the
Administrative Agent a certificate of its chief financial officer to such
effect; PROVIDED that the Borrower will not use more than $50,000,000 of
the proceeds of the Tranche I Revolving Loans to fund any such transaction
and/or pay any related fees or expenses;
(e) the Borrower may (either directly, or indirectly through its
Wholly-Owned Subsidiaries) sell, lease, transfer or otherwise dispose of
the Madera Wine Cellars facility located in Madera, California;
(f) the Borrower may, for the purpose of transferring its jurisdiction
of incorporation from Delaware to another state of incorporation, merge
with and into a Wholly-Owned Subsidiary in a transaction constituting a
tax-free reorganization under 368(a)(1)(F) of the Code, so long as:
(x) the Borrower shall give the Lenders and the Administrative
Agent at least 15 days prior written notice of the occurrence of such
merger;
(y) such Subsidiary shall execute and deliver an instrument in
form and substance satisfactory to each Lender and the Administrative
Agent pursuant to which such Subsidiary shall, effective upon such
merger, assume all of the obligations of the Borrower hereunder and
under the Security Documents (and execute and deliver such other
instruments as the Administrative Agent shall request to ensure the
continued perfection and priority of any Liens granted by the Borrower
pursuant to the Security Documents); and
(z) such Subsidiary shall deliver such proof of corporate action,
incumbency of officers, opinions of counsel and other documents as is
consistent with those delivered by the Borrower pursuant to Section
5.01 hereof upon the Effective Date or as any Lender or the
Administrative Agent shall have requested; and
(g) the Borrower may, for the purpose of making itself a Wholly-Owned
Subsidiary of a newly-formed holding company (herein the "HOLDING
COMPANY"), enter into a transaction of merger or consolidation with another
entity or transfer its assets to another entity (such entity, in either
such case, being herein called the "NEW COMPANY"), so long as:
(u) the Borrower shall give the Lenders and the Administrative
Agent at least 15 days prior written notice of the occurrence of such
transaction (which notice shall specify the manner and timing in which
such transaction is to occur);
(v) in such transaction the shareholders of the Borrower shall
receive in exchange for the shares of stock in the Borrower held by
them immediately prior to such transaction newly-issued shares of
stock in the Holding Company representing substantially the same
respective percentage ownership interests in the Holding Company as
such shareholders held in the Borrower immediately prior to such
transaction;
(w) immediately after giving effect to such transaction, the
Borrower (or the New Company, as the case may be) shall be a
Wholly-Owned Subsidiary of the Holding Company;
(x) in the event that such transaction constitutes a merger with
a New Company in which the Borrower is not the surviving entity or
such transaction involves the transfer by the Borrower of its assets
to a New Company, the New Company shall execute and deliver an
instrument in form and substance satisfactory to each Lender and the
Administrative Agent pursuant to which the New Company shall,
effective upon such transaction, assume all of the obligations of the
Borrower hereunder and under the Security Documents (and execute and
deliver such other instruments as the Administrative Agent shall
request to ensure the continued perfection and priority of any Liens
granted by the Borrower pursuant to the Security Documents);
(y) the Holding Company shall execute and deliver an instrument
in form and substance satisfactory to each Lender and the
Administrative Agent pursuant to which the Holding Company shall,
effective upon such transaction, guarantee all of the obligations of
the Borrower (or the New Company, as the case may be) hereunder and
under the Security Documents and pledge all of the shares of stock
held by it in the Borrower (or the New Company, as the case may be)
and shall take such further action as the Administrative Agent shall
request to ensure the perfection and priority of any Liens granted by
the Holding Company pursuant to such instrument; and
(z) the Holding Company and the Borrower (or the New Company, as
the case may be) shall each deliver such proof of corporate action,
incumbency of officers, opinions of counsel and other documents as is
consistent with those delivered by the Borrower pursuant to Section
5.01 upon the Effective Date or as any Lender or the Administrative
Agent shall have requested.
SECTION 7.04. INVESTMENTS. The Borrower will not, nor will it permit any of
its Subsidiaries to, make or permit to remain outstanding any Investments
except:
(a) Investments outstanding on the date hereof and identified in Part
B of Schedule IV;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Borrower and its Wholly-Owned Subsidiaries in
the Borrower and its Wholly-Owned Subsidiaries, PROVIDED that the aggregate
amount of such Investments in Foreign Subsidiaries, together with the
aggregate amount of Investments in Joint Venture Entities under paragraph
(i) below, shall not exceed $20,000,000 at any one time;
(e) Hedging Agreements entered into in the ordinary course of business
and not for speculative purposes;
(f) Investments permitted pursuant to clause (d) of Section 7.03;
(g) Investments consisting of security deposits with utilities and
other like Persons made in the ordinary course of business;
(h) the Senior Subordinated Note Guarantees, and any Guarantee of
additional Subordinated Indebtedness that complies with the requirements
Section 7.09(b);
(i) Investments by the Borrower and its Subsidiaries in Joint Venture
Entities (and Investments by Joint Venture Entities in other Persons),
PROVIDED that the aggregate amount of such Investments in Joint Venture
Entities, together with the aggregate amount of Investments in Foreign
Subsidiaries, under paragraph (d) above, shall not exceed $20,000,000 at
any one time; and
(j) additional Investments by the Borrower (excluding, however,
Investments in Joint Venture Entities) up to but not exceeding $15,000,000
at any one time outstanding.
The aggregate amount of an Investment at any one time outstanding for purposes
of clauses (d), (i) and (j) above shall be deemed to be equal to (A) the
aggregate amount of cash, together with the aggregate fair market value of
Property, loaned, advanced, contributed, transferred or otherwise invested that
gives rise to such Investment MINUS (B) the aggregate amount of dividends,
distributions or other payments received in cash in respect of such Investment;
the amount of an Investment shall not in any event be reduced by reason of any
write-off of such Investment nor increased by any increase in the amount of
earnings retained in the Person in which such Investment is made that have not
been dividended, distributed or otherwise paid out.
SECTION 7.05. RESTRICTED PAYMENTS.
(a) The Borrower will not, nor will it permit any of its Subsidiaries to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except that the Borrower may (i) declare and pay dividends with respect
to its capital stock payable solely in additional shares of its common stock,
(ii) make Restricted Payments in respect of stock appreciation rights, or other
stock-based awards, as contemplated by the Long-Term Stock Incentive Plan so
long as no Default shall have occurred and be continuing or would result
therefrom, (iii) cancel or terminate any warrants, options or any other rights
to acquire any shares of capital stock of the Borrower in exchange for the
issuance of any other warrants, options or rights to acquire shares of capital
stock of the Borrower, (iv) repurchase its capital stock to the extent provided
in paragraph (b) below and (v) declare and make Restricted Payments in cash,
subject (in the case of this clause (v)) to the satisfaction of each of the
following conditions on the date of such Restricted Payment and after giving
effect thereto:
(w) no Default shall have occurred and be continuing;
(x) the aggregate amount of Restricted Payments made during any fiscal
year, including the fiscal year ending February 28, 1998, shall not exceed
an amount equal to 50% of consolidated net income of the Borrower and its
Consolidated Subsidiaries for such fiscal year;
(y) the Debt Ratio for the period of four consecutive fiscal quarters
most recently ended prior to the date of any such Restricted Payment shall
not exceed 2.00 to 1; and
(z) the Borrower shall have delivered to the Administrative Agent, at
least 10 Business Days (but not more than 20 Business Days) prior to the
date of declaration of any such Restricted Payment, a certificate of a
Financial Officer of the Borrower setting forth computations in reasonable
detail demonstrating satisfaction of the foregoing conditions as at the
date of such certificate and stating that such Financial Officer believes
in good faith that none of such conditions will fail to be satisfied on the
date of payment of such Restricted Payment,
it being understood that to the extent the conditions specified in the foregoing
clauses (w) through (y) are satisfied on the date of declaration of such
Restricted Payment by the board of directors of the Borrower, such Restricted
Payment may be made at any time within the 60- day period thereafter, regardless
of whether such conditions continue to be satisfied.
(b) The Borrower may on any date make any Restricted Payment consisting of
a repurchase of its capital stock, PROVIDED that:
(i) the Borrower shall have delivered to the Administrative Agent, at
least 10 Business Days (but not earlier than the first day of the current
fiscal quarter) prior to such date, a certificate of a Financial Officer of
the Borrower setting forth an aggregate amount (herein, the "PROPOSED
AMOUNT") proposed to be expended by the Borrower in respect of such
repurchase and calculations in form and detail (including assumptions)
satisfactory to the Administrative Agent demonstrating on a pro forma basis
that the Borrower would have been in compliance with Section 7.08 during
the four quarter period most-recently ended, and during the four-quarter
period following the date of such Restricted Payment, in each case after
giving effect to Restricted Payments in the Proposed Amount;
(ii) the Borrower will not make Restricted Payments under this
paragraph (b) in excess of the Proposed Amount without delivering to the
Administrative Agent pursuant to clause (i) above another calculation (with
respect to an additional "Proposed Amount") demonstrating pro forma
compliance as described in said clause (i) with respect to such additional
"Proposed Amount"; and
(iii) the Borrower will not make any Restricted Payment under this
paragraph (b) unless at the time thereof, and after giving effect thereto,
no Default shall have occurred and be continuing.
(c) Nothing in this Section shall be deemed to prohibit the payment of
dividends by any Subsidiary of the Borrower to the Borrower or to any other
Subsidiary of the Borrower.
SECTION 7.06. TRANSACTIONS WITH AFFILIATES. The Borrower will not, nor will
it permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates; PROVIDED that (x) any Affiliate who is an individual may serve as a
director, officer or employee of the Borrower or any of its Subsidiaries and
receive reasonable compensation for his or her services in such capacity and (y)
the Borrower and its Subsidiaries may enter into transactions (other than
extensions of credit by the Borrower or any of its Subsidiaries to an Affiliate)
providing for the leasing of Property, the rendering or receipt of services or
the purchase or sale of inventory and other Property in the ordinary course of
business if the monetary or business consideration arising therefrom would be
substantially as advantageous to the Borrower and its Subsidiaries as the
monetary or business consideration which would obtain in a comparable
transaction with a Person not an Affiliate.
During any period that the Borrower is a public company regulated by, and
required to file regular periodic reports with, the Securities and Exchange
Commission, any compensation paid to an executive officer of the Borrower (who
is an Affiliate) which has been specifically approved by the board of directors
of the Borrower (or by the Compensation Committee of the board of directors of
the Borrower) during such period will be deemed to be reasonable for purposes of
the foregoing. Notwithstanding the foregoing, the Borrower may enter into
so-called split-dollar life insurance agreements with Affiliates substantially
in the form of Schedule VII, so long as the aggregate amount of premiums payable
by the Borrower during any fiscal year pursuant to such agreements shall not
exceed $2,000,000 in the aggregate.
SECTION 7.07. CERTAIN RESTRICTIONS ON SUBSIDIARIES. The Borrower will not
permit any of its Subsidiaries (other then Joint Venture Entities) to enter
into, after the date hereof, any indenture, agreement, instrument or other
arrangement that, directly or indirectly, prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse conditions
upon, the incurrence or payment of Indebtedness, the granting of Liens, the
declaration or payment of dividends, the making of loans, advances, guarantees
or Investments or the sale, assignment, transfer or other disposition of
Property; PROVIDED that (i) the foregoing shall not apply to restrictions and
conditions imposed by law or by this Agreement, (ii) the foregoing shall not
apply to restrictions and conditions existing pursuant to the Senior
Subordinated Note Indenture (but shall apply to any extension or renewal of, or
any amendment or modification expanding the scope of, any such restriction or
condition), or pursuant to any additional Subordinated Indebtedness to the
extent that such restrictions are not less favorable to the Borrower than those
contained in the Senior Subordinated Note Indenture, (iii) the foregoing shall
not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, (iv) as applied to Liens, the foregoing shall
not apply to restrictions or conditions imposed by any agreement relating to
secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness and
(v) as applied to Liens, the foregoing shall not apply to customary provisions
in leases and other contracts restricting the assignment thereof.
SECTION 7.08. CERTAIN FINANCIAL COVENANTS.
(a) DEBT RATIO. The Borrower will not permit the Debt Ratio to exceed the
following respective ratios at any time during the following respective periods:
PERIOD RATIO
From the date hereof
through 2/28/99 4.50 to 1
From 3/1/99
through 2/29/00 4.00 to 1
From 3/1/00 and at
all times thereafter 3.50 to 1
(b) SENIOR DEBT RATIO. The Borrower will not permit the Senior Debt Ratio
to exceed the following respective ratios at any time during the following
respective periods:
PERIOD RATIO
From the date hereof
through 2/28/99 3.50 to 1
From 3/1/99 and at
all times thereafter 3.00 to 1
(c) INTEREST COVERAGE RATIO. The Borrower will not permit the Interest
Coverage Ratio to be less than 3.25 to 1 at any time.
(d) FIXED CHARGES RATIO. The Borrower will not permit the Fixed Charges
Ratio to be less than 1.00 to 1 as at the last day of any fiscal quarter of each
fiscal year.
SECTION 7.09. SUBORDINATED INDEBTEDNESS. The Borrower may after the date
hereof incur additional Subordinated Indebtedness subject to the following
conditions (each of which shall have been fulfilled in form and substance
satisfactory to the Required Lenders):
(a) such Indebtedness shall be subordinated to the obligations of the
Borrower to pay principal of and interest on the Loans, the Reimbursement
Obligations and all other amounts payable hereunder on terms in form and
substance satisfactory to the Required Lenders (it being understood that
the terms and provisions of the Senior Subordinated Note Indenture are
satisfactory to the Required Lenders);
(b) such Indebtedness shall be an obligation of the Borrower only, and
none of its Subsidiaries shall be contingently or otherwise obligated in
respect thereof, unless subordinated to the obligations of such Subsidiary
to pay principal of and interest on the Loans, the Reimbursement
Obligations and all other amounts payable hereunder on terms in form and
substance satisfactory to the Required Lenders (it being understood that
the terms and provisions of the Senior Subordinated Note Indenture are
satisfactory to the Required Lenders);
(c) to the extent required pursuant to Section 2.11(c)(v), proceeds of
such Indebtedness shall be applied to prepay Loans in the manner provided
in Section 2.11(c)(v);
(d) the terms of such Indebtedness shall not provide for payment of
any portion of the principal thereof prior to the date six months after the
final maturity of the Loans hereunder;
(e) terms in respect of financial and other covenants, events of
default and mandatory prepayments applicable to such Indebtedness shall
have been reasonably determined by the Required Lenders to be terms that
are at the time customary in the market for subordinated debt being
incurred by borrowers, and in transactions, comparable in the reasonable
judgment of the Required Lenders to the Borrower and proposed debt issuance
(it being understood that the terms in respect of financial and other
covenants, events of default and mandatory prepayments included in the
Senior Subordinated Note Indenture are, in the judgment of the Required
Lenders, comparable to those customary in such market);
(f) at the time of issuance of such Indebtedness, and after giving
effect thereto, the Borrower shall be in compliance with Section 7.08 (the
determination of such ratios to be calculated under the assumption that
such Indebtedness was issued, at the beginning of the respective period and
that any other Indebtedness to be retired with the proceeds thereof was in
fact retired on such date of issuance), and the Borrower shall have
delivered to the Administrative Agent a certificate of its chief financial
officer to such effect setting forth in reasonable detail the computations
necessary to determine such compliance; and
(g) at the time of such issuance, and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing hereunder
and the Borrower shall have delivered to the Administrative Agent a
certificate of a Financial Officer to such effect.
Neither the Borrower nor any of its Subsidiaries shall purchase, redeem,
retire or otherwise acquire for value, or set apart any money for a sinking,
defeasance or other analogous fund for, the purchase, redemption, retirement or
other acquisition of, or make any voluntary payment or prepayment of the
principal of or interest on, or any other amount owing in respect of, any
Subordinated Indebtedness, except that the Borrower may (i) make payments on the
regularly-scheduled payment dates with respect to the principal of and interest
on the Subordinated Indebtedness as in effect on the date hereof (or, as to any
Subordinated Indebtedness issued after the date hereof, as originally in
effect), and (ii) so long as no Default shall have occurred and be continuing
(or will occur as a result of such payment), from the proceeds of Subordinated
Indebtedness issued in accordance with the first paragraph of this Section,
redeem Subordinated Indebtedness that is being refinanced as contemplated in
clause (c) of the first paragraph of this Section. Neither the Borrower nor any
of its Subsidiaries will consent to any modification, supplement or waiver of
any of the provisions of any Subordinated Indebtedness without the prior consent
of the Administrative Agent (with the approval of the Required Lenders).
SECTION 7.10. MODIFICATIONS OF CERTIFICATE OF INCORPORATION.
Notwithstanding the provisions of clause (f) or (g) of Section 7.03, the
Borrower will not modify or supplement its Certificate of Incorporation as in
effect on the date hereof in any manner adverse to the interests of the Lenders
without the prior consent of the Administrative Agent (with the approval of the
Required Lenders).
SECTION 7.11. INVENTORY LOCATED IN OFF-PREMISES WAREHOUSES. The Borrower
will not, nor will it permit any of its Subsidiaries to, maintain inventory at
Off- Premises Warehouses in an amount in excess of $50,000,000 (as to the
Borrower and all Subsidiaries) at any time unless the Borrower or such
Subsidiary has taken such steps as are necessary to ensure that the
Administrative Agent has a valid prior perfected security interest in such
inventory (including, without limitation, the filing of an appropriate uniform
commercial code financing statement in the respective jurisdiction in which such
inventory is located naming the Borrower or such Subsidiary as "secured party"
and the delivery of satisfactory evidence that such an arrangement constitutes a
consignment or first priority perfected security interest under applicable law
and that such security interest has been validly assigned to the Administrative
Agent under the Security Agreement).
ARTICLE VIII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or under any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of two or more Business Days;
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries in or in connection with this
Agreement or any other Loan Document or any amendment or modification
hereof or thereof, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement
or any other Loan Document or any amendment or modification hereof or
thereof, shall prove to have been incorrect when made or deemed made in any
material respect;
(d) the Borrower shall fail to observe or perform any covenant or
agreement contained in Section 6.02, 6.03 (with respect to the Borrower's
existence) or 6.09 or in Article VII;
(e) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d) of this Article) or any other Loan
Document and such failure shall continue unremedied for a period of 45 or
more days after notice thereof from the Administrative Agent (given at the
request of any Lender) to the Borrower;
(f) the Borrower or any of its Subsidiaries shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due
and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; PROVIDED that this clause (g)
shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the Property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any of its Subsidiaries or its debts,
or of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any of
its Subsidiaries or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for a period
of 60 or more days or an order or decree approving or ordering any of the
foregoing shall be entered;
(i) the Borrower or any of its Subsidiaries shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (h)
of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any of its Subsidiaries or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) the Borrower or any of its Subsidiaries shall become unable, admit
in writing its inability or fail generally to pay its debts as they become
due;
(k) one or more judgments for the payment of money in excess of
$500,000 in the aggregate (exclusive of judgment amounts fully covered by
insurance where the insurer has admitted liability in respect of such
judgment) or in excess of $5,000,000 in the aggregate (regardless of
insurance coverage) shall be rendered against the Borrower or any of its
Subsidiaries or any combination thereof and the same shall remain
undischarged for a period of 45 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Borrower or any
of its Subsidiaries to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse
Effect;
(m) a reasonable basis shall exist for the assertion against the
Borrower or any of its Subsidiaries of (or there shall have been asserted
against the Borrower or any of its Subsidiaries) claims or liabilities,
whether accrued, absolute or contingent, based on or arising from the
generation, storage, transport, handling or disposal of Hazardous Materials
by the Borrower or any of its Subsidiaries or Affiliates, or any
predecessor in interest of the Borrower or any of its Subsidiaries or
Affiliates, or relating to any site or facility owned, operated or leased
by the Borrower or any of its Subsidiaries or Affiliates, which claims or
liabilities (insofar as they are payable by the Borrower or any of its
Subsidiaries but after deducting any portion thereof which is reasonably
expected to be paid by other creditworthy Persons jointly and severally
liable therefor), in the judgment of the Required Lenders are reasonably
likely to be determined adversely to the Borrower or any of its
Subsidiaries, and the amount thereof is, singly or in the aggregate,
reasonably likely to have a Material Adverse Effect;
(n) common stock of the Borrower (after giving effect to the exercise
of all outstanding Equity Rights, other than the conversion of shares of
Class B common stock into shares of Class A common stock), which in the
aggregate represents voting power to elect at least 50% (in number of
votes) of the board of directors of the Borrower, shall cease to be owned
or otherwise controlled by (i) Marvin Sands, his children, his
grandchildren or any spouse of any of the foregoing persons, (ii) trusts
for the benefit of Marvin Sands, his children, his grandchildren or any
spouse of any of the foregoing persons, or any trust for the benefit of
Andrew Stern, which trusts are under the control of Marvin Sands, his
children, his grandchildren or any spouse of any of the foregoing persons,
or (iii) partnerships which are controlled by (and a majority in interest
of the partnership interests in which are owned by) Marvin Sands, his
children, his grandchildren, any spouse of any of the foregoing persons, by
a trust referred to in the foregoing clause (ii) or by any partnership that
satisfies the conditions of this clause (iii); or
(o) any Lien created by the Security Documents shall at any time not
constitute a valid and perfected Lien on the collateral intended to be
covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the
Administrative Agent, free and clear of all other Liens (other than Liens
permitted under Section 7.02 or under the respective Security Documents),
or, except for expiration in accordance with its terms, any of the Security
Documents shall for whatever reason be terminated or cease to be in full
force and effect, or the enforceability thereof shall be contested by any
Obligor;
then, and in every such event (other than an event with respect to any Obligor
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Obligors accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by each Obligor; and in case of any
event with respect to any Obligor described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Obligors accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Obligor.
ARTICLE IX
THE ADMINISTRATIVE AGENT
Each of the Lenders and the Issuing Lenders hereby irrevocably appoints the
Administrative Agent as its agent hereunder and under the other Loan Documents
and authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the
terms hereof or thereof, together with such actions and powers as are reasonably
incidental thereto.
The Person serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent is required to
exercise in writing by the Required Lenders, and (c) except as expressly set
forth herein and in the other Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders or in the absence of its own gross negligence or wilful
misconduct. The Administrative Agent shall be deemed not to have knowledge of
any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein,
(iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article V or
elsewhere herein or therein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for an Obligor), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders, the Issuing Lenders and the Borrower. Upon any
such resignation, the Required Lenders shall have the right, in consultation
with the Borrower, to appoint a successor, which shall be a commercial bank
having an office in New York City and capital and surplus of at least
$500,000,000. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Lenders,
appoint a successor Administrative Agent meeting the qualifications described
above. Upon the acceptance of its appointment as Administrative Agent hereunder
by a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 10.03 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 Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder.
Except as otherwise provided in Section 10.02(b) with respect to this
Agreement, the Administrative Agent may, with the prior consent of the Required
Lenders (but not otherwise), consent to any modification, supplement or waiver
under any of the Loan Documents, PROVIDED that, without the prior consent of
each Lender, the Administrative Agent shall not (except as provided herein or in
the Security Documents) release any collateral or otherwise terminate any Lien
under any Security Document providing for collateral security, agree to
additional obligations being secured by such collateral security (unless the
Lien for such additional obligations shall be junior to the Lien in favor of the
other obligations secured by such Security Document, in which event the
Administrative Agent may consent to such junior Lien provided that it obtains
the consent of the Required Lenders thereto) or alter the relative priorities of
the obligations entitled to the benefits of the Liens created under the Security
Documents, except that no such consent shall be required, and the Administrative
Agent is hereby authorized, to release any Lien covering Property that is the
subject of either a disposition of Property permitted hereunder or a disposition
to which the Required Lenders have consented.
Without the authorization of the Required Lenders, neither the
Administrative Agent nor any Lender shall send to the Borrower or the Trustee
under the Senior Subordinated Note Indenture any notice of a Default or Event of
Default hereunder if such notice would result in a payment block in respect of
the Senior Subordinated Notes.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower or any Subsidiary Guarantor, to it at 116
Buffalo Street, Canandaigua, New York 14424-1086, Attention of Robert
Sands, Esq. (Telecopy No. (716) 394-6017);
(b) if to the Administrative Agent, to The Chase Manhattan Bank, 1
Chase Manhattan Plaza, 8th Floor, New York, New York 10081, Attention Loan
and Agency Services Group (Telecopy No. (212) 552-5658), with a copy to The
Chase Manhattan Bank, 270 Park Avenue, New York, New York 10017, Attention
of Elizabeth Iacoviello (Telecopy No. 212-270-6937);
(c) if to either Issuing Lender, to it at such address as may be
notified by it to the other parties hereto;
(d) if to the Swingline Lender, to it at such address as may be
notified by it to the other parties hereto; and
(e) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 10.02. WAIVERS; AMENDMENTS.
(a) NO DEEMED WAIVERS; REMEDIES CUMULATIVE. No failure or delay by the
Administrative Agent, either Issuing Lender or any Lender in exercising any
right or power hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Lenders and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Obligor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or either Issuing Lender may have had notice or knowledge of
such Default at the time.
(b) AMENDMENTS. Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders; PROVIDED
that no such agreement shall (i) increase any Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan
or LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) alter the manner in which payments or
prepayments of principal, interest or other amounts hereunder shall be applied
as between the Lenders or Classes of Loans, (v) change any of the provisions of
this Section or the definition of the term "Required Lenders" or any other
provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender, or (vi)
release any Subsidiary Guarantor from any of its guarantee obligations under
Article III without the written consent of each Lender; and PROVIDED FURTHER
that (x) no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, either Issuing Lender or the Swingline
Lender hereunder without the prior written consent of the Administrative Agent,
such Issuing Lender or the Swingline Lender, as the case may be, and (y) that
any modification or supplement of Article III shall require the consent of each
Subsidiary Guarantor.
Anything in this Agreement to the contrary notwithstanding, no waiver or
modification of any provision of this Agreement that has the effect (either
immediately or at some later time) of enabling the Borrower to satisfy a
condition precedent to the making of a Revolving Loan, or Tranche II Term Loan
of any Series, shall be effective against the Lenders of such Class for purposes
of the respective Tranche I Revolving Commitments, Tranche II Revolving
Commitments or Tranche II Term Loan Commitments of such Series, as applicable,
unless the Required Lenders of such Class shall have concurred with such waiver
or modification, and no waiver or modification of any provision of this
Agreement or any other Loan Document that could reasonably be expected to
adversely affect the Lenders of any Class shall be effective against the Lenders
of such Class unless the Required Lenders of such Class shall have concurred
with such waiver or modification.
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) COSTS AND EXPENSES. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all out-of-pocket
expenses incurred by either Issuing Lender in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder, (iii) all out-of-pocket expenses incurred by the
Administrative Agent, either Issuing Lender or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, either
Issuing Lender or any Lender, in connection with the enforcement or protection
of its rights in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including in connection with any workout,
restructuring or negotiations in respect thereof and (iv) and all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Security Document or any other document referred to therein.
(b) INDEMNIFICATION BY BORROWER. The Borrower shall indemnify the
Administrative Agent, each Issuing Lender and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an
"INDEMNITEE") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the
use of the proceeds therefrom (including any refusal by either Issuing Lender to
honor a demand for payment under a Letter of Credit if the documents presented
in connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any Property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; PROVIDED that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) REIMBURSEMENT BY LENDERS. To the extent that the Borrower fails to pay
any amount required to be paid by it to the Administrative Agent, an Issuing
Lender or the Swingline Lender under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to the Administrative Agent, such Issuing Lender
or the Swingline Lender, as the case may be, such Lender's Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; PROVIDED that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent, such
Issuing Lender or the Swingline Lender in its capacity as such.
(d) WAIVER OF CONSEQUENTIAL DAMAGES, ETC. To the extent permitted by
applicable law, no Obligor shall assert, and each Obligor hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.
(e) PAYMENTS. All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 10.04. SUCCESSORS AND ASSIGNS.
(a) ASSIGNMENTS GENERALLY. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Obligor may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by any
Obligor without such consent shall be null and void), PROVIDED that any merger
or consolidation involving any Obligor permitted under Section 7.03 shall not be
deemed to be an assignment for purposes of this paragraph (a). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Issuing Lenders and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) ASSIGNMENTS BY LENDERS. Any Lender may assign to one or more assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitments and the Loans at the time owing to it);
PROVIDED that:
(i) except in the case of an assignment to a Lender or an Affiliate of
a Lender, each of the Borrower and the Administrative Agent (and, in the
case of an assignment of all or a portion of a Commitment or any Lender's
obligations in respect of its LC Exposure or Swingline Exposure, the
respective Issuing Lender and the Swingline Lender) must give their prior
written consent to such assignment (which consent shall not be unreasonably
withheld),
(ii) except in the case of an assignment to a Lender or an Affiliate
of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment(s), the amount of the Commitment(s) of the
assigning Lender subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $10,000,000 unless each
of the Borrower and the Administrative Agent otherwise consent,
(iii) each partial assignment of the Loans or Commitments of any Class
shall be made as an assignment of a proportionate part of all the assigning
Lender's rights and obligations under this Agreement in respect of such
Class, except that this clause (iii) shall not apply to rights in respect
of outstanding Competitive Loans,
(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire;
PROVIDED FURTHER that any consent of the Borrower otherwise required under this
paragraph shall not be required if an Event of Default under clause (h) or (i)
of Article VIII has occurred and is continuing. Upon acceptance and recording
pursuant to paragraph (d) of this Section, from and after the effective date
specified in each Assignment and Acceptance, the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 10.03). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) MAINTENANCE OF REGISTER BY ADMINISTRATIVE AGENT. The Administrative
Agent, acting for this purpose as an agent of the Borrower, shall maintain at
one of its offices in The City of New York a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the "REGISTER"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Lenders and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, either Issuing Lender and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.
(d) EFFECTIVENESS OF ASSIGNMENTS. Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, the
assignee's completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall accept
such Assignment and Acceptance and record the information contained therein in
the Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) PARTICIPATIONS. Any Lender may, without the consent of the Borrower,
the Administrative Agent, either Issuing Lender or the Swingline Lender, sell
participations to one or more banks or other entities (a "PARTICIPANT") in all
or a portion of such Lender's rights and obligations under this Agreement and
the other Loan Documents (including all or a portion of its Commitments and the
Loans owing to it); PROVIDED that (i) such Lender's obligations under this
Agreement and the other Loan Documents shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent, the
Issuing Lenders and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and the other Loan
Documents and to approve any amendment, modification or waiver of any provision
of this Agreement or any other Loan Document; PROVIDED that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 10.02(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.
(f) LIMITATIONS ON RIGHTS OF PARTICIPANTS. A Participant shall not be
entitled to receive any greater payment under Section 2.15 or 2.17 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.17 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.17(e) as though it were a
Lender.
(g) PLEDGES. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any such pledge or assignment to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; PROVIDED that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such assignee for such Lender as a party hereto.
(h) NO ASSIGNMENTS TO OBLIGORS OR AFFILIATES. Anything in this Section to
the contrary notwithstanding, no Lender may assign or participate any interest
in any Loan or LC Exposure held by it hereunder to the Borrower or any of its
Affiliates or Subsidiaries without the prior consent of each Lender.
SECTION 10.05. SURVIVAL. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, either Issuing Lender or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.15, 2.16, 2.17, 3.03 and 10.03 and
Article IX shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 10.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 5.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.07. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, 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 to or for the
credit or the account of any Obligor against any of and all the obligations of
any Obligor now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) SUBMISSION TO JURISDICTION. Each Obligor hereby irrevocably and
unconditionally submits, for itself and its Property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, either Issuing Lender or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement against any Obligor or
its properties in the courts of any jurisdiction.
(c) WAIVER OF VENUE. Each Obligor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) SERVICE OF PROCESS. Each party to this Agreement irrevocably consents
to service of process in the manner provided for notices in Section 10.01.
Nothing in this Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.
(a) TREATMENT OF CERTAIN INFORMATION. The Borrower acknowledges that from
time to time financial advisory, investment banking and other services may be
offered or provided to the Borrower or one or more of its Subsidiaries (in
connection with this Agreement or otherwise) by any Lender or by one or more
subsidiaries or affiliates of such Lender and the Borrower hereby authorizes
each Lender to share any information delivered to such Lender by the Borrower
and its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, to any such subsidiary or
affiliate, it being understood that any such subsidiary or affiliate receiving
such information shall be bound by the provisions of paragraph (b) of this
Section as if it were a Lender hereunder. Such authorization shall survive the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitments or the termination of this Agreement or any provision
hereof.
(b) CONFIDENTIALITY. Each of the Administrative Agent, the Issuing Lenders
and the Lenders agrees (on behalf of itself and each of its affiliates,
directors, officers, employees and representatives) to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (i) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (ii) to bank examiners (or any other regulatory
authority having jurisdiction over any Lender or the Administrative Agent),
(iii) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (iv) to any other party to this Agreement,
(v) in connection with the exercise of any remedies hereunder or under any other
Loan Document or any suit, action or proceeding relating to this Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder,
(vi) subject to an agreement containing provisions substantially the same as
those of this paragraph, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (vii) with the consent of the Borrower or (viii) to the
extent such Information (A) becomes publicly available other than as a result of
a breach of this paragraph or (B) becomes available to the Administrative Agent,
either Issuing Lender or any Lender on a nonconfidential basis from a source
other than an Obligor. For the purposes of this paragraph, "INFORMATION" means
all information received from any Obligor or any of its Subsidiaries or Joint
Venture Entities relating to any Obligor, its business or any such Subsidiary or
Joint Venture Entity, other than any such information that is available to the
Administrative Agent, either Issuing Lender or any Lender on a nonconfidential
basis prior to disclosure by an Obligor. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
Unless specifically prohibited by applicable law or court order, each
Lender and the Administrative Agent shall, prior to disclosure thereof, notify
the Borrower of any request for disclosure of any Information (A) by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Lender by such
governmental agency) or (B) pursuant to legal process, and will permit the
Borrower (to the extent the same would not adversely affect such Lender or the
Administrative Agent) to pursue available remedies to resist such disclosure and
or obtain a protective order limiting such disclosure.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
CANANDAIGUA BRANDS, INC.
By /s/ Thomas S. Summer
--------------------
Title: Chief Financial Officer
SUBSIDIARY GUARANTORS
---------------------
BATAVIA WINE CELLARS, INC.
CANANDAIGUA EUROPE LIMITED
CANANDAIGUA WINE COMPANY, INC
ROBERTS TRADING CORP.
By /s/ Thomas S. Summer
--------------------
Title: Treasurer
BARTON INCORPORATED
BARTON BRANDS, LTD.
BARTON BEERS, LTD.
BARTON BRANDS OF CALIFORNIA, INC.
BARTON BRANDS OF GEORGIA, INC.
BARTON DISTILLERS IMPORT CORP.
MONARCH IMPORT COMPANY
STEVENS POINT BEVERAGE CO.
THE VIKING DISTILLERY, INC.
By /s/ Raymond E. Powers
---------------------
Title: Treasurer
BARTON FINANCIAL CORPORATION
By /s/ Raymond E. Powers
---------------------
Title: President
LENDERS
-------
THE CHASE MANHATTAN BANK,
individually, as Swingline Lender
and as Administrative Agent
By /s/ Carol A. Ulmer
------------------
Title: Vice President
CREDIT SUISSE FIRST BOSTON
By /s/ Joel Glodowski
------------------
Title: Managing Director
By /s/ Daniel R. Wenger
--------------------
Title: Associate
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Judith L. Mayberry
----------------------
Title: Authorized Agent
FLEET BANK
By /s/ Martin K. Birmingham
------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ J. Alan Edwards
-------------------
Title: Authorized Signatory
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By /s/ Jim Brown
-------------
Title: Vice President
CREDIT AGRICOLE INDOSUEZ
By /s/ W. Leroy Startz
-------------------
Title: First Vice President
By /s/ Katherine L. Abbott
-----------------------
Title: First Vice President
CREDIT LYONNAIS, NEW YORK BRANCH
By /s/ Vladimir Labun
------------------
Title: First Vice President - Manager
MANUFACTURERS AND TRADERS TRUST
COMPANY
By /s/ Philip M. Smith
-------------------
Title: Regional Senior Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH
By /s/ Angelo J. Balestrieri
-------------------------
Title: Vice President
By /s/ W. Pieter C. Kodde
----------------------
Title: Vice President
THE SUMITOMO BANK, LIMITED
By /s/ James Drum
--------------
Title: Vice President, NY Office
By /s/ William N. Paty
-------------------
Title: Vice President and Manager
US TRUST
By /s/ Thomas Z. Macina
--------------------
Title: Vice President
WELLS FARGO BANK, N.A.
By /s/ Clifford Lawrence
---------------------
Title: Vice President
CORESTATES BANK, NATIONAL ASSOCIATION
By /s/ Robert A. Brown
-------------------
Title: Vice President
THE FUJI BANK LIMITED, NEW YORK BRANCH
By /s/ Teljl Teramoto
------------------
Title: Vice President & Manager
KEYBANK NATIONAL ASSOCIATION
By /s/ Michael Landini
-------------------
Title: Vice President
THE LONG TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By /s/ Jun Ebihara
---------------
Title:
MELLON BANK
By /s/ Peyton R. Latimer
---------------------
Title: Senior Vice President
MERITA BANK LTD
By /s/ Frank Maffei
----------------
Title: Vice President
By /s/ Clifford Abramsky
---------------------
Title: Vice President
NATIONAL CITY BANK
By /s/ Lisa B. Lisi
----------------
Title: Assistant Vice President
PNC BANK, NATIONAL ASSOCIATION
By /s/ Thomas R. Colwell
---------------------
Title: Vice President
THE SAKURA BANK, LIMITED
By /s/ Yasuhiro Terada
-------------------
Title: Senior Vice President
SANWA BANK LTD.
By /s/ Paul Judicke
----------------
Title: Vice President
STATE STREET BANK AND TRUST COMPANY
By /s/ Chris Del Signore
---------------------
Title:
SUMITOMO TRUST & BANKING CO., LTD.,
NEW YORK BRANCH
By /s/ Suraj P. Bhatia
-------------------
Title: Senior Vice President
Manager, Corporate Finance Dept.
SUNTRUST BANK, ATLANTA
By /s/ Robert V. Honeycutt
-----------------------
Title: Vice President
By /s/ William McEhl
-----------------
Title: B.O.
TOKAI BANK LTD., NEW YORK BRANCH
By /s/ Kaoru Oda
-------------
Title: Assistant General Manager
CREDIT AGREEMENT BETWEEN THE REGISTRANT,
ITS PRINCIPAL OPERATING SUBSIDIARIES, AND CERTAIN BANKS FOR WHICH
THE CHASE MANHATTAN BANK ACTS AS ADMINISTRATIVE AGENT
LIST OF OMITTED SCHEDULES AND EXHIBITS
SCHEDULE I - Commitments
SCHEDULE II - Material Agreements and Liens
SCHEDULE III - Litigation and Environmental Matters
SCHEDULE IV - Subsidiaries and Investments
SCHEDULE V - Stock Options
SCHEDULE VI - Real Property
SCHEDULE VII - Life Insurance Agreements
EXHIBIT A - Form of Assignment and Acceptance
EXHIBIT B - Form of Security Agreement
EXHIBIT C - Form of Guarantee Assumption Agreement
EXHIBIT D-1 - Form of Opinion of Special Counsel to Obligors
EXHIBIT D-2 - Form of Opinion of California Counsel to Obligors
EXHIBIT D-3 - Form of Opinion of Kentucky Counsel to Obligors
EXHIBIT E - Form of Opinion of Special New York Counsel to The Chase
Manhattan Bank