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Title: |
Credit Agreement |
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Entities: |
Citibank, NA; Geerlings & Wade, Inc.; Geerlings & Wade Inc |
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Date: |
2003 |
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Size: |
Preview shows 16KB of 74KB total |
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Price: |
$43 |
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ID: |
#174516 |
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CREDIT AGREEMENT
Dated as of February 24, 2003
with
THE PARTIES LISTED ON
SCHEDULE 1 HERETO
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{PAGE}
TABLE OF CONTENTS
{TABLE}
{CAPTION}
Page
{S} {C}
1. Definitions; Certain Rules of Construction ................................ 1
2. Revolving Credit Facility ................................................. 5
2.1. Revolving Loan ....................................................... 5
2.2. Maximum Amount of Credit ............................................. 5
2.3. Borrowing Requests ................................................... 5
2.4. Notes ................................................................ 5
2.5. Use of Proceeds ...................................................... 5
3. Interest; Commitment Fees, etc. ........................................... 6
3.1. Interest ............................................................. 6
3.2. Unused Line Fee ...................................................... 6
3.3. Default Rate ......................................................... 6
3.4. Computations of Interest ............................................. 6
3.5. Warrants ............................................................. 6
4. Payment ................................................................... 7
4.1. Payment at Maturity .................................................. 7
4.2. Mandatory Prepayments ................................................ 7
4.3. Voluntary Prepayments of Loan ........................................ 7
4.4. Reborrowing .......................................................... 7
4.5. Cash Collection System ............................................... 7
5. Conditions to Extending Credit ............................................ 7
5.1. Officer's Certificate ................................................ 7
5.2. Notes ................................................................ 7
5.3. Security Agreement ................................................... 8
5.4. Perfection of Security ............................................... 8
5.5. Lenders' Expenses .................................................... 8
5.6. Insurance ............................................................ 8
5.7. Compliance ........................................................... 8
5.8. Proper Proceedings ................................................... 8
5.9. Legality, etc. ....................................................... 8
5.10. General ............................................................. 9
6. General Covenants ......................................................... 9
6.1. Conduct of Business .................................................. 9
6.2. Payment of Taxes and Other Amounts ................................... 9
6.3. Compliance with Laws ................................................. 9
6.4. Insurance ............................................................ 9
6.4.1. Property Insurance ....................................... 9
6.4.2. Liability Insurance ...................................... 9
6.5. Financial Statements and Reports ..................................... 9
6.5.1. Annual Reports ........................................... 10
6.5.2. Quarterly Reports ........................................ 10
{/TABLE}
-i-
{PAGE}
{TABLE}
{S} {C}
6.5.3. Monthly Calculations ..................................... 10
6.5.4. Notice of Litigation, Defaults, etc. ..................... 10
6.5.5. Other Information ........................................ 11
6.6. Current Ratio ........................................................ 11
6.7. Quick Ratio .......................................................... 11
6.8. EBIT ................................................................. 12
6.9. Capital Expenditures ................................................. 12
6.10. Indebtedness and Liens ............................................... 12
6.11. Distributions ........................................................ 13
6.12. Investments and Acquisitions ......................................... 13
6.13. Merger; Sale of Assets; Share Issuance ............................... 13
6.14. Sales and Leasebacks ................................................. 13
6.15. Transactions with Affiliates ......................................... 13
6.16. Management Fees ...................................................... 14
7. Representations and Warranties ............................................ 14
7.1. Organization and Business ............................................ 14
7.2. Financial Statements and Other Information ........................... 14
7.3. Litigation ........................................................... 14
7.4. No Legal Obstacle to Agreements ...................................... 14
7.5. Taxes ................................................................ 15
8. Defaults .................................................................. 15
8.1. Events of Default .................................................... 15
8.1.1. Payment .................................................. 15
8.1.2. Covenant Compliance ...................................... 15
8.1.3. Representations and Warranties ........................... 15
8.1.4. Cross-Default ............................................ 16
8.1.5. Judgments ................................................ 16
8.1.6. Material Adverse Change .................................. 16
8.1.7. Change in Control ........................................ 16
8.1.8. Bankruptcy ............................................... 16
8.2. Certain Actions Following an Event of Default ........................ 17
8.2.1. No Obligation to Extend Credit; Acceleration ............. 17
8.2.2. Exercise of Rights ....................................... 17
8.2.3. Bankruptcy Default ....................................... 17
8.2.4. Setoff ................................................... 17
8.2.5. Cumulative Remedies ...................................... 17
8.3. Waivers .............................................................. 17
9. Expense Indemnity ......................................................... 18
9.1. Expenses ............................................................. 18
9.2. General Indemnity .................................................... 18
10. Successors and Assigns .................................................... 18
11. Notices ................................................................... 19
12. Course of Dealing, Amendments and Waivers ................................. 20
13. Venue; Service of Process; Certain Waivers ................................ 20
{/TABLE}
-ii-
{PAGE}
{TABLE}
{S} {C}
14. WAIVER OF JURY TRIAL ...................................................... 20
15. General ................................................................... 21
{/TABLE}
-iii-
{PAGE}
SCHEDULES
1. Commitment Amounts
2. Tranche I Percentages
3. Tranche II Percentages
4. Fee Percentages
5. Warrants
EXHIBITS
2.4 - Form of Note
5.1 - Officer's Certificate and Borrowing Request
5.3 - Security Agreement
6.10 - Existing Indebtedness and Liens
7.1 - Subsidiaries
-i-
{PAGE}
GEERLINGS & WADE, INC.
CREDIT AGREEMENT
This Agreement, dated as of February 24, 2003, is among Geerlings & Wade,
Inc., a Massachusetts corporation (the "Company"), and John M. Connors, Jr.,
James C. Curvey, John J. Remondi, Gordon Romer and Robert L. Webb (each a
"Lender", and collectively the "Lenders"). The parties agree as follows:
1. Definitions; Certain Rules of Construction. Except as the context otherwise
explicitly requires, (a) the capitalized term "Section" refers to sections of
this Agreement, (b) the capitalized term "Exhibit" refers to exhibits to this
Agreement, (c) references to "$" and "Dollars" are to United States dollars, (d)
the word "including" shall be construed as "including without limitation", (e)
accounting terms not otherwise defined herein have the meaning provided under
GAAP, (f) references to a particular statute or regulation include all rules and
regulations thereunder and any successor statute, regulation or rules, in each
case as from time to time in effect, and (g) references to a particular Person
include such Person's successors and assigns to the extent not prohibited by
this Agreement and the other Credit Documents. References to "the date hereof"
mean the date first set forth above.
"Affiliate" means as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (a)
vote 10% or more of the securities having ordinary voting power for the election
of directors (or persons performing similar functions) of such Person or (b)
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise: provided, that with respect to any Person, the
term "Affiliate" shall include each officer, director, employee and general
partner of such Person, the Members of the Immediate Family of each such
officer, director, employee and general partner and each Affiliate of each of
the foregoing.
"Banking Day" means any day (other than Saturday or Sunday) on which banks
are open to conduct business in Boston, Massachusetts.
"Bankruptcy Code" means Title 11 of the United States Code (or any
successor statute) and the rules and regulations thereunder, all as from time to
time in effect.
"Base Rate" means, on any date, the greater of (a) the rate of interest
announced by Citibank, N.A. as its prime rate plus three percent (3.0%) or (b)
six percent (6.00%).
"Borrowing Request" is defined in Section 2.3.
"Capital Expenditures" means, for any fiscal quarter, the sum (without
duplication) of all expenditures (whether paid in cash or accrued as
liabilities) during such fiscal quarter that are or should be treated as capital
expenditures under GAAP.
-1-
{PAGE}
"Change of Control" means (a) a majority of the board of directors of the
Company shall be neither (i) directors of the Company as of the date hereof nor
(ii) nominated, appointed or approved by directors of the Company as of the date
hereof nor (iii) nominated, appointed or approved by directors described in
clause (ii) above; (b) any Person, together with "affiliates" and "associates"
of such Person within the meaning of Rule 12b-2 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or any "group" including such Person
under sections 13(d) and 14(d) of the Exchange Act shall acquire after the date
hereof (i) beneficial ownership within the meaning of Rule 13d-3 of the Exchange
Act of 33% or more of either the voting stock or total equity capital of the
Company or (ii) direct or indirect control of the Company through a shareholder,
voting or similar agreement or arrangement; or (c) the Company shall initiate
any action to dissolve, liquidate or otherwise terminate its existence.
"Closing Date" means the date on which any extension of credit is made
pursuant to Section 2.
"Closing Price" means the closing price of the Company's common stock, par
value $.01 per share, as quoted on the Nasdaq SmallCap Market on the Initial
Closing Date.
"Common Stock" means the Company's common stock, par value $.01 per share.
"Connors" means John M. Connors, Jr., a Lender hereunder.
"Company" is defined in the Preamble.
"Credit Documents" means:
(a) this Agreement, the Security Agreement and the Notes,
each as from time to time in effect; and
(b) any other present or future agreement or instrument from
time to time entered into by the Lenders, on one hand, and the
Company on the other hand, relating to, amending or modifying
this Agreement or any other Credit Document referred to above or
which is stated to be a Credit Document, each as from time to
time in effect.
"Credit Obligations" means all present and future liabilities, obligations
and indebtedness of the Company under or in connection with this Agreement, the
Notes or any other Credit Document, including obligations in respect of
principal, interest, amounts provided for in Section 3.2 and other fees,
charges, indemnities and expenses from time to time owing hereunder or under any
other Credit Document.
"Curvey" means James C. Curvey, a Lender hereunder.
"Default" means any Event of Default and any event or condition which with
the passage of time or giving of notice, or both, would become an Event of
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