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THE CHALONE WINE GROUP, LTD.
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CREDIT AGREEMENT
Dated as of April 19, 2002
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COOPERATIEVE CENTRALE RAIFFEISEN -
BOERENLEENBANK B.A.,
"RABOBANK INTERNATIONAL", NEW YORK BRANCH
ARRANGER, ADMINISTRATIVE AGENT SWINGLINE LENDER AND ISSUING LENDER
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS ......................................................1
SECTION 1.01 Certain Defined Terms........................................1
SECTION 1.02 Accounting Principles.......................................24
(A) ACCOUNTING TERMS.....................................24
(B) GAAP CHANGES.........................................24
(c) "FISCAL YEAR" AND "FISCAL QUARTER"...................24
SECTION 1.03 Interpretation..............................................24
ARTICLE II THE LOANS.......................................................25
SECTION 2.01 The Loans...................................................25
(A) REVOLVING LOANS......................................25
(B) TERM LOANS...........................................26
(C) SWINGLINE LOANS......................................26
(D) ADDITIONAL TERM LOANS................................26
SECTION 2.02 Borrowing Procedure - Revolving Loans and Term Loans........26
(A) NOTICE TO THE AGENT..................................26
(B) NOTICE TO THE LENDERS................................27
(C) NON-RECEIPT OF FUNDS.................................27
SECTION 2.03 Borrowing Procedure--Swingline Loans........................27
(A) NOTICE TO THE AGENT..................................27
(b) PARTICIPATIONS IN SWINGLINE LOANS:...................28
SECTION 2.04 Lending Offices.............................................29
SECTION 2.05 Evidence of Indebtedness....................................29
SECTION 2.06 Minimum Amounts.............................................30
SECTION 2.07 Required Notice.............................................30
ARTICLE III THE LETTERS OF CREDIT..........................................30
SECTION 3.01 The Letter of Credit Subfacility............................30
(A) LETTERS OF CREDIT....................................30
(B) CONDITIONS TO ISSUANCE...............................31
SECTION 3.02 Issuance, Amendment and Renewal of Letters of Credit........32
(A) NOTICE TO ISSUING LENDER OF ISSUANCE REQUEST.........32
(B) ISSUANCE OF LETTERS OF CREDIT........................32
(C) NOTICE TO ISSUING LENDER OF AMENDMENT REQUEST........32
(D) NOTICE TO ISSUING LENDER OF RENEWAL REQUEST..........33
(E) EXPIRY OF LETTERS OF CREDIT..........................33
(F) CONFLICTS WITH L/C-RELATED DOCUMENTS.................33
(G) DELIVERY OF COPIES OF LETTERS OF CREDIT..............33
(H) NOTICES TO LENDERS...................................33
SECTION 3.03 Participations, Drawings and Reimbursements.................34
(A) PARTICIPATIONS OF LENDERS IN ADDITIONAL LETTERS
OF CREDIT..........................................34
(B) DRAWING AND REIMBURSEMENT............................34
(C) FUNDING BY LENDERS...................................34
i.
PAGE
(D) L/C UNREIMBURSED DRAWINGS............................35
(E) OBLIGATION OF LENDERS ABSOLUTE.......................35
SECTION 3.04 Repayment of Participations.................................35
SECTION 3.05 Role of the Issuing Lender..................................35
(A) NO RESPONSIBILITY OF ISSUING LENDER..................35
(B) NO LIABILITY OF AGENT/IB-RELATED PERSONS.............36
SECTION 3.06 Obligations of Borrower Absolute............................36
SECTION 3.07 Cash Collateral Pledge......................................37
SECTION 3.08 Letter of Credit Fees.......................................37
(A) CERTAIN LETTER OF CREDIT FEES........................37
(B) CERTAIN ADDITIONAL FEES AND CHARGES..................38
(C) FEES NONREFUNDABLE...................................38
SECTION 3.09 Applicability of ISP98......................................38
ARTICLE IV INTEREST AND FEES; CONVERSION OR CONTINUATION...................38
SECTION 4.01 Interest....................................................38
(A) INTEREST RATE........................................38
(B) INTEREST PERIODS.....................................39
(C) INTEREST PAYMENT DATES...............................39
(D) NOTICE TO THE BORROWER AND THE LENDERS...............40
SECTION 4.02 Default Rate of Interest....................................40
SECTION 4.03 Fees........................................................40
(A) COMMITMENT FEE.......................................40
(B) UPFRONT FEE..........................................40
(C) ANNUAL AGENCY FEE....................................40
(D) FEES NONREFUNDABLE...................................40
SECTION 4.04 Computations................................................40
SECTION 4.05 Conversion or Continuation..................................41
(A) ELECTION.............................................41
(B) AUTOMATIC CONVERSION.................................41
(C) NOTICE TO THE AGENT..................................41
(D) NOTICE TO THE LENDERS................................41
SECTION 4.06 Highest Lawful Rate.........................................42
ARTICLE V REDUCTION OF COMMITMENTS; REPAYMENT; PREPAYMENT..................42
SECTION 5.01 Reduction or Termination of the Commitments.................42
(A) OPTIONAL REDUCTION OR TERMINATION....................42
(B) MANDATORY TERMINATION................................42
(C) OTHER MANDATORY REDUCTIONS...........................42
(D) NOTICE...............................................43
(E) ADJUSTMENT OF COMMITMENT FEE; NO REINSTATEMENT.......43
SECTION 5.02 Repayment of the Loans......................................43
(A) REVOLVING LOANS......................................43
(B) TERM LOANS...........................................43
(C) SWINGLINE LOANS......................................43
ii.
PAGE
SECTION 5.03 Prepayments.................................................43
(A) OPTIONAL PREPAYMENTS.................................43
(B) MANDATORY PREPAYMENTS................................44
(C) ORDER OF APPLICATION.................................45
(D) NOTICE; APPLICATION..................................46
ARTICLE VI YIELD PROTECTION AND ILLEGALITY.................................46
SECTION 6.01 Inability to Determine Rates................................46
SECTION 6.02 Funding Losses..............................................47
SECTION 6.03 Regulatory Changes..........................................47
(A) INCREASED COSTS......................................47
(B) CAPITAL REQUIREMENTS.................................47
(C) REQUESTS.............................................48
SECTION 6.04 Illegality..................................................48
SECTION 6.05 Funding Assumptions.........................................48
SECTION 6.06 Obligation to Mitigate......................................48
SECTION 6.07 Substitution of Lenders.....................................48
ARTICLE VII PAYMENTS.......................................................49
SECTION 7.01 Pro Rata Treatment..........................................49
SECTION 7.02 Payments....................................................49
(A) PAYMENTS.............................................49
(B) APPLICATION..........................................49
(C) EXTENSION............................................49
SECTION 7.03 Taxes.......................................................50
(A) NO REDUCTION OF PAYMENTS.............................50
(B) DEDUCTION OR WITHHOLDING; TAX RECEIPTS...............50
(C) INDEMNITY............................................50
(D) FORMS................................................50
(E) MITIGATION...........................................51
SECTION 7.04 Non-Receipt of Funds........................................51
SECTION 7.05 Sharing of Payments.........................................51
ARTICLE VIII CONDITIONS PRECEDENT..........................................52
SECTION 8.01 Conditions Precedent to the Initial Credit Extensions.......52
(A) FEES AND EXPENSES....................................52
(B) LOAN DOCUMENTS.......................................52
(C) DOCUMENTS AND ACTIONS RELATING TO COLLATERAL.........52
(D) ADDITIONAL CLOSING DOCUMENTS AND ACTIONS.............53
(E) CORPORATE DOCUMENTS..................................54
(F) LEGAL OPINIONS.......................................54
(G) SENIOR SECURED NOTE DOCUMENTS........................55
(H) PRO-FORMA DEBT TO EBITDA RATIO.......................55
SECTION 8.02 Conditions Precedent to All Credit Extensions...............55
(A) NOTICE...............................................55
iii.
PAGE
(B) MATERIAL ADVERSE EFFECT..............................55
(C) REPRESENTATIONS AND WARRANTIES; NO DEFAULT...........55
(D) ADDITIONAL DOCUMENTS.................................56
ARTICLE IX REPRESENTATIONS AND WARRANTIES..................................56
SECTION 9.01 Representations and Warranties..............................56
(A) ORGANIZATION AND POWERS..............................56
(B) AUTHORIZATION; NO CONFLICT...........................56
(C) BINDING OBLIGATION...................................56
(D) CONSENTS.............................................56
(E) NO DEFAULTS..........................................57
(F) TITLE TO PROPERTIES; LIENS; USE......................57
(G) LITIGATION...........................................57
(H) COMPLIANCE WITH ENVIRONMENTAL LAWS...................57
(I) GOVERNMENTAL REGULATION..............................57
(J) ERISA................................................57
(K) SUBSIDIARIES.........................................58
(L) MARGIN REGULATIONS...................................58
(M) TAXES................................................58
(N) PATENTS AND OTHER RIGHTS.............................58
(O) INSURANCE............................................59
(P) FINANCIAL STATEMENTS.................................59
(Q) LIABILITIES..........................................59
(R) LABOR DISPUTES, ETC..................................59
(S) SOLVENCY.............................................59
(T) DISCLOSURE...........................................59
ARTICLE X COVENANTS........................................................59
SECTION 10.01 Reporting Covenants.........................................59
(A) FINANCIAL STATEMENTS AND OTHER REPORTS...............60
(B) ADDITIONAL INFORMATION...............................62
SECTION 10.02 Financial Covenants.........................................63
(A) LEVERAGE RATIO.......................................63
(B) MINIMUM CONSOLIDATED TANGIBLE NET WORTH..............63
(C) INTEREST COVERAGE RATIO..............................63
(D) FIXED CHARGE COVERAGE RATIO..........................64
(E) CAPITAL EXPENDITURES.................................64
SECTION 10.03 Additional Affirmative Covenants............................65
(A) PRESERVATION OF EXISTENCE, ETC.......................65
(B) PAYMENT OF OBLIGATIONS...............................65
(C) MAINTENANCE OF INSURANCE.............................65
(D) KEEPING OF RECORDS AND BOOKS OF ACCOUNT..............66
(E) INSPECTION RIGHTS....................................66
(F) COMPLIANCE WITH LAWS, ETC............................66
(G) MAINTENANCE OF PROPERTIES, ETC.......................66
iv.
PAGE
(H) LICENSES.............................................66
(I) ACTION UNDER ENVIRONMENTAL LAWS......................66
(J) USE OF PROCEEDS......................................67
(K) ADDITIONAL SUBSIDIARIES..............................67
(L) PROCEEDS OF EVENTS OF LOSS...........................67
(M) FURTHER ASSURANCES AND ADDITIONAL ACTS...............67
SECTION 10.04 Negative Covenants..........................................67
(A) INDEBTEDNESS.........................................67
(B) LIENS; NEGATIVE PLEDGES..............................69
(C) CHANGE IN NATURE OF BUSINESS.........................69
(D) RESTRICTIONS ON FUNDAMENTAL CHANGES..................69
(E) SALES OF ASSETS......................................69
(F) LOANS AND INVESTMENTS................................70
(G) SALES AND LEASEBACKS.................................71
(H) DISTRIBUTIONS. (i)..................................71
(I) AMENDMENTS OF CERTAIN DOCUMENTS......................72
(J) REDEMPTION OF SUBORDINATED DEBT......................72
(K) TRANSACTIONS WITH RELATED PARTIES....................72
(L) HAZARDOUS SUBSTANCES.................................73
(M) ACCOUNTING CHANGES...................................73
(N) FOREIGN SUBSIDIARIES.................................73
ARTICLE XI EVENTS OF DEFAULT...............................................73
SECTION 11.01 Events of Default...........................................73
(A) PAYMENTS.............................................73
(B) REPRESENTATIONS AND WARRANTIES.......................73
(C) FAILURE BY BORROWER TO PERFORM CERTAIN COVENANTS.....73
(D) FAILURE BY BORROWER TO PERFORM OTHER COVENANTS.......73
(E) INSOLVENCY; VOLUNTARY PROCEEDINGS....................74
(F) INVOLUNTARY PROCEEDINGS..............................74
(G) DEFAULT UNDER OTHER INDEBTEDNESS.....................74
(H) JUDGMENTS............................................75
(I) ERISA................................................75
(J) DISSOLUTION, ETC.....................................75
(K) MATERIAL ADVERSE EFFECT..............................75
(L) CHANGE IN OWNERSHIP OR CONTROL.......................75
(M) FAILURE BY GUARANTOR TO PERFORM COVENANTS;
INVALIDITY OF GUARANTY.............................75
(N) ENVIRONMENTAL INDEMNITY..............................76
(O) SUBORDINATION PROVISIONS.............................76
(P) COLLATERAL DOCUMENTS.................................76
SECTION 11.02 Effect of Event of Default..................................76
v.
PAGE
ARTICLE XII THE AGENT 77
SECTION 12.01 Authorization and Action....................................77
SECTION 12.02 Limitation on Liability of Agent; Notices; Closing..........77
(A) LIMITATION ON LIABILITY OF AGENT AND ISSUING
LENDER.............................................78
(B) NOTICES..............................................78
(C) CLOSING..............................................78
SECTION 12.03 Agent and Affiliates........................................79
SECTION 12.04 Notice of Defaults..........................................79
SECTION 12.05 Non-Reliance on Agent and Issuing Lender....................79
SECTION 12.06 Indemnification.............................................79
SECTION 12.07 Delegation of Duties........................................80
SECTION 12.08 Successor Agent.............................................80
SECTION 12.09 Collateral Matters..........................................80
(A) AUTHORIZATION........................................80
(B) COLLATERAL RELEASES..................................81
ARTICLE XIII MISCELLANEOUS.................................................81
SECTION 13.01 Amendments and Waivers......................................81
SECTION 13.02 Notices.....................................................82
(A) NOTICES..............................................82
(B) FACSIMILE AND TELEPHONIC NOTICE......................83
(C) ELECTRONIC MAIL......................................83
SECTION 13.03 No Waiver; Cumulative Remedies..............................83
SECTION 13.04 Costs and Expenses; Indemnification.........................83
(A) COSTS AND EXPENSES...................................83
(B) INDEMNIFICATION......................................84
(C) OTHER CHARGES........................................84
SECTION 13.05 Right of Set-Off............................................85
SECTION 13.06 Survival....................................................85
SECTION 13.07 Obligations Several.........................................85
SECTION 13.08 Benefits of Agreement.......................................85
SECTION 13.09 Binding Effect; Assignment..................................86
(A) BINDING EFFECT.......................................86
(B) ASSIGNMENT...........................................86
SECTION 13.10 Governing Law...............................................87
SECTION 13.11 Submission to Jurisdiction..................................87
(A) NO LIMITATION........................................88
vi.
PAGE
SECTION 13.12 Waiver of Jury Trial........................................88
SECTION 13.13 Limitation on Liability.....................................88
SECTION 13.14 Confidentiality.............................................88
SECTION 13.15 Entire Agreement............................................89
SECTION 13.16 Payments Set Aside..........................................89
SECTION 13.17 Severability................................................90
SECTION 13.18 Counterparts................................................90
vii.
ANNEXES
Annex 1 Pricing Grid
SCHEDULES
Schedule 1 Commitments and Pro Rata Shares
Schedule 2 Lending Offices; Addresses for Notices
Schedule 3 Existing Indebtedness
Schedule 4 Existing Liens
Schedule 5 Litigation
Schedule 6 Subsidiaries
Schedule 7 Specified Assets
Schedule 8 Description of Hewitt Ranch Property
Schedule 9 Affiliate Transactions
EXHIBITS
Exhibit A Form of Borrowing Base Certificate
Exhibit B Form of Compliance Certificate
Exhibit C Form of Deed of Trust
Exhibit D Form of Environmental Indemnity
Exhibit E-1 Form of Guaranty
Exhibit E-2 Form of Guaranty of Edna Valley Vineyard
Exhibit F Form of Patent and Trademark Security Agreement
Exhibit G Form of Revolving Note
Exhibit H-1 Form of Security Agreement
Exhibit H-2 Form of Security Agreement of Edna Valley Vineyard
Exhibit I Form of Swingline Note
Exhibit J Form of Term Note
Exhibit K Form of Notice of Borrowing
Exhibit L-1 Form of Opinion of Counsel to the Borrower and the
Guarantor
Exhibit L-2 Form of Opinion of Special Washington Counsel to the
Collateral Agent
Exhibit M Form of Assignment and Acceptance
Exhibit N Form of Update Certificate
Exhibit O Form of Intercreditor and Collateral Agency Agreement
viii.
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), dated as of April 19
2002, is made among The Chalone Wine Group, Ltd., a California corporation (the
"Borrower"), the financial institutions listed on the signature pages of this
Agreement under the heading "LENDERS" (each a "Lender" and, collectively, the
"Lenders"), Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank
International", New York Branch ("Rabobank") as letter of credit issuing bank
(in such capacity, the "Issuing Lender"), as swingline lender (in such capacity,
the "Swingline Lender") and as administrative agent for the Lenders hereunder
(in such capacity, the "Agent").
The Borrower has requested that the Lenders, and the Lenders
have agreed to, make certain credit facilities (including a letter of credit
subfacility) available to the Borrower, upon the terms and subject to the
conditions set forth in this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 CERTAIN DEFINED TERMS. As used in this Agreement
(including in the recitals hereof), the following terms shall have the following
meanings:
"ACQUISITION" means any transaction or series of related
transactions for the purpose of, or resulting, directly or indirectly, in (a)
the acquisition of all or substantially all of the assets of a Person, or any
line or segment of business or division of a Person, (b) the acquisition of in
excess of 50% of the capital stock, partnership interests, membership interests
or equity of any Person, or otherwise causing any Person to become a Subsidiary,
or (c) a merger or consolidation or any other combination with another Person
(other than a Person that is a Subsidiary) provided that (i) the Borrower or a
Subsidiary is the surviving entity or (ii) after giving effect to such merger or
consolidation, such other Person has become a Subsidiary of the Borrower.
"AFFECTED LENDER" has the meaning set forth in Section 6.07.
"AFFILIATE" means any Person which, directly or indirectly,
controls, is controlled by or is under common control with another Person. For
purposes of the foregoing, "control," "controlled by" and "under common control
with" with respect to any Person shall mean the possession, directly or
indirectly, of the power (i) to vote 10% or more of the securities having
ordinary voting power of the election of directors of such Person, or (ii) to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
"AGENT" has the meaning set forth in the introduction to this
Agreement.
1.
"AGENT/IB-RELATED PERSONS" means Rabobank as Agent, Swingline
Lender and Issuing Lender, any successor Agent arising under Section 12.08,
together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"AGENT'S ACCOUNT" means the account of the Agent set forth on
Schedule 2 or such other account as the Agent from time to time shall designate
in a written notice to the Borrower and the Lenders.
"APPLICABLE FEE AMOUNT" means with respect to the commitment
fee and letter of credit fee payable hereunder, the amount set forth opposite
the indicated Level below the heading "Commitment Fee" and "Letter of Credit
Fee," respectively, in the pricing grid set forth on Annex I in accordance with
the parameters for calculations of such amount also set forth on Annex I.
"APPLICABLE MARGIN" means (i) with respect to Base Rate Loans,
the amount set forth opposite the indicated Level below the heading "Revolving
Loan Base Rate Spread" or "Term Loan Base Rate Spread", as applicable, in the
pricing grid set forth on Annex I in accordance with the parameters for
calculations of such amounts also set forth on Annex I, and (ii) with respect to
Eurodollar Rate Loans, the amount set forth opposite the indicated Level below
the heading "Revolving Loan Eurodollar Rate Spread" or "Term Loan Eurodollar
Rate Spread", as applicable, in the pricing grid set forth on Annex I in
accordance with the parameters for calculations of such amounts also set forth
on Annex I.
"ASSIGNMENT AND ACCEPTANCE" has the meaning set forth in
Section 12.02(a).
"ATTRIBUTABLE INDEBTEDNESS" means, on any date, (a) in respect
of any Capital Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease payments under the relevant lease that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP if such lease were accounted for as a Capital Lease.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy."
"BASE RATE" means for any day the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest in
effect for such day as publicly announced from time to time by Rabobank as its
reference rate. (The reference rate is a rate set by Rabobank based upon various
factors including Rabobank's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate.) Any change
in the reference rate announced by Rabobank shall take effect at the opening of
business on the day specified in the public announcement of such change. Each
change in the interest rate on the Loans or other Obligations bearing interest
at the Base Rate based on a change in the Base Rate shall be effective as of the
effective date of such change in the Base Rate.
2.
"BASE RATE LOAN" means a Revolving Loan, a Term Loan or an L/C
Advance bearing interest based on the Base Rate.
"BORROWER" has the meaning set forth in the introduction to
this Agreement.
"BORROWER'S ACCOUNT" means the account of the Borrower set
forth on Schedule 2, or such other account as the Borrower from time to time
shall designate in a written notice to the Agent.
"BORROWING" means a borrowing consisting of a Revolving Loan,
a Swingline Loan or a Term Loan, or of simultaneous Revolving Loans, Swingline
Loans or Term Loans, as the case may be, made at any one time by the Borrower
from the Lenders pursuant to Article II or III.
"BORROWING BASE" means, in respect of the Borrower at any
time, the aggregate sum of (i) in the case of Eligible Inventory consisting of
bulk wine to be sold in the bulk wine market, 60% of (A) fair market value (as
reported in the most recently published quarterly Turrentine Collateral Value
Report or, if not available, an equivalent compilation selected in the Agent's
reasonable discretion) MINUS (B) Grower Payables, if any, incurred in connection
with such bulk wine, PLUS (ii) in the case of Eligible Inventory consisting of
other bulk wine, 70% of (A) book value at the date of determination MINUS (B)
Grower Payables, if any, incurred in connection with such bulk wine, PLUS (iii)
in the case of Eligible Inventory consisting of cased wine or separately bottled
wine, 65% of the posted F.O.B. selling price at the date of determination for
the immediately preceding calendar month, PLUS (iv) in the case of Eligible
Inventory consisting of Wine Bottling Inventory, 60% of book value at the date
of determination (in the case of each of the preceding clauses (i), (ii), (iii)
and (iv), net of depletion allowances), PLUS (v) 85% of Eligible Receivables at
such time.
"BORROWING BASE CERTIFICATE" means a certificate of a
Responsible Officer of the Borrower, in substantially the form of Exhibit A,
with such changes thereto as the Agent or any Lender may from time to time
reasonably request.
"BUSINESS DAY" means a day other than a Saturday, a Sunday, or
a day on which commercial banks in New York City, New York, are authorized to
close and, if the applicable day relates to any Eurodollar Rate Loan, means a
Eurodollar Business Day.
"CANOE RIDGE INTERCOMPANY LOAN AMOUNT" means the sum of (i)
$7,000,000 PLUS (ii) on each anniversary of the Closing Date, 10% of the Canoe
Ridge Intercompany Loan Amount in effect immediately prior to such anniversary.
"CAPITAL LEASE" means, for any Person, any lease of property
(whether real, personal or mixed) which, in accordance with GAAP, would, at the
time a determination is made, be required to be recorded as a capital lease in
respect of which such Person is liable as lessee.
"CHANGE OF CONTROL" means (a) any "person" (as such term is
used in subsections 13(d) and 14(d) of the Exchange Act) or group of persons on
or after the Closing Date other than members of the Board of Directors of the
Borrower and their "affiliates" (as such term is used in
3.
Rule 405 of the Securities Act of 1933), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 51% or more of the combined voting power of the
Borrower's then-outstanding voting securities, or (b) the existing directors for
any reason cease to constitute a majority of the Borrower's board of directors.
"Existing directors" means (x) individuals constituting the Borrower's board of
directors on the Closing Date, and (y) any subsequent director whose election by
the board of directors or nomination for election by the Borrower's shareholders
was approved by a vote of at least a majority of the directors then in office,
which directors either were directors on the Closing Date or whose election or
nomination for election was previously so approved.
"CLOSING DATE" means the date on which all conditions
precedent set forth in Section 8.01, and in Section 8.02 with respect to any
Credit Extensions to be made on the Closing Date, are satisfied or waived by all
the Lenders (or, in the case of Section 8.01(a), waived by the Person entitled
to receive such payment).
"COLLATERAL" means the property described in the Collateral
Documents, and all other property now existing or hereafter acquired which may
at any time be or become subject to a Lien in favor of the Collateral Agent, the
Agent or the Lenders pursuant to the Collateral Documents or otherwise, securing
the payment and performance of the Obligations.
"COLLATERAL AGENT" means Rabobank in its capacity as
collateral agent for the Lenders and the holders of the Senior Secured Notes
pursuant to the Intercreditor and Collateral Agency Agreement, and any successor
collateral agent thereunder.
"COLLATERAL DOCUMENTS" means the Deeds of Trust, the Security
Agreement, the Patent and Trademark Security Agreement, any other agreement
pursuant to which the Borrower, the Guarantors or any other Person provides a
Lien on its assets in favor of the Lenders, or in favor of the Collateral Agent
or the Agent for the benefit of the Lenders, or in favor of the Collateral Agent
for the benefit of the Agent, the Lenders and the Senior Noteholders, and all
financing statements, fixture filings, patent, trademark and copyright filings,
assignments, acknowledgments and other filings, documents and agreements made or
delivered pursuant thereto.
"COMMITMENT" means, for each Lender, the sum of its Term
Commitment and its Revolving Commitment.
"COMPLIANCE CERTIFICATE" means a certificate of a Responsible
Officer of the Borrower, in substantially the form of Exhibit B, with such
changes thereto as the Agent or any Lender may from time to time reasonably
request.
"CONSOLIDATED EBIT" means, for any period, Consolidated Net
Income (computed without giving effect to any gains or losses from dispositions
of assets and other extraordinary items) PLUS Consolidated Interest Expense PLUS
income tax expense, in each case, which were deducted in determining
Consolidated Net Income of the Borrower and its Subsidiaries on a consolidated
basis as determined in accordance with GAAP.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net
Income (computed without giving effect to any gains or losses from dispositions
of assets and other
4.
extraordinary items) PLUS Consolidated Interest Expense PLUS income tax expense
PLUS depreciation expense, amortization expense and other non-cash expenses, in
each case, which were deducted in determining Consolidated Net Income of the
Borrower and its Subsidiaries on a consolidated basis as determined in
accordance with GAAP.
"CONSOLIDATED INDEBTEDNESS" means, as of any date of
determination, (a) the total Indebtedness of the Borrower and its Subsidiaries
on a consolidated basis MINUS (b) accounts payable to trade creditors for goods
and services and current operating liabilities (not the result of the borrowing
of money) incurred in the ordinary course of the Borrower's or the Subsidiaries'
business in accordance with customary terms and paid within the specified time
(unless contested in good faith by appropriate proceedings and reserved for in
accordance with GAAP) MINUS (c) until such time as the Indebtedness owing as of
the date hereof by the Borrower to the estate of Richard Graff is repaid in
full, Indebtedness owing by the Borrower to the estate of Richard Graff in a
principal amount not to exceed $1,000,000.
"CONSOLIDATED INTEREST EXPENSE" means, for any period,
interest expense (including that attributable to Capital Leases) of the Borrower
and its Subsidiaries on a consolidated basis, including all commissions,
discounts and other fees and charges owed with respect to standby letters of
credit, as determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the net
income of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period, as determined in accordance with
GAAP.
"CONSOLIDATED RENT EXPENSE" means, for any period, operating
lease expense of the Borrower and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means, as of any date of
determination, Consolidated Total Assets PLUS Subordinated Debt MINUS
Consolidated Total Liabilities; PROVIDED, HOWEVER, that there shall be excluded
from Consolidated Total Assets all assets which would be classified as
intangible assets in accordance with GAAP, including goodwill, organizational
expense, research and development expense, patent applications, patents,
trademarks, trade names, brands, copyrights, trade secrets, customer lists,
licenses, franchises and covenants not to compete.
"CONSOLIDATED TOTAL ASSETS" means, as of any date of
determination, the total assets of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"CONSOLIDATED TOTAL LIABILITIES" means, as of any date of
determination, the total liabilities of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"CREDIT EXTENSION" means each of (a) the making of any Term
Loans, Revolving Loans or Swingline Loans hereunder; (b) the continuation of any
Eurodollar Rate Loan or conversion of any Loan pursuant to Section 4.05; (c) the
issuance of any Letters of Credit hereunder; and (d) the amendment or renewal of
any Letters of Credit hereunder.
5.
"DEEDS OF TRUST" means each deed of trust or mortgage entered
into by the Borrower, any Guarantor or any other Person, as trustor or
mortgagor, for the benefit of the Collateral Agent or the Agent, as beneficiary
or mortgagee on behalf of the Lenders and the Senior Noteholders, in
substantially the form of Exhibit C.
"DEFAULT" means an Event of Default or an event or condition
which with notice or lapse of time or both would constitute an Event of Default.
"DOLLARS" and the sign "$" each means lawful money of the
United States.
"EDNA VALLEY INTERCOMPANY LOAN AMOUNT" means the sum of (i)
$20,000,000 PLUS (ii) on each anniversary of the Closing Date, 10% of the Edna
Valley Intercompany Loan Amount in effect immediately prior to such anniversary.
"EFFECTIVE AMOUNT" means (i) with respect to any Revolving
Loans, Swingline Loans and Term Loans on any date, the aggregate outstanding
principal amount thereof after giving effect to any Borrowings and prepayments
or repayments of Term Loans, Revolving Loans and Swingline Loans, as the case
may be, occurring on such date; and (ii) with respect to any outstanding L/C
Obligations on any date, the amount of such L/C Obligations on such date after
giving effect to any issuances of Letters of Credit occurring on such date and
any other changes in the aggregate amount of the L/C Obligations as of such
date, including as a result of any reimbursements of outstanding unpaid drawings
under any Letters of Credit or any reductions in the maximum amount available
for drawing under Letters of Credit taking effect on such date; PROVIDED that
for purposes of subsection 5.03(b), the Effective Amount shall be determined
without giving effect to any mandatory prepayments to be made under subsection
5.03(b).
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized
under the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (ii) a commercial bank organized
under the laws of any other country which is a member of the OECD, or a
political subdivision of any such country, and having a combined capital and
surplus of at least $100,000,000, PROVIDED that such bank is acting through a
branch or agency located in the United States and licensed by the United States
or any state thereof; (iii) a Person that is primarily engaged in the business
of commercial banking and that is (A) a Subsidiary of a Lender, (B) a Subsidiary
of a Person of which a Lender is a Subsidiary, or (C) a Person of which a Lender
is a Subsidiary, or (iv) any other Person (other than an individual) which is an
"accredited investor" (as defined in Regulation D under the Securities Exchange
Act of 1934) which extends credit or buys loans as one of its businesses,
including insurance companies, mutual funds and lease financing companies.
"ELIGIBLE INVENTORY" means, in respect of the Borrower at any
time, the aggregate amount of the Borrower's and each Subsidiary Guarantor's
Inventory consisting of bulk wine, cased wine, separately bottled wine, Wine
Bottling Inventory, which is of marketable quality and held for sale or use in
the ordinary and usual course of business, net of applicable allowances and
reserves (including allowances or reserves for shrinkage or obsolescence),
excluding the following:
6.
(i) Inventory (other than bulk wine and Wine Bottling
Inventory) consisting of raw materials, supplies or work in process;
(ii) Inventory which is not owned by the Borrower or a
Subsidiary Guarantor free and clear of all Liens and rights of others (other
than the Liens in favor of the Agent on behalf of the Lenders, Growers' Liens or
Production Liens);
(iii) Inventory in which the Agent on behalf of the Lenders
shall not have a valid and perfected first priority Lien, other than Growers'
Liens or Production Liens;
(iv) Inventory which is located in any location other than
California, Washington, the locations listed on Schedule 1 to the Security
Agreement, or any other locations agreed to in writing after the Closing Date by
the Agent;
(v) Inventory which is not in the direct possession of the
Borrower or a Subsidiary Guarantor at one of the locations set forth in Part 1
of Schedule 1 to the Security Agreement or at a location set forth in a notice
from the Borrower to the Agent pursuant to Section 5(e) of the Security
Agreement;
(vi) Inventory on lease or consignment or subject to
warehousing arrangements, except for Inventory subject to warehousing
arrangements (1) in form and substance acceptable to the Agent and approved in
writing by the Agent and (2) which contain, or as to which the Agent has
received, a subordination and/or waiver by the warehouseman in form and
substance satisfactory to the Agent;
(vii) Inventory which is used or intended to be used in
research and development;
(viii) Inventory which is obsolete, unmerchantable, spoiled,
damaged or unfit for sale or further processing;
(ix) Inventory which is packaging, shipping, or advertising
materials (other than the Wine Bottling Inventory); and
(x) Inventory which is, in the exercise of the Agent's
reasonable credit judgment, exercised in good faith, unacceptable due to age,
type, category or quantity or is otherwise ineligible.
Any Inventory which is at any time Eligible Inventory, but
which subsequently fails to meet any of the foregoing requirements, shall
forthwith cease to be Eligible Inventory until such time as such Inventory shall
meet all of the foregoing requirements.
"ELIGIBLE RECEIVABLE DEBTOR" means, for purposes of clause
(xi) of the definition of "Eligible Receivables," a Receivable Debtor for which
the Borrower has provided or caused to be provided to the Agent financial
statements of such Receivable Debtor which are satisfactory in form and
substance to the Agent and the Majority Lenders and who the Agent and the
Majority Lenders deem creditworthy in their reasonable credit judgment.
7.
"ELIGIBLE RECEIVABLES" means, in respect of the Borrower at
any time, the aggregate amount of the Borrower's and each Subsidiary Guarantor's
Receivables, payable in cash in Dollars, net of applicable allowances, reserves,
discounts, returns, credits or offsets (including allowances or reserves for
doubtful accounts), excluding the following:
(i) Receivables for which the Borrower's or a Subsidiary
Guarantor's right to receive payment has not been fully earned by performance or
is contingent upon the fulfillment of any condition whatsoever or which
otherwise do not arise from a bona fide completed transaction;
(ii) Receivables against which there are asserted any
defenses, counterclaims, discounts (other than normal trade discounts) or
offsets of any nature, whether well-founded or otherwise (but only to the extent
of such asserted defenses, counterclaims, discounts or offsets) to the extent
not already deducted as an allowance for doubtful accounts;
(iii) Receivables that do not comply in all material
respects with all applicable legal requirements, including all laws, rules,
regulations and orders of any Governmental Authority;
(iv) Receivables which represent a prepayment or progress
payment or arising out of the placement of goods on consignment, guaranteed sale
or other arrangement by reason of which the payment by the Receivable Debtor may
be conditional or contingent;
(v) Receivables which are not owned by the Borrower or a
Subsidiary Guarantor free and clear of all Liens and rights of others (other
than the Liens in favor of the Collateral Agent or the Agent on behalf of
Lenders, Growers' Liens or Production Liens);
(vi) Receivables in which the Collateral Agent or the
Agent, on behalf of the Lenders, shall not have a valid and perfected
first-priority Lien (other than Growers' Liens or Production Liens);
(vii) Receivables owing (A) by the United States or any
department, agency or instrumentality thereof or (B) by a State or any
department, agency, instrumentality or political subdivision thereof (other than
State owned stores or other equivalent alcohol beverage control Receivable
Debtors to the extent that there are no statutory, regulatory or other
governmental restrictions on the grant of security interests in Receivables due
from such Receivable Debtors), unless, in the case of Receivables described in
sub-clause (A), the Agent has agreed to the contrary in writing and the Borrower
has complied with the Federal Assignment of Claims Act with respect to such
Receivables;
(viii)Receivables owing by any Receivable Debtor who is not a
resident of or located in the United States or the Dominion of Canada;
(ix) Receivables not paid in full within 90 days from the
date of invoice (to the extent not already deducted as an allowance for doubtful
accounts;
8.
(x) Receivables owing by any Receivable Debtor who has
failed to make full payment within 90 days from the date of invoice on more than
20% of the aggregate amount of Receivables owing to the Borrower and the
Subsidiary Guarantors by such Receivable Debtor;
(xi) that portion of Receivables owing by any single
Receivable Debtor (other than an Eligible Receivable Debtor) which exceeds 20%
of the aggregate amount of Eligible Receivables owing to the Borrower and the
Subsidiary Guarantors by all Receivable Debtors (to the extent not already
deducted as an allowance for doubtful accounts);
(xii) Receivables which constitute the proceeds of Inventory
which Inventory is at the same time included in the Borrowing Base;
(xiii)Receivables owing by any Receivable Debtor who is the
subject of an Insolvency Proceeding;
(xiv) Receivables owing by any Affiliate of the Borrower or of
a Subsidiary Guarantor; and
(xv) Receivables with respect to which the Agent, in its
reasonable discretion, deems the creditworthiness or financial condition of the
Receivable Debtor to be unsatisfactory or the prospect of payment or performance
to be impaired, and other Receivables which, in the exercise of the Agent's good
faith reasonable credit judgment, are otherwise ineligible.
Any Receivable which is at any time an Eligible Receivable,
but which subsequently fails to meet any of the foregoing eligibility
requirements, shall forthwith cease to be an Eligible Receivable until such time
as such Receivable shall meet all of the foregoing requirements.
"ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity of
the Borrower and the Subsidiary Guarantors, in substantially the form of Exhibit
D.
"ENVIRONMENTAL LAWS" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directives, requests, licenses, authorizations
and permits of, and agreements with (including consent decrees), any
Governmental Authorities, in each case relating to or imposing liability or
standards of conduct concerning public health, safety and environmental
protection matters, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Clean Air Act, the Federal Water
Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances Control Act, the
Emergency Planning and Community Right-to-Know Act, the California Hazardous
Waste Control Law, the California Solid Waste Management, Resource Recovery and
Recycling Act, the California Water Code and the California Health and Safety
Code.
"ERISA" means the Employee Retirement Income Security Act of
1974, including (unless the context otherwise requires) any rules or regulations
promulgated thereunder.
9.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which is under common control with the Borrower or any Guarantor
within the meaning of Section 4001(a)(14) of ERISA and Sections 414(b), (c) and
(m) of the Internal Revenue Code.
"EURODOLLAR BUSINESS DAY" means a Business Day on which
dealings in Dollar deposits are carried on in the interbank eurodollar market
where the eurodollar funding operations of Rabobank are customarily conducted.
"EURODOLLAR RATE" means for each Interest Period for each
Eurodollar Rate Loan the rate per annum (rounded upward, if necessary, to the
nearest 1/100 of 1%) determined by the Agent pursuant to the following formula:
Eurodollar Rate = Interbank Rate
------------------------------------
100% - Eurodollar Reserve Percentage
The Eurodollar Rate shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"EURODOLLAR RATE LOAN" means a Revolving Loan or a Term Loan
bearing interest based on the Eurodollar Rate.
"EURODOLLAR RESERVE PERCENTAGE" means the maximum reserve
requirement percentage (including any ordinary, supplemental, marginal and
emergency reserves), if any, as determined by the Agent, then applicable under
Regulation D in respect of Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities") of a member bank in the Federal Reserve System with
deposits exceeding $1,000,000,000.
"EVENT OF DEFAULT" has the meaning set forth in Section 11.01.
"EVENT OF LOSS" means with respect to any asset of the
Borrower or its Subsidiaries any of the following: (i) any loss, destruction or
damage of such asset; (ii) any pending or threatened institution of any
proceedings for the condemnation or seizure of such asset or of any right of
eminent domain; or (iii) any actual condemnation, seizure or taking, by exercise
of the power of eminent domain or otherwise, of such asset, or confiscation of
such asset or requisition of the use of such asset.
"EXISTING CREDIT FACILITY" means the Credit Agreement dated
March 31, 1999, between the Borrower and Rabobank, as amended.
"FEE LETTER" means that certain letter agreement dated March
__, 2002, between the Borrower and Rabobank.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100 of 1%), as determined by the
Agent, equal to 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 for any day of determination (or if such day of
determination is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a
10.
Business Day, the average of the quotations for such day on such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by it.
"FINAL MATURITY DATE" means April 19, 2009.
"FOREIGN SUBSIDIARY" means each Subsidiary of the Borrower
organized under the laws of any jurisdiction outside of the United States or
which is domiciled outside of the United States.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its principal
functions.
"GAAP" means generally accepted accounting principles in the
U.S. as in effect from time to time.
"GOVERNMENTAL AUTHORITY" means any federal, state, local or
other governmental department, commission, board, bureau, agency, central bank,
court, tribunal or other instrumentality or authority, domestic or foreign,
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GROWER PAYABLES" means, in respect of the Borrower or any
Subsidiary Guarantor, the aggregate amount due from the Borrower or such
Subsidiary Guarantor to any other Person on account of any crops, produce, or
other farm products supplied by such Person to the Borrower or such Subsidiary
Guarantor as to which crops, produce or other farm products such Person has
statutory lien rights.
"GROWERS' LIENS" means statutory Liens securing the payment of
amounts due from the Borrower or any Subsidiary Guarantor to any other Person on
account of any crops, produce or other farm products supplied by such Person to
the Borrower or such Subsidiary Guarantor, including but not limited to, Liens
in favor of growers arising pursuant to Article 9 (commencing with Section
55631), Chapter 6, Division 20 of the California Food and Agricultural Code, as
now in effect or hereafter amended.
"GUARANTOR" means each Subsidiary Guarantor and each other
Person party to a Guaranty in its capacity as a guarantor hereunder.
"GUARANTOR DOCUMENTS" means each Guaranty and all other
certificates, documents, agreements and instruments delivered to the Agent, the
Issuing Lender and the Lenders under or in connection with a Guaranty.
"GUARANTY" means the Guaranty of each Guarantor, in
substantially the form of Exhibit E-1 (or in substantially the form of Exhibit
E-2, in the case of Edna Valley Vineyard), and any other guaranty under any
separate agreement executed by any Guarantor pursuant to which it guarantees the
Obligations.
"GUARANTY OBLIGATION" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to any Indebtedness, lease, dividend, letter of credit or other
obligation (the "primary obligations") of another Person (the
11.
"primary obligor"), including any obligation of that Person (i) to purchase,
repurchase or otherwise acquire such primary obligations or any property
constituting direct or indirect security therefor, or (ii) to advance or provide
funds (A) for the payment or discharge of any such primary obligation, or (B) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet item, level of income
or financial condition of the primary obligor, or (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, (iv) in connection with any synthetic lease or other
similar off balance sheet lease transaction, or (v) otherwise to assure or hold
harmless the holder of any such primary obligation against loss in respect
thereof.
"HAZARDOUS SUBSTANCES" means any toxic or hazardous
substances, materials, wastes, contaminants or pollutants, including asbestos,
PCBs, petroleum products and byproducts, and any substances defined or listed as
"hazardous substances," "hazardous materials," "hazardous wastes" or "toxic
substances" (or similarly identified), regulated under or forming the basis for
liability under any applicable Environmental Law.
"HEWITT APPRAISAL" has the meaning set forth in subsection
2.01(d).
"HEWITT RANCH PROPERTY" means the Borrower's real property and
improvements located in Rutherford, California, and further described on
Schedule 8 hereto.
"INDEBTEDNESS" means, for any Person: (i) all indebtedness or
other obligations of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of property, assets or businesses; (iii) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property); (iv)
all obligations under Capital Leases and Synthetic Lease Obligations; (v) all
reimbursement or other obligations of such Person under or in respect of letters
of credit and bankers acceptances, and all net obligations in respect of Rate
Contracts in an amount equal to the Swap Termination Values thereof; (vi) all
reimbursement or other obligations of such Person in respect of any bank
guaranties, shipside bonds, surety bonds and similar instruments issued for the
account of such Person or as to which such Person is otherwise liable for
reimbursement of drawings or payments; (vii) all Guaranty Obligations; and
(viii) all indebtedness of another Person secured by any Lien upon or in
property owned by the Person for whom Indebtedness is being determined, whether
or not such Person has assumed or become liable for the payment of such
indebtedness of such other Person. For all purposes hereof, the Indebtedness of
any Person shall include the Indebtedness of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which such Person is a general partner or a joint venturer, unless
such Indebtedness is expressly made non-recourse to such Person (subject only to
customary recourse exceptions acceptable to the Agent in its reasonable
discretion). The amount of any Capital Lease or Synthetic Lease Obligation as of
any date shall be deemed to be the amount of Attributable Indebtedness in
respect thereof as of such date.
12.
"INSOLVENCY PROCEEDING" means, with respect to any Person, (i)
any case, action or proceeding before any court or other Governmental Authority
relating to the bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief from debt of such Person, or
(ii) any general assignment by such Person for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors, in each case undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.
"INTERBANK RATE" means the rate per annum determined by the
Agent to be the average (rounded upward, if necessary, to the nearest 1/16 of
1%) of the rates at which deposits in Dollars are offered to Rabobank by prime
banks in the interbank eurodollar market where the eurodollar funding operations
of Rabobank are customarily conducted, at approximately 11:00 (London time), two
Eurodollar Business Days before the first day of such Interest Period, in an
amount substantially equal to the proposed Eurodollar Rate Loan to be made,
continued or converted by Rabobank and for a period of time comparable to such
Interest Period.
"INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT" means the
Intercreditor and Collateral Agency Agreement among the Lenders, the holders of
the Senior Secured Notes, the Collateral Agent and the other parties thereto, in
substantially the form of Exhibit O.
"INTEREST PAYMENT DATE" means a date specified for the payment
of interest pursuant to Section 4.01(c).
"INTEREST PERIOD" means, with respect to any Eurodollar Rate
Loan, the period determined in accordance with Section 4.01(b) applicable
thereto.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, including (unless the context otherwise requires) any rules or regulations
promulgated thereunder.
"INVENTORY" means all "inventory" (as such term is defined in
the UCC). For purposes of this Agreement, bulk wine shall be deemed Inventory
regardless of whether bulk wine is properly classified as "inventory" under the
UCC.
"IRS" means the Internal Revenue Service, or any successor
thereto.
"ISSUING LENDER" has the meaning set forth in the introduction
to this Agreement.
"L/C ADVANCE" means each Lender's participation in any L/C
Unreimbursed Draw in accordance with its Pro Rata Share.
"L/C AMENDMENT APPLICATION" means (i) an application form for
amendments of outstanding standby letters of credit as shall at any time be in
use at the Issuing Lender, as the Issuing Lender shall request and as shall be
satisfactory to the Agent.
"L/C APPLICATION" means such application form for issuances of
standby letters of credit as shall at any time be in use at the Issuing Lender,
as the Issuing Lender shall request and as shall be satisfactory to the Agent.
13.
"L/C COMMITMENT" has the meaning specified in subsection
3.01(a).
"L/C OBLIGATIONS" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit, PLUS (b) the amount of all
unreimbursed drawings under all Letters of Credit, including all L/C
Unreimbursed Draws.
"L/C-RELATED DOCUMENTS" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document, agreement
and instrument relating to any Letter of Credit, including any of the Issuing
Lender's standard form documents for letter of credit issuances.
"L/C UNREIMBURSED DRAW" means an extension of credit resulting
from a drawing under any Letter of Credit which shall not have been reimbursed
on the date when made nor converted into a Borrowing of Revolving Loans under
Section 2.01(a).
"LENDERS" has the meaning specified in the introductory clause
hereto. References to the Lenders shall include references to Rabobank in its
capacity as the Issuing Lender and the Swingline Lender; for purposes of
clarification only, to the extent that Rabobank may have any rights or
obligations in addition to those of the Lenders due to its status as the Issuing
Lender or the Swingline Lender, its status as such will be specifically
referenced. Unless the context otherwise clearly requires, the Lenders shall
include any such Person in its capacity as Swap Provider. Unless the context
otherwise clearly requires, references to any such Person as a Lender shall also
include any of such Person's Affiliates that may at any time of determination be
Swap Providers.
"LENDING OFFICE" has the meaning set forth in Section 2.04.
"LETTERS OF CREDIT" means any standby letter of credit issued
by the Issuing Lender pursuant to Article III.
"LEVERAGE RATIO" has the meaning specified in subsection
10.02(a).
"LIEN" means any mortgage, deed of trust, pledge, security
interest, assignment, deposit arrangement, charge or encumbrance, lien
(statutory or other), or other preferential arrangement (including any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing or any agreement
to give any security interest).
"LOAN" means an extension of credit, in the form of a Term
Loan, Revolving Loan, Swingline Loan or L/C Advance, by a Lender to the Borrower
pursuant to Article II or III.
"LOAN DOCUMENTS" means this Agreement, the Notes, the
Collateral Documents, the Intercreditor and Collateral Agency Agreement, the Fee
Letter, each Guaranty, the Guarantor Documents, the Environmental Indemnity, any
documents evidencing or relating to Specified Swap Contracts and all other
certificates, documents, agreements and instruments delivered to the Agent, the
Issuing Lender and the Lenders under or in connection with this Agreement, and
all L/C-Related Documents.
14.
"MAJORITY LENDERS" means as at any time of determination
Lenders then holding in excess of 60% of the then aggregate sum of (i) the
unused Commitments at such time (for so long as the Commitments are in effect)
PLUS (ii) the unpaid principal amount of the Loans and participations in the L/C
Obligations and Swingline Loans at such time; PROVIDED, however , that if any
Lender has failed to fund any portion of the Loans or participations in the L/C
Obligations or the Swingline Loans required to be funded by it hereunder, then
such Lender's unused Commitments, Loans and participations shall be excluded
from the calculation of the "Majority Lenders".
"MATERIAL ADVERSE EFFECT" means any event, matter, condition
or circumstance which (i) has or would reasonably be expected to have a material
adverse effect on the business, properties, results of operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole;
(ii) would materially impair the ability of the Borrower, or any other Person to
perform or observe its obligations under or in respect of the Loan Documents, or
(iii) affects the legality, validity, binding effect or enforceability of any of
the Loan Documents or the perfection or priority of any Lien granted to the
Lenders, or the Collateral Agent or the Agent for the benefit of the Lenders,
under any of the Collateral Documents.
"MAXIMUM INTERCOMPANY LOAN AMOUNT" means the sum of (i)
$35,000,000 PLUS (ii) on each anniversary of the Closing Date, 10% of the
Maximum Intercompany Loan Amount in effect immediately prior to such
anniversary.
"MINIMUM AMOUNT" has the meaning set forth in Section 2.06.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined
in Sections 3(37) and 4001(a)(3) of ERISA.
"NET ISSUANCE PROCEEDS" means, as to any issuance or other
incurrence of debt or any issuance of equity by any Person, cash proceeds
received or receivable by such Person in connection therewith, net of
out-of-pocket costs and expenses paid or incurred in connection therewith in
favor of any Person not an Affiliate of such Person.
"NET PROCEEDS" means, as to any sale, transfer or other
disposition of assets ("Disposition") by a Person, proceeds in cash, checks or
other cash equivalent financial instruments as and when received by such Person,
net of: (a) the direct costs relating to such Disposition excluding amounts
payable to such Person or any Affiliate of such Person, (b) sale, use or other
transaction taxes, and income taxes, paid or reasonably expected to be payable
by such Person as a direct result thereof, and (c) amounts required to be
applied to repay principal, interest and prepayment premiums and penalties on
Indebtedness secured by a Lien on the asset which is the subject of such
Disposition. "NET PROCEEDS" shall also include proceeds paid on account of any
Event of Loss, net of (i) all money actually applied or set aside within six
months after the receipt of such proceeds to repair, replace or reconstruct the
damaged property or property affected by the condemnation or taking, (ii) all of
the costs and expenses reasonably incurred in connection with the collection of
such proceeds, award or other payments, and (iii) any amounts retained by or
paid to parties having superior rights to such proceeds, awards or other
payments.
15.
"NOTES" means the Revolving Notes, the Swingline Note and the
Term Notes.
"NOTICE" means a Notice of Borrowing, a Notice of Conversion
or Continuation or a Notice of Prepayment.
"NOTICE OF BORROWING" has the meaning set forth in Section
2.02(a).
"NOTICE OF CONVERSION OR CONTINUATION" has the meaning set
forth in Section 4.05(c).
"NOTICE OF PREPAYMENT" has the meaning set forth in Section
5.03(d).
"OBLIGATIONS" means the indebtedness, liabilities and other
obligations of the Borrower and the Guarantors to the Collateral Agent, the
Agent or any Lender under or in connection with the Loan Documents, including
all Loans, all interest accrued thereon, all fees due under this Agreement and
all other amounts payable by the Borrower to the Collateral Agent, the Agent or
any Lender thereunder or in connection therewith, whether now or hereafter
existing or arising, and whether due or to become due, absolute or contingent,
liquidated or unliquidated, determined or undetermined.
"OECD" means the Organization for Economic Cooperation and
Development.
"OPERATING LEASE" means, for any Person, any lease of any
property of any kind by that Person as lessee which is not a Capital Lease.
"ORGANIZATION DOCUMENTS" means, (a) with respect to any
corporation, the certificate or articles of incorporation and the bylaws (or
equivalent or comparable constitutional documents with respect to any non-U.S.
jurisdiction); (b) with respect to any limited liability company, the articles
of formation and operating agreement; and (c) with respect to any partnership,
joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation and any agreement,
instrument, filing or notice with respect thereto filed in connection with its
formation with the applicable Governmental Authority in the jurisdiction of its
formation, in each case as amended from time to time.
"PARTICIPATION DATE" has the meaning set forth in Section
3.03(c).
"PATENT AND TRADEMARK SECURITY AGREEMENT" means each Patent
and Trademark Security Agreement between the Borrower or a Subsidiary Guarantor
and the Collateral Agent, in substantially the form of Exhibit F.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PENSION PLAN" means any employee pension benefit plan covered
by Title IV of ERISA (other than a Multiemployer Plan) that is maintained for
employees of the Borrower, any Guarantor or any ERISA Affiliate or with regard
to which the Borrower, any Guarantor or an ERISA Affiliate is a contributing
sponsor within the meaning of Sections 4001(a)(13) or 4069 of ERISA.
16.
"PERMITTED INVESTMENTS" means any of the following Dollar
denominated investments, maturing within one year from the date of acquisition,
selected by the Borrower:
(i) marketable direct obligations issued or
unconditionally guaranteed by the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States;
(ii) marketable direct obligations issued by any state of
the United States or any political subdivision of any such state or any public
instrumentality thereof and, at the time of acquisition, having the highest
credit rating obtainable from either S&P or Moody's;
(iii) commercial paper or corporate promissory notes
bearing at the time of acquisition the highest credit rating either of S&P or
Moody's issued by United States, Australian, Canadian, European or Japanese bank
holding companies or industrial or financial companies (other than an Affiliate
of the Borrower or any Guarantor);
(iv) certificates of deposit issued by and bankers
acceptances of and interest bearing deposits with any Lender, or with any United
States, Australian, Canadian, European or Japanese commercial banks having
capital and surplus of at least $500,000,000 or the equivalent and which issues
(or the parent of which issues) commercial paper or other short term securities
bearing the highest credit rating obtainable from either S&P or Moody's; and
(v) money market funds organized under the laws of the
United States or any state thereof that invest solely in any of the foregoing
investments permitted under clauses (i), (ii), (iii) and (iv).
"PERMITTED LIENS" means:
(i) Liens in favor of the Lenders,or the Collateral Agent or
the Agent for the benefit of the Lenders, to secure the Obligations;
(ii) the existing Liens listed in Schedule 4 or incurred in
connection with the extension, renewal or refinancing of the Indebtedness
secured by such existing Liens, PROVIDED that any extension, renewal or
replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the Indebtedness being extended, renewed or
refinanced does not increase;
(iii) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings and which are adequately reserved for in accordance with
GAAP;
(iv) Liens of materialmen, mechanics, warehousemen, artisans,
carriers or employees or other like Liens (including Growers' Liens and
Production Liens) arising in the ordinary course of business and securing
obligations either not delinquent or being contested in good faith by
appropriate proceedings which are adequately reserved for in accordance with
GAAP;
17.
(v) Liens consisting of deposits or pledges to secure the
payment of worker's compensation, unemployment insurance or other social
security benefits or obligations, or to secure the performance of bids, trade
contracts, leases (other than Capital Leases), public or statutory obligations,
surety or appeal bonds or other obligations of a like nature incurred in the
ordinary course of business (other than for Indebtedness or any Liens arising
under ERISA);
(vi) easements, rights of way, servitudes or zoning or
building restrictions and other minor encumbrances on real property and
irregularities in the title to such property which do not in the aggregate
materially impair the use or value of such property or risk the loss or
forfeiture of title thereto;
(vii) statutory landlord's Liens under leases to which the
Borrower or any of its Subsidiaries is a party;
(viii) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; PROVIDED that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Borrower in excess of those set forth by regulations promulgated
by the FRB, and (ii) such deposit account is not intended by the Borrower or any
Subsidiary to provide collateral to the depository institution;
(ix) Liens securing Indebtedness incurred by the Borrower or
any Subsidiary which is permitted under Section 10.04(a)(x); provided that (i)
such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition;
(x) Liens on specific tangible assets of Persons which
become Subsidiaries after the date of this Agreement; PROVIDED, HOWEVER, that
(A) such Liens existed at the time the respective Persons became Subsidiaries
and were not created in anticipation thereof, (B) any such Lien does not by its
terms cover any assets after the time such Person becomes a Subsidiary which
were not covered immediately prior thereto, (C) any such Lien does not by its
terms secure any Indebtedness other than Indebtedness existing immediately prior
to the time such Person becomes a Subsidiary, and (D) such Indebtedness is
permitted by Section 10.04(a)(x); and
(xi) Liens securing the Senior Secured Notes and Senior
Secured Notes Guaranties, subject to the Intercreditor and Collateral Agency
Agreement.
"PERMITTED PREFERRED STOCK" means preferred stock of the
Borrower, subject to the following: such preferred stock shall not (a) have
mandatory redemption rights, or redemption at the option of the holder, sinking
fund payments, guaranteed return or exchange ability or conversions into debt
instruments or any other "debt-like" features other than any mandatory rights of
redemption effective not earlier than six months after the Final Maturity Date,
and (b) require the payment of any dividends thereon while any Event of Default
exists hereunder.
18.
"PERSON" means an individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization or
any other entity of whatever nature or any Governmental Authority.
"PLAN" means any employee pension benefit plan as defined in
Section 3(2) of ERISA (including any Multiemployer Plan) and any employee
welfare benefit plan, as defined in Section 3(1) of ERISA (including any plan
providing benefits to former employees or their survivors).
"PREMISES" means any and all real property, including all
buildings and improvements now or hereafter located thereon and all
appurtenances thereto, now or hereafter owned, leased, occupied or used by the
Borrower or any of its Subsidiaries.
"PRIMARY TRADEMARKS" means the following trademarks: ACACIA,
CHALONE VINEYARD, GAVILAN, SAGELANDS, STATON HILLS, MISTY RIDGE and PHOENIX.
"PRINCIPAL PAYMENT DATE" means a day on which the Borrower is
required to make a payment of principal pursuant to Section 5.02(b).
"PRODUCTION LIENS" means statutory Liens securing the right of
Persons who have rendered services for the storage, protection, improvement,
safekeeping, carriage, alteration, repair, harvest or crushing of any grapes or
Inventory, including without limitation, artisans and service liens under
California Civil Code Section 3051, thresher's liens under California Civil Code
Section 3061, and harvesters liens under California Civil Code Section 3061.5.
"PRO RATA SHARE" means, as to any Lender at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth decimal
place) at such time of (a) in the case of the Revolving Commitments or the
Revolving Loans, such Lender's Revolving Commitment divided by the combined
Revolving Commitments of all Lenders (or, if all Revolving Commitments have been
terminated, the aggregate principal amount of such Lender's Revolving Loans PLUS
the its participations in the L/C Obligations and Swingline Loans divided by the
aggregate principal amount of the Revolving Loans and the participations in L/C
Obligations and Swingline Loans then held by all Lenders), (b) in the case of
the Term Commitments or the Term Loans, such Lender's Term Commitment divided by
the combined Term Commitments of all Lenders (or, if all Term Commitments have
been terminated, the aggregate principal amount of such Lender's Term Loans
divided by the aggregate principal amount of Term Loans then held by all
Lenders), and (c) in all other cases, such Lender's unused Commitment PLUS its
outstanding Loans and participations in the L/C Obligations and Swingline Loans
divided by the combined unused Commitments and the outstanding Loans and
participations in L/C Obligations and Swingline Loans of all Lenders (or, if all
Commitments have been terminated, the aggregate principal amount of such
Lender's Loans and participations in L/C Obligations and Swingline Loans divided
by the aggregate principal amount of Loans and participations in L/C Obligations
and Swingline Loans then held by all Lenders). The initial Pro Rata Shares of
each Lender are set forth opposite such Lender's name in SCHEDULE 1.
"RABOBANK" has the meaning set forth in the introduction to
this Agreement.
19.
"RATE CONTRACTS" means interest rate swaps, caps, floors and
collars, currency swaps, or other similar financial products designed to provide
protection against fluctuations in interest, currency or exchange rates.
"RECEIVABLE DEBTOR" means any Person obligated on a
Receivable.
"RECEIVABLES" means all rights to payment arising out of the
sale or lease of goods or the performance of services in the ordinary and usual
course of business, however evidenced.
"REGULATION D" means Regulation D of the FRB.
"REGULATORY CHANGE" has the meaning set forth in Section 6.03.
"RELATED PARTY" has the meaning set forth in Section 10.04(k).
"RELATED PERSON" has the meaning set forth in Section
13.04(b).
"REPLACEMENT LENDER" has the meaning set forth in Section
6.07.
"REQUIRED NOTICE DATE" has the meaning set forth in Section
2.07.
"REQUIREMENT OF LAW" means, as to any Person, any law
(statutory or common), treaty, code, decree, order, rule or regulation or
determination of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
"RESPONSIBLE OFFICER" means, with respect to any Person, the
chief executive officer, the president, the chief financial officer or the
treasurer of such Person, or any other senior officer of such Person having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief executive officer, the chief
financial officer or the treasurer of any such Person, or any other senior
officer of such Person involved principally in the financial administration or
controllership function of such Person and having substantially the same
authority and responsibility.
"REVOLVING COMMITMENT" means, when used with reference to any
Lender at the time any determination thereof is to be made, the amount set forth
opposite the name of such Lender as its "Revolving Commitment" on Schedule 1, as
from time to time reduced pursuant to Section 5.01, or, where the context so
requires, the obligation of such Lender to make Revolving Loans up to such
amount on the terms and conditions set forth in this Agreement. The initial
aggregate Revolving Commitments of all the Lenders shall be $55,000,000, as the
same may from time to time be reduced pursuant to Section 5.01.
"REVOLVING EXPIRY DATE" means April 19, 2005.
"REVOLVING LOAN" has the meaning set forth in Section 2.01(a).
"REVOLVING NOTE" means a Promissory Note of the Borrower
payable to the order of a Lender, in substantially the form of Exhibit G.
20.
"SEC" means the Securities and Exchange Commission, or any
successor thereto.
"SECURITY AGREEMENT" means the Security Agreement among the
Borrower and the Subsidiaries party thereto in favor of the Collateral Agent for
the benefit of the Agent, the Lenders and the Senior Noteholders, in
substantially the form of Exhibit H-1 (or in substantially the form of Exhibit
H-2, in the case of Edna Valley Vineyard).
"SENIOR NOTEHOLDERS" means the noteholders from time to time
holding one or more of the Senior Secured Notes and in whose name such Senior
Secured Note(s) are registered in the register maintained by the Borrower
pursuant to the Senior Secured Note Documents.
"SENIOR SECURED NOTE DOCUMENTS" means the note purchase
agreement, documents and agreements evidencing the Senior Secured Notes,
including all deeds of trust, mortgages, security agreements and other documents
and agreements purporting to grant a Lien on the assets of the Borrower or any
Subsidiary or any other Person to secure the obligations owing by the Borrower
or any other Person under the Senior Secured Notes and Senior Secured Notes
Guaranties.
"SENIOR SECURED NOTES" means (a) the Borrower's $5,000,000
Adjustable Rate Senior Guaranteed Notes, Series A, Due September 15, 2010; (b)
the Borrower's $10,000,000 Adjustable Rate Senior Guaranteed Notes, Series B,
Due September 15, 2010; and (c) the Borrower's $15,000,000 Adjustable Rate
Senior Guaranteed Notes, Series C, Due September 15, 2010, as amended and
restated concurrently herewith.
"SENIOR SECURED NOTES GUARANTIES" means the Subsidiary
Guarantee Agreements entered into by the Subsidiary Guarantors in favor of the
Senior Noteholders to guaranty the Borrower's obligations under the Senior
Secured Notes and the other Senior Secured Note Documents.
"SHW INTERCOMPANY LOAN AMOUNT" means the sum of (i) $8,000,000
plus (ii) on each anniversary of the Closing Date, 10% of the SHW Intercompany
Loan Amount in effect immediately prior to such anniversary.
"SOLVENT" means, as to any Person at any time, that (i) the
fair value of the property of such Person is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for purposes
of Section 101(32) of the Bankruptcy Code; (ii) the present fair saleable value
of the property of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become
absolute and matured; (iii) such Person is able to realize upon its property and
pay its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business; (iv)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"SPECIFIED ASSETS" means the assets of the Borrower and its
Subsidiaries identified on Schedule 7 hereto which are being held for sale.
21.
"SPECIFIED SWAP CONTRACT" means any Rate Contract made or
entered into at any time, or in effect at any time (whether heretofore or
hereafter), whether directly or indirectly, and whether as a result of
assignment or transfer or otherwise, between the Borrower and any Swap Provider
which Rate Contract is or was intended by the Borrower to have been entered
into, in part or entirely, for purposes of mitigating interest rate or currency
exchange risk relating to any Loan (which intent shall conclusively be deemed to
exist if the Borrower so represents to the Swap Provider in writing).
"SUBORDINATED DEBT" means any Indebtedness of the Borrower or
any Subsidiary incurred after the date hereof in accordance with Section
10.04(a)(xi).
"SUBSIDIARY" means any corporation, association, partnership,
joint venture or other business entity of which more than 50% of the voting
stock or other equity interest is owned directly or indirectly by any Person or
one or more of the other Subsidiaries of such Person or a combination thereof.
"SUBSIDIARY GUARANTOR" means each of Edna Valley Vineyard,
Canoe Ridge Vineyard L.L.C., Canoe Ridge Winery, Inc., SHW Equity Co., Staton
Hills Winery Company Limited and each other Subsidiary that becomes party to a
Guaranty.
"SWAP PROVIDER" means any Lender, or any Affiliate of any
Lender, that is at the time of determination party to a Rate Contract with the
Borrower.
"SWAP TERMINATION VALUE" means, in respect of any one or more
Rate Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Rate Contracts, (i) for any date on or after
the date such Rate Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (ii) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Rate Contracts, as determined by the Borrower
based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such Rate Contracts (which may include any Lender).
"SWINGLINE COMMITMENT" has the meaning specified in subsection
2.01(c).
"SWINGLINE LENDER" has the meaning specified in the
introduction to this Agreement.
"SWINGLINE LOAN" has the meaning specified in subsection
2.01(c).
"SWINGLINE NOTE" means a Promissory Note of the Borrower
payable to the order of the Swingline Lender, in substantially the form of
Exhibit I.
"SYNTHETIC LEASE OBLIGATION" means the monetary obligation of
a Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).
22.
"TAXES" has the meaning set forth in Section 7.03(a).
"TERM COMMITMENT" means, when used with reference to any
Lender at the time any determination thereof is to be made, the amount set forth
opposite the name of such Lender as its "Term Commitment" on Schedule 1 or,
where the context so requires, the obligation of such Lender to make a Term Loan
up to such amount on the terms and conditions set forth in this Agreement. The
initial aggregate Term Commitments of all the Lenders shall be $17,500,000.
"TERMINATION EVENT" means any of the following:
(i) with respect to a Pension Plan, a reportable event
described in Section 4043 of ERISA and the regulations issued thereunder (other
than a reportable event not subject to the provisions for 30-day notice to the
PBGC under such regulations);
(ii) the withdrawal of the Borrower,any Guarantor or an ERISA
Affiliate from a Pension Plan during a plan year in which the withdrawing
employer was a "substantial employer" as defined in Section 4001(a)(2) or
4062(e) of ERISA;
(iii) the taking of any actions (including the filing of a
notice of intent to terminate) by the Borrower, any Guarantor, an ERISA
Affiliate, the PBGC, a Plan Administrator, or any other Person to terminate a
Pension Plan or the treatment of a Plan amendment as a termination of a Pension
Plan under Section 4041 of ERISA;
(iv) any other event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; or
(v) the complete or partial withdrawal of the Borrower, any
Guarantor or an ERISA Affiliate from a Multiemployer Plan.
"TERM LOAN" has the meaning set forth in Section 2.01(b), and
shall include the additional Term Loans, if any, made pursuant to Section
2.01(d).
"TERM NOTE" means a Promissory Note of the Borrower payable to
the order of a Lender, in substantially the form of Exhibit J.
"UCC" means the Uniform Commercial Code of the jurisdiction
the law of which governs the Loan Document in which such term is used or the
attachment, perfection or priority of the Lien on any Collateral.
"UNFUNDED ACCRUED BENEFITS" means the excess of a Pension
Plan's accrued benefits, as defined in Section 3(23) of ERISA, over the current
value of that Plan's assets, as defined in Section 3(26) of ERISA.
"UPDATE CERTIFICATE" means a certificate of a Responsible
Officer of the Borrower in substantially the form of Exhibit N, with such
changes thereto as the Agent or any Lender may from time to time reasonably
request.
23.
"WINE BOTTLING INVENTORY" means Borrower's bottles, capsules,
corks and other supplies used in its wine production, bottling and packaging.
"WINE DIVIDEND CREDITS" means annual credits provided by the
Borrower to shareholders owning 100 or more shares of the Borrower's common
stock, which credits may be applied by each such shareholder, for a period not
to exceed one year following such shareholder's receipt of such credits, towards
up to 50% of the purchase price of mail-order or other direct purchases of wine
from the Borrower.
SECTION 1.02 ACCOUNTING PRINCIPLES.
(a) ACCOUNTING TERMS. Unless otherwise defined or the
context otherwise requires, all accounting terms not expressly defined herein
shall be construed, and all accounting determinations and computations required
under the Loan Documents shall be made, in accordance with GAAP, consistently
applied.
(b) GAAP CHANGES. If GAAP shall have been modified after the
Closing Date and the application of such modified GAAP shall have a material
effect on any financial computations hereunder (including the computations
required for the purpose of determining compliance with the covenants set forth
in Section 10.02), then, at the request of the Agent or the Majority Lenders,
such computations shall be made and the financial statements, certificates and
reports due hereunder shall be prepared, and all accounting terms not otherwise
defined herein shall be construed, in accordance with GAAP as in effect prior to
such modification, unless and until the Majority Lenders and the Borrower shall
have agreed upon the terms of the application of such modified GAAP.
(c) "FISCAL YEAR" AND "FISCAL QUARTER". References herein to
"fiscal year" and "fiscal quarter" refer to such fiscal periods of the Borrower.
SECTION 1.03 INTERPRETATION. In the Loan Documents, except to
the extent the context otherwise requires:
(i) Any reference to an Article, a Section, a Schedule or an
Exhibit is a reference to an article or section thereof, or a schedule or an
exhibit thereto, respectively, and to a subsection or a clause is, unless
otherwise stated, a reference to a subsection or a clause of the Section or
subsection in which the reference appears.
(ii) The words "hereof," "herein," "hereto," "hereunder" and
the like mean and refer to this Agreement or any other Loan Document as a whole
and not merely to the specific Article, Section, subsection, paragraph or clause
in which the respective word appears.
(iii) The meaning of defined terms shall be equally applicable
to both the singular and plural forms of the terms defined.
(iv) The words "including," "includes" and "include" shall be
deemed to be followed by the words "without limitation."
24.
(v) References to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of the Loan Documents.
(vi) References to statutes or regulations are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation referred to.
(vii) Any table of contents, captions and headings are for
convenience of reference only and shall not affect the construction of this
Agreement or any other Loan Document.
(viii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding"; and the word "through"
means "to and including."
(ix) The use of a word of any gender shall include each of
the masculine, feminine and neuter genders.
(x) This Agreement and the other Loan Documents are the
result of negotiations among the Agent, the Borrower and the other parties, have
been reviewed by counsel to the Agent, the Borrower and such other parties, and
are the products of all parties. Accordingly, they shall not be construed
against the Lenders or the Agent merely because of the Agent's or Lenders'
involvement in their preparation.
ARTICLE II
THE LOANS
SECTION 2.01 THE LOANS.
(a) REVOLVING LOANS. Each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make revolving loans (each
a "Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower
from time to time on any Business Day during the period from the Closing Date
until the Revolving Expiry Date, in an aggregate principal amount up to but not
exceeding at any time outstanding such Lender's Revolving Commitment; PROVIDED,
that (i) the Effective Amount of all Revolving Loans PLUS the Effective Amount
of all Swingline Loans PLUS the Effective Amount of all L/C Obligations shall
not exceed the aggregate Revolving Commitments and (ii) the Effective Amount of
all Revolving Loans PLUS the Effective Amount of all Swingline Loans PLUS the
Effective Amount of all L/C Obligations shall not exceed the Borrowing Base then
in effect; and PROVIDED FURTHER, that the Effective Amount of the Revolving
Loans of any Lender PLUS the participation of such Lender in the Effective
Amount of all Swingline Loans and L/C Obligations shall not exceed such Lender's
Revolving Commitment. Within the foregoing limits and subject to the other terms
and conditions hereof, during such period the Borrower may borrow, repay the
Revolving Loans in whole or in part, and reborrow, all in accordance with the
terms and conditions hereof.
25.
(b) TERM LOANS. Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make a term loan (each a "Term
Loan" and, collectively, the "Term Loans") to the Borrower on the Closing Date,
in a principal amount up to but not exceeding such Lender's Term Commitment. Any
amount of the Term Loans repaid may not be reborrowed.
(c) SWINGLINE LOANS. The Swingline Lender agrees, on the
terms and conditions set forth in this Agreement, to make a portion of the
Revolving Commitment available to the Borrower by making swingline loans
denominated in Dollars (individually, a "Swingline Loan", and, collectively, the
"Swingline Loans") to the Borrower on any Business Day during the period from
the Closing Date to the Revolving Expiry Date in an aggregate principal amount
at any one time outstanding not to exceed $5,000,000, notwithstanding the fact
that such Swingline Loans, when aggregated with any other Credit Extensions made
by or participated in by the Swingline Lender, may exceed the Swingline Lender's
Revolving Commitment (the amount of such commitment of the Swingline Lender to
make Swingline Loans to the Company pursuant to this subsection 2.01(c), as the
same shall be reduced pursuant to Section 5.01, the Swingline Lender's
"Swingline Commitment"); PROVIDED that at no time shall (i) the sum of the
Effective Amount of all Swingline Loans PLUS the Effective Amount of all
Revolving Loans PLUS the Effective Amount of all L/C Obligations exceed the
combined Revolving Commitments, or (ii) the Effective Amount of all Swingline
Loans exceed the Swingline Commitment. Additionally, no more than one Swingline
Loan may be outstanding at any one time, and all Swingline Loans shall at all
times be Base Rate Loans or accrue interest at such other rate as may be agreed
to by the Swingline Lender and the Borrower. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrower may borrow, repay
the Swingline Loans in whole or in part, and reborrow, all in accordance with
the terms and conditions hereof.
(d) ADDITIONAL TERM LOANS. Each Lender severally agrees, on
the terms and conditions set forth in this Agreement, to make an additional Term
Loan to the Borrower on or prior to April 30, 2002. The obligation of each
Lender to make such additional Term Loan shall be within its sole and absolute
discretion and shall be subject to the following: (i) the Agent shall have
received by no later than April 15, 2002, a written appraisal report in respect
of the fair market value of the Hewitt Ranch Property prepared by an ARA or MAI
certified appraiser (the "Hewitt Appraisal"); and (ii) the appraised fair market
value of the Hewitt Ranch Property set forth in the Hewitt Appraisal shall be
greater than $11,600,000. If the conditions set forth in the preceding clauses
(i) and (ii) are satisfied, then the Borrower may request additional Term Loans
in an aggregate amount not to exceed the lesser of (A) 70% of the difference
between the appraised fair market value of the Hewitt Ranch Property set forth
in the Appraisal MINUS $11,600,000 and (B) $2,500,000. Any amount of the
additional Term Loans repaid may not be reborrowed.
SECTION 2.02 BORROWING PROCEDURE - REVOLVING LOANS AND TERM
LOANS.
(a) NOTICE TO THE AGENT. Each Borrowing of Revolving Loans
or Term Loans shall be made on a Business Day upon written or telephonic notice
(in the latter case to be confirmed promptly in writing) from the Borrower to
the Agent, which notice shall be received by the Agent not later than 1:00 p.m.
(New York time) on the Required Notice Date. Each such
26.
notice, except as provided in Sections 6.01 and 6.04, shall be irrevocable and
binding on the Borrower, shall be in substantially the form of Exhibit K (a
"Notice of Borrowing") and shall specify whether the Borrowing consists of Base
Rate Loans or Eurodollar Rate Loans and the other information required thereby.
Notwithstanding the foregoing, the Borrower may give the Agent standing
instructions in writing to make a Swingline Loan on the date any interest is due
hereunder, in the amount of such interest, PROVIDED that the making of the
Swingline Loan would otherwise be permissible under Section 2.01(c) and Section
8.02, and prior to the rescission in writing by the Borrower of such standing
instructions, no further notice shall be necessary under this Section 2.02 with
respect to Borrowings of Swingline Loans to pay accrued and unpaid interest
owing hereunder.
(b) NOTICE TO THE LENDERS. The Agent shall give each Lender
prompt notice by telephone (confirmed promptly in writing) or by facsimile of
each Borrowing of Revolving Loans or Term Loans, specifying the information
contained in the Borrower's Notice and such Lender's Pro Rata Share of the
Borrowing. On the date of each such Borrowing, each Lender shall make available
such Lender's Pro Rata Share of such Borrowing, in same day or immediately
available funds, to the Agent for the Agent's Account, not later than 3:00 p.m.
(New York time). Upon fulfillment of the applicable conditions set forth in
Article VIII and after receipt by the Agent of any such funds, and unless other
payment instructions are provided by the Borrower, the Agent shall make such
funds available to the Borrower by crediting the Borrower's Account with same
day or immediately available funds on such Borrowing date.
(c) NON-RECEIPT OF FUNDS. Unless the Agent shall have
received notice from a Lender prior to the date of any Borrowing of Revolving
Loans or Term Loans that such Lender shall not make available to the Agent such
Lender's Pro Rata Share of such Borrowing, the Agent may assume that such Lender
has made such portion available to the Agent on the date of such Borrowing in
accordance with Section 2.02(b) and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent such Lender shall not have so made such Pro Rata Share
available to the Agent, and the Agent in such circumstances shall have made
available to the Borrower such amount, such Lender agrees to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent, at the Federal Funds Rate. If such
Lender shall repay to the Agent such corresponding amount, such amount so repaid
shall constitute such Lender's Loan as part of such Borrowing for purposes of
this Agreement. If such amount is not made available by such Lender to the Agent
on the Business Day following the Borrowing date, the Agent shall notify the
Borrower of such failure to fund and, upon demand by the Agent, the Borrower
shall pay such amount to the Agent for the Agent's Account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
SECTION 2.03 BORROWING PROCEDURE--SWINGLINE LOANS.
(a) NOTICE TO THE AGENT. The Borrower shall provide the
Agent irrevocable written notice (including notice via facsimile confirmed
immediately by a telephone call) in the form of a Notice of Borrowing of any
Swingline Loan requested hereunder (which notice must be received by the Agent
prior to 1:00 p.m. (New York time) on the requested Borrowing date)
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specifying (i) the amount to be borrowed, which shall be in a Minimum Amount
(unless otherwise agreed by the Swingline Lender), and (ii) the requested
Borrowing date, which shall be a Business Day. Unless the Swingline Lender has
received notice prior to 2:00 p.m. (New York time) on such Borrowing date from
the Agent (including at the request of any Lender) (A) directing the Swingline
Lender not to make the requested Swingline Loan as a result of the limitations
set forth in the proviso set forth in the first sentence of subsection 2.01(a);
or (B) that one or more conditions specified in Article VIII are not then
satisfied; then, subject to the terms and conditions hereof, the Swingline
Lender will, not later than 3:00 p.m. (New York time) on the Borrowing date
specified in such Notice of Borrowing, make the amount of its Swingline Loan
available to the Borrower by crediting the Borrower's Account with same day or
immediately available funds on such Borrowing date.
(b) PARTICIPATIONS IN SWINGLINE LOANS.If:
(1) any Swingline Loan shall remain outstanding at 4:00 p.m.
(New York time) on the Business Day immediately prior to the date on which such
Swingline Loan is due and by such time on such Business Day the Agent shall have
received neither: (A) a Notice of Borrowing delivered pursuant to Section 2.02
requesting that Revolving Loans be made pursuant to subsection 2.01 on such due
date in an amount at least equal to the aggregate principal amount of such
Swingline Loan; nor (B) any other notice indicating the Borrower's intent to
repay such Swingline Loan with funds obtained from other sources; or
(2) any Swingline Loans shall remain outstanding during the
existence of a Default or Event of Default and the Swingline Lender shall in its
sole discretion notify the Agent that the Swingline Lender desires that such
Swingline Loans be converted into Revolving Loans;
THEN the Agent shall be deemed to have received a Notice of Borrowing from the
Borrower pursuant to Section 2.02 requesting that Base Rate Loans be made
pursuant to subsection 2.01(a) on such due date (in the case of the
circumstances described in clause (1) above) or on the first Business Day
subsequent to the date of such notice from the Swingline Lender (in the case of
the circumstances described in clause (2) above) in an amount equal to the
aggregate amount of such Swingline Loans, and the procedures set forth in
subsections 2.02(b) shall be followed in making such Base Rate Loans; PROVIDED,
that such Base Rate Loans shall be made notwithstanding the Borrower's failure
to comply with Section 8.02; and PROVIDED, FURTHER, that if a Borrowing of
Revolving Loans becomes legally impracticable and if so required by the
Swingline Lender at the time such Revolving Loans are required to be made by the
Lenders in accordance with this subsection 2.03(c), each Lender agrees that in
lieu of making Revolving Loans as described in this subsection 2.03(c), such
Lender shall purchase a participation from the Swingline Lender in the
applicable Swingline Loans in an amount equal to such Lender's Pro Rata Share of
such Swingline Loans, and the procedures set forth in subsections 2.02(b) shall
be followed in connection with the purchases of such participations. Upon such
purchases of participations the prepayment requirements of this subsection
2.03(c) shall be deemed waived with respect to such Swingline Loans. If any
Swingline Loan shall remain outstanding in lieu of a Borrowing of Revolving
Loans as provided above, interest on such Swingline Loan shall be due and
payable on demand and shall accrue at the rate then applicable to Base Rate
Loans. The proceeds of such Base Rate Loans, or participations purchased, shall
be applied to repay such Swingline Loans. A
28.
copy of each notice given by the Agent to the Lenders pursuant to this
subsection 2.03(c) with respect to the making of Revolving Loans, or the
purchases of participations, shall be promptly delivered by the Agent to the
Borrower. Each Lender's obligation in accordance with this Agreement to make the
Revolving Loans, or purchase the participations, as contemplated by this
subsection 2.03(c), shall be absolute and unconditional and shall not be
affected by any circumstance, including (1) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the
Swingline Lender, the Borrower or any other Person for any reason whatsoever;
(2) the occurrence or continuance of a Default, an Event of Default or a
Material Adverse Effect; or (3) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
SECTION 2.04 LENDING OFFICES. The Loans made by each Lender
may be made from and maintained at such offices of such Lender (each a "Lending
Office") as such Lender may from time to time designate (whether or not such
office is specified on Schedule 2). A Lender shall not elect a Lending Office
(other than that set forth on Schedule 2) that, at the time of making such
election, increases the amounts which would have been payable by the Borrower to
such Lender under this Agreement in the absence of such election. With respect
to Eurodollar Rate Loans made from and maintained at any Lender's non-U.S.
offices, the obligation of the Borrower to repay such Eurodollar Rate Loans
shall nevertheless be to such Lender and shall, for all purposes of this
Agreement (including for purposes of the definition of the term "Majority
Lenders") be deemed made or maintained by it, for the account of any such
office; PROVIDED that Borrower shall not be required to pay any increased
amounts that would not have been payable to any such Lender absent such
election.
SECTION 2.05 EVIDENCE OF INDEBTEDNESS. The Loans made by each
Lender shall be evidenced by one or more loan accounts maintained by such Lender
in accordance with its usual practices. The loan accounts maintained by the
Agent and each such Lender shall be rebuttable presumptive evidence of the
amount of the Loans made by such Lender to the Borrower and the interest and
payments thereon. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrower hereunder to
pay any amount owing with respect to the Loans. At the request of any Lender,
(i) as additional evidence of the Indebtedness of the Borrower to such Lender
resulting from the Revolving Loans made by such Lender, the Borrower shall
execute and deliver for account of such Lender pursuant to Article VIII a
Revolving Note, dated the Closing Date, setting forth such Lender's Revolving
Commitment as the maximum principal amount thereof, and (ii) as additional
evidence of the Indebtedness of the Borrower to such Lender resulting from the
Term Loan made by such Lender, the Borrower shall execute and deliver for
account of such Lender pursuant to Article VIII a Term Note, dated the Closing
Date, in the principal amount of the Term Loan made by such Lender on the
Closing Date. At the request of the Swingline Lender, as additional evidence of
the Indebtedness of the Borrower to the Swingline Lender resulting from the
Swingline Loans made by the Swingline Lender, the Borrower shall execute and
deliver for the account of the Swingline Lender pursuant to Article VIII a
Swingline Note, dated the Closing Date, setting forth the Swingline Lender's
Swingline Commitment as the maximum principal amount thereof. At the request of
any Lender that makes an additional Term Loan pursuant to Section 2.01(d), as
additional evidence of the Indebtedness of the Borrower to such Lender resulting
from the additional Term Loan made by such Lender, the Borrower shall execute
and deliver for the account of such Lender an additional Term Note, dated the
date of
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such additional Term Loan, in the principal amount of the additional Term Loan
made by such Lender.
SECTION 2.06 MINIMUM AMOUNTS. Any Borrowing, conversion,
continuation, Commitment reduction or prepayment of Revolving Loans or Term
Loans hereunder shall be in an aggregate amount determined as follows (each such
specified amount a "Minimum Amount"): (i) any Borrowing or partial prepayment of
Base Rate Loans (other than Swingline Loans) shall be in the amount of
$1,000,000 or a greater amount which is an integral multiple of $100,000; (ii)
any Borrowing, continuation or partial prepayment of, or conversion into,
Eurodollar Rate Loans shall be in the amount of $1,000,000 or a greater amount
which is an integral multiple of $100,000; (iii) any Borrowing or partial
prepayment of Swingline Loans shall be in the minimum amount of $100,000 or a
greater amount which is an integral multiple of $10,000; and (iv) any partial
Commitment reduction under Section 5.01(a) shall be in the amount of $1,000,000
or a greater amount which is an integral multiple of $100,000.
SECTION 2.07 REQUIRED NOTICE. Any Notice hereunder shall be
given not later than the date determined as follows (each such specified date a
"Required Notice Date"): (i) any Notice with respect to a Borrowing of, or
conversion into, Base Rate Loans (other than Swingline Loans) shall be given at
least one Business Day prior to the date of the proposed Borrowing or
conversion; (ii) any Notice with respect to any Borrowing or continuation of, or
conversion into, Eurodollar Rate Loans shall be given at least three Eurodollar
Business Days prior to the date of the proposed Borrowing, conversion or
continuation; (iii) any Notice with respect to a Borrowing or full or partial
prepayment of Swingline Loans shall be given not later than the date of the
proposed Borrowing or prepayment; (iv) any Notice with respect to any prepayment
under Section 5.03(a) (other than with respect to Swingline Loans) or Commitment
reduction under Section 5.01(a) shall, except as otherwise provided in Section
5.03(b), be given at least three Business Days prior to the proposed prepayment
or reduction date; (v) any notice with respect to the issuance of any Letter of
Credit shall, except to the extent the Issuing Lender may agree in a particular
instance to a shorter notice period in its sole and absolute discretion, be
given at least two Business Days prior to the proposed issuance date; and (vi)
any notice with respect to the amendment or renewal of any Letter of Credit
shall, except to the extent the Issuing Lender may agree in a particular
instance to a shorter notice period in its sole and absolute discretion, be
given at least two Business Days prior to the proposed amendment or renewal
date.
ARTICLE III
THE LETTERS OF CREDIT
SECTION 3.01 THE LETTER OF CREDIT SUBFACILITY.
(a) LETTERS OF CREDIT. On the terms and conditions
hereinafter set forth, (i) the Issuing Lender hereby agrees (A) from time to
time on any Business Day during the period from the Closing Date to the
Revolving Expiry Date to issue Letters of Credit for the account of the Borrower
in accordance with Section 3.02(a), and to amend or renew Letters of Credit
previously issued by it, in accordance with subsections 3.02(c) and 3.02(d), in
an aggregate amount not to exceed at any time $5,000,000 (the "L/C Commitment"),
and (B) to honor drafts under the
30.
Letters of Credit; and (ii) the Lenders severally agree to participate in
Letters of Credit issued for the account of the Borrower; PROVIDED, that the
Issuing Lender shall not be obligated to issue any Letter of Credit if (1) the
Effective Amount of all L/C Obligations PLUS the Effective Amount of all
Revolving Loans PLUS the Effective Amount of all Swingline Loans shall exceed
the aggregate Revolving Commitments, (2) the participation of any Lender in the
Effective Amount of all L/C Obligations PLUS the participation of such Lender in
the Effective Amount of all Swingline Loans PLUS the Effective Amount of the
Revolving Loans of such Lender shall exceed such Lender's Revolving Commitment,
(3) the Effective Amount of L/C Obligations shall exceed the L/C Commitment or
(4) the Effective Amount of all L/C Obligations PLUS the Effective Amount of all
Revolving Loans PLUS the Effective Amount of all Swingline Loans shall exceed
the Borrowing Base then in effect. Within the foregoing limits, and subject to
the other terms and conditions hereof, the Borrower's ability to obtain Letters
of Credit shall be fully revolving, and, accordingly, the Borrower may, during
the foregoing period, obtain Letters of Credit to replace Letters of Credit
which have expired or which have been drawn upon and reimbursed.
(b) CONDITIONS TO ISSUANCE. The Issuing Lender shall be
under no obligation to issue, amend or reinstate any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain the
Issuing Lender from issuing, amending or reinstating such Letter of Credit, or
any law, rule or regulation applicable to the Issuing Lender or any request,
guideline or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Lender shall prohibit,
or request that the Issuing Lender refrain from, the issuance, amendment or
reinstatement of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Lender with respect to such Letter
of Credit any restriction, reserve or capital requirement (for which the Issuing
Lender is not otherwise compensated) not in effect on the Closing Date, or shall
impose upon the Issuing Lender any unreimbursed loss, cost or expense which was
not applicable on the Closing Date and which the Issuing Lender in good faith
deems material to it;
(ii) the Issuing Lender has received written notice from any
Lender, the Agent or the Borrower, at least one Business Day prior to the
requested date of issuance, amendment or reinstatement of such Letter of Credit,
that one or more of the applicable conditions contained in Article VIII is not
then satisfied;
(iii) the expiry date of any requested Letter of Credit is (A)
more than one year after the date of issuance, unless the Majority Lenders have
approved such expiry date in writing, PROVIDED that a Letter of Credit may state
that the expiry date thereof may be extended for an additional term as shall be
satisfactory to the Issuing Lender (either upon prior notice or automatically)
so long as the next succeeding additional term at any time is not more than one
year; or (B) after the Revolving Expiry Date, unless all of the Lenders have
approved such expiry date in writing and such Letter of Credit is fully cash
collateralized;
(iv) any requested Letter of Credit does not provide for
drafts, or is not otherwise in form and substance acceptable to the Issuing
Lender, or the issuance, amendment or renewal of a Letter of Credit shall
violate any applicable policies of the Issuing Lender; or
31.
(v) such Letter of Credit is denominated in a currency other
than dollars.
SECTION 3.02 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF
CREDIT.
(a) NOTICE TO ISSUING LENDER OF ISSUANCE REQUEST. Each
Letter of Credit shall be issued upon the irrevocable written request of the
Borrower received by the Issuing Lender (with a copy sent by the Borrower to the
Agent) not later than the Required Notice Date. Each such request for issuance
of a Letter of Credit shall be in writing, in the form of an L/C Application,
and shall specify in form and detail satisfactory to the Issuing Lender: (i) the
proposed date of issuance of the Letter of Credit (which shall be a Business
Day); (ii) the face amount of the Letter of Credit; (iii) the expiry date of the
Letter of Credit; (iv) the name and address of the beneficiary thereof; (v) the
documents to be presented by the beneficiary of the Letter of Credit in case of
any drawing thereunder; (vi) the full text of any certificate to be presented by
the beneficiary in case of any drawing thereunder; and (vii) such other matters
as the Issuing Lender may require.
(b) ISSUANCE OF LETTERS OF CREDIT. At least two Business
Days prior to the issuance of any Letter of Credit or any amendment or renewal
of any Letter of Credit, the Issuing Lender shall confirm with the Agent (by
telephone or in writing) that the Agent has received a copy of the L/C
Application or L/C Amendment Application from the Borrower and, if not, the
Issuing Lender will provide the Agent with a copy thereof. Unless the Issuing
Lender has received notice on or before the Business Day immediately preceding
the date the Issuing Lender is to issue, amend or renew a requested Letter of
Credit from the Agent (i) directing the Issuing Lender not to issue, amend or
renew such Letter of Credit because such issuance, amendment or renewal is not
then permitted under Section 3.01(a) as a result of the limitations set forth in
clauses (1) through (4) thereof or Section 3.01(b); or (ii) that one or more
conditions specified in Article VIII are not then satisfied; then, subject to
the terms and conditions hereof, the Issuing Lender shall, on the requested
date, issue a Letter of Credit for the account of the Borrower or amend or renew
a Letter of Credit, as the case may be, in accordance with the Issuing Lender's
usual and customary business practices.
(c) NOTICE TO ISSUING LENDER OF AMENDMENT REQUEST. >From time
to time while a Letter of Credit is outstanding and prior to the Revolving
Expiry Date, the Issuing Lender shall, upon the written request of the Borrower
received by the Issuing Lender (with a copy sent by the Borrower to the Agent)
not later than the Required Notice Date, amend any Letter of Credit issued by
it. Each such request for amendment of a Letter of Credit shall be made in
writing, in the form of an L/C Amendment Application, and shall specify in form
and detail satisfactory to the Issuing Lender: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment of the Letter of Credit (which
shall be a Business Day); (iii) the nature of the proposed amendment; and (iv)
such other matters as the Issuing Lender may require. The Issuing Lender shall
be under no obligation to amend any Letter of Credit, and shall not permit the
amendment of a Letter of Credit, if: (A) the Issuing Lender would have no
obligation at such time to issue such Letter of Credit in its amended form under
the terms of this Agreement; or (B) the beneficiary of any such Letter of Credit
does not accept the proposed amendment to the Letter of Credit.
32.
(d) NOTICE TO ISSUING LENDER OF RENEWAL REQUEST. The Issuing
Lender and the Lenders agree that, while a Letter of Credit is outstanding and
prior to the Revolving Expiry Date, at the option of the Borrower and upon the
written request of the Borrower received by the Issuing Lender (with a copy sent
by the Borrower to the Agent) not later than the Required Notice Date, the
Issuing Lender shall be entitled to authorize the automatic renewal of any
Letter of Credit issued by it. Each such request for renewal of a Letter of
Credit shall be made in writing, in the form of an L/C Amendment Application,
and shall specify in form and detail satisfactory to the Issuing Lender: (i) the
Letter of Credit to be renewed; (ii) the proposed date of notification of
renewal of the Letter of Credit (which shall be a Business Day); (iii) the
revised expiry date of the Letter of Credit; and (iv) such other matters as the
Issuing Lender may require. The Issuing Lender shall be under no obligation so
to renew any Letter of Credit, and shall not permit any renewal (including any
automatic renewal of a Letter of Credit), if: (A) the Issuing Lender would have
no obligation at such time to issue or amend such Letter of Credit in its
renewed form under the terms of this Agreement; or (B) the beneficiary of any
such Letter of Credit does not accept the proposed renewal of the Letter of
Credit. If any outstanding Letter of Credit shall provide that it shall be
automatically renewed unless the beneficiary thereof receives notice from the
Issuing Lender that such Letter of Credit shall not be renewed, and if at the
time of renewal the Issuing Lender would be entitled to authorize the automatic
renewal of such Letter of Credit in accordance with this subsection (d) upon the
request of the Borrower but the Issuing Lender shall not have received any L/C
Amendment Application from the Borrower with respect to such renewal or other
written direction by the Borrower with respect thereto, the Issuing Lender shall
nonetheless be permitted to allow such Letter of Credit to renew, and the
Borrower and the Lenders hereby authorize such renewal, and, accordingly, the
Issuing Lender shall be deemed to have received an L/C Amendment Application
from the Borrower requesting such renewal.
(e) EXPIRY OF LETTERS OF CREDIT. The Issuing Lender may, at
its election (or shall, when required by the Agent at the direction of the
Majority Lenders), deliver any notices of termination or other communications to
any Letter of Credit beneficiary or transferee, or take any other action as
necessary or appropriate, at any time and from time to time, in order to cause
the expiry date of such Letter of Credit to be a date not later than the
Revolving Expiry Date, unless such later date has been previously approved by
the Agent and all the Lenders in writing and such Letter of Credit is fully cash
collateralized.
(f) CONFLICTS WITH L/C-RELATED DOCUMENTS. This Agreement
shall control in the event of any conflict with any L/C-Related Document (other
than any Letter of Credit).
(g) DELIVERY OF COPIES OF LETTERS OF CREDIT. The Issuing
Lender shall also deliver to the Agent, concurrently with or promptly following
its delivery of a Letter of Credit, or amendment to or renewal of a Letter of
Credit, to an advising bank or a beneficiary, a true and complete copy of each
such Letter of Credit or amendment to or renewal of a Letter of Credit.
(h) NOTICES TO LENDERS. The Agent shall promptly notify the
Lenders of the issuance, amendment or renewal of a Letter of Credit hereunder
(including the date thereof and the amount, expiry and reference number of such
Letter of Credit).
33.
SECTION 3.03 PARTICIPATIONS, DRAWINGS AND REIMBURSEMENTS.
(a) PARTICIPATIONS OF LENDERS IN ADDITIONAL LETTERS OF
CREDIT. Immediately upon the issuance of each Letter of Credit, the Issuing
Lender shall be deemed irrevocably to have sold and transferred to each Lender
without recourse or warranty, and each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase and accept from the Issuing
Lender, for such Lender's own account and risk, an undivided interest and a
participation in such Letter of Credit and each drawing thereunder in an amount
equal to the product of (i) the Pro Rata Share of such Lender, times (ii) the
maximum amount available to be drawn under such Letter of Credit and the amount
of such drawing, respectively. For purposes of Section 3.01(a), each issuance of
a Letter of Credit shall be deemed to utilize the Revolving Commitment of each
Lender by an amount equal to the amount of such participation.
(b) DRAWING AND REIMBURSEMENT. In the event of any request
for a drawing under a Letter of Credit by the beneficiary thereof, the Issuing
Lender shall immediately notify the Borrower and the Agent. The Borrower shall
reimburse the Issuing Lender prior to 1:00 p.m. (New York time), on each date
that any amount is paid by the Issuing Lender under any Letter of Credit, in an
amount equal to the amount paid by the Issuing Lender on such date under such
Letter of Credit. In the event the Borrower shall fail to reimburse the Issuing
Lender for the full amount of any drawing under any Letter of Credit by 1:00
p.m. (New York time) on the same date such drawing is honored by the Issuing
Lender, the Issuing Lender shall promptly notify the Agent and the Agent shall
promptly notify each Lender thereof (including the amount of the drawing and
such Lender's Pro Rata Share thereof), and the Borrower shall be deemed to have
requested that Base Rate Loans be made by the Lenders to be disbursed on the
date of payment by the Issuing Lender under such Letter of Credit, subject to
the amount of the unutilized portion of the Revolving Commitment of each Lender
and subject to the conditions set forth in clauses (b) and (c) of Section 8.02.
The Borrower hereby directs that the proceeds of any such Loans deemed to be
made by it shall be used to pay its reimbursement obligations in respect of any
such drawing. Solely for the purposes of making such Loans, the Minimum Amount
limitations set forth in Section 2.06 shall not be applicable. Any notice given
by the Issuing Lender or the Agent pursuant hereto may be telephonic if
immediately confirmed in writing; PROVIDED that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.
(c) FUNDING BY LENDERS. Each Lender shall upon receipt of
any notice pursuant to subsection (b) make available to the Agent for the
account of the Issuing Lender an amount in Dollars and in same day or
immediately available funds equal to its Pro Rata Share of the amount of the
drawing, whereupon the participating Lenders shall (subject to subsection(b))
each be deemed to have made a Revolving Loan consisting of a Base Rate Loan to
the Borrower in that amount. If any Lender so notified shall fail to make
available to the Agent for the account of the Issuing Lender the amount of such
Lender's Pro Rata Share of the amount of the drawing by no later than 3:00 p.m.
(New York time) on the date such drawing was honored by the Issuing Lender (the
"Participation Date"), then interest shall accrue on such Lender's obligation to
make such payment, from the Participation Date to the date such Lender makes
such payment, at a rate per annum equal to (i) the Federal Funds Rate in effect
from time to time during the period commencing on the Participation Date and
ending on the date three Business Days thereafter, and (ii) thereafter at the
Base Rate as in effect from time to time. The Agent shall promptly give
34.
notice of the occurrence of the Participation Date, but failure of the Agent to
give any such notice on the Participation Date or in sufficient time to enable
any Lender to effect such payment on such date shall not relieve such Lender
from its obligations under this Section 3.03.
(d) L/C UNREIMBURSED DRAWINGS. With respect to any
unreimbursed drawing that is not converted into Revolving Loans consisting of
Base Rate Loans to the Borrower in whole or in part, because of the Borrower's
failure to satisfy the conditions set forth in clauses (b) and (c) of Section
8.02 or for any other reason, the Borrower shall be obligated to the Issuing
Lender for an L/C Unreimbursed Draw in the amount of such drawing, which L/C
Unreimbursed Draw shall be due and payable on demand, together with interest,
and shall bear interest at a rate per annum equal to the Base Rate PLUS the
Applicable Margin PLUS 2% per annum, and each Lender's payment to the Issuing
Lender pursuant to subsection (c) shall be deemed payment in respect of its
participation in such L/C Unreimbursed Draw and shall constitute an L/C Advance
from such Lender in satisfaction of its participation obligation under this
Section 3.03.
(e) OBLIGATION OF LENDERS ABSOLUTE. Each Lender's obligation
in accordance with this Agreement to make the Revolving Loans or L/C Advances,
as contemplated by this Section 3.03, as a result of a drawing under a Letter of
Credit shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against the Issuing Lender, the Borrower
or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse Effect; or
(iii) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
SECTION 3.04 REPAYMENT OF PARTICIPATIONS. Upon(and only upon)
receipt by the Agent for the account of the Issuing Lender of funds from the
Borrower (i) in reimbursement of any payment made by the Issuing Lender under
the Letter of Credit with respect to which any Lender has theretofore paid the
Agent for the account of the Issuing Lender for such Lender's participation in
the Letter of Credit pursuant to Section 3.03, or (ii) in payment of interest
thereon, the Agent shall pay to each Lender, in the same funds as those received
by the Agent for the account of the Issuing Lender, the amount of such Lender's
Pro Rata Share of such funds, and the Issuing Lender shall receive the amount of
the Pro Rata Share of such funds of any Lender that did not so pay the Agent for
the account of the Issuing Lender. If the Agent or the Issuing Lender is
required at any time to return to the Borrower or to a trustee, receiver,
liquidator, custodian, or any official in any Insolvency Proceeding, any portion
of the payments made by the Borrower to the Agent for the account of the Issuing
Lender in reimbursement of a payment made under the Letter of Credit or interest
thereon, each Lender shall, on demand of the Agent, forthwith return to the
Agent or the Issuing Lender the amount of its Pro Rata Share of any amounts so
returned by the Agent or the Issuing Lender PLUS interest thereon from the date
such demand is made to the date such amounts are returned by such Lender to the
Agent or the Issuing Lender, at a rate per annum equal to the Federal Funds Rate
in effect from time to time.
SECTION 3.05 ROLE OF THE ISSUING LENDER.
(a) NO RESPONSIBILITY OF ISSUING LENDER. Each Lender and the
Borrower agrees that, in paying any drawing under a Letter of Credit, the
Issuing Lender shall not have any
35.
responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. The Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; PROVIDED, HOWEVER, that this
assumption is not intended to, and shall not, preclude the Borrower's pursuing
such rights and remedies as it may have against the beneficiary or transferee at
law or under any other agreement. No Agent/IB-Related Person, nor any of the
respective correspondents, participants or assignees of the Issuing Lender,
shall be liable or responsible for any of the matters described in clauses (i)
through (vii) of Section 3.06; PROVIDED, HOWEVER, anything in such clauses to
the contrary notwithstanding, that the Borrower may have a claim against the
Issuing Lender, and the Issuing Lender may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the Issuing Lender's willful misconduct or gross negligence or the
Issuing Lender's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) the Issuing Lender may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Lender shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.
(b) NO LIABILITY OF AGENT/IB-RELATED PERSONS. No
Agent/IB-Related Person nor any of the respective correspondents, participants
or assignees of the Issuing Lender shall be liable to any Lender for: (i) any
action taken or omitted in connection herewith at the request or with the
approval of the Lenders (including the Majority Lenders, as applicable); (ii)
any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.
SECTION 3.06 OBLIGATIONS OF BORROWER ABSOLUTE.The obligations
of the Borrower under this Agreement and any L/C-Related Document to reimburse
the Issuing Lender for a drawing under a Letter of Credit, and to repay any L/C
Unreimbursed Draw and any drawing under a Letter of Credit converted into
Revolving Loans, shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and each such other
L/C-Related Document under all circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement
or any L/C-Related Document;
(ii) any change in the time, manner or place of payment of,or
in any other term of, all or any of the obligations of the Borrower in respect
of any Letter of Credit or any other amendment or waiver of or any consent to
departure from all or any of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any
36.
Person for whom any such beneficiary or any such transferee may be acting), the
Issuing Lender or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or by the L/C-Related Documents or any
unrelated transaction;
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) any payment by the Issuing Lender under any Letter of
Credit against presentation of a draft or certificate that does not strictly
comply with the terms of any Letter of Credit; or any payment made by the
Issuing Lender under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of any Letter of Credit, including any arising in
connection with any bankruptcy, reorganization or other insolvency proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to departure
from any other guarantee, for all or any of the obligations of the Borrower in
respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower or a guarantor.
SECTION 3.07 CASH COLLATERAL PLEDGE. Upon (i) the request of
the Agent, (A) if the Issuing Lender has honored any full or partial drawing
request on any Letter of Credit and such drawing has resulted in an L/C
Unreimbursed Draw hereunder, or (B) if, as of the Revolving Expiry Date, any
Letters of Credit may for any reason remain outstanding and partially or wholly
undrawn, or (ii) the occurrence of the circumstances described in Sections
5.03(b) or 11.02 requiring the Borrower to cash collateralize Letters of Credit,
the Borrower shall immediately pay over cash in an amount equal to the L/C
Obligations to the Collateral Agent for the benefit of the Lenders, to be held
by the Collateral Agent as cash collateral subject to the terms of this Section
3.07. Such amount, together with any amount received by the Collateral Agent in
respect of outstanding Letters of Credit pursuant to Section 11.02, when
received by the Collateral Agent, shall be held by the Collateral Agent as part
of the Collateral pursuant to the terms of the Security Agreement as cash
collateral for the reimbursement obligations of the Borrower under this
Agreement in respect of the L/C Obligations and for the other Obligations. Such
cash collateral shall bear interest for the benefit of the Borrower, PROVIDED
that all such accrued interest shall be held as additional cash collateral
hereunder and under the Security Agreement. All cash collateral shall be held by
the Collateral Agent until the release thereof shall be permitted pursuant to
the terms of the Security Agreement.
SECTION 3.08 LETTER OF CREDIT FEES.
(a) CERTAIN LETTER OF CREDIT FEES.The Borrower shall pay (i)
to the Agent for the account of each of the Lenders a letter of credit fee with
respect to the Letters of Credit equal
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to the Applicable Fee Amount multiplied by the average daily maximum amount
available to be drawn on the outstanding Letters of Credit, and (ii) to the
Issuing Lender a letter of credit fronting fee with respect to the Letters of
Credit equal to 0.125% per annum of the average daily maximum amount available
to be drawn of the outstanding Letters of Credit, computed in each case on a
quarterly basis in arrears on the last Business Day of each calendar quarter
based upon Letters of Credit outstanding for that quarter as calculated by the
Agent. Such letter of credit fees shall be due and payable quarterly in arrears
on the last Business Day of each calendar quarter during which Letters of Credit
are outstanding, commencing on the first such quarterly date to occur after the
Closing Date, through the Revolving Expiry Date (or such later date upon which
the outstanding Letters of Credit shall expire), with the final payment to be
made on the Revolving Expiry Date (or such expiration date).
(b) CERTAIN ADDITIONAL FEES AND CHARGES. The Borrower shall
pay to the Issuing Lender from time to time on demand the normal issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the Issuing Lender relating to standby letters of credit as from
time to time in effect.
(c) FEES NONREFUNDABLE. All fees and charges payable under
this Section 3.08 shall be nonrefundable.
SECTION 3.09 APPLICABILITY OF ISP98. Unless otherwise
expressly agreed by the Issuing Lender and the Borrower when a Letter of Credit
is issued and subject to applicable laws, performance under Letters of Credit by
the Issuing Lender, its correspondents, and beneficiaries will be governed by
the rules of the "International Standby Practices 1998" (ISP98) or such later
revision as may be published by the Institute of International Banking Law &
Practice on any date any standby Letter of Credit may be issued.
ARTICLE IV
INTEREST AND FEES; CONVERSION OR CONTINUATION
SECTION 4.01 INTEREST.
(a) INTEREST RATE. The Borrower shall pay interest on the
unpaid principal amount of each Loan from the date of such Loan until such
principal amount shall be paid in full, at the following rates:
(i) during such periods as such Loan is a Base Rate Loan
(other than a Swingline Loan), at a rate per annum equal at all times to the
Base Rate plus the Applicable Margin;
(ii) during such periods as such Loan is a Eurodollar Rate
Loan, at a rate per annum equal at all times during each Interest Period for
such Eurodollar Rate Loan to the Eurodollar Rate for such Interest Period plus
the Applicable Margin.
(iii) during such periods as such Loan is a Swingline Loan, at
a rate per annum equal to a quoted rate as shall from time to time be mutually
agreed upon by the Borrower and the Swingline Lender.
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(b) INTEREST PERIODS. The initial and each subsequent
Interest Period for the Eurodollar Rate Loans shall be a period of one, two,
three or six months, or such other period as requested by the Borrower and
acceptable to all the Lenders. The determination of Interest Periods shall be
subject to the following provisions:
(A) in the case of immediately successive Interest Periods,
each successive Interest Period shall commence on the day on which the next
preceding Interest Period expires;
(B) if any Interest Period would otherwise end on a day
which is not a Business Day, that 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;
(C) the Borrower may select Interest Periods with respect to
Term Loans which commence before and end after a Principal Payment Date only to
the extent that the Base Rate Loans to be outstanding on such Principal Payment
Date PLUS the Eurodollar Rate Loans with Interest Periods ending on such
Principal Payment Date at least equal in principal amount the required principal
payment on such Principal Payment Date;
(D) no Interest Period shall extend beyond (1) the Revolving
Expiry Date with respect to any Revolving Loan, and (2) the Final Maturity Date
with respect to any Term Loan;
(E) any Interest Period that begins on the last Eurodollar
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the ending calendar month of such Interest Period) shall
end on the last Eurodollar Business Day of the ending calendar month of such
Interest Period;
(F) there shall be no more than five Interest Periods in
effect at any one time.
(c) INTEREST PAYMENT DATES. Subject to Section 4.02,interest
on the Loans shall be payable in arrears at the following times:
(i) interest on each Base Rate Loan (other than Swingline
Loans) shall be payable quarterly on the last Business Day in each calendar
quarter, on the date of any prepayment or conversion of any such Base Rate Loan,
and at maturity;
(ii) interest on each Eurodollar Rate Loan shall be payable
on the last day of each Interest Period for such Eurodollar Rate Loan, PROVIDED
that (A) in the case of any such Interest Period which is greater than three
months, interest on such Eurodollar Rate Loan shall be payable on each date that
is three months, or any integral multiple thereof, after the beginning of such
Interest Period, and on the last day of such Interest Period, and (B) if any
prepayment, conversion, or continuation is effected other than on the last day
of such Interest Period, accrued interest on such Eurodollar Rate Loan shall be
due on such prepayment, conversion or continuation date as to the principal
amount of such Eurodollar Rate Loan prepaid, converted or continued; and
(iii) interest on each Swingline Loan shall be payable monthly
on the last Business Day in each calendar month and at maturity.
39.
(d) NOTICE TO THE BORROWER AND THE LENDERS. Each
determination by the Agent hereunder of a rate of interest and of any change
therein, including any changes in (i) the Applicable Margin, (ii) the Base Rate
during any periods in which Base Rate Loans shall be outstanding, (iii) the
Federal Funds Rate during any periods in which Swingline Loans are outstanding
and (iv) the Eurodollar Reserve Percentage (if any) during any periods in which
Eurodollar Rate Loans shall be outstanding, in the absence of manifest error
shall be conclusive and binding on the parties hereto and shall be promptly
notified by the Agent to the Borrower and the Lenders (or to the Swingline
Lender, as applicable). Such notice shall set forth in reasonable detail the
basis for any such determination or change. The failure of the Agent to give any
such notice specified in this subsection shall not affect the Borrower's
obligation to pay such interest or fees.
SECTION 4.02 DEFAULT RATE OF INTEREST.Notwithstanding Section
4.01, in the event that any amount of principal of or interest on any Loan is
not paid in full when due, or any other amount payable hereunder or under the
Loan Documents is not paid in full within three (3) Business Days of when due
(in each case, whether at stated maturity, by acceleration or otherwise), the
Borrower shall pay interest on such unpaid principal, interest or other amount,
from the date such amount becomes due until the date such amount is paid in
full, and after as well as before any entry of judgment to the extent permitted
by law, payable on demand, at a rate per annum equal at all times to the Base
Rate PLUS the Applicable Margin PLUS 2%.
SECTION 4.03 FEES.
(a) COMMITMENT FEE. The Borrower agrees to pay to the Agent
for the account of each Lender a commitment fee on the average daily unused
portion of such Lender's Revolving Commitment as in effect from time to time
from the Closing Date until the Revolving Expiry Date at a rate per annum equal
to the Applicable Fee Amount, payable quarterly in arrears on the last Business
Day of each calendar quarter in each year, commencing on the first such date
after the Closing Date, and on the earlier of the date such Revolving Commitment
is terminated hereunder or the Revolving Expiry Date. For purposes of
calculation of such unused portion of a Lender's Revolving Commitment, each
Lender's Revolving Commitment shall be considered used on any date to the extent
of its participation on such date in any Letter of Credit or Swingline Loan and
any L/C Advance made by it.
(b) UPFRONT FEE. The Borrower agrees to pay to the Agent for
the account of each Lender an upfront fee payable on the Closing Date as
specified in the Fee Letter.
(c) ANNUAL AGENCY FEE. The Borrower agrees to pay to the
Agent for its own account on the Closing Date and on each anniversary of the
Closing Date such fee for agency services as specified in the Fee Letter.
(d) FEES NONREFUNDABLE. All fees payable under this Section
4.03 shall be nonrefundable.
SECTION 4.04 COMPUTATIONS. All computations of interest,
commitment fees and letter of credit fees hereunder shall be made on the basis
of a year of 360 days for the actual number of days occurring in the period for
which such fee or interest is payable, which
40.
results in more interest being paid than if computed on the basis of a 365-day
year. Notwithstanding the foregoing, if any Loan is repaid on the same day on
which it is made, such day shall be included in computing interest on such Loan.
SECTION 4.05 CONVERSION OR CONTINUATION.
(a) ELECTION. The Borrower may elect (i) to convert all or
any part of (A) outstanding Base Rate Loans into Eurodollar Rate Loans, or (B)
outstanding Eurodollar Rate Loans into Base Rate Loans; or (ii) to continue all
or any part of a Loan with one type of interest rate as such; PROVIDED, HOWEVER,
that if the aggregate amount of Eurodollar Rate Loans in respect of any
Borrowing shall have been reduced, by payment, prepayment, or conversion of part
thereof to be less than $1,000,000, such Eurodollar Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into,
Eurodollar Rate Loans shall terminate. The continued or converted Base Rate and
Eurodollar Rate Loans shall be allocated to the Lenders ratably in accordance
with their Pro Rata Shares. Any conversion or continuation of Eurodollar Rate
Loans shall be made on the last day of the current Interest Period for such
Eurodollar Rate Loans. No outstanding Loan may be converted into or continued as
a Eurodollar Rate Loan if any Event of Default has occurred and is continuing.
(b) AUTOMATIC CONVERSION. On the last day of any Interest
Period for any Eurodollar Rate Loans, such Eurodollar Rate Loans shall, if not
repaid, automatically convert into Base Rate Loans unless the Borrower shall
have made a timely election to continue such Eurodollar Rate Loans as such for
an additional Interest Period or to convert such Eurodollar Rate Loans, in each
case as provided in subsection (a) .
(c) NOTICE TO THE AGENT. The conversion or continuation of
any Loans contemplated by subsection (a) shall be made upon written or
telephonic notice (in the latter case to be confirmed promptly in writing) from
the Borrower to the Agent, which notice shall be received by the Agent not later
than 1:00 p.m. (New York time) on the Required Notice Date. Each such notice (a
"Notice of Conversion or Continuation") shall, except as provided in Sections
6.01 and 6.04, be irrevocable and binding on the Borrower, shall refer to this
Agreement and shall specify: (i) the proposed date of the conversion or
continuation, which shall be a Business Day (or a Eurodollar Business Day, for
conversions into or continuations of Eurodollar Rate Loans); (ii) the
outstanding Loans (or parts thereof) to be converted into or continued as Base
Rate or Eurodollar Rate Loans; (iii) the aggregate amount of the Loans which are
the subject of such continuation or conversion, which shall be in a Minimum
Amount; (iv) if the conversion or continuation consists of any Eurodollar Rate
Loans, the duration of the Interest Period with respect thereto; and (v) that no
Event of Default exists hereunder.
(d) NOTICE TO THE LENDERS. The Agent shall give each Lender
prompt notice by telephone (confirmed promptly in writing) or by facsimile of
(i) the proposed conversion or continuation of any Loans, specifying the
information contained in the Borrower's Notice and such Lender's Pro Rata Share
thereof or (ii), if timely notice was not received from the Borrower, the
details of any automatic conversion under subsection 4.05(b).
41.
SECTION 4.06 HIGHEST LAWFUL RATE. Anything herein to the
contrary notwithstanding, if during any period for which interest is computed
hereunder, the applicable interest rate, together with all fees, charges and
other payments which are treated as interest under applicable law, as provided
for herein or in any other Loan Document, would exceed the maximum rate of
interest which may be charged, contracted for, reserved, received or collected
by any Lender in connection with this Agreement under applicable law (the
"Maximum Rate"), the Borrower shall not be obligated to pay, and such Lender
shall not be entitled to charge, collect, receive, reserve or take, interest in
excess of the Maximum Rate, and during any such period the interest payable
hereunder shall be limited to the Maximum Rate.
ARTICLE V
REDUCTION OF COMMITMENTS;
REPAYMENT; PREPAYMENT
SECTION 5.01 REDUCTION OR TERMINATION OF THE COMMITMENTS.
(a) OPTIONAL REDUCTION OR TERMINATION. The Borrower may,
upon prior notice to the Agent as provided herein, terminate in whole or reduce
ratably in part, as of the date specified by the Borrower in such notice, any
then unused portion of the Revolving Commitments (including the L/C Commitment);
PROVIDED, HOWEVER, that each partial reduction shall be in a Minimum Amount; and
PROVIDED FURTHER, HOWEVER, that no such reduction or termination shall be
permitted if the Effective Amount of Revolving Loans, Swingline Loans and L/C
Obligations would exceed the amount of the aggregate Revolving Commitments
thereafter in effect; and PROVIDED FURTHER, HOWEVER, that once reduced in
accordance with this Section 5.01, the Revolving Commitment of any Lender may
not be increased. The amount of any such Revolving Commitment reductions shall
not be applied to the L/C Commitment unless otherwise specified by the Borrower
or unless the Revolving Commitments as so reduced would be less than the L/C
Commitment. All accrued commitment fees to, but not including, the effective
date of any termination of the Revolving Commitments shall be payable on the
effective date of such termination.
(b) MANDATORY TERMINATION.
(i) If on the Closing Date the Term Commitments of the
Lenders shall exceed the aggregate outstanding principal amount of the Term
Loans, such unused portion of the Term Commitments shall terminate on the
Closing Date. The parties agree and acknowledge that the termination of the Term
Commitments shall not affect the operation of subsection 2.01(d).
(ii) The Revolving Commitments shall terminate on the
Revolving Expiry Date.
(c) OTHER MANDATORY REDUCTIONS.
(i) Upon the making of any mandatory prepayment under clause
(ii), (iii) or (iv) of Section 5.03(b) on or prior to the Revolving Expiry Date,
the Revolving Commitment of each Lender shall automatically reduce by an amount
equal to such Lender's Pro Rata Share of the aggregate amount of principal of
Revolving Loans, Swingline Loans and L/C Advances
42.
prepaid and Letters of Credit cash collateralized, effective as of the date of
receipt by the Borrower or its Subsidiary of the Net Proceeds or Net Issuance
Proceeds, as the case may be, arising from the applicable disposition of assets,
incurrence of debt for borrowed money or Event of Loss.
(ii) If prior to the Revolving Expiry Date the amount
required to be paid on account of the Revolving Loans, Swingline Loans or L/C
Advances, or applied to cash collateralize the Letters of Credit, pursuant to
clause (ii), (iii) or (iv) of Section 5.03(b) shall exceed the outstanding
principal amount of the Revolving Loans, Swingline Loans and L/C Advances or the
amount of the L/C Obligations then outstanding, such automatic reduction shall
nonetheless occur and shall be determined on the basis of the amount of
Revolving Loans, Swingline Loans and L/C Advances that would be required to be
prepaid and Letters of Credit that would be required to be cash collateralized
assuming the Revolving Commitments were fully utilized.
(d) NOTICE. The Agent shall give each Lender prompt notice
of any termination or reduction of its Revolving Commitment under this Section
5.01.
(e) ADJUSTMENT OF COMMITMENT FEE; NO REINSTATEMENT. >From the
effective date of any reduction or termination prior to the Revolving Expiry
Date, the commitment fee payable under Section 4.03(a) shall be computed on the
basis of the Revolving Commitments as so reduced or terminated. Once reduced or
terminated, the Revolving Commitments may not be increased or otherwise
reinstated.
SECTION 5.02 REPAYMENT OF THE LOANS.
(a) REVOLVING LOANS. The Borrower shall repay to the Lenders
in full on the Revolving Expiry Date the aggregate principal amount of the
Revolving Loans outstanding on such date.
(b) TERM LOANS. The Borrower shall repay to the Lenders the
aggregate principal amount of the Term Loans in substantially equal consecutive
quarterly installments, commencing June 30, 2003, with subsequent installments
payable on the last day of each calendar quarter thereafter, to and including
the Final Maturity Date; PROVIDED, HOWEVER, that the last such installment shall
be in the amount necessary to repay in full the aggregate unpaid principal
amount of the Term Loans.
(c) SWINGLINE LOANS. The Borrower shall repay to the
Swingline Lender on each date as shall from time to time be mutually agreed upon
by the Swingline Lender and the Borrower the aggregate principal amount of the
Swingline Loans outstanding on such date; PROVIDED, HOWEVER, the aggregate
principal amount of the Swingline Loans outstanding on the Revolving Expiry Date
shall be due and payable on such date.
SECTION 5.03 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. Subject to Section 6.02, the
Borrower may, upon prior notice to the Agent not later than the Required Notice
Date, prepay the outstanding amount
43.
of the Loans in whole or ratably in part, without premium or penalty. Partial
prepayments shall be in Minimum Amounts.
(b) MANDATORY PREPAYMENTS.
(i) Subject to Section 6.02, if on any date the Effective
Amount of all Revolving Loans PLUS the Effective Amount of all Swingline Loans
PLUS the Effective Amount of all L/C Obligations shall exceed the lesser of (A)
the aggregate Revolving Commitments then in effect and (B) the Borrowing Base
then in effect, the Borrower shall immediately, and without notice or demand,
prepay the outstanding principal amount of the Revolving Loans, L/C Advances and
Swingline Loans and/or cash collateralize the Letters of Credit by an amount
equal to the applicable excess. Additionally, if on any date the aggregate
outstanding amount of L/C Obligations shall exceed the L/C Commitment, the
Borrower shall cash collateralize on such date the outstanding Letters of Credit
in an amount equal to the excess of the maximum amount then available to be
drawn under the Letters of Credit over the L/C Commitment.
(ii) Upon the sale, transfer or other disposition of any
assets (or group of related assets), other than the Specified Assets, by the
Borrower or any Subsidiary under subsection 10.04(e)(iii) (to the extent the Net
Proceeds from the sale, transfer or other disposition of worn out or obsolete
assets are not promptly applied to replace such assets) or 10.04(e)(vi), the
Borrower shall, within one Business Day of the Borrower's or such Subsidiary's
receipt of the proceeds thereof, prepay the outstanding principal amount of the
Loans, in an amount equal to 100% of the Net Proceeds therefrom by depositing
such amount with the Collateral Agent for application by the Collateral Agent
under and pursuant to Section 6.10 of the Intercreditor Agreement to the Secured
Obligations; PROVIDED, HOWEVER, that in the case of prepayments of any Revolving
Loans, Swingline Loans and L/C Advances, the required prepayment shall be in an
amount equal to the excess, if any (after giving effect to the related mandatory
Commitment reduction under Section 5.01(c)), of the Effective Amount of the
Revolving Loans, Swingline Loans and L/C Obligations over the aggregate
RevolvingCommittments. If on the date of the foregoing required prepayment the
amount of any such required prepayment (after giving effect to the related
mandatory Commitment reduction under Section 5.01(c)) shall exceed the
outstanding principal amount of the Loans and there shall be any Letters of
Credit outstanding, then the Borrower shall apply such funds to cash
collateralize any such outstanding Letters of Credit.
(iii) Upon the incurrence of Indebtedness for borrowed money
other than Subordinated Debt by the Borrower or any Subsidiary, the Borrower
shall, within one Business Day of the Borrower's or such Subsidiary's receipt of
the proceeds thereof, prepay the outstanding principal amount of the Loans in an
amount equal to 100% of the Net Issuance Proceeds therefrom by depositing such
amount with the Collateral Agent for application by the Collateral Agent under
and pursuant to Section 6.10 of the Intercreditor Agreement to the Secured
Obligations; PROVIDED that in the case of prepayments of any Revolving Loans,
Swingline Loans and L/C Advances, the required prepayment shall be in an amount
equal to the excess (after giving effect to the related
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mandatory Commitment reduction under Section 5.01(c)) of the Effective Amount of
the Revolving Loans, Swingline Loans and L/C Obligations over the aggregate
Revolving Commitments. If on the date of the foregoing required prepayment the
amount of any such required prepayment (after giving effect to the related
mandatory Commitment reduction under Section 5.01(c)) shall exceed the
outstanding principal amount of the Loans and there shall be any Letters of
Credit outstanding, then the Borrower shall apply such funds to cash
collateralize any such outstanding Letters of Credit.
(iv) If any Event of Loss shall occur with respect to any
assets of the Borrower or any Subsidiary, the Borrower shall prepay the
outstanding principal amount of the Loans in an amount equal to the Net Proceeds
(after giving effect to repair or replacement as provided in the definition of
"Net Proceeds") therefrom by depositing such amount with the Collateral Agent
for application by the Collateral Agent under and pursuant to Section 6.10 of
the Intercreditor Agreement to the Secured Obligations, PROVIDED, HOWEVER, that,
(A) such prepayment shall not be required if such amount is less than $1,500,000
and (B) in the case of prepayments of any Revolving Loans, Swingline Loans and
L/C Advances, the required prepayment (subject to sub-clause (A) of this
proviso) shall be in an amount equal to the excess (after giving effect to the
related mandatory Commitment reduction under Section 5.01(c)) of the Effective
Amount of the Revolving Loans, Swingline Loans and L/C Obligations over the
aggregate Revolving Commitments. If on the date of the foregoing required
prepayment the amount of any such required prepayment (after giving effect to
the related mandatory Commitment reduction under Section 5.01(c)) shall exceed
the outstanding principal amount of the Loans and there shall be any Letters of
Credit outstanding, then the Borrower shall apply such funds to cash
collateralize any such outstanding Letters of Credit.
(v) If the appraised fair market value of the Hewitt Ranch
Property set forth in the Hewitt Appraisal shall be less than $11,600,000, the
Borrower shall prepay the outstanding principal amount of the Loans in an amount
equal to 70% of the difference between (A) $11,600,000 MINUS (B) the appraised
fair market value of the Hewitt Ranch Property set forth in the Hewitt
Appraisal.
(c) ORDER OF APPLICATION.
(i) Any prepayments pursuant to clause (i) of subsection
5.03(b) above shall be applied, first, to any Swingline Loans then outstanding,
second, to any L/C Advances then outstanding, third, to any Revolving Loans then
outstanding and, fourth, to cash collateralize any L/C Obligations then
outstanding;
(ii) Any prepayments pursuant to clauses (ii), (iii),(iv) and
(v) of subsection 5.03(b) above shall be applied, first, to any Term Loans then
outstanding, second, to any Swingline Loans then outstanding, third, to any L/C
Advances then outstanding, fourth, to any Revolving Loans then outstanding and,
fifth, to cash collateralize any L/C Obligations then outstanding; PROVIDED,
HOWEVER, that to the extent the Net Proceeds to be applied to prepay the Loans
pursuant to clauses (ii) and (iv) of subsection 5.03(b) above arise as a result
of the sale, transfer or other disposition of Inventory or as a result of an
Event of Loss with respect to Inventory, then such Net Proceeds shall be
applied, first, to any Swingline Loans then outstanding, second, to any L/C
Advances then outstanding, third, to any Revolving Loans then outstanding,
fourth, to cash collateralize any L/C Obligations then outstanding and, fifth,
to any Term Loans then outstanding.
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(iii) Subject to clauses (i) and (ii) of this subsection
5.03(c), any prepayments pursuant to subsection 5.03(b) above shall be applied,
first, to any Base Rate Loans then outstanding and, second, to Eurodollar Rate
Loans with the shortest Interest Periods remaining; PROVIDED, HOWEVER, that if
the amount of Base Rate Loans then outstanding is not sufficient to satisfy the
entire prepayment requirement, the Borrower may, at its option so long as no
Default or Event of Default has occurred and is continuing, place any amounts
which it would otherwise be required to use to prepay Eurodollar Rate Loans on a
day other than the last day of the Interest Period therefor in an
interest-bearing account pledged to the Collateral Agent for the benefit of the
Lenders under the Security Agreement until the end of such Interest Period, at
which time such pledged amounts will be applied to prepay such Eurodollar Rate
Loans. The Borrower shall pay, together with each prepayment under subsections
5.03(a) or 5.03(b), accrued interest on the amount of any Loans prepaid and any
amounts required pursuant to Section 6.02. Any voluntary prepayments of Term
Loans pursuant to subsection 5.03(a) shall be applied pro rata across each
remaining installment of principal. Any mandatory prepayments of Term Loans
pursuant to subsection 5.03(b) shall be applied to the remaining principal
installments in inverse order of maturity.
(d) NOTICE; APPLICATION. The notice given of any prepayment
(a "Notice of Prepayment") shall specify the date and amount of the prepayment
and whether the prepayment is of Base Rate Loans, Eurodollar Rate Loans or
Swingline Loans or a combination thereof, and if of a combination thereof the
amount of the prepayment allocable to each. Such Notice of Prepayment shall also
specify whether the prepayment is of L/C Advances, Revolving Loans, Term Loans,
Swingline Loans or a combination thereof. Upon receipt of the Notice of
Prepayment of L/C Advances, Revolving Loans or Term Loans, the Agent shall
promptly notify each Lender thereof. Upon receipt of the Notice of Prepayment of
Swingline Loans, the Agent shall promptly notify the Swingline Lender thereof.
If a Notice of Prepayment is given, the Borrower shall make such prepayment and
the prepayment amount specified in such Notice shall be due and payable on the
date specified therein, with accrued interest to such date on the amount
prepaid.
ARTICLE VI
YIELD PROTECTION AND ILLEGALITY
SECTION 6.01 INABILITY TO DETERMINE RATES. If the Agent shall
determine that adequate and reasonable means do not exist to ascertain the
Eurodollar Rate, or the Majority Lenders shall determine that the Eurodollar
Rate does not accurately reflect the cost to the Lenders of making or
maintaining Eurodollar Rate Loans, then the Agent shall give telephonic notice
(promptly confirmed in writing) to the Borrower and each Lender of such
determination. Such notice shall specify the basis for such determination and
shall, in the absence of manifest error, be conclusive and binding for all
purposes. Thereafter, the obligation of the Lenders to make or maintain
Eurodollar Rate Loans hereunder shall be suspended until the Agent (upon the
instructions of the Majority Lenders) revokes such notice. Upon receipt of such
notice, the Borrower may revoke any Notice then submitted by it. If the Borrower
does not revoke such Notice, the Lenders shall make, convert or continue Loans,
as proposed by the Borrower, in the amount specified in the Notice submitted by
the Borrower, but such Loans shall be made, converted or continued as Base Rate
Loans instead of Eurodollar Rate Loans.
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SECTION 6.02 FUNDING LOSSES. In addition to such amounts as
are required to be paid by the Borrower pursuant to Section 6.03, the Borrower
shall compensate each Lender, promptly upon receipt of such Lender's written
request made to the Borrower (with a copy to the Agent), for all losses, costs
and expenses (including any loss or expense incurred by such Lender in
obtaining, liquidating or re-employing deposits or other funds to fund or
maintain its Eurodollar Rate Loans), if any, which such Lender sustains: (i) if
the Borrower repays, converts or prepays any Eurodollar Rate Loan on a date
other than the last day of an Interest Period for such Eurodollar Rate Loan
(whether as a result of an optional prepayment, mandatory prepayment, a payment
as a result of acceleration or otherwise); (ii) if the Borrower fails to borrow
a Eurodollar Rate Loan after giving its Notice (other than as a result of the
operation of Section 6.01 or 6.04); (iii) if the Borrower fails to convert into
or continue a Eurodollar Rate Loan after giving its Notice (other than as a
result of the operation of Section 6.01 or 6.04); or (iv) if the Borrower fails
to prepay a Eurodollar Rate Loan after giving its Notice. Any such request for
compensation shall set forth the basis for requesting such compensation in
reasonable detail and shall, in the absence of manifest error, be conclusive and
binding for all purposes.
SECTION 6.03 REGULATORY CHANGES.
(a) INCREASED COSTS. If after the date hereof, the adoption
of, or any change in, any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration thereof
(a "Regulatory Change"), or compliance by any Lender (or its Lending Office)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority, shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including any such requirement
imposed by the FRB, but excluding with respect to any Eurodollar Rate Loan any
such requirement included in the calculation of the Eurodollar Rate) against
assets of, deposits with or for the account of, or credit extended by, any
Lender's Lending Office or shall impose on any Lender (or its Lending Office) or
on the interbank eurodollar market any other condition affecting any Lender's
Eurodollar Rate Loans or its obligation to make Eurodollar Rate Loans or its
other obligations hereunder, and the result of any of the foregoing is to
increase the cost to such Lender (or its Lending Office) of agreeing to make or
making, funding or maintaining any Loan or participating in any L/C Obligations,
or increase the cost to the Issuing Lender of agreeing to issue or issuing or
maintaining any Letter of Credit or of agreeing to make or making, funding or
maintaining any unpaid drawing under any Letter of Credit, or to reduce the
amount of any sum received or receivable by such Lender (or its Lending Office)
or the Issuing Lender under this Agreement with respect thereto, by an amount
deemed by such Lender to be material, then from time to time, within 15 days
after demand by such Lender (with a copy to the Agent), the Borrower shall pay
to such Lender such additional amounts as shall compensate such Lender for such
increased cost or reduction.
(b) CAPITAL REQUIREMENTS.If any Lender shall have determined
that any Regulatory Change regarding capital adequacy, or compliance by such
Lender (or any corporation controlling such Lender) with any request, guideline
or directive regarding capital adequacy (whether or not having the force of law)
of any Governmental Authority issued or taking effect after the Closing Date,
has or shall have the effect of reducing the rate of return on such Lender's,
the Issuing Lender's or such corporation's capital as a consequence of such
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Lender's obligations hereunder to a level below that which such Lender, the
Issuing Lender or such corporation would have achieved but for such adoption,
change or compliance (taking into consideration such Lender's, the Issuing
Lender's or corporation's policies with respect to capital adequacy), by an
amount deemed by such Lender to be material, then from time to time, within 15
days after demand by such Lender (with a copy to the Agent), the Borrower shall
pay to such Lender such additional amounts as shall compensate such Lender for
such reduction.
(c) REQUESTS. Any such request for compensation by a Lender
under this Section 6.03 shall set forth the basis of calculation thereof and
shall, in the absence of manifest error, be conclusive and binding for all
purposes.
SECTION 6.04 ILLEGALITY.If any Lender shall determine that it
has become unlawful, as a result of any Regulatory Change, for such Lender to
make, convert into or maintain Eurodollar Rate Loans as contemplated by this
Agreement, such Lender shall promptly give notice of such determination to the
Borrower (through the Agent), and (i) the obligation of such Lender to make or
convert into Eurodollar Rate Loans, as the case may be, shall be suspended until
such Lender gives notice that the circumstances causing such suspension no
longer exist; and (ii) each of such Lender's outstanding Eurodollar Rate Loans,
as the case may be, shall, if requested by such Lender, be converted into a Base
Rate Loan not later than upon expiration of the Interest Period related to such
Eurodollar Rate Loan, or, if earlier, on such date as may be required by the
applicable Regulatory Change, as shall be specified in such request. Any such
determination shall, in the absence of manifest error, be conclusive and binding
for all purposes.
SECTION 6.05 FUNDING ASSUMPTIONS. Solely for purposes of
calculating amounts payable by the Borrower to the Lenders under this Article
VI, each Eurodollar Rate Loan made by a Lender (and any related reserve, special
deposit or similar requirement) shall be conclusively deemed to have been funded
at the Interbank Rate used in determining the Eurodollar Rate for such
Eurodollar Rate Loan by a matching deposit or other borrowing in the interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan is in fact so funded.
SECTION 6.06 OBLIGATION TO MITIGATE. Each Lender agrees that
as promptly as practicable after it becomes aware of the occurrence of an event
that would entitle it to give notice pursuant to Section 6.03(a) or 6.04, and in
any event if so requested by the Borrower, each Lender shall use reasonable
efforts to make, fund or maintain its affected Eurodollar Rate Loans through
another Lending Office if as a result thereof the increased costs would be
avoided or materially reduced or the illegality would thereby cease to exist and
if, in the reasonable opinion of such Lender, the making, funding or maintaining
of such Eurodollar Rate Loans through such other Lending Office would not in any
material respect be disadvantageous to such Lender or contrary in any material
respect to such Lender's normal banking practices.
SECTION 6.07 SUBSTITUTION OF LENDERS. Without limiting the
Borrower's obligations under Sections 6.03 and 7.03, upon the receipt by the
Borrower from any Lender (an "Affected Lender") of a request for compensation
under Section 6.03 or under Section 7.03, the Borrower may (i) request one or
more of the other Lenders to acquire and assume all or part of
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such Affected Lender's Loans and Commitment; or (ii) designate a replacement
commercial bank (which shall be an Eligible Assignee) satisfactory to the
Borrower to acquire and assume all or a ratable part of such Affected Lender's
Loans and Commitment (a "Replacement Lender"); PROVIDED, HOWEVER, that the
Borrower shall be liable for the payment upon demand of all costs and other
amounts arising under Section 6.02 that result from the acquisition of any
Affected Lender's Loan and/or Commitment (or any portion thereof) by a Lender or
Replacement Lender, as the case may be, on a date other than the last day of the
applicable Interest Period with respect to any Eurodollar Rate Loan then
outstanding. Any such designation of a Replacement Lender under clause (ii)
shall be effected in accordance with, and subject to the terms and conditions
of, the assignment provisions contained in Section 13.09, and shall in any event
be subject to the prior written consent of the Agent (which consent shall not be
unreasonably withheld).
ARTICLE VII
PAYMENTS
SECTION 7.01 PRO RATA TREATMENT. Except as otherwise provided
in this Agreement, each Borrowing hereunder, each Commitment reduction, each
payment (including each prepayment) by the Borrower on account of the principal,
interest, drawings under Letters of Credit, fees and other amounts required
hereunder shall be made without set-off or counterclaim and, except as otherwise
expressly provided with respect to drawings under Letters of Credit, shall be
made ratably in accordance with the Pro Rata Shares. Each conversion or
continuation of Loans shall also be made ratably in accordance with the
respective Pro Rata Shares of the Lenders. Notwithstanding the foregoing, if one
or more Lenders elects in its sole discretion not to make an additional Term
Loan pursuant to subsection 2.01(d), then any Borrowing of additional Term Loans
pursuant to subsection 2.01(d) shall be made ratably in accordance with the
relative Pro Rata Shares of the Lenders electing in their sole discretion to
make such additional Term Loans.
SECTION 7.02 PAYMENTS.
(a) PAYMENTS. The Borrower shall make each payment under the
Loan Documents, unconditionally in full without set-off, counterclaim or other
defense, not later than 3:00 p.m. (New York time) on the day when due to the
Agent in Dollars and in same day or immediately available funds, to the Agent's
Account. The Agent shall promptly thereafter distribute like funds relating to
the payment on account of principal, interest, drawings under Letters of Credit,
commitment fee or any other amounts payable to the Lenders or to the Issuing
Lender, as the case may be, ratably (except as a result of the operation of
Article V) to the Lenders in accordance with their Pro Rata Shares, or to the
Issuing Lender, as the case may be.
(b) APPLICATION. Unless the Agent shall receive a timely
election by the Borrower with respect to the application of any principal
payments or as otherwise provided herein, each payment of principal by the
Borrower shall be applied (A) first, to the Base Rate Loans then outstanding,
and (B) second, to the Eurodollar Rate Loans then outstanding (in such manner as
the Agent shall determine in its sole discretion).
(c) EXTENSION.Whenever any payment hereunder shall be stated
to be due, or whenever any Interest Payment Date or any other date specified
hereunder would otherwise
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occur, on a day other than a Business Day, then, except as otherwise provided
herein, such payment shall be made, and such Interest Payment Date or other date
shall occur, on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest,
commitment fee or letter of credit fee hereunder.
SECTION 7.03 TAXES.
(a) NO REDUCTION OF PAYMENTS. The Borrower shall pay all
amounts of principal, interest, fees and other amounts due under the Loan
Documents free and clear of, and without reduction for or on account of, any
present and future taxes, levies, imposts, duties, fees, assessments, charges,
deductions or withholdings and all liabilities with respect thereto excluding,
in the case of each Lender and the Agent, income and franchise taxes imposed on
it by the jurisdiction under the laws of which such Lender or the Agent is
organized or in which its principal executive offices may be located or any
political subdivision or taxing authority thereof or therein, and by the
jurisdiction of such Lender's Lending Office and any political subdivision or
taxing authority thereof or therein (all such nonexcluded taxes, levies,
imposts, duties, fees, assessments, charges, deductions, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Taxes shall be
required by law to be deducted or withheld from any payment, the Borrower shall
increase the amount paid so that the respective Lender or the Agent receives
when due (and is entitled to retain), after deduction or withholding for or on
account of such Taxes (including deductions or withholdings applicable to
additional sums payable under this Section 7.03), the full amount of the payment
provided for in the Loan Documents.
(b) DEDUCTION OR WITHHOLDING; TAX RECEIPTS. If the Borrower
makes any payment hereunder in respect of which it is required by law to make
any deduction or withholding, it shall pay the full amount to be deducted or
withheld to the relevant taxation or other authority within the time allowed for
such payment under applicable law and promptly thereafter shall furnish to the
Agent (for itself or for redelivery to the Lender to or for the account of which
such payment was made) an original or certified copy of a receipt evidencing
payment thereof, together with such other information and documents as the Agent
or any Lender (through the Agent) may reasonably request.
(c) INDEMNITY. If any Lender or the Agent is required by law
to make any payment on account of Taxes, or any liability in respect of any Tax
is imposed, levied or assessed against any Lender or the Agent, the Borrower
shall indemnify the Agent and the Lenders for and against such payment or
liability, together with any incremental taxes, interest or penalties, and all
costs and expenses, payable or incurred in connection therewith, including Taxes
imposed on amounts payable under this Section 7.03, whether or not such payment
or liability was correctly or legally asserted. A certificate of the Agent or
any Lender as to the amount of any such payment shall, in the absence of
manifest error, be conclusive and binding for all purposes.
(d) FORMS. Each Lender that is incorporated under the laws
of any jurisdiction outside the United States agrees to deliver to the Agent and
the Borrower on or prior to the Closing Date, and in a timely fashion
thereafter, IRS Form W-8BEN, IRS Form W-8ECI or such other documents and forms
of the IRS, duly executed and completed by such Lender, as
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are required under United States law to establish such Lender's status for
United States withholding tax purposes.
(e) MITIGATION. Each Lender agrees that as promptly as
practicable after it becomes aware of the occurrence of an event that would
cause the Borrower to make any payment in respect of Taxes to such Lender or a
payment in indemnification with respect to any Taxes, and in any event if so
requested by the Borrower following such occurrence, such Lender shall promptly
notify the Borrower in writing and use reasonable efforts to make, fund or
maintain its affected Loan (or relevant part thereof) through another Lending
Office if as a result thereof the additional amounts so payable by the Borrower
would be avoided or materially reduced and if, in the reasonable opinion of such
Lender, the making, funding or maintaining of such Loan (or relevant part
thereof) through such other Lending Office would not in any material respect be
disadvantageous to such Lender or contrary to such Lender's normal banking
practices. Upon receipt by the Borrower from any Lender of such notice, Borrower
may request a Replacement Lender pursuant to Section 6.07.
(f) SPECIFIED SWAP CONTRACTS. Nothing contained in this
Section 7.03 shall override any term or provision of any Specified Swap Contract
regarding withholding taxes relating to Rate Contracts.
SECTION 7.04 NON-RECEIPT OF FUNDS.Unless the Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to any of the Lenders hereunder that the Borrower shall not make such payment in
full, the Agent may assume that the Borrower has made such payment in full to
the Agent on such date and the Agent may, in reliance upon such assumption,
cause to be distributed to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower shall not have so
made such payment in full to the Agent, each Lender shall repay to the Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Agent, at the
Federal Funds Rate.
SECTION 7.05 SHARING OF PAYMENTS. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Loans made by it (other than
pursuant to a provision hereof providing for non-pro rata treatment) in excess
of its Pro Rata Share of payments on account of the Loans obtained by all the
Lenders, such Lender shall forthwith advise the Agent of the receipt of such
payment, and within five Business Days of such receipt purchase from the other
Lenders (through the Agent), without recourse, such participations in the Loans
made by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them in accordance with the respective Pro
Rata Shares of the Lenders; PROVIDED, HOWEVER, that if all or any portion of
such excess payment is thereafter recovered by or on behalf of the Borrower from
such purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 7.05 may exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation. No documentation other than notices and the like referred to in
this Section 7.05
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shall be required to implement the terms of this Section 7.05. The Agent shall
keep records (which shall be conclusive and binding in the absence of manifest
error) of participations purchased pursuant to this Section 7.05 and shall in
each case notify the Lenders following any such purchases.
ARTICLE VIII
CONDITIONS PRECEDENT
SECTION 8.01 CONDITIONS PRECEDENT TO THE INITIAL CREDIT
EXTENSIONS. The obligation of each Lender to make its initial Credit Extension
shall be subject to the satisfaction of each of the following conditions
precedent on or before the Closing Date:
(a) FEES AND EXPENSES. The Borrower shall have paid (i) all
fees then due in accordance with Section 4.03 and (ii) all invoiced costs and
expenses then due in accordance with Section 13.04(a).
(b) LOAN DOCUMENTS. The Agent shall have received the
following Loan Documents: (i) the Notes, executed by the Borrower; (ii) (in
sufficient copies for each of the Lenders and the Borrower) counterparts of this
Agreement, (iii) the Collateral Documents, the Guaranties, the Environmental
Indemnity and the Intercreditor and Collateral Agency Agreement, executed by
each of the respective parties thereto.
(c) DOCUMENTS AND ACTIONS RELATING TO COLLATERAL. The Agent
shall have received the following, in form and substance satisfactory to it and
the Lenders:
(i) evidence that all filings, registrations and recordings
have been made in the appropriate governmental offices, and all other action has
been taken, which shall be necessary to create, in favor of the Collateral Agent
on behalf of the Lenders, a perfected first priority Lien on the Collateral
(subject to Permitted Liens), including evidence of recordation of the Deeds of
Trust (which may consist of a written or telephonic confirmation from the title
insurance company), and filing of completed UCC-1 financing statements, in each
case in the appropriate governmental offices;
(ii) the results, dated as of a recent date prior to the
Closing Date, of searches conducted (A) in the UCC filing records in each of the
governmental offices in each jurisdiction in which personal property and fixture
Collateral is located, and (B) of the records maintained by the U.S. Patent and
Trademark Office and Copyright Office with respect to all United States patents
and patent applications and all United States registered trademarks and United
States registered copyrights constituting Collateral, which shall have revealed
no Liens with respect to any of the Collateral except Permitted Liens;
(iii) a title insurance policy (or a binding commitment
therefor) for the Deeds of Trust (A) issued by a title insurance company of
recognized standing satisfactory to the Agent, (B) in an amount and form
satisfactory to the Agent, (C) naming the Collateral Agent, for the ratable
benefit of the Lenders and the Senior Noteholders, as the insured thereunder,
(D) insuring that the Deeds of Trust insured thereby create a valid first
priority Lien on the property covered by each such Deed of Trust, subject to no
other Liens, other than Permitted Liens, and to no
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other exceptions, other than those satisfactory to the Agent, and (E) containing
such endorsements and affirmative coverage as the Agent or any Lender (through
the Agent) may reasonably request; and
(iv) such appraisals, collateral audits, consents of
landlords, estoppels from landlords, tenant subordination agreements and other
documents and instruments in connection with the Deeds of Trust as shall
reasonably be deemed necessary by the Agent or any Lender.
(d) ADDITIONAL CLOSING DOCUMENTS AND ACTIONS.The Agent shall
have received the following, in form and substance satisfactory to it and the
Lenders:
(i) confirmation that: (i) all amounts due under the
Existing Credit Facility shall have been paid in full concurrently with the
initial Credit Extension hereunder and (ii) the Existing Credit Facility shall
terminate on the Closing Date (subject to subsection 13.04(d));
(ii) evidence of completion to the satisfaction of the Agent
and the Lenders of such investigations, reviews and audits with respect to the
Borrower and the Guarantors and their respective operations as the Agent or any
Lender may deem appropriate;
(iii) evidence that all insurance required under this
Agreement and the Collateral Documents is in full force and effect, together
with copies of all policies of such insurance and all endorsements thereto
required under this Agreement and the Collateral Documents;
(iv) an environmental site assessment or other environmental
review report and opinion with respect to each Premises subject to the Lien of a
Deed of Trust, dated as of a recent date prior to the Closing Date, prepared by
a qualified environmental consulting firm acceptable to the Agent;
(v) evidence that all (A) authorizations or approvals of any
Governmental Authority and (B) approvals or consents of any other Person,
required in connection with the execution, delivery and performance of the Loan
Documents shall have been obtained;
(vi) (in sufficient copies for the Lenders) the audited
consolidated balance sheet of the Borrower and its Subsidiaries as at December
31, 2001, and the related consolidated statements of income, shareholders'
equity and cash flows for the fiscal year then ended;
(vii) a completed Borrowing Base Certificate as of the end of
the immediately preceding fiscal month, together with the related collateral
reports, also as of such date, specified in Section 10.01(a)(vii);
(viii)a completed Compliance Certificate, dated the Closing
Date, demonstrating the Borrower's compliance with the financial covenants set
forth in Section 10.02 as of the end of the immediately preceding fiscal
quarter, measured on a pro forma basis after giving effect to the Borrowings to
be made hereunder on the Closing Date;
(vii) a certificate of a Responsible Officer of the Borrower,
dated the Closing Date, stating that (A) the representations and warranties
contained in Section 9.01 and in the
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other Loan Documents are true and correct on and as of the date of such
certificate as though made on and as of such date and (B) on and as of the
Closing Date, no Default shall have occurred and be continuing or shall result
from the initial Credit Extension;
(viii)a certificate of a Responsible Officer of each
Guarantor, dated the Closing Date, stating that the representations and
warranties contained in Section 9 of the Guaranty and in the other Guarantor
Documents are true and correct on and as of the date of such certificate as
though made on and as of such date;
(e) CORPORATE DOCUMENTS. The Agent shall have received the
following, in form and substance satisfactory to it:
(i) certified copies of the Organization Documents of the
Borrower, together with certificates as to good standing, from the Secretary of
State or other Governmental Authority, as applicable, of the Borrower's state of
incorporation and certificates from the Secretary of State or other Governmental
Authority, as applicable, of the State of Washington as to the Borrower's status
as a foreign corporation and tax status, each dated as of a recent date prior to
the Closing Date;
(ii) a certificate of the Secretary or Assistant Secretary of
the Borrower, dated the Closing Date, certifying (A) the resolutions of the
Board of Directors of the Borrower authorizing the execution, delivery and
performance of the Loan Documents and (B) the incumbency, authority and
signatures of each officer of the Borrower authorized to execute and deliver the
Loan Documents and act with respect thereto, upon which certificate the Agent
and the Lenders may conclusively rely until the Agent shall have received a
further certificate of the Secretary or an Assistant Secretary of the Borrower
canceling or amending such prior certificate;
(iii) certified copies of the Organization Documents of each
Guarantor, together with certificates as to good standing, from the Secretary of
State or other Governmental Authority, as applicable, of the Guarantor's state
of incorporation and certificates from the Secretary of State or other
Governmental Authority as applicable, of California and Washington, as the case
may be, as to the Guarantor's status as a foreign corporation and tax status,
each dated as of a recent date prior to the Closing Date;
(iv) a certificate of the Secretary or Assistant Secretary of
each Guarantor, dated the Closing Date, certifying (A) the resolutions of the
Board of Directors or other governing body of the Guarantor authorizing the
execution, delivery and performance of the Guarantor Documents and (B) the
incumbency, authority and signatures of each officer of the Guarantor authorized
to execute and deliver the Guarantor Documents and act with respect thereto,
upon which certificate the Agent and the Lenders may conclusively rely until the
Agent shall have received a further certificate of the Secretary or an Assistant
Secretary of the Guarantor canceling or amending such prior certificate;
(f) LEGAL OPINIONS. The Agent shall have received the
following: (i) the opinion of Farella Braun and Martel LLP, counsel to the
Borrower and the Subsidiary Guarantors, dated the Closing Date, in substantially
the form of Exhibit L-1; and (ii) the opinion
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of Davis Wright Tremaine LLP, local Washington counsel to the Collateral Agent,
dated the Closing Date, in substantially the form of Exhibit L-2.
(g) SENIOR SECURED NOTE DOCUMENTS. The Agent shall have
received executed copies of the amended and restated Senior Secured Note
Documents, which shall be in form and substance reasonably satisfactory to the
Agent and the Majority Lenders.
(h) PRO-FORMA DEBT TO EBITDA RATIO. The ratio of (i)
Consolidated Indebtedness PLUS six times Consolidated Rent Expense (measured on
a trailing 12-month basis) to (ii) Consolidated EBITDA PLUS one times
Consolidated Rent Expense (in each case, measured on a trailing 12-month basis),
shall not be greater than 5.75 to 1.00, measured on a pro forma basis (after
giving effect to the Borrowings to be made hereunder on the Closing Date) as of
the last day of the immediately preceding fiscal quarter.
SECTION 8.02 CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS.
The obligation of each Lender to make any Credit Extension to be made by it
hereunder (including its initial Credit Extension) is subject to the
satisfaction of the following conditions precedent on the relevant Credit
Extension date:
(a) NOTICE. The Agent shall have received a Notice of
Borrowing or Notice of Conversion or Continuation, as the case may be; or in the
case of any issuance, amendment or renewal of any Letter of Credit, the Issuing
Lender and the Agent shall have received an L/C Application or L/C Amendment
Application, as required under Section 3.02.
(b) MATERIAL ADVERSE EFFECT. On and as of the date of such
Credit Extension, there shall have occurred no Material Adverse Effect since
December 31, 2001.
(c) REPRESENTATIONS AND WARRANTIES; NO DEFAULT. On the date
of such Credit Extension date, both before and after giving effect thereto and
to the application of proceeds therefrom: (i) the representations and warranties
contained in Section 9.01 and in the other Loan Documents shall be true, correct
and complete on and as of the date of such Credit Extension date as though made
on and as of such date; and (ii) no Default shall have occurred and be
continuing or shall result from such Credit Extension. For purposes of this
Section 8.02(c), clause (i) shall be deemed instead to refer to the last day of
the most recent quarter and year for which financial statements have then been
delivered in respect of the representation and warranty made in Section 9.01(p);
clause (i) and shall not be deemed to refer to any other representations and
warranties which relate solely to an earlier date (PROVIDED that such other
representations and warranties shall be true, correct and complete as of such
earlier date); and clause (i) shall take into account any amendments to the
Schedules and other disclosures made in writing by the Borrower and the
Guarantors to the Agent and the Lenders after the Closing Date and approved by
the Agent and the Majority Lenders. The giving of any Notice of Borrowing or
Notice of Conversion or Continuation, as the case may be, the submission of any
L/C Application or L/C Amendment Application, and the acceptance by the Borrower
of the proceeds of each Borrowing following the Closing Date, shall each be
deemed a certification to the Agent and the Lenders that on and as of the date
of such Credit Extension such statements are true.
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(d) BORROWING BASE CERTIFICATE AND COLLATERAL REPORTS.
The Borrower shall have delivered to the Agent the completed Borrowing Base
Certificate, together with the related collateral reports, required under
Section 10.01(a), and the statements contained therein shall be true, correct
and complete on and as of the date of such Borrowing as though made on and as of
such date. The giving of any Notice of Borrowing or Notice of Conversion or
Continuation, as the case may be, the submission of any L/C Application or L/C
Amendment Application, and the acceptance by the Borrower of the proceeds of a
Borrowing, shall each be deemed a certification to the Agent and the Lenders
that on and as of the date of the Credit Extension such statements are true,
correct and complete.
(d) ADDITIONAL DOCUMENTS. The Agent shall have received, in
form and substance satisfactory to it, such additional approvals, opinions,
documents and other information as the Agent or any Lender (through the Agent)
may reasonably request.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
SECTION 9.01 REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to each Lender and the Agent that:
(a) ORGANIZATION AND POWERS. Each of the Borrower and its
Subsidiaries is a corporation, limited liability company or partnership duly
organized or formed, as the case may be, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation, is
qualified to do business and is in good standing in each jurisdiction in which
the failure so to qualify or be in good standing would result in a Material
Adverse Effect and has all requisite power and authority to own its assets and
carry on its business and to execute, deliver and perform its obligations under
the Loan Documents.
(b) AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance by the Borrower and each Guarantor of the Loan Documents to which
such Person is a party have been duly authorized by all necessary corporate
action of such Person and do not and will not (i) contravene the terms of the
Organization Documents of such Person or result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which such Person is a party or by which it or its
properties may be bound or affected; (ii) violate any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree or the like binding
on or affecting such Person; or (iii) except as contemplated by this Agreement,
result in, or require, the creation or imposition of any Lien upon or with
respect to any of the properties of such Person.
(c) BINDING OBLIGATION. The Loan Documents constitute, or
when delivered under this Agreement will constitute, legal, valid and binding
obligations of the Borrower and the Guarantors, enforceable against the Borrower
and the Guarantors in accordance with their respective terms.
(d) CONSENTS. No authorization, consent, approval, license,
exemption of, or filing or registration with, any Governmental Authority, or
approval or consent of any other Person, is required for the due execution,
delivery or performance by the Borrower or the
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Guarantors of any of the Loan Documents, except for recordings or filings in
connection with the perfection of the Liens on the Collateral in favor of the
Collateral Agent on behalf of the Lenders.
(e) NO DEFAULTS. Neither the Borrower nor any of its
Subsidiaries is in default under any material contract, lease, agreement,
judgment, decree or order to which it is a party or by which it or its
properties may be bound.
(f) TITLE TO PROPERTIES; LIENS; USE. The Borrower and its
Subsidiaries have good and marketable title to, or valid and subsisting
leasehold interests in, their properties and assets, including all property
forming a part of the Collateral, there is no Lien upon or with respect to any
of such properties or assets, including any of the Collateral, except for
Permitted Liens, and the use, ownership, maintenance and operation of each
Premises by the Borrower or its Subsidiaries is in compliance in all material
respects with all applicable Requirements of Law.
(g) LITIGATION. Except as set forth on Schedule 5 hereto,
there are no actions, suits or proceedings pending or, to the best of the
Borrower's knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries or the properties of the Borrower or any of its Subsidiaries before
any Governmental Authority or arbitrator which if determined adversely to the
Borrower or any such Subsidiary would result in a Material Adverse Effect.
(h) COMPLIANCE WITH ENVIRONMENTAL LAWS. Each of the Borrower
and its Subsidiaries is in full compliance with all Environmental Laws, whether
in connection with the ownership, use, maintenance or operation of its Premises
or the conduct of any business thereon, or otherwise. Neither the Borrower, any
of its Subsidiaries nor to the best of the Borrower's knowledge, after due and
diligent inquiry and investigation, any previous owner, tenant, occupant, user
or operator of the Premises, or any present tenant or other present occupant,
user or operator of the Premises has used, generated, manufactured, installed,
treated, released, stored or disposed of any Hazardous Substances on, under, or
at the Premises, except in compliance with all applicable Environmental Laws.
After due and diligent inquiry and investigation the Borrower has determined
that no Hazardous Substances have at any time been spilled, leaked, dumped,
deposited, discharged, disposed of or released or migrated on, under, at or from
the Premises, nor have any of the Premises been used at any time by any Person
as a landfill or waste disposal site. There are no actions, suits, claims,
notices of violation, hearings, investigations or proceedings pending or, to the
best of the Borrower's knowledge, threatened against or affecting the Borrower
or any of its Subsidiaries or with respect to the ownership, use, maintenance
and operation of the Premises, relating to Environmental Laws or Hazardous
Substances.
(i) GOVERNMENTAL REGULATION. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940,
the Interstate Commerce Act, any state public utilities code or any other
federal or state statute or regulation limiting its ability to incur
Indebtedness.
(j) ERISA.
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(i) The Borrower and all ERISA Affiliates have satisfied all
applicable contribution requirements under Section 412(c)(11) of the Internal
Revenue Code and have never sought a waiver under Section 412(d) of the Internal
Revenue Code;
(ii) no Termination Event has occurred and is continuing, or
is reasonably expected to occur;
(iii) the aggregate amount of Unfunded Accrued Benefits under
all Pension Plans (excluding in such computation Pension Plans with assets
greater than accrued benefits) does not exceed $1,500,000;
(iv) there is no condition or event under which the Borrower,
any ERISA Affiliate, or any Plan maintained by the Borrower or any ERISA
Affiliate could be subject to any risk of material liability under ERISA or the
Internal Revenue Code, regardless of whether the Borrower or any ERISA Affiliate
engaged in a transaction giving rise to the liability;
(v) neither the Borrower nor any ERISA Affiliate has
unfunded, contingent liability that exceeds $1,500,000 with respect to Plans
that provide post-retirement welfare benefits; and
(vi) all Plans maintained by, or contributed to by, the
Borrower or any ERISA Affiliate comply in all material respects, and have been
administered in material compliance with, the requirements of applicable law
(including, if applicable, foreign law, ERISA and the Internal Revenue Code),
and in accordance with each Plan's terms.
(k) SUBSIDIARIES. The name, capital structure and ownership
of each Subsidiary of the Borrower on the date of this Agreement are as set
forth in Schedule 6. All of the outstanding capital stock of, or other interest
in, each such Subsidiary has been validly issued, and is fully paid and
nonassessable. Except as set forth in such Schedule, on the date of this
Agreement the Borrower has no equity interest in any Person.
(l) MARGIN REGULATIONS. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying "margin
stock" (within the meaning of Regulation U of the FRB). No part of the proceeds
of the Loans will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock,
except in accordance with the provisions of Regulations T, U, and X of the FRB.
(m) TAXES.Each of the Borrower and its Subsidiaries has duly
filed all tax and information returns required to be filed, and has paid all
taxes, fees, assessments and other governmental charges or levies that have
become due and payable, except to the extent such taxes or other charges are
being contested in good faith and are adequately reserved against in accordance
with GAAP.
(n) PATENTS AND OTHER RIGHTS. Each of the Borrower and its
Subsidiaries possesses all permits, franchises, licenses, patents, trademarks,
trade names, service marks, copyrights and all rights with respect thereto, free
from burdensome restrictions, that are necessary for the ownership, maintenance
and operation of its business and neither the Borrower nor any such Subsidiary
is in violation of any rights of others with respect to the foregoing.
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(o) INSURANCE. The properties of the Borrower and its
Subsidiaries are insured, with financially sound and reputable insurance
companies, in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the Borrower or such Subsidiary
operates.
(p) FINANCIAL STATEMENTS.(i)The audited consolidated balance
sheet of the Borrower and its Subsidiaries as at December 31, 2001, and the
related consolidated statements of income, shareholders' equity and cash flows
for the fiscal year then ended are complete and correct and fairly present the
financial condition of the Borrower and its Subsidiaries as at such dates and
the results of operations of the Borrower and its Subsidiaries for the periods
covered by such statements, in each case in accordance with GAAP consistently
applied. (ii) Since December 31, 2001, there has been no Material Adverse
Effect.
(q) LIABILITIES. Neither the Borrower nor any of its
Subsidiaries has any material liabilities, fixed or contingent, that are not
reflected in the financial statements referred to in subsection (p), in the
notes thereto or otherwise disclosed in writing to the Lenders.
(r) LABOR DISPUTES, ETC. There are no strikes, lockouts or
other labor disputes against the Borrower or any of its Subsidiaries, or, to the
best of the Borrower's knowledge, threatened against or affecting the Borrower
or any of its Subsidiaries, and no Event of Loss has occurred with respect to
any assets or property of the Borrower or any of its Subsidiaries, which may
result in a Material Adverse Effect.
(s) SOLVENCY. Each of the Borrower and its Subsidiaries is
Solvent.
(t) DISCLOSURE. None of the representations or warranties
made by the Borrower or any of its Subsidiaries in the Loan Documents as of the
date of such representations and warranties, and none of the statements or other
information contained in each exhibit, report, certificate or written statement
furnished by or on behalf of the Borrower or any of its Subsidiaries to the
Agent and the Lenders in connection with the Loan Documents, contains any untrue
statement of a material fact or omits any material fact required to be stated
therein or necessary to make the statements made therein, in the light of the
circumstances under which they are made, not misleading, as of the time made or
delivered; PROVIDED that to the extent any such exhibit, report, certificate or
written statement was based upon or constitutes a forecast or projection, the
Borrower represents only that it has acted in good faith and utilized reasonable
assumptions and due care in the preparation of such exhibit, report, certificate
or written statement (it being understood that forecasts and projections by
their nature involve approximations and uncertainties).
ARTICLE X
COVENANTS
SECTION 10.01 REPORTING COVENANTS. So long as any of the
Obligations shall remain unpaid, any Letter of Credit shall remain outstanding
or any Lender shall have any Commitment, the Borrower agrees that:
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(a) FINANCIAL STATEMENTS AND OTHER REPORTS. The Borrower
shall furnish to the Agent in sufficient copies for distribution to the Lenders:
(i) as soon as available and in any event within 45 days
after the end of the first three fiscal quarters of each fiscal year, a
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter, and the related consolidated and, as
to statements of income only, consolidating statements of income, shareholders'
equity and cash flows of the Borrower and its Subsidiaries for such quarter and
the portion of the fiscal year through the end of such quarter, prepared in
accordance with GAAP consistently applied, subject to changes resulting from
normal, year-end audit adjustments and except for the absence of notes, all in
reasonable detail and setting forth in comparative form the figures for the
corresponding period in the preceding fiscal year, together with a certificate
of a Responsible Officer of the Borrower stating that such financial statements
fairly present the financial condition of the Borrower and its Subsidiaries as
at such date and the results of operations of the Borrower and its Subsidiaries
for the period ended on such date and have been prepared in accordance with GAAP
consistently applied, subject to changes resulting from normal, year-end audit
adjustments and except for the absence of notes;
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year, a consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as of the end of such fiscal year,
and the related consolidated and, as to statements of income only, consolidating
statements of income, shareholders' equity and cash flows of the Borrower and
its Subsidiaries for such fiscal year, prepared in accordance with GAAP
consistently applied, all in reasonable detail and setting forth in comparative
form the figures for the previous fiscal year, and (A) in the case of such
consolidated financial statements, accompanied by an audit report thereon of
Moss Adams LLP or another firm of independent certified public accountants of
recognized national standing acceptable to the Majority Lenders, which report
shall not be qualified as to (1) going concern, or (2) any limitation in the
scope of the audit, and (B) in the case of such consolidating financial
statements, certified by a Responsible Officer of the Borrower;
(iii) together with the financial statements required pursuant
to clauses (i) and (ii), (A) a Compliance Certificate of a Responsible Officer
as of the end of the applicable accounting period and (B) an Update Certificate
of a Responsible Officer as of the end of the applicable accounting period;
(iv) promptly upon receipt thereof, copies of all reports
submitted to the Borrower by its independent certified public accountants in
connection with each annual, interim or special audit examination of the
Borrower and its Subsidiaries made by such accountants, including the
"management letter" submitted by such accountants to the Borrower in connection
with their annual audit;
(v) as soon as available and in any event not less than 30
days prior to the start of each fiscal year, a consolidated financial forecast
for the Borrower and its Subsidiaries for the following fiscal year and each
fiscal year thereafter through the Final Maturity Date, including forecasted
consolidated balance sheets, consolidated statements of income, shareholders'
equity and cash flows of the Borrower and its Subsidiaries which forecast shall
(A) state the
60.
assumptions used in the preparation thereof, (B) contain such other information
as reasonably requested by the Agent or the Majority Lenders and (C) be in form
reasonably satisfactory to the Agent and the Majority Lenders;
(vi) as soon as available and in any event not less than 30
days prior to the start of each fiscal year, budgets of the Borrower and its
Subsidiaries for each quarter of the following fiscal year, which budgets shall
(A) state the assumptions used in the preparation thereof, (B) be in form
satisfactory to the Agent and the Majority Lenders, and (C) be accompanied by a
statement of a Responsible Officer of the Borrower that, to the best of such
Responsible Officer's knowledge, such budgets are a reasonable and good-faith
estimate for the period covered thereby;
(vii) as soon as available and in any event not later than the
last Business Day of each fiscal month, (A) a completed Borrowing Base
Certificate, (B) full and complete reports with respect to the Receivables,
including information as to concentration, aging, identity of Receivable
Debtors, letters of credit securing Receivables, disputed Receivables and other
matters, as the Agent shall reasonably request, and (C) a detailed schedule of
the Borrower's Inventory, each as of the end of the immediately preceding fiscal
month and in form and substance reasonably satisfactory to the Agent;
(viii)promptly after the same are released, copies of all
press releases; and
(ix) promptly after the giving, sending or filing thereof,
copies of all reports, if any, which the Borrower or any of its Subsidiaries
sends to the holders of its respective capital stock or other securities and of
all reports or filings, if any, by the Borrower or any of its Subsidiaries with
the SEC or any national securities exchange.
As to any information contained in materials furnished pursuant to clause (ix),
the Borrower shall not be separately required to furnish such information under
clause (i) or (ii), but the foregoing shall not be in derogation of the
obligation of the Borrower to furnish the information and materials described in
clauses (i) and (ii) at the times specified therein. Additionally, reports
required to be delivered pursuant to clauses (i), (ii) or (ix) of subsection
10.01(a) (to the extent any such financial statements, reports or proxy
statements are included in materials otherwise filed with the SEC) may be
delivered electronically and if so, shall be deemed to have been delivered on
the date on which the Borrower posts such reports, or provides a link thereto,
either: (i) on the Borrower's website on the Internet at the website address
listed on Schedule 2; or (ii) when such report is posted electronically on
IntraLinks/IntraAgency or other relevant website to which each Lender and the
Agent have access (whether a commercial, third-party website or whether
sponsored by the Agent), if any, on the Borrower's behalf; PROVIDED that: (A)
the Borrower shall deliver paper copies of such reports to the Agent or any
Lender who requests the Borrower to deliver such paper copies until written
request to cease delivering paper copies is given by the Agent or such Lender;
(B) the Borrower shall notify (which may be by facsimile or electronic mail) the
Agent and each Lender of the posting of any such reports and provide to the
Agent by email electronic versions (I.E. soft copies) of such reports; and (C)
in every instance the Borrower shall provide paper copies of the Compliance
Certificates required by clause (iii) above to the Agent and each of the
Lenders. Except for such Compliance Certificates, the Agent shall have no
obligation to request the delivery or to maintain copies of the reports referred
to above, and in any
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event shall have no responsibility to monitor compliance by the Borrower with
any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such reports.
(b) ADDITIONAL INFORMATION. The Borrower will furnish to the
Agent:
(i) promptly after the Borrower has knowledge or becomes
aware thereof, notice of the occurrence of any Event of Loss with respect to its
property or assets aggregating $1,500,000 (or its equivalent in another
currency) or more;
(ii) promptly after the Borrower has knowledge or becomes
aware thereof, notice of the occurrence or existence of any Default;
(iii) promptly after any Person becomes a Subsidiary of the
Borrower (whether by acquisition or otherwise), prompt written notice thereof;
(iv) prompt written notice of (A) any proposed acquisition of
stock, assets or property by the Borrower or any of its Subsidiaries that could
reasonably be expected to result in environmental liability under Environmental
Laws, and (B)(1) any spillage, leakage, discharge, disposal, leaching, migration
or release of any Hazardous Substances required to be reported to any
Governmental Authority under applicable Environmental Laws, and (2) all actions,
suits, claims, notices of violation, hearings, investigations or proceedings
pending, or to the best of the Borrower's knowledge, threatened against or
affecting the Borrower or any of its Subsidiaries or with respect to the
ownership, use, maintenance and operation of the Premises, relating to (1)
Environmental Laws or Hazardous Substances or (2) any other Requirement of Law
that, in the case of this clause (2), may have a Material Adverse Effect;
(v) prompt written notice of all actions, suits and
proceedings before any Governmental Authority or arbitrator pending, or to the
best of the Borrower's knowledge, threatened against or affecting the Borrower
or any of its Subsidiaries which (A) if adversely determined would involve an
aggregate uninsured liability of $1,500,000 (or its equivalent in another
currency) or more, or (B) otherwise may have a Material Adverse Effect;
(vi) promptly after the Borrower has knowledge or becomes
aware thereof, (A) notice of the occurrence of any Termination Event, together
with a copy of any notice of such Termination Event to the PBGC, and (B) the
details concerning any action taken or proposed to be taken by the IRS, PBGC,
Department of Labor or other Person with respect thereto;
(vii) the information regarding insurance maintained by the
Borrower and its Subsidiaries as required under Section 10.03(c);
(viii)within 30 days of the date thereof, or, if earlier, on
the date of delivery of any financial statements pursuant to subsection (a),
notice of any material change in accounting policies or financial reporting
practices by the Borrower or any of its Subsidiaries;
(ix) promptly after the occurrence thereof, notice of any
labor controversy resulting in or threatening to result in any strike, work
stoppage, boycott, shutdown or other
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material labor disruption against or involving the Borrower or any of its
Subsidiaries which could result in a Material Adverse Effect;
(x) upon the request from time to time of the Agent or any
Lender (through the Agent), the Swap Termination Values, together with a
description of the method by which such values were determined, relating to any
then-outstanding Rate Contracts to which the Borrower or any of its Subsidiaries
is party;
(xi) prompt written notice of any other condition or event
which has resulted, or that could reasonably be expected to result, in a
Material Adverse Effect; and
(xii) such other information respecting the operations,
properties, business or condition (financial or otherwise) of the Borrower or
its Subsidiaries (including with respect to the Collateral) as any Lender
(through the Agent) may from time to time reasonably request.
Each notice pursuant to this subsection (b) shall be accompanied by a written
statement by a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein, and stating what action the Borrower proposes to
take with respect thereto.
SECTION 10.02 FINANCIAL COVENANTS. So long as any of the
Obligations shall remain unpaid, any Letter of Credit shall remain outstanding
or any Lender shall have any Commitment, the Borrower agrees that:
(a) LEVERAGE RATIO. The Borrower shall maintain a ratio of
(a) Consolidated Indebtedness PLUS six times Consolidated Rent Expense (measured
on a rolling 4-quarter basis) to (b) Consolidated EBITDA PLUS one times
Consolidated Rent Expense (in each case, measured on a rolling 4-quarter basis)
(such ratio, the "Leverage Ratio") as of the last day of each fiscal quarter of
not more than (i) 5.75 to 1.00 for the first, second, third and fourth fiscal
quarters of 2002, (ii) 5.50 to 1.00 for the first fiscal quarter of 2003, (iii)
5.25 to 1.00 for the second fiscal quarter of 2003, (iv) 5.00 to 1.00 for the
third and fourth fiscal quarters of 2003 and the first and second fiscal
quarters of 2004, (v) 4.75 to 1.00 for the third and fourth fiscal quarters of
2004, (vi) 4.50 to 1.00 for the first and second fiscal quarters of 2005, (vii)
4.00 to 1.00 for the third and fourth fiscal quarters of 2005 and the first and
second fiscal quarters of 2006 and (viii) 3.50 to 1.00 for the third fiscal
quarter of 2006 and each fiscal quarter ending thereafter.
(b) MINIMUM CONSOLIDATED TANGIBLE NET WORTH. The Borrower
shall maintain Consolidated Tangible Net Worth at all times of not less than
$76,000,000 PLUS the Net Issuance Proceeds received by the Borrower or any
Subsidiary from the sale or issuance of equity securities to any Person other
than the Borrower or any Subsidiary PLUS the Net Issuance Proceeds received by
the Borrower or any Subsidiary from the sale or issuance of Subordinated Debt to
any Person other than the Borrower or any Subsidiary PLUS 75% of positive
Consolidated Net Income, if any, for each fiscal quarter elapsed after December
31, 2001;
(c) INTEREST COVERAGE RATIO. The Borrower shall maintain a
ratio of Consolidated EBIT to Consolidated Interest Expense, for each period of
four consecutive fiscal quarters then ended, of not less than (i) 1.50 to 1.00
as of the last day of the first, second, third and fourth fiscal quarters of
2002, (ii) 1.75 to 1.00 as of the last day of the first, second, third and
fourth fiscal quarters of 2003, (iii) 2.50 to 1.00 as of the last day of the
first, second, third and
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fourth fiscal quarters of 2004, (iv) 3.00 to 1.00 as of the last day of the
first, second, third and fourth fiscal quarters of 2005 and (v) 3.50 to 1.00 as
of the last day of the first fiscal quarter of 2006 and each fiscal quarter
ending thereafter.
(d) FIXED CHARGE COVERAGE RATIO. The Borrower shall maintain
a ratio of (a) Consolidated EBITDA to (b) the sum of Consolidated Interest
Expense PLUS regularly scheduled principal payments on Indebtedness (including
such payments attributable to Capital Leases) PLUS cash income taxes PLUS cash
dividends, of the Borrower and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP, for each period of four consecutive fiscal
quarters then ended of not less than (i) 1.65 to 1.00 as of the last day of the
first fiscal quarter of 2002 through the last day of the second fiscal quarter
of 2004 and (ii) 1.25 to 1.00 as of the last day of the third fiscal quarter of
2004 and each fiscal quarter ending thereafter.
(e) CAPITAL EXPENDITURES. (i) The Borrower shall not, and
shall not permit any of its Subsidiaries to, make or become legally obligated to
make any expenditure in respect of the purchase or other acquisition of any new
wine barrels where such expenditure exceeds, in the aggregate for the Borrower
and its Subsidiaries during each fiscal year set forth below, the amount set
forth opposite such fiscal year:
FISCAL YEAR ENDING AMOUNT
__________________ ___________
2002 $4,500,000
2003 $5,000,000
2004 $5,500,000
2005 $6,000,000
2006 $6,500,000
2007 $7,000,000
2008 $7,500,000
2009 $8,000,000
(ii) The Borrower shall not, and shall not permit any of its
Subsidiaries to, make or become legally obligated to make any expenditure in
respect of the purchase or other acquisition of any fixed or capital assets
(excluding those assets set out in clause (i) above), where such expenditure
exceeds, in the aggregate for the Borrower and its Subsidiaries during each
fiscal year set forth below, the amount set forth opposite such fiscal year:
FISCAL YEAR ENDING AMOUNT
__________________ _____________
2002 $6,000,000
2003 $12,000,000
2004 $12,500,000
2005 $4,500,000
2006 $3,000,000
2007 $3,000,000
2008 $2,500,000
2009 $2,500,000
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PROVIDED, HOWEVER, that in respect of clauses (i) and (ii) above, so long as no
Default or Event of Default has occurred and is continuing or would result from
such expenditure, any portion of any such amount set forth above, if not
expended in the fiscal year for which it is permitted above, may be carried over
for expenditure in the next following fiscal year, but may not be carried over
for expenditure in any fiscal year thereafter.
SECTION 10.03 ADDITIONAL AFFIRMATIVE COVENANTS. So long as any
of the Obligations shall remain unpaid, any Letter of Credit shall remain
outstanding or any Lender shall have any Commitment, the Borrower agrees that:
(a) PRESERVATION OF EXISTENCE, ETC. The Borrower shall, and
shall cause each of its Subsidiaries to, maintain and preserve its legal
existence, its rights to transact business and all other rights, franchises and
privileges necessary or desirable in the normal course of its business and
operations and the ownership of its properties, except in connection with
transactions permitted by Section 10.04.
(b) PAYMENT OF OBLIGATIONS. The Borrower shall, and shall
cause each of its Subsidiaries to, pay and discharge (i) all taxes, fees,
assessments and governmental charges or levies imposed upon it or upon its
properties or assets prior to the date on which penalties attach thereto, and
all lawful claims for labor, materials and supplies which, if unpaid, might
become a Lien upon any properties or assets of the Borrower or any Subsidiary,
except to the extent such taxes, fees, assessments or governmental charges or
levies, or such claims, are being contested in good faith by appropriate
proceedings and are adequately reserved against in accordance with GAAP; (ii)
all lawful claims which, if unpaid, would by law become a Lien upon its property
not constituting a Permitted Lien; and (iii) all Indebtedness, as and when due
and payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.
(c) MAINTENANCE OF INSURANCE. The Borrower shall, and shall
cause each of its Subsidiaries to, carry and maintain in full force and effect,
at its own expense and with financially sound and reputable insurance companies,
insurance in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in the same or similar businesses and
owning similar properties in the localities where the Borrower or such
Subsidiary operates, including fire, extended coverage, business interruption,
public liability, property damage and worker's compensation. Insurance on the
Collateral shall name the Collateral Agent, for the ratable benefit of the
Lenders as their interests may appear, as additional insured and as loss payee.
Upon the request of the Agent or any Lender, the Borrower shall furnish the
Agent from time to time with full information as to the insurance carried by it
and, if so requested, copies of all such insurance policies. The Borrower shall
also furnish to the Agent from time to time upon the request of the Agent or any
Lender a certificate of the Borrower's insurance broker or other insurance
specialist stating that all premiums then due on the policies relating to
insurance on the Collateral have been paid, that such policies are in full force
and effect and that such insurance coverage and such policies comply with all
the requirements of this subsection. All insurance policies required under this
subsection shall provide that they shall not be terminated or cancelled nor
shall any such policy be materially changed without at least 30 days' prior
written notice to the Borrower and the Agent. Receipt of notice of termination
or cancellation of any such insurance policies or reduction of coverages or
65.
amounts thereunder shall entitle the Agent to renew any such policies, cause the
coverages and amounts thereof to be maintained at levels required pursuant to
the first sentence of this subsection (c) or otherwise to obtain similar
insurance in place of such policies, in each case at the expense of the
Borrower.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Borrower
shall, and shall cause each of its Subsidiaries to, keep adequate records and
books of account, in which complete entries shall be made in accordance with
GAAP, reflecting all financial transactions of the Borrower and its
Subsidiaries.
(e) INSPECTION RIGHTS. The Borrower shall upon reasonable
notice at any reasonable time during normal business hours and from time to time
(i) permit the Agent and the Lenders or any of their respective agents or
representatives to visit and inspect any of the properties of the Borrower and
its Subsidiaries and to examine and make copies of and abstracts from the
records and books of account of the Borrower and its Subsidiaries, and to
discuss the business affairs, finances and accounts of the Borrower and any such
Subsidiary with any of the officers, employees or accountants of the Borrower or
such Subsidiary, and (ii) permit the Agent or any of its agents or
representatives to conduct periodic audits of the Collateral at such frequencies
as the Agent or the Majority Lenders shall deem appropriate, in each case, at
the expense of the Borrower; PROVIDED, HOWEVER, that other than during the
occurrence and continuation of an Event of Default, the Borrower shall not be
required to pay for more than one such inspection or audit during any 12-month
period.
(f) COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall
cause each of its Subsidiaries to, comply in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including all Environmental Laws) and the terms of any
indenture, contract or other instrument to which it may be a party or under
which it or its properties may be bound.
(g) MAINTENANCE OF PROPERTIES, ETC. The Borrower shall, and
shall cause each of its Subsidiaries to, maintain and preserve all of its
properties necessary or useful in the proper conduct of its business in good
working order and condition in accordance with the general practice of other
corporations or companies in similar businesses and of similar character and
size, ordinary wear and tear excepted.
(h) LICENSES. The Borrower shall, and shall cause each of
its Subsidiaries to, obtain and maintain all licenses, authorizations, consents,
filings, exemptions, registrations and other governmental approvals necessary in
connection with the execution, delivery and performance of the Loan Documents,
the consummation of the transactions therein contemplated or the operation and
conduct of its business and ownership of its properties.
(i) ACTION UNDER ENVIRONMENTAL LAWS. The Borrower shall, and
shall cause each of its Subsidiaries to, upon becoming aware of the presence of
any Hazardous Substance other than Hazardous Substances customarily used in
businesses such as Borrower's, which Hazardous Substances are used in strict
compliance with all applicable Environmental Laws, or the existence of any
environmental liability under applicable Environmental Laws with respect to the
Premises, take all actions, at their cost and expense, as shall be necessary or
reasonably
66.
advisable to investigate and clean up the condition of the Premises, including
all removal, containment and remedial actions, and restore the Premises to a
condition in compliance with applicable Environmental Laws. Nothing in this
Section 10.03(i) is intended to limit, derogate or otherwise reduce the rights
of the Collateral Agent and the Lenders under the Deeds of Trust with respect to
Environmental Laws.
(j) USE OF PROCEEDS. The Borrower shall use the proceeds of
the Loans solely for general corporate purposes not in contravention of any
Requirement of Law and to repay amounts owing under the Existing Credit
Facility.
(k) ADDITIONAL SUBSIDIARIES. (i) Promptly after the date the
Borrower incorporates, creates or acquires any additional Subsidiary and, in any
event, within ten Business Days of such incorporation, creation or acquisition,
the Borrower shall cause such Subsidiary to execute and deliver to the Agent (i)
an accession agreement, as provided for in Section 22 of the Security Agreement,
(ii) an accession agreement, as provided for in Section 26 of the Guaranty,
(iii) any UCC-1 financing statements which are required by the Collateral Agent
or the Agent for filing in each jurisdiction in which such filing is necessary
to perfect the security interest of the Collateral Agent in the Collateral of
such Subsidiary and (iv) such other items as reasonably requested by the Agent
in connection with the foregoing, including resolutions, incumbency and
officers' certificates, opinions of counsel, search reports and other
certificates and documents.
(l) PROCEEDS OF EVENTS OF LOSS. All proceeds paid to the
Borrower or any Subsidiary on account of any Event of Loss in excess of
$1,500,000 shall be deposited or otherwise held in a deposit account or
securities account in respect of which the Collateral Agent holds a perfected
first priority Lien (subject only to Permitted Liens), for the ratable benefit
of the Lenders as their interests may appear, pending the application of such
proceeds to repay the Loans as provided in Section 5.03(b) or to repair, replace
or reconstruct the property affected by the Event of Loss.
(m) FURTHER ASSURANCE S AND ADDITIONAL ACTS. The Borrower
shall execute, acknowledge, deliver, file, notarize and register at its own
expense all such further agreements, instruments, certificates, documents and
assurances and perform such acts as the Agent or the Majority Lenders shall deem
necessary or appropriate to effectuate the purposes of the Loan Documents, and
promptly provide the Agent with evidence of the foregoing satisfactory in form
and substance to the Agent or the Majority Lenders.
SECTION 10.04 NEGATIVE COVENANTS. So long as any of the
Obligations shall remain unpaid, any Letter of Credit shall remain outstanding
or any Lender shall have any Commitment, the Borrower agrees that:
(a) INDEBTEDNESS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, create, incur, assume or otherwise become
liable for or suffer to exist any Indebtedness, other than:
(i) Indebtedness of the Borrower and its Subsidiaries to the
Lenders hereunder;
67.
(ii) Indebtedness of the Borrower and its Subsidiaries
existing on the Closing Date and set forth in Schedule 3 or extensions, renewals
and refinancings of such Indebtedness, PROVIDED that the principal amount of
such Indebtedness being extended, renewed or refinanced does not increase;
(iii) accounts payable to trade creditors for goods and
services and current operating liabilities (not the result of the borrowing of
money) incurred in the ordinary course of the Borrower's or such Subsidiary's
business in accordance with customary terms and paid within the specified time,
unless contested in good faith by appropriate proceedings and reserved for in
accordance with GAAP;
(iv) Indebtedness consisting of guarantees resulting from
endorsement of negotiable instruments for collection by the Borrower or any such
Subsidiary in the ordinary course of business;
(v) Indebtedness under the Senior Secured Notes and any
renewal, extension or refinancing of the Senior Secured Notes; PROVIDED that any
such renewal, extension or refinancing shall be at (or less than) then
prevailing interest rates and be on terms substantially similar to the terms
which govern the Senior Secured Notes on the Closing Date or on terms which are
more favorable to the Borrower than such governing terms existing on the Closing
Date; and PROVIDED FURTHER that the aggregate principal amount thereof shall not
exceed $30,000,000 at any time outstanding;
(vi) Indebtedness under the Senior Secured Note Guaranties;
(vii) Guaranty Obligations not to exceed $1,000,000 in the
aggregate at any time outstanding;
(viii)Rate Contracts entered into in the ordinary course of
business;
(ix) unsecured Indebtedness of the Borrower and its
Subsidiaries in an aggregate principal amount not to exceed $3,000,000 at any
time outstanding;
(x) Indebtedness in respect of Capital Leases, Synthetic
Lease Obligations and purchase money obligations for fixed or capital assets
within the limitations set forth in clause (ix) of the definition of Permitted
Liens set forth in Section 1.01 and other Indebtedness secured by Liens within
the limitations set forth in clause (x) of the definition of Permitted Liens set
forth in Section 1.01, or, in each case, extensions, renewals and refinancings
of such Indebtedness, PROVIDED that the principal amount of such Indebtedness
being extended, renewed or refinanced does not increase, and PROVIDED FURTHER
that the aggregate principal amount of all such Indebtedness does not exceed
$16,000,000 at any time outstanding;
(xi) Indebtedness subordinated on terms satisfactory to the
Majority Lenders to the Obligations in an aggregate principal amount not to
exceed $2,000,000 at any time outstanding; and
(xii) Indebtedness of the Borrower to any of its wholly owned
Subsidiaries or of any of its wholly owned Subsidiaries to another of its wholly
owned Subsidiaries.
68.
(b) LIENS; NEGATIVE PLEDGES.
(i) The Borrower shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any of its properties, revenues or assets, whether now owned or
hereafter acquired, other than Permitted Liens.
(ii) The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into or suffer to exist any negative pledge or similar
agreement (other than pursuant to this Agreement, any other Loan Document and
the Senior Secured Note Documents) prohibiting or conditioning the creation or
assumption of any Lien upon any of its properties, revenues or assets, whether
now owned or hereafter acquired; PROVIDED, HOWEVER, that this subsection shall
not prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under subsection 10.04(a)(x) solely to the extent any
such negative pledge relates to the property financed by or the subject of such
Indebtedness.
(c) CHANGE IN NATURE OF BUSINESS. The Borrower shall not,and
shall not permit any of its Subsidiaries to, engage in any material line of
business substantially different from those lines of business carried on by it
at the date hereof.
(d) RESTRICTIONS ON FUNDAMENTAL CHANGES. The Borrower shall
not, and shall not permit any of its Subsidiaries to, merge with or consolidate
into, or acquire all or substantially all of the assets of, any Person, or sell,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets, except that:
(i) any of the Borrower's wholly owned Subsidiaries may
merge with, consolidate into or transfer all or substantially all of its assets
to another of the Borrower's wholly owned Subsidiaries that is a Guarantor or to
the Borrower and in connection therewith such Subsidiary may be liquidated or
dissolved;
(ii) the Borrower or any of its Subsidiaries may sell or
dispose of assets in accordance with the provisions of subsection (e); and
(iii) the Borrower or any of its Subsidiaries may make any
investment permitted by subsection (f).
(e) SALES OF ASSETS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, sell, lease, transfer, or otherwise dispose
of, or part with control of (whether in one transaction or a series of
transactions) any assets (including any shares of stock in any Subsidiary or
other Person), except sales or other dispositions of any of the following:
(i) any inventory in the ordinary course of business;
(ii) any Permitted Investments;
(iii) any assets which have become worn out or obsolete or
which are promptly being replaced, in the ordinary course of business;
69.
(iv) any assets by any of its wholly owned Subsidiaries to
another of its wholly owned Subsidiaries or to the Borrower;
(v) any Specified Assets; PROVIDED that such sale or
disposition is made in a bona fide arm's length transaction; and PROVIDED
FURTHER that at the time of any such sale or disposition, no Event of Default
shall exist or shall result therefrom; and
(vi) any other assets to the extent not otherwise permitted
under this subsection (e); PROVIDED that such assets do not constitute the
Primary Trademarks or Substantial Assets and such sale or disposition is made
for fair market value; and PROVIDED FURTHER that (A) at the time of any such
sale or disposition, no Event of Default shall exist or shall result therefrom,
(B) the aggregate sales price from such sale or disposition shall be paid in
cash, and (C) no dispositions of accounts or notes receivable shall be permitted
hereunder.
For purposes of clause (vi) a sale, lease, transfer or other disposition of
assets shall be deemed to be of "Substantial Assets" if such assets, when added
to all other assets sold, leased, transferred or otherwise disposed of during
the same fiscal year (other than assets sold in the ordinary course of
business), shall exceed 5% of the Borrower's Consolidated Total Assets
determined as of the end of the most recently completed fiscal year.
(f) LOANS AND INVESTMENTS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, purchase or otherwise acquire the capital
stock, assets, obligations or other securities of or any interest in any Person,
or otherwise extend any credit to, guarantee the obligations of or make any
additional investments in any Person, other than:
(i) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sales of goods or services in
the ordinary course of business;
(ii) investments by the Borrower in the capital stock of
wholly-owned Subsidiaries, and extensions of credit by the Borrower to any of
its wholly owned Subsidiaries or by any of its wholly owned Subsidiaries to
another of its wholly owned Subsidiaries or the Borrower, in each case in the
ordinary course of business;
(iii) Permitted Investments;
(iv) purchases of assets in the ordinary course of business;
(v) additional purchases of or investments in joint ventures
or the capital stock, assets, obligations or other securities of or interest in
other Persons, PROVIDED that (A) immediately prior to and after giving effect to
such purchase or investment, no Event of Default shall have occurred and be
continuing, (B) the aggregate cash and non-cash consideration for any such
purchase or investment (or series of related purchases or investments) shall not
exceed $5,000,000 without the prior written consent of the Majority Lenders, (C)
after giving effect to such purchase or investment, the Borrower shall be in
full pro forma compliance with each of the financial covenants set forth in
subsections 10.02(a) through (f), measured as of the last day of the fiscal
quarter then most recently ended, and (D) in the case of any Acquisition, the
prior, effective written consent or approval to such Acquisition of the board of
directors or equivalent governing body of the acquiree is obtained;
70.
(vi) employee loans and guarantees in accordance with the
Borrower's usual and customary practices with respect thereto;
(vii) Guaranty Obligations permitted under subsection (a); or
(viii)extensions of credit by the Borrower to its Subsidiary
Canoe Ridge Vineyard L.L.C., its Subsidiary SHW Equity Co. and/or its Subsidiary
Edna Valley Vineyard outstanding on or after the Closing Date in an aggregate
amount for all such extensions of credit not to exceed, without the prior
written consent of the Majority Lenders in their sole discretion, the Maximum
Intercompany Loan Amount at any time outstanding; PROVIDED that all such
extensions of credit by the Borrower (i) to Canoe Ridge Vineyard L.L.C. shall
not at any time outstanding exceed the Canoe Ridge Intercompany Loan Amount,
(ii) to Edna Valley Vineyard shall not at any time outstanding exceed the Edna
Valley Intercompany Loan Amount, and (iii) to SHW Equity Co. shall not at any
time outstanding exceed the SHW Intercompany Loan Amount; and PROVIDED FURTHER
that no Event of Default shall exist at the time of making any such credit
extension or would result therefrom.
(g) SALES AND LEASEBACKS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, become liable, directly or indirectly,
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, (i) which the Borrower or such Subsidiary has sold or transferred or
is to sell or transfer to any other Person or (ii) which the Borrower or such
Subsidiary intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by the Borrower or such
Subsidiary to any other Person in connection with such lease, unless such sale
or transfer is permitted under subsection (e)(vi).
(h) DISTRIBUTIONS. (i) The Borrower shall not declare or
pay any dividends in respect of the Borrower's capital stock, or purchase,
redeem, retire or otherwise acquire for value any of its capital stock now or
hereafter outstanding, return any capital to its shareholders as such, or make
any distribution of assets to its shareholders as such, or permit any of its
Subsidiaries to purchase, redeem, retire, or otherwise acquire for value any
stock of the Borrower, except that the Borrower may:
(A) declare and deliver dividends and distributions payable
only in common stock of the Borrower;
(B) purchase, redeem, retire, or otherwise acquire shares of
its capital stock with the proceeds received from a substantially concurrent
issue of new shares of its capital stock;
(C) declare and pay cash dividends to its stockholders and
purchase, redeem, retire or otherwise acquire shares of its own outstanding
capital stock for cash during any fiscal year if (1) after giving effect thereto
the aggregate amount of such dividends, purchases, redemptions, retirements and
acquisitions paid or made during any fiscal year is not in excess of 25% of
Consolidated Net Income of the Borrower for the fiscal year immediately
preceding the year in which such dividend, purchase, redemption, retirement or
acquisition is paid or made and
71.
(2) immediately prior to and after giving effect thereto, no Default shall have
occurred and be continuing; and
(D) declare and pay the Wine Dividend Credits, PROVIDED that
immediately prior to and after giving effect thereto, no Default shall have
occurred and be continuing.
(ii) The Borrower shall not permit any Subsidiary of the
Borrower to grant or otherwise agree to or suffer to exist any consensual
restrictions on the ability of such Subsidiary to pay dividends and make other
distributions to the Borrower, or to pay any Indebtedness owed to the Borrower
or transfer properties and assets to the Borrower.
(i) AMENDMENTS OF CERTAIN DOCUMENTS. The Borrower shall not,
and shall not permit any of its Subsidiaries to, agree to or permit any
amendment, modification or waiver of:
(i) any provision of any agreement related to any
Subordinated Debt (including any amendment, modification or waiver pursuant to
an exchange of other securities or instruments for outstanding Subordinated
Debt) if the effect of such amendment, modification or waiver is to (A) increase
the interest rate on such Subordinated Debt or change (to earlier dates) the
dates upon which principal and interest are due thereon; (B) alter the
redemption, prepayment or subordination provisions thereof; (C) alter the
covenants and events of default in a manner which would make such provisions
more onerous or restrictive to the Borrower or such Subsidiary; or (D) otherwise
increase the obligations of the Borrower or such Subsidiary in respect of such
Subordinated Debt or confer additional rights upon the holders thereof which
individually or in the aggregate would be adverse to the Borrower, its
Subsidiaries or the Lenders; and
(ii) any provision of any of the Senior Secured Note
Documents (including any amendment, modification or waiver pursuant to an
exchange of other securities or instruments for outstanding Senior Secured
Notes) if the effect of such amendment, modification or waiver would be to (A)
change to earlier dates the dates upon which principal and interest are due
thereunder, (B) alter the redemption or prepayment provisions thereof, or (C)
alter the provisions thereof relating to dispositions of collateral.
(j) REDEMPTION OF SUBORDINATED DEBT. The Borrower shall not,
and shall not permit any of its Subsidiaries to, make any voluntary or optional
payment or repayment on, redemption, exchange or acquisition for value of, or
any sinking fund or similar payment with respect to, any Subordinated Debt.
Notwithstanding the foregoing, the Borrower may from time to time satisfy all or
any portion of the outstanding principal and accrued and unpaid interest in
respect of any Subordinated Debt by exchanging common stock or Permitted
Preferred Stock of the Borrower in satisfaction of such outstanding principal
and accrued and unpaid interest pursuant to a non-cash transaction approved in
good faith by the Board of Directors of the Borrower. The Borrower shall
promptly notify the Agent of any such exchange.
(k) TRANSACTIONS WITH RELATED PARTIES. Except as set forth
in Schedule 9 hereto, the Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any transaction, including the purchase, sale or
exchange of property or the rendering of any services,
72.
with any Affiliate, any officer or director thereof or any Person which
beneficially owns or holds 5% or more of the equity securities, or 5% or more of
the equity interest, thereof (a "Related Party"), or enter into, assume or
suffer to exist, or permit any Subsidiary to enter into, assume or suffer to
exist, any employment or consulting contract with any Related Party, except a
transaction or contract which is in the ordinary course of the Borrower's or
such Subsidiary's business and which is upon fair and reasonable terms not less
favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's length transaction with a Person not a Related Party.
(l) HAZARDOUS SUBSTANCES. The Borrower shall not, and shall
not permit any of its Subsidiaries to, use, generate, manufacture, install,
treat, release, store or dispose of any Hazardous Substances, except in
compliance with all applicable Environmental Laws.
(m) ACCOUNTING CHANGES. The Borrower shall not,and shall not
suffer or permit any of its Subsidiaries to, make any significant change in
accounting treatment or reporting practices, except as required or permitted by
GAAP, or change its fiscal year or that of any of its consolidated Subsidiaries,
except to change the fiscal year of a Subsidiary acquired in connection with a
permitted acquisition to conform its fiscal year to the Borrower's.
(n) FOREIGN SUBSIDIARIES. The Borrower shall not directly or
indirectly create or acquire any Foreign Subsidiary without the prior written
consent of the Agent and the Majority Lenders.
ARTICLE XI
EVENTS OF DEFAULT
SECTION 11.01 EVENTS OF DEFAULT. Any of the following events
which shall occur shall constitute an "Event of Default":
(a) PAYMENTS. The Borrower shall fail to pay (i) any amount
of principal of, or interest on, any Loan or Note or any amount of any L/C
Obligation when due or (ii) any fee or other amount payable hereunder or under
any of the other Loan Documents within three (3) Business Days after the same
shall have become due.
(b) REPRESENTATIONS AND WARRANTIES. Any representation or
warranty by the Borrower under or in connection with the Loan Documents shall
prove to have been incorrect in any material respect when made or deemed made.
(c) FAILURE BY BORROWER TO PERFORM CERTAIN COVENANTS. The
Borrower shall fail to perform or observe any term, covenant or agreement
contained in Section 10.01, Section 10.02, subsections (a), (c), (e), and (j) of
Section 10.03 or Section 10.04.
(d) FAILURE BY BORROWER TO PERFORM OTHER COVENANTS. The
Borrower shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement or any other Loan Document on its part to be
performed or observed and any such failure shall remain unremedied for a period
of 20 days from the occurrence thereof (unless the Majority Lenders determine
that such failure is not capable of remedy).
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(e) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Borrower or any
Subsidiary (i) ceases or fails to be Solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(f) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Borrower or any Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the Borrower's or any Subsidiary's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Borrower or any Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) the Borrower or any Subsidiary acquiesces in the appointment of a
receiver, trustee, custodian, conservator, liquidator, mortgagee in possession
(or agent therefor), or other similar Person for itself or a substantial portion
of its property or business; or
(g) DEFAULT UNDER OTHER INDEBTEDNESS. (i) The Borrower or
any of its Subsidiaries shall fail (A) to make any payment of any principal of,
or interest or premium on, any Indebtedness (other than in respect of the Loans
or any Rate Contract) having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $1,500,000 (or
its equivalent in another currency) when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the agreement
or instrument relating to such Indebtedness as of the date of such failure; or
(B) to perform or observe any term, covenant or condition on its part to be
performed or observed under any agreement or instrument relating to any such
Indebtedness, when required to be performed or observed, and such failure shall
continue after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such failure to perform or observe is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or (ii) any such Indebtedness shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; (iii) any facility or
commitment available to the Borrower or any Subsidiary relating to Indebtedness
in an aggregate amount at any one time of not less than $1,500,000 (or its
equivalent in any other currency) is withdrawn, suspended or cancelled by reason
of any default (however described) of the Borrower or such Subsidiary; or (iv)
there occurs under any Rate Contract an Early Termination Date (as defined in
such Rate Contract) resulting from (A) any event of default under such Rate
Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as
defined in such Rate Contract) or (B) any Termination Event (as so defined) as
to which the Borrower or any Subsidiary is an Affected Party (as so defined),
and, in either event, the Swap Termination Value owed by the Borrower or such
Subsidiary as a result thereof is greater than $1,500,000 (or its equivalent in
another currency).
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(h) JUDGMENTS. (i) A final judgment or order for the payment
of money in excess of $1,500,000 (or its equivalent in another currency) over
the amount covered by third-party insurance shall be rendered against the
Borrower or any of its Subsidiaries; or (ii) any non-monetary judgment or order
shall be rendered against the Borrower or any such Subsidiary which has or would
reasonably be expected to have a Material Adverse Effect; and in each case there
shall be any period of 20 consecutive days during which such judgment continues
unsatisfied or during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect.
(i) ERISA.
(i) The Borrower or an ERISA Affiliate shall fail to satisfy
its contribution requirements in an amount in excess of $1,500,000 under Section
412(c)(11) of the Internal Revenue Code, whether or not it has sought a waiver
under Section 412(d) of the Internal Revenue Code; (ii) in the case of a
Termination Event involving the withdrawal from a Pension Plan of a "substantial
employer" (as defined in Section 4001(a)(2) or Section 4062(e) of ERISA), the
Borrower's or an ERISA Affiliate's proportionate share of that Pension Plan's
Unfunded Accrued Benefits is more than $1,500,000; (iii) in the case of a
Termination Event involving the complete or partial withdrawal from a
Multiemployer Plan, the Borrower or an ERISA Affiliate has incurred a withdrawal
liability in an aggregate amount exceeding $1,500,000; (iv) in the case of a
Termination Event not described in clause (ii) or (iii), the Unfunded Accrued
Benefits of the relevant Pension Plan or Plans exceed $1,500,000; (v) a Plan of
the Borrower or an ERISA Affiliate that is intended to be qualified under
Section 401(a) of the Internal Revenue Code shall lose its qualification, and
the loss can reasonably be expected to impose on the Borrower or an ERISA
Affiliate liability (for additional taxes, to Plan participants, or otherwise)
in the aggregate amount of $1,500,000 or more; (vi) the commencement or increase
of contributions to, the adoption of, or the amendment of a Plan by, the
Borrower or an ERISA Affiliate shall result in a net increase in unfunded
liabilities to the Borrower or an ERISA Affiliate in excess of $1,500,000; or
(vii) the occurrence of any combination of events listed in clauses (ii) through
(vi) that involves a net increase in aggregate Unfunded Accrued Benefits and
unfunded liabilities in excess of $1,500,000.
(j) DISSOLUTION, ETC.The Borrower or any of its Subsidiaries
shall (i) liquidate, wind up or dissolve (or suffer any liquidation, wind-up or
dissolution), except to the extent expressly permitted by Section 10.04, (ii)
suspend its operations other than in the ordinary course of business, or (iii)
take any corporate action to authorize any of the actions or events set forth
above in this subsection (j).
(k) MATERIAL ADVERSE EFFECT. A Material Adverse Effect shall
occur.
(l) CHANGE IN OWNERSHIP OR CONTROL. A Change of Control
shall occur.
(m) FAILURE BY GUARANTOR TO PERFORM COVENANTS; INVALIDITY OF
GUARANTY. Any Guarantor shall fail in any material respect to perform or observe
any term, covenant or agreement contained in its Guaranty or any other Guarantor
Document on its part to be performed or observed and any such failure shall
remain unremedied for a period of 20 days from the occurrence thereof (unless
the Majority Lenders determine that such failure is not
75.
capable of remedy), or any "Event of Default" as defined in any Guaranty shall
have occurred; or any Guaranty or any other Guarantor Document shall for any
reason be revoked or invalidated, or otherwise cease to be in full force and
effect, or any Guarantor or any other Person shall contest in any manner the
validity or enforceability thereof or deny that it has any further liability or
obligation thereunder.
(n) ENVIRONMENTAL INDEMNITY. The Environmental Indemnity
after delivery thereof shall for any reason be revoked or invalidated, or
otherwise cease to be in full force and effect, or the Borrower or any other
Person shall contest in any manner the validity or enforceability thereof, or
the Borrower or any other Person shall deny that it has any further liability or
obligation thereunder.
(o) SUBORDINATION PROVISIONS. The subordination or
intercreditor provisions of the Intercreditor and Collateral Agency Agreement or
of any agreement or instrument governing any Subordinated Debt shall for any
reason be revoked or invalidated, or otherwise cease to be in full force and
effect, any Person shall contest in any manner the validity or enforceability
thereof or deny that it has any further liability or obligation thereunder, or
the Indebtedness hereunder shall for any reason be subordinated or shall not
have the priority contemplated by this Agreement or such subordination or
intercreditor provisions.
(p) COLLATERAL DOCUMENTS. The Borrower or any other Person
shall fail to perform or observe any term, covenant or agreement contained in
the Collateral Documents on its part to be performed or observed and any such
failure shall remain unremedied for a period of 20 days from the occurrence
thereof (unless the Majority Lenders determine that such failure is not capable
of remedy), or any "Event of Default" as defined in any Collateral Document
shall have occurred; or any of the Collateral Documents after delivery thereof
shall for any reason be revoked or invalidated, or otherwise cease to be in full
force and effect, or the Borrower or any other Person shall contest in any
manner the validity or enforceability thereof, or the Borrower or any other
Person shall deny that it has any further liability or obligation thereunder; or
any of the Collateral Documents for any reason, except to the extent permitted
by the terms thereof, shall cease to create a valid and perfected first priority
Lien subject only to Permitted Liens in any of the Collateral purported to be
covered thereby; or any title insurance coverage in respect of any material
portion of the Collateral is disavowed or becomes ineffective.
SECTION 11.02 EFFECT OF EVENT OF DEFAULT. If any Event of
Default shall occur and be continuing, the Agent shall, at the request of, or
may, with the consent of, the Majority Lenders, (i) by notice to the Borrower,
(A) require that the Borrower cash collateralize the L/C Obligations (in an
amount equal to the then outstanding amount thereof), (B) declare the
Commitments of the Lenders (other than their respective share of the L/C
Commitment with respect to outstanding Letters of Credit) and any obligations of
the Issuing Lender to issue, amend or renew Letters of Credit, to be terminated,
whereupon the same shall forthwith terminate, and (C) declare an amount equal to
the maximum aggregate amount that is or at any time thereafter may become
available for drawing under any outstanding Letters of Credit (whether or not
any beneficiary shall have presented, or shall be entitled at such time to
present, the drafts or other documents required to draw under such Letters of
Credit) to be immediately due and payable, and declare the entire unpaid
principal amount of the Loans and the Notes, all interest accrued and unpaid
thereon and all other Obligations to be forthwith due and payable,
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whereupon such amount with respect to Letters of Credit, the Loans and the
Notes, all such accrued interest and all such other Obligations shall become and
be forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
PROVIDED that if an event described in Sections 11.01(e) or 11.01(f) shall
occur, the result which would otherwise occur only upon giving of notice by the
Agent to the Borrower as specified in this clause (i) shall occur automatically,
without the giving of any such notice; and (ii) whether or not the actions
referred to in clause (i) have been taken, (A) instruct the Collateral Agent to
exercise any or all of the Collateral Agent's rights and remedies under the
Collateral Documents and applicable law (subject to the Intercreditor and
Collateral Agency Agreement), and (B) proceed to enforce all other rights and
remedies available to the Agent and the Lenders under the Loan Documents and
applicable law.
ARTICLE XII
THE AGENT
SECTION 12.01 AUTHORIZATION AND ACTION. Each Lender hereby
appoints Rabobank as Agent and authorizes the Agent to execute the Loan
Documents and to take such action as agent on its behalf and to exercise such
powers and perform such duties under this Agreement and the other Loan Documents
as are delegated to the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto. The duties and obligations of the
Agent are strictly limited to those expressly provided for herein, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Agent. As to any matters not expressly provided for by the Loan Documents
(including enforcement of the Loan Documents or collection of any amounts due
thereunder), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders;
PROVIDED, HOWEVER, that except for action expressly required of the Agent
hereunder, the Agent shall in all cases be fully justified in failing or
refusing to act under any Loan Document unless it shall be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by reason of taking or continuing to take any such action, and that
the Agent shall not in any event be required to take any action which exposes
the Agent to liability or which is contrary to any Loan Document or applicable
law. Nothing in any Loan Document shall, or shall be construed to, constitute
the Agent a trustee or fiduciary for any Lender or the Issuing Lender. In
performing its functions and duties hereunder, the Agent shall act solely as the
agent of the Lenders and does not assume and shall not be deemed to have assumed
any obligation towards or relationship of agency or trust with or for the
Borrower or any Guarantor. Each Lender agrees that the Borrower shall be
entitled to rely on any action purportedly taken by the Agent on behalf of the
Lenders. Each Lender agrees that the Borrower shall have no liability for the
Agent's failure to properly distribute to the Lenders, as their interests may
appear, any funds received by the Agent on behalf of the Lenders.
SECTION 12.02 LIMITATION ON LIABILITY OF AGENT; NOTICES;
CLOSING.
77.
(a) LIMITATION ON LIABILITY OF AGENT AND ISSUING LENDER.None
of the Agent/IB-Related Persons shall be liable for any action taken or omitted
to be taken by it or them under or in connection with any Loan Document, except
for its or their own gross negligence or willful misconduct. Without limitation
of the generality of the foregoing, the Agent (i) may treat a Lender as the
holder of its Loans for all purposes hereof unless and until such Lender and its
assignee shall have delivered to the Agent and the Borrower an Assignment and
Acceptance Agreement substantially in the form of Exhibit M (an "Assignment and
Acceptance") and the other conditions to assignment set forth in Section 13.09
shall have been satisfied; (ii) may consult with legal counsel (including
counsel to the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; and (iii) shall incur no liability to any Lender under
or in respect of any Loan Document by acting upon any notice, consent,
certificate, telegram, facsimile, electronic mail, telex or teletype message,
statement or other instrument or writing believed by it to be genuine and signed
or sent by the proper party or parties or by acting upon any representation or
warranty made or deemed to be made hereunder or under any other Loan Document.
Further, the Agent (A) makes no warranty or representation to any Lender and
shall not be responsible to any Lender for the accuracy or completeness of any
information, exhibit or report furnished under any Loan Document, for any
statements, warranties or representations (whether written or oral) made or
deemed made in or in connection with any Loan Documents; (B) shall have no duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement or any other Loan Document on
the part of the Borrower, the Guarantors or any other Person or to inspect the
property, books or records of the Borrower, the Guarantors or any other Person;
and (C) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency, value or collectibility of
this Agreement or any other Loan Document or any of the Collateral.
(b) NOTICES. Promptly upon receipt thereof, the Agent shall
forward to each Lender originals or copies, as specified in this Agreement or
any other Loan Document, of all agreements, instruments, opinions, financial
statements, notices and other documents delivered by the Borrower, the
Guarantors or any other Person to the Agent pursuant to any Loan Document for
distribution to the Lenders. Except for any of the foregoing expressly required
to be furnished to the Lenders by the Agent hereunder, the 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 Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
(c) CLOSING. For purposes of determining compliance with the
conditions specified in Section 8.01, each Lender that has executed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter either sent (or made available) by
the Agent to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Lender, unless an officer of the Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice from
such Lender prior to the Closing Date specifying its objection thereto and
either such objection shall not have been withdrawn by notice to the Agent to
that effect on or prior to the Closing Date or, if any
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Borrowing on the Closing Date has been requested, the Lender shall not have made
available to the Agent on or prior to the Closing Date the Lender's Pro Rata
Share of any Borrowing.
SECTION 12.03 AGENT AND AFFILIATES. With respect to its
Commitment, the Loans made by it, the Notes issued to it, Letters of Credit
issued by it, and all other Obligations owing to it as a Lender, the Agent shall
have the same rights and powers under the Loan Documents as any other Lender and
may exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include the Agent in its
individual capacity. The Agent and its Affiliates may accept deposits from, lend
money to, issue letters of credit for the account of, act as trustee under
indentures of and generally engage in any kind of business with the Borrower,
the Guarantors and any Affiliate thereof, all as if the Agent were not the Agent
hereunder and without any duty to account therefor to the Lenders.
SECTION 12.04 NOTICE OF DEFAULTS. The Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default hereunder
(other than nonpayment of principal of or interest on the Loans or of any fees
or any of its costs and expenses) unless the Agent has actual knowledge thereof
or has received notice in writing from a Lender or the Borrower referring to
this Agreement, describing such event or condition and expressly stating that
such notice is a "notice of default." Should the Agent receive such notice of
the occurrence of a Default, the Agent shall promptly give notice thereof to the
Lenders. The Agent thereupon shall take such action with respect to such Default
as shall be reasonably directed by the Majority Lenders; PROVIDED that, unless
and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default as it shall deem advisable in the best interests of
the Lenders.
SECTION 12.05 NON-RELIANCE ON AGENT AND ISSUING LENDER. Each
Lender has itself been, and will continue to be, based on such documents and
information as it has deemed appropriate, solely responsible for making its own
independent appraisal of and investigations into the financial condition,
creditworthiness, condition, affairs, status and nature of the Borrower or any
of its Subsidiaries and the nature and value of any of the Collateral.
Accordingly, each Lender confirms to the Agent and the Issuing Lender that it
has not relied, and will not hereafter rely, on the Agent or the Issuing Lender
(i) to check or inquire on such Lender's behalf into the adequacy, accuracy or
completeness of any information provided by the Borrower or any other Person
under or in connection with the Loan Documents or the transactions herein
contemplated (whether or not such information has been or is hereafter
distributed to such Lender by the Agent or the Issuing Lender), or (ii) to
assess or keep under review on such Lender's behalf the financial condition,
creditworthiness, condition, affairs, status or nature of the Borrower, any
Subsidiary or the nature or value of any of the Collateral.
SECTION 12.06 INDEMNIFICATION. The Lenders agree to indemnify
each Agent/IB Related Person (to the extent not reimbursed by the Borrower),
ratably in accordance with the respective Pro Rata Shares of the Lenders,
against and hold each of them harmless from any and all liabilities,
obligations, losses, claims, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel to such Agent/IB Related Person
(including allocated costs of internal counsel), which may be imposed on,
incurred by, or asserted against such Agent/IB Related Person, in any way
relating to or arising out of the Loan Documents, the use or intended
79.
use of the proceeds of the Loans or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent/IB Related Person in
connection with any of the foregoing; PROVIDED that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent they
are found by a final decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Agent/IB
Related Person. Without limitation of the foregoing, each Lender agrees to
reimburse each Agent/IB Related Person promptly upon demand for such Lender's
Pro Rata Share of any costs and expenses or other charges incurred by such
Agent/IB Related Person and payable by the Borrower pursuant to Section 13.04(a)
or any other Loan Document to the extent that such Agent/IB Related Person is
not reimbursed for such expenses or charges by the Borrower (without prejudice
to the Borrower's obligation to so reimburse such Agent/IB Related Person).
SECTION 12.07 DELEGATION OF DUTIES. The Agent may, in its
discretion, employ from time to time one or more agents or attorneys-in-fact
(including any of the Agent's Affiliates) to perform any of the Agent's duties
under the Loan Documents. The Agent shall not be responsible for the negligence
or misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
SECTION 12.08 SUCCESSOR AGENT. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving 30 days' written notice thereof to the Lenders and the Borrower.
Upon any such resignation, the Majority Lenders shall have the right to appoint
a successor Agent from among the Lenders, and the Lenders shall use their best
efforts so to appoint a successor Agent. If no successor Agent shall have been
so appointed by the Majority Lenders, and shall have accepted such appointment,
prior to the effective date of the retiring Agent's resignation, the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent from among the
Lenders. Upon the effectiveness of the acceptance of any appointment as Agent
hereunder by a successor Agent, (i) the Borrower shall be promptly notified and
(ii) such successor Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges, duties and obligations of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
the Loan Documents. After any retiring Agent's resignation hereunder as Agent,
the provisions of this Article XII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under the Loan Documents.
The appointment of a successor Agent (other than a successor by operation of
law) shall be subject to the consent of the Borrower (such consent not to be
unreasonably withheld or delayed), unless an Event of Default shall have
occurred and be continuing, in which case no consent of the Borrower to the
appointment of a successor Agent shall be required.
SECTION 12.09 COLLATERAL MATTERS.
(a) AUTHORIZATION. The Collateral Agent is authorized on
behalf of all the Lenders, without the necessity of any notice to or further
consent from the Lenders, from time to time to take any action with respect to
any Collateral or the Collateral Documents which may be necessary to perfect and
maintain perfected the Liens on the Collateral granted pursuant to the
Collateral Documents or protect and preserve the Collateral Agent's ability to
enforce the Liens or realize upon the Collateral.
80.
(b) COLLATERAL RELEASES. The Lenders irrevocably authorize
the Collateral Agent, at its option and in its discretion, to release any Lien
granted to or held by the Collateral Agent upon any Collateral (i) upon
termination of the Commitments and payment in full of all Loans and all other
Obligations known to the Collateral Agent and payable under this Agreement or
any other Loan Document; (ii) constituting property sold or to be sold or
disposed of as part of or in connection with any sale or other disposition
permitted hereunder or under any Collateral Document; (iii) constituting
property in which the Borrower or its Subsidiaries owned no interest at the time
the Lien was granted or at any time thereafter; (iv) constituting property
leased to the Borrower or any Subsidiary under a lease permitted hereunder; (v)
consisting of an instrument evidencing Indebtedness or other debt instrument, if
the Indebtedness evidenced thereby has been paid in full; or (vi) if approved,
authorized or ratified in writing by the Majority Lenders or all the Lenders, as
the case may be, as provided in Section 13.01. Upon request by the Collateral
Agent at any time, the Lenders shall confirm in writing the Collateral Agent's
authority to release particular types or items of Collateral pursuant to this
Section 12.09, PROVIDED that the absence of any such confirmation for whatever
reason shall not affect the Collateral Agent's rights under this Section 12.09.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 AMENDMENTS AND WAIVERS. Except as otherwise
provided herein or in any other Loan Document, (i) no amendment to any provision
of this Agreement or any of the other Loan Documents shall in any event be
effective unless the same shall be in writing and signed by the Borrower (and/or
any other party thereto, as applicable), the Agent and the Majority Lenders (or
the Agent with the written consent of the Majority Lenders); and (ii) no waiver
of any provision of this Agreement or any other Loan Document, or consent to any
departure by the Borrower or other party therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Agent and the
Majority Lenders (or the Agent with the consent of the Majority Lenders). Any
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. Notwithstanding the
foregoing provisions of this Section 13.01, any term or provision of any such
other Loan Document may be amended without the agreement or consent of, or prior
notice to, the Borrower or other party thereto, to the extent such Loan Document
provides for amendments without the agreement or consent of, or notice to, the
Borrower or such other party, and any term or provision of Article XII may be
amended without the agreement or consent of, or prior notice to, the Borrower;
and, unless in writing and signed by all of the Lenders (or by the Agent with
the written consent of all the Lenders), no amendment, waiver or consent shall
do any of the following:
(A) increase the amount, or extend the stated expiration or
termination date, of the Commitments of the Lenders;
(B) reduce the principal of,or interest on, the Loans or any
fee or other amount payable to the Lenders hereunder;
81.
(C) postpone any date fixed for any payment in respect of
principal of, or interest on, the Loans or any fee or other amount payable to
the Lenders hereunder;
(D) change the definition of "Majority Lenders" or any
definition or provision of this Agreement requiring the approval of Majority
Lenders or some other specified amount of Lenders;
(E) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under the Loan Documents;
(F) release any Guaranty or any material portion of the
Collateral except as contemplated herein and in the Collateral Documents
relating thereto;
(G) amend, modify or waive the provisions of Section 7.01,
7.05 or 13.07; or
(H) amend, modify or waive the provisions of this Section
13.01; and
PROVIDED FURTHER, HOWEVER, that no amendment, waiver or consent (1) shall,
unless in writing and signed by the Agent in addition to the Lenders required
hereinabove to take such action, affect the rights, obligations or duties of the
Agent under any Loan Document; (2) shall, unless in writing and signed by the
Collateral Agent in addition to the Lenders required hereinabove to take such
action, affect the rights, obligations or duties of the Collateral Agent under
any Loan Document; (3) shall, unless in writing and signed by the Issuing Lender
in addition to the Lenders required hereinabove to take such action, affect the
rights or duties of the Issuing Lender under this Agreement or any L/C-Related
Document to which it is a party; or (4) shall, unless in writing and signed by
the Swingline Lender in addition to the Lenders required hereinabove to take
such action, affect the rights, obligations or duties of the Swingline Lender
under any Loan Document; PROVIDED FURTHER, that the Fee Letter and documents
evidencing Specified Swap Contracts may be amended, or rights or privileges
thereunder waived, in a writing executed by the parties thereto; AND PROVIDED
FURTHER, HOWEVER, that, for the avoidance of doubt, it is agreed and
acknowledged by and among the Agent, the Borrower and the Lenders that, subject
to the immediately preceding proviso, the provisions of subsection 5.03(b) may
be amended or waived with the written consent of the Agent, the Borrower and the
Majority Lenders.
SECTION 13.02 NOTICES.
(a) NOTICES. All notices and other communications provided
for hereunder and under the other Loan Documents shall, unless otherwise stated
herein, be in writing (including by facsimile transmission and, subject to
subsection (c), by electronic mail) and mailed, sent or delivered to the
respective parties hereto at or to their respective addresses, facsimile numbers
or email addresses set forth in Schedule 2, or at or to such other address,
facsimile number or email address as shall be designated by any party in a
written notice to the other parties hereto. All such notices and communications
shall be effective (i) if delivered by hand, when delivered; (ii) if sent by
mail, upon the earlier of the date of receipt or five Business Days after
deposit in the mail, first class (or air mail, with respect to communications to
be sent to or from the United States), postage prepaid; and (iii) if sent by
facsimile transmission or electronic mail, when sent; PROVIDED, HOWEVER, that
notices and communications to the Agent
82.
shall not be effective until actually received by the Agent, and notices to the
Issuing Lender pursuant to Article III shall not be effective until actually
received by the Issuing Lender.
(b) FACSIMILE AND TELEPHONIC NOTICE. The Borrower
acknowledges and agrees that the agreement of the Agent and the Lenders herein
and in any other Loan Document to receive certain notices by telephone and
facsimile is solely for the convenience and at the request of the Borrower. The
Agent and the Lenders shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Borrower to give such notice and the
Agent and the Lenders shall not have any liability to the Borrower or other
Person on account of any action taken or not taken by the Agent and the Lenders
in reliance upon such telephonic or facsimile notice. The obligation of the
Borrower to repay the Loans, the drawings under Letters of Credit and the other
Obligations shall not be affected in any way or to any extent by any failure by
the Agent and the Lenders to receive written confirmation of any telephonic or
facsimile notice or the receipt by the Agent and the Lenders of a confirmation
which is at variance with the terms understood by the Agent and the Lenders to
be contained in the telephonic or facsimile notice.
(c) ELECTRONIC MAIL. Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents for
execution by the parties thereto, and may not be used for any other purpose.
SECTION 13.03 NO WAIVER; CUMULATIVE REMEDIES. No failure on
the part of the Agent, any Lender or the Collateral Agent to exercise, and no
delay in exercising, any right, remedy, power or privilege under any Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights and remedies under the Loan Documents are cumulative and
not exclusive of any rights, remedies, powers and privileges that may otherwise
be available to the Agent, any Lender or the Collateral Agent.
SECTION 13.04 COSTS AND EXPENSES; INDEMNIFICATION.
(a) COSTS AND EXPENSES.The Borrower agrees to pay on demand,
whether or not the transactions contemplated hereby shall be consummated:
(i) the reasonable out-of-pocket costs and expenses of the
Agent, the Issuing Lender and any of their respective Affiliates, and the
reasonable fees and disbursements of counsel to the Agent and the Issuing Lender
(including allocated costs of internal counsel), in connection with the
negotiation, preparation, execution, delivery, syndication (including
out-of-pocket expenses in connection with the use of IntraLinks) and
administration of the Loan Documents, and any amendments, modifications or
waivers of the terms thereof;
(ii) all title, appraisal (including the allocated cost of
internal appraisal services), survey, audit, environmental inspection,
consulting, search, recording, filing and similar costs, fees and expenses
incurred or sustained by the Agent or any of its Affiliates in connection with
the Loan Documents or the Collateral; and
83.
(iii) all costs and expenses of the Agent, the Issuing Lender,
their respective Affiliates and the Lenders, and fees and disbursements of
counsel (including allocated costs of internal counsel), in connection with (A)
any Default, (B) the enforcement or attempted enforcement of, and preservation
of any rights or interests under, the Loan Documents, (C) any out-of-court
workout or other refinancing or restructuring or any Insolvency Proceeding, and
(D) the preservation of and realization upon any of the Collateral, including
any losses, costs and expenses sustained by the Agent, the Issuing Lender and
any Lender as a result of any failure by the Borrower or any Guarantor to
perform or observe its respective obligations contained in the Loan Documents.
(b) INDEMNIFICATION. Whether or not the transactions
contemplated hereby shall be consummated, the Borrower hereby agrees to
indemnify each Agent/IB Related Person, each Lender and any Affiliates,
directors, officers, employees, agents, counsel and other advisors
(collectively, the "Related Persons") of any Lender (each an "Indemnified
Person") against, and hold each of them harmless from, any and all liabilities,
obligations, losses, claims, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel to an Indemnified Person (including
allocated costs of internal counsel), which may be imposed on, incurred by, or
asserted against any Indemnified Person, (i) by any Governmental Authority or
other third party in any way relating to or arising out of any of the Loan
Documents, the Letters of Credit, the use or intended use of the proceeds of the
Loans or the transactions contemplated hereby or thereby, (ii) with respect to
any investigation, litigation or other proceeding relating to any of the
foregoing, irrespective of whether the Indemnified Person shall be designated a
party thereto, or (iii) in any way relating to or arising out of the use,
generation, manufacture, installation, treatment, storage or presence, or the
spillage, leakage, leaching, migration, dumping, deposit, discharge, disposal or
release, at any time, of any Hazardous Substances on, under, at or from any
Premises, including any personal injury or property damage suffered by any
Person, and any investigation, site assessment, environmental audit, feasibility
study, monitoring, clean-up, removal, containment, restoration, remedial
response or remedial work undertaken by or on behalf of the any Indemnified
Person at any time, voluntarily or involuntarily, with respect to the Premises
(the "Indemnified Liabilities"); PROVIDED that the Borrower shall not be liable
to any Indemnified Person for any portion of such Indemnified Liabilities to the
extent they are found by a final decision of a court of competent jurisdiction
to have resulted from such Indemnified Person's gross negligence or willful
misconduct. If and to the extent that the foregoing indemnification is for any
reason held unenforceable, the Borrower agrees to make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
(c) OTHER CHARGES.The Borrower agrees to indemnify the Agent
and each of the Lenders against and hold each of them harmless from any and all
present and future stamp, transfer, documentary and other such taxes, levies,
fees, assessments and other charges made by any jurisdiction by reason of the
execution, delivery, performance and enforcement of the Loan Documents.
(d) OBLIGATIONS UNDER EXISTING CREDIT FACILITY. All rights
of Rabobank in respect of any indemnification and otherwise for reimbursement or
payment of any losses, costs, charges, expenses or disbursements (including fees
and disbursements of counsel) under or in
84.
respect of the Existing Credit Facility shall survive the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby.
SECTION 13.05 RIGHT OF SET-OFF. Upon the occurrence and during
the continuance of any Event in Default, each Lender hereby is authorized at any
time and from time to time, without notice to the Borrower (any such notice
being expressly waived by the Borrower), to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any and all of the Obligations of
the Borrower now or hereafter existing under this Agreement and the other Loan
Documents, irrespective of whether or not such Lender shall have made any demand
under this Agreement or any such other Loan Document and although such
Obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
(through the 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. The rights of each Lender under this Section 13.05
are in addition to other rights and remedies (including other rights of set-off)
which such Lender may have. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL
EXERCISE, OR ATTEMPT TO EXERCISE, ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE
LIKE, AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF THE BORROWER OR ANY SUBSIDIARY
HELD OR MAINTAINED BY THE LENDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE AGENT
AND THE MAJORITY LENDERS.
SECTION 13.06 SURVIVAL. All covenants, agreements,
representations and warranties made in any Loan Document shall, except to the
extent otherwise provided therein, survive the execution and delivery of this
Agreement, the making of the Credit Extensions and the execution and delivery of
the Notes, and shall continue in full force and effect so long as the Lenders
have any Commitments, any Loans or Letters of Credit remain outstanding or any
other Obligations remain unpaid or any obligation to perform any other act under
any Loan Document remains unsatisfied. Without limiting the generality of the
foregoing, the obligations of the Borrower under Sections 6.02, 6.03, 7.03 and
13.04, and of the Lenders under Sections 7.03 and 12.06, and all similar
obligations under the other Loan Documents (including all obligations to pay
costs and expenses and all indemnity obligations), shall survive the repayment
of the Loans, the termination of the Letters of Credit and the termination of
the Commitments.
SECTION 13.07 OBLIGATIONS SEVERAL. The obligations of the
Lenders under the Loan Documents are several. The failure of any Lender or the
Agent to carry out its obligations thereunder shall not relieve any other Lender
or the Agent of any obligation thereunder, nor shall any Lender or the Agent be
responsible for the obligations of, or any action taken or omitted by, any other
Person hereunder or thereunder. Nothing contained in any Loan Document shall be
deemed to cause any Lender or the Agent to be considered a partner of or joint
venturer with any other Lender or Lenders, the Agent, the Guarantors or the
Borrower.
SECTION 13.08 BENEFITS OF AGREEMENT. The Loan Documents are
entered into for the sole protection and benefit of the parties hereto and their
successors and assigns, and no other Person (other than any Agent/IB Related
Persons and any Related Persons of the Lenders) shall be a direct or indirect
beneficiary of, or shall have any direct or indirect cause of action or claim in
connection with, any Loan Document.
85.
SECTION 13.09 BINDING EFFECT; ASSIGNMENT.
(a) BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower, the Issuing Lender and the
Agent and when the Agent shall have been notified by each Lender that such
Lender has executed it and thereafter shall be binding upon, inure to the
benefit of and be enforceable by the Borrower, the Issuing Lender, the Agent and
each Lender and their respective successors and assigns.
(b) ASSIGNMENT. The Borrower shall not have the right to
assign its rights and obligations hereunder or under the other Loan Documents or
any interest herein or therein without the prior written consent of all the
Lenders. Each Lender may sell, assign, transfer or grant participations in all
or any portion of such Lender's rights and obligations hereunder and under the
other Loan Documents to any Lender or Eligible Assignee on the basis set forth
below in this subsection.
(i) Any Lender may,with the written consent of the Borrower,
the Agent and the Issuing Lender (which in each case shall not be unreasonably
withheld), at any time assign and delegate to one or more Eligible Assignees
all, or any ratable part of all, of the Loans, the Commitments and the other
rights and obligations of such Lender hereunder; PROVIDED, HOWEVER, that (i) no
written consent of the Borrower shall be required during the existence of a
Default; (ii) no written consent of the Borrower or the Agent shall be required
in connection with any assignment and delegation by a Lender to an Eligible
Assignee that is another Lender or an Affiliate of such Lender; (iii) except in
connection with an assignment of all of a Lender's rights and obligations with
respect to its Commitment and Loans, any such assignment to an Eligible Assignee
that is not a Lender hereunder shall be equal to or greater than $2,000,000, and
(iv) any Lender may (1) assign all or any part of its Term Loans separately from
its Revolving Loans and Revolving Commitment and (2) assign all or any ratable
part of its Revolving Loans and Revolving Commitment separately from its Term
Loans.
(ii) In the event of any such assignment,unless and until (A)
an Assignment and Acceptance shall have been delivered pursuant to clause (i) of
Section 12.02(a), (B) the Agent shall have received payment of an administrative
transfer charge in the amount of $3,500 from the assigning Lender (unless the
assignee shall otherwise agree to pay such charge), and (C) the Agent and the
Borrower shall have received all tax forms and documents required under Section
7.03(d), such assignee shall not be entitled to exercise the rights of a Lender
under this Agreement and the other Loan Documents with respect to such
assignment and the Agent shall not be obligated to make payment of any amount to
which such assignee may become entitled thereunder other than to the assigning
Lender. Subject to satisfaction of the foregoing conditions in connection with
any assignment, upon the effectiveness of such assignment the assignee shall be
deemed a "Lender" for all purposes of this Agreement and the other Loan
Documents with respect to the rights and obligations assigned to it, and the
other Loan Documents with respect to the rights and obligations assigned to it,
and the assigning Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Loan Documents; PROVIDED, HOWEVER, that the assigning
Lender shall not relinquish its rights under Article VI or under Sections 7.03
and 13.04 to the extent such rights relate to the time prior to the effective
date of the Assignment and Acceptance.
86.
(iii) In connection with any partial assignment, upon the
request of the assigning Lender or the assignee, (A) the Borrower shall execute
and deliver substitute Notes to the assigning Lender or the assignee, dated the
effective date of such assignment, setting forth the respective Revolving
Commitments of such assigning Lender and assignee as the maximum principal
amount thereof (in the case of substitute Revolving Notes), or the principal
amount of the Term Loans held by such assigning Lender and assignee (in the case
of substitute Term Notes), and containing other appropriate insertions, and the
assigning Lender (and assignee, if applicable) shall thereupon return the Notes
previously held by it; and (B) Schedules 1 and 2 shall be deemed amended to
reflect the adjustment of the Commitments and Pro Rata Shares of the Lenders
resulting therefrom and the Lending Office, if any, and address for notices of
the assignee.
(iv) In the event of any grant of a participation, the
granting Lender shall remain a "Lender" for purposes of this Agreement, the
Borrower, the Guarantors, the other Lenders, the Issuing Lender and the Agent
shall continue to deal solely and directly with such Lender in connection with
this Agreement and the other Loan Documents, and no Lender shall transfer or
grant any participating interest under which the participant shall have rights
to approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent such amendment,
consent or waiver would require unanimous consent of all the Lenders as
described in Section 13.01. In the case of any such participation, the
participant shall not have any of the rights of a Lender under this Agreement or
the other Loan Documents, except that the participant shall (A) be deemed to
have a right of setoff under Section 13.05 in respect of its participation to
the same extent as if it were a "Lender" hereunder, PROVIDED that such
participant shall also be considered a "Lender" for purposes of such Section
13.05 and Section 7.05; and (B) such participant shall also be entitled to the
benefits of Sections 6.02, 6.03, 7.03 and 13.04 , PROVIDED that any amounts
payable under Sections 6.03 or 7.03 to any participant shall not exceed the
amounts which would have been payable by the Borrower thereunder to the Lender
granting such participation.
(v) The Borrower agrees that in connection with any such
grant or assignment, such Lender may deliver to the prospective participant or
assignee financial statements and other relevant information relating to the
Borrower and its Subsidiaries.
(vi) Each Lender shall obtain from any such prospective
participant or assignee a confidentiality agreement in which such participant or
assignee agrees to an obligation of confidentiality substantially similar to the
terms of Section 13.14.
SECTION 13.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 13.11 SUBMISSION TO JURISDICTION. The Borrower hereby
(i) submits to the non-exclusive jurisdiction of the courts of the State of New
York and the Federal courts of the United States sitting in the State of New
York for the purpose of any action or proceeding arising out of or relating to
the Loan Documents, (ii) agrees that all claims in respect of any such action or
proceeding may be heard and determined in such courts, (iii) irrevocably waives
(to the extent permitted by applicable law) any objection which it now or
87.
hereafter may have to the laying of venue of any such action or proceeding
brought in any of the foregoing courts, and any objection on the ground that any
such action or proceeding in any such court has been brought in an inconvenient
forum and (iv) agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner permitted by law.
(a) NO LIMITATION. Nothing in this Section 13.11 shall limit
the right of the Agent, the Lenders or the Collateral Agent to bring any action
or proceeding against the Borrower or its property in the courts of other
jurisdictions.
SECTION 13.12 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS
AND THE AGENT HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS AND THE
AGENT HEREBY AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT IN ANY WAY LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM, OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. A COPY OF THIS
SECTION 13.12 MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE WAIVER OF
THE RIGHT TO TRIAL BY JURY AND CONSENT TO TRIAL BY COURT. THIS SECTION 13.12 MAY
NOT BE AMENDED, MODIFIED, TERMINATED OR WAIVED EXCEPT BY A WRITING WHICH MAKES
SPECIFIC REFERENCE TO THIS SECTION 13.12.
SECTION 13.13 LIMITATION ON LIABILITY. No claim shall be made
by the Borrower or its Affiliates against any Agent/IB Related Person, or the
Lenders or any of their respective Related Persons, for any special, indirect,
exemplary, consequential or punitive damages in respect of any breach or
wrongful conduct (whether or not the claim therefor is based on contract, tort
or duty imposed by law), in connection with, arising out of or in any way
related to the transactions contemplated by the Loan Documents or any act or
omission or event occurring in connection therewith; and the Borrower hereby
waives, releases and agrees not to sue upon any such claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
SECTION 13.14 CONFIDENTIALITY. Each Lender, the Issuing Lender
and the Agent shall hold all non-public information relating to the Borrower and
its Subsidiaries
88.
obtained by it under this Agreement in accordance with its customary procedures
for handling confidential information of this nature, which in no event shall be
less protective than the procedures such Lender, Issuing Lender or Agent employs
with respect to its own confidential information of a like kind and no less
protective than is required by applicable laws, including U.S. federal
securities laws and regulations governing the disclosure and use of material
non-public information, except for: (i) disclosure to its Affiliates or to its
counsel or to any agent or advisor acting on its behalf in connection with the
negotiation, execution or performance of the Loan Documents; (ii) disclosure as
reasonably required in connection with a transfer to a prospective assignee or
participant of all or part of its Loans or any participation therein, as
provided in Section 13.09(b); (iii) disclosure as may be required or requested
by any Governmental Authority or representative thereof or pursuant to legal
process; (iv) disclosure to any Person and in any proceeding necessary in such
Lender's, the Issuing Lender's or the Agent's judgment to protect its interests
in connection with any claim or dispute involving such Lender, the Issuing
Lender or the Agent; (v) disclosure to any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty's or
prospective counterparty's professional advisor) to any credit derivative
transaction relating to any Obligations; (vi) disclosure to the National
Association of Insurance Commissioners or any other similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's or its Affiliates' investment portfolio in connection with ratings
issued with respect to such Lender or its Affiliates; and (vii) any other
disclosure with the prior written consent of the Borrower. In addition, the
Agent and the Lenders may disclose the existence of this Agreement and
information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to the Agent and the
Lenders in connection with the administration and management of this Agreement
and the other Loan Documents. Prior to any disclosure by any Lender, the Issuing
Lender or the Agent of such non-public information permitted under clause (iii)
(other than in connection with an examination of the financial condition of such
Lender, the Agent or any of their Affiliates by any Governmental Authority), it
shall, if permitted by applicable laws or judicial order, notify the Borrower of
such pending disclosure. In no event shall any Lender, the Issuing Lender or the
Agent be obligated or required to return any materials furnished by the Borrower
or its Subsidiaries. Notwithstanding the foregoing, such obligation of
confidentiality shall not apply if the information or substantially similar
information (A) is rightfully received by any Lender, the Issuing Lender or the
Agent from a Person other than the Borrower or any of its Affiliates without
such Lender, the Issuing Lender or the Agent being under an obligation to such
Person not to disclose such information, or (B) is or becomes part of the public
domain.
SECTION 13.15 ENTIRE AGREEMENT. The Loan Documents reflect the
entire agreement among the Borrower, the Lenders and the Agent with respect to
the matters set forth herein and therein and supersede any prior agreements,
commitments, drafts, communications, discussions and understandings, oral or
written, with respect thereto.
SECTION 13.16 PAYMENTS SET ASIDE. To the extent that any
payment by or on behalf of the Borrower is made to the Agent or any Lender, or
the Agent or any Lender exercises its right of set-off, and such payment or the
proceeds of such set-off or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under the
89.
Bankruptcy Code or other U.S. Federal, state or foreign liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief laws, or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Lender severally agrees to pay to
the Agent upon demand its applicable share of any amount so recovered from or
repaid by the Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Federal Funds Rate
from time to time in effect.
SECTION 13.17 SEVERABILITY. Whenever possible, each provision
of the Loan Documents shall be interpreted in such manner as to be effective and
valid under all applicable laws and regulations. If, however, any provision of
any of the Loan Documents shall be prohibited by or invalid under any such law
or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed
modified to conform to the minimum requirements of such law or regulation, or,
if for any reason it is not deemed so modified, it shall be ineffective and
invalid only to the extent of such prohibition or invalidity without affecting
the remaining provisions of such Loan Document, or the validity or effectiveness
of such provision in any other jurisdiction.
SECTION 13.18 COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
[SIGNATURE PAGES FOLLOW.]
90.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
THE BORROWER
THE CHALONE WINE GROUP, LTD
By:____________________________________
Name:__________________________________
Title:_________________________________
THE AGENT
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
INTERNATIONAL", NEW YORK BRANCH, as
Agent
By:____________________________________
Name:__________________________________
Title:_________________________________
By:____________________________________
Name:__________________________________
Title:_________________________________
91.
THE LENDERS
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
INTERNATIONAL", NEW YORK BRANCH, as
Issuing Lender, as Swingline Lender and
as a Lender
By:____________________________________
Name:__________________________________
Title:_________________________________
By:____________________________________
Name:__________________________________
Title:_________________________________
92.
FARM CREDIT WEST FLCA
By:____________________________________
Name:__________________________________
Title:_________________________________
93.
U.S. BANK NATIONAL ASSOCIATION
By:____________________________________
Name:__________________________________
Title:_________________________________
94.
COMERICA BANK-CALIFORNIA
By:____________________________________
Name:__________________________________
Title:_________________________________
95.
ANNEX I
PRICING GRID
From the Closing Date until the date on which the Borrower
delivers a Compliance Certificate pursuant to Section 10.01(a)(iii) of the
Credit Agreement for the fiscal quarter ending March 31, 2002 (the "INITIAL
PERIOD"), the Applicable Margin and the Applicable Fee Amount shall be fixed at
Level 2. From and after the last day of the Initial Period, the Applicable
Margin and the Applicable Fee Amount for any day shall be the amount per annum
set forth below based on the Leverage Ratio set forth in the most recently
delivered Compliance Certificate delivered by the Borrower pursuant to Section
10.01(a)(iii) of the Credit Agreement. Changes in the Applicable Margin and the
Applicable Fee Amount resulting from a change in the Leverage Ratio shall become
effective on the date of delivery by the Borrower to the Agent of a new
Compliance Certificate pursuant to Section 10.01(a)(iii), except that no such
change shall take effect until the end of the Initial Period. If the Borrower
shall fail to deliver a Compliance Certificate and accompanying financial
statements within the number of days after the end of any fiscal quarter or
fiscal year as required pursuant to Section 10.01(a), the parties agree that the
Applicable Margin and the Applicable Fee Amount shall be fixed at Level 1 until
such time as the Borrower delivers such new Compliance Certificate and
accompanying financial statements pursuant to Section 10.01(a).
===============================================================================================================================
REVOLVING TERM TERM
LOAN REVOLVING LOAN LOAN LOAN
EURODOLLAR BASE RATE COMMITMENT EURODOLLAR BASE RATE LETTER OF
LEVEL LEVERAGE RATIO RATE SPREAD SPREAD FEE RATE SPREAD SPREAD CREDIT FEE
===============================================================================================================================
Level 1 greater than or 2.25% 1.00% 0.45% 2.75% 1.50% 2.25%
equal to 5.50 to 1.00
_______________________________________________________________________________________________________________________________
Level 2 greater than or 2.00% 0.75% 0.375% 2.50% 1.25% 2.00%
equal to 4.50 to
1.00 and less than
5.50 to 1.00
_______________________________________________________________________________________________________________________________
Level 3 greater than or 1.75% 0.50% 0.375% 2.25% 1.00% 1.75%
equal to 3.50 to
1.00 and less than
4.50 to 1.00
_______________________________________________________________________________________________________________________________
Level 4 less than 3.50 to 1.25% 0.00% 0.25% 1.75% 0.50% 1.25%
1.00
_______________________________________________________________________________________________________________________________
96.
SCHEDULE 1
to the Credit Agreement
COMMITMENTS AND PRO RATA SHARES
1. REVOLVING LOANS
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BANK REVOLVING COMMITMENT PRO RATA SHARE
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Cooperatieve Centrale $25,000,000.00 45.454545454%
Raiffeisen-Boerenleenbank B.A.
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U.S. Bank National Association $15,000,000.00 27.272727273%
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Comerica Bank $15,000,000.00 27.272727273%
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TOTAL $55,000,000.00 100%
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2. TERM LOANS
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BANK TERM COMMITMENT PRO RATA SHARE
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Farm Credit West, FLCA $17,500,000.00 100%
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TOTAL $17,500,000.00 100%
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S-1.