EXHIBIT 10.54
CREDIT AGREEMENT
This Credit Agreement dated as of the 27th day of February, 2003, by
and between XXXXXXX FOOD SERVICE, INC., a Delaware corporation (hereinafter
referred to as "Borrower"), and OLD NATIONAL BANK, a national banking
association (hereinafter referred to as "Bank").
W I T N E S S E T H :
WHEREAS, the Borrower desires to obtain certain financial
accommodations from the Bank; and
WHEREAS, the Bank is willing to provide such financial accommodations
to the Borrower on the terms and subject to the conditions in this Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
hereinafter contained, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1. Definitions. When used herein, the capitalized terms defined
in the preamble and recitals above shall have the meanings therein stated and
the following capitalized terms shall have the meanings ascribed to them below.
Other terms used but not otherwise defined herein shall have the meaning
ascribed to such terms by the Uniform Commercial Code in effect in Indiana from
time to time and GAAP, as the context may require, unless the context expressly
provides otherwise.
1.1 "Account Debtor" means the party, who is obligated on or
under any Receivable or Contract Right.
1.2 "Agreement" means this Credit Agreement between the Borrower
and the Bank including all exhibits hereto and the executed originals thereof,
as the same may be amended from time to time.
1.3 "Application for Advance" means that document required by
Section 2.1.1 hereof in the form and substance of Exhibit 1.3 hereof.
1.4 "Banking Day" means a day which is not (a) Saturday, Sunday or
legal holiday on which banking institutions in the State of Indiana or the city
in which the office of the Bank is located is authorized to remain closed, or
(b) a day on which the New York Stock Exchange is closed. For the Bank, a
"Banking Day" ends at 2:00 P.M. Eastern Standard Time, and all business
transacted after such time on any particular day shall be deemed to have been
transacted as of the next Banking Day.
1.5 "Bankruptcy Code" means the Federal Bankruptcy Code of 1978,
as amended.
1.6 "Basis Point" means One One-Hundredth of One Percent (0.01%).
1.7 "Beasleys" means Xxxxxxx and Xxxxxxxx Xxxxxxx
1.8 "Xxxxxxx Transportation" means Xxxxxxx Transportation, Inc., a
Delaware corporation.
1.9 "Board" means the Board of Governors of the Federal Reserve
System.
1.10 "Borrowing Base" means an amount equal to Seventy Percent
(70%) of Eligible Receivables less the PACA Inventory Deduction, as disclosed on
the most recent Borrowing Base Report furnished to the Bank pursuant to the
requirements of this Agreement.
1.11 "Borrowing Base Certificate" means the certificate required by
Section 7.2.1 hereof, in the form and substance of Exhibit 1.11 hereto.
1.12 "Business Day" means a day which is not (a) a Saturday, Sunday
or legal holiday on which banking institutions in the State of Indiana or the
city in which the office of the Bank is located is authorized to remain closed,
or (b) a day on which the New York Stock Exchange is closed.
1.13 "Certificate of No Default" means that certificate required
by Section 7.2.4 hereof, in the form and substance of Exhibit 1.13 hereto.
1.14 "Closing Date" means the date upon which the conditions set
forth in Section 6 hereof are satisfied and the financial accommodations
referenced in this Agreement are consummated.
1.15 "Code" means the Internal Revenue Code of 1986, as amended.
1.16 "Collateral" means all of Borrower's interest in personal
property of every kind and nature including all Receivables, Contract Rights,
Inventory, Investment Property, Machinery and Equipment, Proprietary Rights,
General Intangibles, chattel paper, documents and instruments and shall also
include, without limitation, (i) all attachments, accessions and equipment now
owned or hereafter affixed to any of the Collateral or used in connection
therewith, substitutions and replacements thereof, (ii) all items of Collateral
now owned or existing and hereafter acquired, created or arising, and all
products and proceeds thereof (including without limitation claims of the
Borrower against third parties for loss or damage to or destruction of any
Collateral and all insurance proceeds) and any substitution or replacement
thereto, (iii) all monies, securities, drafts, notes, items and other property
of the Borrower, and the proceeds thereof, now or hereafter held or received by
or in transit to the Bank from or for the Borrower, whether for safekeeping,
custody, pledge, transmission, collection, or otherwise, (iv) any and all
deposits (general or special), balances, sums, proceeds and credits of the
Borrower with, any and all claims of the Borrower against, the Bank, at any time
existing, and (v) all labels and other devises, names or marks affixed to or to
be affixed to any of the Inventory for purposes of selling or of identifying the
same or the seller or manufacturer thereof and all right, title and interest of
the Borrower therein and thereto. The Collateral shall also include any property
described in any separate schedules at any time or from time to time furnished
by the Borrower to the Bank (all of which shall be and hereby are deemed part of
this Agreement) and shall also include without limitation all other Collateral
now or hereafter pledged, assigned, hypothecated or transferred to the Bank.
1.17 "Contract Rights" means any right of the Borrower to payment
under a contract for the sale or lease of goods or the rendering of services,
which right is at the time not yet earned by performance.
1.18 "Current Ratio" means Borrower's current assets divided by
current liabilities.
1.19 "Debt" means Borrower's total indebtedness associated with
borrowed money.
1.20 "Debt to Tangible Net Worth Ratio" means Borrower's Debt
divided by Tangible Net Worth.
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1.21 "Debt Service Coverage Ratio" means the Borrower's net profit
plus depreciation and amortization plus interest expense minus taxes divided by
all principal and interest payments.
1.22 "Eligible Receivables" means those Receivables which are not
greater than sixty (60) days past due, have been validly assigned to Bank and in
which Bank has a first priority security interest and strictly comply with all
of Borrower's warranties and representations to Bank; but Eligible Receivables
will not include the following: (a) Receivables with respect to which the
Account Debtor is a shareholder, officer, employee or agent of Borrower, or a
corporation more than Five Percent (5%) of the stock of which is owned by any of
such persons; (b) Receivables with respect to which the Account Debtor is not a
resident of the United States unless supported/confirmed by a Letter of Credit
in form or otherwise insured in a manner acceptable to the Bank; (c) Receivables
with respect to which the Account Debtor is a subsidiary of, related to,
affiliated or has common officers or directors with Borrower; and (d) any
Receivables which may be subject to any claim of reduction, counterclaim,
setoff, recoupment or any claims for credits, allowances, or adjustments by the
Account Debtor because of unsatisfactory services; (e) any Receivables owed by
the U.S. Government, or a department or agency thereof, not properly assigned to
the Bank; (f) any Receivables not billed or invoiced under usual and customary
trade credit terms; (g) any and all Receivables owed by a particular Account
Debtor when Twenty-Five Percent (25%) or more of the total Receivables of such
Account Debtor are more than ninety (90) days old from the invoice date; (h) any
Receivables owed by an Account Debtor who does not meet Bank's standards of
credit worthiness in Bank's sole credit judgment exercised in good faith; and
(i) any amounts attributable to retainages.
1.23 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.24 "Event of Default" means the occurrence of any event specified
in Section 9 hereof.
1.25 "GAAP" means generally accepted accounting principles, in
effect from time to time, in the United States excepting for this purpose FAS
141 and 142.
1.26 "General Intangibles" means all present and future general
intangibles (including choses or things in action), goodwill, blueprints,
drawings, purchase orders, customer lists, monies due or recoverable from
pension funds, route lists, infringement claims, computer programs, computer
disks, computer software, computer tapes, literature, reports, catalogs, deposit
accounts, insurance premium rebates, tax refunds, tax refund claims and
insurance proceeds, together with all proceeds and products thereof.
1.27 "Guarantors" means Xxxxxxx Transportation, Inc., Landlord and
Syndicated, collectively.
1.28 "Inventory" means all goods, merchandise and other personal
property of the Borrower, now owned or existing or hereafter acquired, created
or arising, which are held for sale or lease or are furnished or to be furnished
under a contract of service or supply or are raw materials, work-in-process,
finished goods, or materials used or to be used in the Borrower's business.
1.29 "Investment Property" shall mean all investment property (as
that term is defined in the Uniform Commercial Code) including, without
limitation, all securities, whether certified or uncertified, all security
entitlements, all securities accounts all commodity contracts and all commodity
accounts owned by Borrower in which Borrower has an interest.
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1.30 "Landlord" means Syndicated Bloomington I LLC, a Delaware
limited liability company.
1.31 "Leased Premises" means the real estate and improvements
located thereon located at 0000 Xxxx Xxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx 00000.
1.32 "Line of Credit" means the revolving line of credit extended
to the Borrower by the Bank, pursuant to the terms and conditions of Section 2.1
hereof, including all renewals and extensions thereof.
1.33 "Line of Credit Loan" means any advance, and in the plural all
advances, made to the Borrower from time to time under the Line of Credit.
1.34 "Line of Credit Note" means the Revolving Line of Credit Note
from the Borrower to the Bank described in Section 2.1.1 hereof, including all
renewals and extensions thereof evidencing the Line of Credit Loans.
1.35 "Loan Documents" means this Agreement, the Notes and such
other documents, instruments, certificates, statements or other writings
contemplated by or delivered or to be delivered by Borrower in connection with
this Agreement.
1.36 "Loans" means all Line of Credit Loans, including all
renewals, modifications, amendments and extensions thereof.
1.37 "Machinery and Equipment" shall mean all tools, accessories,
parts, machinery, equipment, trucks, trailers and other rolling stock,
furniture, office equipment, leasehold improvements, fixtures, trade fixtures
and accessions and accessories thereto wherever situated, and any substitution
or replacement of such property.
1.38 "Net Worth" means Borrower's net worth as defined by GAAP.
1.39 "Notes" means the Line of Credit Note, including all renewals
and extensions thereof and amendments thereto evidencing the Loans.
1.40 "PACA Inventory Deduction" means an amount equal to the value
of the Inventory in excess of Fifteen Percent (15%) of Borrower's total
Inventory consisting of perishable agricultural commodities which may be subject
to the Perishable Agricultural Commodities Act (7 U.S.C. Section 499e(c) et
seq.).
1.41 "Plan" means an employee pension benefit plan as defined in
ERISA.
1.42 "Prime Rate" means the fluctuating rate of interest which is
publicly announced from time to time by Bank as its "prime rate" or "base rate",
with each change in the Prime Rate automatically, immediately and without notice
changing the fluctuating interest rate thereafter applicable hereunder, it being
agreed that the Prime Rate is not necessarily the lowest rate of interest then
available from Bank on fluctuating rate loans.
1.43 "Proprietary Rights" means all patent rights, patent
applications, franchise rights, trademarks, service marks, tradenames, corporate
names, copyrights, trade secrets and other proprietary rights and general
intangibles necessary to the conduct of the business of the Borrower as it is
now
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conducted, including all reissue applications, registrations,
registration applications, and corporate name authorizations applicable
thereto.
1.44 "Quick Ratio" means Borrower's current assets minus
inventories divided by current liabilities.
1.45 "Receivables" means all accounts, account
receivables, notes, contract rights, contract receivables, contracts,
instruments, documents, and chattel paper, whether secured or unsecured
which the Borrower owns or hereafter acquires or in which it has or
acquires an interest.
1.46 "Tangible Net Worth" shall mean the total of the
capital stock (less treasury stock), paid- in surplus, general
contingency reserves and retained earnings (deficit) of Borrower and
any subsidiary as determined on a consolidated basis in accordance with
GAAP after eliminating all inter-company items and all amounts properly
attributable to minority interests, if any, in the stock and surplus of
any subsidiary, minus the following items (without duplication of
deductions), if any, appearing on the consolidated balance sheet of
Borrower:
(i) all deferred charges (less amortization,
unamortized debt discount and expense and corporate organization
expenses);
(ii) the book amount of all assets which would be
treated as intangibles under generally accepted accounting principles,
including, without limitation, such items as goodwill, trademark
applications, trade names, service marks, brand names, copyrights,
patents, patent applications and licenses, and rights with respect to
the foregoing;
(iii) the amount by which aggregate inventories or
aggregate securities appearing on the asset side of such consolidated
balance sheet exceed the lower of cost or market value (at the date of
such balance sheet) thereof; and
(iv) any write-up in the book amount of any asset
resulting from a revaluation thereof from the book amount entered upon
acquisition of such asset.
1.47 "Syndicated" means Syndicated Food Service
International, Inc., a Florida corporation.
1.48 "UCC" means the Uniform Commercial Code as adopted
and in force in the State of Indiana from time to time.
1.49 "Unmatured Event of Default" means any event which,
if it continues uncured (other than obligations which have not
matured), will with lapse of time or notice, or both, constitute an
Event of Default.
SECTION 2. Credit Facilities.
2.1 Line of Credit. So long as no Event of Default or
Unmatured Event of Default has occurred, the Bank may lend to the
Borrower and the Borrower agrees to borrow from the Bank (and to repay
to the Bank in accordance with the terms hereof) from time to time an
aggregate principal sum equal to the lesser of (i) One Million and
No/100 Dollars ($1,000,000.00) and (ii) the Borrowing Base.
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2.1.1 The Note; Method of Borrowing. The obligation of the
Borrower to repay the Line of Credit Loans shall be evidenced by the
Line of Credit Note which shall be repayable on or before August 7,
2004, unless extended and renewed pursuant to Section 2.1.3 of this
Agreement. As long as no Event of Default or Unmatured Event of Default
shall have occurred and be continuing, and subject to the further
conditions and limitations contained herein and until expiration of the
Line of Credit, upon acceleration or otherwise, the Borrower may
borrow, repay and re-borrow under the Line of Credit Note. Each Line of
Credit Loan which the Bank determines to make to the Borrower will, at
the discretion of the Bank be conditioned upon the receipt by the Bank
of an Application for Advance dated as of the date of request. The
Bank, in its sole discretion, shall be entitled to rely on any oral or
telephonic communication requesting an advance and/or providing
disbursement instructions which shall be received by it in good faith
from anyone identifying himself as a person authorized by certified
borrowing resolutions delivered from time to time to the Bank or from
anyone reasonably believed by the Bank to be an officer or agent of the
Borrower otherwise authorized to borrow funds from the Bank on behalf
of the Borrower. The Borrower shall, upon the Bank's request,
immediately confirm in writing to the Bank any such oral or telephonic
communication. All Line of Credit Loans by the Bank and payments by the
Borrower shall be recorded by the Bank on its books and records, and
said books and records shall be conclusive evidence of the total
indebtedness owed under the Line of Credit.
2.1.2 Interest. The Borrower agrees to pay interest on the
unpaid balance of the Line of Credit Note outstanding from time to time
from the date thereof until its maturity at a variable per annum rate
equal to the sum of the Prime Rate plus One Hundred (100) Basis Points
and after maturity, whether by acceleration or otherwise or after the
occurrence and during the continuation of an Event of Default, at a per
annum rate equal to the Prime Rate plus Four Hundred (400) Basis
Points. These rates shall change from time to time effective
concurrently with a change in the Prime Rate. Interest shall be due and
payable commencing on April 7, 2003, and on the seventh day of each
month thereafter until maturity of the Line of Credit Note, whether by
acceleration or otherwise, and will be computed on the basis of a
360-day year over the actual number of days elapsed. If the Bank has
not received accrued but unpaid interest as of the due date thereof
(after any applicable cure period), the Bank shall have the right to
disburse to itself the amount of such interest as of the date thereof
and to add such amount to the principal balance of the Line of Credit.
2.1.3 Renewal. Commencing as of May 7, 2004, the Line of
Credit will be reviewed by the Bank on or before May 7 of each fiscal
year while it is outstanding. If the Bank fails to renew the Line of
Credit for whatever reason, the maturity and expiration of the Line of
Credit shall be August 7 of such year in which such non-renewal occurs.
2.1.4 Reimbursements Due to Payments by the Bank. Any amounts
which the Bank is permitted to pay on behalf of the Borrower pursuant
to any of the Loan Documents and which in its sole discretion the Bank
elects to pay, plus any other amounts to which the Bank is entitled to
reimbursement from the Borrower, shall be invoiced to the Borrower and
shall be payable Five (5) days after the date of the invoice. If not
paid within such Five (5) days, such amounts shall be charged to the
Line of Credit. Thereupon, the available Line of Credit shall be
immediately reduced by a corresponding amount. Upon being charged to
the Line of Credit, these amounts shall be considered to be principal
and shall immediately begin to bear interest at the same rate and shall
be payable at the same times as set forth in Section 2.1.2 hereof.
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2.1.5 Application of Payments. Any payments received from the
Borrower with respect to the Line of Credit Loan generally shall be
applied first to accrued interest thereon, then to any expenses for
which the Bank is entitled to reimbursement pursuant to the terms of
this Agreement or any of the Loan Documents, and then to the principal
balance of the Line of Credit Loan.
2.1.6 Collection and Application of Receivables. Unless the
Bank otherwise instructs, prior to the occurrence of an Event of
Default, or after the occurrence of an Event of Default but before the
Bank exercises its rights of notification and collection described
below, the Borrower shall make collection of all Receivables for the
Bank, receive all payments thereon as the Bank's trustee, and
immediately deliver them to the Bank in their original form. After the
occurrence of an Event of Default, the Bank or its designee may notify
customers or Account Debtors at any time, and from time to time, that
the Receivables have been assigned to the Bank and of the Bank's
security interests therein, and may collect them directly and charge
the collection costs and expenses to the Account.
2.1.7 Mandatory Reductions. If at any time the aggregate
principal outstanding under the Line of Credit exceeds the lesser of
One Million and No/100 Dollars ($1,000,000.00) or the Borrowing Base,
either as a result of a decrease in the value of the Borrowing Base or
otherwise, the Borrower shall immediately repay to the Bank, without
the necessity of notice or demand from the Bank, an amount not less
than such excess.
2.1.8 Cash Allocation Manager. Notwithstanding any contrary
terms or provisions contained in this Section 2, the disbursement
procedures associated with the Line of Credit shall be altered during
any period of time that the Borrower and the Bank are parties to a Cash
Allocation Manager Agreement whose terms shall prevail and control to
the extent of any inconsistency between the provisions of this Section
2 and the express provisions of the Cash Allocation Manager Agreement.
SECTION 3. Expenses. All out-of-pocket expenses of the Bank, including
without limitation, field audit fees, UCC search fees, filing fees, recording
fees, attorneys' fees and disbursements made by or for the benefit of the Bank
with respect to the initial extension of the Loans will be paid by the Bank.
SECTION 4. Grant of Security Interest. In consideration of one or more
loans, advances, or other financial accommodations at any time before, at or
after the date hereof made or extended by the Bank (at the sole discretion of
the Bank in each instance) to or for the account of the Borrower, including
without limitation this Agreement and the Notes, the Borrower hereby grants and
transfers to the Bank a continuing security interest in and a right of setoff
against, and the Borrower hereby assigns to the Bank, the Collateral, whether
currently owned or hereafter acquired, to secure the payment, performance and
observance of all indebtedness, obligations, liabilities, guaranties and
agreements of any kind of the Borrower to the Bank, now existing or hereafter
arising, direct or indirect (including without limitation any participation or
interest of the Bank in obligations of the Borrower to another), acquired
outright, conditionally or as collateral security from another, absolute or
contingent, joint or several, secured or unsecured, due or not, contractual or
tortious, liquidated or unliquidated, arising by operation of law or otherwise,
and of all agreements, documents and instruments evidencing any of the foregoing
or under which any of the foregoing may have been issued, created, assumed or
guaranteed, including without limitation the Notes.
SECTION 5. Representations and Warranties of the Borrower. To induce
the Bank to make the Loans requested by the Borrower, and to provide the
financial accommodations to the Borrower
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contemplated by this Agreement, the Borrower represents and warrants, upon which
the Bank is entitled to rely and is relying in entering into this Agreement,
that:
5.1 Existence and Power of Borrower. The Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Delaware and is duly licensed or qualified to transact business in all
places where the character of its properties or the nature of its activities
make such licensing or qualification necessary; provided that Borrower's
operations may require qualification in Kentucky, Ohio or Illinois but Borrower
has not received notice or claim from any public official advising of a
violation of any state foreign corporation qualification requirement or mandate.
The Borrower has full power and legal right to carry on its business as now
conducted, to own its property, to execute and deliver this Agreement and the
other Loan Documents, to borrow hereunder and to perform and otherwise
consummate the obligations contemplated hereby and by the other Loan Documents.
5.2 Authority. The making and performance by the Borrower of this
Agreement, the Notes, the Loans hereunder, and all other Loan Documents imposing
obligations on the Borrower, have been duly authorized by all requisite action
of the Borrower and will not (i) violate or conflict with any provisions of law
or regulation or of any order, injunction, decree or writ of any court or agency
of government or of any provision of its Articles of Incorporation or By-Laws,
(ii) result in the breach or violation of, or constitute or result in, or with
the passage of time or the giving of notice would result in, a default or
require any consent under, any indenture, lease, instrument, arrangement,
understanding or other agreement to which the Borrower is a party or by which it
or its properties may be bound or affected or (iii) result in or require the
creation or imposition of any mortgage, pledge, lien, security interest or other
charge or encumbrance upon or with respect to any property now owned or
hereafter acquired by the Borrower, except as provided herein. This Agreement,
the Notes and the other Loan Documents when duly executed and delivered, will
constitute the valid, legal and binding obligations of the Borrower, enforceable
in accordance with their respective terms.
5.3 Financial Condition. The Borrower has no contingent
liabilities, material liabilities for taxes, unusual forward or long-term
commitments outside the ordinary course of business or material unrealized or
anticipated losses from any unfavorable commitments which are material with
respect to the financial condition, affairs, prospects or business of the
Borrower except as reflected or provided for in such financial statements. The
financial statements of Borrower contain no material misstatement and omit no
material fact necessary to make such financial statements not misleading; nor,
at this time is Borrower aware of any event which would have a material adverse
impact on the financial condition of Borrower.
5.4 Litigation. Other than as has been previously described to the
Bank as summarized in Exhibit 5.4, there are no suits, investigations, or
proceedings (whether administrative, bankruptcy or otherwise) pending or
threatened against or affecting the Borrower.
5.5 Approvals. No approvals, licenses, authorizations, consents,
filings, permits or registrations from or with any governmental authority,
department or agency are required for the making and performance by the Borrower
of this Agreement, the other Loan Documents, or the transactions contemplated
hereby or thereby. All approvals, licenses, authorizations, consents and
permits, if any, required by federal, state or local law, statute, ordinance,
rule or regulation for the conduct of Borrower's business have been obtained,
are valid and are in full force and effect with no protests, or threats thereof,
to the issuance or validity of any thereof having been filed with any
governmental office or having been received by the Borrower.
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5.6 Taxes. The Borrower has filed all tax returns which the
Borrower was required to file as of the date hereof in all jurisdictions,
whether federal, state or local, and has paid all taxes that are due and
payable, including interest and penalties, if any.
5.7 Liens. Other than as disclosed on Exhibit 5.7 hereto, as of
the Closing Date the Borrower will be the lawful owner, free and clear of all
liens and encumbrances, of all property in which it will grant a security
interest to the Bank in accordance with Section 4 hereof, there will be no
financing statements or lien instruments covering all or any portion of said
property which have been executed, recorded or filed, except those in favor of
the Bank, and the security interests granted to the Bank herein and pursuant to
the provisions hereof will be valid, perfected, and of first priority.
5.8 Full Disclosure. Any financial statements or projections
delivered to the Bank by Borrower do not nor do this Agreement and the Loan
Documents made or furnished by the Borrower to the Bank in connection with the
financial accommodations contemplated by this Agreement, contain any untrue
statement of a material fact or omit to state any facts necessary to make such
statements not misleading in light of the circumstances in which they are made.
5.9 Regulation U. The Borrower is not engaged principally, nor as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock within the meaning of Regulation
U issued by the Board. The proceeds of the Loans made pursuant to this Agreement
will be used by the Borrower only for the purposes set forth in Section 5.13 of
this Agreement.
5.10 Employee Benefit Plans. Each Plan maintained by the Borrower
is described in Exhibit 5.10 to this Agreement and is in compliance with ERISA,
the Code and all applicable rules and regulations adopted by regulatory
authorities pursuant thereto. The Borrower has filed all reports and returns
required to be filed by ERISA, the Code and such rules and regulations. Each
Plan described in Exhibit 5.10 is an individual account plan as defined in
Section 3(34) of ERISA and, as such, is not subject to the minimum funding rules
of ERISA or the jurisdiction of the Pension Benefit Guaranty Corporation.
5.11 Investment Company Act. The Borrower is not an "investment
company" or a company controlled by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
5.12 Nature of Business and Assets. The Borrower operates a
wholesale food delivery and distribution business. The Borrower owns no interest
in any other corporation, partnership, joint venture or other business
enterprise. The location of Borrower's principal office, other business
locations and all of the Borrower's material tangible assets and records
(including without limitation, the Inventory) is listed in Exhibit 5.12 hereto.
In the event that any Collateral will be attached to real estate, the
description of such real estate and the known owner of record of such real
estate shall be furnished to the Bank and appended to this Agreement as Exhibit
5.12-A. If any of the Collateral is attached to such real estate prior to the
perfection of the security interests granted herein, the Borrower will, on
demand, furnish the Bank with a subordination, disclaimer or disclaimers,
executed by all persons having an interest in such real estate. The Borrower has
no subsidiaries, wholly-owned or otherwise, or affiliates other than
shareholders, directors and officers and the Guarantors. The Borrower uses no
names (fictitious or otherwise), other than its own and that of "Xxxxxxx
Produce" in the operation and conduct of its business. The Borrower has no
subsidiaries, wholly owned or otherwise. The Borrower is not in violation of any
law, regulation, order, injunction, decree or writ relating to or affecting the
Borrower, its business, or the
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conduct thereof, including without limitation, laws relating to securities,
health and safety of employees, environment and pollution control, pricing,
sales and distribution of products and exporting of goods and materials,
collective bargaining rights, equal opportunity in employment and advancement,
political contributions or improper payments the result of which would not have
a material adverse effect. The Borrower is not in material default under any
indenture, lease, instrument or other agreement to which the Borrower is a party
or by which it is bound.
5.13 Use of Proceeds. The proceeds of the Notes will be used by the
Borrower for general working capital purposes.
SECTION 6. Closing; Security and Conditions of Lending. The closing of
the transactions contemplated by this Agreement ("Closing") shall take place at
such location as the Bank and the Borrower may mutually agree. As conditions
precedent to the advancement of any funds pursuant to this Agreement, the
following matters shall have been completed to the Bank's satisfaction and the
Bank shall have received from the Borrower and the Borrower agrees to furnish or
cause to be furnished to the Bank the following in form and content satisfactory
to the Bank:
6.1 The Line of Credit Note and Agreement. The Line of Credit Note
and this Agreement, each signed by duly authorized officers of the Borrower.
6.2 Security Agreement. A Security Agreement and Perfection
Certificate, each completed and signed by a duly authorized officer of Borrower.
6.3 Guaranties. Unconditional Unlimited Continuing Guaranties
executed by each of the Guarantors.
6.4 Application for Advance. An Application for Advance, together
with a completed Borrowing Base Report, each signed by duly authorized officers
of Borrower.
6.5 Officer's Certificates. Officers certificates, complete with
exhibits with respect to the Borrower's and each of the Guarantors'
organizational documents, resolutions and incumbency in form and substance
acceptable to the Bank.
6.6 Certificates of Existence. Certificates of the Secretary of
State of Delaware and Florida certifying that, as applicable, each of the
Borrower and the Guarantors are organized and existing under the laws of the
State of Delaware and Florida, as applicable.
6.7 Certificates of Authority/Qualification. Certificates of the
Secretaries of States of those states where Borrower and the Guarantors are
qualified to do business as foreign corporations or other organizations,
including without limitation, Indiana.
6.8 Evidence of Insurance. Certified copies of insurance policies
evidencing insurance coverage as required to be maintained by the Borrower
pursuant to this Agreement and the Loan Documents and a Loss Payee Endorsement
in form acceptable to the Bank, assigning the proceeds of such policies to the
Bank to secure repayment of the Loans, as well as any and all other obligations
and liabilities of the Borrower to the Bank.
6.9 Assignment of Lease. A Collateral Assignment of Tenant's
Interest in Lease regarding the Leased Premises executed by duly authorized
officers of the Borrower.
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6.10 Landlord's Waiver. A Landlord's Waiver and Consent to
Assignment regarding the Leased Premises executed by duly authorized officers of
the Landlord and acknowledged by duly authorized officers of the Borrower.
6.11 Financing Statements. UCC Financing Statements, in form and
substance acceptable to Bank, to be filed in the Indiana, Florida and Delaware
Secretary of State's Offices, Uniform Commercial Code Division, and the Monroe
County, Indiana Recorder's Office.
6.12 Reimbursement of Fees. Payment of the expenses reimbursable to
the Bank pursuant to Section 3 hereof.
6.13 Environmental Certificate. An Environmental Certificate
relating to the condition of the Leased Premises and providing for further
rights and remedies of the Bank executed by duly authorized officers of the
Borrower.
6.14 Financial Statements. Certain financial statements of Borrower
and Guarantors as requested in advance by the Bank.
6.15 Opinion of Counsel. Opinions of legal counsel executed by
legal counsel to the Borrower and the Guarantors.
6.16 Life Insurance Assignments. An Assignment of Life Insurance
Policy as Collateral upon the life of Xxxxxxx X. Xxxxxxx in an amount of not
less than One Million and No/100 Dollars ($1,000,000.00), together with a
specimen copy or copies of such life insurance policies.
6.17 Fixed Asset Appraisal. An appraisal of the Borrower's fixed
assets, in form and content reasonably acceptable to the Bank
6.18 Subordination Agreement. A Subordination Agreement, in form
and content acceptable to the Bank, executed and delivered by the Beasleys.
6.19 Pledge Agreement. A Pledge Agreement executed by Syndicated
pledging all of its right, title and interest in the ownership interests of
Borrower and the other Guarantors (other than Syndicated), together with stock
powers, irrevocable proxies and the original share certificates or other
evidence of ownership of such shares or ownership interests.
6.20 Cash Allocation Manager Agreement. A Cash Allocation Manager
Agreement executed by duly authorized officers of the Borrower.
6.21 Subsequent Advances. At the time of each advance under the
Line of Credit, no Event of Default or Unmatured Event of Default shall have
occurred and be continuing, and the representations and warranties contained in
this Agreement, including without limitation those in Section 5 hereof, shall be
true and correct as of the date of the advance except as previously disclosed in
writing to the Bank.
6.22 Other Information. Such other certificates, statements,
documents and information as the Bank may reasonably request in connection with
this Agreement.
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SECTION 7. Affirmative Covenants. Unless the Bank otherwise consents in
writing and until payment in full of the Loans and fulfillment of all other
obligations and liabilities of the Borrower to the Bank, the Borrower agrees as
follows:
7.1 Payment of Loans. The Borrower agrees to repay the Loans in
accordance with the terms and conditions of this Agreement and the Notes.
7.2 Financial Statements. The Borrower agrees that it shall
furnish to the Bank:
7.2.1 As soon as available and in no event later than
Thirty (30) days after the close of each calendar quarterly period of
each fiscal year, (a) Borrower's (or the consolidated group in which
Borrower reports) balance sheet and a statement of income, expenses and
retained earnings prepared as of the end of such period and on a year
to date basis prepared in accordance with GAAP by Borrower's
independent certified public accountants on a reviewed basis and
certified as accurate by the Borrower's duly authorized representative,
(b) Borrower's receivables aging schedule, (c) Borrower's payables
aging schedule, and (d) such other financial information regarding
Borrower as the Bank may reasonably request from time to time.
7.2.2 As soon as available and in no event later than
Ninety (90) days following the close of each fiscal year of the
Borrower, a balance sheet and statement of income, expenses and
retained earnings, and a statement of changes in the financial position
of the Borrower, together with supporting schedules reflecting the
financial condition of the Borrower at the close of such year and the
results of its operations during such year, all of such statements
which shall be prepared in accordance with GAAP consistently applied
and shall be audited by independent certified public accountants of
recognized standing selected by Borrower and satisfactory to the Bank.
7.2.3 As soon as available and in no event later than
Thirty (30) days after the close of each calendar quarterly period of
each fiscal year, (a) Landlord's (or the consolidated group in which
Landlord reports) balance sheet and a statement of income, expenses and
retained earnings prepared as of the end of such period and on a year
to date basis prepared in accordance with GAAP and certified as
accurate by the Landlord's duly authorized representative, and (b) such
other financial information regarding Landlord as the Bank may
reasonably request from time to time.
7.2.4 As soon as available and in no event later than
Ninety (90) days following the close of each fiscal year of the
Landlord, a balance sheet and statement of income, expenses and
retained earnings, and a statement of changes in the financial position
of the Landlord (or the consolidated group in which Landlord reports),
together with supporting schedules reflecting the financial condition
of the Landlord at the close of such year and the results of its
operations during such year, all of such statements which shall be
prepared in accordance with GAAP consistently applied and shall be
audited by independent certified public accountants of recognized
standing selected by Landlord and satisfactory to the Bank.
7.2.5 As soon as available and in no event later than Ten
(10) days after the close of each calendar monthly period of each
fiscal year, a Borrowing Base Certificate certified as accurate by the
Borrower's duly authorized representative.
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7.2.6 At the time of submission of each of the financial
statements requested by this Section 7.2, a Certificate of No Default
in the form of Exhibit 1.12 hereto, dated as of the date of submission.
7.2.7 Such other information as the Bank may reasonably
request from time to time.
7.3 Adverse Changes and Litigation. The Borrower shall give notice
in writing to the Bank of (a) the occurrence of any Event of Default or
Unmatured Event of Default or of any other change or occurrence which could have
a material adverse effect on its financial condition or business, promptly but
not later than Five (5) Business Days after occurrence; (b) all litigation or
any threat thereof and all proceedings and investigations or any threat thereof
before or by any governmental or regulatory agencies affecting the Borrower, any
of which, if adversely determined, may have a material adverse effect on the
financial condition or business of the Borrower, promptly but not later than
Five (5) Business Days of service of process or other notification or threat of
such litigation and/or proceedings; and (c) the actual knowledge of the
occurrence of any facts which would cause the representations and warranties set
forth in Section 5 hereof to become untrue or materially misleading.
7.4 Insurance. The Borrower shall keep adequately insured in
appropriate amounts (but not less than the aggregate of the principal balance
plus accrued interest thereon outstanding from time to time under the Notes and
under the Agreement, and, in any event, not less than replacement value of the
Collateral and in amounts sufficient to prevent the Borrower or the Bank from
becoming a co-insurer of any loss by financially sound and reputable insurers)
all property of a character usually insured by entities engaged in the same or
similar business, similarly situated, against loss or damage by fire, extended
coverage perils and business interruption, as well as such other risks and
liabilities customarily insured against by such businesses, and shall furnish
evidence thereof to the Bank. Each policy in respect to the insurance required
by this Section 7.4 shall (a) bear a first lien holder endorsement in favor of
the Bank and in form and in substance satisfactory to the Bank in its sole
discretion, providing that any loss thereunder involving the Collateral or the
insured property shall be made payable to the Bank and the Borrower, as their
interests may appear, notwithstanding any failure by the Borrower to pay any
premium, fee of other amount with respect to such policy, and (b) contain
agreements by the insurer that it shall give to the Bank at least Thirty (30)
days prior written notice of cancellation and that any loss thereunder in
respect of the property shall be payable notwithstanding any occupation or use
for purposes more hazardous than permitted by the terms of such policy, any
breach of any warranty, representation or covenant contained in such policy, any
act or neglect of the Borrower, or any foreclosure or other proceedings or
notice of sale or of any change in title or ownership. Within Thirty (30) days
after written notice from Bank, Borrower shall obtain such additional insurance
as Bank may request.
7.5 Debts and Taxes. The Borrower shall pay and discharge all
current obligations in a manner Consistent with commercially reasonable
practice, including without limitation, trade accounts payable and all taxes,
assessments, and governmental charges and levies imposed upon it or upon its
income or profits or upon any of its property prior to the date on which
penalties attach; provided, however, the Borrower shall not be required to pay
any such obligation, tax, assessment, charge or levy, the payment of which is
being contested in good faith and by proper proceedings if a reserve is
maintained with respect thereto in accordance with GAAP and in amounts
reasonably deemed adequate by Bank.
7.6 Existence. The Borrower shall preserve and maintain its
corporate existence and good standing as well as all of its rights, privileges,
permits and licenses; shall conduct its business in an orderly and efficient
manner; and shall comply with all material requirements of applicable laws,
statutes, ordinances, rules and regulations.
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7.7 Access to Books and Inspection. The Borrower shall keep proper
books of record and account for itself and shall give any representative of the
Bank access to, and permit him to examine, copy or make extracts from, any and
all of its books, records and documents, to inspect any of its properties and to
discuss its affairs, finances and accounts with any of its principal officers
and with the certified public accountant reviewing the financial statements
referred to in Section 7.2.2 hereof, all at such times and as often as may
reasonably be requested.
7.8 Compliance with ERISA. The Borrower shall at all times meet
the minimum funding and reporting requirements of ERISA with respect to any Plan
of the Borrower which is covered by ERISA, and shall deliver or cause to be
delivered to the Bank such information concerning the Borrower's compliance
therewith as the Bank may reasonably request. Immediately upon becoming aware of
the occurrence of any (a) "reportable event" (as such term is defined in Section
4043 of ERISA), or (b) "prohibited transaction" (as such term is defined in
Section 406 or described in Section 3003(a) of ERISA) in connection with any
such Plan, the Borrower shall give written notice to the Bank specifying the
nature thereof, what action the Borrower is taking or proposes to take with
respect thereto, and when known, any action taken by the Internal Revenue
Service, the Department of Labor or the Pension Benefit Guaranty Corporation
with respect thereto.
7.9 Reimbursement of Expenses and Indemnification. The Borrower
shall reimburse the Bank for all costs and expenses, including reasonable
attorneys' fees, incurred by the Bank in the collection of the Loans as well as
all other obligations and liabilities of the Borrower to the Bank as a result of
the occurrence of an Event of Default hereunder or in the pursuit of any remedy
of the Bank available to it under or pursuant to this Agreement or any of the
other Loan Documents. The Borrower shall at all times protect, indemnify, defend
and save harmless the Bank from and against any and all claims, actions, suits
and other legal proceedings, and liabilities, damages, costs, interest, charges,
filing fees and taxes, expenses relating to title, stamp, mortgage or other
taxes and liabilities for delays in paying them, counsel fees and disbursements
and other expenses and penalties of which the Bank may at any time sustain or
incur by reason of or in consequence of or arising out of the execution and
delivery of, the consummation of the transactions contemplated by, or the
amendment or modification of, or any waiver or consent under or in respect of
the Agreement or any of the Loan Documents including without limitation the
Notes. The provisions of this Section 7.9 shall survive the payment of the Notes
and the termination of the Agreement.
7.10 Grant of Security Interests. Except with respect to the liens
permitted in Section 5.7 hereof, the Borrower has granted to the Bank a first
priority security interest in and to the Collateral in which the Borrower has an
interest, pursuant to and under the terms of this Agreement, wheresoever
located, whether now owned or existing or hereafter acquired or arising, and
all proceeds thereof, which security interests shall continue in full force and
effect until all indebtedness, obligations and liabilities of the Borrower to
the Bank (whether arising out of the Agreement or any other Loan Documents or
otherwise and also including without limitation all future advances) shall have
been fully satisfied. The Borrower will take any and all steps requested by the
Bank to perfect, maintain and protect the Bank's security interest in any and
all such assets.
7.11 Depository Relationship. The Bank will be the principal
depository in which substantially all of the Borrower's funds are deposited, and
the principal bank account of the Borrower, as long as this Agreement is in
effect and the Loans are outstanding. Borrower will grant the Bank the
opportunity to provide corporate banking services required by the Borrower,
including, without limitation, cash
14
management, employee benefit plan services, employee banking, merchant credit
card services and private banking services for members of the executive
management of Borrower.
7.12 Financial Covenants. During the term of this Agreement and
while any portion of the Loans or the other obligations of the Borrower to the
Bank are outstanding, the Borrower, together with Landlord and Xxxxxxx
Transportation, Inc., on a consolidated basis, shall comply with the following
financial covenants:
7.12.1 Maintain a Debt Service Coverage Ratio of not less
than 1.25 to 1.0 at all times.
7.12.2 Maintain a Current Ratio of not less than 1.70 to
1.00 at all times;
7.12.3 Maintain a Quick Ratio of not less than 1.0 to 1.0 at
all times;
7.12.4 Maintain a Debt to Tangible Net Worth Ratio of not
greater than 1.0 to 1.0 at all times; and
7.12.5 Maintain a minimum Net Worth of not less than One
Million Nine Hundred Thousand and No/100 Dollars
($1,900,000.00) at all times.
7.13 Further Assurances. The Borrower shall, at its cost and
expense, upon reasonable request of the Bank, duly execute and deliver, or cause
to be duly executed and delivered to the Bank, such further instruments and to
do and cause to be done such further acts as may be necessary or proper in the
opinion of the Bank to carry out more effectually the provisions and purposes of
this Agreement.
SECTION 8. Negative Covenants. Unless the Bank otherwise consents in
writing, until payment or performance in full of the Notes and all other
obligations and liabilities of the Borrower to the Bank, the Borrower agrees as
follows:
8.1 Liens. The Borrower shall not mortgage or otherwise encumber
any of its assets to anyone other than the Bank without the Bank's prior written
consent except:
8.1.1 Those liens required by this Agreement;
8.1.2 Liens, pledges or deposits for workmen's
compensation, unemployment insurance, old age benefits or social
security obligations, statutory obligations or other similar charges,
liens for current taxes or assessments not yet due or which are payable
without penalty or the validity of which is being contested in good
faith and by appropriate proceedings upon stay of execution of the
requirement thereof and a reserve is maintained with respect thereto in
accordance with GAAP and in amounts deemed reasonably adequate by the
Bank, or deposits required to be made in the ordinary course of
business;
8.1.3 The pledge of assets for the purpose of securing an
appeal or stay or discharge in the course of any legal proceeding, or
liens for judgments or awards in respect of which the Borrower shall be
prosecuting an appeal or proceeding for review in good faith so long as
execution is not levied thereunder and provided that an adequate
reserve in accordance with GAAP for the payment of such judgments or
awards is maintained; or
8.1.4 Those liens described on attached Exhibit 5.7.
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8.2 Sale of Assets; Consolidation; Merger; Distributions; Capital
Structure. The Borrower shall not:
8.2.1 Make any material change in the nature of its
business, or sell, lease, transfer, exchange, or otherwise dispose of
all or a substantial part of its properties and/or assets to any
person, firm, corporation or other entity except for sales of assets in
the ordinary course of business; or
8.2.2 Consolidate with, merge into, acquire or otherwise
combine with any other corporation; or
8.2.3 Not declare or pay any dividend or distributions
(except stock dividends) on its capital stock if an Event of Default
has occurred prior to such distributions or will occur as a result of
such distribution.
8.2.4 Not make any inter-company payments of any kind
(including, without limitation, debt repayments, payments for goods or
services or otherwise, if an Event of Default has occurred prior to
such payments or will occur as a result of such payment.
8.2.5 Alter or amend its capital structure or sell or issue
new capital stock, or purchase, redeem or otherwise acquire for value
any of its capital stock.
8.3 Loans and Investments. The Borrower shall not make or permit
to exist any loans or advances to or investments in any person, firm,
corporation or other entity except:
8.3.1 Investments in direct obligations of the United
States Government maturing within one year of acquisition thereof;
8.3.2 Investments in certificates of deposit or savings
accounts of a bank (other than the Bank), with a maturity of no more
than one year and in amounts of not more than $100,000 in any such
bank, and with respect to the Bank, with any maturity and in any
amounts;
8.3.3 Investments in money market funds, commercial paper
of corporations rated A-l by Standard and Poor's Corporation or P-l by
Xxxxx'x Investors Service, Inc. or of any affiliate of the Bank, and in
obligations insured directly or indirectly by the government of the
United States; or
8.3.4 Deferred payments by customers of the Borrower; or
8.3.5 Loans to or investments in third parties, as
previously approved by the Bank or, which are currently reflected on
the Borrower's financial statements.
8.4 Fiscal Year. The Borrower shall not change its fiscal year.
8.5 Management. The Borrower shall not permit any material change
in its day-to-day executive management personnel to occur except by death,
protracted illness, disability or disqualification or to allow any material
change in the equity ownership of the Borrower.
16
8.6 Indebtedness. The Borrower shall not become liable, directly
or indirectly, as guarantor or otherwise for any obligation except for the
endorsement of commercial paper for deposit or collection in the ordinary course
of business; further, Borrower will not incur, create, assume or permit to exist
any indebtedness except: (a) the Loans and the Mortgage Loan; (b) existing
indebtedness as shown on the Borrower's current financial statements to be
permitted to exist after the Closing; and (c) trade indebtedness incurred in the
ordinary course of business.
SECTION 9. Events of Default. The occurrence of any one or more of the
following events shall be deemed a default of this Agreement:
9.1 Default in Payment. The Borrower shall fail to pay any part or
all of the principal or interest required by this Agreement and the Notes after
becoming due and payable.
9.2 Insolvency; Judgments. Any proceedings shall be commenced in a
court of competent jurisdiction by or against the Borrower seeking an order (i)
for relief under the Bankruptcy Code or establishing the insolvency of the
Borrower, (ii) appointing a trustee, receiver or other custodian of the Borrower
or of any substantial part of Borrower's property, or (iii) approving or
effecting an arrangement for the liquidation, dissolution, winding up or
reorganization of the Borrower pursuant to the Bankruptcy Code, or any other law
for the relief of debtors, or seeking judicial modification or alteration of the
rights of the Bank hereunder or under the Notes; and any such proceedings
described in clauses (i), (ii), or (iii) shall not be dismissed, any such
receiver, trustee or other custodian shall not be discharged, or jurisdiction of
the court shall not be relinquished or vacated or stayed on appeal or otherwise
within Thirty (30) days from commencement of any such proceedings or the
Borrower shall (iv) file any petition, commence any proceedings or take or
consent to any other action seeking any such judicial order described in clauses
(i), (ii) or (iii) preceding, or (v) make an assignment for the benefit of its
creditors, or (vi) become insolvent, or admit in writing the inability to pay
its debts and obligations, as they become due, or (vii) have failed within,
Thirty (30) days to pay or otherwise discharge any one or more judgments or
attachments against it exceeding Twenty-five Thousand and No/100 Dollars
($25,000) in the aggregate, except those that are being contested in good faith
and enforcement or execution of which has been stayed and for which adequate
reservation accordance with GAAP for the payment thereof are maintained.
9.3 Misrepresentation. Any representation or warranty made by the
Borrower in this Agreement or in any financial statements, instruments,
agreements, certificates or reports furnished to the Bank in connection herewith
proves to be untrue or misleading in any material respect as of the date it is
made or deemed to have been made.
9.4 Other Defaults. The Borrower shall default in the performance
of any covenant, obligation or agreement contained herein or in any of the other
Loan Documents, which default, other than the defaults set forth in Section 9.1
hereof or violation of the negative covenants set forth in Section 8 hereof, if
subject to cure, shall remain uncured for Thirty (30) days after the Bank
provides the Borrower with notice of the occurrence thereof.
9.5 Default of Other Obligations. The Borrower shall fail to pay
any material indebtedness to or perform any other obligation to any other firm,
party or person, and such failure shall continue beyond any applicable grace
period and result in the acceleration of such indebtedness or obligation or the
Borrower shall suffer to exist beyond any applicable grace period any other
event of default under any material agreement binding upon the Borrower,
including, without limitation, the lease of the Leased Premises, unless such
event of default has been waived in writing by the appropriate party or parties
to such agreement.
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9.6 Adverse Changes. Any material adverse change in the Borrower's
business, financial condition or management, as determined by the Bank in the
reasonable exercise of its discretion.
9.7 Loss of Collateral. The loss, theft, substantial damage to or
destruction of any Collateral for which there is either no insurance coverage or
for which, in the sole and exclusive opinion of the Bank, there is insufficient
coverage, or the making or filing of any lien, except permitted liens, levy, or
execution on, or seizure, attachment or garnishment of, any Collateral.
9.8 Insecurity. The Bank at any time and for any justifiable
reason shall believe in good faith that the prospect of repayment of the Loans
or any part thereof and the Borrower's compliance with the terms of the Loan
Documents is or will be impaired.
9.9 Invalidity of Loan Documents. Any material provision of any of
the Loan Documents shall at any time and for any reason cease to be valid and
binding upon the Borrower, or shall be declared to be null and void, or the
validity or enforceability thereof shall be contested by the Borrower, or
proceedings shall be commenced by any governmental agency or authority having
jurisdiction over the Borrower seeking to establish the invalidity or
unenforceability thereof, or the Borrower shall improperly deny that it has any
or further liability or obligation under this Agreement or the Loan Documents.
9.10 Cross Default. Landlord shall default in the performance of
any covenant, obligation or agreement contained in any credit or collateral
document entered into with the Bank, it being the express intent of the Bank
that any default under such credit and collateral documents shall constitute a
default under the Loan Documents.
SECTION 10. Rights on Default. Upon the occurrence of an Event of
Default and at any time thereafter (said Event of Default not having previously
been cured), the Bank shall have the remedies of a secured party under the
Uniform Commercial Code as amended and in effect in Indiana from time to time.
Borrower agrees that it shall not be entitled to relief from valuation and
appraisement laws, and Borrower waives any and all rights thereto. The Bank may
appropriate, set off and apply to the payment of the obligations, any Collateral
in, or coming into, the possession of the Bank or any of its affiliates or
agents, without notice to the Borrower and in such manner as the Bank may in its
discretion determine.
SECTION 11. Set Off. If any Event of Default occurs hereunder, any
indebtedness from the Bank to the Borrower may be set off and applied toward the
payment of the Notes and/or any other liability of the Borrower to the Bank,
whether or not the Notes or other liability, or any part thereof, shall then be
due.
SECTION 12. General Provisions.
12.1 Rights and Remedies of Bank. No delay or omission of the Bank
to exercise any right or power hereunder shall impair such right or power or be
construed as a waiver of any default or as acquiescence therein; and any single
or partial exercise of any such right or power shall not preclude other or
further exercise thereof or the exercise of any other right or power; and no
waiver shall be valid unless in writing signed by the Bank, and then only to the
extent specifically set forth in such writing, All rights and remedies hereunder
and under any of the other Loan Documents or by law afforded shall be cumulative
and all shall be available to the Bank until the Notes and all other liabilities
of the Borrower to the Bank have been paid in full and all obligations of the
Borrower to the Bank have been satisfied.
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12.2 Appointment. To effectuate the terms and provisions hereof,
the Borrower hereby designates and appoints the Bank and each of its designees
or agents as attorney in fact of the Borrower, irrevocably and with power of
substitution, with authority upon the occurrence of an Event of Default, to:
receive, open and dispose of all mail addressed to the Borrower and notify the
Post Office authorities to change the address for delivery of mail addressed to
the Borrower to such address as the Bank may designate, endorse the name of the
Borrower on any notes, acceptances, checks, drafts, money orders, instruments or
other evidences of Collateral that may come into the Bank's possession, sign the
name of the Borrower on any invoices, documents, drafts against or notices to
Account Debtors or obligors of the Borrower, assignments and requests for
verification of accounts, execute proofs of claim and loss, endorsements,
assignments or other instruments of conveyance or transfer, adjust and
compromise any claims under insurance policies or otherwise, execute releases,
and do all other acts and things necessary or advisable in the sole and
exclusive discretion of the Bank to carry out and enforce this Agreement, or the
Borrower's obligations to the Bank. All acts done under the foregoing
authorization are hereby ratified and approved and neither the Bank nor any
designee or agent thereof shall be liable for any acts of commission or
omission, for any error of judgment or for any mistake of fact or law. This
power of attorney is coupled with an interest and is irrevocable while any
indebtedness shall remain unpaid.
12.3 Financing Statements; Additional Documents. The Borrower
authorizes the Bank to file one or more financing statements, this Agreement and
any other documents, instruments or statements of any kind on its behalf in
those public offices deemed necessary by the Bank in its sole discretion to
perfect and continue the perfection of its security interest in the Collateral
and to protect, defend and further assure the grant, validity and perfection
thereof. In addition, the Borrower will, at its expense deliver or cause to be
delivered such other documents, as the Bank may request to secure payment of the
indebtedness referred to herein or to further perfect, protect and defend the
security interest granted herein, including, without limitation, any certificate
or certificates of title to the Collateral with the security interest of the
Bank noted thereon.
12.4 Litigation. In the event of any litigation with respect to any
matter connected with this Agreement, the Borrower's obligations to the Bank or
the Collateral, Borrower hereby irrevocably consents to the jurisdiction of the
Courts of the State of Indiana and of any Federal Court located in such State in
connection with any action or proceeding arising out of or relating to such
obligations, this Agreement, the Loan Documents or the Collateral. Borrower
hereby waives personal service of any process in connection with any such action
or proceeding and agrees that the service thereof may be made by certified or
registered mail directed to Borrower at any address of Borrower set forth in
this Agreement or appearing on the books and records of the Bank. Borrower so
served shall appear or answer to such process within Thirty (30) days after the
mailing thereof. Should Borrower so served fail to appear or answer within said
Thirty (30) day period, Borrower shall be deemed in default and judgment may be
entered by Bank against Borrower for the amount or such other relief as may be
demanded in any process so served. In the alternative, in its sole discretion,
the Bank may effect service upon Borrower in any other form or manner permitted
by law.
12.5 Waiver of Various Rights. The Borrower hereby waives all
rights of valuation and appraisement in connection with or arising out of any of
the Loan Documents including without limitation this Agreement and the Notes, or
the validity, protection, interpretation, collection or enforcement thereof or
any other claim or dispute howsoever arising between the Borrower and the Bank.
The Borrower waives acceptance or notice of acceptance hereof and agrees that
the Agreement, the Notes, and all of the other Loan Documents shall be fully
valid, binding, effective, and enforceable as of the date hereof even though
this Agreement and any one or more of the other Loan Documents which require the
signature of the Bank, may be executed by or on behalf of the Bank on other than
the date hereof. The Borrower
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waives notice of presentment, notice of dishonor, demand, protest of all
instruments included in or evidencing the Borrower's obligations to the Bank or
Collateral. Borrower further waives any right to require the Bank to xxxxxxxx
any assets in favor of the Borrower, any other creditor of the Borrower or any
other person claiming any rights by or through the Borrower to any of the
Collateral in which the Bank has a security interest. THE BANK AND THE BORROWER
HEREBY WAIVE THE RIGHT OF TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS
AGREEMENT, THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY.
12.6 Bank's Responsibilities. Beyond the exercise of reasonable
care to assure the safe custody of the Collateral while held hereunder, the Bank
shall have no duty or liability to preserve rights pertaining thereto, and shall
be relieved of all responsibility for the Collateral upon surrendering it to the
Borrower or Borrower's designee.
12.7 Survival. All representations, warranties, and covenants of
the Borrower herein or in any certificate, agreement or other instrument
delivered by it or on its behalf under this Agreement shall be considered to
have been relied upon by the Bank and shall survive the making of Loans and
delivery to the Bank of the Notes. All statements in any such certificate or
other instrument shall constitute warranties and representations hereunder by
the Borrower, as the case may be.
12.8 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the Borrower and the Bank and their respective
successors and assigns; provided, however, that the Borrower may not assign
(whether by operation of law or otherwise) its rights hereunder without the
prior written consent of the Bank. The provisions of this Agreement are intended
to be for the benefit of any holder, from time to time, of the Notes and shall
be enforceable by such holder, whether or not an express assignment to such
holder of rights under this Agreement has been made by the Bank, its successors
or assigns.
12.9 Governing Law; Severability. This Agreement and the other Loan
Documents have been or are being executed and delivered and are intended to be
performed in the State of Indiana and shall be governed, construed and enforced
in all respects in accordance with the laws of the State of Indiana. Whenever
possible, each provision of this Agreement or any related agreement or
instrument shall be interpreted in such manner as to be effective and valid
under applicable law, but if any such provision shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this or any related agreement or
instrument.
12.10 Headings; Exhibits. The section headings used herein are for
convenience only and shall not be read or construed as limiting the substance or
generality of this Agreement. All agreements and instruments attached hereto as
exhibits and referred to herein, including the executed originals thereof, shall
be deemed a part of the Agreement.
12.11 Notices. Notices or demands under this Agreement shall (unless
otherwise expressly provided) be in writing and shall be delivered, by hand,
courier, or the United States Mail (registered or certified mail), with all
expenses of delivery being prepaid, and shall be addressed as follows:
If to the Borrower: Xxxxxxx Food Service, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, President
20
with copies (which shall not constitute notice) to:
Xxxxxx & Xxxxxxxxx
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxx, Esq.
And
Syndicated Food Service International, Inc.
Overlook III, Suite 750
0000 Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
If to the Bank: Old National Bank
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. XxxXxxXxxxx
with a copy (which shall not constitute notice) to:
Xxxxx XxXxxxx LLP
Xxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
or at such other address as the Borrower or the Bank shall have furnished to the
other in writing. Any notice or demand so addressed and mailed by registered or
certified mail shall be deemed to be given Three (3) days after the date so
mailed, Any notice or demand so addressed and otherwise delivered shall be
deemed to be given when actually received by the addressee.
12.12 Business Day. If any installment of principal or interest on
the Notes falls due on a day which is not a Business Day, the due date shall be
extended to the next succeeding Business Day and such payment will be payable at
the applicable rate of interest for the period of such extension.
12.13 Modification, Counterparts. This Agreement may be amended,
modified, renewed or extended only by written instrument executed in the manner
of its original execution. This Agreement may be signed in any number of
counterparts each of which shall be considered an original with the same effect
as if the signatures thereto and hereto were upon the same instrument.
12.14 Certificates. Unless otherwise expressly provided, this
Agreement and the other Loan Documents, or any notice, request, certificate or
statement of the Borrower required or permitted to be made or given under any
provisions hereof shall be sufficient when signed by the President of the
Borrower. The Bank may rely upon the certificate of the Secretary of the
Borrower as to the adoption of resolutions by the Board of Directors of the
Borrower or as to the incumbency and authority of those officers signing on
behalf of the Borrower.
21
12.15 Interest Rate Limitations. Notwithstanding anything contained
herein to the contrary, the obligation of the Borrower to make payments of
interest shall be subject to the limitation that payments under the law or laws
applicable to the Bank limiting rates of interest which may be charged or
collected by the Bank. Any such payments of interest which are not made as a
result at the limitation referred to in the preceding sentence shall be made by
the Borrower to the Bank on the earliest payment date or dates on which the
receipt thereof would be permissible under the laws applicable to the Bank
limiting rates of interest which may be charged or collected by the Bank.
12.16 Other Agreements. This Agreement and the other Loan Documents
shall be construed consistently with each other in order to best effectuate the
intent of the Borrower and the Bank in entering into the relationships
contemplated by all these agreements. The agreements referenced herein
constitute the sole and entire agreement of the parties and no statement or
promise has been made with respect to the subject matter of these agreements
other than as expressed herein. In the event of a conflict between the terms of
this Agreement and any of the other Loan Documents, the provisions of this
Agreement shall control, except with respect to the Notes, those terms shall
control.
12.17 No Partnership. Nothing contained herein or in any of the
Loan Documents is intended to create or will be construed to create any
relationship between the Bank and the Borrower other than as expressly set forth
herein or therein and will not create any joint venture, partnership or other
relationship.
12.18 Participations. Notwithstanding any other provision of this
Agreement, the Borrower understands that the Bank may at any time enter into
participation agreements with one or more participating banks whereby the Bank
will allocate certain percentages of its commitments to them. The Borrower
acknowledges that, for the convenience of all parties, this Agreement is being
entered into with the Bank only and that its obligations under this Agreement
are undertaken for the benefit of, and as inducement to, any such participating
bank as well as the Bank, and the Borrower hereby grants to each such
participating bank, to the extent of its participation in the Loans, the right
to set off deposit accounts maintained by the Borrower with such bank.
12.19 Severability. If any provision of this Agreement shall be held
invalid under any applicable laws, such invalidity shall not effect any other
provision of this Agreement that can be given effect without the invalid
provision and, to this end, the provisions hereof are severable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date and year
first written above.
XXXXXXX FOOD SERVICE, INC.
("Borrower")
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx, President
OLD NATIONAL BANK
("Bank")
By: /s/ Xxxxxx X. XxxXxxXxxxx
------------------------------------
Xxxxxx X. XxxXxxXxxxx, Vice President
22
Exhibits: 1.3 - Application for Advance
1.11 - Borrowing Base Certificate
1.13 - Certificate of No Default
5.4 - Litigation Summary
5.7 - Permitted Liens
5.10 - Employee Benefit Plans Description
5.12 - Borrower's Business Locations
5.12-A - Legal Descriptions
23
STATE OF INDIANA )
)SS:
COUNTY OF XXXXXX )
Before me the undersigned, a Notary Public in and for said County and
State, personally appeared Xxxxxxx X. Xxxxxxx, the President of Xxxxxxx Food
Services, Inc., a Delaware corporation, who acknowledged the execution of the
above and foregoing Credit Agreement on behalf of said entity as of February _,
2003.
________________________________
Notary Public
________________________________
Printed
My Commission Expires: My County of Residence:
______________________ ________________________________
24
EXHIBIT 1.3
Old National Bank
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. XxxXxxXxxxx
Dear Xx. XxxXxxXxxxx:
Pursuant to a certain Credit Agreement dated February 27, 2003
(referred to herein as "Agreement") by and between Xxxxxxx Food Service, Inc.
("Borrower") and Old National Bank ("Bank"), application is hereby made for an
advance under the Revolving Line of Credit in the principal sum of $
_____________. Our records indicate that the principal balance of advances under
the Revolving Line of Credit to the date hereof, exclusive of the advance hereby
requested, totals $__________, and that the total outstanding indebtedness
(including the advance requested hereby) will not exceed the amount available
under the borrowing formula set forth in the Agreement as evidenced by the
Borrowing Base Report attached as Exhibit A.
Please disburse the advance as follows:
[ ] wire transfer to Account # _______________________ maintained
by the Borrower at _______________.
[ ] by issuing your cashier's check in the amount of the advance
hereby requested made payable to________________________.
[ ] by crediting to Account #______________________ maintained by
the Borrower with the Bank.
By making this request, the undersigned certifies that no Event of
Default or Unmatured Event of Default, as such terms are defined under the
Agreement, has occurred and is continuing and that, to the best knowledge of the
undersigned, there is no reason to believe that any changes have occurred in the
financial condition or the asset base of the undersigned which could result in
an Event of Default or substantially impair the amount of the Borrowing Base as
set forth on the Borrowing Base Report attached hereto as Exhibit X.
XXXXXXX FOOD SERVICE, INC.
Dated: ________________ By:_____________________________________
Printed: EXHIBIT
Title: _________________________________
25
EXHIBIT 1.11
BORROWING BASE CERTIFICATE
--------------------------------------------------------------------------------
Old National Bank Date: _____________, 200_
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
This Borrowing Base Certificate is furnished pursuant to Section 7.2.5 of a
certain Credit Agreement (the "Agreement") dated February 27, 2003 between
XXXXXXX FOOD SERVICE, INC. (the "Borrower") and OLD NATIONAL BANK (the "Bank").
Capitalized terms are as defined in the Agreement.
--------------------------------------------------------------------------------
RECEIVABLES: Aged as of_______________, ________ -Credit Terms of___________
--------------------------------------------------------------------------------
Total Receivables: $
--------------------------------------------------------------------------------
Less Excluded Accounts: $( )
--------------------------------------------------------------------------------
Eligible Receivables: $ x 70% = 1$
--------------------------------------------------------------------------------
LESS PACA INVENTORY ($ xl00%) = 2($ )
DEDUCTION
--------------------------------------------------------------------------------
TOTAL BORROWING BASE: (1-2) 3$
--------------------------------------------------------------------------------
LOAN BALANCE:
--------------------------------------------------------------------------------
Principal Amount Outstanding A$
under Revolving Line of Credit
--------------------------------------------------------------------------------
TOTAL LOANS SUPPORTED BY BORROWING BASE [A]:
$____________________________
--------------------------------------------------------------------------------
BORROWING BASE SURPLUS/DEFICIENCY: [3 - A] $__________
--------------------------------------------------------------------------------
The undersigned, on behalf of the Borrower, certifies that, except as provided
in the Agreement, all Receivables of the Borrower in which the Bank has a
security interest are subject only to a first lien in favor of the Bank. The
undersigned further certifies that it has reviewed the foregoing Borrowing Base
listing and based upon that and a review of the Borrower's financial records,
the information furnished is accurate to the best of its knowledge and belief,
and the Bank may rely on its accuracy in making credit decisions. No material
changes in the value set forth have occurred subsequent to the aging or
valuation dates listed. If changes occur in these values so as to create a
Borrowing Base Deficiency, the Borrower will eliminate that Deficiency by
submitting sufficient payments on the Loans, and will submit an amended
Certificate reflecting the current values.
XXXXXXX FOOD SERVICE, INC.
By: ____________________________
Title: _________________________
Date:___________________________
EXCLUDED ACCOUNTS:
a) Receivables more than 60 days past due $
b) Receivables from a Person
affiliated with or related to Borrower $_______________
c) Receivables subject to any off-set,
reduction or claim $_______________
d) Receivables owed by any Account Debtor
where 25% or more of its accounts payable
to Borrower are more than 90 days past
the invoice date $_______________
e) Federal Government Receivables not
properly assigned to Old National Bank $_______________
f) Centra-accounts $_______________
g) Foreign accounts not supported by letters of credit $_______________
h) Other $_______________
EXHIBIT 1.13
CERTIFICATE OF NO DEFAULT
In compliance with Section 7.2.6 of that certain Credit Agreement by
and between XXXXXXX FOOD SERVICE., INC. ("Borrower") and OLD NATIONAL BANK
("Bank") dated as of February 27, 2003 ("Agreement"), the undersigned hereby
certifies that he is the duly elected, qualified, and acting ______________of
the Borrower, and he further certifies and warrants that as of the date hereof,
there exists no Event of Default or Unmatured Event of Default (as such terms
are defined in the Agreement) under any of the terms and conditions of the
Agreement, except as set forth below:
The Borrower has taken or plans to take the following action with
respect to the Event of Default or Unmatured Event of Default described above:
The representations and warranties of the Borrower contained in the
Agreement, including those contained in Section 5 thereof, continue to be true
as of the date hereof, except that the representations and warranties in Section
5.3 of the Agreement shall be deemed given with respect to the financial
statements accompanying this certificate as of the date of such financial
statements.
The Borrower's records indicate that as of the date hereof, the
principal balance of advances under the Line of Credit totals
$___________________________and that the total outstanding indebtedness under
the Line of Credit does not exceed the amount available under the Borrowing Base
set forth in Section 10 of the Agreement.
IN WITNESS WHEREOF, the undersigned has set his hand for and on behalf
of the Borrower this ___day of________________________, 20_.
XXXXXXX FOOD SERVICE, INC.
By: ____________________________
Printed: _______________________
Title: _________________________
26
EXHIBIT 5.4
LITIGATION DISCLOSURE SCHEDULE
None
27
EXHIBIT 5.7
PERMITTED LIENS
None
EXHIBIT 5.10
EMPLOYEE BENEFIT PLANS DESCRIPTION
- Principal Financial 401 (k) Plan
- Xxxxxxx Produce Employee Health Insurance Plan - Anthem
- Xxxxxxx Produce Section 125 Cafeteria Plan
EXHIBIT 5.12
BORROWER'S BUSINESS LOCATIONS
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
EXHIBIT 5.12-A
LEGAL DESCRIPTIONS
Owner of Record: Syndicated Bloomington I LLC, a Delaware limited
liability company
Legal Description See attached
EXHIBIT A
Lots Numbered Thirty (30) and Thirty-one (31) in Northwest Park Subdivision as
shown by the recorded plat thereof, recorded in Plat Cabinet "C", Envelope 146
and as amended by Amendment to a Plat recorded in Plat Cabinet "C", Envelope
155, in the Office of the Recorder of Monroe County, Indiana.
