Exhibit 10.1
LOAN AND SECURITY AGREEMENT
Dated as of August 10, 2018
between
Siena Lending Group
LLC
,
as Lender,
New Age Beverages Corporation
NABC, INC.
NABC Properties, LLC
New Age Health Sciences, Inc.
as Borrower,
TABLE OF CONTENTS
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Page
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1
LOANS
AND LETTERS OF CREDIT
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1
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1.1
Amount
of Loans / Letters of Credit
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1
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1.2
Reserves
re Revolving Loans / Letters of Credit
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2
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1.3
Protective
Advances
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2
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1.4
Notice
of Borrowing; Manner of Revolving Loan Borrowing
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3
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1.5
Other
Provisions Applicable to Letters of Credit
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3
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1.6
Conditions
of Making the Loans and Issuing Letters of Credit
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4
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1.7
Repayments
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5
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1.8
Prepayments
/ Voluntary Termination / Application of Prepayments
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5
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1.9
Obligations
Unconditional
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6
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1.10
Reversal
of Payments
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7
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2
INTEREST
AND FEES; LOAN ACCOUNT
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7
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2.1
Interest
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7
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2.2
Fees
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8
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2.3
Computation
of Interest and Fees
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8
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2.4
Loan
Account; Monthly Accountings
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8
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2.5
Further
Obligations; Maximum Lawful Rate
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8
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3
SECURITY
INTEREST GRANT / POSSESSORY COLLATERAL / FURTHER
ASSURANCES
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9
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3.1
Grant
of Security Interest
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9
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3.2
Possessory
Collateral
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9
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3.3
Further
Assurances
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9
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3.4
UCC
Financing Statements
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10
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4
CERTAIN
PROVISIONS REGARDING ACCOUNTS, INVENTORY, COLLECTIONS, APPLICATIONS
OF PAYMENTS, INSPECTION RIGHTS, AND APPRAISALS
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11
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4.1
Lock
Boxes and Blocked Accounts
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11
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4.2
Application
of Payments
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11
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4.3
Notification;
Verification
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12
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4.4
Power
of Attorney
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12
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4.5
Disputes
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14
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4.6
Inventory
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14
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4.7
Access
to Collateral, Books and Records
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14
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4.8
Appraisals
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15
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5
REPRESENTATIONS,
WARRANTIES AND COVENANTS
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15
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5.1
Existence
and Authority
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15
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5.2
Names;
Trade Names and Styles
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16
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5.3
Title
to Collateral; Third Party Locations; Permitted Liens
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16
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5.4
Accounts
and Chattel Paper
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17
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5.5
Electronic
Chattel Paper
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17
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5.6
Capitalization;
Investment Property
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17
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5.7
Commercial
Tort Claims
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19
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5.8
Jurisdiction
of Organization; Location of Collateral
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19
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5.9
Financial
Statements and Reports; Solvency
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19
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5.10
Tax
Returns and Payments; Pension Contributions
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19
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5.11
Compliance
with Laws; Intellectual Property; Licenses
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20
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5.12
Litigation
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22
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5.13
Use
of Proceeds
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22
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5.14
Insurance
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22
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5.15
Financial,
Collateral and Other Reporting / Notices
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23
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5.16
Litigation
Cooperation
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25
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5.17
Maintenance
of Collateral, Etc
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25
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5.18
Material
Contracts
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25
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5.19
No
Default
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25
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5.20
No
Material Adverse Change
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26
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5.21
Full
Disclosure
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26
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5.22
Sensitive
Payments
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26
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5.23
Reserved
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26
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5.24
Subordinated
Debt
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26
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5.25
Negative
Covenants
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27
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5.26
Financial
Covenants
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28
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5.27
Employee
and Labor Matters
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28
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6
RELEASE,
LIMITATION OF LIABILITY AND INDEMNITY
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29
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6.1
Release
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29
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6.2
Limitation
of Liability
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29
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6.3
Indemnity/Currency
Indemnity
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29
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7
EVENTS
OF DEFAULT AND REMEDIES
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30
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7.1
Events
of Default
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30
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7.2
Remedies
with Respect to Lending Commitments/Acceleration/Etc
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33
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7.3
Remedies
with Respect to Collateral
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33
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8
LOAN
GUARANTY
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38
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8.1
Guaranty
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38
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8.2
Guaranty
of Payment
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39
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8.3
No
Discharge or Diminishment of Loan Guaranty
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39
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8.4
Defenses
Waived
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39
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8.5
Rights
of Subrogation
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40
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8.6
Reinstatement;
Stay of Acceleration
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40
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8.7
Information
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40
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8.8
Termination
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40
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8.9
Maximum
Liability
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41
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8.10
Contribution
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41
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8.11
Liability
Cumulative
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41
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9
PAYMENTS
FREE OF TAXES; OBLIGATION TO WITHHOLD; PAYMENTS ON ACCOUNT OF
TAXES
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42
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10
GENERAL
PROVISIONS
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43
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10.1
Notices
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43
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10.2
Severability
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45
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10.3
Integration
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46
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10.4
Waivers
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46
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10.5
Amendment
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46
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10.6
Time
of Essence
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46
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10.7
Expenses,
Fee and Costs Reimbursement
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46
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10.8
Benefit
of Agreement; Assignability; Servicer
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47
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10.9
Recordation
of Assignment
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48
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10.10
Participations
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48
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10.11
Headings;
Construction
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49
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10.12
USA
PATRIOT Act Notification
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49
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10.13
Counterparts;
Email Signatures
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49
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10.14
GOVERNING
LAW
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49
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10.15
CONSENT
TO JURISDICTION; WAIVER OF JURY TRIAL; CONSENT TO SERVICE OF
PROCESS
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50
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10.16
Publication
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50
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10.17
Confidentiality
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50
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10.18
Borrowing
Agency Provisions
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51
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Disclosure
Schedule
Schedule
A
Description of
Certain Terms
Schedule
E
Financial
Covenants
Exhibit
A
Form of Notice of
Borrowing
Exhibit
B
Closing
Checklist
Exhibit
C
Client User
Form
Exhibit
D
Authorized Accounts
Form
Exhibit
E
Form of Account
Debtor Notification
Exhibit
F
Form of Compliance
Certificate
Exhibit
G
Form of Monthly
Financial Model
Loan and Security Agreement
This Loan and Security
Agreement (as it may be amended, restated or otherwise modified
from time to time, this “
Agreement
”) is
entered into as of August 10, 2018 among (1) SIENA LENDING
GROUP LLC, together with its successors and assigns
(“
Lender
”),
(2) NEW AGE BEVERAGES CORPORATION, a Washington corporation
(“
Borrower 1
”),
NABC, INC., a Colorado corporation (“
Borrower 2
”)
NABC PROPERTIES, LLC, a Colorado limited liability company
(“
Borrower 3
”),
NEW AGE HEALTH SCIENCES, INC., a Nevada corporation
(“
Borrower 4
and
together with Borrower 1, Borrower 2, Borrower 3 and any other
Person who from time to time becomes a borrower hereunder,
individually and collectively as the context may require,
“
Borrower
”).
The Schedules and Exhibits to this Agreement are an integral part
of this Agreement and are incorporated herein by reference. Terms
used, but not defined elsewhere, in this Agreement are defined in
Schedule B.
1.
LOANS
AND LETTERS OF CREDIT.
1.1
Amount of Loans / Letters of
Credit.
(a)
Revolving Loans and Letters of Credit.
Subject to the terms and conditions contained in this Agreement,
including Sections 1.3 and 1.6, Lender shall,
from time to time prior to the
Maturity Date, at Borrowing Agent’s request, make revolving
loans to Borrower (“
Revolving
Loans
”), and make, or cause or permit a Participant
(as defined in Section 10.10) to make, letters of credit
("
Letters of
Credit
") available to Borrower;
provided
, that after
giving effect to each such Revolving Loan and each such Letter of
Credit, the outstanding balance of all Revolving Loans and
the Letter of Credit Balance will not exceed the lesser of (x) the
Maximum Revolving Facility Amount and (y) the Borrowing Base, and
none of the other Loan Limits for Revolving Loans will be
exceeded. All Revolving Loans shall be made in and repayable in
Dollars.
1.2
Reserves re Revolving Loans / Letters of
Credit.
Lender may, with or without notice to Borrowing
Agent, from time to time establish and revise reserves against the
Borrowing Base and/or the Maximum Revolving Facility Amount in such
amounts and of such types as Lender deems appropriate in its
Permitted Discretion (“
Reserves
”).
Such Reserves shall be available for Borrowing Agent to view in
Passport 6.0 simultaneously with the imposition thereof;
provided
, that
Lender shall endeavor to provide email notice advising Borrowing
Agent of such Reserves prior to or simultaneously with the
imposition of such Reserves;
provided, further
that Lender shall have no liability for failing to provide such
email notice.
Without
limiting the foregoing, references to Reserves shall include the
Dilution Reserve. In no event shall the establishment of a Reserve
in respect of a particular actual or contingent liability obligate
Lender to make advances to pay such liability or otherwise obligate
Lender with respect thereto.
1.3
Protective Advances.
Any contrary
provision of this Agreement or any other Loan Document
notwithstanding, Lender is hereby authorized by Borrower at any
time, regardless of (a) the existence of a Default or an Event of
Default, (b) whether any of the other applicable conditions
precedent set forth in Section 1.6 hereof have not been satisfied
or the commitment of Lender to make Loans hereunder has been
terminated for any reason, or (c) any other contrary provision of
this Agreement, to make (in its Permitted Discretion prior to the
occurrence and continuance of an Event of Default) Revolving Loans
to, or for the benefit of, Borrower that Lender, in its sole
discretion, deems necessary or desirable ) to preserve or protect
the Collateral, or any portion thereof, (ii) to enhance the
likelihood of, or maximize the amount of, repayment of the Loans
and other Obligations, or (iii) to pay any other amount chargeable
to Borrowers pursuant to the terms of this Agreement (the
“
Protective
Advances
”). Any contrary provision of this Agreement
or any other Loan Document notwithstanding, Lender may direct the
proceeds of any Protective Advance to Borrower or to such other
Person as Lender determines in its sole discretion. All Protective
Advances shall be payable immediately upon demand.
1.4
Notice
of Borrowing; Manner of Revolving Loan Borrowing.
Borrowing
Agent shall request each Revolving Loan by an Authorized Officer
submitting such request via Passport 6.0 (or, if requested by
Lender, by delivering, in writing or via an Approved Electronic
Communication, a Notice of Borrowing substantially in the form of
Exhibit A hereto) (each such request a “
Notice of
Borrowing
”). Subject to the terms and conditions of
this
Agreement
, including
Sections 1.1 and 1.6, Lender shall, except as provided in Section
1.3, deliver the amount of the Revolving Loan requested in the
Notice of Borrowing for credit to any account of Borrower at a bank
in the United States of America as Borrowing Agent may specify
(
provided
that such account must be one
identified on Section 3 of the Disclosure Schedule and
approved by Lender as an account to be used for funding of loan
proceeds) by wire transfer of immediately available funds on
the same day if the Notice of Borrowing is received by Lender on or
before 11:00 a.m. Eastern Time on a Business Day, or on the
immediately following Business Day if the Notice of Borrowing is
received by Lender after 11:00 a.m. Eastern Time on a Business Day,
or is received by Lender on any day that is not a Business Day.
Lender shall charge to the Revolving Loan Lender’s usual and
customary fees for the wire transfer of each Loan.
1.5
Other Provisions Applicable to Letters of
Credit.
Lender shall, on the terms and conditions set forth
in this Agreement (including the terms and conditions set forth in
Section 1.1 and Section 1.6), make Letters of Credit available to
Borrower either by issuing them, or by causing other financial
institutions to issue them supported by Lender’s guaranty or
indemnification;
provided
, that after
giving effect to each Letter of Credit, the Letter of Credit
Balance will not exceed the Letter of Credit Limit. Notwithstanding
anything in this Agreement, the parties agree that in connection
with Lender’s option to make Letters of Credit available to
Borrower by causing other financial institutions to issue Letters
of Credit, Lender may cause or permit any Participant under this
Agreement to cause other financial institutions to issue such
Letters of Credit and thereafter all such Letters of Credit shall
be treated for all purposes under this Agreement as if such Letters
of Credit were requested by Borrowing Agent and made available by
Lender, such Participant’s support of such Letters of Credit
in the form of a guaranty or indemnification shall be treated as if
such support had been made by Lender, Borrower hereby
unconditionally and irrevocably agrees to pay to Lender the amount
of each payment or disbursement made by such Participant or the
applicable issuer under any such Letter of Credit honoring any
demand for payment thereunder upon demand in accordance with the
reimbursement provisions of this Section 1.5 and agrees that such
reimbursement obligations of Borrower constitute Obligations under
this Agreement, and any and all amounts paid by such Participant or
the applicable issuer in respect of any such Letter of Credit will,
at the election of Lender, be treated for all purposes as a
Revolving Loan, and be payable, in the same manner as a Revolving
Loan. Borrower agrees to execute all documentation reasonably
required by Lender and/or the issuer of any Letter of Credit in
connection with any such Letter of Credit. Borrower hereby
unconditionally and irrevocably agrees to reimburse Lender and/or
the applicable issuer for each payment or disbursement made by
Lender and/or the applicable issuer under any Letter of Credit
honoring any demand for payment made thereunder, in each case on
the date that such payment or disbursement is made.
Borrower’s reimbursement obligations hereunder shall be
irrevocable and unconditional under all circumstances, including
any lack of validity or enforceability of any Letter of Credit,
this Agreement or any other Loan Document, the existence of any
claim, set-off, defense or other right which any Loan Party may
have at any time against a beneficiary named in a Letter of Credit,
any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), Lender, any Participant, the
applicable issuer under any Letter or Credit, or any other Person,
whether in connection with any Letter of Credit, this Agreement,
any other Loan Document, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction
between any Loan Party and the beneficiary named in any Letter of
Credit), any lack of validity, sufficiency or genuineness of
any document which Lender or the applicable issuer has determined
complies on its face with the terms of the applicable Letter of
Credit, even if such document should later prove to have been
forged, fraudulent, invalid or insufficient in any respect or any
statement therein shall have been untrue or inaccurate in any
respect, or the surrender or impairment of any security for the
performance or observance of any of the terms hereof. Any and all
amounts paid by Lender and any Participant in respect of a Letter
of Credit will, at the election of Lender, be treated for all
purposes as a Revolving Loan, and bear interest, and be payable, in
the same manner as a Revolving Loan.
1.6
Conditions of Making the Loans and Issuing
Letters of Credit.
Lender’s obligation to make any
Loan or issue or cause any Letter of Credit to be issued under this
Agreement is subject to the following conditions precedent (as well
as any other conditions set forth in this Agreement or any other
Loan Document), all of which must be satisfied in a manner
acceptable to Lender (and as applicable, pursuant to documentation
which in each case is in form and substance acceptable to Lender)
as of each day that such Loan is made or such Letter of Credit is
issued, as applicable:
(a)
Loans and Letters of Credit Made and/or Issued
on the Closing Date:
With respect to Loans made, and/or
Letters of Credit issued, on the Closing Date, each applicable Loan
Party Obligor shall have duly executed and/or delivered, or, as
applicable, shall have caused such other applicable Persons to have
duly executed and or delivered, to Lender such agreements,
instruments, documents, proxies and certificates as Lender may
require, and including such other agreements, instruments,
documents and/or certificates listed on the closing checklist
attached hereto as Exhibit B; Lender shall have completed its
business and legal due diligence pertaining to the Loan Parties,
their respective businesses and assets, with results thereof
satisfactory to Lender in its sole discretion; Lender’s
obligations and commitments under this Agreement shall have been
approved by Lender’s Credit Committee; after giving effect to
such Loans and Letters of Credit, as well as to the payment of all
trade payables older than sixty (60) days past due and the
consummation of all transactions contemplated hereby to occur on
the Closing Date, closing costs and any book overdraft, Excess
Availability (after the inclusion of a $1,000,000 Availability
Block for failure to maintain the financial covenant on Schedule E)
shall be no less than $3,000,000; (v) New Age Beverages Corporation
shall have received debt or equity net cash proceeds in an amount
not less than $9,500,000 (“Closing Proceeds”) with any
such debt to be in form and substance acceptable to Lender and
pursuant to documentation in form and substance acceptable to
Lender, including, without limitation, a subordination agreement,
and the Closing Proceeds shall be sent to Lender by 11:30AM NYC
time as part of the Closing Date distribution to Borrower; provided
that, if Lender has not received the Closing Proceeds by 11:30AM
NYC time on August 24, 2018, then this agreement shall be deemed
null and void and Lender shall have no obligation to lend to or
extend credit to Borrower under this Agreement and/or any other
Loan Document; and (vi) Borrower shall have paid to Lender all fees
due on the date hereof, and shall have paid or reimbursed Lender
for all of Lender’s costs, charges and expenses incurred
through the Closing Date (and in connection herewith, Borrower
hereby irrevocably authorizes Lender to charge such fees, costs,
charges and expenses as Revolving Loans); and
(b)
All Loans and/or Letters of Credit:
With
respect to Loans made and/or Letters of Credit issued, on the
Closing Date and/or at any time thereafter, in addition to the
conditions specified in clause (a) above as applicable, Borrower
shall have provided to Lender such information as Lender may
require in order to determine the Borrowing Base (including the
items set forth in Section 5.15(a)), as of such borrowing or issue
date, after giving effect to such Loans and/or Letters of Credit,
as applicable; each applicable Obligor shall have duly executed
and/or delivered, or, as applicable, shall have caused such other
applicable Persons to have duly executed and or delivered, to
Lender such further agreements, instruments, documents, proxies and
certificates as Lender may require in connection therewith; each of
the representations and warranties set forth in this Agreement and
in the other Loan Documents shall be true and correct in all
respects as of the date such Loan is made and/or such Letter of
Credit is issued (or to the extent any representations or
warranties are expressly made solely as of an earlier date, such
representations and warranties shall be true and correct as of such
earlier date), both before and after giving effect thereto; and
no Default or Event of Default shall be in existence, both
before and after giving effect thereto.
1.7
Repayments.
(a)
Revolving Loans/Letters of Credit.
If at
any time for any reason whatsoever (including without limitation as
a result of currency fluctuations) the sum of the outstanding
balance of all Revolving Loans and the Letter of Credit Balance
exceeds the lesser of (x) the Maximum Revolving Facility Amount and
(y) the Borrowing Base, or any of the Loan Limits for
Revolving Loans or Letters of Credit are exceeded, then in each
case, Borrower will immediately pay to Lender such amounts (or,
with respect to the Letter of Credit Balance, provide cash
collateral to Lender in the manner set forth in clause ((c)) below)
as shall cause Borrower to eliminate such excess (such excess, an
“
Overadvance
”).
(b)
[Reserved].
(c)
Maturity Date Payments / Cash
Collateral.
All remaining outstanding monetary Obligations
(including, all accrued and unpaid fees described on Schedule C)
shall be payable in full on the Maturity Date. Without limiting the
generality of the foregoing, if, on the Maturity Date, there are
any outstanding Letters of Credit, then on such date Borrower shall
provide to Lender cash collateral in an amount equal to 105% of the
Letter of Credit Balance to secure all of the Obligations
(including estimated attorneys’ fees and other expenses)
relating to said Letters of Credit, pursuant to a cash pledge
agreement in form and substance reasonably satisfactory to
Lender.
(d)
Currency Due.
If, notwithstanding the
terms of this Agreement or any other Loan Document, Lender receives
any payment from or on behalf of Borrower or any other Person in a
currency other than the Currency Due, Lender may convert the
payment (including the monetary proceeds of realization upon any
Collateral and any funds then held in a cash collateral account)
into the Currency Due at exchange rate selected by Lender in the
manner contemplated by Section 6.3(b) and Borrower shall
reimburse Lender on demand for all reasonable costs they incur with
respect thereto. To the extent permitted by law, the obligation
shall be satisfied only to the extent of the amount actually
received by Lender upon such conversion.
1.8
Prepayments / Voluntary
Termination / Application of Prepayments.
(a)
Certain Mandatory Prepayment Events.
Borrower shall be required to prepay the outstanding principal
balance of the Revolving Loans on the date of each and every
Prepayment Event (and on any date thereafter on which proceeds
pertaining thereto are received by any Loan Party), in each case
without any demand or notice from Lender or any other Person, all
of which is hereby expressly waived by Borrower, in the amount of
100% of the proceeds (net of documented reasonable out-of-pocket
costs and expenses incurred in connection with the collection of
such proceeds, in each case payable to Persons that are not
Affiliates of any Loan Party) received by any Loan Party with
respect to such Prepayment Event;
provided
that with
respect to a Prepayment Event of the type described in clause (ii)
of the definition of Prepayment Event, so long as no Default or
Event of Default exists, to the extent that the proceeds received
by such Person as a result of such Prepayment Event do not exceed
$100,000 in the aggregate during any Fiscal Year and are actually
applied within 180 days of such receipt to (x) replace the property
or assets subject to such Prepayment Event with property and/or
assets performing the same or similar functions or (y) repair,
replace or reconstruct property and or assets damaged by such
Prepayment Event, such proceeds shall not be required to prepay the
Loans pursuant to this Section 1.8(a) (pending such reinvestment
such proceeds shall be delivered to Lender to hold in an escrow
account;
provided
to the
extent such proceeds are not reinvested within such 180 day period,
or any Default or Event of Default occurs during such period,
Lender shall apply such proceeds as a prepayment of the Revolving
Loans as provided in this Section 1.8(a)). Each such prepayment
shall be subject to the Early Payment/Termination Premium in the
amount specified in Schedule C.
(b)
[Reserved.].
(c)
[Reserved.].
(d)
Voluntary Termination of Loan
Facilities.
Borrower may, on at least thirty (30) days prior
and irrevocable written notice received by Lender, permanently
terminate the Loan facilities by repaying all of the outstanding
Obligations, including all principal, interest and fees with
respect to the Revolving Loans, and an Early Payment/Termination
Premium in the amount specified in Schedule C. If, on the date of a
voluntary termination pursuant to this Section 1.8(d), there are
any outstanding Letters of Credit, then on such date, and as a
condition precedent to such termination, Borrower shall provide to
Lender cash collateral in an amount equal to 105% of the Letter of
Credit Balance to secure all of the Obligations (including
estimated attorneys’ fees and other expenses) relating to
said Letters of Credit, pursuant to a cash pledge agreement in form
and substance reasonably satisfactory to Lender. From and after
such date of termination, Lender shall have no obligation
whatsoever to extend any additional Loans or Letters of Credit and
all of its lending commitments hereunder shall be
terminated.
(e)
[Reserved.].
1.9
Obligations
Unconditional.
(a)
The payment and
performance of all Obligations shall constitute the absolute and
unconditional obligations of each Loan Party Obligor, and shall be
independent of any defense or rights of set-off, recoupment or
counterclaim which any Loan Party Obligor or any other Person might
otherwise have against Lender or any other Person. All payments
required (other than by Lender) by this Agreement and/or the other
Loan Documents shall be made in Dollars (unless payment in a
different currency is expressly provided otherwise in the
applicable Loan Document) and paid free of any deductions or
withholdings for any taxes or other amounts and without abatement,
diminution or set-off. If any Loan Party Obligor is required by
applicable law to make such a deduction or withholding from a
payment under this Agreement or under any other Loan Document, such
Loan Party Obligor shall pay to Lender such additional amount as is
necessary to ensure that, after the making of such deduction or
withholding, Lender receives (free from any liability in respect of
any such deduction or withholding) a net sum equal to the sum which
it would have received and so retained had no such deduction or
withholding been made or required to be made. Each Loan Party
Obligor shall pay the full amount of any deduction or withholding,
which it is required to make by law, to the relevant authority
within the payment period set by applicable law, and promptly after
any such payment, deliver to Lender an original (or certified copy)
official receipt issued by the relevant authority in respect of the
amount withheld or deducted or, if the relevant authority does not
issue such official receipts, such other evidence of payment of the
amount withheld or deducted as is reasonably acceptable to
Lender.
(b)
If, at any time
and from time to time after the Closing Date (or at any time before
or after the Closing Date with respect to (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules,
regulations, guidelines or directives thereunder or issued in
connection therewith, or (y) all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States regulatory authorities, in
each case for purposes of this clause (y) pursuant to Basel III,
regardless of the date enacted, adopted or issued), any change in
any existing law, regulation, treaty or directive or in the
interpretation or application thereof, any new law, regulation,
treaty or directive enacted or application thereof, or compliance
by Lender with any request or directive (whether or not having the
force of law) from any Governmental Authority, central bank or
comparable agency subjects Lender to any tax, levy, impost,
deduction, assessment, charge or withholding of any kind whatsoever
with respect to any Loan Document, or changes the basis of taxation
of payments to Lender of any amount payable thereunder (except for
net income taxes, or franchise taxes imposed in lieu of net income
taxes, imposed generally by federal, state, local or other taxing
authorities with respect to interest or fees payable hereunder or
under any other Loan Document or changes in the rate of tax on the
overall net income of Lender or its members), or imposes on Lender
any other condition or increased cost in connection with the
transactions contemplated thereby or participations therein, and
the result of any of the foregoing is to increase the cost to
Lender of making or continuing any Loan or Letter of Credit or to
reduce any amount receivable hereunder or under any other Loan
Documents, then, in any such case, Borrower shall promptly pay to
Lender, when notified to do so by Lender, any additional amounts
necessary to compensate Lender, on an after-tax basis, for such
additional cost or reduced amount as determined by Lender. Each
such notice of additional amounts payable pursuant to this Section
1.9(b) submitted by Lender to Borrowing Agent shall, absent
manifest error, be final, conclusive and binding for all
purposes.
(c)
This Section 1.9
shall remain operative even after the Termination Date and shall
survive the payment in full of all of the Obligations.
1.10
Reversal of Payments.
To the extent that
any payment or payments made to or received by Lender pursuant to
this Agreement or any other Loan Document are subsequently
invalidated, declared to be fraudulent or preferential, set aside,
or required to be repaid to any trustee, receiver or other Person
under any state, federal or other bankruptcy or other such
applicable law, then, to the extent thereof, such amounts (and all
Liens, rights and remedies therefore) shall be revived as
Obligations (secured by all such Liens) and continue in full force
and effect under this Agreement and under the other Loan Documents
as if such payment or payments had not been received by Lender to
the extent allowed under applicable law. This Section 1.10 shall
remain operative even after the Termination Date and shall survive
the payment in full of all of the Obligations.
2.
INTEREST
AND FEES; LOAN ACCOUNT.
2.1
Interest.
All Loans and other monetary
Obligations shall bear interest at the interest rate(s) set forth
in Section 3 of Schedule A, and accrued interest shall be
payable on the first day of each month in arrears, upon a
prepayment of such Loan in accordance with Section 1.8, and on
the Maturity Date;
provided
, that after
the occurrence and during the continuation of an Event of Default,
all Loans and other monetary Obligations shall bear interest at a
rate per annum equal to five (5) percentage points in excess
of the rate otherwise applicable thereto (the “
Default
Rate
”), and all such interest shall be payable on
demand. Changes in the interest rate shall be effective as of the
date of any change in the Base Rate.
2.2
Fees.
Borrower shall pay Lender the fees set forth on Schedule C
hereto
on the dates set
forth therein, which fees are in addition to all fees and other
sums payable by Borrower or any other Person to Lender under this
Agreement or under any other Loan Document, and, in each case are
not refundable once paid.
2.3
Computation
of Interest and Fees.
All interest and fees shall be
calculated daily on the outstanding monetary Obligations based on
the actual number of days elapsed in a year of 360
days.
2.4
Loan Account; Monthly Accountings.
Lender shall maintain a loan account for Borrower reflecting all
outstanding Loans and the Letters of Credit Balance, along with
interest accrued thereon and such other items reflected therein
(the “
Loan
Account
”), and shall provide Borrowing Agent with a
monthly accounting reflecting the activity in the Loan Account,
viewable by Borrowing Agent on Passport 6.0. Each accounting shall
be deemed correct, accurate and binding on Borrower and an account
stated (except for reverses and reapplications of payments made and
corrections of errors discovered by Lender), unless Borrowing Agent
notifies Lender in writing to the contrary within thirty (30) days
after such account is rendered, describing the nature of any
alleged errors or omissions. However, Lender’s failure to
maintain the Loan Account or to provide any such accounting shall
not affect the legality or binding nature of any of the
Obligations. Interest, fees and other monetary Obligations due and
owing under this Agreement (including fees and other amounts paid
by Lender to issuers of Letters of Credit) may, in Lender’s
discretion, be charged to the Loan Account, and will thereafter be
deemed to be Revolving Loans and will bear interest at the same
rate as other Revolving Loans.
2.5
Further Obligations; Maximum Lawful
Rate.
With respect to all monetary Obligations for which the
interest rate is not otherwise specified herein (whether such
Obligations arise hereunder or under any other Loan Document, or
otherwise), such Obligations shall bear interest at the rate(s) in
effect from time to time with respect to the Revolving Loans and
shall be payable upon demand by Lender. In no event shall the
interest charged with respect to any Loan or any other Obligation
exceed the maximum amount permitted under applicable law.
Notwithstanding anything to the contrary herein or elsewhere, if at
any time the rate of interest payable or other amounts hereunder or
under any other Loan Document (the “
Stated Rate
”)
would exceed the highest rate of interest or other amount permitted
under any applicable law to be charged (the “
Maximum Lawful
Rate
”), then for so long as the Maximum Lawful Rate
would be so exceeded, the rate of interest and other amounts
payable shall be equal to the Maximum Lawful Rate;
provided
, that if at
any time thereafter the Stated Rate is less than the Maximum Lawful
Rate, Borrower shall, to the extent permitted by applicable law,
continue to pay interest and such other amounts at the Maximum
Lawful Rate until such time as the total interest and other such
amounts received is equal to the total interest and other such
amounts which would have been received had the Stated Rate been
(but for the operation of this provision) the interest rate payable
or such other amounts payable. Thereafter, the interest rate and
such other amounts payable shall be the Stated Rate unless and
until the Stated Rate again would exceed the Maximum Lawful Rate,
in which event this provision shall again apply. In no event shall
the total interest or other such amounts received by Lender exceed
the amount which it could lawfully have received had the interest
and other such amounts been calculated for the full term hereof at
the Maximum Lawful Rate. If, notwithstanding the prior sentence,
Lender has received interest or other such amounts hereunder in
excess of the Maximum Lawful Rate, such excess amount shall be
applied to the reduction of the principal balance of the Loans or
to other Obligations (other than interest) payable hereunder, and
if no such principal or other Obligations are then outstanding,
such excess or part thereof remaining shall be paid to Borrower. In
computing interest payable with reference to the Maximum Lawful
Rate applicable to any Lender, such interest shall be calculated at
a daily rate equal to the Maximum Lawful Rate divided by the number
of days in the year in which such calculation is made.
3.
SECURITY
INTEREST GRANT / POSSESSORY COLLATERAL / FURTHER
ASSURANCES.
3.1
Grant of Security Interest.
To secure
the full payment and performance of all of the Obligations, each
Loan Party Obligor hereby assigns to Lender and grants to Lender a
continuing security interest in all property of each Loan Party
Obligor, whether tangible or intangible, real or personal, now or
hereafter owned, existing, acquired or hereafter arising and
wherever now or hereafter located, and whether or not eligible for
lending purposes, including: all Accounts (whether or not
Eligible
Accounts) and
all Goods whose sale, lease or other disposition by any Loan Party
Obligor has given rise to Accounts and have been returned to, or
repossessed or stopped in transit by, any Loan Party Obligor;
all Chattel Paper (including Electronic Chattel Paper),
Instruments, Documents, and General Intangibles (including all
patents, patent applications, trademarks, trademark applications,
trade names, trade secrets, goodwill, copyrights, copyright
applications, registrations, licenses, software, franchises,
customer lists, tax refund claims, claims against carriers and
shippers, guarantee claims, contracts rights, payment intangibles,
security interests, security deposits and rights to
indemnification); all Inventory (whether or not Eligible
Inventory); all Goods (other than Inventory), including
Equipment, Farm Products, Health-Care-Insurance Receivables,
vehicles, and Fixtures; all Investment Property, including,
without limitation, all rights, privileges, authority, and powers
of each Loan Party Obligor as an owner or as a holder of Pledged
Equity, including, without limitation, all economic rights, all
control rights, authority and powers, and all status rights of each
Loan Party Obligor as a member, equity holder or shareholder, as
applicable, of each Issuer; all Deposit Accounts, bank
accounts, deposits and cash; all Letter-of-Credit Rights;
all Commercial Tort Claims listed in Section 2 of the
Disclosure Schedule; all Supporting Obligations; any
other property of any Loan Party Obligor now or hereafter in the
possession, custody or control of Lender or any agent or any
parent, Affiliate or Subsidiary of Lender or any Participant with
Lender in the Loans, for any purpose (whether for safekeeping,
deposit, collection, custody, pledge, transmission or otherwise),
and all additions and accessions to, substitutions for, and
replacements, products and Proceeds of the foregoing property,
including proceeds of all insurance policies insuring the foregoing
property, and all of each Loan Party Obligor’s books and
records relating to any of the foregoing and to any Loan
Party’s business (but excluding any Excluded
Collateral).
3.2
Possessory Collateral.
Promptly, but in
any event no later than five (5) Business Days after any Loan Party
Obligor’s receipt of any portion of the Collateral evidenced
by an agreement, Instrument or Document, including any Tangible
Chattel Paper and any Investment Property consisting of
certificated securities, such Loan Party Obligor shall deliver the
original thereof to Lender together with an appropriate endorsement
or other specific evidence of assignment thereof to Lender (in form
and substance acceptable to Lender). If an endorsement or
assignment of any such items shall not be made for any reason,
Lender is hereby irrevocably authorized, as attorney and
agent-in-fact (coupled with an interest) for each Loan Party
Obligor, to endorse or assign the same on such Loan Party
Obligor’s behalf.
3.3
Further
Assurances.
(a)
Each Loan Party
will, at the time that any Loan Party forms any direct or indirect
Subsidiary, acquires any direct or indirect Subsidiary after the
Closing Date, within ten days of such event (or such later date as
permitted by Lender in its sole discretion) (a) cause such new
Subsidiary (i) to become a Loan Party and to grant Lender a first
priority Lien (subject to Permitted Liens) in and to the assets of
such newly formed or acquired Subsidiary), (b) provide, or cause
the applicable Loan Party to provide, to Lender a pledge agreement
and appropriate certificates and powers or financing statements,
pledging all of the direct or beneficial ownership interest in such
new Subsidiary in form and substance reasonably satisfactory to
Lender (which pledge, if reasonably requested by Lender, shall be
governed by the laws of the jurisdiction of such Subsidiary), and
(c) provide to Lender all other documentation, including one or
more opinions of counsel reasonably satisfactory to Lender, which,
in its opinion, is appropriate with respect to the execution and
delivery of the applicable documentation referred to above
(including policies of title insurance, flood certification
documentation or other documentation with respect to all Real
Property owned in fee and subject to a mortgage). Any document,
agreement, or instrument executed or issued pursuant to this
Section 3.3 shall constitute a Loan Document.
(b)
Each Loan Party
will, and will cause each of the other Loan Parties to, at any time
upon the reasonable request of Lender, execute or deliver to Lender
any and all financing statements, fixture filings, security
agreements, pledges, assignments, mortgages, deeds of trust,
opinions of counsel, and all other documents (the
“
Additional
Documents
”) that Lender may reasonably request in form
and substance reasonably satisfactory to Lender, to create,
perfect, and continue to be perfected or to better perfect
Lender’s Liens in all of the assets of each of the Loan
Parties (whether now owned or hereafter arising or acquired,
tangible or intangible, real or personal), to create and perfect
Liens in favor of Lender in any Real Property acquired by any other
Loan Party with a fair market value in excess of $100,000, and in
order to fully consummate all of the transactions contemplated
hereby and under the other Loan Documents. To the maximum extent
permitted by applicable law, if any Borrower or any other Loan
Party refuses or fails to execute or deliver any reasonably
requested Additional Documents within a reasonable period of time
following the request to do so, each Borrower and each other Loan
Party hereby authorizes Lender to execute any such Additional
Documents in the applicable Loan Party’s name and authorizes
Lender to file such executed Additional Documents in any
appropriate filing office.
(c)
Each Loan Party
Obligor shall, at its own cost and expense, promptly and duly take,
execute, acknowledge and deliver (and/or use commercially
reasonable efforts to cause such other applicable Person to take,
execute, acknowledge and deliver) all such further acts, documents,
agreements and instruments as Lender shall deem reasonably
necessary in order to (a) carry out the intent and purposes of the
Loan Documents and the transactions contemplated thereby, (b)
establish, create, preserve, protect and perfect a first priority
lien (subject only to Permitted Liens) in favor of Lender in all
Collateral (wherever located) from time to time owned by the Loan
Party Obligors, (c) cause each Loan Party Obligor to guarantee all
of the Obligations, and (d) facilitate the collection of the
Collateral. Without limiting the foregoing, each Loan Party Obligor
shall, at its own cost and expense, promptly and duly take,
execute, acknowledge and deliver (and/or use commercially
reasonable efforts to cause such other applicable Person to take,
execute, acknowledge and deliver) to Lender all promissory notes,
security agreements, agreements with landlords, mortgagees and
processors and other bailees, subordination and intercreditor
agreements and other agreements, instruments and documents, in each
case in form and substance reasonably acceptable to Lender, as
Lender may request from time to time to perfect, protect, and
maintain Lender's security interests in the Collateral, including
the required priority thereof, and to fully carry out the
transactions contemplated by the Loan Documents.
3.4
UCC
Financing Statements.
Each Loan Party Obligor authorizes
Lender to file, transmit, or communicate, as applicable, from time
to time, Uniform Commercial Code financing statements, along with
amendments and modifications thereto, in all filing offices
selected by Lender, listing such Loan Party Obligor as the debtor
and Lender as the secured party, and describing the collateral
covered thereby in such manner as Lender may elect, including using
descriptions such as “all personal property of debtor”
or “all assets of debtor” or words of similar
effect.
4.
CERTAIN
PROVISIONS REGARDING ACCOUNTS, INVENTORY, COLLECTIONS, APPLICATIONS
OF PAYMENTS, INSPECTION RIGHTS, AND APPRAISALS.
4.1
Lock Boxes and Blocked Accounts.
Each
Loan Party Obligor hereby represents and warrants that all Deposit
Accounts and all other depositary and other accounts maintained by
each Loan Party Obligor as of the Closing Date are described in
Section 3 of the Disclosure Schedule, which description includes
for each such account the name of the Loan Party Obligor
maintaining such account, the name, of the financial institution at
which such account is maintained, the account number, and the
purpose of such account. After the Closing Date, no Loan Party
Obligor shall open any new Deposit Accounts or any other depositary
or other accounts without the prior written consent of Lender and
without updating Section 3 of the Disclosure Schedule to reflect
such Deposit Accounts or other accounts, as applicable. No Deposit
Accounts or other accounts of any Loan Party Obligor shall at any
time constitute a Restricted Account other than accounts expressly
indicated on Section 3 of the Disclosure Schedule as being a
Restricted Account (and each Loan Party Obligor hereby represents
and warrants that each such account shall at all times meet the
requirements set forth in the definition of Restricted Account to
qualify as a Restricted Account). Each Loan Party Obligor will, at
its expense, establish (and revise from time to time as Lender may
require) procedures acceptable to Lender, in Lender’s
Permitted Discretion, for the collection of checks, wire transfers
and all other proceeds of all of such Loan Party Obligor’s
Accounts and other Collateral (“
Collections
”),
which shall include directing all Account Debtors to send all
Account proceeds directly to a post office box designated by Lender
either in the name of such Loan Party Obligor (but as to which
Lender has exclusive access) or, at Lender’s option, in the
name of Lender (a “
Lock Box
”),
and/or depositing all Collections received by such Loan Party
Obligor into one or more bank accounts maintained in the name of
such Loan Party Obligor (but as to which Lender has exclusive
access) or, at Lender’s option, in the name of Lender (each,
a “
Blocked
Account
”), under an arrangement acceptable to Lender
with a depository bank acceptable to Lender, pursuant to which all
funds deposited into each Blocked Account are to be transferred to
Lender in such manner, and with such frequency, as Lender shall
specify, and/or a combination of the foregoing. Each Loan
Party Obligor agrees to execute, and to cause its depository banks
and other account holders to execute, such Lock Box and Blocked
Account control agreements and other documentation as Lender shall
require from time to time in connection with the foregoing, all in
form and substance acceptable to Lender, and in any event such
arrangements and documents must be in place on the date hereof with
respect to accounts in existence on the date hereof, or prior to
any such account being opened with respect to any such account
opened after the date hereof, in each case excluding Restricted
Accounts. Prior to the Closing Date, Borrowing Agent shall deliver
to Lender a complete and executed Authorized Accounts form
regarding Borrower’s operating account(s) into which the
proceeds of Loans are to be paid in the form of Exhibit D
annexed hereto.
4.2
Application
of Payments.
All amounts paid to or received by Lender in
respect of the monetary Obligations, from whatever source (whether
from Borrower or any other Loan Party Obligor pursuant to such
other Loan Party Obligor’s guaranty of the Obligations, any
realization upon any Collateral, or otherwise) shall, unless
otherwise directed by Borrowing Agent with respect to any
particular payment (unless an Event of Default shall then be
continuing, in which event Lender may disregard Borrowing
Agent’s direction), be applied by Lender to the Obligations
in such order as Lender may elect, and absent such election shall
be applied as follows:
(i)
FIRST, to reimburse
Lender for all out-of-pocket costs and expenses, and all
indemnified losses, incurred by Lender which are reimbursable to
Lender in accordance with this Agreement and/or any of the other
Loan Documents,
(ii)
SECOND,
to any accrued but unpaid interest on any Protective
Advances,
(iii)
THIRD,
to the outstanding principal of any Protective
Advances,
(iv)
FOURTH,
to any accrued but unpaid fees owing to Lender under this Agreement
and/or any other Loan Documents,
(v)
FIFTH, to any
unpaid accrued interest on the Obligations,
(vi)
SIXTH,
to the outstanding principal of the Revolving Loans, and, to the
extent required by this Agreement, to cash collateralize the Letter
of Credit Balance, and
(vii)
SEVENTH,
to the payment of any other outstanding Obligations; and after
payment in full in cash of all of the outstanding monetary
Obligations, any further amounts paid to or received by Lender in
respect of the Obligations (so long as no monetary Obligations are
outstanding) shall be paid over to Borrower or such other Person(s)
as may be legally entitled thereto. For purposes of determining the
Borrowing Base, such amounts will be credited to the Loan Account
and the Collateral balances to which they relate upon
Lender’s receipt of an advice from Lender’s Bank (set
forth in Section 5 of Schedule A) that such items have
been credited to Lender’s account at Lender’s Bank (or
upon Lender’s deposit thereof at Lender’s Bank in the
case of payments received by Lender in kind), in each case subject
to final payment and collection. However, for purposes of computing
interest on the Obligations, such items shall be deemed applied by
Lender three Business Days after Lender’s receipt of advice
of deposit thereof at Lender’s Bank.
4.3
Notification;
Verification.
Lender or its designee may, from time to time,
whether or not a Default or Event of Default has occurred:
verify directly with the Account Debtors of the Loan Party
Obligors (or by any reasonable manner and through any reasonable
medium Lender considers advisable in the exercise of its Permitted
Discretion) the validity, amount and other matters relating to the
Accounts and Chattel Paper of the Loan Party Obligors, by means of
mail, telephone or otherwise, either in the name of the applicable
Loan Party Obligor or Lender or such other name as Lender may
choose, and notify Account Debtors of the Loan Party Obligors
that Lender has a security interest in the Accounts of the Loan
Party Obligors. Lender or its designee may, from time to time, if a
Default or Event of Default has occurred and is continuing: (i)
require any Loan Party Obligor to cause all invoices and statements
which it sends to Account Debtors or other third parties to be
marked, in a manner satisfactory to Lender, to reflect
Lender’s security interest therein and payment instructions
acceptable to Lender, (ii) direct such Account Debtors to make
payment thereof directly to Lender; such notification to be sent on
the letterhead of such Loan Party Obligor and substantially in the
form of Exhibit E annexed hereto; and (iii) demand,
collect or enforce payment of any Accounts and Chattel Paper (but
without any duty to do so). Each Loan Party Obligor hereby
authorizes Account Debtors to make payments directly to Lender and
to rely on notice from Lender without further inquiry. Lender may
on behalf of each Loan Party Obligor endorse all items of payment
received by Lender that are payable to such Loan Party Obligor for
the purposes described above.
Each
Loan Party Obligor hereby grants to Lender an irrevocable power of
attorney, coupled with an interest, authorizing and permitting
Lender (acting through any of its officers, employees, attorneys or
agents), at Lender's option (and solely with respect to any actions
taken by Lender under Section 4.4(a) below, in the exercise of its
Permitted Discretion), but without obligation, with or without
notice to such Loan Party Obligor, and at such Loan Party
Obligor’s expense, to do any or all of the following, in such
Loan Party Obligor’s name or otherwise:
(a)
(i) execute on
behalf of such Loan Party Obligor any documents that Lender may
deem advisable in order to perfect, protect and maintain
Lender’s security interests, and priority thereof, in the
Collateral (including such financing statements and continuation
financing statements, and amendments or other modifications
thereto, as Lender shall deem necessary or appropriate); (ii)
endorse such Loan Party Obligor’s name on all checks and
other forms of remittances received by Lender; (iii) pay any sums
required on account of such Loan Party Obligor’s taxes or to
secure the release of any Liens therefor; (iv) pay any amounts
necessary to obtain, or maintain in effect, any of the insurance
described in Section 5.14; (v) receive and otherwise take control
in any manner of any cash or non-cash items of payment or Proceeds
of Collateral; (vi) receive, open and process all mail addressed to
such Loan Party Obligor at any post office box/lockbox maintained
by Lender for such Loan Party Obligor or at any other business
premises of Lender with Collections to be promptly transferred to
the Blocked Account and any mail unrelated to Collections to be
promptly remitted to such Loan Party Obligor along with copies of
all other mail addressed to such Loan Party Obligor and received by
Lender, and (vii) endorse or assign to Lender on such Loan Party
Obligor’s behalf any portion of Collateral evidenced by an
agreement, Instrument or Document if an endorsement or assignment
of any such items is not made by Borrower pursuant to Section 3.2;
and
(b)
After the
occurrence and during the continuance of an Event of Default and
subject to the terms and conditions of Section 7 of this Agreement;
(i) execute on behalf of such Loan Party Obligor any document
exercising, transferring or assigning any option to purchase, sell
or otherwise dispose of or lease (as lessor or lessee) any real or
personal property which is part of the Collateral or in which
Lender has an interest; (ii) execute on behalf of such Loan Party
Obligor any invoices relating to any Accounts, any draft against
any Account Debtor, any proof of claim in bankruptcy, any notice of
Lien or claim, and any assignment or satisfaction of mechanic's,
materialman's or other Lien; (iii) except as otherwise provided in
Section 4.3(i) hereof, execute on behalf of such Loan Party Obligor
any notice to any Account Debtor; (iv) pay, contest or settle any
Lien, charge, encumbrance, security interest and adverse claim in
or to any of the Collateral, or any judgment based thereon, or
otherwise take any action to terminate or discharge the same; (v)
grant extensions of time to pay, compromise claims relating to, and
settle Accounts, Chattel Paper and General Intangibles for less
than face value and execute all releases and other documents in
connection therewith; (vi) settle and adjust, and give releases of,
any insurance claim that relates to any of the Collateral and
obtain payment therefor; (vii) instruct any third party having
custody or control of any Collateral or books or records belonging
to, or relating to, such Loan Party Obligor to give Lender the same
rights of access and other rights with respect thereto as Lender
has under this Agreement or any other Loan Document; (viii) change
the address for delivery of such Loan Party Obligor’s mail;
(ix) vote any right or interest with respect to any Investment
Property; and (x) instruct any Account Debtor to make all payments
due to such Loan Party Obligor directly to Lender.
Any and
all sums paid, and any and all costs, expenses, liabilities,
obligations and reasonable attorneys' fees incurred, by Lender with
respect to the foregoing shall be added to and become part of the
Obligations, shall be payable on demand, and shall bear interest at
a rate equal to the highest interest rate applicable to any of the
Obligations at such time. Each Loan Party Obligor agrees that
Lender's rights under the foregoing power of attorney and/or any of
Lender's other rights under this Agreement or the other Loan
Documents shall not be construed to indicate that Lender is in
control of the business, management or properties of such Loan
Party Obligor.
4.5
Disputes.
Each Loan Party Obligor shall promptly notify Lender of all
disputes or claims relating to its Accounts and Chattel Paper in
connection with the Account roll-forward and supporting credit
journals required under Schedule D. Each Loan Party Obligor agrees
that it will not, without Lender’s prior written consent,
compromise or settle any of its Accounts or Chattel Paper for less
than the full amount thereof, grant any extension of time for
payment of any of its Accounts or Chattel Paper, release (in whole
or in part) any Account Debtor or other person liable for the
payment of any of its Accounts or Chattel Paper or grant any
credits, discounts, allowances, deductions, return authorizations
or the like with respect to any of its Accounts or Chattel Paper;
except (unless otherwise directed by Lender during the existence of
a Default or an Event of Default) such Loan Party Obligor may take
any of such actions in the ordinary course of its business
consistent with past practices,
provided
that Borrower promptly reports
the same to Lender.
4.6
Inventory.
(a)
Returns.
No Loan Party Obligor will
accept returns of any Inventory from any Account Debtor except in
the ordinary course of its business. In the event the value of
returned Inventory in any one calendar month exceeds $100,000
(collectively for all Loan Party Obligors), Borrower will
immediately notify Lender (which notice shall specify the value of
all such returned Inventory, the reasons for such returns, and the
locations and the condition of such returned
Inventory).
(b)
Third Party Locations.
No Loan Party
Obligor will, without Lender’s prior written consent, at any
time, store any Inventory with any warehouseman or other third
party other than as set forth in Section 1(d) of the Disclosure
Schedule.
(c)
Sale on Return, etc.
No Loan Party
Obligor will, without Lender’s prior written consent, at any
time, sell any Inventory on a sale-or-return, guaranteed sale,
consignment, or other contingent basis.
(d)
Fair Labor Standards Act.
Each Loan
Party Obligor represents and warrants, and covenants that at all
times, that all of the Inventory of each Loan Party Obligor has
been, at all times will be, produced only in accordance with the
Fair Labor Standards Act of 1938 and all rules, regulations and
orders promulgated thereunder.
4.7
Access
to Collateral, Books and Records.
At reasonable times,
Lender and/or its representatives or agents shall have the right to
inspect the Collateral, and the right to examine and copy each Loan
Party’s books and records. Each Loan Party Obligor agrees to
give Lender access to any or all of such Loan Party
Obligor’s, and each of its Subsidiaries’, premises to
enable Lender to conduct such inspections and examinations. Such
inspections and examinations shall be at Borrower’s expense
and the charge therefor shall be
$
1,200 per person per day (or such
higher amount as shall represent Lender’s then current
standard charge), plus out-of-pocket expenses. Upon the occurrence
and during the continuance of an Event of Default, Lender may, at
Borrower’s expense, use each Loan Party’s personnel,
computer and other equipment, programs, printed output and computer
readable media, supplies and premises for the collection, sale or
other disposition of Collateral to the extent Lender, in its sole
discretion, deems appropriate. Each Loan Party Obligor hereby
irrevocably authorizes all accountants and other financial
professional third parties to disclose and deliver to Lender, at
Borrower’s expense, all financial information, books and
records, work papers, management reports and other information in
their possession regarding the Loan Parties.
4.8
Appraisals.
Each Loan Party Obligor will permit Lender and each of its
representatives or agents to conduct two (2) appraisals and
valuations of the Collateral in any given Fiscal Year at such times
and intervals as Lender may designate. Such appraisals and
valuations shall be at Borrower’s expense;
provided
that Borrower shall only be
required to reimburse Lender for up to two appraisals and
valuations in any Fiscal Year plus any additional appraisals and
valuations that are conducted during the existence of an Event of
Default.
5.
REPRESENTATIONS,
WARRANTIES AND COVENANTS.
To
induce Lender to enter into this Agreement, each Loan Party Obligor
represents, warrants and covenants as follows (it being understood
and agreed that (a) each such representation and warranty (i)
will be made as of the date hereof and be deemed remade as of each
date on which any Loan is made or Letter of Credit is issued
(except to the extent any such representation or warranty expressly
relates only to any earlier and/or specified date, in which case
such representation or warranty will be made as of such earlier
and/or specified date), and (ii) shall not be affected by any
knowledge of, or any investigation by, Lender, and (b) each
such covenant shall continuously apply with respect to all times
commencing on the date hereof and continuing until the Termination
Date):
5.1
Existence
and Authority.
Each Loan Party is duly incorporated or
otherwise organized, validly existing and in good standing under
the laws of its jurisdiction of organization (which jurisdiction is
identified in Section 1(a) of the Disclosure Schedule) and is
qualified to do business in each jurisdiction in which the
operation of its business requires that it be qualified (which each
such jurisdiction is identified in Section 1(a) of the Disclosure
Schedule), except where the failure to be so qualified could not
reasonably be expected to result in a Material Adverse Effect. Each
Loan Party will, and will cause each of its Subsidiaries to, at all
times preserve and keep in full force and effect such
Person’s valid existence and good standing in its
jurisdiction of organization and, except as could not reasonably be
expected to result in a Material Adverse Effect, good standing with
respect to all other jurisdictions in which it is qualified to do
business and any rights, franchises, permits, licenses,
accreditations, authorizations, or other approvals material to
their businesses. Each Loan Party has all requisite power and
authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter
into the Loan Documents to which it is a party and to carry out the
transactions contemplated thereby. The execution, delivery and
performance by each Loan Party Obligor of this Agreement and all of
the other Loan Documents to which such Loan Party Obligor is a
party have been duly and validly authorized, do not violate such
Loan Party Obligor’s Organic Documents, or any law or any
agreement or instrument or any court order which is binding upon
any Loan Party or its property, do not constitute grounds for
acceleration of any Indebtedness or obligation under any agreement
or instrument which is binding upon any Loan Party or its property,
and do not require the consent of any Person. No Loan Party is
required to obtain any government approval, consent, or
authorization from, or to file any declaration or statement with,
any Governmental Authority in connection with or as a condition to
the execution, delivery or performance of any of the Loan
Documents. This Agreement and each of the other Loan Documents have
been duly executed and delivered by, and are enforceable against
each of the Loan Party Obligors who have signed them, in accordance
with their respective terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium
or similar laws of general applicability affecting the enforcement
of creditors’ rights and (b) the application of general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Section 1(f)
of the Disclosure Schedule sets forth the ownership of each
Borrower and their respective Subsidiaries.
5.2
Names;
Trade Names and Styles.
The name of each Loan Party Obligor
set forth on Section 1(b) of the Disclosure Schedule is its correct
and complete legal name as of the date hereof, and no Loan Party
Obligor has used any other name at any time in the past five years
except as listed in Section 1(b) of the Disclosure Schedules, or at
any time will use any other name, in any tax filing made in any
jurisdiction. Listed in Section 1(b) of the Disclosure Schedule are
all prior names used by each Loan Party Obligor at any time in the
past five years and all of the present and prior trade names used
by any Loan Party Obligor at any time in the past five years.
Borrower shall give Lender at least thirty (30) days’ prior
written notice (and will deliver an updated Section 1(b) of the
Disclosure Schedule to reflect the same) before it or any other
Loan Party Obligor changes its legal name or does business under
any other name.
5.3
Title
to Collateral; Third Party Locations; Permitted Liens.
Each
Loan Party Obligor has, and at all times will continue to have,
good and marketable title to all of the Collateral. The Collateral
now is, and at all times will remain, free and clear of any and all
Liens, except for Permitted Liens. Lender now has, and will at all
times continue to have, a first-priority perfected and enforceable
security interest in all of the Collateral, and each Loan Party
Obligor will at all times defend Lender and the Collateral against
all claims of others. None of the Collateral which is Equipment is,
or will at any time, be affixed to any real property that is not
subject to a Mortgage in favor of Lender in such a manner, or with
such intent, as to become a fixture. Except for leases or subleases
as to which Borrower has delivered to Lender a landlord’s
waiver in form and substance satisfactory to Lender, no Loan Party
Obligor is or will be a lessee or sublessee under any real property
lease or sublease. Except for warehouses as to which Borrower has
delivered to Lender a warehouseman’s waiver in form and
substance satisfactory to Lender, no Loan Party Obligor is or will
at any time be a bailor of any Goods at any warehouse or otherwise.
Prior to causing or permitting any Collateral to at any time be
located upon premises in which any third party (including any
landlord, warehouseman, or otherwise) has an interest, Borrower
shall notify Lender and the applicable Loan Party Obligor shall
cause each such third party to execute and deliver to Lender, in
form and substance acceptable to Lender, such waivers, collateral
access agreements, and subordinations as Lender shall specify, so
as to, among other things, ensure that Lender’s rights in the
Collateral are, and will at all times continue to be, superior to
the rights of any such third party and that Lender has access to
such Collateral. Each applicable Loan Party Obligor will keep at
all times in full force and effect, and will comply at all times
with all the terms of, any lease of real property where any of the
Collateral now or in the future may be located.
5.4
Accounts, Chattel Paper and
Inventory.
(a)
As of each date
reported by Borrower, all Accounts which Borrower has then reported
to Lender as then being Eligible Accounts comply in all respects
with the criteria for eligibility set forth in the definition of
Eligible Accounts. All such Accounts and Chattel Paper are genuine
and in all respects what they purport to be, arise out of a
completed, bona fide and unconditional and non-contingent sale and
delivery of goods or rendition of services by Borrower in the
ordinary course of its business and in accordance with the terms
and conditions of all purchase orders, contracts or other documents
relating thereto, each Account Debtor thereunder had the capacity
to contract at the time any contract or other document giving rise
to such Accounts and Chattel Paper were executed, and the
transactions giving rise to such Accounts and Chattel Paper comply
with all applicable laws and governmental rules and
regulations.
(b)
As
of each date reported by Borrower, all Inventory which Borrower has
then reported to Lender as then being Eligible Inventory complies
in all respects with the criteria for eligibility set forth in the
definition of Eligible Inventory
.
5.5
Electronic
Chattel Paper.
To the extent that any Loan Party Obligor
obtains or maintains any Electronic Chattel Paper, such Loan Party
Obligor shall at all times create, store and assign the record or
records comprising the Electronic Chattel Paper in such a manner
that a single authoritative copy of the record or records
exists which is unique, identifiable and except as otherwise
provided below, unalterable, the authoritative copy
identifies Lender as the assignee of the record or records,
the authoritative copy is communicated to and maintained by
Lender or its designated custodian, copies or revisions that
add or change an identified assignee of the authoritative copy can
only be made with the participation of Lender, each copy of
the authoritative copy and any copy of a copy is readily
identifiable as a copy that is not the authoritative copy and
any revision of the authoritative copy is readily
identifiable as an authorized or unauthorized
revision.
5.6
Capitalization; Investment
Property.
(a)
No Loan Party,
directly or indirectly, owns, or shall at any time own, any Equity
Interests of any other Person except as set forth in Sections 1(f)
and 1(g) of the Disclosure Schedule, which such Sections of the
Disclosure Schedule list all Investment Property owned by each Loan
Party Obligor, except in each case for Permitted
Investments;
(b)
None of the Pledged
Equity has been issued or otherwise transferred in violation of the
Securities Act, or other applicable laws of any jurisdiction to
which such issuance or transfer may be subject.
(c)
The Pledged Equity
pledged by each Loan Party Obligor hereunder constitutes all of the
issued and outstanding equity interests of each Issuer owned by
such Loan Party Obligor.
(d)
All of the Pledged
Equity has been duly and validly issued and is fully paid and
non-assessable, and the holders thereof are not entitled to any
preemptive, first refusal, or other similar rights. There are no
outstanding options, warrants or similar agreements, documents, or
instruments with respect to any of the Pledged Equity.
(e)
Each Loan Party
Obligor has caused each Issuer to amend or to otherwise modify its
Organic Documents, books, records, and related agreements,
documents, and instruments, as applicable, to reflect the rights
and interests of Lender hereunder, and to the extent required to
enable and empower Lender to exercise and enforce its rights and
remedies hereunder in respect of the Pledged Equity and other
Investment Property.
(f)
Each Loan Party
Obligor will take any and all actions required or requested by
Lender, from time to time, to cause Lender to obtain
exclusive control of any Investment Property in a manner acceptable
to Lender and obtain from any Issuers and such other Persons
as Lender shall specify, for the benefit of Lender, written
confirmation of Lender’s exclusive control over such
Investment Property and take such other actions as Lender may
request to perfect Lender’s security interest in any
Investment Property. For purposes of this Section 5.6, Lender
shall have exclusive control of Investment Property if
pursuant to Section 3.2, such Investment Property
consists of certificated securities and the applicable Loan Party
Obligor delivers such certificated securities to Lender (with all
appropriate endorsements); such Investment Property consists
of uncertificated securities and either (x) the applicable
Loan Party Obligor delivers such uncertificated securities to
Lender or (y) the Issuer thereof agrees, pursuant to
documentation in form and substance satisfactory to Lender, that it
will comply with instructions originated by Lender without further
consent by the applicable Loan Party Obligor, and such
Investment Property consists of security entitlements and either
(x) Lender becomes the entitlement holder thereof or
(y) the appropriate securities intermediary agrees, pursuant
to documentation in form and substance satisfactory to Lender, that
it will comply with entitlement orders originated by Lender without
further consent by the applicable Loan Party Obligor. Each Loan
Party Obligor that is a limited liability company or a partnership
hereby represents and warrants that it has not, and at no time
will, elect pursuant to the provisions of Section 8-103 of the UCC
to provide that its equity interests are securities governed by
Article 8 of the UCC.
(g)
No Loan Party owns,
or has any present intention of acquiring, any “margin
security” or any “margin stock” within the
meaning of Regulations T, U or X of the Board of Governors of the
Federal Reserve System (herein called “margin security”
and “margin stock”). None of the proceeds of the Loans
will be used, directly or indirectly, for the purpose of purchasing
or carrying, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry,
any margin security or margin stock or for any other purpose which
might constitute the transactions contemplated hereby a
“purpose credit” within the meaning of said Regulations
T, U or X, or cause this Agreement to violate any other regulation
of the Board of Governors of the Federal Reserve System or the
Exchange Act, or any rules or regulations promulgated under such
statutes.
(h)
No Loan Party
Obligor shall vote to enable, or take any other action to cause or
to permit, any Issuer to issue any equity interests of any nature,
or to issue any other securities or interests convertible into or
granting the right to purchase or exchange for any equity interests
of any nature of any Issuer.
(i)
No Loan Party
Obligor shall take, or fail to take, any action that would in any
manner impair the value or the enforceability of Lender’s
Lien on any of the Investment Property, or any of Lender’s
rights or remedies under this Agreement or any other Loan Document
with respect to any of the Investment Property.
(j)
In the case of any
Loan Party Obligor which is an Issuer, such Issuer agrees that the
terms of Section 7.3(g)(iii) of this Agreement shall apply to such
Loan Party Obligor with respect to all actions that may be required
of it pursuant to such Section 7.3(g)(iii) regarding the Investment
Property issued by it.
5.7
Commercial
Tort Claims.
No Loan Party Obligor has any Commercial Tort
Claims pending other than those listed in Section 2 of the
Disclosure Schedule, and each Loan Party Obligor shall promptly
(but in any case no later than five (5) Business Days thereafter)
notify Lender in writing upon incurring or otherwise obtaining a
Commercial Tort Claim after the date hereof against any third
party. Such notice shall constitute such Loan Party Obligor’s
authorization to amend such Section 2 to add such Commercial Tort
Claim and shall automatically be deemed to amend such Section 2 to
include such Commercial Tort Claim.
5.8
Jurisdiction of Organization; Location of
Collateral.
Sections 1(c) and 1(d) of the Disclosure
Schedule set forth each place of business of each Loan
Party Obligor (including its chief executive office), all
locations where all Inventory, Equipment, and other Collateral
owned by each Loan Party Obligor is kept, and whether each
such Collateral location and/or place of business (including each
Loan Party Obligor’s chief executive office) is owned by a
Loan Party or leased (and if leased, specifies the complete name
and notice address of each lessor). No Collateral is located
outside the United States or in the possession of any lessor,
bailee, warehouseman or consignee, except as expressly indicated in
Sections 1(c) and 1(d) of the Disclosure Schedule. Each Loan Party
Obligor will give Lender at least thirty (30) days’ prior
written notice before changing its jurisdiction of organization,
opening any additional place of business, changing its chief
executive office or the location of its books and records, or
moving any of the Collateral to a location other than one of the
locations set forth in Sections 1(c) and 1(d) of the
Disclosure Schedule, and will execute and deliver all financing
statements, landlord waivers, collateral access agreements,
mortgages, and all other agreements, instruments and documents
which Lender shall require in connection therewith prior to making
such change, all in form and substance satisfactory to Lender.
Without the prior written consent of Lender, no Loan Party Obligor
will at any time (x) change its jurisdiction of organization or (y)
allow any Collateral to be located outside of the continental
United States of America.
5.9
Financial
Statements and Reports; Solvency.
(a)
All financial
statements delivered to Lender by or on behalf of any Loan Party
have been, and at all times will be, prepared in conformity with
GAAP and completely and fairly reflect the financial condition of
each Loan Party covered thereby, at the times and for the periods
therein stated.
(b)
As of the date
hereof (after giving effect to the Loans and Letters of Credit to
be made or issued on the date hereof, and the consummation of the
transactions contemplated hereby), and as of each other day that
any Loan or Letter of Credit is made or issued (after giving effect
thereof), the fair saleable value of all of the assets and
properties of each Loan Party, individually, exceeds the aggregate
liabilities and Indebtedness of each such Loan Party (including
contingent liabilities), each Loan Party, individually, is solvent
and able to pay its debts as they come due, each Loan Party,
individually, has sufficient capital to carry on its business
as now conducted and as proposed to be conducted, no Loan Party is
contemplating either the liquidation of all or any substantial
portion of its assets or property, or the filing of any petition
under any state, federal, or other bankruptcy or insolvency law,
and no Loan Party has knowledge of any Person contemplating the
filing of any such petition against any Loan Party.
5.10
Tax
Returns and Payments; Pension Contributions.
Each Loan Party
has timely filed all tax returns and reports required by applicable
law, has timely paid all applicable Taxes, assessments, deposits
and contributions owing by such Loan Party and will timely pay all
such items in the future as they became due and payable. Each Loan
Party may, however, defer payment of any contested taxes;
provided
, that such
Loan Party in good faith contests its obligation to pay such
Taxes by appropriate proceedings promptly and diligently instituted
and conducted; notifies Lender in writing of the commencement
of, and any material development in, the proceedings; posts
bonds or takes any other commercially reasonable steps required to
keep the contested taxes from becoming a Lien upon any of the
Collateral and maintains adequate reserves therefor in
conformity with GAAP. No Loan Party is aware of any claims or
adjustments proposed for any prior tax years that could result in
additional taxes becoming due and payable by any Loan Party. Each
Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other applicable laws. Each Plan
that is intended to be a qualified plan under Section 401(a)
of the Code has received a favorable determination letter or
opinion letter from the Internal Revenue Service to the effect that
the form of such Plan is qualified under Section 401(a) of the
Code and the trust related thereto has been determined by the
Internal Revenue Service to be exempt from federal income tax under
Section 501(a) of the Code, or an application for such a
letter is currently being processed by the Internal Revenue
Service. To the best knowledge of each Loan Party, nothing has
occurred that would prevent or cause the loss of such tax-qualified
status. There are no pending or, to the best knowledge of any Loan
Party or any ERISA Affiliate, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to
any Plan that could reasonably be expected to result in liabilities
individually or in the aggregate in excess of $50,000 on any Loan
Party. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has
resulted or could reasonably be expected to result in liabilities
individually or in the aggregate on any Loan Party in excess of
$50,000. No ERISA Event has occurred, and no Loan Party or any
ERISA Affiliate is aware of any fact, event or circumstance that
could reasonably be expected to constitute or result in an ERISA
Event with respect to any Pension Plan, in each case that could
reasonably be expected to result in liabilities individually or in
the aggregate in excess of $50,000. Each Loan Party and each ERISA
Affiliate has met all applicable requirements under the Pension
Funding Rules in respect of each Pension Plan, and no waiver of the
minimum funding standards under the Pension Funding Rules has been
applied for or obtained, in each case except as could not
reasonably be expected to result in liabilities individually or in
the aggregate to any Loan Party or any ERISA Affiliate in excess of
$50,000. As of the most recent valuation date for any Pension
Plan, the funding target attainment percentage (as defined in
Section 430(d)(2) of the Code) is 60% or higher and no Loan
Party or any ERISA Affiliate knows of any facts or circumstances
that could reasonably be expected to cause the funding target
attainment percentage for any such plan to drop below 60% as of the
most recent valuation date; (iv) no Loan Party nor any ERISA
Affiliate has incurred any liability to the PBGC other than for the
payment of premiums, and there are no premium payments which have
become due that are unpaid, except as could not reasonably be
expected to result in liabilities individually or in the aggregate
to any Loan Party or ERISA Affiliate in excess of $50,000. No Loan
Party nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or Section 4212(c) of
ERISA except as could not reasonably be expected to result in
liabilities individually or in the aggregate to the Loan Parties in
excess of $50,000. No Pension Plan has been terminated by the plan
administrator thereof nor by the PBGC, and no event or circumstance
has occurred or exists that could reasonably be expected to cause
the PBGC to institute proceedings under Title IV of ERISA to
terminate any Pension Plan except as could not reasonably be
expected to result in liabilities individually or in the aggregate
to the Loan Parties in excess of $50,000.
5.11
Compliance
with Laws; Intellectual Property; Licenses.
(a)
Each Loan Party has
complied, and will continue at all times to comply, in all material
respects with all provisions of all applicable laws and
regulations, including those relating to the ownership, use or
operations of real or personal property, the conduct and licensing
of each Loan Party’s business, the payment and withholding of
Taxes, ERISA and other employee matters, and safety and
environmental matters.
(b)
No Loan Party has
received written notice of default or violation, nor is any Loan
Party in default or violation, with respect to any judgment, order,
writ, injunction, decree, demand or assessment issued by any court
or any federal, state, local, municipal or other Governmental
Authority relating to any aspect of any Loan Party’s
business, affairs, properties or assets. No Loan Party has received
written notice of or been charged with, or is, to the knowledge of
any Loan Party, under investigation with respect to, any violation
in any material respect of any provision of any applicable law. No
Loan Party or any real property owned, leased or used in the
operation of the business of any Loan Party is subject to any
federal, state or local investigation to determine whether any
remedial action is needed to address any hazardous materials or an
environmental release (as that term is defined under environmental
and health and safety laws) at, on, or under any real property
currently leased, owned or used by a Loan Party nor is a Loan Party
liable for any environmental release identified or under
investigation at, on or under any real property previously owned,
leased or used by a Loan Party. No Loan Party has any contingent
liability with respect to any environmental release, environmental
pollution or hazardous material on any real property now or
previously owned, leased or operated by it.
(c)
No Loan Party
Obligor owns any Intellectual Property, except as set forth in
Section 4 of the Disclosure Schedule. Except as set forth in
Section 4 of the Disclosure Schedule, none of the Intellectual
Property owned by any Loan Party Obligor is the subject of any
licensing or franchise agreement pursuant to which such Loan Party
Obligor is the licensor or franchisor. Each Loan Party Obligor
shall promptly (but in any event within thirty (30) days
thereafter) notify Lender in writing of any additional Intellectual
Property rights acquired or arising after the Closing Date and
shall submit to Lender a supplement to Section 4 of the Disclosure
Schedule to reflect such additional rights (
provided
that such Loan Party
Obligor’s failure to do so shall not impair Lender’s
security interest therein). Each Loan Party Obligor shall execute a
separate security agreement granting Lender a security interest in
such Intellectual Property (whether owned on the Closing Date or
thereafter), in form and substance acceptable to Lender and
suitable for registering such security interest in such
Intellectual Property with the United States Patent and Trademark
Office and/or United States Copyright Office, as applicable
(
provided
that such Loan
Party Obligor’s failure to do so shall not impair
Lender’s security interest therein). Each Loan Party owns or
has, and will at all times continue to own or have, the valid right
to use all material patents, trademarks, copyrights, software,
computer programs, equipment designs, network designs, equipment
configurations, technology and other Intellectual Property used,
marketed and sold in such Loan Party’s business, and each
Loan Party is in compliance, and will continue at all times to
comply, in all material respects with all licenses, user agreements
and other such agreements regarding the use of Intellectual
Property. No Loan Party has any knowledge that, or has received any
notice claiming that, any of such Intellectual Property infringes
upon or violates the rights of any other Person.
(d)
Each Loan Party has
and will continue at all times to have, all federal, state, local
and other licenses and permits required to be maintained in
connection with such Loan Party’s business operations, and
its ownership, use and operation of any real property, and all such
licenses and permits, necessary for the operation of the business
are valid and will remain and in full force and effect. Each Loan
Party has, and will continue at all times to have, complied with
the requirements of such licenses and permits in all material
respects, and has received no written notice of any pending or
threatened proceedings for the suspension, termination, revocation
or limitation thereof. No Loan Party is aware of any facts or
conditions that could reasonably be expected to cause or permit any
of such licenses or permits to be voided, revoked or
withdrawn.
(e)
In addition to and
without limiting the generality of clause (a) above, (i) comply in
all material respects with applicable provisions of ERISA and the
IRC with respect to all Plans, (ii) without the prior written
consent of Lender, not take any action or fail to take action the
result of which could result in a Loan Party or ERISA Affiliate
incurring a material liability to the PBGC or to a Multiemployer
Plan (other than to pay contributions or premiums payable in the
ordinary course), (iii) allow any facts or circumstances to
exist with respect to one or more Plans that, in the aggregate,
reasonably could be expected to result in a Material Adverse
Effect, (iv) not participate in any prohibited transaction that
could result in other than a de minimis civil penalty excise tax,
fiduciary liability or correction obligation under ERISA or the
IRC, (v) operate each Plan in such a manner that will not incur any
material tax liability under the IRC (including Section 4980B of
the IRC), and (vi) furnish to Lender upon Lender’s written
request such additional information about any Plan for which any
Loan Party or ERISA Affiliate could reasonably expect to incur any
material liability. With respect to each Pension Plan (other than a
Multiemployer Plan) except as could not reasonably be expected to
result in liability to the Loan Parties, the Loan Parties and the
ERISA Affiliates shall (y) satisfy in full and in a timely manner,
without incurring any late payment or underpayment charge or
penalty and without giving rise to any Lien, all of the
contribution and funding requirements of the IRC and of ERISA, and
(z) pay, or cause to be paid, to the PBGC in a timely manner,
without incurring any late payment or underpayment charge or
penalty, all premiums required pursuant to ERISA.
5.12
Litigation.
Section 1(e) of the Disclosure Schedule discloses all
claims, proceedings, litigation or investigations pending or (to
the best of each Loan Party Obligor’s knowledge) threatened
against any Loan Party as of the Closing Date. There is no claim,
suit, litigation, proceeding or investigation pending or (to the
best of each Loan Party Obligor’s knowledge) threatened by or
against or affecting any Loan Party in any court or before any
Governmental Authority (or any basis therefor known to any Loan
Party Obligor) which may result, either separately or in the
aggregate, in liability in excess of $100,000 for the Loan Parties,
in any Material Adverse Effect, or in any material impairment in
the ability of any Loan Party to carry on its business in
substantially the same manner as it is now being
conducted.
5.13
Use
of Proceeds.
All proceeds of all Loans and Letters of Credit
shall be used by Borrower solely with respect to Loans made on the
Closing Date, to repay in full all obligations owing and
outstanding pursuant to the Dominion Transaction, to pay the fees,
costs, and expenses incurred in connection with this Agreement, the
other Loan Documents, and the transactions contemplated hereby and
thereby, for Borrower’s working capital purposes and for such
other purposes as specifically permitted pursuant to the terms of
this Agreement. All proceeds of all Loans and Letters of Credit
will be used solely for lawful business purposes.
(a)
Each Loan Party
will at all times carry property, liability and other insurance,
with insurers acceptable to Lender, in such form and amounts, and
with such deductibles and other provisions, as Lender shall
require, and Borrower will provide Lender with evidence
satisfactory to Lender that such insurance is, at all times, in
full force and effect. A true and complete listing of such
insurance as of the Closing Date, including issuers, coverages and
deductibles, is set forth in Section 5 of the Disclosure Schedule.
Each property insurance policy shall name Lender as loss payee and
shall contain a lender’s loss payable endorsement in form
acceptable to Lender, each liability insurance policy shall name
Lender as an additional insured, and each business interruption
insurance policy shall be collaterally assigned to Lender, all in
form and substance reasonably satisfactory to Lender. All policies
of insurance shall provide that they may not be cancelled or
changed without at least thirty (30) days’ prior written
notice to Lender, and shall otherwise be in form and substance
reasonably satisfactory to Lender. Borrower shall advise Lender
promptly of any policy cancellation, non-renewal, reduction, or
material amendment with respect to any insurance policies
maintained by any Loan Party or any receipt by any Loan Party of
any notice from any insurance carrier regarding any intended or
threatened cancellation, non-renewal, reduction or material
amendment of any of such policies, and Borrower shall promptly
deliver to Lender copies of all notices and related documentation
received by any Loan Party in connection with the
same.
(b)
Borrower shall
deliver to Lender no later than fifteen (15) days prior to the
expiration of any then current insurance policies, insurance
certificates evidencing renewal of all such insurance policies
required by this Section 5.14. Borrower shall deliver to
Lender, upon Lender’s request, certificates evidencing such
insurance coverage in such form as Lender shall specify. If any
Loan Party fails to provide Lender with a certificate of insurance
or other evidence of the continuing insurance coverage required by
this Agreement within the time period set forth in the first
sentence of this Section 5.14(b), Lender may purchase insurance
required by this Agreement at Borrower’s expense. This
insurance may, but need not, protect any Loan Party’s
interests.
5.15
Financial, Collateral and Other Reporting /
Notices.
Each Loan Party has kept and will at all times keep
adequate records and books of account with respect to its business
activities and the Collateral in which proper entries are made in
accordance with GAAP reflecting all its financial transactions.
Each Loan Party Obligor will cause to be prepared and furnished to
Lender, in each case in a form and in such detail as is acceptable
to Lender the following items (the items to be provided under this
Section 5.15 shall be delivered to Lender by posting on Passport
6.0 (or, if requested by Lender, by another form of Approved
Electronic Communication or in writing)).
(a)
Annual Financial Statements.
Not later
than one hundred and five (105) days after the close of each Fiscal
Year, financial statements of each Loan Party as of the end of such
Fiscal Year, including balance sheet, income statement, and
statement of cash flow for such Fiscal Year, in each case on a
consolidated and consolidating basis, audited and certified
(without qualification) by a firm of independent certified public
accountants of recognized standing selected by Borrower but
acceptable to Lender, together with a copy of any management letter
issued in connection therewith. Concurrently with the delivery of
such financial statements, Borrowing Agent shall deliver to Lender
a Compliance Certificate, indicating whether Borrower is in
compliance with each of the covenants specified in Section 5.26,
and setting forth a detailed calculation of such covenants, and any
Default or Event of Default is then in existence;
(b)
Interim Financial Statements.
Not later
than thirty (30) days after the end of each month hereafter,
including the last month of each Fiscal Year, (i) the Monthly
Financial Model, (ii) unaudited interim financial statements of
each Loan Party as of the end of such month and of the portion of
such Fiscal Year then elapsed, including balance sheet, income
statement, statement of cash flow, and results of their respective
operations during such month and the then-elapsed portion of the
Fiscal Year, together with comparative figures for the same periods
in the immediately preceding Fiscal Year and the corresponding
figures from the budget for the Fiscal Year covered by such
financial statements, in each case on a consolidated and
consolidating basis, certified by an Authorized Officer of
Borrowing Agent as prepared in accordance with GAAP and fairly
presenting the consolidated financial position and results of
operations (including management discussion and analysis of such
results) of each Loan Party for such month and period subject only
to changes from ordinary course year-end audit adjustments and
except that such statements need not contain footnotes and (iii)
monthly trail balance submitted in Excel format. Concurrently with
the delivery of such financial statements, Borrowing Agent shall
deliver to Lender a Compliance Certificate, indicating whether
Borrower is in compliance with each of the covenants specified in
Section 5.26, and setting forth a detailed calculation of such
covenants, and any Default or Event of Default is then in
existence;
(c)
Borrowing Base / Collateral Reports / Insurance
Certificates / Disclosure Schedules / Other Items
. The items
described on Schedule D hereto by the respective dates set forth
therein.
(d)
Projections, Etc.
Not later than thirty
(30) days prior to the end of each Fiscal Year, monthly business
projections for the following Fiscal Year for the Loan Parties on a
consolidated and consolidating basis, which projections shall
include for each such period Borrowing Base projections, profit and
loss
projections, balance sheet
projections, income statement projections and cash flow
projections, together with appropriate supporting details and a
statement of underlying assumptions used in preparing such
projections;
(e)
Shareholder Reports, Etc.
To the extent
the following are not publicly available on New Age Beverages
Corporation’s website or on the website of the Securities and
Exchange Commission, promptly after the sending or filing thereof,
as the case may be, copies of any proxy statements, financial
statements or reports which each Loan Party has made available to
its shareholders and copies of any regular, periodic and special
reports or registration statements which any Loan Party files with
the Securities and Exchange Commission or any Governmental
Authority which may be substituted therefor, or any national
securities exchange;
(f)
ERISA Reports.
Copies of any annual
report to be filed pursuant to the requirements of ERISA in
connection with each plan subject thereto promptly upon request by
Lender and in addition, each Loan Party shall promptly notify
Lender upon having knowledge of any ERISA Event; and
(g)
Tax Returns.
Upon request from Lender,
each federal and state income tax return filed by any Loan Party or
Other Obligor promptly, together with such supporting documentation
as is supplied to the applicable tax authority with such return and
proof of payment of any amounts owing with respect to such
return.
(h)
Notification of Certain Changes.
Borrower will promptly (and in no case later than the earlier of
five (5) Business Days after Borrower obtains Knowledge of the
occurrence of any of the following and such other date that such
information is required to be delivered pursuant to this Agreement
or any other Loan Document) notify Lender in writing of: the
occurrence of any Default or Event of Default, the occurrence of
any event that has had, or may reasonably be expected to have, a
Material Adverse Effect, any change in any Loan Party’s
Senior Officers or directors, any material investigation, action,
suit, proceeding or claim (or any material development with respect
to any existing investigation, action, suit, proceeding or claim)
relating to any Loan Party, any officer or director of a Loan
Party, the Collateral or which may result in an adverse impact upon
any Loan Party’s business, assets or financial condition, any
violation or asserted violation of any applicable law (including
OSHA or any Environmental Laws), if an adverse resolution could
have a Material Adverse Effect or otherwise result in material
liability to any Loan Party Obligor,
any event or the existence of any
circumstance that has resulted in, or could reasonably be expected
to result in, any material adverse change in the business or
financial affairs of any Loan Party, any Default, or any Event of
Default, or which would make any representation or warranty
previously made by any Loan Party to Lender untrue in any material
respect or constitute a material breach if such representation or
warranty was then being made, any actual or alleged breaches of any
Material Contract or termination or threat to terminate any
Material Contract or any material amendment to or modification of a
Material Contract, or the execution of any new Material Contract by
any Loan Party, any change in any Loan Party’s certified
accountant. In the event of each such notice under this Section
5.15(h), Borrower shall give notice to Lender of the action or
actions that each Loan Party has taken, is taking, or proposes to
take with respect to the event or events giving rise to such notice
obligation.
(i)
Other Information.
Promptly upon
request, such other data and information (financial and otherwise)
as Lender, from time to time, may reasonably request, bearing upon
or related to the Collateral or each Loan Party’s and each
Other Obligor’s business or financial condition or results of
operations.
5.16
Litigation
Cooperation.
Should any third-party suit, regulatory action,
or any other judicial, administrative, or similar proceeding be
instituted by or against Lender with respect to any Collateral or
in any manner relating to any Loan Party, this Agreement, any other
Loan Document or the transactions contemplated hereby, each Loan
Party Obligor shall, without expense to Lender, make available each
Loan Party, such Loan Party’s officers, employees and agents,
and any Loan Party’s books and records, without charge, to
the extent that Lender may deem them reasonably necessary in order
to prosecute or defend any such suit or proceeding.
5.17
Maintenance
of Collateral, Etc.
Each Loan Party Obligor will maintain
all of the Collateral in good working condition, ordinary wear and
tear excepted, and no Loan Party Obligor will use the Collateral
for any unlawful purpose.
5.18
Material Contracts.
Except as expressly
disclosed in Section 1(h) of the Disclosure Schedule, no Loan Party
is a party to any contract which has had or could reasonably be
expected to have a Material Adverse Effect or in default in the
performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (x) any contract to which
it is a party or by which any of its assets or properties is bound,
which default, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect or result in
liabilities in excess of $100,000 or (y) any Material
Contract. Except for the contracts and other agreements listed in
Section 1(h) of the Disclosure Schedule, no Loan Party is party, as
of the Closing Date, to any employment agreements covering the
management of any Loan Party, collective bargaining agreements or
other labor agreements covering any employees of any Loan Party,
agreements for managerial, consulting or similar services to which
any Loan Party is a party or by which it is bound, agreements
regarding any Loan Party, its assets or operations or any
investment therein to which any of its equity holders is a party,
patent licenses, trademark licenses, copyright licenses or other
lease or license agreements to which any Loan Party is a party,
either as lessor or lessee, or as licensor or licensee,
distribution, marketing or supply agreements to which any Loan
Party is a party, customer agreements to which any Loan Party is a
party (in each case with respect to any contract of the type
described in the preceding clauses (i), (iii), (iv), (v), (vi) and
(vii) requiring payments of more than $100,000 in the aggregate in
any Fiscal Year), partnership agreements to which any Loan Party is
a partner, limited liability company agreements to which any Loan
Party is a member or manager, or joint venture agreements to which
any Loan Party is a party, real estate leases, or any other
contract to which any Loan Party is a party, in each case with
respect to this clause (x) the breach, nonperformance or
cancellation of which, could reasonably be expected to have a
Material Adverse Effect; (each such contract and agreement,
described in the preceding clauses (i) to (x), a
“
Material
Contract
”).
5.19
No
Default.
No Default or Event of Default has occurred and is
continuing.
5.20
No
Material Adverse Change.
Since March 31, 2018, there has
been no material adverse change in the financial condition,
business, prospects, operations, or properties of any Loan Party or
any Other Obligor.
5.21
Full
Disclosure.
No written report, notice, certificate,
information or other statement delivered or made (including, in
electronic form) by or on behalf of any Loan Party, any Other
Obligor or any of their respective Affiliates to Lender in
connection with this Agreement or any other Loan Document contains
or will at any time contain any untrue statement of a material
fact, or omits or will at any time omit to state any material fact
necessary to make any statements contained herein or therein not
misleading. Except for matters of a general economic or political
nature which do not affect any Loan Party or any Other Obligor
uniquely, there is no fact presently known to any Loan Party
Obligor which has not been disclosed to Lender, which has had or
could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
5.22
Sensitive
Payments.
No Loan Party has made or will at any time make
any contributions, payments or gifts to or for the private use of
any governmental official, employee or agent where either the
payment or the purpose of such contribution, payment or gift is
illegal under the applicable laws of the United States or the
jurisdiction in which made or any other applicable jurisdiction,
has established or maintained or will at any time establish or
maintain any unrecorded fund or asset for any purpose or made any
false or artificial entries on its books, has made or will at any
time make any payments to any Person with the intention that any
part of such payment was to be used for any purpose other than that
described in the documents supporting the payment, or has engaged
in or will at any time engage in any “trading with the
enemy” or other transactions violating any rules or
regulations of the Office of Foreign Assets Control or any similar
applicable laws, rules or regulations.
5.23
[Reserved].
5.24
Subordinated
Debt.
(a)
Borrower has
furnished Lender a true, correct and complete copy of each the
Subordinated Debt Documents. No statement or representation made in
any of the Subordinated Debt Documents by Borrower or any other
Loan Party or, to Borrower’s knowledge, any other Person,
contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the
circumstances under which they are made, not misleading in any
material respect as of the time that such statement or
representation is made. Each of the representations and warranties
of the Loan Parties set forth in each of the Subordinated Debt
Documents are true and correct in all respects. No portion of the
Subordinated Debt is, or at any time shall be, secured by any
assets of any of the Loan Parties or any other Person or any Equity
Interests issued by any of the Loan Parties or any other Person
(except to the extent expressly permitted by the Subordinated Debt
Subordination Agreement), or guaranteed by any Person (except
to the extent expressly permitted by the Subordinated Debt
Subordination Agreement).
(b)
[Reserved].
(c)
The provisions of
the Subordinated Debt Subordination Agreement are enforceable
against each holder of the Subordinated Debt. Borrower and each
other Loan Party Obligor acknowledges that Lender is entering into
this Agreement and extending credit and making the Loans in
reliance upon the Subordinated Debt Subordination Agreement and
this Section 5.24. All Obligations constitute senior
Indebtedness entitled to the benefits of the subordination
provisions contained in the Subordinated Debt
Documents.
5.25
Negative
Covenants.
No Loan Party Obligor shall, and no Loan Party
Obligor shall permit any other Loan Party to, without
Lender’s prior written consent:
(a)
merge or
consolidate with another Person,
(b)
form any new
Subsidiary or acquire any interest in any Person;
provided
that
Borrower may form or acquire a Subsidiary in connection with a
Permitted Acquisition;
provided further
that in connection with any such formation or acquisition, (i) such
Subsidiary expressly, in the Permitted Discretion of Lender, (A)
joins this Agreement as a borrower and becomes jointly and
severally liable for the obligations of Borrower hereunder and any
other Loan Documents between Borrower and Lender, or (B) becomes a
Guarantor with respect to the Obligations, and (ii) Lender shall
have received all documents, including without limitation, legal
opinions and appraisals it may reasonably require to establish
compliance with each of the foregoing conditions in connection
therewith;
(c)
acquire any assets
except in the ordinary course of business and as otherwise
expressly permitted by this Agreement;
provided
that
Borrower may acquire assets in connection with a Permitted
Acquisition;
(d)
enter into any
transaction outside the ordinary course of business that is not
expressly permitted by this Agreement;
(e)
sell, transfer,
return, or dispose of any Collateral or other assets with an
aggregate value in excess of $10,000 in any calendar month, except
that each Loan Party may sell finished goods Inventory in the
ordinary course of its business;
(f)
make any loans to,
or investments in, any Affiliate or other Person in the form of
money or other assets;
provided
that
Borrower may make loans and investments in its wholly-owned
domestic Subsidiaries that are Loan Party Obligors;
(g)
incur any
Indebtedness other than the Obligations and Permitted
Indebtedness;
(h)
create, incur,
assume or suffer to exist any Lien or other encumbrance of any
nature whatsoever, other than in favor of Lender to secure the
Obligations, on any of the Collateral whether now or hereafter
owned, other than Permitted Liens;
(i)
guaranty or
otherwise become liable with respect to the obligations of any
Person other than (i) the Obligations and (ii) guarantees in
respect of Permitted Indebtedness;
(j)
pay or declare any
dividends or other distributions on any Loan Party’s Equity
Interests (except for dividends payable solely in capital stock or
other equity interests of such Loan Party and dividends and
distributions to Borrower);
(k)
redeem, retire,
purchase or otherwise acquire, directly or indirectly, any of Loan
Party’s Equity Interests;
(l)
make any change in
any Loan Party’s capital structure;
(m)
dissolve or elect
to dissolve;
(n)
engage, directly or
indirectly, in a business other than the business which is being
conducted on the date hereof or any business reasonably related,
incidental or ancillary thereto, wind up its business operations or
cease substantially all, or any material portion, of its normal
business operations, or suffer any material disruption,
interruption or discontinuance of a material portion of its normal
business operations;
(o)
pay any principal
or other amount on any Indebtedness that is contractually
subordinated to Lender in violation of the applicable subordination
or intercreditor agreement or optionally prepay, redeem, defease,
purchase, or otherwise acquire any Indebtedness of any Loan Party
or its Subsidiaries, other than the Obligations in accordance with
this Agreement;
(p)
enter into any
transaction with an Affiliate other than on arms-length terms
disclosed to Lender in writing;
(q)
change its
jurisdiction of organization or enter into any transaction which
has the effect of changing its jurisdiction of organization except
as provided for in Section 5.8;
(r)
agree, consent,
permit or otherwise undertake to amend or otherwise modify any of
the terms or provisions of any Loan Party’s Organic
Documents, except for such amendments or other modifications
required by applicable law or that are not adverse to Lender, and
then, only to the extent such amendments or other modifications are
fully disclosed in writing to Lender no less than five (5) Business
Days prior to being effectuated;
(s)
enter into or
assume any agreement prohibiting the creation or assumption of any
Lien on the Collateral to secure the Obligations upon its
properties or assets, whether now owned or hereafter
acquired;
(t)
create or otherwise
cause or suffer to exist or become effective any encumbrance or
restriction (other than any Loan Documents) of any kind on the
ability of any such Person to pay or make any dividends or
distributions to Borrower, to pay any of the Obligations,
to make loans or advances or to transfer any of its
property or assets to Borrower, except customary terms and
conditions in respect of any Permitted Indebtedness or Permitted
Liens; or
(u)
agree, consent,
permit or otherwise undertake to amend or otherwise modify any of
the terms or provisions of any Subordinated Debt Document in
violation of the Subordinated Debt Subordination
Agreement.
5.26
Financial Covenants.
Each Loan Party
Obligor shall at all times comply with the Financial Covenants
described on Schedule E.
5.27
Employee
and Labor Matters.
There is (i) no unfair labor practice
complaint pending or, to the knowledge of any Borrower, threatened
against any Loan Party Obligor or its Subsidiaries before any
Governmental Authority and no grievance or arbitration proceeding
pending or threatened against any Loan Party Obligor or its
Subsidiaries which arises out of or under any collective bargaining
agreement and that could reasonably be expected to result in a
material liability, (ii) no strike, labor dispute, slowdown,
stoppage or similar action or grievance pending or threatened in
writing against any Loan Party Obligor or its Subsidiaries that
could reasonably be expected to result in a material liability, or
(iii) to the knowledge of any Borrower, after due inquiry, no union
representation question existing with respect to the employees of
any Loan Party Obligor or its Subsidiaries and no union organizing
activity taking place with respect to any of the employees of any
Loan Party Obligor or its Subsidiaries. None of any Loan Party
Obligor or its Subsidiaries has incurred any liability or
obligation under the Worker Adjustment and Retraining Notification
Act or similar state law, which remains unpaid or unsatisfied. The
hours worked and payments made to employees of each Loan Party and
its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable legal requirements. All
material payments due from any Loan Party or its Subsidiaries on
account of wages and employee health and welfare insurance and
other benefits have been paid or accrued as a liability on the
books of Borrowers, except where the failure to do so could not,
individually or in the aggregate, reasonably be expected to result
in a material liability.
6.
RELEASE,
LIMITATION OF LIABILITY AND INDEMNITY.
6.1
Release.
Borrower and each other Loan
Party Obligor on behalf of itself and its successors, assigns,
heirs, and other legal representatives, hereby absolutely,
unconditionally and irrevocably releases, remises and forever
discharges Lender and any and all Participants, their successors
and assigns, their Affiliates, their respective directors,
officers, employees, attorneys and agents and any other Person
affiliated with or representing Lender (the “
Released
Parties
”) of and from any and all liability, including
all actual or potential claims, demands or causes of action of any
kind, nature or description whatsoever, whether arising in law or
equity or under contract or tort or under any state or federal law
or otherwise which Borrower or any Loan Party or any of their
successors, assigns, or other legal representatives has had, now
has or has made claim to have against any of the Released Parties
for or by reason of any act, omission, matter, cause or thing
whatsoever, including any liability arising from acts or omissions
pertaining to the transactions contemplated by this Agreement and
the other Loan Documents, whether based on errors of judgment or
mistake of law or fact, from the beginning of time to and including
the Closing Date, whether such claims, demands and causes of action
are matured or known or unknown (except any liability arising
solely as the result of the gross negligence or willful misconduct
of such Released Parties, as finally determined by a court of
competent jurisdiction). Notwithstanding any provision in this
Agreement to the contrary, this Section 6.1 shall remain
operative even after the Termination Date and shall survive the
payment in full of all of the Loans. Such release is made on the
date hereof and remade upon each request for a Loan or Letter of
Credit by Borrower.
6.2
Limitation of Liability.
In no
circumstance will any of the Released Parties be liable for lost
profits or other special, punitive, or consequential damages.
Notwithstanding any provision in this Agreement to the contrary,
this Section 6.2 shall remain operative even after the Termination
Date and shall survive the payment in full of all of the
Loans.
6.3
Indemnity/Currency
Indemnity.
(a)
Each Loan Party
Obligor hereby agrees to indemnify the Released Parties and hold
them harmless from and against any and all claims, debts,
liabilities, losses, demands, obligations, actions, causes of
action, fines, penalties, costs and expenses (including reasonable
attorneys’ fees and consultants’ fees), of every
nature, character and description (including, without limitation,
natural resources damages, property damage and claims for personal
injury), which the Released Parties may sustain or incur based upon
or arising out of any of the transactions contemplated by this
Agreement or any other Loan Documents or any of the Obligations,
including any transactions or occurrences relating to the issuance
of any Letter of Credit, any Collateral relating thereto, any
drafts thereunder and any errors or omissions relating thereto
(including, without limitation, any loss or claim due to any action
or inaction taken by the issuer of any Letter of Credit or Lender)
(and for this purpose any charges to Lender by any issuer of
Letters of Credit shall be conclusive as to their appropriateness
and may be charged to the Loan Account), or any other matter,
including any breach of any covenant or representation or warranty
relating to any environmental and health and safety laws or an
environmental release, cause or thing whatsoever occurred, done,
omitted or suffered to be done by Lender relating to any Loan Party
or the Obligations (except any such amounts sustained or incurred
solely as the result of the gross negligence or willful misconduct
of such Released Parties, as finally determined by a court of
competent jurisdiction), provided that such indemnity under this
Section 6.3(a) shall not be available to any Released Party to the
extent that such claims, debts, liabilities, losses, demands,
obligations, actions, causes of action, fines, penalties, costs or
related expenses (including attorneys’ fees and
consultants’ fees) (i) are determined by a court of competent
jurisdiction to have resulted from the gross negligence or willful
misconduct of such Released Party or (ii) result from a claim
brought by Borrower against any Released Party for breach of such
Released Party's obligations under any Loan Document.
Notwithstanding any provision in this Agreement to the contrary,
this Section 6.3 shall remain operative even after the Termination
Date and shall survive the payment in full of all of the
Obligations.
(b)
If, for the
purposes of obtaining or enforcing judgment in any court in any
jurisdiction with respect to this Agreement or any Loan Document,
it becomes necessary to convert into the currency of such
jurisdiction (the “
Judgment
Currency
”) any amount due under this Agreement or
under any Loan Document in any currency other than the Judgment
Currency (the “
Currency Due
”)
(or for the purposes of Section 1.7(c)), then, to the extent
permitted by law, conversion shall be made at the exchange rate
reasonably selected by Lender on the Business Day before the day on
which judgment is given (or for the purposes of
Section 1.7(c), on the Business Day on which the payment was
received by the Lender). In the event that there is a change in
such exchange rate between the Business Day before the day on which
the judgment is given and the date of receipt by the Lender of the
amount due, each Loan Party Obligor shall to the extent permitted
by law, on the date of receipt by Lender, pay such additional
amounts, if any, or be entitled to receive reimbursement of such
amount, if any as may be necessary to ensure that the amount
received by Lender on such date is the amount in the Judgment
Currency which (when converted at such exchange rate on the date of
receipt by Lender in accordance with normal banking procedures in
the relevant jurisdiction) is the amount then due under this
Agreement or such Loan Document in the Currency Due. If the amount
of the Currency Due (including any Currency Due for purposes of
Section 1.7(c)) which the Lender is so able to purchase is
less than the amount of the Currency Due (including any Currency
Due for purposes of Section 1.7(c)) originally due to it, each
Loan Party Obligor shall to the extent permitted by law jointly and
severally indemnify and save Lender harmless from and against loss
or damage arising as a result of such deficiency.
7.
EVENTS
OF DEFAULT AND REMEDIES.
7.1
Events of Default.
The occurrence of any
of the following events shall constitute an “
Event of
Default
”:
(a)
if any warranty,
representation, statement, report or certificate made or delivered
to Lender by or on behalf of any Loan Party or any Other Obligor is
untrue or misleading in any material respect when
made;
(b)
if any Loan Party
Obligor or any Other Obligor fails to pay to Lender, (i) when due,
any principal or interest payment required under this Agreement or
any other Loan Document, or (ii) within three (3) Business Days
when due, any other monetary Obligation;
(c)
if any Loan Party
or any Other Obligor defaults in the due observance or performance
of any covenant, condition or agreement contained in Section 3.2,
4.1, 4.6, 4.7, 4.8, 5.2 (limited to the last sentence of Section
5.2), 5.3, 5.13, 5.14, 5.15, 5.17, 5.24, 5.25 or 5.26 of this
Agreement or in any provisions of the Post-Closing Agreement;
or
(1)
if any Loan Party
or any Other Obligor defaults in the due observance or performance
of any covenant, condition or agreement contained in any provision
of this Agreement or any other Loan Document and not addressed in
clauses Sections 7.1(a), (b) or (c)(1), and the continuance of such
default unremedied for a period of twenty (20) Business Days;
provided that such fifteen (15) Business Day grace period shall not
be available for any default that is not reasonably capable of
being cured within such period or for any intentional
default;
(d)
if one or more
judgments aggregating in excess of
$
250,000 is obtained against any Loan
Party or any Other Obligor which remains unstayed for more than
thirty (30) days or is enforced;
(e)
any default with
respect to any Indebtedness (other than the Obligations) with a
then-outstanding principal balance of $500,000 or more of any Loan
Party or any Other Obligor if such default shall consist of the
failure to pay such Indebtedness when due, whether by acceleration
or otherwise, or the effect of such default is to permit the
holder, with or without notice or lapse of time or both, to
accelerate the maturity of any such Indebtedness or to cause such
Indebtedness to become due prior to the stated maturity thereof
(without regard to the existence of any subordination or
intercreditor agreements);
(f)
the dissolution,
death, termination of existence, insolvency or business failure or
suspension or cessation of business as usual of any Loan Party or
any Other Obligor (or of any general partner of any Loan Party or
any Other Obligor if it is a partnership);
(g)
if any Loan
Party or any Other Obligor shall apply for or consent to the
appointment of a receiver, trustee, custodian or liquidator of it
or any of its properties, admit in writing its inability to pay its
debts as they mature, make a general assignment for the benefit of
creditors, be adjudicated a bankrupt or insolvent or be the subject
of an order for relief under the Bankruptcy Code or under any
bankruptcy or insolvency law of a foreign jurisdiction, or file a
voluntary petition in bankruptcy, or a petition or an answer
seeking reorganization or an arrangement with creditors or to take
advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or statute, or
an answer admitting the material allegations of a petition filed
against it in any proceeding under any such law, or take or permit
to be taken any action in furtherance of or for the purpose of
effecting any of the foregoing;
(h)
the
commencement of an involuntary case or other proceeding against any
Loan Party or any Other Obligor seeking liquidation, reorganization
or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar applicable law or seeking
the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its
property and the same is not dismissed within sixty (60) days, or
if an order for relief is entered against any Loan Party or any
Other Obligor under any bankruptcy
insolvency or other similar
applicable law as now or hereafter in effect;
(i)
the actual or
attempted revocation or termination of, or limitation or denial of
liability under, any guaranty of any of the Obligations, or any
security document securing any of the Obligations, by any Loan
Party or Other Obligor;
(j)
if, without the
prior consent of Lender, any Loan Party or Other Obligor makes any
payment on account of any Indebtedness or obligation which has been
contractually subordinated to the Obligations other than payments
which are not prohibited by the applicable subordination provisions
pertaining thereto, or if any Person who has subordinated such
Indebtedness or obligations attempts to limit or terminate any
applicable subordination provisions pertaining
thereto;
(k)
if there is any
actual indictment or conviction of Borrower, any Guarantor or any
of their respective Senior Officers under any criminal statute in
each case related to a felony committed in the direct conduct of
Borrower’s, or such Guarantor’s business, as
applicable;
(l)
if (i) any person
or group of persons (within the meaning of Section 13(d) or 14(a)
of the Exchange Act) shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the SEC under the
Exchange Act) of 25% or more of the voting Equity Interests of New
Age Beverages Corporation; (ii) during any period of 12 consecutive
months, a majority of the members of the board of directors of New
Age Beverages Corporation cease to be composed of individuals (1)
who were members of that board or equivalent governing body on the
first day of such period, (2) whose election or nomination to that
board was approved by individuals referred to in clause (1) above
constituting at the time of such election or nomination at least a
majority of that board, or (3 whose election or nomination to that
board was approved by individuals referred to in clauses (1) and
(2) above constituting at the time of such election or nomination
at least a majority of that board, or (iii) New Age Beverages
Corporation shall cease to directly own and control 100% of each
class of the outstanding equity interests of each Loan
Party;
(m)
if (i) Brent David
Willis ceases to be employed as, and actively perform the duties
of, the chief executive officer of each Loan Party, or (ii) Charles
Ence ceases to be employed as, and actively perform the duties of,
the chief financial officer/controller of each Loan Party, in each
case unless a successor is appointed within sixty (60) days after
the termination of such individual’s employment, and such
successor is reasonably satisfactory to Lender;
(n)
if any Lien
purported to be created by any Loan Document shall cease to be a
valid perfected first priority Lien (subject only to any priority
accorded by law to Permitted Liens) on any material portion of the
Collateral, or any Loan Party or any Other Obligor shall assert in
writing that any Lien purported to be created by any Loan Document
is not a valid perfected first priority lien (subject only to any
priority accorded by law to Permitted Liens) on the assets or
properties purported to be covered thereby;
(o)
if any of the Loan
Documents shall cease to be in full force and effect (other than as
a result of the discharge thereof in accordance with the terms
thereof or by written agreement of all parties
thereto);
(p)
if Lender
determines in good faith that the Collateral is insufficient to
fully secure the Obligations or that the prospect of payment of
performance of the Obligations is impaired;
(q)
if the outstanding
balance of all Revolving Loans and the Letter of Credit Balance
exceeds, at any time, the lesser of (x) the Maximum Revolving
Facility Amount and (y) the Borrowing Base, or any of the
Loan Limits for Revolving Loans are, at any time, exceeded;
or
(r)
An ERISA
Event occurs with respect to a Pension Plan or Multiemployer Plan
which has resulted or could reasonably be expected to result in
liability of any Loan Party or any ERISA Affiliate under Title IV
of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an
aggregate amount in excess of $50,000, the existence of any Lien
under Section 430(k) or Section 6321 of the Code or Section 303(k)
or Section 4068 of ERISA on any assets of a Loan Party or any ERISA
Affiliate, or a Loan Party or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of $50,000; or
(s)
If (i) any Loan
Party is enjoined, restrained or in any way prevented by any
Governmental Authority from conducting any material part of its
business, (ii) any Loan Party suffers the loss, revocation or
termination of any material license, permit, lease or agreement
necessary to its business, or (iii) there is a cessation of any
material part of any Loan Party’s business for a material
period of time.
7.2
Remedies with Respect to Lending
Commitments/Acceleration/Etc.
Upon the occurrence and during
the continuance of an Event of Default Lender may, in
Lender’s sole discretion terminate all or any portion
of its commitment to lend to or extend credit to Borrower under
this Agreement and/or any other Loan Document, without prior notice
to any Loan Party, and/or demand payment in full of all or
any portion of the Obligations (whether or not payable on demand
prior to such Event of Default), together the Early
Payment/Termination Premium in the amount specified in Schedule C,
and demand that the Letters of Credit be cash collateralized in the
manner described in Section 1.7(c) and/or take any and all
other and further actions and avail itself of any and all rights
and remedies available to Lender under this Agreement, any other
Loan Document, under law and/or in equity. Notwithstanding the
foregoing sentence, upon the occurrence of any Event of Default
described in Section 7.1(g) or Section 7.1(h), without
notice, demand or other action by Lender all of the Obligations
(including without limitation the Early Payment/Termination Premium
in the amount specified in Schedule C) shall immediately become due
and payable whether or not payable on demand prior to such Event of
Default.
7.3
Remedies
with Respect to Collateral.
Without limiting any rights or
remedies Lender may have pursuant to this Agreement, the other Loan
Documents, under applicable law or otherwise, upon the occurrence
and during the continuance of an Event of Default:
(a)
Any and All Remedies.
Lender may take
any and all actions and avail itself of any and all rights and
remedies available to Lender under this Agreement, any other Loan
Document, under law or in equity, and the rights and remedies
herein and therein provided shall be cumulative and not exclusive
of any rights or remedies provided by applicable law or
otherwise.
(b)
Collections; Modifications of Terms.
Lender may but shall be under no obligation to notify all
appropriate parties that the Collateral, or any part thereof, has
been assigned to Lender; demand, sue for, collect and give
receipts for and take all necessary or desirable steps to collect
any Collateral or Proceeds in its or any Loan Party Obligor’s
name, and apply any such collections against the Obligations as
Lender may elect; take control of any Collateral and any cash
and non-cash Proceeds of any Collateral; enforce, compromise,
extend, renew settle or discharge any rights or benefits of each
Loan Party Obligor with respect to or in and to any Collateral, or
deal with the Collateral as Lender may deem advisable; and
make any compromises, exchanges, substitutions or surrenders
of Collateral Lender deems necessary or proper in its reasonable
discretion, including extending the time of payment, permitting
payment in installments, or otherwise modifying the terms or rights
relating to any of the Collateral, all of which may be effected
without notice to, consent of, or any other action of any Loan
Party and without otherwise discharging or affecting the
Obligations, the Collateral or the security interests granted to
Lender under this Agreement or any other Loan
Document.
(c)
Insurance.
Lender may file proofs of
loss and claim with respect to any of the Collateral with the
appropriate insurer, and may endorse in its own and each Loan Party
Obligor’s name any checks or drafts constituting Proceeds of
insurance. Any Proceeds of insurance received by Lender may be
applied by Lender against payment of all or any portion of the
Obligations as Lender may elect in its reasonable
discretion.
(d)
Possession and Assembly of Collateral.
Lender may take possession of the Collateral and/or without removal
render each Loan Party Obligor’s Equipment unusable. Upon
Lender’s request, each Loan Party Obligor shall assemble the
Collateral and make it available to Lender at a place or places to
be designated by Lender.
(e)
Set-off.
Lender may and without any
notice to, consent of or any other action by any Loan Party (such
notice, consent or other action being expressly waived), set-off or
apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by or for the
account of Lender or any Affiliate of Lender, and/or any
Indebtedness at any time owing by Lender or any Affiliate of Lender
or any Participant in the Loans to or for the credit or the account
of any Loan Party Obligor, to the repayment of the Obligations
irrespective of whether any demand for payment of the Obligations
has been made.
(f)
Disposition of Collateral
.
(i)
Sale, Lease, etc. of Collateral.
Lender
may, without demand, advertising or notice, all of which each Loan
Party Obligor hereby waives (except as the same may be required by
the UCC or other applicable law and is not waivable under the UCC
or such other applicable law), at any time or times in one or more
public or private sales or other dispositions, for cash, on credit
or otherwise, at such prices and upon such terms as determined by
Lender (
provided
such price
and terms are commercially reasonable within the meaning of the UCC
to the extent such sale or other disposition is subject to the UCC
requirements that such sale or other disposition must be
commercially reasonable) sell, lease, license or otherwise
dispose of any and all Collateral, and/or deliver and grant
options to a third party to purchase, lease, license or otherwise
dispose of any and all Collateral. Lender may sell, lease, license
or otherwise dispose of any Collateral in its then-present
condition or following any preparation or processing deemed
necessary by Lender in its reasonable discretion. Lender may be the
purchaser at any such public or private sale or other disposition
of Collateral, and in such case Lender may make payment of all or
any portion of the purchase price therefor by the application of
all or any portion of the Obligations due to Lender to the purchase
price payable in connection with such sale or disposition. Lender
may, if it deems it reasonable, postpone or adjourn any sale or
other disposition of any Collateral from time to time by an
announcement at the time and place of the sale or disposition to be
so postponed or adjourned without being required to give a new
notice of sale or disposition;
provided
, however, that Lender shall
provide the applicable Loan Party Obligor with written notice of
the time and place of such postponed or adjourned sale or
disposition. Each Loan Party Obligor hereby acknowledges and agrees
that Lender’s compliance with any requirements of applicable
law in connection with a sale, lease, license or other disposition
of Collateral will not be considered to adversely affect the
commercial reasonableness of any sale, lease, license or other
disposition of such Collateral.
(ii)
Deficiency.
Each Loan Party Obligor shall remain liable for all amounts of the
Obligations remaining unpaid as a result of any deficiency of the
Proceeds of the sale, lease, license or other disposition of
Collateral after such Proceeds are applied to the Obligations as
provided in this Agreement.
(iii)
Warranties;
Sales on Credit.
Lender may sell, lease, license or
otherwise dispose of the Collateral without giving any warranties
and may specifically disclaim any and all warranties, including but
not limited to warranties of title, possession, merchantability and
fitness. Each Loan Party Obligor hereby acknowledges and agrees
that Lender’s disclaimer of any and all warranties in
connection with a sale, lease, license or other disposition of
Collateral will not be considered to adversely affect the
commercial reasonableness of any such disposition of the
Collateral. If Lender sells, leases, licenses or otherwise disposes
of any of the Collateral on credit, Borrower will be credited only
with payments actually made in cash by the recipient of such
Collateral and received by Lender and applied to the Obligations.
If any Person fails to pay for Collateral acquired pursuant to this
Section 7.3(f) on credit, Lender may re-offer the Collateral for
sale, lease, license or other disposition.
(g)
Investment Property; Voting and Other Rights;
Irrevocable Proxy
.
(i)
All rights of each
Loan Party Obligor to exercise any of the voting and other
consensual rights which it would otherwise be entitled to exercise
in accordance with the terms hereof with respect to any Investment
Property, and to receive any dividends, payments, and other
distributions which it would otherwise be authorized to receive and
retain in accordance with the terms hereof with respect to any
Investment Property, shall immediately, at the election of Lender
(without requiring any notice) cease, and all such rights shall
thereupon become vested solely in Lender, and Lender (personally or
through an agent) shall thereupon be solely authorized and
empowered, without notice, to transfer and register in its
name, or in the name of its nominee, the whole or any part of the
Investment Property, it being acknowledged by each Loan Party
Obligor that any such transfer and registration may be effected by
Lender through its irrevocable appointment as attorney-in-fact
pursuant to Section 7.3(g)(ii) and Section 4.4 of this Agreement,
exchange certificates and/or instruments representing or evidencing
Investment Property for certificates and/or instruments of smaller
or larger denominations, exercise the voting and all other
rights as a holder with respect to all or any portion of the
Investment Property (including, without limitation, all economic
rights, all control rights, authority and powers, and all status
rights of each Loan Party Obligor as a member or as a shareholder
(as applicable) of the Issuer), collect and receive all
dividends and other payments and distributions made thereon,
notify the parties obligated on any Investment Property to
make payment to Lender of any amounts due or to become due
thereunder, endorse instruments in the name of each Loan
Party Obligor to allow collection of any Investment Property,
enforce collection of any of the Investment Property by suit
or otherwise, and surrender, release, or exchange all or any part
thereof, or compromise or renew for any period (whether or not
longer than the original period) any liabilities of any nature of
any Person with respect thereto, consummate any sales of
Investment Property or exercise any other rights as set forth in
Section 7.3(f) hereof, otherwise act with respect to the
Investment Property as though Lender was the outright owner
thereof, and exercise any other rights or remedies Lender may
have under the UCC, other applicable law, or
otherwise.
(ii)
EACH LOAN PARTY OBLIGOR HEREBY
IRREVOCABLY CONSTITUTES AND APPOINTS LENDER AS ITS PROXY AND
ATTORNEY-IN-FACT FOR SUCH LOAN PARTY OBLIGOR WITH RESPECT TO ALL OF
EACH SUCH LOAN PARTY OBLIGOR’S INVESTMENT PROPERTY WITH THE
RIGHT, DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, WITHOUT
NOTICE, TO TAKE ANY OF THE FOLLOWING ACTIONS: TRANSFER AND
REGISTER IN LENDER’S NAME, OR IN THE NAME OF ITS NOMINEE, THE
WHOLE OR ANY PART OF THE INVESTMENT PROPERTY, VOTE THE
PLEDGED EQUITY, WITH FULL POWER OF SUBSTITUTION TO DO SO,
RECEIVE AND COLLECT ANY DIVIDEND OR ANY OTHER PAYMENT OR
DISTRIBUTION IN RESPECT OF, OR IN EXCHANGE FOR, THE INVESTMENT
PROPERTY OR ANY PORTION THEREOF, TO GIVE FULL DISCHARGE FOR THE
SAME AND TO INDORSE ANY INSTRUMENT MADE PAYABLE TO ANY LOAN PARTY
OBLIGOR FOR THE SAME, EXERCISE ALL OTHER RIGHTS, POWERS,
PRIVILEGES, AND REMEDIES (INCLUDING ALL ECONOMIC RIGHTS, ALL
CONTROL RIGHTS, AUTHORITY AND POWERS, AND ALL STATUS RIGHTS OF EACH
LOAN PARTY OBLIGOR AS A MEMBER OR AS A SHAREHOLDER (AS APPLICABLE)
OF THE ISSUER) TO WHICH A HOLDER OF THE PLEDGED COLLATERAL WOULD BE
ENTITLED (INCLUDING, WITH RESPECT TO THE PLEDGED EQUITY, GIVING OR
WITHHOLDING WRITTEN CONSENTS OF MEMBERS OR SHAREHOLDERS, CALLING
SPECIAL MEETINGS OF MEMBERS OR SHAREHOLDERS, AND VOTING AT SUCH
MEETINGS), AND (E) TAKE ANY ACTION AND TO EXECUTE ANY
INSTRUMENT WHICH LENDER MAY DEEM NECESSARY OR ADVISABLE TO
ACCOMPLISH THE PURPOSES OF THIS AGREEMENT. THE APPOINTMENT OF
LENDER AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST
AND SHALL BE VALID AND IRREVOCABLE UNTIL (X) ALL OF THE
OBLIGATIONS HAVE BEEN INDEFEASIBLY PAID IN FULL IN CASH IN
ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, (Y) LENDER HAS NO FURTHER OBLIGATIONS UNDER THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND (Z) THE COMMITMENTS UNDER
THIS AGREEMENT HAVE EXPIRED OR HAVE BEEN TERMINATED (IT BEING
UNDERSTOOD AND AGREED THAT SUCH OBLIGATIONS WILL BE AUTOMATICALLY
REINSTATED IF AT ANY TIME PAYMENT, IN WHOLE OR IN PART, OF ANY OF
THE OBLIGATIONS IS RESCINDED OR MUST OTHERWISE BE RESTORED OR
RETURNED BY LENDER FOR ANY REASON WHATSOEVER, INCLUDING, WITHOUT
LIMITATION, AS A PREFERENCE, FRAUDULENT CONVEYANCE, OR OTHERWISE
UNDER ANY BANKRUPTCY, INSOLVENCY, OR SIMILAR LAW, ALL AS THOUGH
SUCH PAYMENT HAD NOT BEEN MADE; IT BEING FURTHER UNDERSTOOD THAT IN
THE EVENT PAYMENT OF ALL OR ANY PART OF THE OBLIGATIONS IS
RESCINDED OR MUST BE RESTORED OR RETURNED, ALL REASONABLE
OUT-OF-POCKET COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
ALL REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS) INCURRED BY
LENDER IN DEFENDING AND ENFORCING SUCH REINSTATEMENT SHALL HEREBY
BE DEEMED TO BE INCLUDED AS A PART OF THE OBLIGATIONS). SUCH
APPOINTMENT OF LENDER AS PROXY AND AS ATTORNEY-IN-FACT SHALL BE
VALID AND IRREVOCABLE AS PROVIDED HEREIN NOTWITHSTANDING ANY
LIMITATIONS TO THE CONTRARY SET FORTH IN ANY ORGANIC DOCUMENTS OF
ANY LOAN PARTY OBLIGOR, ANY ISSUER, OR OTHERWISE.
(iii)
In order to further effect the
foregoing transfer of rights in favor of Lender, during the
continuance of an Event of Default, each Loan Party Obligor hereby
authorizes and instructs each Issuer of Investment Property pledged
by such Loan Party Obligor to comply with any instruction received
by such Issuer from Lender without any other or further instruction
from such Loan Party Obligor, and each Loan Party Obligor
acknowledges and agrees that each Issuer shall be fully protected
in so complying, and to pay any dividends, distributions, or other
payments with respect to any of the Investment Property directly to
Lender.
(iv)
Upon
exercise of the proxy set forth herein, all prior proxies given by
any Loan Party Obligor with respect to any of the Pledged Equity or
other Investment Property, as applicable (other than to Lender),
are hereby revoked, and no subsequent proxies (other than to
Lender) will be given with respect to any of the Pledged Equity or
any of the other Investment Property, as applicable, unless Lender
otherwise subsequently agrees in writing. Lender, as proxy, will be
empowered and may exercise the irrevocable proxy to vote the
Pledged Equity and/or the other Investment Property at any and all
times during the existence of an Event of Default, including,
without limitation, at any meeting of shareholders or members, as
the case may be, however called, and at any adjournment thereof, or
in any action by written consent, and may waive any notice
otherwise required in connection therewith. To the fullest extent
permitted by applicable law, Lender shall have no agency,
fiduciary, or other implied duties to any Loan Party Obligor, any
Issuer, any Loan Party, or any other Person when acting in its
capacity as such proxy or attorney-in-fact. Each Loan Party Obligor
hereby waives and releases any claims that it may otherwise have
against Lender with respect to any breach, or alleged breach, of
any such agency, fiduciary, or other duty.
(v)
Any transfer to
Lender or its nominee, or registration in the name of Lender or its
nominee, of the whole or any part of the Investment Property shall
be made solely for purposes of effectuating voting or other
consensual rights with respect to the Investment Property in
accordance with the terms of this Agreement and is not intended to
effectuate any transfer of ownership of any of the Investment
Property. Notwithstanding the delivery by Lender of any instruction
to any Issuer or any exercise by Lender of an irrevocable proxy or
otherwise, Lender shall not be deemed the owner of, or assume any
obligations or any liabilities whatsoever of the owner or holder
of, any Investment Property unless and until Lender expressly
accepts such obligations in a duly authorized and executed writing
and agrees in writing to become bound by the applicable Organic
Documents or otherwise becomes the owner thereof under applicable
law (including through a sale as described in Section 7.3(f)
hereof). The execution and delivery of this Agreement shall not
subject Lender to, or transfer or pass to Lender, or in any way
affect or modify, the liability of any Loan Party Obligor under the
Organic Documents of any Issuer or any related agreements,
documents, or instruments or otherwise. In no event shall the
execution and delivery of this Agreement by Lender, or the exercise
by Lender of any rights hereunder or assigned hereby, constitute an
assumption of any liability or obligation whatsoever of any Loan
Party Obligor to, under, or in connection with any of the Organic
Documents of any Issuer or any related agreements, documents, or
instruments or otherwise.
(h)
Election of Remedies.
Lender shall have
the right in Lender’s sole discretion to determine which
rights, security, Liens and/or remedies Lender may at any time
pursue, foreclose upon, relinquish, subordinate, modify or take any
other action with respect to, without in any way impairing,
modifying or affecting any of Lender’s other rights,
security, Liens or remedies with respect to such Property, or any
of Lender’s rights or remedies under this Agreement or any
other Loan Document.
(i)
Lender’s Obligations.
Each Loan
Party Obligor agrees that Lender shall not have any obligation to
preserve rights to any Collateral against prior parties or to
marshal any Collateral of any kind for the benefit of any other
creditor of any Loan Party Obligor or any other Person. Lender
shall not be responsible to any Loan Party Obligor or any other
Person for loss or damage resulting from Lender’s failure to
enforce its Liens or collect any Collateral or Proceeds or any
monies due or to become due under the Obligations or any other
liability or obligation of any Loan Party Obligor to
Lender.
(j)
Waiver of Rights by Loan Party Obligors.
Except as otherwise expressly provided for in this Agreement or by
non-waivable applicable law, each Loan Party waives:
presentment, demand and protest and notice of presentment,
dishonor, notice of intent to accelerate, notice of acceleration,
protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper
and guaranties at any time held by Lender on which any Loan Party
Obligor may in any way be liable, and hereby ratifies and confirms
whatever Lender may do in this regard, all rights to notice
and a hearing prior to Lender’s taking possession or control
of, or to Lender’s replevy, attachment or levy upon, the
Collateral or any bond or security which might be required by any
court prior to allowing Lender to exercise any of its remedies and
the benefit of all valuation, appraisal, marshalling and
exemption laws.
8.1
Guaranty.
Each Loan Party Obligor hereby agrees that it is jointly and
severally liable for, and absolutely and unconditionally guarantees
to Lender, the prompt payment when due, whether at stated maturity,
upon acceleration or otherwise, and at all times thereafter, all of
the Obligations and all costs and expenses, including all court
costs and reasonable attorneys’ and paralegals’ fees
(including allocated costs of in-house counsel and paralegals) and
expenses paid or incurred by Lender in endeavoring to collect all
or any part of the Obligations from, or in prosecuting any action
against, Borrower, any Loan Party Obligor or any Other Obligor of
all or any part of the Obligations (and such costs and expenses
paid or incurred shall be deemed to be included in the
Obligations). Each Loan Party Obligor further agrees that the
Obligations may be extended or renewed in whole or in part without
notice to or further assent from it, and that it remains bound upon
its guarantee notwithstanding any such extension or renewal. All
terms of this Loan Guaranty apply to and may be enforced by or on
behalf of any branch or Affiliate of Lender that extended any
portion of the Obligations.
8.2
Guaranty
of Payment.
This Loan Guaranty is a guaranty of payment and
not of collection. Each Loan Party Obligor waives any right to
require Lender to sue or otherwise take action against Borrower,
any other Loan Party Obligor, any Other Obligor, or any other
Person obligated for all or any part of the Obligations, or
otherwise to enforce its payment against any Collateral securing
all or any part of the Obligations.
8.3
No
Discharge or Diminishment of Loan Guaranty.
(a)
Except as otherwise
expressly provided for herein, the obligations of each Loan Party
Obligor hereunder are unconditional and absolute and not subject to
any reduction, limitation, impairment or termination for any reason
(other than the indefeasible payment in full in cash of all of the
Obligations), including: any claim of waiver, release, extension,
renewal, settlement, surrender, alteration, or compromise of any of
the Obligations, by operation of law or otherwise; any change in
the corporate existence, structure or ownership of Borrower or any
Obligor; any insolvency, bankruptcy, reorganization or other
similar proceeding affecting Borrower or any Obligor, or their
assets or any resulting release or discharge of any obligation of
Borrower or any Obligor; or the existence of any claim, setoff or
other rights which any Loan Party Obligor may have at any time
against Borrower, any Obligor, Lender, or any other Person, whether
in connection herewith or in any unrelated
transactions.
(b)
The obligations of
each Loan Party Obligor hereunder are not subject to any defense or
setoff, counterclaim, recoupment, or termination whatsoever by
reason of the invalidity, illegality, or unenforceability of any of
the Obligations or otherwise, or any provision of applicable law or
regulation purporting to prohibit payment by Borrower or any
Obligor, of the Obligations or any part thereof.
(c)
Further, the
obligations of any Loan Party Obligor hereunder are not discharged
or impaired or otherwise affected by: the failure of Lender to
assert any claim or demand or to enforce any remedy with respect to
all or any part of the Obligations; any waiver or modification of
or supplement to any provision of any agreement relating to the
Obligations; any release, non-perfection, or invalidity of any
indirect or direct security for all or any part of the Obligations
or all or any part of any obligations of any Obligor; any action or
failure to act by Lender with respect to any Collateral; or any
default, failure or delay, willful or otherwise, in the payment or
performance of any of the Obligations, or any other circumstance,
act, omission or delay that might in any manner or to any extent
vary the risk of such Loan Party Obligor or that would otherwise
operate as a discharge of any Loan Party Obligor as a matter of law
or equity (other than the indefeasible payment in full in cash of
all of the Obligations).
8.4
Defenses
Waived.
To the fullest extent permitted by applicable law,
each Loan Party Obligor hereby waives any defense based on or
arising out of any defense of any Loan Party Obligor or the
unenforceability of all or any part of the Obligations from any
cause, or the cessation from any cause of the liability of any Loan
Party Obligor, other than the indefeasible payment in full in cash
of all of the Obligations. Without limiting the generality of the
foregoing, each Loan Party Obligor irrevocably waives acceptance
hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person
against Borrower, any Obligor, or any other Person. Each Loan Party
Obligor confirms that it is not a surety under any state law and
shall not raise any such law as a defense to its obligations
hereunder. Lender may, at its election, foreclose on any Collateral
held by it by one or more judicial or nonjudicial sales, accept an
assignment of any such Collateral in lieu of foreclosure or
otherwise act or fail to act with respect to any Collateral,
compromise or adjust any part of the Obligations, make any other
accommodation with Borrower or any Obligor or exercise any other
right or remedy available to it against Borrower or any Obligor,
without affecting or impairing in any way the liability of any Loan
Party Obligor under this Loan Guaranty except to the extent the
Obligations have been fully and indefeasibly paid in cash. To the
fullest extent permitted by applicable law, each Loan Party Obligor
waives any defense arising out of any such election even though
that election may operate, pursuant to applicable law, to impair or
extinguish any right of reimbursement or subrogation or other right
or remedy of any Loan Party Obligor against Borrower or any Obligor
or any security.
8.5
Rights
of Subrogation.
No Loan Party Obligor will assert any right,
claim or cause of action, including, without limitation, a claim of
subrogation, contribution or indemnification that it has against
Borrower or any Obligor, or any Collateral, until the Termination
Date.
8.6
Reinstatement; Stay of Acceleration.
If
at any time any payment of any portion of the Obligations is
rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, or reorganization of Borrower or any other
Person, or otherwise, each Loan Party Obligor’s obligations
under this Loan Guaranty with respect to that payment shall be
reinstated at such time as though the payment had not been made and
whether or not Lender is in possession of this Loan Guaranty. If
acceleration of the time for payment of any of the Obligations is
stayed upon the insolvency, bankruptcy or reorganization of
Borrower, all such amounts otherwise subject to acceleration under
the terms of any agreement relating to the Obligations shall
nonetheless be payable by the Loan Party Obligors forthwith on
demand by Lender. This Section 8.6 shall remain operative even
after the Termination Date and shall survive the payment in full of
all of the Obligations.
8.7
Information.
Each Loan Party Obligor assumes all responsibility for being and
keeping itself informed of Borrower’s financial condition and
assets, and of all other circumstances bearing upon the risk of
nonpayment of the Obligations and the nature, scope and extent of
the risks that each Loan Party Obligor assumes and incurs under
this Loan Guaranty, and agrees that Lender shall not have any duty
to advise any Loan Party Obligor of information known to it
regarding those circumstances or risks.
8.8
Termination.
To the maximum extent permitted by law, each Loan Party Obligor
hereby waives any right to revoke this Loan Guaranty as to future
Obligations. If such a revocation is effective
notwithstanding the foregoing waiver, each Loan Party Obligor
acknowledges and agrees that no such revocation shall be
effective until written notice thereof has been received by Lender,
no such revocation shall apply to any Obligations in
existence on the date of receipt by Lender of such written notice
(including any subsequent continuation, extension, or renewal
thereof, or change in the interest rate, payment terms, or other
terms and conditions thereof), no such revocation shall apply
to any Obligations made or created after such date to the extent
made or created pursuant to a legally binding commitment of Lender,
no payment by Borrower, any other Loan Party Obligor, or from
any other source, prior to the date of Lender’s receipt of
written notice of such revocation shall reduce the maximum
obligation of any Loan Party Obligor hereunder, and any
payment, by Borrower or from any source other than a Loan Party
Obligor which has made such a revocation, made subsequent to the
date of such revocation, shall first be applied to that portion of
the Obligations as to which the revocation is effective and which
are not, therefore, guarantied hereunder, and to the extent so
applied shall not reduce the maximum obligation of any Loan Party
Obligor hereunder.
8.9
Maximum Liability.
The provisions of
this Loan Guaranty are severable, and in any action or proceeding
involving any federal or state corporate law or other law governing
business entities, or any state, federal or foreign bankruptcy,
insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Loan Party Obligor
under this Loan Guaranty would otherwise be held or determined to
be avoidable, invalid or unenforceable on account of the amount of
such Loan Party Obligor’s liability under this Loan Guaranty,
then, notwithstanding any other provision of this Loan Guaranty to
the contrary, the amount of such liability shall, without any
further action by the Loan Party Obligors or Lender, be
automatically limited and reduced to the highest amount that is
valid and enforceable as determined in such action or proceeding
(such highest amount determined hereunder being the relevant Loan
Party Obligor’s “
Maximum
Liability
”). This Section with respect to the Maximum
Liability of each Loan Party Obligor is intended solely to preserve
the rights of Lender to the maximum extent not subject to avoidance
under applicable law, and no Loan Party Obligor nor any other
Person shall have any right or claim under this Section with
respect to such Maximum Liability, except to the extent necessary
so that the obligations of any Loan Party Obligor hereunder shall
not be rendered voidable under applicable law. Each Loan Party
Obligor agrees that the Obligations may at any time and from time
to time exceed the Maximum Liability of each Loan Party Obligor
without impairing this Loan Guaranty or affecting the rights and
remedies of Lender hereunder,
provided
that,
nothing in this sentence shall be construed to increase any Loan
Party Obligor’s obligations hereunder beyond its Maximum
Liability.
8.10
Contribution.
In the event any Loan
Party Obligor shall make any payment or payments under this Loan
Guaranty or shall suffer any loss as a result of any realization
upon any collateral granted by it to secure its obligations under
this Loan Guaranty (such Loan Party Obligor a “
Paying
Guarantor
”), each other Loan Party Obligor (each a
“
Non-Paying
Guarantor
”) shall contribute to such Paying Guarantor
an amount equal to such Non-Paying Guarantor’s
“Applicable Percentage” of such payment or payments
made, or losses suffered, by such Paying Guarantor. For purposes of
this Section 8.10, each Non-Paying Guarantor’s
“Applicable Percentage” with respect to any such
payment or loss by a Paying Guarantor shall be determined as of the
date on which such payment or loss was made by reference to the
ratio of such Non-Paying Guarantor’s Maximum Liability as of
such date (without giving effect to any right to receive, or
obligation to make, any contribution hereunder) or, if such
Non-Paying Guarantor’s Maximum Liability has not been
determined, the aggregate amount of all monies received by such
Non-Paying Guarantor from Borrower after the date hereof (whether
by loan, capital infusion or by other means) to the aggregate
Maximum Liability of all Loan Party Obligors hereunder (including
such Paying Guarantor) as of such date (without giving effect to
any right to receive, or obligation to make, any contribution
hereunder), or to the extent that a Maximum Liability has not been
determined for any Loan Party Obligor, the aggregate amount of all
monies received by such Loan Party Obligors from Borrower after the
date hereof (whether by loan, capital infusion or by other means).
Nothing in this provision shall affect any Loan Party
Obligor’s several liability for the entire amount of the
Obligations (up to such Loan Party Obligor’s Maximum
Liability). Each of the Loan Party Obligors covenants and agrees
that its right to receive any contribution under this Loan Guaranty
from a Non-Paying Guarantor shall be subordinate and junior in
right of payment to the payment in full in cash of all of the
Obligations. This provision is for the benefit of Lender and the
Loan Party Obligors and may be enforced by any one, or more, or all
of them in accordance with the terms hereof.
8.11
Liability
Cumulative.
The liability of each Loan Party Obligor under
this Section 8 is in addition to and shall be cumulative with
all liabilities of each Loan Party Obligor to Lender under this
Agreement and the other Loan Documents to which such Loan Party
Obligor is a party or in respect of any obligations or liabilities
of the other Loan Parties, without any limitation as to amount,
unless the instrument or agreement evidencing or creating such
other liability specifically provides to the contrary.
9.
PAYMENTS FREE OF TAXES; OBLIGATION
TO WITHHOLD; PAYMENTS ON ACCOUNT OF TAXES.
(a)
Any and all
payments by or on account of any obligation of the Loan Party
Obligors hereunder or under any other Loan Document shall to the
extent permitted by applicable laws be made free and clear of and
without reduction or withholding for any Taxes. If, however,
applicable laws require the Loan Party Obligors to withhold or
deduct any Tax, such Tax shall be withheld or deducted in
accordance with such laws as the case may be, upon the basis of the
information and documentation to be delivered pursuant to
subsection (e) below.
(b)
If any Loan Party
Obligor shall be required by applicable law to withhold or deduct
any Taxes from any payment, then such Loan Party Obligor shall
withhold or make such deductions as are required based upon the
information and documentation it has received pursuant to
subsection (e) below, such Loan Party Obligor shall timely pay the
full amount withheld or deducted to the relevant Governmental
Authority in accordance with the applicable law, and to the extent
that the withholding or deduction is made on account of Indemnified
Taxes, the sum payable by the Loan Party Obligors shall be
increased as necessary so that after any required withholding or
the making of all required deductions (including deductions
applicable to additional sums payable under this Section) the
Recipient receives an amount equal to the sum it would have
received had no such withholding or deduction been made. Upon
request by Lender or other Recipient, Borrower shall deliver to
Lender or such other Recipient, as the case may be, the original or
a certified copy of a receipt issued by such Governmental Authority
evidencing such payment of Indemnified Taxes, a copy of any return
required by applicable law to report such payment or other evidence
of such payment reasonably satisfactory to Lender or such other
Recipient, as the case may be.
(c)
Without limiting
the provisions of subsections (a) and (b) above, the Loan Party
Obligors shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable
law.
(d)
Without
limiting the provisions of subsections (a) through (c) above, each
Loan Party Obligor shall, and does hereby, on a joint and several
basis indemnify Lender and each other Recipient (and their
respective directors, officers, employees, affiliates and agents)
and shall make payment in respect thereof within ten (10) days
after demand therefor, for the full amount of any Indemnified Taxes
and Other Taxes (including Indemnified Taxes and Other Taxes
imposed or asserted on or attributable to amounts payable under
this Section) paid or incurred by Lender or any other Recipient on
account of, or in connection with any Loan Document or a breach by
a Loan Party Obligor thereof, and any penalties, interest and
related expenses and losses arising therefrom or with respect
thereto (including the fees, charges and disbursements of any
counsel or other tax advisor for Lender or any other Recipient (or
their respective directors, officers, employees, affiliates, and
agents)), whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of any such
payment or liability delivered to Borrower shall be conclusive
absent manifest error. Notwithstanding any provision in this
Agreement to the contrary, this Section 9 shall remain operative
even after the Termination Date and shall survive the payment in
full of all of the Loans.
(e)
Lender shall
deliver to Borrower and each Participant shall deliver to the
applicable Lender granting the participation, at the time or times
prescribed by applicable laws, such properly completed and executed
documentation prescribed by applicable laws or by the taxing
authorities of any jurisdiction and such other reasonably requested
information as will permit Borrower or Lender granting a
participation, as the case may be, to determine whether or not
payments made hereunder or under any other Loan Document are
subject to Taxes, if applicable, the required rate of withholding
or deduction, and such Lender’s or Participant’s
entitlement to any available exemption from, or reduction of,
applicable Taxes in respect of all payments to be made to such
Recipient by the Loan Party Obligors pursuant to this Agreement or
otherwise to establish such Recipient’s status for
withholding tax purposes in the applicable jurisdiction;
provided
each Recipient shall only be required to deliver such documentation
as it may legally provide.
Without
limiting the generality of the foregoing, if a Borrower is resident
for tax purposes in the United States:
(i)
Lender (or
Participant) that is a “United States person” within
the meaning of Section 7701(a)(30) of the Code shall deliver
to Borrower (or Lender granting a participation as applicable) an
executed original of Internal Revenue Service Form W-9 or such
other documentation or information prescribed by applicable law or
reasonably requested by Borrower (or Lender granting a
participation) as will enable Borrower (or Lender granting a
participation) as the case may be, to determine whether or not such
Lender (or Participant) is subject to backup withholding or
information reporting requirements under the Code;
(ii)
Lender (or Participant) that is
not a “United States person” within the meaning of
Section 7701(a)(30) of the Code (a “
Non-U.S.
Recipient
”) shall deliver to Borrower (and Lender
granting a participation in case the Non-U.S. Recipient is a
Participant) and Lender on or prior to the date on which such
Non-U.S. Person becomes a party to this Agreement or a Participant
(and from time to time thereafter upon the reasonable request of
Borrower or Lender granting the participation but only if such
Non-U.S. Recipient is legally entitled to do so), whichever of the
following is applicable: (I) executed originals of Internal Revenue
Service Form W-8BEN claiming eligibility for benefits of an income
tax treaty to which the United States is a party; (II) executed
originals of Internal Revenue Service Form W-8ECI; (III) executed
originals of Internal Revenue Service Form W-8IMY and all required
supporting documentation; (IV) each Non-U.S. Recipient claiming the
benefits of the exemption for portfolio interest under section
881(c) of the Code, shall provide (x) a certificate to the effect
that such Non-U.S. Recipient is not a “bank” within the
meaning of section 881(c)(3)(A) of the Code, a “10 percent
shareholder” of Borrower within the meaning of section
881(c)(3)(B) of the Code, or a “controlled foreign
corporation” described in section 881(c)(3)(C) of the Code
and (y) executed originals of Internal Revenue Service Form W-8BEN;
and/or (V) executed originals of any other form prescribed by
applicable law (including FATCA) as a basis for claiming exemption
from or a reduction in United States Federal withholding tax
together with such supplementary documentation as may be prescribed
by applicable law to permit Borrower or any Lender granting a
participation, to determine the withholding or deduction required
to be made. Each Non-U.S. Recipient shall promptly notify Borrower
(or any Lender granting a participation if the Non-U.S. Recipient
is a Participant) of any change in circumstances which would modify
or render invalid any claimed exemption or reduction.
(a)
Notice by Approved Electronic
Communications
.
Lender
and each of its Affiliates is authorized to transmit, post or
otherwise make or communicate, in its sole discretion (but shall
not be required to do so), by Approved Electronic Communications in
connection with this Agreement or any other Loan Document and the
transactions contemplated therein. Lender is hereby authorized to
establish procedures to provide access to and to make available or
deliver, or to accept, notices, documents and similar items by
posting to Passport 6.0. Each of the Loan Parties and Lender hereby
acknowledges and agrees that the use of Passport 6.0 and other
Approved Electronic Communications is not necessarily secure and
that there are risks associated with such use, including risks of
interception, disclosure and abuse and each indicates it assumes
and accepts such risks by hereby authorizing Lender and each of its
Affiliates to transmit Approved Electronic Communications. Passport
6.0 and all Approved Electronic Communications shall be provided
“as is” and “as available”. None of Lender
or any of its Affiliates or related persons warrants the accuracy,
adequacy or completeness of Passport 6.0 or any other electronic
platform or electronic transmission and disclaims all liability for
errors or omissions therein. No warranty of any kind is made by
Lender or any of its Affiliates or related persons in connection
with Passport 6.0 or any other electronic platform or electronic
transmission, including any warranty of merchantability, fitness
for a particular purpose, non-infringement of third-party rights or
freedom from viruses or other code defects. Each of Borrower and
each other Loan Party executing this Agreement agrees that Lender
has no responsibility for maintaining or providing any equipment,
software, services or any testing required in connection with
Passport 6.0, any Approved Electronic Communication or otherwise
required for Passport 6.0 or any Approved Electronic
Communication.
Prior
to the Closing Date, Borrowing Agent shall deliver to Lender a
complete and executed Client User Form regarding Borrowing
Agent’s use of Passport 6.0 in the form of Exhibit C
annexed hereto.
No
Approved Electronic Communications shall be denied legal effect
merely because it is made electronically. Approved Electronic
Communications that are not readily capable of bearing either a
signature or a reproduction of a signature may be signed, and shall
be deemed signed, by attaching to, or logically associating with
such Approved Electronic Communication, an E-Signature, upon which
Lender and the Loan Parties may rely and assume the authenticity
thereof. Each Approved Electronic Communication containing a
signature, a reproduction of a signature or an E-Signature shall,
for all intents and purposes, have the same effect and weight as a
signed paper original. Each E-Signature shall be deemed sufficient
to satisfy any requirement for a “signature” and each
Approved Electronic Communication shall be deemed sufficient to
satisfy any requirement for a “writing”, in each case
including pursuant to this Agreement, any other Loan Document, the
Uniform Commercial Code, the Federal Uniform Electronic
Transactions Act, the Electronic Signatures in Global and National
Commerce Act and any substantive or procedural law governing such
subject matter. Each party or beneficiary hereto agrees not to
contest the validity or enforceability of an Approved Electronic
Communication or E-Signature under the provisions of any applicable
law requiring certain documents to be in writing or signed;
provided
, that
nothing herein shall limit such party’s or
beneficiary’s right to contest whether an Approved Electronic
Communication or E-Signature has been altered after
transmission.
(b)
All Other Notices
.
All
notices, requests, demands and other communications under or in
respect of this Agreement or any transactions hereunder, other than
those approved for or required to be delivered by Approved
Electronic Communications (including via Passport 6.0 or otherwise
pursuant to Section 10.1(a)), shall be in writing and shall be
personally delivered or mailed (by prepaid registered or certified
mail, return receipt requested), sent by prepaid recognized
overnight courier service, or by email to the applicable party at
its address or email address indicated below,
If to
Lender:
Siena
Lending Group LLC
9 W
Broad Street, 5th Floor
Stamford,
Connecticut 06902
Attention: Steve
Sanicola
Email:
ssanicola@sienalending.com
with a
copy to:
Blank
Rome LLP
The
Chrysler Building
405
Lexington Avenue
New
York, NY 10174
Attention: Lawrence
F. Flick II, Esq.
Email:
Flick@blankrome.com
If to
Borrower or any other Loan Party:
New Age
Beverages Corporation
1700 E
68
th
Ave.
Denver,
Colorado 80229
Attention: Mr.
Brent Willis
Email:
bwillis@newagebev.com
with a
copy to:
Sichenzia Ross
Ference Kesner LLP
1185
Avenue of the Americas, 37th Floor
New
York, NY 10036
Attention: Gregory
Sichenzia, Esq.
Email:
GSichenzia@srfkllp.com
or, as
to each party, at such other address as shall be designated by such
party in a written notice to the other party delivered as
aforesaid. All such notices, requests, demands and other
communications shall be deemed given when personally delivered,
three (3) Business Days after being deposited in the mails with
postage prepaid (by registered or certified mail, return receipt
requested), one (1) Business Day after being delivered to the
overnight courier service, if prepaid and sent overnight delivery,
addressed as aforesaid and with all charges prepaid or billed to
the account of the sender, or when sent by email transmission to an
email address designated by such addressee and the sender receives
a confirmation of transmission.
10.2
Severability.
If any provision of this Agreement or any other Loan Document is
held invalid or unenforceable, either in its entirety or by virtue
of its scope or application to given circumstances, such provision
shall thereupon be deemed modified only to the extent necessary to
render same valid, or not applicable to given circumstances, or
excised from this Agreement or such other Loan Document, as the
situation may require, and this Agreement and the other Loan
Documents shall be construed and enforced as if such provision had
been included herein as so modified in scope or application, or had
not been included herein or therein, as the case may
be.
10.3
Integration.
This Agreement and the other Loan Documents represent the final,
entire and complete agreement between each Loan Party party hereto
and thereto and Lender and supersede all prior and contemporaneous
negotiations, oral representations and agreements, all of which are
merged and integrated into this Agreement. THERE ARE NO ORAL
UNDERSTANDINGS, REPRESENTATIONS OR AGREEMENTS BETWEEN THE PARTIES
THAT ARE NOT SET FORTH IN THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS.
10.4
Waivers.
The failure of Lender at any time or times to require any Loan
Party to strictly comply with any of the provisions of this
Agreement or any other Loan Documents shall not waive or diminish
any right of Lender later to demand and receive strict compliance
therewith. Any waiver of any default shall not waive or affect any
other default, whether prior or subsequent, and whether or not
similar. None of the provisions of this Agreement or any other Loan
Document shall be deemed to have been waived by any act or
knowledge of Lender or its agents or employees, but only by a
specific written waiver signed by an authorized officer of Lender
and delivered to Borrower. Once an Event of Default shall have
occurred, it shall be deemed to continue to exist and not be cured
or waived unless specifically cured pursuant to the terms of this
Agreement or waived in writing by an authorized officer of Lender
and delivered to Borrower. Each Loan Party Obligor waives demand,
protest, notice of protest and notice of default or dishonor,
notice of payment and nonpayment, release, compromise, settlement,
extension or renewal of any commercial paper, Instrument, Account,
General Intangible, Document, Chattel Paper, Investment Property or
guaranty at any time held by Lender on which such Loan Party
Obligor is or may in any way be liable, and notice of any action
taken by Lender, unless expressly required by this Agreement, and
notice of acceptance hereof.
10.5
Amendment.
This Agreement may not be amended or modified except in a writing
executed by Borrower, the other Loan Party Obligors party hereto
(to the extent such amendment is directly adverse to such Loan
Party Obligor), and Lender.
10.6
Time
of Essence.
Time is of the essence in the performance by
each Loan Party Obligor of each and every obligation under this
Agreement and the other Loan Documents.
10.7
Expenses,
Fee and Costs Reimbursement.
Borrower hereby agrees to
promptly pay
all fees, costs and expenses of Lender
(including Lender’s underwriting fees) and
all out of
pocket fees, costs and expenses of legal counsel to, and
appraisers, accountants, consultants and other professionals and
advisors retained by or on behalf of, Lender, all of which shall be
reasonable, prior to the occurrence and continuance of an Event of
Default) in connection with: all loan proposals and commitments
pertaining to the transactions contemplated hereby (whether or not
such transactions are consummated), the examination, review, due
diligence investigation, documentation, negotiation, and closing of
the transactions contemplated by the Loan Documents (whether or not
such transactions are consummated), the creation, perfection and
maintenance of Liens pursuant to the Loan Documents, the
performance by Lender of its rights and remedies under the Loan
Documents, the administration of the Loans (including usual and
customary fees for wire transfers and other transfers or payments
received by Lender on account of any of the Obligations) and Loan
Documents, any amendments, modifications, consents and
waivers to and/or under any and all Loan Documents (whether or not
such amendments, modifications, consents or waivers are
consummated), any periodic public record searches conducted
by or at the request of Lender (including, title investigations and
public records searches), pending litigation and tax lien searches
and searches of applicable corporate, limited liability company,
partnership and related records concerning the continued existence,
organization and good standing of certain Persons),
protecting, storing, insuring, handling, maintaining,
auditing, examining, valuing or selling any Collateral, any
litigation, dispute, suit or proceeding relating to any Loan
Document, and any workout, collection, bankruptcy, insolvency
and other enforcement proceedings under any and all of the Loan
Documents (it being agreed that such costs and expenses may include
the costs and expenses of workout consultants, investment bankers,
financial consultants, appraisers, valuation firms and other
professionals and advisors retained by or on behalf of Lender), and
without limitation of the preceding clauses (i) and (ii), all out
of pocket costs and expenses of Lender in connection with
Lender’s reservation of funds in anticipation of the funding
of the initial Loans to be made hereunder. Any fees, costs and
expenses owing by Borrower or other Loan Party Obligor hereunder
shall be due and payable within three (3) days after written demand
therefor.
10.8
Benefit
of Agreement; Assignability; Servicer.
(a)
The provisions of
this Agreement shall be binding upon and inure to the benefit of
the respective successors, assigns, heirs, beneficiaries and
representatives of Borrower, each other Loan Party Obligor party
hereto and Lender;
provided
, that
neither Borrower nor any other Loan Party Obligor may assign or
transfer any of its rights under this Agreement without the prior
written consent of Lender, and any prohibited assignment shall be
void. No consent by Lender to any assignment shall release any Loan
Party Obligor from its liability for any of the Obligations. Lender
shall have the right to assign all or any of its rights and
obligations under the Loan Documents to one or more other Persons,
and each Loan Party Obligor agrees, to the extent applicable, to
execute any agreements, instruments and documents requested by
Lender in connection with any such assignments. Notwithstanding any
provision of this Agreement or any other Loan Document to the
contrary, Lender may at any time pledge or grant a security
interest in all or any portion of its rights under this Agreement
and the other Loan Documents to secure obligations of Lender,
including any pledge or grant to secure obligations to a Federal
Reserve Bank.
(b)
In the event of any
assignment by Lender of its rights and obligations under the Loan
Documents to an Affiliate of Lender (an “
Affiliate
Assignee
”) and at all times thereafter, Servicer shall
be deemed to act as servicer and agent for the applicable Affiliate
Assignee, and Servicer will retain the sole right to enforce this
Agreement and the other Loan Documents, to approve any amendment,
restatement, modification, supplement or waiver of any provision of
this Agreement or any other Loan Document, and to receive or
collect all payments with respect to the Obligations. By acceptance
of any such assignment, each Affiliate Assignee irrevocably
appoints Servicer as servicer and agent for the purposes of
servicing and managing the Loans, and authorizes Servicer to take
such actions and to exercise such powers on behalf of such
Affiliate Assignee as are reasonably necessary or advisable and
incidental thereto, including the sole and exclusive authority to:
(i) possess, keep and maintain books and records with respect to
the Loans, (ii) receive, process, account for, deliver or arrange
for the delivery of, all Collections in accordance with the terms
of this Agreement; (iii) monitor and pursue payment of all
Obligations; (iv) monitor, manage and perfect security interests in
all Collateral for the Obligations, including without limitation,
to make the determination of whether any Accounts and Inventory
constitute Eligible Accounts or Eligible Inventory, as applicable,
or whether to impose, modify or release any Reserve; (v) exercise
any rights or remedies with respect to the Obligations and the
Collateral available under law or in equity, including, without
limitation, any non-judicial and judicial enforcement, liquidation
and collection of the Obligations, and the engagement of attorneys
and other professionals for such purpose; and (vi) take all lawful
actions and procedures required to (A) cause Borrower to promptly
and diligently comply with Borrower’s obligations under the
Loan Documents; (B) maximize the value of the Collateral; and (C)
collect and enforce payment of all Obligations. Each Affiliate
Assignee agrees that any action taken by Servicer in accordance
with the terms of this Agreement or the other Loan Documents, and
the exercise by Servicer of its powers set forth herein or therein,
together with such other powers that are reasonably incidental
thereto, shall be authorized by and binding upon all of the
Affiliate Assignees. Servicer’s exercise of its discretion in
connection with the foregoing matters, if exercised in good faith,
shall exonerate Servicer from liability to any Affiliate Assignee
and other Person for any error in judgment. Servicer may perform
any and all of its duties and exercise its rights and powers by or
through any one or more agents appointed by Servicer. Servicer
shall not be liable to any Affiliate Assignee for any action taken
or omitted to be taken under the Loan Documents, except for losses
directly and solely caused by the Servicer’s gross negligence
or willful misconduct, as finally determined by a court of
competent jurisdiction, and Servicer does not assume any
responsibility for any failure or delay in performance or any
breach by any Loan Party or any other Person of any obligations
under the Loan Documents. In the event that a petition seeking
relief under Title 11 of the United States Code or any other
Federal, state or foreign bankruptcy, insolvency, liquidation or
similar law is filed by or against any Loan Party Obligor, or any
other Person obligated under any Loan Document, Servicer is
authorized, to the fullest extent permitted by applicable law, to
act on behalf of the Affiliate Assignees in connection with such
proceeding, including, without limitation, to file proofs of claim
on behalf of itself and the Affiliate Assignees in such proceeding
for the total amount of obligations owed by Loan Party Obligors, or
any of them, or any other Person under any Loan
Document.
(c)
Servicer may resign
on sixty (60) days written notice to Lender and Borrowing Agent and
upon such resignation, Lender will promptly designate a successor
Servicer reasonably satisfactory to Borrower (provided that no such
approval by Borrower shall be required (i) in any case where the
successor Servicer is one of the Lender or an Affiliate or
Subsidiary of the Lender or (ii) after the occurrence and during
the continuance of any Event of Default). Any such successor
Servicer shall succeed to the rights, powers and duties of
Servicer, and shall in particular succeed to all of
Servicer’s right, title and interest in and to all of the
Liens in the Collateral securing the Obligations created hereunder
or any other Loan Document (including the Mortgage, Pledge
Agreement and all account control agreements), and the term
“Servicer” shall mean such successor Servicer effective
upon its appointment, and the former Servicer’s rights,
powers and duties as Servicer shall be terminated, without any
other or further act or deed on the part of such former Servicer.
However, notwithstanding the foregoing, if at the time of the
effectiveness of the new Servicer’s appointment, any further
actions need to be taken in order to provide for the legally
binding and valid transfer of any Liens in the Collateral from
former Servicer to new Servicer and/or for the perfection of any
Liens in the Collateral as held by new Servicer or it is otherwise
not then possible for new Servicer to become the holder of a fully
valid, enforceable and perfected Lien as to any of the Collateral,
former Servicer shall continue to hold such Liens solely as
Servicer for perfection of such Liens on behalf of new Servicer
until such time as new Servicer can obtain a fully valid,
enforceable and perfected Lien on all Collateral, provided that
Servicer shall not be required to or have any liability or
responsibility to take any further actions after such date as such
Servicer for perfection to continue the perfection of any such
Liens (other than to forego from taking any affirmative action to
release any such Liens). After any Servicer’s resignation as
Servicer, the provisions of this Section 10.8, and any
indemnification rights under this Agreement, including without
limitation, rights arising under Section 10.7 hereof, shall inure
to its benefit as to any actions taken or omitted to be taken by it
while it was Servicer under this Agreement (and in the event
resigning Servicer continues to hold any Liens pursuant to the
provisions of the immediately preceding sentence, the provisions of
this Section 10.7 and any indemnification rights under this
Agreement, including without limitation, rights arising under
Article 6 hereof, shall inure to its benefit as to any actions
taken or omitted to be taken by it in connection with such
Liens).
10.9
Recordation of Assignment.
In respect of
any assignment of all or any portion of any Lender’s interest
in this Agreement and/or any other Loan Documents at any time and
from time to time, the following provisions shall be
applicable:
(a)
Borrower, or
any agent appointed by Borrower, shall maintain a register (the
“
Register
”) in
which there shall be recorded the name and address of each Person
holding any Loans or any commitment to lend hereunder, and the
principal amount and stated interest payable to such Person
hereunder or committed by such Person under such Person’s
lending commitment. Borrower hereby irrevocably appoints Lender
(and/or any subsequent Lender appointed by Lender then maintaining
the Register) as Borrower’s non-fiduciary agent for the
purpose of maintaining the Register.
(b)
In connection with
any negotiation, transfer or assignment as aforesaid, the
transferor/assignor shall deliver to Lender then maintaining the
Register an assignment and assumption agreement executed by the
transferor/assignor and the transferee/assignee, setting forth the
specifics of the subject transaction, including but not limited to
the amount and nature of Obligations and/or lending commitments
being transferred or assigned (and being assumed, as applicable),
and the proposed effective date of such transfer or assignment and
the related assumption (if applicable).
(c)
Subject to
receipt of any required tax forms reasonably required by Lender,
such Person shall record the subject transfer, assignment and
assumption in the Register. Anything contained in this Agreement or
other Loan Document to the contrary notwithstanding, no
negotiation, transfer or assignment shall be effective until it is
recorded in the Register pursuant to this Section 10.9(c). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error; and Borrower and each Lender shall
treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement and the other
Loan Documents. The Register shall be available for inspection by
Borrower and each Lender at any reasonable time and from time to
time upon reasonable prior notice.
10.10
Participations.
Anything in this
Agreement or any other Loan Document to the contrary
notwithstanding, Lender may, at any time and from time to time,
without in any manner affecting or impairing the validity of any
Obligations, sell to one or more Persons participating interests in
its Loans, commitments and/or other interests hereunder and/or
under any other Loan Document (any such Person, a
“
Participant
”).
In the event of a sale by Lender of a participating interest to a
Participant, such Lender’s obligations hereunder and under
the other Loan Documents shall remain unchanged for all purposes,
Borrower and Lender shall continue to deal solely and directly with
each other in connection with Lender’s rights and obligations
hereunder and under the other Loan Documents and all amounts
payable by Borrower shall be determined as if Lender had not sold
such participation and shall be paid directly to Lender,
provided
,
however
, a
Participant shall be entitled to the benefits of Section 9 as if it
were a Lender if Borrower is notified of the Participation and the
Participant complies with Section 9(e). Borrower agrees that if
amounts outstanding under this Agreement or any other Loan Document
are due and payable (as a result of acceleration or otherwise),
each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this
Agreement and the other Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a
Lender under this Agreement;
provided
that such right of set-off shall
not be exercised without the prior written consent of Lender and
shall be subject to the obligation of each Participant to share
with Lender its share thereof. Borrower also agrees that each
Participant shall be entitled to the benefits of Section 10.9 as if
it were Lender. Notwithstanding the granting of any such
participating interests: Borrower shall look solely to Lender for
all purposes of this Agreement, the Loan Documents and the
transactions contemplated hereby, Borrower shall at all times have
the right to rely upon any amendments, waivers or consents signed
by Lender as being binding upon all of the Participants, and all
communications in respect of this Agreement and such transactions
shall remain solely between Borrower and Lender (exclusive of
Participants) hereunder. Lender granting a participation hereunder
shall maintain, as a non-fiduciary agent of Borrower, a register as
to the participations granted and transferred under this Section
containing the same information specified in Section 10.9 on the
Register as if each Participant were a Lender to the extent
required to cause the Loans to be in registered form for the
purposes of Sections 163(f), 165(j), 871, 881, and 4701 of the
Code.
10.11
Headings;
Construction.
Section and subsection headings are used in
this Agreement only for convenience and do not affect the meanings
of the provisions that they precede.
10.12
USA
PATRIOT Act Notification.
Lender hereby notifies the Loan
Parties that pursuant to the requirements of the USA PATRIOT Act,
it may be required to obtain, verify and record certain information
and documentation that identifies such Person, which information
may include the name and address of each such Person and such other
information that will allow Lender to identify such Persons in
accordance with the USA PATRIOT Act.
10.13
Counterparts;
Email Signatures.
This Agreement may be executed in any
number of counterparts, all of which shall constitute one and the
same agreement. This Agreement may be executed by signatures
delivered by electronic mail, each of which shall be fully binding
on the signing party.
10.14
GOVERNING
LAW.
THIS AGREEMENT, ALONG WITH ALL OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED OTHERWISE IN SUCH OTHER LOAN DOCUMENT)
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES
(EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATION LAW). FURTHER, THE LAW OF THE STATE OF NEW YORK SHALL
APPLY TO ALL DISPUTES OR CONTROVERSIES ARISING OUT OF OR CONNECTED
TO OR WITH THIS AGREEMENT AND ALL SUCH OTHER LOAN DOCUMENTS WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES (EXCEPT SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK GENERAL OBLIGATION LAW).
10.15
CONSENT
TO JURISDICTION; WAIVER OF JURY TRIAL; CONSENT TO SERVICE OF
PROCESS.
ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF
NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND BORROWER AND EACH OTHER LOAN PARTY
OBLIGOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFOREMENTIONED COURTS. BORROWER AND EACH OTHER LOAN PARTY OBLIGOR
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, OR BASED ON UPON 28 U.S.C. §
1404, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING AND
ADJUDICATION OF ANY SUCH ACTION, SUIT OR PROCEEDING IN ANY OF THE
AFOREMENTIONED COURTS AND AMENDMENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. BORROWER
AND EACH OTHER LOAN PARTY OBLIGOR HEREBY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING
ANY RIGHTS UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
UNDER ANY AMENDMENT, WAIVER, AMENDMENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED
IN CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY FINANCING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR THE OTHER TRANSACTION DOCUMENTS, AND AGREES
THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY. BORROWER AND EACH OTHER LOAN
PARTY OBLIGOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON BORROWER OR ANY OTHER LOAN PARTY OBLIGOR AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL (RETURN
RECEIPT REQUESTED) DIRECTED TO THE BORROWER’S NOTICE ADDRESS
(ON BEHALF OF THE BORROWER OR SUCH LOAN PARTY OBLIGOR) SET FORTH IN
SECTION 10.1 HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED
IN THE MAIL, OR, AT THE LENDER’S OPTION, BY SERVICE UPON
BORROWER OR ANY OTHER LOAN PARTY OBLIGOR IN ANY OTHER MANNER
PROVIDED UNDER THE RULES OF ANY SUCH COURTS.
10.16
Publication.
Borrower and each other Loan Party Obligor consents to the
publication by Lender of a tombstone, press releases or similar
advertising material relating to the financing transactions
contemplated by this Agreement, and Lender reserves the right to
provide to industry trade organizations information necessary and
customary for inclusion in league table measurements. Borrower and
Lender shall consult with each other in connection with issuing any
public disclosure with respect to the transactions contemplated
hereunder.
10.17
Confidentiality.
Lender agrees to use commercially reasonable efforts not to
disclose Confidential Information to any Person without the prior
consent of Borrower; provided, however, that nothing herein
contained shall limit any disclosure of the tax structure of the
transactions contemplated hereby, or the disclosure of any
information to the extent required by applicable law, statute,
rule, regulation or judicial process or in connection with the
exercise of any right or remedy under any Loan Document, or as
may be required in connection with the examination, audit or
similar investigation of the Lender or any of its Affiliates, to
examiners, auditors, accountants or any regulatory authority, to
the officers, partners, managers, directors, employees, agents and
advisors (including independent auditors, lawyers and counsel) of
the Lender or any of its Affiliates, in connection with any
litigation or dispute which relates to this Agreement or any other
Loan Document to which the Lender is a party or is otherwise
subject, to a subsidiary or Affiliate of the Lender,
to any
assignee or participant (or prospective assignee or participant)
which agrees to be bound by this Section 10.17 and
to any lender
or other funding source of the Lender (each reference to Lender in
the foregoing clauses shall be deemed to include the actual and
prospective assignees and participants referred to in clause (f)
and the lenders and other funding sources referred to in clause
(g), as applicable for purposes of this Section 10.17), and
further
provided
, that in no
event shall the Lender be obligated or required to return any
materials furnished by or on behalf of the Borrower or any other
Loan Party or Obligor. The obligations of the Lender under this
Section 10.17 shall supersede and replace the obligations of
the Lender under any confidentiality letter or provision in respect
of this financing or any other financing previously signed and
delivered by the Lender to the Borrower or any of its
Affiliates.
10.18
Borrowing
Agency Provisions.
(a)
Each Borrower
hereby irrevocably designates Borrowing Agent to be its attorney
and agent and in such capacity to (i) borrow, (ii) request
advances, (iii) request the issuance of Letters of Credit, (iv)
sign and endorse notes, (v) execute and deliver all instruments,
documents, applications, security agreements, reimbursement
agreements and letter of credit agreements for Letters of Credit
and all other certificates, notice, writings and further assurances
now or hereafter required hereunder, (vi) make elections regarding
interest rates, (vii) give instructions regarding Letters of Credit
and agree with the issuer thereof upon any amendment, extension or
renewal of any Letter of Credit and (viii) otherwise take action
under and in connection with this Agreement and the other Loan
Documents, all on behalf of and in the name such Borrower or
Borrowers, and hereby authorizes Lender to pay over or credit all
Loan proceeds hereunder in accordance with the request of Borrowing
Agent.
(b)
The handling of
this credit facility as a co-borrowing facility with a borrowing
agent in the manner set forth in this Agreement is solely as an
accommodation to the Borrowers and at their request. Lender shall
not incur liability to any Borrower as a result thereof. To induce
Lender to do so and in consideration thereof, each Borrower hereby
indemnifies Lender and holds Lender harmless from and against any
and all liabilities, expenses, losses, damages and claims of damage
or injury asserted against Lender by any Person arising from or
incurred by reason of the handling of the financing arrangements of
Borrowers as provided herein, reliance by Lender on any request or
instruction from Borrowing Agent or any other action taken by
Lender with respect to this Section 10.18 except due to willful
misconduct or gross (not mere) negligence by the indemnified party
(as determined by a court of competent jurisdiction in a final and
non-appealable judgment).
(c)
All Obligations
shall be joint and several, and each Borrower shall make payment
upon the maturity of the Obligations by acceleration or otherwise,
and such obligation and liability on the part of each Borrower
shall in no way be affected by any extensions, renewals and
forbearance granted by Lender to any Borrower, failure of Lender to
give any Borrower notice of borrowing or any other notice, any
failure of Lender to pursue or preserve its rights against any
Borrower, the release by Lender of any Collateral now or thereafter
acquired from any Borrower, and such agreement by each Borrower to
pay upon any notice issued pursuant thereto is unconditional and
unaffected by prior recourse by Lender to the other Borrowers or
any Collateral for such Borrower’s Obligations or the lack
thereof. Each Borrower waives all suretyship defenses.
[signature
page follows]
IN
WITNESS WHEREOF, Borrower, each other Loan Party Obligor party
hereto, and Lender have signed this Agreement as of the date first
set forth above.
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Borrower:
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Lender:
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NEW AGE BEVERAGES CORPORATION
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SIENA LENDING GROUP LLC
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By:
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By:
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Name: Brent
Willis
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Name: James
Persico
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Its
:
Chief Executive Officer
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Its: Authorized
Signatory Authorized Signatory
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NABC, INC.
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By:
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Name:
Steve Sanicola
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By:
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Its:
Authorized Signatory
Authorized Signatory
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Name:
Brent Willis
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Its:
President
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NABC
PROPERTIES, LLC
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By:
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Name: Brent Willis
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Its: Managing Member
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NEW AGE HEALTH SCIENCES, INC.
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By:
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Name: Brent
Willis
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Its: Managing
Member
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Disclosure Schedule
1.
Information
(c)
Jurisdiction
of Organization.
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Loan Party
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Jurisdiction of Organization
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Foreign Qualifications
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New Age
Beverages Corporation
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Washington
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Colorado
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NABC,
Inc.
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Colorado
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None
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NABC
Properties, LLC
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Colorado
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None
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New Age
Health Sciences, Inc.
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Nevada
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None
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(d)
Legal
Name; Trade Names; Prior Names.
Legal Name; Trade Names.
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Legal Name of Loan Party
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Trade Name
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Type
(tradename, tradestyle or assumed name)
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Owner (if not Company)
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Prior Names.
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Loan Party
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Prior Name
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Date of Change
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(e)
Owned
Properties and Leased Locations.
Owned Properties
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Full Property Address
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Subject to Existing
Mortgage (Y/N)
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Existing Mortgagee
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Mortgage Debt Secured
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Type of Collateral
and Aggregate Value
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2410
Country Road 100 S, Alamosa, CO 81001
1
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N
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None
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$0
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N/A
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$
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$
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$
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Leased Office Locations.
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Landlord
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Address
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Lease Ends On
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Monthly Rent
|
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Type of Collateral
and Aggregate Value
|
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Vision
68
th
,
LLC
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1700 E.
68
th
Avenue, Denver, CO
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__/__/20__
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$52,000
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__/__/20__
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$
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__/__/20__
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$
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__/__/20__
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$
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(f)
Third
Party Locations Where Collateral is Located.
2
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Name of Third Party
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Address
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William
Mackey
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2520
Aviation Way, Colorado Springs, CO 80916
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1911
Spirits
|
|
4472 US
Route, LaFayette, NY
|
|
Bettaway
Beverage Dist. Inc.
|
|
110
Sylvania Place, South Plainfield, NJ 07080
|
|
California
Natural Products
|
|
1250
West Lathrop Rd., Lathrop, CA 95330
|
|
Complemar
Partners In
|
|
500 Lee
Road
Suite
200, Rochester, NY 14606
|
|
Lieb
Foods, LLC
|
|
[To Come], Portland, OR
|
|
O-AT-KA
Milk Products Co op
|
|
[To Come], Buffalo, NY
|
|
Pflug
Packaging
|
|
17500
Shideler Pkwy Lathrop, CA 95330
|
|
Polar
Corp.
|
|
1001
Southbridge Street, Worcester, MA, 01610
|
|
Premium
H2O
|
|
5835 E.
61
st
Street Commerce, CA 90040
|
|
Refresco
US, Inc.
|
|
2875 West 19
th
Street, Chicago, IL
60623
|
|
Sonoma
Beverage Co.
|
|
16195
Stephens St., Hacienda Heights CA
|
|
Summit
Shipping
|
|
9524 W.
Camelback Rd. Suite C-130, PMB#231 Glendale AZ 85305
|
|
Union
Beverage Packers
|
|
600
North Union Avenue, Hillside NJ 07205
|
|
United
States Cold Storage
|
|
3100
52
nd
Ave.,
Sacramento, CA 95823
|
|
Versatile
|
|
11335
Apple Drive Nunica, MI 49448
|
(g)
Defendant
Litigation.
|
Case Name
|
|
Case Index No.
|
|
Court
|
|
Description of Claim
|
|
Covered by Insurance (Y/N)
|
|
Amount ofClaim
|
|
None
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(h)
Equityholders.
|
Loan Party Obligor
|
|
Equity Holder
|
|
No. of Interests and Certificate #
|
|
Class
|
|
% of Ownership
|
|
New Age
Beverages Corporations
|
|
See
Beneficial Ownership Chart [to come]
|
|
See
Beneficial Ownership Chart [to come]
|
|
Common
|
|
varies
|
|
NABC,
Inc.
|
|
New Age
Beverages Corporation
|
|
100,000
Certificate
No. 1
|
|
Common
|
|
100
|
|
New Age
Health Sciences, Inc.
|
|
New Age
Beverages Corporation
|
|
100
Certificate
No. 1
|
|
Common
|
|
100
|
|
NABC
Properties, LLC
|
|
New Age
Beverages Corporaiton
|
|
100
Uncertificated
|
|
Membership
Interests
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
Investment
Property.
|
Loan Party Obligor
|
|
Name of Entity
|
|
State of Formation
|
|
No. of Interests
|
|
% of Ownership
|
|
Certificate Numbers(if applicable)
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(j)
Material
Contracts.
|
Name of Agreement
|
|
Parties to Agreement
|
|
Date of Agreement
|
|
Date of Expiry
|
|
Nature of Agreement
|
|
[To
come]
|
|
|
|
__/__/20__
|
|
__/__/20__
|
|
|
|
|
|
|
|
__/__/20__
|
|
__/__/20__
|
|
|
|
|
|
|
|
__/__/20__
|
|
__/__/20__
|
|
|
|
|
|
|
|
__/__/20__
|
|
__/__/20__
|
|
|
(k)
[Inactive
Subsidiaries]
|
Name of Subsidiary
|
|
Aggregate Amount of Assets Owner
|
|
N/A
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2.
Commercial
Tort Claims.
|
Case Name
|
|
Case Index No.
|
|
Court
|
|
Description of Claim
|
|
$ Value
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
Bank
Accounts. Please indicate the account into which Lender shall fund
the proceeds of Loans with an asterisk:
“*”
|
Bank
|
|
Acct No.
|
|
Purpose of Account
(collections, disbursement, payroll, worker’s comp.,
etc.)
|
|
Is this Account a Restricted Account? Mark “Yes” or
“No”
|
|
US
Bank
|
|
1036
9078 5300
|
|
Operating
account
|
|
No
|
|
US
Bank
|
|
1036
9078 5318
|
|
EFT
account - transfers
|
|
No
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
Intellectual
Property
|
Trademark Title
|
|
Application No.
|
|
Date of Application
|
|
Reg. No.
|
|
Date of Registration
|
|
[To
come]
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
Patent Title
|
|
Application No.
|
|
Date of Application
|
|
Reg. No.
|
|
Date of Registration
|
|
[To
Come]
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
Copyright Title
|
|
Application No.
|
|
Date of Application
|
|
Reg. No.
|
|
Date of Registration
|
|
None
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
|
|
|
|
|
__/__/20__
|
|
|
|
__/__/20__
|
5.
Insurance
Coverage.
|
Carrier
|
|
Type of Coverage
|
|
Deductible
|
|
Policy No.
|
|
Term
|
|
[To
Come]
|
|
$
|
|
$
|
|
|
|
__/__/20__
- __/__/20__
|
|
|
|
$
|
|
$
|
|
|
|
__/__/20__
- __/__/20__
|
|
|
|
$
|
|
$
|
|
|
|
__/__/20__
- __/__/20__
|
|
|
|
$
|
|
$
|
|
|
|
__/__/20__
- __/__/20__
|
|
|
|
$
|
|
$
|
|
|
|
__/__/20__
- __/__/20__
|
|
|
|
$
|
|
$
|
|
|
|
__/__/20__
- __/__/20__
|
|
|
|
$
|
|
$
|
|
|
|
__/__/20__
- __/__/20__
|
|
|
|
$
|
|
$
|
|
|
|
__/__/20__
- __/__/20__
|
6.
Permitted
Indebtedness.
|
|
|
Creditor
|
|
Amount
|
|
Secured(Y/N)
|
|
Maturity Date
|
|
[To
come]
|
|
|
|
$
|
|
|
|
__/__/20__
|
|
|
|
|
|
$
|
|
|
|
__/__/20__
|
|
|
|
|
|
$
|
|
|
|
__/__/20__
|
|
|
|
|
|
$
|
|
|
|
__/__/20__
|
7.
Permitted
Liens.
|
Loan Party Obligor
|
|
Assets Subject to Lien
|
|
Secured Party
|
|
Amount Secured
|
|
[To
come]
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
Schedule A
Description of Certain Terms
|
1.
Loan
Limits for Revolving Loansand Letters of
Credit:
|
|
|
|
(a) Maximum
Revolving Facility Amount:
|
|
$
12,000,000
|
|
(b) Advance
Rates:
|
|
|
|
(i) Accounts
Advance Rate:
|
|
As to
each of the DSD Division and the Brand Division respectively,
85%
;
provided
, as to each
Accounts Advance Rate, that if Dilution exceeds 3%, Lender may, at
its option (A) reduce such advance rate by the number of full
or partial percentage points comprising such excess or
(B) establish a Reserve on account of such excess (the
“
Dilution
Reserve
”).
|
|
(ii) Inventory
Advance Rate(s):
|
|
|
|
(A) Raw
Materials:
|
|
0%
|
|
(B) Finished
goods:
|
|
As to each of the
DSD Division and the Brand Division respectively, the lesser of (i)
60% of the lower of cost or market value and (ii) 80% of the net
orderly liquidation value of such Eligible Inventory determined
from time to time based upon the most recent Inventory appraisal
received by the Lender prepared by an appraiser acceptable to
Lender
|
|
(c)
Letter of Credit Limit
|
|
$0
|
|
(b)
Inventory
Sublimits:
|
|
Up
to 100% of 1(b) (i) above
|
|
(c)
Letter of Credit
Limit
|
|
$0
|
|
(d)
Availability
Block
|
|
Failure
to maintain financial covenant in Schedule E results in $1,000,000
Availability Block.
|
|
|
|
|
|
3. Interest
Rates:
|
|
|
|
(a) Revolving
Loans and Letters of Credit:
|
|
2.75%
per annum in excess of the Base Rate, but not less than
7.50%
|
|
4. Maximum
Days re Eligible Accounts:
|
|
|
|
(a) Maximum
days after original
invoice date
for
Eligible Accounts:
|
|
Ninety
(90) days
|
|
(b) Maximum
days after original
invoice due date
for
Eligible Accounts:
|
|
Sixty
(60) days
|
|
5. Lender’s
Bank:
|
|
Wells Fargo Bank, National Association and its affiliatesSiena
Funding Depository AccountAccount # 4986311751ABA Routing #
121000248Reference: New Age Beverages
Corporation
(which
bank may be changed from time to time by notice from Lender to
Borrower)
|
|
6. Scheduled
Maturity Date:
|
|
August
10, 2021
|
Schedule B
Definitions
Unless
otherwise defined herein, the following terms are used herein as
defined in the UCC: Accounts, Account Debtor, Certificated
Security, Chattel Paper, Commercial Tort Claims, Deposit Accounts,
Documents, Electronic Chattel Paper, Equipment, Farm Products,
Fixtures, General Intangibles, Goods, Health-Care-Insurance
Receivables, Instruments, Inventory, Letter-of-Credit Rights,
Proceeds, Supporting Obligations and Tangible Chattel
Paper.
As used
in this Agreement, the following terms have the following
meanings:
“
Accounts Advance
Rate
” means the percentage set forth in
Section 1(b)(i) of Schedule A.
“
Advance Rates
”
means, collectively, the Accounts Advance Rate and the Inventory
Advance Rate.
“
Affiliate
”
means, with respect to any Person, any other Person in control of,
controlled by, or under common control with the first Person, and
any other Person who has a substantial interest, direct or
indirect, in the first Person or any of its Affiliates, including,
any officer or director of the first Person or any of its
Affiliates;
provided
, however,
that neither Lender nor any of its Affiliates shall be deemed an
“Affiliate” of Borrower for any purposes of this
Agreement. For the purpose of this definition, a “substantial
interest” shall mean the direct or indirect legal or
beneficial ownership of more than ten (10%) percent of any class of
equity or similar interest.
“
Agreement
” and
“
this
Agreement
” have the meanings set forth in the heading
to this Agreement.
“
Approved Electronic
Communication
” means each notice, demand,
communication, information, document and other material
transmitted, posted or otherwise made or communicated by e-mail,
facsimile, Passport 6.0, or any other equivalent electronic
service, whether owned, operated or hosted by Lender, any of its
Affiliates or any other Person, that any party is obligated to, or
otherwise chooses to, provide to Lender pursuant to this Agreement
or any other Loan Document, including any financial statement,
financial and other report, notice, request, certificate and other
information or material;
provided
that
Approved Electronic Communications shall not include any notice,
demand, communication, information, document or other material that
Lender specifically instructs a Person to deliver in physical
form.
“
Authorized
Officer
” means the chief executive officer, chief
financial officer or treasurer of Borrower and each other Person
designated from time to time by any of the foregoing officers of
Borrower in a notice to Lender, which designation shall continue in
force and effect until terminated in a notice to Lender from any of
the foregoing officers of Borrower.
“
Availability
Block
” means if any, set forth in Section 1(f) of
Schedule A.
“
Bankruptcy
Code
” means the United States Bankruptcy Code (11
U.S.C. § 101
et
seq
.).
“
Base Rate
”
means, for any day, the per annum rate of interest which is
identified as the “Prime Rate” and normally published
in the Money Rates section of
The Wall Street Journal
(or, if
such rate ceases to be so published, as quoted from such other
generally available and recognizable source as Lender may select)
(the “
Published Prime
Rate
”). Any change in the Base Rate due to a change in
such Published Prime Rate shall be effective on the effective date
of such change in such Published Prime Rate.
“
Billed Accounts Advance
Rate
” means the percentage set forth in Section
1(b)(i) of Schedule A.
“
Blocked
Account
” has the meaning set forth in
Section 4.1.
“
Borrower
” has
the meaning set forth in the Preamble to this
Agreement.
“
Borrowing
Agent
” means New Age Beverages Corporation, acting for
itself in its capacity as Borrower or in its capacity as agent for
all of the Borrowers (including itself).
“
Borrowing
Base
” means, as of any date of determination, the
Dollar Equivalent Amount as of such date of determination of (i)
the aggregate amount of Eligible Accounts multiplied by the
Accounts Advance Rate (but in no event to exceed the Accounts
Sublimit); plus (ii) the lower of cost or market value of Eligible
Inventory multiplied by the applicable Inventory Advance Rate(s),
but not to exceed the Inventory Sublimit(s); minus (iii) all
Reserves which Lender has established pursuant to Section 1.2
(including those to be established in connection with any requested
Revolving Loan or Letter of Credit); minus (iv) the Availability
Block, if any, set forth in Section 1(f) of Schedule
A.
“
Brands
Division
” means the beverage brand business division
of New Age Beverages Corporation comprised of ready-to-drink
better-for-you beverages.
“
Business Day
”
means a day other than a Saturday or Sunday or any other day on
which Lender or banks in New York are authorized to
close.
“
Capital
Expenditures
” means all expenditures which, in
accordance with GAAP, would be required to be capitalized and shown
on the consolidated balance sheet of Borrower, but
excluding expenditures made in connection with the
acquisition, replacement, substitution or restoration of assets to
the extent financed (a) from insurance proceeds (or other
similar recoveries) paid on account of the loss of or damage to the
assets being replaced or restored or (b) with cash awards of
compensation arising from the taking by eminent domain or
condemnation of the assets being replaced.
“
Capitalized
Lease
” means any lease which is or should be
capitalized on the balance sheet of the lessee thereunder in
accordance with GAAP.
“
Closing Date
”
means August 10, 2018.
“
Closing
Fee
”
has the
meaning set forth in Section (a) of Schedule C hereto.
“
Code
” means
the Internal Revenue Code of 1986, as amended.
“
Collateral
”
means all property and interests in property in or upon which a
security interest, mortgage, pledge or other Lien is granted
pursuant to this Agreement or the other Loan Documents, including
all of the property of each Loan Party Obligor described in
Section 3.1.
“
Collateral Monitoring
Fee
”
has the
meaning set forth in Section (c) of Schedule C hereto.
“
Collateral Pledge
Agreement(s)
”
means (a) that certain Collateral Pledge Agreement dated as of the
date hereof by Borrowing Agent as pledgor and Lender, as pledgee
and (b) any other pledge agreement made by a pledgor in favor of
Lender from time to time after the Closing Date.
“
Collections
”
has the meaning set forth in Section 4.1.
“
Compliance
Certificate
” means a compliance certificate
substantially in the form of Exhibit F hereto to be signed by an
Authorized Officer of Borrowing Agent.
“
Confidential
Information
” means confidential information that any
Loan Party furnishes to the Lender pursuant to any Loan Document
concerning any Loan Party’s business, but does not include
any such information once such information has become, or if such
information is, generally available to the public or available to
the Lender (or other applicable Person) from a source other than
the Loan Parties which is not, to the Lender’s knowledge,
bound by any confidentiality agreement in respect
thereof.
“
Default
” means
any event which with notice or passage of time, or both, would
constitute an Event of Default.
“
Default Rate
”
has the meaning set forth in Section 2.1.
“
Dilution
”
means, as of any date of determination, a percentage, based upon
the experience of the greater of (i) the immediately prior three
(3) months and (ii) the immediately prior twelve (12) months, that
is the result of dividing the Dollar Equivalent Amount of
(a) bad debt write-downs, discounts, advertising allowances,
credits, or other dilutive items with respect to Borrower’s
Accounts during such period, by (b) Borrower’s billings
with respect to Accounts during such period.
“
Dilution
Reserve
” has the meaning set forth in
Section 1(b)(i) of Schedule A.
“
Disclosure
Schedule
” shall mean that
certain Disclosure Schedule annexed hereto immediately following
the signature page to this Agreement, as the same may be updated
from time to time after the Closing Date.
“
Dollar
Equivalent
” means, at any
time, (a) as to any amount denominated in Dollars, the amount
hereof at such time, and (b) as to any amount denominated in a
currency other than Dollars, the equivalent amount in Dollars as
determined by Lender at such time that such amount could be
converted into Dollars by Lender according to prevailing exchange
rates selected by Lender.
“
Dollars
”
or “
$
”
means United States Dollars, lawful currency for the payment of
public and private debts.
“
Dominion
Transaction
”
means the transactions pursuant to the Securities
Purchase Agreement dated June 20, 2018 between Borrowing Agent and
Dominion Capital LLC.
“
DSD Division
”
means the distributor division of New Age Beverages Corporation
comprised of distribution services of beverages and snacks in
Colorado.
“
E-Signature
”
means the process of attaching to or logically associating with an
Approved Electronic Communication an electronic symbol, encryption,
digital signature or process (including the name or an abbreviation
of the name of the party transmitting the Approved Electronic
Communication) with the intent to sign, authenticate or accept such
Approved Electronic Communication.
“
Early Payment/Termination
Premium
”
has
the meaning set forth in Schedule C.
“
EBITDA
”
means, for the applicable period, for the Loan Parties on a
consolidated basis, the sum of (a) Net Income, plus (b) Interest
Expense deducted in the calculation of such Net Income, plus (c)
federal, state, and local income taxes, whether paid, payable or
accrued, deducted in the calculation of such Net Income, plus (d)
depreciation expense deducted in the calculation of such Net
Income, plus (e) amortization expense deducted in the calculation
of such Net Income, plus (f) all non-cash losses, and any
extraordinary non-cash losses, and extraordinary non-cash loss
items from discontinued operations, in either case reflected in Net
Income (other than write-downs of Collateral), including non-cash
stock compensation expense
minus (g) all non-cash gains, and any
extraordinary gains and extraordinary gain items from discontinued
operations.
“
Eligible
Account
” means, at any time of determination, a DSD
Division Account or a Brands Division Account owned by Borrower
which satisfies the general criteria set forth below and which is
otherwise acceptable to Lender in its Permitted Discretion
(
provided
, that
Lender may, in its Permitted Discretion, change the general
criteria for acceptability of Eligible Accounts and shall notify
Borrower of such change promptly thereafter). For clarification,
the calculation of the criteria below shall be done separately for
the DSD Division and Brand Division. An Account shall be deemed to
meet the current general criteria if:
(i)
neither the Account
Debtor nor any of its Affiliates is an Affiliate, creditor or
supplier of the applicable Borrower (with Accounts to be ineligible
to the extent of any amounts owed by such the applicable Borrower
to such Person as a creditor or supplier);
(ii)
it
does not remain unpaid more than the earlier to occur of
(A) the number of days after the original
invoice date
set
forth in Section 4(a) of Schedule A or (B) the
number of days after the original
invoice due date
set
forth in Section 4(b) of Schedule A;
(iii)
the
Account Debtor or its Affiliates are not past due (or past any of
applicable dates referenced in clause (ii) above) on other Accounts
owing to the applicable Borrower comprising more than 25% of all of
the Accounts owing to the applicable Borrower by such Account
Debtor or its Affiliates;
(iv)
all
Accounts owing by the Account Debtor or its Affiliates do not
represent more than 10% of all otherwise Eligible Accounts,
provided that all Accounts owing by each of UNFI, Kroger, King
Soopers, Walmart/Sams Club, Safeway, KeHE and Hilary Salesmaster or
any of such Account Debtors Affiliates do not represent more than
25% of all otherwise Eligible Accounts as to each such Account
Debtor (
provided
, that
Accounts which are deemed to be ineligible solely by reason of this
clause (iv) shall be considered Eligible Accounts to the
extent of the amount thereof which does not exceed such applicable
percentage of all otherwise Eligible Accounts);
(v)
the Account
complies with each covenant, representation or warranty contained
in this Agreement or any other Loan Document with respect to
Eligible Accounts (including any of the representations set forth
in Section 5.4);
(vi)
the
Account is not subject to any contra relationship, counterclaim,
dispute or set-off;
provided
that such
Account shall be deemed to be ineligible only to the extent of such
contra, counterclaim, dispute or set-off;
(vii)
the
Account Debtor’s chief executive office or principal place of
business is located in the United States or Canada, unless
(A) the sale is fully backed by a letter of credit, guaranty
or acceptance acceptable to Lender in its Permitted Discretion, and
if backed by a letter of credit, such letter of credit has been
issued or confirmed by a bank satisfactory to Lender in its
Permitted Discretion, is sufficient to cover such Account, and if
required by Lender, the original of such letter of credit has been
delivered to Lender or Lender’s agent and the issuer thereof
notified of the assignment of the proceeds of such letter of credit
to Lender or (B) such Account is subject to credit insurance
payable to Lender issued by an insurer and on terms, conditions and
in an amount acceptable to Lender in its Permitted
Discretion;
(viii)
the
Account is payable solely in Dollars;
(ix)
it
is absolutely owing to Borrower and does not arise from a sale on a
bill-and-hold, guarantied sale, sale-or-return, sale-on-approval,
consignment, retainage or any other repurchase or return basis or
consist of progress billings;
(x)
Lender shall have
verified the Account in a manner satisfactory to
Lender;
(xi)
the
Account Debtor is not the United States of America or any state or
political subdivision (or any department, agency or instrumentality
thereof), unless the applicable Borrower has complied with the
Assignment of Claims Act of 1940 (31 U.S.C. §203
et
seq
.) or other applicable
similar state or local law in a manner satisfactory to
Lender;
(xii)
it
is at all times subject to Lender’s duly perfected, first
priority security interest and to no other Lien that is not a
Permitted Lien, and the goods giving rise to such Account
(A) were not, at the time of sale, subject to any Lien except
Permitted Liens and (B) have been sold by the applicable
Borrower to the Account Debtor in the ordinary course of the
applicable Borrower’s business and delivered to and accepted
by the Account Debtor, or the services giving rise to such Account
have been performed by the applicable Borrower and accepted by the
Account Debtor in the ordinary course of the applicable
Borrower’s business;
(xiii)
the
Account is not evidenced by Chattel Paper or an Instrument of any
kind (unless delivered to Lender in accordance with Section 3.2 of
this Agreement) and has not been reduced to judgment;
(xiv)
the
Account Debtor’s total indebtedness to the applicable
Borrower does not exceed the amount of any credit limit established
by the applicable Borrower or Lender in its Permitted Discretion
and the Account Debtor is otherwise deemed to be creditworthy by
Lender (
provided
, that
Accounts which are deemed to be ineligible solely by reason of this
clause (xiii) shall be considered Eligible Accounts to the
extent the amount of such Accounts does not exceed the lower of
such credit limits);
(xv)
there
are no facts or circumstances existing, or which could reasonably
be anticipated to occur, which might result in any adverse change
in the Account Debtor’s financial condition or impair or
delay the collectability of all or any portion of such
Account;
(xvi)
Lender
has been furnished with all documents and other information
pertaining to such Account which Lender has reasonably requested,
or which the applicable Borrower is obligated to deliver to Lender,
pursuant to this Agreement;
(xvii)
the
applicable Borrower has not made an agreement with the Account
Debtor to extend the time of payment thereof beyond the time
periods set forth in clause (ii) above;
(xviii)
the
applicable Borrower has not posted a surety or other bond in
respect of the contract under which such Account
arose;
(xix)
any
non Walmart or affiliated entity account;
(xx)
the
invoice is not expected to be paid in cash; and
(xxi)
the
Account Debtor is not subject to any proceeding seeking
liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar
applicable law.
“
Eligible
Inventory
” means, at any
time of determination,
DSD Division Inventory or Brands
Division Inventory owned by Borrower which satisfies the general
criteria set forth below and which is otherwise acceptable to
Lender in its Permitted Discretion (
provided
, that
Lender may, in its Permitted Discretion, change the general
criteria for acceptability of Eligible Inventory and shall notify
Borrower of such change promptly thereafter). Inventory shall be
deemed to meet the current general criteria if:
(i)
it consists of
finished goods but not work in progress or raw
materials;
(ii)
it
is in good, new and saleable condition;
(iii)
it
is not slow-moving, expired, obsolete, damaged, contaminated,
unmerchantable, returned, rejected, discontinued or repossessed, or
supplies and packaging;
(iv)
it
is not in the possession of a processor, consignee or bailee, or
located on premises leased or subleased to the applicable Borrower,
or on premises subject to a mortgage in favor of a Person other
than Lender, unless (x) such processor, consignee, bailee or
mortgagee or the lessor or sublessor of such premises, as the case
may be, has executed and delivered all documentation which Lender
shall require to evidence the subordination or other limitation or
extinguishment of such Person's rights with respect to such
Inventory and Lender's right to gain access thereto or (y) a rent
Reserve has been established in accordance with
Section 4.8(b)(y)(ii) hereof in the case of third party leased
locations, or such other reserve satisfactory to Lender in its
Permitted Discretion has been established with respect to Inventory
in possession of any processor, consignee or bailee, or located on
the premises owned by any Loan Party Obligor subject to a mortgage
in favor of a Person other than Lender;
(v)
it does not consist
of fabricated parts, consigned items, supplies or
packaging;
(vi)
it
meets all standards imposed by any Governmental
Authority;
(vii)
it
conforms in all respects to any covenants, warranties and
representations set forth in this Agreement and each other Loan
Document;
(viii)
it
is at all times subject to Lender’s duly perfected, first
priority security interest and no other Lien except a Permitted
Lien;
(ix)
it
is not purchased or manufactured pursuant to a license agreement
that is not assignable to each of Lender and its transferees,
unless such license agreement is satisfactory to Lender or Lender
is in receipt of a Licensor Consent Agreement in form and substance
satisfactory to Lender;
(x)
it is situated at a
Collateral location (1) listed in Section 1(c) of the
Disclosure Schedule or other location of which Lender has been
notified as required by Section 5.8 (and it is not in-transit)
and (2) that has greater than $100,000 of Eligible Inventory at
such location, in each case which location must be in the
continental United States; and
(xi)
it
is not subject to expiration within 90 days.
“
Equity
Interests
” means, with respect to a Person, all of the
shares of stock, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in such Person,
whether voting or nonvoting, including capital stock (or other
ownership or profit interests or units), preferred stock, or any
other “equity security” (as such term is defined in
Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities Exchange Commission under the Securities Exchange Act of
1934, as in effect from time to time).
“
ERISA
” means
the Employee Retirement Income Security Act of 1974 and all rules,
regulations and orders promulgated thereunder.
“
ERISA
Affiliate
” means any trade or business (whether or not
incorporated) under common control with a Loan Party within the
meaning of section 414(b) or (c) of the Code (and sections 414(m)
and (o) of the Code for purposes of provisions relating to section
412 of the Code and section 302 of ERISA).
“
ERISA Event
”
means (a) a Reportable Event with respect to a Pension Plan; (b)
the withdrawal of any Loan Party or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan
year in which such entity was a “substantial employer”
as defined in Section 4001(a)(2) of ERISA or a cessation of
operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) a complete or partial withdrawal
by a Loan Party or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d)
the filing of a notice of intent to terminate, the treatment of a
Pension Plan amendment as a termination under Section 4041 or
4041A of ERISA; (e) the institution by the PBGC of proceedings to
terminate a Pension Plan; (f) any event or condition which
constitutes grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Pension Plan; (g) the determination that any Pension Plan is
considered an at-risk plan or a plan in endangered or critical
status within the meaning of Sections 430, 431 and 432 of the Code
or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due
but not delinquent under Section 4007 of ERISA, upon a Loan
Party or any ERISA Affiliate.
“
Event of
Default
” has the meaning set forth in
Section 7.1.
“
Excess
Availability
” means the amount, as determined by
Lender, calculated at any date, equal to the difference of (A) the
lesser of (x) the Maximum Revolving Facility Amount, minus the
Availability Block and (y) the Borrowing Base minus Reserves
against the Borrowing Base, minus (B) the outstanding balance
of all Revolving Loans and the Letter of Credit Balance;
provided
that if any of the Loan Limits for Revolving Loans is exceeded as
of the date of calculation, then Excess Availability shall be
zero.
“
Excluded
Collateral
” means applications filed in the United
States Patent and Trademark Office to register trademarks or
service marks on the basis of Borrower’s “intent to
use” such trademarks or service marks unless and until the
filing of a “Statement of Use” or “Amendment to
Allege Use” has been filed and accepted, whereupon such
application shall be automatically subject to the Liens granted
herein and deemed included in the Collateral.
“
Excluded
Taxes
” means any of the following Taxes imposed on or
with respect to a Recipient or required to be withheld or deducted
from a payment to a Recipient, (a) Taxes imposed on or measured by
net income (however denominated), franchise Taxes, and branch
profits Taxes, in each case, imposed as a result of such Recipient
being organized under the laws of, or having its principal office
or, in the case of Lender, its Lending Office located in, the
jurisdiction imposing such Tax (or any political subdivision
thereof); (b) in the case of a Non-U.S. Recipient (as defined in
Section
9(e)
), U.S. federal
withholding Taxes imposed on amounts payable to or for the account
of such Non-U.S. Recipient with respect to an applicable interest
in a Loan or Commitment pursuant to a law in effect on the date on
which Non-U.S. Recipient becomes a party to this Agreement or
acquires a participation, except in each case to the extent that,
pursuant to
Section
9
amounts with respect to such
Taxes were payable either to such Non-U.S. Recipient assignor (or
Lender granting such participation) immediately before such
assignment or grant of participation; (c) United States federal
withholding Taxes that would not have been imposed but for such
Recipient’s failure to comply with
Section
9(e)
(except where the failure
to comply with
Section
9(e)
was the result of a change
in law, ruling, regulation, treaty, directive, or interpretation
thereof by a Governmental Authority after the date the Recipient
became a party to this Agreement or a Participant) and (d) any U.S.
federal withholding Taxes imposed pursuant to FATCA.
“
Extraordinary
Receipts
” means any cash or cash equivalents received
by or paid to or for the account of any Loan Party not in the
ordinary course of business, including amounts received in respect
of foreign, United States, state or local tax refunds, purchase
price adjustments, indemnification payments, and pension plan
reversions.
“
FATCA
” means
Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is
substantively comparable and not materially more onerous to comply
with) and any current or future regulations or official
interpretations thereof.
“
Fiscal Year
”
means the fiscal year of Borrower which ends on December 31 of each
year.
“
Fixed Charge Coverage
Ratio
” has the meaning set forth in Section (a) of
Schedule E hereto.
“
Fixed Charges
”
means, for the period in question, on a consolidated basis, the sum
of (i) all principal payments scheduled or required to be made
during or with respect to such period in respect of Indebtedness of
the Loan Parties,
plus
(ii) all Interest Expense
of the Loan Parties for such period paid or required to be paid in
cash during such period,
plus
(iii) all federal, state,
and local income taxes of the Loan Parties paid or required to be
paid for such period,
plus
(iv) all cash
distributions, dividends, redemptions and other cash payments made
or required to be made during such period with respect to any
Equity Interests issued by any Loan Party.
“
GAAP
” means
generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the United States
accounting profession), which are applicable to the circumstances
as of the date of determination, in any case consistently
applied.
“
Governmental
Authority
” means the government of the United States
of America or any other nation, or of any political subdivision
thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining
to government (including any supra-national bodies such as the
European Union or the European Central Bank).
“
Guaranty
”,
“
Guaranteed
” or
to “
Guarantee
”, as
applied to any Indebtedness, liability or other obligation, means
(i) a guaranty, directly or indirectly, in any manner, including by
way of endorsement (other than endorsements of negotiable
instruments for collection in the ordinary course of business), of
any part or all of such Indebtedness, liability or obligation, and
(ii) an agreement, contingent or otherwise, and whether or not
constituting a guaranty, assuring, or intended to assure, the
payment or performance (or payment of damages in the event of
non-performance) of any part or all of such Indebtedness, liability
or obligation by any means (including, the purchase of securities
or obligations, the purchase or sale of property or services, or
the supplying of funds).
“
Guarantors
”
has the meaning set forth in the heading to this
Agreement.
“
Indebtedness
”
means (without duplication), with respect to any Person, (i) all
obligations or liabilities, contingent or otherwise, for borrowed
money, (ii) all obligations represented by promissory notes, bonds,
debentures or the like, or on which interest charges are
customarily paid, (iii) all liabilities secured by any Lien on
property owned or acquired, whether or not such liability shall
have been assumed, (iv) all obligations of such Person under
conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (v) all obligations of
such Person issued or assumed as the deferred purchase price of
property or services (excluding trade payables which are not ninety
(90) days past the invoice date incurred in the ordinary course of
business, but including the maximum potential amount payable under
any earn-out or similar obligations), (vi) all Capitalized Leases
of such Person, (vii) all obligations (contingent or otherwise) of
such Person as an account party or applicant in respect of letters
of credit and/or bankers’ acceptances, or in respect of
financial or other hedging obligations, (viii) all equity
interests issued by such Person subject to repurchase or redemption
at any time on or prior to the Scheduled Maturity Date, other than
voluntary repurchases or redemptions that are at the sole option of
such Person, (ix) all principal outstanding under any synthetic
lease, off-balance sheet loan or similar financing product, and (x)
all Guarantees, endorsements (other than for collection in the
ordinary course of business) and other contingent obligations in
respect of the obligations of others.
“
Indemnified
Taxes
” means (a) Taxes, other than Excluded Taxes,
imposed on or with respect to any payment made by or on account of
any obligation of any Loan Party under any Loan Document and (b) to
the extent not otherwise described in clause (a), Other
Taxes.
“
Intellectual
Property
” means the collective reference to all
rights, priorities and privileges relating to intellectual
property, whether arising under United States, multinational or
foreign laws or otherwise, including copyrights, copyright
licenses, patents, patent licenses, trademarks and trademark
licenses, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
“
Interest
Expense
” means, for the applicable period, for the
Loan Parties on a consolidated basis, total interest expense
(including interest attributable to Capitalized Leases in
accordance with GAAP) and fees with respect to outstanding
Indebtedness.
“
Inventory Advance
Rate
” means the percentage(s) set forth in
Section 1(b)(ii) of Schedule A.
“
Inventory
Sublimit
” means the amount(s) set forth in
Section 1(d) of Schedule A.
“
Investment
Property
” means the collective reference to (a) all
“investment property” as such term is defined in
Section 9-102 of the UCC, (b) all “financial assets” as
such term is defined in Section 8-102(a)(9) of the UCC, and (c)
whether or not constituting “investment property” as so
defined, all Pledged Equity.
“
Issuers
” means
the collective reference to each issuer of Investment
Property.
“
Judgment
Currency
” has the meaning set forth in
Section 6.3(b).
“Knowledge”
shall mean the actual knowledge of.
“
Lender
” has
the meaning set forth in the heading to this
Agreement.
“
Letter of
Credit
” has the meaning set forth in
Section 1.1.
“
Letter of Credit
Balance
” means the sum of (i) the aggregate
undrawn face amount of all outstanding Letters of Credit and
(ii) all interest, fees and costs due or, in Lender’s
estimation, likely to become due in connection
therewith.
“
Letter of Credit
Limit
” means the amount set forth in Section 1(e)
of Schedule A.
“
LIBOR Rate
”
means, for any day, a rate per annum equal to (i) the offered rate
for deposits in Dollars for a 30-day period and for the amount of
the applicable Loan as published in the "Money Rates" section of
The Wall Street Journal (or another national publication selected
by Lender if such rate is not so published) as of such day, divided
by (ii) the sum of one minus the aggregate maximum reserve
requirement (expressed as a decimal) then imposed under Regulation
D of the FRB for “Eurocurrency
Liabilities”.
“
Lien
” means
any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory
or other), security interest, or other security arrangement and any
other preference, priority, or preferential arrangement in the
nature of a security interest of any kind or nature whatsoever,
including any conditional sale contract or other title retention
agreement, the interest of a lessor under a Capital Lease and any
synthetic or other financing lease having substantially the same
economic effect as any of the foregoing.
“
Loan Account
”
has the meaning set forth in Section 2.4.
“
Loan
Documents
” means, collectively, this Agreement and all
notes, guaranties, security agreements, mortgages, certificates,
landlord’s agreements, Lock Box and Blocked Account
agreements, the Mortgage, Collateral Pledge Agreement, the Personal
Guaranties Agreement, the Officer Indemnification Agreement, the
Subordinated Debt Subordination Agreements, the Post-Closing
Agreement and all other agreements, documents and instruments now
or hereafter executed or delivered by Borrower, any Loan Party, or
any Other Obligor in connection with, or to evidence the
transactions contemplated by, this Agreement.
“
Loan Guaranty
”
means Section 8 of this Agreement.
“
Loan Limits
”
means, collectively, the Loan Limits for Revolving Loans and
Letters of Credit set forth in Section 1 of Schedule A and all
other limits on the amount of Loans and Letters of Credit set forth
in this Agreement.
“
Loan Party
”
means, individually, Borrower, or any Subsidiary; and
“
Loan
Parties
” means, collectively, Borrowers and all
Subsidiaries.
“
Loan Party
Obligor
” means, individually, Borrower or any Obligor
that is a Loan Party; and “
Loan Party
Obligors
” means, collectively, Borrower and each Loan
Party Obligor.
“
Loans
” means,
collectively, the Revolving Loans.
“
Lock Box
” has
the meaning set forth in Section 4.1.
“
Material Adverse
Effect
” means any event, act, omission, condition or
circumstance which, which individually or in the aggregate, has or
could reasonably be expected to have a material adverse effect on
(i) the business, operations, prospects, properties, assets or
condition, financial or otherwise, of any Loan Party Obligor, (ii)
the ability of any Loan Party Obligor to perform any of its
obligations under any of the Loan Documents, or (iii) the validity
or enforceability of, or Lender’s rights and remedies under,
any of the Loan Documents.
“
Material
Contract
” means has the meaning set forth in Section
5.18.
“
Maturity Date
”
means the Scheduled Maturity Date (or if earlier the Termination
Date), or such earlier date as the Obligations may be accelerated
in accordance with the terms of this Agreement (including without
limitation pursuant to Section 7.2).
“
Maximum Lawful
Rate
” has the meaning set forth in Section
2.5.
“
Maximum
Liability
” has the meaning set forth in Section
8.9.
“
Maximum Revolving Facility
Amount
” means the amount set forth in
Section 1(a) of Schedule A.
“Monthly Financial
Model”
means a report substantially in
the form of Exhibit H hereto to be signed by an Authorized Officer
of Borrowing Agent.
“
Mortgage(s)
”
means the Deed of Trust, Assignment of Rents, Security Agreement
and Fixture Filing dated as of the date hereof on NABC Properties,
LLC’s real property located at 2410 County Rd 100 S; Alamosa,
CO 81001 securing the Obligations.
“
Multiemployer
Plan
” means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which a Loan
Party or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or
been obligated to make contributions.
“
Net Income
”
means, for the applicable period, for Borrower individually or for
the Loan Parties on a consolidated basis, as applicable, the net
income (or loss) of Borrower individually or of the Loan Parties on
a consolidated basis, as applicable, for such period, in each case
of Borrower individually or of the Loan Parties on a consolidated
basis, as applicable, for such period.
“
Non-Paying
Guarantor
” has the meaning set forth in Section
8.10.
“
Non-U.S.
Recipient
” has the meaning set forth in Section
9(e)(ii).
“
Notice of
Borrowing
” has the meaning set forth in Section
1.3.
“
Obligations
”
means all present and future Loans, advances, debts, liabilities,
fees, expenses, obligations, guaranties, covenants, duties and
indebtedness at any time owing by Borrower or any Loan Party
Obligor to Lender, whether evidenced by this Agreement, any other
Loan Document or otherwise whether arising from an extension of
credit, opening of a Letter of Credit, guaranty, indemnification or
otherwise, whether direct or indirect (including those acquired by
assignment and any participation by Lender in Borrower’s
indebtedness owing to others), whether absolute or contingent,
whether due or to become due, and whether arising before or after
the commencement of a proceeding under the Bankruptcy Code or any
similar statute.
“
Obligor
” means
any guarantor, endorser, acceptor, surety or other Person liable
on, or with respect to, any of the Obligations or who is the owner
of any property which is security for any of the Obligations, other
than Borrower.
“
Organic
Documents
” means, with respect to any Person, the
certificate of incorporation, articles of incorporation,
certificate of formation, certificate of limited partnership,
by-laws, operating agreement, limited liability company agreement,
limited partnership agreement or other similar governance document
of such Person.
“
Other Obligor
”
means any Obligor other than any Loan Party Obligor.
“
Other Taxes
”
means all present or future stamp, court or documentary, property,
excise, intangible, recording, filing or similar Taxes that arise
from any payment made under, from the execution, delivery,
performance, enforcement or registration of, from the receipt or
perfection of a security interest under, or otherwise with respect
to, any Loan Document.
“
Overadvance
”
has the meaning set forth in Section 1.7(a).
“
Participant
”
has the meaning set forth in Section 10.10.
“
Passport 6.0
”
means the electronic and/or internet-based system approved by
Lender for the purpose of making notices, requests, deliveries,
communications, and for the other purposes contemplated in this
Agreement or otherwise approved by Lender, whether such system is
owned, operated or hosted by Lender, any of its Affiliates or any
other Person.
“
Paying
Guarantor
” has the meaning set forth in Section
8.10.
“
PBGC
” means
the Pension Benefit Guaranty Corporation.
“
Pension Act
”
means the Pension Protection Act of 2006.
“
Pension Funding
Rules
” means the rules of the Code and ERISA regarding
minimum required contributions (including any installment payment
thereof) to Pension Plans and Multiemployer Plans and set forth in,
with respect to plan years ending prior to the effective date of
the Pension Act, Section 412 of the Code and Section 302
of ERISA, each as in effect prior to the Pension Act and,
thereafter, Section 412, 430, 431, 432 and 436 of the Code and
Sections 302, 303, 304 and 305 of ERISA, and any sections of the
Code or ERISA related thereto that are enacted after the date of
this Agreement.
“
Pension Plan
”
means any employee pension benefit plan (including a Multiple
Employer Plan or a Multiemployer Plan) that is maintained or is
contributed to by a Loan Party and or ERISA Affiliate and is either
covered by Title IV of ERISA or is subject to the minimum funding
standards under Section 412 of the Code.
“
Permitted
Acquisitions
” means any acquisition by a Borrower,
provided,
that (i)
the line of business of any acquired Person shall be the same as,
substantially similar to, or reasonably ancillary, complementary or
related to, or a reasonable extension, development or expansion of,
the businesses conducted by any Borrower on the Closing Date, (ii)
the property acquired (or the property of the Person acquired) in
such acquisition is used or useful in the businesses conducted by
the Borrowers, (iii) the Lender shall have received not less than
five Business Days prior written notice of such acquisition, which
notice shall contain a summary, in reasonable detail, of the
acquisition terms and conditions, including price, sources and
uses, the Borrowing Agent’s financial projections prepared in
connection with such acquisition and, to the extent available, the
historical financial information (including income statements,
balance sheets, cash flows and projected borrowing base with excess
availability) covering on a monthly basis the next 12 months, on an
annual basis the next 2 years and historically the current year to
date vs the prior year to date as well as the two most recently
ended fiscal years for which financial statements have been
prepared for such Person, division or line of business prior to the
closing of such acquisition or the entire financial history for
such Person, division or line of business, whichever period is
shorter, together with a quality of earnings report or other
third-party reports obtained by the Borrower in connection with
such acquisition, (iv) in the case of an acquisition of the Equity
Interests of another Person, such acquisition must not be hostile,
(v) no Default or Event of Default exists or would be caused by
such acquisition, (vi) the Borrowers may not acquire (A) the Equity
Interests of any Person not organized under the laws of, or
substantially all of the property of which is not located in, any
State of the United States of America or the District of Columbia,
or (B) property which is not located within the United States
of America, (vii) the business and assets acquired in such
acquisition shall be free and clear of all Liens, (viii) the
Borrowing Agent shall have delivered to the Lender, as soon as
available but in any event within five Business Days of such
acquisition, executed counterparts of the acquisition agreement and
other material documents or instruments pursuant to which such
acquisition is to be consummated (including any material related
management, non-compete, employment, option or other material
agreements), any schedules to such agreements, documents or
instruments and all other material ancillary agreements,
instruments and documents to be executed or delivered in connection
therewith, (ix) Lender shall have received a first-priority
security interest in all acquired assets and Equity Interests,
subject to documentation satisfactory to Lender, and (x) the
acquisition is funded solely with proceeds of an equity
contribution. Notwithstanding anything to the contrary above, no
assets acquired in such transaction(s) shall be included as
Eligible Accounts or Eligible Inventory until Lender has completed
its due diligence on such acquired assets and at Lender’s
Permitted Discretion.
“
Permitted
Discretion
” means a determination made by Lender in
the exercise of reasonable (from the perspective of an asset-based
secured lender) business judgment.
“
Permitted
Indebtedness
”
means: (a)
the Obligations; (b) the Indebtedness existing on the date hereof
described in Section 6 of the Disclosure Schedule; in each case
along with
extensions, refinancings, modifications,
amendments and restatements thereof,
provided
, that (i)
the principal amount thereof is not increased, (ii) if such
Indebtedness is subordinated to any or all of the Obligations, the
applicable subordination terms shall not be modified without the
prior written consent of Lender, and (iii) the terms thereof are
not modified to impose more burdensome terms upon any Loan Party;
(c) capitalized leases and purchase
money Indebtedness secured by Permitted Liens in an aggregate
amount not exceeding $100,000 at any time outstanding; (d)
Indebtedness incurred as a result of endorsing negotiable
instruments received in the ordinary course of business; (e) if
applicable pursuant to Section 1.6(a)(v), the Closing
Proceeds
.
“
Permitted
Investments
” means:
(i)
direct obligations
of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the
full faith and credit of the United States of America), in each
case maturing within one year from the date of acquisition
thereof;
(ii)
marketable
direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the
date of acquisition thereof and, at the time of acquisition, having
a rating of at least AA from Standard & Poor’s Ratings
Services, a Division of the McGraw-Hill Companies, Inc.
(“S&P”) or Aa from Moody’s Investors Service,
Inc. (“Moodys”);
(iii)
investments
in commercial paper maturing within one year from the date of
acquisition thereof and having, at such date of acquisition, a
rating of at least A-2 from S&P or P-2 from
Moody’s;
(iv)
investments
in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition
thereof issued or guaranteed by or placed with and money market
deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States of
America or any State thereof, or by any Lender which has a combined
capital and surplus and undivided profits of not less than
$500,000,000;
(v)
fully
collateralized repurchase agreements with a term of not more than
120 days for securities described in clause (a) of this definition
and entered into with a financial institution satisfying the
criteria described in clause (d) of this definition;
and
(vi)
money
market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment
Company Act of 1940, (ii) are rated at least AA by S&P or
Aa by Moody’s and (iii) have portfolio assets of at
least $1,000,000.000.
“
Permitted
Liens
” means
(a) purchase
money security interests in specific items of Equipment securing
Permitted Indebtedness described under clause (c) of the definition
of Permitted Indebtedness; (b) Liens disclosed in Section 7 of the
Disclosure Schedule;
provided
,
however, that to qualify as a Permitted Lien, any such Lien
described in Section 7 of the Disclosure Schedule shall only secure
the Indebtedness that it secures on the Closing Date and any
permitted refinancing in respect thereof; (c) liens for taxes,
fees, assessments, or other governmental charges or levies, either
not delinquent or being contested in good faith by appropriate
proceedings (which proceedings have the effect of preventing the
enforcement of such lien) for which adequate reserves in accordance
with GAAP are being maintained,
provided
the same have no priority over any of
Lender’s security interests; (d) liens of materialmen,
mechanics, carriers, or other similar liens arising in the ordinary
course of business and securing obligations which are not
delinquent or are being contested in good faith by appropriate
proceedings (which proceedings have the effect of preventing the
enforcement of such lien) for which adequate reserves in accordance
with GAAP are being maintained; (e) liens which constitute
banker’s liens, rights of set-off, or similar rights as to
deposit accounts or other funds maintained with a bank or other
financial institution (but only to the extent such banker’s
liens, rights of set-off or other rights are in respect of
customary service charges relative to such deposit accounts and
other funds, and not in respect of any loans or other extensions of
credit by such bank or other financial institution to any Loan
Party); (f) cash deposits or pledges of an aggregate amount
not to exceed $10,000 to secure the payment of worker’s
compensation, unemployment insurance, or other social security
benefits or obligations, public or statutory obligations, surety or
appeal bonds, or other obligations of a like nature incurred in the
ordinary course of business.
“
Person
” means
any individual, sole proprietorship, partnership, joint venture,
limited liability company, trust, unincorporated organization,
association, corporation, government or any agency or political
division thereof, or any other entity.
“
Plan
” means
any employee benefit plan within the meaning of Section 3(3)
of ERISA (including a Pension Plan), maintained by any Loan Party
or any such plan to which any Loan Party (or with respect to any
plan subject to Section 412 or 430 of the Code or Section 302 or
Title IV of ERISA, any ERISA Affiliate) is required to
contribute.
“
Pledged
Equity
” means the Equity Interests listed on Sections
1(f) and 1(g) of the Disclosure Schedule, together with any other
Equity Interests, certificates, options, or rights or instruments
of any nature whatsoever in respect of the equity interests of any
Person that may be issued or granted to, or held by, any Loan Party
Obligor while this Agreement is in effect, and including, without
limitation, to the extent attributable to, or otherwise related to,
such pledged equity interests, all of such Loan Party
Obligor’s (i) interests in the profits and losses of each
Issuer, (ii) rights and interests to receive distributions of each
Issuer’s assets and properties, and (iii) rights and
interests, if any, to participate in the management or each Issuer
related to such pledged equity interests.
“
Post-Closing
Agreement
” means that post-closing agreement dated as
of the date hereof by and among Lender, Borrower and the Loan Party
Obligors.
“
Prepayment
Event
” means: (i) any sale (other than sales of
inventory in the ordinary course of business), transfer or other
disposition (including pursuant to a sale and leaseback
transaction) of any property or asset of any Loan Party other than
assets with an aggregate fair value which do not exceed $100,000 in
any Fiscal Year; (ii) any casualty or other insured damage to, or
any taking under power of eminent domain or by condemnation or
similar proceeding of, any property or asset of any of any Loan
Party with an aggregate fair value immediately prior to such event
equal to or greater than $100,000 in any Fiscal Year; (iii) the
issuance by any Loan Party to any Person (other than to another
Loan Party) of any equity interests after the Closing Date, or the
receipt by any Loan Party of any capital contribution from any
Person (other than from another Loan Party) after the Closing Date;
(iv) the incurrence by any Loan Party of any Indebtedness not
permitted by this Agreement; and (v) the receipt by any Loan Party
of any Extraordinary Receipts in excess of $100,000 in the
aggregate in any Fiscal Year.
“
Protective
Advances
” has the meaning set forth in Section
1.3.
“
Recipient
”
means any Lender, Participant, or any other recipient of any
payment to be made by or on account of any Obligation of any Loan
Party under this Agreement or any other Loan Document, as
applicable.
“
Register
” has
the meaning set forth in Section 10.9(a).
“
Released
Parties
” has the meaning set forth in
Section 6.1.
“
Reportable
Event
” means any of the events set forth in Section
4043(c) of ERISA, other than events for which the 30 day notice
period has been waived.
“
Reserves
” has
the meaning set forth in Section 1.2.
“
Restricted
Accounts
” means Deposit Accounts (a) established
and used (and at all times will be used) solely for the purpose of
paying current payroll obligations of Loan Parties (and which do
not (and will not at any time) contain any deposits other than
those necessary to fund current payroll), in each case in the
ordinary course of business, or (b) maintained (and at all
times will be maintained) solely in connection with an employee
benefit plan, but solely to the extent that all funds on deposit
therein are solely held for the benefit of, and owned by, employees
(and will continue to be so held and owned) pursuant to such
plan.
“
Revolving
Loans
” has the meaning set forth in
Section 1.1(a).
“
Scheduled Maturity
Date
” means the date set forth in Section 6 of
Schedule A.
“
Securities
Act
” means the Securities of Act of 1933, as
amended.
“
Senior
Officer
” means the current president, chief executive
officer, global controller, chief financial officer, treasurer or
assistant treasurer of any Loan Party Obligor.
“
Servicer
”
means Siena Lending Group LLC, a Delaware limited liability
company, in its a capacity as servicer.
“
Stated Rate
”
has the meaning set forth in Section 2.5.
“
Subordinated
Debt
” means Indebtedness owing to a Person other than
Lender that is subordinate in right of payment to the payment of
the Obligations pursuant to a Subordinated Debt Subordination
Agreement.
“
Subordinated Debt
Documents
” means any documents, instruments or
agreements which evidence the Subordinated Debt or pursuant to
which the Subordinated Debt was issued or is governed, in each case
as amended, modified, supplemented or restated from the time to
time, in accordance with the terms of this Agreement.
“
Subordinated Debt
Subordination Agreement
” means any subordination
agreement in form and substance satisfactory to Lender between
Lender and any holder of Subordinated Debt.
“
Subsidiary
”
means any corporation or other entity of which a Person owns,
directly or indirectly, through one or more intermediaries, more
than 50% of the Equity Interests at the time of determination.
Unless the context indicates otherwise, references to a Subsidiary
shall be deemed to refer to a Subsidiary of Borrower.
“
Taxes
” means
all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any
interest, additions to tax or penalties applicable
thereto.
“
Termination
Date
” means the date on which all of the Obligations
have been paid in full in cash and all of Lender’s lending
commitments under this Agreement and under each of the other Loan
Documents have been terminated.
“
UCC
” means, at
any given time, the Uniform Commercial Code as adopted and in
effect at such time in the State of New York or such other
applicable jurisdiction.
Unless
otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder (including
determinations made pursuant to the exhibits hereto) shall be made,
and all financial statements required to be delivered hereunder
shall be prepared on a consolidated basis in accordance with GAAP
consistently applied. If at any time any change in GAAP would
affect the computation of any financial ratio or financial
requirement set forth in any Loan Document, and either Borrower or
Lender shall so request, Lender and Borrower shall negotiate in
good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP;
provided
that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such
change therein and (ii) Borrower shall provide to Lender
financial statements and other documents required under this
Agreement and the other Loan Documents which include a
reconciliation between calculations of such ratio or requirement
made before and after giving effect to such change in GAAP.
Notwithstanding any other provision contained herein, all terms of
an accounting or financial nature used herein shall be construed,
and all computations of amounts and ratios referred to herein shall
be made, without giving effect to any election under Statement of
Financial Accounting Standards 159 (Codification of Accounting
Standards 825-10) to value any Indebtedness or other liabilities of
any Loan Party Obligor at “fair value”, as defined
therein.
Notwithstanding
anything to the contrary contained in the paragraph above or the
definitions of Capital Expenditures or Capitalized Leases, in the
event of a change in GAAP after the Closing Date requiring all
leases to be capitalized, only those leases (assuming for purposes
of this paragraph that they were in existence on the Closing Date)
that would constitute Capitalized Leases on the Closing Date shall
be considered Capital Leases (and all other such leases shall
constitute operating leases) and all calculations and deliverables
under this Agreement or the other Loan Documents shall be made in
accordance therewith (other than the financial statements delivered
pursuant to this Agreement;
provided
that all
such financial statements delivered to Lender in accordance with
the terms of this Agreement after the date of such change in GAAP
shall contain a schedule showing the adjustments necessary to
reconcile such financial statements with GAAP as in effect
immediately prior to such change).
References in this
Agreement to “Articles”, “Sections”,
“Annexes”, “Exhibits” or
“Schedules” shall be to Articles, Sections, Annexes,
Exhibits or Schedules of or to this Agreement unless otherwise
specifically provided. Any term defined herein may be used in the
singular or plural. “Include”, “includes”
and “including” shall be deemed to be followed by
“without limitation”. “Or” shall be
construed to mean “and/or”. Except as otherwise
specified or limited herein, references to any Person include the
successors and assigns of such Person. References
“from” or “through” any date mean, unless
otherwise specified, “from and including” or
“through and including”, respectively. Unless otherwise
specified herein, the settlement of all payments and fundings
hereunder between or among the parties hereto shall be made in
lawful money of the United States and in immediately available
funds. Time is of the essence for each performance obligation of
the Loan Party Obligors under this Agreement and each Loan
Document. All amounts used for purposes of financial calculations
required to be made herein shall be without duplication. References
to any statute or act shall include all related current regulations
and all amendments and any successor statutes, acts and
regulations. References to any agreement, instrument or document
(i) shall include all schedules, exhibits, annexes and other
attachments thereto and (ii) shall be construed as referring to
such agreement, instrument or other document as from time to time
amended, amended and restated, restated, supplemented or otherwise
modified (subject to any restrictions on such amendments,
restatements, supplements or modifications set forth herein or in
any other Loan Document). The words “asset” and
“property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and
contract rights. Unless otherwise specified herein Dollar ($)
baskets set forth in the representations and warranty, covenants
and event of default provisions of this Agreement (and other
similar baskets) are calculated as of each date of measurement by
the Dollar Equivalents thereof as of such date of
measurement.
Schedule C
Fees
(a)
Closing
Fee.
A fee equal to $120,000 (the “
Closing Fee
”),
which Closing Fee shall be deemed to be fully earned and payable as
of the Closing Date.
(b)
[Reserved].
(c)
Collateral Monitoring Fee.
A fee equal
to $108,000 (the “
Collateral Monitoring
Fee
”). The full amount of the Collateral Monitoring
Fee shall be deemed to be fully earned on the Closing Date and
shall be payable in installments as follows: (i) equal payments of
$3,000 shall be payable on the Closing Date and on the first day of
each month thereafter and (ii) the remaining amount of the
Collateral Monitoring Fee shall be paid in full on the Maturity
Date.
(d)
Unused Line Fee.
An unused line fee (the
“
Unused
Line Fee
”) equal to 0.50% per annum of the amount by
which (i) the Maximum Revolving Facility Amount, calculated
without giving effect to any Reserves and/or the Availability
Block, if any, applied to the Maximum Revolving Facility Amount,
exceeds (ii) the average daily outstanding principal balance
of the Revolving Loans and the Letter of Credit Balance during the
immediately preceding month (or part thereof), which each such fee
shall be deemed to be fully earned and payable, in arrears, on the
first day of each month until the Termination Date.
(e)
Minimum Borrowing Fee.
Beginning on
November 7, 2018, a minimum borrowing fee (the “
Minimum Borrowing
Fee
”) equal to the excess, if any, of
(i) interest which would have been payable in respect of each
month if, at all times during such month, the principal balance of
the Revolving Loans was equal to $2,000,000 over (ii) the
actual interest payable in respect of such month on the Revolving
Loans, which each such fee shall be deemed to be fully earned as of
the last day of each such month and payable on the first day of the
first month following the end of such period until the Termination
Date.
(f)
Letter of Credit Fees.
A fee equal to 0%
per annum of the face amount of each Letter of Credit (the
“
Letter
of Credit Fees
”), which each such fee shall be deemed
to be fully earned and payable, in arrears, on the first day of
each month until the Termination Date, plus all costs and fees
charged from time to time by the issuer, payable as and when such
costs and fees are charged.
(g)
Early Payment/Termination Premium.
In
the event that for any reason (including without limitation as a
result of any voluntary or mandatory prepayment of the Loans, any
acceleration of the Loans resulting from an Event of Default, any
foreclosure and sale of Collateral, or any sale of Collateral in
any bankruptcy or insolvency proceeding) all or any portion of the
Lender’s commitment to make Revolving Loans is terminated
prior to the Scheduled Maturity Date, in each case pursuant to
Section 1.8(d), Section 7.2 or otherwise, then in each such case,
in addition to the payment of the subject principal amount and all
unpaid accrued interest and other amounts due thereon, the Borrower
immediately shall be required to pay to the Lender an Early
Payment/Termination Premium (as liquidated damages and compensation
for the cost of the Lender being prepared to make funds available
under this Agreement with respect to such Loans during the
scheduled term of this Agreement) in an amount equal to the
Applicable Percentage (as defined below) of the amount of any such
Revolving Loan commitment termination, as applicable. With respect
to any such event, the “
Applicable
Percentage
” shall be (i) 4%, if such event occurs on
or before the first anniversary of the Closing Date, (ii) 2.25% if
such event occurs after the first anniversary of the Closing Date,
but on or before the second anniversary of the Closing Date, or
(iii) 1.25% if such event occurs after the second anniversary of
the Closing Date but before the Scheduled Maturity Date. Borrower
acknowledges and agrees that (x) the provisions of this paragraph
shall remain in full force and effect notwithstanding any
rescission by Lender of an acceleration with respect to all or any
portion of the Obligations pursuant to Section 7.2 or otherwise,
(y) payment of any Early Payment/Termination Premium under this
paragraph constitutes liquidated damages and not a penalty and (z)
the actual amount of damages to Lender or profits lost by Lender as
a result of such early payment or termination would be
impracticable and extremely difficult to ascertain, and the Early
Payment/Termination Premium under this paragraph is provided by
mutual agreement of the Borrower and Lender as a reasonable
estimation and calculation of such lost profits or damages of the
Borrower and Lender.
(h)
[Reserved].
(i)
Late Document Fee.
A fee equal to $150
per document per calendar day for each document, instrument or
report identified on Schedule D and required to be delivered to
Lender pursuant to this Agreement that is overdue. Notwithstanding
the payment of any such fee, any Event of Default resulting from
such late delivery shall not be cured by such payment of any such
fee. Each such fee shall be deemed to be fully earned and payable
upon demand by Lender.
(j)
Passport 6.0 Fee.
A fee equal to $250 per month for
access to and use of Passport 6.0,
which each such shall be
deemed to be fully earned and payable as of the Closing Date and on
the first day of each month thereafter until the Termination
Date.
Schedule D
Provide
Lender with each of the documents set forth below at the following
times in form satisfactory to Lender:
|
No
later than the date that is 45 days after the Closing
Date
|
(a) a
historical financial model for Passport 6.0, in a form to be
determined by Lender
|
|
Weekly
(no later than the 2nd Business Day of each week), but in any event
no later than the date of each Loan made or more frequently if
Lender requests
|
(b) a
detailed aging, by total, of Borrower’s Accounts, together
with an Account roll-forward with supporting details supplied from
sales journals, collection journals, credit registers and any other
records, with respect to Borrower’s Accounts (delivered
electronically in an acceptable format),
(c)
copies of invoices together with corresponding shipping and
delivery documents, and credit memos together with corresponding
supporting documentation, with respect to invoices and credit memos
in excess of (i) $25,000 as it relates to Accounts from the Brands
Division and (ii) $10,000 as it relates to Accounts from the DSD
Division; provided, however such amounts may be adjusted in the
Permitted Discretion of Lender, from time to time, and
(d) a
summary aging, by vendor, of each Loan Party’s accounts
payable and any unvouchered payables, book overdraft and an aging,
by vendor, of any held checks (delivered electronically in an
acceptable format).
|
|
Weekly
(no later than the 2nd Business Day of each week) or more
frequently if Lender requests
|
(e)
notice of all claims, offsets, or disputes asserted by Account
Debtors with respect to Borrower’s Accounts,
(f) a
detailed Inventory perpetual report with respect to
Borrower’s Inventory together with a listing by category and
location of Inventory (delivered electronically in an acceptable
format), and
(g) a
detailed calculation of Inventory of Borrower that is not eligible
for the Borrowing Base (delivered electronically in an acceptable
format).
|
|
Monthly
(no later than the 10th day of each fiscal month)
|
(h) a
detailed aging, by total, of Borrower’s Accounts, together
with a monthly Account roll-forward with respect to
Borrower’s Accounts, in a format acceptable to Lender in its
discretion, tied to the beginning and ending Account balances of
Borrower’s general ledger (delivered electronically in an
acceptable format)
(i) a
summary aging, by vendor, of each Loan Party’s accounts
payable and any unvouchered payables, book overdraft and an aging,
by vendor, of any held checks (delivered electronically in an
acceptable format), and
(j) a
detailed Inventory perpetual report with respect to
Borrower’s Inventory together with a listing by category and
location of Inventory (delivered electronically in an acceptable
format).
|
|
Monthly
(no later than the 20th day of each fiscal
month)
|
(k) a
reconciliation of Accounts, trade accounts payable, and Inventory
of Borrower’s general ledger accounts to its monthly
financial statements including any book reserves related to each
category,
(l) a
monthly sales backlog report, and
(m) a
sales and gross margin report by brand comparing the current
year-to-date to prior year-to-date.
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Monthly
(no later than the 20th day of each fiscal
month))
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(14)
a monthly model
(referred to as the “FTA”) for Passport 6.0, in a form
to be determined by Lender,
(15)
evidence of the
pre-payment of the Marley royalty payment for the succeeding
quarter, and
(16)
a monthly report
listing any (1) terminations of distributor agreements and (2) new
distributor agreements (along with a copy of such agreement) within
such month.
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Quarterly
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(q) a
report regarding each Loan Party’s accrued, but unpaid, ad
valorem taxes.
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Bi-Annually
(in January and in July of each calendar year)
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(r) a
detailed list of each Loan Party’s customers, with address
and contact information,
(s) a
detailed list of each Loan Party’s vendors, with address and
contact information, and
(t) an
updated Disclosure Schedule, true and correct in all material
respects as of the date of delivery, accompanied by a certificate
executed by an Authorized Officer of Borrower and substantially in
the form of Exhibit F hereto (it being understood and agreed that
no such update shall serve to cure any existing Event of Default,
including any Event of Default resulting from any failure to
provide any such disclosure to Lender on an earlier date or any
breach of any earlier made representation and/or
warranty).
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Yearly
(no later than the 120th day after the end of each Fiscal Year of
Borrower)
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(u)
financial statements of each Other Obligor.
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Promptly
upon (but in no event later than two Business Days after) delivery
or receipt, as applicable, thereof
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(v)
copies of any and all written notices (including notices of default
or acceleration), reports and other deliveries received by or on
behalf of any Loan Party from or sent by or on behalf of any Loan
Party to, any holder, agent or trustee with respect to any or all
of the Subordinated Debt (in such holder’s, agent’s or
trustee’s capacity as such).
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Schedule E
Financial Covenant
Fixed Charge Coverage Ratio
. If the
Borrowers’ Excess Availability is less than $1,000,000,
Borrowers shall not permit the ratio of (i) EBITDA for the
prior three month period ending on the most recently reported prior
3 monthly financials per section 5.15 (b) , minus unfinanced
Capital Expenditures of the Loan Parties on a consolidated basis
for such period, to (ii) Fixed Charges for such period to be
less than 1.10x .
Exhibit A
FORM OF NOTICE OF BORROWING
[letterhead of New Age Beverages Corporation]
Siena
Lending Group LLC
9 W
Broad Street, 5th Floor
Stamford,
Connecticut 06902
Attention:
Steve Sanicola
Dear
Mr. Sanicola:
Please
refer to the Loan and Security Agreement dated as of August 10,
2018 (as amended, restated or otherwise modified from time to time,
the “
Loan
Agreement
”) among the undersigned, as Borrowing Agent,
each of the other Borrowers party thereto, and Siena Lending Group
LLC, as Lender. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Loan
Agreement. This notice is given pursuant to Section 1.4 of the Loan
Agreement and constitutes a representation by Borrowing Agent, on
behalf of Borrower, that the conditions specified in Section 1.6 of
the Loan Agreement have been satisfied. Without limiting the
foregoing, (i) each of the representations and warranties set forth
in the Loan Agreement and in the other Loan Documents is true and
correct in all respects as of the date hereof (or to the extent any
representations or warranties are expressly made solely as of an
earlier date, such representations and warranties shall be true and
correct as of such earlier date), both before and after giving
effect to the Loans requested hereby, and (ii) no Default or Event
of Default is in existence, both before and after giving effect to
the Loans requested hereby (
if not
true, in the “Comments Regarding Exceptions” section
below, specify the Default of Event of Default, its nature, when it
occurred, whether it is continuing and the steps being taken by
Borrower with respect to such Default of Event of
Default)
.
Borrowing Agent, on
behalf of Borrower, hereby requests a borrowing under the Loan
Agreement as follows:
The
aggregate amount of the proposed borrowing is $[______________].
The requested borrowing date for the proposed borrowing (which is a
Business Day) is [______________], [____].
Borrowing Agent has
caused this Notice of Borrowing to be executed and delivered by its
Authorized Officer thereunto duly authorized on
[_____________].
Comments Regarding Exceptions:
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NEW AGE BEVERAGES
CORPORATION
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By:
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Title:
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Exhibit B
CLOSING CHECKLIST
[Attached]
Exhibit C
CLIENT USER FORM
Siena
Lending Group LLC
Passport
6.0 – Client User Form
Borrower Name
: New Age Beverages Corporation
Borrower Number
: ________
Loan and Security Agreement Date
: August 10,
2018
We,
being two Authorized Officers of the above borrower (the
“
Borrowing
Agent
”), refer to the above referenced Loan and
Security Agreement dated as of August 10, 2018 (as amended,
restated or otherwise modified from time to time, the
“
Loan
Agreement
”) between the Borrowing Agent, each of the
other Borrowers (as defined therein) and Siena Lending Group LLC.
This is the Client User Form, used to determined client access to
Passport 6.0.
Being
duly authorized by the Borrowing Agent, we each confirm that the
following people have been authorized by the Borrowing Agent to
have access (Full Access or Read Only, as indicated below) to
Passport 6.0:
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First Name
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Last Name
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Full Access or Read Only Access
3
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Email Address
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Phone Number
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NEW AGE BEVERAGES CORPORATION
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Exhibit D
AUTHORIZED ACCOUNTS FORM
Siena
Lending Group LLC
Authorized Accounts Form
Borrower Name
: New Age Beverages Corporation
Borrower Number
: ________
Loan and Security Agreement Date
: August 10,
2018
I,
being an Authorized Officer of New Age Beverages Corporation (the
“
Borrowing
Agent
”), refer to the above referenced Loan and
Security Agreement dated as of August 10, 2018 (as amended,
restated or otherwise modified from time to time, the
“
Loan
Agreement
”) between the Borrowing Agent, each of the
other Borrowers (as defined therein) and Siena Lending Group LLC
(“
Lender
”). This
is the Authorized Accounts Form, referring to authorized operating
bank accounts of the Borrower. Terms defined in the Loan Agreement
have the same meaning when used in this Authorized Accounts
Form.
Being
duly authorized by the Borrowing Agent, I confirm that the
following operating bank accounts of the Borrowing Agent are the
accounts into which the proceeds of any Loan may be
paid:
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Bank
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Routing Number
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Account number
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Account name
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NEW AGE BEVERAGES CORPORATION
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Date:
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Date:
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Exhibit E-1
FORM OF ACCOUNT DEBTOR NOTIFICATION
New Age Beverages Corporation
______________
______________
VIA OVERNIGHT COURIER
___________________________
___________________________
___________________________
Re:
Loan Transaction with Siena Lending Group LLC
Ladies
and Gentlemen:
Please
be advised that we and certain of our subsidiaries or affiliates
have entered into certain financing arrangements (the "
Financing
Arrangements
") with Siena Lending Group LLC (as originating
lender, and after the Closing Date as servicer for affiliated
assignee, Siena Funding LLC, a Delaware limited liability company
(“Siena Funding”), and together with Siena Funding,
collectively, “Lender”)), pursuant to which we have
granted to Lender a security interest in, among other things, any
and all Accounts and Chattel Paper (as those terms are defined in
the Uniform Commercial Code) owing by you to us, whether now
existing or hereafter arising.
You are
authorized and directed to respond to any inquiries that Lender may
direct to you from time to time pertaining to the validity, amount,
and other matters relating to such Accounts and Chattel Paper. In
addition, you are hereby authorized and directed to pay all
invoices and amounts now and hereafter due to us pursuant to the
following directions:
If
remitting payment via wire transfer, please wire transfer the
monies to the following account:
Transit
Number (RTN/ABA): __________________________
Bank Name:
__________________________
Account Name:
__________________________
Beneficiary Account
Number: __________________________
Reference:
__________________________
If
payment by check:
Made
payable to: NEW AGE BEVERAGES CORPORATION
Mailed
to:
___________________________
___________________________
___________________________
Please notify your accounting department of this change. If you
make payment to us in any manner other than as set forth above,
such payment will not constitute settlement of the account. These
instructions may not be modified or supplemented without written
notice from Siena Lending Group LLC.
This
authorization and directive shall be continuing and irrevocable
until all of the Financing Agreements have been terminated and all
obligations owing thereunder by us and our subsidiaries or
affiliates have been paid in full in cash (other than unasserted
contingent indemnification obligations).
[SIGNATURES TO FOLLOW ON NEXT PAGE]
Very
truly yours,
NEW AGE BEVERAGES CORPORATION
By:
__________________________________________
Name:
Title:
cc:
Siena Lending Group
LLC
9 W
Broad Street, 5th Floor
Attention:
Steven Sanicola
Exhibit E-2
FORM OF ACCOUNT DEBTOR NOTIFICATION
NABC, INC.
______________
______________
VIA OVERNIGHT COURIER
___________________________
___________________________
___________________________
Re:
Loan Transaction with Siena Lending Group LLC
Ladies
and Gentlemen:
Please
be advised that we and certain of our subsidiaries or affiliates
have entered into certain financing arrangements (the "
Financing
Arrangements
") with Siena Lending Group LLC (as originating
lender, and after the Closing Date as servicer for affiliated
assignee, Siena Funding LLC, a Delaware limited liability company
(“Siena Funding”), and together with Siena Funding,
collectively, “Lender”)), pursuant to which we have
granted to Lender a security interest in, among other things, any
and all Accounts and Chattel Paper (as those terms are defined in
the Uniform Commercial Code) owing by you to us, whether now
existing or hereafter arising.
You are
authorized and directed to respond to any inquiries that Lender may
direct to you from time to time pertaining to the validity, amount,
and other matters relating to such Accounts and Chattel Paper. In
addition, you are hereby authorized and directed to pay all
invoices and amounts now and hereafter due to us pursuant to the
following directions:
If
remitting payment via wire transfer, please wire transfer the
monies to the following account:
Transit
Number (RTN/ABA): __________________________
Bank
Name:
__________________________
Account
Name:
__________________________
Beneficiary Account
Number:
__________________________
Reference:
__________________________
If
payment by check:
Made
payable to: NABC, INC.
Mailed
to:
___________________________
___________________________
___________________________
Please notify your accounting department of this change. If you
make payment to us in any manner other than as set forth above,
such payment will not constitute settlement of the account. These
instructions may not be modified or supplemented without written
notice from Siena Lending Group LLC.
This
authorization and directive shall be continuing and irrevocable
until all of the Financing Agreements have been terminated and all
obligations owing thereunder by us and our subsidiaries or
affiliates have been paid in full in cash (other than unasserted
contingent indemnification obligations).
[SIGNATURES TO FOLLOW ON NEXT PAGE]
Very
truly yours,
NABC, INC.
By:
__________________________________________
Name:
Title:
cc:
Siena Lending Group
LLC
9 W
Broad Street, 5th Floor
Attention:
Steven Sanicola
Exhibit E-3
FORM OF ACCOUNT DEBTOR NOTIFICATION
NABC PROPERTIES, LLC
______________
______________
VIA OVERNIGHT COURIER
___________________________
___________________________
___________________________
Re:
Loan Transaction with Siena Lending Group LLC
Ladies
and Gentlemen:
Please
be advised that we and certain of our subsidiaries or affiliates
have entered into certain financing arrangements (the "
Financing
Arrangements
") with Siena Lending Group LLC (as originating
lender, and after the Closing Date as servicer for affiliated
assignee, Siena Funding LLC, a Delaware limited liability company
(“Siena Funding”), and together with Siena Funding,
collectively, “Lender”)), pursuant to which we have
granted to Lender a security interest in, among other things, any
and all Accounts and Chattel Paper (as those terms are defined in
the Uniform Commercial Code) owing by you to us, whether now
existing or hereafter arising.
You are
authorized and directed to respond to any inquiries that Lender may
direct to you from time to time pertaining to the validity, amount,
and other matters relating to such Accounts and Chattel Paper. In
addition, you are hereby authorized and directed to pay all
invoices and amounts now and hereafter due to us pursuant to the
following directions:
If
remitting payment via wire transfer, please wire transfer the
monies to the following account:
Transit
Number (RTN/ABA): __________________________
Bank
Name:
__________________________
Account
Name:
__________________________
Beneficiary Account
Number:
__________________________
Reference:
__________________________
If
payment by check:
Made
payable to: NABC PROPERTIES, LLC
Mailed
to:
___________________________
___________________________
___________________________
Please notify your accounting department of this change. If you
make payment to us in any manner other than as set forth above,
such payment will not constitute settlement of the account. These
instructions may not be modified or supplemented without written
notice from Siena Lending Group LLC.
This
authorization and directive shall be continuing and irrevocable
until all of the Financing Agreements have been terminated and all
obligations owing thereunder by us and our subsidiaries or
affiliates have been paid in full in cash (other than unasserted
contingent indemnification obligations).
[SIGNATURES TO FOLLOW ON NEXT PAGE]
Very
truly yours,
NABC PROPERTIES, LLC
By:
__________________________________________
Name:
Title:
cc:
Siena Lending Group
LLC
9 W
Broad Street, 5th Floor
Attention:
Steven Sanicola
Exhibit E-3
FORM OF ACCOUNT DEBTOR NOTIFICATION
New Age Health Sciences, Inc.
______________
______________
VIA OVERNIGHT COURIER
___________________________
___________________________
___________________________
Re:
Loan Transaction with Siena Lending Group LLC
Ladies
and Gentlemen:
Please
be advised that we and certain of our subsidiaries or affiliates
have entered into certain financing arrangements (the "
Financing
Arrangements
") with Siena Lending Group LLC (as originating
lender, and after the Closing Date as servicer for affiliated
assignee, Siena Funding LLC, a Delaware limited liability company
(“Siena Funding”), and together with Siena Funding,
collectively, “Lender”)), pursuant to which we have
granted to Lender a security interest in, among other things, any
and all Accounts and Chattel Paper (as those terms are defined in
the Uniform Commercial Code) owing by you to us, whether now
existing or hereafter arising.
You are
authorized and directed to respond to any inquiries that Lender may
direct to you from time to time pertaining to the validity, amount,
and other matters relating to such Accounts and Chattel Paper. In
addition, you are hereby authorized and directed to pay all
invoices and amounts now and hereafter due to us pursuant to the
following directions:
If
remitting payment via wire transfer, please wire transfer the
monies to the following account:
Transit
Number (RTN/ABA): __________________________
Bank
Name:
__________________________
Account
Name:
__________________________
Beneficiary Account
Number:
__________________________
Reference:
__________________________
If
payment by check:
Made
payable
to: NEW
AGE HEALTH SCIENCES, INC.
Mailed
to:
___________________________
___________________________
___________________________
Please notify your accounting department of this change. If you
make payment to us in any manner other than as set forth above,
such payment will not constitute settlement of the account. These
instructions may not be modified or supplemented without written
notice from Siena Lending Group LLC.
This
authorization and directive shall be continuing and irrevocable
until all of the Financing Agreements have been terminated and all
obligations owing thereunder by us and our subsidiaries or
affiliates have been paid in full in cash (other than unasserted
contingent indemnification obligations).
[SIGNATURES TO FOLLOW ON NEXT PAGE]
Very
truly yours,
NEW AGE HEALTH SCIENCES, INC.
By:
__________________________________________
Name:
Title:
cc:
Siena Lending Group
LLC
9 W
Broad Street, 5th Floor
Attention:
Steven Sanicola
Exhibit F
FORM OF COMPLIANCE CERTIFICATE
[letterhead
of Borrowing Agent]
To:
Siena Lending Group
LLC
9 W
Broad Street, 5th Floor
Stamford,
Connecticut 06902
Attention:
Steven Sanicola
Re:
Compliance Certificate dated _______________
Ladies
and Gentlemen:
Reference
is made to that certain Loan and Security Agreement dated as of
August 10, 2018 (as amended, restated or otherwise modified from
time to time, the “
Loan
Agreement
”) by and among (1) Siena Lending Group LLC
(together with its successors and assigns, “
Lender
”),
(2) NEW AGE BEVERAGES CORPORATION, a Washington corporation
(“
Borrower 1
”),
NABC, INC., a Colorado corporation (“
Borrower 2
”)
NABC PROPERTIES, LLC, a Colorado limited liability company
(“
Borrower 3
”),
NEW AGE HEALTH SCIENCES, INC., a Nevada corporation
(“
Borrower 4
and
together with Borrower 1, Borrower 2, Borrower 3, individually and
collectively as the context may require, “
Borrower
”) and
each of the Loan Party Obligors (as defined therein) party thereto.
Capitalized terms used in this Compliance Certificate have the
meanings set forth in the Loan Agreement unless specifically
defined herein.
Pursuant
to Section 5.15 of the Loan Agreement, the undersigned Authorized
Officer of Borrowing Agent, on behalf of the Borrower, hereby
certifies (solely in his capacity as an officer of Borrowing Agent
and not in his individual capacity) that:
1.
The financial
statements of Borrower for the ___ -month period ending
_____________ attached hereto have been prepared in accordance with
GAAP, and fairly present the financial condition of Borrower for
the periods and as of the dates specified therein.
2.
As of the date
hereof, there does not exist any Default or Event of
Default.
3.
Borrower is in
compliance with the applicable financial covenants contained in
Section 5.26 of the Loan Agreement for the periods covered by this
Compliance Certificate. Attached hereto are statements of all
relevant facts and computations in reasonable detail sufficient to
evidence Borrower’s compliance with such financial covenants,
which computations were made in accordance with GAAP.
IN
WITNESS WHEREOF, this Compliance Certificate is executed by the
undersigned Authorized Officer this ____ day of _______________,
______.
NEW
AGE BEVERAGES CORPORATION
By:
________________________________
Name:
Title:
Exhibit G
FORM OF MONTHLY FINANCIAL MODEL
[See
attached]