EXECUTION COPY
Exhibit 10.14
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$120,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
among
CORE-MARK INTERNATIONAL, INC.,
The Several Lenders
from Time to Time Parties Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of April 1, 1998
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS. . . . . . . . . . . . . . . . . . . . 24
2.1 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . 24
2.2 Procedure for Revolving Credit Borrowing . . . . . . . . . . . . . . . . 24
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.4 Termination or Reduction of Commitments. . . . . . . . . . . . . . . . . 25
2.5 Repayment of Loans; Evidence of Debt . . . . . . . . . . . . . . . . . . 25
2.6 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.7 Mandatory Prepayments and Other Reductions of Revolving Credit
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.8 Conversion and Continuation Options. . . . . . . . . . . . . . . . . . . 27
2.9 Maximum Number of Tranches . . . . . . . . . . . . . . . . . . . . . . . 27
2.10 Interest Rates and Payment Dates. . . . . . . . . . . . . . . . . . . . 27
2.11 Computation of Interest and Fees. . . . . . . . . . . . . . . . . . . . 28
2.12 Inability to Determine Interest Rate. . . . . . . . . . . . . . . . . . 29
2.13 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . . . . 29
2.14 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.15 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.16 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.17 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.18 Change of Lending Office. . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3. LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.1 L/C Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.2 Procedure for Issuance of Letters of Credit. . . . . . . . . . . . . . . 34
3.3 Fees, Commissions and Other Charges. . . . . . . . . . . . . . . . . . . 35
3.4 L/C Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.5 Reimbursement Obligation of the Borrower . . . . . . . . . . . . . . . . 36
3.6 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.7 Letter of Credit Payments. . . . . . . . . . . . . . . . . . . . . . . . 37
3.8 Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 38
4.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.2 No Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . 38
4.4 Corporate Power; Authorization; Enforceable Obligations. . . . . . . . . 39
4.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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4.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . 39
4.9 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.10 No Burdensome Restrictions. . . . . . . . . . . . . . . . . . . . . . . 40
4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.12 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.14 Investment Company Act; Other Regulations . . . . . . . . . . . . . . . 41
4.15 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.16 Purpose of Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.18 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . 42
4.19 Security Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.20 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5. CONDITIONS TO EFFECTIVENESS. . . . . . . . . . . . . . . . . . . . . . 43
5.1 Conditions to Restatement Effective Date . . . . . . . . . . . . . . . . 43
5.2 Conditions to Each Extension of Credit . . . . . . . . . . . . . . . . . 46
SECTION 6. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . 46
6.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.2 Certificates; Other Information. . . . . . . . . . . . . . . . . . . . . 47
6.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.4 Conduct of Business and Maintenance of Existence . . . . . . . . . . . . 49
6.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . 49
6.6 Inspection of Property; Books and Records; Discussions . . . . . . . . . 49
6.7 Annual Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.9 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.10 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.11 Cash Management System. . . . . . . . . . . . . . . . . . . . . . . . . 51
6.12 Additional Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.13 Tax Stamp Bonding.. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.14 Compliance with Terms of Leaseholds.. . . . . . . . . . . . . . . . . . 52
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.1 Financial Condition Covenants. . . . . . . . . . . . . . . . . . . . . . 53
7.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 54
7.3 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.4 Limitation on Guarantee Obligations. . . . . . . . . . . . . . . . . . . 56
7.5 Limitation on Fundamental Changes. . . . . . . . . . . . . . . . . . . . 57
7.6 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . . . . 57
7.7 Limitation on Speculative Transactions . . . . . . . . . . . . . . . . . 58
7.8 Limitation on Dividends. . . . . . . . . . . . . . . . . . . . . . . . . 58
7.9 Limitation on Capital Expenditures . . . . . . . . . . . . . . . . . . . 58
7.10 Limitation on Investments, Loans and Advances . . . . . . . . . . . . . 59
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7.11 Limitation on Optional Payments and Modifications of Debt
Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.12 Limitation on Transactions with Affiliates. . . . . . . . . . . . . . . 59
7.13 Limitation on Sales and Leasebacks. . . . . . . . . . . . . . . . . . . 60
7.14 Limitation on Changes in Fiscal Year. . . . . . . . . . . . . . . . . . 60
7.15 Limitation on Negative Pledge Clauses . . . . . . . . . . . . . . . . . 60
7.16 Limitation on Lines of Business . . . . . . . . . . . . . . . . . . . . 60
SECTION 8. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . 63
9.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.4 Reliance by Administrative Agent . . . . . . . . . . . . . . . . . . . . 64
9.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.6 Non-Reliance on Administrative Agent and Other Lenders . . . . . . . . . 65
9.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.8 Administrative Agent in Its Individual Capacity. . . . . . . . . . . . . 66
9.9 Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . 66
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . . . . . 68
10.4 Survival of Representations and Warranties. . . . . . . . . . . . . . . 68
10.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . 68
10.6 Successors and Assigns; Participations and Assignments. . . . . . . . . 69
10.7 Adjustments; Set-off. . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.9 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.10 Integration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.11 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.12 Submission To Jurisdiction; Waivers. . . . . . . . . . . . . . . . . . 72
10.13 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.14 WAIVERS OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . 73
10.15 Judgment Currency. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.16 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.17 Special Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 74
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ANNEXES
Annex A Fee and Applicable Margin Table
SCHEDULES
1.1(a) Commitments
4.2 Changes
4.4 Consents
4.6 Litigation
4.8 Ownership of Property; Liens
4.9 Intellectual Property
4.11 Taxes
4.13 ERISA
4.15 Subsidiaries
4.17 Environmental Matters
4.19(b) Security Documents; Offices
7.2 Indebtedness
7.3 Liens
7.4 Guarantee Obligations
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Borrowing Base Certificate
Exhibit C Form of Borrowing Certificate
Exhibit D Form of Responsible Officer's Certificate
Exhibit E Form of Supplemental Reporting
Exhibit F-1 Form of Opinion of Paul, Weiss, Rifkind,
Wharton & Garrison
Exhibit F-2 Form of Opinion of Sheppard, Mullin,
Richter & Hampton, LLP
Exhibit F-3 Form of Opinion of Stoel Rives LLP
Exhibit F-4 Form of Opinions of Stikeman, Elliott; and Thompson Dorfman
Sweatman
Exhibit G Form of Assignment and Acceptance
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 1, 1998,
among CORE-MARK INTERNATIONAL, INC., a Delaware corporation (the "BORROWER"),
the several banks and other financial institutions from time to time parties to
this Agreement (the "LENDERS") and The Chase Manhattan Bank, a New York banking
corporation, as administrative agent for the Lenders hereunder.
W I T N E S S E T H :
WHEREAS, the Borrower, certain of the Lenders and the Administrative
Agent are parties to that certain Credit Agreement, dated as of August 7, 1996
(as heretofore amended, the "EXISTING CREDIT AGREEMENT");
WHEREAS, subject to the terms and conditions of this Agreement, the
Borrower, the Lenders and the Administrative Agent wish to amend and restate the
Existing Credit Agreement in its entirety as provided herein;
NOW, THEREFORE, subject to the satisfaction of the conditions set
forth in subsection 5.1, the Borrower, the Lenders and the Administrative Agent
hereby agree to amend and restate the Existing Credit Agreement in its entirety
to read as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
For purposes hereof: "PRIME RATE" shall mean the rate of interest per
annum publicly announced from time to time by the Administrative Agent as
its prime rate in effect at its principal office in New York City (the
Prime Rate not being intended to be the lowest rate of interest charged by
Chase Manhattan Bank in connection with extensions of credit to debtors);
"BASE CD RATE" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which is one and
the denominator of which is one minus the C/D Reserve Percentage and (b)
the C/D Assessment Rate; "THREE-MONTH SECONDARY CD RATE" shall mean, for
any day, the secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board of Governors of
the Federal Reserve System (the "BOARD") through the public information
telephone line of the Federal Reserve Bank of New York (which rate will,
under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or, if
such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money
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center banks in New York City received at approximately 10:00 A.M., New
York City time, on such day (or, if such day shall not be a Business Day,
on the next preceding Business Day) by the Administrative Agent from three
New York City negotiable certificate of deposit dealers of recognized
standing selected by it; and "FEDERAL FUNDS EFFECTIVE RATE" shall mean,
for any day, the weighted average 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 which is a Business Day, the average of the quotations for the
day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. Any change in
the ABR due to a change in the Prime Rate, the Three-Month Secondary CD
Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"ABR LOANS": Loans the rate of interest applicable to which is based
upon the ABR.
"ACCOUNT": as defined in Section 9-106 of the UCC.
"ADJUSTMENT DATE": the second Business Day following receipt by the
Administrative Agent of both (a) the financial statements required to be
delivered pursuant to subsection 6.1(a) or 6.1(b), as the case may be, for
the most recently completed fiscal period and (b) the certificate required
to be delivered pursuant to subsection 6.2(b) with respect to such fiscal
period.
"ADMINISTRATIVE AGENT": Chase, together with its affiliates, as the
arranger of the Commitments and as the administrative agent for the Lenders
under this Agreement and the other Loan Documents.
"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
"AGGREGATE COVERED OUTSTANDING REVOLVING EXTENSIONS OF CREDIT": at
any date of determination, the excess of (a) the Aggregate Outstanding
Revolving Extensions of Credit over (b) the lesser of the L/C Obligations
then outstanding and the Uncovered L/C Amount.
"AGGREGATE OUTSTANDING REVOLVING EXTENSIONS OF CREDIT": at any time,
an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Credit Loans then outstanding and (b) the L/C Obligations then
outstanding.
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"AGREEMENT": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"APPLICABLE COMMITMENT FEE RATE": 0.375%, PROVIDED that, the
Applicable Commitment Fee Rate will be adjusted, on each Adjustment Date
occurring after the Restatement Effective Date, to the Commitment Fee Rate
set forth on ANNEX A opposite the Category of the Borrower in effect on
such Adjustment Date, PROVIDED, HOWEVER that the Applicable Commitment Fee
Rate shall not be adjusted below Category 2 for a period of six months
following the Restatement Effective Date, at which time the Applicable
Commitment Fee Rate will be adjusted if necessary based on the Borrower's
most recent financial statements. In the event that the financial
statements required to be delivered pursuant to subsection 6.1(a) or
6.1(b), as applicable, and the related certificate required pursuant to
subsection 6.2(b), are not delivered when due, the Administrative Agent or
the Majority Lenders may, at their option, during the period from the date
upon which such financial statements were required to be delivered until
two Business Days following the date upon which they actually are
delivered, increase the Applicable Commitment Fee Rate to 0.50%.
"APPLICABLE MARGIN": for each Type of Revolving Loan, the rate per
annum set forth under the relevant column heading below:
ABR LOANS EURODOLLAR LOANS
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1.00% 2.00%
PROVIDED that, the Applicable Margin for each Type of Revolving Loan will
be adjusted, on each Adjustment Date occurring after the Restatement
Effective Date, to the Applicable Margin set forth on ANNEX A opposite the
Category of the Borrower in effect on such Adjustment Date, PROVIDED,
HOWEVER, that the Applicable Margin shall not be adjusted below Category 2
for a period of six months following the Restatement Effective Date, at
which time the Applicable Margin will be adjusted if necessary based on the
Borrower's most recent financial statements. In the event that the
financial statements required to be delivered pursuant to subsection 6.1(a)
or 6.1(b), as applicable, and the related certificate required pursuant to
subsection 6.2(b), are not delivered when due, the Administrative Agent or
the Majority Lenders may, at their option, during the period from the date
upon which such financial statements were required to be delivered until
two Business Days following the date upon which they actually are
delivered, increase the Applicable Margin for ABR Loans to 1.50% and the
Applicable Margin for Eurodollar Loans to 2.50%.
"APPLICATION": an application, in such form as the Issuing Bank may
specify from time to time, requesting the Issuing Bank to open a Letter of
Credit.
"ASSIGNEE": as defined in subsection 10.6(c).
"AVAILABLE REVOLVING CREDIT COMMITMENTS": at any time, an amount
equal to the excess, if any, of (a) the Revolving Credit Commitments over
(b) the Aggregate Outstanding Revolving Extensions of Credit.
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"BORROWER SECURITY DOCUMENTS": the collective reference to the
Security Agreement and the Borrower Stock Pledge Agreement.
"BORROWER STOCK PLEDGE AGREEMENT": the Borrower Stock Pledge
Agreement, dated as of August 7, 1996, executed and delivered by the
Borrower in connection with the Existing Credit Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.
"BORROWING BASE": on any date of determination thereof, the sum
(without duplication) of:
a. 85% of the aggregate Eligible Canadian Accounts Receivable;
b. 85% of the excess of the aggregate Eligible Canadian Cash Equivalents
over the Canadian Cash Adjustment;
c. 75% of the aggregate Eligible Vendor Receivables;
d. 85% of the aggregate Eligible Cigarette Inventory purchased by the
Borrower on zero day EFT terms;
e. 65% of the aggregate Eligible Cigarette Inventory purchased by the
Borrower on terms other than zero day EFT terms;
f. 80% of the aggregate Eligible Tobacco and Cigar Inventory;
g. 65% of the aggregate Eligible Other Inventory; and
h. 100% of the aggregate cash held by the Administrative Agent in the US
Cash Collateral Account.
All determinations in connection with the Borrowing Base shall be (i) made
by the Borrower in conjunction with the Borrowing Base Certificates and
Supplemental Reportings to be provided by the Borrower to the
Administrative Agent pursuant to subsection 6.2(f), (ii) made by the
Borrower in Dollars, and any amounts determined in Canadian dollars shall,
for purposes of calculating the Borrowing Base, be converted into Dollars
at the Spot Rate and (iii) certified to the Administrative Agent by a
Responsible Officer of the Borrower, provided, however, that the
Administrative Agent shall have the final right to review and adjust, in
its reasonable judgment, any such determination to the extent such
determination is not in accordance with this Agreement. The Administrative
Agent may also decrease any of the foregoing percentages upon ten Business
Days' written notice to the Borrower if, in the judgment of the
Administrative Agent in its reasonable discretion based on the findings of
the on-site periodic field exams conducted pursuant to subsection 6.7, a
material adverse change shall have occurred in any of the items included in
the Borrowing Base.
"BORROWING BASE CERTIFICATE": a certificate delivered by the Borrower
to the Administrative Agent pursuant to subsection 6.2(f) and certified by
a Responsible Officer of the Borrower, substantially in the form of Exhibit
B.
"BORROWING DATE": any Business Day specified in a notice pursuant to
subsection 2.2 as a date on which the Borrower requests the Lenders to make
Loans hereunder.
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"BUSINESS": as defined in subsection 4.17.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close.
"CANADIAN CASH ADJUSTMENT": as of any date of determination, the
aggregate total of all checks written and outstanding, payable to Canadian
government cigarette tax jurisdictions, for amounts owing to them related
to cigarette sales or purchases.
"CANADIAN CASH COLLATERAL ACCOUNT": has the meaning specified in the
Security Agreement.
"CANADIAN CASH EQUIVALENTS": means (i) any term deposit receipts of
the Bank of Montreal having a maturity of not greater than 90 days from the
date of acquisition thereof, (ii) cash owned by the Borrower or any of its
Subsidiaries and denominated in Canadian dollars and (iii) subject to the
receipt by the Administrative Agent of a written legal opinion in form and
substance and from a firm satisfactory to the Administrative Agent and its
counsel to the effect that the Administrative Agent and the Lenders would
have a perfected security interest in such items, the following items
having a maturity of not greater than 90 days from the date of acquisition
thereof:
(a) readily marketable direct obligations of the Government of
Canada or any province thereof or obligations unconditionally
guaranteed by the full faith and credit of the Government of Canada;
(b) insured certificates of deposit, deposit notes or term
deposit receipts of any commercial bank listed on Schedule 1 of the
Bank Act (Canada); or
(c) commercial paper in an aggregate amount of no more than
$1,000,000 per issuer outstanding at any time, issued by any
corporation organized under the laws of Canada or any province thereof
and rated at least A-1 or better (or the then equivalent grade) by
Canada Bond Rating Service or R-2 (middle) or better (or the then
equivalent grade) by Dominion Bond Rating Service.
"CANADIAN RECEIVABLE OFFSETS": the aggregate Canadian credit balances
of the Borrower (determined on an account debtor by account debtor basis)
more than 45 days past due.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"CASH INTEREST EXPENSE": of any Person for any period, Interest
Expense of such Person for such period (a) minus, in each case to the
extent included in determining such Interest Expense for such period, the
sum of the following: (i) non-cash expenses for interest payable in kind
and (ii) amortization of debt discount and
6
fees and (iii) the fees described in subsections 2.3 and 3.3 and (b) plus
the sum of the following in each case to the extent previously subtracted
pursuant to clause (a) of this definition: cash payments made by such
Person or any Subsidiary of such Person during such period in respect of
the items referred to in such clause (a)(i).
"C/D ASSESSMENT RATE": for any day as applied to any ABR Loan, the
annual assessment rate in effect on such day which is payable by a member
of the Bank Insurance Fund maintained by the Federal Deposit Insurance
Corporation (the "FDIC") classified as well-capitalized and within
supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. Section 327.4 (or any
successor provision) to the FDIC (or any successor) for the FDIC's (or
such successor's) insuring time deposits at offices of such institution
in the United States.
"C/D RESERVE PERCENTAGE": for any day as applied to any ABR Loan,
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) (the "BOARD"), for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board) in
respect of new non-personal time deposits in Dollars having a maturity of
30 days or more.
"CHASE": The Chase Manhattan Bank.
"CIGARETTE INVENTORY": the cigarette Inventory of the Borrower and
its Subsidiaries, including all tax stamps (whether affixed or unaffixed)
in respect thereof.
"CMIC": Core-Mark Interrelated Companies, Inc., a California
corporation and a wholly-owned Subsidiary of the Borrower.
"CM MIDCONTINENT": Core-Mark Midcontinent, Inc., an Arkansas
corporation and a wholly-owned Subsidiary of the Borrower.
"C/M PRODUCTS": C/M Products, Inc., a California corporation and a
wholly-owned Subsidiary of the Borrower.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document.
"COMMERCIAL LETTER OF CREDIT": as defined in subsection 3.1(b)(1)(B).
"COMMITMENT PERIOD": the period from and including the date hereof to
but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.
"COMMITMENTS": the collective reference to the Revolving Credit
Commitments.
7
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"CONSOLIDATED": when used in connection with any defined term, and not
otherwise defined, means such term as it applies to the Borrower and its
Subsidiaries on a consolidated basis, after eliminating all intercompany
items.
"CONSOLIDATED WORKING CAPITAL": as of the date of determination,
Current Assets of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in conformity with GAAP, minus Current
Liabilities of the Borrower and its Subsidiaries at such date, determined
on a consolidated basis in conformity with GAAP.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or any provision applicable to such Person
of any agreement, instrument or other undertaking to which such Person is a
party or by which it or any of its property is bound.
"CONTROL PERCENTAGE": means 51%, provided that such percentage may be
reduced but not below 35%, if prior to or concurrently with such reduction,
the following conditions have been satisfied: (1) there has been an initial
public offering of the common stock of the Borrower, (2) the Uncovered L/C
Amount shall have been permanently reduced to zero and (3) the lesser of
(x) the available Borrowing Base and (y) the Available Revolving Credit
Commitments shall be at least $15,000,000 determined on a pro forma basis
giving effect to the transaction that causes such reduction on the basis of
the average amount of the Borrowing Base and the Aggregate Outstanding
Revolving Extensions of Credit, respectively, during the calendar month
preceding the month in which such transaction occurs.
"CURRENT ASSETS": of any Person, at the date of determination, all
assets of such Person which would, in accordance with GAAP (using the
first-in, first-out inventory valuation method), be classified on a balance
sheet of such Person as current assets, other than deferred taxes.
"CURRENT LIABILITIES": of any Person, at the date of determination,
all liabilities of such Person which would, in accordance with GAAP (using
the first-in, first-out inventory valuation method), be classified on a
balance sheet of such Person as current liabilities, other than deferred
taxes and the current portion of any long-term Indebtedness of such Person.
"CUSTOMER REBATE RESERVES": $30,000 for rebates to customers subject
to change by the Administrative Agent in its reasonable discretion based on
the findings of the on-site periodic field exams conducted pursuant to
subsection 6.7.
8
"DEFAULT": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"DEPOSIT ACCOUNT LETTERS": has the meaning specified in the Security
Agreement.
"DEPOSIT ACCOUNTS": has the meaning specified in the Security
Agreement.
"DEPOSITORY LETTERS": has the meaning specified in the Security
Agreement.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"EBITDA": means with respect to any Person, for any period, the Net
Income of such Person for such period determined on a consolidated basis,
PLUS, to the extent deducted in determining such Net Income, (i) Interest
Expense, (ii) depreciation, (iii) depletion, (iv) amortization, (v) all
Federal, state, local and foreign income taxes and (vi) any extraordinary
and unusual losses, and, MINUS, to the extent added in determining such
Net Income, any extraordinary and unusual gains, all as determined on a
consolidated basis in accordance with GAAP using the first-in, first-out
inventory valuation method.
"EFT": electronic funds transfer.
"ELIGIBLE CANADIAN ACCOUNTS RECEIVABLE": at a particular date, the
total outstanding balance of accounts receivable before bad debt reserves
historically recorded by the Borrower, determined in accordance with GAAP
and stated on a basis consistent with the historical practices of the
Borrower as of the date thereof (but excluding in any event any material
delivery charges, freight charges, finance charges, late fees and other
fees and less the value of any accrual which has been recorded by the
Borrower with respect to downward price adjustments) of the Borrower or any
of its Subsidiaries (excluding Vendor Receivables): (a) which are accounts
within the meaning of Section 9-106 of the New York Uniform Commercial Code
(or any successor provisions thereto), (b) which are bona fide, valid and
legally enforceable obligations of the parties thereto or the account
debtor in respect thereof and arise from the actual sale of goods in the
ordinary course of business to such account debtor or parties, (c) with
respect to which all consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority required to
be obtained, effected or given in connection with the execution, delivery
and performance of such accounts receivable have been duly obtained,
effected or given, are in full force and effect and do not subject the
scope of such Accounts to any materially adverse limitation, either
specific or general in nature, (d) which conform in all other respects to
the representations and warranties contained herein and in the Security
Agreement, (e) which have been invoiced by the Borrower or any of its
Subsidiaries and which are not more than 45 days past due, (f) which are
not owed by an obligor which is (i) a Governmental Authority, or (ii) an
Affiliate or Subsidiary of the Borrower, (g) which are not owed by an
obligor which has taken any of the actions or suffered any of the events of
the kind described in subsection 8(f), (h) which are not
9
owed by an obligor 25% or more of the outstanding balance of accounts
receivable (that otherwise meet the requirements of clauses (n) and (o) of
this definition) of which do not constitute Eligible Canadian Accounts
Receivable hereunder, (i) which are assignable and subject to a perfected,
first-priority Lien in favor of the Administrative Agent pursuant to the
Security Agreement and which are not subject to any other Liens except
Liens permitted under subsection 7.3(a), (b) or (h), (j) which are not
owed by an obligor with terms greater than 45 days, (k) which the
Borrower is not required to perform any additional services or perform or
incur any additional obligations to the account debtor in order to collect
such accounts receivable, (l) which are not subject to any defense,
setoff, recoupment or counterclaim, (m) to which the Borrower or any of its
Subsidiaries has good, valid and marketable title as sole owner and as to
which no other Person has asserted in writing any claim to right of
possession or dominion, (n) the obligor in respect of which is located in
Canada, (o) which is denominated in Dollars or in Canadian dollars, and
(p) which the Administrative Agent in its reasonable discretion based on
the findings of the on-site periodic field exams conducted pursuant to
subsection 6.7 has not otherwise determined to be unacceptable, EXCLUDING
the aggregate amount of Canadian Receivable Offsets and Customer Rebate
Reserves and the aggregate amount owing to any obligor who is a supplier
or creditor of the Borrower or any of its Subsidiaries to the extent that
there is a receivable balance due from such obligor that would otherwise
constitute an Eligible Canadian Accounts Receivable.
"ELIGIBLE CANADIAN CASH EQUIVALENTS": at a particular date, the total
value of Canadian Cash Equivalents credited to the Canadian Cash Collateral
Account and the Deposit Accounts in accordance with subsection 6.11.
"ELIGIBLE CIGARETTE INVENTORY": at a particular date, the total value
of the Cigarette Inventory of the Borrower and its Subsidiaries (calculated
as the lower of (x) cost, determined on a first in first out basis in
accordance with GAAP and stated on a basis consistent with the historical
practices of the Borrower on the date hereof before inventory reserves
historically recorded by the Borrower and (y) fair market value) (a) which
conforms in all respects to the representations and warranties contained
herein and in the Security Agreement, (b) which is located in the United
States of America, (c) which is subject to a perfected, first-priority Lien
in favor of the Administrative Agent pursuant to the Security Agreement and
which is not subject to any other Liens except Liens permitted under
subsection 7.3 (a), (b) or (h), (d) which is stored in the Borrower's or
any of its Subsidiaries' warehouses, which has been placed in the
Borrower's or any of its Subsidiaries' storage area or allocated to the
Borrower or any of its Subsidiaries in a third-party warehouse and
identified separately from the inventory of others, or which is in transit
between such third-party warehouses and Borrower's or any of its
Subsidiaries' warehouses, (e) to which the Borrower or any of its
Subsidiaries has good, valid and marketable title as sole owner and as to
which no other Person has asserted in writing any claim to right of
possession or dominion, (f) which is not raw materials, supplies, work-
in-process or packaging, packing or shipping materials, and (g) which the
Administrative Agent in its reasonable discretion based on the findings of
the on-site periodic field exams conducted pursuant to subsection 6.7 has
not otherwise determined to be unacceptable, EXCLUDING the
10
aggregate amount of the Inventory Reserves, Tax Reserves and Landlord Lien
Reserves allocable to such Inventory.
"ELIGIBLE OTHER INVENTORY": at a particular date, the total value of
Inventory of the Borrower and its Subsidiaries (calculated as the lower of
(x) cost, determined on a first in a first out basis in accordance with
GAAP and stated on a basis consistent with the historical practices of the
Borrower on the date hereof before inventory reserves historically recorded
by the Borrower, and (y) fair market value: (a) which does not consist of
Tobacco Products Inventory, (b) which does not consist of fresh produce,
fresh meat or dairy products in an aggregate amount in excess of $250,000,
(c) which conforms in all respects to the representations and warranties
contained herein and in the Security Agreement, (d) which is located in the
United States of America, (e) which is subject to a perfected, first-
priority Lien in favor of the Administrative Agent pursuant to the Security
Agreement and which is not subject to any other Liens except Liens
permitted under subsection 7.3 (a), (b) or (h), (f) which is stored in the
Borrower's or any of its Subsidiaries' warehouses, which has been placed in
the Borrower's or any of its Subsidiaries' storage area or allocated to the
Borrower or any of its Subsidiaries in a third-party warehouse and
identified separately from the inventory of others, or which is in transit
between such third-party warehouses and Borrower's or any of its
Subsidiaries' warehouses, (g) to which the Borrower or any of its
Subsidiaries has good, valid and marketable title as sole owner and as to
which no other Person has asserted in writing any claim to right of
possession or dominion, (h) which is not raw materials, supplies, work-
in-process or packaging, packing or shipping materials, and (i) which the
Administrative Agent in its reasonable discretion based on the findings of
the on-site periodic field exams conducted pursuant to subsection 6.7 has
not otherwise determined to be unacceptable, EXCLUDING the aggregate amount
of the Inventory Reserves, Tax Reserves and Landlord Lien Reserves
allocable to such Inventory.
"ELIGIBLE TOBACCO AND CIGAR INVENTORY": at a particular date, the
total value of the Tobacco and Cigar Inventory of the Borrower and its
Subsidiaries (calculated as the lower of (x) cost, determined on a first in
first out basis in accordance with GAAP and stated on a basis consistent
with the historical practices of the Borrower on the date hereof before
inventory reserves historically recorded by the Borrower, and (y) fair
market value): (a) which is not Eligible Cigarette Inventory, (b) which
conforms in all respects to the representations and warranties contained
herein and in the Security Agreement, (c) which is located in the United
States of America, (d) which is subject to a perfected, first-priority Lien
in favor of the Administrative Agent pursuant to the Security Agreement and
which is not subject to any other Liens except Liens permitted under
subsection 7.3 (a), (b) or (h), (e) which is stored in the Borrower's or
any of its Subsidiaries' warehouses, which has been placed in the
Borrower's or any of its Subsidiaries' storage area or allocated to the
Borrower or any of its Subsidiaries in a third-party warehouse and
identified separately from the inventory of others, or which is in transit
between such third-party warehouses and Borrower's or any of its
Subsidiaries' warehouses, (f) to which the Borrower or any of its
Subsidiaries has good, valid and marketable title as sole owner and as to
which no other Person has asserted in writing any claim to right of
possession or dominion, (g) which is not raw materials, supplies, work-in-
process or packaging, packing or shipping materials, and
11
(h) which the Administrative Agent in its reasonable discretion based on
the findings of the on-site periodic field exams conducted pursuant to
subsection 6.7 has not otherwise determined to be unacceptable, EXCLUDING
the aggregate amount of the Inventory Reserves, Tax Reserves and Landlord
Lien Reserves allocable to such Inventory.
"ELIGIBLE VENDOR RECEIVABLES": at a particular date, the total
outstanding balance of Vendor Receivables of the Borrower and its
Subsidiaries, determined in accordance with GAAP and stated on a basis
consistent with the historical practices of the Borrower as of the date
thereof (a) which are accounts within the meaning of Section 9-106 of the
New York Uniform Commercial Code (or any successor provisions thereto), (b)
which are bona fide, valid and legally enforceable obligations of the
parties thereto or the account debtor in respect thereof and arise in the
ordinary course of business to such account debtor or parties, (c) with
respect to which all consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority required to
be obtained, effected or given in connection with the execution, delivery
and performance of such accounts receivable have been duly obtained,
effected or given, are in full force and effect and do not subject the
scope of such Accounts to any materially adverse limitation, either
specific or general in nature, (d) which conform in all other respects to
the representations and warranties contained herein and in the Security
Agreement, (e) which are not owed by an obligor which is (i) a Governmental
Authority, or (ii) an Affiliate or Subsidiary of the Borrower, (f) which
are not owed by an obligor which has taken any of the actions or suffered
any of the events of the kind described in subsection 8(f), (g) which are
assignable and subject to a perfected, first-priority Lien in favor of the
Administrative Agent pursuant to the Security Agreement and which are
not subject to any other Liens except Liens permitted under subsection
7.3(a), (b) or (h), (h) which are not subject to any defense, setoff,
recoupment or counterclaim, (i) to which the Borrower or any of its
Subsidiaries has good, valid and marketable title as sole owner and as to
which no other Person has asserted in writing any claim to right of
possession or dominion, (j) the obligor in respect of which is located in
the United States of America or in Canada, (k) which is denominated in
Dollars or in Canadian dollars, and (l) which the Administrative Agent in
its reasonable discretion based on the findings of the on-site periodic
field exams conducted pursuant to subsection 6.7 has not otherwise
determined to be unacceptable, EXCLUDING (1) the aggregate amount owing to
any obligor who is a supplier or creditor of the Borrower or any of its
Subsidiaries to the extent that there is a receivable balance due from
such obligor that would otherwise constitute an Eligible Vendor Receivable
and (2) 50% of any Vendor Receivable due 180 days or more from the
applicable date of determination.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state,
provincial, local or municipal laws, rules, guidelines, orders,
regulations, statutes, ordinances, codes, decrees, requirements of any
Governmental Authority or other Requirements of Law (including common law)
regulating, relating to or imposing liability or standards of conduct
concerning protection of employee health and safety or the environment, as
now or may at any time hereafter be in effect.
12
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
rate at which Chase is offered Dollar deposits at or about 10:00 A.M., New
York City time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations in respect of its Eurodollar Loans are
then being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to the
amount of its Eurodollar Loan to be outstanding during such Interest
Period.
"EURODOLLAR LOANS": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EVENT OF DEFAULT": any of the events specified in Section 8,
PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"EXISTING CREDIT AGREEMENT": as defined in the recitals hereto.
"EXISTING CREDIT FACILITY": the Existing Credit Agreement.
"EXISTING HIGH YIELD SUBORDINATED DEBT": Indebtedness of the Borrower
evidenced by the High Yield Notes.
"EXITING LENDER": a lender under the Existing Credit Facility who is
not a Lender under this Agreement.
"FINANCING LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
13
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any state,
province or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "PRIMARY OBLIGATIONS") of any other third Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; PROVIDED,
HOWEVER, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and
the maximum amount for which such guaranteeing person may be liable are
not stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in
good faith.
"GUARANTOR": any Person who delivered the Subsidiaries Guarantee.
"HEDGE AGREEMENTS": means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"HIGH YIELD NOTES": $75,000,000 11-3/8% senior subordinated notes due
2003 of the Borrower issued pursuant to the indenture dated as of September
27, 1996.
"INDEBTEDNESS": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which
14
is evidenced by a note, bond, debenture or similar instrument, (c) all
obligations of such Person under Financing Leases, (d) all obligations of
such Person in respect of outstanding letters of credit, acceptances and
similar obligations created for the account of such Person, (e) all
obligations of such Person under Hedge Agreements and (f) all liabilities
secured by any Lien on any property owned by such Person even though such
Person has not assumed or otherwise become liable for the payment thereof.
Indebtedness of the Borrower and its Subsidiaries shall include, without
limitation, the liabilities of the Receivables Sub under the Receivables
Transaction whether or not such liabilities would be classified as
indebtedness on a Consolidated balance sheet of the Borrower under GAAP.
The principal amount of such liabilities at any time shall be deemed to be
the Invested Amount at such time.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": the collective reference to Copyrights,
Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark
Licenses, in each case, as defined in the Security Agreement.
"INTEREST EXPENSE": of any Person for any period the amount of
interest expense, both expensed and capitalized, of such Person, determined
on a consolidated basis in accordance with GAAP, for such period on the
aggregate principal amount of its Indebtedness.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day of each
March, June, September and December, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day which is three months or a whole multiple
thereof, after the first day of such Interest Period and the last day of
such Interest Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six months thereafter, as selected by
the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then
current Interest Period with respect thereto;
15
PROVIDED that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date;
(3) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(4) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"INVENTORY": as defined in Section 9-109(4) of the UCC.
"INVENTORY RESERVE": with respect to any Inventory of the Borrower
and its Subsidiaries, determined on a first in first out basis in
accordance with GAAP and stated on a basis consistent with the historical
practices of the Borrower on the date hereof, which intent is to record a
deterioration in Inventory value for damaged, unsalable in the ordinary
course or otherwise unmerchantable items or which have been held for more
than six months in the case of Tobacco Products Inventory or more than
twelve months in the case of other Inventory or is stale.
"INVESTED AMOUNT": shall mean, with respect to any date of
determination, an amount equal to the outstanding principal amount of the
investment under the Receivables Transaction on such date.
"ISSUING BANK": Chase or an Affiliate of Chase designated by it, in
its capacity as issuer of any Letter of Credit; initially, Chase Manhattan
Bank Delaware.
"LANDLORD LIEN RESERVES": at any time, the aggregate amount of any
and all past due and current amounts then owing by the Borrower and its
Subsidiaries to landlords in respect of their warehouse facilities.
"L/C COMMITMENT": at any date of determination the lesser of
$40,000,000 and Revolving Credit Commitments at such date.
"L/C FEE PAYMENT DATE": the last day of each March, June, September,
and December, and the Termination Date.
16
"L/C OBLIGATIONS": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit
which have not then been reimbursed pursuant to subsection 3.5(a).
"L/C PARTICIPANTS": the collective reference to all the Lenders with
Revolving Credit Commitments other than the Issuing Bank.
"LEASE EXPENSE": for any Person for any period, the aggregate amount
of fixed and contingent rentals payable by such Person for such period with
respect to leases of real and personal property.
"LETTERS OF CREDIT": as defined in subsection 3.1(a).
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as
any of the foregoing).
"LOAN": any loan made by any Lender pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, any Notes, the Applications, any
Letters of Credit, the Subsidiaries Guarantee and the Security Documents.
"LOAN PARTIES": the Borrower and each Subsidiary of the Borrower
which is a party to a Loan Document.
"MAJORITY LENDERS": at any time, Lenders the Voting Percentages of
which aggregate more than 50%.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole or (b) the validity
or enforceability of this or any of the other Loan Documents or the rights
or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
17
"NET INCOME": of any Person for any period, net income of such Person,
determined on a consolidated basis in accordance with GAAP.
"NET WORTH": means, with respect to any Person as of any date of
determination, the stockholder's equity of such Person as of such date,
without giving effect to any cumulative gains or losses from foreign
currency translations PLUS minority interests of such Person as of such
date, in each case determined on a Consolidated basis and in accordance
with GAAP using the first-in, first-out inventory valuation method
(excluding any additional minimum pension liability); plus any reduction in
Net Worth attributable to the write-off on the Restatement Effective Date
of up to $700,000 of fees paid by the Borrower in connection with the
Existing Credit Facility.
"NON-EXCLUDED TAXES": as defined in subsection 2.16.
"NOTES": the Revolving Credit Notes.
"PARTICIPANT": as defined in subsection 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"PERMITTED ACQUISITION": any acquisition of all or substantially all
the assets of, or shares or other equity interests in, a Person or division
or line of business of a Person or other significant assets of a Person
(other than inventory, leases, materials and equipment in the ordinary
course of business) if immediately after giving effect thereto: (a) no
Default or Event of Default shall have occurred and be continuing or would
result therefrom, (b) all transactions related thereto shall be consummated
in all material respects in accordance with applicable laws, (c) 100% of
the Capital Stock of any acquired or newly formed corporation, partnership,
association or other business entity are owned directly by the Borrower or
a Subsidiary and all actions required to be taken, if any, with respect to
such acquired or newly formed subsidiary under subsections 6.10 and 6.12
shall have been taken, (d)(i) the Borrower shall be in compliance, on a PRO
FORMA basis after giving effect to such acquisition or formation, with the
covenants contained in subsection 7.1 recomputed as at the last day of the
most recently ended fiscal quarter of the Borrower as if such acquisition
had occurred on the first day of each relevant period for testing such
compliance, and the Borrower shall have delivered to the Administrative
Agent a certificate of a Responsible Officer to such effect, together with
all relevant financial information for such subsidiary or assets (to the
extent reasonably available), and (ii) after giving effect to such
transaction, any acquired or newly formed subsidiary shall not be liable
for any Indebtedness (except for Indebtedness permitted by subsection 7.2)
and (e) the Borrower shall have delivered to the Administrative Agent
monthly projections on a PRO FORMA basis after giving effect to such
acquisition or formation, for each of the twelve months following the
proposed date of such acquisition or formation, which projections shall
indicate that (i) the Borrower would be in compliance with the covenants
contained in subsection 7.1 recomputed as of the last day of the most
recently ended month as if such acquisition had occurred on the first
day of each
18
month for testing such compliance and (ii) the average amount of the
lesser of (1) the available Borrowing Base and (2) the Available Revolving
Credit Commitments shall be at least $15,000,000 during such 12 month
period and the Borrower shall have delivered to the Administrative Agent a
certificate of a Responsible Officer to such effect, PROVIDED, that
clauses (d)(i) and (e) above shall not apply to any acquisition the
aggregate amount of which is less than $5 million unless and until all
such acquisitions which are less than $5 million exceed $10 million in the
aggregate during the term of this Agreement.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PROPERTIES": as defined in subsection 4.17.
"RECEIVABLES SALES DOCUMENTS": shall mean the following documents,
each dated as of the Restatement Effective Date: the Receivables Sale and
Contribution Agreement, among the Borrower, CMIC, CM Midcontinent and the
Receivables Sub; the Pooling Agreement (the "POOLING AGREEMENT"), among the
Receivables Sub, the Borrower and Chase; the Servicing Agreement, among the
Receivables Sub, the Borrower and the other subsidiaries named therein; the
1998-1 Supplement, among the Receivables Sub, the Borrower and Chase; the
1998-2 Supplement, among the Receivables Sub, the Borrower, Chase and Park
Avenue Receivables Corporation and any other supplements to the Pooling
Agreement which may be entered into from time to time.
"RECEIVABLES SUB": the wholly-owned Subsidiary, formed for the
purpose of selling participations pursuant to the Receivables Transaction.
"RECEIVABLES TRANSACTION": the transaction contemplated by the
Receivables Sales Documents.
"REGISTER": as defined in subsection 10.6(d).
"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse the Issuing Bank pursuant to subsection 3.5(a) for amounts drawn
under Letters of Credit.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
19
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 2615 or other PBGC regulations or guidance.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, the president, or
the executive vice president of the Borrower or, with respect to financial
matters, the chief financial officer, the treasurer or the Controller of
the Borrower.
"RESPONSIBLE OFFICER'S CERTIFICATE": as defined in subsection 6.2(b).
"RESTATEMENT EFFECTIVE DATE": the date on which the conditions to
effectiveness set forth in subsection 5.1 shall be satisfied.
"REVOLVING CREDIT COMMITMENT": as to any Lender, the obligation of
such Lender to make Revolving Credit Loans to and/or issue or participate
in Letters of Credit issued on behalf of the Borrower hereunder in an
aggregate principal and/or face amount at any one time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule 1.1(a)
under the heading "Revolving Credit Commitment", as such amount may be
reduced from time to time pursuant to this Agreement or as such amount may
be adjusted from time to time pursuant to subsection 10.6; collectively, as
to all such Lenders, the "REVOLVING CREDIT COMMITMENTS".
"REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any Lender (a) at any
time prior to the termination of the Revolving Credit Commitments, the
percentage of the Revolving Credit Commitments then constituted by such
Lender's Revolving Credit Commitment and (b) at any time after the
termination of the Revolving Credit Commitments, the percentage which (i)
the sum of (x) such Lender's Revolving Credit Loans then outstanding PLUS
(y) the product of such Lender's Revolving Credit Commitment Percentage
immediately prior to the termination of the Revolving Credit Commitments
(after giving effect to any permitted assignment pursuant to subsection
10.6) times the L/C Obligations then outstanding then constitutes of (ii)
the sum of (x) the aggregate principal amount of Revolving Credit Loans of
all the Lenders then outstanding PLUS (y) the aggregate L/C Obligations
then outstanding.
"REVOLVING CREDIT LOANS": as defined in subsection 2.1.
"REVOLVING CREDIT NOTE": as defined in subsection 2.5(e).
"SECURITY AGREEMENT": the Amended and Restated Security Agreement,
dated as of the date hereof, executed and delivered by the Borrower and
each of the
20
Subsidiaries (other than the Receivables Sub), as the same may be further
amended, supplemented or otherwise modified from time to time.
"SECURITY DOCUMENTS": the collective reference to the Security
Agreement, the Borrower Stock Pledge Agreement and all other security
documents hereafter delivered to the Administrative Agent granting a Lien
on any asset or assets of any Person to secure the obligations and
liabilities of the Borrower hereunder and under any of the other Loan
Documents or to secure any guarantee of any such obligations and
liabilities.
"SENIOR DEBT": at any date of determination, Total Debt of the
Borrower and its Subsidiaries outstanding at such date of determination
MINUS all Subordinated Debt of the Borrower and its Subsidiaries
outstanding at such date of determination, as determined on a consolidated
basis in accordance with GAAP.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"SOSNICK ACQUISITION": the acquisition, consummated on January 28,
1997, of substantially all of the assets of the Melvin Sosnick Company and
Capital Cigar Company and the payment of related costs and expenses.
"SOLVENT": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount of all "liabilities of such Person, contingent or
otherwise", as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured, (c)
such Person will not have, as of such date, an unreasonably small amount
of capital with which to conduct its business, and (d) such Person will
be able to pay its debts as they mature. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim"
means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such
breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.
"SPOT RATE": the rate of exchange quoted by the Administrative
Agent on such date of determination (at the hour on such date of
determination at which it customarily makes such determination) to prime
banks in the interbank market where its foreign currency exchange
operations in respect of Canadian Dollars are then being conducted for
the spot purchase of Canadian Dollars with Dollars.
"STANDBY LETTER OF CREDIT": as defined in subsection 3.1(b)(1)(A).
21
"SUBORDINATED DEBT": the Existing High Yield Subordinated Debt and
any unsecured Indebtedness of the Borrower no part of the principal of
which is required to be paid (whether by way of mandatory sinking fund,
mandatory redemption, mandatory prepayment or otherwise) on or before the
Termination Date; the payment of the principal of and interest on which and
other obligations of the Borrower in respect thereof are subordinated to
the prior payment in full of the principal of and interest (including
post-petition interest) on the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent and the Lenders
hereunder on terms and conditions approved in writing by the Administrative
Agent; and all other terms and conditions of which are satisfactory in form
and substance to the Administrative Agent.
"SUBSIDIARIES GUARANTEE": the Guarantee, dated as of August 7, 1996,
executed and delivered by each Subsidiary (other than the Receivables Sub)
in connection with the Existing Credit Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"SUBSIDIARY": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to C/M Products, CMIC, CM Midcontinent and/or the
Receivables Sub, the only active Subsidiaries of the Borrower.
"SUPPLEMENTAL REPORTING": the reports, accounting records and
analyses delivered by the Borrower to the Administrative Agent pursuant to
subsection 6.2(f) and certified by a Responsible Officer, as described in
Exhibit E.
"TAX RESERVES": at any time, all unpaid and unbonded state and local
municipality tax stamp liabilities.
"TERMINATION DATE": the fifth anniversary of the Restatement
Effective Date.
"TOBACCO AND CIGAR INVENTORY": the cigar, chewing tobacco and other
tobacco products Inventory of the Borrower and its Subsidiaries in respect
thereof (excluding items classified as Cigarette Inventory).
"TOBACCO PRODUCTS INVENTORY": collectively, Cigarette Inventory and
Tobacco and Cigar Inventory.
"TOTAL DEBT": at any date of determination, all Indebtedness of
the Borrower and its Subsidiaries outstanding at such date of
determination (other than Indebtedness of the type set forth in clauses
(d) (with respect to letters of credit only), (e) and (f) in
22
the definition thereof in subsection 1.1) as determined on a consolidated
basis in accordance with GAAP.
"TOTAL DEBT LEVERAGE RATIO": as of the last day of each fiscal
quarter of the Borrower, the ratio of (i) Consolidated Total Debt of the
Borrower at the last day of such fiscal quarter to (ii) Consolidated EBITDA
of the Borrower for the period of four consecutive fiscal quarters of the
Borrower ending on such last day. For purposes of computing Consolidated
Total Debt of the Borrower, the amount of Revolving Credit Loans and
Invested Amount included therein as of the last day of a fiscal quarter
shall be the average daily outstanding principal amount thereof for the
period of two consecutive fiscal quarters ending on such date.
"TRANCHE": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"TRANSFEREE": as defined in subsection 10.6(f).
"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"UCC": the Uniform Commercial Code as in effect in the State of New
York from time to time.
"UNCOVERED L/C AMOUNT": $20,000,000.
"UNIFORM CUSTOMS": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"US CASH COLLATERAL ACCOUNT": has the meaning specified in the
Security Agreement.
"US CASH EQUIVALENTS": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition and overnight bank deposits of any Lender or
of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days with respect to securities issued or fully
guaranteed or insured by the United States Government, (d) commercial paper
of a domestic issuer rated at least A-2 by Standard and Poor's Rating Group
("S&P") or P-2 by Moody's Investors Service, Inc. ("MOODY'S"), (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the
United States, by any political subdivision or taxing authority of any such
state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign
23
government (as the case may be) are rated at least A by S&P or A by
Moody's, (f) securities with maturities of one year or less from the
date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b)
of this definition or (g) shares of money market mutual or similar funds
which invest primarily in assets satisfying the requirements of clauses
(a) through (f) of this definition.
"VENDOR RECEIVABLES": at a particular date, amounts not subject to
offset or counter-claim, that are owing to the Borrower and its
Subsidiaries from vendors whose creditworthiness is reasonably satisfactory
to the Administrative Agent, that relate to marketing and promotional
incentive programs and manufacturing rights agreements historically offered
to the Borrower and its Subsidiaries from such vendors and are payable in
cash.
"VOTING PERCENTAGE": as to any Lender (a) at any time prior to the
termination of the Revolving Credit Commitments, the percentage which such
Lender's Revolving Credit Commitment then constitutes of the Revolving
Credit Commitments of all the Lenders then outstanding, and (b) at any time
after the termination of the Revolving Credit Commitments, the percentage
which (i) the sum of (x) the principal amount of such Lender's Loans then
outstanding PLUS (y) the product of such Lender's Revolving Credit
Commitment Percentage (as in effect immediately prior to the termination of
the Revolving Credit Commitments) times the L/C Obligations then
outstanding then constitutes of (ii) the sum of (x) the aggregate principal
amount of Loans of all the Lenders then outstanding PLUS (y) the aggregate
L/C Obligations of all the Lenders then outstanding.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified. The phrase "date hereof" when used in this Agreement shall refer to
the Restatement Effective Date.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) Notwithstanding anything to the contrary herein, for purposes of
making all calculations in connection with the covenants contained in Section 7,
all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP as in effect on
the date of this Agreement consistently applied. In the
24
event of any material difference at any time between GAAP in effect on the
date of this Agreement and GAAP from time to time in effect, the certificate
of a Responsible Officer required pursuant to subsection 6.2(b) shall include
a reconciliation of the calculations required thereby with the financial
statements being delivered with such certificate.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("REVOLVING CREDIT LOANS") to the Borrower from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Revolving Credit Commitment Percentage of the
then outstanding L/C Obligations, does not exceed the amount of such Lender's
Revolving Credit Commitment, provided that no Lender shall be required to make a
Revolving Credit Loan to the extent that, after giving effect thereto, the
Aggregate Covered Outstanding Revolving Extensions of Credit at such time would
exceed the Borrowing Base. During the Commitment Period the Borrower may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i) Eurodollar
Loans, (ii) ABR Loans, or (iii) a combination thereof, as determined by the
Borrower and notified to the Administrative Agent in accordance with subsections
2.2 and 2.8, PROVIDED that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the Termination Date.
2.2 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower may borrow
under the Revolving Credit Commitments during the Commitment Period on any
Business Day, PROVIDED that the Borrower shall give the Administrative Agent
irrevocable notice which notice must be received by the Administrative Agent
prior to 1:00 P.M., New York City time, (a) three Business Days prior to the
requested Borrowing Date, if all or any part of the requested Revolving Credit
Loans are to be initially Eurodollar Loans, or (b) on the requested Borrowing
Date, otherwise, specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, ABR
Loans or a combination thereof and (iv) if the borrowing is to be entirely or
partly of Eurodollar Loans, the amount of such Loan and the length of the
initial Interest Period therefor. Each borrowing under the Commitments shall be
in an amount equal to (x) in the case of ABR Loans, $500,000 or a whole multiple
of $100,000 in excess thereof (or, if the then Available Revolving Credit
Commitments are less than $500,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $1,000,000 or a whole multiple of $100,000 in excess thereof.
Upon receipt of any such notice from the Borrower, the Administrative Agent
shall promptly notify each Lender thereof. Each Lender will make the amount of
its pro rata share of each borrowing available to the Administrative Agent for
the account of the Borrower at the office of the Administrative Agent specified
in subsection 10.2 prior to 2:30 P.M., New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with
25
the aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.
2.3 FEES. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee for the period from and
including the first day of the Commitment Period to but not including the
Termination Date, computed at a rate per annum equal to the Applicable
Commitment Fee Rate then in effect on the average daily amount of the
Available Revolving Credit Commitment of such Lender during the period for
which payment is made, payable quarterly in arrears on the last day of each
March, June, September and December and on the Termination Date or such
earlier date as the Revolving Credit Commitments shall terminate as provided
herein, commencing on the first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent on the
Restatement Effective Date and on each anniversary thereof, the administration
fee as specified in the Fee Letter dated January 23, 1998.
2.4 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower shall have
the right, upon not less than five Business Days' notice to the Administrative
Agent, to terminate the Commitments or, from time to time, to reduce the amount
of the Commitments provided that no such termination or reduction shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans made on the effective date thereof, the Aggregate
Outstanding Revolving Extensions of Credit would exceed the Revolving Credit
Commitments then in effect. Any such reduction shall be in an amount equal to
$100,000 or a whole multiple thereof and shall reduce permanently the Revolving
Credit Commitments then in effect.
2.5 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Revolving Credit Loan of
such Lender on the Termination Date (or such earlier date on which the Revolving
Credit Loans become due and payable pursuant to Section 8). The Borrower hereby
further agrees to pay interest on the unpaid principal amount of the Loans from
time to time outstanding from the date hereof until payment in full thereof at
the rates per annum, and on the dates, set forth in subsection 2.11.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 10.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Credit Loan made hereunder, the Type
thereof and each 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) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
26
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.5(b), absent manifest error, shall, to the
extent permitted by applicable law, be PRIMA FACIE evidence of the existence and
amounts of the obligations of the Borrower therein recorded; PROVIDED, HOWEVER,
that the failure of any Lender or the Administrative Agent to maintain the
Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay (with applicable interest) the
Loans made to such Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing the Revolving Credit Loans of such
Lender, substantially in the form of Exhibit A with appropriate insertions as to
date and principal amount (a "REVOLVING CREDIT NOTE").
2.6 OPTIONAL PREPAYMENTS. The Borrower may at any time and from time
to time, prepay the Loans, in whole or in part, without premium or penalty, (i)
with respect to Eurodollar Loans, upon at least three Business Days' irrevocable
notice to the Administrative Agent, specifying the date and amount of prepayment
and (ii) with respect to ABR Loans, upon same day irrevocable notice if such
notice is received by the Administrative Agent by 1:00 P.M., New York City time,
on such day, specifying the date and amount of prepayment; and whether the
prepayment is of Eurodollar Loans, ABR Loans or a combination thereof, and, if
of a combination thereof, the amount allocable to each. Prepayments of
Eurodollar Loans shall be subject to the provisions of subsection 2.17. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
Lender thereof. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with any
amounts payable pursuant to subsection 2.17. Partial prepayments of ABR Loans
shall be in an aggregate principal amount of a minimum of $500,000 and partial
prepayments of Eurodollar Loans shall be in an aggregate principal amount of a
minimum of $1,000,000.
2.7 MANDATORY PREPAYMENTS AND OTHER REDUCTIONS OF REVOLVING CREDIT
LOANS. If, at any time, the Aggregate Covered Outstanding Revolving Extensions
of Credit at such time exceed the Borrowing Base at such time, the Borrower
shall, without notice or demand, immediately repay the Revolving Credit Loans in
an aggregate principal amount equal to the lesser of (i) the amount of such
excess and (ii) the aggregate principal amount of Revolving Credit Loans then
outstanding, together with interest accrued to the date of such payment or
prepayment on the principal so prepaid and any amounts payable under subsection
2.17 in connection therewith. To the extent that after giving effect to any
prepayment of the Revolving Credit Loans required by the preceding sentence, the
Aggregate Covered Outstanding Revolving Extensions of Credit at such time exceed
the Borrowing Base at such time, the Borrower shall, without notice or demand,
immediately deposit in a Cash Collateral Account upon terms reasonably
satisfactory to the Administrative Agent an amount equal to the lesser of (i)
the aggregate then outstanding L/C Obligations and (ii) the amount of such
remaining excess. The Administrative Agent shall apply any cash deposited in
the Cash Collateral Account (to the extent thereof) to pay any Reimbursement
Obligations which become due thereafter, PROVIDED that the Administrative Agent
shall release to the Borrower from time to time such portion of the amount on
deposit in the Cash Collateral Account
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which is equal to the amount by which the Borrowing Base at such time plus
the amount on deposit in the Cash Collateral Account exceeds the Aggregate
Outstanding Revolving Extensions of Credit at such time. "CASH COLLATERAL
ACCOUNT" means an account established by the Borrower with the Administrative
Agent and over which the Administrative Agent shall have exclusive dominion
and control, including the right of withdrawal for application in accordance
with this subsection 2.7.
2.8 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent at least two Business Days' prior irrevocable notice
of such election, PROVIDED that any such conversion of Eurodollar Loans may
only be made on the last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans
by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to
Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. All or any part of
outstanding Eurodollar Loans and ABR Loans may be converted as provided
herein, PROVIDED that (i) no Loan may be converted into a Eurodollar Loan
when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Majority Lenders have determined that such a
conversion is not appropriate and (ii) no Loan may be converted into a
Eurodollar Loan after the date that is one month prior to the Termination
Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Administrative Agent, in accordance with the applicable provisions
of the term "Interest Period" set forth in subsection 1.1, of the length of the
next Interest Period to be applicable to such Loans, PROVIDED that no Eurodollar
Loan may be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Majority Lenders have
determined that such a continuation is not appropriate or (ii) after the date
that is one month prior to the Termination Date and PROVIDED, FURTHER, that if
the Borrower shall fail to give such notice or if such continuation is not
permitted such Loans shall be automatically converted to ABR Loans on the last
day of such then expiring Interest Period.
2.9 MAXIMUM NUMBER OF TRANCHES. In no event shall there be more than
ten (10) Eurodollar Tranches outstanding at any time.
2.10 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Loans and any such overdue
interest, commitment fee or other amount shall bear interest
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at a rate per annum which is (x) in the case of principal, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this subsection plus 2% or (y) in the case of any such overdue interest,
commitment fee or other amount, the rate described in paragraph (b) of this
subsection plus 2%, in each case from the date of such non-payment until such
overdue principal, interest, commitment fee or other amount is paid in full
(as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
(e) Prior to the Restatement Effective Date, all principal amounts
outstanding under the Existing Credit Facilities shall continue to be subject to
the interest rates provided in
the Existing Credit Agreement. From and after the Restatement Effective
Date, the interest rates provided in subsections 2.10(a) and (b) hereof shall
apply to all principal amounts then outstanding hereunder.
2.11 COMPUTATION OF INTEREST AND FEES. (a) Amounts payable under
this Agreement including interest, shall be calculated on the basis of a
360-day year for the actual days elapsed, except that with respect to (i)
interest calculated on the basis of the Prime Rate and (ii) commitment fees,
such amounts shall be calculated on the basis of a 365- (or 366-, as the case
may be) day year for the actual days elapsed. The Administrative Agent shall
as soon as practicable, notify the Borrower and the affected Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the ABR or the Eurocurrency Reserve
Requirement shall become effective as of the opening of business on the day
on which such change becomes effective. The Administrative Agent shall, as
soon as practicable, notify the Borrower and the affected Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to subsection 2.10(a), (b) or (c).
(c) For purposes of the INTEREST ACT (Canada), whenever any interest
under the Loan Documents is calculated using a rate based on a year of 360 days,
such rate determined pursuant to such calculation, when expressed as an annual
rate, is equivalent to (i) the applicable rate based on a year of 360 days, (ii)
multiplied by the actual number of days in the calendar year in which the period
for which such interest is payable (or compounded) ends, and (iii) divided by
360.
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2.12 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period;
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as ABR Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be converted to or continued as ABR Loans and (z) any
outstanding Eurodollar Loans shall be converted, on the first day of such
Interest Period, to ABR Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall the Borrower have the right to convert ABR Loans to
Eurodollar Loans.
2.13 PRO RATA TREATMENT AND PAYMENTS. (a) All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 12:00 Noon, New York City time, on the
due date thereof to the Administrative Agent, for the account of the appropriate
Lenders, at the Administrative Agent's office specified in subsection 10.2
(except as otherwise provided herein) in Dollars and in immediately available
funds. The Administrative Agent shall distribute such payments to the Lenders
entitled to receive the same promptly upon receipt in like funds as received.
If any payment hereunder (other than payments on Eurodollar Loans) becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day (and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension)
unless the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its portion of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the
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Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. If such Lender's portion of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to ABR Loans hereunder, on demand, from the Borrower.
(c) Each borrowing by the Borrower of Revolving Credit Loans shall be
made ratably from the Lenders in accordance with their respective Revolving
Credit Commitment Percentages. Any reduction of the Revolving Credit
Commitments shall be made ratably among the Lenders in accordance with their
respective Revolving Credit Commitment Percentages. Each payment (including
each prepayment) by the Borrower on account of principal of and interest on the
Revolving Credit Loans shall be made PRO RATA according to the respective
outstanding principal amounts of the Revolving Credit Loans then held by the
Lenders.
2.14 ILLEGALITY. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Agreement, (a)
the commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall
forthwith be cancelled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to ABR Loans on
the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to
subsection 2.17.
2.15 REQUIREMENTS OF LAW. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note or any Eurodollar Loan made by
it, or change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes covered by subsection
2.16 and changes in the rate of tax on the overall net income of such
Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
31
(iii) shall impose on such Lender any other condition; and the
result of any of the foregoing is to increase the cost to such Lender, by
an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or to reduce any amount
receivable hereunder in respect thereof,
then, in any such case, the Borrower shall promptly pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, the Borrower shall
promptly pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Borrower (with a
copy to the Administrative Agent) of the event by reason of which it has
become so entitled. A certificate as to any additional amounts payable
pursuant to this subsection submitted by such Lender to the Borrower (with a
copy to the Administrative Agent) shall be conclusive in the absence of
manifest error. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.16 TAXES. (a) All payments made by the Borrower under this
Agreement and any Notes shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former
connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under,
or enforced, this Agreement or any Note). If any such non-excluded taxes,
levies, imposts, duties, charges, fees deductions or withholdings
("NON-EXCLUDED TAXES") are required to be withheld from any amounts payable
to the Administrative Agent or any Lender hereunder or under any Note, the
amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or
such Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, PROVIDED, HOWEVER, that the Borrower shall not be required to
32
increase any such amounts payable to any Lender that is not incorporated or
organized under the laws of the United States of America or a state thereof
if such Lender fails to comply with the requirements of paragraph (b) of this
subsection. Whenever any Non-Excluded Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall send to the Administrative
Agent for its own account or for the account of such Lender, as the case may
be, a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the
Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
(b) Each Lender that is not incorporated or organized under the laws
of the United States of America or a state thereof shall:
(i) deliver to the Borrower and the Administrative Agent, prior to
the Restatement Effective Date in the case of any Lenders not a party to
the Existing Credit Facility, (A) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, and (B) an Internal Revenue Service Form W-8 or
W-9, or successor applicable form, as the case may be;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower or
the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred after the date of this Agreement and
prior to the date on which any such delivery would otherwise be required which
renders all such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such Lender so
advises the Borrower and the Administrative Agent. Such Lender shall certify
(i) in the case of a Form 1001 or 4224, that it is entitled to receive payments
under this Agreement or the Notes without deduction or withholding of any United
States federal income taxes and (ii) in the case of a Form W-8 or W-9, that it
is entitled to an exemption from United States backup withholding tax. Each
Person that shall become a Lender or a Participant pursuant to subsection 10.6
shall, upon the effectiveness of the related transfer, be required to provide
all of the forms and statements required pursuant to this subsection, provided
that in the case of a Participant such Participant shall furnish all such
required forms and statements to the Lender from which the related participation
shall have been purchased.
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(c) Neither the Administrative Agent nor any Lender shall be entitled
to claim any indemnity payment or additional amount payable pursuant to this
subsection 2.16 with respect to any tax unless the Administrative Agent or such
Lender, as the case may be, shall have notified the Borrower that it will demand
compensation for such payment or amount not more than 120 days after the date on
which the Administrative Agent or such Lender, as the case may be, becomes aware
of the costs or reductions giving rise to such claim. Failure on the part of
the Administrative Agent or such Lender, as the case may be, to demand any
indemnity payment of any such additional amount with respect to any period shall
not constitute a waiver of the Administrative Agent's or such Lender's, right,
as the case may be, to demand compensation with respect to any other period.
2.17 INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin referred to in subsection
2.10, included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.18 CHANGE OF LENDING OFFICE. Each Lender agrees that if it makes
any demand for payment under subsection 2.15 or 2.16(a), or if any adoption or
change of the type described in subsection 2.14 shall occur with respect to it,
it will use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under subsection 2.15 or
2.16(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 2.14.
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SECTION 3. LETTERS OF CREDIT
3.1 L/C COMMITMENT.
(a) Subject to the terms and conditions hereof, the Issuing Bank, in
reliance on the agreements of the other Lenders set forth in subsection 3.4(a)
agrees to issue letters of credit ("LETTERS OF CREDIT") for the account of the
Borrower on any Business Day during the Commitment Period in such form as may be
approved from time to time by the Issuing Bank; PROVIDED that the Issuing Bank
shall have no obligation to issue any Letter of Credit if, after giving effect
to such issuance, (1) the L/C Obligations would exceed the L/C Commitment, (2)
the Available Revolving Credit Commitments would be less than zero or (3) the
Aggregate Covered Outstanding Revolving Extensions of Credit at such time would
exceed the Borrowing Base at such time.
(b) Each Letter of Credit shall:
(1) be denominated in Dollars and shall be either (A) a standby
letter of credit issued to support obligations of the Borrower (a "STANDBY
LETTER OF CREDIT"), or (B) a commercial letter of credit issued in respect
of the purchase of goods or services by the Borrower and its Subsidiaries
in the ordinary course of business (a "COMMERCIAL LETTER OF CREDIT") and
(2) expire no later than the earlier of (i) one year after the
date of issuance and (ii) five Business Days prior to the Termination Date;
provided that any Letter of Credit with a one-year tenor may provide for
the renewal thereof for additional one-year periods (which shall in no
event extend beyond the date referred to in clause (ii) above).
(c) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New
York.
(d) The Issuing Bank shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Bank or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law.
3.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT.
The Borrower may from time to time request that the Issuing Bank
issue a Letter of Credit by delivering to the Issuing Bank at its address for
notices specified herein an Application therefor, completed to the
satisfaction of the Issuing Bank, and such other certificates, documents and
other papers and information as the Issuing Bank may request. Upon receipt of
any Application, the Issuing Bank will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall
the Issuing Bank be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such
other certificates, documents and other papers and information relating
thereto)
35
by issuing the original of such Letter of Credit to the beneficiary thereof
or as otherwise may be agreed by the Issuing Bank and the Borrower. The
Issuing Bank shall furnish a copy of such Letter of Credit to the Borrower
promptly following the issuance thereof.
3.3 FEES, COMMISSIONS AND OTHER CHARGES.
(a) The Borrower shall pay to the Administrative Agent, for the
account of the Issuing Bank, a fronting fee with respect to each Letter of
Credit in an amount equal to 1/4 of 1% per annum of the face amount of such
Letter of Credit. Such fronting fee shall be payable in arrears on each L/C Fee
Payment Date and shall be nonrefundable.
(b) Subject to subsection 3.3(e), the Borrower shall pay to the
Administrative Agent, for the account of the Issuing Bank and the L/C
Participants, a letter of credit commission with respect to each Letter of
Credit, computed for the period from the date of issuance thereof at a per annum
rate equal to the Applicable Margin (less any fronting fee paid pursuant to
subsection 3.3(a)) then in effect for Eurodollar Loans, calculated on the basis
of a 360 day year, of the aggregate average daily amount available to be drawn
under such Letter of Credit during the period for which payment is being made.
Such fee shall be payable to the Issuing Bank and the L/C Participants to be
shared ratably among them in accordance with their respective Revolving Credit
Commitment Percentages. Such commissions shall be payable in arrears on each
L/C Fee Payment Date.
(c) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Bank for such normal and customary fees as
are incurred or charged by the Issuing Bank in issuing, effecting payment under,
amending or otherwise administering any Letter of Credit.
(d) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Bank and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this subsection.
(e) Prior to the Restatement Effective Date, the Borrower shall pay a
letter of credit commission with respect to each Letter of Credit issued under
the Existing Credit Facility at a per annum rate as provided under the Existing
Credit Agreement. From and after the Restatement Effective Date, the letter of
credit commission provided in subsection 3.3(b) hereof shall apply to all
outstanding Letters of Credit issued prior to the Restatement Effective Date.
3.4 L/C PARTICIPATIONS.
(a) The Issuing Bank irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce the Issuing Bank to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from the Issuing Bank, on the terms and conditions
hereinafter stated, for such L/C Participant's own account and risk an undivided
interest equal to such L/C Participant's Revolving Credit Commitment Percentage
in the Issuing Bank's obligations and rights under each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Bank thereunder. Each
L/C Participant unconditionally and irrevocably agrees with the Issuing Bank
36
that, if a draft is paid under any Letter of Credit for which the Issuing Bank
is not reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Bank upon demand at the
Issuing Bank's address for notices specified herein an amount equal to such L/C
Participant's Revolving Credit Commitment Percentage of the amount of such
draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Bank pursuant to subsection 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Bank under any Letter of Credit is
paid to the Issuing Bank within three Business Days after the date such payment
is due, such L/C Participant shall pay to the Issuing Bank on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
funds rate, as quoted by the Issuing Bank, during the period from and including
the date such payment is required to the date on which such payment is
immediately available to the Issuing Bank, times (iii) a fraction the numerator
of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any L/C
Participant pursuant to subsection 3.4(a) is not in fact made available to the
Issuing Bank by such L/C Participant within three Business Days after the date
such payment is due, the Issuing Bank shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to ABR Loans hereunder. A certificate
of the Issuing Bank submitted to any L/C Participant with respect to any amounts
owing under this subsection shall be conclusive in the absence of manifest
error.
(c) Whenever, at any time after the Issuing Bank has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with subsection 3.4(a), the Issuing
Bank receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by the Issuing Bank), or any payment of interest on account thereof, the Issuing
Bank will distribute to such L/C Participant its pro rata share thereof;
PROVIDED, HOWEVER, that in the event that any such payment received by the
Issuing Bank pursuant to subsection 3.5 shall be required to be returned by the
Issuing Bank, such L/C Participant shall return to the Issuing Bank the portion
thereof previously distributed by the Issuing Bank to it.
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER.
(a) The Borrower agrees to reimburse the Issuing Bank on each date on
which the Issuing Bank notifies the Borrower of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Bank for the amount
of (i) such draft so paid and (ii) any taxes, fees, charges or other costs or
expenses incurred by the Issuing Bank in connection with such payment. Each
such payment shall be made to the Issuing Bank at its address for notices
specified herein in lawful money of the United States of America and in
immediately available funds.
(b) Interest shall be payable on any and all amounts remaining unpaid
by the Borrower under this subsection from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate which would be payable on any outstanding ABR Loans which were then
overdue.
37
3.6 OBLIGATIONS ABSOLUTE.
(a) The Borrower's obligations under this Section 3 shall be
absolute and unconditional under any and all circumstances and irrespective
of any set-off, counterclaim or defense to payment which the Borrower may
have or have had against the Issuing Bank or any beneficiary of a Letter of
Credit.
(b) The Borrower also agrees with the Issuing Bank that the Issuing
Bank shall not be responsible for, and the Borrower's Reimbursement Obligations
under subsection 3.5(a) shall not be affected by, among other things, (i) the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, provided
that the Issuing Bank shall have exercised the standard of care specified in the
Uniform Customs, or (ii) any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or (iii) any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee.
(c) The Issuing Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Bank's gross negligence or willful
misconduct.
(d) The Borrower agrees that any action taken or omitted by the
Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence of willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Bank to the Borrower.
3.7 LETTER OF CREDIT PAYMENTS.
If any draft shall be presented for payment under any Letter of
Credit, the Issuing Bank shall promptly notify the Borrower of the date and
amount thereof. The responsibility of the Issuing Bank to the Borrower in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.
3.8 APPLICATION.
To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Section 3, the
provisions of this Section 3 shall apply.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Administrative Agent
and each Lender that:
4.1 FINANCIAL CONDITION. The consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at December 31, 1996 and the
related consolidated statements of income and of cash flows for the fiscal
year ended on such date, reported on by KPMG Peat Marwick LLP copies of which
have heretofore been furnished to the Administrative Agent with copies for
each Lender, present fairly in all material respects the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at
such date, and the consolidated results of their operations and their
consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries
as at September 30, 1997 and the related unaudited consolidated statements of
income and of cash flows for the three and nine-month period ended on such
date, certified by a Responsible Officer, copies of which have heretofore
been furnished to the Administrative Agent with copies for each Lender,
present fairly in all material respects the consolidated financial condition
of the Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated cash flows
for the three and nine-month period then ended (subject to normal year-end
audit adjustments), except that they have been prepared on a
first-in-first-out inventory valuation method and except for the absence of
notes and related schedules. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved
by such accountants or Responsible Officer, as the case may be, and as
disclosed therein). Neither the Borrower nor any of its consolidated
Subsidiaries had, at the date of the most recent balance sheet referred to
above, any material Guarantee Obligation, contingent liability or liability
for taxes, or any long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing statements or
in the notes thereto. During the period from December 31, 1996 to and
including the date hereof there has been no sale, transfer or other
disposition by the Borrower or any of its consolidated Subsidiaries of any
material part of its business or property and no purchase or other
acquisition of any business or property (including any capital stock of any
other Person) material in relation to the consolidated financial condition of
the Borrower and its consolidated Subsidiaries at December 31, 1996, except
for the Sosnick Acquisition.
4.2 NO CHANGE. (a) Except as set forth on Schedule 4.2, since December
31, 1996, there has been no development or event which has had or could
reasonably be expected to have a Material Adverse Effect, and (b) during the
period from December 31, 1996, to and including the date hereof no dividends or
other distributions have been declared, paid or made upon the Capital Stock of
the Borrower nor has any of the Capital Stock of the Borrower been redeemed,
retired, purchased or otherwise acquired for value by the Borrower or any of its
Subsidiaries.
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Borrower
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of
39
the jurisdiction of its organization, (b) has the corporate power and
authority, and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification except where the failure to obtain such qualification would not
have a Material Adverse Effect and (d) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Borrower has the corporate power and authority, and the legal right, to make,
deliver and perform this Agreement and to borrow hereunder and has taken all
necessary corporate action to authorize the borrowings on the terms and
conditions of the Loan Documents to which it is a party and to authorize the
execution, delivery and performance of this Agreement. Except as set forth on
Schedule 4.4, no consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement. This
Agreement and each other Loan Document to which it is a party has been duly
executed and delivered on behalf of the Borrower. This Agreement and each other
Loan Document to which it is a party constitutes a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
4.5 NO LEGAL BAR. The execution, delivery and performance of the Loan
Documents to which the Borrower is a party, the borrowings hereunder and the use
of the proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of the Borrower or of any of its Subsidiaries and will not result in,
or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation.
4.6 NO MATERIAL LITIGATION. Except as set forth on Schedule 4.6,
no litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against
any of its or their respective properties or revenues (a) with respect to any
of the Loan Documents or any of the transactions contemplated hereby or
thereby, or (b) which could reasonably be expected to have a Material Adverse
Effect.
4.7 NO DEFAULT. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Except as set forth on Schedule
4.8, each of the Borrower and its Subsidiaries has a valid leasehold interest
in, all its real property, or a
40
valid leasehold interest in, all its other property, and none of such owned
property and no such leasehold interest is subject to any Lien except as
permitted by subsection 7.3.
4.9 INTELLECTUAL PROPERTY. Except as set forth on Schedule 4.9, the
Borrower and each of its Subsidiaries owns, is licensed to use, or otherwise has
the right to use all trademarks, tradenames, copyrights, technology, know-how
and processes necessary for the conduct of its business as currently conducted
except for those the failure to own or license which could not reasonably be
expected to have a Material Adverse Effect (the "INTELLECTUAL PROPERTY"). No
claim has been asserted and is pending by any Person challenging or questioning
the use of any such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, nor does the Borrower know of any valid basis
for any such claim, which could reasonably be expected to have a Material
Adverse Effect. To the knowledge of the Borrower and its Subsidiaries the use
of such Intellectual Property by the Borrower and its Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, do not have and could not reasonably be expected to have
a Material Adverse Effect. To the knowledge of the Borrower, all registrations
and filings which, in the reasonable judgment of the Borrower, are necessary to
preserve the rights of the Borrower and each of the Subsidiaries in their
material Intellectual Property have been made and are in good standing.
4.10 NO BURDENSOME RESTRICTIONS. No Requirement of Law or Contractual
Obligation of the Borrower or any of its Subsidiaries has or could reasonably be
expected to have a Material Adverse Effect.
4.11 TAXES. Except as set forth on Schedule 4.11, each of the
Borrower and its Subsidiaries has filed or caused to be filed all tax returns
which, to the knowledge of the Borrower, are required to be filed and has paid
all taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority that are now
due and payable (other than any the amount or validity of which are currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
Borrower or its Subsidiaries, as the case may be); no tax Lien has been filed,
and, to the knowledge of the Borrower, no claim is being asserted, with respect
to any such tax, fee or other charge.
4.12 FEDERAL REGULATIONS. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation G or
Regulation U of the Board of Governors of the Federal Reserve System as now
and from time to time hereafter in effect. If requested by the
Administrative Agent, the Borrower will furnish to the Administrative Agent
with copies for each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form G-1 or FR Form U-1 referred to in said
Regulation G or Regulation U, as the case may be.
4.13 ERISA. Neither a Reportable Event which could result in a
material liability to the Borrower or any of its Subsidiaries nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed
41
made with respect to any Plan, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred that is reasonably likely
to cause the Borrower to incur liability, and no Lien in favor of the PBGC or
a Plan has arisen, during such five-year period. Except as set forth on
Schedule 4.13, the present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not,
as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits. Except as set forth on Schedule
4.13, neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan in the past five
years, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any
such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. The Borrower is not
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
4.15 SUBSIDIARIES. Schedule 4.15 sets forth a list of all
Subsidiaries of the Borrower at the date hereof. Each subsidiary of the
Borrower that is not a Subsidiary, is a corporation that conducts no business,
owns no assets (other than certain intercompany receivables), has no liabilities
having an aggregate value in excess of $75,000 other than certain intercompany
payables, and other than corporate franchise taxes.
4.16 PURPOSE OF LOANS. The proceeds of the Revolving Credit Loans
shall be used by the Borrower for general corporate purposes, to fund ongoing
working capital and to finance future acquisitions of the Borrower and its
Subsidiaries in the ordinary course of business.
4.17 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 4.17:
(a) The facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "PROPERTIES") do not contain, and
have not previously contained, any Materials of Environmental Concern in
amounts or concentrations which (i) constitute or constituted a violation
of, or (ii) could reasonably be expected to give rise to liability under,
any Environmental Law, which, in either case, could reasonably be expected
to have a Material Adverse Effect.
(b) The Properties and all operations at the Properties are in
compliance, and to the knowledge of the Borrower have in the last five (5)
years been in compliance, in all material respects with all applicable
Environmental Laws, and to the knowledge of the Borrower there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated
by
42
the Borrower or any of its Subsidiaries (the "BUSINESS") which could
materially interfere with the continued operation of the Properties or
materially impair the fair saleable value thereof.
(c) Neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business,
nor does the Borrower have knowledge or reason to believe that any such
notice is being threatened, except, in either case, for such notice as
could not reasonably be expected to have a Material Adverse Effect.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a
location which could reasonably be expected to give rise to liability
under, any Environmental Law, except for such transportation or disposal as
could not reasonably be expected to have a Material Adverse Effect, nor
have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in
a manner that could reasonably be expected to give rise to liability under,
any applicable Environmental Law, except for such transportation or
disposal as could not reasonably be expected to have a Material Adverse
Effect.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or
the Business.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could reasonably give rise to liability
under Environmental Laws except such releases or threats of releases which
could not reasonably be expected to have a Material Adverse Effect.
4.18 ACCURACY OF INFORMATION. No factual statement or information
contained in this Agreement, any other Loan Document, or any other document,
certificate or written statement furnished to the Administrative Agent or the
Lenders or any of them by or on behalf of any Loan Party for use in
connection with the transactions contemplated by this Agreement or the other
Loan Documents (including, without limitation, any financial information
furnished pursuant to Section 4.1), taken as a whole contained as of the date
such statement, information, document or certificate was so furnished any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein in
light of the circumstances in which it was made not misleading. The
projections contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Borrower to be
reasonable at the
43
time made, it being recognized by the Lenders that such financial information
as it relates to future events is not to be viewed as fact and that actual
results during the period or periods covered by such financial information
may differ from the projected results set forth therein. There is no fact
known to any Loan Party that could reasonably be expected to have a Material
Adverse Effect that has not been expressly disclosed herein, in the other
Loan Documents, or in such other documents, certificates and statements
furnished to the Administrative Agent for the benefit of the Lenders for use
in connection with the transactions contemplated hereby and by the other Loan
Documents.
4.19 SECURITY DOCUMENTS. (a) The Borrower Stock Pledge Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Pledged Stock
(as defined therein) and proceeds thereof and constitutes a fully perfected
first priority Lien on, and security interest in, all right, title and interest
of the Borrower in such Pledged Stock and the proceeds thereof, in each case
(except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally) prior and superior in right to any other Person.
(b) The Security Agreement is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral described therein and proceeds
thereof; financing statements in appropriate form have been filed in the offices
specified on Schedule 4.19(b) and, except as set forth in the Security
Agreement, the Security Agreement constitutes a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Collateral and, to the extent provided therein, the proceeds thereof, in each
case (except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally) prior and superior in right to any other Person,
other than with respect to Liens expressly permitted by subsection 7.3.
4.20 SOLVENCY. Each Loan Party is, and after giving effect to the
incurrence or assumption of all Indebtedness and obligations being incurred or
assumed in connection herewith and the Receivables Transaction, will continue to
be, Solvent.
SECTION 5. CONDITIONS TO EFFECTIVENESS
5.1 CONDITIONS TO RESTATEMENT EFFECTIVE DATE. This amendment and
restatement of the Existing Credit Agreement shall become effective upon, and
the agreement of each Lender to make the initial extension of credit requested
to be made by it under the Existing Credit Agreement as so amended and restated
is subject to the satisfaction of, immediately prior to or concurrently with the
making of such extension of credit on the Restatement Effective Date, the
following conditions:
(a) LOAN DOCUMENTS. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart for each Lender and (ii) the Security
Agreement, executed by a duly authorized officer of the Borrower and each
Grantor named therein.
44
(b) RECEIVABLES TRANSACTION. The Receivables Transaction shall have
been consummated and the Borrower shall have the ability to sell
participations thereunder and/or to issue term and variable funding
certificates thereunder in an aggregate face amount of not less than $70
million.
(c) BORROWING CERTIFICATE. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Restatement Effective Date, substantially in the form
of Exhibit C, with appropriate insertions and attachments, satisfactory in
form and substance to the Administrative Agent, executed by a Responsible
Officer.
(d) CORPORATE PROCEEDINGS OF THE BORROWER. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of the Borrower authorizing the execution,
delivery and performance of this Agreement and the borrowings contemplated
hereunder and shall state that such resolutions have not been amended,
modified, revoked or rescinded.
(e) BORROWER INCUMBENCY CERTIFICATE. The Administrative Agent shall
have received, with a counterpart for each Lender, a Certificate of the
Borrower, dated the Restatement Effective Date, as to the incumbency and
signature of the officer of the Borrower executing this Agreement
satisfactory in form and substance to the Administrative Agent, executed by
the President or any Vice President and the Secretary or any Assistant
Secretary of the Borrower.
(f) CORPORATE PROCEEDINGS OF SUBSIDIARIES. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of each Subsidiary of the Borrower which
is a party to any Loan Document authorizing the execution, delivery and
performance of such Loan Document(s), certified by the Secretary or an
Assistant Secretary of each such Subsidiary as of the Restatement Effective
Date, which certificate shall be in form and substance satisfactory to the
Administrative Agent and shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded.
(g) SUBSIDIARY INCUMBENCY CERTIFICATES. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate of
each Subsidiary of the Borrower which is a Loan Party, dated the
Restatement Effective Date, as to the incumbency and signature of the
officers of such Subsidiaries executing any Loan Document, satisfactory in
form and substance to the Administrative Agent, executed by the President
or any Vice President and the Secretary or any Assistant Secretary of each
such Subsidiary.
(h) CONSENTS, LICENSES AND APPROVALS. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of a
Responsible Officer of the Borrower (i) attaching copies of all consents,
authorizations and filings referred to in subsection 4.4, and (ii) stating
that such consents, licenses and filings are in full
45
force and effect, and each such consent, authorization and filing shall be
in form and substance satisfactory to the Administrative Agent.
(i) FEES AND EXPENSES. The Lenders, the Administrative Agent and its
Affiliates shall have received all fees required to be paid, and all
expenses required to be paid for which invoices have been presented, on or
before the Restatement Effective Date.
(j) LEGAL OPINIONS. The Administrative Agent shall have received,
with a counterpart for each Lender, the following executed legal opinions:
(1) the executed legal opinion of Paul, Weiss, Rifkind,
Wharton & Garrison, special counsel to the Borrower and the other Loan
Parties, substantially in the form of Exhibit F-1;
(2) the executed legal opinion of Sheppard, Mullin, Richter &
Hampton, LLP, special counsel to the Administrative Agent and the
Lenders in the State of California, substantially in the form of
Exhibit F-2;
(3) the executed legal opinion of Stoel Rives LLP, special
counsel to the Administrative Agent and the Lenders in the State of
Oregon, substantially in the form of Exhibit F-3;
(4) the executed legal opinions of (i) Stikeman, Elliott; and
(ii) Thompson Dorfman, Sweatman, counsel to the Administrative Agent
and the Lenders in Canada, substantially in the form of Exhibit F-4.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require;
(k) REPAYMENT OF EXITING LENDERS; REPAYMENTS AND REBORROWINGS. The
Administrative Agent shall have received evidence satisfactory to it that
the commitments of Exiting Lenders under the Existing Credit Facility have
been cancelled and such Exiting Lenders have received payment in full of
their outstanding loans under the Existing Credit Facility and accrued
interest and fees thereunder and have been released from their obligations
in respect of outstanding letters of credit thereunder. In addition, the
Borrower shall have effected such repayments and reborrowings hereunder
from the Lenders such that, after giving effect thereto, the outstanding
principal amount of the Revolving Credit Loans of each Lender shall be in
proportion to the Revolving Commitment Percentages of the Lenders (after
giving effect to the amendment and restatement hereof).
(l) BORROWING BASE CERTIFICATE. The Administrative Agent shall have
received a Borrowing Base Certificate, certifying in reasonable detail the
Borrowing Base as of the close of business on the last calendar day of the
immediately preceding calendar week or calendar month, as the case may be,
pursuant to subsection 6.2(f), which gives pro forma effect to the
Receivables Transaction.
46
5.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit) is subject
to the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Borrower in or pursuant to the Loan Documents shall
be true and correct in all material respects on and as of such date as if
made on and as of such date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
(c) ADDITIONAL MATTERS. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be reasonably satisfactory in form and substance to the
Administrative Agent in all material respects, and the Administrative Agent
shall have received such other documents and legal opinions in respect of
any aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
Each borrowing by and Letter of Credit issued on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date thereof that the conditions contained in this subsection have been
satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or the Administrative Agent
hereunder or under any other Loan Document, the Borrower shall and (except in
the case of delivery of financial information, reports and notices) shall cause
each of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of
such year and the related consolidated statements of income and retained
earnings and of cash flows for such year, in each case, using the last-in,
first-out inventory valuation method, and setting forth in comparative form
the figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by KPMG Peat Marwick LLP or other independent certified
public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the
47
unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and retained earnings and of cash flows
of the Borrower and its consolidated Subsidiaries for such quarter and the
portion of the fiscal year through the end of such quarter, in each case,
using the first-in, first-out inventory valuation method, and setting
forth in comparative form the figures for the previous year, certified by
a Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 30 days
after the end of each month (other than March, June, September and
December) of each fiscal year of the Borrower, the unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the
end of such month and the related unaudited consolidated statements of
income and retained earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such month and the portion of the fiscal year
through the end of such month, in each case, using the first-in, first-out
inventory valuation method, and setting forth in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent with copies for each Lender except as otherwise provided in clause (g)
below:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in such
certificate;
(b) subject to the proviso below, concurrently with the delivery of
the financial statements referred to in subsections 6.1(a), (b) and (c), a
certificate of a Responsible Officer (1) stating that, to the best of such
Officer's knowledge, during such period (i) no Subsidiary has been formed
or acquired (or, if any such Subsidiary has been formed or acquired, the
Borrower has complied with the requirements of subsection 6.12 with respect
thereto), (ii) neither the Borrower nor any of its Subsidiaries has changed
its name, its principal place of business, its chief executive office or
the location of any material item of tangible Collateral without complying
with the requirements of this Agreement and the Security Documents with
respect thereto and (iii) the Borrower has observed or performed in all
material respects all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan Documents
to be observed, performed or satisfied by it, and that such Officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate; provided that with respect to the financial
48
statements delivered pursuant to subsection 6.1(c), such certificate need
only cover the items set forth in clause (i) above, and (2) in the case of
the financial statements delivered pursuant to subsections 6.1(a) and (b)
setting forth, in reasonable detail, a calculation of the financial
covenants set forth in subsection 7.1 for the period corresponding to such
financial statements; and, with respect to the annual financial statements
required to be furnished pursuant to subsection 6.1(a), a reconciliation of
such financial statements from the last-in first-out inventory valuation
method to the first-in, first-out inventory valuation method in order to
calculate the financial covenants set forth in subsection 7.1, all in
substantially the form set forth on Exhibit D (the "Responsible Officer's
Certificate").
(c) not later than 10 days prior to the end of each fiscal year of the
Borrower, a copy of the projections by the Borrower of the operating budget
and cash flow budget of the Borrower and its Subsidiaries for the
succeeding fiscal year using the first-in, first-out inventory valuation
method, such projections to be accompanied by a certificate of a
Responsible Officer to the effect that such projections have been prepared
on the basis of sound financial planning practice and that such Responsible
Officer has no reason to believe they are incorrect or misleading in any
material respect;
(d) promptly upon receipt thereof, copies of all reports submitted to
the Borrower or any of its Subsidiaries by KPMG Peat Marwick or any other
independent accountants of the Borrower or any such Subsidiary in
connection with each annual, interim or special audit of its financial
statements made by such accountants (including, without limitation, any
comment letter submitted by such accountants to management of the Borrower
or any such Subsidiary in connection with their annual audit and any
reports addressing internal accounting controls of the Borrower or such
Subsidiary submitted by such accountants), and, promptly upon completion
thereof, copies of any response report from the Borrower or such Subsidiary
to such accountants;
(e) within five days after the same are filed, copies of all financial
statements and reports which the Borrower may make to, or file with, the
Securities and Exchange Commission or any successor or analogous
Governmental Authority, and at such time, if any, that the Borrower becomes
subject to the reporting requirements of the Securities Exchange Act of
1934, as amended, within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to its
stockholders;
(f) promptly, but in no event later than 1:00 P.M., New York City
time, on the third Business Day following the end of each calendar week,
UNLESS such third Business Day falls in the last week of a calendar month,
in which case, in no event later than 1:00 P.M., New York City time, on the
third Business Day of the next calendar month, a Borrowing Base
Certificate, certifying in reasonable detail the Borrowing Base as of the
close of business on the last calendar day of the immediately preceding
calendar week or calendar month, as the case may be, and in each case, a
copy to the Administrative Agent of a Supplemental Reporting presenting the
Borrower's computation thereof. Each Borrowing Base Certificate shall
remain in
49
effect from and including the date on which such Borrowing Base
Certificate is delivered, to, but excluding, the date on which the next
Borrowing Base Certificate is delivered; and
(g) promptly, furnish to the Administrative Agent or any Lender such
additional financial and other information with respect to the business or
operations of the Borrower and its Subsidiaries as the Administrative Agent
or such Lender may from time to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all
its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided
on the books of the Borrower or its Subsidiaries, as the case may be.
6.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue to
engage in business of the same general type as now conducted by it or businesses
reasonably related thereto; preserve, renew and keep in full force and effect
its corporate existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business except as otherwise permitted pursuant to subsection 7.5 and except to
the extent that failure to comply with the foregoing would not, in the
aggregate, be reasonably expected to have a Material Adverse Effect; comply with
all Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, be reasonably expected
to have a Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE. Keep all tangible property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance on
all its tangible property in at least such amounts and against at least such
risks (but including in any event public liability, product liability and
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business; and furnish to the
Administrative Agent with copies for each Lender, upon written request, full
information as to the insurance carried.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time during normal business hours and as often as may reasonably be desired and
to discuss the business, operations, properties and financial and other
condition of the Borrower and its Subsidiaries with officers and employees of
the Borrower and its Subsidiaries and with its independent certified public
accountants; provided that such inspection shall be conducted in a manner that
does not unreasonably interfere with the business or operations of the Borrower
or its Subsidiaries.
6.7 ANNUAL REVIEWS. At any time upon the request of the
Administrative Agent, permit the Administrative Agent or professionals
(including investment bankers, consultants, accountants, lawyers and appraisers)
retained by the Administrative Agent to
50
conduct evaluations and appraisals (at a reasonable time during normal
business hours provided that the following is conducted in a manner that does
not unreasonably interfere with the business or operations of the Borrower or
its Subsidiaries) of (i) the Borrower's practices in the computation of the
Borrowing Base, (ii) the assets included in the Borrowing Base, (iii) systems
and procedures related to Borrowing Base items, (iv) other related procedures
deemed necessary by the Administrative Agent, and pay the reasonable fees and
expenses in connection therewith (including, without limitation, the
reasonable fees and expenses associated with services performed by the
Administrative Agent's Collateral Monitoring Department); provided, however,
that such persons shall not be entitled to conduct such evaluations and
appraisals of assets more frequently than once per year unless (x) a Default
or Event of Default has occurred and is continuing or (y) the Administrative
Agent or the Majority Lenders determine that any material event or material
change has occurred with respect to the Loan Parties, their inventory or
receivables practices or the performance of the Collateral and that as a
result of such event or change more frequent evaluations or appraisals are
required to effectively monitor the Borrowing Base, in which case the
Borrower will permit such Persons to conduct such evaluations and appraisals
at such reasonable times during normal business hours and as often as may be
reasonably requested; provided that such inspection shall be conducted in a
manner that does not unreasonably interfere with the business or operations
of the Borrower or its Subsidiaries.
6.8 NOTICES. Promptly give notice to the Administrative Agent with
copies for each Lender of (to the extent it has knowledge of same):
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, which
in either case, if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $2,000,000 or more and not
covered by insurance or with respect to which the Borrower or its
Subsidiaries is not fully indemnified by a third party or in which
injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan
or (ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan; and
(e) any development or event which has had or which the Borrower
believes could reasonably be expected to have a Material Adverse Effect.
51
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
6.9 ENVIRONMENTAL LAWS. (a) Comply with, and use diligent efforts to
ensure compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply in all material respects with and
maintain, and use diligent efforts to ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except, in either case to the extent that failure
to do so could not be reasonably expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested in
good faith by appropriate proceedings and the pendency of such proceedings
could not be reasonably expected to have a Material Adverse Effect.
6.10 FURTHER ASSURANCES. Upon the request of the Administrative
Agent, promptly perform or cause to be performed any and all acts and execute or
cause to be executed any and all documents (including, without limitation,
financing statements and continuation statements) for filing under the
provisions of the Uniform Commercial Code or any other Requirement of Law which
are necessary or advisable to maintain in favor of the Administrative Agent, for
the benefit of the Lenders, Liens on the Collateral that are duly perfected in
accordance with all applicable Requirements of Law.
6.11 CASH MANAGEMENT SYSTEM. Maintain (i) the US Cash Collateral
Account into which all proceeds of Collateral payable in the United States are
deposited (including any amounts paid to the Borrower or any of its Subsidiaries
and required pursuant to the Security Agreement, to be deposited by the Borrower
and its Subsidiaries into the Depository Accounts) with the Administrative Agent
and (ii) the Canadian Cash Collateral Account and the Deposit Accounts into
which all proceeds of Collateral payable in Canada are paid (including any
amounts paid to the Borrower or any of its Subsidiaries and required pursuant to
the Security Agreement to be deposited by the Borrower and its Subsidiaries into
the Canadian Cash Collateral Account or the Deposit Accounts) with Bank of
Montreal, or, in each case, one or more banks reasonably acceptable to the
Administrative Agent that have acknowledged the assignment of such accounts to
the Administrative Agent pursuant to the Depository Letters or the Deposit
Account Letters and the Security Agreement, as the case may be, and maintain
cash management systems reasonably acceptable to the Majority Lenders.
At the beginning of each Business Day, transfer to the US Cash
Collateral Account such amounts of Canadian dollars as shall be necessary to
cause the aggregate amount of available funds on deposit in the Canadian Cash
Collateral Account and the Deposit Accounts not to exceed $30,000,000 Canadian
dollars.
52
6.12 ADDITIONAL COLLATERAL. (a) With respect to any assets acquired
on or after the Restatement Effective Date by the Borrower or any of its
Subsidiaries that are intended to be subject to the Lien created by any of the
Security Documents but which are not so subject (other than any assets described
in paragraph (b) or (c) of this subsection and assets that, in the judgment of
the Administrative Agent are immaterial or a Lien on which cannot be perfected
by filing UCC-1 financing statements or their foreign equivalents), promptly
(and in any event within 30 days after the acquisition thereof): (i) execute
and deliver to the Administrative Agent such amendments to the relevant Security
Documents or such other documents as the Administrative Agent shall reasonably
deem necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a Lien on such assets, (ii) take all actions necessary
or advisable to cause such Lien to be duly perfected in accordance with all
applicable Requirements of Law, including, without limitation, the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent, and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described in clauses (i) and (ii) immediately preceding, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(b) With respect to any Person that, on or subsequent to the
Restatement Effective Date, becomes an active Subsidiary, promptly upon the
request of the Administrative Agent: (i) execute and deliver to the
Administrative Agent, for the benefit of the Lenders, a new pledge agreement
or such amendments to the Borrower Stock Pledge Agreement as the
Administrative Agent shall reasonably deem necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a Lien on the
Capital Stock of such Subsidiary (unless such Subsidiary is a foreign
Subsidiary in which case, 66% of the Capital Stock of such foreign
subsidiary) which is owned by the Borrower or any of its Subsidiaries, (ii)
deliver to the Administrative Agent the certificates representing such
Capital Stock, together with undated stock powers executed and delivered in
blank by a duly authorized officer of the Borrower or such Subsidiary, as the
case may be, (iii) cause such new Subsidiary other than the Receivables Sub
(A) to become a party to the Subsidiary Guarantee and the Security Agreement,
in each case pursuant to documentation which is in form and substance
satisfactory to the Administrative Agent, and (B) to take all actions
necessary or advisable to cause the Lien created by the Security Agreement to
be duly perfected in accordance with all applicable Requirements of Law,
including, without limitation, the filing of financing statements in such
jurisdictions as may be reasonably requested by the Administrative Agent and
(iv) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described in clauses (i), (ii)
and (iii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
6.13 TAX STAMP BONDING. Maintain surety bonds if and to the extent
required by law (including, with respect to amounts) with respect to all tobacco
tax stamps not paid for on a cash basis.
6.14 COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments and
otherwise perform all material obligations in respect of all leases of real
property to which the Borrower or any of its Subsidiaries is a party, keep such
leases in full force and effect and not allow such leases to lapse or be
terminated or any rights to renew such leases to
53
be forfeited or cancelled if the failure to make such payments or perform
such obligations, to keep such lease in full force and effect, or the lapse,
termination or failure to renew would reasonably be likely to result in a
Material Adverse Effect, notify the Administrative Agent of any default by
any party of which the Borrower has actual knowledge with respect to such
leases and cooperate with the Administrative Agent in all respects to cure
any such default, and cause each of its Subsidiaries to do so.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or the Administrative Agent
hereunder or under any other Loan Document, the Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly:
7.1 FINANCIAL CONDITION COVENANTS.
(a) MAINTENANCE OF CURRENT RATIO. Permit the ratio of Consolidated
Current Assets of the Borrower to Consolidated Current Liabilities of the
Borrower at any time to be less than 1.40 to 1.00.
(b) MAINTENANCE OF NET WORTH. Permit Consolidated Net Worth of the
Borrower at any time to be less than an amount equal to $6,500,000 PLUS the
aggregate of 50% of Consolidated Net Income of the Borrower, if positive,
for each quarter during the period commencing on January 1, 1997 and ending
at the close of the fiscal quarter then last ended.
(c) MAINTENANCE OF SENIOR DEBT LEVERAGE RATIO. Permit the ratio of
(i) Consolidated Senior Debt of the Borrower at the last day of any fiscal
quarter ending during any "Test Period" set forth below to (ii)
Consolidated EBITDA for the period of four consecutive fiscal quarters
ending on such date to be greater than the amount set forth opposite such
period below:
TEST PERIOD RATIO
----------- -----
12/31/97 - 9/30/98 4.00 to 1.00
12/31/98 - 9/30/01 and each four-quarter period thereafter 3.75 to 1.00
For purposes of computing Consolidated Senior Debt of the Borrower,
the amount of Revolving Credit Loans and Invested Amount included therein
as of the last day of a fiscal quarter shall be the average daily
outstanding principal amount thereof for the period of two consecutive
fiscal quarters ending on such date (or, if shorter, the period commencing
on the Restatement Effective Date and ending on such date).
54
(d) MAINTENANCE OF MINIMUM EBITDA. Permit Consolidated EBITDA of the
Borrower for the four quarters ending at the last day of any period set
forth below to be less than the amount set forth opposite such period
below:
TEST PERIOD AMOUNT
----------- ------
9/30/97 - 12/31/97 $32,000,000
3/31/98 - 6/30/98 $33,500,000
9/30/98 - 12/31/98 $35,000,000
3/31/99 - 6/30/99 $36,500,000
9/30/99 - 12/31/99 and
each four-quarter period thereafter $38,000,000
(e) MAINTENANCE OF INTEREST COVERAGE. Permit for any period of four
consecutive fiscal quarters ending during any "Test Period" set forth below
the ratio of (i) Consolidated EBITDA of the Borrower to (ii) Consolidated
Cash Interest Expense of the Borrower for such period to be less than the
ratio set forth opposite such period below:
TEST PERIOD RATIO
----------- -----
12/31/97 - 9/30/98 1.65 to 1.00
12/31/98 - 9/30/99 1.75 to 1.00
12/31/99 - 9/30/00 2.00 to 1.00
12/31/00 - 9/30/01 and
each four quarter period thereafter 2.25 to 1.00
7.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary;
(c) Indebtedness of the Borrower and any of its Subsidiaries incurred
to finance the acquisition of fixed or capital assets (whether pursuant to
a loan, a Financing Lease or otherwise) in an aggregate principal amount
not exceeding as to the Borrower and its Subsidiaries $5 million at any
time outstanding;
(d) Indebtedness outstanding on August 7, 1996 and listed on Schedule
7.2 and any refinancings, refundings, renewals or extensions thereof;
provided that the aggregate principal amount set forth on Schedule 7.2 does
not increase in connection with any such refinancing, refunding, renewal or
extension;
(e) Indebtedness in respect of Hedge Agreements designed to hedge
against fluctuations in interest rates or foreign exchange rates incurred
in the ordinary course of business and consistent with prudent business
practice in an aggregate notional
55
amount not to exceed $75,000,000, in the case of the interest rate Hedge
Agreements, and $40,000,000, in the case of foreign exchange rate Hedge
Agreements, at any time outstanding;
(f) additional Indebtedness of the Borrower and its Subsidiaries (not
otherwise described in this Section 7.2) not exceeding $3 million in
aggregate principal amount at any one time outstanding;
(g) Indebtedness constituting Existing High Yield Subordinated Debt;
(h) Subordinated Debt of the Borrower (other than the High Yield
Notes) in an aggregate principal amount not to exceed $2,000,000 at any one
time outstanding;
(i) Indebtedness in respect of the conditional sale of coffee machines
and similar fast food equipment where the Borrower or its Subsidiaries
guarantee the purchase price of such equipment in the event the purchaser
of such equipment does not purchase such equipment through coffee and food
purchases;
(j) Indebtedness in respect of state cigarette stamp tax and other
bonds incurred in the ordinary course of business on a basis consistent
with past practice;
(k) Indebtedness in respect of letters of credit which are denominated
in Canadian dollars and issued for the account of the Borrower, in an
aggregate face amount not to exceed $5 million Canadian dollars; provided,
that any such letter of credit is supported by a Letter of Credit;
(l) Indebtedness of the type described in clause (f) of the definition
of "Indebtedness" which is secured by Liens permitted under subsection 7.3;
(m) Indebtedness assumed in connection with Permitted Acquisitions,
provided that such Indebtedness was not incurred in anticipation of the
Permitted Acquisition and, in any case, not to exceed $500,000 in the
aggregate; and
(n) Indebtedness under the Receivables Transaction.
7.3 LIMITATION ON LIENS. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, PROVIDED that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlord's or other like Liens arising in the ordinary course of business
for amounts which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
56
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) easements, rights-of-way, restrictions, restrictive covenants,
encroachments and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount
and which do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct
of the business of the Borrower or such Subsidiary;
(f) Liens in existence on August 7, 1996 listed on Schedule 7.3,
securing Indebtedness permitted by subsection 7.2(d) and new Liens created
thereafter in connection with refinancings, refundings, renewals, and
extensions described in subsection 7.2(d), PROVIDED that no such Lien is
spread to cover any additional property after the Restatement Effective
Date and that the principal amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower and its Subsidiaries
permitted by subsection 7.2(c) incurred to finance the acquisition of fixed
or capital assets, PROVIDED that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness, (iii) the principal amount of
Indebtedness secured thereby is not increased and (iv) the principal amount
of Indebtedness secured by any such Lien shall at no time exceed the
original purchase price of such property at the time it was acquired;
(h) Liens created pursuant to the Security Documents;
(i) Liens arising under licensing agreements entered into by the
Borrower or any Subsidiaries in the ordinary course of business for the use
of Intellectual Property or other intangible assets of the Borrower or any
Subsidiary, and any consents to use, and other similar agreements
concerning Intellectual Property or other intangible assets or judgments
adjudicating rights in any intangible rights in Intellectual Property or
other intangible assets;
(j) Liens securing Indebtedness of the Borrower and its Subsidiaries
permitted by subsection 7.2(b); and
(k) Liens on the assets of the Receivables Sub pursuant to the
Receivables Transaction.
7.4 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
57
(a) Guarantee Obligations in existence on the date hereof and listed
on Schedule 7.4 and refinancings, renewals or extensions thereof, provided
that the aggregate principal amount set forth on Schedule 7.4 does not
increase in connection with any such refinancing, renewal or extension;
(b) guarantees made in the ordinary course of its business by the
Borrower of obligations of any Subsidiary of Indebtedness permitted by
subsections 7.2(c), (d) and (e) or any leases for real property by any
Subsidiary; and
(c) the Subsidiaries Guarantee.
7.5 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into, or be liquidated, wound up or dissolved into, the Borrower
(PROVIDED that the Borrower shall be the continuing or surviving
corporation) or with or into any one or more wholly owned Subsidiaries of
the Borrower (PROVIDED that the wholly owned Subsidiary or Subsidiaries
shall be the continuing or surviving corporation);
(b) subject to subsections 7.10(c) and (d), the Borrower or any
Subsidiary may be merged or consolidated with any other Person organized
under a jurisdiction of the United States with assets held primarily in the
United States; PROVIDED, that the Borrower or such Subsidiary shall be the
continuing or surviving corporation; the Administrative Agent is provided
with written notice, and after giving effect thereto no Default or Event of
Default would exist or reasonably be expected to be caused thereby;
(c) any wholly owned Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any other wholly owned Subsidiary of the
Borrower; and
(d) as contemplated pursuant to the Receivables Transaction.
7.6 LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out property in
the ordinary course of business;
(b) the sale or other disposition of any property in the ordinary
course of business, PROVIDED that (other than inventory) the aggregate book
value of all assets so
58
sold or disposed of in any period of twelve consecutive months shall not
exceed $500,000;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the
compromise or collection thereof; and
(e) the sale, abandonment or other disposition in the ordinary course
of business of Intellectual Property that is no longer necessary for the
conduct of the business of the Borrower or any Subsidiary;
(f) as permitted by subsection 7.5; and
(g) as contemplated pursuant to the Receivables Transaction.
7.7 LIMITATION ON SPECULATIVE TRANSACTIONS. Engage, or permit any of
its Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions (including, without
limitation, take-or-pay contracts) except for Hedge Agreements permitted under
subsection 7.2(e).
7.8 LIMITATION ON DIVIDENDS. Declare or pay any dividend (other than
dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of the Borrower or any warrants or
options to purchase any such Stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower or any Subsidiary
(such declarations, payments, setting apart, purchases, redemptions,
defeasances, retirements, acquisitions and distributions being herein called
"RESTRICTED PAYMENTS"), except that if no Default or Event of Default exists or
would reasonably be expected to be caused thereby, the Borrower may repurchase
shares of its common stock from its employees and former employees so long as
the aggregate amount of all such repurchases since August 7, 1996 does not
exceed $1 million.
7.9 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make (by
way of the acquisition of securities of a Person or otherwise) any expenditure
in respect of the purchase or other acquisition of fixed or capital assets
except for expenditures in the ordinary course of business not exceeding, in the
aggregate for the Borrower and its Subsidiaries, $11,500,000, for the 1997
fiscal year and $9,500,000, for each fiscal year thereafter, PROVIDED, that up
to $1,500,000 of any such amount if not so expended in the fiscal year for which
it is permitted above, may be carried over for expenditure in the next following
fiscal year; PROVIDED, FURTHER, that any expenditures constituting a portion of
the acquisition price of a business or a line of business acquired as a going
concern and also classified as an acquisition covered by subsection 7.10 shall
not be taken into account for purposes of determining compliance with the
provisions of this subsection 7.9.
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7.10 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except :
(a) extensions of trade credit in the ordinary course of business;
(b) investments in US Cash Equivalents and Canadian Cash Equivalents;
(c) investments constituting Permitted Acquisitions; provided, that
at the date of signing of definitive documentation with respect to such
proposed Permitted Acquisition, the lesser of (1) the Borrowing Base minus
the Aggregate Outstanding Revolving Extensions of Credit and (2) the
Available Revolving Credit Commitments shall be at least $15,000,000
determined on the basis of the average amount of the Borrowing Base and the
Aggregate Outstanding Revolving Extensions of Credit, respectively, during
the calendar month preceding the date such definitive documentation is
signed;
(d) loans and advances to employees of the Borrower or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrower and its
Subsidiaries not to exceed $500,000 at any one time outstanding;
(e) investments by the Borrower and its Subsidiaries in securities and
notes to the extent received in settlement of delinquent obligations of any
supplier or customer that is in bankruptcy or reorganization proceedings or
received in settlement of accounts receivables that are more than 60 days
past due;
(f) investments by the Borrower in its Subsidiaries and investments by
such Subsidiaries in the Borrower and in other Subsidiaries; and
(g) subject to the limitations set forth in subsection 7.2(e),
investments constituting Hedge Agreements.
7.11 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS. (a) Make any optional payment or prepayment on or optional
redemption or optional purchase of any Indebtedness or receivables sold
pursuant to the Receivables Transaction (other than (1) the Loans and (2) a
refinancing of Indebtedness permitted by subsection 7.2(d)), or (b) amend,
modify or change, or consent or agree to any amendment, modification or
change to any of the terms of any such Indebtedness (other than any such
amendment, modification or change which would extend the maturity or reduce
the amount of any payment of principal thereof or which would reduce the rate
or extend the date for payment of interest thereon).
7.12 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise not prohibited under this Agreement, and
(b) upon fair and reasonable terms no less favorable to
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the Borrower or such Subsidiary, as the case may be, than it would obtain in
a comparable arm's length transaction with a Person which is not an Affiliate.
7.13 LIMITATION ON SALES AND LEASEBACKS. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary.
7.14 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal year of
the Borrower to end on a day other than December 31.
7.15 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with any
Person any agreement, other than (a) this Agreement, (b) any Indebtedness
permitted by subsection 7.2(c) (in which case, any prohibition or limitation
shall only be effective against the assets financed thereby), (c) any
refinancing, refunding, renewal or extension permitted by subsection 7.2(d) (in
which case any prohibition or limitation shall not be more restrictive than the
prohibition or limitation contained in the Indebtedness that was so refinanced,
refunded, renewed or extended) and (d) the Receivables Transaction, which
prohibits or limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired.
7.16 LIMITATION ON LINES OF BUSINESS. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement or
businesses reasonably related thereto.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Loan, or any
other amount payable hereunder, within five days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in subsections 6.4,
6.8, 6.11 (other than as a result of wire transfer difficulties or system
malfunctions beyond the control of any
61
Loan Party), and 6.12, Section 7, Section 5 of the Borrower Stock Pledge
Agreement or Section 4 of the Security Agreement; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue
unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest of any Indebtedness (other than the
Loans) or in the payment of any Guarantee Obligation, in each case, that is
outstanding in a principal amount of at least $1 million either
individually or in the aggregate, beyond the period of grace (not to exceed
30 days), if any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition relating to
any such Indebtedness or Guarantee Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or
such Guarantee Obligation to become payable; or
(f) an Early Termination (as defined in the Receivables Sales
Documents) occurs; or
(g) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
the Borrower or any of its Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) the Borrower or any
62
of its Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(h) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise
on the assets of the Borrower or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence
to have a trustee appointed, or a trustee shall be appointed, to administer
or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Majority Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Majority Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of,
a Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events or
conditions in clauses (i) through (vi), if any, could reasonably be
expected to have a Material Adverse Effect and is reasonably expected to
result in liability exceeding $1 million; or
(i) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $1,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within 60 days from the entry thereof or, in the
event of such a stay, such judgment shall not be discharged within 60 days
after such stay expires; or
(j) (i) Any of the Security Documents shall cease, for any reason, to
be in full force and effect, or the Borrower or any other Loan Party which
is a party to any of the Security Documents shall so assert or (ii) the
Lien created by any of the Security Documents shall cease to be enforceable
and of the same effect and priority purported to be created thereby; or
(k) The Subsidiaries Guarantee shall cease, for any reason, to be in
full force and effect or any Guarantor shall so assert; or
(l) (i) Jupiter Partners, LP ("Jupiter") shall at any time for any
reason cease to control, directly or indirectly, at least the Control
Percentage of the voting rights of the Borrower having ordinary voting
power in the election of directors of the Borrower or (ii), any other
Person or "group" (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) (other than Jupiter and its
Affiliates) shall have acquired control of 35% or more of the voting rights
of the Borrower having ordinary voting power in the election of directors
of the Borrower unless the acquisition by any such Person or "group" shall
have been recommended by the board of directors of the Borrower;
63
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Majority Lenders, the Administrative Agent may, or upon the request of the
Majority Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Majority Lenders,
the Administrative Agent may, or upon the request of the Majority Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement to be due and payable forthwith, whereupon the same shall immediately
become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Administrative Agent an amount equal to
the aggregate then undrawn and unexpired amount of such Letters of Credit. The
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Bank and the L/C Participants, a security interest in such cash
collateral to secure all obligations of the Borrower under this Agreement and
the other Loan Documents. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrower hereunder and under the Notes. After all
such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the Notes shall have been paid in full, the
Administrative Agent shall return the balance, if any, in such cash collateral
account to the Borrower and shall execute documents to terminate its security
interest in such cash collateral. The Borrower shall execute and deliver to the
Administrative Agent, for the account of the Issuing Bank and the L/C
Participants, such further documents and instruments as the Administrative Agent
may request to evidence the creation and perfection of the security interest in
such cash collateral account.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly
64
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere
in this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any administrative
agents or attorneys in-fact selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its officers, directors, employees, administrative agents, attorneys-in-fact
or Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of the Borrower.
9.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement and the other
Loan Documents in accordance with a request of
65
the Majority Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders
of the Loans.
9.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Majority Lenders; PROVIDED that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
9.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, administrative agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent 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 appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
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
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
9.7 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Voting Percentages in effect on the
date on which indemnification is sought, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Loans) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of, the Commitments, this
Agreement, any of the other Loan Documents or any documents
66
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing;
PROVIDED that no Lender shall be liable for the payment of any portion of
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Loans and all
other amounts payable hereunder.
9.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents. With respect to the Loans made by it and with respect to
any Letter of Credit issued or participated in by it, the Administrative Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Majority Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent (provided
that it shall have been approved by the Borrower), shall succeed to the rights,
powers and duties of the Administrative Agent hereunder. Effective upon such
appointment and approval, the term "Administrative Agent" shall mean such
successor agent, and the former Administrative Agent's rights, powers and duties
as Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this subsection.
The Majority Lenders may, or, with the written consent of the Majority Lenders,
the Administrative Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Borrower hereunder or thereunder or (b) waive, on such terms and
conditions as the Majority Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the
67
amount or extend the scheduled date of maturity of any Loan or of any
installment thereof, or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or increase the
amount or extend the expiration date of any Lender's Commitment, in each case
without the consent of each Lender affected thereby, or (ii) amend, modify or
waive any provision of this subsection or subsection 2.13, or reduce the
percentage specified in the definition of Majority Lenders, or consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents or, subject to the proviso
below, release the Subsidiaries Guarantee or all or any substantial part of
the Collateral, in each case without the written consent of all the Lenders;
provided, that with respect to a release of the Subsidiaries Guarantee or all
or any substantial part of the Collateral relating solely to the obligations
of the Borrower or any of its Subsidiaries in connection with a Hedge
Agreement entered into with any Lender, the written consent of the Lender
affected thereby, or (iii) increase any of the percentages specified in the
Borrowing Base or increase the Uncovered L/C Amount, in each case, without
the written consent of all the Lenders, or (iv) amend, modify or waive any
provision of Section 9 without the written consent of the then Administrative
Agent. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Borrower, the Lenders and the
Administrative Agent shall be restored to their former positions and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrower, the Administrative Agent and the Issuing
Banks, and as set forth on its signature page hereto in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
The Borrower: Core-Mark International, Inc.
395 Oyster Point Boulevard, Suite 415
South San Francisco, CA 94080
Attention: Leo F. Korman
Fax: 650-589-4010
The Administrative
Agent: Chase Securities Inc.
101 California Street, 27th Floor
San Francisco, CA 94111
Attention: Wendy E. Gittings
Fax: 415-954-9583
68
with a copy to: Chase Agent Bank Services
1 Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Janet Belden
Fax: 212-552-5658
The Issuing Bank: Chase Manhattan Bank Delaware
1201 Market Street
Wilmington, Delaware 19801
Attention: Michael Handago
Fax: 302-428-3390
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.7 or 2.12 shall not be
effective until received.
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
10.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay
or reimburse the Administrative Agent and its Affiliates for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
preparation, execution, delivery and administration of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents
and any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby
including, without limitation, the fees specified in subsection 6.7 and
monthly collateral monitoring fees, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b)
to pay or reimburse the Administrative Agent and the Lenders for all their
out-of-pocket costs and expenses incurred in connection with the enforcement
or preservation of any rights under this Agreement, the other Loan Documents
and any such other documents, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent and the
Lenders, (c) to pay, indemnify, and hold the Administrative Agent and its
Affiliates and the Lenders (and their respective officers, directors,
employees, advisors and agents) harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other like taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or
69
any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold
the Administrative Agent and its Affiliates and the Lenders (and their
respective officers, directors, employees, advisors and agents) harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement or the other
Loan Documents or of the financing contemplated thereby or the use or the
proposed use of the proceeds thereof (other than matters the subject matter
of which is covered by clauses (a), (b) or (c) above), including, without
limitation, any of the foregoing relating to the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations
of the Borrower, any of its Subsidiaries or any of the Properties (all the
foregoing in this clause (d), collectively, the "indemnified liabilities"),
PROVIDED that the Borrower shall have no obligation hereunder to the
Administrative Agent or any Lender with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of the Administrative
Agent or any such Lender or arising from events or actions occurring after
any Lender has taken possession of the property at issue by foreclosure or
otherwise. The agreements in this subsection shall survive repayment of the
Loans and all other amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent and their respective successors and permitted
assigns. The Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("PARTICIPANTS") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents,
provided that each such sale shall be of Loans and Commitments in an
aggregate amount of at least $5,000,000 and provided further, that no Lender
may so sell its Commitments so that less than $5,000,000 of such Commitments
are held by such Lender without participating interests therein, unless such
Lender so sells 100% of its Commitments, in each case, unless otherwise
agreed by the Borrower and the Administrative Agent. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and
the Borrower and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. No Lender
shall be entitled to create in favor of any Participant, in the participation
agreement pursuant to which such Participant's participating interest shall
be created or otherwise, any right to vote on, consent to or approve any
matter relating to this Agreement or any other Loan Document except for those
specified in clauses (i) and (ii) of the proviso to subsection 10.1. The
Borrower agrees that if amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have
70
the right of setoff in respect of its participating interest in amounts owing
under this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement, PROVIDED
that, in purchasing such participating interest, such Participant shall be
deemed to have agreed to share with the Lenders the proceeds thereof as
provided in subsection 10.7(a) as fully as if it were a Lender hereunder.
The Borrower also agrees that each Participant shall be entitled to the
benefits of subsections 2.15, 2.16 and 2.17 (Requirements of Law, Taxes and
Indemnity) with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; PROVIDED that, in the
case of subsection 2.16 (Taxes), such Participant shall have complied with
the requirements of said subsection and PROVIDED, FURTHER, that no
Participant shall be entitled to receive any greater amount pursuant to any
such subsection than the transferor Lender would have been entitled to
receive in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
(c) Upon prior written notice to the Borrower, any Lender may, in
the ordinary course of its commercial banking business and in accordance with
applicable law, at any time and from time to time assign to any Lender or any
Affiliate thereof or, with the consent of the Borrower, the Administrative
Agent and the Issuing Bank (which in each case shall not be unreasonably
withheld), to an additional bank or financial institution (an "ASSIGNEE") all
or any part of its rights and obligations under this Agreement and the other
Loan Documents pursuant to an Assignment and Acceptance, substantially in the
form of Exhibit G, executed by such Assignee, such assigning Lender (and, in
the case of an Assignee that is not then a Lender or an affiliate thereof, by
the Borrower, the Administrative Agent and the Issuing Bank) and delivered to
the Administrative Agent for its acceptance and recording in the Register,
PROVIDED that, each such sale be of Loans and Commitments of an aggregate
amount of at least $5,000,000 and provided further, that no Lender party to
this Agreement on the date hereof may so sell any of its initial Commitments
hereunder such that such Lender holds directly less than $5,000,000 of such
Commitments unless such Lender so sells 100% of its Commitments. Upon such
execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein PROVIDED that, no Assignee
shall be entitled to receive any greater amount pursuant to subsection 2.16
than the assignor Lender would have been entitled to receive in respect of
the amount assigned by such assignor Lender to such Assignee had no such
assignment occurred, and (y) the assigning Lender thereunder shall, to the
extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such assigning Lender shall
cease to be a party hereto). Notwithstanding any provision of this paragraph
(c) and paragraph (e) of this subsection, the consent of the Borrower shall
not be required, and, unless requested by the Assignee and/or the assigning
Lender, new Notes shall not be required to be executed and delivered by the
Borrower, for any assignment which occurs at any time when any of the events
described in Section 8(f) shall have occurred and be continuing.
71
(d) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in subsection
10.2 a copy of each Assignment and Acceptance delivered to it and a register
(the "REGISTER") for the recordation of the names and addresses of the Lenders
and the Commitments of, and principal amounts of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower and the Administrative
Agent) together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Borrower.
(f) Subject to subsection 10.16, the Borrower authorizes each Lender
to disclose to any Participant or Assignee (each, a "TRANSFEREE") and any
prospective Transferee any and all financial information in such Lender's
possession concerning the Borrower and its Affiliates which has been delivered
to such Lender by or on behalf of the Borrower pursuant to this Agreement or
which has been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender's credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
10.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITTED
LENDER") shall at any time receive any payment of all or part of its Loans or
the Reimbursement Obligations owing to it, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in
Section 8(f), or otherwise), in a greater proportion than any such payment to
or collateral received by any other Lender, if any, in respect of such other
Lender's Loans or the Reimbursements Obligations owing to it, or interest
thereon, such benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other Lender's
Loans, or the Reimbursement Obligations owing to it, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Lender to share the
excess payment or benefits of such
72
collateral or proceeds ratably with each of the Lenders; PROVIDED, HOWEVER,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such benefitted Lender, such purchase shall be rescinded, and
the purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify
the Borrower and the Administrative Agent after any such set-off and application
made by such Lender, PROVIDED that the failure to give such notice shall not
affect the validity of such set-off and application.
10.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the Courts
of the State of New York sitting in the Borough of
73
Manhattan, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 10.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this subsection any special, exemplary, punitive or consequential
damages.
10.13 ACKNOWLEDGEMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 JUDGMENT CURRENCY. (a) If, for the purposes of obtaining
judgment in any court, it is necessary to convert a sum due under any of the
Loan Documents to the Administrative Agent or any Lender in any currency (the
"Original Currency") into another currency (the "Other Currency"), the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with
74
normal banking procedures the Administrative Agent or such Lender, as the
case may be, could purchase the Original Currency with the Other Currency on
the Business Day preceding that on which final judgment is paid or satisfied.
(b) The obligations of the Borrower in respect of any sum due in the
Original Currency from it to the Administrative Agent or any Lender under any of
the Loan Documents shall, notwithstanding any judgment in any Other Currency, be
discharged only to the extent that on the Business Day following receipt by the
Administrative Agent or such Lender of any sum adjudged to be so due in such
Other Currency, the Administrative Lender or such Lender, as the case may be,
may in accordance with normal banking procedures purchase the Original Currency
with such Other Currency. If the amount of the Original Currency so purchased
is less than the sum originally due to the Administrative Agent or the Lender,
as the case may be, in the Original Currency, the Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the
Administrative Agent or such Lender, as the case may be, against such loss, and
if the amount of the Original Currency so purchased exceeds the sum originally
due to the Administrative Agent or such Lender, as the case may be, in the
Original Currency, the Administrative Agent and such Lender, as the case may be,
agree to remit such excess to the Borrower.
10.16 CONFIDENTIALITY. The Administrative Agent and each Lender
agrees to keep confidential all non-public information provided to it by or on
behalf of the Borrower or any Subsidiary that is designated by the Borrower or
any Subsidiary as confidential; PROVIDED that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent or any other Lender, (b) to any Transferee or
prospective Transferee which agrees to comply with the provisions of this
subsection 10.16, (c) to the employees, directors, agents, attorneys,
accountants and other professional advisors of such Lender for purposes related
to the transactions contemplated by the Loan Documents, (d) upon the request or
demand of any Governmental Authority having jurisdiction over the Administrative
Agent or such Lender, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to applicable
law or regulation, (f) which has been publicly disclosed other than in breach of
this subsection 10.16, or (g) in connection with the exercise of any remedy
hereunder or under any other Loan Document.
10.17 SPECIAL PROVISIONS. (a) From and after the Restatement
Effective Date, (i) each Exiting Lender shall cease to be a party to this
Agreement, (ii) no Exiting Lender shall have any obligations or liabilities
under this Agreement with respect to the period from and after the Restatement
Effective Date and, without limiting the foregoing, no Exiting Lender shall have
any Revolving Credit Commitment under this Agreement or any participation in any
Letter of Credit outstanding hereunder and (iii) no Exiting Lender shall have
any rights under the Existing Credit Agreement, this Agreement or any other Loan
Document (other than rights under the Existing Credit Agreement expressly stated
to survive the termination of the Existing Credit Agreement and the repayment of
amounts outstanding thereunder).
(b) The Lenders hereby waive any requirements for notice of
prepayment, commitment terminations, minimum amounts of prepayments of Revolving
Credit Loans (as defined in the Existing Credit Agreement), ratable reductions
of Revolving Credit
75
Commitments (as defined in the Existing Credit Agreement) and ratable
payments on account of the principal or interest of any Revolving Credit Loan
(as defined in the Existing Credit Agreement) under the Existing Credit
Agreement to the extent such prepayment, reductions or payments are required
pursuant to subsection 5.1(k).
(c) Each of the Exiting Lenders shall deliver to the Administrative
Agent prior to the Restatement Effective Date written consent waiving its rights
to pro-rata payment and pro-rata termination under the Existing Credit
Agreement.
(d) The Lenders hereby confirm that, from and after the Restatement
Effective Date, all participations of the Lenders in respect of Letters of
Credit outstanding hereunder pursuant to subsection 3.4(a) shall be based upon
the Revolving Credit Commitment Percentages of the Lenders (after giving effect
to this Agreement).
(e) The Borrower hereby releases, effective as of the Restatement
Effective Date, in full the Exiting Banks from their obligations in respect of
the Revolving Credit Commitments (as defined in the Existing Credit Agreement)
and, effective as of the Restatement Effective Date, the Lenders hereby assume
such obligations, it being understood that such assumption is reflected in the
Commitments of the Lenders hereunder.
(f) The Borrower shall pay directly to each Exiting Lender, upon
receiving an invoice from such Exiting Lender, any payments due under Section
2.20 of the Existing Credit Agreement.
[Signature Pages Follow]
76
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
CORE-MARK INTERNATIONAL, INC.
By: /s/ LEO F. KORMAN
-------------------------------------
Name: Leo F. Korman
Title: Sr. VP and CFO
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Lender
By: /s/ MARIAN N. SCHULMAN
-------------------------------------
Name: Marian N. Schulman
Title: Vice President
BANKBOSTON, N.A., as a Lender
By: /s/ R. BRANDON
-------------------------------------
Name: R. Brandon
Title: Director
Address for Notices:
BANKBOSTON, N.A.
100 Federal Street
Boston, MA 02110
Attention: Kali Ramachandran
Telecopy: 617-434-6241
UNION BANK OF CALIFORNIA, N.A., as a
Lender
By: /s/ DAVID W. KINKELA
-------------------------------------
Name: David W. Kinkela
Title: Assistant Vice President
Address for Notices:
UNION BANK OF CALIFORNIA, N.A.
350 California Street
6th Floor
San Francisco, CA 94104
Attention: David Kinkela
Telecopy: (415) 705-5093
BANK OF MONTREAL, as a Lender
By: /s/ LEON H. SINCLAIR
----------------------------
Name: Leon H. Sinclair
Title: Director
Address for Notices:
BANK OF MONTREAL
601 South Figueroa Street
Los Angeles, CA 90017
Attention: Maria Chachere
Telecopy: 213-239-0617
LASALLE BUSINESS CREDIT, INC., as a Lender
By: /s/ ROBERT C. ALEXANDER
------------------------------
Name: Robert C. Alexander
Title: V.P.
Address for Notices:
LASALLE BUSINESS CREDIT, INC.
One Centerpointe Drive, Suite 100
Lake Oswego, OR 97035
Attention: John Mundstock
Telecopy: 503-684-4665
SANWA BUSINESS CREDIT CORPORATION,
as a Lender
By: /s/ RAFFI SHIRINYAN
----------------------------
Name: Raffi Shirinyan
Title: Vice President
Address for Notices:
SANWA BUSINESS CREDIT CORPORATION
550 North Brand Blvd.
Glendale, CA 91203
Attention: Sandra Sha
Telecopy: 818-545-0095
U.S. BANK NATIONAL ASSOCIATION, as a
Lender
By: /s/ GREG WILSON
----------------------------
Name: Greg Wilson
Title: Commercial Banking Officer
Address for Notices:
U.S. BANK NATIONAL ASSOCIATION
601 Second Avenue South, MPFP0702
Minneapolis, MN 55402-4302
Attention: Elliot Jaffee
Telecopy: (612) 973-0825
TRANSAMERICA BUSINESS CREDIT
CORPORATION, as a Lender
By: /s/ PERRY VAVOULES
----------------------------
Name: Perry Vavoules
Title: Senior Vice President
Address for Notices:
TRANSAMERICA BUSINESS CREDIT CORPORATION
555 Theodore Fremd Avenue, Suite C-301
Rye, NY 10580
Attention: Ron Walker
Telecopy: (914) 921-0110
ERSTE BANK DER OSTERREICHISCHEN
SPARKASSEN AG, as a Lender
By: /s/ RIMA TERRADISTA
----------------------------
Name: Rima Terradista
Title: Vice President
By: /s/ JOHN S. RUNNION
-----------------------------
Name: John S. Runnion
Title: First Vice President
Address for Notices:
ERSTE BANK DER OSTERREICHISCHEN
SPARKASSEN AG
280 Park Avenue West Building
New York, NY 10017
Attention: Rima Terradista
Telecopy: (212) 984-5627
BANQUE NATIONALE DE PARIS, as a Lender
By: /s/ DAVID W. LOW
---------------------------------
Name: David W. Low
Title: Vice President and Manager
By: /s/ JEFFREY S. KAJISA
---------------------------------
Name: Jeffrey S. Kajisa
Title: Assistant Vice President
Address for Notices:
BANQUE NATIONALE DE PARIS
180 Montgomery Street
San Francisco, CA 94104
Attention: David Low
Telecopy: (650) 296-8954
CREDITANSTALT CORPORATE FINANCE,
INC., as a Lender
By: /s/ JACK R. BERTGES
----------------------------
Name: Jack R. Bertges
Title: Senior Vice President
By: /s/ JAMES F. MCCANN
---------------------------------
Name: James F. McCann
Title: Vice President
Address for Notices:
CREDITANSTALT CORPORATE FINANCE, INC.
4 Embarcadero Center, Suite 1630
San Francisco, CA 94111
Attention: Jack R. Bertgus/James F. McCann
Telecopy: (415) 481-0622
SCHEDULE 1.1 (a)
CORE-MARK INTERNATIONAL, INC.
REVOLVING CREDIT COMMITMENT ALLOCATIONS
$120,000,000
BANKS TOTAL ALLOCATION
THE CHASE MANHATTAN BANK $12,000,000.00
U.S. BANK NATIONAL ASSOCIATION 12,000,000.00
BANK OF MONTREAL 11,500,000.00
BANKBOSTON, N.A. 11,500,000.00
LASALLE BUSINESS CREDIT, INC. 11,500,000.00
UNION BANK OF CALIFORNIA, N.A. 11,500,000.00
SANWA BUSINESS CREDIT 10,000,000.00
CORPORATION
TRANSAMERICA BUSINESS CREDIT 10,000,000.00
CORPORATION
CREDITANSTALT CORPORATE FINANCE, INC. 10,000,000.00
BANQUE NATIONALE DE PARIS 10,000,000.00
ERSTE BANK DER OSTERREICHISCHEN 10,000,000.00
SPARKASSEN AG (FORMERLY
GIROCREDIT)
TOTALS 120,000,000.00
EXHIBIT A TO
CREDIT AGREEMENT
[FORM OF]
REVOLVING CREDIT NOTE
New York, New York
$ , 1998
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FOR VALUE RECEIVED, the undersigned, CORE-MARK INTERNATIONAL, INC., a
Delaware corporation (the "BORROWER"), hereby unconditionally promises to pay
to the order of __________________ (the "LENDER") at the office of The Chase
Manhattan Bank, located at 270 Park Avenue, New York, New York 10017, in
lawful money of the United States of America and in immediately available
funds, on the Termination Date the principal amount of (a) ____________
($___________), or, if less, (b) the aggregate unpaid principal amount of all
Revolving Credit Loans made by the Lender to the Borrower pursuant to
subsection 2.1 of the Credit Agreement, as hereinafter defined. The Borrower
further agrees to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in subsections 2.5 and 2.10 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which
shall be attached hereto and made a part hereof the date, Type and amount of
each Revolving Credit Loan made pursuant to the Credit Agreement and the date
and amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of Eurodollar Loans, the length of each Interest Period
with respect thereto. Each such endorsement, absent manifest error, shall
constitute PRIMA FACIE evidence of the accuracy of the information endorsed.
The failure to make any such endorsement or any error in such endorsement
shall not affect the obligations of the Borrower in respect of such Revolving
Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred to in the
Amended and Restated Credit Agreement dated as of ___________ __, 1998 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among the Borrower, the Lender, the other banks and financial
institutions from time to time parties thereto and The Chase Manhattan Bank,
as administrative agent, (b) is subject to the provisions of the Credit
Agreement and (c) is subject to optional and mandatory prepayment in whole or
in part as provided in the Credit Agreement. This Note is secured and
guaranteed as provided in the Loan Documents. Reference is hereby made to
the Loan Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
the guarantees, the terms and conditions upon which the security interests
and each guarantee were granted and the rights of the holder of this Note in
respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether as
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind in connection
with this Note.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
CORE-MARK INTERNATIONAL, INC.
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By:
Name:
Title:
2
Schedule A
TO REVOLVING CREDIT NOTE
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
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Amount Amount of Amount of ABR Loans Unpaid Principal
Amount of Converted to Principal of Converted to Balance of Notation
Date ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans ABR Loans Made By
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Schedule B
TO REVOLVING CREDIT NOTE
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
Interest Period Amount of Amount of
Amount of Amount and Eurodollar Principal of Eurodollar Loans Unpaid Principal
Eurodollar Converted to Rate with Eurodollar Loans Converted to Balance of Notation
Date Loans Eurodollar Loans Respect Thereto Repaid ABR Loans Eurodollar Loans Made By
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