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Previous: CHIQUITA BRANDS INTERNATIONAL INC, 8-K, EX-99.1, 2001-01-16 |
Next: UNITED REFINING CO, 10-Q, 2001-01-16 |
<PAGE> 1
EXHIBIT 99.2
CONFIDENTIAL AND PRIVATE
CHIQUITA BRANDS, INC. AND CHIQUITA INTERNATIONAL LIMITED
SUMMARY OF PROPOSED TERMS AND CONDITIONS
SENIOR SECURED CREDIT FACILITIES
JANUARY 15, 2001
I. FACILITIES: $85,000,000 of senior secured credit facilities
comprising three credit facilities (each a "Facility" and together the
"Facilities") allocated as follows;
ALLOCATIONS: 1. $35,000,000 Formula Accounts Receivable
Revolver to be provided by Fleet Capital
Corporation ("FCC") as Agent and Lender.
2. $25,000,000 Term Loan to be provided by
Fleet National Bank ("Fleet").
3. $25,000,000 Tranche B Term Loan to be
provided by Back Bay Capital Funding, LLC
("Back Bay"). (together referred to as the
"Lenders")
CO-BORROWERS: 1. Chiquita Brands, Inc. ("Chiquita Brands")
and Chiquita International Limited ("CIL").
2. Chiquita International Limited and Compania
Bananera Atlantica Limitada and certain of
its Costa Rican affiliates.
<PAGE> 2
JANUARY 15, 2001
3. Chiquita International Limited and
Compania Bananera Atlantica Limitada and
certain of its Costa Rican affiliates.
(together referred to as the "Borrowers")
MATURITY: The Facilities will mature on July 31, 2002.
ADMINISTRATIVE AND
COLLATERAL AGENT: Fleet Capital Corporation ("FCC" or "Agent").
PARTICIPANTS: A group of lending institutions acceptable to
FCC and Fleet. With respect to the Tranche B
Term Loan, a group of lending institutions
acceptable to Back Bay.
PURPOSE: To provide funds to Chiquita Brands, CIL and
the Borrower Group to (i) fund working capital
needs, and (ii) fund capital expenditures.
II. FORMULA ACCOUNTS RECEIVABLE REVOLVER FACILITY ("REVOLVER")
AMOUNT: $35,000,000
CO-BORROWERS: Chiquita Brands and CIL
GUARANTORS: Unlimited secured guarantees from the companies
DOMESTIC (SECURED) listed below:
- Chiquita Brands Company, North America
- Chiquita International Trading Company
- American Produce Company
- Progressive Produce Corporation
- Chiriqui Land Company
- Compania Frutera de Sevilla
- Maritrop Trading Corporation
- All other U.S. subsidiaries owned by
the Borrower Group, other than the
Excluded Subsidiaries.
Limited secured guarantees from the companies
listed below:
INTERNATIONAL (SECURED) - Chiquita Banana Company, B.V.
- Chiquita (Canada) Inc.
- Chiquita Far East Holdings, B.V.
- Chiquita Fresh B.V.B.A
-2-
<PAGE> 3
JANUARY 15, 2001
- Chiquita Frupac B.V.
- Chiquita Tropical Fruit Company B.V.
- B.V. v/h Bruigom en Visser
- E.C. van Eeuwijk Bananen B.V.
- International Banana Ripening Company
N.V.
- M.M. Holding Ltd.
- Processed Fruit Ingredients B.V.
- Spiers N.V.
- Ter Wal Bananen B.V.
The above listed guarantors together are
referred to as the "Revolver Secured
Guarantors" and as appropriate the "Domestic"
or "International Revolver Secured Guarantors".
Limited unsecured guarantee from the company
listed below:
INTERNATIONAL (UNSECURED)- Chiquita Italia, S.p.a.
The guarantees from the International Revolver
Secured Guarantors and Chiquita Italia will be
limited to an amount to be determined and such
limits will be established on a commercially
reasonable basis in relation to the support
and, including but not limited to, the amount
of trade financing provided by CIL. Such
guarantees are expected to equal at least
$40,000,000 in the aggregate. These limited
guarantees will be acceptable to the Agent in
form, substance and amount.
COLLATERAL: PRIMARY REVOLVER COLLATERAL
- Perfected first-priority security
interests in all assets, both tangible
and intangible, excluding real property
interests, of Chiquita Brands, CIL and
the Domestic Revolver Secured
Guarantors. Such collateral will include
trade names, trademarks and license
rights, including the "Chiquita" brand
name, as well as all intercompany notes
and debt claims. A materiality standard
will be employed regarding perfection of
security interests and filings to be
established by the Lenders in order to
avoid documentation and legal expenses
in those jurisdictions where value of
the assets available as collateral does
not meet an agreed materiality standard.
A negative pledge on assets not taken as
collateral will be required.
-3-
<PAGE> 4
JANUARY 15, 2001
- Pledge of 100% of the capital stock of
CIL and the Domestic Revolver Secured
Guarantors.
- Perfected first-priority security
interests in all assets, both tangible
and intangible, excluding real property
interests, of the International Revolver
Secured Guarantors to the maximum extent
permitted by applicable country laws.
The Borrowers will agree to assist the
Agent in filing supplemental collateral
documents at least on a bi-weekly basis
(or more often as determined by the
Agent) in order to maintain collateral
perfection. A materiality standard will
be employed regarding perfection of
security interests and filings to be
established by the Lenders in order to
avoid documentation and legal expenses
in those jurisdictions where value of
the assets available as collateral does
not meet an agreed materiality standard.
A negative pledge on assets not taken as
collateral will be required.
- Pledge of 100% of the capital stock of
the International Revolver Secured
Guarantors.
SECONDARY REVOLVER COLLATERAL:
- Cross-collateralized by the collateral
securing the Tranche B Term Loan (as
defined in Section IV); however, the
Revolver lenders will have a
second-priority claim on proceeds from
the sale of this collateral.
- Cross-collateralized by the collateral
securing the Term Loan (as defined in
Section III); however, the Revolver and
Tranche B Term Loan lenders will have a
pari-passu second-priority claim on
proceeds from the sale of this
collateral.
- Negative pledge on the capital stock and
assets (subject to pre-existing liens
and other liens permitted herein) of the
Chiquita Fresh European Group
subsidiaries that are not International
Revolver Secured Guarantors and the
Chiquita Fresh Latin American Group (see
definitions). Chiquita Brands will not
allow the Chiquita Fresh European Group
subsidiaries that are not International
Revolver Secured Guarantors and the
Chiquita Fresh Latin American Group to
enter into other agreements that will
prohibit the Lenders from obtaining
collateral from these companies (subject
to other debt and liens permitted
herein).
-4-
<PAGE> 5
JANUARY 15, 2001
USAGE: For revolving advances and for the
issuance of letters of credit subject to
a sub-limit of up to $5,000,000.
AVAILABILITY: Limited to the lesser of $35,000,000
($30,000,000 against the Domestic
Borrowing Base Amount and $5,000,000
against the International Borrowing Base
Amount once all international collateral
is perfected) or the most recently
calculated Revolver Borrowing Base
Amount as updated by the Borrowers for
each successive two-week period, and
subject to the Revolver Minimum Excess
Availability requirements as defined in
the Financial Covenant section below.
REVOLVER BORROWING BASE: The Revolver Borrowing Base Amount will
equal the sum of (i) the Domestic
Borrowing Base Amount, plus (ii) the
International Borrowing Base Amount,
less (iii) any applicable reserves (e.g.
reserves for potential PACA claims and
other reserves that the Agent in its
reasonable discretion deems
appropriate). The Domestic Borrowing
Base Amount will equal the product of
the Domestic Account Receivable Advance
Rate multiplied by the Eligible Domestic
Accounts Receivable Amount. The
International Borrowing Base Amount will
equal the product of the International
Account Receivable Advance Rate
multiplied by the Eligible International
Accounts Receivable Amount. The Domestic
Accounts Receivable Advance Rate will be
initially set at 85%, except the advance
rates against the Packaged Foods
receivables and the Processed Foods
receivables will be initially set at 70%
and 75%, respectively. The International
Accounts Receivable Advance Rate will be
initially set at 75%. FCC, as Collateral
Agent, reserves the right to adjust
advance rates and/or eligibility
criteria from time to time in its
reasonable discretion.
PRICING: The Applicable Margins and Commitment
Fees for the Revolver are as follows:
-5-
<PAGE> 6
JANUARY 15, 2001
Adj. Base LIBOR Commitment
Rate Rate Fee
---- ---- ---
1.50% 3.50% .50%
LETTER OF CREDIT FEES: Fees payable pro rata to the lenders at
a rate per annum equal to the Applicable
Margin for LIBOR Rate loans, as
determined by the pricing grid, times
the face amount of each letter of
credit, payable in advance; plus a
fronting fee of .125% per annum payable
to the Agent on the face amount of each
issued letter of credit.
DEFAULT RATE: 2.00% over the rate otherwise in effect.
UNDERWRITING FEES: 2.50% payable at closing.
ARRANGEMENT FEE: $100,000 payable at closing.
ANNUAL AGENT FEE: $35,000 per annum payable at closing and
annually thereafter on each anniversary
date of closing.
PREPAYMENTS: Loans may be prepaid at any time without
penalty, subject to funding breakage
costs on LIBOR loans if such prepayment
occurs other than at the end of an
interest period. Prepayments may be
reborrowed subject to compliance with
applicable conditions. A prepayment
penalty of 2% and 1% (based on average
loans outstanding during the 12 months
prior to such prepayment) will be
required during years 1 and 2,
respectively, on voluntary Revolver
commitment reductions. If prepayment
occurs from the proceeds of a new
facility provided, in whole or in part,
by Fleet or its affiliates, then such
prepayment penalty will not be required.
OTHER CONDITIONS: See Section V below.
III. TERM LOAN FACILITY ("TERM LOAN")
AMOUNT: $25,000,000
-6-
<PAGE> 7
JANUARY 15, 2001
CO-BORROWERS: CIL and Compania Bananera Atlantica
Limitada and certain of its Costa Rican
affiliates.
GUARANTORS: - Chiquita Brands, Inc.
- Chiquita Far East Holdings, B.V.
- M.M. Holding Ltd.
- Revolver Secured Guarantors (as
defined in Section II).
COLLATERAL: - Pledge of 100% of the capital stock
of M.M. Holding Ltd. and its 50%
ownership interest in Mundimar,
Ltd. (subject to M.M. Holding's
rights in and to the Mundimar, Ltd.
equity interests as defined in the
Joint Venture Agreement with
Andulsia, S.A.).
- Pledge of 100% of the capital
stock of Chiquita Far East
Holdings which will at all times
own all of the capital stock of
Chiquita Brands South Pacific
which is under the control of
Chiquita Brands. Chiquita Far
East Holdings will execute a
direct pledge of the Chiquita
Brands South Pacific shares.
- Cross-collateralized by the
collateral securing the Revolver
and the Tranche B Term Loan (as
defined in Sections II and IV);
however, the Term Loan lenders
will have a junior-priority
claim on proceeds from the sale
of this collateral.
PRICING: Same as the Revolver (as defined in
Section II).
CLOSING FEES: 1.5% payable at closing.
AMORTIZATION: None required.
PREPAYMENTS: Allowed at any time without penalty,
subject to funding breakage costs on
LIBOR loans if such prepayment occurs
other than at the end of an interest
period. Prepayments may not be
reborrowed.
OTHER CONDITIONS: See Section V below.
IV. TRANCHE B TERM LOAN FACILITY ("TRANCHE B TERM LOAN")
AMOUNT: $25,000,000
-7-
<PAGE> 8
JANUARY 15, 2001
CO-BORROWERS: CIL and Compania Bananera Atlantica
Limitada and certain of its Costa
Rican affiliates.
GUARANTORS: - Chiquita Brands, Inc.
- Revolver Secured Guarantors (as
defined in Section II).
COLLATERAL: - Pledge of 100% of the equity
interests of Friday
Holdings, L.L.C. and
Chiquita Processed Foods, LLC.
- Perfected first-priority
security interests in all
assets, both tangible and
intangible, excluding real
property interests, of Friday
Holdings, L.L.C.
- Pledge of 100% of the capital stock
of the Great White Fleet.
- Cross-collateralized by the
collateral securing the Revolver
(as defined in Section II);
however, the Tranche B Term Loan
lenders will have a second-priority
claim on proceeds from the sale of
this collateral.
- Cross-collateralized by the
collateral securing the Term
Loan (as defined in Section
III); however, the Revolver and
Tranche B Term Loan lenders will
have a pari-passu
second-priority claim on
proceeds from the sale of this
collateral.
PRICING: 13.75% cash interest during year one,
payable monthly. The cash interest
rate will be adjusted each quarter
thereafter and will equal the greater
of (i) Fleet's Base Rate + 4.25%, or
(ii) 13.75%. In addition, 3.50% per
annum accruing, to be added to the
principal balance of the Tranche B
Term Loan on the first day of each
calendar quarter, and payable at
maturity.
DEFAULT RATE: 3.0% over the rate otherwise in effect.
CLOSING/COMMITMENT FEES: 3.75% at closing and 1.60% of the
Tranche B Term Loan balance outstanding
on the first anniversary of closing.
ANNUAL AGENT FEE: $35,000 payable at closing and annually
thereafter on each anniversary date of
closing.
AMORTIZATION: None required.
PREPAYMENT PENALTY: Year 1: 2.0% of the principal amount
prepaid Thereafter: None
-8-
<PAGE> 9
JANUARY 15, 2001
Penalties will not be required on
Mandatory Prepayments that are
required to be applied to the Tranche
B Term Loan as outlined herein.
OTHER CONDITIONS: See Section V below.
V. OTHER CONDITIONS
INTEREST RATES: With respect to the Revolver and the
Term Loan, the Borrowers, at their
option, may elect to borrow at either I)
the Adjusted Base Rate plus the
Applicable Margin or ii) the LIBOR Rate
plus the Applicable Margin as defined in
Section II above. Adjusted Base Rate
will be the higher of a) the Agent's
Base Rate or b) the Overnight Federal
Funds Rate plus .50%. LIBOR Rates
(adjusted for reserves) will be
available for 1, 2, or 3 month periods
of time. Interest on Adjusted Base Rate
loans will be payable at the end of each
calendar quarter and be based on a 365
day year (and if applicable, 366 days).
Interest on LIBOR Rate loans will be
payable at the end of each relevant
interest period, but in any event at the
end of every 90 days, and be based on a
360 day year.
FIELD EXAMS: FCC field exams will be conducted on an
ongoing basis at regular intervals (not
less than three times annually and
subject to greater frequency at FCC
discretion) to ensure the adequacy of
receivable collateral and related
reporting and control systems.
CASH DOMINION: The Borrowers will establish Dominion
accounts (accounts for benefit of FCC as
Agent for the lenders) to receive all
collections of accounts receivable
pledged as collateral. It is anticipated
that appropriate Dominion accounts would
be established for each legal entity
included among Chiquita Brands, CIL and
the Revolver Secured Guarantors
(Dominion accounts for the International
Revolver Secured Guarantors will be
completed by 3/15/01). The Agent will
endeavor to limit the incremental cost
of these accounts whenever possible.
-9-
<PAGE> 10
JANUARY 15, 2001
COLLATERAL
APPRAISALS AND
BORROWER INFORMATION: Prior to closing, the Lenders will have
obtained an independent appraisal of the
fair market value of (i) the "Chiquita"
trade names and trademarks, and (ii) the
equity interests of Chiquita Processed
Foods, LLC. Furthermore, Chiquita Brands
will provide Fleet with information,
whether from internal or public sources,
useful to estimate the fair market value
of Chiquita Brand's equity interests in
Chiquita Brands South Pacific, Great
White Fleet, and M.M. Holding Ltd.
(Grupo Jaremar).
MANDATORY PREPAYMENTS: The Borrower Group will prepay the
Facilities from proceeds of the
following:
EXCESS CASH FLOW:
50% of Excess Cash Flow. Payments will
be based on fiscal year-end Borrower
Group financial statements and will be
due 120 days after each year-end, with
the first payment, if any, due by April
30, 2002.
ASSET SALE PROCEEDS:
100% of asset sale proceeds (including
proceeds from the sale of equity
interests of any Borrower Group
subsidiary) in excess of $2,500,000 on
an annual basis if such proceeds are not
(a) used to repay Indebtedness secured
by the assets of the respective Borrower
Group subsidiary that sold such assets,
and/or (b) so long as no Material
Defaults are continuing, reinvested
within 6 months in equipment or
businesses related to those conducted by
the Borrower Group. Notwithstanding the
foregoing, assets sold in the ordinary
course of business (inventory) will be
excluded from this provision.
EQUITY PROCEEDS:
100% of the proceeds from any equity
offerings received by Chiquita Brands,
excluding, however, equity contributions
received from CBII.
DEBT ISSUANCE PROCEEDS:
100% of proceeds of Indebtedness in
excess of $20,000,000 received by CBII.
Notwithstanding the foregoing, a
mandatory prepayment will not
-10-
<PAGE> 11
JANUARY 15, 2001
be required if CBII issues Indebtedness
to refinance Indebtedness of CBII
existing at the closing, so long as such
Indebtedness (i) is non-recourse to the
Borrower Group, (ii) has a maturity date
that is at least one year after the
maturity date of the Facilities, and
(iii) has other terms and conditions
that are acceptable to the Agent (such
approval will not be unreasonably
withheld).
Mandatory prepayments from Excess Cash
Flow and Asset Sale Proceeds will be
applied to the Facilities as follows:
(i) one-third will be applied to reduce
loans outstanding under the Revolver but
not the Revolver commitment, (ii)
one-third will be applied to reduce
loans outstanding under the Term Loan
(pro rata across all scheduled
amortization payments) and reduce the
Term Loan commitment, and (iii)
one-third will be applied to reduce
loans outstanding under the Tranche B
Term Loan and reduce the Tranche B Term
Loan commitment. If any of the
Facilities are repaid, then mandatory
prepayments will be applied to the
remaining Facilities on an equal basis.
Mandatory prepayments from Equity
Proceeds and Debt Issuance Proceeds will
be applied to the Facilities as follows:
(i) one-half will be applied to reduce
loans outstanding under the Revolver but
not the Revolver commitment, (ii)
one-half will be applied to reduce loans
outstanding under the Term Loan (pro
rata across all scheduled amortization
payments) and reduce the Term Loan
commitment.
Notwithstanding the foregoing, proceeds
from the sale of collateral will be
applied to the respective Facilities as
outlined and required by the collateral
priority rights described in Sections
II, III, and IV.
FINANCIAL COVENANTS: Covenants would selectively address the
financial condition and performance of
(i) the Borrower Group, and (ii) CBII on
a consolidated basis as
-11-
<PAGE> 12
JANUARY 15, 2001
follows. All covenants will be
calculated and based on GAAP as of
12/31/00.
BORROWER GROUP:
- Minimum EBITDA:
Three-month period ending 3/31/01:
$50,000,000
Six-month period ending 6/30/01:
$90,000,000
Nine-month period ending 9/30/01:
$90,000,000
Twelve-month period ending 12/31/01:
$77,000,000
Trailing Twelve-Month Periods Ending
3/31/02 and 6/30/02:
$77,000,000
- Minimum Fixed Charge Coverage Ratio:
Three-month period ending 3/31/01:
2.00x
Six-month period ending 6/30/01:
2.00x
Nine-month period ending 9/30/01:
1.60x
Twelve-month period ending 12/31/01:
1.20x
Trailing Twelve-Month Periods Ending
3/31/02 and 6/30/02:
1.20x
- Minimum Liquidity
i) Revolver Minimum Excess
Availability During Each Fiscal
Year:
1/1 to 2/28 $10,000,000
3/1 to 5/31 $ 5,000,000
6/1 to 12/31 $15,000,000
ii) CBII on a consolidated basis
will maintain cash and short-term
investments of at least
$50,000,000 at all times.
- Minimum Net Worth:
$950,000,000 at all times, plus
intercompany debt that is converted
into equity.
-12-
<PAGE> 13
JANUARY 15, 2001
- Maximum Capital Expenditures:
Consolidated capital expenditures
of the Borrower Group shall not
exceed $18,000,000 in fiscal year
2001 and $30,000,000 in fiscal
year 2002, provided, however,
capital expenditures funded out
of proceeds from the following
sources will be excluded from
this limitation: (i) Asset Sale
Proceeds, Equity Proceeds, and
Debt Issuance Proceeds not
required to prepay the Facilities
as outlined by the Mandatory
Prepayment provisions, (ii)
proceeds from Sale and Leaseback
Transactions permitted hereby,
and (iii) insurance claims and
refunds.
Events of default will also include
defaults tied to continuing compliance
by CBII of the following financial
covenants:
CBII CONSOLIDATED BASIS:
- Minimum Interest Coverage Ratio:
Three-month period ending 3/31/01:
1.50x
Six-month period ending 6/30/01:
1.50x
Nine-month period ending 9/30/01:
1.25x
Twelve-month period ending 12/31/01:
1.20x
Trailing Twelve-Month Periods Ending
3/31/02 and 6/30/02:
1.20x
- Minimum Net Worth:
$500,000,000 at the end of each
quarter.
NEGATIVE COVENANTS: LIMITATIONS ON DISTRIBUTIONS:
The Borrower Group will not allow or
permit any Distributions except for
the following:
1) Chiquita Brands will be allowed to
make Permitted Distributions to CBII.
Permitted Distributions will mean cash
distributions by Chiquita Brands to CBII
for the payment of (i) corporate
overhead (maximum annual amount to be
determined), (ii) tax payments, but only
to the extent CBII is required to make
cash tax payments to governmental
authorities, (iii) repurchase of capital
stock, but only as required by the terms
of employee benefit plans (maximum
annual amount
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<PAGE> 14
JANUARY 15, 2001
to be determined), (iv) payment of
interest on Indebtedness owed by CBII,
such interest not to exceed $92,000,000
per annum. Notwithstanding the
foregoing, if a Material Default exists
before or after the making of a
Permitted Distribution, then the
Borrower Group will be allowed to make
Permitted Distributions only for items
(i) and (iii) above.
2) Chiquita Brands, CIL and the Revolver
Secured Guarantors will not be allowed
to make Distributions to Borrower Group
subsidiaries (Distributions between
Chiquita Brands, CIL and the Revolver
Secured Guarantors will be allowed) or
Non-Borrower Group subsidiaries, other
than in the ordinary course of business.
3) The Borrower Group will not be
allowed to make Distributions to the
Non-Borrower Group other than in the
ordinary course of business.
LIMITATIONS ON INDEBTEDNESS:
1) The Borrower Group will not incur,
assume, or guarantee the payment of any
Indebtedness except Indebtedness to the
Lenders under the Facilities.
Notwithstanding the foregoing, the
following Indebtedness may be incurred:
i) The Chiquita Fresh European
Group's total Indebtedness
outstanding, at any time,
will not exceed $20,000,000 in
the aggregate.
ii)The Chiquita Fresh Latin
American Group's total
Indebtedness outstanding, at
any time, will not exceed
$40,000,000 in the aggregate.
iii)Purchase money Indebtedness
(including mortgages,
conditional sales contracts,
capitalized leases or other
deferred
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<PAGE> 15
JANUARY 15, 2001
purchase price arrangements) in
an aggregate amount equal to
$10,000,000.
iv) Chiquita Frupac Inc.'s
$18,000,000 credit facility
and other Indebtedness
outstanding at the closing
(Borrowers will provide a
schedule of such other
Indebtedness at closing).
Notwithstanding the foregoing, the
aggregate amount of Indebtedness
outstanding under sections i), ii) and
iii) above, will not exceed
$60,000,000.
2) Great White Fleet will not incur
any Indebtedness unless such
Indebtedness is non-recourse to the
Borrower Group and is permitted by the
terms of Great White Fleet's senior
secured credit facilities (or any
successor facilities). Notwithstanding
the foregoing, the Great White Fleet's
total Indebtedness outstanding, at any
time, will not exceed $250,000,000 in
the aggregate.
3) Chiquita Processed Foods will not
incur any Indebtedness unless such
Indebtedness is non-recourse to the
Borrower Group and is permitted by the
terms of Chiquita Processed Foods'
$200,000,000 senior secured credit
facilities (or any successor
facilities). Notwithstanding the
foregoing, Chiquita Processed Foods'
total Indebtedness outstanding, at any
time, will not exceed the sum of (i)
Indebtedness allowed under the
$200,000,000 senior secured credit
facilities less mandatory prepayments
made, plus (ii) existing Industrial
Revenue Bond Indebtedness, plus (iii)
$30,000,000 (which will include all
intercompany obligations owing to CBII
and any of its subsidiaries).
LIMITATIONS ON LIENS:
The Borrower Group will not allow or
permit to exist any Liens except for the
following;
1) Liens securing the Facilities.
2) Liens to secure Indebtedness of the
Borrower Group (including the
Chiquita Fresh
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<PAGE> 16
JANUARY 15, 2001
European Group, the Chiquita Fresh
Latin American Group and Chiquita
Frupac, Inc.) permitted herein,
including Liens existing at the
closing.
3) Purchase money liens (including
mortgages, conditional sales
contracts, capitalized leases or
other deferred purchase price
arrangements) on property of the
Borrower Group so long as such
Indebtedness secured by each such
Lien does not exceed the cost of the
property related thereto
and does not, at any time, exceed an
amount equal to $10,000,000.
4) Liens on property of the Borrower
Group for taxes, easements, deposits
for workers compensation, judgements
which are being contested in good
faith, performance bonds, mechanics
or other like Liens arising in the
ordinary course of business.
5) Liens to secure Indebtedness of
Great White Fleet, Chiquita
Processed Foods and Chiquita Frupac
Inc. permitted herein.
LIMITATIONS ON ACQUISITIONS AND
INVESTMENTS:
The Borrower Group will not allow or
permit any acquisitions or Investments
except for the following:
1) Chiquita Brands, CIL and the Revolver
Secured Guarantors will not be allowed
to make Investments in Borrower Group
subsidiaries (Investments between
Chiquita Brands, CIL and the Revolver
Secured Guarantors will be allowed) or
Non-Borrower Group subsidiaries, other
than in the ordinary course of business.
2) The Borrower Group will not make any
Investments in an entity which does not
become a subsidiary of the Borrower
Group, other than Investments which do
not exceed $5,000,000, on a cumulative
basis over the life of the Facilities,
plus cash income, dividends or
distributions actually received from
such Investments. Notwithstanding the
foregoing, advances made to independent
growers in the ordinary course of
business will be allowed.
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JANUARY 15, 2001
LIMITATIONS ON AFFILIATE TRANSACTIONS:
The Borrower Group will not effect a
transaction with any affiliate (other
than a Borrower Group subsidiary) unless
such transaction is on terms taken as a
whole that are no less favorable than if
such transaction had been completed with
a non-affiliate under similar
circumstances.
LIMITATIONS ON MERGERS, CONSOLIDATIONS,
AND ASSET SALES:
The Borrower Group will not become party
to any merger or consolidation or sell,
lease or otherwise dispose of, its
assets except for the following;
1) Chiquita Brands and CIL will not
become party to any merger or
consolidation.
2) Any Borrower Group subsidiary (other
than Chiquita Brands and CIL) may merge
or consolidate with, or may sell, lease
or otherwise dispose of any of its
assets to, any other Borrower Group
subsidiary, except that (i) a Revolver
Secured Guarantor may not merge or
consolidate with a Chiquita Fresh Latin
American Group subsidiary unless the
Revolver Secured Guarantor is the
surviving entity, (ii) a Chiquita Fresh
European Group subsidiary may not merge
or consolidate with a Chiquita Fresh
Latin American Group subsidiary unless
the Chiquita Fresh European Group
subsidiary is the surviving entity,
(iii) Friday Holdings may be merged into
Chiquita Brands, and (iv) Chiquita
Brands, CIL and a Revolver Secured
Guarantor may not sell or lease its
assets to a Chiquita Fresh Latin
American Group subsidiary, other than in
the ordinary course of business
(Chiquita Brands will be allowed to sell
and/or contribute the capital stock of
Keelings (Fruit) Limited to Chiquita
Banana Company, B.V.).
3) Any Borrower Group subsidiary (other
than Chiquita Brands and CIL) may merge
or consolidate with any Non-Borrower
Group subsidiary (excluding the Great
White Fleet and Chiquita Processed Foods
and their subsidiaries) so long as the
Borrower Group subsidiary is the
surviving entity and, in the case of
merger
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<PAGE> 18
JANUARY 15, 2001
involving a Revolver Secured Guarantor,
the lenders receive such Non-Borrower
Group subsidiary's assets as collateral
to secure the Facilities.
4) The Borrower Group may sell inventory
and other assets in the ordinary course
of business or assets that are no longer
needed or useful to the operations of
the Borrower Group, provided, however,
that (i) at least 75% of the
consideration received must be in the
form of cash and equivalents, excluding
the sale of "tropical farms" and related
assets so long as such sales do not
exceed $10,000,000 in the aggregate over
the life of the Facilities, (ii) assets
sold on a cumulative basis over the life
of the Facilities will not have
contributed EBITDA, over the period of
four fiscal quarters prior to such sale,
exceeding 5.0% of the consolidated
EBITDA of the Borrower Group for the
year-ended December 31, 2000, and (iii)
the Borrowers are able to demonstrate
pro forma covenant compliance (i.e.
compliance with financial covenants as
if the sale had actually occurred
four-quarters prior to such sale).
Notwithstanding the foregoing, the sale
of M.M. Holding and/or Mundimar, Ltd.
will be excluded from this limitation.
5) The Borrower Group will not sell any
assets with an aggregate fair market
value of $5,000,000 or more, on a
cumulative basis over the life of the
Facilities, with the intention of taking
back a lease of such assets (a "Sale and
Leaseback Transaction"). Notwithstanding
the foregoing, the Borrower Group will
be allowed to complete Sale and
Leaseback Transactions of up to
$25,000,000, on a cumulative basis over
the life of the Facilities, on
containers and other similar equipment
and assets. This $25,000,000 limitation
will exclude Sale and Leaseback
Transactions completed within 3 months
after the Borrower Group has acquired
title to such containers and other
similar equipment and assets.
6) Chiquita Brands, CIL, or any other
Borrower Group subsidiary will be
allowed to convert into a limited
liability company so long as the Agent
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JANUARY 15, 2001
receives all appropriate documentation
(including, if applicable, collateral
documentation in form and substance
acceptable to the Agent).
CHANGE OF CONTROL:
1) A default will occur if any person,
other than American Financial Group,
Inc. ("AFG") and its affiliates, owns
more than 30% of the total voting shares
of CBII then outstanding provided that
AFG and its affiliates own a lesser
percentage of the voting shares than
such other person and AFG does not have
the right by voting power to elect or
designate for election a majority of the
board of directors.
2) CBII will at all times own, directly
or indirectly, 100% of Chiquita Brands.
3) Chiquita Brands will at all times
directly or indirectly own the Domestic
Revolver Secured Guarantors and Friday
Holdings, LLC or Chiquita Processed
Foods, LLC.
4) Chiquita International Trading
Company will at all times own, directly
or indirectly, CIL, the Chiquita Fresh
European Group subsidiaries and the
Chiquita Fresh Latin American Group
subsidiaries.
REPRESENTATIONS AND 1. Usual and customary for transactions
WARRANTIES: of this type, including but not limited
to, the Borrower Group's representation
and warranty that the transactions
contemplated by this Proposed Summary of
Terms and Conditions will not violate
the permitted indebtedness, permitted
lien, and use of proceed provisions of
CBII's Senior and Subordinated Note
indentures. Also, there will be no
defaults under the financing
arrangements of the Great White Fleet,
Chiquita Processed Foods and Chiquita
Frupac, Inc.
2. Chiquita Brands, CIL and the Chiquita
Fresh Latin American Group subsidiaries
will not make any changes to their
transfer pricing policies, other than
those required by applicable laws, that
would cause a material adverse effect on
the Borrowers and the Revolver Secured
Guarantors.
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<PAGE> 20
JANUARY 15, 2001
3. Without the consent of the Lenders,
the Borrower Group will not make any
material changes to the pricing/fees
paid to the Great White Fleet for the
transportation of products, except as
required by law.
EVENTS OF DEFAULT: Usual and customary for transactions of
this type. Cross-defaulted to any
Indebtedness of CBII's subsidiaries
equal to or in excess of $2,500,000.
FINANCIAL REPORTING: Chiquita Brands will provide FCC with
the following:
BI-WEEKLY AND QUARTERLY INFORMATION:
1. Minimum weekly domestic borrowing
base information and minimum bi-weekly
international borrowing base
information, in a format to be
determined, supported by a summary of
accounts receivable aging. FCC, as
Collateral Agent, reserves the right to
require greater frequency of borrowing
base information depending upon Revolver
usage.
2. Internally prepared monthly financial
statements for certain of the material
Borrower Group subsidiaries in a form
already generated by Chiquita's internal
accounting systems.
3. Internally prepared quarterly
consolidated balance sheet, income
statement, and cash flow statement for
the Borrower Group, due within 90 days
after the end of the quarter.
4. Internally prepared quarterly
consolidating balance sheet, income
statement, and cash flow statement,
which reconciles the Borrower Group to
the Chiquita Brands consolidated
statements, due within 90 days after the
end of the quarter (120 days after the
quarter ended December 31). The
consolidating schedules will separately
present the financial condition and
results of the Borrower Group (broken
down between the
"Marketing/Distribution" group and the
"Tropical Growing" group), Great White
Fleet, Chiquita Processed Foods, Produce
Ventures, and consolidated Chiquita
Brands.
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<PAGE> 21
JANUARY 15, 2001
5. Internally prepared quarterly
consolidated balance sheet, income
statement, and cash flow statement for
the Great White Fleet and Chiquita
Processed Foods, in a form as provided
to the lenders of these companies and
due on the same dates due to the lenders
of these companies.
6. Quarterly financial covenant
compliance certificates.
7. CBII will furnish CBII's quarterly
consolidated financial statements as
provided to the SEC for public reporting
purposes.
ANNUAL INFORMATION
1. Annual audited consolidated balance
sheet, income statement, and cash flow
statement for the Borrower Group, due
within 180 days after year-end.
2. Annual unaudited consolidated and
consolidating balance sheet, income
statement, and cash flow statement,
which reconciles the Borrower Group to
the Chiquita Brands consolidated
statements, due within 120 after
year-end. These statements will be
subject to normal year-end audit
adjustments. The consolidating schedules
will separately present the financial
condition and results of the Borrower
Group (broken down between the
"Marketing/Distribution" group and the
"Tropical Growing" group), Great White
Fleet, Chiquita Processed Foods, Produce
Ventures, and consolidated Chiquita
Brands.
3. In addition to the audit report,
consolidating balance sheet, income
statement, and cash flow statement,
which reconciles the Borrower Group to
the Chiquita Brands consolidated
statements accompanied by an auditor's
inclusion letter. The consolidating
schedules will separately present the
financial condition and results of the
Borrower Group (broken down between the
"Marketing/Distribution" group and the
"Tropical Growing" group), Great White
Fleet, Chiquita Processed Foods, Produce
Ventures, and consolidated Chiquita
Brands.
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<PAGE> 22
JANUARY 15, 2001
4. Annual consolidated balance sheet,
income statement, and cash flow
statement for the Great White Fleet
(unaudited) and Chiquita Processed Foods
(audited), in a form as provided to the
lenders of these companies and due on
the same dates due to the lenders of
these companies.
5. Annual financial covenant compliance
certificates.
6. CBII will furnish CBII's annual
audited consolidated financial
statements as provided to the SEC for
public reporting purposes as well as the
annual report provided to shareholders.
7. A forecast for the following year, by
month, detailing cash flow, loan usage,
and excess availability for the Borrower
Group, due by December 31 of the
preceding year.
8. A forecast for the following year, by
quarter, detailing profit and loss,
balance sheet, cash flow, and pro forma
covenant compliance for the Borrower
Group, due by December 31 of the
preceding year.
9. A forecast for the following year, by
quarter, detailing profit and loss,
balance sheet, cash flow, and pro forma
covenant compliance for CBII, due by
December 31 of the preceding year.
10. The Agent will reserve the right to
inspect the books and records of the
Borrower Group at any time.
CONDITIONS PRECEDENT: Usual and customary in the context of
the proposed transaction, including but
not limited to, the following:
1. SATISFACTORY FINANCIAL PROJECTIONS:
The Borrowers will provide projections,
satisfactory to the Lenders
which demonstrates the Borrower Group's
ability to service the proposed
Facilities and remain in compliance with
financial covenants.
2. NO MATERIAL ADVERSE CHANGE/MINIMUM
EBITDA: There will be no material
adverse change in the financial
condition, operations, assets or
prospects of the Borrower Group and
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<PAGE> 23
JANUARY 15, 2001
the collateral between the 9/30/00
financial statements and the closing.
The Borrower Group will be required to
maintain a minimum EBITDA level of
$78,000,000 as of 9/30/00.
3. COMPLETION OF DUE DILIGENCE: Due
diligence would include but not be
limited to: (i) receipt of copies of all
tax sharing agreements and other written
agreements between CBII and its
subsidiaries, (ii) detailed schedule of
all debt and other claims of CBII
against any of its subsidiaries, and
(iii) confirmation from CBII's auditors
that material Borrower Group companies
(i.e. Chiquita Brands, CIL, Chiquita
Banana Company, B.V., and Chiquita
Brands Company, North America) were
included among those entities tested for
audit purposes in the fiscal year 1999
audit report.
4. OTHER DOCUMENTATION: Execution and
delivery of such instruments, documents,
certificates, legal opinions (both from
domestic and Bermuda legal counsel),
collateral documents and filings,
inter-creditor agreement between the
Lenders, and other such documents as may
be reasonably requested to effect the
closing of the proposed Facilities.
Receipt of licenses and good standing
certificates with all applicable
regulatory agencies indicating
satisfactory results as determined by
the Lenders in their sole discretion.
5. OTHER INDEBTEDNESS: The following
Indebtedness will be repaid and
terminated prior to or at the closing of
the Facilities:
i) CBII's $110,000,000 Revolver with
Fleet National Bank as Agent.
ii) Compania Bananera Atlantica
Limitada's $50,000,000 Term Loan with
Fleet as Agent.
The Borrowers will provide evidence
satisfactory to the Lenders that
Chiquita Frupac Inc's $18,000,000
revolver provided by First Union will be
in place at closing and that no events
of default will occur under this
facility as a result of
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<PAGE> 24
JANUARY 15, 2001
the financing arrangements contemplated
herein.
6. INTERCOMPANY DEBT OBLIGATIONS:
i) Obligations of the Borrower Group
owing to CBII or any Non-Borrower Group
subsidiary will be converted into
equity, excluding however, a portion of
such intercompany debt obligations in an
amount acceptable to the Lenders. Any
obligations that are not converted into
equity will have a maturity date of at
least ten years, will be non-cash
interest (paid-in-kind until maturity),
and will be deeply subordinated on terms
acceptable to the Lenders.
ii) All claims of every kind (including
PACA claims) by CIL or its subsidiaries
against Chiquita Brands or its U.S.
subsidiaries will be deeply subordinated
on terms acceptable to the Lenders.
iii) All claims of every kind (including
PACA claims) by Compania Bananera
Atlantica Limitada and certain of its
Costa Rican affiliates against Chiquita
Brands and its U.S. subsidiaries or CIL
will be deeply subordinated on terms
acceptable to the Lenders.
7. MINIMUM BORROWER GROUP LIQUIDITY: At
closing, the Borrower Group will
maintain minimum liquidity of at least
$25,000,000. Minimum liquidity will mean
the sum of (i) excess availability
(based on the Revolver Borrowing Base
Amount defined by FCC under the
Revolver) plus (ii) unencumbered cash
and short-term investments on a
consolidated basis in excess of
$20,000,000.
8. AFFILIATE SALES CONTRACTS: All sales
contracts between Chiquita Brands and
its subsidiaries with Chiquita Brands
and any of its subsidiaries that are
subject to the benefits of the PACA
Trust will be required to have payment
terms of 31 days or more and include
appropriate waivers/language necessary
to effect the exclusion of all
underlying sales transactions from
qualifying for treatment under PACA
Trust regulations.
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JANUARY 15, 2001
9. LICENSE AGREEMENT: Chiquita Brands
and CBII will enter into a license
agreement that will restrict CBII's use
of any of the "Chiquita" brands and
trade names and marks and will allow
Chiquita Brands, upon the occurrence of
certain triggering events (to be
defined), to prohibit CBII from using
the "Chiquita" brands and trade names
and marks.
ASSIGNMENTS
AND PARTICIPATIONS: Usual and customary for transactions of
this type.
SYNDICATION ISSUES: FCC will manage, in consultation with
the Borrowers, all aspects of the
syndication of the Revolver, including
the selection of lenders, the
determination of when FCC will approach
potential lenders, and the final
allocations among the lenders. The
Borrowers agree to assist FCC actively
in achieving a timely syndication that
is reasonably satisfactory to FCC, such
assistance to include, among other
things, (i) direct contact during the
syndication between the Borrower's
senior officers, representatives and
advisors, on the one hand, and
prospective lenders, on the other hand,
at such times and places as FCC may
reasonably request, (ii) providing to
FCC all financial and other information
available to the Borrowers with respect
to the Borrower Group and the
transactions contemplated herein that
FCC may reasonably request, including
but not limited to financial projections
relating to the foregoing, and (iii)
assistance in the preparation of a
confidential information memorandum and
other marketing materials to be used in
connection with the syndication.
The Lenders will be entitled to change
the pricing (interest rates and fees),
structure, terms or the amount of the
Facilities if the Lenders determine that
such changes are advisable in order to
ensure a successful syndication or an
optimal credit structure for the
Facilities, so long
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<PAGE> 26
JANUARY 15, 2001
as the aggregate amount of the
Facilities will not be less than
$85,000,000.
The Borrowers agree that, during the
syndication of the Facilities, the
Borrower Group will not permit any
offering, placement or arrangement of
any competing issues of debt securities
or commercial bank facilities of any of
the Borrower Group subsidiaries that
will have a material impact on FCC's
ability to syndicate the Facilities.
INDEMNIFICATION: The Borrowers agree to indemnify and
hold the Lenders, FCC and the other
lenders and their respective
shareholders, directors, agents,
officers, subsidiaries and affiliates
harmless from and against any and all
damages, losses, settlement payments,
obligations, liabilities, claims,
actions or causes of action, and
reasonable costs and expenses incurred,
suffered, sustained or required to be
paid by an indemnified party by reason
of or resulting from the transactions
contemplated hereby except to the extent
resulting from the gross negligence or
willful misconduct of the indemnified
party. In all such litigation, or the
preparation therefor, the Lenders, FCC
and the other lenders shall be entitled
to select their own counsel and, in
addition to the foregoing indemnity, the
Borrowers agree to pay promptly the
reasonable fees and expenses of such
counsel.
EXPENSES: Borrowers will pay all fees and expenses
incurred by the Lenders and FCC in
connection with the preparation and
execution of the Facilities. These will
include but not be limited to legal,
syndication, examination of books and
records, appraisals on the equity
interests of Chiquita Processed Foods
and the "Chiquita" brand name, and
direct out-of-pocket expenses.
GOVERNING LAW: State of New York
DEPOSIT: The Lenders acknowledge that the
Borrowers have already remitted to (i)
the Lenders work fee
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<PAGE> 27
JANUARY 15, 2001
deposits totaling $366,667 ($150,000 in
December, 2000 to FCC and $216,667 to
the Lenders in November, 2000), (ii)
Bingham Dana $220,000 for legal
expenses, and (iii) FCC $80,000 in July,
2000 and $33,333 in November, 2000 for
due diligence and other related
expenses. The work fees paid under (i)
above will be credited against all
closing fees outlined herein at closing
of the Facilities in accordance with the
terms of the Letter of Agreement, dated
as of January 15, 2001 (as amended and
in effect from time to time, the "FEE
LETTER"), by and among Chiquita Brands,
CIL and the Lenders. Upon the terms and
subject to the conditions contained in
PARAGRAPH 2(a) of the Fee Letter, the
Lenders may be obligated to refund the
work fees under (i) above. If, for any
reason, the Facilities do not close,
Bingham Dana will return to the
Borrowers any unused funds under (ii)
above. Amounts paid under (iii) above
are not refundable.
VI. DEFINITIONS "ADJUSTED EBITDA" will mean the sum of
consolidated Borrower Group EBITDA plus
actual cash Distributions and
Investments received from Non-Borrower
Group subsidiaries (i.e. Great White
Fleet, Chiquita Processed Foods, Produce
Ventures etc.), plus cash interest
income.
"BORROWER GROUP" will include Chiquita
Brands, CIL, the Domestic Revolver
Secured Guarantors, the Chiquita Fresh
European Group, the Chiquita Fresh Latin
American Group, Chiquita Frupac, Inc.,
and other Chiquita Brands subsidiaries
excluding the Great White Fleet and its
subsidiaries, Chiquita Processed Foods
and its subsidiaries, Produce Ventures
and its subsidiaries, and M.M. Holding
Ltd./ Mundimar.
"CHIQUITA FRESH LATIN AMERICAN GROUP"
will mean the following companies and
their subsidiaries:
- Chile Group: Blue Fish Holdings
Establishment / CILPAC Establishment
and their subsidiaries
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<PAGE> 28
JANUARY 15, 2001
(excluding Heaton Holdings, Ltd. and
its subsidiaries)
- Costa Rica Group: Conexpro Inc.
Establishment and its subsidiaries
- Colombia Group: Antioquia
Establishment/Bijzondere
Benedenwindse Beleggingen
Establis/Uraba Establishment/Tairona
Establishment/Quindio Establishment
and their subsidiaries
- Guatemala Group: Banacorp,
S.A./Compania Agricola San Nicolas,
S.A. and their subsidiaries
- Honduras Group: Catellia
Ltd./Tropical Traders Ltd./Compania
- Agricola San Nicolas, S.A. and their
subsidiaries
- Other: Financiera Agro-Exportaciones
Limitada/Financiera
- Financiera Agro-Exportaciones
Limitada Agricola Ltd./Chiquita
International Services Group
N.V./Banexpro Ltd./Brundicorpi S.A.
and their subsidiaries
"CHIQUITA FRESH EUROPEAN GROUP" will
mean the following companies and their
subsidiaries:
- Chiquita Banana Company, B.V.
- Chiquita (Canada) Inc.
- Chiquita Compagnie des Bananes
- Chiquita CR, S.r.o.
- Chiquita Finland Oy
- Chiquita Fresh B.V.B.A
- Chiquita Frupac B.V.
- Chiquita Italia, S.p.A.
- Chiquita Packaged Goods Distributing
S.r.l.
- Chiquita Tropical Fruit Company B.V.
- B.V. v/h Bruigom en Visser
- Banafruta-Comercio de Bananas, LDA
- E.C. van Eeuwijk Bananen B.V.
- International Banana Ripening
Company N.V.
- Processed Fruit Ingredients B.V.
- Spiers N.V.
- Ter Wal Bananen B.V.
"DISTRIBUTIONS" will mean (i) the
declaration or payment of any dividend
on any shares of capital stock, other
than dividends payable solely in shares
of common stock, (ii) the purchase or
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JANUARY 15, 2001
other retirement of any class of capital
stock, (iii) any other distribution on
or in respect of any class of capital
stock, and (iv) any payment of principal
or interest or premium on, or any
purchase or other retirement of, any
indebtedness required to be subordinated
to the Facilities, including
intercompany debt obligations of the
Borrower Group to any affiliates.
"EXCESS CASH FLOW" will mean the sum of
(i) Adjusted EBITDA, minus capital
expenditures (excluding capital
expenditures funded by Asset Sale
Proceeds, Equity Proceeds, Debt Issuance
Proceeds, Sale and Leaseback
Transactions, and insurance claims and
refunds not required to prepay the
Facilities as detailed herein), minus
cash taxes, plus or minus changes to
working capital, minus (ii) Fixed
Charges plus $2,500,000.
"EXCLUDED SUBSIDIARIES" will mean
Chiquita Processed Foods and its
subsidiaries, Chiquita Frupac, Inc. and
its subsidiaries, Produce Ventures, Inc.
and its subsidiaries, and Chiquita
Citrus Packers, Inc. and its
subsidiaries.
"FIXED CHARGES" will mean the sum of
cash interest, plus scheduled principal
payments, including payments on capital
leases (excluding mandatory and
voluntary prepayments), plus actual cash
Distributions and Investments made by
the Borrower Group to CBII and
Non-Borrower Group subsidiaries as
permitted herein.
"FIXED CHARGE COVERAGE RATIO" will mean
the sum of (i) Adjusted EBITDA, minus
capital expenditures (excluding capital
expenditures funded by Asset Sale
Proceeds, Equity Proceeds, Debt Issuance
Proceeds, Sale and Leaseback
Transactions, and insurance claims and
refunds not required to prepay the
Facilities as detailed herein), minus
cash taxes, divided by (ii) Fixed
Charges.
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JANUARY 15, 2001
"INDEBTEDNESS" will mean indebtedness
for borrowed money evidenced by notes,
bonds, debentures and any other similar
instruments, letters of credit, capital
lease obligations, all obligations for
the deferred purchase price of property,
guarantees of other Indebtedness, and
net exposure under SWAPS and other
derivative products.
"INTEREST COVERAGE RATIO" will mean
EBITDA to Net Cash Interest Expense
(cash interest expense less cash
interest income).
"INVESTMENTS" will mean (i) any loan,
advance or extension of credit
(including guarantees), (ii) any capital
contribution or purchase of capital
stock or other securities evidencing
ownership interests, and (iii) any
acquisition of property or assets other
than upon full payment in cash at fair
market value.
"MATERIAL DEFAULT" will be defined as
payment defaults, financial covenant
defaults, certain negative covenant
defaults (to be determined),
cross-payment defaults,
cross-acceleration to other Indebtedness
for borrowed money, and bankruptcy
events.
"NET WORTH" will mean total
shareholders' equity as reported on the
Company's financial statements.
"NON-BORROWER GROUP" will mean CBII and
all of its subsidiaries and affiliates
that are not part of the Borrower Group.
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