EXHIBIT 10.49
[EXECUTION COPY]
AMENDED AND RESTATED CREDIT AGREEMENT
Dated November 12, 1997
Between
SNAPPER, INC.
and
AMSOUTH BANK
Relating to an
$80,000,000 Credit Facility
TABLE OF CONTENTS
Page
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ARTICLE 1
Rules of Construction and Definitions
SECTION 1.1 General Rules of Construction. . . . . . . 1
SECTION 1.2 Definitions. . . . . . . . . . . . . . . . 2
ARTICLE 2
Credit to be Extended
Under this Agreement
SECTION 2.1 Loan . . . . . . . . . . . . . . . . . . . 13
SECTION 2.2 Advances . . . . . . . . . . . . . . . . . 13
SECTION 2.3 Payments . . . . . . . . . . . . . . . . . 14
SECTION 2.4 Prepayment . . . . . . . . . . . . . . . . 14
SECTION 2.5 Reduction or Cancellation of Maximum
Credit Amount. . . . . . . . . . . . . . 14
SECTION 2.6 Fees . . . . . . . . . . . . . . . . . . . 14
SECTION 2.7 Extension of Termination Date. . . . . . . 15
SECTION 2.8 Place and Time of Payments . . . . . . . . 15
SECTION 2.9 Security . . . . . . . . . . . . . . . . . 16
SECTION 2.10 Guaranty Agreements. . . . . . . . . . . . 16
SECTION 2.11 Make-Whole Account . . . . . . . . . . . . 16
SECTION 2.12 Subordination Agreement. . . . . . . . . . 16
SECTION 2.13 Lock Box Agreement . . . . . . . . . . . . 16
ARTICLE 3
Interest
SECTION 3.1 Applicable Interest Rates. . . . . . . . . 18
SECTION 3.2 Procedure for Exercising Interest Rate
Options. . . . . . . . . . . . . . . . . 18
SECTION 3.3 Floating Rate. . . . . . . . . . . . . . . 18
SECTION 3.4 LIBOR-Based Rate . . . . . . . . . . . . . 19
SECTION 3.5 Termination of LIBOR-Based Rate; Increase
in LIBOR-Based Rate; Reduction of
Return. . . . . . . . . .. . . . . . . . 19
SECTION 3.6 Compensation . . . . . . . . . . . . . . . 20
ARTICLE 4
Representations and Warranties
SECTION 4.1 Financial Statements . . . . . . . . . . . 21
i
SECTION 4.2 Non-Existence of Defaults. . . . . . . . . 21
SECTION 4.3 Litigation . . . . . . . . . . . . . . . . 21
SECTION 4.4 Material Adverse Changes . . . . . . . . . 22
SECTION 4.5 Title to Property. . . . . . . . . . . . . 22
SECTION 4.6 Corporate Status . . . . . . . . . . . . . 22
SECTION 4.7 Corporate Power and Authority. . . . . . . 22
SECTION 4.8 Place of Business. . . . . . . . . . . . . 22
SECTION 4.9 Place Where Records Maintained . . . . . . 22
SECTION 4.10 Validity, Binding Nature and
Enforceability of the Credit Documents . 22
SECTION 4.11 Taxes. . . . . . . . . . . . . . . . . . . 22
SECTION 4.12 Compliance with Laws . . . . . . . . . . . 23
SECTION 4.13 Consents . . . . . . . . . . . . . . . . . 23
SECTION 4.14 Purpose. . . . . . . . . . . . . . . . . . 23
SECTION 4.15 Condition of the Business. . . . . . . . . 23
SECTION 4.16 Labor Contracts. . . . . . . . . . . . . . 23
SECTION 4.17 ERISA. . . . . . . . . . . . . . . . . . . 23
SECTION 4.18 Patents and Trademarks . . . . . . . . . . 23
SECTION 4.19 Location of Property . . . . . . . . . . . 23
SECTION 4.20 Real Property. . . . . . . . . . . . . . . 23
SECTION 4.21 Capitalization . . . . . . . . . . . . . . 24
SECTION 4.22 Subsidiaries . . . . . . . . . . . . . . . 24
SECTION 4.23 Federal Reserve Board Regulations. . . . . 24
SECTION 4.24 Investment Company Act . . . . . . . . . . 24
ARTICLE 5
Conditions of Lending
SECTION 5.1 Representations and Warranties . . . . . . 24
SECTION 5.2 No Default . . . . . . . . . . . . . . . . 24
SECTION 5.3 Automatic Representations and Warranties . 25
SECTION 5.4 Required Items . . . . . . . . . . . . . . 25
SECTION 5.5 Supporting Documents . . . . . . . . . . . 25
ARTICLE 6
Covenants
SECTION 6.1 Payment and Performance. . . . . . . . . . 27
SECTION 6.2 Insurance. . . . . . . . . . . . . . . . . 27
SECTION 6.3 Collection of Receivables; Sale of
Inventory. . . . . . . . . . . . . . . . 28
SECTION 6.4 Notice of Litigation and Proceedings . . . 28
SECTION 6.5 Payment of Indebtedness to Third Persons . 29
SECTION 6.6 Notice of Change of Business Location. . . 29
SECTION 6.7 Pension Plans. . . . . . . . . . . . . . . 29
SECTION 6.8 Payment of Taxes . . . . . . . . . . . . . 29
ii
SECTION 6.9 Further Assurances . . . . . . . . . . . . 29
SECTION 6.10 Advancements . . . . . . . . . . . . . . . 29
SECTION 6.11 Maintenance of Status. . . . . . . . . . . 30
SECTION 6.12 Financial Statements; Reporting
Requirements; Certification as to
Events of Defaults . . . . . . . . . . . 30
SECTION 6.13 Notice of Existence of Default . . . . . . 32
SECTION 6.14 Compliance with Laws . . . . . . . . . . . 32
SECTION 6.15 Maintenance of Property. . . . . . . . . . 32
SECTION 6.16 Property Records and Statements. . . . . . 32
SECTION 6.17 Inspection of Property, etc. . . . . . . . 32
SECTION 6.18 Change of Name, Etc. . . . . . . . . . . . 33
SECTION 6.19 Sale or Transfer of Assets . . . . . . . . 33
SECTION 6.20 Acquisition of Stock of Third Person . . . 33
SECTION 6.21 False Certificates or Documents. . . . . . 33
SECTION 6.22 Transactions with Affiliates . . . . . . . 33
SECTION 6.23 Dividends. . . . . . . . . . . . . . . . . 33
SECTION 6.24 Payments on MIG Notes. . . . . . . . . . . 33
SECTION 6.25 Loan . . . . . . . . . . . . . . . . . . . 34
SECTION 6.26 Use of Credit Proceeds . . . . . . . . . . 34
SECTION 6.27 Indebtedness . . . . . . . . . . . . . . . 34
SECTION 6.28 Guaranties . . . . . . . . . . . . . . . . 34
SECTION 6.29 Investments, etc . . . . . . . . . . . . . 34
SECTION 6.30 Sale of Receivables. . . . . . . . . . . . 34
SECTION 6.31 Solvency . . . . . . . . . . . . . . . . . 35
SECTION 6.32 Lease Obligations. . . . . . . . . . . . . 35
SECTION 6.33 Financial Covenants. . . . . . . . . . . . 35
SECTION 6.34 ERISA Compliance . . . . . . . . . . . . . 36
SECTION 6.35 Fiscal Year. . . . . . . . . . . . . . . . 36
ARTICLE 7
Events of Default
SECTION 7.1 Events of Default. . . . . . . . . . . . . 37
SECTION 7.2 Lender's Remedies on Default . . . . . . . 39
ARTICLE 8
Miscellaneous
SECTION 8.1 Notices. . . . . . . . . . . . . . . . . . 40
SECTION 8.2 Expenses . . . . . . . . . . . . . . . . . 42
SECTION 8.3 Independent Obligations. . . . . . . . . . 42
SECTION 8.4 Successors and Assigns . . . . . . . . . . 42
SECTION 8.5 Governing Law. . . . . . . . . . . . . . . 42
SECTION 8.6 Date of Agreement. . . . . . . . . . . . . 42
SECTION 8.7 Separability Clause. . . . . . . . . . . . 43
iii
SECTION 8.8 Counterparts . . . . . . . . . . . . . . . 43
SECTION 8.9 No Oral Agreements . . . . . . . . . . . . 43
SECTION 8.10 Waiver and Election. . . . . . . . . . . . 43
SECTION 8.11 No Obligations of Lender; Indemnification. 43
SECTION 8.12 Set-off. . . . . . . . . . . . . . . . . . 44
SECTION 8.13 Participation. . . . . . . . . . . . . . . 44
SECTION 8.14 Submission to Jurisdiction . . . . . . . . 44
SECTION 8.15 Usury Laws . . . . . . . . . . . . . . . . 45
SECTION 8.16 Arbitration; Dispute Resolution;
Preservation of Foreclosure Remedies . . 46
SECTION 8.17 Original Credit Agreement Amended and
Restated in its Entirety . . . . . . . . 47
SECTION 8.18 Miscellaneous Provisions . . . . . . . . . 47
SECTION 8.19 Amendments to Certain Credit Documents . . 47
Schedule
A Credit Documents
B Eligible Adjusted Equipment Value
C Permitted Encumbrances
D Request for Advances or Interest Rate Election
E Borrowing Base Certificate
F Extended Terms
G Thirty Day Terms
4.3 Litigation
4.6 Trade Names
4.8 Locations of Personal Property
4.16 Labor Contracts
4.17 ERISA
4.18 Patents, Trademarks and Copyrights
4.20 Real Property
iv
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT ("this Agreement") dated
November 12, 1997, is between SNAPPER, INC., a Georgia corporation (the
"Borrower"), and AMSOUTH BANK (formerly named AmSouth Bank of Alabama), an
Alabama banking corporation (the "Lender").
Recitals
A. Capitalized terms used in these Recitals have the meanings defined for
them above or in Section 0.
B. The Borrower and the Lender have heretofore entered into a Credit
Agreement dated November 26, 1996, as amended by First Amendment to Credit
Agreement and Certain Other Credit Documents dated as of April 30, 1997 (the
"First Amendment") and by Second Amendment to Credit Agreement and Other Credit
Documents dated as of August 11, 1997 (said Credit Agreement, as so amended,
being sometimes herein referred to as the "Original Credit Agreement").
C. The Bridge Loan provided for in the First Amendment has been paid in
full. The Borrower, the Stockholder and the Sponsors have requested that the
Commitment Amount be increased to $80,000,000 and that certain other changes be
made in the Original Credit Agreement and the other Credit Documents.
D. The Lender is willing to increase the Commitment Amount to $80,000,000
and to make the other changes in the Credit Documents requested by the Borrower,
the Stockholder and the Sponsors, on the condition, among others, that the
Original Credit Agreement be amended and restated as set forth below.
Amended and Restated Agreement
NOW, THEREFORE, in consideration of the foregoing Recitals, to induce the
Lender to extend credit to the Borrower under this Agreement and the other
Credit Documents, and in order to amend and restate the Original Credit
Agreement in its entirety, the Borrower agrees with the Lender as follows:
ARTICLE I.
Rules of Construction and Definitions
SECTION A. General Rules of Construction. For the purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
1. Words of masculine, feminine or neuter gender include the correlative
words of
other genders. Singular terms include the plural as well as the singular, and
vice versa.
2. All references herein to designated "Articles," "Sections" and other
subdivisions or to lettered Schedules are to the designated Articles, Sections
and subdivisions hereof and the Schedules annexed hereto unless expressly
otherwise designated in context. All Article, Section, other subdivision and
Schedule captions herein are used for reference only and do not limit or
describe the scope or intent of, or in any way affect, this Agreement.
3. The terms "include," "including," and similar terms shall be construed
as if followed by the phrase "without being limited to."
4. The terms "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, other subdivision or Schedule.
5. All Recitals set forth in, and all Schedules to, this Agreement are
hereby incorporated in this Agreement by reference.
6. No inference in favor of or against any party shall be drawn from the
fact that such party or such party's counsel has drafted any portion hereof.
7. All references in this Agreement to a separate instrument are to such
separate instrument as the same may be amended or supplemented from time to time
pursuant to the applicable provisions thereof.
8. If the Borrower hereafter has any Subsidiaries, all computations
required in connection with the covenants contained in Article 0 shall be made
for the Borrower and its Subsidiaries on a combined or consolidated basis, after
elimination of intercompany items, and all financial statements, reports and
certificates required hereunder shall be prepared on the same basis.
SECTION B. Definitions. As used in this Agreement, capitalized terms that
are not otherwise defined herein have the meanings defined for them in the
Security Agreement, and the following terms are defined as follows:
1. Actual/360 Day Basis means a method of computing interest and other
charges on the basis of an assumed year of 360 days for the actual number of
days elapsed, meaning that the interest accrued for each day will be computed by
multiplying the interest rate applicable on that day by the unpaid principal
balance on that day and dividing the result by 360.
2. Advance is defined in Section 0.
3. Affiliate of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For purposes of this definition, "control"
when used with respect to any specified person means the power to direct the
management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
4. Agreement means, on any date, this Amended and Restated Credit
Agreement, as originally in effect on the Closing Date and as thereafter from
time to time amended, supplemented, restated or otherwise modified and in effect
on such date.
5. Authorized Representative means the officer or officers of the
Borrower that are duly authorized to act for the Borrower in the specified
capacity under the Governing Documents of the Borrower or applicable law.
6. Borrowing Base means, at any time, the sum of:
(a) eighty percent (80.0%) of the Net Outstanding Amount of Eligible
Accounts at such time consisting of Accounts arising from the sale of Inventory
to (1) Home Depot; (2) a dealer which has financed the purchase of such
Inventory by means of a floor planning arrangement; (3) a dealer pursuant to
Extended Terms, on any date when the due date with respect to such Account is
fewer than ninety-one (91) days after such date or on which such Account is past
due but not more than sixty (60) days past due; (4) a dealer pursuant to Thirty
Day Terms; or (5) a dealer or distributor located outside the United States
whose Inventory has been shipped on the security of a letter of credit
acceptable to the Lender;
(b) the lesser of (A) $10,000,000 and (B) fifty-five percent (55.0%)
of (1) the Net Outstanding Amount of Eligible Accounts at such time consisting
of Accounts arising from the sale of Inventory to a dealer pursuant to Extended
Terms, on any date when the due date with respect to such Account is more than
ninety (90) days after such date (provided, that with respect to Accounts
arising from sales to dealers of Inventory consisting of snow products, which
Inventory has not been sold by the dealer or financed by the dealer by means of
a floor planning arrangement, the Borrower shall be permitted to extend the due
date with respect to such Account from March 10 of any year to December 10 of
such year) times (2) a dealer cost conversion factor of 65.8%, or such other
factor as the Borrower and the Lender may mutually agree to from time to time;
and
(c) an amount equal to the lesser of
(1) $60,000,000 on and after the Closing Date to and including
December 30, 1997, $55,000,000 on and after December 31, 1997, to and
including December 30, 1998, and $20,000,000 on and after December 31,
1998, and
(2) the sum of
(A) from the Closing Date to and including December 30,
1998, eighty percent (80.0%) and on and after December 31, 1998,
fifty percent (50.0%), in each case of Eligible Inventory at such
time consisting of finished goods that are ready for sale in the
ordinary course of business, identified by serial numbers and
located at the Borrower's factory in
McDonough, Georgia or at the Borrower's other distribution
centers and commissioned distributor warehouses,
(B) the lesser of (i) $5,000,000 and (ii) fifty percent
(50.0%) of Eligible Inventory at such time consisting of engines,
and
(C) from the Closing Date to and including December 30,
1998, the lesser of (i) $7,500,000 and (ii) forty percent
(40.0%), and on and after December 31, 1998, the lesser of
(x) $3,000,000 and (y) thirty percent (30.0%), in each case of
Eligible Inventory at such time consisting of parts and
accessories other than engines; and
(e) an amount equal to seventy-five percent (75%) of the Eligible
Adjusted Equipment Value.
7. Business means the manufacture, distribution and/or sale of lawn,
garden, snow removal or outdoor power equipment and other products by the
Borrower.
8. Business Day means (a) any day on which commercial banks located in
Birmingham, Alabama are generally open for business and (b) if such day relates
to the giving of notices or quotes in connection with a LIBOR Quote or to a
borrowing of, a payment or prepayment of principal of or interest on, or a
LIBOR-Based Rate Period for, a LIBOR-Based Rate Segment or a notice by the
Borrower with respect to any such borrowing, payment, prepayment or LIBOR-Based
Rate Period, any day on which dealings in Dollar deposits are carried out in the
London interbank market.
9. Closing Date means November 12, 1997.
10. Code means the Internal Revenue Code of 1986, as amended from time to
time.
11. Commitment Amount means $80,000,000 (as the same may be reduced at any
time or from time to time pursuant to Section 2.5).
12. Controlled Group means all members of a controlled group of
corporations and all trade or business (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414(c) of the Code.
13. Credit means, individually and collectively, all loans, forbearances,
renewals, extensions, advances, disbursements and other extensions of credit now
or hereafter made by the Lender to or for the account of the Borrower under this
Agreement and the other Credit Documents, including the Loan.
14. Credit Documents means this Agreement and the documents described in
Schedule A and all other documents now or hereafter executed or delivered in
connection with the transactions contemplated thereby.
15. Debt of any person means a. all indebtedness, whether or not
represented by bonds, debentures, notes or other securities, for the repayment
of borrowed money, b. all deferred indebtedness for the payment of the purchase
price of property or assets purchased, c. all capitalized lease obligations,
d. all indebtedness secured by any Lien on any property of such person, whether
or not indebtedness secured thereby has been assumed, e. all obligations with
respect to any conditional sale contract or title retention agreement, f. all
indebtedness and obligations arising under acceptance facilities or in
connection with surety or similar bonds, and the outstanding amount of all
letters of credit issued for the account of such person, and g. all obligations
with respect to interest rate swap agreements.
16. Default Rate means a rate of interest equal to two percentage points
(200 basis points) in excess of the Floating Rate in effect from time to time,
or the maximum rate permitted by law, whichever is less.
17. Dollar and the symbol $ means dollars constituting legal tender for
the payment of public and private debts in the United States of America.
18. Eligible Account means only Accounts that are not more than 60 days
past due (provided, that with respect to Accounts arising from sales to dealers
of Inventory consisting of snow products, which Inventory has not been sold by
the dealer or financed by the dealer by means of a floor planning arrangement,
the Borrower shall be permitted to extend the due date with respect to such
Account from March 10 of any year to December 10 of such year), according to the
terms shown on the invoice (or the date of the invoice where terms are not
specifically stated). Without limiting the generality of the foregoing, the
Lender may exclude any Account from Eligible Accounts if:
a. the subject goods have been shipped or delivered to an Account
Debtor on a xxxx-and-hold, guaranteed sale, consignment, approval or
sale-or-return basis or subject to any other repurchase or return
agreement; or
b. any material part of the subject goods has been returned,
rejected, lost or damaged; or
c. the Account Debtor is located outside the United States, and the
subject goods have not been shipped on the security of a banker's
acceptance or letter of credit acceptable to the Lender and pledged to the
Lender, or the Account is not payable in United States dollars; or
d. the Account Debtor is also the Borrower's supplier or creditor;
or
e. more than 50% in amount of the other Accounts of the Account
Debtor are more than 90 days past due; or
f. the Account arises out of transactions with an employee, officer,
agent, director, stockholder, partner, member of the Borrower or the
Stockholder and its subsidiaries; or
g. any of the representations or warranties set forth in Section 3.2
of the Security Agreement are not true and correct in all material respects
with respect to such Account.
19. Eligible Adjusted Equipment Value means the value of the Borrower's
Equipment assumed by the Lender in the amounts and for the periods set forth on
Schedule B, which amount shall be included as part of the Borrowing Base.
20. Eligible Inventory means Inventory, less any amount reserved on the
Borrower's books for surplus or obsolescence, consisting of factory whole goods,
engines or other parts and accessories held for sale by the Borrower that meet
all of the following specifications:
Documents. If it is represented or covered by documents of title, the
Borrower is the owner of the documents free of all Liens except the
Permitted Encumbrances.
Location. It is stored at such locations in the United States of
which the Borrower has given the Lender notice and where the Lender
has perfected its security interest, and is in the possession or
control of the Borrower or its consignee. If it is located on leased
premises, the Lender has received a landlord's waiver of rights with
respect to such Inventory. If it is held by a bailee, warehouseman or
similar party, the Lender shall have received from such bailee,
warehouseman or similar party such acknowledgements of the Lender's
Lien, warehouse receipts or other agreements, each in form and
substance acceptable to the Lender, as the Lender may require in its
reasonable discretion. If it is held by a consignee: (a) the Lender
shall have received a copy of a consignment agreement in form and
substance reasonably satisfactory to the Lender, (b) the Borrower
shall have filed all necessary or appropriate UCC consignment
financing statements in form and substance reasonably satisfactory to
the Lender as reasonably requested by the Lender, (c) the Borrower
shall have sent to the consignee's prior filed secured parties a
consignment notification letter in form and substance reasonably
satisfactory to the Lender, (d) the prior filed secured parties of the
consignee shall have subordinated their security interest in the
consigned inventory and all proceeds thereof in favor of the Borrower,
the Lender and The Chase Manhattan Bank, in form and substance
reasonably satisfactory to the Lender, (e) consignee and consignee's
landlord shall have executed a waiver of landlord's Lien in form and
substance reasonably satisfactory to the Lender and subordinating such
Lien in favor of the Borrower, the Lender and The Chase Manhattan
Bank, (f) the Borrower has agreed upon the request of the Lender to
file UCC financing statements against the Borrower in the jurisdiction
where such consigned inventory is located, and (g) prior filed secured
creditors of the Borrower shall have subordinated their security
interest in the consigned inventry in favor of the Lender.
Miscellaneous. It is unused, and it has not, in the Lender's good
faith judgment, been materially reduced in market value by reason of
age, obsolescence, surplus
or other factors.
Ownership. It is owned by the Borrower free of all Liens except the
Permitted Encumbrances, and the Lender has a perfected first security
interest therein.
Other Financing. No financing statement is on file covering such item
or the products or proceeds thereof except for the Lender's financing
statement [and the financing statement of The Chase Manhattan Bank.
WIP. It is not work-in-process.
21. Environmental Laws means the Resource Conversation and Recovery Act,
as amended, the Toxic Substance Control Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Solid
Waste Disposal Act, as amended, the Clean Air Act, as amended, the Clean Water
Act, as amended, and any comparable federal or state statutes, now existing or
later enacted, or any regulation promulgated under any of such federal or state
statutes relating to the protection of the environment.
22. ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
23. Events of Default is defined in Section 0. An Event of Default
"exists" if an Event of Default has occurred and is continuing.
24. Extended Terms has the meaning set forth in Exhibit F.
25. Federal Funds Effective Rate means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of Atlanta, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations at approximately 10:00 a.m.
(Birmingham, Alabama time) on such day on such transactions received by the
Lender from three Federal funds brokers of recognized standing selected by the
Lender in its sole discretion.
26. Floating Rate means a rate per annum equal to (A) from the Closing
Date to and including December 30, 1998, the higher of (1) the Prime Rate in
effect from time to time or (2) the Federal Funds Effective Rate in effect from
time to time, plus one-half of one percentage point (50 basis points) and
(B) from December 31, 1998, until the Termination Date, the higher of (1) the
Prime Rate in effect from time to time, plus one and one-half percentage points
(150 basis points) or (2) the Federal Funds Effective Rate in effect from time
to time, plus two percentage points (200 basis points).
27. GAAP means generally accepted accounting principles, consistently
applied.
28. Governing Documents means all organizational and governing documents
applicable to the Borrower, including the Borrower's certificate or articles of
incorporation and bylaws, and all applicable resolutions or other directions of
the directors, shareholders, officers or other relevant persons comprising,
owning, managing or operating the Borrower.
29. Governmental Authority means any national, state, county, municipal or
other government, domestic or foreign, and any agency, authority, department,
commission, bureau, board, court or other instrumentality thereof.
30. Governmental Requirements means all laws, rules, regulations,
ordinances, judgments, decrees, codes, orders, injunctions, notices and demand
letters of any Governmental Authority.
31. Hazardous Substances means any and all hazardous or toxic substances,
materials or wastes as defined or listed under the Environmental Laws.
32. LIBOR-Based Rate means a rate per annum equal to (A) from the Closing
Date to and including December 30, 1998, the LIBOR Quote plus two and one-half
percentage points (250 basis points) and (B) from December 31, 1998, until the
Termination Date, the LIBOR Quote plus four percentage points (400 basis
points).
33. LIBOR-Based Rate Period means the period of time, selected by the
Borrower under Section 0, with respect to which the LIBOR-Based Rate is (or is
proposed to be) applicable to a Segment.
34. LIBOR-Based Rate Segment means a Segment to which the LIBOR-Based Rate
is (or is proposed to be) applicable.
35. LIBOR Quote means, with respect to any time at which the LIBOR-Based
Rate is to be determined, the rate of interest determined by the Lender at such
time by reference to the Xxxxxx-Xxxxxx MoneyCenter reporting service or other
comparable financial information reporting service at the time employed by the
Lender, as the Lender's best estimate of the cost of funds available to the
Lender from the purchase on the London interbank market of funds in the form of
time deposits in Dollars in the approximate amount of the Segment that is to
bear interest at the LIBOR-Based Rate, having a maturity comparable to the
LIBOR-Based Rate Period during which the LIBOR-Based Rate is to be in effect, it
being expressly understood that (1) the Lender may not actually purchase any
such time deposits and obtain such funds and (2) the LIBOR Quote will be an
estimate, and for a variety of reasons, including changing market conditions,
the actual cost of funds to the Lender (if the Lender elects to purchase funds
in the form of time deposits on such date) might vary from the LIBOR Quote.
36. LIBOR Reserve Requirement means the percentage (expressed as a
decimal) prescribed by the Board of Governors of the Federal Reserve System (or
any successor Governmental Authority), on the date on which the LIBOR-Based Rate
is determined, for determining the reserve requirements of the Lender (including
any marginal, emergency, supplemental, special or other reserves) with respect
to liabilities relating to time deposits
purchased in the London interbank market having a maturity equal to the period
during which the LIBOR-Based Rate will be in effect and in an amount equal to
the LIBOR-Based Rate Segment involved, without any benefit or credit for any
proration, exemptions or offsets under any now or hereafter applicable
regulations.
37. Lien means any mortgage, pledge, assignment, charge, encumbrance,
lien, security title, security interest or other preferential arrangement.
38. Loan is defined in Section 0.
39. Margin Stock is defined in Regulation U of the Federal Reserve Board,
as amended.
40. Maximum Credit Amount means the lesser of a. the amount of the
Borrowing Base; or b. the Commitment Amount.
41. MIG Notes means the $23,800,000 Subordinated Promissory Note dated
November 26, 1996, and the $10,000,000 Subordinated Promissory Note dated
November 12, 1997, in each case issued by the Borrower to the Stockholder.
42. Net Outstanding Amount of Eligible Accounts means the net outstanding
amount of all then Eligible Accounts after eliminating from the aggregate face
amount thereof all payments, adjustments, discounts, credits and allowances
applicable thereto and all amounts due thereon considered uncollectible by
reason of return, rejection, repossession or loss of, or damage to, the
merchandise covered thereby, disputes, financial difficulty of the Account
Debtor or otherwise.
43. Note is defined in Section 2.1.
44. Obligations means a. the payment of all amounts now or hereafter
becoming due and payable under the Credit Documents, including the principal
amount of the Credit, all interest (including interest that, but for the filing
of a petition in bankruptcy, would accrue on any such principal) and all other
fees, charges and costs (including attorneys' fees and disbursements) payable in
connection therewith; b. the observance and performance by the Borrower of all
of the provisions of the Credit Documents; c. the payment of all sums advanced
or paid by the Lender in exercising any of its rights, powers or remedies under
the Credit Documents, and all interest (including post-bankruptcy petition
interest, as aforesaid) on such sums provided for herein or therein; d. the
payment and performance of all other indebtedness, obligations and liabilities
of the Borrower to the Lender (including obligations of performance) of every
kind whatsoever, arising directly between the Borrower and the Lender or
acquired outright, as a participation or as collateral security from another
person by the Lender, direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, contracted or arising, joint or
several, liquidated or unliquidated, regardless of how they arise or by what
agreement or instrument they may be evidenced or whether they are evidenced by
agreement or instrument, and whether incurred as maker, endorser, surety,
guarantor, general partner, drawer, tort-feasor, account party with respect to a
letter of credit, indemnitor or
otherwise; and e. all renewals, extensions, modifications and amendments of any
of the foregoing, whether or not any renewal, extension, modification or
amendment agreement is executed in connection therewith.
45. Obligors means the Borrower, the Stockholder, the Sponsors and any
other maker, endorser, surety, guarantor or other person now or hereafter liable
for the payment or performance, in whole or in part, of any of the Obligations.
46. PBGC means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
47. Pension Plan means an "employee pension benefit plan" (as such term is
defined in ERISA) from time to time maintained by the Borrower or a member of
the Controlled Group.
48. Permitted Contest means any appropriate proceeding conducted in good
faith by the Borrower to contest any tax, assessment, charge, Lien or similar
claim, during the pendency of which proceeding the enforcement of such tax,
assessment, charge, Lien or claim is stayed; provided that the Borrower has set
aside on its books or, if required by the Lender, deposited as cash collateral
with the Lender, adequate cash reserves to assure the payment of any such tax,
assessment, charge, Lien or claim.
49. Permitted Encumbrances means (a) Liens for taxes, assessments or other
governmental charges or levies not yet delinquent or that are subject to
Permitted Contests; (b) Liens of mechanics, materialmen, landlord, warehousemen,
carriers and similar Liens arising in the future in the ordinary course of
business for sums not yet delinquent or that are subject to Permitted Contests;
(c) Liens incurred in the ordinary course of business in connection with
workers' compensation, unemployment insurance, social security, and similar
items for sums not yet delinquent or that are subject to Permitted Contests; (d)
lessor's Liens arising from operating and capitalized leases entered into in the
ordinary course of business; (e) Liens arising from legal proceedings, so long
as such proceedings are subject to a Permitted Contest, and so long as execution
is stayed on all judgments resulting from any such proceedings; (f) easements,
rights of way, restrictions and other similar encumbrances incurred in the
ordinary course of business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of property or minor imperfections
in title thereto that, in the aggregate, are not material in amount and that do
not materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the Business; (g) Liens securing Debt
incurred for the payment of all or any part of the purchase price of any real
property and fixed assets, and any renewal, extensions or refinancings thereof;
(h) Liens upon the real property of the Borrower located at 000 Xxxxx Xxxx,
XxXxxxxxx, Xxxxxxx that are expressly permitted by the Deed to Secure Debt and
Security Agreement in favor of the Lender relating to such real property; (i)
Liens and security interest existing on the Closing Date and set forth on
Schedule C hereto (which include the Liens of The Chase Manhattan Bank); and (j)
Liens in favor of the Lender.
50. Permitted Investments means a. direct obligations of, or obligations
unconditionally guaranteed by, the United States of America or any agency
thereof maturing in less than one year from the date of purchase; b. commercial
paper issued by any person
organized and doing business under the laws of the United States of America or
any state thereof rated P-1 or better by Xxxxx'x Investors Services, Inc. or A-1
or better by Standard & Poor's Corporation and maturing in less than one year
from the date of purchase; and c. certificates of deposit maturing within one
year of the date of acquisition thereof issued by the Lender or any other
financial institution acceptable to the Lender.
51. Person (whether or not capitalized) includes natural persons, sole
proprietorships, corporations, trusts, unincorporated organizations,
associations, companies, institutions, entities, joint ventures, partnerships,
limited liability companies and Governmental Authorities.
52. Plan means, at any time, an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (a) maintained by the Borrower or any
member of a Controlled Group for employees of the Borrower or any member of such
Controlled Group or (b) maintained pursuant to a collective bargaining agreement
or any other arrangement under which more than one employer makes contributions
and to which the Borrower or any member of a Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
53. Prime Rate means that rate of interest designated by the Lender from
time to time as its "prime rate," it being expressly understood and agreed that
the "prime rate" is merely an index rate used by the Lender to establish lending
rates and is not necessarily the Lender's most favorable lending rate, and that
changes in the "prime rate" are discretionary with the Lender.
54. Principal Office means the principal office of the Lender located at
AmSouth-Sonat Tower, 0000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000.
55. Property means all property, real and personal, that is now or
hereafter conveyed or assigned to the Lender, or in which the Lender is now or
hereafter granted a Lien, as security for any of the Obligations.
56. Request for Advances or Interest Rate Election is defined in
Section 2.2.
57. Security Agreement means the General Security Agreement described on
Schedule A.
58. Security Documents means all Credit Documents that now or hereafter
grant or purport to grant to Lender any guaranty, collateral or other security
for any of the Obligations.
59. Segment means a portion of the Advances (or all thereof) with respect
to which a particular interest rate is (or is proposed to be) applicable. The
aggregate amount of all Advances that bear interest at the Floating Rate shall
be deemed to constitute a single Segment. The aggregate amount of all Advances
that bear interest at the same LIBOR-Based Rate and for the same LIBOR-Based
Rate Period shall be deemed to constitute a single LIBOR-Based Rate Segment.
60. Solvent means, with respect to any person on a particular date, that
as of such date a. the fair value of the property of such person is greater than
the total amount of liabilities (including contingent liabilities) of such
person, b. the present fair salable value of the assets of such person is not
less than the amount that will be required to pay the probable liability of such
person on its debts as they become absolute and matured, c. such person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such person's property would constitute an unreasonably
small capital, and d. such person does not intend to, or believe or reasonably
should have believed that it will, incur debts beyond its ability to repay as
they become due.
61. Sponsors means Xxxx X. Xxxxx and Xxxxxx Xxxxxxxxx.
62. Stockholder means Metromedia International Group, Inc., a Delaware
corporation.
63. Subordinated Debt means Debt of the Borrower (including the Debt
evidenced by the MIG Notes) that is subordinated to the Obligations on terms
approved by the Lender.
64. Subsidiary means a. any corporation more than 50% of whose shares of
stock having general voting power under ordinary circumstances to elect a
majority of the board of directors, managers or trustees of such corporation
(irrespective of whether or not at the time stock of any other class or classes
has or might have voting power by reason of the happening of any contingency),
are owned or controlled directly or indirectly by the Borrower, or b. any
partnership or limited liability company, 50% or more of the partnership or
membership interests in which are owned or controlled, directly or indirectly,
by the Borrower, and includes entities currently or hereafter falling within the
categories described above.
65. Termination Date means the maturity date of the Loan (which is
initially January 1, 2000), as such date may be extended from time to time
pursuant to Section 0 or accelerated pursuant to Section 0.
66. Thirty Day Terms has the meaning as set forth in Exhibit G.
ARTICLE II.
Credit to be Extended
Under this Agreement
SECTION A. Loan. From the Closing Date to (but not including) the
Termination Date, the Lender agrees, upon the terms and subject to the
conditions of this Agreement, to make a revolving line of credit available to
the Borrower, pursuant to which the Borrower may from time to time borrow from
the Lender and repay and reborrow, such sums as may be needed by the Borrower
for the purposes expressed in this Agreement up to a maximum aggregate principal
amount at any one time outstanding not exceeding the Maximum Credit Amount (the
"Loan").
All advances made by the Lender to the Borrower under this Agreement
("Advances") shall be evidenced by an Amended and Restated Note (the "Note")
dated the Closing Date, payable to the order of the Lender, duly executed by the
Borrower and in the maximum principal amount of $80,000,000. The Advances shall
bear interest as provided in Article 3. In no event shall the balance of the
Loan be reduced below $100.
SECTION B. Advances. The Advances made by the Lender pursuant to each
request for Advances shall be in an aggregate amount not less than $1,000,000 or
a greater integral multiple of $100,000. Each request for Advances must be in
writing (which may be by facsimile transmission) and must be received by the
Lender not later than 10:00 a.m., Birmingham, Alabama time, on the day on which
the Advances are to be made, except that, if the Advances are to bear interest
at the LIBOR-Based Rate, the request must be received by the Lender not later
than 10:00 a.m., Birmingham, Alabama time, two Business Days prior to the day on
which the Advances are to be made. Each request for Advances shall be in the
form attached hereto as Schedule D ("Request for Advances or Interest Rate
Election") and shall specify the aggregate amount of the Advances requested, the
day as of which the Advances are to be made and shall provide the interest rate
information called for in Section 0. All the Advances requested in a single
Request for Advances or Interest Rate Election shall be subject to the same
interest rate terms. Not later than 2:00 p.m. Birmingham, Alabama time on the
date specified for the Advances, the Lender shall make available the amount of
the Advances to be made by it on such date to the Borrower by depositing the
proceeds thereof into an account with the Lender or with an Affiliate of the
Lender in the name of the Borrower. The Lender's obligation to make Advances
shall terminate, if not sooner terminated pursuant to the provisions of this
Agreement, on the Termination Date. The Lender shall have no obligation to make
Advances if an Event of Default exists. Each Request for Advances or Interest
Rate Election, whether submitted under this Section 0 in connection with
requested Advances or under Section 0 in connection with an interest rate
election, shall be signed by an Authorized Representative of the Borrower
designated as authorized to sign and submit Request for Advances or Interest
Rate Election forms in the documents submitted to the Lender pursuant to
Section 0. The Borrower may, from time to time, by written notice to the
Lender, terminate the authority of any Authorized Representative to submit
Request for Advances or Interest Rate Election forms, such termination of
authority to become effective upon actual receipt by the Lender of such notice
of termination. The Borrower may from time to time authorize other Authorized
Representatives to sign and submit Request for Advances or Interest Rate
Election forms by delivering to the Lender a certificate of the Secretary of the
Borrower certifying the incumbency and specimen signature of each such
Authorized Representative. The Lender shall be entitled to rely conclusively
upon the authority of any Authorized Representative so designated by the
Borrower.
SECTION C. Payments. All interest accrued at the Floating Rate shall be
payable in arrears monthly on the first day of each month, commencing on
December 1, 1997; and all interest accrued on each LIBOR-Based Rate Segment
shall be payable on the last day of the applicable LIBOR-Based Rate Period. The
principal amount of the Advances, together with accrued interest thereon, shall
be due and payable on the Termination Date.
SECTION D. Prepayment.
1. The Borrower may at any time prepay all or any part of the Advances,
without premium or penalty; provided, however, that (1) unless the Borrower pays
the amounts, if any, due under Section 0, no LIBOR-Based Rate Segment may be
prepaid during a LIBOR-Based Rate Period if the Lender, at any time during the
LIBOR-Based Rate Period, purchases on the London interbank market funds in the
form of time deposits in dollars in the approximate amount of the LIBOR-Based
Rate Segment being prepaid, and (2) any partial prepayment shall be in the
amount of not less than $1,000,000 or a greater integral multiple of $100,000.
Any prepayment shall be accompanied by the payment of accrued interest to the
date of prepayment on the principal amount prepaid.
2. If at any time the principal amount of the Advances is greater than
the Maximum Credit Amount, the Borrower shall immediately make a prepayment
(notwithstanding the provisions of clause (a)(1) of this section, but subject to
the provisions of Section 0) on the Advances equal to the difference between
said aggregate principal amount of the Advances and the Maximum Credit Amount.
SECTION E. Reduction or Cancellation of Maximum Credit Amount. The
Borrower shall have the right at any time to reduce the unused portion of the
Maximum Credit Amount on the first day of each month, provided that: (a) the
Borrower shall give the Lender at least 10 days' prior notice in writing of each
such reduction, (b) the amount of such reduction shall not be less than
$500,000, and (c) no reduction in the Maximum Credit Amount may be reinstated.
The Borrower shall also have the right at any time to terminate this Agreement
by prepayment in full of the Obligations (subject to the provisions of
Section 0) with at least 15 days' prior notice in writing of such termination.
SECTION F. Fees.
1. The Borrower shall pay to the Lender on the Closing Date a closing fee
equal to $525,000. This fee shall be fully earned and non-refundable as of the
Closing Date.
2. The Borrower shall pay to the Lender an availability fee (the
"Availability Fee") that begins to accrue on the Closing Date and shall be
computed at the Applicable Rate per annum times the daily average difference
between (1) the Commitment Amount and (2) the sum of the aggregate outstanding
principal amount of the Advances made by the Lender. The Availability Fee shall
be payable in arrears monthly on the first day of each month in each year,
commencing on December 1, 1997, and on the Termination Date. The Availability
Fee shall be computed on an Actual/360 Basis. The term "Applicable Rate" shall
mean from the Closing Date to and including December 31, 1998, one-half of one
percent (.5%) and from January 1, 1999, until the Termination Date, three
quarters of one percent (.75%).
3. The Borrower shall pay to the Lender on June 30, 1998, a
non-refundable fee of $400,000 unless, prior to that date (i) a bank acceptable
to the Lender has agreed to participate in the Loan in the principal amount of
not less than $25,000,000 or (ii) the Commitment Amount, and the outstanding
principal amount of the Loan, have been reduced to $55,000,000 or less.
SECTION G. Extension of Termination Date. The Borrower and the Lender may
from time to time extend the then-current Termination Date to any subsequent
termination date upon which the Borrower and the Lender may agree by executing a
written extension agreement. Upon the execution of such an extension agreement
by the Borrower and the Lender, the maturity date of the Loan shall be extended
to the agreed-upon termination date, and the agreed-upon termination date shall
become the new "Termination Date" for purposes of this Agreement.
SECTION H. Place and Time of Payments.
1. All payments by the Borrower to the Lender under this Agreement and
the other Credit Documents shall be made in lawful currency of the United States
and in immediately available funds to the Lender at its Principal Office in
Birmingham, Alabama at the hand delivery address set forth in Section 0 or at
such other address within the continental United States as shall be specified by
the Lender by notice to the Borrower. Any payment received by the Lender after
2:00 p.m. (Birmingham, Alabama time) on a Business Day (or at any time on a day
that is not a Business Day) shall be deemed made by the Borrower and received by
the Lender on the following Business Day.
2. All amounts payable by the Borrower to the Lender under this Agreement
or any of the other Credit Documents for which a payment date is expressly set
forth herein or therein shall be payable on the specified due date without
notice or demand by the Lender. All amounts payable by the Borrower to the
Lender under this Agreement or the other Credit Documents for which no payment
date is expressly set forth herein or therein shall be payable ten days after
written demand by the Lender to the Borrower. The Lender may, at its option,
send written notice or demand to the Borrower of amounts payable on a specified
due date pursuant to this Agreement or the other Credit Documents, but the
failure to send such notice shall not affect or excuse the Borrower's obligation
to make payment of the amounts due on the specified due date.
3. Payments that are due on a day that is not a Business Day shall be
payable on the next succeeding Business Day, and any interest payable thereon
shall be payable for such extended time at the specified rate.
4. Except as otherwise required by law, payments received by the Lender
shall be applied first to expenses, fees and charges, then to interest and
finally to principal.
SECTION I. Security. The security for the Obligations shall include the
collateral and other security granted to the Lender under the Security Documents
described in Schedule A. The Security Documents shall be valid and binding as
security for, the aggregate amount of the Obligations outstanding from time to
time, whether or not the full amount of the Credit is actually advanced by the
Lender to the Borrower.
SECTION J. Guaranty Agreements. Concurrently with the execution of this
Agreement (a) the Stockholder is executing and delivering to the Lender a
guaranty agreement pursuant to which the Stockholder is unconditionally
guaranteeing the payment to the Lender, when and as due and payable, of the
Obligations, and (b) the Sponsors are executing and delivering to the Lender a
limited guaranty agreement pursuant to which the Sponsors are, jointly and
severally, unconditionally guaranteeing the payment to the Lender, when and as
due and
payable, of a portion of the Obligations.
SECTION K. Make-Whole Account. The Borrower has deposited, or
concurrently with the execution of this Agreement is depositing, with the Lender
the sum of $1,000,000 in a restricted account (the "Snapper Make-Whole
Account"). Funds in the Snapper Make-Whole Account may be withdrawn by the
Lender from time to time to pay any and all amounts that are due the Lender from
time to time pursuant to the terms of this Agreement and other credit documents,
if the Borrower has not made such payment within the time provided herein in the
other credit documents (after giving effect to any notice or cure periods). The
Snapper Make-Whole Agreement shall be pledged to the Lender pursuant to the
terms of the Security Agreement. Any withdrawals from the Snapper Make-Whole
Account shall not cure a default under this Agreement unless the default was due
solely to a failure on the part of the Borrower to make a scheduled payment of
principal or interest pursuant to the terms of this Agreement or the Lenders so
agrees in writing.
SECTION L. Subordination Agreement. Concurrently with the execution of
this Agreement, the Borrower and the Stockholder are executing and delivering to
the Lender a Subordination Agreement pursuant to which the MIG Notes are
expressly subordinated to the Obligations pursuant to the terms therein
described.
SECTION M. Lock Box Agreement.
1. Receipt and Credit for Collections. Within 60 days after the Closing
Date, the Borrower shall enter into a Lock Box Agreement with the Lender
pursuant to which the Lender will be granted access to the post office box
to which all Account Debtors shall be instructed to forward payments with
respect to all Property. All checks, drafts, cash, notes, money orders,
acceptances and other remittances in part or full payment with respect to
the Property ("Collections") received through the Lock Box shall be
retained by the Lender and processed in accordance with the Lock Box
Agreement. All Collections received directly by the Borrower shall
immediately be sent or delivered by the Borrower to the post office box
that is part of the lock box arrangement. The Lender shall, without
further inquiry and without regard to any instructions from the Borrower,
deposit all collections in such account or accounts as the Lender shall
from time to time elect. Any fees or expenses charged to the Lender by any
other bank for transfer of funds from the Borrower's account shall be
charged as accrued, as a debit to the Obligations.
2. Verification of Receivables. If an Event of Default exists, the
Lender may confirm and verify all Accounts in any reasonable manner. In
such circumstance, the Borrower shall assist the Lender in confirmation and
verification of the Accounts. If no Event of Default exists, the Lender
and the Borrower shall in good faith coordinate the verification of all
Accounts. The Lender may at any time after an Event of Default exists,
notify or require the Borrower to notify, all of the Borrower's Account
Debtors or any of them to make payment directly to the Lender to the extent
not already provided by the Lock Box. The Lender may enforce collection
of, settle, compromise, extend or renew the indebtedness of any or all of
the Borrower's Account Debtors after an Event of
Default exists.
3. Authority to Perform for Borrower - Lock Box. The Borrower hereby
appoints the Lender as the Borrower's attorney-in-fact in connection solely
with enforcement of the Lender's rights under the Lock Box Agreement, (i)
to endorse the name of the Borrower on any notes, acceptances, checks,
drafts, money orders or other instruments for the payment of money or any
security interest that may come into the Lender's possession; (ii) after an
Event of Default exists, to sign the Borrower's name on any invoice or xxxx
of lading relating to any of the Accounts, on drafts against Account
Debtors, and notices to Account Debtors; and (iii) after an Event of
Default exists, to receive, open and dispose of all mail addressed to the
Borrower and received at the lock box established pursuant to subparagraph
(a) hereof. This power, because it is coupled with an interest, is
irrevocable during the term of this Agreement. The Lender is hereby
authorized and empowered to accept the return of goods represented by any
of the Accounts, without notice to or the consent of the Borrower and
without discharging or in any way affecting the Borrower's liability
hereunder. Except in case of its gross negligence or intentional
misconduct, neither the Lender nor its appointee shall be liable for any
acts of commission or omission, nor for any error of judgment or mistake of
fact or law.
ARTICLE III.
Interest
SECTION A. Applicable Interest Rates. The Borrower shall have the option
to elect to have any Segment bear interest at the Floating Rate or the
LIBOR-Based Rate. For any period of time and for any Segment with respect to
which the Borrower does not elect the LIBOR-Based Rate, such Segment shall bear
interest at the Floating Rate. The Borrower's right to elect the LIBOR-Based
Rate shall be subject to the following requirements: (a) each LIBOR-Based Rate
Segment shall be in the amount of $1,000,000 or more and in an integral multiple
of $100,000 thereafter, (b) each LIBOR-Based Rate Segment shall have a maturity
selected by the Borrower of one, two or three months, (c) no more than three
Segments may be outstanding at any time, and (d) no LIBOR-Based Rate Segment may
have a maturity date later than the Termination Date.
SECTION B. Procedure for Exercising Interest Rate Options. The Borrower
may elect to have a particular interest rate apply to a Segment by notifying the
Lender in writing (which may be by facsimile transmission) not later than 10:00
a.m., Birmingham, Alabama time, on the day on which a requested interest rate is
to become applicable, except that, if the Segment is to bear interest at the
LIBOR-Based Rate, the notice must be received by the Lender not later than 10:00
a.m. Birmingham, Alabama time, two Business Days before the day on which the
requested interest rate is to become applicable. Any notice of interest rate
election hereunder shall be irrevocable and shall be on a Request for Advances
or Interest Rate Election form and shall set forth the following: (a) the
amount of the Segment to which the requested interest rate will apply, (b) the
date on which the selected interest rate will become applicable, (c) whether the
interest rate selected is the Floating Rate or the LIBOR-Based Rate and (d) if
the interest rate selected is the LIBOR-Based Rate, the maturity selected for
the LIBOR-Based Rate Period. On the day that the Lender receives a notice
hereunder requesting that the LIBOR-Based Rate be applicable, the Lender shall
use its best efforts to notify the Borrower by telephone or by facsimile
transmission of the Lender's estimate of the applicable LIBOR-Based Rate as
early on that day or the next Business Day as may be practical in the
circumstances. The Lender shall not be required to provide an estimate of the
LIBOR-Based Rate on any day on which dealings in deposits in Dollars are not
transacted in the London interbank market. If the Borrower does not immediately
accept the LIBOR-Based Rate quoted by the Lender, the Lender may, in view of
changing market conditions, revise the quoted LIBOR-Based Rate at any time. No
LIBOR-Based Rate shall be effective until mutually agreed upon by the Borrower
and the Lender. If the Lender and the Borrower attempt to agree on the
LIBOR-Based Rate but fail so to agree, or if there is any uncertainty as to
whether or not the Lender and the Borrower have agreed upon the LIBOR-Based
Rate, interest shall accrue on the Segment for which the LIBOR-Based Rate has
been selected at the then applicable Floating Rate.
SECTION C. Floating Rate. Each Segment subject to the Floating Rate shall
bear interest from the date the Floating Rate becomes applicable thereto until
payment in full, or until the LIBOR-Based Rate is selected by the Borrower and
becomes applicable thereto, on the unpaid principal balance of such Segment on
an Actual/360 Basis. Any change in the Floating Rate caused by a change in the
Prime Rate or in the Federal Funds Effective Rate shall take effect on the
effective date of such change in the Prime Rate designated by the Lender or in
the Federal Funds Effective Rate, without notice to the Borrower and without any
further action by the Lender. If an Event of Default exists, each Segment
subject to the Floating Rate shall bear interest from the date of such Event of
Default until payment in full at a per annum rate (computed on an Actual/360
Basis) equal to the Default Rate. Notwithstanding the foregoing, for the
purpose of enabling the Lender to send periodic billing statements in advance of
each interest payment date reflecting the amount of interest payable on such
interest payment date, at the option of the Lender, the Prime Rate or the
Federal Funds Effective Rate, as applicable, in effect 15 days prior to each
interest payment date shall be deemed to be the Prime Rate or the Federal Funds
Effective Rate, as applicable, as continuing in effect until the date prior to
such interest payment date for purposes of computing the amount of interest
payable on such interest payment date. If the Lender elects to use the Prime
Rate or the Federal Funds Effective Rate, as applicable, 15 days prior to the
interest payment date for billing purposes, and if the Prime Rate or the Federal
Funds Effective Rate, as applicable, changes during such 15-day period, the
difference between the amount of interest that in fact accrues during such
period and the amount of interest actually paid will be added to or subtracted
from, as the case may be, the interest otherwise payable in preparing the
periodic billing statement for the next succeeding interest payment date. In
determining the amount of interest payable at the Termination Date or upon full
prepayment of the Obligations, all changes in the Prime Rate or the Federal
Funds Effective Rate, as applicable, occurring on or prior to the day before the
Termination Date or the date of such full prepayment shall be taken into
account.
SECTION D. LIBOR-Based Rate. Each LIBOR-Based Rate Segment shall bear
interest from the date the LIBOR-Based Rate becomes applicable thereto until the
end of the applicable LIBOR-Based Rate Period on the unpaid principal balance of
such LIBOR-Based Rate
Segment at the LIBOR-Based Rate on an Actual/360 Basis. If an Event of Default
exists, each LIBOR-Based Rate Segment shall bear interest from the date of such
Event of Default until payment in full at a per annum rate (computed on an
Actual/360 Basis) equal to two percent (2%) in excess of the LIBOR-Based Rate
that would otherwise have been applicable.
SECTION E. Termination of LIBOR-Based Rate; Increase in LIBOR-Based Rate;
Reduction of Return.
1. If at any time the Lender shall reasonably determine (which
determination, if reasonable, shall be final, conclusive and binding upon all
parties) that:
(1) by reason of any changes arising after Closing Date affecting the
London interbank market or affecting the position of the Lender in such
market, adequate and fair means do not exist for ascertaining the
LIBOR-Based Rate by reference to the LIBOR Quote with respect to a
LIBOR-Based Rate Segment; or
(2) the continuation by the Lender of LIBOR-Based Rate Segments at
the LIBOR-Based Rate or the funding thereof in the London interbank market
would be unlawful by reason of any law, governmental rule, regulation,
guidelines or order; or
(3) the continuation by the Lender of LIBOR-Based Rate Segments at
the LIBOR-Based Rate or the funding thereof in the London interbank market
would be impracticable as a result of a contingency occurring after the
Closing Date that materially and adversely affects the London interbank
market;
then, and in any such event, the Lender shall on such date give notice (by
telephone and confirmed in writing) to the Borrower of such determination. The
obligation of the Lender to make or maintain LIBOR-Based Rate Segments so
affected or to permit interest to be computed thereon at the LIBOR-Based Rate,
as the case may be, shall be terminated, and interest shall thereafter be
computed on the affected Segment or Segments at the then applicable Floating
Rate.
2. It is the intention of the parties hereto that the LIBOR-Based Rate
shall accurately reflect the cost to the Lender of maintaining any LIBOR-Based
Rate Segment during the applicable LIBOR-Based Rate Period assuming the Bank
purchases any such time deposits and obtains such funds comprising any
LIBOR-Based Rate Segment. Accordingly, if by reason of any change after the
date hereof in any applicable Governmental Requirement (or any interpretation
thereof and including the introduction of any new Governmental Requirement),
including any change in the LIBOR Reserve Requirement, the cost to the Lender of
maintaining any LIBOR-Based Rate Segment or funding the same by means of a
London interbank market time deposit, as the case may be, shall increase, the
LIBOR-Based Rate applicable to such LIBOR-Based Rate Segment shall be adjusted
as necessary to reflect such change in cost to the Lender, effective as of the
date on which such change in any applicable Governmental Requirement becomes
effective. Any amounts due under this Section 0 as a result of a change in the
LIBOR Reserve Requirement shall only be payable by the Borrower to the extent
the Lender incurs actual costs associated with any such change.
3. If the Lender shall have determined that the adoption after the
Closing Date of any Governmental Requirement regarding capital adequacy, or any
change in any of the foregoing or in the interpretation or administration of any
of the foregoing by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by the Lender (or any lending office of the Lender) or the Lender's holding
company with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the Lender's capital or on the capital of the Lender's holding company, as a
consequence of the Lender's obligations under this Agreement or the Advances
made by the Lender pursuant hereto to a level below that which the Lender or the
Lender's holding company could have achieved but for such adoption, change or
compliance (taking into consideration the Lender's guidelines with respect to
capital adequacy) by an amount deemed by the Lender to be material, then from
time to time the Borrower shall pay to the Lender such additional amount or
amounts as will compensate the Lender or the Lender's holding company for any
such reduction suffered.
SECTION F. Compensation. The Borrower shall compensate the Lender for all
reasonable losses, expenses and liabilities (including any interest paid by the
Lender to lenders on funds borrowed by the Lender to make or carry any
LIBOR-Based Rate Segment and any loss sustained by the Lender in connection with
the re-employment of such funds), that the Lender may sustain: (a) if for any
reason (other than a default by the Lender) following agreement between the
Borrower and the Lender as to the LIBOR-Based Rate applicable to the LIBOR-Based
Rate Segment the Borrower fails to accept such LIBOR-Based Rate Segment, (b) as
a consequence of any unauthorized action taken or default by the Borrower in the
repayment of any LIBOR-Based Rate Segment when required by the terms of this
Agreement or (c) as a consequence of the prepayment of any LIBOR-Based Rate
Segment pursuant to Section 0. A certificate as to the amount of any additional
amounts payable pursuant to this section or Section 0 (setting forth in
reasonable detail the basis for requesting such amounts) submitted by the Lender
to the Borrower shall be conclusive, in the absence of manifest error. The
Borrower shall pay to the Lender the amount shown as due on any such certificate
delivered by the Lender within 30 days after the Borrower's receipt of the same.
ARTICLE IV.
Representations and Warranties
The Borrower represents and warrants to the Lender as follows:
SECTION A. Financial Statements. The Borrower's audited consolidated
financial statements as at December 31, 1996, and the Borrower's unaudited
consolidated financial statement as at September 30, 1997, copies of which have
been previously submitted to the Lender, have been prepared in conformity with
GAAP and present fairly in all material respects the financial condition of the
Borrower as at such dates and the results of its operations for the periods then
ended, subject (in the case of the September 30, 1997, financial statements) to
year-end audit adjustments and omission of footnotes.
SECTION B. Non-Existence of Defaults. As of the Closing Date, it is not
in default with respect to any material amount of its existing Debt. The making
and performance of this Agreement and the Credit Documents, will not
immediately, or with the passage of time, the giving of notice, or both: (a)
violate the provisions of the organizational documents or any other corporate
document of the Borrower; (b) violate any laws; (c) result in a material default
under any contract, agreement, or instrument to which the Borrower is a party or
by which the Borrower or its properties are bound; or (d) result in the creation
or imposition of any Lien upon any of the Property of the Borrower except in
favor of the Lender or The Chase Manhattan Bank.
SECTION C. Litigation. Set forth on Schedule 4.3 is a list of all
material actions, suits, investigations or proceedings pending or, in the
knowledge of the Borrower, threatened against the Borrower as of the Closing
Date in which there is a reasonable probability of an adverse decision that
would materially and adversely affect the Borrower, the Business, the Property,
or the conditions, financial or otherwise, of the Borrower.
SECTION D. Material Adverse Changes. As of the Closing Date, the Borrower
does not know of any material adverse change in the Business, or in the
Borrower's assets, liabilities, properties, or condition, financial or
otherwise, including changes in the Borrower's financial condition from
September 30, 1996, through the Closing Date.
SECTION E. Title to Property. The Borrower has good and marketable title
to all of the Property, free and clear of any and all Liens, other than the
Permitted Encumbrances.
SECTION F. Corporate Status. The Borrower is a duly organized Georgia
corporation, in good standing, with perpetual corporate existence. The Borrower
has the corporate power and authority to own its properties and to transact the
Business in which it is engaged and presently proposes to engage. The Borrower
has not done business under any other name, trade name or otherwise, within the
five years immediately preceding the Closing Date except as set forth in
Schedule 4.6.
SECTION G. Corporate Power and Authority. The Borrower has the corporate
power to borrow and to execute, deliver and carry out the terms and provisions
of the Credit Documents and is duly qualified or registered to do business in
every jurisdiction where the character of its properties or the nature of its
activities makes such qualification or registration necessary, except to the
extent it would not have a material adverse effect on the Borrower to so qualify
or register. The Borrower has taken or caused to be taken all necessary
corporate action to authorize the execution, delivery and performance of the
Credit Documents and the borrowing thereunder (including the obtaining of any
consent of shareholders required by law or by the Borrower's Certificate of
Incorporation or Bylaws).
SECTION H. Place of Business. As of the Closing Date, the primary place
of business and chief executive office of the Borrower is at 000 Xxxxx Xxxx,
XxXxxxxxx, XX 00000. The Property is maintained as of the Closing Date solely
at the locations listed in Schedule 4.8, and all assets used in the Business are
in such locations.
SECTION I. Place Where Records Maintained. As of the Closing Date the
Borrower's records concerning the Property are kept at the chief executive
office of the Borrower referenced above, or will be kept at such other place
that the Borrower informs the Lender of in advance of relocation.
SECTION J. Validity, Binding Nature and Enforceability of the Credit
Documents. The Credit Documents executed by the Borrower are the valid and
binding obligations of the Borrower and are enforceable against the Borrower in
accordance with their terms, except as limited by bankruptcy, insolvency, or
other laws of general application relating to the enforcement of creditors'
rights.
SECTION K. Taxes. As of the Closing Date, the Borrower has (a) filed all
federal and all material state and local tax returns and other reports that it
is required by law to file prior to the Closing Date, (b) paid or cause to be
paid all taxes, assessments and other governmental charges that are due and
payable prior to the Closing Date, the failure of which to pay would have a
material adverse effect on the Business, except those subject to a Permitted
Contest, and (c) made adequate provision for the payment of such taxes,
assessments or other charges accruing but not yet payable. The Borrower has no
knowledge of any deficiency or additional assessment in a material amount in
connection with any taxes, assessments or charges.
SECTION L. Compliance with Laws. As of the Closing Date, the Borrower has
complied in all material respects with all applicable laws, including any
Environmental Laws and any zoning laws, the failure of which to comply with
would have a material adverse effect on the Borrower.
SECTION M. Consents. As of the Closing Date, the Borrower has duly
obtained all material consents, permits, licenses, approvals or authorization
of, or effected the filing, registration or qualification with, any Governmental
Authority that is required to be obtained or effected by the Borrower in
connection with the Business or the execution and delivery of this Agreement and
the other Credit Documents the failure of which to obtain or effect would have a
material adverse effect on the Borrower.
SECTION N. Purpose. The proceeds of the Loan shall be used by the
Borrower solely for capital expenditures and the working capital needs of the
Borrower.
SECTION O. Condition of the Business. All material assets used in the
conduct of the Business are in good operating condition and repair and are fully
usable in the ordinary course thereof, reasonable wear and tear excepted.
SECTION P. Labor Contracts. As of the Closing Date, the Borrower is not a
party to or bound by any collective bargaining agreements, nor are there any
petitions to certify a collective bargaining organization or notices of
intention to organize pursuant to the National Labor Relations Act, other than
as described in Schedule 4.16.
SECTION Q. ERISA. As of the Closing Date, except as set forth on
Schedule 4.17,
the Borrower has no employee benefit plans covered by Title IV of ERISA and no
qualified or nonqualified retirement plans or deferred compensation plans.
SECTION R. Patents and Trademarks. As of the Closing Date, the Borrower
owns no registered patents, trademarks or service marks, and has no pending
registration applications with respect to patents, trademarks or service marks,
in either case relating to the Business, other than those listed in the attached
Schedule 4.18.
SECTION S. Location of Property. Schedule 4.8 describes the locations
where any of the Property is located or stored as of the date hereof.
SECTION T. Real Property. As of the Closing Date, the Borrower does not
own or lease any real property, except as set forth on Schedule 4.20 attached
hereto.
SECTION U. Capitalization. The Borrower has authorized and outstanding
1,000 shares of its capital stock, which are held beneficially and of record as
follows:
Shareholder Number of Shares
----------- ----------------
Stockholder 1,000
There are no outstanding subscriptions, options, rights, warrants, calls,
commitments or agreements of any kind to issue, acquire or transfer any shares
of capital stock of the Borrower or any securities convertible into any shares
of such capital stock.
SECTION V. Subsidiaries. The Borrower has no Subsidiaries.
SECTION W. Federal Reserve Board Regulations. The Borrower does not
intend to use any part of the proceeds of the Credit, and has not incurred any
indebtedness to be reduced, retired or purchased by it out of such proceeds, for
the purpose of purchasing or carrying any Margin Stock, and it does not own and
has no intention of acquiring any such Margin Stock.
SECTION X. Investment Company Act. The Borrower is not an "investment
company," or a company "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended.
ARTICLE V.
Conditions of Lending
The obligation of the Lender to lend hereunder is subject to the following
conditions precedent:
SECTION A. Representations and Warranties. On and as of the Closing Date
and
any later date on which Credit is to be extended hereunder, and on the date the
Borrower presents to the Lender each Request for Advance or Interest Rate
Election form requesting an Advance, the representations and warranties set
forth in Article 0 must be true and correct in all material respects with the
same effect as though they had been made on and as of such date, except to the
extent that they expressly relate to an earlier date.
SECTION B. No Default. On and as of the Closing Date hereof and any later
date on which Credit is to be extended hereunder and on the date the Borrower
presents to the Lender each Request for Advance or Interest Rate Election form
requesting an Advance, no Event of Default, nor any event that upon notice or
lapse of time or both would constitute an Event of Default, may exist. The
presentation by the Borrower of each Request for Advance or Interest Rate
Election form requesting an Advance shall constitute representation and warranty
by the Borrower to the Lender that no Event of Default exists.
SECTION C. Automatic Representations and Warranties. The making of any
request for an Advance shall constitute an automatic representation and warranty
by the Borrower that the representations and warranties contained in Article 0
are true and correct in all material respects on and as of the date of such
Advance.
SECTION D. Required Items. On and as of the Closing Date and on and as of
the date of each Advance and on the date the Borrower presents to the Lender
each Request for Advance or Interest Rate Election form, the Lender must have
received all financial statements (if any), reports and other items required as
of that date under Article 0 and Article 0 of this Agreement.
SECTION E. Supporting Documents.
1. The Lender shall have received on or before the Closing Date:
(a) a copy of resolutions of the Board of Directors of the Borrower,
certified as in full force and effect on the Closing Date by the Secretary
of the Borrower, authorizing the execution, delivery and performance of the
Credit Documents by the Borrower and authorizing designated officers of the
Borrower to execute and deliver the Credit Documents and execute and
deliver to the Lender Request for Advances or Interest Rate Election forms;
(b) a certificate of the Secretary of the Borrower, dated the Closing
Date, certifying (A) that attached thereto are true, correct and accurate
copies of Certificate of Incorporation and By-laws of the Borrower and
(B) the incumbency and specimen signatures of the designated officers
referred to clause (i) above;
(c) Opinions of Counsel to the Borrower, the Stockholder and the
Sponsors in form and content acceptable to the Lender and its counsel as to
the execution and delivery by the Borrower, the Stockholder and the
Sponsors of the Credit Documents and other matters related thereto;
(d) a Pledge Agreement duly executed by the Stockholder granting to
the Lender a first priority perfected security interest in all the
outstanding capital stock of the Borrower, together with all stock powers,
stock certificates and financing statements related thereto;
(e) other duly executed Security Documents granting to the Lender a
first priority perfected security interest and Lien on all other assets,
real or personal, then or thereafter owned by the Borrower;
(f) the Subordination Agreement duly executed by the Borrower and the
Stockholder together with a copy of each of the MIG Notes;
(g) the Make-Whole and Pledge Agreement duly executed by the Sponsors
dated the Closing Date in favor of the Lender;
(h) the Intercreditor and Subordination Agreement duly executed by
the Lender and The Chase Manhattan Bank dated the Closing Date;
(i) the deposit of $1,000,000 made by the Borrower into the Snapper
Make-Whole Account provided for in the Make-Whole and Pledge Agreement;
(j) the Lock Box Agreement duly executed by the Bank, the Lender and
the Borrower;
(k) a copy of resolutions of the Board of Directors of the
Stockholder, certified as in full force and effect on the Closing Date by
the Secretary of Stockholder, authorizing the execution, delivery and
performance by the Stockholder of the Credit Documents to which it is a
party and authorizing designated officers of the Stockholder to execute and
deliver such Credit Documents on behalf of the Stockholder;
(l) a certificate of the Secretary of the Stockholder, dated the
Closing Date, certifying (A) that attached thereto are true, correct and
accurate copies of the Certificate of Incorporation and By-laws of the
Stockholder and (B) the incumbency and specimen signatures of the
designated officers referred to in clause (xii) above;
(m) the Guaranty Agreement duly executed by the Stockholder in favor
of the Lender;
(n) the Limited Guaranty Agreement duly executed by the Sponsors in
favor of the Lender;
(o) certificates of good standing with respect to the Borrower and
the Stockholder from the appropriate Governmental Authorities in the
jurisdictions under the laws of which each of them is incorporated or
formed; and
(p) such additional supporting documents as the Lender or its counsel
may
reasonably request.
2. The Lender shall have received on or before the Closing Date the
following additional documents:
(a) a Phase I environmental audit with respect to the real property
described on Schedule 4.20 (the "Real Property") showing that there exist
no material environmental problems with the Real Property;
(b) evidence satisfactory to the Lender that there has been no
material pending or threatened litigation, bankruptcy or insolvency,
injunction, order or claim pending with respect to the Borrower or any of
them and that no material adverse change has occurred in the financial
condition, business or prospects of the Borrower or any of them since the
date of the financial statements referred to in Section 4.1;
(c) a title insurance policy, endorsed to be effective as of the
Closing Date, in the amount of $12,000,000 with respect to the Real
Property, issued by a title insurance company approved by the Lender and
insuring the Lien of the Lender, under the deed to secure debt executed and
delivered by the Borrower, and showing no exceptions other than Permitted
Encumbrances;
(d) to the extent required by the Lender, subordinations and consents
from the landlords where the Borrower has any Inventory located or
consigned whereby each such party acknowledges the Lender's first-priority
security interest in the Borrower's Inventory and other tangible personal
property;
(e) such additional supporting documents as the Agents, the Lenders
or their counsel may reasonably request.
3. On or before the delivery to the Lender of any Security Document, the
Borrower shall have delivered to the Lender, at the Borrower's expense, such
title insurance commitments, environmental reports, surveys, UCC searches,
financing statements, filing information, opinions of counsel and other
information as shall be requested by the Lender in order to satisfy the Lender
and its counsel as to the validity, legality, effectiveness, perfection,
priority and enforceability of such Security Document.
4. All documents delivered to the Lender under this Section 5.5 shall be
in form and substance reasonably satisfactory to the Lender and its counsel.
ARTICLE VI.
Covenants
The Borrower covenants and agrees that:
SECTION A. Payment and Performance. The Borrower shall pay and perform
all Obligations in full when and as due under the terms of the Credit Documents.
SECTION B. Insurance.
1. Type of Insurance. The Borrower shall at all times cause the Business
and the Property to be insured by reputable insurers of reasonable
financial soundness and having an A. M. Best rating of A or better, with
such policies, against such risks (including products liability) and in
such amounts as are appropriate for reasonably prudent businesses in the
Borrower's industry and of the Borrower's size and financial strength.
2. Requirements as to Insurance Policies. The policies of insurance
which the Borrower is required to carry pursuant to the provisions of
Section 6.2(a) shall comply with the requirements listed below:
(i) Each such policy shall provide that it may not be cancelled or
allowed to lapse at the end of a policy period without at least 30
days' prior written notice to the Lender;
(ii) Each liability and hazard insurance policy shall name the Lender
as an additional insured; and
(iii) Each insurance policy required under Section 6.2(a) shall
contain a standard lender's loss payable clause in favor of the
Lender. Such insurance policies shall also contain lender's loss
payable endorsements satisfactory to the Lender providing, among other
things, that any loss shall be payable in accordance with the terms of
such policy notwithstanding any act of the Borrower which might
otherwise result in forfeiture of such insurance.
3. Collection of Claims. The Borrower agrees that it shall promptly
advise the Lender of any insured casualty in excess of $100,000 and, if
such loss represents the destruction of any Property that causes the
Borrowing Base to be exceeded, the Borrower agrees that the Lender may
direct all insurance proceeds therefrom to be paid directly to the Lender,
and hereby appoints the Lender its attorney-in-fact for such purpose.
4. Blanket Policies. Any insurance required by this Section 6.2 may be
supplied by means of a blanket or umbrella insurance policy.
5. Delivery of Policies or Certificate of Insurance. The Borrower shall
deliver to the Lender certificates of insurance issued by insurers to
evidence that the insurance maintained by the Borrower complies with the
requirements of this Section 6.2.
SECTION C. Collection of Receivables; Sale of Inventory. The Borrower
shall collect its Accounts and sell its Inventory only in the ordinary course of
business, unless written permission to the contrary is obtained from the Lender.
SECTION D. Notice of Litigation and Proceedings. The Borrower shall give
prompt notice to the Lender of (a) any litigation or proceeding (including fines
and penalties of any public authority) in which it is a party in which there is
a reasonable probability of an adverse decision that would require it to pay
more than $500,000, or deliver assets the value of which exceeds $500,000,
whether or not the claim is considered to be covered by insurance; (b) any class
action litigation against it, regardless of size; and (c) the institution of any
other suit or proceeding that could reasonably be likely to materially and
adversely affect its operations, financial condition, property or the Business.
SECTION E. Payment of Indebtedness to Third Persons. The Borrower shall
pay, when due, all Debt due third persons, except when the amount thereof is
subject to a Permitted Contest.
SECTION F. Notice of Change of Business Location. The Borrower shall
notify the Lender: (a) 30 days in advance of any change in or discontinuation
of the location of the Property, the Borrower's principal place of business, (b)
30 days in advance of the establishment of any new places of business relating
to the Business, and (c) 2 days in advance of any change in or addition to the
locations where the Borrower's Inventory or records are kept; provided, however,
that Inventory shall be excluded from the Borrowing Base if it is moved to a new
location and the Lender is not satisfied it has a valid perfected security
interest in such Inventory.
SECTION G. Pension Plans. The Borrower shall (a) fund all of its defined
benefit or defined contribution pension plans, if any, in accordance with, and
in amounts not less than that required by, the minimum funding standards of
Section 302 of ERISA, as amended, (b) make available for inspection and copying
by the Lender, all audit reports and Forms 5500, filed with the United States
Department of Labor or the Internal Revenue Service with respect to all such
plans promptly after filing, and any other related information as may be
reasonably requested from time to time by the Lender, and (c) promptly advise
the Lender of the occurrence of any reportable event or non-exempt prohibited
transaction (as defined in ERISA) with respect to any such plan.
SECTION H. Payment of Taxes. The Borrower shall pay or cause to be paid
when and as due, all taxes, assessments and charges or levies imposed upon it or
on any of its property or that it is required to withhold and pay over to the
taxing authority or that it must pay on its income, the failure of which to pay
would have a material adverse effect on the Borrower, except where subject to a
Permitted Contest. The Borrower shall, however, pay or cause to be paid all
such taxes, assessments, charges or levies immediately whenever foreclosure of
any Lien that attaches on the Property or the Real Property appears imminent.
SECTION I. Further Assurances. The Borrower agrees to, execute such other
and further documents, including confirmatory deeds, deeds to secure debt,
promissory notes, security agreements, financing statements, continuation
statements, certificates of title, and the like as may from time to time in the
reasonable opinion of the Lender be necessary to perfect, confirm, establish,
reestablish, continue, or complete the security interests, collateral
assignments and liens in the Property, and the purposes and intentions of this
Agreement.
SECTION J. Advancements. If the Borrower fails to (i) perform any of the
affirmative covenants contained in Section 6.1, (ii) protect or preserve the
Property or (iii) protect or preserve the status and priority of the Liens and
security interest of the Lender in the Property, the Lender may make advances to
perform those obligations. All sums so advanced shall immediately upon
advancement be subject to the terms and provisions of this Agreement and all of
the Credit Documents. Any provisions in this Agreement to the contrary
notwithstanding, the authorizations contained in this Section 6.10 shall impose
no duty or obligation on the Lender to perform any action or make any
advancement on behalf of the Borrower and are for the sole benefit and
protection of the Lender.
SECTION K. Maintenance of Status. The Borrower shall take all necessary
steps to (i) preserve its existence as a corporation, (ii) preserve the
Borrower's franchises and permits the loss of which would have a material
adverse effect on the Business, and (iii) comply with all present and future
material agreements to which the Borrower's is subject. The Borrower shall not
change the nature of the Business during the term of this Agreement.
SECTION L. Financial Statements; Reporting Requirements; Certification as
to Events of Defaults. During the term of this Agreement, the Borrower shall
furnish copies of the following to the Lender:
1. within thirty (30) days of each month, the Borrower's monthly
financial package, consisting of projections of the Borrowing Base for the
next succeeding twelve month period, financial operating results summary,
together with operating summaries for the Borrower for the month and year
to date then ended, subject to year-end audit adjustments, and certified by
the Chief Financial Officer of the Borrower to have been prepared in
accordance with GAAP and to accurately reflect in all material respects the
financial condition of the Borrower;
2. within 90 days of each fiscal year, annual financial statements for
the Borrower as of the end of such fiscal year, consisting of a
consolidated balance sheet, consolidated statement of operations,
consolidated statements of cash flows and consolidated statement of
stockholder's equity, in comparative form. The statements and balance
sheet shall be consolidated with the financial statements of the
Stockholder and the Stockholder's financial statements shall be audited by
an independent firm of certified public accountants selected by the
Stockholder and reasonably acceptable to the Lender (the Stockholder's
present accounting firm, KPMG Peat Marwick is acceptable and any so-called
"Big Six" accounting firm selected by the Stockholder shall be acceptable
to the Lender), and certified by that firm of certified public accountants
to have been prepared in accordance with GAAP. The certified public
accountants shall render an unqualified opinion as to such statements and
balance sheets; provided, however, if the opinion is qualified, the
accountants shall provide a precise and full explanation of the reasons for
any such qualification together with all papers upon which any such
qualification is based. the Lender shall have the absolute and irrevocable
right, from time to time, to discuss the affairs of the Borrower directly
with the independent certified public accountant after prior notice to the
Borrower and the reasonable opportunity of the Borrower to be present at
any such discussions and a representative of the Stockholder
shall have the right to be present during any such discussions;
3. within 45 days after the close of each fiscal quarter beginning with
the fiscal quarter ending December 31, 1997, a certificate of the
President, Chief Financial Officer, or Director of Taxes of the Borrower
stating that he has reviewed the provisions of the Credit Documents and
that a review of the activities of the Borrower during such quarter has
been made by or under his supervision with a view to determining whether
the Borrower has observed and performed all of the Borrower's obligations
under the Credit Documents, and that, to the best of his knowledge,
information and belief, the Borrower has observed and performed each and
every undertaking contained in the Credit Documents and is not at the time
in default in the observance or performance of any of the terms and
conditions thereof or, if the Borrower shall be so in default, specifying
all of such defaults and events of which he may have knowledge;
4. by January 3l of each fiscal year, an operating plan for such fiscal
year prepared for each month, including projected income statements,
balance sheets, cash flow budgets, and capital expenditure budgets for each
month supported by a narrative describing the assumptions upon which the
plan is based;
5. within 15 days after the end of each month, financial statements
similar to those referred to in Section 6.12(b) for such month and for the
period beginning on the first day of the fiscal year and beginning on the
last day of such month, unaudited but certified by the Chief Financial
Officer of the Borrower;
6. on Monday of each week, a completed Borrowing Base Certificate in the
form attached hereto as Schedule E, certified by an Authorized
Representative of the Borrower, together with (i) a detailed aged trial
balance, in form and substance acceptable to the Lender, of all
then-existing Accounts specifying the names, addresses, face value and
dates of invoices for each Account Debtor obligated on an Account so
listed, separated as to Eligible Accounts and Accounts which are not
Eligible Accounts, and, upon demand, the original copy of all documents
(including proof of shipment and delivery, sales journals, contracts, bills
of lading, warehouse receipts, purchase orders, invoices, customer
statements, repayment histories, completion certificates or other proof of
the satisfactory performance of the services that gave rise to an Account,
and present status reports) evidencing or relating to the Accounts so
scheduled and such other matters and information relating to the
then-existing Accounts as the Lender shall reasonably request and
(ii) schedules of inventory; original orders; invoices; shipping documents;
floorplan billing settlements and receivables; market and inventory listing
containing model, serial number, location and parts inventory by location,
the current status and value of the Inventory and weekly sales reports in
form and detail reasonably satisfactory to the Lender. The statements
shall be in the form and shall contain the information as is prescribed by
the Lender. Other reporting shall be available upon request by the Lender,
including inventory reporting showing the cost (determined on a "first-in,
first-out" basis) and market value thereof;
7. promptly upon receipt thereof, copies of all final reports and final
management
letters (or excerpts of such reports or letters which include information
about the Borrower) submitted to the Stockholder by independent accountants
in connection with any annual or interim audit of the books of the
Stockholder made by such accountants that relate solely to the Borrower;
8. copies of any and all reports, filings and other documentation
delivered to the Securities and Exchange Commission, if any; and
9. any other statements, reports and other information as the Lender may
reasonably request concerning the financial condition of the Borrower.
SECTION M. Notice of Existence of Default. The Borrower shall promptly
notify the Lender of: (i) the existence of any known condition or event, which
is or which will be with notice or the passage of time or both an Event of
Default of (ii) the actual or threatened termination, suspension, lapse or
relinquishment of any material license, authorization, permit or other right
granted the Borrower or for the Borrower's benefit and used in the Business by
any Governmental Authority material to the Business.
SECTION N. Compliance with Laws. The Borrower shall comply in all
material respects with all applicable laws, rules, regulations and orders the
noncompliance with which would have a material adverse effect on the Borrower.
SECTION O. Maintenance of Property. The Borrower shall maintain the
Property and every part thereof in good condition and repair. The Borrower
shall not permit the value of the Property to be materially impaired. The
Borrower shall defend the Property against all claims and legal proceedings by
persons other than the Lender and The Chase Manhattan Bank. The Borrower shall
not transfer the Property from the premises where now located (other than
Inventory sold in the ordinary course of business, other Property transferred in
the ordinary course of business or in accordance with Section 6.19 of this
Agreement), or permit the Property to become a fixture or accession (unless so
affixed on the Closing Date) to any goods which are not items of Property,
without the prior written approval of the Lender. The Borrower shall not permit
the Property to be used in violation of any applicable law, regulations, or
policy of insurance. As to Property consisting of Instruments and Chattel
Paper, the Borrower shall preserve rights in it against prior parties.
SECTION P. Property Records and Statements. The Borrower shall keep such
accurate and complete books and records pertaining to the Property in such
detail and form as the Lender reasonably requires.
SECTION Q. Inspection of Property, etc. The Lender may examine the
Property at any time, and from time to time. The Lender shall have full access
to, and the right to audit, inspect and make abstracts and copies from the
Borrower's books and records pertaining to the information included in the
Borrowing Base Certificate or the Property, wherever located, at any time during
reasonable business hours, and from time to time. The Borrower shall assist the
Lender in so doing. Without limiting the generality of the foregoing, the
Lender shall have the right to perform or cause to be performed, a lender's due
diligence examination of the Borrower
and its business and assets and to obtain independent appraisals of the
Borrower's Accounts, Equipment and Inventory. The Borrower will cooperate fully
with the Lender to the end that such examination and appraisals can be completed
within 60 days after the Closing Date. The Borrower will promptly reimburse the
Lender for all costs incurred by the Lender in connection with such audit and
appraisals, whether prepared by personnel of the Lender or by other persons at
the Lender's request.
SECTION R. Change of Name, Etc. The Borrower shall not change its name,
or begin to trade under any assumed names or trade names in connection with the
Business without thirty (30) days' prior written notice to the Lender, other
than the trade name "Blackhawk" and "Xxxx Xxxxxx" of which the Lender is hereby
given notice may be applied to certain products of the Borrower.
SECTION S. Sale or Transfer of Assets. Except as consented to in writing
by the Lender, the Borrower shall not sell, transfer, lease (including
sale-leaseback) or otherwise dispose of all or any material portion of its
assets or merge with any person (whether or not the Borrower shall be the
survivor of such merger); provided that the Borrower may sell or otherwise
dispose of Property having an aggregate book value of not more than $500,000 in
any fiscal year or an aggregate fair market value of not more than $250,000 in
any fiscal year. This provision shall not apply to any sale if the proceeds of
such sale pay the Obligations in full.
SECTION T. Acquisition of Stock of Third Person. The Borrower shall not
enter into any agreement, commitment letter or letter of intent to acquire any
equity interest or stock in another business.
SECTION U. False Certificates or Documents. The Borrower shall not
furnish the Lender with any certificate or other document delivered pursuant to
this Agreement that contains any untrue statement of material fact or that omits
to state a material fact necessary to make it not misleading in light of the
circumstances under which it was furnished.
SECTION V. Transactions with Affiliates. Without the prior written
consent of the Lender, which shall not be unreasonably withheld, the Borrower
shall not enter into any contracts, leases, sales or other transactions with any
division or Affiliates on terms less favorable than could be obtained generally
by the Borrower from a nonaffiliate or in the aggregate, would have a material
adverse effect on the Property or on the Business.
SECTION W. Dividends. The Borrower shall not declare or pay any dividends
or make any distributions upon any of its stock (including dividends and
distributions payable only in shares of its stock) or directly or indirectly
apply any of its assets to the redemption, retirement, purchase or other
acquisition of its stock.
SECTION X. Payments on MIG Notes. The Borrower shall not make any
payments to the Stockholder on the MIG Notes at any time (a) that an Event of
Default exists or would result because of such payment, (b) that the aggregate
principal amount of the Loan outstanding exceeds the Borrowing Base or (c) prior
to June 1, 1998. Such payments may not be made more frequently than quarterly
after September 30, 1998.
SECTION Y. Loan. The Borrower shall not make any loan to any Person,
except for loans in anticipation of reasonable and normally reimbursable
business expenses, trade credit extended in the ordinary course of Business and
loans to employees in an aggregate principal amount not to exceed $300,000 at
any one time outstanding.
SECTION Z. Use of Credit Proceeds. Not, directly or indirectly use any
part of the proceeds of the Credit 1. for any purpose other than capital
expenditures and general working capital needs or 2. without limiting the
generality of the foregoing, for the purpose of purchasing or carrying any
Margin Stock, or of reducing, retiring or purchasing any indebtedness incurred
for such purpose; or take any other action that would involve a violation of
Section 7 of the Securities Exchange Act of 1934, as amended, or any regulation
issued thereunder, including Regulation U or Regulation X of the Federal Reserve
Board, in connection with the transactions contemplated hereby; provided,
however, that nothing set forth in this Section 6.26 or elsewhere in this
Agreement shall be construed as imposing any duty on the Lender to supervise the
use or application of the Credit proceeds or any liability on the Lender to any
person if the Credit proceeds are not used for the purposes set forth in this
Agreement.
SECTION AA. Indebtedness. The Borrower shall not incur, create, assume or
permit to exist any Debt, other than the Obligations, Subordinated Debt, Debt
existing on the Closing Date and reflected on the Borrower's financial
statements, other Debt to the Lender, capitalized lease obligations in excess of
$3,000,000 and purchase money obligations allowed under Permitted Encumbrances.
SECTION BB. Guaranties. The Borrower shall not guarantee, endorse, become
surety for or otherwise in any way become or be responsible for the indebtedness
or obligations of any other person, whether by agreement to purchase the
indebtedness, liabilities or obligations of any other person, or agreement for
the furnishing of funds to any other person (directly or indirectly, through the
purchase of goods, supplies or services or by way of stock purchase, capital
contribution, working capital maintenance agreement, advance or loan) or for the
purpose of paying or discharging the indebtedness or obligations of any other
person, or otherwise, except for the endorsement of negotiable instruments in
the ordinary course of business for collection.
SECTION CC. Investments, etc. The Borrower shall not purchase or hold
beneficially any stock, other securities or evidences of indebtedness of or make
any investment or acquire any interest whatsoever in, any other person;
provided, however, that it may invest in Permitted Investments.
SECTION DD. Sale of Receivables. The Borrower shall not sell, assign or
discount, or grant or permit any Lien (other than Permitted Encumbrances) on any
of its accounts receivable or any promissory note held by it, with or without
recourse, other than the discount of such notes in the ordinary course of
business for collection.
SECTION EE. Solvency. The Borrower shall continue to be Solvent.
SECTION FF. Lease Obligations. Except for existing leases (and all
renewals, extensions and replacements thereof), the Borrower shall not incur,
create, permit to exist or assume any commitment to make any direct or indirect
payment, whether as rent or otherwise, under any lease, rental or other
arrangement for the use of property of any other person, if immediately
thereafter the aggregate of such payments to be made by it would exceed $500,000
in any consecutive twelve-month period.
SECTION GG. Financial Covenants. The Borrower will at all times maintain:
1. on each of the dates set forth below, a Tangible Net Worth plus
Subordinated Debt in the combined amount of not less than the amount indicated
for such date:
Tangible Net Worth
Date plus Subordinated Debt
----------------- ----------------------
December 31, 1997 $14,500,000
March 31, 1998 $15,500,000
June 30, 1998 $ 7,800,000
September 30, 1998 $ 5,500,000
December 31, 1998 $ 7,500,000
March 31, 1999 $ 8,000,000
June 30, 1999 $ 8,000,000
September 30, 1999 $ 7,000,000
December 31, 1999 $ 8,000,000
2. on each of the dates set forth below, an EBITDA of not less than the
amount indicated for the three-month period ending on such date:
Date Minimum EBITDA
---------------- ------------------
December 31, 1997 $1,500,000
March 31, 1998 $3,750,000
June 30, 1998 $3,750,000
September 30, 1998 $1,000,000
December 31, 1998 $3,000,000
March 31, 1999 $4,500,000
June 30, 1999 $4,500,000
September 30, 1999 $1,500,000
December 31, 1999 $4,500,000
For purposes of this Section 6.33: (i) "Tangible Net Worth" means the book
value of the Borrower's assets less liabilities, excluding from such assets all
Intangibles; (ii) "Intangibles" means and includes general intangibles (as that
term is defined in the Uniform Commercial Code), accounts receivable and
advances due from officers, directors, employees, stockholders and affiliates,
non-trade accounts receivable and other unidentified accounts receivable,
leasehold improvements net of depreciation, licenses, goodwill, prepaid
expenses, escrow deposits,
covenants not to compete, the excess of cost over book value of acquired assets,
franchise fees, organizational costs, finance reserves held for recourse
obligations, capitalized research and development costs and such other similar
items as the Lender may from time to time determine in the Lender's reasonable
discretion; (iii) "EBITDA" means, for any period of determination, the
consolidated net income of the Borrower before provision for income taxes,
Interest Expense, depreciation and amortization (including implicit interest
expense on capitalized leases), all as determined in accordance with GAAP,
excluding therefrom (to the extent included): (a) non-operating gains
(including extraordinary or nonrecurring gains, gains from discontinuance of
operations and gains arising from the sale of assets other than Inventory)
during the applicable period; (b) net earnings of any business entity in which
the Borrower has an ownership interest unless such net earnings shall have
actually been received by the Borrower in the form of cash distributions; (c)
the earnings of any Person to which any assets of the Borrower shall have been
sold, transferred or disposed of, or into which the Borrower shall have merged,
or been a party to any consolidation or other form of reorganization, prior to
the date of such transaction; (d) any gain arising from the acquisition of any
securities of the Borrower; and (e) non-operating losses arising from the sale
of capital assets during such period; and (iv) "Interest Expense" means interest
payable on Debt during the period in question. The foregoing terms will be
determined in accordance with GAAP, and, if applicable, on a consolidated basis.
SECTION HH. ERISA Compliance. Neither the Borrower nor any member of the
Controlled Group nor any Plan of any of them will:
1. engage in any "prohibited transaction" (as such term is defined in
Section 406 or Section 2003 (a) of ERISA) which is not subject to a legal
exemption;
2. incur any "accumulated funding deficiency" (as such term is defined in
Section 302 of ERISA) whether or not waived;
3. terminate any Pension Plan in a manner that could result in the
imposition of a Lien on any property of the Borrower or any member of the
Controlled Group pursuant to Section 4068 of ERISA; or
4. violate state or federal securities laws applicable to any Plan.
SECTION II. Fiscal Year. The Borrower shall not change its fiscal
year-end without sixty days prior written notice to the Lender.
ARTICLE VII.
Events of Default
SECTION A. Events of Default. The occurrence of any of the following
events shall constitute an event of default (an "Event of Default") under this
Agreement (whatever the reason for such event and whether or not it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
Governmental Requirement):
1. any representation or warranty made in this Agreement or in any of the
other Credit Documents shall prove to be false or misleading in any material
respect as of the time made; or
2. any certificate, financial statement or other instrument furnished
pursuant to this Agreement or any of the other Credit Documents, shall prove to
be false or misleading in any material respect as of the time furnished; or
3. default shall be made in the payment when due of any of the
Obligations, and such default shall continue unremedied for five (5) days; or
4. default shall be made in the due observance or performance of any
covenant, condition or agreement on the part of the Borrower to be observed or
performed pursuant to the terms of Sections 6.19, 6.20, 6.21, 6.23, 6.24, 6.25,
6.27, 6.28, 6.29, 6.30, 6.31, 6.32, 6.33, 6.34 and 6.35 hereof; or
5. default shall be made in the due observance or performance of any
covenant, condition or agreement on the part of the Borrower to be observed or
performed pursuant to the terms of this Agreement (other than any covenant,
condition or agreement, default in the observance or performance of which is
elsewhere in this Section 0 specifically dealt with) and such default shall
continue unremedied until the first to occur of a. the date that is thirty (30)
days after written notice by the Lender to the Borrower or b. the date that is
thirty (30) days after the Borrower first obtains knowledge thereof; or
6. any default or event of default, as therein defined, shall occur under
any of the other Credit Documents (after giving effect to any applicable notice,
grace or cure period specified therein); or
7. default shall be made with respect to any Debt (other than the
Obligations) of any Obligor in a principal amount in excess of $2,000,000, if
the effect of such default is to accelerate the maturity of such Debt or to
permit the holder thereof to cause such Debt to become due prior to its stated
maturity, or any such Debt shall not be paid when due (after giving effect to
any applicable notice, grace or cure periods); or
8. any Obligor shall a. apply for or consent to the appointment of a
receiver, trustee, liquidator or other custodian of such Obligor or any of such
Obligor's properties or assets, b. fail or admit in writing such Obligor's
inability to pay such Obligor's debts generally as they become due, c. make a
general assignment for the benefit of creditors, d. suffer or permit an order
for relief to be entered against such Obligor in any proceeding under the
federal Bankruptcy Code, or e. file a voluntary petition in bankruptcy, or a
petition or an answer seeking an arrangement with creditors or to take advantage
of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute, or an answer admitting the material allegations
of a petition filed against such Obligor in any proceeding under any such law or
statute, or if corporate action shall be taken by any Obligor for the purpose of
effecting any of the foregoing; or
9. a petition shall be filed, without the application, approval or
consent of any Obligor in any court of competent jurisdiction, seeking
bankruptcy, reorganization, rearrangement, dissolution or liquidation of such
Obligor or of all or a substantial part of the properties or assets of such
Obligor, or seeking any other relief under any law or statute of the type
referred to in Section 0 against such Obligor, or the appointment of a receiver,
trustee, liquidator or other custodian of such Obligor or of all or a
substantial part of the properties or assets of such Obligor, and such petition
shall not have been stayed or dismissed within 60 days after the filing thereof;
or
10. any Obligor shall be dissolved or liquidated, if an entity, or cease
to be Solvent or suspend business; or
11. a Change in Control shall occur; for purposes hereof, a "Change in
Control" shall mean (1) a change of ownership of the Borrower that results in
the Stockholder not owning at least 80% of all the outstanding stock of the
Borrower, (2) a change of ownership of the Stockholder that results in (A) the
Sponsors not having beneficial ownership or common voting power of at least 15%
of the common voting power of the Stockholder, (B) any "person" (as such term is
defined in 13(d) and 14(d) of the Securities and Exchange Act of 1934) having
more common voting power than the Sponsors or (C) any person other than the
Sponsors for any reason obtaining the right to appoint a majority of the board
of directors of the Stockholder; or
12. an Estate Default shall occur; for purposes hereof an "Estate Default"
shall mean (1) a failure by the estate of either Sponsor within ninety (90) days
after the death of such Sponsor, or a failure by a conservator, committee or
guardian (a "conservator") for the assets of either Sponsor within ninety (90)
days of the appointment of any such conservator, (A) to duly allow and assume,
or otherwise confirm, a creditor's claim filed against the estate or the
conservator in accordance with applicable law relating to the obligations of
such Sponsor under the Make-Whole and Pledge Agreement (which, in the case of
the death of either Sponsor, shall, if required by applicable law, be evidenced
by a creditor's claim filed against the estate in accordance with applicable
law) and (B) to agree for the benefit of the Lender to maintain (unless the
Lender is furnished with cash collateral), a letter of credit or other
collateral acceptable to the Lender in an amount equal to the estate's maximum
exposure under the Make-Whole and Pledge Agreement (assuming an Event of Default
thereunder and an acceleration of the Obligations hereunder at a time when the
Loan was fully drawn) the net worth of the estate (disregarding the separate
status of the Borrower) of at least $1,000,000,000 and not to make any
beneficial distribution from the estate that would cause its net worth to be
less than such amount and (C) to provide a legal opinion (in form and substance,
and from counsel, reasonably satisfactory to the Lender) regarding such
allowance and assumption or confirmation and such agreement or (2) any
rejection, or attempt at rejection, by the estate of either Sponsor or a
conservator for either Sponsor's assets of his obligations under the Make-Whole
and Pledge Agreement or the taking of any action or the filing of any motion by
such estate or conservator that could reasonably be expected to materially
adversely affect or impede the enforceability of such obligation; or
13. the Borrower or any member of the Controlled Group shall fail to pay
when due an amount or amounts aggregating in excess of $2,000,000 which it shall
have become liable to
pay to the PBGC or to a Plan under Section 515 of ERISA or Title IV of ERISA;
or notice of intent to terminate a Plan or Plans (other than a multi-employer
plan, as defined in Section 4001(3) of ERISA), having aggregate benefit
commitments or vested liabilities in excess of assets by an amount in excess of
$2,000,000 shall be filed under Title IV of ERISA by the Borrower, any member of
the Controlled Group, any plan administrator or any combination of the
foregoing, or the PBGC shall institute proceedings under Title IV of ERISA to
terminate any such Plan or Plans and such default, if capable of cure, continues
for thirty (30) calendar days after notice of such default to the Borrower from
the Lender; or
14. any writ of execution, attachment or garnishment shall be issued
against the assets of any Obligor, the fair market value of which assets are in
excess of $2,000,000, and such writ of execution, attachment or garnishment
shall not be dismissed, discharged, bonded off or quashed within 90 days of
issuance; or
15. any final judgment for the payment of money in the amount of $250,000
or more shall be rendered against the Borrower or any such judgment in the
amount of $1,000,000 or more shall be rendered against the Stockholder or either
of the Sponsors and in either case such judgment shall remain undischarged for a
period of 30 days during which execution shall not be effectively stayed; or
16. any guarantor of any of the Obligations shall default in the due
observance or performance of any covenant, condition or agreement on such
guarantor's part to be observed or performed under such guarantor's guaranty
agreement (after giving effect to any applicable notice, grace or cure period
specified therein) or shall terminate or attempt to terminate such guarantor's
guaranty agreement.
SECTION B. Lender's Remedies on Default. If an Event of Default exists,
or any event exists that upon notice or lapse of time or both would constitute
an Event of Default, the Lender shall have no obligation to extend any further
Credit hereunder. If an Event of Default exists under Section 0 or 0, all of
the Obligations shall automatically become immediately due and payable. If any
other Event of Default exists, the Lender may, by written notice to the
Borrower, declare any or all of the Obligations to be immediately due and
payable, whereupon they shall become immediately due and payable. Any such
acceleration (whether automatic or upon notice) shall be effective without
presentment, demand, protest or other action of any kind, all of which are
hereby expressly waived, anything contained herein or in any of the other Credit
Documents to the contrary notwithstanding. If an Event of Default exists, the
Lender may exercise any of its rights and remedies on default under the Credit
Documents or applicable law, including the right to make withdrawals from the
Make-Whole Accounts (as defined in the Make-Whole and Pledge Agreement).
ARTICLE VIII.
Miscellaneous
SECTION A. Notices.
1. Any request, demand, authorization, direction, notice, consent, waiver
or other document provided or permitted by this Agreement or the other Credit
Documents to be made upon, given or furnished to, or filed with, the Borrower or
the Lender must (except as otherwise provided in this Agreement or the other
Credit Documents) be in writing and be delivered by one of the following means:
a. by personal delivery at the hand delivery address specified below, b. by
first-class, registered or certified mail, postage prepaid and addressed as
specified below, or c. if facsimile transmission facilities for such party are
identified below or pursuant to a separate notice from such party, sent by
facsimile transmission to the number specified below or in such notice.
2. The hand delivery address, mailing address and (if applicable)
facsimile transmission number for receipt of notice or other documents by such
parties are as follows:
Borrower
--------
By hand Snapper, Inc.
or mail: 000 Xxxxx Xxxx
XxXxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx/Xxxx X. Xxxx
By facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx/Xxxx X. Xxxx
With a copy to the x/x Xxx Xxxxxxxxxxx Xxxxx
Stockholder and the Xxxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Sponsors: Attention: Xxxxxx X. Xxxxxx
By facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
And to: Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
By facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx
Lender:
By hand: AmSouth Bank
7th Floor, AmSouth-Sonat Tower
0000 0xx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: S. Xxxx Xxxxxxx
By mail: AmSouth Bank
X.X. Xxx 00000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: S. Xxxx Xxxxxxx
By facsimile: (000) 000-0000
Attention: S. Xxxx Xxxxxxx
With a copy to: J. Xxxx Xxxxx
Xxxxxxx, Xxxxxx & Xxxx, P.C.
0000 Xxxxx Xxxxxx Xxxxx
0000 XxXxxxx/Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
By facsimile: (000) 000-0000
Any of such parties may change the address or facsimile transmission notice for
receiving any such notice or other document by giving notice of the change to
the other parties named in this Section 0.
3. Any such notice or other document shall be deemed delivered when
actually received by the party to whom directed (or, if such party is not a
natural person, to an officer, director, partner, member or other legal
representative of the party) at the address or number specified pursuant to this
Section 0, or, if sent by mail, three Business Days after such notice or
document is deposited in the United States mail, addressed as provided above.
4. Five Business Days' written notice to the Borrower as provided above
shall constitute reasonable notification to the Borrower when notification is
required by law; provided, however, that nothing contained in the foregoing
shall be construed as requiring five Business Days' notice if, under applicable
law and the circumstances then existing, a shorter period of time would
constitute reasonable notice.
SECTION B. Expenses. The Borrower shall promptly on demand pay all costs
and expenses, including the fees and disbursements of counsel to the Lender,
reasonably incurred by the Lender in connection with 1. the extension of the
Credit and the administration or collection of the Obligations, 2. the
negotiation, preparation and review of the Credit Documents (whether or not the
transactions contemplated by this Agreement shall be consummated), 3. the
enforcement of any of the Credit Documents, 4. the custody and preservation of
the Property, 5. the protection or perfection of the Lender's rights and
interests under the Security Documents in the Property, 6. the filing or
recording of the Security Documents or any related financing, continuation or
termination statements, or similar documents (including any stamp, documentary,
mortgage, recording and similar taxes and fees), 7. the exercise by or on behalf
of the Lender of any of its rights, powers or remedies under the Credit
Documents, 8. the compliance by the Lender with any Governmental Requirements
with respect to any of the Credit Documents, any of the Property or any of the
Obligations, and 9. the successful prosecution or defense of any
action or proceeding by or against the Lender, the Borrower, any Obligor, or any
one or more of them, concerning any matter related to this Agreement or any of
the other Credit Documents, any of the Property or any of the Obligations. All
such amounts shall bear interest from the date demand is made at the Default
Rate and shall be included in the Obligations secured by the Security Documents.
The Borrower's obligations under this Section 0 shall survive the payment in
full of the Obligations and the termination of this Agreement.
SECTION C. Independent Obligations. The Borrower agrees that each of the
obligations of the Borrower to the Lender under this Agreement may be enforced
against the Borrower without the necessity of joining any other Obligor, any
other holders of Liens in any Property or any other person, as a party.
SECTION D. Successors and Assigns. Whenever in this Agreement any party
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party, except that neither the Borrower nor the Lender may
assign or transfer this Agreement without the prior written consent of the other
party; and all covenants and agreements of the Borrower contained in this
Agreement shall bind the Borrower's successors and assigns and shall inure to
the benefit of the successors and assigns of the Lender.
SECTION E. Governing Law. This Agreement and the other Credit Documents
shall be construed in accordance with and governed by Title 9 of the U.S. Code
and the internal laws of the State of Alabama (without regard to conflict of law
principles) except as required by mandatory provisions of law and except to the
extent that the validity and perfection of the Liens on the Property are
governed by the laws of any jurisdiction other than the State of Alabama.
SECTION F. Date of Agreement. The date of this Agreement is intended as a
date for the convenient identification of this Agreement and is not intended to
indicate that this Agreement was executed and delivered on that date.
SECTION G. Separability Clause. If any provision of the Credit Documents
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION H. Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed an original, but all
such counterparts shall together constitute but one and the same agreement.
SECTION I. No Oral Agreements. This Agreement is the final expression of
the agreement between the parties hereto, and this Agreement may not be
contradicted by evidence of any prior oral agreement between such parties. All
previous oral agreements between the parties hereto have been incorporated into
this Agreement and the other Credit Documents, and there is no unwritten oral
agreement between the parties hereto in existence.
SECTION J. Waiver and Election. The exercise by the Lender of any option
given under this Agreement shall not constitute a waiver of the right to
exercise any other option. No failure or delay on the part of the Lender in
exercising any right, power or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any further exercise
thereof or the exercise of any other right, power or remedy. No modification,
termination or waiver of any provisions of the Credit Documents, nor consent to
any departure by the Borrower therefrom, shall be effective unless in writing
and signed by an authorized representative of the Lender, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances. NO SUCH WRITTEN AMENDMENT, MODIFICATION OR SUPPLEMENT
THAT WOULD (A) INCREASE THE PRINCIPAL AMOUNT OF OR RATE OF INTEREST ON THE
OBLIGATIONS, (B) INCREASE THE RATE OF ANY FEE PAYABLE UNDER SECTION 2.6(b) OR
(c) OF THIS AGREEMENT, (C) EXCEPT AS MAY BE OTHERWISE SPECIFICALLY PROVIDED IN
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, RELEASE ALL OR SUBSTANTIALLY ALL OF
THE PROPERTY, OR (D) WAIVE AN EVENT OF DEFAULT UNDER ANY CREDIT DOCUMENT SHALL
BE EFFECTIVE BETWEEN THE PARTIES THERETO UNLESS CONSENTED TO IN WRITING BY THE
STOCKHOLDER AND THE SPONSORS.
SECTION K. No Obligations of Lender; Indemnification. The Lender does not
by virtue of this Agreement or any of the transactions contemplated by the
Credit Documents assume any duties, liabilities or obligations with respect to
any property now or hereafter granted to it as collateral for any of the
Obligations unless expressly assumed by the Lender under a separate agreement in
writing, and the Credit Documents shall not be deemed to confer on the Lender
any duties or obligations that would make the Lender directly or derivatively
liable for any person's negligent, reckless or wilful conduct. The Borrower
agrees to indemnify and hold the Lender harmless against and with respect to any
damage, claim, action, loss, cost, expense, liability, penalty or interest
(including attorney's fees) and all costs and expenses of all actions, suits,
proceedings, demands, assessments, claims and judgments directly or indirectly
resulting from, occurring in connection with, or arising out of: 1. any
inaccurate representation made by the Borrower or any Obligor in this Agreement
or any other Credit Document; and 2. any breach of any of the warranties or
obligations of the Borrower or any Obligor under this Agreement or any other
Credit Document. The provisions of this Section 0 shall survive the payment of
the Obligations in full and the termination of this Agreement and the other
Credit Documents, and the satisfaction, release (in whole or in part) and
foreclosure of the Security Documents.
SECTION L. Set-off. While any Event of Default exists, the Lender is
authorized at any time and from time to time, without notice to the Borrower
(any such notice being expressly waived by the Borrower), to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by the Lender to or
for the credit or the account of the Borrower against any and all of the
Obligations, irrespective of whether or not the Lender shall have made any
demand under this Agreement and although such Obligations may be unmatured. The
rights of the Lender under this Section 8.12 are in addition to all other rights
and remedies (including other rights of set-off or pursuant to any banker's
lien) that the Lender may have.
SECTION M. Participation. The Borrower understands that the Lender may,
with the
Borrower's consent, from time to time enter into a participation agreement or
agreements with one or more participants pursuant to which each such participant
shall be given a participation in the Credit and that any such participant may
from time to time similarly grant to one or more subparticipants
subparticipations in the Credit. The Borrower agrees that any participant or
subparticipant may exercise any and all rights of banker's lien or set-off with
respect to the Borrower, as fully as if such participant or subparticipant had
made a loan directly to the Borrower in the amount of the participation or
subparticipation given to such participant or subparticipant in the Credit. For
the purposes of this Section 0 only, the Borrower shall be deemed to be directly
obligated to each participant or subparticipant in the amount of its
participating interest in the amount of the Credit and any other Obligations.
Nothing contained in this Section 0 shall affect the Lender's right of set-off
(under Section 8.12 or applicable law) with respect to the entire amount of the
Obligations, notwithstanding any such participation or subparticipation. The
Lender may divulge to any participant or subparticipant all information,
reports, financial statements, certificates and documents obtained by it from
the Borrower or any other person under any provision of this Agreement or
otherwise.
SECTION N. Submission to Jurisdiction. The Borrower irrevocably
1. acknowledges that this Agreement will be accepted by the Lender and performed
by the Borrower in the State of Alabama; 2. submits to the jurisdiction of each
state or federal court sitting in Jefferson County, Alabama (collectively, the
"Courts") over any suit, action or proceeding arising out of or relating to this
Agreement (to enforce the arbitration provisions hereof or, if the arbitration
provisions are found to be unenforceable, to determine any issues arising out of
or relating to this Agreement) or any of the other Credit Documents
(individually, an "Agreement Action"); 3. waives, to the fullest extent
permitted by law, any objection or defense that the Borrower may now or
hereafter have based on improper venue, lack of personal jurisdiction,
inconvenience of forum or any similar matter in any Agreement Action brought in
any of the Courts; 4. agrees that final judgment in any Agreement Action brought
in any of the Courts shall be conclusive and binding upon the Borrower and may
be enforced in any other court to the jurisdiction of which the Borrower is
subject, by a suit upon such judgment; 5. consents to the service of process on
the Borrower in any Agreement Action by the mailing of a copy thereof by
registered or certified mail, postage prepaid, to the Borrower at the Borrower's
address designated in or pursuant to Section 0; 6. agrees that service in
accordance with Section 0 shall in every respect be effective and binding on the
Borrower to the same extent as though served on the Borrower in person by a
person duly authorized to serve such process; and 7. AGREES THAT THE PROVISIONS
OF THIS SECTION, EVEN IF FOUND NOT TO BE STRICTLY ENFORCEABLE BY ANY COURT,
SHALL CONSTITUTE "FAIR WARNING" TO THE BORROWER THAT THE EXECUTION OF THIS
AGREEMENT MAY SUBJECT THE BORROWER TO THE JURISDICTION OF EACH STATE OR FEDERAL
COURT SITTING IN JEFFERSON COUNTY, ALABAMA WITH RESPECT TO ANY AGREEMENT
ACTIONS, AND THAT IT IS FORESEEABLE BY THE BORROWER THAT THE BORROWER MAY BE
SUBJECTED TO THE JURISDICTION OF SUCH COURTS AND MAY BE SUED IN THE STATE OF
ALABAMA IN ANY AGREEMENT ACTIONS. Nothing in this Section 0 shall limit or
restrict the Lender's right to serve process or bring Agreement Actions in
manners and in courts otherwise than as herein provided.
SECTION O. Usury Laws. Any provision of this Agreement or any of the
other
Credit Documents to the contrary notwithstanding, the Borrower and the Lender
agree that they do not intend for the interest or other consideration provided
for in this Agreement and the other Credit Documents to be greater than the
maximum amount permitted by applicable law. Regardless of any provision in this
Agreement or any of the other Credit Documents, the Lender shall not be entitled
to receive, collect or apply, as interest on the Obligations, any amount in
excess of the maximum rate of interest permitted to be charged under applicable
law until such time, if any, as that interest, together with all other interest
then payable, falls within the then applicable maximum lawful rate of interest.
If the Lender shall receive, collect or apply any amount in excess of the then
maximum rate of interest, the amount that would be excessive interest shall be
applied first to the reduction of the principal amount of the Obligations then
outstanding in the inverse order of maturity, and second, if such principal
amount is paid in full, any excess shall forthwith be returned to the Borrower.
In determining whether the interest paid or payable under any specific
contingency exceeds the highest lawful rate, the Borrower and the Lender shall,
to the maximum extent permitted under applicable law, 1. characterize any
nonprincipal payment as an expense, fee or premium rather than as interest,
2. exclude voluntary prepayments and the effects thereof, 3. consider all the
Obligations as one general obligation of the Borrower, and 4. "spread" the total
amount of the interest throughout the entire term of the Note so that the
interest rate is uniform throughout the entire term of the Note.
SECTION P. Arbitration; Dispute Resolution; Preservation of Foreclosure
Remedies.
1. The Borrower represents to the Lender that its business and affairs
constitute substantial interstate commerce and that it contemplates using the
proceeds of the Note in substantial interstate commerce. Except as otherwise
specifically set forth below, any action, dispute, claim, counterclaim or
controversy ("Dispute" or "Disputes"), between or among the Lender, the Borrower
or any other Obligor, including any claim based on or arising from an alleged
tort, shall be resolved by arbitration as set forth below. As used herein,
Disputes shall include all actions, disputes, claims, counterclaims or
controversies arising in connection with the Note, any extension of or
commitment to extend Credit by the Lender, any collection of any indebtedness
owed to the Lender, any security or collateral given to the Lender, any action
taken (or any omission to take any action) in connection with any of the
foregoing, any past, present and future agreement between or among the Lender,
the Borrower or any other Obligor (including the Note and any Credit Document),
and any past, present or future transactions between or among the Lender, the
Borrower or any other Obligor. Without limiting the generality of the
foregoing, Disputes shall include actions commonly referred to as lender
liability actions.
2. All Disputes shall be resolved by binding arbitration in accordance
with Title 9 of the U.S. Code and the Commercial Arbitration Rules of the
American Arbitration Association (the "AAA"). Defenses based on statutes of
limitation, estoppel, waiver, laches and similar doctrines, that would otherwise
be applicable to an action brought by a party, shall be applicable in any such
arbitration proceeding, and the commencement of an arbitration proceeding with
respect to this Agreement shall be deemed the commencement of an action for such
purposes.
3. Notwithstanding the foregoing, the Borrower and each other Obligor
agrees that
the Lender shall have the option, but not the obligation, to submit to and
pursue in a court of law any claim against the Borrower or any other Obligor for
a debt due. The Borrower and each other Obligor agrees that, if the Lender
pursues such a claim in a court of law, a. failure of the Lender to assert any
additional claim in such proceeding shall not be deemed a waiver of, or estoppel
to pursue, such claim as a claim or counterclaim in arbitration as set forth
above, and b. the institution or maintenance of a judicial action hereunder
shall not constitute a waiver of the right of any party to submit any other
action, dispute, claim or controversy as described above, even though arising
out of the same transaction or occurrence, to binding arbitration as set forth
herein. If the Borrower asserts a claim against the Lender in arbitration or
otherwise during the pendency of a claim brought by the Lender in a court of
law, the court action shall be stayed and the parties shall submit to
arbitration all claims.
4. No provision of, nor the exercise of any rights under this Section,
shall limit the right of any party a. to foreclose against any real or personal
property collateral by exercise of a power of sale under any Credit Document, or
by exercise of any rights of foreclosure or of sale under applicable law, b. to
exercise self-help remedies such as set-off, or c. to obtain provisional or
ancillary remedies such as injunctive relief, attachment or the appointment of a
receiver from a court having jurisdiction before, during or after the pendency
of any arbitration or referral. The institution and maintenance of an action
for judicial relief or pursuit of provisional or ancillary remedies or exercise
of self-help remedies shall not constitute a waiver of the right of any party,
including the plaintiff in such an action, to submit the Dispute to arbitration
or, in the case of actions on a debt, to judicial resolution.
5. Whenever an arbitration is required hereunder, the arbitrator shall be
selected in accordance with the Commercial Arbitration Rules of the AAA. The
AAA shall designate a panel of 10 potential arbitrators knowledgeable in the
subject matter of the Dispute. Each of the Lender and the Obligor shall
designate, within 30 days of the receipt of the list of potential arbitrators,
one of the potential arbitrators to serve, and the two arbitrators so designated
shall select a third arbitrator from the eight remaining potential arbitrators.
The panel of three arbitrators shall determine the resolution of the Dispute.
SECTION Q. Original Credit Agreement Amended and Restated in its Entirety.
This Agreement amends and restates, in its entirety, the Original Credit
Agreement.
SECTION R. Miscellaneous Provisions.
1. In order to induce the Lender to enter into this Agreement, the
Borrower represents and warrants to the Lender that (i) all the representations
and warranties set forth in the Original Credit Agreement and the other Credit
Documents are true and correct in all material respects on and as of the Closing
Date, except to the extent that such representations and warranties expressly
relate to an earlier date, and (ii) as of the Closing Date, except as permitted
under this Agreement, the Borrower is in compliance in all material respects
with all the terms and provisions set forth in the Original Credit Agreement and
the other Credit Documents on its part to be observed or performed and no Event
of Default nor any event that upon notice or lapse of time or both would
constitute an Event of Default, has occurred and is continuing.
2. Nothing contained in this Agreement or in any of the other amendments
to the Credit Documents that are being made in connection with this Agreement
shall be deemed to constitute a novation of the terms of any of the Credit
Documents, nor to impair any Liens granted to the Lender under the Credit
Documents, nor to release any Obligor from liability for any of the Obligations,
nor to affect any of the rights, powers or remedies of the Lender under the
Credit Documents, nor to constitute a waiver of any provision thereof, except as
specifically set forth in this Agreement and in said other amendments to the
Credit Documents.
SECTION S. Amendments to Certain Credit Documents. The parties agree that
the following amendments are hereby made to certain of the Credit Documents, as
follows:
1. All references in the Credit Documents other than this Agreement to
the "Credit Agreement" shall refer to this Agreement, as the same may hereafter
from time to time be amended, supplemented, restated or otherwise modified.
2. Subsection 1.2(g) of the Security Agreement is hereby amended to read,
in its entirety, as follows:
"(g) Credit means, individually and collectively, all
loans, forbearances, renewals, extensions, advances,
disbursements and other extensions of credit now or
hereafter made by the Lender to or for the account of the
Borrower under the Credit Documents."
3. Subsection 1.2(b) of the Environmental Indemnity Agreement is hereby
amended to read, in its entirety, as follows:
"(b) Credit means, individually and collectively, all
loans, forbearances, renewals, extensions, advances,
disbursements and other extensions of credit now or
hereafter made by the Lender to or for the account of the
Borrower under the Credit Documents."
4. Exhibits B, C, D and E to the Security Agreement are hereby amended to
read, in their entirety, in the forms attached hereto as Revised Exhibits B, C,
D and E, respectively.
5. The list of the Credit Documents contained in Exhibit B to each of the
Security Agreement and the Environmental Indemnity Agreement is hereby amended
to read, in its entirety, in the form of the list contained in Schedule A to
this Agreement.
IN WITNESS WHEREOF, the Borrower and the Lender have caused this Agreement
to be dated November _____, 1997, and to be duly executed and delivered.
SNAPPER, INC.
By---------------------------------------
Its---------------------------------
AMSOUTH BANK
By--------------------------------------
Its Senior Vice President
LIST OF SCHEDULES
Schedule
A Credit Documents
B Eligible Adjusted Equipment Value
C Permitted Encumbrances
D Request for Advances or Interest Rate Election
E Borrowing Base Certificate
F Extended Terms
G Thirty Day Terms
4.3 Litigation
4.6 Trade Names
4.8 Locations of Personal Property
4.16 Labor Contracts
4.17 ERISA
4.18 Patents, Trademarks and Copyrights
4.20 Real Property
SCHEDULE A
CREDIT DOCUMENTS
The "Credit Documents" referred to in this Agreement include the following:
(a) Amended and Restated Credit Agreement dated November 12, 1997,
executed by the Borrower and the Lender.
(b) Amended and Restated Promissory Note dated November 12, 1997, in the
principal amount of Eighty Million and No/100 Dollars ($80,000,000.00) executed
by the Borrower in favor of the Lender (the "Note"), which evidences the loan
made by the Lender to the Borrower and has a final maturity date of January 1,
2000.
(c) Limited Guaranty Agreement dated November 12, 1997, executed by
Xxxx X. Xxxxx and Xxxxxx Xxxxxxxxx.
(d) Environmental Indemnity Agreement dated November 26, 1996, executed
by the Borrower and Metromedia International Group, Inc. in favor of the Lender,
as amended by First Amendment thereto dated as of April 30, 1997, and by Amended
and Restated Credit Agreement dated November 12, 1997.
(e) Security Agreement (General) dated November 26, 1996, executed by the
Borrower in favor of the Lender, as amended by First Amendment thereto dated as
of April 30, 1997, and by Amended and Restated Credit Agreement dated
November 12, 1997.
(f) Guaranty Agreement dated November 26, 1996, executed by Metromedia
International Group, Inc. in favor of the Lender, as amended by First Amendment
to MIG Documents dated as of April 30, 1997, and by Second Amendment to MIG
Documents dated November 12, 1997.
(g) Pledge Agreement dated November 26, 1996, executed by Metromedia
International Group, Inc. in favor of the Lender, as amended by First Amendment
to MIG Documents dated as of April 30, 1997, and by Second Amendment to MIG
Documents dated November 12, 1997.
(h) Make-Whole and Pledge Agreement dated November 26, 1996, executed by
Xxxx X. Xxxxx and Xxxxxx Xxxxxxxxx in favor of the Lender, as amended by First
Amendment to Sponsor Documents dated as of April 30, 1997, and by Second
Amendment to Sponsor Documents dated November 12, 1997.
(i) Deed to Secure Debt, Security Agreement and Assignment of Rents and
Leases dated November 26, 1996, executed by the Borrower in favor of the Lender,
as amended by First Amendment to Deed to Secure Debt, Security Agreement and
Assignment of Rents and Leases dated as of April 30, 1996, and by Second
Amendment to Deed to Secure Debt, Security
Agreement and Assignment of Rents and Leases dated November 12, 1997.
(j) Subordination Agreement dated November 26, 1996, executed by the
Borrower and Metromedia International Group, Inc. for the benefit of the Lender,
as amended by First Amendment to MIG Documents dated as of April 30, 1997, and
by Second Amendment to MIG Documents dated November 12, 1997.
(k) Intercreditor and Subordination Agreement dated November 26, 1996, by
and among The Chase Manhattan Bank, the Borrower, Metromedia International
Group, Inc. and the Lender, as amended by First Amendment to Intercreditor and
Subordination Agreement dated as of April 30, 1997, and by Second Amendment to
Intercreditor and Subordination Agreement dated November 12, 1997.
(l) Amended and Restated Reimbursement and Priority Agreement dated
November 12, 1997, by the Borrower, Metromedia International Group, Inc.,
Xxxx X. Xxxxx and Xxxxxx Xxxxxxxxx.
SCHEDULE B
ELIGIBLE ADJUSTED EQUIPMENT VALUE
Applicable Period Equipment Value
12/97 $6,363,000
1/98 6,236,000
2/98 6,111,000
3/98 5,989,000
4/98 5,869,000
5/98 5,752,000
6/98 5,637,000
7/98 5,524,000
8/98 5,414,000
9/98 5,306,000
10/98 5,200,000
11/98 5,096,000
12/98 4,994,000
1/99 until the
Termination Date Values to be based upon a new
equipment appraisal to be
provided by the Borrower to the
Lender after the Lender applying
the assumed depreciation
percentage of 2%
SCHEDULE C
PERMITTED ENCUMBRANCES
Jurisdiction State UCC Secured Party Collateral
-------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-193-845 AT&T Systems Specific equipment
Superior Court
-------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-194-106 AT&T Systems Specific equipment under lease
Superior Court
-------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-1075-96-565 AT&T Systems Leasing Specific equipment under lease
Superior Court
-------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07596001965 AT&T Systems Leasing Specific equipment under lease
Superior Court
-------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07596001966 AT&T Systems Leasing Specific equipment under lease
Superior Court
-------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597000092 AT&T Systems Leasing Specific equipment under lease
Superior Court
-------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597000326 AT&T Systems Leasing Specific equipment under lease
Superior Court
-------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597000327 AT&T Systems Leasing Specific equipment under lease
Superior Court
-------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597001096 AT&T Systems Leasing Specific equipment under lease
Superior Court
-------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597001097 AT&T Systems Leasing Specific equipment under lease
Superior Court
--------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597001442 AT&T Systems Leasing Specific equipment under lease
Superior Court
--------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597001443 AT&T Systems Leasing Specific equipment under lease
Superior Court
--------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597001444 AT&T Systems Leasing Specific equipment under lease
Superior Court
--------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597001762 AT&T Systems Leasing Specific equipment under lease
Superior Court
---------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597002111 AT&T Systems Leasing Specific equipment under lease
Superior Court
Superior Court
----------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597002112 AT&T Systems Leasing Specific equipment under lease
Superior Court
----------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07596001452 AT&T Systems Leasing Specific equipment under lease
Superior Court
----------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597001948 Financial Federal Credit, Equipment, fixtures, inventory,
Superior Court Inc. general intangibles, chattel
paper, negotiable instruments,
vehicles, accounts, proceeds,
miscellaneous goods
-----------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07597000419 Financial Federal Credit, Equipment, fixtures, inventory,
Superior Court Inc. general intangibles, chattel
paper, negotiable instruments,
vehicles, accounts, proceeds,
miscellaneous goods
------------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07596002064 GTE Leasing Corporation Specific equipment under lease
Superior Court
------------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-07596002065 GTE Leasing Corporation Specific equipment under lease
Superior Court
------------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-04497006470 Hyster Credit Company Specific equipment under lease
Superior Court (Assignee)
Xxxxx Handling, Inc.
------------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-193-790 Xxxxx Handling Specific equipment under lease
Superior Court
------------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-194-1095 GE Capital Specific equipment under lease
Superior Court
------------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-1075-95-468 StorageTek Distributed Specific equipment under lease
Superior Court
------------------------------------------------------------------------------------------------------------------------------
Xxxxx County Clerk of GA UCC-1075-95-683 StorageTek Distributed Specific equipment under lease
Superior Court
------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx Xxxxx xx XX XXX-0000-00-0000 Leasetec Corporation Specific equipment under lease
Superior Court
------------------------------------------------------------------------------------------------------------------------------
SCHEDULE D
REQUEST FOR ADVANCES OR INTEREST RATE ELECTION
Under the Amended and Restated Credit Agreement dated November 12, 1997
(the "Credit Agreement") entered into by SNAPPER, INC., a Georgia corporation,
(the "Borrower"), and AMSOUTH BANK, an Alabama banking corporation:
Request for Advances
Pursuant to Section 0 of the Credit Agreement, the Borrower hereby requests
Advances as follows:
(a) Aggregate amount of Advances -
$_______________.
(b) Date as of which the Advances are to be made -
_________________, 199__.
(c) The following interest rate information is
provided with respect to the Segment represented
by the Advances:
(i) the interest rate shall be [the Floating
Rate] [the LIBOR-Based Rate] (circle one).
(ii) If the LIBOR-Based Rate is selected, the
maturity selected for the LIBOR-Based Rate Period
is [one month] [two months] [three months] (circle
one, if applicable).
Interest Rate Election
Pursuant to Section 0 of the Credit Agreement, the Borrower makes the
following interest rate election with respect to the Segment in the principal
amount of $______________ that matures on ____________________.
(a) The amount of the Segment to which the requested
interest rate will apply - $__________.
(b) The date on which the selected interest rate will
become applicable - _______________.
(c) The interest rate selected is [the Floating Rate]
[the LIBOR-Based Rate] (circle one).
(d) If the LIBOR-Based Rate is selected, the maturity
selected for the LIBOR-Based Rate Period is [one
month] [two months] [three months] (circle one, if
applicable).
In accordance with Section 0 of the Credit Agreement, the presentation by
the Borrower of this Request for Advances or Interest Rate Election constitutes
a representation and warranty by the Borrower to the Lender that (a) no material
adverse change in the financial condition of the Borrower in the financial
statements referred to in Section 4.1 of the Credit Agreement, has occurred
since the date of such financial statements, and (b) no Event of Default exists.
Dated ________________, 199__.
SNAPPER, INC.
By:________________________________________
Its ____________________________________
D-2
SCHEDULE E
BORROWING BASE CERTIFICATE
To: AmSouth Bank
Date: _______________, 19____
Snapper, Inc. (the "Borrower") hereby furnishes the following information
to you pursuant to the Amended and Restated Credit Agreement (the "Credit
Agreement") between you and the Borrower dated November 12, 1997. Capitalized
terms used in this certificate and not otherwise defined herein have the
meanings defined for them in the Credit Agreement.
I. ACCOUNTS RECEIVABLE
A. Dealer Accounts
(1) Home Depot $------------------
(2) Dealers utilizing floor plan financing ------------------
(3) Dealers utilizing Extended Terms ------------------
(4) Dealers utilizing Thirty Day Terms ------------------
(5) Dealers/Distributors outside U.S. with
letter of credit serving Inventory shipped ------------------
B. Sum of (1) through (5) ------------------
C. Less adjustments per definition of Net Outstanding
Amount of Eligible Accounts (------------------)
D. Line (B) minus (C) ------------------
E. Line (D) times 80% $------------------
------------------
F. $10,000,000 $10,000,000.00
G. Dealer Accounts utilizing Extended Terms over 90 days
but not 60 days past due (1)
H. Less adjustments per definition of Net Outstanding
Amount of Eligible Accounts (------------------)
I. Line (G) minus (H) ------------------
J. Line (I) times 65.8% ------------------
K. Line (J) times 55% ------------------
L. Lesser of Line (F) and (K) ------------------
M. TOTAL OF LINES (E) and (L) $------------------
------------------
--------------------
(1) With respect to the Accounts arising from sales to dealers of Inventory
consisting of snow products, which Inventory has not been sold by the dealer or
financed by the dealer by means of floor planning arrangement, the Borrower
shall be permitted to extend the due date with respect to such Account for March
10 of any year to December 10 of such year.
II. INVENTORY
A. $60,000,000 on and after the Closing Date to
and including December 30, 1997; $55,000,000
on and after December 31, 1997, to and
including December 30, 1998; and $20,000,000
on and after December 31, 1998 $----------------
B. Finished Goods Inventory ----------------
C. Line (B) times (i) from the Closing Date to and
including December 30, 1998, 80%, and (ii) on and
after December 31, 1998, 50% $----------------
----------------
D. $5,000,000 $ 5,000,000.00
E. Engines -----------------
F. Line (E) times 50% -----------------
G. Lesser of Line (D) and (F) $----------------
----------------
H. From the Closing Date to and including
December 30, 1998, $7,500,000, and on and
after December 31, 1998, $3,000,000 $----------------
I. Parts and accessories (other than engines) ----------------
J. Line (H) times (i) from the Closing Date to and
including December 30, 1998, 40%, and (ii) on and
after December 31, 1998, 30% ----------------
K. Lesser of Line (H) and (J) $---------------
---------------
L. Sum of Lines (C), (G) and (K) $---------------
M. Less Inventory that is not Eligible Inventory or
that should be excluded per Section 6.6 of the
Credit Agreement (---------------)
N. Line (L) minus (M) -----------------
O. Lesser of Lines (A) and (N) $----------------
----------------
III. EQUIPMENT
A. Eligible Adjusted Equipment Value $----------------
B. Line (A) times 75% $----------------
----------------
IV. MAXIMUM CREDIT ACCOUNT
A. Borrowing Base Amount sum of Lines (I.M.,
II.O. and III.B.) $----------------
B. Commitment Amount -----------------
C. Lesser of Lines (A) and (B) -----------------
D. Outstanding Advances -----------------
E. Line (C) minus (D) (Maximum Availability) $----------------
----------------
E-2
The Borrower certifies to you as follows:
(a) The representations and warranties contained in the Credit Agreement
are true and correct on and as of the date of this certificate, except as
follows:
(b) The representations and warranties contained in Section 3.2 of the
Security Agreement are true and correct with respect to all Accounts included in
the Net Outstanding Amount of Eligible Accounts on line 3 of this certificate
except as follows:
(c) The representations and warranties contained in Section 3.3 of the
Security Agreement are true and correct with respect to all Inventory included
in the Eligible Inventory on line 7 of this certificate except as follows:
(d) No Event of Default, nor any event that would constitute an Event of
Default with the passage of time or the giving of notice, or both, exists under
the Credit Agreement or the other Credit Documents, except as follows:
(e) The information contained in this certificate is true and correct to
the best of the Borrower's knowledge.
This certificate is furnished to you for the purpose of obtaining Advances
from you under the Credit Agreement or otherwise complying with the provisions
of the Credit Agreement.
SNAPPER, INC.
By:______________________________________________
Its ________________________________________
E-3
SCHEDULE F
EXTENDED TERMS
Extended Terms - Open Account Only
Dealers:
Residential Lawn & Garden: Dealers Utilizing Floorplan - For stocking
order shipments during the months of
September through December 31, 1997,
payment due July 31, 1998. For stocking
order shipments during the months of
January through April 30, 1998, payment due
August 31, 1998. Non-stocking order
shipments and all in-season reorders
payment due 120 days from invoice date.
Open Account - Net 30 days from invoice date.
Commercial: For certified commercial dealers, all
shipments due for payment in 10 months from
shipment date.
Snow: Dealers Utilizing Floorplan - All shipments
June 1, 1997 through December 31, 1997,
payment due March 31, 1998.
Open Account - Net 30 days from invoice
date.
Parts and Accessories: All 1998 stocking orders due one-half May
1, 1998, and one-half July 1, 1998. Parts
reorders due 30 days from invoice date.
SCHEDULE G
THIRTY DAY TERMS
For all Accounts with dealers that are not subject to Extended Terms or
floor plan financing, Invoices due 30 days from Invoice Date.
