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Credit Agreement
dated as of July 25, 2000
among
DREYER'S GRAND ICE CREAM, INC.
THE BANKS PARTY TO THIS AGREEMENT,
BANK OF AMERICA, N.A.
as Agent for the Banks, Swing Line Bank
and Letter of Credit Issuing Bank,
UNION BANK OF CALIFORNIA, N.A.
as Syndication Agent
and
BANC OF AMERICA SECURITIES LLC
as Lead Arranger and
Book Manager
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TABLE OF CONTENTS
Section Page
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ARTICLE I DEFINITIONS.......................................................................1
1.01 Certain Defined Terms....................................................1
1.02 Other Interpretive Provisions...........................................18
1.03 Accounting Principles...................................................19
ARTICLE II THE CREDITS......................................................................19
2.01 Amounts and Terms of Commitments........................................19
2.02 Loan Accounts; Noteless Agreement.......................................20
2.03 Procedure for Borrowing.................................................20
2.04 Conversion and Continuation Elections...................................21
2.05 Change in Combined Commitments..........................................22
2.06 Optional Prepayments....................................................23
2.07 Repayment...............................................................24
2.08 Interest................................................................24
2.09 Fees....................................................................25
2.10 Computation of Fees and Interest........................................25
2.11 Payments by the Company.................................................26
2.12 Payments by the Banks to the Agent......................................26
2.13 Sharing of Payments, Etc................................................27
2.14 Swing Line Commitment...................................................27
2.15 Borrowing Procedures for Swing Line Loans...............................28
2.16 Prepayment or Refunding of Swing Line Loans.............................28
2.17 Participations in Swing Line Loans......................................28
2.18 Participation Obligations Unconditional.................................29
2.19 Conditions to Swing Line Loans..........................................29
ARTICLE III THE LETTERS OF CREDIT............................................................30
3.01 The Letter of Credit Subfacility......................................30
3.02 Issuance, Amendment and Renewal of Letters of Credit....................31
3.03 Risk Participations, Drawings and Reimbursements. .....................33
3.04 Repayment of Participations.............................................35
3.05 Role of the Issuing Banks...............................................35
3.06 Obligations Absolute....................................................36
3.07 Cash Collateral Pledge..................................................37
3.08 Letter of Credit Fees...................................................37
3.09 Uniform Customs and Practice............................................37
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY...........................................38
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4.01 Taxes...................................................................38
4.02 Illegality..............................................................39
4.03 Increased Costs and Reduction of Return.................................39
4.04 Funding Losses..........................................................40
4.05 Inability to Determine Rates............................................41
4.06 Reserves on Offshore Rate Loans.........................................41
4.07 Survival................................................................41
ARTICLE V CONDITIONS PRECEDENT.............................................................41
5.01 Conditions of Initial Loans Etc.........................................41
5.02 Conditions to All Borrowings............................................43
ARTICLE VI REPRESENTATIONS AND WARRANTIES...................................................44
6.01 Corporate Existence and Power...........................................44
6.02 Corporate Authorization; No Contravention...............................44
6.03 Governmental Authorization..............................................44
6.04 Binding Effect..........................................................44
6.05 Litigation..............................................................45
6.06 No Default..............................................................45
6.07 ERISA Compliance........................................................45
6.08 Use of Proceeds; Margin Regulations.....................................46
6.09 Title to Properties.....................................................46
6.10 Taxes...................................................................46
6.11 Financial Condition.....................................................46
6.12 Environmental Matters...................................................47
6.13 Regulated Entities......................................................47
6.14 No Burdensome Restrictions..............................................47
6.15 Labor Relations.........................................................47
6.16 Copyrights, Patents, Trademarks and Licenses, etc.......................47
6.17 Subsidiaries............................................................48
6.18 Insurance...............................................................48
6.19 Full Disclosure.........................................................48
6.20 Disclosure re Margin Stock..............................................48
ARTICLE VII AFFIRMATIVE COVENANTS............................................................48
7.01 Financial Statements....................................................48
7.02 Certificates; Other Information.........................................49
7.03 Notices.................................................................49
7.04 Preservation of Corporate Existence, Etc................................50
7.05 Maintenance of Property.................................................51
7.06 Insurance...............................................................51
7.07 Payment of Obligations..................................................51
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7.08 Compliance with Laws....................................................51
7.09 Compliance with ERISA...................................................52
7.10 Inspection of Property and Books and Records............................52
7.11 Environmental Laws......................................................52
7.12 Use of Proceeds.........................................................52
7.13 Cooperation.............................................................53
ARTICLE VIII NEGATIVE COVENANTS...............................................................53
8.01 Limitation on Liens.....................................................53
8.02 Disposition of Assets...................................................54
8.03 Consolidations and Mergers..............................................55
8.04 Loans and Investments...................................................56
8.05 Limitation on Indebtedness..............................................56
8.06 Transactions with Affiliates............................................57
8.07 Use of Proceeds.........................................................57
8.08 Contingent Obligations..................................................58
8.09 Joint Ventures..........................................................58
8.10 Lease Obligations.......................................................58
8.11 Restricted Payments.....................................................59
8.12 ERISA...................................................................60
8.13 Consolidated Net Worth..................................................60
8.14 Minimum Fixed Charge Coverage Ratio.....................................61
8.15 Funded Debt/EBITDA Ratio................................................62
8.16 Change in Business......................................................62
8.17 Accounting Changes......................................................62
8.18 Other Contracts.........................................................62
8.19 Senior Notes............................................................62
ARTICLE IX EVENTS OF DEFAULT................................................................62
9.01 Event of Default........................................................62
9.02 Remedies................................................................65
9.03 Rights Not Exclusive....................................................66
ARTICLE X THE AGENT........................................................................66
10.01 Appointment and Authorization...........................................66
10.02 Delegation of Duties......................................................67
10.03 Liability of Agent......................................................67
10.04 Reliance by Agent.......................................................67
10.05 Notice of Default.......................................................68
10.06 Credit Decision.........................................................68
10.07 Indemnification of Agent................................................69
10.08 Agent in Individual Capacity............................................69
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10.09 Successor Agent.........................................................69
10.10 Withholding Tax.........................................................70
10.11 Other Agent.............................................................71
ARTICLE XI MISCELLANEOUS....................................................................71
11.01 Amendments and Waivers..................................................71
11.02 Notices.................................................................72
11.03 No Waiver; Cumulative Remedies..........................................73
11.04 Costs and Expenses......................................................73
11.05 Company Indemnification.................................................74
11.06 Payments Set Aside......................................................74
11.07 Successors and Assigns..................................................74
11.08 Assignments, Participations, etc.......................................75
11.09 Confidentiality.........................................................76
11.10 Set-off.................................................................77
11.11 Notification of Addresses, Lending Offices, Etc.........................77
11.12 Counterparts............................................................77
11.13 Severability............................................................77
11.14 No Third Parties Benefitted.............................................77
11.15 Commitment Letter.......................................................77
11.16 Termination of Commitments to Lend Under the Prior
Credit Agreement........................................................78
11.17 Governing Law and Jurisdiction..........................................78
11.18 Waiver of Jury Trial....................................................78
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Section Page
EXHIBITS
Exhibit A Form of Compliance Certificate
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Notice of Swing Line Loan
Exhibit E Form of Request for Increase in Aggregate Commitment
Exhibit F Form of Opinion of Counsel
Exhibit G Form of Assignment and Acceptance Agreement
Exhibit H Form of Note
SCHEDULES
Schedule 1.1 Pricing Schedule
Schedule 2.01 Commitments
Schedule 4.01 Existing Letters of Credit
Schedule 6.07 ERISA Compliance
Schedule 6.11 Special Disclosures of Financial Condition
Schedule 6.15 Labor Relations
Schedule 6.17 Subsidiaries
Schedule 8.01 Existing Liens
Schedule 8.04 Investments
Schedule 8.05 Indebtedness
Schedule 8.08 Contingent Obligations
Schedule 11.02 Addresses for Notices
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CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of July 25, 2000, among Dreyer's
Grand Ice Cream, Inc., a Delaware corporation (the "Company"), the several
financial institutions from time to time party to this Agreement (collectively,
the "Banks"; individually, a "Bank"), Bank of America, N.A., as letter of credit
issuing bank and Bank of America, N.A., as agent for the Banks.
WHEREAS, the Company, certain financial institutions party thereto,
ABN-AMRO Bank N.V., San Francisco International Branch as Co-Agent, and Bank of
America, N.A. (then known as Bank of America National Trust and Savings
Association), as agent for the Banks, entered into an Amended and Restated
Credit Agreement dated as of March 27, 1998 (as amended as of the date of this
Agreement, the "Prior Credit Agreement");
WHEREAS, the Banks have agreed to make available to the Company a revolving
credit facility upon the terms and conditions set forth in this Agreement, the
initial borrowings of which will be used to repay principal, interest, and all
other sums then due and payable under the Prior Credit Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms 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 of any 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 the Company or the Subsidiary is the
surviving entity.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership
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interests, by contract, or otherwise. Each of General Electric Capital
Corporation, the Trustees of General Electric Pension Trust, GE Investment
Private Placement Partners I, and Nestle Holdings, Inc. and its Affiliates shall
not be deemed an Affiliate of the Company by reason of such Person's equity
holdings in the Company as of the date of this Agreement.
"Agent" means BofA in its capacity as agent for the Banks hereunder, and
any successor agent arising under Section 10.09.
"Agent-Related Persons" means BofA, any successor agent arising under
Section 9.09 and any successor to BofA as letter of credit issuing bank
hereunder, together with their respective Affiliates (including, in the case of
BofA, the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on
Schedule 10.02 in relation to the Agent, or such other address as the Agent may
from time to time specify.
"Agreement" means this Credit Agreement as in effect from time to time.
"Arranger" means Banc of America Securities LLC.
"Assignee" has the meaning specified in subsection 11.08(a).
"Attorney Costs" means and includes all fees and disbursements of any law
firm or other external counsel, the allocated cost of internal legal services
and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory clause hereto.
References to the "Banks" shall include BofA in its capacity as Swing Line Bank
and Issuing Bank; for purposes of clarification only, to the extent that the
Swing Line Bank or the Issuing Bank may have any rights or obligations in
addition to those of the other Banks due to its status as a Swing Line Bank or
Issuing Bank, as the case may be, its status as such will be specifically
referenced.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C.ss.101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per annum above
the Federal Funds Rate for such day; and (b) the rate of interest in effect for
such day as publicly announced from time to time by BofA in Charlotte, North
Carolina, as its "Prime Rate." (The "Prime Rate" is a rate set by BofA based
upon various factors including
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BofA'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 Prime Rate announced by
BofA shall take effect at the opening of business on the day specified in the
public announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"Base Rate Margin" - see Schedule 1.1.
"BofA" means Bank of America, N.A., a national banking association.
"Borrowing" means a borrowing hereunder consisting of Loans of the same
Type made to the Company on the same day under Article II and, other than in the
case of Base Rate Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under Section
2.03 or a Swing Line Loan is made under Section 2.14.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in Chicago, Illinois, Dallas, Texas, Charlotte, North
Carolina, New York, New York, or San Francisco, California are authorized or
required by law to close and, if the applicable Business Day relates to any
Offshore Rate Loan, means such a day on which dealings are carried on in the
applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Cash Collateralize" means to pledge and deposit with or deliver to the
Agent, for the benefit of the Agent, the Issuing Banks and the Banks, as
collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Agent and the Majority
Banks. Derivatives of such term shall have corresponding meanings. Cash
collateral shall be maintained in blocked accounts at BofA or, with BofA's
consent, the applicable Issuing Bank.
"Cash Equivalents" means:
(a) securities issued or fully guaranteed or insured by the United States
Government or any agency thereof and backed by the full faith and credit of the
United States having maturities of not more than six months from the date of
acquisition;
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(b) certificates of deposit, time deposits, Eurodollar time deposits,
repurchase agreements, reverse repurchase agreements, or bankers' acceptances,
having in each case a tenor of not more than six months, issued by any Bank, or
by any U.S. commercial bank or any branch or agency of a non-U.S. bank licensed
to conduct business in the U.S. having combined capital and surplus of not less
than $100,000,000 whose short term securities are rated at least A-1 by Standard
& Poor's Corporation and P-1 by Moody's Investors Service, Inc.;
(c) commercial paper of an issuer rated at least A-1 by Standard & Poor's
Corporation or P-1 by Moody's Investors Service, Inc. and in either case having
a tenor of not more than three months.
"Closing Date" means the date on which all conditions precedent set forth
in Section 5.01 are satisfied or waived by all Banks (or, in the case of
subsection 5.01(d), waived by the Person entitled to receive such payment),
which date must occur before July 25, 2000.
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.
"Commitment", as to each Bank, has the meaning specified in Section 2.01.
"Commitment Fee Rate" - see Schedule 1.1.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit A.
"Consolidated Net Worth" of the Company means stockholders' equity plus
Series A Preferred Stock (other than any portion thereof which is mandatorily
redeemable within one year), minus any treasury stock.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability of that Person, whether or not contingent, with or without recourse,
(a) with respect to any Indebtedness, lease, dividend, letter of credit or other
obligation (the "primary obligations") of another Person (the "primary
obligor"), including any obligation of that Person (i) to purchase, repurchase
or otherwise acquire such primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any such primary
obligation, or 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, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, or (iv) otherwise to assure or hold
harmless the holder of any such primary
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obligation against loss in respect thereof (each, a "Guaranty Obligation"); (b)
with respect to any Surety Instrument issued for the account of that Person or
as to which that Person is otherwise liable for reimbursement of drawings or
payments; (c) to purchase any materials, supplies or other property from, or to
obtain the services of, another Person if the relevant contract or other related
document or obligation requires that payment for such materials, supplies or
other property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is ever made or tendered,
or such services are ever performed or tendered, or (d) in respect of any Swap
Contract. The amount of any Contingent Obligation shall, in the case of Guaranty
Obligations, be deemed equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made or, if not
stated or if indeterminable, the maximum reasonably anticipated liability in
respect thereof, and in the case of other Contingent Obligations other than in
respect of Swap Contracts, shall be equal to the maximum reasonably anticipated
liability in respect thereof and, in the case of Contingent Obligations in
respect of Swap Contracts, shall be equal to the Swap Termination Value.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under Section 2.04,
the Company (a) converts Loans of one Type to another Type, or (b) continues as
Loans of the same Type with a new Interest Period, Loans of the same Type with
Interest Periods expiring on such date.
"Default" means any event or circumstance which, with the giving of notice,
the lapse of time, or both, would (if not cured or otherwise remedied during
such time) constitute an Event of Default.
"Dollars", "dollars" and "$" each mean lawful money of the United States.
"EBITDA" means, for any Person for any period, such Person's consolidated
earnings before interest, taxes, depreciation and amortization of non-cash
charges, all determined on a consolidated basis and in accordance with GAAP for
such period.
"Effective Amount" means, 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, 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 Letter of
Credit or any reduction in the maximum amount available for drawing under
Letters of Credit taking effect on such date.
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"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 Organization for Economic
Cooperation and Development (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
country in which it is organized or another country which is also a member of
the OECD; or (iii) a Person that is primarily engaged in the business of
commercial banking with total assets of at least $100,000,000.
"Environmental Claims" means all written claims received by the Company,
however asserted, by any Governmental Authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
"Environmental Laws" means all federal, state, local, or foreign laws and
regulations, relating to pollution or protection of public health and the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), including, without limitation, laws
and regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of Materials of Environmental Concern.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to
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constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Company or
any ERISA Affiliate.
"Event of Default" means any of the events or circumstances specified in
Section 9.01.
"Exchange Act" means the Securities Exchange Act of 1934, and regulations
promulgated thereunder.
"Existing Letter of Credit" means the Letters of Credit listed on Schedule
4.01.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor,
"H.15(519)") on the preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so published on any
such preceding Business Day, the rate for such day will be the arithmetic mean
as determined by the Agent of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by
each of three leading brokers of Federal funds transactions in New York City
selected by the Agent.
"Fee Letter" has the meaning specified in subsection 2.09(a).
"FRB" means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.
"Funded Debt" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary terms); (c)
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; (d) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the Person (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property); (e) all
obligations with respect to capital leases; (f) all Synthetic Lease Obligations
of such Person; and (g) in the case of the Company, any portion of the Series A
Preferred Stock which is mandatorily redeemable in less than one year.
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"Funded Debt/EBITDA Ratio" means at any time the ratio of (i) Funded Debt
of the Company and its Subsidiaries determined on a consolidated basis at such
time to (ii) EBITDA for the most recent period of four fiscal quarters of the
Company for which financial statements have been delivered pursuant to Section
7.01.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Grand Soft Capital Company" means Grand Soft Capital Company, a California
corporation.
"Grand Soft Equipment Company" means Grand Soft Equipment Company, a
Kentucky corporation.
"Grand Soft Program" means (i) all sales by Grand Soft Capital Company or
Grand Soft Equipment Company of leases covering machinery manufactured for or by
Grand Soft Equipment Company; (ii) all sales and leasebacks by Grand Soft
Capital Company or Grand Soft Equipment Company of machinery manufactured for or
by Grand Soft Equipment Company; and (iii) all leases of equipment manufactured
for or by Grand Soft Equipment Company leased by Grand Soft Equipment Company or
Grand Soft Capital Company.
"Guaranty Obligation" has the meaning specified in the definition of
"Contingent Obligation."
"Honor Date" has the meaning specified in Section 3.03(b).
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary terms); (c)
all non-contingent reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by
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notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets or
businesses; (e) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights and
remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property); (f) all obligations with
respect to capital leases; (g) all indebtedness referred to in clauses (a)
through (f) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including accounts and contracts rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness; (h) all Guaranty Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (a) through (g) above;
and all Synthetic Lease Obligations of such Person.
"Indemnified Liabilities" has the meaning specified in Section 11.05.
"Indemnified Person" has the meaning specified in Section 11.05.
"Independent Auditor" has the meaning specified in subsection 7.01(a).
"Insolvency Proceeding" means, with respect to any Person, (a) any case,
action or proceeding with respect to such Person before any court or other
Governmental Authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of debtors, or (b)
any general assignment 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; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, as to any Loan other than a Base Rate Loan
or Swing Line Loan, the last day of each Interest Period applicable to such Loan
and, as to any Base Rate Loan or Swing Line Loan, the last Business Day of each
calendar quarter and each date such Loan is converted into another Type of Loan,
provided, however, that if any Interest Period for an Offshore Rate Loan exceeds
three months, the date that falls three months after the beginning of such
Interest Period and after each Interest Payment Date thereafter is also an
Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Offshore Rate Loan,
and ending on the date one, two, three or six months thereafter, as selected by
the Company in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
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(i) if any Interest Period would otherwise end on a day that is not a
Business Day, that Interest Period shall be extended to the following Business
Day unless, in the case of an Offshore Rate Loan, 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 preceding Business Day;
(ii) any Interest Period pertaining to an Offshore Rate Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and
(iii) no Interest Period for any Loan shall extend beyond the scheduled
Revolving Termination Date.
"IRS" means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Issuance Date" has the meaning specified in subsection 3.01(a).
"Issue" means, with respect to any Letter of Credit, to issue or to extend
the expiry of, or to renew or increase the amount of, such Letter of Credit; and
the terms "Issued," "Issuing" and "Issuance" have corresponding meanings.
"Issuing Bank" means BofA in its capacity as issuer of one or more Letters
of Credit hereunder, together with (i) any replacement letter of credit issuer
arising under subsection 10.01(c) or Section 10.09 and (ii) any other Bank or
any Affiliate of a Bank which the Agent and the Company have approved in writing
as an "Issuing Bank" hereunder.
"Joint Venture" means a single-purpose corporation, partnership, limited
liability company, joint venture or other similar legal arrangement (whether
created by contract or conducted through a separate legal entity) now or
hereafter formed by the Company or any of its Subsidiaries with another Person
in order to conduct a common venture or enterprise with such Person.
"L/C Advance" means each Bank's participation in any L/C Borrowing in
accordance with its Pro Rata Share.
"L/C Amendment Application" means an application form for amendment of an
outstanding standby letter of credit as shall at any time be in use by the
applicable Issuing Bank, as such Issuing Bank shall request.
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"L/C Application" means an application form for issuance of a standby
letter of credit as shall at any time be in use by the applicable Issuing Bank,
as such Issuing Bank shall request.
"L/C Borrowing" 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 Loans under subsection 3.03(d).
"L/C Commitment" means the commitment of the Issuing Banks to Issue, and
the commitment of the Banks severally to participate in, Letters of Credit from
time to time Issued or outstanding under Article III in an aggregate amount not
to exceed on any date the lesser of $25,000,000 and the combined Commitments; it
being understood that the L/C Commitment is a part of the combined Commitments
rather than a separate, independent commitment.
"L/C Fee Rate" - see Schedule 1.1.
"L/C Obligations" means at any time the sum of (a) the aggregate undrawn
amount of all Letters of Credit then outstanding, plus (b) the amount of all
unreimbursed drawings under all Letters of Credit, including all outstanding L/C
Borrowings.
"L/C-Related Documents" means the Letters of Credit, the L/C Applications,
the L/C Amendment Applications and any other document relating to any Letter of
Credit, including any of the applicable Issuing Bank's standard form documents
for letter of credit issuances.
"Letter of Credit" means any Existing Letter of Credit and any standby
letter of credit Issued by an Issuing Bank pursuant to Article III.
"Lending Office" means, as to any Bank, the office or offices of such Bank
specified as its "Lending Office" or "Domestic Lending Office" or "Offshore
Lending Office", as the case may be, on Schedule 11.02, or such other office or
offices as such Bank may from time to time notify the Company and the Agent.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not including
the interest of a lessor under an operating lease.
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"Loan" means an extension of credit by a Bank to the Company under Article
II or Article III (excluding the issuance of a Letter of Credit), and may be a
Base Rate Loan, an Offshore Rate Loan or a Swing Line Loan (each, a "Type"of
Loan), or an L/C Advance.
"Loan Documents" means this Agreement, any Notes, the L/C-Related
Documents, the Fee Letter, and all other documents delivered to the Agent or any
Bank in connection herewith.
"Majority Banks" means (a) at any time when there are more than two Banks,
Banks then holding more than 50% of the then aggregate unpaid principal amount
of the Loans; provided that if and so long as any Bank fails to fund any Loan
when required by Section 3.03 or a participation in an L/C Borrowing pursuant to
Section 3.03, as the case may be, such Bank's Pro Rata Share shall be deemed for
purposes of this definition to be reduced by the percentage which the defaulted
amount constitutes of the combined Commitments (or, if the Commitments have
terminated, the sum of the aggregate principal amount of all outstanding Loans
plus the Effective Amount of all L/C Obligations, and the Pro Rata Share of the
applicable Issuing Bank shall be deemed for purposes of this definition to be
increased by such percentage), or, if no such principal amount is then
outstanding, Banks then having more than 50% of the combined Commitments of the
Banks; or (b) at any time when there are only two Banks, both Banks.
"Margin Stock" means "margin stock" as such term is defined in Regulation
G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, assets,
liabilities (actual or contingent), condition (financial or otherwise) or
prospects of the Company or the Company and its Subsidiaries taken as a whole;
(b) a material impairment of the ability of the Company or any Subsidiary to
perform under any Loan Document and to avoid any Event of Default; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against the Company of any Loan Document.
"Material Subsidiary" means Edy's Grand Ice Cream and, at any time, any
other Subsidiary of the Company having at such time either (i) total (gross)
revenues for the preceding four fiscal quarter period in excess of 10% of the
total (gross) revenues of the Company on a consolidated basis, or (ii) total
assets, as of the last day of the preceding fiscal quarter, having a net book
value in excess of $50,000,000 in each case, based upon the Company's most
recent annual or quarterly financial statements delivered to the Agent under
Section 7.01.
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"Materials of Environmental Concern" means chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum, and
petroleum products.
"Multiemployer Plan" means a "multiemployer plan", within the meaning of
Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes,
is making, or is obligated to make contributions or, during the preceding three
calendar years, has made, or been obligated to make, contributions.
"Net Issuance Proceeds" means, in respect of any offering of equity or debt
securities or debt instruments, cash proceeds and non-cash proceeds received or
receivable in connection therewith, net of reasonable out-of-pocket costs and
expenses paid or incurred in connection therewith in favor of any Person not an
Affiliate of the Company or in favor of Manwell & Milton, such costs and
expenses not to exceed 5% of the gross proceeds of such issuance.
"Note" means any promissory note issued at the request of a Bank pursuant
to Section 2.02(b) in the form of Exhibit H.
"Notice of Borrowing" means a notice in substantially the form of Exhibit
B.
"Notice of Conversion/Continuation" means a notice in substantially the
form of Exhibit C.
"Notice of Swing Line Loan" means a notice substantially in the form of
Exhibit D.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document owing by the Company to any
Bank, the Agent, or any Indemnified Person, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising.
"Offshore Rate Margin" - see Schedule 1.1.
"Offshore Rate" means, for any Interest Period, with respect to Offshore
Rate Loans comprising part of the same Borrowing: (a) the rate per annum
(carried out to the fifth decimal place) determined by the Agent to be the
offered rate that appears on the page of the Telerate Screen that displays an
average British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
or
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(b) if the rate referenced in the preceding clause (a) does not appear on
such page or service or such page or service shall cease to be available, the
rate per annum (carried out to the fifth decimal place) determined by the Agent
to be the offered rate on such other page or other service that displays an
average British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
or
(c) if the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Agent as the rate of interest at
which deposits in Dollars (for delivery on the first day of such Interest
Period) in same day funds in the approximate amount of the applicable Offshore
Rate Loan of BofA (or such other Lender as the Borrower and the Agent shall
agree) and with a term equivalent to such Interest Period would be offered by
BofA's (or such Lender's) London branch to major banks in the offshore Dollar
market at their request at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period.
"Offshore Rate (Reserve Adjusted)" means, with respect to any Offshore Rate
Loan for any Interest Period applicable thereto, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined pursuant to the
following formula:
Offshore Rate (Reserve Adjusted) = Offshore Rate/1-Offshore Reserve Percentage
Period, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor), for determining reserve requirements
applicable to "Eurocurrency liabilities" pursuant to Regulation D or any other
then applicable regulation of the Board of Governors which prescribes reserve
requirements applicable to "Eurocurrency liabilities," as presently defined in
Regulation D. For purposes of this definition, any Offshore Rate Loans hereunder
shall be deemed to be "Eurocurrency liabilities" as defined in Regulation D.
"Organization Documents" means, for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement,
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and all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"Other Agent" has the meaning specified in Section 10.11.
"Other Taxes" means any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection 11.08(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which the Company sponsors, maintains, or to which
it makes, is making, or is obligated to make contributions, or in the case of a
multiple employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five (5) plan years.
"Permitted Acquisition" means an Acquisition (a) which has been authorized
by the board of directors or other governing body of the Person that is the
object of such Acquisition, (b) which occurs when no Default or Event of Default
exists or will result therefrom, (c) after giving effect to which no Default or
Event of Default will exist on a pro forma basis (assuming that such Acquisition
had occurred on the last day of the fiscal quarter most recently ended after the
date which is one year prior to the date of such Acquisition), as demonstrated
by Borrower in writing to the Agent and the Banks, (d) which is of a Person in
the same general line of business as the Borrower and its Subsidiaries, and (e)
if (i) total cash consideration (including assumed Indebtedness) for such
Acquisition exceeds $50,000,000, or (ii) after giving effect to such Acquisition
the total cash consideration (including assumed Indebtedness) for all
Acquisitions for the current fiscal year of the Company exceed $75,000,000, or
(iii) the Person or assets of the Person being acquired do not have positive
EBITDA for the most recent twelve-month period for which financial statements
are available (it being understood that such calculation of EBITDA may be
adjusted upwards for (x) non-recurring owners compensation, to the extent
deducted in determining such EBITDA and (y) other reasonably estimated cost
savings as a result of such Acquisition, in each case as set forth in a
certificate signed by an authorized officer of the Company and delivered to the
Agent), which has been consented by the Majority Banks.
"Permitted Liens" has the meaning specified in Section 8.01.
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"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Company sponsors or maintains or to which the Company makes, is
making, or is obligated to make contributions and includes any Pension Plan.
"Prior Credit Agreement" has the meaning ascribed in the first "WHEREAS"
clause of this Agreement.
"Pro Rata Share" means, as to any Bank at any time, the proportion
(expressed as a decimal, rounded to the ninth decimal place) which such Bank's
Commitment constitutes of the combined Commitments (or, after the Commitments
have terminated, which (i) the principal amount of such Bank's Loans plus
(without duplication) the participation of such Bank in (or in the case of a
Swing Line Bank or an Issuing Bank, as the case may be, the unparticipated
portion of) the principal amount of all Swing Line Loans and the Effective
Amount of all L/C Obligations constitutes of (ii) the aggregate principal amount
of all Loans plus (without duplication) the principal amount of all Swing Line
Loans and the Effective Amount of all L/C Obligations).
"Reportable Event" means, any of the events set forth in Section 4043(c) of
ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, 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 the chief executive officer or the president of
the Company, or the chief financial officer or the treasurer of the Company, or
any other officer having substantially the same authority and responsibility.
"Revolving Termination Date" means the earlier to occur of:
(a) July 25, 2005; and
(b) the date on which the Commitments terminate in accordance with the
provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
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"Senior Notes" means, collectively, the following unsecured notes of the
Company which are not subordinated to but are of equal rank with the
Obligations: (a) the $25,000,000 9.30% Senior Notes Due March 15, 2001, (b) the
$15,000,000 7.68% Series A Senior Notes Due June 1, 2002, (c) the $15,000,000
8.06% Series B Senior Notes Due June 1, 2006, and (d) the $20,000,000 8.34%
Series C Senior Notes Due June 1, 2008.
"Series A Certificate of Designation" means the Company's Certificate of
Designation of Series A Convertible Preferred Stock as in effect on the date
hereof.
"Series A Preferred Stock" means the Company's Series A Convertible
Preferred Stock issued pursuant to the Series A Certificate of Designation.
"Subsidiary" of a Person means any corporation, limited liability company,
association, partnership, joint venture or other business entity of which more
than 50% of the voting stock, membership interests, or other equity interests
(in the case of Persons other than corporations), is owned or controlled
directly or indirectly by the Person, or one or more of the Subsidiaries of the
Person, or a combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the Company.
"Surety Instruments" means all letters of credit (including standby and
commercial), banker's acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.
"Swap Contract" means any agreement, whether or not in writing, relating to
any transaction that is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap or option, bond,
note or bill option, interest rate option, forward foreign exchange transaction,
cap, collar or floor transaction, currency swap, cross-currency rate swap,
swaption, currency option or any other, similar transaction (including any
option to enter into any of the foregoing) or any combination of the foregoing,
and, unless the context otherwise clearly requires, any master agreement
relating to or governing any or all of the foregoing.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined by the Company
based upon one or more mid-market or other readily available quotations
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provided by any recognized dealer in such Swap Contracts (which may include any
Bank).
"Swing Line Bank" means BofA in its capacity as swing line bank hereunder,
together with any replacement swing line bank arising under Section 10.09.
"Swing Line Commitment" means the commitment of the Swing Line Bank to make
Swing Line Loans hereunder.
"Swing Line Loan" has the meaning specified in Section 2.14.
"Synthetic Lease" means a lease transaction under which the parties intend
that (i) the lease will be treated as an "operating lease" by the lessee
pursuant to Statement of Financial Accounting Standards No. 13, as amended, and
(ii) the lessee will be entitled to various tax and other benefits ordinarily
available to owners (as opposed to lessees) of like property.
"Synthetic Lease Obligations" means, with respect to any Person, the sum of
(a) all remaining rental obligations of such Person as lessee under Synthetic
Leases which are attributable to principal and, without duplication, (b) all
rental and purchase price payment obligations of such Person under Synthetic
Leases assuming such Person exercises the option to purchase the leased property
at the end of the lease term.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent, such taxes (including income
taxes or franchise taxes) as are imposed on or measured by each Bank's net
income by the jurisdiction (or any political subdivision thereof) under the laws
of which such Bank or the Agent, as the case may be, is organized or maintains a
lending office.
"Type" has the meaning specified in the definition of "Loan."
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"United States" and "U.S." each means the United States of America.
"Wholly-Owned Subsidiary" means any corporation in which (other than
directors' qualifying shares required by law) 100% of the capital stock of each
class having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and
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of record, by the Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer to
this Agreement as a whole and not to any particular provision of this Agreement;
and subsection, Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified:
(c) (1) The term "documents" includes any and all instruments, documents,
agreements, certificates, indentures, notices and other writings, however
evidenced.
(2) The term "including" is not limiting and means "including without
limitation."
(3) 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."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) 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 any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms. Unless otherwise expressly provided,
any reference to any action of the Agent or the
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Banks by way of consent, approval or waiver shall be deemed modified by the
phrase "in its/their sole discretion."
1.3 Accounting Principles.
(1) Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied.
(2) References herein to "fiscal year" and "fiscal quarter" refer to such
fiscal periods of the Company.
ARTICLE II
THE CREDITS
1.4 Amounts and Terms of Commitments.
(1) The Revolving Credit. Each Bank severally agrees, on the terms and
conditions set forth herein, to make Loans to the Company from time to time on
any Business Day during the period from the Closing Date to the Revolving
Termination Date, in an aggregate amount not to exceed at any time outstanding,
for the relevant period, the amount set forth opposite such Bank's name on
Schedule 2.01 under the heading "Commitment" (such amount, as the same may be
reduced under Section 2.05(a) or as a result of one or more assignments under
Section 11.08, or increased under Section 2.05(b), the Bank's "Commitment");
provided, however, that, after giving effect to any Borrowing, the aggregate
principal amount of all outstanding Loans shall not at any time exceed the
combined Commitments; and provided, further, that the aggregate principal amount
of the Loans of any Bank plus the participation of such Bank in the Effective
Amount of all L/C Obligations and the principal amount of all outstanding Swing
Line Loans shall not exceed at any time such Bank's Commitment. Within the
limits of each Bank's Commitment, and subject to the other terms and conditions
hereof, the Company may borrow under this subsection, prepay under Section 2.06
and reborrow under this subsection.
1.5 Loan Accounts; Noteless Agreement. (a) The Loans made by each Bank and
the Letters of Credit issued by each Issuing Bank as the case may be, shall be
evidenced by one or more loan accounts or records maintained by such Bank in the
ordinary course of business. The loan accounts or records maintained by the
Agent, each Issuing Bank and each Bank shall be conclusive, absent manifest
error, of the amount of the Loans made by the Banks to the Company and the
Letters of Credit Issued for the account of the Company, 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 Company hereunder to
pay any amount owing with respect to the Loans or any Letter of Credit.
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(b) Upon the request of any Bank made through the Agent, the Loans made by
such Bank may be evidenced by one or more Notes, instead of or in addition to
loan accounts. Each such Bank shall endorse on the schedules annexed to its
Note(s) the date, amount and maturity of each Loan made by it and the amount of
each payment of principal made by the Company with respect thereto. Each such
Bank is irrevocably authorized by the Company to endorse its Note(s) and each
Bank's record shall be conclusive absent manifest error; provided that the
failure of a Bank to make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect the obligations of the
Company hereunder or under any such Note to such Bank.
1.6 Procedure for Borrowing.
(1) Each Borrowing shall be made upon the Company's irrevocable written
notice delivered to the Agent in accordance with Section 11.02 in the form of a
Notice of Borrowing which notice must be received by the Agent prior to:
(1) 9:00 a.m. (San Francisco, California time) three Business Days prior to
the requested Borrowing Date, in the case of Offshore Rate Loans; and
(2) 9:00 a.m. (San Francisco, California time) on the requested Borrowing
Date, in the case of Base Rate Loans, specifying:
(1) the amount of the Borrowing, which shall be in an aggregate minimum
principal amount of $1,000,000 or any multiple of $100,000 in excess thereof;
(1) the requested Borrowing Date, which shall be a Business Day;
(2) whether the Borrowing is to be comprised of Offshore Rate Loans or Base
Rate Loans;
(3) the duration of the Interest Period applicable to such Loans included
in such notice. If the Notice of Borrowing shall fail to specify the duration of
the Interest Period for any Borrowing comprised of Offshore Rate Loans, such
Interest Period shall be three months;
provided, however, that with respect to any Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Agent not later than
9:00 a.m. (San Francisco, California time) on the Closing Date or three Business
Days before the Closing Date if the Borrowing is to consist of Base Rate or
Offshore Rate Loans, respectively.
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(2) The Agent will promptly notify each Bank of its receipt of any Notice
of Borrowing and of the amount of such Bank's Pro Rata Share of that Borrowing.
(3) Each Bank will make the amount of its Pro Rata Share of each Borrowing
available to the Agent for the account of the Company at the Agent's Payment
Office by 11:00 a.m. (San Francisco, California time) on the Borrowing Date
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by the
Agent at such office by crediting the account of the Company on the books of
BofA with the aggregate of the amounts made available to the Agent by the Banks
and in like funds as received by the Agent.
(4) After giving effect to any Borrowing, unless the Agent shall otherwise
consent, there may not be more than six different Interest Periods in effect.
1.7 Conversion and Continuation Elections.
(1) The Company may, upon irrevocable written notice to the Agent in
accordance with subsection 2.04(b):
(1) elect, as of any Business Day, in the case of Base Rate Loans, or
as of the last day of the applicable Interest Period, in the case of any
other Type of Loans, to convert any such Loans (or any part thereof in an
amount not less than $1,000,000, or that is in an integral multiple of
$100,000 in excess thereof) into Loans of any other Type; or
(2) elect, as of the last day of the applicable Interest Period, to
continue any Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than $1,000,000, or that is in an
integral multiple of $100,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans
in respect of any Borrowing is reduced, by payment, prepayment, or
conversion of part thereof to be less than $1,000,000, such Offshore Rate
Loans shall automatically convert into Base Rate Loans, and on and after
such date the right of the Company to continue such Loans as, and convert
such Loans into, Offshore Rate Loans shall terminate.
(2) The Company shall deliver a Notice of Conversion/Continuation to be
received by the Agent not later than 9:00 a.m. San Francisco, California time)
at least (i) three Business Days in advance of the Conversion/Continuation Date,
if the Loans are to be converted into or continued as Offshore Rate Loans; and
(ii) one Business Day in advance of the Conversion/Continuation Date, if the
Loans are to be converted into Base Rate Loans, specifying:
(1) the proposed Conversion/Continuation Date;
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(2) the aggregate amount of Loans to be converted or continued;
(3) the Type of Loans resulting from the proposed conversion or
continuation; and
(4) other than in the case of conversions into Base Rate Loans, the
duration of the requested Interest Period.
(3) If upon the expiration of any Interest Period applicable to Offshore
Rate Loans, the Company has failed to select timely a new Interest Period to be
applicable to such Offshore Rate Loans, or if any Default or Event of Default
then exists, the Company shall be deemed to have elected to convert such
Offshore Rate Loans into Base Rate Loans bearing interest at the Base Rate plus
the applicable Base Rate Margin then in effect as of the expiration date of such
Interest Period.
(4) The Agent will promptly notify each Bank of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by the Company, the
Agent will promptly notify each Bank of the details of any automatic conversion.
All conversions and continuations shall be made ratably according to the
respective outstanding principal amounts of the Loans with respect to which the
notice was given held by each Bank.
(5) Unless the Majority Banks otherwise consent, during the existence of a
Default or Event of Default, the Company may not elect to have a Loan converted
into or continued as an Offshore Rate Loan.
(6) After giving effect to any conversion or continuation of Loans, unless
the Agent shall otherwise consent, there may not be more than six different
Interest Periods in effect.
1.8 Change in Combined Commitments.
(1) Voluntary Termination or Reduction of Commitments. The Company may,
upon not less than five Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an aggregate minimum
amount of $3,000,000 or any multiple of $1,000,000 in excess thereof; unless,
after giving effect thereto and to any prepayments of Loans made on the
effective date thereof, the then outstanding principal amount of the Loans would
exceed the amount of the combined Commitments then in effect. Once reduced in
accordance with this subsection, the Commitments may not be increased, except as
provided in Section 2.05(b). Any reduction of the Commitments shall be applied
to each Bank according to its Pro Rata Share. All accrued commitment fees to,
but not including the effective date of any reduction or termination of
Commitments, shall be paid on the effective date of such reduction or
termination.
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(2) Optional Increase in Combined Commitments. The Company may, on one
occasion, by means of a letter to the Agent substantially in the form of Exhibit
E, request that the combined Commitments be increased by (a) increasing the
Commitment of one or more Banks which have agreed to such increase and/or (b)
adding one or more commercial banks or other Persons as a party hereto with a
Commitment in an amount agreed to by any such commercial bank or other Person;
provided that (i) no commercial bank or other Person shall be added as a party
hereto without the written consent of the Agent (which shall not be unreasonably
withheld), (ii) at the time of the proposed increase in the combined Commitments
no Default or Event of Default will exist or result from such increase, (iii)
after giving effect to the funding of any Loan or portion thereof which
constitutes part of the increase in the combined Commitments, no Default or
Event of Default on a pro forma basis will exist or result from any such
funding, and (iv) in no event shall the combined Commitments exceed $250,000,000
less the aggregate amount of any permanent reduction(s) of the Commitments
effected pursuant to Section 2.05(a), during the term of this Agreement. The
increase in the combined Commitments pursuant to this Section 2.05(b) shall be
effective three Business Days after the date on which the Agent has received and
accepted the applicable increase letter in the form of Annex 1 to Exhibit E (in
the case of an increase in the Commitment of an existing Bank) or assumption
letter in the form of Annex 2 to Exhibit E (in the case of the addition of a
commercial bank or other Person as a new Bank). The Agent shall promptly notify
the Company and the Banks of the increase in the amount of the combined
Commitments pursuant to this Section 2.05(b) and of the Commitment and Pro Rata
Share of each Bank after giving effect thereto. The Company acknowledges that,
in order to maintain Loans in accordance with each Bank's Pro Rata Share, a
reallocation of the Commitments as a result of a non-pro-rata increase in the
combined Commitments may require prepayment of all or portions of certain Loans
on the date of such increase (and any such prepayment shall be subject to the
provisions of Section 4.04, but shall not be subject to the restrictions on the
amount of prepayments set forth in Section 2.06). The Agent shall promptly
notify all Banks of the increase in the combined Commitments pursuant to this
Section 2.05(b).
1.9 Optional Prepayments. Subject to Section 4.04, the Company may at any
time or from time to time ratably prepay any Loans in whole or in part in minium
amounts of $1,000,000 or any multiple of $100,000 in excess thereof. Each
prepayment shall be made upon not less than three Business Days' irrevocable
notice to the Agent with respect to Offshore Rate Loans and not less than same
day irrevocable notice of prepayment with respect to Base Rate Loans. Such
notice of prepayment shall specify the date and amount of such prepayment and
the Type(s) of Loans to be prepaid. The Agent will promptly notify each Bank of
its receipt of any such notice, and of such Bank's Pro Rata Share of such
prepayment. If such notice is given by the Company, the Company shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to each
such date on the amount prepaid and any amounts required pursuant to Section
4.04.
1.10 Repayment. The Company shall on the Revolving Termination Date repay
the aggregate principal amount of Loans outstanding (including any outstanding
Swing Line Loans) on such date.
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1.11 Interest.
(1) Each Loan shall bear interest on the outstanding principal amount
thereof from the applicable Borrowing Date at a rate per annum equal to (i) the
Offshore Rate (Reserve Adjusted) plus the applicable Offshore Rate Margin from
time to time in effect or (ii) the Base Rate plus the applicable Base Rate
Margin from time to time in effect, as the case may be (and subject to the
Company's right to convert to other Types of Loans under Section 2.04),
provided, however, that each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to the Base Rate plus the applicable Base Rate Margin from
time to time in effect or such other rate as may be agreed to from time to time
by the Company and the Swing Line Bank; provided that after any purchase by the
Banks of a participation in a Swing Line Loan, the rate of interest on such
Swing Line Loan shall not be less than the Base Rate plus the applicable Base
Rate Margin from time to time in effect.
(2) Interest on each Loan shall be paid in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any prepayment of Loans under
Section 2.06 for the portion of the Loans so prepaid and upon payment (including
prepayment) in full thereof and, during the existence of any Event of Default,
interest shall be paid on demand of the Agent at the request or with the consent
of the Majority Banks.
(3) Notwithstanding subsection (a) of this Section, while any Event of
Default exists or after acceleration, the Company shall pay interest (after as
well as before entry of judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Obligations, at a rate per annum which is
determined by adding 2% per annum to (i) the applicable interest rate then in
effect for each such Loan, in the case of Obligations consisting of Loans and
(ii) the Base Rate plus the applicable Base Rate Margin, in the case of
Obligations other than Loans which are not paid when due; provided, however,
that, on and after the expiration of any Interest Period applicable to any
Offshore Rate Loan outstanding on the date of occurrence of such Event of
Default or acceleration, the principal amount of such Loan shall, during the
continuation of such Event of Default or after acceleration, bear interest at a
rate per annum equal to the Base Rate plus the applicable Base Rate Margin from
time to time in effect.
(4) Anything herein to the contrary notwithstanding, the obligations of the
Company to any Bank hereunder shall be subject to the limitation that payments
of interest shall not be required for any period for which interest is computed
hereunder, to the extent (but only to the extent) that contracting for or
receiving such payment by such Bank would be contrary to the provisions of any
law applicable to such Bank limiting the highest rate of interest that may be
lawfully contracted for, charged or received by such Bank, and in such event the
Company shall pay such Bank interest at the highest rate permitted by applicable
law.
1.12 Fees. In addition to certain fees described in Section 3.08:
(1) Arrangement, Agency Fees. The Company shall pay an arrangement fee to
the Arranger for the Arranger's own account, and shall pay an agency fee to the
Agent for the Agent's own account, as required by the letter agreement ("Fee
Letter") between the Company, the Arranger, and Agent dated June 14, 2000.
(2) Closing Fees. On the Closing Date, the Company shall pay to the Banks,
through Agent, closing fees in the amount set forth in BofA's commitment letter
and term sheet dated June 14, 2000 and agreed to by the Company.
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(3) Commitment Fees. (1) The Company shall pay to the Agent for the account
of each Bank a commitment fee on the actual daily unused portion of such Bank's
Commitment, computed on a quarterly basis in arrears on the last Business Day of
each calendar quarter, based upon the daily utilization for that quarter as
calculated by the Agent, at a rate per annum equal to the Commitment Fee Rate in
effect from time to time. For purposes of computing the commitment fee, Swing
Line Loans shall not constitute utilization of any Bank's Commitment.
(2) Such commitment fee shall accrue from the Closing Date to the Revolving
Termination Date and shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter commencing on September 30, 2000 through
the Revolving Termination Date, with the final payment to be made on the
Revolving Termination Date; provided that, in connection with any increase,
reduction or termination of Commitments under Section 2.05(a), the accrued
commitment fee calculated for the period ending on such date shall also be paid
on the date of such increase, reduction or termination, with the following
quarterly payment being calculated on the basis of the period from such
increase, reduction or termination date to such quarterly payment date.
(3) The commitment fees provided in this subsection shall accrue at all
times after the above-mentioned commencement date, including at any time during
which one or more conditions in Article V are not met.
1.13 Computation of Fees and Interest.
(1) All computations of interest for Base Rate Loans when the Base Rate is
determined by the Prime Rate shall be made on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed. All other computations of
fees and interest shall be made on the basis of a 360-day year and actual days
elapsed (which results in more interest being paid than if computed on the basis
of a 365-day year). Interest and fees shall accrue during each period during
which interest or such fees are computed from the first day thereof to the last
day thereof.
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(2) Each determination of an interest rate by the Agent shall be conclusive
and binding on the Company and the Banks in the absence of manifest error.
1.14 Payments by the Company.
(1) All payments (including prepayments) to be made by the Company on
account of principal, interest, fees, and other amounts required hereunder shall
be made without set-off, recoupment or counterclaim. Except as otherwise
expressly provided herein, all payments by the Company shall be made to the
Agent for the account of the Banks at the Agent's Payment Office, and shall be
made in dollars and in immediately available funds, no later than 10:00 a.m.
(San Francisco, California time) on the date specified herein. The Agent will
promptly distribute to each Bank its Pro Rata Share (or other applicable share
as expressly provided herein) of such payment in like funds as received. Any
payment received by the Agent later than 1:00 p.m. (San Francisco, California
time) shall be deemed to have been received on the following Business Day and
any applicable interest or fee shall continue to accrue.
(2) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(3) Unless the Agent receives notice from the Company prior to the date on
which any payment is due to the Banks that the Company will not make such
payment in full as and when required, the Agent may assume that the Company has
made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Company has not made such
payment in full to the Agent, each Bank shall repay to the Agent on demand such
amount distributed to such Bank, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such Bank
until the date repaid.
1.15 Payments by the Banks to the Agent.
(1) Unless the Agent receives notice from a Bank on or prior to the Closing
Date or, with respect to any Borrowing after the Closing Date, at least one
Business Day prior to the date of such Borrowing, that such Bank will not make
available as and when required hereunder to the Agent for the account of the
Company the amount of that Bank's Pro Rata Share of the Borrowing, the Agent may
assume that each Bank has made such amount available to the Agent in immediately
available funds on the Borrowing Date and the Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Company on
such date a corresponding amount. If and to the extent any Bank shall not have
made its full amount available to the Agent in immediately available funds and
the Agent in such circumstances has made available to the Company such amount,
that Bank shall on the Business Day following
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such Borrowing Date make such amount available to the Agent, together with
interest at the Federal Funds Rate for each day during such period. A notice of
the Agent submitted to any Bank with respect to amounts owing under this
subsection shall be conclusive, absent manifest error. If such amount is so made
available, such payment to the Agent shall constitute such Bank's Loan on the
date of Borrowing for all purposes of this Agreement. If such amount is not made
available to the Agent on the Business Day following the Borrowing Date, the
Agent will notify the Company of such failure to fund and, upon demand by the
Agent, the Company 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.
(2) The failure of any Bank to make any Loan on any Borrowing Date shall
not relieve any other Bank of any obligation hereunder to make a Loan on such
Borrowing Date, but no Bank shall be responsible for the failure of any other
Bank to make the Loan to be made by such other Bank on any Borrowing Date.
1.16 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such participations in the
Loans made by them as shall be necessary to cause such purchasing Bank to share
the excess payment pro rata with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid therefor, together with an
amount equal to such paying Bank's ratable share (according to the proportion of
(i) the amount of such paying Bank's required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 11.10) with respect to
such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation. The Agent will keep records (which
shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify the
Banks following any such purchases or repayments.
1.17 Swing Line Commitment. Subject to the terms and conditions of this
Agreement, the Swing Line Bank agrees to make loans to the Company on a
revolving basis (each such loan, a "Swing Line Loan") from time to time on any
Business Day during the period from the Closing Date to the Revolving
Termination Date in an aggregate principal amount at any one time outstanding
not to exceed $10,000,000; provided that after giving effect to any proposed
Swing Line Loan, the aggregate principal amount of all outstanding Loans shall
not at any time exceed the combined Commitments.
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1.18 Borrowing Procedures for Swing Line Loans. The Company shall provide a
Notice of Swing Line Loan or telephonic notice (followed by a confirming Notice
of Swing Line Loan) of a proposed Swing Line Loan to the Agent and the Swing
Line Bank not later than 11:00 a.m. (San Francisco, California time) on the
proposed Borrowing Date. Each such notice shall be effective upon receipt by the
Agent and the Swing Line Bank and shall specify the date and the principal
amount of such Swing Line Loan. Unless the Swing Line Bank has received written
notice prior to 11:00 a.m. (San Francisco, California time) on the proposed
Borrowing Date from the Agent or any Bank that one or more of the conditions
precedent set forth in Article V with respect to such Swing Line Loan is not
then satisfied, the Swing Line Bank shall pay over the requested principal
amount to the Company on the requested Borrowing Date in immediately available
funds. Each Swing Line Loan shall be made on a Business Day and shall be in the
amount of $100,000 or a higher integral multiple of $25,000. The Swing Line Bank
will promptly notify the Agent of the making and amount of each Swing Line Loan.
1.1
1.19 Prepayment or Refunding of Swing Line Loans.
(1) The Company may, at any time and from time to time, prepay any Swing
Line Loan in whole or in part, in an amount equal to $100,000 or a higher
integral multiple of $25,000. The Company shall deliver a notice of prepayment
in accordance with Section 11.02 to be received by the Agent and the Swing Line
Bank not later than 11:00 a.m. (San Francisco, California time) on the Business
Day of such prepayment, specifying the date and amount of such prepayment. If
such notice is given by the Company, the payment amount specified in such notice
shall be due and payable on the date specified therein.
(2) The Swing Line Bank may, at any time in its sole and absolute
discretion, on behalf of the Company (which hereby irrevocably directs the Swing
Line Bank to act on its behalf), request each Bank to make a Loan in an amount
equal to such Bank's Pro Rata Share of the principal amount of the Swing Line
Loans outstanding on the date such notice is given. Unless any of the events
described in subsection 9.01(f) or (g) shall have occurred (in which event the
procedures of Section 2.17 shall apply), and regardless of whether the
conditions precedent set forth in this Agreement to the making of Loans are then
satisfied or the aggregate amount of such Loans is not in the minimum or
integral amount otherwise required hereunder, each Bank shall make the proceeds
of its Loan available to the Agent for the account of the Swing Line Bank at the
Agent's Payment Office prior to l1:00 a.m. (San Francisco, California time) in
immediately available funds on the Business Day next succeeding the date such
notice is given. The proceeds of such Loans shall be immediately applied to
repay the outstanding Swing Line Loans. All Loans made pursuant to this Section
2.16 shall be Base Rate Loans (but, subject to the other provisions of this
Agreement, may be converted to Offshore Rate Loans).
1.20 Participations in Swing Line Loans. If an event described in
subsection 9.01(f) or (g) exists (or for any reason the Banks may not make Loans
pursuant to Section 2.18), each Bank will, upon notice from the Agent, purchase
from the Swing Line Bank (and the Swing Line Bank
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will sell to each Bank) an undivided participation interest in all outstanding
Swing Line Loans in an amount equal to its Pro Rata Share of the outstanding
principal amount of the Swing Line Loans (and each Bank will immediately
transfer to the Agent, for the account of the Swing Line Bank, in immediately
available funds, the amount of its participation).
Whenever, at any time after the Swing Line Bank has received payment for
any Bank's participation interest in the Swing Line Loans pursuant to subsection
2.17(a), the Swing Line Bank receives any payment on account thereof, the Swing
Line Bank will distribute to the Agent for the account of such Bank its
participation interest in such amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Bank's
participation interest was outstanding and funded) in like funds as received;
provided, however, that in the event that such payment received by the Swing
Line Bank is required to be returned, such Bank will return to the Agent for the
account of the Swing Line Bank any portion thereof previously distributed by the
Swing Line Bank to it in like funds as such payment is required to be returned
by the Swing Line Bank.
1.21 Participation Obligations Unconditional.
(1) Each Bank's obligation to make Loans pursuant to Section 2.16 and/or to
purchase participation interests in Swing Line Loans pursuant to Section 2.17
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Bank may have against the Swing Line Bank, the
Company or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of an Event of Default or Unmatured Event of Default; (iii) any
adverse change in the condition (financial or otherwise) of the Company or any
other Person; (iv) any breach of this Agreement or any other Loan Document by
the Company or any other Person; (v) any inability of the Company to satisfy the
conditions precedent to borrowing set forth in this Agreement on the date upon
which any such Loan is to be made or any participation interest therein is to be
purchased; or (vi) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
(2) Notwithstanding the provisions of subsection 2.18(a), no Bank shall be
required to make any Loan to the Company to refund a Swing Line Loan pursuant to
Section 2.16 or to purchase a participation interest in a Swing Line Loan
pursuant to Section 2.17 if, prior to the making by the Swing Line Bank of such
Swing Line Loan, the Swing Line Bank received written notice from any Bank
specifying that such Bank believed in good faith that one or more of the
conditions precedent to the making of such Swing Line Loan were not satisfied
and, in fact, such conditions precedent were not satisfied at the time of the
making of such Swing Line Loan; provided that the obligation of such Bank to
make such Loans and to purchase such participation interests shall be reinstated
upon the earlier to occur of (i) the date on which such Bank notifies the Swing
Line Bank that its prior notice has been withdrawn and (ii) the date on which
all conditions precedent to the making of such Swing Line Loan have been
satisfied (or waived by the Majority Banks or all Banks, as applicable).
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1.22 Conditions to Swing Line Loans. Notwithstanding any other provision of
this Agreement, the Swing Line Bank shall not be obligated to make any Swing
Line Loan if a Default or an Event of Default exists or would result therefrom.
ARTICLE III
THE LETTERS OF CREDIT
1.23 The Letter of Credit Subfacility.
(1) On the terms and conditions set forth herein (i) each Issuing Bank
agrees, (A) from time to time on any Business Day during the period from the
date hereof to the Revolving Termination Date to issue Letters of Credit for the
account of the Company, and to amend or renew Letters of Credit previously
issued by it, in accordance with subsections 3.02(c) and 3.02(d), and (B) to
honor properly drawn drafts under the Letters of Credit issued by it; and (ii)
the Banks severally agree to participate in Letters of Credit Issued for the
account of the Company; provided that no Issuing Bank shall be obligated to
Issue, and no Bank shall be obligated to participate in, any Letter of Credit if
as of the date of Issuance of such Letter of Credit (the "Issuance Date") (1)
the sum of the aggregate principal amount of all outstanding Loans plus the
Effective Amount of all L/C Obligations exceed the combined Commitments, (2) the
Effective Amount of all L/C Obligations would exceed the L/C Commitment or (3)
the participation of any Bank in the Effective Amount of all L/C Obligations
plus the outstanding principal amount of the Loans of such Bank would exceed
such Bank's Commitment. Within the foregoing limits, and subject to the other
terms and conditions hereof, the Company's ability to obtain Letters of Credit
shall be fully revolving, and, accordingly, the Company 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.
(2) No Issuing Bank shall be under any obligation to Issue 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 such Issuing Bank
from Issuing such Letter of Credit, or any Requirement of Law applicable to such
Issuing Bank or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over such Issuing Bank
shall prohibit, or request that such Issuing Bank refrain from, the Issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Bank with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which such Issuing Bank is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon such Issuing Bank any unreimbursed loss, cost or expense which was
not applicable on the Closing Date and which such Issuing Bank in good faith
deems material to it (it
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being understood that the applicable Issuing Bank shall promptly notify the
Company and the Agent of any of the foregoing events or circumstances);
(ii) such Issuing Bank has received written notice from any Bank, the Agent
or the Company, on or prior to the Business Day prior to the requested date of
Issuance of such Letter of Credit, that one or more of the applicable conditions
contained in Article V is not then satisfied;
(iii) the expiry date of such requested Letter of Credit is after the
scheduled Revolving Termination Date, unless all of the Banks have approved such
expiry date in writing;
(iv) such Letter of Credit does not provide for drafts, or is not otherwise
in form and substance acceptable to such Issuing Bank, or the Issuance of a
Letter of Credit shall violate any applicable policies of such Issuing Bank; or
(v) such Letter of Credit is denominated in a currency other than Dollars.
(3) On and after the Closing Date, the Existing Letters of Credit shall be
deemed for all purposes to be Letters of Credit outstanding under this
Agreement. Each Bank shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Bank on the Closing Date a
participation in each Existing Letter of Credit and each drawing thereunder in
an amount equal to the product of (i) such Bank's applicable Pro Rata Share
times (ii) the maximum amount available to be drawn under such Letter of Credit
and the amount of each drawing thereunder, respectively.
1.24 Issuance, Amendment and Renewal of Letters of Credit.
(1) Each Letter of Credit shall be issued upon the irrevocable written
request of the Company received by the applicable Issuing Bank (with a copy sent
by the Company to the Agent) at least one Business Day (or such shorter time as
the applicable Issuing Bank and the Agent may agree in a particular instance in
their sole discretion) prior to the proposed date of issuance. Each such request
for issuance of a Letter of Credit shall be by facsimile, confirmed immediately
(by messenger or overnight courier) in an original writing, in the form of an
L/C Application, and shall specify in form and detail satisfactory to the
applicable Issuing Bank: (i) the face amount of the Letter of Credit; (ii) the
expiry date of the Letter of Credit; (iii) the name and address of the
beneficiary thereof; (iv) the documents to be presented by the beneficiary of
the Letter of Credit in case of any drawing thereunder; (v) the full text of any
certificate to be presented by the beneficiary in case of any drawing
thereunder; and (vi) such other matters as such Issuing Bank may require.
(2) Promptly upon receipt of any L/C Application or L/C Amendment
Application, the applicable Issuing Bank will confirm with the Agent (by
telephone or in writing)
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that the Agent has received a copy of such L/C Application or L/C Amendment
Application from the Company and, if not, such Issuing Bank will provide the
Agent with a copy thereof. Unless the applicable Issuing Bank has received on or
before the Business Day immediately preceding the date such Issuing Bank is to
issue a requested Letter of Credit, (A) notice from the Agent directing such
Issuing Bank not to issue such Letter of Credit because such issuance is not
then permitted under subsection 3.01(a) as a result of the limitations set forth
in clauses (1) through (3) thereof or (B) a notice described in subsection
3.01(b)(ii), then, subject to the terms and conditions hereof, such Issuing Bank
shall, on the requested date, issue a Letter of Credit for the account of the
Company in accordance with such Issuing Bank's usual and customary business
practices.
(3) From time to time while a Letter of Credit is outstanding and prior to
the Revolving Termination Date, the applicable Issuing Bank will, upon the
written request of the Company received by such Issuing Bank (with a copy sent
by the Company to the Agent) at least one Business Day (or such shorter time as
the applicable Issuing Bank and the Agent may agree in a particular instance in
their sole discretion) prior to the proposed date of amendment, amend any Letter
of Credit issued by it. Each such request for amendment of a Letter of Credit
shall be made by facsimile, confirmed immediately (by messenger or overnight
courier) in an original writing, made in the form of an L/C Amendment
Application and shall specify in form and detail satisfactory to such Issuing
Bank: (i) the Letter of Credit to be amended; (ii) the proposed date of
amendment of such Letter of Credit (which shall be a Business Day); (iii) the
nature of the proposed amendment; and (iv) such other matters as such Issuing
Bank may require. No Issuing Bank shall have any obligation to amend any Letter
of Credit if: (A) such Issuing Bank 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 such Letter of Credit does not accept the
proposed amendment to such Letter of Credit. The Agent will promptly notify the
Banks of any Issuance or amendment of a Letter of Credit.
(4) The Issuing Banks and the Banks agree that, while a Letter of Credit is
outstanding and prior to the Revolving Termination Date, at the option of the
Company and upon the written request of the Company received by the applicable
Issuing Bank (with a copy sent by the Company to the Agent) at least one
Business Day (or such shorter time as the applicable Issuing Bank and the Agent
may agree in a particular instance in their sole discretion) prior to the
proposed date of notification of renewal, the applicable Issuing Bank 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 by
facsimile, confirmed immediately in an original writing, in the form of an L/C
Amendment Application, and shall specify in form and detail satisfactory to the
applicable Issuing Bank: (i) the Letter of Credit to be renewed; (ii) the
proposed date of notification of renewal of such Letter of Credit (which shall
be a Business Day); (iii) the revised expiry date of such Letter of Credit
(which, unless all Banks otherwise consent in writing, shall be prior to the
Revolving Termination Date); and (iv) such other matters as such Issuing Bank
may require. No Issuing Bank shall be under any obligation to renew any Letter
of Credit if: (A) such Issuing Bank would have no obligation at such time to
issue or amend such
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Letter of Credit in its renewed form under the terms of this Agreement; or (B)
the beneficiary of such Letter of Credit does not accept the proposed renewal of
such 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 applicable Issuing Bank that such Letter of Credit shall not be
renewed, and if at the time of renewal such Issuing Bank would be entitled to
authorize the automatic renewal of such Letter of Credit in accordance with this
subsection 3.02(d) upon the request of the Company but such Issuing Bank shall
not have received any L/C Amendment Application from the Company with respect to
such renewal or other written direction by the Company with respect thereto,
such Issuing Bank shall nonetheless be permitted to allow such Letter of Credit
to renew, and the Company and the Banks hereby authorize such renewal, and,
accordingly, such Issuing Bank shall be deemed to have received an L/C Amendment
Application from the Company requesting such renewal.
(5) Each Issuing Bank may, at its election (or as required by the Agent at
the direction of the Majority Banks), deliver any notice of termination or other
communication to any Letter of Credit beneficiary or transferee, and 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 Termination Date.
(6) This Agreement shall control in the event of any conflict with any
L/C-Related Document (other than any Letter of Credit).
(7) Each Issuing Bank will deliver to the Agent and the Company,
concurrently 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 such Letter of Credit or of such
amendment or renewal.
1.25 Risk Participations, Drawings and Reimbursements.
(1) Immediately upon the Issuance of each Letter of Credit on or after the
date on which all conditions are satisfied under Section 5.01, each Bank shall
be deemed to, and hereby irrevocably and unconditionally agrees to, purchase
from the applicable Issuing Bank a participation in such Letter of Credit and
each drawing thereunder in an amount equal to the product of (i) such Bank's Pro
Rata Share 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
2.01, each Issuance of a Letter of Credit shall be deemed to utilize the
Commitment of each Bank by an amount equal to the amount of such participation.
(2) In the event of any request for a drawing under a Letter of Credit by
the beneficiary or transferee thereof, the applicable Issuing Bank will promptly
notify the Company and the Agent. The Company shall (subject, if applicable, to
its right to obtain Base Rate Loans as provided below) reimburse the applicable
Issuing Bank prior to 11:00 a.m. San Francisco, California time on each date
that any amount is paid by such Issuing Bank under any Letter of
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Credit (each such date, an "Honor Date") in an amount equal to the amount so
paid by such Issuing Bank; provided that, to the extent that any Issuing Bank
accepts a drawing under a Letter of Credit after 11:00 a.m. San Francisco,
California time, the Company will not be obligated to reimburse such Issuing
Bank until the next Business Day and the "Honor Date" for such Letter of Credit
shall be such next Business Day. If the Company fails to reimburse an Issuing
Bank for the full amount of any drawing under any Letter of Credit by 11:00 a.m.
San Francisco, California time on the Honor Date, such Issuing Bank will
promptly notify the Agent and the Agent will promptly notify each Bank thereof
(no later than 12:00 noon San Francisco, California time on such Honor Date),
and the Company shall be deemed to have requested that Base Rate Loans be made
by the Banks to be disbursed on the Honor Date under such Letter of Credit,
subject to the amount of the unutilized portion of the combined Commitments and
subject to the conditions set forth in Section 5.02 other than Section 5.02(a).
Any notice given by an Issuing Bank or the Agent pursuant to this subsection
3.03(b) may be oral if immediately confirmed in writing (including by
facsimile); provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(3) Each Bank shall upon any notice pursuant to subsection 3.03(b) make
available to the Agent for the account of the applicable Issuing Bank an amount
in Dollars and in immediately available funds equal to its Pro Rata Share of the
amount of the drawing, whereupon the Banks shall (subject to subsection 3.03(d))
each be deemed to have made a Loan consisting of a Base Rate Loan to the Company
in such amount. If any Bank so notified fails to make available to the Agent for
the account of the applicable Issuing Bank the amount of such Bank's Pro Rata
Share of the amount of such drawing by no later than 2:00 p.m. San Francisco,
California time on the Honor Date, then interest shall accrue on such Bank's
obligation to make such payment, from the Honor Date to the date such Bank makes
such payment, at a rate per annum equal to the Federal Funds Rate in effect from
time to time during such period. The Agent will promptly give notice of the
occurrence of the Honor Date, but failure of the Agent to give any such notice
on the Honor Date or in sufficient time to enable any Bank to effect such
payment on such date shall not relieve such Bank from its obligations under this
Section 3.03 (but shall relieve any such Bank from its obligation to pay such
interest so long as it makes such payment on the next Business Day following the
date such notice is given by the Agent).
(4) With respect to any unreimbursed drawing that is not converted into
Base Rate Loans in whole or in part, because of the Company's failure to satisfy
the conditions set forth in Section 5.02 (other than subsection 5.02(a) which
need not be satisfied) or for any other reason, the Company shall be deemed to
have incurred from the applicable Issuing Bank an L/C Borrowing in the amount of
such drawing, which L/C Borrowing shall be due and payable on demand and shall
bear interest (payable on demand) at a rate per annum equal to the sum of the
Base Rate plus the Base Rate Margin plus 2%, and each Bank's payment to such
Issuing Bank pursuant to subsection 3.03(c) shall be deemed payment in respect
of its participation in such L/C Borrowing and shall constitute an L/C Advance
from such Bank in satisfaction of its participation obligation under this
Section 3.03.
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(5) Each Bank's obligation in accordance with this Agreement to make the
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
without recourse to any Issuing Bank and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such Bank may have against the applicable Issuing Bank, the
Company or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of an Event of Default, an Unmatured 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; provided that each Bank's
obligation to make Loans under this Section 3.03 is subject to the conditions
set forth in Section 5.02 (other than subsection 5.02(a)).
1.26 Repayment of Participations.
(1) Upon (and only upon) receipt by the Agent for the account of an Issuing
Bank of immediately available funds from the Company (i) in reimbursement of any
payment made by such Issuing Bank under a Letter of Credit with respect to which
any Bank has paid the Agent for the account of such Issuing Bank for such Bank's
participation in such Letter of Credit pursuant to Section 3.03 or (ii) in
payment of interest thereon, the Agent will pay to each Bank, in the same funds
as those received by the Agent for the account of such Issuing Bank, the amount
of such Bank's Pro Rata Share of such funds, and such Issuing Bank shall receive
the amount of the Pro Rata Share of such funds of any Bank that did not so pay
the Agent for the account of such Issuing Bank.
(2) If the Agent or an Issuing Bank is required at any time to return to
the Company, or to a trustee, receiver, liquidator or custodian, or to any
official in any Insolvency Proceeding, any portion of any payment made by the
Company to the Agent for the account of an Issuing Bank pursuant to subsection
3.04(a) in reimbursement of a payment made under a Letter of Credit or interest
or fee thereon, each Bank shall, on demand of the Agent, forthwith return to the
Agent or the applicable Issuing Bank the amount of its Pro Rata Share of any
amount so returned by the Agent or such Issuing Bank plus interest thereon from
the date such demand is made to the date such amount is returned by such Bank to
the Agent or such Issuing Bank, at a rate per annum equal to the Federal Funds
Rate in effect from time to time.
1.27 Role of the Issuing Banks.
(1) Each Bank and the Company agree that, in paying any drawing under a
Letter of Credit, the applicable Issuing Bank shall not have any responsibility
to obtain any document (other than any sight draft and certificate expressly
required by such 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.
(2) No Issuing Bank or Agent-Related Person, nor any of their respective
correspondents, participants or assignees, shall be liable to any Bank for: (i)
any action taken or
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omitted in connection herewith at the request or with the approval of the Banks
(including the Majority Banks, 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.
(3) The Company 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 that this assumption is not intended to, and shall not, preclude the
Company's pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement. No Issuing Bank
or Agent-Related Person, nor any of their respective correspondents,
participants or assignees, shall be liable or responsible for any of the matters
described in clauses (i) through (vii) of Section 3.06; provided that, anything
in such clauses to the contrary notwithstanding, the Company may have a claim
against an Issuing Bank, and such Issuing Bank may be liable to the Company, to
the extent, but only to the extent, of any direct, as opposed to consequential
or exemplary, damages suffered by the Company which the Company proves were
caused by such Issuing Bank's willful misconduct or gross negligence or such
Issuing Bank'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 such Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) an Issuing Bank 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) no Issuing Bank shall 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.
1.28 Obligations Absolute. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the applicable Issuing Bank
for a drawing under a Letter of Credit, and to repay any L/C Borrowing and any
drawing under a Letter of Credit converted into 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 Company 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
Company may have at any time against any beneficiary or any transferee of any
Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be
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acting), the applicable Issuing Bank or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby or by any L/C-Related
Document 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;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under any Letter of Credit;
(v) any payment by an Issuing Bank under any Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by an Issuing Bank 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
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 Company 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 Company or a
guarantor.
1.29 Cash Collateral Pledge. If any Letter of Credit remains outstanding
and partially or wholly undrawn as of the Revolving Termination Date, then the
Company shall immediately Cash Collateralize the L/C Obligations in an amount
equal to the maximum amount then available to be drawn under all Letters of
Credit.
1.30 Letter of Credit Fees.
(1) The Company shall pay to the Agent for the account of each Bank a
letter of credit fee with respect to each Letter of Credit equal to the L/C Fee
Rate per annum of the average daily maximum amount available to be drawn on such
Letter of Credit, computed on a quarterly basis in arrears on the last Business
Day of each calendar quarter and on the Revolving Termination Date (or such
later date on which such Letter of Credit shall expire or be fully drawn).
(2) The letter of credit fees payable under subsection 3.08(a) 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
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Closing Date through the Revolving Termination Date (or such later date upon
which all outstanding Letters of Credit shall expire or be fully drawn), with
the final payment to be made on the Revolving Termination Date (or such later
date).
(3) The Company shall pay to each Issuing Bank a letter of credit fronting
fee at such times and in such amounts as are mutually agreed to from time to
time by the Company and such Issuing Bank.
(4) The Company shall pay to each Issuing Bank from time to time on demand
the normal issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of such Issuing Bank relating to each Letter
of Credit as from time to time in effect.
1.31 Uniform Customs and Practice. The Uniform Customs and Practice for
Documentary Credits as published by the International Chamber of Commerce
("UCP") most recently at the time of issuance of any Letter of Credit shall
(unless otherwise expressly provided in such Letter of Credit) apply to such
Letter of Credit.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
1.32 Taxes.
(1) Any and all payments by the Company to each Bank or the Agent under
this Agreement and any other Loan Document shall be made free and clear of, and
without deduction or withholding for any Taxes. In addition, the Company shall
pay all Other Taxes.
(2) The Company agrees to indemnify and hold harmless each Bank and the
Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section) paid by
the Bank or the Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within 30 days after the date
the Bank or the Agent makes written demand therefor.
(3) If the Company shall be required by law to deduct or withhold any Taxes
or Other Taxes from or in respect of any sum payable hereunder to any Bank or
the Agent, then:
(1) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Bank or the Agent, as the case may be, receives an amount equal to the sum
it would have received had no such deductions or withholdings been made;
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(2) the Company shall make such deductions and withholdings;
(3) the Company shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with applicable
law; and
(4) the Company shall also pay to each Bank or the Agent for the
account of such Bank, at the time interest is paid, all additional amounts
which the respective Bank specifies as necessary to preserve the after-tax
yield the Bank would have received if such Taxes or Other Taxes had not
been imposed.
(4) Within 30 days after the date of any payment by the Company of Taxes or
Other Taxes, the Company shall furnish the Agent the original or a certified
copy of a receipt evidencing payment thereof, or other evidence of payment
satisfactory to the Agent.
(5) If the Company is required to pay additional amounts to any Bank or the
Agent pursuant to subsection (c) of this Section, then such Bank shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Company which may thereafter accrue, if such change in the
judgment of such Bank is not otherwise disadvantageous to such Bank.
1.33 Illegality.
(1) If any Bank determines that the introduction of any Requirement of Law,
or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Bank or its applicable Lending Office to make Offshore Rate Loans, then,
on notice thereof by the Bank to the Company through the Agent, any obligation
of that Bank to make Offshore Rate Loans shall be suspended until the Bank
notifies the Agent and the Company that the circumstances giving rise to such
determination no longer exist.
(2) If a Bank determines that it is unlawful to maintain any Offshore Rate
Loan, the Company shall, upon its receipt of notice of such fact and demand from
such Bank (with a copy to the Agent), prepay in full such Offshore Rate Loans of
that Bank then outstanding, together with interest accrued thereon and amounts
required under Section 4.04, either on the last day of the Interest Period
thereof, if the Bank may lawfully continue to maintain such Offshore Rate Loans
to such day, or immediately, if the Bank may not lawfully continue to maintain
such Offshore Rate Loan. If the Company is required to so prepay any Offshore
Rate Loan, then concurrently with such prepayment, the Company shall borrow from
the affected Bank, in the amount of such repayment, a Base Rate Loan.
(3) If the obligation of any Bank to make or maintain Offshore Rate Loans
has been so terminated or suspended, the Company may elect, by giving notice to
the Bank through
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the Agent that all Loans which would otherwise be made by the Bank as Offshore
Rate Loans shall be instead Base Rate Loans.
(4) Before giving any notice to the Agent under this Section, the affected
Bank shall designate a different Lending Office with respect to its Offshore
Rate Loans if such designation will avoid the need for giving such notice or
making such demand and will not, in the judgment of the Bank, be illegal or
otherwise disadvantageous to the Bank.
1.34 Increased Costs and Reduction of Return.
(1) If any Bank determines that, due to either (i) the introduction of or
any change (other than any change by way of imposition of or increase in reserve
requirements included in the calculation of the Offshore Rate) in or in the
interpretation of any law or regulation or (ii) the compliance by that Bank with
any guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Bank of agreeing to make or making, funding or maintaining any
Offshore Rate Loans or participating in any Letter of Credit, or, in the case of
an Issuing Bank, any increase in the cost to such Issuing Bank of agreeing to
issue, 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,
then the Company shall be liable for, and shall from time to time, upon demand
(with a copy of such demand to be sent to the Agent), pay to the Agent for the
account of such Bank, additional amounts as are sufficient to compensate such
Bank for such increased costs. (1)
(2) If any Bank shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation,
(iii) any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Bank (or its
Lending Office) or any corporation controlling the Bank with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by the Bank or any corporation controlling the Bank
and (taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy and such Bank's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitment, loans, credits or obligations under this Agreement, then, upon
demand of such Bank to the Company through the Agent, the Company shall pay to
the Bank, from time to time as specified by the Bank, additional amounts
sufficient to compensate the Bank for such increase.
1.35 Funding Losses. The Company shall reimburse each Bank and hold each
Bank harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:
(1) the failure of the Company to make on a timely basis any payment of
principal of any Offshore Rate Loan;
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(2) the failure of the Company to borrow, continue or convert a Loan after
the Company has given (or is deemed to have given) a Notice of Borrowing or a
Notice of Conversion/Continuation;
(3) the failure of the Company to make any prepayment in accordance with
any notice delivered under Section 2.06;
(4) the prepayment or other payment (including after acceleration thereof)
of an Offshore Rate Loan on a day that is not the last day of the relevant
Interest Period; or
(5) the automatic conversion under Section 2.04 of any Offshore Rate Loan
or to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Company to the Banks under this Section and
under subsection 4.04(a), each Offshore Rate Loan made by a Bank (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Offshore Rate
for such Offshore 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 Offshore Rate Loan is in fact so funded.
1.36 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan or that the Offshore Rate applicable for any requested Interest Period with
respect to a proposed Offshore Rate Loan does not adequately and fairly reflect
the cost to the Banks of funding such Loan, the Agent will promptly so notify
the Company and each Bank. Thereafter, the obligation of the Banks to make or
maintain Offshore Rate Loans hereunder shall be suspended until the Agent upon
the instruction of the Majority Banks revokes such notice in writing. Upon
receipt of such notice, the Company may revoke any Notice of Borrowing or Notice
of Conversion/Continuation then submitted by it. If the Company does not revoke
such Notice, the Banks shall make, convert or continue the Loans, as proposed by
the Company, in the amount specified in the applicable notice submitted by the
Company, but such Loans shall be made, converted or continued as Base Rate Loans
instead of Offshore Rate Loans.
1.37 Reserves on Offshore Rate Loans. The Company shall pay to each Bank,
as long as such Bank shall be required under regulations of the FRB to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency funds or deposits (currently known as "Eurocurrency liabilities"),
additional costs on the unpaid principal amount of each Offshore Rate Loan equal
to the actual costs of such reserves allocated to such Loan by the Bank (as
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determined by the Bank in good faith, which determination shall be conclusive),
payable on each date on which interest is payable on such Loan, provided the
Company shall have received at least 15 days' prior written notice (with a copy
to the Agent) of such additional interest from the Bank. If a Bank fails to give
notice 15 days prior to the relevant Interest Payment Date, such additional
interest shall be payable 15 days from receipt of such notice.
1.38 Survival. The agreements and obligations of the Company in this
Article IV shall survive the payment of all other Obligations.
ARTICLE V
CONDITIONS PRECEDENT
1.39 Conditions of Initial Loans Etc. The obligation of each Bank to make
its initial Loan hereunder (including the obligation of the Swing Line Bank to
make any Swing Line Loan and the Issuing Bank to Issue any Letter of Credit) or
to convert or continue any Loan outstanding on the Closing Date is subject to
the condition that the Agent have received on or before the Closing Date all of
the following, in form and substance satisfactory to the Agent and each Bank,
and in sufficient copies for each Bank:
(1) Agreement. This Agreement executed by each party thereto;
(2) Resolutions; Incumbency.
(1) Copies of the resolutions of the board of directors of the Company
authorizing the transactions contemplated hereby, certified as of the Closing
Date by the Secretary or an Assistant Secretary of the Company; and
(2) A certificate of the Secretary or Assistant Secretary of the Company
certifying the names and true signatures of the officers of the Company
authorized to execute, deliver and perform, as applicable, this Agreement, and
all other Loan Documents to be delivered by it hereunder.
(3) Legal Opinion. An opinion of Freeland, Cooper, LeHockey & Hamburg,
counsel to the Company and addressed to the Agent and the Banks, substantially
in the form of Exhibit F;
(4) Payment of Fees. Evidence of payment by the Company of all accrued and
unpaid fees, costs and expenses to the extent then due and payable on the
Closing Date, together with Attorney Costs of BofA to the extent invoiced prior
to or on the Closing Date, plus such additional amounts of Attorney Costs as
shall constitute BofA's reasonable estimate of Attorney Costs incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude final settling of accounts between the Company and
BofA);
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including any such costs, fees and expenses arising under or referenced in
Sections 2.09 and 11.04;
(5) Prior Credit Agreement; Payment of Sums Due and Termination of
Commitment to Lend Under the Prior Credit Agreement. Evidence of:
(1) Payment by the Company of all sums due unpaid (including but not
limited to principal, interest and commitment fees through the Closing Date
under the Prior Credit Agreement) under the Prior Credit Agreement, except
for any break-funding fees associated with the prepayment of outstanding
Loans under the Prior Credit Agreement in connection with payment and
prepayment of such Loans under this clause. These fees are due and payable
upon demand; and
(2) Termination of the various commitments to extend credit under the
Prior Credit Agreement.
(6) Certificate. A certificate signed by a Responsible Officer, dated as of
the Closing Date, stating that:
(1) the representations and warranties contained in Article VI are
true and correct on and as of such date, as though made on and as of such
date;
(2) no Default or Event of Default exists or would result from
execution and performance of this Agreement by the Company; and
(3) there has occurred since December 31, 1999 no event or
circumstance that has resulted or could reasonably be expected to result in
a Material Adverse Effect.
(7) Other Documents. Such other approvals, opinions, documents or materials
as the Agent or any Bank may reasonably request.
1.40 Conditions to All Borrowings. The obligation of each Bank to make any
Loan to be made by it (including its initial Loan, and the obligation of the
Swing Line Bank to make any Swing Line Loan and Issuing Bank to Issue any Letter
of Credit) or to continue or convert any Loan under Section 2.04 (including
continuations or conversions of Loans outstanding on the Closing Date) is
subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date, Issuance Date or Conversion/Continuation Date:
(1) Notices Regarding Loans and Letters of Credit. The Agent shall have
received a Notice of Borrowing, a Notice of Conversion/Continuation or a Notice
of Swing Line Loan, as applicable or, in the case of the Issuance of any Letter
of Credit, the applicable Issuing
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Bank and the Agent shall have received an L/C Application or L/C Amendment
Application, as required under Section 3.02;
(2) Continuation of Representations and Warranties. The representations and
warranties in Article VI shall be true and correct on and as of such Borrowing
Date, Issuance Date or Conversion/Continuation Date with the same effect as if
made on and as of such Borrowing Date, Issuance Date or Conversion/Continuation
Date (except to the extent such representations and warranties expressly refer
to an earlier date, in which case they shall be true and correct as of such
earlier date); and
(3) No Existing Default. No Default or Event of Default exists or shall
result from such Borrowing or continuation or conversion.
Each Notice of Borrowing, Notice of Swing Line Loans, notice of acceptance
of an L/C Application and L/C Amendment Application and Notice of
Conversion/Continuation submitted by the Company hereunder shall constitute a
representation and warranty by the Company hereunder, as of the date of each
such notice and as of each Borrowing Date, Issuance Date or
Conversion/Continuation Date, as applicable, that the conditions in this Section
5.02 are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
1.41 Corporate Existence and Power. The Company and each of its
Subsidiaries, other than Dreyer's International, Inc.:
(1) is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(2) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents;
(3) is duly qualified as a foreign corporation and is licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license; and
(4) is in compliance with all Requirements of Law.
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1.42 Corporate Authorization; No Contravention. The execution, delivery and
performance by the Company of this Agreement and each other Loan Document to
which the Company is party, have been duly authorized by all necessary corporate
action, and do not and will not:
(1) contravene the terms of any of the Company's Organization Documents;
(2) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which the Company is a party or any order, injunction, writ or decree of any
Governmental Authority to which the Company or its property is subject; or
(3) violate any Requirement of Law.
1.43 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Company or any of its Subsidiaries of the Agreement or any other
Loan Document.
1.44 Binding Effect. This Agreement and each other Loan Document to which
the Company is a party constitute the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
1.45 Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the Company, or its Subsidiaries or any of their respective
properties which:
(1) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or
(2) if determined adversely to the Company or its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
1.46 No Default. No Default or Event of Default exists or would result from
the incurring of any Obligations by the Company. As of the Closing Date, neither
the Company nor
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any Subsidiary is in default under or with respect to any Contractual Obligation
in any respect which, individually or together with all such defaults, could
reasonably be expected to have a Material Adverse Effect, or that would, if such
default had occurred after the Closing Date, create an Event of Default under
subsection 9.01(e).
1.47 ERISA Compliance. Except as specifically disclosed in Schedule 6.07:
(1) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state law. Each Plan which is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS and to the best knowledge of the Company,
nothing has occurred which would cause the loss of such qualification. The
Company and each ERISA Affiliate made all required contributions to any Plan
subject to Section 412 of the Code, and no application for a funding waiver or
an extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.
(2) There are no pending or, to the best knowledge of Company, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan which has resulted or could reasonably be expected to result
in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(3) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Company nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Company nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
1.48 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to
be used solely for the purposes set forth in and permitted by Section 7.12 and
Section 8.07. Neither the Company nor any Subsidiary is generally engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
1.49 Title to Properties. The Company and each Subsidiary have good record
and marketable title in fee simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
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1.50 Taxes. The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.
1.51 Financial Condition.
(1) (i) The audited consolidated financial statements of the Company and
its Subsidiaries dated December 31, 1999, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal period ended on that date, and (ii) the unaudited financial statements of
the Company and its Subsidiaries dated March 31, 2000, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal period ended on that date:
(1) were prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, except as otherwise expressly noted
therein, subject, in the case of the unaudited interim statements, to
ordinary, good faith year end audit adjustments;
(2) fairly present subject, in the case of the unaudited interim
statements, to ordinary, good faith year-end audit adjustments, the
financial condition of the Company and its Subsidiaries as of the dates
thereof and results of operations for the periods covered thereby; and
(3) except as specifically disclosed in Schedule 6.11, show all
material indebtedness and other liabilities, direct or contingent, of the
Company and its consolidated Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Contingent Obligations.
(2) Since December 31, 1999 there has been no Material Adverse Effect.
1.52 Environmental Matters. Except where non-compliance is not reasonably
likely to have a Material Adverse Effect, the Company and its Subsidiaries are
in compliance with all Environmental Laws. Except in cases or circumstances not
reasonably likely to have a Material Adverse Effect, there is no Environmental
Claim pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary.
1.53 Regulated Entities. None of the Company, any Person controlling the
Company, or any Subsidiary, is an "Investment Company" within the meaning of the
Investment Company
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Act of 1940. The Company is not subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code, or any other Federal or state statute or
regulation limiting its ability to incur Indebtedness.
1.54 No Burdensome Restrictions. Neither the Company nor any Subsidiary is
a party to or bound by any Contractual Obligation, or subject to any restriction
in any Organization Document, or any Requirement of Law, which could reasonably
be expected to have a Material Adverse Effect.
1.55 Labor Relations. There are no strikes, lockouts or other labor
disputes against the Company or any of its Subsidiaries, or, to the best of the
Company's knowledge, threatened against or affecting the Company or any of its
Subsidiaries and, except as specifically disclosed in Schedule 6.15, no
significant unfair labor practice complaint is pending against the Company or
any of its Subsidiaries or, to the best knowledge of the Company, threatened
against any of them before any Governmental Authority.
1.56 Copyrights, Patents, Trademarks and Licenses, etc. The Company or its
Subsidiaries own or are licensed or otherwise have the right to use all of the
patents, trademarks, service marks, trade names, copyrights, contractual
franchises, distribution rights, authorizations and other rights that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. To the best knowledge of the
Company, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Company or any Subsidiary infringes upon any rights held by any
other Person. No claim or litigation regarding any of the foregoing is pending
or threatened, and no patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code is pending or, to the knowledge
of the Company, proposed, which, in either case, could reasonably be expected to
have a Material Adverse Effect.
1.57 Subsidiaries. The Company has no Subsidiaries other than those
specifically disclosed in part (a) of Schedule 6.17 hereto and has no equity
investments in any other corporation or entity other than those specifically
disclosed in part (b) of Schedule 6.17.
1.58 Insurance. The Company has a self-insurance program covering types of
risks and/or properties in amounts consistent with the practices of other
companies in the same or similar business and of similar size. The properties of
the Company and its Subsidiaries are, consistent with its self-insurance
program, insured with financially sound and reputable insurance companies not
Affiliates of the Company, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Company or such Subsidiary
operates.
1.59 Full Disclosure. None of the representations or warranties made by the
Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are
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made or deemed made, and none of the statements contained in any exhibit,
report, statement or certificate furnished by or on behalf of the Company or any
Subsidiary 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 light of the circumstances
under which they are made, not misleading as of the time when made or delivered.
1.60 Disclosure re Margin Stock. On the Closing Date, the Company owns no
Margin Stock.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in writing:
1.61 Financial Statements. The Company shall deliver to the Agent, in form
and detail satisfactory to the Agent and the Majority Banks, with sufficient
copies for each Bank:
(1) as soon as available, but not later than 100 days after the end of each
fiscal year, a copy of the audited consolidated balance sheet of the Company and
its Subsidiaries as at the end of such year and the related consolidated
statements of income or operations, shareholders' equity and cash flows for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, and accompanied by the opinion of PriceWaterhouseCoopers
or another nationally-recognized independent public accounting firm
("Independent Auditor") which report shall state that such consolidated
financial statements present fairly, in all material respects, the financial
position for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years. Such opinion shall not be qualified or limited
because of a restricted or limited examination by the Independent Auditor of any
material portion of the Company's or any Subsidiary's records;
(2) as soon as available, but not later than 60 days after the end of each
of the first three fiscal quarters of each fiscal year, a copy of the unaudited
consolidated balance sheet of the Company and its Subsidiaries' as of the end of
such quarter and the related consolidated statements of income, shareholders'
equity and cash flows for the period commencing on the first day and ending on
the last day of such quarter, and certified by a Responsible Officer as fairly
presenting, in all material respects, in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments), the financial position and the
results of operations of the Company and the Subsidiaries;
1.62 Certificates; Other Information. The Company shall furnish to the
Agent, with sufficient copies for each Bank:
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(1) concurrently with the delivery of the financial statements referred to
in subsection 7.01(a), a certificate of the Independent Auditor stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(2) concurrently with the delivery of the financial statements referred to
in subsections 7.01(a) and (b), a Compliance Certificate executed by a
Responsible Officer;
(3) promptly, copies of all financial statements and reports that the
Company sends to its shareholders, and copies of all financial statements and
regular, periodical or special reports (including Forms 10-K, 10-Q and 8-K) that
the Company or any Subsidiary may make to, or file with, the SEC; and
(4) promptly, such additional information regarding the business, financial
or corporate affairs of the Company or any Subsidiary as the Agent, at the
request of any Bank, may from time to time request.
1.63 Notices. The Company shall promptly notify the Agent and each Bank:
(1) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that foreseeably will
become a Default or Event of Default;
(2) of any matter that has resulted or may result in a Material Adverse
Effect, including (i) breach or non-performance of, or any default under, a
Contractual Obligation of the Company or any Subsidiary; (ii) any dispute,
litigation, investigation, proceeding or suspension between the Company or any
Subsidiary and any Governmental Authority; or (iii) the commencement of, or any
material development in, any litigation or proceeding affecting the Company or
any Subsidiary; including pursuant to any applicable Environmental Laws;
(3) of the occurrence of any of the following events affecting the Company
or any ERISA Affiliate (but in no event more than 10 days after such event), and
deliver to the Agent and each Bank a copy of any notice with respect to such
event that is filed with a Governmental Authority and any notice delivered by a
Governmental Authority to the Company or any ERISA Affiliate with respect to
such event:
(1) an ERISA Event;
(2) a material increase in the Unfunded Pension Liability of any
Pension Plan;
(3) the adoption of, or the commencement of contributions to, any Plan
subject to Section 412 of the Code by the Company or any ERISA Affiliate;
or
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(4) the adoption of any amendment to a Plan subject to Section 412 of
the Code, if such amendment results in a material increase in contributions
or Unfunded Pension Liability.
(4) of any material change in accounting policies or financial reporting
practices by the Company or any of its consolidated Subsidiaries;
(5) upon the request from time to time of the Agent, the Swap Termination
Values, together with a description of the method by which such values were
determined, relating to any then-outstanding Swap Contracts to which the Company
or any of its Subsidiaries is party.
Each notice under this Section shall be accompanied by a written statement
by a Responsible Officer setting forth details of the occurrence referred to
therein, and stating what action the Company or any affected Subsidiary proposes
to take with respect thereto and at what time. Each notice under subsection
7.03(a) shall describe with particularity any and all clauses or provisions of
this Agreement or other Loan Document that have been (or foreseeably will be)
breached or violated.
1.64 Preservation of Corporate Existence, Etc. Except where failure to do
so could not reasonably be expected to have a Material Adverse Effect, and, in
the case of clause (b), except as permitted by Section 8.02 or 8.03, the Company
shall, and shall cause each Subsidiary to:
(1) preserve and maintain in full force and effect its corporate existence
and good standing under the laws of its state or jurisdiction of incorporation;
(2) preserve and maintain in full force and effect all governmental rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business;
(3) use reasonable efforts, in the ordinary course of business, to preserve
its business organization and goodwill; and
(4) preserve or renew all of its registered patents, trademarks, trade
names and service marks.
1.65 Maintenance of Property. The Company shall maintain, and shall cause
each Subsidiary to maintain, and preserve all its property which is used or
useful in its business in good working order and condition, ordinary wear and
tear excepted and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
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1.66 Insurance. The Company shall maintain (in accordance with its
self-insurance program), and shall cause each Subsidiary to maintain (in
accordance with the Company's self-insurance program), with financially sound
and reputable independent insurers, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons.
1.67 Payment of Obligations. The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:
(1) interest, principal, fees, and all other sums outstanding under or in
respect of this Agreement, the Fee Letter, and any other instrument required
hereunder in accordance with the terms hereof and thereof;
(2) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by the Company or such Subsidiary;
(3) all lawful claims which, if unpaid, would by law become a Lien upon its
property; and
(4) all indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
1.68 Compliance with Laws. The Company shall comply, and shall cause each
Subsidiary to comply (a) in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist, and (b)
with any contract or agreement to which the Company or any Subsidiary is a party
where a failure to so comply would have a Material Adverse Effect.
1.69 Compliance with ERISA. The Company shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
1.70 Inspection of Property and Books and Records. The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial
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transactions and matters involving the assets and business of the Company and
such Subsidiary. The Company shall permit, and shall cause each Subsidiary to
permit, representatives and independent contractors of the Agent or any Bank to
visit and inspect any of their respective properties, to examine their
respective corporate, financial and operating records, and make copies thereof
or abstracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent public
accountants, all at the expense of the Company and at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Company; provided, however, when an Event of
Default exists the Agent or any Bank may do any of the foregoing at the expense
of the Company at any time during normal business hours and without advance
notice.
1.71 Environmental Laws. The Company shall, and shall cause each Subsidiary
to, conduct its operations and keep and maintain its property in compliance with
all Environmental Laws.
1.72 Use of Proceeds.
(1) The Company shall use the proceeds of the Loans made on the Closing
Date to repay (to the extent of such proceeds) principal, interest, fees, and
all other sums due and payable under the Prior Credit Agreement and thereafter
for working capital, for Permitted Acquisitions, to purchase, redeem or
otherwise acquire capital stock to the extent permitted by Section 8.11 and for
other general corporate purposes not in contravention of any Requirement of Law
or of any Loan Document.
(2) The Company shall not, directly or indirectly, use any portion of the
Loan proceeds (i) knowingly to purchase Ineligible Securities from the Arranger
during any period in which the Arranger makes a market in such Ineligible
Securities, (ii) knowingly to purchase during the underwriting or placement
period Ineligible Securities being underwritten or privately placed by the
Arranger, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by the Arranger and issued by or for
the benefit of the Company or any Affiliate of the Company. The Arranger is a
registered broker-dealer and permitted to underwrite and deal in certain
Ineligible Securities; and "Ineligible Securities" means securities which may
not be underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (12 U.S.C. ss. 24, Seventh), as
amended.
1.73 Cooperation. The Company shall perform, on request of the Agent or the
Majority Banks and at the Company's expense, such acts as may be necessary or
advisable to otherwise carry out the intent of this Agreement.
ARTICLE VIII
NEGATIVE COVENANTS
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So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in writing:
1.74 Limitation on Liens. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following ("Permitted
Liens"):
(1) any Lien existing on property of the Company or any Subsidiary on the
Closing Date and set forth in Schedule 8.01 securing Indebtedness outstanding on
such date and any Lien associated with operating leases of the Company and any
Subsidiary existing as of the Closing Date;
(2) any Lien created under any Loan Document;
(3) Liens for taxes, fees, assessments or other governmental charges which
are not delinquent or remain payable without penalty, or to the extent that
non-payment thereof is permitted by Section 7.07, provided that no notice of
lien has been filed or recorded under the Code;
(4) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(5) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other social security legislation;
(6) Liens on the property of the Company or its Subsidiary securing (i) the
non-delinquent performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, (ii) contingent obligations on surety and
appeal bonds, and (iii) other non-delinquent obligations of a like nature; in
each case, incurred in the ordinary course of business, provided all such Liens
in the aggregate would not (even if enforced) cause a Material Adverse Effect;
(7) Liens consisting of judgment or judicial attachment liens, provided
that the enforcement of such Liens is effectively stayed and all such liens in
the aggregate at any time outstanding for the Company and its Subsidiaries do
not exceed $5,000,000;
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(8) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the businesses of the Company and its Subsidiaries;
(9) Liens on assets of corporations which become Subsidiaries after the
date of this Agreement, provided that such Liens existed at the time the
respective corporations became Subsidiaries and were not created in anticipation
thereof and the principal amount of the obligations secured by such Liens does
not exceed $10,000,000;
(10) purchase money security interests on any property acquired or held by
the Company or its Subsidiaries in the ordinary course of business, securing
Indebtedness incurred or assumed for the purpose of financing all or any part of
the cost of acquiring such property; provided that (i) any such Lien attaches to
such property concurrently with or within 20 days after the acquisition thereof,
(ii) such Lien attaches solely to the property so acquired in such transaction,
(iii) the principal amount of the debt secured thereby does not exceed 100% of
the cost of such property, and (iv) the principal amount of the Indebtedness
secured by any and all such purchase money security interests shall not at any
time exceed $10,000,000;
(11) Liens securing obligations in respect of capital leases and operating
leases on assets subject to such leases, provided that such capital leases and
operating leases are otherwise permitted hereunder; and
(12) 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 Company in excess of those set forth by regulations promulgated by
the FRB, and (ii) such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution.
1.75 Disposition of Assets. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any property (including accounts and notes receivable, with or without recourse)
or enter into any agreement to do any of the foregoing, except:
(1) dispositions of inventory, or used, worn-out or surplus equipment, all
in the ordinary course of business;
(2) the sale of equipment to the extent that such equipment is exchanged
for credit against the purchase price of similar replacement equipment, or the
proceeds of such sale are reasonably promptly applied to the purchase price of
such replacement equipment;
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(3) the sale by Grand Soft Capital Company or Grand Soft Equipment Company
of leases and/or machinery pursuant to the Grand Soft Program;
(4) the lease, by the Company, of its real and personal property which is
not needed by the Company for its current business operations, for fair market
value; and
(5) the sale, assignment, lease, conveyance, transfer, or other disposition
by the Company, of the following assets:
(1) any interest in the Company's Lindenhurst and Gaithersburg
Maryland facilities including, without limitation, all assets related
thereto; and
(2) any interests in the following Wholly-Owned Subsidiaries: Grand
Soft Equipment Company and Grand Soft Capital Company including, without
limitation, all assets related thereto.
(6) dispositions not otherwise permitted hereunder which are made for fair
market value; provided, that (i) at the time of any disposition, no Event of
Default shall exist or shall result from such disposition, (ii) the aggregate
sales price from such disposition shall be paid in cash, and (iii) the aggregate
value of all assets so sold by the Company and its Subsidiaries, together, shall
not exceed in any fiscal year $5,000,000.
1.76 Consolidations and Mergers. The Company shall not, and shall not
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
(1) any Subsidiary may merge with the Company, provided that the Company
shall be the continuing or surviving corporation, or with any one or more
Subsidiaries, provided that if any transaction shall be between a Subsidiary and
a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be the continuing
or surviving corporation; and
(2) any Subsidiary may sell all or substantially all of its assets (upon
voluntary liquidation or otherwise), to the Company or another Wholly-Owned
Subsidiary (other than Grand Soft Equipment Company and Grand Soft Capital
Company).
1.77 Loans and Investments. The Company shall not purchase or acquire, or
suffer or permit any Subsidiary to purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligations or other
securities of, or any interest in, any Person, or make or commit to make any
Acquisitions, or make or commit to make any advance, loan, extension of credit
or capital contribution to or any other investment in, any Person including any
Affiliate of the Company, except for:
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(1) investments by the Company or Subsidiary in Cash Equivalents;
(2) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
(3) extensions of credit by the Company to any of its Wholly-Owned
Subsidiaries or by any of its Wholly-Owned Subsidiaries to another of its
Wholly-Owned Subsidiaries;
(4) investments (other than those permitted under subsections (a), (b),
(c), (e), and (f) of this Section) after the Closing Date in an aggregate amount
not exceeding $60,000,000, provided that:
(1) prior to the first anniversary of this Agreement, not more than
$50,000,000 may be invested in Persons engaged in businesses substantially
similar to the businesses currently engaged in by the Company and/or any of
its Subsidiaries and
(2) not more than an aggregate amount of $15,000,000 may be invested
in Persons engaged in businesses not covered by clause (1) of this
subsection;
(5) investments acquired in exchange for stock of the Company;
(6) investments existing as of the Closing Date as set forth in Schedule
8.04; and
(7) Permitted Acquisitions.
1.78 Limitation on Indebtedness. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(1) Indebtedness incurred pursuant to this Agreement;
(2) 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 Business of the Company or such Subsidiary 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;
(3) Indebtedness consisting of Contingent Obligations permitted pursuant to
Section 8.08;
(4) Indebtedness existing on the Closing Date and set forth in Schedule
8.05;
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(5) Indebtedness secured by Liens permitted pursuant to subsections 8.01(i)
and 8.01(j);
(6) Indebtedness incurred in connection with leases permitted pursuant to
Section 8.10;
(7) Indebtedness under the Senior Notes as reduced from time to time
pursuant to the amortization schedules for the Senior Notes in effect on the
date hereof;
(8) Unsecured Indebtedness of Subsidiaries in an aggregate amount
outstanding not to exceed $10,000,000;
(9) Synthetic Lease Obligations, provided that the aggregate amount of all
Synthetic Lease Obligations shall not at any time exceed $30,000,000; and
(10) Indebtedness of the Company which ranks pari passu with the
Obligations under this Agreement in an aggregate amount outstanding not to
exceed $100,000,000; provided that the covenants, amortization schedule,
collateral position and maturity with respect to any such Indebtedness shall at
all times be no more favorable to any lender thereunder, as reasonably
determined by the Majority Banks, than the comparable provisions contained in
this Agreement.
1.79 Transactions with Affiliates. The Company shall not, and shall not
suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of the Company, except upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Company or such
Subsidiary.
1.80 Use of Proceeds. The Company shall not, and shall not suffer or permit
any Subsidiary to, use any portion of the Loan proceeds or any Letter of Credit,
directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or
otherwise refinance indebtedness of the Company or others incurred to purchase
or carry Margin Stock, (iii) to extend credit for the purpose of purchasing or
carrying any Margin Stock, or (iv) to acquire any security in any transaction
that is subject to Section 13 or 14 of the Exchange Act, provided that the
Company may purchase shares of its own stock to the extent permitted by Section
8.11 so long as such shares are immediately retired..
1.81 Contingent Obligations. The Company shall not, and shall not suffer or
permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(1) endorsements for collection or deposit in the ordinary course of
business;
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(2) Contingent Obligations of the Company and its Subsidiaries existing as
of the Closing Date and listed in Schedule 8.08; and
(3) Guaranty Obligations in respect of Indebtedness of a Subsidiary which
is permitted under this Agreement;
(4) The Contingent Obligations of Grand Soft Capital Company and Grand Soft
Equipment Company with respect to leases each sells or enters into pursuant to
the Grand Soft Program up to an aggregate amount of $10,000,000; and the
Company's Guaranty Obligations, if any, with respect to such Contingent
Obligations of Grand Soft Capital Company and Grand Soft Equipment Company up to
an aggregate amount of $10,000,000; and
(5) In addition to that permitted under the preceding subsections, Guaranty
Obligations covering up to $5,000,000 principal of primary obligations.
1.82 Joint Ventures. Except for investments in a Joint Venture permitted
under Section 8.04, the Company shall not, and shall not suffer or permit any
Subsidiary to, enter into any Joint Venture, other than in the ordinary course
of business.
1.83 Lease Obligations. The Company shall not, and shall not suffer or
permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except for:
(1) leases of the Company and of Subsidiaries in existence on the Closing
Date and any renewal, extension or refinancing thereof.
(2) operating leases other than those permitted under other subsections of
this Section entered into by the Company or any of its Subsidiaries after the
Closing Date in the ordinary course of business as conducted as of the Closing
Date; provided that the aggregate amount of rent and other charges to be paid
under such leases (without discounting to present value and without regard to
any options to extend) does not exceed $10,000,000.
(3) leases other than those permitted under other subsections of this
Section entered into by the Company or any of its Subsidiaries after the Closing
Date, provided, that.
(1) immediately prior to giving effect to such lease, the Property subject
to such lease was sold by the Company or any such Subsidiary to the lessor
pursuant to a transaction permitted under Section 8.02;
(2) no Default or Event of Default exists or would occur as a result of
such sale and subsequent lease; and
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(3) the aggregate amount of rent and other charges to be paid under such
leases (without discounting to present value and without regard to any options
to extend) does not exceed $5,000,000.
(4) capital leases other than those permitted under other subsections of
this Section, entered into by the Company or any of its Subsidiaries after the
Closing Date to finance the acquisition of equipment; provided that the
aggregate for all such capital leases included in the Company's most current
consolidated balance sheet furnished to the Agent pursuant to Section 7.01 to
the Agent shall not exceed $15,000,000.
1.84 Restricted Payments. The Company shall not, and shall not suffer or
permit any Subsidiary to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of its capital stock or any warrants,
rights or options to acquire such shares, now or hereafter outstanding; except
that if no Default or Event of Default exists or would exist after giving effect
thereto:
(1) Any Subsidiary may pay dividends to the Company or a wholly-owned
Subsidiary.
(2) The Company may declare and make dividend payments or other
distributions to:
(1) its common stockholders, payable in cash or its common stock; and
(2) its preferred stockholders, up to an annual aggregate amount of
$4,600,000 payable in cash or in its common stock. The amount by which
$4,600,000 exceeds the aggregate dividend payments and other distributions made
in any fiscal year (commencing with 1996) to preferred stockholders may be
added, on a cumulative basis, to the amount available for dividend payments to
preferred stockholders in subsequent fiscal years;
provided that, and notwithstanding the foregoing, the Company may not declare
and make any such dividend payments or other distributions in any of the
following calendar years in excess of: (i) $5,000,000 in 2000, (ii) $10,000,000
in 2001, (iii) $15,000,000 in 2002, (iv) $20,000,000 in 2003, (v) $20,000,000 in
2004 and (vi) $20,000,000 in 2005.
(3) The Company may purchase, redeem or otherwise acquire shares of its
common stock or warrants or options to acquire any such shares with the proceeds
received from the substantially concurrent issue of new shares of its common
stock.
(4) the Company may convert all or part of its Series A Preferred Stock
into its common stock.
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(5) The Company may purchase shares of its common stock pursuant to:
(1) the Company's "Employee Secured Stock Purchase Plan (1990)" and
the Company's "Section 423 Employee Stock Purchase Plan (1990)" both as in
effect on the Closing Date and as amended to comply with applicable tax,
securities, or other laws, and
(2) the Company's "Stock Option Plan (1992)", the Company's "Incentive
Stock Option Plan (1982)", and the Company's "Stock Option Plan (1993)",
all as in effect on the Closing Date and as amended to comply with
applicable tax, securities, or other laws or to increase the number of
shares authorized to be issued under such plans as approved by the
stockholders of the Company.
(6) In addition to the purchases, redemptions or other acquisitions
permitted by clause (g) below, the Company may purchase, redeem or otherwise
acquire shares of its capital stock or warrants or options to acquire such
shares in an aggregate amount not to exceed $10,000,000, which amount shall be
adjusted upwards or downwards on a cumulative basis for each fiscal quarter
commencing on September 30, 2000, by 50% of the Company's consolidated net
income or 100% of consolidated net loss for such fiscal quarter; provided that
all such purchases, redemptions or acquisitions of such stock for the calendar
year 2000 shall not exceed the aggregate amount of $25,000,000.
(7) The Company may, at any time, purchase, redeem or otherwise acquire all
or a portion of the Series A Preferred Stock or common stock resulting from the
conversion thereof, provided that the Company shall promptly deliver a
certificate to the Agent and the Banks demonstrating that, after giving effect
thereto, no Default or Event of Default will exist.
1.85 ERISA. The Company shall not, and shall not suffer or permit any of
its ERISA Affiliates to: (a) engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan which has resulted
or could reasonably be expected to result in liability of the Company in an
aggregate amount in excess of $10,000,000; or (b) engage in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
1.86 Consolidated Net Worth. The Company shall not permit its Consolidated
Net Worth at any time to be less than the total of:
(i) $142,000,000; plus
(ii) 75% of the Company's consolidated net income for each fiscal quarter
beginning with the fiscal quarter ending on June 30, 2000 (with no deduction for
losses) in any such quarter; plus
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(iii) 75% of Net Issuance Proceeds of any stock offerings issued (excluding
stock issuances under Section 8.11(c)); minus
(iv) Series A Preferred Stock which is mandatorily redeemable within one
year; plus
(v) the book value of any such shares of Series A Preferred Stock referred
to in clause (iv) which are converted into common stock; minus
(vi) the book value of any common stock referred to in clause (v) which has
been redeemed or repurchased by the Company from the Person which held the
Series A Preferred Stock immediately prior to conversion thereof.
1.87 Minimum Fixed Charge Coverage Ratio.
(1) The Company shall not permit its Fixed Charge Coverage Ratio:
--------------------------------------------------------------------------------
For the period consisting of the four consecutive fiscal
To be less than: quarters ending on the last day of its:
--------------------------------------------------------------------------------
2.00 Second, third and fourth fiscal quarters of 2000 and first
fiscal quarter of 2001
--------------------------------------------------------------------------------
2.25 Second fiscal quarter of 2001
--------------------------------------------------------------------------------
2.50 Third fiscal quarter of 2001
--------------------------------------------------------------------------------
2.75 Fourth fiscal quarter of 2001
--------------------------------------------------------------------------------
3.00 First fiscal quarter of 2002 and each fiscal quarter
thereafter
--------------------------------------------------------------------------------
(2) For purposes of this Section, Fixed Charge Coverage Ratio means,
computed on a consolidated basis for any period of four consecutive fiscal
quarters ending on the last day of any fiscal quarter, the ratio of "A" to "B"
where:
"A" means the sum for such period of EBITDA plus operating lease expenses
plus, without duplication, all payments under Synthetic Leases; and
"B" means the sum for such period of (i) cash interest expense, plus
operating lease expenses, plus, without duplication, all payments under
Synthetic Leases, plus all cash dividends paid by the Company plus (ii) the
current portion, as of the last day of such period, of all principal of
Indebtedness (excluding the Series A Preferred Stock).
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1.88 Funded Debt/EBITDA Ratio. The Company shall not permit its Funded
Debt/EBITDA Ratio to be greater than 3.0 at any time.
1.89 Change in Business. The Company shall not, and shall not suffer or
permit any Subsidiary to, engage in any material line of business substantially
different from those lines of business carried on by the Company and its
Subsidiaries on the date hereof.
1.90 Accounting Changes. The Company shall not, and shall not suffer or
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Company or of any Subsidiary.
1.91 Other Contracts.
(1) The Company shall not enter into any employment contracts or other
employment or service-retention arrangements whose terms, including salaries,
benefits and other compensation, are not normal and customary.
(2) The Company shall not permit to exist or permit any Subsidiary to be a
party to any other agreement that would prohibit or restrict the ability of any
Subsidiary to make loans to the Company or to make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any share of any class of its capital stock now or hereafter
outstanding ,provided that the foregoing provisions of this Section 8.18(b)
shall not apply to any Subsidiary until 90 days after the date such Subsidiary
first became a Subsidiary.
1.92 Senior Notes. The Company shall not amend any Senior Note or any
indenture or other agreement pursuant to which any Senior Note is issued or
otherwise relating to the Senior Note if such amendment changes (a) the final
maturity date of such Senior Note and/or (b) the repayment schedule of such
Senior Note; provided that the Banks shall not unreasonably withhold a waiver of
this Section.
1.93 Negative Pledge. Except for the Senior Notes, the Company shall not,
and shall not suffer or permit any Subsidiary to, enter into any agreement
containing any provision which would prohibit the Company or any Subsidiary from
granting to the Agent, for the benefit of the Banks, a Lien on any of its
assets.
ARTICLE IX
EVENTS OF DEFAULT
1.94 Event of Default. Any of the following shall constitute an "Event of
Default":
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(1) Non-Payment. The Company fails to pay, (i) when and as required to be
paid herein, any amount of principal of any Loan or of any L/C Obligation, or
(ii) within five days after the same becomes due, any interest, fee or any other
amount payable hereunder or under any other Loan Document; or
(2) Representation or Warranty. Any representation or warranty by the
Company or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company, any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
(3) Specific Defaults. The Company fails to perform or observe any term,
covenant or agreement contained in any of Sections 7.03, 7.10 or in Article VIII
other than Sections 8.01, 8.05, 8.06, 8.12, 8.16, 8.17, or 8.18; or
(4) Other Defaults. The Company fails to perform or observe:
(1) any term, covenant or agreement contained in any of Sections 7.01,
7.02, 8.01, or 8.05 and such default shall continue unremedied for a period of
five Business Days after notice from the Agent or any Bank that such failure to
comply constitutes an Event of Default; or
(2) any other term or covenant contained in this Agreement or any other
Loan Document, and such default shall continue unremedied for a period of 30
days after its occurrence; or
(5) Cross-Default. The Company or any Subsidiary (i) fails to make any
payment in respect of any Indebtedness or Contingent Obligation 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 $1,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
document relating thereto on the date of such failure; or (ii) fails to perform
or observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, and such failure continues after the
applicable grace or notice period, if any, specified in the document relating
thereto on the date of such failure if the effect of such failure, event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its stated maturity,
or such Contingent Obligation to become payable or cash collateral in respect
thereof to be demanded; or
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(6) Insolvency; Voluntary Proceedings. The Company or any Material
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
(7) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Company or any Material Subsidiary, or any writ,
judgment, warrant of attachment, execution or similar process, is issued or
levied against a substantial part of the Company's or any Material 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 Company or any Material 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 Company or any Material 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
(8) ERISA. (i) An ERISA Event shall occur with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $5,000,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $5,000,000; or (iii) the Company or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$5,000,000; or
(9) Monetary Judgments. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against the
Company or any Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related series of transactions,
incidents or conditions, in an aggregate amount equal to 5% or more of the
Company's Consolidated Net Worth, and the same shall remain unsatisfied,
unvacated and unstayed pending appeal for a period of 30 days after the entry
thereof; or
(10) Non-Monetary Judgments. Any non-monetary judgment, order or decree is
entered against the Company or any Subsidiary which does or would reasonably be
expected to have a Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
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(11) Change of Control. (i) Any person acquires beneficial ownership of 40%
or more of the combined voting power of the Company's outstanding securities
immediately after such acquisition (which 40% shall be calculated after
including the dilutive effect of the conversion or exchange of any outstanding
securities of the Company convertible into or exchangeable for voting
securities), (ii) a change occurs in the composition of majority membership of
the Company's Board of Directors over any two year period, (iii) a change of
ownership of the Company such that the Company becomes subject to the delisting
of its common stock from the NASDAQ National Market System, (iv) the Company's
Board of Directors approves the sale of all or substantially all of the assets
of the Company, or (v) the Company's Board of Directors approves any merger,
consolidation, issuance of securities, or purchase of assets, the result of
which would be the occurrence of any event described in clause (i), (ii), or
(iii) of this subsection. Notwithstanding anything to the contrary in this
subsection, acquisitions by any person (or any group of which such a person is a
member) who as of the date of this Agreement is a member of the Board of
Directors of the Company, of beneficial ownership of 40% or more of the combined
voting power of the Company's outstanding securities immediately after such
acquisition (calculation of such 40% being made as described above) shall not be
deemed subject to this subsection;
(12) Loss of Licenses. Any Governmental Authority revokes or fails to renew
any material license, permit or franchise of the Company or any Subsidiary, or
the Company or any Subsidiary for any reason loses any material license, permit
or franchise, or the Company or any Subsidiary suffers the imposition of any
restraining order, escrow, suspension or impound of funds in connection with any
proceeding (judicial or administrative) with respect to any material license,
permit or franchise; or
(13) Adverse Change. There occurs a Material Adverse Effect which, in the
opinion of Majority Banks, (1) will adversely affect the ability of the Company
to perform under any Loan Document or to avoid any Event of Default or (2) will
have a material adverse effect upon the legality, validity, binding effect, or
enforceability against the Company of any Loan Document; or
(14) Invalidity of Subordination Provisions. The subordination provisions
of any agreement or instrument governing any subordinated debt is for any reason
revoked or invalidated, or otherwise cease to be in full force and effect, or
any Person contests in any manner the validity or enforceability thereof or
denies that it has any further liability or obligation thereunder, or the
Indebtedness hereunder is for any reason subordinated or does not have the
priority contemplated by this Agreement or such subordination provisions.
1.95 Remedies. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Majority Banks:
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(1) declare the commitment of each Bank to make Loans (including the
commitment of the Swing Line Bank to make Swing Line Loans) and any obligation
of each Issuing Bank to Issue Letters of Credit to be terminated, whereupon such
commitments shall be terminated;
(2) declare an amount equal to the maximum aggregate amount that is or at
any time thereafter may become available for drawing under all 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, or declare
the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Company; and
(3) exercise on behalf of itself and the Banks all rights and remedies
available to it and the Banks under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 9.01 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans and any obligation of an Issuing Bank to issue Letters of Credit
shall automatically terminate and the unpaid principal amount of all outstanding
Loans and unreimbursed drawings under all outstanding Letters of Credit, and all
interest and other amounts as aforesaid shall automatically become due and
payable without further act of the Agent, the Issuing Bank or any Bank.
1.96 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
1.1
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ARTICLE X
THE AGENT
1.97 Appointment and Authorization.
(1) Each Bank hereby irrevocably (subject to Section 10.09) appoints,
designates and authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(2) The Swing Line Bank shall have all of the benefits and immunities (i)
provided to the Agent in this Article X with respect to any acts taken or
omissions suffered by the Swing Line Bank in connection with Swing Line Loans
made or proposed to be made by it as fully as if the term "Agent", as used in
this Article X, included the Swing Line Bank with respect to such acts or
omissions and (ii) as additionally provided in this Agreement with respect to
the Swing Line Bank.
(3) Each Issuing Bank shall act on behalf of the Banks with respect to any
Letters of Credit Issued by it and the documents associated therewith until such
time and except for so long as the Agent may agree at the request of the
Majority Banks to act for such Issuing Bank with respect thereto; provided,
however, that each Issuing Bank shall have all of the benefits and immunities
(i) provided to the Agent in this Article X with respect to any acts taken or
omissions suffered by such Issuing Bank in connection with Letters of Credit
Issued by it or proposed to be Issued by it and the application and agreements
for letters of credit pertaining to the Letters of Credit as fully as if the
term "Agent", as used in this Article X, included such Issuing Bank with respect
to such acts or omissions, and (ii) as additionally provided in this Agreement
with respect to such Issuing Bank.
1.98 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and
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shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agent or attorney-in-fact that it selects with reasonable care.
1.99 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates. For purposes of this Section, "Affiliates" of the
Company include the entities mentioned in the last sentence of the definition of
"Affiliates".
1.100 Reliance by Agent.
(1) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Company), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Majority Banks as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Majority
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
(2) For purposes of determining compliance with the conditions specified in
Section 4.01, each Bank 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 by the Agent to such Bank for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to the Bank.
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1.101 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will notify the Banks of its receipt of any such
notice. The Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Majority Banks in accordance with Article
VIII; provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
1.102 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company and its Subsidiaries
hereunder. Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company.
Except for notices, reports and other documents expressly herein required to be
furnished to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Company which may come into the possession
of any of the Agent-Related Persons.
1.103 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
from and against any and all Indemnified Liabilities; provided, however, that no
Bank shall be liable for the payment to the Agent-Related Persons of any portion
of such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each Bank
shall reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney
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Costs) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Agent is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Agent.
1.104 Agent in Individual Capacity. BofA and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent, the Swing Line
Bank or an Issuing Bank hereunder and without notice to or consent of the Banks.
The Banks acknowledge that, pursuant to such activities, BofA or its Affiliates
may receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans, BofA
shall have the same rights and powers under this Agreement as any other Bank and
may exercise the same as though it were not the Agent, the Swing Line Bank or an
Issuing Bank, and the terms "Bank" and "Banks" include BofA in its individual
capacity. For purposes of this Section, "Affiliates" of the Company include the
entities mentioned in the last sentence of the definition of "Affiliates".
1.105 Successor Agent. The Agent may, and at the request of the Majority
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Majority Banks shall appoint from among the
Banks a successor agent for the Banks. If no successor agent is appointed prior
to the effective date of the resignation of the Agent, the Agent may appoint,
after consulting with the Banks and the Company, a successor agent from among
the Banks. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article and Sections 10.04 and 10.05 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Banks appoint a successor agent as provided for
above. Notwithstanding the foregoing, however, BofA may not be removed as the
Agent at the request of the Majority Banks unless BofA and any applicable
Affiliate thereof shall also simultaneously be replaced as "Swing Line Bank" and
"Issuing Bank" hereunder pursuant to documentation in form and substance
reasonably satisfactory to BofA.
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1.106 Withholding Tax.
(1) If any Bank is a "foreign corporation, partnership or trust" within the
meaning of the Code and such Bank claims exemption from, or a reduction of, U.S.
withholding tax under Sections 1441 or 1442 of the Code, such Bank agrees with
and in favor of the Agent, to deliver to the Agent:
(1) if such Bank claims an exemption from, or a reduction of, withholding
tax under a United States tax treaty, two properly completed and executed copies
of IRS Form 1001 before the payment of any interest in the first calendar year
and before the payment of any interest in each third succeeding calendar year
during which interest may be paid under this Agreement;
(2) if such Bank claims that interest paid under this Agreement is exempt
from United States withholding tax because it is effectively connected with a
United States trade or business of such Bank, two properly completed and
executed copies of IRS Form 4224 before the payment of any interest is due in
the first taxable year of such Bank and in each succeeding taxable year of such
Bank during which interest may be paid under this Agreement; and
(3) such other form or forms as may be required under the Code or other
laws of the United States as a condition to exemption from, or reduction of,
United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(2) If any Bank claims exemption from, or reduction of, withholding tax
under a United States tax treaty by providing IRS Form 1001 and such Bank sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of the Company to such Bank, such Bank agrees to notify the Agent of
the percentage amount in which it is no longer the beneficial owner of
Obligations of the Company to such Bank. To the extent of such percentage
amount, the Agent will treat such Bank's IRS Form 1001 as no longer valid.
(3) If any Bank claiming exemption from United States withholding tax by
filing IRS Form 4224 with the Agent sells, assigns, grants a participation in,
or otherwise transfers all or part of the Obligations of the Company to such
Bank, such Bank agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(4) If any Bank is entitled to a reduction in the applicable withholding
tax, the Agent may withhold from any interest payment to such Bank an amount
equivalent to the
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applicable withholding tax after taking into account such reduction. However, if
the forms or other documentation required by subsection (a) of this Section are
not delivered to the Agent, then the Agent may withhold from any interest
payment to such Bank not providing such forms or other documentation an amount
equivalent to the applicable withholding tax imposed by Sections 1440 and 1442
of the Code, without reduction.
(5) If the IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold tax
from amounts paid to or for the account of any Bank (because the appropriate
form was not delivered or was not properly executed, or because such Bank failed
to notify the Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Bank shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses (including
Attorney Costs). The obligation of the Banks under this subsection shall survive
the payment of all Obligations and the resignation or replacement of the Agent.
1.107 Other Agent. The Bank identified on the facing page or signature
pages of this Agreement as "Syndication Agent" (the "Other Agent"), shall have
no right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Banks as such. Without limiting the
foregoing, the Other Agent shall not have and shall not be deemed to have any
fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on the Other Agent in deciding to enter into this
Agreement or in taking or not taking action hereunder.
ARTICLE XI
MISCELLANEOUS
1.108 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) and the Company and acknowledged by the Agent,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such waiver, amendment, or consent shall, unless in writing and signed by all
the Banks and the Company and acknowledged by the Agent, do any of the
following:
(1) increase or extend the Commitment of any Bank (or reinstate any
Commitment terminated pursuant to Section 9.02);
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(2) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Banks (or any of them) hereunder or under any other Loan Document; (1)
(3) reduce the principal of, or the rate of interest specified herein on
any Loan, or (subject to clause (ii) below) any fees or other amounts payable
hereunder or under any other Loan Document;
(4) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which is required for the Banks or any of them to
take any action hereunder; or
(5) amend this Section, or Section 2.13, or any provision herein providing
for consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the applicable Issuing Bank in addition to the Majority
Banks or all Banks, as the case may be, affect the rights or duties of such
Issuing Bank under this Agreement or any L/C-Related Document relating to any
Letter of Credit Issued or to be Issued by it, (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Agent in addition to the
Majority Banks or all the Banks, as the case may be, affect the rights or duties
of the Agent under this Agreement or any other Loan Document, and (iii) the Fee
Letter may be amended, or rights or privileges thereunder waived, in a writing
executed by the parties thereto.
1.109 Notices.
(1) All notices, requests, consents, approvals, waivers, and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by the Company by facsimile (i) shall be immediately confirmed by a
telephone call to the recipient at the number specified on Schedule 11.02, and
(ii) shall be followed promptly by delivery of a hard copy original thereof) and
mailed, faxed or delivered, to the address or facsimile number specified for
notices on Schedule 11.02; or, as directed to the Company or the Agent, to such
other address as shall be designated by such party in a written notice to the
other parties, and as directed to any other party, at such other address as
shall be designated by such party in a written notice to the Company and the
Agent.
(2) All such notices, requests and communications shall, when transmitted
by overnight delivery, or faxed, be effective when delivered for overnight
(next-day) delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date deposited
into the U.S. mail, or if delivered, upon delivery; except that notices pursuant
to Articles II, III or V to the Agent or the Swing Line Bank, as the case may
be, shall not be effective until actually received by the Agent, and notices
pursuant to Article III
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to the applicable Issuing Bank shall not be effective until actually received by
such Issuing Bank at the address specified for such "Issuing Bank" on Schedule
11.02.
(3) Any agreement of the Agent and the Banks herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Company. The Agent and the Banks shall be entitled to rely on the
authority of any Person purporting to be a Person authorized by the Company to
give such notice and the Agent and the Banks shall not have any liability to the
Company or other Person on account of any action taken or not taken by the Agent
or the Banks in reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans shall not be affected in any way or
to any extent by any failure by the Agent and the Banks to receive written
confirmation of any telephonic or facsimile notice or the receipt by the Agent
and the Banks of a confirmation which is at variance with the terms understood
by the Agent and the Banks to be contained in the telephonic or facsimile
notice. The obligation of the Company to repay the Loans and L/C 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.
1.110 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent or any Bank, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
1.111 Costs and Expenses. The Company shall:
(1) whether or not the transactions contemplated hereby are consummated,
pay or reimburse BofA (including in its capacity as Agent, Swing Line Bank and
Issuing Bank) and the Arranger within five Business Days after demand (subject
to subsection 5.01(d)) for all costs and expenses incurred by BofA (including in
its capacity as Agent, Swing Line Bank and Issuing Bank) and the Arranger in
connection with the development, preparation, delivery, administration and
execution of, and any amendment, supplement, waiver or modification to (in each
case, whether or not consummated), this Agreement, any Loan Document and any
other documents prepared in connection herewith or therewith (including
assignments and delegations by any Bank or Banks of their rights and obligations
under this Agreement), and the consummation of the transactions contemplated
hereby and thereby, including reasonable Attorney Costs incurred by BofA
(including in its capacity as Agent, Swing Line Bank and Issuing Bank) and the
Arranger with respect thereto; and
(2) pay or reimburse the Agent, the Arranger, and each Bank within five
Business Days after demand (subject to subsection 5.01(d)) for all costs and
expenses (including Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or
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preservation of any rights or remedies under this Agreement or any other Loan
Document during the existence of an Event of Default or after acceleration of
the Loans (including in connection with any "workout" or restructuring regarding
the Loans, and including in any Insolvency Proceeding or appellate proceeding).
1.112 Company Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Company shall indemnify, defend, and hold the
Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Bank) be imposed on, incurred by or asserted against
any such Person in any way related to or arising out of this Agreement or any
document contemplated by or referred to herein, or the transactions contemplated
hereby, or any action taken or omitted by any such Person under or in connection
with any of the foregoing, including with respect to any investigation,
litigation or proceeding (including any Insolvency Proceeding or appellate
proceeding) related to or arising out of this Agreement or the Loans or the
Letters of Credit or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Company shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting solely from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Section shall survive payment of all
other Obligations.
1.113 Payments Set Aside. To the extent that the Company makes a payment to
the Agent or the Banks, or the Agent or the Banks exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding 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 Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
1.114 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Bank.
1.115 Assignments, Participations, etc.
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(1) Any Bank may, with the written consent of the Company, the Agent and
each Issuing Bank (which consents shall not be unreasonably withheld and, in the
case of the Company, shall not be required during the existence of an Event of
Default) at any time, assign and delegate to one or more Eligible Assignees
(provided that no written consent of the Company or the Agent or any Issuing
Bank shall be required in connection with any assignment and delegation by a
Bank to an Eligible Assignee that is an Affiliate of such Bank) (each an
"Assignee") all, or any ratable part of all, of the Loans, the Commitments, the
L/C Obligations and the other rights and obligations of such Bank hereunder, in
a minimum amount of $10,000,000; provided, however, that the Company and the
Agent may continue to deal solely and directly with such Bank in connection with
the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Bank and the Assignee; (ii) such Bank and its Assignee
shall have delivered to the Company and the Agent an Assignment and Acceptance
in the form of Exhibit G ("Assignment and Acceptance"); and (iii) the assignor
Bank or Assignee has paid to the Agent a processing fee in the amount of $3,500
(except as set forth in a separate agreement between the Agent and the
Co-Agent).
(2) From and after the date that the Agent notifies the assignor Bank that
it has received (and provided its consent with respect to and, to the extent
required, received the consent of the Issuing Bank and the Company) an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Bank under
the Loan Documents, and (ii) the assignor Bank 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.
(3) Immediately upon each Assignee's making its processing fee payment
under the Assignment and Acceptance, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Bank pro tanto.
(4) Any Bank may at any time sell to one or more commercial banks or other
Persons not Affiliates of the Company (a "Participant") participating interests
in any Loans, the Commitment of that Bank and the other interests of that Bank
(the "originating Bank") hereunder and under the other Loan Documents; provided,
however, that (i) the originating Bank's obligations under this Agreement shall
remain unchanged, (ii) the originating Bank shall remain solely responsible for
the performance of such obligations, (iii) the Company, the Swing Line Bank,
each Issuing Bank and the Agent shall continue to deal solely and directly with
the originating Bank in connection with the originating Bank's rights and
obligations under this
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Agreement and the other Loan Documents, and (iv) no Bank shall transfer or grant
any participating interest under which the Participant has 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 the Banks as described in the first proviso
to Section 11.01. In the case of any such participation, the Participant shall
be entitled to the benefit of Sections 4.01, 4.03 and 11.05 as though it were
also a Bank hereunder, and shall not have any other rights under this Agreement,
or any of the other Loan Documents, and all amounts payable by the Company
hereunder shall be determined as if such Bank had not sold such participation;
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Bank under this Agreement.
Notwithstanding any other provision in this Agreement, any Bank may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR
ss.203.14, and such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted under applicable law.
1.116 Confidentiality. Each Bank agrees to take and to cause its Affiliates
to take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "confidential" or "secret" by
the Company and provided to it by the Company or any Subsidiary, or by the Agent
on such Company's or Subsidiary's behalf, under this Agreement or any other Loan
Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Company or any Subsidiary; except to
the extent such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Bank, or (ii) was or becomes
available on a non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; provided, however, that any Bank may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent, any
Bank or their respective Affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document; (F) to such Bank's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or potential,
provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Banks hereunder; (H) as to any
Bank or its Affiliate, as expressly permitted under the terms of any other
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document or agreement regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Bank or such Affiliate; and (I)
to its Affiliates.
1.117 Set-off. In addition to any rights and remedies of the Banks provided
by law, if an Event of Default exists or the Loans have been accelerated, each
Bank is authorized at any time and from time to time, without prior notice to
the Company, any such notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the account
of the Company against any and all Obligations owing to such Bank, now or
hereafter existing, irrespective of whether or not the Agent or such Bank shall
have made demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured. Each Bank agrees promptly to notify
the Company and the Agent after any such set-off and application made by such
Bank; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application.
1.118 Notification of Addresses, Lending Offices, Etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
1.119 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
1.120 Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
1.121 No Third Parties Benefitted. This Agreement is made and entered into
for the sole protection and legal benefit of the Company, the Banks, the Agent
and the Agent-Related Persons, and their permitted successors and assigns, and
no other Person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any of the other Loan Documents.
1.122 Commitment Letter. This is the Credit Agreement referred to in the
June 14, 2000 letter (and accompanying term sheet) to the Company from the
Arranger and BofA (the "Commitment Letter") and contains the terms and
conditions relating to the credit facility described in the Commitment Letter.
These terms and conditions are modified, as set forth in this Agreement. The
terms and conditions of the June 14, 2000 Fee Letter remain in full force and
effect and are not amended or modified by this Agreement.
80
<PAGE>
1.123 Termination of Commitments to Lend Under the Prior Credit Agreement.
The Company and each of the Banks party to the Prior Credit Agreement agree
that:
(1) the commitment of each of such Banks to extend credit under the Prior
Credit Agreement terminates upon execution of this Agreement without necessity
of further act of the parties; and
(2) principal, interest, and fees due under the Prior Credit are
immediately due and payable upon execution of this Agreement and all sums due
under Section 4.04 of the Prior Credit Agreement by reason of payment of such
items shall be due and payable on demand.
1.124 Governing Law and Jurisdiction.
(1) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF ILLINOIS; PROVIDED THAT THE AGENT AND THE BANKS SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(2) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR
OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND THE BANKS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND THE BANKS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY, THE AGENT AND THE
BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.
1.125 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE AGENT EACH 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 ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT
TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
81
<PAGE>
THE COMPANY, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT 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.
82
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Chicago, Illinois by their proper and duly
authorized officers as of the day and year first above written.
DREYER'S GRAND ICE CREAM, INC.
By: /s/ William C. Collett
---------------------------
Name: William C. Collett
-------------------------
Title: Treasurer
------------------------
BANK OF AMERICA, N.A., as Agent
By: /s/ Lynn A. Durning
---------------------------
Name: Lynn A. Durning
-------------------------
Title: Principal
------------------------
BANK OF AMERICA N.A.,
as Swing Line Bank, Letter of Credit
Issuing Bank and as a Bank
By: /s/ Lynn A. Durning
---------------------------
Name: Lynn A. Durning
-------------------------
Title: Principal
------------------------
UNION BANK OF CALIFORNIA, N.A.,
as Syndication Agent
By: /s/ Gail L. Fletcher
---------------------------
Name: Gail L. Fletcher
-------------------------
Title: Vice President
------------------------
WELLS FARGO BANK, N.A.
By: /s/ Thomas M. Gloger
---------------------------
Name: Thomas M. Gloger
-------------------------
S-1
<PAGE>
Title: Associate Vice President
--------------------------
HARRIS TRUST AND SAVINGS BANK
By: /s/ Edwin A. Adams, Jr.
-----------------------------
Name: Edwin A. Adams, Jr.
---------------------------
Title: Vice President
--------------------------
COBANK, ACB
By: /s/ Brian J. Klatt
-----------------------------
Name: Brian J. Klatt
---------------------------
Title: Vice President
--------------------------
SUNTRUST BANK
By: /s/ Brian M. Davis
-----------------------------
Name: Brian M. Davis
---------------------------
Title: Director
--------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND" NEW YORK BRANCH
By: /s/ Edward Peyser
-----------------------------
Name: Edward Peyser
---------------------------
Title: Executive Director
--------------------------
CREDIT AGRICOLE INDOSUEZ
By: /s/ Bradley C. Peterson
-----------------------------
Name: Bradley C. Peterson
---------------------------
Title: Vice President, Manager
--------------------------
S-2
<PAGE>
By: /s/ Alan I. Schmetzer
-------------------------------
Name: Alan I. Schmetzer
-----------------------------
Title: Senior Relationship Manager
----------------------------
THE BANK OF NEW YORK
By: /s/ Elizabeth T. Ying
-------------------------------
Name: Elizabeth T. Ying
-----------------------------
Title: Vice President
----------------------------
S-3
<PAGE>
SCHEDULE 1.1
PRICING SCHEDULE
The Base Rate Margin, the Offshore Rate Margin, the Commitment Fee Rate and
the LC Fee Rate, respectively, shall be determined in accordance with the table
below and the other provisions of this Schedule 1.1.
-------------------------------------------------------------------------------
Level I Level II Level III Level IV Level V
-------------------------------------------------------------------------------
Base Rate Margin 0.00% 0.00% 0.25% 0.500% 0.875%
-------------------------------------------------------------------------------
Offshore Rate Margin 0.75% 1.00% 1.25% 1.50% 1.875%
-------------------------------------------------------------------------------
Commitment Fee Rate 0.25% 0.300% 0.35% 0.375% 0.450%
-------------------------------------------------------------------------------
LC Fee Rate 0.75% 1.00% 1.25% 1.50% 1.875%
-------------------------------------------------------------------------------
Level I applies when the Funded Debt to EBITDA Ratio is less than 1.0 to 1.
Level II applies when the Funded Debt to EBITDA Ratio is equal to or
greater than 1.0 to 1 but less than 1.5 to 1.
Level III applies when the Funded Debt to EBITDA Ratio is equal to or
greater than 1.5 to 1 but less than 2.0 to 1.
Level IV applies when the Funded Debt to EBITDA Ratio is equal to or
greater than 2.0 to 1 but less than 2.5 to 1.
Level V applies when the Funded Debt to EBITDA Ratio is equal to or greater
than 2.5 to 1.
Initially, the applicable Level shall be determined in accordance with the
Funded Debt to EBITDA Ratio at the time of closing, but shall not be less than
Level III. The applicable Level shall be adjusted, to the extent applicable, 60
days (or, in the case of the last fiscal quarter of any fiscal year of the
Company, 100 days) after the end of each fiscal quarter based on the Funded Debt
to EBITDA Ratio as of the last day of such fiscal quarter; provided that the
applicable level shall not be
1
<PAGE>
below Level III at any time prior to the six-month anniversary of the date of
this Agreement (at which time the applicable Level shall be adjusted, if
applicable, based upon the Funded Debt to EBITDA Ratio as of the most recent
date on which an adjustment would have occurred absent this proviso); and
provided, further, that if the Company fails to deliver the financial statements
required by Section 7.01(a) or 7.01(b), as applicable, and the related
certificate required by Section 7.02(b) by the 65th day (or, if applicable, the
105th day) after any fiscal quarter, Level V shall apply until such financial
statements are delivered.
2
<PAGE>
EXHIBIT A
DREYER'S GRAND ICE CREAM, INC.
COMPLIANCE CERTIFICATE
Financial
Statement Date: ______________, 200__
Reference is made to that certain Credit Agreement dated as of July 25,
2000, (as extended, renewed, amended or restated from time to time, the
"Agreement") among Dreyer's Grand Ice Cream, Inc., a Delaware corporation (the
"Company"), the several financial institutions from time to time parties to the
Agreement (the "Banks"), Union Bank of California, N.A., as syndication agent
and Bank of America, N.A., as administrative agent for the Banks (in such
capacity, the "Agent"). Unless otherwise defined herein, capitalized terms used
herein have the respective meanings assigned to them in the Agreement.
The undersigned Responsible Officer of the Company, hereby certifies as of
the date hereof that he/she is the ___________________ of the Company, and that,
as such, he/she is authorized to execute and deliver this Certificate to the
Banks and the Agent on behalf of the Company and its consolidated Subsidiaries,
and that:
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection 7.01(a) of the Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
audited consolidated balance sheet of the Company and its Subsidiaries as at the
end of the fiscal year ended ________________________and (b) the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, accompanied by the opinion of the
Independent Auditor which states that such consolidated financial statements
present fairly, in all material respects, the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years. Such opinion is not qualified or limited because of a restricted or
limited examination by the Independent Auditor of any material portion of the
Company's or any Subsidiary's records.
or
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection 7.01(b) of the Agreement.]
A-1
<PAGE>
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
the end of the fiscal quarter ended _______________________, ________, and (b)
the related unaudited consolidated statements of income, shareholders' equity
and cash flows for the period commencing on the first day and ending on the last
day of such quarter, and such financial statements were prepared in accordance
with GAAP (subject only to ordinary, good faith year-end audit adjustments and
the absence of footnotes) and fairly present, in all material respects, the
financial position and the results of operations of the Company and its
Subsidiaries.
2. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and conditions (financial or otherwise) of
the Company during the accounting period covered by the attached financial
statements.
3. To the best of the undersigned's knowledge, the Company, during such
period, has observed, performed or satisfied all of its covenants and other
agreements, and satisfied every condition in the Agreement to be observed,
performed or satisfied by the Company, and the undersigned has no knowledge of
any Default or Event of Default.
4. The following financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
Certificate. All amounts and ratios refer to the financial statements attached
as Schedule 1 hereto and are determined in accordance with the specifications
set forth in the Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
__________________, _____.
DREYER'S GRAND ICE CREAM, INC.
By:____________________________
Name:__________________________
Title:_________________________
Date:__________________________
For the fiscal quarter/year
ended__________________________
A-2
<PAGE>
Schedule I
To
Compliance Certificate
[Attach applicable financial statements]
A-3
<PAGE>
Schedule 2
to Compliance Certificate
Financial Covenant Analyses and Information
Date: _________________
For the fiscal quarter ended: _________________
Schedule 2
to the Compliance Certificate
Financial Covenant Analyses and Information
Section 8.01 - Limitation on Liens
1. ss.8.01(g) Aggregate amount of judgment or judicial attachment liens
falling within this Section:
Permitted: $5,000,000 Actual: $______________
2. ss.8.01(i) Aggregate principal amount secured by Liens on assets of
corporations which became Subsidiaries after the date of the Agreement and
falling within this Section:
Permitted: $10,000,000 Actual: $______________
3. ss.8.01(j) Principal amount of indebtedness secured by purchase money
security interests in property held by the Company and its Subsidiaries in the
ordinary course of business and falling within this Section:
Permitted: $10,000,000 Actual: $______________
Section 8.02 Disposition of Assets
ss.8.02(g) Dispositions falling within this Section:
Permitted: $5,000,000 Actual: $______________
Section 8.04 Loans and Investments
1. ss.8.04(d) Investments under subsections 8.04(d)(1) and (2) shall not at
any time exceed $60,000,000 during the term of this Agreement.
Actual: $_____________
A-4
<PAGE>
2. ss.8.04(d)(1) Investments falling within this clause:
Aggregate amount permitted prior to the first Anniversary of this
Agreement: $50,000,000
Actual: $_____________
3. ss.8.04(d)(2) Investments falling within this clause:
Aggregate amount permitted for the term of this Agreement: $15,000,000
Actual: $_____________
Section 8.05 Limitation on Indebtedness
ss.8.05(h) Aggregate amount of Indebtedness of Subsidiaries
Permitted: $10,000,000 Actual: $____________
ss.8.05(i) Aggregate amount of Synthetic Lease Obligations
Permitted: $30,000,000 Actual: $____________
ss.8.05(j) Aggregate amount of Indebtedness which ranks pari passu with the
Obligations
Permitted: $100,000,000 Actual: $____________
Section 8.08 Contingent Obligations
1. ss.8.08(d) Aggregate amount of Contingent Obligations of Grand Soft
Capital Company and Grand Soft Equipment Company with respect to leases sold or
entered into pursuant to the Grand Soft Program:
Permitted: $10,000,000 Actual: $____________
Company's Guaranty Obligations with respect to such Contingent Obligations:
Permitted: $10,000,000 Actual: $____________
2. ss.8.08(e) Guaranty Obligations falling within this Section:
Permitted: $5,000,000 Actual: $____________
A-5
<PAGE>
Section 8.10 Lease Obligations
1. ss.8.10(b) Aggregate amount of rent and other charges to be paid under
operating leases falling underss.8.10(b) (without discounting to present value
and without regard to any options to extend):
Permitted: $10,000,000 Actual: $____________
ss.8.10(c)(3) Aggregate amount of rent and other charges to be paid under
leases falling under ss.8.10(c)(3) (without discounting to present value and
without regard to any options to extend):
Permitted: $5,000,0000 Actual: $____________
3. ss.8.10(d) Capital leases falling underss.8.10(e):
Permitted: $15,000,000 Actual: $____________
Section 8.11 Restricted Payments
1. ss.8.11(b)(2) Aggregate amount of annual dividend payments or other
distributions to preferred stockholders falling under clause (b)(2) *(provided
that the amount by which $4,600,000 exceeds the aggregate dividend payments and
other distributions made in any fiscal year (commencing in 1996) to preferred
stockholders may be added, on a cumulative basis, to the amount available for
dividend payments to preferred stockholders in subsequent fiscal years):
Permitted: *$4,600,000 Actual: $____________
* Please attach calculation of change, if any, to Permitted Amount.
provided that any such dividend payments or distributions in any of the
following calendar years shall not exceed:
Permitted (2000): $ 5,000,000 Actual: $____________
Permitted (2001): $10,000,000 Actual: $____________
Permitted (2002): $15,000,000 Actual: $____________
Permitted (2003): $20,000,000 Actual: $____________
Permitted (2004): $20,000,000 Actual: $____________
Permitted (2005): $20,000,000 Actual: $____________
(2) ss.8.11(f) Aggregate amount of purchases, redemptions or other
acquisitions of its capital stock or warrants for options to acquire such shares
*(subject to adjustment upwards or downwards on a cumulative basis for each
fiscal quarter commencing on September 30, 2000, by 50% of the Company's
consolidated net income or 100% of consolidated net loss for such fiscal
A-6
<PAGE>
quarter; provided that all such purchases, redemptions or acquisitions of such
stock for the calendar year 2000 shall not exceed the aggregate amount of
$25,000,000):
Permitted: *$10,000,000 Actual: $____________
* Please attach calculation of change, if any, to Permitted amount.
Section 8.13 Consolidated Net Worth
1. (a) Base amount $142,000,000
(b) 75% of the Company's consolidated net income for
each fiscal quarter beginning with the fiscal
quarter ending on June 30, 2000 (with no deduction
for losses) $___________
(c) 75% of Net Issuance Proceeds of any stock
offerings issued (excluding stock issuances under
Section 8.11(c)) $___________
(d) Sum of 1(a), 1(b), and 1(c) $___________
(e) Series A Preferred Stock which is mandatorily
redeemable within one year $___________
(f) The book value of any such shares of Series A
Preferred Stock referred to in 1(e) above which
are converted into common stock $___________
(g) The book value of any common stock referred to in
1(f) above which has been redeemed or repurchased
by the Company from the Person which held the
Series A Preferred Stock immediately prior to
conversion thereof $___________
(h) Sum of 1(e) minus 1(f) plus 1(g) $___________
2. Sum of 1(d) plus 1(h) or minimum required Consolidated
Net Worth $___________
3. Actual Consolidated Net Worth $___________
Section 8.14 Minimum Fixed Charge Coverage Ratio
A-7
<PAGE>
Minimum Fixed Charge Coverage For the period consisting of the four
Ratio cannot be less than: consecutive fiscal quarters ending on the
last day of its:
2.00 Second, third and fourth fiscal quarters of
2000 and first fiscal quarter of 2001
2.25 Second fiscal quarter of 2001
2.50 Third fiscal quarter of 2001
2.75 Fourth fiscal quarter of 2001
3.00 First fiscal quarter of 2002 and each fiscal
quarter thereafter
The following computations are to be made for the period consisting of four
consecutive fiscal quarters ending on the last day of the fiscal quarter first
above written on page 1 of this Schedule.
1. EBITDA $_____________
(2) Operating lease expenses $_____________
3. Synthetic Lease Payments $_____________
(without duplication to Item No. 2 above)
4. Sum of 1 + 2 + 3 $_____________
5. Cash interest expense $_____________
6. Operating lease expense $_____________
7. Synthetic Lease Payments $_____________
(without duplication to Item No. 6 above)
8. Cash dividends $_____________
9. Current portion, as of the last day of such period,
of all principal of Indebtedness $_____________
(excluding the Series A Preferred Stock)
10. Sum of 5 + 6 + 7 + 8 + 9 $_____________
11. Ratio of 4 to 10 $_____________
A-8
<PAGE>
12. Allowed $_____________
Section 8.15 Funded Debt / EBITDA Ratio
Funded Debt/ EBITDA Ratio cannot be greater than 3.0:
(a) Funded Debt (with adjustments permitted
under definition of Funded Debt) $_____________
(b) EBITDA $_____________
(c) Ratio of 1 to 2: $_____________
A-9
<PAGE>
SCHEDULE 2.01
COMMITMENTS
<TABLE>
<CAPTION>
===================================================================================================
BANK COMMITMENT PRO RATA
SHARE
---------------------------------------------------------------------------------------------------
<S> <C> <C>
BANK OF AMERICA, N.A. $ 40,000,000.00 16.666666666666666
---------------------------------------------------------------------------------------------------
UNION BANK OF CALIFORNIA, N.A. $ 35,000,000.00 14.583333333333334
---------------------------------------------------------------------------------------------------
WELLS FARGO BANK, N.A. $ 25,000,000.00 10.416666666666667
---------------------------------------------------------------------------------------------------
COBANK, ACB $ 25,000,000.00 10.416666666666667
---------------------------------------------------------------------------------------------------
HARRIS TRUST AND SAVINGS BANK $ 25,000,000.00 10.416666666666667
---------------------------------------------------------------------------------------------------
SUNTRUST BANK $ 25,000,000.00 10.416666666666667
---------------------------------------------------------------------------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK-NEDERLAND" NEW YORK BRANCH $ 25,000,000.00 10.416666666666667
---------------------------------------------------------------------------------------------------
CREDIT AGRICOLE INDOSUEZ $ 25,000,000.00 10.416666666666667
---------------------------------------------------------------------------------------------------
THE BANK OF NEW YORK $ 15,000,000.00 6.250000000000000
---------------------------------------------------------------------------------------------------
TOTAL $240,000,000.00 100.000000000000000
===================================================================================================
</TABLE>
