[LOGO OF TOKAI BANK]
EXHIBIT 10.7
REVOLVING LOAN AGREEMENT
THIS REVOLVING LOAN AGREEMENT ("Agreement") is made as of June 23, 2000 by and
between GW SERVICES, INC., a California corporation ("GW") and GLACIER WATER
SERVICES, INC., a Delaware corporation ("Glacier"), (collectively "Borrower"),
and TOKAI BANK OF CALIFORNIA, a California banking corporation ("Lender").
A. Borrower has applied to Lender for a loan in the principal amount of TEN
MILLION AND 00/100THS DOLLARS ($10,000,000.00).
B. Lender has agreed to make the loan to Borrower upon the terms and conditions
hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
DEFINITIONS AND INTERPRETATIONS.
For purposes of this Agreement, the following terms shall have the following
meanings:
1.1 Definitions. The definitions set forth in the Recitals are incorporated
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herein by reference.
"Advance" shall mean any advance of Loan Proceeds by the Lender under
the Revolving Loan.
"Agreement" shall mean this Revolving Loan Agreement, either as
originally executed or as it may from time to time be supplemented,
modified, or amended.
"Affiliate" shall mean any person or business entity, directly or
indirectly, related to, in control of, controlled by or under the common
control of Borrower, or of a successor thereof, whether through merger,
consolidation, transfer of assets or otherwise.
"Assets" shall have the meaning usually given that term in accordance
with GAAP, but shall exclude sums due to Borrower from Affiliates (other
than subsidiaries).
"Business Day" shall mean a day of the year on which banks are not
required or authorized to close in California.
"Compensating Balances" shall mean the average balances in the
Borrower's non-interest bearing account with Lender during the
applicable period less the sum of float, reserves and balances required
to cover service charges to maintain the account. These amounts will be
computed in accordance with customary Lender practices which may change
from time to time.
"Contingent Liabilities" shall mean all contingent liabilities as
determined and computed in accordance with GAAP.
"Cross Default" shall mean as described in the Note(s).
"Current Assets" shall mean all current assets as determined and
computed in accordance with GAAP (excluding loans to officers and
employees).
"Current Liabilities" shall mean all current liabilities as determined
and computed in accordance with GAAP.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974 as the
same may be amended from time to time, and, unless the context otherwise
requires, the regulations thereunder.
"Event of Default" shall mean any of those events specified in Section 5 hereof.
"Financial Statements" means balance sheets, income statements, reconciliation
of capital structure, statements of sources and applications of funds together
with appropriate notes and footnotes in accordance with GAAP. Financial
Statements provided Lender in accordance with this Agreement shall be reviewed.
"Financing Statement" shall mean a financing statement (Form UCC-1) given by
Borrower to Lender covering the FF&E and all other personal property and/or
fixtures owned by Borrower.
"GAAP" shall mean generally accepted accounting principles consistently applied
and maintained throughout the period indicated and consistent with the prior
financial practice of Borrower except for changes mandated by the Financial
Accounting Standards Board or any similar accounting authority of comparable
standing.
"Government Agency" or "Government Agency" shall mean any federal, state or
local governmental or quasi-governmental agency, authority, board, bureau,
commission department, instrumentality or public body, court administrative
tribunal, or public utility.
"Insurance Policies" shall mean any of the policies of insurance specified in
Section 4.1 hereof.
"Laws" shall mean, collectively, all federal, state and local laws, rules,
regulations, ordinances, and codes.
"Liabilities" shall have the meaning usually given that term in accordance
with GAAP.
"Loan" shall mean the loan described in Section 3 of this Agreement in the
principal amount of TEN MILLION AND 00/100THS DOLLARS ($10,000,000.00).
"Loan Documents" shall mean the Note, Security Agreement, Financing Statement,
this Agreement, and such other documents as Lender may require Borrower to give
to Lender as evidence of and/or security for the Loan.
"Loan Proceeds" shall mean all funds advanced by Lender as a Loan to Borrower
under this Agreement.
"Maturity Date" shall mean November 1, 2001.
"Net Profit" shall have the meaning usually given that term in accordance with
GAAP.
"Note" shall mean the Revolving Promissory Note(s) of Borrower payable to the
order of Lender, evidencing the Loan.
"Organizational Documents" shall mean:
(a) Borrower's Articles of Incorporation.
(b) An affidavit of Borrower signed by an officer of Borrower, where
applicable, in form and substance satisfactory to Lender affirming the
authority of Borrower to borrow the
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Loan and enter into the Loan Documents, and affirming the names and
signatures of all officers of Borrower authorized to execute documents
in connection with the Loans.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
established under ERISA.
"Person" shall mean an individual, corporation, partnership, joint venture,
trust or unincorporated organization or a Government Agency.
"Plan" means an employee benefit plan or other plan maintained for
employees of Borrower and covered by Title IV of ERISA.
"Prime Rate" shall mean Lender's Prime Rate which is the rate announced
from time to time by Lender to be the Prime Rate as reflected in the books
and records of Lender. The Prime Rate may vary from time to time and the
interest rate shall automatically change on the same day the Prime Rate
changes.
"Property" shall mean the property or properties on which the Borrower
maintains its offices and conducts its business.
"Security Agreement" shall mean Commercial Security Agreement of even date
herewith executed by Borrower in favor of Lender.
"Tangible Net Worth" shall mean the excess of Assets over Liabilities,
excluding, however, from the determination of Assets: (i) all assets that
would be classified as intangible assets under GAAP, including without
limitation, goodwill (whether representing the excess of cost over book
value of assets acquired or otherwise), negative goodwill, patents,
trademarks, trade names, copyrights, franchises and deferred charges
(including, without limitation, unamortized debt discount and expense,
organization costs and research and development costs); and (ii)
subordinated debt.
"Working Capital" shall mean the existence of Current Assets, excluding
LIFO reserves, over Current Liabilities as those terms are understood in
accordance with GAAP.
1.2 Accounting Terms. All accounting terms not specifically defined herein
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shall be construed in accordance with GAAP consistent with those applied in
the preparation of the Financial Statements referred to in Section 4.14 and
all financial data submitted pursuant to this Agreement shall be prepared
in accordance with such principles.
1.3 Use of Defined Terms. Any defined terms used in the plural shall include
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the singular and such terms shall encompass all members of the relevant
class.
1.4 Schedules And Exhibits. All schedules and exhibits to this Agreement,
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either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by reference.
1.5 References. Any reference to this Agreement or any other document
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shall include such document both as originally executed and as it may from
time to time be supplemented and modified. References herein to Paragraphs,
Sections and Exhibits shall be construed as references to this Agreement
unless a different document is named.
1.6 Other Terms. The term "document" is used in its broadest sense and
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encompasses agreements, certificates, opinions, consents, instruments and
other written material of every kind. The terms "including" and "include"
shall mean "including (include), without limitation."
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2. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
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Borrower hereby represents and warrants to Lender as of the date of this
Agreement, the date the Loan Proceeds are disbursed to Borrower, and each
and every date during the existence of the Loan, or any portion thereof, as
the context admits or requires, that:
2.1 Borrower's Capacity. GW is, and shall continue to be a corporation duly
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organized and existing under the Laws of the State of California, and
Glacier is and shall continue to be a corporation duly organized and
existing under the Laws of the State of Delaware and Borrower is duly
qualified to do business in any state in which the nature of its
business requires it to be so qualified.
2.2 Validity Of Loan Documents. The Loan Documents are and shall continue
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to be in all respects valid and binding upon Borrower according to
their terms, subject to all Laws, including equitable principles,
insolvency laws, and other matters applying to creditors generally;
provided, however, that the implementation of such Laws do not and will
not affect the ultimate realization of the security afforded thereby.
The execution and delivery by Borrower of and the performance by
Borrower of all its obligations under the Loan Documents have been
duly authorized by all necessary action and do not and will not:
(a) Require any consent or approval not heretofore obtained or any
other person holding any interest or entitled to receive any
interest issued or to be issued by Borrower or otherwise;
(b) Violate any provision of the Organizational Documents or other
agreements to which Borrower is bound;
(c) Result in or require the creation or imposition of any mortgage,
deed of trust, pledge, lien, security interest, claim, charge,
right of others or other encumbrance of any nature (other than
under the Loan Documents) upon or with respect to any property now
owned or leased or hereafter acquired by Borrower;
(d) Violate any provision of any Laws, or of any order, writ
judgment, injunction, decree, determination, or award;
(e) Result in a breach of or constitute a default under, cause or
permit the acceleration of any obligation owed under, or require
any consent under any indenture or loan or credit agreement or any
other agreement lease, or instrument to which Borrower is a party
or by which Borrower or any property of Borrower is bound or
affected.
2.3 Borrower Not in Default Or Violation. Borrower is not in default under
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or in violation of any Laws, order writ, judgment, injunction, decree,
determination or award. Borrower is not in default under any
obligation, agreement, instrument loan, or indenture, whether to Lender
or otherwise, or any lease. No event has occurred and is continuing, or
would result from the making of the Loans or an Advance, which
constitutes an Event of Default, or would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both.
2.4 No Governmental Approvals Required. Borrower does not require any
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authorization, consent, approval, order, license, exemption from, or
filing, registration, or qualification with, any Governmental Agency in
connection with the execution and delivery by Borrower, and the
performance by Borrower, of all or any of its obligations under, the
Loan Documents, except that filing and/or recording with Governmental
Agencies may be required to perfect liens, security interest, or other
charges or encumbrances granted Lender by Borrower.
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2.5 Tax Liability. Borrower has filed and shall file all tax returns (federal,
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state, and local) required to be filed and has paid and shall pay all
taxes shown thereon to be due and all property taxes due, including
interest and penalties, if any.
2.6 Financial Statements. All financial statements, information and other data
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which have been and which may hereafter be submitted by Borrower to Lender
are true, accurate and correct and have been and will be prepared in
accordance with generally accepted accounting principles consistently
applied and accurately represent the financial condition of Borrower and,
as applicable, the other information disclosed therein. Since the most
recent submission of any such financial statement, information or other
data to Lender, the Borrower represents and warrants that no material
adverse change in the financial condition or operations of the Borrower
has occurred which has not been fully disclosed to Lender in writing.
2.7 Pending Litigation. There are no actions, suits, or proceedings pending,
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or to the knowledge of Borrower threatened, against or affecting the
Borrower, or involving the validity or enforceability of any of the Loan
Documents or the priority of the lien thereof, at Law or in equity, or
before or by any Governmental Agency, except actions, suits and
proceedings that are fully covered by insurance or which, if adversely
determined, would not substantially impair the ability of Borrower to
perform each and every one of its obligations under and by virtue of the
Loan Documents; and Borrower is not in default with respect to any order,
writ, injunction, decree or demand of any court or any Governmental
Agency.
2.8 Violation Of Laws. Borrower has no knowledge of any violations or
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notices of violations of any Laws relating to the Property.
2.9 Compliance With Zoning Ordinances And Environmental Laws. Borrower does
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not presently, and will not in the future, use, store, manufacture,
generate, transport to or from, or dispose of any toxic substances,
hazardous materials, hazardous wastes, radioactive materials, flammable
explosives or related material on or in connection with the Property or
the business of Borrower on the Property. Borrower does not presently, and
will not in the future, permit any lessee on the Property to use, store,
manufacture, generate, transport to or from, or dispose of any toxic
substances, hazardous materials, hazardous waste, radioactive materials,
flammable explosives, related material on or in connection with the
Property or the business on the Property. ("Toxic substances," "hazardous
materials" and "hazardous waste" shall include, but not be limited to,
such substances, materials and wastes which are or become regulated under
applicable Laws or which are classified as hazardous or toxic under
applicable Laws.) Borrower shall not seek, make or consent to any change
in the zoning, conditions of use, or any other applicable land use
permits, approvals or regulations pertaining to the Property, or any
portion thereof, which would constitute a violation of the warranties and
representations herein contained, or would otherwise impair the ability of
Borrower to complete construction of any improvements now underway
constituting the Property, or would change the nature of the use or
occupancy of the Property.
2.10 Compliance With ERISA. Borrower does not and shall not maintain any
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employee benefit plan or other plan maintained for employees of Borrower
which is or might be deemed to be covered by Title IV or ERISA, except
plans that are or shall be in compliance with all applicable provisions of
ERISA. No Reportable Event has occurred or is continuing with respect to
any Plan.
2.11 Solvency. Borrower is and shall continue to be able to pay its debts as
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they mature and the realizable value of its Assets is, and at all times
that it may have obligations hereunder shall continue to be, sufficient to
satisfy any and all obligations hereunder.
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2.12 Principal Place of Business. The principal place of business of
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Borrower is, and will continue to be as set forth under Section 7.11
of this Agreement. In the event that Borrower hereafter intends to
move its principal place of business, it shall first give at least
thirty (30) days prior written notice to Lender of its intention so to
move, the date that such move is anticipated, and its new address. No
later than ten (10) days after commencement of the move by Borrower,
Borrower will deliver such new Financing Statements (on Form UCC-1),
Continuation Statements (on Form UCC-2) or other instruments as Lender
may require.
2.13 Permits. Borrower possesses all licenses, permits, franchises,
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patents, copyrights, trademarks, and trade names, or rights thereto,
that are necessary to conduct its business substantially as now
conducted and as presently proposed to be conducted, and Borrower is
not in material violation of any valid rights of others with respect
to any of the foregoing.
3. THE LOAN.
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3.1 The Loan. Lender agrees, on the terms and conditions hereinafter set
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forth, to make Advances to Borrower in aggregate principal amounts
outstanding at any time not to exceed TEN MILLION AND 00/100 DOLLARS
(10,000,000.00). Borrower may borrow, reborrow, repay, or prepay
pursuant to this Section.
3.2 Note. The Loan(s) shall be evidence by the Note. Each Advance made by
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Lender and all payments under the Loans shall be evidenced and recorded
by Lender upon Loan Records, which recordation shall be prima facie
evidence of such Advance and payment; provided, however, that the
failure by Lender to make any such recordation shall not limit or
otherwise affect the obligation of Borrower hereunder or under the
Note.
3.3 Interest. Interest on the outstanding principal balance under the
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Note shall accrue at the rate provided for in the Note and shall be
paid as provided for in the Note.
3.4 Use of Proceeds. The Loan Proceeds shall be used by Borrower for
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working capital and capital expenditures.
3.5 Conditions Precendent to Loan. The obligation of Lender to make the
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Loan is subject to and expressly conditioned upon the following:
(a) Borrower, at its sole expense, shall deliver to Lender, at its
office in Los Angeles, California, on or before the date of the
first Advance the following, in form and substance satisfactory to
the Lender, in Lender's sole opinion and judgement:
(i) The Note;
(ii) The Security Agreement;
(iii) The Financing Statement;
(iv) This Agreement;
(v) The Loan Disbursement Instructions;
(vi) The Agreement to Furnish Insurance;
(vii) The Corporate Resolution to Borrow;
(viii) The Insurance Policies;
(ix) Such additional assignments, agreements, certificates,
reports, approvals, instruments, documents, financing
statements, consents, and opinions as lender may
reasonably request.
(b) Review and approval by Lender, its counsel, or both, of true and
correct copies of Borrower's Organizational Documents, matters
affecting the Property, and all other Loan Documents:
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(c) Review and approval by Lender of true and correct copies of
Financial Statements of Borrower:
(d) No suit, action, or other proceeding of material consequence
shall be pending or threatened which seeks to restrain or
prohibit the consummation of the transactions contemplated
by this Agreement, or to obtain damages or other relief in
connection therewith.
3.6 Limitations On Advances And Payments
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(a) The Loan Proceeds shall be disbursed in accordance with the
provisions of Section 3.4 above:
(b) The Note may be prepaid as provided for in the Note;
(c) Payments shall be as provided for in the Note:
(d) Borrower hereby authorizes Lender, if and to the extent any
payment of principal or interest or sum otherwise due
hereunder is not promptly made pursuant to the Note, and to
the extent of any obligation of Borrower to Lender under
this Agreement or any other agreement, to charge against any
account of Borrower with Lender an amount equal to part or
all of the principal costs and expenses, and accrued
interest from time to time due and payable to Lender under
the Note or otherwise. Lender is under no obligation to
charge such past due payments against any account of
Borrower, but may elect to do so in Lender's sole and
absolute opinion and judgement:
(e) If, with respect to the Loan there is, due to either (i) the
introduction of or any change (including, without
limitation, any change by way of imposition or increase of
reserve requirements) in any Law or regulation or in the
interpretation thereof, or (ii) the compliance by Lender
with any guidelines or request from any central bank or
other governmental authority (whether or not having the
force of Law), any increase in the cost of Lender of
agreeing to make or making, funding or maintaining such
Loan, then Borrower shall from time to time, upon demand by
Lender, pay to Lender additional amounts sufficient to
indemnify Lender against such increased costs. A certificate
as to the amount of such increased costs submitted to
Borrower by Lender shall be prima facie evidence of the
increased costs, and shall be immediately due and payable
upon demand.
3.7 Security. The Loan shall be secured by the following, in each
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case, subject only to the Permitted Encumbrances
(a) The Security Agreement.
4 BORROWER'S COVENANTS
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In addition to anything else herein stated, Borrower agrees:
4.1 Insurance. To obtain and at all times maintain hazard and
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liability insurance in amount, form and issued by a company or
companies satisfactory to Lender. The insurance is to include
business interruption, boiler and machinery and glass insurance.
Lender is to be a loss payable payee under the hazard insurance
and an additional insured under said liability insurance. Said
liability insurance is to include, but not be limited to
xxxxxxx'x compensation and employers liability insurance. All
policies or a certificate acceptable to Lender shall be
delivered to Lender together with evidence of payment of premium
thereon and an agreement to give Lender at least thirty (30)
Business Days prior notice of any material changes, termination,
or expiration of the policies. All insurance policies provided
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under any lease with tenants of the Property shall be assigned to Lender as
additional security.
4.2 Right Of Entry. Lender and lender's employees or agents shall have the right
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at all times to enter upon Borrowers premises for whatever purpose Lender
deems appropriate, including, without limitation inspection of the premises
and the posting of such notices and other written or printed material
thereon as Lender may deem appropriate or desirable.
4.3 Lender May Examine Books and Records. Lender shall have the right, from
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time to time, acting by and through its employees or agents, to examine the
books, records, and accounting data of Borrower, and to make extracts
therefrom or copies thereof. Borrower shall promptly make such books,
records, and accounting data available to Lender, as stated above, upon
written request and upon like request shall promptly advise Lender in
writing, of the location of such books, records, and accounting data.
4.4 No Automatic Set-Off. The existence of any deposit account with Lender
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and/or the fact of any sum or sums being on deposit in said account shall in
no way constitute as set-off against or be deemed to compensate the
obligation of the Loan or any payment or performance due under this
Agreement or any of the other Loan Documents, unless and until the Lender,
by affirmative action shall so apply said account or any portion thereof and
then only to the extent thereof so designated by Lender.
4.5 Payment Of Taxes. Borrower shall pay and discharge all taxes, assessments,
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and governmental charges or levies imposed upon Borrower or upon its income
or profits, or upon any properties belonging to it prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid might
become a lien or charge of a material nature upon any of its properties,
provided that Borrower shall not be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and
by proper proceedings if it maintains adequate reserves with respect
thereto.
4.6 Preservation Of Existence. Borrower, if other than a natural person, will,
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so long as Borrower remains obligated on the Loan, do all things necessary
to preserve and keep in full force and effect its organizational status, and
will comply with all Laws, orders and decrees of any Governmental Agency or
court applicable to Borrower or in the Project.
4.7 Compliance With Laws And Contracts. Borrower shall comply with the
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requirements of all applicable Laws and orders of any Governmental Agency,
provided that if Borrower has not so complied by the date prescribed in any
such Law or order, regulation. Borrower shall comply therewith by the date
set forth in any order of the Governmental Agency charged with the
enforcement of such Law, rule or regulation if such date is later, and
comply with all contracts, agreements, indentures or instruments by which it
is bound.
4.8 Maintenance Of Properties. Borrower shall use its best efforts to maintain
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and preserve, or cause to be maintained and preserved, all of its
properties, necessary or useful in the proper conduct of its business,
including such as may be under lease, in good working order and condition,
ordinary wear and tear excepted.
4.9 Debt Service Coverage Ratio. Borrower shall maintain a debt Service Coverage
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Ratio of not less than 1.50:1.0. For purposes of this section, the term
"Debt Service Coverage Ratio" shall mean the ratio of the combined
annualized earnings before interest, taxes, depreciation, amortization and
other non-cash expense (plus or minus) derived from realized gains or losses
from investment divided by the sum of current portion maturities of long
term debts and/or capital lease obligations plus annualized interest expense
as those terms are understood in accordance with GAAP.
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4.10 Minimum Liquidity. Glacier shall maintain at all times a minimum
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liquidity of not less than $2,000,000.00. For purpose of this section,
the term "Liquidity" shall mean cash and marketable securities, excluding
margined marketable securities or pledged cash. The liquidity shall be
monitored by Lender on a quarterly basis.
4.12 Limitation On Advances and Investment. Borrower shall not make or permit
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to exist any advances or loans to, or any investments in, any person,
and shall not assume or incur any contingent obligation or liability,
as guarantor or otherwise, with respect to the obligations of any
person, whether by contributions to capital, purchase of stock,
securities or other evidences of indebtedness or otherwise, except as
provided for herein.
4.13 Limitation On Disposition of Assets. Except for Assets or properties
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sold, leased or otherwise disposed of in the ordinary course of business,
and the sale or leasing of properties or Assets of less than
$25,000,000.00 in the aggregate. Borrower shall not convey, sell, lease
or otherwise dispose of properties or Assets without the prior written
content of the Lender which consent shall not be unreasonably withheld.
4.14 Tangible Net Worth. Borrower shall maintain a minimum effective Tangible
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Net Worth including subordinated debt at all times of not less than
$60,000,000.00. Starting January 2, 2001, the effective Tangible Net
Worth including subordinated debt shall be not less than $50,000,000.00.
4.15 Operating Profit. Borrower shall reflect operating profit on the
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year-to-date basis for the period ending June 30, 2001, and thereafter.
4.16 Reporting Requirements. So long as Borrower shall have any obligation to
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Lender under this Agreement. Borrower shall deliver to the Lender the
following financial statements and reports:
(a) As soon as available and in any event within five (5) days after
Borrower knows or should reasonably have known of the commencement
of any legal action against it, except actions seeking money
judgment that are fully insured or bonded, a report of the
commencement of such action containing a statement signed by the
chief financial officer of Borrower setting forth details of such
legal action and any action Borrower proposes to take with respect
thereto;
(b) Within five (5) days of the occurrence of any Event of Default or
event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default, a report regarding such Event
of Default or event setting forth details and describing any action
which Borrower proposes to take with respect thereto, signed by an
officer of Borrower;
(c) Any change in name of Borrower or use of any trade names or trade
styles not presently used;
(d) As soon as available and in any event within one hundred twenty
(120) days after the end of each fiscal year of Glacier, a copy of
the Glacier's Financial Statements for such year, in form and
substance acceptable to Lender;
(e) As soon as available and in any event within forty-five (45) days
after the end of each quarter, complete copies of Form 10-Q
quarterly report of Glacier, pursuant to Section
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13 or 15(d) of the Securities Exchange Act of 1934, in form and
substance acceptable to Lender.
(f) As soon as available and in any event within one hundred twenty (120)
days after the end of each fiscal year of Glacier complete copies of
Form 10-K annual report of Glacier, pursuant to Section 13 for 15(d)
of the Securities Exchange Act of 1934, in form and substance
acceptable to lender;
(g) As soon as available and in any event within ninety (90) days after
the end of each fiscal year, a copy of Glacier's annual budget in form
and substance acceptable to Lender;
(h) Within sixty (60) days after the end of each fiscal year, a
certificated of the president and chief financial officer of the
Borrower stating that neither such officer has any knowledge that an
Event of Default or any event which, with notice or lapse of time, or
both, would constitute an Event of Default, has occurred and is
continuing, or if, in the opinion of either such officer, an Event of
Default or such an event has occurred and is continuing, a statement
as to the nature thereof;
(i) Promptly upon receipt thereof, one (1) copy of any other report
submitted to Borrower by independent accounts in connection with any
annual, interim or special audit made by them, of the books of
Borrower;
(j) Within five (5) days of (i) any contact from any Governmental Agency
concerning any environmental protection Laws, including, but not
limited to, any notice of any proceeding or inquiry with respect to
the presence of any hazardous waste, toxic substances or hazardous
materials on the Property or the migration thereof from or to other
property, (ii) any and all claims made or threatened by any third
party against or relating to the Property concerning any loss or
injury resulting from toxic substances, hazardous waste, or hazardous
materials, or (iii) Borrower's discovery of any occurrence or
condition on any property adjoining or in the vicinity of the Property
that could cause the Property, or any part thereof, to be subject to
any restrictions on the ownership, occupancy, transferability, or loss
of the Property under any Law. Borrower shall delivery to Lender a
report regarding such contract and setting forth in detail and
describing any action which Borrower proposes to take with respect
thereto, signed by an officer of Borrower;
(k) Within five (5) business days of becoming aware of any developments or
other information which may materially and adversely affect Borrower's
properties, business, prospects, profits or condition (financial
otherwise) or Borrower's ability to perform this agreement or the
other Loan Documents, telephonic or telegraphic notice specifying the
nature of such development or information and such anticipated effect,
which shall be promptly confirmed in writing;
(i) Such other information respecting the business, properties or the
condition or operations, financial or otherwise, of Borrower as the
Lender may from time to time request.
4.17 Transfer. There shall not be, wither voluntarily, involuntarily, or by
operation of Law, a transfer or sale of real and/or personal property.
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5. EVENTS OF DEFAULT
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An "Event of Default" shall be deemed to have occurred hereunder if:
5.1 Default Under Loan Documents. Borrower shall fail to pay principal or
----------------------------
interest, or both, when due under the terms of the Notes, or Borrower
shall fail to perform or observe any term, covenant, or agreement
contained in this Agreement or in any of the other Loan Documents, which
failure may be cured by the payment of money, and, in any of such events,
such failure shall continue for a period of ten (10) days from the date
such payment or performance was due; or Borrower shall fail to perform
or observe any term, covenant or agreement contained in this agreement or
in any of the other Loan Documents, which failure cannot be cured by the
payment of money and such failure shall continue for a period of fifteen
(15) days after the Lender shall have given written notice to Borrower
specifying such default; or
5.2 Breach Of Warranty. Any warranties or representations made or agreed to
------------------
be made in this Agreement or in any of the other Loan Documents shall be
breached in any material respect or shall prove to be false or misleading
in any respect when made; or
5.3 Litigation Against Borrower. Any suit shall be filed against Borrower,
---------------------------
which, if adversely determined, could substantially impair the ability of
Borrower to perform any or all of its obligations under and by virtue of
this agreement or any of the other Loan Documents, unless Borrower's
counsel furnishes to Lender its opinion, to the satisfaction of Lender
and Lenders counsel, that, in its judgment the suit is essentially
without merit; or
5.4 Levy Upon Property. A levy shall be made on the Property under any
------------------
process and such levy shall not be bonded over or shall continue unstayed
for thirty (30) days or more; or
5.5 Acceleration Of Other Debts. Borrower does, or omits to do, any act, or
---------------------------
any event occurs, as a result of which any material obligation of
Borrower, whether or not arising hereunder and/or relating to or
affecting the Property or Borrower's ability to perform hereunder, may be
declared immediately due and payable by the holder thereof; or
5.6 Bankruptcy. Borrower shall fail to pay its debts as they become due, or
----------
shall make an assignment for the benefit of its creditors, or shall
admit, in writing, its inability to pay its debts as they become due, or
shall file a petition under any chapter of the Federal Bankruptcy Code or
any similar law, now or hereafter existing, or shall become "insolvent"
as that term is generally defined under the Federal Bankruptcy Code, or
shall in any involuntary bankruptcy case commenced against it file an
answer admitting insolvency or inability to pay its debts as they become
due, or shall fail to obtain a dismissal of such case within thirty (30)
calendar days after its commencement or convert the case from one chapter
of the Federal Bankruptcy Code to another chapter, or be the subject of
an order for relief in such bankruptcy case, or be adjudged a bankrupt or
insolvent, or shall have a custodian, trustee, or receiver appointed for,
or have any court take jurisdiction of, its properties, or any part
thereon, in any voluntary or involuntary proceeding, including, but not
limited to, those for the purpose of reorganization, arrangement,
dissolution, or liquidation, and such custodian, trustee, or receiver
shall not be discharged, or such jurisdiction shall not be relinquished,
vacated, or stayed within thirty (30) days after the appointment; or
5.7 Borrower Status. Without Lenders prior written consent, Borrower shall be
---------------
liquidated, dissolved, or fail to maintain its status as a going
concern; or
5.8 Execution Levy. Execution shall have been levied against the Property in
--------------
excess of $1,000,000.00 or any lien creditor shall commence suit to
enforce a judgment lien against the Property in excess of $1,000,000.00
and such action or suit shall not have been bonded or shall continue
unstayed for a period of thirty (30) days or more; or
Page 11 of 16
5.9 Attachment. Any proceeding shall be brought, the object of which is
----------
that any part of the Lender's commitment to make the Advances
hereunder shall at any time be subject or liable to attachment or levy
by any creditor of Borrower; or
5.10 Destruction. Any part or all of the Property in excess of
-----------
$1,000,000.00 is materially damaged or destroyed by fire or other
casualty and the loss shall prove to be inadequately covered by
insurance actually collected or in the process of collection to restore
the Property to its condition prior to such fire or other casualty; or
5.11 Eminent Domain. Any part of all of the Property shall be the subject of
--------------
an eminent domain proceeding or a taking adverse to the interest of
Lender; or
5.12 Misrepresentation And/Or Non-Disclosure. Borrower has made certain
---------------------------------------
statements and disclosures in order to induce Lender to make the Loan
and enter into this Agreement, and, in the event Borrower has made
material misrepresentations or failed to disclose any material fact.
Lender may treat such misrepresentation or omission as a breach of this
Agreement. Such action shall not affect any remedies Lender may have for
such misrepresentation or non-disclosure, as such, or under its Deed of
Trust for such misrepresentation or concealment; or
5.13 ERISA. Any of the following events occur or exist with respect to
-----
Borrower;
(a) Any Reportable Event with respect to any Plan;
(b) The filing under Title IV of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan;
(c) Any event or circumstance that might constitute grounds entitling
the PBGC to institute proceedings for the termination of, or for the
appointment of a trustee to administrate any Plan, or the
institution by the PBGC of any such proceeding; or
5.14 Financial Condition. There shall be any material adverse changes in
-------------------
Borrower's financial condition.
6. REMEDIES.
--------
6.1 Cease Payment And/Or Accelerate. Upon, or at any time after, the
-------------------------------
occurrence of an Event of Default or upon the occurrence of a default in
any other joint and/or several obligation or obligations of the
Borrower to Lender, Lender shall have no obligation to make any further
Advances, all sums disbursed or advanced by Lender and all accrued and
unpaid interest thereon shall, at the option of Lender, become
immediately due and payable, and Lender shall be released from any and
all obligations to Borrower under the terms of this Agreement.
6.2 Rights And Remedies Non-Exclusive. In addition to the specific rights
---------------------------------
and remedies hereinabove mentioned, Lender shall have the right to avail
itself of any other rights or remedies to which it may be entitled, at
Law or in equity, including, but not limited to, the right to realize
upon any or all of its security, and to do so in any order. Furthermore,
the rights and remedies set forth above are not exclusive, and Lender
may avail itself of any individual right or remedy set forth in this
Agreement, or available at Law or in equity, without utilizing any other
right or remedy.
Page 12 of 16
7. GENERAL CONDITIONS AND MISCELLANEOUS.
------------------------------------
7.1 Nonliability Of Lender. Borrower acknowledges and agrees that by
----------------------
accepting or approving anything required to be observed, performed,
fulfilled or given to Lender pursuant to this Agreement or insurance
policy Lender shall not be deemed to have warranted or represented the
sufficiency, legality, effectiveness or legal effect of the same, or
of any term, provision or condition thereof an such acceptance or
approval thereof shall not be or constitute any warranty or
representation to anyone with respect thereto by Lender.
7.2 No Third Parties Benefitted. This agreement is made for the purpose
---------------------------
of defining and setting forth certain obligations rights, and duties
of Borrower and Lender in connection with the Loan. It shall be deemed
a supplement to the Note and the other Loan Documents, and shall not
be construed as a modification of the Note or other Loan Documents,
except as provided herein. It is made for the sole protection of
Borrower and Lender, and Lender's successors and assigns. No other
person shall have any rights of any nature hereunder or by reason
hereof or the right to rely hereon.
7.3 Indemnity By Borrower. Borrower hereby indemnifies and agrees to hold
---------------------
harmless Lender and its directors, officers, agents and employees
(individually and collectively the "Indemnitees") from and against:
(a) Any and all claims, demands, actions or causes or actions that
are asserted against any indemnitee by any person if the claim,
demand, action or cause of action that the person has or asserts
against Borrower; and
(b) Any and all liabilities, losses, costs or expenses (including
court costs and attorneys' fees) that any indemnitee suffers or
incurs as a result of the assertion of any claim, demand, action
or cause of action specified in this Section 7.3.
7.4 Change In Laws. In the event of the enactment, after the date of this
--------------
Agreement, of any Laws; (a) deducting from the value of property for
the purpose of taxation of any lien or security interest thereon; (b)
imposing upon Lender the payment of the whole or any part of the taxes
or assessments or charges or liens herein required to be paid by
Borrower. (c) changing in any way the Laws relating to the taxation of
deeds of trust or mortgages or security agreements, or the interest of
the mortgagee or secured party in the property covered thereby; or (d)
the manner of collection of such taxes so as to affect the Deed of
Trust secured thereby or longer, then, and in any such event.
Borrower, upon demand by Lender, shall promptly pay such taxes,
assessments, charges or liens, or reimburse Lender therefor. If
Borrower shall be prohibited from paying such tax or from reimbursing
Lender for the amount thereof. Borrower shall execute a modification
to the Loan Documents which modifications shall increase the interest
rate payable pursuant to the Note so as to permit Lender to maintain
its yield as if such tax had not been imposed. If Borrower shall be
prohibited from executing the above-referenced modifications, Lender
may, in Lender's sole opinion and judgement, declare the principal of
all amounts disbursed and owing under the Note, this Agreement, and
the other Loan Documents (including all obligations secured by this
Agreement or the other Loan Documents) and all other indebtedness of
Borrower to Lender, together with interest thereon, to be forthwith
due and payable, regardless of any other specified maturity or due
date.
7.5 Time Is Of The Essence. Time is of the essence of this Agreement and
----------------------
of each and every provision hereof. The waiver by Lender of any
breach or breaches hereof shall not be deemed, nor shall the same
constitute, a waiver of any subsequent breach or breaches.
Page 13 of 16
7.6 Binding Effect; Assignment. This Agreement shall be binding upon and inure
--------------------------
to the benefit of Borrower and Lender and their respective successors and
assigns, except that Borrower may not assign its rights hereunder or any
interest herein without the prior written consent of Lender. Lender shall
have the right to assign its rights under this Agreement or the other Loan
Documents and to grant participations in the Loan to others, but all
waivers or abridgments of Borrower's obligations that may be granted from
time to time by Lender in writing, shall be binding upon such assignees or
participants.
7.7 Execution in Counterparts. This Agreement and any other Loan Document,
-------------------------
except the Note, may be executed in any number of counterparts, and any
party hereto or thereto may execute any counterpart, each of which, when
executed and delivered, will be deemed to be an original, and all of which
counterparts of this Agreement or any other Loan Document, as the case may
be, taken together will be deemed to be but one and the same instrument.
The execution of this Agreement or any other Loan Document by any party
hereto or thereto will not become effective until counterparts hereon or
thereof, as the case may be, have been executed by all the parties hereto
or thereto.
7.8 Integration; Amendments; Consents. This Agreement, together with the
---------------------------------
documents referred to herein, constitutes the entire agreement of the
parties touching upon the subject matter hereof, supersedes any prior
negotiations or agreements on such matter. No amendment, modification or
supplement of any provision of this Agreement or any of the other Loan
Documents shall be effective unless in writing, signed by Lender and
Borrower; and no waiver of any of Borrower's obligations under this
Agreement or any of the other Loan Documents or consent to any departure by
Borrower therefrom shall be effective unless in writing, signed by Lender,
and then only in the specific instance and for the specific purpose given.
7.9 Costs, Expenses And Taxes. Borrower shall pay to Lender, on demand:
-------------------------
(a) The reasonable attorneys' fees and out-of-pocket expenses incurred by
Lender in connection with the negotiation, preparation, execution,
delivery and administration of the Agreement and any other Loan
Document and any matter related thereto, including, but not limited
to, appraisals of the Property;
(b) The reasonable costs and expenses of Lender in connection with the
enforcement of this Agreement and any other Loan Document and any
matter related thereto, including the reasonable fees and out-of-
pocket expenses of any legal counsel, independent public accountants,
and other outside experts retained by Lender; and
(c) All costs, expenses, fees, premiums and other charges relating to or
arising from this Agreement or any of the other Loan Documents or any
transactions contemplated hereby or thereby or the compliance with any
of the terms and conditions hereof or thereof, including, but not
limited to, recording fees, filing fees, credit report fees, release
or reconveyance fees, title insurance premiums and the cost of realty
tax service for the term of the Loan.
All sums paid or expended by Lender under the terms of this Agreement
shall be considered to be, and shall be, a part of the Loan. All such
sums, together with all amounts to be paid by Borrower pursuant to
this Agreement, shall bear interest from the date of expenditure at
the default rate provided in the Note, shall be secured by the Deed of
Trust and shall be immediately due and payable by Borrower upon
demand.
7.10 Survival of Representations And Warranties. All representations and
------------------------------------------
warranties of Borrower contained herein or in any other Loan Document shall
survive the making of the Loan and the execution and delivery of the Note,
and are material and have been or will be
Page 14 of 16
relied upon by Lender, notwithstanding any investigation made by Lender or
on behalf of Lender. For the purpose of this Agreement, all statements
contained in any certificate, agreement. Financial Statement or other
writing delivered by or on behalf of Borrower pursuant hereto or to any
other Loan Document or in connection with the transactions contemplated
hereby or thereby shall be deemed to be representations and warranties of
Borrower contained herein or in the other Loan Documents, as the case may
be.
7.11 Notices. All notices, requests, demands, directions, and other
--------
communications provided for hereunder and under any other Loan Document (a
"Notice"), must be in writing and must be mailed, telegraphed, delivered
or sent by telex, cable or other form of electronic written communication
to the appropriate party at its respective address set forth below or, as
to the other parties in accordance with this Section.
Any notice given by telegram, telex, cable or other form of electronic
written communication must be confirmed within forty-eight (48) hours by
letter mailed or delivered to the appropriate party at its respective
address. If any notice is given by mail, it will be effective three (3)
calendar days after being deposited in the mails with first-class or air
mail postage prepaid; if given by telegraph or cable, when delivered to
the telegraph company with charges prepaid; if given by telex or other
form of electronic written communication, when sent; or if given by
personal delivery, when delivered.
Such notices will be given to the following:
To Lender: TOKAI BANK OF CALIFORNIA
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Loan Servicing Department
To Borrower: GW SERVICES, INC., and GLACIER WATER SERVICES, INC.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
7.12 Further Assurances. Borrower shall, at its sole expense and without
-------------------
expense to Lender, do, execute and deliver such further acts and documents
as Lender from time to time may reasonably require for the purpose of
assuring and confirming unto Lender the rights hereby created or intended,
now or hereafter so to be, or for carrying out the intention or
facilitating the performance of the terms of any Loan Documents, or for
assuring the validity of any security interest.
7.13 Governing Law. The Loan shall be deemed to have been made in California
--------------
and this Agreement and the other Loan Documents shall be governed by and
construed and enforced in accordance with the Laws of the State of
California.
7.14 Severability Of Provisions. If any provision of this Agreement or of any
---------------------------
of the other Loan Documents is held to be inoperative, unenforceable or
invalid, such provision shall be inoperative, unenforceable or invalid
without affecting the remaining provisions; this Agreement and the other
Loan Documents shall be construed and enforced as if such illegal, invalid
or unenforceable provision had never comprised a part of this Agreement or
the other Loan Documents; and to this end the provisions of this Agreement
and the other Loan Documents are declared to be severable, remaining in
full force and effect.
7.15 Joint and Several Obligations. If this Agreement is executed by more
------------------------------
than one person as Borrower, the obligations of each of such persons
hereunder shall be joint and several obligations.
Page 15 of 16
7.16 Construction. Whenever the context of this Agreement requires, the
------------
singular shall include the plural and the masculine gender shall
include the feminine and/or neuter.
7.17 Headings. Paragraph and Section headings in this Agreement are
--------
included for convenience of reference only and are not part of this
Agreement for any other purpose.
IN WITNESS WHEREOF, Borrower and Lender have hereunto caused this Agreement to
be executed on the date first above written.
"LENDER"
TOKAI BANK OF CALIFORNIA
a California banking corporation
By: /s/ Xxxxxx Xxxxx
------------------------------------
Xxxxxx Xxxxx, Regional Vice President/Credit Officer
Orange County Regional Office
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Xxxxxxx Xxxxxxxx, Assistant Vice President/
Documentation Team Leader
Loan Servicing Department
"BORROWER"
GW SERVICES, INC., a
California corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------------
Title: President & CEO
----------------------------------
By: /s/ W. Xxxxx Xxxxxxx
------------------------------------
Name: W. Xxxxx Xxxxxxx
----------------------------------
Title: Senior Vice President & CFO
----------------------------------
GLACIER WATER SERVICES, INC., a
Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------------
Title: President & CEO
----------------------------------
By: /s/ W. Xxxxx Xxxxxxx
------------------------------------
Name: W. Xxxxx Xxxxxxx
----------------------------------
Title: Senior Vice President & CFO
----------------------------------
Page 16 of 16
