LOAN AGREEMENT
BY AND AMONG
J & J SNACK FOODS CORP.,
THE SUBSIDIARIES OF J & J SNACK FOODS CORP. SIGNATORY HERETO
THE BANKS SIGNATORY HERETO
AND
FLEET NATIONAL BANK,
AS AGENT FOR SUCH BANKS
DECEMBER 19, 2000
LOAN AGREEMENT
AGREEMENT, made this 19th day of December, 2000, by and among:
J & J SNACK FOODS CORP., a New Jersey corporation;
The Subsidiary Borrowers of Parent that have executed the signature pages
hereto; and
The Banks that have executed the signature pages hereto; and
FLEET NATIONAL BANK, a national banking association, as Agent for the Banks;
W I T N E S S E T H:
WHEREAS, Parent and the Subsidiary Borrowers wish to obtain loans from the Bank
in the aggregate principal sum of up to Sixty Million and 00/100
($60,000,000.00) Dollars, and the Banks are willing to make such loans to Paren
and the Subsidiary Borrowers in an aggregate principal amount of up to such sum
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Definitions
As used in this Agreement, terms defined in the recitals hereto shall have the
meanings therein defined and the following terms shall have the following
meanings:
ABR Loans: Loans that bear interest at a rate based upon the Alternate Base
Rate.
Agent: Fleet National Bank, in its capacity as Agent for the Banks, together
with its successors in such capacity.
Alternate Base Rate: the higher of (i) the Prime Rate and (ii) the Federal
Funds Rate plus 0.50%.
Acquisition: any acquisition by any Borrower of all or a substantial portion of
the Capital Stock, assets and/or properties of another Person, pursuant to and
in accordance with the terms of an Acquisition Agreement.
Acquisition Agreement: any agreement by and between a Borrower and another
Person with respect to such Borrower's acquisition of all or a substantial
portion of the assets and/or properties of such other Person and/or all or a
substantial portion of the issued and outstanding Capital Stock of another
Person owned by such other Person, including all exhibits, annexes and schedules
thereto, and all amendments, modifications and supplements thereof.
Acquisition Cost: with respect to any otherwise Permitted Acquisition, the sum
of (i) all cash consideration paid or agreed to be paid by the acquiror to make
such Acquisition (inclusive of payments by such person of the seller's
professional fees and expenses and other out-of-pocket expenses in connection
therewith), plus (ii) the fair market value of all non-cash consideration paid
by such acquiror in connection therewith, plus (iii) an amount equal to the
principal or stated amount of all liabilities assumed or incurred by such
acquiror in connection therewith, plus (iv) any optional or mandatory capital
contributions made to such entity by such acquiror. The principal or stated
amount of any liability assumed or incurred by an acquiror in connection with an
Acquisition which is a contingent liability shall be an amount equal to the
stated amount of such liability or, if the same is not stated, the maximum
reasonably anticipated amount payable by such acquiror in respect thereof as
determined by such acquiror in good faith.
Additional Costs: as defined in subsection 2.22(b) hereof.
Affected Loans: as defined in Section 2.25 hereof.
Affected Type: as defined in Section 2.25 hereof.
Affiliate: as to any Person, any other Person that directly or indirectly
controls, or is under common control with, or is controlled by, such Person. As
used in this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise), provided that, in any event:
(i) any Person that owns directly or indirectly 5% or more of the securities
having ordinary voting power for the election of directors or other governing
body of a corporation or 5% or more of the partnership or other ownership
interests of any other Person (other than as a limited partner of such other
Person) will be deemed to control such corporation or other Person; and (ii)
each controlling shareholder, director and officer of a Borrower shall be deemed
to be an Affiliate of the Borrowers.
Affiliate Advances: as to any Borrower, all loans, advances and other
distributions to and Investments in any officer, director, employee, Affiliate
and/or Subsidiary of such Borrower, excluding salary, bonuses and benefits paid
to employees of such Borrower in the ordinary course of such Borrower's
business.
Agency Fee: as defined in subsection 2.7(c) hereof.
Applicable Lending Office: with respect to each Bank, with respect to each type
of Loan, the Lending Office as designated for such type of Loan below its name
on the signature pages hereof or such other office of such Bank or of an
affiliate of such Bank as such Bank may from time to time specify to the Agent
and the Parent as the office at which its Loans of such type are to be made and
maintained.
Applicable Margin: with respect to the unpaid principal balance of ABR Loans,
LIBOR Loans and COF Loans, in each case at all times during which the applicable
Pricing Level set forth below is in effect, the percentage set forth below next
to such Pricing Level and under the applicable column
Applicable Applicable Applicable
Margin for Margin for Margin for
Pricing Level ABR Loans LIBOR Loans COF Loans
Pricing Level I 0.125 0.500 0.500
Pricing Level II 0.125 0.625 0.625
Pricing Level III 0.125 0.750 0.750
Pricing Level IV 0.375 0.875 0.875
Pricing Level V 0.625 1.125 1.125
; provided, that, unless and until the Agent has received the financial
statements required by this Agreement for the four full fiscal quarters ending
June 30, 2001, only Pricing Levels II, III, IV and V shall be available and
during such period any Leverage Ratio that would result in Pricing Level I shal
be deemed a Leverage Ratio within Pricing Level II. In each case, the
determination of the Applicable Margin pursuant to the tables set forth above
shall be made on a quarterly basis based on an examination of the financial
statements of the Borrowers delivered pursuant to and in compliance with Section
5.1 or Section 5.2 hereof, which financial statements, whether annual or
quarterly, shall be (A) audited in the case of financial statements furnished
pursuant to Section 5.1 and (B) certified by the chief financial officer of
Parent in the case of financial statements furnished pursuant to Section 5.2 and
shall indicate that there exists no Default or Event of Default hereunder. Each
determination of the Applicable Margin shall be effective five days following
the date on which the financial statements on which such determination was based
were received by the Agent. In the event that financial statements for the four
full fiscal quarters most recently completed prior to such date of determination
either: (i) have not been delivered to the Agent in compliance with Section 5.1
or 5.2 hereof, or (ii) if delivered, do not comply in form or substance with
Section 5.1 or 5.2 hereof (in the sole judgment of the Agent), then the Agent
may determine, in its reasonable judgment, the ratio referred to above that
would have been in effect as at such date, and, consequently, the Applicable
Margin in effect for the period commencing on such date.
Applicable Period: as defined in Section 7.15 hereof.
Assignment and Acceptance: an agreement in the form of Exhibit B hereto.
Bank and Banks: the banks and other financial institutions that have executed
the signature pages hereto together with each bank and any other financial
institution that becomes a Bank pursuant to the terms of this Agreement.
Borrower: Parent or any Subsidiary Borrower.
Borrowers: Parent and the Subsidiary Borrowers collectively.
Borrowing Notice: as defined in Section 2.2 hereof.
Business Day: any day other than Saturday, Sunday or any other day on which
commercial banks in New Jersey are authorized or required to close under the
laws of the State of New Jersey.
Capital Expenditures: for any period, the aggregate amount of all payments made
during such period by any Borrower directly or indirectly for the purpose of
acquiring, constructing or maintaining fixed assets, real property or equipment
that, in accordance with GAAP, would be added as a debit to the fixed asset
account of such Borrower, including, without limitation, all amounts paid or
payable during such period with respect to Capitalized Lease Obligations and
interest that are required to be capitalized in accordance with GAAP.
Capitalized Lease: any lease, the obligations to pay rent or other amounts
under which, constitute Capitalized Lease Obligations.
Capitalized Lease Obligations: as to any Borrower, the obligations of such
Borrower to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Borrower under GAAP and, for purposes of this Agreement, the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP.
Capital Stock: as to any Borrower, all shares, interests, partnership interests,
limited liability company interests, participations, rights in or other
equivalents (however designated) of such Borrower's equity (however designated)
and any rights, warrants or options exchangeable for or convertible into such
shares, interests, participations, rights or other equity.
Cash: as to any Borrower, such Borrower's cash and cash equivalents, as defined
in accordance with GAAP.
CERCLA: the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. 9601, et seq.
Code: the Internal Revenue Code of 1986, as it may be amended from time to
time.
COF Loans: Loans the interest on which is determined on the basis of rates
referred to in clause (b) of the definition of "Fixed Base Rate" in this Article
1.
Commitment: as to each Bank, the amount set forth opposite such Bank's name on
the signature pages hereof under the caption "Commitment" as such amount is
subject to reduction in accordance with the terms hereof; provided, that, if
such Bank increased its Commitment or became a Bank pursuant to Section 2.8(c),
its Commitment shall be the amount set forth opposite such Bank's name on the
signature pages to the Increase Supplement executed by such Bank in connection
therewith.
Commitment Fee: as defined in subsection 2.7(a) hereof.
Commitment Termination Date: December 18, 2001, subject to earlier termination
as provided in this Agreement.
Compliance Certificate: a certificate executed by the president or chief
financial officer of Parent to the effect that: (i) as of the effective date of
the certificate, no Default or Event of Default under this Agreement exists or
would exist after giving effect to the action intended to be taken by the
Borrowers as described in such certificate, including, without limitation, that
the covenants set forth in Section 6.9 hereof would not be breached after giving
effect to such action, together with a calculation in reasonable detail, and in
form satisfactory to the Agent, of such compliance, and (ii) the representations
and warranties contained in Article 3 hereof are true and with the same effect
as though such representations and warranties were made on the date of such
certificate, except for changes in the ordinary course of business none of
which, either singly or in the aggregate, have had a Material Adverse Effect.
Controlled Group: all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control which,
together with the Borrowers, are treated as a single employer under Section
414(b), 414(c) or 414(m) of the Code and Section 4001(a)(2) of ERISA.
Cost of Funds: the per annum rate of interest which Fleet is required to pay, or
is offering to pay, for wholesale liabilities, adjusted for reserve requirements
and such other requirements as may be imposed by federal, state or local
government and regulatory agencies, as determined by Fleet in its reasonable
discretion.
Credit Period: the period commencing on the date of this Agreement and ending
on the Commitment Termination Date.
Debt Instrument: as defined in subsection 8.4(a) hereof.
Default: an event which with notice or lapse of time, or both, would constitute
an Event of Default.
Defined Contribution Plan: a plan which is not covered by Title IV of ERISA or
subject to the minimum funding standards of Section 412 of the Code and which
provides for an individual account for each participant and for benefits based
solely on the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which may be allocated to such participant's account.
Disposal: the discharge, deposit, injection, dumping, spilling, leaking or
placing of any hazardous materials into or on any land or water so that such
hazardous materials or constituent thereof may enter the environment or be
emitted into the air or discharged into any waters, including ground waters.
Dollars and $: lawful money of the United States of America.
Domestic Subsidiary: each direct and indirect Subsidiary of Parent organized
under the laws of the United States of America or a state thereof.
EBITDA: with respect to Parent and its Subsidiaries on a consolidated basis for
any period, the sum of (i) net income (as determined in accordance with GAAP),
(ii) Interest Expense, (iii) depreciation and amortization, (iv) Federal, state
and local income taxes, in each case of the Borrower and its Subsidiaries on a
consolidated basis for such period, computed in accordance with GAAP and (v) up
to $800,000 in connection with the Borrowers' write-down of certain Real
Property owned by J&J Snack Foods Corp./Midwest, a Subsidiary Borrower, and
located at 401 East Joe Orr Road, Chicago Heights, Illinois as reflected in the
Borrowers' financial statements dated September 30, 2000.
Eligible Assignee: a commercial bank or other financial institution organized
under the laws of the United States of America or any state and having a
combined capital and surplus of at least $500,000,000.
Employee Benefit Plan: any employee benefit plan within the meaning of Section
3(3) of ERISA which (a) is maintained for employees of the Borrowers or any of
its ERISA Affiliates or (b) has at any time within the preceding six (6) years
been maintained for employees of any Loan Party or any current or former ERISA
Affiliate.
Employee Welfare Benefit Plan: any employee benefit plan within the meaning of
Section 3(1) of ERISA.
Environmental Laws and Regulations: all federal, state and local environmental,
health and safety laws, regulations, ordinances, orders, judgments and decrees
applicable to any Borrower or any other Loan Party, or any of their respective
assets or properties.
Environmental Liability: any liability under any applicable Environmental Laws
and Regulations for any disposal, release or threatened release of a Hazardous
Substance pollutant or contaminant as those terms are defined under CERCLA, and
any liability which would require a removal, remedial or response action, as
those terms are defined under CERCLA, by any Person or any environmental
regulatory body having jurisdiction over any Borrower or any other Loan Party
and/or any liability arising under any Environmental Laws and Regulations for
any Borrower's or any other Loan Party's failure to comply with such laws and
regulations, including without limitation, the failure to comply with or obtain
any applicable environmental permit.
Environmental Proceeding: any judgment, action, proceeding or investigation
pending before any court or governmental authority, with respect to any Borrower
or any other Loan Party and arising under or relating to any Environmental Laws
and Regulations.
ERISA: the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time, and the regulations promulgated thereunder.
ERISA Affiliate: with respect to any Loan Party, any corporation, person or
trade or business which is a member of a group which is under common control
with any Loan Party, who together with any Loan Party, is treated as a single
employer within the meaning of Sections 414(b) - (o) of the Code and, if
applicable, Sections 4001(a)(14) and (b) of ERISA.
Event of Default: as defined in Article 8 hereof.
Federal Funds Rate: for any day, the weighted average of the rates on overnight
federal funds transactions with member banks of the Federal Reserve System
arranged by federal funds brokers as published by the Federal Reserve Bank of
New York for such day, or if such day is not a Business Day, for the next
preceding Business Day (or, if such rate is not so published for any such day,
the average rate charged to the Agent on such day on such transactions as
reasonably determined by the Agent).
Fee(s): as defined in subsection 2.7(e) hereof.
Financial Statements: with respect to Parent, its consolidated: (i) audited
Balance Sheet as at September 30, 1999, together with the related audited Income
Statement and Statement of Changes in Financial Position Cash Flow for the
fiscal year then ended, and (ii) unaudited Balance Sheet as at June 30, 2000,
together with the related unaudited Income Statement and Statement of Changes in
Financial Position Cash Flow for the nine-month period then ended; provided that
to the extent such financial statements are not the most recent financial
statements furnished by the Borrowers pursuant to Section 5.1 or 5.2 of this
Agreement, "Financial Statements" shall mean the most recent of the applicable
consolidated and/or consolidating financial statements furnished by the
Borrowers pursuant to such Section 5.1 or 5.2.
Fixed Base Rate: with respect to any LIBOR Loan or COF Loan for any Interest
Period therefor:
(a) if such Loan is a LIBOR Loan, LIBOR, as reasonably determined by the
Agent; and
(b) if such Loan is a COF Loan, Cost of Funds as reasonably determined by
Fleet.
Fixed Charge Coverage Ratio: as at any time of determination, the ratio of the
following for the most recently completed four fiscal quarters of Parent: (i)
EBITDA, minus taxes paid, minus Capital Expenditures, each with respect to such
most recently completed four fiscal quarters of Parent, to (ii) Interest Expense
with respect to such most recently completed four fiscal quarters of Parent.
Fixed Rate: for any Fixed Rate Loan for any Interest Period therefor, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined
by the Agent to be equal to (x) the Fixed Base Rate for such Loan for such
Interest Period; divided by (y) 1 minus the Reserve Requirement, if any, for
such Loan for such Interest Period. The Agent shall use its best efforts to
advise Parent of the Fixed Rate as soon as practicable after each change in the
Fixed Rate; provided, however, that the failure of the Agent to so advise Parent
on any one or more occasions shall not affect the rights of the Banks or the
Agent or the obligations of the Borrowers hereunder.
Fixed Rate Loans: LIBOR Loans and COF Loans.
Fleet: Fleet National Bank, a national banking association, in its capacity as
a Bank hereunder.
Foreign Subsidiary: each direct and indirect Subsidiary of Parent that is not a
Domestic Subsidiary.
GAAP: generally accepted accounting principles, consistently applied.
Hazardous Materials: any toxic chemical, Hazardous Substances, contaminants or
pollutants, medical wastes, infectious wastes, or hazardous wastes.
Hazardous Substance: as set forth in Section 101(14) of CERCLA or comparable
provisions of state or local law.
Hazardous Waste: as set forth in the Resource Conservation and Recovery Act, 42
U.S.C. 9603(5), and the Environmental Protection Agency's implementing
regulations, or state or local law.
Increase Supplement: an agreement in the form of Exhibit C hereto.
Indebtedness: with respect to any Borrower, all: (i) liabilities or
obligations, direct and contingent, which in accordance with GAAP would be
included in determining total liabilities as shown on the liability side of a
balance sheet of such Borrower at the date as of which Indebtedness is to be
determined, including, without limitation, contingent liabilities that in
accordance with such principles, would be set forth in a specific Dollar amount
on the liability side of such balance sheet, and Capitalized Lease Obligations
of such Borrower; (ii) liabilities or obligations of others for which such
Borrower is directly or indirectly liable, by way of guaranty (whether by direct
guaranty, suretyship, discount, endorsement, agreement to purchase or advance or
keep in funds or other agreement having the effect of a guaranty) or otherwise;
(iii) liabilities or obligations secured by Liens on any assets of such
Borrower, whether or not such liabilities or obligations shall have been assumed
by it; and (iv) liabilities or obligations of such Borrower, direct or
contingent, with respect to letters of credit issued for the account of such
Borrower and bankers acceptances created for such Borrower.
Interest Expense: with respect to Parent and its Subsidiaries for the applicable
period of determination thereof, the interest expense of Parent and its
Subsidiaries during such period determined on a consolidated basis in accordance
with GAAP.
Interest Period:
(a) with respect to any LIBOR Loan, each period commencing on the date such
Loan is made or converted from a Loan or Loans of another type, or the last day
of the next preceding Interest Period with respect to such Loan, and ending on
the same day in the first, second, third or sixth calendar month thereafter, as
the Borrowers may select as provided in Section 2.2 hereof, except that each
such Interest Period that commences on the last LIBOR Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last LIBOR Business Day
of the appropriate subsequent calendar month;
(b) with respect to any COF Loan, each period commencing on the date such Loan
is made or converted from a Loan or Loans of another type, or the last day of
the next preceding Interest Period with respect to such Loan, and ending not
more than 180 days thereafter, as the Borrowers may select as provided in
Section 2.2 hereof;
Notwithstanding the foregoing: (i) each Interest Period that would otherwise
end on a day that is not a Business Day shall end on the next succeeding
Business Day (or, in the case of an Interest Period for LIBOR Loans, if such
next succeeding LIBOR Business Day falls in the next succeeding calendar month,
on the next preceding LIBOR Business Day); (ii) no more than seven Interest
Periods for Fixed Rate Loans shall be in effect at the same time; (iii) any
Interest Period for any type of Loan that commences before the Commitment
Termination Date shall end no later than the Commitment Termination Date; and
(iv) notwithstanding clause (iv) above, no Interest Period shall have a duration
of less than one months (in the case of LIBOR Loans) or thirty days (in the case
of COF Loans). In the event that the Borrowers fail to select the duration of
any Interest Period for any Loan within the time period and otherwise as
provided in Section 2.2 hereof, such Loans will be automatically converted into
a ABR Loan on the last day of the preceding Interest Period for such Loan.
Interest Rate Contracts: interest rate swap agreements, interest rate cap
agreements, interest rate collar agreements, interest rate insurance and other
agreements or arrangements designed to provide protection against fluctuation in
interest rates, in each case, in form and substance satisfactory to the Agent
and, in each case, with counter-parties satisfactory to the Agent.
Investment: by any Borrower:
(a) the amount paid or committed to be paid, or the value of property or
services contributed or committed to be contributed, by such Borrower for or in
connection with the acquisition by such Borrower of any stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person; and
(b) the amount of any advance, loan or extension of credit by such Borrower,
to any other Person, or guaranty or other similar obligation of such Borrower
with respect to any Indebtedness of such other Person, and (without duplication)
any amount committed to be advanced, loaned, or extended by such Borrower to any
other Person, or any amount the payment of which is committed to be assured by a
guaranty or similar obligation by such Borrower for the benefit of, such other
Person.
IRS: Internal Revenue Service.
Joinder: an agreement in the form of Exhibit D hereto.
Latest Balance Sheet: as defined in subsection 3.9(a) hereof.
Leases: leases and subleases (other than Capitalized Leases), licenses for the
use of real property, easements, grants, and other attachment rights and similar
instruments under which a Borrower has the right to use real or personal
property or rights of way.
Leverage Ratio: the ratio of Total Funded Debt as at the time of determination
to EBITDA with respect to the most recently completed four fiscal quarters of
Parent.
LIBOR: shall mean, as applicable to any LIBOR Loan, the rate per annum (rounded
upward, if necessary, to the nearest 1/32 of one percent) as determined on the
basis of the offered rates for deposits in U.S. dollars, for a period of time
comparable to such LIBOR Loan which appears on the Telerate page 3750 as of
11:00 a.m. London time on the day that is two LIBOR Business Days preceding the
first day of such LIBOR Loan; provided, however, that if the rate described
above does not appear on the Telerate System on any applicable interest
determination date, LIBOR shall be the rate (rounded upwards as described above,
if necessary) for deposits in dollars for a period substantially equal to the
Interest Period on the Reuters Page "LIBO" (or such other page as may replace
the LIBO Page on that service for the purpose of displaying such rates), as of
11:00 a.m.(London Time), on the day that is two (2) LIBOR Business Days prior to
the beginning of such Interest Period. If both the Telerate and Reuters system
are unavailable, then the rate for that date will be determined on the basis of
the offered rates for deposits in U.S. dollars for a period of time comparable
to such LIBOR Loan which are offered by four major banks in the London interbank
market at approximately 11:00 a.m. London time, on the day that is two (2) LIBOR
Business Days preceding the first day of such LIBOR Loan as selected by the
Agent. The principal London office of each of the four major London banks will
be requested to provide a quotation of its U.S. dollar deposit offered rate. If
at least two such quotations are provided, the rate for the date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis of the rates
quoted for loans in U.S. dollars to leading European banks for a period of time
comparable to such LIBOR Loan offered by major banks in New York City at
approximately 11:00 a.m. New York City time, on the day that is two LIBOR
Business Days preceding the first day of such LIBOR Loan. In the event that the
Agent is unable to obtain any such quotation as provided above, it will be
deemed that LIBOR pursuant to a LIBOR Loan cannot be determined.
LIBOR Business Day: a Business Day on which dealings in Dollar deposits are
carried out in the London interbank market.
LIBOR Loans: Loans the interest on which is determined on the basis of rates
referred to in subparagraph (a) of the definition of "Fixed Base Rate" in this
Article 1.
Lien: any mortgage, deed of trust, pledge, security interest, encumbrance, lien
or charge of any kind (including any agreement to give any of the foregoing),
any conditional sale or other title retention agreement, any lease in the nature
of any of the foregoing, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction.
Loan(s): as defined in Section 2.1 hereof. Loans of different types made or
converted from Loans of other types on the same day (or of the same type but
having different Interest Periods) shall be deemed to be separate Loans for all
purposes of this Agreement.
Loan Documents: this Agreement, the Notes and all other documents executed and
delivered in connection herewith or therewith, including all amendments,
modifications and supplements of or to all such documents.
Loan Party: each Borrower, any Domestic Subsidiary of a Borrower that has not
yet become a Borrower pursuant to Section 7.13 hereof, and any other Person
(other than the Banks and the Agent) which now or hereafter executes and
delivers to any Bank or the Agent any Loan Document.
Material Adverse Effect: a material adverse effect on: (i) the business,
condition (financial or otherwise), assets, liabilities or operations of the
Borrowers taken as a whole, (ii) the ability of the Borrowers (taken as a whole)
to perform their obligations under any Loan Document to which the Borrowers are
a party, or (iii) the validity or enforceability of this Agreement or the other
Loan Documents or the rights or remedies of the Banks and/or the Agent hereunder
or thereunder.
Multiemployer Plan: a "multiemployer plan" as defined in Section 4001(a)(3) of
ERISA to which any Loan Party or any ERISA Affiliate is making, or is accruing
an obligation to make, contributions or has made, or been obligated to make,
contributions within the preceding six (6) years.
New Type Loans: as defined in Section 2.25 hereof.
Non-Material Office: an office maintained by a Subsidiary of Parent that is
utilized primarily as a sales office.
Note(s): as defined in Section 2.4 hereof.
Obligations: collectively, all of the Indebtedness, liabilities and obligations
of the Borrowers to the Banks and the Agent, whether now existing or hereafter
arising, whether or not currently contemplated, including, without limitation,
those arising under the Loan Documents.
Parent: J & J Snack Foods Corp., a New Jersey corporation.
Payor: as defined in Section 2.19 hereof.
PBGC: Pension Benefit Guaranty Corporation.
Pension Plan: at any time an employee pension benefit plan that is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is maintained either: (i) by a Borrower or any ERISA Affiliate
for employees of such Borrower, or by such Borrower for any ERISA Affiliate, or
(ii) pursuant to a collective bargaining agreement or any other arrangement
under which more than one employer makes contributions and to which such
Borrower or any ERISA Affiliate is then making or accruing an obligation to make
contributions or has within the preceding five (5) plan years made
contributions.
Permitted Acquisition: an Acquisition that satisfies each of the following
conditions: (i) the entire business or assets acquired or business of the entity
whose Capital Stock is acquired shall be substantially similar to a Borrower's
line of business as conducted on the date hereof; (ii) the Acquisition Cost with
respect to any one Acquisition shall not exceed $5,000,000; (iii) the
Acquisition Cost of all Acquisitions the aggregate in any fiscal year of Parent
which but for this clause would be Permitted Acquisitions shall not exceed
$10,000,000; (iv) at the time of such Acquisition no Default or Event of Default
exists and no Default or Event of Default would occur after giving effect to
such Acquisition; (v) the Acquisition shall have the approval of the target
company's board of directors (or similar governing body); (vi) the applicable
Borrower shall have complied with any applicable state takeover law and any
applicable supermajority charter provisions; (vii) all governmental and third-
party consents and approvals necessary in connection with each aspect of the
Acquisition shall have been obtained (without the imposition of any unreasonable
conditions) and shall remain in effect, except where the failure to obtain same
could not reasonably be expected to have a Material Adverse Effect, all
applicable waiting periods shall have expired or been terminated or waived
without any material adverse action being taken by any authority having
jurisdiction; and no law or regulation shall be applicable that restrains,
prevents or imposes material adverse conditions upon any aspect of the
Acquisition and (viii) the Borrowers shall have delivered to the Agent, not less
than 10 days prior to the consummation of such Acquisition, a certificate of a
financial officer of the Borrower, in all respects reasonably satisfactory to
the Agent and dated the date of such consummation, attaching a pro-forma
compliance certificate (in a format satisfactory to the Bank) evidencing
compliance with Section 6.9 of this Agreement (as the same may be amended from
time to time) after giving effect to such Acquisition and based on the most
recent financial statements delivered to the Bank pursuant to this Agreement;
provided, that, as to such financial covenants (and any other financial
covenants now or hereafter applying to the facilities described in this
Agreement), all of such covenants shall be deemed amended to require compliance
as to the Borrowers with the entity acquired in the Acquisition].
Permitted Liens: as to any Borrower: (i) pledges or deposits by such Borrower
under workers' compensation laws, unemployment insurance laws, social security
laws, or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness of such
Borrower), or leases to which such Borrower is a party, or deposits to secure
public or statutory obligations of such Borrower or deposits of Cash or United
States Government Bonds to secure surety, appeal, performance or other similar
bonds to which such Borrower is a party, or deposits as security for contested
taxes or import duties or for the payment of rent; (ii) Liens imposed by law,
such as carriers', warehousemen's, materialmen's and mechanics' liens, or Liens
arising out of judgments or awards against such Borrower with respect to which
such Borrower at the time shall currently be prosecuting an appeal or
proceedings for review; (iii) Liens for taxes not yet subject to penalties for
non-payment and Liens for taxes the payment of which is being contested as
permitted by Section 6.6 hereof; (iv) minor survey exceptions, minor
encumbrances, easements or reservations of, or rights of, others for rights of
way, highways and railroad crossings, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions as
to the use of real properties; and (v) Liens incidental to the conduct of the
business of such Borrower or to the ownership of such Borrower's property that
were not incurred in connection with Indebtedness of such Borrower, all of which
Liens referred to in the preceding clause (v) do not in the aggregate materially
detract from the value of the properties to which they relate or materially
impair their use in the operation of the business taken as a whole of such
Borrower, and as to all the foregoing only to the extent arising and continuing
in the ordinary course of business.
Person: an individual, a corporation, a limited liability company, a
partnership, a joint venture, a trust or unincorporated organization, a joint
stock company or other similar organization, a government or any political
subdivision thereof, a court, or any other legal entity, whether acting in an
individual, fiduciary or other capacity.
Plan: at any time an employee pension benefit plan that is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code and is either: (i) maintained by a Borrower or any member of the
Controlled Group for employees of a Borrower, or by a Borrower for any other
member of such Controlled Group, or (ii) maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which a Borrower or any member of the Controlled
Group is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.
Post-Default Rate: (i) in respect of any Loans a rate per annum equal to: (x)
if such Loans are ABR Loans, 2% above the Alternate Base Rate as in effect from
time to time plus the Applicable Margin for ABR Loans (but in no event less than
the interest rate in effect on the due date), or (y) if such Loans are Fixed
Rate Loans, 2% above the rate of interest in effect thereon at the time of the
Event of Default that resulted in the Post-Default Rate being instituted until
the end of the then current Interest Period therefor and, thereafter, 2% above
the Alternate Base Rate as in effect from time to time plus the Applicable
Margin for ABR Loans (but in no event less than the interest rate in effect on
the due date); and (ii) in respect of other amounts payable by the Borrowers
hereunder (other than interest) not paid when due (whether at stated maturity,
by acceleration or otherwise), a rate per annum during the period commencing on
the due date until such other amounts are paid in full equal to 2% above the
Alternate Base Rate as in effect from time to time plus the Applicable Margin
for ABR Loans (but in no event less than the interest rate in effect on the due
date).
Pricing Level: Pricing Level I, Pricing Level II, Pricing Level III, Pricing
Level IV or Pricing Level V, as applicable.
Pricing Level I: the applicable Pricing Level at any time when the Leverage
Ratio is less than or equal to 1.00 to1.00.
Pricing Level II: the applicable Pricing Level at any time when the Leverage
Ratio is greater than 1.00 to1.00 but less than or equal to 1.50 to 1.00.
Pricing Level III: the applicable Pricing Level at any time when the Leverage
Ratio is greater than 1.50 to1.00 but less than or equal to 2.00 to 1.00.
Pricing Level IV: the applicable Pricing Level at any time when the Leverage
Ratio is greater than 2.00 to1.00 but less than or equal to 2.50 to 1.00.
Pricing Level V: the applicable Pricing Level at any time when the Leverage
Ratio is greater than 2.50 to1.00 but less than or equal to 3.00 to 1.00.
Primary Subsidiary Borrowers: the Subsidiary Borrowers listed on Schedule 3.1
hereto as "Primary Subsidiary Borrowers".
Prime Rate: the variable per annum rate of interest designated from time to
time by Fleet as its prime rate at the Principal Office. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any borrower. Each Borrower acknowledges that Fleet may regularly
make domestic commercial loans at rates of interest less than the rate of
interest referred to in the preceding sentence. Each change in any interest
rate provided for herein based upon the Prime Rate resulting from a change in
the Prime Rate shall take effect at the time of such change in the Prime Rate.
Principal Office: the principal office of Fleet presently located at 208
Harristown Road, Glen Rock, New Jersey 07452.
Projections: consolidated projections of Parent and its subsidiaries (in a
format reasonably satisfactory to the Agent) prepared on the basis of the
assumptions accompanying them and reflect as of the date thereof Parent's good
faith projections, after reasonable analysis, of the matters set forth therein,
based on such assumptions.
Purchase Money Security Interest: as defined in subsection 7.2(c) hereof.
Quarterly Dates: the first day of each January, April, July and October, the
first of which shall be the first such day after the date of this Agreement,
provided that, if any such date is not a LIBOR Business Day, the relevant
Quarterly Date shall be the next succeeding LIBOR Business Day (or, if the next
succeeding LIBOR Business Day falls in the next succeeding calendar month, then
on the next preceding LIBOR Business Day).
Regulation D: Regulation D of the Board of Governors of the Federal Reserve
System, as the same may be amended or supplemented from time to time.
Regulatory Change: as to any Bank, any change after the date of this Agreement
in United States federal, state or foreign laws or regulations (including
Regulation D and the laws or regulations that designate any assessment rate
relating to certificates of deposit or otherwise (including the "Assessment
Rate" if applicable to any Loan)) or the adoption or making after such date of
any interpretations, directives or requests applying to a class of banks,
including such Bank, of or under any United States federal, state or foreign
laws or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
Release: as set forth in Section 101(22) of CERCLA or state or local law.
Required Banks: at any time while no Loans are outstanding hereunder, Banks
having at least 51% of the aggregate amount of the Commitments and, at any time
while Loans are outstanding hereunder, Banks holding at least 51% of the
outstanding aggregate principal amount of the Loans hereunder.
Required Payment: as defined in Section 2.19 hereof.
Reserve Requirement: for any Fixed Rate Loans for any quarterly period (or, as
the case may be, shorter period) as to which interest is payable hereunder, the
average maximum rate at which reserves (including any marginal, supplemental or
emergency reserves) are required to be maintained during such period under
Regulation D by depository institutions (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such depository
institutions by reason of any Regulatory Change against: (i) any category of
liabilities that includes deposits by references to which the Fixed Rate for
LIBOR Loans or COF Loans (as the case may be) is to be determined as provided in
the definition of "Fixed Base Rate" in this Article 1, or (ii) any category of
extensions of credit or other assets that include LIBOR Loans or COF Loans (as
the case may be).
Subordinated Debt: unsecured Indebtedness for money borrowed in an amount
satisfactory to the Required Banks which does not permit any payment or
prepayment of the principal amount thereof or any interest accrued thereon prior
to the payment in full of the Obligations and that is subordinated to such
prior payment and is otherwise subordinated thereto under terms satisfactory in
form and substance to the Required Banks, as evidenced by the Agent's written
consent thereto given prior to the creation of such Indebtedness.
Subsidiary: with respect to any Person, any corporation, partnership or joint
venture whether now existing or hereafter organized or acquired: (i) in the
case of a corporation, of which a majority of the securities having ordinary
voting power for the election of directors (other than securities having such
power only by reason of the happening of a contingency) are at the time owned by
such Person and/or one or more Subsidiaries of such Person, or (ii) in the case
of a partnership or joint venture in which such Person is a general partner or
joint venturer or of which a majority of the partnership or other ownership
interests are at the time owned by such Person and/or one or more of its
Subsidiaries. Unless the context otherwise requires, references in this
Agreement to "Subsidiary" or "Subsidiaries" shall be deemed to be references to
a direct or indirect Subsidiary or Subsidiaries of Parent.
Subsidiary Borrower and Subsidiary Borrowers: the Domestic Subsidiaries that
have executed the signature pages hereto together with each Domestic Subsidiary
that becomes a Borrower pursuant to the terms of this Agreement.
Tangible Net Worth: the sum of capital surplus, earned surplus, Subordinated
Debt and capital stock, minus deferred charges, intangibles, Affiliate Advances
and treasury stock, all as determined in accordance with GAAP.
Termination Event: any one of the following:
(a) a "Reportable Event" described in Section 4043 of ERISA and the
regulations issued thereunder;
(b) the withdrawal of any Loan Party or any ERISA Affiliate from a Pension
Plan during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA;
or
(c) the termination of a Pension Plan, the filing of a notice of intent to
terminate a Pension Plan or the treatment of a Pension Plan amendment as a
termination under Section 4041 of ERISA;
(d) the institution of proceedings to terminate a Pension Plan by the PBGC;
(e) any other event or condition which would constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan;
(f) the partial or complete withdrawal of any Loan Party or any ERISA
Affiliate from a Multiemployer Plan;
(g) the imposition of a Lien pursuant to Section 412 of the Code or Section
302 of ERISA;
(h) any event or condition which results in the reorganization or insolvency
of a Multiemployer Plan under Section 4241 or Section 4245 of ERISA,
respectively; or
(i) any event or condition which results in the termination of a Multiemployer
Plan under Section 4041A of ERISA or the institution by the PBGC of proceedings
to terminate a Multiemployer Plan under Section 4042 of ERISA.
Total Commitment: the aggregate obligation of the Banks to make Loans hereunder
not exceeding Sixty Million and 00/100 ($60,000,000.00) Dollars, as the same
shall and/or may be increased or reduced pursuant to Sections 2.1, 2.2 and 2.8
hereof.
Total Funded Debt: at any date of determination, the aggregate funded
Indebtedness (as determined in accordance with GAAP) and Capitalized Lease
Obligations of Parent and its Subsidiaries on a consolidated basis in accordance
with GAAP, on such date.
Unused Commitment: as at any date, for each Bank, the difference, if any,
between: (i) the amount of such Bank's Commitment as in effect on such date,
and (ii) the then aggregate outstanding principal amount of all Loans made by
such Bank.
Any accounting terms used in this Agreement that are not specifically defined
herein shall have the meanings customarily given to them in accordance with GAAP
as in effect on the date of this Agreement, except that references in Article 5
to such principles shall be deemed to refer to such principles as in effect on
the date of the financial statements delivered pursuant thereto.
ARTICLE 2
Commitments; Loans
Section 2.1 Loans.
Each Bank hereby severally agrees, on the terms and subject to the conditions of
this Agreement, to make loans (individually a "Loan" and, collectively, the
"Loans") to the Borrowers during the Credit Period to and including the
Commitment Termination Date in an aggregate principal amount at any one time
outstanding up to, but not exceeding, the Commitment of such Bank as then in
effect. Subject to the terms of this Agreement, during the Credit Period the
Borrowers may borrow, repay (provided that repayment of Fixed Rate Loans shall
be subject to the provisions of Section 2.26 hereof) and reborrow up to the
amount of the Total Commitment (after giving effect to the mandatory and
voluntary reductions required and permitted herein) by means of ABR Loans or
Fixed Rate Loans, and during such period and thereafter until the date of the
payment in full of all of the Loans, the Borrowers may convert Loans of one type
into Loans of another type (as provided in Section 2.21 hereof).
Section 2.2 Notices Relating to Loans.
A Borrower shall give the Agent written notice of each termination or reduction
of the Commitments, each borrowing, conversion and prepayment of each Loan and
of the duration of each Interest Period applicable to each Fixed Rate Loan (in
each case, a "Borrowing Notice"). Each such written notice shall be irrevocable
and shall be effective only if received by the Agent not later than 11 a.m., New
Jersey time, on the date that is:
(a) In the case of each notice of termination or reduction, three Business Days
prior to the date of the related termination or reduction.
(b) In the case of each notice of borrowing or prepayment of, or conversion
into, ABR Loans, one Business Day prior to the date of the related termination,
reduction, borrowing, prepayment or conversion;
(c) In the case of each notice of borrowing or prepayment of, or conversion
into, LIBOR Loans, or the duration of an Interest Period for LIBOR Loans, three
LIBOR Business Days prior to the date of the related borrowing, prepayment, or
conversion or the first day of such Interest Period; and
(d) In the case of each notice of borrowing or prepayment of, or conversion
into, COF Loans, or the duration of an Interest Period for COF Loans, one
Business Day prior to the date of the related borrowing, prepayment, or
conversion or the first day of such Interest Period.
Each such notice of termination or reduction shall specify the amount thereof.
Each such notice of borrowing, conversion or prepayment shall specify the amount
(subject to Section 2.1 hereof) and type of Loans to be borrowed, converted or
prepaid (and, in the case of a conversion, the type of Loans to result from such
conversion), the date of borrowing, conversion or prepayment (which shall be:
(x) a Business Day in the case of each borrowing or prepayment of ABR Loans and
COF Loans, and (y) a LIBOR Business Day in the case of each borrowing or
prepayment of LIBOR Loans and each conversion of or into a LIBOR Loan). Each
such notice of the duration of an Interest Period shall specify the Loans to
which such Interest Period is to relate. The Agent shall notify the Banks of
the content of each such Borrowing Notice promptly after its receipt thereof.
Section 2.3 Disbursement of Loan Proceeds.
The Borrowers shall give the Agent notice of each borrowing hereunder as
provided in Section 2.2 hereof. Not later than 11:00 a.m., New Jersey time, on
the date specified for each borrowing hereunder, each Bank shall transfer to the
Agent, by wire transfer or otherwise, but in any event in immediately available
funds, the amount of the Loan to be made by it on such date, and the Agent, upon
its receipt thereof, shall disburse such sum to the Borrowers by depositing the
amount thereof in an account of any Borrower maintained with the Agent.
Section 2.4 Notes.
(a) The Loans made by each Bank shall be evidenced by a single promissory note
of the Borrowers, payable on a joint and several basis, in substantially the
form of Exhibit A hereto (each, a "Note" and collectively, the "Notes"). Each
Note shall be dated the date of the initial borrowing of the Loans under this
Agreement, shall be payable to the order of such Bank in a principal amount
equal to such Bank's Commitment as originally in effect, and shall otherwise be
duly completed. The Notes shall be payable as provided in Sections 2.1 and 2.5
hereof.
(b) Each Bank shall enter on a schedule attached to its Note a notation with
respect to each Loan made hereunder of: (i) the date and principal amount
thereof, (ii) each payment and prepayment of principal thereof, (iii) whether
the interest rate is initially to be determined in accordance with subsection
2.6(a)(i) or 2.6(a)(ii) hereof, and (iv) the Interest Period, if applicable.
The failure of any Bank to make a notation on the schedule to its Note as
aforesaid shall not limit or otherwise affect the obligation of the Borrowers to
repay the Loans in accordance with their respective terms as set forth herein.
Section 2.5 Payment Applications.
(a) The Loans: (i) shall be repaid as and when necessary to cause the aggregate
principal amount of the Loans outstanding not to exceed each Bank's Commitment,
as reduced pursuant to subsection 2.8(a) hereof, and (ii) may be repaid at any
time and from time to time, in whole or in part, without premium or penalty,
upon prior written notice to the Agent as provided in Section 2.2 hereof, in
integral multiples of $500,000 and any amount so repaid may, subject to the
terms and conditions hereof, including the borrowing limitation imposed by the
Commitments, be reborrowed hereunder during the Credit Period; provided,
however, that: (A) Fixed Rate Loans repaid prior to the last day of an Interest
Period for such Loans shall be subject to the payment of any yield maintenance
fee required by Section 2.26 hereof, and (B) all repayments of Loans or any
portion thereof shall be made together with payment of all interest accrued on
the amount repaid through the date of such repayment.
(b) Except as set forth in Sections 2.22, 2.23 and 2.25 hereof, all payments and
repayments made pursuant to the terms hereof shall be applied first to ABR
Loans, and shall be applied to Fixed Rate Loans only to the extent any such
payment exceeds the principal amount of ABR Loans outstanding at the time of
such payment.
(c) The Borrower may request a Fixed Rate Loan only if same would not result in
the Interest Period with respect to such Fixed Rate Loan extending beyond the
Commitment Termination Date.
Section 2.6 Interest.
(a) The Borrowers shall pay to the Agent for the account of each Bank interest
on the unpaid principal amount of each Loan made by such Bank for the period
commencing on the date of such Loan until such Loan shall be paid in full, at
the following rates per annum:
(i) During such periods that such Loan is a ABR Loan, the Alternate Base Rate
plus the Applicable Margin; and
(ii) During such periods that such Loan is a COF Loan or a LIBOR Loan, for each
Interest Period relating thereto, the Fixed Rate for such Loan for such Interest
Period plus the Applicable Margin for such Loan.
(b) Notwithstanding the foregoing, whenever an Event of Default has occurred and
is continuing, the Borrowers shall pay interest on any Loan, and on any other
amount payable by the Borrower hereunder (to the extent permitted by law) for
the period commencing on the occurrence of such Event of Default until such
Event of Default has been cured or waived as acknowledged in writing by the
Agent at the applicable Post-Default Rate.
(c) Except as provided in the next sentence, accrued interest on each Loan shall
be payable: (i) in the case of an ABR Loan, monthly on the first day of each
month commencing with the first such date occurring after the date of each such
Loan, (ii) in the case of a Fixed Rate Loan, on the last day of each Interest
Period for such Loan (and, if such Interest Period exceeds three months'
duration in the case of LIBOR Loans or 90 days' duration in the case of COF
Loans, quarterly, commencing on the first quarterly anniversary of the first day
of such Interest Period in the case of LIBOR Loans and commencing 90 days after
the first day of such Interest Period in the case of COF Loans), and (iii) in
the case of any Loan, upon the payment or prepayment thereof or the conversion
thereof into a Loan of another type (but only on the principal so paid, prepaid
or converted). Interest that is payable at the Post-Default Rate shall be
payable from time to time on demand of the Agent. Promptly after the
establishment of any interest rate provided for herein or any change therein,
the Agent will notify the Banks and a Borrower thereof; provided, however, the
failure of the Agent to so notify a Borrower or the Banks shall not affect the
obligations of the Borrowers hereunder or under any of the Notes in any respect.
Section 2.7 Fees.
(a) The Borrowers shall pay to the Agent for the account of each Bank a
commitment fee (the "Commitment Fee") on the daily average amount of such Bank's
Unused Commitment, for the period from the date hereof to and including the
earlier of the date such Bank's Commitment is terminated or the Commitment
Termination Date, in an amount equal to the total Unused Commitment for such
Bank multiplied by (i) a rate per annum equal to 0.20% at any time the Leverage
Ratio is less than or equal to 1.0 to 1.0 and (ii) a rate per annum equal to
0.25% at any time the Leverage Ratio is greater than 1.0 to 1.0. The accrued
Commitment Fee shall be payable quarterly on the Quarterly Dates and on the
earlier of the date the Commitments are terminated or the Commitment Termination
Date, and, in the event the Borrowers reduce the Commitment as provided in
subsection 2.8 hereof, on the effective date of such reduction. Notwithstanding
the foregoing, unless and until the Agent has received the financial statements
required by this Agreement for the four full fiscal quarters ending June 30,
2001, the Commitment Fee shall be in an amount equal to the total Unused
Commitment for such Bank multiplied by a rate per annum equal to 0.25%.
(b) The Borrowers shall pay to the Agent an agency fee (the "Agency Fee") for
services rendered by the Agent in its capacity as Agent hereunder in the amount
and in the manner provided in that certain letter agreement between Parent and
the Agent dated November 16, 2000 (as such letter agreement may be amended,
modified, replaced or supplemented from time to time).
(c) The Commitment Fee and the Agency Fee are hereinafter sometimes referred to
individually as a "Fee" and collectively as the "Fees".
Section 2.8 Changes in Commitment.
(a) The Borrowers shall be entitled to terminate or reduce the Commitments
provided that Parent shall give notice of such termination or reduction to the
Banks as provided in Section 2.2 hereof and that any partial reduction of the
Commitments shall be in an aggregate amount equal to $5,000,000 or an integral
multiple of $1,000,000 for amounts in excess thereof. Any such termination or
reduction shall be permanent and irrevocable. Any reduction of the Total
Commitment pursuant to this subsection 2.8(a) (i) shall reduce permanently the
amount of the Commitment then in effect, and (ii) shall be accompanied by
prepayment of the Loans outstanding to the extent, if any, that the Loans then
outstanding exceed the amount of the Total Commitment as then reduced, together
with accrued interest on the amount so prepaid to and including the dates of
each such prepayment and any amounts payable pursuant to Section 2.26 in
connection therewith and the payment of any unpaid Commitment Fee then accrued
hereunder. Any termination of the Total Commitment shall be accompanied by
prepayment in full of the Loans outstanding and together with accrued interest
thereon to and including the date of prepayment and any amounts payable pursuant
to Section 2.26 in connection therewith and the payment of any unpaid Commitment
Fee then accrued hereunder.
(b) Intentionally Omitted.
(c) Provided that no Default or Event of Default exists or would exist
immediately before and after giving effect thereto, the Borrowers may at any
time and from time to time, at its sole cost and expense, request any one or
more of the Banks to increase its Commitment (such decision to increase the
Commitment of a Bank to be within the sole and absolute discretion of such
Bank), or request any other institution reasonably satisfactory to the Agent to
provide a new Commitment, by submitting an Increase Supplement, duly executed by
each Borrower and each such increasing Bank or other institution agreeing to
increase its Commitment or provide a new Commitment, as the case may be. If
such Increase Supplement is in all respects reasonably satisfactory to the
Agent, the Agent shall execute such Increase Supplement and deliver a copy
thereof to a Borrower and each such increasing Bank or other institution, as the
case may be. Upon execution and delivery of such Increase Supplement, (i) in
the case of each such increasing Bank, such increasing Bank's Commitment shall
be increased to the amount set forth opposite such Bank's name on the signature
pages to such Increase Supplement, (ii) in the case of each such other
institution, such other institution shall become a party hereto and shall for
all purposes of the Loan Documents be deemed a "Bank" with a Commitment in the
amount set forth in such Increase Supplement, (iii) in each case, the Commitment
of such increasing Bank or such other institution, as the case may be, shall be
as set forth in the applicable Increase Supplement, and (iv) the Borrowers shall
contemporaneously therewith execute and deliver to the Agent (x) for each Bank
providing an increased Commitment, a new Note in the amount of such increased
Commitment in exchange for the return and cancellation of each such Bank's
existing Note and (y) for each such other institution providing a new
Commitment, a Note in the amount of its Commitment; provided, however, that:
(i) immediately after giving effect thereto, the Total Commitment shall not be
in excess of $75,000,000.00;
(ii) unless otherwise agreed to by the Agent, each such increase shall be in an
amount not less than $5,000,000.00 or an integral multiple of $1,000,000.00 in
excess thereof;
(iii) from the date hereof through the Commitment Termination Date, the
Commitment shall not be increased on more than three occasions;
(iv) if Loans shall be outstanding immediately after giving effect to such
increase, each Bank shall be deemed to have automatically assigned or assumed
from each other Bank such rights, and shall have been deemed to have
automatically assigned to or assumed from or delegated to such other Bank such
obligations, in each case without recourse, representation or warranty, as shall
cause the outstanding principal balance of its Loans to be an amount equal to
its Percentage of the aggregate amount of all outstanding Loans (as used herein,
a Bank's "Percentage" shall be determined by dividing the Commitment of such
Bank, by the Total Commitment; provided, that, in each case (x) the Total
Commitment shall be the increased Total Commitment after taking into account the
increased Commitment, or new Commitment, as the case may be and (y) the term
"Banks" shall include all then existing Banks and any and all such "other
institutions" that shall become Banks (as more fully described above)). Each
such Bank shall make such payments to, and as directed by, the Agent and the
Agent shall make such payments to the Banks in order to cause the outstanding
principal balance of the Loans by each Bank to be an amount equal to its
Percentage of the aggregate amount of all outstanding Loans after giving effect
to the Commitment increase. Each Borrower hereby agrees that (x) any amount that
a Bank so pays to another Bank pursuant to this Section 2.8(c) shall be entitled
to all rights of a Bank under this Agreement and such payments to Banks shall
constitute Loans held by each such payor Bank under this Agreement, (y) that
each such payor Bank may, to the fullest extent permitted by law, exercise all
of its right of payment (including the right of set-off) with respect to such
amounts as fully as if such payor Bank had initially advanced the Borrowers the
amount of such payments and (z) each Bank receiving payment of its Loans
pursuant to this Section may treat the assignment of Fixed Rate Loans as a
prepayment of such Fixed Rate Loans for purposes of Section 2.26 hereof;
(v) each such other institution shall have delivered to the Agent and a
Borrower all forms, if any, that are required to be delivered by such other
institution pursuant to this Agreement; and
(vi) within five Business Days after the Agent executes and delivers each
Increase Supplement in accordance with the terms hereof, it shall cause the
assignments and assumptions of Loans contemplated by Section 2.8(c)(iv) to be
effected and shall distribute a copy of such Increase Supplement to each Bank
and upon consummation of the assignments and assumptions of Loans contemplated
by Section 2.8(c)(iv), the Total Commitment as increased pursuant to the
provisions of this Section shall be deemed the Total Commitment for purposes of
this Agreement and each existing Bank increasing its Commitment and any and all
such "other institutions" that becoming Banks shall be deemed to have a
Commitment in the amount set forth opposite such Bank's name on the signature
pages to the Increase Supplement executed by such Bank.
In connection with any increase to the Total Commitment pursuant to this
Section, each Borrower, the Agent and each of the Banks hereby consents to the
addition of each "other institution" as a new Bank as a Bank under this
Agreement with a Commitment in the amount set forth opposite such Bank's name on
the signature pages to the Increase Supplement executed by such Bank.
Section 2.9 Use of Proceeds of Loans.
The proceeds of the Loans hereunder may be used by the Borrowers to refinance
existing Indebtedness owing to First Union National Bank and Mellon Bank, N.A.
and to provide availability for general corporate purposes, including working
capital, capital expenditures, Permitted Acquisitions and permitted stock
repurchases.
Section 2.10 Computations.
Interest on all Loans and each Fee shall be computed on the basis of a year of
360 days and actual days elapsed (including the first day but excluding the
last) occurring in the period for which payable.
Section 2.11 Minimum Amounts of Borrowings, Conversions, Prepayments and
Interest Periods.
Except for borrowings, conversions and prepayments that exhaust the full
remaining amount of the Commitments (in the case of borrowings) or result in the
conversion or prepayment of all Loans of a particular type (in the case of
conversions or prepayments) or conversions made pursuant to Section 2.21,
subsection 2.22(b) or Section 2.24 hereof, each borrowing from each Bank, each
conversion of Loans of one type into Loans of another type and each prepayment
of principal of Loans hereunder shall be in an amount at least equal to $100,000
in the case of ABR Loans or an integral multiple thereof and $500,000 in the
case of Fixed Rate Loans or an integral multiple of $100,000 for amounts in
excess thereof (borrowings, conversions and prepayments of different types of
Loans at the same time hereunder to be deemed separate borrowings, conversions
and prepayments for purposes of the foregoing, one for each type).
Section 2.12 Time and Method of Payments.
All payments of principal, interest, Fees and other amounts (including
indemnities) payable by the Borrowers hereunder shall be made in Dollars, in
immediately available funds, to the Agent at the Principal Office not later than
11:00 a.m., New Jersey time, on the date on which such payment shall become due
(and the Agent or any Bank for whose account any such payment is to be made may,
but shall not be obligated to, debit the amount of any such payment that is not
made by such time to any ordinary deposit account of any Borrower with the Agen
or such Bank, as the case may be). Additional provisions relating to payments
are set forth in Section 10.3 hereof. Each payment received by the Agent
hereunder for the account of a Bank shall be paid promptly to such Bank, in like
funds, for the account of such Bank's Applicable Lending Office for the Loan in
respect of which such payment is made.
Section 2.13 Lending Offices.
The Loans of each type made by each Bank shall be made and maintained at such
Bank's Applicable Lending Office for Loans of such type.
Section 2.14 Several Obligations.
The failure of any Bank to make any Loan to be made by it on the date specified
therefor shall not relieve the other Banks of their respective obligations to
make their Loans on such date, but no Bank shall be responsible for the failure
of the other Banks to make Loans to be made by such other Banks.
Section 2.15 Intentionally Omitted.
Section 2.16 Intentionally Omitted.
Section 2.17 Intentionally Omitted.
Section 2.18 Pro Rata Treatment Among Banks.
Except as otherwise provided herein: (i) each borrowing from the Banks under
Section 2.1 hereof will be made from the Banks and each payment of each Fee
(other than the Agency Fee) shall be made for the account of the Banks pro rata
according to their respective Unused Commitments; (ii) each partial reduction of
the Total Commitment shall be applied to the Commitments of the Banks pro rata
according to each Bank's respective Commitment; (iii) each conversion of Loans
of a particular type under Section 2.21 hereof (other than conversions provided
for by Section 2.24 or 2.25 hereof) will be made pro rata among the Banks
holding Loans of such type according to the respective principal amounts of such
Loans held by such Banks; (iv) each payment and prepayment of principal of or
interest on Loans of a particular type will be made to the Agent for the account
of the Banks holding Loans of such type pro rata in accordance with the
respective unpaid principal amounts of such Loans held by such Banks; and (v)
Interest Periods for Loans of a particular type shall be allocated among the
Banks holding Loans of such type pro rata according to the respective principal
amounts of such Loans held by such Banks.
Section 2.19 Non-Receipt of Funds by the Agent.
Unless the Agent shall have been notified by a Bank or a Borrower (the "Payor")
prior to the date on which such Bank is to make payment to the Agent of the
proceeds of a Loan to be made by it hereunder or the Borrowers are to make a
payment to the Agent for the account of one or more of the Banks, as the case
may be (such payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend to make the
Required Payment to the Agent, the Agent may assume that the Required Payment
has been made and may, in reliance upon such assumption (but shall not be
required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient of such payment shall, on demand, repay to the Agent the
amount made available to it together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to the Federal Funds Rate for such day (when the recipient is a Bank) or
equal to the rate of interest applicable to such Loan (when the recipient is a
Borrower).
Section 2.20 Sharing of Payments and Set-Off Among Banks.
If a Bank shall effect payment of any principal of or interest on Loans held by
it under this Agreement through the exercise of any right of set-off (including
without limitation pursuant to Section 10.5 hereof), banker's lien, counterclaim
or similar right, it shall promptly purchase from the other Banks participations
in the Loans held by the other Banks in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Banks shall share the benefit of such payment pro rata in accordance with the
unpaid principal and interest on the Loans held by each of them. To such end
all the Banks shall make appropriate adjustments among themselves (by the resale
of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. Each Borrower agrees that any Bank so purchasing a
participation in the Loans held by the other Banks may exercise all rights of
set-off, banker's lien, counterclaim or similar rights with respect to such
participation as fully as if such Bank were a direct holder of Loans in the
amount of such participation. Nothing contained herein shall require any Bank
to exercise any such right or shall affect the right of any Bank to exercise and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrowers.
Section 2.21 Conversions of Loans.
The Borrowers shall have the right to convert Loans of one type into Loans of
another type from time to time, provided that: (i) a Borrower shall give the
Agent notice of each such conversion as provided in Section 2.2 hereof; (ii)
Fixed Rate Loans may be converted only on the last day of an Interest Period for
such Loans; and (iii) except as required by Sections 2.22 or 2.25 hereof, no ABR
Loan may be converted into a Fixed Rate Loan if on the proposed date of
conversion a Default or an Event of Default exists. The Agent shall use its
best efforts to notify a Borrower of the effectiveness of such conversion, and
the new interest rate to which the converted Loans are subject, as soon as
practicable after the conversion; provided, however, that any failure to give
such notice shall not affect the Borrowers' obligations, or the Agent's or the
Banks' rights and remedies, hereunder in any way whatsoever.
Section 2.22 Additional Costs; Capital Requirements.
(a) In the event that any existing or future law or regulation, guideline or
interpretation thereof, by any court or administrative or governmental authority
(foreign or domestic) charged with the administration thereof, or compliance by
any Bank with any request or directive (whether or not having the force of law)
of any such authority shall impose, modify or deem applicable or result in the
application of, any capital maintenance, capital ratio or similar requirement
against loan commitments made by any Bank hereunder, and the result of any event
referred to above is to impose upon any Bank or increase any capital requirement
applicable as a result of the making or maintenance of, such Bank's Commitment
or the obligation of the Borrowers hereunder with respect to such Commitment
(which imposition of capital requirements may be determined by each Bank's
reasonable allocation of the aggregate of such capital increases or
impositions), then, upon demand made by such Bank as promptly as practicable
after it obtains knowledge that such law, regulation, guideline, interpretation,
request or directive exists and determines to make such demand, the Borrowers
shall immediately pay to such Bank from time to time as specified by such Bank
additional amounts which shall be sufficient to compensate such Bank for such
imposition of or increase in capital requirements together with interest on each
such amount at a rate per annum during the period (x) commencing on the date
demanded until ten days thereafter equal to the Alternate Base Rate as in effect
from time to time plus the Applicable Margin for ABR Loans and (y) commencing on
the date that is ten days after the date demanded until payment in full thereof
at the Post-Default Rate. A certificate setting forth in reasonable detail the
amount necessary to compensate such Bank as a result of an imposition of or
increase in capital requirements submitted by such Bank to a Borrower shall be
conclusive, absent manifest error, as to the amount thereof. For purposes of
this Section 2.22, all references to any "Bank" shall be deemed to include any
participant in such Bank's Commitment.
(b) In the event that any Regulatory Change shall: (i) change the basis of
taxation of any amounts payable to any Bank under this Agreement or the Notes in
respect of any Loans including, without limitation, Fixed Rate Loans (other than
taxes imposed on the overall net income of such Bank for any such Loans by the
United States of America or the jurisdiction in which such Bank has its
principal office); or (ii) impose or modify any reserve, Federal Deposit
Insurance Corporation premium or assessment, special deposit or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Bank (including any of such Loans or
any deposits referred to in the definition of "Fixed Base Rate" in Article 1
hereof); or (iii) impose any other conditions affecting this Agreement in
respect of Loans, including, without limitation, Fixed Rate Loans (or any of
such extensions of credit, assets, deposits or liabilities); and the result of
any event referred to in clause (i), (ii) or (iii) above shall be to increase
such Bank's costs of making or maintaining any Loans, including, without
limitation, Fixed Rate Loans, or its Commitment, or to reduce any amount
receivable by such Bank hereunder in respect of any of its Fixed Rate Loans, or
its Commitment (such increases in costs and reductions in amounts receivable are
hereinafter referred to as "Additional Costs") in each case, only to the extent
that such Additional Costs are not included in the Fixed Base Rate applicable to
such Fixed Rate Loans, then, upon demand made by such Bank as promptly as
practicable after it obtains knowledge that such a Regulatory Change exists and
determines to make such demand (a copy of which demand shall be delivered to the
Agent), the Borrowers shall pay to such Bank from time to time as specified by
such Bank, additional amounts which shall be sufficient to compensate such Bank
for such increased cost or reduction in amounts receivable by such Bank from the
date of such change, together with interest on each such amount at a rate per
annum during the period (x) commencing on the date demanded until ten days
thereafter equal to the Alternate Base Rate as in effect from time to time plus
the Applicable Margin for ABR Loans and (y) commencing on the date that is ten
days after the date demanded until payment in full thereof at the Post-Default
Rate. All references to any "Bank" shall be deemed to include any participant
in such Bank's Commitment.
(c) Without limiting the effect of the foregoing provisions of this Section
2.22, in the event that, by reason of any Regulatory Change, any Bank either:
(i) incurs Additional Costs based on or measured by the excess above a specified
level of the amount of a category of deposits or other liabilities of such Bank
which includes deposits by reference to which the interest rate on Fixed Rate
Loans is determined as provided in this Agreement or a category of extensions of
credit or other assets of such Bank which includes Fixed Rate Loans, or (ii)
becomes subject to restrictions on the amount of such a category of liabilities
or assets that it may hold, then, if such Bank so elects by notice to a Borrower
(with a copy to the Agent), the obligation of such Bank to make, and to convert
Loans of any other type into, Loans of such type hereunder shall be suspended
until the date such Regulatory Change ceases to be in effect (and all Loans of
such type then outstanding shall be converted into ABR Loans or into Fixed Rate
Loans of another duration, as the case may be, in accordance with Sections 2.21
and 2.25 hereof).
(d) Determinations by any Bank for purposes of this Section 2.22 of the effect
of any Regulatory Change on its costs of making or maintaining Loans or on
amounts receivable by it in respect of Loans, and of the additional amounts
required to compensate such Bank in respect of any Additional Costs, shall be
set forth in writing in reasonable detail and shall be conclusive, absent
manifest error.
Section 2.23 Limitation on Types of Loans.
Anything herein to the contrary notwithstanding, if, on or prior to the
determination of an interest rate for any LIBOR Loans for any Interest Period
therefor, the Required Banks reasonably determine (which determination shall be
conclusive):
(a) by reason of any event affecting the money markets in the United States of
America or the London interbank market, quotations of interest rates for the
relevant deposits are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the rate of interest for such
Loans under this Agreement; or
(b) the rates of interest referred to in the definition of "Fixed Base Rate" in
Article 1 hereof upon the basis of which the rate of interest on any LIBOR Loans
for such period is determined, do not accurately reflect the cost to the Banks
of making or maintaining such Loans for such period,
then the Agent shall give a Borrower and each Bank prompt notice thereof (and
shall thereafter give a Borrower and each Bank prompt notice of the cessation,
if any, of such condition), and so long as such condition remains in effect, the
Banks shall be under no obligation to make LIBOR Loans or to convert any ABR
Loans or COF Loans into LIBOR Loans and the Borrowers shall, on the last day(s)
of the then current Interest Period(s) for the outstanding LIBOR Loans affected,
either prepay such LIBOR Loans in accordance with Section 2.11 hereof or convert
such LIBOR Loans into ABR Loans or COF Loans in accordance with Section 2.21
hereof.
Section 2.24 Illegality.
Notwithstanding any other provision in this Agreement, in the event that it
becomes unlawful for any Bank or its Applicable Lending Office to: (i) honor
its obligation to make LIBOR Loans hereunder, or (ii) maintain LIBOR Loans
hereunder, then such Bank shall promptly notify a Borrower thereof (with a copy
to the Agent), describing such illegality in reasonable detail (and shall
thereafter promptly notify a Borrower and the Agent of the cessation, if any, of
such illegality), and such Bank's obligation to make LIBOR Loans and to convert
other types of Loans into LIBOR Loans hereunder shall, upon written notice given
by such Bank to a Borrower, be suspended until such time as such Bank may again
make and maintain LIBOR Loans and such Bank's outstanding LIBOR Loans shall be
converted into ABR Loans or COF Loans in accordance with Sections 2.21 and 2.25
hereof.
Section 2.25 Certain Conversions pursuant to Sections 2.22 and 2.24.
If the Loans of any Bank of a particular type (Loans of such type are
hereinafter referred to as "Affected Loans" and such type is hereinafter
referred to as the "Affected Type") are to be converted pursuant to Section 2.22
or 2.24 hereof, such Bank's Affected Loans shall be converted into ABR Loans, or
Fixed Rate Loans of another type, as the case may be (the "New Type Loans") on
the last day(s) of the then current Interest Period(s) for the Affected Loans
(or, in the case of a conversion required by subsection 2.22(b) or Section 2.24
hereof, on such earlier date as such Bank may specify to a Borrower with a copy
to the Agent) and, until such Bank gives notice as provided below that the
circumstances specified in Section 2.22 or 2.24 hereof that gave rise to such
conversion no longer exist:
(a) to the extent that such Bank's Affected Loans have been so converted, all
payments and prepayments of principal that would otherwise be applied to such
Affected Loans shall be applied instead to its New Type Loans;
(b) all Loans that would otherwise be made by such Bank as Loans of the Affected
Type shall be made instead as New Type Loans and all Loans of such Bank that
would otherwise be converted into Loans of the Affected Type shall be converted
instead into (or shall remain as) New Type Loans; and
(c) if Loans of any of the Banks other than such Bank that are the same type as
the Affected Type are subsequently converted into Loans of another type (which
type is other than New Type Loans), then such Bank's New Type Loans shall be
automatically converted on the conversion date into Loans of such other type to
the extent necessary so that, after giving effect thereto, all Loans held by
such Bank and the Banks whose Loans are so converted are held pro rata (as to
principal amounts, types and, to the extent applicable, Interest Periods) in
accordance with their respective Commitments.
Section 2.26 Yield Maintenance.
The Borrowers shall pay to the Agent for the account of each Bank, upon the
request of such Bank through the Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost, or expense incurred as a result of: (i) any payment of a Fixed Rate
Loan on a date other than the last day of the Interest Period for such Loan;
(ii) any failure by a Borrower to borrow a Fixed Rate Loan on the date specified
by a Borrower's written notice; or (iii) any failure of a Borrower to pay a
Fixed Rate Loan on the date for payment specified in a Borrower's written
notice. Without limiting the foregoing, the Borrowers shall pay to the Agent
for the account of each such Bank, a "yield maintenance fee" in an amount
computed as follows: The current rate for United States Treasury securities
(bills on a discounted basis shall be converted to a bond equivalent) with a
maturity date closest to the term chosen pursuant to the Fixed Rate Election as
to which the prepayment is made, shall be subtracted from the Fixed Rate in
effect at the time of prepayment. If the result is zero or a negative number,
there shall be no yield maintenance fee. If the result is a positive number,
then the resulting percentage shall be multiplied by the amount of the principal
balance being prepaid. The resulting amount shall be divided by 360 and
multiplied by the number of days remaining in the term chosen pursuant to the
Fixed Rate Election as to which the prepayment is made. Said amount shall be
reduced to present value calculated by using the above referenced United States
Treasury securities rate and the number of days remaining in the term chosen
pursuant to the Fixed Rate Election as to which prepayment is made. The
resulting amount shall be the yield maintenance fee due to each such Bank upon
the payment of a Fixed Rate Loan. Each reference in this paragraph to "Fixed
Rate Election" shall mean the election by a Borrower of a Loan to bear interest
based on the Fixed Rate. If by reason of an Event of Default, the Agent and/or
the Banks elect to declare the Loans and/or the Notes to be immediately due and
payable, then any yield maintenance fee with respect to a Fixed Rate Loan shall
become due and payable in the same manner as though the Borrowers have exercised
such right of prepayment.
ARTICLE 3
Representations and Warranties
Each Borrower hereby represents and warrants to the Banks and the Agent that:
Section 3.1 Organization.
(a) Each Borrower and each other Loan Party is duly organized and validly
existing under the laws of its state of organization and has the power to own
its assets and to transact the business in which it is presently engaged and in
which it proposes to be engaged. Schedule 3.1 hereto accurately and completely
lists, as to each Borrower and each Subsidiary and each other Loan Party: (i)
the state of incorporation or organization of each such entity, and the type of
legal entity that each of them is, (ii) as to each of them that is a
corporation, the classes and number of authorized and outstanding shares of
capital stock of each such corporation, and the owners of such outstanding
shares of capital stock, (iii) as to each of them that is a legal entity other
than a corporation (but not a natural person), the type and amount of equity
interests authorized and outstanding of each such entity, and the owners of such
equity interests, and (iv) the business in which each of such entities is
engaged. All of the foregoing shares or other equity interests that are issued
and outstanding have been duly and validly issued and are fully paid and non-
assessable, and are owned by the Borrowers referred to on Schedule 3.1, free and
clear of any Lien except as otherwise provided for herein. Except as set forth
on Schedule 3.1, there are no outstanding warrants, options, contracts or
commitments of any kind entitling any Person to purchase or otherwise acquire
any shares of Capital Stock or other equity interests of any Borrower or any
Subsidiary or any other Loan Party nor are there outstanding any securities that
are convertible into or exchangeable for any shares of capital stock or other
equity interests of any Borrower or any Subsidiary or any other Loan Party.
Except as set forth on Schedule 3.1, neither any Borrower nor any Subsidiary nor
any other Loan Party has any Subsidiary. Each Subsidiary Borrower is a wholly
owned Subsidiary of J&J Snack Foods Investment Corp. and J&J Snack Foods
Investment Corp. is a wholly owned Subsidiary of Parent. Schedule 3.1 hereto
accurately and completely lists each of the Primary Subsidiary Borrowers, which
are those Subsidiary Borrowers that together with Parent accounted for not less
than 90% of Parent's consolidated net income (as determined in accordance with
GAAP) for Parent's fiscal year ending September 30, 2000.
(b) Each Borrower and each other Loan Party is in good standing in its state of
organization and in each state in which it is qualified to do business. There
are no jurisdictions other than as set forth on Schedule 3.1 hereto in which the
character of the properties owned or proposed to be owned by any Borrower or any
Subsidiary or any other Loan Party or in which the transaction of the business
of any Borrower or any Subsidiary or any other Loan Party as now conducted or as
proposed to be conducted requires or will require any Borrower or any Subsidiary
or any other Loan Party to qualify to do business and as to which failure so to
qualify could have a Material Adverse Effect.
(c) With respect to each Foreign Subsidiary, (i) each office maintained by each
such Foreign Subsidiary is a Non-Material Office, (ii) such Foreign Subsidiaries
do not own real and/or personal property that has a fair market value in excess
of $750,000 with respect to all such property owned by such Foreign Subsidiaries
in the aggregate and (iii) such Foreign Subsidiaries do not in the aggregate
account for more than 5% of Parent's consolidated net income (as determined in
accordance with GAAP) for Parent's fiscal year ending September 30, 2000.
Section 3.2 Power, Authority, Consents.
Each Borrower and each other Loan Party has the power to execute, deliver and
perform the Loan Documents to be executed by it. Each Borrower has the power to
borrow hereunder and has taken all necessary corporate action to authorize the
borrowing hereunder on the terms and conditions of this Agreement. Each
Borrower and each other Loan Party has taken all necessary action, corporate or
otherwise, to authorize the execution, delivery and performance of the Loan
Documents to be executed by it. No consent or approval of any Person
(including, without limitation, any stockholder of any corporate Loan Party or
any partner in any partnership Loan Party), no consent or approval of any
landlord or mortgagee, no waiver of any Lien or right of distraint or other
similar right and no consent, license, certificate of need, approval,
authorization or declaration of any governmental authority, bureau or agency, is
or will be required in connection with the execution, delivery or performance by
any Borrower or any other Loan Party, or the validity, enforcement or priority,
of the Loan Documents, except as set forth on Schedule 3.2 hereto, each of which
either has been duly and validly obtained on or prior to the date hereof and is
now in full force and effect, or is designated on Schedule 3.2 as waived by the
Required Banks.
Section 3.3 No Violation of Law or Agreements.
The execution and delivery by each Borrower and each other Loan Party of each
Loan Document to which it is a party and performance by it hereunder and
thereunder, will not violate any provision of law and will not, except as set
forth on Schedule 3.2 hereto, conflict with or result in a breach of any order,
writ, injunction, ordinance, resolution, decree, or other similar document or
instrument of any court or governmental authority, bureau or agency, domestic or
foreign, or any certificate of incorporation or by-laws of any Borrower or any
other corporate Loan Party or partnership agreement or other organizational
document or instrument of any Loan Party that is not a corporation, or create
(with or without the giving of notice or lapse of time, or both) a default under
or breach of any agreement, bond, note or indenture to which any Borrower or any
other Loan Party is a party, or by which any of them is bound or any of their
respective properties or assets is affected, or result in the imposition of any
Lien of any nature whatsoever upon any of the properties or assets owned by or
used in connection with the business of any Borrower or any other Loan Party.
Section 3.4 Due Execution, Validity, Enforceability.
This Agreement and each other Loan Document to which any Loan Party is a party
has been duly executed and delivered by the Loan Party that is a party thereto
and each constitutes the valid and legally binding obligation of such Borrower
or such other Loan Party that is a party thereto, enforceable in accordance with
its terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar laws, now or hereafter
in effect, relating to or affecting the enforcement of creditors' rights
generally and except that the remedy of specific performance and other equitable
remedies are subject to judicial discretion.
Section 3.5 Properties.
All of the properties and assets owned by each Borrower and each Subsidiary and
each other Loan Party are owned by each of them, respectively, free and clear of
any Lien of any nature whatsoever, except as permitted by Section 7.2 hereof.
Section 3.6 Judgments, Actions, Proceedings.
Except as set forth on Schedule 3.6 hereto, there are no outstanding judgments,
actions or proceedings, including, without limitation, any Environmental
Proceeding, pending before any court or governmental authority, bureau or
agency, with respect to or, to the best of each Borrower's knowledge, threatened
against or affecting any Borrower or any Subsidiary or any other Loan Party,
involving, in the case of any court proceeding, a claim in excess of $250,000,
nor, to the best of each Borrower's knowledge, is there any reasonable basis for
the institution of any such action or proceeding that is probable of assertion,
nor are there any such actions or proceedings in which any Borrower or any
Subsidiary or any other Loan Party is a plaintiff or complainant.
Section 3.7 No Defaults, Compliance With Laws.
Except as set forth on Schedule 3.7 hereto, no Borrower nor any Subsidiary nor
any other Loan Party is in default under any agreement, ordinance, resolution,
decree, bond, note, indenture, order or judgment to which it is a party or by
which it is bound, or any other agreement or other instrument by which any of
the properties or assets owned by it or used in the conduct of its business is
affected, which default could have a Material Adverse Effect. Each Borrower and
each Subsidiary has complied and is in compliance in all respects with all
applicable laws, ordinances and regulations, resolutions, ordinances, decrees
and other similar documents and instruments of all courts and governmental
authorities, bureaus and agencies, domestic and foreign, including, without
limitation, all applicable provisions of the Americans with Disabilities Act (42
U.S.C. 12101-12213) and the regulations issued thereunder and all applicable
Environmental Laws and Regulations, non-compliance with which could have a
Material Adverse Effect.
Section 3.8 Burdensome Documents.
Except as set forth on Schedule 3.8 hereto, no Borrower nor any of the other
Loan Parties is a party to or bound by, nor are any of the properties or assets
owned by any Borrower or any other Loan Party used in the conduct of their
respective businesses affected by, any agreement, ordinance, resolution, decree,
bond, note, indenture, order or judgment, including, without limitation, any of
the foregoing relating to any Environmental Liability, that materially and
adversely affects their respective businesses, assets or conditions, financial
or otherwise.
Section 3.9 Financial Statements; Projections.
(a) Each of the Financial Statements is correct and complete and presents fairly
the consolidated financial position of Parent and its Subsidiaries taken as a
whole, and each other entity to which it relates, as at its date, and has been
prepared in accordance with GAAP. No Borrower nor any of the Subsidiaries, nor
any other entity to which any of the Financial Statements relates, has any
material obligation, liability or commitment, direct or contingent (including,
without limitation, any Environmental Liability), that is not reflected in the
Financial Statements and if it were reflected in the Financial Statements would
result in a Material Adverse Effect. There has been no change in the financial
position or operations of Parent or any of its Subsidiaries or any other entity
to which any of the Financial Statements relates since the date of the latest
balance sheet included in the Financial Statements (the "Latest Balance Sheet")
that has resulted or may result in a Material Adverse Effect. Parent's fiscal
year is the twelve-month period ending on September 30th in each year.
(b) The Projections have been prepared on the basis of the assumptions
accompanying them and reflect as of the date thereof Parent's good faith
projections, after reasonable analysis, of the matters set forth therein, based
on such assumptions.
Section 3.10 Tax Returns.
Each Borrower and each Subsidiary has filed all federal, state and local tax
returns required to be filed by it and has not failed to pay any taxes, or
interest and penalties relating thereto, on or before the due dates thereof.
Except to the extent that reserves therefor are reflected in the Financial
Statements: (i) there are no material federal, state or local tax liabilities
of Parent or any Subsidiary due or to become due for any tax year ended on or
prior to the date of the Latest Balance Sheet relating to such entity, whether
incurred in respect of or measured by the income of such entity, that are not
properly reflected in the Latest Balance Sheet relating to such entity, and (ii)
there are no material claims pending or, to the knowledge of any Borrower,
proposed or threatened against any Borrower or any Subsidiary for past federal,
state or local taxes, except those, if any, as to which proper reserves are
reflected in the Financial Statements.
Section 3.11 Intangible Assets.
Each Borrower possesses all patents, trademarks, service marks, trade names, and
copyrights, and rights with respect to the foregoing, necessary to conduct its
business as now conducted and as proposed to be conducted, without any conflict
with the patents, trademarks, service marks, trade names, and copyrights and
rights with respect to the foregoing, of any other Person, and each of such
patents, trademarks, service marks, trade names, copyrights and rights with
respect thereto, together with any pending applications therefor, are listed on
Schedule 3.11 hereto.
Section 3.12 Regulation U.
No part of the proceeds received by any Borrower or any Subsidiary from the
Loans will be used directly or indirectly for: (a) any purpose other than as
set forth in Section 2.9 hereof, or (b) the purpose of purchasing or carrying,
or for payment in full or in part of Indebtedness that was incurred for the
purposes of purchasing or carrying, any "margin stock", as such term is defined
in 221.3 of Regulation U of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II, Part 221.
Section 3.13 Intentionally Omitted.
Section 3.14 Full Disclosure.
None of the Financial Statements, the Projections, nor any certificate, opinion,
or any other statement made or furnished in writing to the Agent or any Bank by
or on behalf of any Borrower or any of the Subsidiaries or any other Loan Party
in connection with this Agreement or the transactions contemplated herein,
contains any untrue statement of a material fact, or omits to state a material
fact necessary in order to make the statements contained therein or herein not
misleading, as of the date such statement was made. There is no fact known to
any Borrower that has, or would in the now foreseeable future have, a Material
Adverse Effect, which fact has not been set forth herein, in the Financial
Statements, the Projections, or any certificate, opinion or other written
statement so made or furnished to the Agent or the Banks.
Section 3.15 Licenses and Approvals.
Each Borrower and each of the Subsidiaries has all necessary licenses, permits
and governmental authorizations, including, without limitation, licenses,
permits and authorizations arising under or relating to Environmental Laws and
Regulations, to own and operate its properties and to carry on its business as
now conducted.
Section 3.16 Labor Disputes; Collective Bargaining Agreements; Employee
Grievances.
Except as set forth on Schedule 3.16 hereto: (a) there are no collective
bargaining agreements or other labor contracts covering any Borrower or any
Subsidiary; (b) no such collective bargaining agreement or other labor contract
will expire during the term of this Agreement; (c) no union or other labor
organization is seeking to organize, or to be recognized as bargaining
representative for, a bargaining unit of employees of any Borrower or any
Subsidiary; (d) there is no pending or threatened strike, work stoppage,
material unfair labor practice claim or charge, arbitration or other material
labor dispute against or affecting any Borrower or any Subsidiary or their
representative employees; (e) there has not been, during the five (5) year
period prior to the date hereof, a strike, work stoppage, material unfair labor
practice claim or charge, arbitration or other material labor dispute against or
affecting any Borrower or any Subsidiary or any of their representative
employees, and (f) there are no actions, suits, charges, demands, claims,
counterclaims or proceedings pending or, to the best of each Borrower's
knowledge, threatened against any Borrower or any of the Subsidiaries, by or on
behalf of, or with, its employees, other than employee grievances arising in the
ordinary course of business that are not, in the aggregate, material.
Section 3.17 Intentionally Omitted.
Section 3.18 ERISA.
(a) Except as disclosed on Schedule 3.18 hereto, no Employee Benefit Plan,
including without limitation, any Multiemployer Plan, exists or has ever existed
and neither any Loan Party nor any ERISA Affiliate is a participating employer
in any Employee Benefit Plan in which more than one employer makes contributions
as described in Sections 4063 and 4064 of ERISA. Except as disclosed on
Schedule 3.18, no Loan Party nor any ERISA Affiliate has any contingent
liability with respect to any post-retirement benefit under any Employee Welfare
Benefit Plan which is a welfare plan (as defined in Section 3(1) of ERISA),
other than liability for health plan continuation coverage described in Part 6
of Title I of ERISA, which together with any disclosed liability on Schedule
3.18, would not result in liability to any Loan Party or ERISA Affiliate. The
Borrowers have given to the Agent true and complete copies of all the following:
(i) each Employee Benefit Plan and related trust agreement (including all
amendments and commitments with respect to such Employee Benefit Plan or trust)
which any Loan Party or ERISA Affiliate maintains or is committed to contribute
to as of the date hereof and the most recent summary plan description, actuarial
report, determination letter issued by the IRS and Form 5500 filed in respect of
each such Employee Benefit Plan; and (ii) a listing of all of the Multiemployer
Plans to which any Loan Party or ERISA Affiliate contributes or is committed to
contribute and the aggregate amount of the most recent annual contributions
required to be made to each such Multiemployer Plan, together with any
information which has been provided to any Loan Party or ERISA Affiliate
regarding withdrawal liability under any Multiemployer Plan and the collective
bargaining agreement pursuant to which such contribution is required to be made.
(b) Each Employee Benefit Plan complies, in both form and operation in all
material respects, with its terms, ERISA and the Code including, without
limitation, Code Section 4980B, and no condition exists or event has occurred
with respect to any such plan which would result in the incurrence by any Loan
Party or ERISA Affiliate of any material liability, fine or penalty. No Loan
Party nor any ERISA Affiliate has incurred any liability to the PBGC which
remains outstanding other than the payment of premiums, and there are no
premiums which have become due which are unpaid. No Loan Party nor any ERISA
Affiliate has engaged in any transaction which could subject it to liability
under Section 4069 or Section 4212(c) of ERISA. Each Employee Benefit Plan,
related trust agreement, arrangement and commitment of each Loan Party and ERISA
Affiliate is legally valid and binding in full force and effect. Each Employee
Benefit Plan that is intended to be qualified under Section 401(a) of the Code
has been determined by the IRS to be so qualified, and each trust related to
such plan has been determined to be exempt under Section 501(a) of the Code. To
the knowledge of any Loan Party, nothing has occurred or is expected to occur
that would adversely affect the qualified status of the Employee Benefit Plan or
any related trust subsequent to the issuance of such determination letter. No
Employee Benefit Plan is being audited or investigated by any government agency
or subject to any pending or threatened claim or suit.
(c) Each Pension Plan currently meets and always has met the minimum funding
standard of Section 302 of ERISA and Section 412 of the Code (without regard to
any funding waiver). All contributions or payments due and owing as required by
Section 302 of ERISA, Section 412 of the Code or the terms of any Pension Plan
have been made by the due date for such contributions or payments. With respect
to each Multiemployer Plan, each Loan Party and each ERISA Affiliate has paid or
accrued all contributions pursuant to the terms of the applicable collective
bargaining agreement required to be paid or accrued by it. With respect to each
Pension Plan, the market value of assets (exclusive of any contribution due to
the Pension Plan) equals or exceeds the present value of benefit liabilities as
of the latest actuarial valuation date for such plan (but not prior to 12 months
prior to the date hereof), determined on the basis of a shutdown of the company
in accordance with actuarial assumptions used by the PBGC in single-employer
plan terminations and since its last valuation date, there have been no
amendments to such plan that materially increased the present value of accrued
benefits nor any other material adverse changes in the funding status of such
plan. Neither any Loan Party nor any ERISA Affiliate is required to provide
security to a Pension Plan pursuant to Section 307 of ERISA or Section
401(a)(29) of the Code.
(d) Neither any Loan Party nor any ERISA Affiliate nor any fiduciary of any
Employee Benefit Plan has engaged in a prohibited transaction under Section 406
of ERISA or Section 4975 of the Code. The execution, delivery and performance
of the terms of any agreements that are related to this transaction will not
constitute a prohibited transaction under the aforementioned sections.
(e) No Termination Event has occurred or is reasonably expected to occur.
(f) None of the following "reportable events" are which subject to the 30-day
notice requirement of Section 4043(b) of ERISA in respect of any of the Pension
Plans has occurred: (i) an inability to pay benefits when due, (ii) bankruptcy
or insolvency of the sponsor of the Pension Plan, (iii) liquidation or
dissolution of the sponsor of the Pension Plan, (iv) a failure to meet the
minimum funding standards, or (v) certain transactions involving a change of
employer. No Loan Party has received any notice from the PBGC that any of the
Pension Plans is being involuntarily terminated or from the Secretary of the
Treasury of the United States of America that any partial or full termination of
any of the Employee Benefit Plans has occurred and no event shall have occurred,
and there shall exist as of the date hereof no condition or set of circumstances
which present a material risk of the involuntary termination of any of the
Pension Plans.
(g) There are no agreements which will provide payments to any officer,
employee, shareholder or highly compensated individual which will be "parachute
payments" under Section 280G of the Code that are nondeductible to any Loan
Party and which will be subject to the tax under Section 4999 of the Code for
which any Loan Party would have a material withholding liability.
(h) All references to a Borrower or Loan Party in this Section 3.18 or in any
other Section of this Agreement relating to ERISA shall be deemed to refer to
each Borrower or Loan Party, as applicable, and any other entity which is
considered an ERISA Affiliate.
ARTICLE 4
Conditions to the Loans
Section 4.1 Conditions to Initial Loans.
The obligation of each Bank to make the initial Loan to be made by it hereunder
shall be subject to the fulfillment (to the satisfaction of the Agent) of the
following conditions precedent:
(a) The Borrowers shall have executed and delivered to each Bank their Note.
(b) The Borrowers shall have paid to the Agent the Agency Fee.
(c) Blank Rome Comisky & McCauley, counsel to the Borrowers, shall have
delivered its opinion to, and in form and substance reasonably satisfactory to,
the Agent.
(d) The Agent shall have received true and complete copies of the most recent
Financial Statements and Projections, each certified as such in a certificate
executed by the president or vice president of Parent.
(e) The Agent shall have received copies of the following:
(i) All of the consents, approvals and waivers referred to on Schedule 3.2
hereto (except only those which, as stated on Schedule 3.2, shall not be
delivered);
(ii) The certificates of incorporation of each Borrower, certified by the
Secretary of State of their respective states of incorporation;
(iii) The by-laws of each Borrower, certified by their respective secretaries;
(iv) All corporate action taken by each Borrower to authorize the execution,
delivery and performance of each of the Loan Documents and the transactions
contemplated thereby, certified by their respective secretaries;
(v) Good standing certificates generally as of dates not more than twenty (20)
days prior to the date of the initial Loan, with respect to Parent and each
Primary Subsidiary Borrower, from the Secretary of State of their respective
states of incorporation;
(vi) An incumbency certificate (with specimen signatures) with respect to each
Borrower;
(vii) Results of searches of Uniform Commercial Code and other Lien filings with
respect to Parent and each Primary Subsidiary Borrower and such searches shall
disclose no Liens, except for Liens permitted under Section 7.2, or if
unpermitted Liens are disclosed, the Agent shall have received satisfactory
evidence of release of such Liens; and
(viii) Evidence of property and casualty insurance and liability insurance.
(f) (i) Each Borrower shall have complied and shall then be in compliance
with all of the terms, covenants and conditions of this Agreement;
(ii) After giving effect to the initial Loan, there shall exist no Default or
Event of Default hereunder;
(iii) The representations and warranties contained in Article 3 hereof shall be
true and correct on the date hereof; and
(iv) The Agent shall have received a Compliance Certificate dated the date
hereof certifying, inter alia, that the conditions set forth in this subsection
4.1(f) are satisfied on such date.
(g) All legal matters incident to the initial Loans shall be satisfactory to
counsel to the Agent.
Section 4.2 Conditions to Subsequent Loans.
The obligation of each Bank to make each Loan subsequent to its initial Loan
shall be subject to the fulfillment (to the satisfaction of the Agent) of the
following conditions precedent:
(a) The Agent shall have received a Borrowing Notice in accordance with Section
2.3 hereof together with a certification that:
(i) The representations and warranties made by the Borrowers herein or which are
contained in any certificate, document or financial or other statement furnished
at any time under or in connection herewith, shall be correct on and as of the
borrowing date for such Loan as if made on and as of such date; and
(ii) No Default or Event of Default shall have occurred and be continuing on the
date a Loan is to be made or after giving effect to the Loan to be made on such
date.
(b) All legal matters incident to such Loan shall be satisfactory to counsel for
the Agent.
ARTICLE 5
Delivery of Financial Reports, Documents and Other Information.
While the Commitments are outstanding, and, in the event any Loan remains
outstanding, so long as any Borrower is indebted to the Banks or the Agent and
until payment in full of the Notes and full and complete performance of all of
their other obligations arising hereunder, the Borrowers shall deliver to each
Bank:
Section 5.1 Annual Financial Statements and Projections.
Annually, as soon as available, (i) but in any event within ninety (90) days
after the last day of each of its fiscal years, a consolidated and consolidating
balance sheet of Parent and the Subsidiaries as at such last day of the fiscal
year, and consolidated and consolidating statements of income and retained
earnings and statements of cash flow, for such fiscal year, each prepared in
accordance with GAAP, in reasonable detail, and, as to the consolidated
statements, audited and certified without qualification by Grant Thornton, LLP
or another firm of independent certified public accountants satisfactory to the
Agent, or certified, as to the consolidating statements, by the chief financial
officer of Parent, as fairly presenting the financial position and the results
of operations of Parent and the Subsidiaries as at and for the year ending on
its date and as having been prepared in accordance with GAAP and (ii) on or
before each November 15th, Projections for the upcoming fiscal year.
Section 5.2 Quarterly Financial Statements.
As soon as available, but in any event within forty-five (45) days after the end
of the Parent's first three fiscal quarterly periods, a consolidated and
consolidating balance sheet of Parent and the Subsidiaries as of the last day of
such quarter and consolidated and consolidating statements of income and
retained earnings and statements of cash flow, for such quarter, and on a
comparative basis figures for the corresponding period of the immediately
preceding fiscal year, all in reasonable detail, each such statement to be
certified in a certificate of the president or chief financial officer of Parent
as accurately presenting the financial position and the results of operations of
Parent and the Subsidiaries as at its date and for such quarter and as having
been prepared in accordance with GAAP (subject to year-end audit adjustments).
Section 5.3 Compliance Information.
Promptly after a written request therefor, such other financial data or
information evidencing compliance with the requirements of this Agreement, the
Notes and the other Loan Documents, as any Bank may reasonably request from time
to time.
Section 5.4 No Default Certificate.
At the same time as it delivers the financial statements required under the
provisions of Sections 5.1 and 5.2 hereof, a certificate of the president or
chief executive officer of Parent to the effect that no Event of Default
hereunder and that no default under any other agreement to which any Borrower or
any of the Subsidiaries is a party or by which it is bound, or by which, to the
best knowledge of any Borrower or any Subsidiary, any of its properties or
assets, taken as a whole, may be materially affected, and no event which, with
the giving of notice or the lapse of time, or both, would constitute such an
Event of Default or default, exists, or, if such cannot be so certified,
specifying in reasonable detail the exceptions, if any, to such statement. Such
certificate shall be accompanied by a detailed calculation indicating compliance
with the covenants contained in Sections 6.9 and 7.13 hereof.
Section 5.5 Certificate of Accountants.
At the same time as it delivers the financial statements required under the
provisions of Section 5.1 hereof, a certificate of the independent certified
public accountants of Parent addressed specifically to both Parent and the Agent
to the effect that during the course of their audit of the operations of Parent
and its condition as of the end of the fiscal year, nothing has come to their
attention which would indicate that a Default or an Event of Default hereunder
has occurred or that there was any violation of the covenants of the Borrowers
contained in Section 6.9 or Article 7 of this Agreement, or, if such cannot be
so certified, specifying in reasonable detail the exceptions, if any, to such
statement.
Section 5.6 Accountants' Reports.
Promptly upon receipt thereof, copies of each management letter and each other
written report submitted to any and/or all of the Borrowers by its independent
accountants in connection with any annual or interim audit or review of the
books of Parent and/or all or any of the Borrowers made by such accountants.
Section 5.7 Copies of Documents.
Promptly upon their becoming available, copies of any: (i) financial
statements, projections, non-routine reports, notices (other than routine
correspondence), requests for waivers and proxy statements, in each case,
delivered by any Borrower or any of the Subsidiaries to any lending institution
other than the Banks; (ii) correspondence or notices received by any Borrower
from any federal, state or local governmental authority that regulates the
operations of the Borrowers or any of its Subsidiaries, relating to an actual or
threatened change or development that would be materially adverse to any
Borrower or any Subsidiary; (iii) registration statements and any amendments and
supplements thereto, and any regular and periodic reports, if any, filed by any
Borrower or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental authority succeeding to
any or all of the functions of the said Commission and (iv) letters of comment
or correspondence sent to any Borrower or any of its Subsidiaries by any such
securities exchange or such Commission in relation to any Borrower or any of its
Subsidiaries.
Section 5.8 Notices of Defaults.
Promptly, notice of the occurrence of any Default or Event of Default, or any
event that would constitute or cause a material adverse change in the condition,
financial or otherwise, or the operations of any Borrower or any of the
Subsidiaries.
Section 5.9 ERISA Notices and Requests.
Notice of each of the following within ten (10) days after such event or
occurrence:
(a) any Loan Party or ERISA Affiliate knowing or having reason to know that a
Termination Event has occurred or that a Defined Contribution Plan has been
terminated or partially terminated, together with a written statement by the
appropriate chief financial officer setting forth the details of such event;
(b) the filing of a request for a funding waiver by any Loan Party or ERISA
Affiliate with respect to any Pension Plan, and a copy of such request and all
communications received by any Loan Party or ERISA Affiliate with respect to
such request;
(c) receipt by any Loan Party or ERISA Affiliate of a notice of the PBGC's
intent to terminate a Pension Plan, and a copy of such notice;
(d) the failure of any Loan Party or ERISA Affiliate to make a required
installment or payment under Section 302 of ERISA or Section 412 of the Code by
the applicable due date thereof, together with a written notice of such failure;
(e) any Loan Party or ERISA Affiliate knowing or having reason to know that a
prohibited transaction (as defined in Section 406 of ERISA or Section 4975 of
the Code) has occurred with respect to any Employee Benefit Plan, and a written
statement by the appropriate chief financial officer setting forth the details
of such transaction and the action taken with respect thereto;
(f) any increase in the benefits of any existing Employee Benefit Plan or the
establishment of any new Employee Benefit Plan or the commencement of
contributions to any Employee Benefit Plan to which any Loan Party or ERISA
Affiliate had not theretofore been contributing, together with a written notice
of such occurrence;
(g) receipt by any Loan Party or ERISA Affiliate of any favorable or unfavorable
determination letter from the IRS regarding the qualification of a Pension Plan
under Section 401(a) of the Code, together with a copy of such letter;
(h) the filing of an annual report (Form 5500 series), including Schedule B
thereto, filed by any Loan Party or ERISA Affiliate with respect to an Employee
Benefit Plan, together with a copy of such report;
(i) receipt by any Loan Party or ERISA Affiliate of an actuarial report for any
Pension Plan, together with a copy of such report;
(j) receipt by any Loan Party or ERISA Affiliate of all correspondence with the
PBGC, the Secretary of Labor of the United States of America or any
representative of the IRS with respect to any Employee Benefit Plans, relating
to an actual or threatened change or development which would be materially
adverse to any Borrower or any ERISA Affiliate; and
(k) receipt by any Loan Party or ERISA Affiliate of any correspondence from a
Multiemployer Plan with respect to withdrawal liability.
Section 5.10 Intentionally Omitted.
Section 5.11 Additional Information.
Such other information regarding the business, affairs and condition of the
Borrowers and the Subsidiaries as the Agent, may from time to time reasonably
request.
ARTICLE 6
Affirmative Covenants.
While the Commitments are outstanding, and, in the event any Loan remains
outstanding, so long as any Borrower is indebted to the Banks or the Agent, and
until payment in full of the Notes and full and complete performance of all of
their other obligations arising hereunder, the Borrowers shall and shall cause
each Subsidiary to:
Section 6.1 Books and Records.
Keep proper books of record and account in a manner reasonably satisfactory to
the Agent in which full, true and correct entries shall be made of all dealings
or transactions in relation to its business and activities.
Section 6.2 Inspections and Audits.
Permit the Banks to make or cause to be made (at the expense of the Banks except
that, after the occurrence of and during the continuance of an Event of Default,
at the Borrowers' expense), inspections and audits of any books, records and
papers of each Borrower and each of the Subsidiaries and to make extracts
therefrom and copies thereof, or to make inspections and examinations of any
properties and facilities of the Borrowers and the Subsidiaries, on reasonable
notice, at all such reasonable times and as often as any Bank may reasonably
require, in order to assure that the Borrowers are and will be in compliance
with its obligations under the Loan Documents or to evaluate the Banks'
investment in the then outstanding Notes.
Section 6.3 Maintenance and Repairs.
Maintain in good repair, working order and condition, subject to normal wear and
tear, all material properties and assets from time to time owned by it and used
in or necessary for the operation of its business, and make all reasonable
repairs, replacements, additions and improvements thereto.
Section 6.4 Continuance of Business.
Do, or cause to be done, all things reasonably necessary to preserve and keep in
full force and effect its corporate existence and all permits, rights and
privileges necessary for the proper conduct of its business and continue to
engage in the same line of business and comply in all material respects with all
applicable laws, regulations and orders.
Section 6.5 Copies of Corporate Documents.
Subject to the prohibitions set forth in Section 7.12 hereof, promptly deliver
to the Agent copies of any amendments or modifications to its and any
Subsidiary's certificate of incorporation and by-laws, certified with respect to
the certificate of incorporation by the Secretary of State of its state of
incorporation and, with respect to the by-laws, by the secretary or assistant
secretary of such corporation.
Section 6.6 Perform Obligations.
Pay and discharge all of its material obligations and liabilities, including,
without limitation, all taxes, assessments and governmental charges upon its
income and properties when due, unless and to the extent only that such
obligations, liabilities, taxes, assessments and governmental charges shall be
contested in good faith and by appropriate proceedings and that, to the extent
required by GAAP then in effect, proper and adequate book reserves relating
thereto are established by the Borrowers, or, as the case may be, by the
appropriate Subsidiary, and then only to the extent that a bond is filed in
cases where the filing of a bond is necessary to avoid the creation of a Lien
against any of its properties.
Section 6.7 Notice of Litigation.
Promptly notify the Agent in writing of any litigation, legal proceeding or
dispute, other than disputes in the ordinary course of business or, whether or
not in the ordinary course of business, involving amounts in excess of Two
Hundred Fifty Thousand ($250,000) Dollars, affecting any Borrower or any
Subsidiary whether or not fully covered by insurance, and regardless of the
subject matter thereof (excluding, however, any actions relating to workers'
compensation claims or negligence claims relating to use of motor vehicles, if
fully covered by insurance, subject to deductibles and general liability claims
of less than $5,000,000 fully covered by insurance).
Section 6.8 Insurance.
(i) Maintain with responsible insurance companies acceptable to the Agent such
insurance on such of its properties, in such amounts and against such risks as
is customarily maintained by similar businesses; (ii) file with the Agent upon
its request a detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby and (iii)
carry all insurance available through the PBGC or any private insurance
companies covering its obligations to the PBGC.
Section 6.9 Financial Covenants.
Have or maintain, on a consolidated basis, at all times:
(a) A ratio of total liabilities (as determined in accordance with GAAP) to
Tangible Net Worth of not more than 2.0 to 1.0.
(b) Tangible Net Worth of more than the sum of (i) $65,000,000, plus (ii)
beginning with Parent's fiscal quarter ending December 31, 2000 and with respect
to each fiscal quarter of Parent thereafter, 50% of the Borrowers' consolidated
net income (determined in accordance with GAAP), on a cumulative basis and
without any reduction for loss for each such fiscal quarter.
(c) A Leverage Ratio of not more than 3.0 to 1.0.
(d) A Fixed Charge Coverage Ratio of not less than 2.0 to 1.0.
Section 6.10 Notice of Certain Events.
(a) Promptly notify the Agent in writing of the occurrence of any Reportable
Event, as defined in Section 4043 of ERISA, if a notice of such Reportable Event
is required under ERISA to be delivered to the PBGC within 30 days after the
occurrence thereof, together with a description of such Reportable Event and a
statement of the action the Loan Party or the ERISA Affiliate intends to take
with respect thereto, together with a copy of the notice thereof given to the
PBGC.
(b) Promptly notify the Agent in writing if any Loan Party or ERISA Affiliate
receives an assessment of withdrawal liability in connection with a complete or
partial withdrawal with respect to any Multiemployer Plan, together with a
statement of the action that such Loan Party or ERISA Affiliate intends to take
with respect thereto.
(c) Promptly notify the Agent in writing if any Borrower or any other Loan Party
receives: (i) any notice of any violation or administrative or judicial
complaint or order having been filed or about to be filed against such Borrower
or such other Loan Party alleging violations of any Environmental Law and
Regulation, or (ii) any notice from any governmental body or any other Person
alleging that such Borrower or such other Loan Party is or may be subject to any
Environmental Liability; and promptly upon receipt thereof, provide the Agent
with a copy of such notice together with a statement of the action such Borrower
or such other Loan Party intends to take with respect thereto.
Section 6.11 Comply with ERISA.
Materially comply with all applicable provisions of ERISA and the Code now or
hereafter in effect.
Section 6.12 Environmental Compliance.
Operate all property owned, operated or leased by it in compliance with all
Environmental Laws and Regulations, such that no material Environmental
Liability arises under any Environmental Laws and Regulations, which would
result in a Lien on any property of any Borrower or any other Loan Party;
provided, however, that in the event that any such claim is made or any such
Environmental Liability arises, the Borrower or such other Loan Party shall
(subject to such Borrower's or such Loan Party's right to contest such claim in
good faith and at its own expense by appropriate legal proceedings; provided,
however, that during such contest, such Borrower or such other Loan Party shall,
at the option of the Agent, provide security satisfactory to the Agent, assuring
the discharge of such Borrower's or such Loan Party's obligation thereunder and
of any additional interest charge, penalty or expense arising from or incurred
as a result of such contest), at its own cost and expense, in a timely manner,
immediately satisfy such claim or Environmental Liability.
Section 6.13 Certain Subsidiary Matters.
(a) With respect to each fiscal year of Parent, ensure that Persons that are the
Borrowers account for not less than 95% of Parent's consolidated net income (as
determined in accordance with GAAP).
(b) With respect to each Foreign Subsidiary, ensure that (i) each office
maintained by each such Foreign Subsidiary is a Non-Material Office, (ii) such
Foreign Subsidiaries do not own real and/or personal property that has a fair
market value in excess of $750,000 with respect to all such property owned by
such Foreign Subsidiaries in the aggregate and (iii) with respect to any fiscal
year of Parent, such Foreign Subsidiaries do not in the aggregate account for
more than 5% of Parent's consolidated net income (as determined in accordance
with GAAP).
ARTICLE 7
Negative Covenants
While the Commitments are outstanding, and, in the event any Loan remains
outstanding, so long as any Borrower is indebted to the Banks or the Agent and
until payment in full of the Notes and full and complete performance of all of
their other obligations arising hereunder, no Borrower shall and not permit any
of its Subsidiaries to do, agree to do, or permit to be done, any of the
following:
Section 7.1 Indebtedness.
Create, incur, permit to exist or have outstanding any Indebtedness, except:
(a) Indebtedness of the Borrowers to the Banks and the Agent and under this
Agreement and the Notes;
(b) Indebtedness incurred in connection with a Permitted Acquisition; provided
that the amount thereof at any one time outstanding with respect to all
Permitted Acquisitions in the aggregate shall not exceed $3,000,000;
(c) Taxes, assessments and governmental charges, non-interest bearing accounts
payable and accrued liabilities, in any case not more than 90 days past due from
the original due date thereof, and non-interest bearing deferred liabilities
other than for borrowed money (e.g., deferred compensation and deferred taxes),
in each case incurred and continuing in the ordinary course of business;
(d) As set forth on Schedule 7.1 hereto; and
(e) Other Indebtedness; provided that the amount thereof at any one time
outstanding with respect to all such other Indebtedness shall not exceed
$1,000,000;
provided that, notwithstanding the foregoing, the aggregate amount of
Indebtedness permitted to be outstanding pursuant to subsection 7.1(b) and
subsection 7.1(e) shall not in the aggregate exceed $3,000,000.
Section 7.2 Liens.
Create, or assume or permit to exist, any Lien on any of the properties or
assets of any Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, except:
(a) Permitted Liens;
(b) Purchase money mortgages or security interests, conditional sale
arrangements and other similar security interests, on motor vehicles and
equipment acquired by any Borrower or any Subsidiary (hereinafter referred to
individually as a "Purchase Money Security Interest") with the proceeds of the
Indebtedness permitted by subsection 7.1(e) hereof; provided, however, that:
(i) The transaction in which any Purchase Money Security Interest is proposed to
be created is not then prohibited by this Agreement;
(ii) Any Purchase Money Security Interest shall attach only to the property or
asset acquired in such transaction and shall not extend to or cover any other
assets or properties of any Borrower or, as the case may be, a Subsidiary;
(iii) The Indebtedness secured or covered by any Purchase Money Security
Interest shall not exceed the lesser of the cost or fair market value of the
property or asset acquired and shall not be renewed, extended or prepaid from
the proceeds of any borrowing by any Borrower or any Subsidiary; and
(iv) The Indebtedness secured or covered by any Purchase Money Security Interest
shall not exceed the amount of Indebtedness permitted by subsection 7.1(e)
hereof (including the proviso at the end of Section 7.1);
(c) The interests of the lessor under any Capitalized Lease;
(d) As set forth on Schedule 7.2 hereto; and
(e) With the prior written consent of the Agent and the Required Banks (which
consent shall not be unreasonably withheld), Liens on property acquired pursuant
to a Permitted Acquisition; provided, however, that:
(i) any such Lien shall attach only to the property or asset acquired in such
Permitted Acquisition and shall not extend to or cover any other assets or
properties of any Borrower or, as the case may be, a Subsidiary; and
(ii) The Indebtedness secured or covered by any such Lien shall not exceed the
lesser of the cost or fair market value of the property or asset acquired and
shall not be renewed, extended or prepaid from the proceeds of any borrowing by
any Borrower or any Subsidiary; and
(iii) The Indebtedness secured or covered by any such Lien shall not exceed the
amount of Indebtedness permitted by subsection 7.1(b) or Section 7.1(e) hereof
(including the proviso at the end of Section 7.1).
Section 7.3 Guaranties.
Except as set forth on Schedule 7.1 hereto, assume, endorse, be or become liable
for, or guarantee, the obligations of any Person, except (i) by the endorsement
of negotiable instruments for deposit or collection in the ordinary course of
business; (ii) guarantees of loans to employees of a Borrower provided, that,
the aggregate amount of such guaranteed Indebtedness at any one time outstanding
shall not exceed $1,000,000 and (iii) guarantees by a Borrower of Indebtedness
of another Borrower permitted by Section 7.1 hereof. For the purposes hereof,
the term "guarantee" shall include any agreement, whether such agreement is on a
contingency or otherwise, to purchase, repurchase or otherwise acquire
Indebtedness of any other Person, or to purchase, sell or lease, as lessee or
lessor, property or services, in any such case primarily for the purpose of
enabling another Person to make payment of Indebtedness, or to make any payment
(whether as an advance, capital contribution, purchase of an equity interest or
otherwise) to assure a minimum equity, asset base, working capital or other
balance sheet or financial condition, in connection with the Indebtedness of
another Person, or to supply funds to or in any manner invest in another Person
in connection with such Person's Indebtedness.
Section 7.4 Mergers, Acquisitions.
Merge or consolidate with any Person (whether or not any Borrower or any
Subsidiary is the surviving entity), or acquire all or substantially all of the
assets or any of the Capital Stock of any Person except Permitted Acquisitions.
Section 7.5 Redemptions; Distributions.
(a) At any time a Default or Event of Default has occurred and is continuing or
would result therefrom, purchase, redeem, retire or otherwise acquire, directly
or indirectly, or make any sinking fund payments with respect to, any shares of
any class of stock of any Borrower or any Subsidiary now or hereafter
outstanding or set apart any sum for any such purpose; or
(b) Declare or pay any dividends or make any distribution of any kind on any
Borrower's outstanding stock, or set aside any sum for any such purpose, except
that (i) a Subsidiary Borrower may declare or pay any dividend to Parent and
(ii) a Borrower may declare or pay any dividend payable solely in shares of its
common stock.
Section 7.6 Stock Issuance.
Issue any additional shares or any right or option to acquire any shares, or any
security convertible into any shares, of preferred stock of any Borrower or any
Subsidiary.
Section 7.7 Changes in Business.
Make any material change in its business, or in the nature of its operation, or
liquidate or dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, assign, transfer or otherwise dispose of any of its
property, assets or business except dispositions of obsolete equipment and other
dispositions in the ordinary course of business and for a fair consideration or
dispose of any shares of stock or any Indebtedness, whether now owned or
hereafter acquired, or discount, sell, pledge, hypothecate or otherwise dispose
of accounts receivable.
Section 7.8 Prepayments.
Make any voluntary or optional prepayment of any Indebtedness for borrowed money
incurred or permitted to exist under the terms of this Agreement, other than
Indebtedness evidenced by the Notes, unless and to the extent refinanced with
new long term Indebtedness on terms (including amortization and maturity) at
least as favorable to the Borrowers as the Indebtedness being prepaid.
Section 7.9 Investments.
Make, or suffer to exist, any Investment in any Person, including, without
limitation, any shareholder, director, officer or employee of any Borrower or
any of the Subsidiaries, except:
(a) Investments in:
(i) obligations issued or guaranteed by the United States of America;
(ii) certificates of deposit, bankers acceptances and other "money market
instruments" issued by any bank or trust company organized under the laws of the
United States of America or any State thereof and having capital and surplus in
an aggregate amount of not less than $100,000,000;
(iii) open market commercial paper bearing the highest credit rating issued by
Standard & Poor's Corporation or by another nationally recognized credit rating
agency;
(iv) repurchase agreements entered into with any bank or trust company organized
under the laws of the United States of America or any State thereof and having
capital and surplus in an aggregate amount of not less than $100,000,000
relating to United States of America government obligations;
(v) shares of "money market funds", each having net assets of not less than
$100,000,000; in each case maturing or being due or payable in full not more
than 180 days after a Borrower's acquisition thereof; and
(vi) accounts receivable arising out of sales of inventory in the ordinary
course of business;
(b) Investments in Subsidiaries that are acquired pursuant to a Permitted
Acquisition; provided such Subsidiary becomes a Borrower pursuant to Section
7.13 of this Agreement;
(c) Other Investments; provided, that, the amount of all such other Investments
at any one time outstanding shall not exceed $500,000 in the aggregate with
respect to all such other Investments;
(d) Investments by any Borrower in any other Borrower;
(e) Investments existing as of September 30, 2000 in the aggregate amount of
$1,620,000 as reflected in the Financial Statements; and
(f) Investments in ICEE of Mexico, a Foreign Subsidiary, in the aggregate amount
not in excess of $930,000 and other Investments by a Borrower in Foreign
Subsidiaries; provided, that, the aggregate amount of all such other Investments
at any one time outstanding shall not exceed $500,000.
Section 7.10 Fiscal Year.
Change its fiscal year.
Section 7.11 ERISA Obligations.
(a) Permit the occurrence of any Termination Event, or the occurrence of a
termination or partial termination of a Defined Contribution Plan which would
result in a liability to any Loan Party or ERISA Affiliate; or
(b) Permit the present value of all benefit liabilities under all Pension Plans
to exceed the current value of the assets of such Pension Plans allocable to
such benefit liabilities; or
(c) Permit any accumulated deficiency (as defined in Section 302 of ERISA and
Section 412 of the Code) with respect to any Pension Plan, whether or not
waived; or
(d) Fail to make any contribution or payment to any Multiemployer Plan which any
Loan Party or ERISA Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law pertaining thereto which results
in or is likely to result in any liability; or
(e) Engage, or permit any Loan Party or ERISA Affiliate to engage, in any
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code,
for which a civil penalty pursuant to Section 502(i) of ERISA or a tax pursuant
to Section 4975 of the Code is imposed; or
(f) Engage or permit any Loan Party or ERISA Affiliate to engage, in any breach
of fiduciary duty under Part 4 of Title I of ERISA; or
(g) Permit the establishment of any Employee Benefit Plan providing post-
retirement welfare benefits or establish or amend any Employee Benefit Plan
which establishment or amendment could result in liability to any Loan Party or
ERISA Affiliate or increase the obligation of any Loan Party or ERISA Affiliate
to a Multiemployer Plan which liability or increase, individually or together
with all similar liabilities and increases, is material to any Loan Party or
ERISA Affiliate; or
(h) Permit any Loan Party or ERISA Affiliate to be or become obligated to the
PBGC other than in respect of annual premium payments; or
(i) Fail, or permit any Loan Party or ERISA Affiliate to fail, to establish,
maintain and operate each Employee Benefit Plan in compliance in all material
respects with the provisions of ERISA, the Code and all other applicable laws
and the regulations and interpretations thereof.
Section 7.12 Amendments of Documents.
Modify, amend, supplement or terminate, or agree to modify, amend, supplement or
terminate, its certificate of incorporation or by-laws.
Section 7.13 Additional Subsidiaries
Not allow any Domestic Subsidiary to be acquired or established by any Borrower
after the date of this Agreement unless and until the Borrowers shall have
caused such new Domestic Subsidiary to become a Borrower hereunder and in
connection therewith shall execute, and shall have caused such new Domestic
Subsidiary to execute, a Joinder and any other documentation reasonably
requested by the Agent, which may include amendments to this Agreement.
Section 7.14 Double Negative Pledge.
No Borrower shall enter into any agreement which prohibits or limits the ability
of any Borrower to create, incur, assume or suffer to exist any Lien upon any of
its property or revenues, whether now owned or hereafter acquired.
Section 7.15 Intentionally Omitted.
Section 7.16 Intentionally Omitted.
Section 7.17 Transactions with Affiliates.
Except as expressly permitted by this Agreement, directly or indirectly: (a)
make any Investment in any of its Affiliates that is not a Borrower; (b)
transfer, sell, lease, assign or otherwise dispose of any assets to any of its
Affiliates that is not a Borrower; (c) merge into or consolidate with or
purchase or acquire assets from any of its Affiliates that is not a Borrower; or
(d) enter into any other transaction directly or indirectly with or for the
benefit of any of its Affiliates that is not a Borrower (including, without
limitation, guarantees and assumptions of obligations of such an Affiliate);
provided, however, that: (i) payments on Investments expressly permitted by
Section 7.9 hereof may be made, (ii) any Affiliate of a Borrower who is a
natural person may serve as an employee or director of any Borrower and receive
reasonable compensation for his services in such capacity, and (iii) any
Borrower may enter into any transaction with any of its Affiliates that is not a
Borrower providing for the leasing of property, the rendering or receipt of
services or the purchase or sale of product, inventory and other assets in the
ordinary course of business if the monetary or business consideration arising
therefrom would be substantially as advantageous to such Borrower as the
monetary or business consideration that would obtain in a comparable arm's
length transaction with a Person not an Affiliate of a Borrower.
Section 7.18 Hazardous Material.
(a) Cause or permit:
(i) any Hazardous Material to be placed, held, located or disposed of, on, under
or at any real property owned by a Borrower or any part thereof, except for such
Hazardous Materials that are necessary for any Borrower's or any Subsidiary's or
any tenant's operation of its business thereon and which shall be used, stored,
treated and disposed of in compliance with all applicable Environmental Laws and
Regulations; or
(ii) such real property or any part thereof to be used as a collection, storage,
treatment or disposal site for any Hazardous Material.
(b) Each Borrower and each Subsidiary acknowledges and agrees that the Agent and
the Banks shall have no liability or responsibility for either:
(i) damage, loss or injury to human health, the environment or natural resources
caused by the presence, disposal, release or threatened release of Hazardous
Materials on any part of such real property; or
(ii) abatement and/or clean-up required under any applicable Environmental Laws
and Regulations for a release, threatened release or disposal of any Hazardous
Materials located at such real property or used by or in connection with any
Borrower's or any Subsidiary's or any such tenant's business.
ARTICLE 8
Events of Default.
If any one or more of the following events ("Events of Default") shall occur and
be continuing, the Commitments shall terminate and the entire unpaid balance of
the principal of and interest on the Notes outstanding and all other obligations
and Indebtedness of any and/or all of the Borrowers to the Banks and the Agent
arising hereunder and under the other Loan Documents shall immediately become
due and payable upon written notice to that effect given to a Borrower by the
Agent (except that in the case of the occurrence of any Event of Default
described in Section 8.6 no such notice shall be required), without presentment
or demand for payment, notice of non-payment, protest or further notice or
demand of any kind, all of which are expressly waived by each Borrower:
Section 8.1 Payments.
(a) Failure to make any payment of interest upon any Note or to make any payment
of any Fee within five days of when due; or
(b) Failure to make any payment or mandatory prepayment of principal upon any
Note when due; or
Section 8.2 Certain Covenants.
(a) Failure to perform or observe any of the agreements of any Borrower or any
Subsidiary contained in Section 6.9 hereof; or
(b) Failure to perform or observe any of the agreements of any Borrower or any
Subsidiary contained in Article 7 hereof; provided, that, the failure to perform
or observe any of such agreements of any Borrower or any Subsidiary has or may
result in a Material Adverse Effect; or
Section 8.3 Other Covenants.
(a) Failure by any Borrower to (i) perform or observe any of the agreements of
any Borrower or any Subsidiary contained in Article 7 hereof that has not or may
not result in a Material Adverse Effect and (ii) perform or observe any other
term, condition or covenant of this Agreement not covered by any of the other
Events of Default set forth in this Article 8 or of any of the other Loan
Documents to which it is a party, in each case which shall remain unremedied for
a period of 30 days after notice thereof shall have been given to a Borrower by
the Agent; or
(b) Failure by any Loan Party other than a Borrower to perform or observe any
term, condition or covenant of any of the Loan Documents to which it or he is a
party, which shall remain unremedied for a period of 30 days after notice
thereof shall have been given to a Borrower by the Agent; or
Section 8.4 Other Defaults.
(a) Failure to perform or observe any term, condition or covenant of any bond,
note, debenture, loan agreement, indenture, guaranty, trust agreement, mortgage
or similar instrument to which any Borrower or any Subsidiary is a party or by
which it is bound, or by which any of its properties or assets may be affected
(a "Debt Instrument"), so that, as a result of any such failure to perform, the
Indebtedness included therein or secured or covered thereby may be declared due
and payable prior to the date on which such Indebtedness would otherwise become
due and payable; or
(b) Any event or condition referred to in any Debt Instrument shall occur or
fail to occur, so that, as a result thereof, the Indebtedness included therein
or secured or covered thereby may be declared due and payable prior to the date
on which such Indebtedness would otherwise become due and payable; or
(c) Failure to pay any Indebtedness for borrowed money due at final maturity or
pursuant to demand under any Debt Instrument;
provided, however, that the provisions of this Section 8.4 shall not be
applicable to any Debt Instrument that on the date this Section 8.4 would
otherwise be applicable thereto, relates to or evidences Indebtedness in a
principal amount of less than Five Hundred Thousand ($500,000) Dollars; or
Section 8.5 Representations and Warranties.
Any representation or warranty made in writing to the Banks or the Agent in any
of the Loan Documents or in connection with the making of the Loans, or any
certificate, statement or report made or delivered in compliance with this
Agreement, shall have been false or misleading in any material respect when made
or delivered; or
Section 8.6 Bankruptcy.
(a) Any Borrower or any Subsidiary shall make an assignment for the benefit of
creditors, file a petition in bankruptcy, be adjudicated insolvent, petition or
apply to any tribunal for the appointment of a receiver, custodian, or any
trustee for it or him or a substantial part of its or his assets, or shall
commence any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect, or any Borrower or any
Subsidiary shall take any corporate action to authorize any of the foregoing
actions; or there shall have been filed any such petition or application, or any
such proceeding shall have been commenced against it or him, that remains
undismissed for a period of sixty (60) days or more; or any order for relief
shall be entered in any such proceeding; or any Borrower or any Subsidiary by
any act or omission shall indicate its or his consent to, approval of or
acquiescence in any such petition, application or proceeding or the appointment
of a custodian, receiver or any trustee for it or him or any substantial part of
any of its or his properties, or shall suffer any custodianship, receivership or
trusteeship to continue undischarged for a period of sixty (60) days or more; or
(b) Any Borrower or any Subsidiary shall generally not pay its or his debts as
such debts become due; or
(c) Any Borrower or any Subsidiary shall have concealed, removed, or permitted
to be concealed or removed, any part of its or his property, with intent to
hinder, delay or defraud its or his creditors or any of them or made or suffered
a transfer of any of its or his property that may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or shall have made any
transfer of its or his property to or for the benefit of a creditor at a time
when other creditors similarly situated have not been paid; or shall have
suffered or permitted, while insolvent, any creditor to obtain a Lien upon any
of its or his property through legal proceedings or distraint that is not
vacated within sixty (60) days from the date thereof; or
Section 8.7 Judgments.
Any judgment against any Borrower or any Subsidiary or any attachment, levy or
execution against any of its properties for any amount in excess of Two Hundred
Fifty Thousand ($250,000) Dollars shall remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of sixty (60) days or more;
or
Section 8.8 ERISA.
(a) The termination of any Plan or the institution by the PBGC of proceedings
for the involuntary termination of any Plan, in either case, by reason of, or
that results or could result in, a "material accumulated funding deficiency"
under Section 412 of the Code; or
(b) Failure by any Borrower to make required contributions, in accordance with
the applicable provisions of ERISA, to each of the Plans hereafter established
or assumed by it; or
Section 8.9 Ownership of Stock.
Gerald Shreiber (or, in the event of the death of any of them, his estate, legal
representative or heirs) shall at any time own, beneficially and of record, less
than 10% in the aggregate of all of the issued and outstanding shares of Capital
Stock of Parent having ordinary voting rights for the election of directors; or
Section 8.10 Management.
Gerald Shreiber shall cease for any reason whatsoever, including, without
limitation, death or disability (as such disability shall be determined in the
sole and absolute judgment of the Agent) to be and continuously perform the
duties of chief executive officer of Parent or, if such cessation shall occur as
a result of the death or such disability, no successor satisfactory to the
Agent, in its sole discretion, shall have become and shall have commenced to
perform the duties of chief executive officer of Parent within one hundred
twenty (120) days after such cessation; provided, however, that if any
satisfactory successor shall have been so elected and shall have commenced
performance of such duties within such period, the name of such successor or
successors shall be deemed to have been inserted in place of Gerald Shreiber in
this Section 8.10.
ARTICLE 9
The Agent
Section 9.1 Appointment, Powers and Immunities.
Each Bank hereby irrevocably appoints and authorizes the Agent to act as its
agent hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms of this Agreement and the other
Loan Documents together with such other powers as are reasonably incidental
thereto. The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the other Loan Documents and shall not
be a trustee for any Bank. The Agent shall not be responsible to the Banks for
any recitals, statements, representations or warranties contained in this
Agreement, or the other Loan Documents in any certificate or other document
referred to or provided for in, or received by any of them under, this Agreement
or the other Loan Documents, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or any other document referred to or provided for herein or therein or
for the collectibility of the Loans or for any failure by any Borrower or any of
the other Loan Parties to perform any of its obligations hereunder or under the
other Loan Documents. The Agent may employ agents and attorneys-in-fact and
shall not be answerable, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the Agent nor any
of its directors, officers, employees or agents shall be liable or responsible
for any action taken or omitted to be taken by it or them hereunder or the other
Loan Documents or in connection herewith or therewith, except for its or their
own gross negligence or willful misconduct.
Section 9.2 Reliance by Agent.
The Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper person or persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the Agent.
As to any matters not expressly provided for by this Agreement or the other Loan
Documents, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or the other Loan Documents in accordance with
instructions signed by the Required Banks, and such instructions of the Required
Banks and any action taken or failure to act pursuant thereto shall be binding
on all of the Banks.
Section 9.3 Events of Default.
The Agent shall not be deemed to have knowledge of the occurrence of a Default
(other than the non-payment of principal of or interest on Loans) unless the
Agent has received notice from a Bank or a Borrower specifying such Default and
stating that such notice is a "Notice of Default". In the event that the Agent
receives such a notice of the occurrence of a Default, the Agent shall give
notice thereof to the Banks (and shall give each Bank notice of each such non-
payment). The Agent shall (subject to Section 9.7 hereof) take such action with
respect to such Default as shall be directed by the Required Banks.
Section 9.4 Rights as a Bank.
With respect to its Commitment and the Loans made by it, the Agent in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though it were not acting as the
Agent, and the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. The Agent and its
Affiliates may (without having to account therefor to any Bank) accept deposits
from, lend money to and generally engage in any kind of banking, trust or other
business with the Borrowers or their Affiliates, as if it were not acting as the
Agent, and the Agent may accept fees and other consideration from the Borrowers
or their Affiliates, for services in connection with this Agreement or any of
the other Loan Documents or otherwise without having to account for the same to
the Banks.
Section 9.5 Indemnification.
The Banks shall indemnify the Agent (to the extent not reimbursed by the
Borrowers under Sections 10.1 and 10.2 hereof), ratably in accordance with the
aggregate principal amount of the Loans made by the Banks (or, if no Loans are
at the time outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever that may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or any
of the other Loan Documents or any other documents contemplated by or referred
to herein or therein or the transactions contemplated by or referred to herein
or therein or the transactions contemplated hereby and thereby (including,
without limitation, the costs and expenses that the Borrowers are obligated to
pay under Sections 10.1 and 10.2 hereof, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof, or of any such other documents, provided that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.
Section 9.6 Non-Reliance on Agent and other Banks.
Each Bank agrees that it has, independently and without reliance on the Agent or
any other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of each Borrower and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or the other Loan
Documents. The Agent shall not be required to keep itself informed as to the
performance or observance by any Borrower of this Agreement or the other Loan
Documents or any other document referred to or provided for herein or therein or
to inspect the properties or books of any Borrower. Except for notices, reports
and other documents and information expressly required to be furnished to the
Banks by the Agent hereunder or under the other Loan Documents, the Agent shall
not have any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of any
Borrower, that may come into the possession of the Agent or any of its
Affiliates.
Section 9.7 Failure to Act.
Except for action expressly required of the Agent hereunder, the Agent shall in
all cases be fully justified in failing or refusing to act hereunder or
thereunder unless it shall be indemnified to its satisfaction by the Banks
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action.
Section 9.8 Resignation or Removal of Agent.
Subject to the appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving not less than 30 days' prior
written notice thereof to the Banks and a Borrower and the Agent may be removed
at any time with or without cause by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Banks and shall have accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation or the Required Banks' removal
of the retiring Agent, then the retiring Agent may, on behalf of the Banks,
after consultation with Parent, appoint a successor Agent which shall be a bank
that has an office in New Jersey with a combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article 9 shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as the Agent.
Section 9.9 Sharing of Payments.
(a) Prior to any acceleration by the Agent and the Banks of the Obligations:
(i) in the event that any Bank shall obtain payment in respect of a Note, or
interest thereon, whether voluntarily or involuntarily, and whether through the
exercise of a right of banker's lien, set-off or counterclaim against any
Borrower or any other Loan Party or otherwise, in a greater proportion than any
such payment obtained by any other Bank in respect of the corresponding Note
held by it, then the Bank so receiving such greater proportionate payment shall
purchase for cash from the other Bank or Banks such portion of each such other
Bank's or Banks' Loan as shall be necessary to cause such Bank receiving the
proportionate overpayment to share the excess payment with each Bank; and
(ii) in the event that any Bank shall obtain payment in respect of any Interest
Rate Contract to which such Bank is a party, whether voluntarily or
involuntarily, and whether through the exercise of a right of banker's lien,
set-off or counterclaim against any Borrower or any other Loan Party or
otherwise, such Bank shall be permitted to retain the full amount of such
payment and shall not be required to share such payment with any other Bank.
(b) Upon or following any acceleration by the Agent and the Banks of the
Oligations, in the event that any Bank shall obtain payment in respect of a
Note, or interest thereon, whether voluntarily or involuntarily, and whether
through the exercise of a right of banker's lien, set-off or counterclaim
against any Borrower or any other Loan Party or otherwise, in a greater
proportion than any such payment obtained by any other Bank in respect of the
aggregate amount of the corresponding Note held by such Bank and any Interest
Rate Contract to which such Bank is a party, then the Bank so receiving such
greater proportionate payment, shall purchase for cash from the other Bank or
Banks such portion of each such other Bank's or Banks' Loan, as shall be
necessary to cause such Bank receiving the proportionate overpayment to share
the excess payment ratably with each Bank. For the purposes of this subsection
9.9(b), payments on Notes received by each Bank shall be in the same proportion
as the proportion of: (A) the sum of: (x) the Obligations owing to such Bank
in respect of the Note held by such Bank, plus (y) the Obligations owing to such
Bank in respect of Interest Rate Contracts to which such Bank is party, if any,
to (B) the sum of: (x) the Obligations owing to all of the Banks in respect of
all of the Notes, plus (y) the Obligations owing to all of the Banks in respect
of all Interest Rate Contracts to which any Bank is a party;
provided, however, that, with respect to subsections 9.9(a)(i) and (b) above, if
all or any portion of such excess payment or benefits is thereafter recovered
from the Bank that received the proportionate overpayment, such purchase of
Loans or payment of benefits, as the case may be, shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
ARTICLE 10
Miscellaneous Provisions.
Section 10.1 Fees and Expenses; Indemnity.
The Borrowers will promptly pay all costs of the Agent in preparing the Loan
Documents and all costs and expenses of the issue of the Notes and of the
Borrowers' and the other Loan Parties' performance of and compliance with all
agreements and conditions contained herein on its part to be performed or
complied with (including, without limitation, all costs of filing or recording
any assignments, mortgages, financing statements and other documents and all
appraisal and environmental review fees and expenses), and the reasonable fees
and expenses and disbursements of counsel to the Agent in connection with the
preparation, execution and delivery, administration, interpretation and
enforcement of this Agreement, the other Loan Documents and all other
agreements, instruments and documents relating to this transaction, the
consummation of the transactions contemplated by all such documents, the
preservation of all rights of the Banks and the Agent, the negotiation,
preparation, execution and delivery of any amendment, modification or supplement
of or to, or any consent or waiver under, any such document (or any such
instrument that is proposed but not executed and delivered) and with any claim
or action threatened, made or brought against any of the Banks or the Agent
arising out of or relating to any extent to this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby (other than a claim
or action resulting from the gross negligence, willful misconduct, or
intentional violation of law by the Agent and or the Banks). In addition, the
Borrowers will promptly pay all costs and expenses (including, without
limitation, reasonable fees and disbursements of counsel) suffered or incurred
by each Bank in connection with its enforcement of the payment of the Notes held
by it or any other sum due to it under this Agreement or any of the other Loan
Documents or any of its other rights hereunder or thereunder. In addition to
the foregoing, each Borrower shall indemnify each Bank and the Agent and each of
their respective directors, officers, employees, attorneys, agents and
Affiliates against, and hold each of them harmless from, any loss, liabilities,
damages, claims, costs and expenses (including reasonable attorneys' fees and
disbursements) suffered or incurred by any of them arising out of, resulting
from or in any manner connected with, the execution, delivery and performance of
each of the Loan Documents, the Loans and any and all transactions related to or
consummated in connection with the Loans (other than as a result of the gross
negligence, willful misconduct or intentional violation of law by the Agent
and/or the Banks), including, without limitation, losses, liabilities, damages,
claims, costs and expenses suffered or incurred by any Bank or the Agent or any
of their respective directors, officers, employees, attorneys, agents or
Affiliates arising out of or related to any Environmental Liability or
Environmental Proceeding, or in investigating, preparing for, defending against,
or providing evidence, producing documents or taking any other action in respect
of any commenced or threatened litigation, administrative proceeding or
investigation under any federal securities law or any other statute of any
jurisdiction, or any regulation, or at common law or otherwise against the
Agent, the Banks or any of their officers, directors, affiliates, agents or
Affiliates, that is alleged to arise out of or is based upon: (i) any untrue
statement or alleged untrue statement of any material fact of any Borrower and
its affiliates in any document or schedule filed with the Securities and
Exchange Commission or any other governmental body; (ii) any omission or alleged
omission to state any material fact required to be stated in such document or
schedule, or necessary to make the statements made therein, in light of the
circumstances under which made, not misleading; (iii) any acts, practices or
omission or alleged acts, practices or omissions of any Borrower or its agents
related to the making of any acquisition, purchase of shares or assets pursuant
thereto, financing of such purchases or the consummation of any other
transactions contemplated by any such acquisitions that are alleged to be in
violation of any federal securities law or of any other statute, regulation or
other law of any jurisdiction applicable to the making of any such acquisition,
the purchase of shares or assets pursuant thereto, the financing of such
purchases or the consummation of the other transactions contemplated by any such
acquisition; or (iv) any withdrawals, termination or cancellation of any such
proposed acquisition for any reason whatsoever. The indemnity set forth herein
shall be in addition to any other obligations or liabilities of the Borrowers to
the Agent and the Banks hereunder or at common law or otherwise. The provisions
of this Section 10.1 shall survive the payment of the Notes and the termination
of this Agreement.
Section 10.2 Taxes.
If, under any law in effect on the date of the closing of any Loan hereunder, or
under any retroactive provision of any law subsequently enacted, it shall be
determined that any Federal, state or local tax is payable in respect of the
issuance of any Note, then the Borrowers will pay any such tax and all interest
and penalties, if any, and will indemnify the Banks and the Agent against and
save each of them harmless from any loss or damage resulting from or arising out
of the nonpayment or delay in payment of any such tax. If any such tax or taxes
shall be assessed or levied against any Bank or any other holder of a Note, such
Bank, or such other holder, as the case may be, may notify a Borrower and make
immediate payment thereof, together with interest or penalties in connection
therewith, and shall thereupon be entitled to and shall receive immediate
reimbursement therefor from the Borrower. Notwithstanding any other provision
contained in this Agreement, the covenants and agreements of the Borrowers in
this Section 10.2 shall survive payment of the Notes and the termination of this
Agreement.
Section 10.3 Payments.
(a) As set forth in Article 2 hereof, all payments by the Borrowers on account
of principal, interest, fees and other charges (including any indemnities) shall
be made to the Agent at the Principal Office of the Agent, in lawful money of
the United States of America in immediately available funds, by wire transfer or
otherwise, not later than 11:00 A.M. New Jersey time on the date such payment is
due. Any such payment made on such date but after such time shall, if the
amount paid bears interest, be deemed to have been made on, and interest shall
continue to accrue and be payable thereon until, the next succeeding Business
Day. If any payment of principal or interest becomes due on a day other than a
Business Day, such payment may be made on the next succeeding Business Day and
such extension shall be included in computing interest in connection with such
payment. Upon payment in full of any Note, the Bank holding such Note shall
mark the Note "Paid" and return it to a Borrower.
(b) All payments hereunder and under the Notes shall be made without set-off or
counterclaim.
Section 10.4 Survival of Agreements and Representations; Construction.
All agreements, representations and warranties made herein shall survive the
delivery of this Agreement and the Notes. The headings used in this Agreement
and the table of contents are for convenience only and shall not be deemed to
constitute a part hereof. All uses herein of the masculine gender or of
singular or plural terms shall be deemed to include uses of the feminine or
neuter gender, or plural or singular terms, as the context may require.
Section 10.5 Set-off of Deposits.
Each Borrower hereby agrees that, in addition to (and without limitation of) any
right of set-off, banker's lien or counterclaim a Bank may otherwise have, each
Bank shall be entitled, at its option, to offset balances held by it at any of
its offices against any principal of or interest on any of its Loans hereunder,
or any Fee payable to it, that is not paid when due (regardless of whether such
balances are then due to a Borrower), in which case it shall promptly notify a
Borrower and the Agent thereof, provided that its failure to give such notice
shall not affect the validity thereof. Furthermore, at any time, after the
occurrence and during the continuance of any Event of Default, without demand or
notice, the Agent or any Bank may set off any and all deposits or other sums at
any time credited by or due from the Agent or any Bank or any Affiliate of the
Agent or any Bank to the Borrower and/or any other Loan Party, whether now
existing or hereafter arising, whether in regular or special depository accounts
or otherwise or any part thereof and apply the same to any of the Obligations of
the Borrowers and/or any other Loan Party even though unmatured and regardless
of the adequacy of any other collateral securing the Obligations.
Section 10.6 Modifications, Consents and Waivers.
(a) Notwithstanding anything to the contrary contained in any Loan Document,
with the written consent of the Required Banks, the Agent and the Borrowers may,
from time to time, enter into written amendments, supplements or modifications
thereof and, with the consent of the Required Banks, the Agent on behalf of the
Banks, may execute and deliver to any such parties a written instrument waiving
or consenting to the departure from, on such terms and conditions as the Agent
may specify in such instrument, any of the requirements of the Loan Documents or
any Default or Event of Default and its consequences; provided, however, that no
such amendment, supplement, modification, waiver or consent shall:
(i) without the written consent of all of the Banks (A) increase the Commitment
of any Bank, (B) extend the Credit Period, (C) reduce the rate or amount, or
extend the time of payment, of the Commitment Fee , (D) reduce the rate or
amount of, or extend the time of payment of, interest on any Loan or any Note,
(E) reduce the amount, or extend the time of payment of any installment or other
payment of principal on any Loan or any Note, (F) decrease or forgive the
principal amount of any Loan or any Note, (G) consent to any assignment or
delegation by any Borrower of any of its rights or obligations under any Loan
Document; (H) change the provisions of Section 2.22, 2.24, 2.26 or this Section
10.6, (I) change the definition of "Required Banks", or any provision of this
Agreement requiring the consent or approval of all the Banks, (J) change the
several nature of the Banks' obligations, (K) change any provision governing the
sharing of payments and liabilities among the Banks, (L) amend or modify the
dollar amount set forth in Section 2.8(c)(i) hereof; or (M) release all or
substantially all of the obligations of any Borrower under any Loan Document;
provided that any increase to a Commitment or the Total Commitment in accordance
with terms of Section 2.8(c) shall not require the consent of any Bank other
than the Bank whose Commitment is being increased; and
(ii) without the written consent of the Agent, amend, modify or waive any
provision of Article 9 or otherwise change any of the rights or obligations of
the Agent under any Loan Document.
(b) No modification, amendment or waiver of or with respect to any provision of
this Agreement, any Notes, or any of the other Loan Documents and all other
agreements, instruments and documents delivered pursuant hereto or thereto, nor
consent to any departure by any Borrower from any of the terms or conditions
thereof, shall in any event be effective unless it shall be in writing and
signed by the Agent and the Banks whose consent is required as provided above.
Upon full execution, any such amendment, supplement, modification, waiver or
consent shall apply equally to the Agent, each Bank and each Borrower and shall
be binding upon Borrower, the Banks, the Agent and all future holders of the
Notes. In the case of any waiver, each Borrower, the Banks and the Agent shall
be restored to their former position and rights hereunder and under the
outstanding Notes and other Loan Documents to the extent provided for in such
waiver, any such waiver or consent shall be effective only in the specific
instance and for the purpose for which given and any Default or Event of Default
waived shall not extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon. No consent to or demand on any Borrower
in any case shall, of itself, entitle it to any other or further notice or
demand in similar or other circumstances.
Section 10.7 Remedies Cumulative; Counterclaims.
Each and every right granted to the Agent and the Banks hereunder or under any
other document delivered hereunder or in connection herewith, or allowed it by
law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of the Agent or any Bank or the holder of any Note to
exercise, and no delay in exercising, any right shall operate as a waiver
thereof, nor shall any single or partial exercise of any right preclude any
other or future exercise thereof or the exercise of any other right. The due
payment and performance of the Obligations shall be without regard to any
counterclaim, right of offset or any other claim whatsoever that any Borrower
may have against any Bank or the Agent and without regard to any other
obligation of any nature whatsoever that any Bank or the Agent may have to any
Borrower, and no such counterclaim or offset shall be asserted by any Borrower
(unless such counterclaim or offset would, under applicable law, be permanently
and irrevocably lost if not brought in such action) in any action, suit or
proceeding instituted by any Bank or the Agent for payment or performance of the
Obligations .
Section 10.8 Further Assurances.
At any time and from time to time, upon the request of the Agent, each Borrower
shall execute, deliver and acknowledge or cause to be executed, delivered and
acknowledged, such further documents and instruments and do such other acts and
things as the Agent may reasonably request in order to fully effect the purposes
of this Agreement, the other Loan Documents and any other agreements,
instruments and documents delivered pursuant hereto or in connection with the
Loans.
Section 10.9 Notices.
All notices, requests, reports and other communications pursuant to this
Agreement shall be in writing, either by letter (delivered by hand or commercial
messenger service or sent by certified mail, return receipt requested, except
for routine reports delivered in compliance with Article 5 hereof which may be
sent by ordinary first-class mail) or telegram or telecopy, addressed as
follows:
(a) If to any Borrower:
C/o J & J Snack Foods Corp.
6000 Central Highway
Pennsauken, NJ 08109
Attention: Mr. Dennis Moore, Chief Financial Officer
Telecopier No.: (856) 488-7587
with a copy to:
Blank Rome Comisky & McCauley
Woodland Falls Corporate Park
210 Lake Drive East
Cherry Hill, NJ 08002
Attention: A. Fred Ruttenberg, Esq.
Telecopier No.: (856) 779-7647
(b) If to any Bank:
To its address set forth below its
name on the signature pages hereof,
with a copy to the Agent; and
(c) If to the Agent:
Fleet National Bank, as Agent
208 Harristown Road
Glen Rock, New Jersey 07452
Attention: Kathryn Murphy, Vice President
Telecopier No.: (201) 251-5275
with a copy (other than in the case
of Borrowing Notices and reports
and other documents delivered in
compliance with Article 5 hereof) to:
Emmet, Marvin & Martin, LLP
120 Broadway
New York, New York 10271
Attention: Richard M. Skoller, Esq.
Telecopier No.: (212) 238-3100
Any notice, request, demand or other communication hereunder shall be deemed to
have been given on: (x) the day on which it is telecopied to such party at its
telecopier number specified above (provided such notice shall be effective only
if followed by one of the other methods of delivery set forth herein) or
delivered by receipted hand or such commercial messenger service to such party
at its address specified above, or (y) on the third Business Day after the day
deposited in the mail, postage prepaid, if sent by mail, or (z) on the day it is
delivered to the telegraph company, addressed as aforesaid, if sent by
telegraph. Any party hereto may change the person, address or telecopier number
to whom or which notices are to be given hereunder, by notice duly given
hereunder; provided, however, that any such notice shall be deemed to have been
given hereunder only when actually received by the party to which it is
addressed.
Section 10.10 Counterparts.
This Agreement may be signed in any number of counterparts with the same effect
as if the signatures thereto and hereto were upon the same instrument.
Section 10.11 Severability.
The provisions of this Agreement are severable, and if any clause or provision
hereof shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction and shall not in any
manner affect such clause or provision in any other jurisdiction, or any other
clause or provision in this Agreement in any jurisdiction. Each of the
covenants, agreements and conditions contained in this Agreement is independent
and compliance by the Borrowers with any of them shall not excuse non-compliance
by the Borrowers with any other. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 10.12 Binding Effect; No Assignment or Delegation by Borrowers.
This Agreement shall be binding upon and inure to the benefit of each Borrower
and its successors and to the benefit of the Banks and the Agent and their
respective successors and assigns. The rights and obligations of the Borrowers
under this Agreement shall not be assigned or delegated without the prior
written consent of the Agent, and any purported assignment or delegation without
such consent shall be void.
Section 10.13 Assignments and Participations by Banks.
(a) Each Bank may, with the prior written consent of the Agent and a Borrower
(which consents shall not be unreasonably withheld; provided that, at any time a
Default or Event of Default has occurred and is continuing, the prior consent of
a Borrower shall not be required), assign to one or more banks or other
entities all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment, the Loans
owing to it, and the Note or Notes held by it); provided, however, that: (i)
each such assignment shall be of a constant, and not a varying, percentage of
all of the assigning Bank's rights and obligations under this Agreement, (ii)
the amount of the Commitment of the assigning Bank being assigned pursuant to
each such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than $5,000,000 and
shall be an integral multiple of $1,000,000 for amounts in excess thereof, and
(iii) each such assignment shall be to an Eligible Assignee. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least two Business Days after the execution thereof: (x) 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, have the rights and obligations of a Bank hereunder, and (y) the
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Bank's rights and obligations under this Agreement, such
Bank shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the Bank assignor
thereunder and the assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Bank makes no representation or warranty and assumes
no responsibility with respect to the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of such financial statements and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Bank or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by it as a Bank.
(c) Upon its receipt of an Assignment and Acceptance executed by an assigning
Bank and an assignee representing that it is an Eligible Assignee, together with
any Note subject to such assignment, the Agent shall: (i) accept such
Assignment and Acceptance, and (ii) give prompt notice thereof to a Borrower.
Within five Business Days after its receipt of such notice, the Borrowers, at
their own expense, shall execute and deliver to the Agent in exchange for the
surrendered Note a new Note to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Bank has retained a Commitment hereunder, a new Note to
the order of the assigning Bank in an amount equal to the Commitment retained by
it hereunder. Such new Note shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Note, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A hereto.
(d) Each Bank may, without the prior consent of the other Banks or any Borrower,
sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment), the Loans owing to it, and the
Note held by it; provided, however, that: (i) such Bank's obligations under this
Agreement (including, without limitation, its Commitment hereunder) shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Bank shall remain the
holder of any such Note for all purposes of this Agreement, and (iv) the
Borrowers, the Agent and the other Banks shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement.
(e) Any Bank may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 10.13, disclose to the
assignee or participant or proposed assignee or participant, any information
relating to the Borrowers furnished to such Bank by or on behalf of the
Borrowers; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Borrowers
received by it from such Bank.
(f) Anything in this Section 10.13 to the contrary notwithstanding, any Bank may
assign and pledge all or any portion of its Loans and its Notes to any Federal
Reserve Bank (and its transferees) as collateral security pursuant to Regulation
A of the Board of Governors of the Federal Reserve System and any Operating
Circular issued by such Federal Reserve Bank. No such assignment shall release
the assigning Bank from its obligations hereunder.
Section 10.14 Delivery of Tax Forms.
Each Bank that is not organized under the laws of the United States or a state
thereof shall:
(a) deliver to a Borrower and the Agent, on or prior to the date of the
execution and delivery of this Agreement: (i) two accurate and duly completed
executed copies of United States IRS Form 1001 or 4224, or successor applicable
form, as the case may be, and (ii) an accurate and complete IRS Form W-8 or W-9,
or successor applicable form, as the case may be;
(b) deliver to a Borrower and the Agent two further accurate and complete
executed copies of any such form or certification on or before the date that any
such form or certification expires or becomes obsolete and after the occurrence
of any event requiring a change in the most recent form previously delivered by
it to a Borrower; and
(c) obtain such extensions of time for filing and completing such forms or
certifications as may reasonably be requested by a Borrower or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank so advises a Borrower and the Agent. Such
Bank shall certify: (i) in the case of a Form 1001 or 4224 that is required
pursuant to subsection 10.14(a), that it is entitled to receive payments under
this Agreement without deduction or withholding of any United States Federal
income taxes; (ii) in the case of an IRS Form 1001 or 4224, that is provided
pursuant to subsection 10.14(b), to the extent legally entitled to do so, that
it is entitled to receive payments under this Agreement without, or at a reduced
rate of, deduction or withholding of any United States Federal income taxes; and
(iii) in the case of a Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax. Each Person not organized under the laws
of the United States or a state thereof that is an assignee hereunder shall,
prior to the effectiveness of the related transfer, be required to provide all
of the forms and statements required pursuant to this subsection 10.14.
Section 10.15 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF TRIAL BY JURY .
(a) THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL OTHER DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH AND THEREWITH, SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW JERSEY WITHOUT REGARD TO ITS RULES PERTAINING TO CONFLICTS OF
LAWS.
(b) EACH BORROWER IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING
AGAINST IT UNDER, ARISING OUT OF OR IN ANY MANNER RELATING TO THIS AGREEMENT,
AND EACH OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY COURT OF THE STATE OF NEW
JERSEY, COUNTY LOCATED IN NEW JERSEY, OR IN THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF NEW JERSEY. EACH BORROWER, BY THE EXECUTION AND DELIVERY OF
THIS AGREEMENT, EXPRESSLY AND IRREVOCABLY ASSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. EACH
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS,
NOTICE OR OTHER PROCESS RELATING TO ANY SUCH ACTION OR PROCEEDING BY DELIVERY
THEREOF TO IT BY HAND OR BY MAIL IN THE MANNER PROVIDED FOR IN SECTION 10.9
HEREOF. EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY CLAIM OR
DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED ON ANY ALLEGED LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS OR ANY SIMILAR BASIS. NO
BORROWER SHALL BE ENTITLED IN ANY SUCH ACTION OR PROCEEDING TO ASSERT ANY
DEFENSE GIVEN OR ALLOWED UNDER THE LAWS OF ANY STATE OTHER THAN THE STATE OF NEW
JERSEY UNLESS SUCH DEFENSE IS ALSO GIVEN OR ALLOWED BY THE LAWS OF THE STATE OF
NEW JERSEY. NOTHING IN THIS SECTION 10.15 SHALL AFFECT OR IMPAIR IN ANY MANNER
OR TO ANY EXTENT THE RIGHT OF ANY BANK TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY BORROWER IN ANY JURISDICTION OR TO SERVE PROCESS
IN ANY MANNER PERMITTED BY LAW.
(c) EACH BORROWER, THE AGENT AND THE BANKS (BY ACCEPTANCE OF THE NOTES)
MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A
TRIAL BY JURY, AND EACH BORROWER WAIVES THE RIGHT TO INTERPOSE ANY SETOFF OR
COUNTERCLAIM, IN EACH CASE IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT,
COURSE OR DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF THE AGENT OR ANY BANK RELATING TO THE ADMINISTRATION OF
THE LOANS AND/OR ANY OTHER CREDIT FACILITIES HEREUNDER OR THE ENFORCEMENT OF THE
LOAN DOCUMENTS AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION WITH ANY OTHER ACTION IN WHICH JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED.
Section 10.16 Entire Agreement
This Agreement and the other Loan Documents are intended by the parties as the
final, complete and exclusive statement of the transactions evidenced thereby.
All prior or contemporaneous promises, agreements and understandings, whether
oral or written, are deemed to be superceded by this Agreement and such other
Loan Documents, and no party is relying on any promise, agreement or
understanding not set forth in this Agreement or such other Loan Documents.
Section 10.17 Interest Adjustment.
All Loan Documents are hereby expressly limited so that in no contingency or
event whatsoever, whether by reason of acceleration of maturity of the
indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to
be paid to a Bank for the use or the forbearance of the indebtedness evidenced
hereby exceed the maximum permissible under applicable law. As used herein, the
term "applicable law" shall mean the law in effect as of the date hereof;
provided, however, that in the event there is a change in the law which results
in a higher permissible rate of interest, then the Loan Documents shall be
governed by such new law as of its effective date. In this regard, it is
expressly agreed that it is the intent of each Borrower, the Agent and the Banks
in the execution, delivery and acceptance of this Agreement to contract in
strict compliance with the laws of the State of New Jersey from time to time in
effect. If, under or from any circumstances whatsoever, fulfillment of any
provision hereof or of any of the Loan Documents at the time of performance of
such provision shall be due, shall involve transcending the limit of such
validity prescribed by applicable law, then the obligation to be fulfilled shall
automatically be reduced to the limits of such validity, and if under or from
circumstances whatsoever a Bank should ever receive as interest an amount which
would exceed the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the principal balance evidenced by
a Note (in such manner as such Bank may determine in its sole discretion) and
not to the payment of interest. This provision shall control every other
provision of each of the Loan Documents.
Section 10.18 Lost Notes
Upon receipt of an affidavit of an officer of any Bank as to the loss, theft,
destruction or mutilation of any Note payable to such Bank or any other Loan
Document which is not of public record, and, in the case of any such loss,
theft, destruction or mutilation, upon surrender and cancellation of such Note
or other Loan Document, each Borrower will issue, in lieu thereof, a replacement
Note or other Loan Document in the same principal amount thereof and otherwise
of like tenor.
Section 10.19 Joint and Several Basis; Notices Binding
All Obligations of the Borrowers to the Agent and/or Bank under or in any way
connected with the Loan Documents shall be on a joint and several basis and each
Borrower shall be jointly and severally liable for all such Obligations. It is
expressly agreed that any notice sent by one or more Borrowers to the Agent
and/or any Bank shall be binding on all the Borrowers and any notice sent by the
Agent and/or any Bank to one or more Borrowers shall be binding upon each
Borrower.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGES AND EXHIBITS FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the date first above written.
PARENT:
J & J SNACK FOODS CORP.
By:_________________________________
Name: Dennis G. Moore
Title: Senior Vice President
SUBSIDIARY BORROWERS:
BAKERS BEST SNACK FOODS CORP.
FEDERAL PBC COMPANY
THE ICEE COMPANY
J & J RESTAURANT GROUP, INC.
J & J SNACK FOODS SALES CORP. OF TEXAS
J & J SNACK FOODS CORP. OF NEW JERSEY
J & J SNACK FOODS SALES CORP.
J & J SNACK FOODS CORP. OF PENNSYLVANIA
J & J SNACK FOODS TRANSPORT CORP.
J & J SNACK FOODS CORP. OF CALIFORNIA
J & J SNACK FOODS INVESTMENT CORP.
J & J SNACK FOODS CORP./MIDWEST
J & J SNACK FOODS CORP./MIA
PRETZELS, INC.
By:_____________________________________
Name: Dennis G. Moore
Title: Vice President of each of the
above Subsidiary Borrowers
Commitment:
$30,000,000.00 FLEET NATIONAL BANK,
as Agent and as a Bank
By:_________________________________
Name: John F. Cullinan
Title: Senior Vice President
Lending Office for ABR
Loans, LIBOR Loans and
COF Loans:
Fleet National Bank
208 Harristown Road
Glen Rock, New Jersey 07452
Attention: Kathryn Murphy, Vice President
Address for Notices:
Fleet National Bank
208 Harristown Road
Glen Rock, New Jersey 07452
Attention: Kathryn Murphy, Vice President
Telecopier: (201) 251-5275
Commitment:
$20,000,000.00 NATIONAL CITY BANK, as a Bank
By:_________________________________
Name: Tara M. Handforth
Title: Corporate banking Officer
Lending Office for ABR
Loans, LIBOR Loans and
COF Loans:
National City Bank
One South Broad Street - 13th Floor
Philadelphia, Pennsylvania 19107
Attention: Melissa Landay, Vice President
Address for Notices:
National City Bank
One South Broad Street - 13th Floor
Philadelphia, Pennsylvania 19107
Attention: Melissa Landay, Vice President
Telecopier: (267) 256-4001
Commitment:
$10,000,000.00 MELLON BANK, N.A., as a Bank
By:_________________________________
Name: Frank P. Mohapp
Title: First Vice President
Lending Office for ABR
Loans, LIBOR Loans and
COF Loans:
AIM 199-5220
Mellon Independence Center
701 Market Street
Philadelphia, PA 19106
Mailing Address:
AIM 199-5220
Post Office Box 7899
Philadelphia, PA 19101-7899
Attention: Tammy Sanders
Loan Administration
Telephone: (215) 553-0361
Facsimile: (215) 553-4789
Address for Notices:
Mellon Bank, N.A.
610 W. Germantown Pike
Suite 200
Plymouth Meeting, PA 19462
Attention: Frank P. Mohapp
First Vice President
Telecopier: (610) 941-4136
