AMENDED AND RESTATED
CREDIT AGREEMENT
among
CHIC BY H.I.S, INC.
as Borrower,
AND
THE DOMESTIC SUBSIDIARIES OF CHIC BY H.I.S, INC.
as Guarantors,
AND
THE LENDERS IDENTIFIED HEREIN,
AND
NATIONSBANK, N.A.,
as Agent
DATED AS OF MARCH 17, 1997
TABLE OF CONTENTS
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions...........................................................1
1.2 Computation of Time Periods and Other Definitional Provisions........19
1.3 Accounting Terms.....................................................20
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans......................................................20
2.2 Term Loans...........................................................22
2.3 Continuations and Conversions........................................23
2.4 Minimum Amounts......................................................24
2.5 Notes................................................................24
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS
3.1 Interest.............................................................24
3.2 Place and Manner of Payments.........................................25
3.3 Prepayments..........................................................25
3.4 Commitment Fees......................................................27
3.5 Payment in full at Maturity..........................................27
3.6 Computations of Interest and Fees....................................27
3.7 Pro Rata Treatment...................................................28
3.8 Sharing of Payments..................................................28
3.9 Capital Adequacy.....................................................29
3.10 Inability To Determine Interest Rate................................30
3.11 Illegality..........................................................30
3.12 Requirements of Law.................................................31
3.13 Taxes...............................................................32
3.14 Indemnity...........................................................34
SECTION 4
GUARANTY
4.1 Guaranty of Payment..................................................35
4.2 Obligations Unconditional............................................35
4.3 Modifications........................................................36
4.4 Waiver of Rights.....................................................36
4.5 Reinstatement........................................................37
4.6 Remedies.............................................................37
4.7 Limitation of Guaranty...............................................37
4.8 Rights of Contribution...............................................37
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions...................................................38
5.2 Conditions to All Revolving Loans....................................40
SECTION 6
REPRESENTATIONS AND WARRANTIES
6.1 Financial Condition..................................................41
6.2 No Material Change...................................................41
6.3 Organization and Good Standing.......................................42
6.4 Due Authorization....................................................42
6.5 No Conflicts.........................................................42
6.6 Consents.............................................................42
6.7 Enforceable Obligations..............................................43
6.8 No Default...........................................................43
6.9 Ownership............................................................43
6.10 Indebtedness........................................................43
6.11 Litigation..........................................................43
6.12 Taxes...............................................................43
6.13 Compliance with Law.................................................44
6.14 ERISA...............................................................44
6.15 Subsidiaries........................................................45
6.16 Use of Proceeds; Margin Stock.......................................45
6.17 Government Regulation...............................................45
6.18 Environmental Matters...............................................46
6.19 Intellectual Property...............................................47
6.20 Solvency............................................................48
6.21 Investments.........................................................48
6.22 Chief Executive Office..............................................48
6.23 Disclosure..........................................................48
6.24 Licenses, etc.......................................................48
6.25 Collateral Documents................................................48
SECTION 7
AFFIRMATIVE COVENANTS
7.1 Information Covenants................................................49
7.2 Financial Covenants..................................................51
7.3 Preservation of Existence and Franchises.............................52
7.4 Books and Records....................................................52
7.5 Compliance with Law..................................................52
7.6 Payment of Taxes and Other Indebtedness..............................53
7.7z Insurance...........................................................53
7.8 Maintenance of Property..............................................53
7.9 Performance of Obligations...........................................53
7.10 Collateral..........................................................53
7.11 Use of Proceeds.....................................................54
7.12 Audits/Inspections..................................................54
7.13 Additional Credit Parties...........................................54
7.14 Stock Certificates..................................................54
SECTION 8
NEGATIVE COVENANTS
8.1 Indebtedness.........................................................55
8.2 Liens................................................................56
8.3 Nature of Business...................................................56
8.4 Consolidation and Merger.............................................56
8.5 Sale or Lease of Assets..............................................56
8.6 Sale Leasebacks......................................................57
8.7 Advances, Investments and Loans......................................57
8.8 Restricted Payments..................................................57
8.9 Transactions with Affiliates.........................................57
8.10 Fiscal Year; Organizational Documents...............................58
8.11 Negative Pledges....................................................58
8.12 Consulting Fees.....................................................58
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default....................................................58
9.2 Acceleration; Remedies...............................................61
9.3 Allocation of Payments After Event of Default........................62
SECTION 10
AGENCY PROVISIONS
10.1 Appointment.........................................................63
10.2 Delegation of Duties................................................63
10.3 Exculpatory Provisions..............................................64
10.4 Reliance on Communications..........................................64
10.5 Notice of Default...................................................65
10.6 Non-Reliance on Agent and Other Lenders.............................65
10.7 Indemnification.....................................................65
10.8 Agent in Its Individual Capacity....................................66
10.9 Successor Agent.....................................................66
SECTION 11
MISCELLANEOUS
11.1 Notices.............................................................67
11.2 Right of Set-Off....................................................67
11.3 Benefit of Agreement................................................67
11.4 No Waiver; Remedies Cumulative......................................70
11.5 Payment of Expenses; Indemnification................................70
11.6 Amendments, Waivers and Consents....................................71
11.7 Counterparts........................................................72
11.8 Headings............................................................72
11.9 Defaulting Lender...................................................72
11.10 Survival of Indemnification and Representations and Warranties.....72
11.11 Governing Law; Jurisdiction........................................73
11.12 Waiver of Jury Trial...............................................73
11.13 Time...............................................................74
11.14 Severability.......................................................74
11.15 Entirety...........................................................74
11.16 Binding Effect.....................................................74
11.17 Confidentiality....................................................74
11.18 Amendment and Restatement of Existing Credit Agreement.............75
11.19 Release of Collateral..............................................75
SCHEDULES
Schedule 1.1(a) Commitment Percentages
Schedule 6.10 Indebtedness
Schedule 6.15 Subsidiaries
Schedule 6.22 Chief Executive Offices
Schedule 8.2 Liens
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.3 Form of Notice of Continuation/Conversion
Exhibit 2.5(a) Form of Revolving Loan Note
Exhibit 2.5(b) Form of Term Loan Note
Exhibit 7.1(c) Form of Borrowing Base Report
Exhibit 7.1(d) Form of Officer's Certificate
Exhibit 7.13 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit Agreement"), is
entered into as of March 17, 1997 among CHIC BY H.I.S, INC., a Delaware
corporation (the "Borrower"), the Domestic Subsidiaries of the Borrower
(individually a "Guarantor" and collectively the "Guarantors"), the Lenders (as
defined herein), and NATIONSBANK, N.A., as Agent for the Lenders.
RECITALS
WHEREAS, the Borrower is currently party to that certain Amended and
Restated Revolving Credit and Term Loan Agreement dated as of December 15, 1994
(the "Existing Credit Agreement"); and
WHEREAS, the Borrower and the Guarantors have requested, and the Lenders
have agreed, to amend and restate the Existing Credit Agreement on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Additional Credit Party" means each Person that becomes a Guarantor
after the Closing Date, as provided in Section 7.13.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by or under direct or
indirect common control with such Person. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly,
the power (i) to vote 10% or more of the securities having ordinary voting
power for the election of directors of such corporation or (ii) to direct
or cause direction of the management and policies of such corporation,
whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means NationsBank, N.A. (or any successor thereto) or any
successor administrative agent appointed pursuant to Section 10.9.
"Applicable Percentage" means the appropriate applicable percentages
corresponding to the Leverage Ratio in effect as of the most recent
Calculation Date as shown below:
--------------------------------------------------------------------------
Applicable Applicable
Pricing Percentage For Percentage For
Level Leverage Ratio Eurodollar Loans Base Rate Loans
--------------------------------------------------------------------------
I < 2.75 to 1.0 1.00% 0%
--------------------------------------------------------------------------
II < 3.75 to 1.0 but 1.25% 0%
$ 2.75 to 1.0
--------------------------------------------------------------------------
III $ 3.75 to 1.0 1.50% .25%
--------------------------------------------------------------------------
The Applicable Percentage shall, in each case, be determined and
adjusted quarterly on the date (each a "Calculation Date") five Business
Days after the date by which the Borrower is required to provide the
officer's certificate in accordance with the provisions of Section 7.1(d);
provided that the initial Applicable Percentage shall be based on Pricing
Level II (as shown above) and shall remain at Pricing Level II until the
first Calculation Date subsequent to the Closing Date and, thereafter, the
Pricing Level shall be determined by the then current Leverage Ratio; and
provided further that if the Borrower fails to provide the officer's
certificate required by Section 7.1(d) on or before the most recent
Calculation Date, the Applicable Percentage from such Calculation Date
shall be based on Pricing Level III until such time that an appropriate
officer's certificate is provided whereupon the Pricing Level shall be
determined by the then current Leverage Ratio. Each Applicable Percentage
shall be effective from one Calculation Date until the next Calculation
Date. Any adjustment in the Applicable Percentage shall be applicable to
all existing Loans as well as any new Loans made.
"Asset Disposition" means the disposition of any or all of the
assets (or the sale of the stock of a Subsidiary) of the Borrower or any
of its Subsidiaries whether by sale, lease, transfer or otherwise other
than those permitted by the terms of Section 8.5(a), (b) or (c).
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time
to time.
"Base Rate" means, for any day, the rate per annum (rounded upwards,
if necessary, to the nearest whole multiple of 1/16 of 1%) equal to the
greater of (a) the Federal Funds Rate in effect on such day plus 1/2 of 1%
or (b) the Prime Rate in effect on such day. If for any reason the Agent
shall have determined (which determination shall be conclusive absent
manifest error) that it is unable after due inquiry to ascertain the
Federal Funds Rate for any reason, including the inability or failure of
the Agent to obtain sufficient quotations in accordance with the terms
hereof, the Base Rate shall be determined without regard to clause (a) of
the first sentence of this definition until the circumstances giving rise
to such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be effective on
the effective date of such change in the Prime Rate or the Federal Funds
Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means Chic by H.I.S, Inc., a Delaware corporation,
together with any successors and permitted assigns.
"Borrowing Base Assets" means, at any date of determination, the sum
of (a) 50% of Eligible Inventory plus (b) 80% of Eligible Receivables.
"Borrowing Base Report" means a report in the form of Exhibit
7.1(c).
"Business Day" means any day other than a Saturday, a Sunday, a
legal holiday or a day on which banking institutions are authorized or
required by law or other governmental action to close in Charlotte, North
Carolina or New York, New York; provided that in the case of Eurodollar
Loans, such day is also a day on which dealings between banks are carried
on in U.S. dollar deposits in the London interbank market.
"Calculation Date" has the meaning set forth in the definition of
Applicable Percentage.
"Capital Expenditures" means all expenditures of the Borrower and
its Subsidiaries which, in accordance with GAAP, would be classified as
capital expenditures, including, without limitation, Capital Leases.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (b) U.S.
dollar denominated time and demand deposits and certificates of deposit of
(i) any Lender, (ii) any domestic commercial bank having capital and
surplus in excess of $100,000,000 or (iii) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof
or from Xxxxx'x is at least P-1 or the equivalent thereof (any such bank
being an "Approved Bank"), in each case with maturities of not more than
270 days from the date of acquisition, (c) commercial paper and variable
or fixed rate notes issued by any Approved Bank (or by the parent company
thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by
S&P or P-1 (or the equivalent thereof) or better by Moody's and maturing
within six months of the date of acquisition, (d) repurchase agreements
with a bank or trust company (including any of the Lenders) or securities
dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of America
in which the Borrower shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the
repurchase obligations and (e) Investments, classified in accordance with
GAAP as current assets, in money market investment programs registered
under the Investment Company Act of 1940, as amended, which are
administered by financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).
"Change in Control" means (a) the shares of common stock of the
Borrower are neither listed for trading on a United States national
securities exchange nor approved for trading on an established
over-the-counter trading market in the United States; (b) the Board of
Directors of the Borrower authorizes, approves of or enters into an
agreement that contemplates (i) a merger or consolidation of the Borrower,
if, as a result thereof, the owners of the equity securities of the
Borrower immediately preceding such event own 50% or less of the equity
interests of the surviving entity immediately after such event, (ii) a
sale
of all or substantially all of the assets of the Borrower, as the case may
be, (iii) the acquisition by the Borrower for cash, property or securities
(other than its own equity securities), in one transaction or a series of
related transactions, of 30% or more of the fair market value of the
equity securities of the Borrower outstanding immediately prior to the
commencement of such acquisitions, or (iv) a distribution by the Borrower
to its equity holders, in one transaction or a series of related
transactions, of cash, property or securities having an aggregate fair
market value at the time of distribution that is 30% of the fair market
value of the equity securities of the Borrower outstanding immediately
prior to such distribution; (c) during any period of two consecutive
years, individuals who at the beginning of any such period constitute the
Board of Directors of the Borrower cease for any reason to constitute at
least a majority thereof, unless the election of each director first
elected during such period was approved by a vote of a majority of
directors of the Borrower then still in office who were directors at the
beginning of any such period; and (d) any person is or becomes the
beneficial owner, directly or indirectly, of 50% or more of the shares of
common stock or the voting capital stock of the Borrower.
"Closing Date" means the date hereof.
"CMLTD" means all principal payments that were due on long term debt
(as defined in accordance with GAAP) and Capital Leases of the Borrower
and its Subsidiaries during the applicable period.
"Code" means the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder, as amended, modified, succeeded or
replaced from time to time.
"Collateral" means all collateral referred to in and covered by the
Collateral Documents.
"Collateral Documents" means the Pledge Agreement and such other
documents executed and delivered in connection with the attachment and
perfection of the Lenders' security interests in the Collateral, including
without limitation, the UCC financing statements.
"Commitment Fees" means the fees payable to the Lenders pursuant to
Section 3.4.
"Commitments" means the commitment of each Lender with respect to
the Revolving Committed Amount and the Term Loan Committed Amount.
"Credit Documents" means this Credit Agreement, the Notes, the
Subordination Agreement, any Joinder Agreement, the Collateral Documents,
and all other related
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto.
"Credit Parties" means the Borrower and the Guarantors and "Credit
Party" means any one of them.
"Credit Party Obligations" means, without duplication, all of the
obligations of the Credit Parties to the Lenders and the Agent, whenever
arising, under this Credit Agreement, the Notes, the Collateral Documents
or any of the other Credit Documents to which the Borrower or any of its
Subsidiaries is a party.
"Current Assets" means, at any time, all items which, in accordance
with GAAP, would be classified as current assets on a consolidated balance
sheet of the Borrower.
"Current Liabilities" means, at any time, all items which, in
accordance with GAAP, would be classified as current liabilities on a
consolidated balance sheet of the Borrower.
"Debt Issuance" means the issuance of any Indebtedness for borrowed
money by the Borrower or any of its Subsidiaries, other than Indebtedness
permitted by Section 8.1.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, (a) has
failed to make a Loan or purchase a Participation Interest required
pursuant to the terms of this Credit Agreement (but only for so long as
such Loan is not made or such Participation Interest is not purchased),
(b) has failed to pay to the Agent or any Lender an amount owed by such
Lender pursuant to the terms of this Credit Agreement (but only for so
long as such amount has not been repaid) or (c) has been deemed insolvent
or has become subject to a bankruptcy or insolvency proceeding or to a
receiver, trustee or similar official.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Subsidiaries" means all direct and indirect Subsidiaries
of Borrower that are domiciled, incorporated, or organized under the laws
of any state of the United States or has any material assets located in
the United States of America.
"EBITDA" means, for any period, with respect to the Borrower and its
Subsidiaries on a consolidated basis, the sum of (a) Net Income for such
period (excluding the effect of any extraordinary or other non-recurring
gains outside of the ordinary course of business
and any non-cash losses incurred prior to the end of the 1996 fiscal year)
plus (b) an amount which, in the determination of Net Income for such
period has been deducted for (i) Interest Expense for such period, (ii)
total Federal, state, local, foreign or other income taxes for such period
and (iii) all depreciation and amortization for such period, all as
determined in accordance with GAAP.
"Effective Date" means the date on which the conditions set forth in
Section 5.1 shall have been fulfilled (or waived in the sole discretion of
the Lenders) and on which the initial Loans shall have been made.
"Eligible Assignee" means (a) any Lender or Affiliate or subsidiary
of a Lender and (b) any other commercial bank, financial institution,
institutional lender or "accredited investor" (as defined in Regulation D
of the Securities and Exchange Commission) with capital of at least $500
million and with an office in the United States.
"Eligible Inventory" means, as of any date of determination and
without duplication, the lower of the aggregate cost (valued by the FIFO
method) or fair market value of all raw materials, work in process and
finished goods inventory owned by the Credit Parties as of such date, less
appropriate reserves determined in accordance with GAAP, but excluding (a)
inventory subject to any Lien, other than Permitted Liens; provided that
any Inventory subject to a purchase money Lien shall not be deemed to be
Eligible Inventory, (b) inventory which is not in good condition or fails
to meet standards for sale or use imposed by governmental agencies,
departments or divisions having regulatory authority over such goods, (c)
inventory which is not useable or saleable at prices approximating their
cost in the ordinary course of the applicable Credit Party's business
(including without duplication the amount of any reserves for
obsolescence, unsalability or decline in value), (d) inventory which is
not located in the United States and (e) inventory which is leased or on
consignment.
"Eligible Receivables" means, as of any date of determination and
without duplication, the aggregate of all accounts receivable reflected on
the balance sheet of the Borrower and its Domestic Subsidiaries as of such
date, less appropriate reserves determined in accordance with GAAP, but
excluding (a) accounts receivable that are more than 89 days past due, (b)
accounts receivable subject to any Lien (other than Permitted Liens), (c)
accounts receivable for obligations that have not been fully performed or
that are subject to dispute and (d) accounts receivable with respect to
which the obligor is (i) past due on more than 50% of its obligations to
the Credit Parties, (ii) an Affiliate of the Borrower or one of its
Subsidiaries, (iii) located outside of the United States or Canada or (iv)
the government of the United States or an agency of the government of the
United States.
"Environmental Claim" means any investigation, written notice,
violation, written demand, written allegation, action, suit, injunction,
judgment, order, consent decree, penalty, fine, lien, proceeding, or
written claim whether administrative, judicial, or private in nature
arising (a) pursuant to, or in connection with, an actual or alleged
violation of, any Environmental Law, (b) in connection with any Hazardous
Material, (c) from any assessment, abatement, removal, remedial,
corrective, or other response action in connection with an Environmental
Law or other order of a Governmental Authority or (d) from any actual or
alleged damage, injury, threat, or harm to health, safety, natural
resources, or the environment.
"Environmental Laws" means any current or future legal requirement
of any Governmental Authority pertaining to (a) the protection of health,
safety, and the indoor or outdoor environment, (b) the conservation,
management, or use of natural resources and wildlife, (c) the protection
or use of surface water and groundwater, (d) the management, manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal, release, threatened release, abatement, removal, remediation or
handling of, or exposure to, any hazardous or toxic substance or material
or (e) pollution (including any release to land surface water and
groundwater) and includes, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42
USC 9601 et seq., Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste
Amendment of 1984, 42 USC 6901 et seq., Federal Water Pollution Control
Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et seq., Clean
Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic Substances Control
Act of 1976, 15 USC 2601 et seq., Hazardous Materials Transportation Act,
49 USC App. 1801 et seq., Occupational Safety and Health Act of 1970, as
amended, 29 USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et
seq., Emergency Planning and Community Right-to-Know Act of 1986, 42 USC
11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321 et
seq., Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq.,
any analogous implementing or successor law, and any amendment, rule,
regulation, order, or binding directive issued thereunder.
"Equity Issuance" means any issuance by the Borrower or any of its
Subsidiaries to any Person of (a) shares of its capital stock or other
equity interests, (b) any shares of its capital stock or other equity
interests pursuant to the exercise of options or warrants where the
aggregate consideration paid by such Person exceeds $100,000 or (c) any
shares of its capital stock or other equity interests pursuant to the
conversion of any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto, as interpreted by the rules
and regulations thereunder, all as the same may be in effect from time to
time. References to sections of ERISA shall be construed also to refer to
any successor sections.
"ERISA Affiliate" means an entity, whether or not incorporated,
which is under common control with any Credit Party or any of its
Subsidiaries within the meaning of Section 4001(a)(14) of ERISA, or,
solely for the purposes of potential liability under Section 302(c)(ll) of
ERISA and Section 412(c)(ll) of the Code and the lien created under
Section 302(f) of ERISA and Section 412(o) of the Code, Section 414(m) of
the Code.
"Eurodollar Loan" means a Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant to
the following formula:
Eurodollar Rate = London Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System (or
any successor), as such regulation may be amended from time to time or any
successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities, as
that term is defined in Regulation D, having a term equal to the Interest
Period for which such Eurodollar Reserve Percentage is being calculated
(or against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is determined),
whether or not Lender has any Eurocurrency liabilities subject to such
reserve requirement at that time. Eurodollar Loans shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credits for proration, exceptions
or offsets that may be available from time to time to a Lender. The
Eurodollar Rate shall be adjusted automatically on and as of the effective
date of any change in the Eurodollar Reserve Percentage.
"Event of Default" means any of the events or circumstances
described in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as amended,
modified, succeeded or replaced from time to time.
"Existing Credit Agreement" has the meaning set forth in the
recitals to this Credit Agreement.
"Federal Funds Rate" means for any day the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day and (b) if no such
rate is so published on such next preceding Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to the Agent by
three Federal Funds brokers of recognized standing on such day on such
transactions as determined by the Agent.
"Fee Letter" means the fee letter between the Agent and the Borrower
dated as of the Closing Date.
"Fixed Charge Ratio" means the ratio of (a) an amount equal to (i)
EBITDA minus (ii) Capital Expenditures of the Borrower and its
Subsidiaries (other than Capital Expenditures incurred with Indebtedness
subject to Permitted Liens) minus (iii) cash tax expenditures of the
Borrower and its Subsidiaries to (b) an amount equal to (i) cash Interest
Expense of the Borrower and its Subsidiaries plus (ii) dividends paid by
the Borrower plus (iii) CMLTD.
"Foreign Subsidiaries" means all Subsidiaries of the Borrower that
are not Domestic Subsidiaries.
"Funded Debt" means, without duplication, the sum of (a) all
Indebtedness of the Borrower and its Subsidiaries for borrowed money, (b)
all purchase money Indebtedness of the Borrower and its Subsidiaries, (c)
the principal portion of all obligations of the Borrower and its
Subsidiaries under Capital Leases, (d) all obligations, contingent or
otherwise, relative to the face amount of all letters of credit (other
than letters of credit supporting trade payables in the ordinary course of
business), whether or not drawn, and banker's acceptances issued for the
account of such Person (it being understood that, to the extent an undrawn
letter of credit supports another obligation consisting of Indebtedness,
in calculating aggregated Indebtedness only such other obligation shall be
included), (e) all
Guaranty Obligations of the Borrower and its Subsidiaries with respect to
Funded Debt of another Person, (f) all Funded Debt of another entity
secured by a Lien on any property of the Borrower and its Subsidiaries
whether or not such Funded Debt has been assumed by the Borrower or any of
its Subsidiaries, (g) all Funded Debt of any partnership or unincorporated
joint venture to the extent the Borrower or one of its Subsidiaries is
legally obligated, net of any assets of such partnership or joint venture
and (h) the principal balance outstanding under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product where such transaction is considered borrowed
money indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to Section .
"Governmental Authority" means any Federal, state, local, provincial
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means each of the Domestic Subsidiaries of the Borrower
and each Additional Credit Party which has executed a Joinder Agreement,
together with their successors and assigns.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations (other than endorsements in the ordinary
course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person
in any manner, whether direct or indirect, and including without
limitation any obligation, whether or not contingent, (a) to purchase any
such Indebtedness or other obligation or any property constituting
security therefor, (b) to advance or provide funds or other support for
the payment or purchase of such indebtedness or obligation or to maintain
working capital, solvency or other balance sheet condition of such other
Person (including, without limitation, maintenance agreements, comfort
letters, take or pay arrangements, put agreements or similar agreements or
arrangements) for the benefit of the holder of Indebtedness of such other
Person, (c) to lease or purchase property, securities or services
primarily for the purpose of assuring the owner of such Indebtedness or
(d) to otherwise assure or hold harmless the owner of such Indebtedness or
obligation against loss in respect thereof. The amount of any Guaranty
Obligation hereunder shall (subject to any limitations set forth therein)
be deemed to be an amount equal to the outstanding principal amount of the
Indebtedness in respect of which such Guaranty Obligation is made.
"Hazardous Materials" means any substance, material or waste defined
or regulated in or under any Environmental Laws.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made (c) all obligations of
such Person under conditional sale or other title retention agreements
relating to property purchased by such Person to the extent of the value
of such property (other than customary reservations or retentions of title
under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations, other than intercompany items, of such
Person issued or assumed as the deferred purchase price of property or
services purchased by such Person which would appear as liabilities on a
balance sheet of such Person, (e) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed,
(f) all Guaranty Obligations of such Person, (g) the principal portion of
all obligations of such Person under (i) Capital Leases and (ii) any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product of such Person where such
transaction is considered borrowed money indebtedness for tax purposes but
is classified as an operating lease in accordance with GAAP, (h) all
obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, or other interest or
exchange rate or commodity price hedging agreements, (i) the maximum
amount of all performance and standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (j)
all preferred stock issued by such Person and required by the terms
thereof to be redeemed, or for which mandatory sinking fund payments are
due, by a fixed date and (k) the aggregate amount of uncollected accounts
receivable of such Person subject at such time to a sale of receivables
(or similar transaction) regardless of whether such transaction is
effected without recourse to such Person or in a manner that would not be
reflected on the balance sheet of such Person in accordance with GAAP. The
Indebtedness of any Person shall include the Indebtedness of any
partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable with
respect thereto.
"Interest Expense" means, for any period, with respect to the
Borrower and its Subsidiaries on a consolidated basis, all net interest
expense, including the interest component under Capital Leases, as
determined in accordance with GAAP.
"Interest Payment Date" means (a) as to Base Rate Loans, the last
day of each month and the Maturity Date and (b) as to Eurodollar Loans,
the last day of each applicable Interest Period and the Maturity Date and
in addition where the applicable Interest Period for a Eurodollar Loan is
greater than three months, then also on the date three months from the
beginning of the Interest Period and each three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of one,
two, three or six months' duration, as the Borrower may elect, commencing,
in each case, on the date of the borrowing (including continuations and
conversions thereof); provided, however, (a) if any Interest Period would
end on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day (except that where the next
succeeding Business Day falls in the next succeeding calendar month, then
on the next preceding Business Day), (b) no Interest Period shall extend
beyond the Maturity Date and (c) where an Interest Period begins on a day
for which there is no numerically corresponding day in the calendar month
in which the Interest Period is to end, such Interest Period shall end on
the last Business Day of such calendar month.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of capital stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance, loan
or other extension of credit to, such Person (other than deposits made in
connection with the purchase of equipment or other assets in the ordinary
course of business) or (c) any other capital contribution to or investment
in such Person, including, without limitation, any Guaranty Obligation
(including any support for a letter of credit issued on behalf of such
Person) incurred for the benefit of such Person.
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Exhibit 7.13.
"Lender" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Leverage Ratio" means, at the end of each fiscal quarter of the
Borrower, the ratio of (a) all Funded Debt of the Borrower and its
Subsidiaries to (b) EBITDA for the prior twelve month period.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference,
priority or charge of any kind, including, without limitation, any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, and any lease in the nature thereof.
"Loan" or "Loans" means the Revolving Loans and/or the Term Loans
(or a portion of any such Loan), individually or collectively, as
appropriate or any Participation Interest purchased in such Loan or Loans.
"London Interbank Offered Rate" means, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period and for an amount
comparable to such Eurodollar Loan; provided, however, if more than one
rate is specified on Telerate Page 3750, the applicable rate shall be the
arithmetic mean of all such rates. If, for any reason, such rate is not
available, the term "London Interbank Offered Rate" shall mean, with
respect to any Eurodollar Loan for the Interest Period applicable thereto,
the rate of interest per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period and for an amount
comparable to such Eurodollar Loan; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall
be the arithmetic mean of all such rates.
"Material Adverse Effect" means a material adverse effect on (a) the
operations, financial condition or business of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of a Credit Party to
perform its respective material obligations under this Credit Agreement or
any of the other Credit Documents, or (c) the validity or enforceability
of this Credit Agreement, any of the other Credit Documents, or the rights
and remedies of the Lenders hereunder or thereunder taken as a whole.
"Maturity Date" means March 31, 2000.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"Multiemployer Plan" means a Plan covered by Title IV of ERISA which
is a multiemployer plan as defined in Section 3(37) or 4001(a)(3) of
ERISA.
"Multiple Employer Plan" means a Plan covered by Title IV of ERISA,
other than a Multiemployer Plan, with respect to which any Credit Party or
any of its Subsidiaries or any ERISA Affiliate and at least one employer
other than a Credit Party or any of its Subsidiaries or any ERISA
Affiliate are contributing sponsors.
"Net Cash Proceeds" means the gross cash proceeds (including cash
actually received (but only when received) by way of deferred payment
pursuant to a promissory note, receivable, or otherwise) received from an
Asset Disposition, an Equity Issuance or a Debt Issuance net of (a)
transaction costs, fees and expenses payable to third parties and (b) a
good faith estimate of the taxes payable with respect to such gross
proceeds.
"Net Income" means, for any period, the net income after taxes for
such period of the Borrower and its Subsidiaries on a consolidated basis,
as determined in accordance with GAAP.
"Net Worth" means, as of any date, shareholders' equity or net worth
of the Borrower and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.
"Non-Excluded Taxes" has the meaning set forth in Section 3.13.
"Note" or "Notes" means the Revolving Loan Notes and the Term Loan
Notes, individually or collectively, as appropriate.
"Notice of Borrowing" means a request by the Borrower for a
Revolving Loan, in the form of Exhibit 2.1(b).
"Notice of Continuation/Conversion" means a request by the Borrower
in the form of Exhibit 2.3 to (a) continue an existing Eurodollar Loan to
a new Interest Period or (b) convert a Eurodollar Loan to a Base Rate Loan
or a Base Rate Loan to a Eurodollar Loan.
"Operating Lease" means, as to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as an operating lease.
"Participation Interest" means the extension of credit by a Lender
by way of a purchase of a participation in any Loans as provided in
Section 3.8.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"Permitted Investments" means Investments which are (a) cash or Cash
Equivalents, (b) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance
with customary trade terms, (c) inventory, raw materials and general
intangibles acquired in the ordinary course of business, (d) Investments
by one Credit Party in another Credit Party; (e) investments in Foreign
Subsidiaries not to exceed $5,000,000, in the aggregate, at any one time,
(f) loans to directors, officers or employees of a Credit Party in the
ordinary course of business for reasonable business expenses, not to
exceed $500,000, in the aggregate, at any one time, and (g) Investments in
Capital Expenditures.
"Permitted Liens" means (a) Liens securing Credit Party Obligations,
(b) Liens for taxes not yet due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the property
subject to any such Lien is not yet subject to foreclosure, sale or loss
on account thereof), (c) Liens in respect of property imposed by law
arising in the ordinary course of business such as materialmen's,
mechanics', warehousemen's, carrier's, landlords' and other nonconsensual
statutory Liens which are not yet due and payable or which are being
contested in good faith by appropriate proceedings for which adequate
reserves determined in accordance with GAAP have been established (and as
to which the property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof), (d) pledges or deposits
made in the ordinary course of business to secure payment of worker's
compensation insurance, unemployment insurance, pensions or social
security programs, (e) Liens arising from good faith deposits in
connection with or to secure performance of tenders, bids, leases,
government contracts, performance and return-of- money bonds and other
similar obligations incurred in the ordinary course of business (other
than obligations in respect of the payment of borrowed money), (f) Liens
arising from good faith deposits in connection with or to secure
performance of statutory obligations and surety and appeal bonds, (g)
easements, rights-of-way, restrictions (including zoning restrictions),
matters of plat, minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered property for its intended purposes, (h) judgment
Liens that would not constitute an Event of Default, (i) Liens in
connection with Indebtedness allowed under Section 8.1(e) and (f), (j)
Liens arising by virtue of any statutory or common law provision relating
to banker's liens, rights of setoff or similar rights as to deposit
accounts or other funds maintained with a creditor depository institution,
(k) Liens existing on the date hereof and identified on Schedule 8.2;
provided that no such Lien shall extend to any property other than the
property subject thereto on the Closing Date, (l) rights reserved to or
vested in any municipality or public authority to control or regulate, or
to use, any property of the Borrower that do not materially impair the use
and/or value of such
property for the purposes for which it is held by the Borrower and/or its
Subsidiaries and (m) Liens arising out of claims against the Borrower and
its Affiliates for employee wages as set forth in 00-00-000 of the
Tennessee Statutes Annotated, as amended from time to time, such Liens not
to exceed $20,000 for Borrower and its Affiliates taken as a whole.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated), or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3)
of ERISA) which is subject to Title I (other than Subtitle A or Part 1 of
Subtitle B thereof) or Title IV of ERISA and with respect to which any
Credit Party or any of its Subsidiaries or any ERISA Affiliate is (or, if
such plan were terminated at such time, would under Section 4069 of ERISA
be deemed to be) an "employer" within the meaning of Section 3(5) of
ERISA.
"Pledge Agreement" means the Pledge Agreement executed and delivered
by the Borrower in favor of the Agent, for the benefit of the Lenders, to
secure its obligations under the Credit Documents, as amended, modified,
extended, renewed or replaced from time to time.
"Prime Rate" means the per annum rate of interest established from
time to time by the Agent at its principal office in Charlotte, North
Carolina (or such other principal office of the Agent as communicated in
writing to the Borrower and the Lenders) as its Prime Rate. Any change in
the interest rate resulting from a change in the Prime Rate shall become
effective as of 12:01 a.m. of the Business Day on which each change in the
Prime Rate is announced by the Agent. The Prime Rate is a reference rate
used by the Agent in determining interest rates on certain loans and is
not intended to be the lowest rate of interest charged on any extension of
credit to any debtor.
"Regulation D, G, U, or X" means Regulation D, G, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof.
"Reportable Event" means a "reportable event" as defined in Section
4043 of ERISA with respect to which the notice requirements to the PBGC
have not been waived.
"Required Lenders" means Lenders whose aggregate Credit Exposure (as
hereinafter defined) constitutes more than 67% of the Credit Exposure of
all Lenders at such time; provided, however, that if any Lender shall be a
Defaulting Lender at such time then there shall be excluded from the
determination of Required Lenders the aggregate
principal amount of Credit Exposure of such Lender at such time. For
purposes of the preceding sentence, the term "Credit Exposure" as applied
to each Lender shall mean (a) at any time prior to the termination of the
Commitments, the sum of (i) the Revolving Commitment Percentage of such
Lender multiplied by the Revolving Committed Amount plus (ii) the Term
Loan Commitment Percentage of such Lender multiplied by the aggregate
amount of Term Loans outstanding at such time and (b) at any time after
the termination of the Commitments, the sum of the principal balance of
the outstanding Loans of such Lender.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material property is
subject.
"Revolving Loan Commitment Percentage" means, for each Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule
1.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"Revolving Committed Amount" means THIRTY MILLION DOLLARS
($30,000,000) or such lesser amount as the Revolving Committed Amount may
be reduced pursuant to Section 2.1(d) or Section 3.3(c).
"Revolving Loans" means the Revolving Loans made to the Borrower
pursuant to Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory notes of
the Borrower in favor of each of the Lenders evidencing the Revolving
Loans provided pursuant to Section 2.1, individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time and as
evidenced in the form of Exhibit 2.1(g).
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"Single Employer Plan" means any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan or a Multiple Employer
Plan.
"Solvent" means, with respect to any Person as of a particular date,
that on such date (a) such Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature
in the normal course of business, (b) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature in their
ordinary course, (c) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction,
for which such Person's assets would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry
in which such Person is engaged or is to engage, (d) the fair value of the
assets of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person and
(e) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured. In
computing the amount of contingent liabilities at any time, it is intended
that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Subordination Agreement" means that certain Subordination
Agreement, dated as the Closing Date, among Xxxxx X. Xxxxxx Company, Inc.,
Xxxxx X. Xxxxxx and the Agent.
"Subsidiary" means, as to any Person, (a) any corporation more than
50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such
Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
person directly or indirectly through Subsidiaries has more than a 50%
equity interest at any time.
"Tangible Net Worth" means, as of any date, an amount equal to Net
Worth minus the book value of those assets on the balance sheet of the
Borrower and its Subsidiaries that would, in accordance with GAAP, be
treated as intangibles.
"Term Loans" means the Term Loans made to the Borrower pursuant to
Section 2.2(a).
"Term Loan Commitment Percentage" means, for each Lender, the
percentage identified as its Term Loan Commitment Percentage on Schedule
1.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"Term Loan Committed Amount" means TWENTY MILLION DOLLARS
($20,000,000).
"Term Loan Note" or "Term Loan Notes" means the promissory notes of
the Borrower in favor of each of the Lenders evidencing the Term Loans
provided pursuant to Section 2.3(a), individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time as evidenced
in the form of Exhibit 2.6(b).
"Termination Event" means (a) with respect to any Single Employer
Plan, the occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (b) the
withdrawal of the Borrower or any of its Subsidiaries or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was
a substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan; (c) the
distribution of a notice of intent to terminate or the actual termination
of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (d) the
institution of proceedings to terminate or the actual termination of a
Plan by the PBGC under Section 4042 of ERISA; (e) any event or condition
which might reasonably constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
Plan; or (f) the complete or partial withdrawal of the Borrower or any of
its Subsidiaries or any ERISA Affiliate from a Multiemployer Plan.
"Total Liabilities" means, as of any date, all items (including
Capital Leases) which, in accordance with GAAP, would be classified as a
liability on the balance sheet of the Borrower and its Subsidiaries.
"Unused Commitment" means, for any period, the amount by which (a)
the then applicable aggregate Revolving Committed Amount exceeds (b) the
daily average sum for such period of the outstanding aggregate principal
amount of all Revolving Loans.
1.2 Computation of Time Periods and Other Definitional Provisions.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding." References in this Agreement to "Articles", "Sections", "Schedules"
or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to
this Agreement unless otherwise specifically provided.
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder
shall be prepared, in accordance with GAAP applied on a consistent
basis. All financial statements delivered to the Lenders hereunder shall be
accompanied by a statement from the Borrower that GAAP has not changed since the
most recent financial statements delivered by the Borrower to the Lenders or if
GAAP has changed describing such changes in detail and explaining how such
changes affect the financial statements. All calculations made for the purposes
of determining compliance with this Credit Agreement shall (except as otherwise
expressly provided herein) be made by application of GAAP applied on a basis
consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 7.1 (or, prior to the delivery of the first
financial statements pursuant to Section 7.1, consistent with the financial
statements described in Section 5.1(c)); provided, however, if (a) the Borrower
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) either the Agent or the Required Lenders
shall so object in writing within 60 days after delivery of such financial
statements (or after the Lenders have been informed of the change in GAAP
affecting such financial statements, if later), then such calculations shall be
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms and conditions
set forth herein, each Lender severally agrees to make revolving loans
(each a "Revolving Loan" and collectively the "Revolving Loans") to the
Borrower, in Dollars, at any time and from time to time, during the period
from and including the Effective Date to but not including the Maturity
Date (or such earlier date if the Revolving Committed Amount has been
terminated as provided herein); provided, however, that (i) the sum of the
aggregate amount of Revolving Loans outstanding shall not exceed the
lesser of (x) the Revolving Committed Amount and (y) the Borrowing Base
Assets and (ii) with respect to each individual Lender, the Lender's pro
rata share of outstanding Revolving Loans shall not exceed such Lender's
Revolving Loan Commitment Percentage of the Revolving Committed Amount.
Subject to the terms of this Credit Agreement (including Section 3.3), the
Borrower may borrow, repay and reborrow Revolving Loans.
(b) Method of Borrowing for Revolving Loans. By no later than 11:00
a.m. (i) on the date of the requested borrowing of Revolving Loans that
will be Base Rate Loans or (ii) three Business Days prior to the date of
the requested borrowing of Revolving Loans that will be Eurodollar Loans,
the Borrower shall submit a written Notice of Borrowing in the form of
Exhibit 2.1(b) to the Agent setting forth (A) the amount requested, (B)
whether such Revolving Loans shall accrue interest at the Adjusted Base
Rate, or the Adjusted Eurodollar Rate, (C) with respect to Eurodollar
Loans, the Interest Period applicable thereto and (D) certification that
the Borrower has complied in all respects with Section 5.2.
(c) Funding of Revolving Loans. Upon receipt of a Notice of
Borrowing, the Agent shall promptly inform the Lenders as to the terms
thereof. Each Lender shall make its Revolving Loan Commitment Percentage
of the requested Revolving Loans available to the Agent by 1:00 p.m. on
the date specified in the Notice of Borrowing by deposit, in Dollars, of
immediately available funds at the offices of the Agent at its principal
office in Charlotte, North Carolina or at such other address as the Agent
may designate in writing. The amount of the requested Revolving Loans will
then be made available to the Borrower by the Agent by crediting the
account of the Borrower on the books of such office of the Agent, to the
extent the amount of such Revolving Loans are made available to the Agent.
No Lender shall be responsible for the failure or delay by any other
Lender in its obligation to make Revolving Loans hereunder; provided,
however, that the failure of any Lender to fulfill its obligations
hereunder shall not relieve any other Lender of its obligations hereunder.
Unless the Agent shall have been notified by any Lender prior to the date
of any such Revolving Loan that such Lender does not intend to make
available to the Agent its portion of the Revolving Loans to be made on
such date, the Agent may assume that such Lender has made such amount
available to the Agent on the date of such Revolving Loans, and the Agent
in reliance upon such assumption, may (in its sole discretion but without
any obligation to do so) make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Agent, the Agent shall be able to recover such corresponding amount from
such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent will promptly notify
the Borrower, and the Borrower shall immediately pay such corresponding
amount to the Agent. The Agent shall also be entitled to recover from the
Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was
made available by the Agent to the Borrower to the date such corresponding
amount is recovered by the Agent at a per annum rate equal to (i) from the
Borrower at the applicable rate for such Revolving Loan pursuant to the
Notice of Borrowing and (ii) from a Lender at the Federal Funds Rate.
(d) Reductions of Revolving Committed Amount. Upon at least three
Business Days' notice, the Borrower shall have the right to permanently
terminate or reduce the aggregate unused amount of the Revolving Committed
Amount at any time or from time to time; provided that (i) each partial
reduction shall be in an aggregate amount at least equal to $1,000,000 and
in integral multiples of $1,000,000 above such amount and (ii) no
reduction shall be made which would reduce the Revolving Committed Amount
to an amount less than the aggregate amount of outstanding Revolving
Loans. Any reduction in (or termination of) the Revolving Committed Amount
shall be permanent and may not be
reinstated. The Agent shall immediately notify the Lenders of any
reduction in the Revolving Committed Amount.
2.2 Term Loans.
(a) Term Loan. Subject to the terms and conditions set forth herein,
each Lender severally agrees, on the Effective Date, to make a term loan
(collectively, the "Term Loans") to the Borrower, in Dollars, in an amount
equal to such Lender's Term Loan Commitment Percentage of the Term Loan
Committed Amount; provided that the aggregate amount of such Term Loans
made on the Effective Date shall not exceed the Term Loan Committed
Amount. Once repaid, Term Loans cannot be reborrowed.
(b) Funding of Term Loans. On the Effective Date, each applicable
Lender will make its Term Loan Commitment Percentage of the Term Loan
Committed Amount available to the Agent by deposit, in Dollars and in
immediately available funds, at the offices of the Agent at its principal
office in Charlotte, North Carolina or at such other address as the Agent
may designate in writing. The amount of the Term Loans will then be made
available to the Borrower by the Agent by crediting the account of the
Borrower on the books of such office of the Agent, to the extent the
amount of such Term Loans are made available to the Agent. All Term Loans
on the Effective Date shall be Base Rate Loans. Thereafter, all or any
portion of the Term Loans may be converted into Eurodollar Loans in
accordance with the terms of Section 2.3.
No Lender shall be responsible for the failure or delay by any other
Lender in its obligation to make a Term Loan hereunder; provided, however,
that the failure of any Lender to fulfill its obligations hereunder shall
not relieve any other Lender of its obligations hereunder. If the Agent
shall have received an executed signature page to this Credit Agreement
(whether an original or via telecopy) from a Lender, the Agent may assume
that such Lender has or will make the amount of its Term Loans available
to the Agent on the Effective Date, and the Agent in reliance upon such
assumption, may (in its sole discretion but without any obligation to do
so) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent, the Agent
shall be able to recover such corresponding amount from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent will promptly notify the Borrower, and
the Borrower shall immediately pay such corresponding amount to the Agent.
The Agent shall also be entitled to recover from the Lender or the
Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by the Agent to the Borrower to the date such corresponding
amount is recovered by the Agent at a per annum rate equal to (i) from the
Borrower at the applicable rate for such Term Loan and (ii) from a Lender
at the Federal Funds Rate.
(c) Amortization. The principal amount of the Term Loans shall be
repaid in quarterly payments on the dates set forth below:
Principal Amortization Term Loan Principal
Payment Dates Amortization Payment
---------------------- ---------------------
June 30, 1997 $1,000,000
September 30, 1997 $1,000,000
December 31, 1997 $1,000,000
March 31, 1998 $1,000,000
June 30, 1998 $1,000,000
September 30, 1998 $1,000,000
December 31, 1998 $1,000,000
March 31, 1999 $1,000,000
June 30, 1999 $1,000,000
September 30, 1999 $1,000,000
December 31, 1999 $1,000,000
March 31, 2000 $9,000,000
Total $20,000,000
2.3 Continuations and Conversions.
The Borrower shall have the option, on any Business Day, to continue
existing Eurodollar Loans for a subsequent Interest Period, to convert Base Rate
Loans into Eurodollar Loans or to convert Eurodollar Loans into Base Rate Loans;
provided, however, that (a) each such continuation or conversion must be
requested by the Borrower pursuant to a written Notice of
Continuation/Conversion, in the form of Exhibit 2.3, in compliance with the
terms set forth below, (b) except as provided in Section 3.12, Eurodollar Loans
may only be continued or converted into Base Rate Loans on the last day of the
Interest Period applicable hereto, (c) after notice from the Agent or the
Required Lenders, Eurodollar Loans may not be continued nor may Base Rate Loans
be converted into Eurodollar Loans during the existence and continuation of a
Default or Event of Default and (d) any request to extend a Eurodollar Loan that
fails to comply with the terms hereof or any failure to request an extension of
a Eurodollar Loan at the end of an Interest Period shall constitute a conversion
to a Base Rate Loan on the last day of the applicable Interest Period. Each
continuation or conversion must be requested by the Borrower no later than 11:00
a.m. (i) the date for a requested conversion of a Eurodollar Loan to a Base Rate
Loan or (ii) three Business Days prior to the date for a requested continuation
of a Eurodollar Loan or conversion of a Base Rate Loan to a Eurodollar Loan, in
each case pursuant to a written Notice of Continuation/Conversion submitted to
the Agent which shall set forth (A) whether the Loans to be continued or
converted are Revolving Loans or Term Loans, (B) whether the Borrower wishes to
continue or convert such Loans and (C) if the request is to continue a
Eurodollar Loan or convert a Base Rate Loan to a Eurodollar Loan, the Interest
Period applicable thereto.
2.4 Minimum Amounts.
Each request for a borrowing, conversion or continuation shall be subject
to the requirements that (a) each Eurodollar Loan shall be in a minimum amount
of $1,000,000 and in integral multiples of $100,000 in excess thereof, (b) each
Base Rate Loan shall be in a minimum amount of the lesser of $100,000 (and
integral multiples of $100,000 in excess thereof) or the remaining amount
available under the Revolving Committed Amount or the Term Loan Committed
Amount, as applicable and (c) no more than five Eurodollar Loans shall be
outstanding hereunder at any one time. For the purposes of this Section, all
Eurodollar Loans with the same Interest Periods shall be considered as one
Eurodollar Loan, but Eurodollar Loans with different Interest Periods, even if
they begin on the same date, shall be considered as separate Eurodollar Loans.
2.5 Notes.
(a) Revolving Loan Notes. The Revolving Loans made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower to
each applicable Lender in the face amount of its Revolving Loan Commitment
Percentage of the Revolving Committed Amount in substantially the form of
Exhibit 2.5(a).
(b) Term Loan Notes. The Term Loan made by each Lender shall be
evidenced by a duly executed promissory note of the Borrower to each
applicable Lender in the face amount of its Term Loan Commitment
Percentage of the Term Loan Committed Amount in substantially the form of
Exhibit 2.5(b).
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS
3.1 Interest.
(a) Interest Rate. All Base Rate Loans shall accrue interest at the
Adjusted Base Rate and all Eurodollar Loans shall accrue interest at the
Adjusted Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing
hereunder or under the other Credit Documents (including without
limitation fees and expenses) shall bear interest, payable on demand, at a
per annum rate equal to 2% plus the rate which would otherwise be
applicable (or if no rate is applicable, then the Adjusted Base Rate plus
two percent (2%) per annum).
(c) Interest Payments. Interest on Loans shall be due and payable in
arrears on each Interest Payment Date. If an Interest Payment Date falls
on a date which is not a Business Day, such Interest Payment Date shall be
deemed to be the next succeeding Business Day, except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding day.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other amounts to
be made by a Credit Party under this Agreement shall be received not later than
2:00 p.m. on the date when due, in Dollars and in immediately available funds,
by the Agent at its offices in Charlotte, North Carolina. Payments received
after such time shall be deemed to have been received on the next Business Day.
The Borrower shall, at the time it makes any payment under this Agreement,
specify to the Agent, the Loans, fees or other amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the event that it fails
to specify, or if such application would be inconsistent with the terms hereof,
the Agent shall, subject to Section 3.7, distribute such payment to the Lenders
in such manner as the Agent may deem appropriate). The Agent will distribute
such payments to the applicable Lenders if any such payment is received prior to
2:00 p.m.; otherwise the Agent will distribute such payment to the applicable
Lenders on the next succeeding Business Day. Whenever any payment hereunder
shall be stated to be due on a day which is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day (subject to
accrual of interest and fees for the period of such extension), except that in
the case of Eurodollar Loans, if the extension would cause the payment to be
made in the next following calendar month, then such payment shall instead be
made on the next preceding Business Day.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time without premium or
penalty; provided, however, that (i) Eurodollar Loans may only be prepaid
on three Business Days' prior written notice to the Agent and any
prepayment of Eurodollar Loans will be subject to Section 3.14; (ii) each
such partial prepayment of Loans shall be in the minimum principal amount
of $100,000 and integral multiples of $100,000 in excess thereof; and
(iii) voluntary prepayments with respect to the Term Loans shall be
applied in direct order to the principal payments due under Section
2.2(c).
(b) Mandatory Prepayments.
(i) Committed Amount. If at any time the aggregate amount of
Revolving Loans outstanding exceeds the lesser of (x) the Revolving
Committed Amount and (y) the Borrowing Base Assets, the Borrower
shall immediately make a principal payment to the Lenders in the
manner and in an amount necessary to be in compliance with Section
2.1.
(ii) Asset Dispositions. Immediately upon receipt by a Credit
Party or any of its Subsidiaries of proceeds from any Asset
Disposition, the Borrower shall forward 100% of the Net Cash
Proceeds of such Asset Disposition to the Lenders as a prepayment of
the Loans (to be applied as set forth in Section 3.3(c) below);
provided, however, that (A) the Borrower shall not be required, in
connection with the sale of stock of h.i.s. sportswear AG permitted
by the terms of this Credit Agreement, to forward to the Lenders (as
a prepayment of the Loans) an
amount equal to the lesser of (x) $10 million and (y) 25% of the Net
Cash Proceeds from such sale and (B) the Borrower shall not be
required to forward to the Lenders (as a prepayment of the Loans)
the first $5,000,000 in Net Cash Proceeds received from all other
Asset Dispositions during the term of this Credit Agreement.
(iii) Issuances of Debt. Immediately upon receipt by a Credit
Party or any of its Subsidiaries of proceeds from any Debt Issuance,
the Borrower shall forward 100% of the Net Cash Proceeds of such
Debt Issuance to the Lenders as a prepayment of the Loans (to be
applied as set forth in Section 3.3(c) below).
(iv) Issuances of Equity. Immediately upon receipt by a Credit
Party or any of its Subsidiaries of proceeds from any Equity
Issuance, the Borrower shall forward 100% of the Net Cash Proceeds
of such Equity Issuance to the Lenders as a prepayment of the Loans
(to be applied as set forth in Section 3.3(c) below).
(c) All amounts required to be paid pursuant to Section
3.3(b)(ii)(B) and Section 3.3(b)(iii) shall be applied first to the Term
Loans (first to the principal payment due March 31, 2000 and then pro rata
among all remaining principal payments) until such Term Loans have been
paid in full and second to the Revolving Loans (with a corresponding
reduction in the Revolving Committed Amount). All amounts required to be
paid pursuant to Section 3.3(b)(ii)(A) and Section 3.3(b)(iv) shall be
applied first to the Term Loans (first to the principal payment due March
31, 2000 and then pro rata among all remaining principal payments) until
such Term Loans have been paid in full and second to the Revolving Loans
(without any reduction in the Revolving Committed Amount). Within the
parameters of such application prepayments shall be applied first to Base
Rate Loans and second to
Eurodollar Loans in direct order of Interest Period maturities. All
prepayments hereunder shall be subject to Section 3.14.
3.4 Commitment Fees.
In consideration of the Revolving Committed Amount being made available by
the Lenders hereunder, the Borrower agrees to pay to the Agent, for the pro rata
benefit of each Lender (based on each Lender's Revolving Loan Commitment
Percentage of the Revolving Committed Amount), a fee equal to .375% multiplied
by the Unused Commitment (the "Commitment Fees"). The accrued Commitment Fees
shall commence to accrue on the Effective Date and shall be due and payable in
arrears on the last day of each fiscal quarter of the Borrower (as well as on
the Maturity Date and on any date that the Revolving Committed Amount is
reduced) for the immediately preceding fiscal quarter (or portion thereof),
beginning with the first of such dates to occur after the Closing Date.
3.5 Payment in full at Maturity.
On the Maturity Date, the entire outstanding principal balance of all
Revolving Loans, together with accrued but unpaid interest and all other sums
owing with respect thereto, shall be due and payable in full, unless accelerated
sooner pursuant to Section 9.
3.6 Computations of Interest and Fees.
(a) All computations of interest and fees hereunder shall be made on
the basis of the actual number of days elapsed over a year of 360 days.
Interest shall accrue from and include the date of borrowing (or
continuation or conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit Parties to
conform to and contract in strict compliance with applicable usury law
from time to time in effect. All agreements between the Lenders and the
Borrower are hereby limited by the provisions of this paragraph which
shall override and control all such agreements, whether now existing or
hereafter arising and whether written or oral. In no way, nor in any event
or contingency (including but not limited to prepayment or acceleration of
the maturity of any obligation), shall the interest taken, reserved,
contracted for, charged, or received under this Credit Agreement, under
the Notes or otherwise, exceed the maximum nonusurious amount permissible
under applicable law. If, from any possible construction of any of the
Credit Documents or any other document, interest would otherwise be
payable in excess of the maximum nonusurious amount, any such construction
shall be subject to the provisions of this paragraph and such documents
shall be automatically reduced to the maximum nonusurious amount permitted
under applicable law, without the necessity of execution of any amendment
or new document. If any Lender shall ever receive anything of value which
is characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum lawful
amount, an amount equal to the amount which would have been excessive
interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Loans and not to the payment of interest, or
refunded to the Borrower or the other payor thereof if and to the extent
such amount which would have been excessive exceeds such unpaid principal
amount of the Loans. The right to demand payment of the Loans or any other
indebtedness evidenced by any of the Credit Documents does not include the
right to receive any interest which has not otherwise accrued on the date
of such demand, and the Lenders do not intend to charge or receive any
unearned interest in the event of such demand. All interest paid or agreed
to be paid to the Lenders with respect to the Loans shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term (including any renewal or extension) of
the Loans so that the amount of interest on account of such indebtedness
does not exceed the maximum nonusurious amount permitted by applicable
law.
3.7 Pro Rata Treatment.
Except to the extent otherwise provided herein, each Revolving Loan
borrowing, each payment or prepayment of principal of any Loan, each payment of
fees, each reduction of the Revolving Committed Amount, and each conversion or
continuation of any Loan, shall (except as otherwise provided in Section 3.11)
be allocated pro rata among the relevant Lenders in accordance with the
respective Revolving Loan Commitment Percentages and Term Loan Commitment
Percentages, as applicable, of such Lenders (or, if the Commitments of such
Lenders have expired or been terminated, in accordance with the respective
principal amounts of the outstanding Loans and Participation Interests of such
Lenders); provided that, if any Lender shall have failed to pay its applicable
pro rata share of any Revolving Loan, then any amount to which such Lender would
otherwise be entitled pursuant to this Section 3.7 shall instead be payable to
the Agent until the share of such Loan not funded by such Lender has been
repaid; provided further, that in the event any amount paid to any Lender
pursuant to this Section 3.7 is rescinded or must otherwise be returned by the
Agent, each Lender shall, upon the request of the Agent, repay to the Agent the
amount so paid to such Lender, with interest for the period commencing on the
date such payment is returned by the Agent until the date the Agent receives
such repayment at a rate per annum equal to, during the period to but excluding
the date three Business Days after such request, the Federal Funds Rate, and
thereafter, the Base Rate plus two percent (2%) per annum.
3.8 Sharing of Payments.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan, or any other obligation owing to such Lender under this Credit
Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of the Bankruptcy
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, in excess of its pro rata
share of such payment as provided for in this Credit Agreement, such Lender
shall promptly pay in cash or purchase from the other Lenders a participation in
such Loans, and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by payment in cash or a
repurchase of a participation theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a participation may, to
the fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Loan or other obligation in the
amount of such participation. Except as otherwise expressly provided in this
Credit Agreement, if any Lender shall fail to remit to the Agent or any other
Lender an amount payable by such Lender to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.8 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders under this Section
3.8 to share in the benefits of any recovery on such secured claim.
3.9 Capital Adequacy.
If, after the date hereof, any Lender has determined that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender, or its parent corporation, with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's (or parent corporation's) capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender, or its parent corporation, could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender's (or parent corporation's) policies with respect to capital adequacy),
unless such adoption, effectiveness or change is specific to an individual
Lender, then, upon notice from such Lender to the Borrower, the Borrower shall
be obligated to pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. Upon determination in good faith that
amounts will be owing pursuant to this Section 3.9, a Lender will give prompt
notice thereof to the Borrower, which notice shall set forth the basis in
reasonable detail of the calculation of such additional amounts, although the
failure to give any such notice shall not release or diminish any of the
Borrower's obligations under this Section 3.9. Any amounts determined to be paid
in error hereunder shall be promptly refunded to the Borrower, or applied to
amounts owing hereunder, as such Lender may elect. Each determination by any
such Lender of amounts owing under this Section shall, absent manifest error, be
conclusive and binding on the parties hereto. This covenant shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
3.10 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Agent shall have
determined in good faith (which determination shall be conclusive and binding
upon the Borrower absent manifest error) that, by reason of circumstances
arising after the date hereof affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, the Agent shall give telecopy or telephonic notice thereof to
the Borrower and the Lenders as soon as practicable thereafter, and will also
give prompt written notice to the Borrower when such conditions no longer exist.
If such notice is given (a) any Eurodollar Loans requested to be made on the
first day of such Interest Period required shall be made as Base Rate Loans, (b)
any Loans that were to have been converted on the first day of such Interest
Period to or continued as Eurodollar Loans shall be converted to or continued as
Base Rate Loans and (c) any outstanding Eurodollar Loans shall be converted, on
the first day of such Interest Period, to Base Rate Loans. Until such notice has
been withdrawn by the Agent, no further Eurodollar Loans shall be made or
continued as such, nor shall the Borrower have the right to convert Base Rate
Loans to Eurodollar Loans.
3.11 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender in good
faith to make or maintain Eurodollar Loans as contemplated by this Credit
Agreement, (a) such Lender shall promptly give written notice of such
circumstances to the Borrower and the Agent (which notice shall be withdrawn
whenever such circumstances no longer exist), (b) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert a Base Rate Loan to a Eurodollar Loan shall forthwith be canceled and,
until such time as it shall no longer be unlawful for such Lender in good faith
to make or maintain Eurodollar Loans, such Lender shall then have a commitment
only to make a Base Rate Loan when a Eurodollar Loan is requested and (c) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 3.14.
3.12 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind whatsoever with
respect to any Loans made by it or its obligation to make Loans, or change
the basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by Section 3.13 (including
Non-Excluded Taxes imposed solely by reason of any failure of such Lender
to comply with its obligations under Section 3.13(b)) and changes in taxes
measured by or imposed upon the overall net income, or franchise tax
(imposed in lieu of such net income tax), of such Lender or its applicable
lending office, branch, or any affiliate thereof);
(b) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender; or
(c) shall impose on such Lender any other condition (excluding any
tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Loans or to reduce any amount receivable hereunder in
respect thereof, unless such adoption or change is specific to an individual
Lender, then, in any such case, upon notice to the Borrower from such Lender,
through the Agent, in accordance herewith, the Borrower shall be obligated to
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable. If
any Lender becomes entitled to claim any additional amounts pursuant to this
Section 3.12, it shall provide prompt notice thereof to the Borrower, through
the Agent, certifying (x) that one of the events described in this Section 3.12
has occurred and describing in reasonable detail the nature of such event, (y)
as to the increased cost or reduced amount resulting from such event and (z) as
to the additional amount demanded by such Lender and a reasonably detailed
explanation of the calculation thereof. Such a certificate as to any additional
amounts payable pursuant to this Section 3.12 submitted by such Lender, through
the Agent, to the Borrower shall be conclusive and binding on the parties hereto
in the absence
of manifest error. This covenant shall survive the termination of this Credit
Agreement and the payment of the Loans and all other amounts payable hereunder.
3.13 Taxes.
(a) Except as provided below in this Section 3.13, all payments made
by the Borrower under this Credit Agreement and any Notes shall be made
free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any court, or
governmental body, agency or other official, excluding taxes measured by
or imposed upon the overall net income of any Lender or its applicable
lending office, or any branch or affiliate thereof, and all franchise
taxes, branch taxes, taxes on doing business or taxes on the overall
capital or net worth of any Lender or its applicable lending office, or
any branch or affiliate thereof: (i) by the jurisdiction under the laws of
which such Lender, applicable lending office, branch or affiliate is
organized or is located, or in which its principal executive office is
located, or any nation within which such jurisdiction is located or any
political subdivision thereof; or (ii) by reason of any connection between
the jurisdiction imposing such tax and such Lender, applicable lending
office, branch or affiliate other than a connection arising solely from
such Lender having executed, delivered or performed its obligations, or
received payment under or enforced, this Credit Agreement or any Notes. If
any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Agent or any Lender hereunder or
under any Notes, (A) the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or such
Lender (after payment of all Non- Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified
in this Credit Agreement and any Notes, provided, however, that the
Borrower shall be entitled to deduct and withhold any Non-Excluded Taxes
and shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the United States of
America or a state thereof (or its "lending office" is located in a
jurisdiction outside the United States) if such Lender fails to comply
with the requirements of paragraph (b) of this Section 3.13 whenever any
Non-Excluded Taxes are payable by the Borrower, and (B) as promptly as
possible after requested the Borrower shall send to the Agent for its own
account or for the account of such Lender, as the case may be, a certified
copy of an original official receipt received by the Borrower showing
payment thereof. If the Borrower fails to pay any Non-Excluded Taxes when
due to the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrower
shall indemnify the Agent and any Lender for any incremental taxes,
interest or penalties that may become payable by the Agent or any Lender
as a result of any such failure. The agreements in this
subsection shall survive the termination of this Credit Agreement and the
payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof or has its "lending office"
located in a jurisdiction other than the United States of America or a
state thereof shall:
(i) (A) on or before the date of any payment by the Borrower
under this Credit Agreement or Notes to such Lender, deliver to the
Borrower and the Agent (x) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, or successor
applicable form, as the case may be, certifying that it is entitled
to receive payments under this Credit Agreement and any Notes
without deduction or withholding of any United States federal income
taxes and (y) an Internal Revenue Service Form W-8 or W-9, as
applicable, or successor applicable form, as the case may be,
certifying that it is entitled to an exemption from United States
backup withholding tax;
(B) deliver to the Borrower and the Agent two further
copies of any such form or certification on or before the date
that any such form or certification expires or becomes
obsolete and after the occurrence of any event requiring a
change in the most recent form previously delivered by it to
the Borrower; and
(C) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Agent; or
(ii) in the case of any such Lender that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Internal Revenue
Code, (A) represent to the Borrower (for the benefit of the Borrower
and the Agent) that it is not a bank within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (B) agree to furnish to
the Borrower, on or before the date of any payment by the Borrower,
with a copy to the Agent, two accurate and complete original signed
copies of Internal Revenue Service Form W-8, or successor applicable
form certifying to such Lender's legal entitlement at the date of
such certificate to an exemption from U.S. withholding tax under the
provisions of Section 881(c) of the Internal Revenue Code with
respect to payments to be made under this Credit Agreement and any
Notes (and to deliver to the Borrower and the Agent two further
copies of such form on or before the date it expires or becomes
obsolete and after the occurrence of any event requiring a change in
the most recently provided form and, if necessary,
obtain any extensions of time reasonably requested by the Borrower
or the Agent for filing and completing such forms), (C) agree, to
the extent legally entitled to do so, upon reasonable request by the
Borrower, to provide to the Borrower (for the benefit of the
Borrower and the Agent) such other forms as may be reasonably
required in order to establish the legal entitlement of such Lender
to an exemption from withholding with respect to payments under this
Credit Agreement and any Notes and (D) will promptly notify the
Agent and the Borrower of any changes in circumstances that would
modify or render invalid any claims, exemptions or reductions.
Notwithstanding the above, if any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such Lender
from duly completing and delivering any such form with respect to it and
such Lender so advises the Borrower and the Agent then such Lender shall
be exempt from such requirements. Each Person that shall become a Lender
or a participant of a Lender pursuant to Section 11.3 shall, upon the
effectiveness of the related transfer, be required to provide all of the
forms, certifications and statements required pursuant to this subsection
(b); provided that in the case of a participant of a Lender, the
obligations of such participant of a Lender pursuant to this subsection
(b) shall be determined as if the participant of a Lender were a Lender
except that such participant of a Lender shall furnish all such required
forms, certifications and statements to the Lender from which the related
participation shall have been purchased.
(c) Each Lender and the Agent agrees that if it subsequently
recovers or receives a refund or credit in respect of the Non-Excluded
Taxes paid by the Borrower under subsection (a) such Lender or Agent shall
promptly repay the Borrower such refund or credit net of all out-of-pocket
expenses related thereto; provided, however, that if, due to subsequent
adjustment of such Non-Excluded Taxes, such Lender or Agent is required to
repay such amount to the relevant taxing authority, the Borrower agrees to
repay the Lender or the Agent the amount required to be repaid.
(d) Each Lender that is a Lender incorporated under the laws of the
United States or a state thereof or has its "lending office" located in
the United States or a state thereof represents to the Borrower that it is
entitled to an exemption from United States backup withholding tax.
3.14 Indemnity.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in
accordance with the provisions of this Credit Agreement, other than loss or
expenses due to a Lender solely arising by virtue of such Lender's default under
Section 2.1(c), (b) default by the Borrower in making any prepayment of a
Eurodollar Loan after the Borrower has given a notice thereof in accordance with
the provisions of this Credit Agreement and (c) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto. The agreements in this Section shall survive the termination of
this Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
SECTION 4
GUARANTY
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Lender and the Agent the prompt
payment of the Credit Party Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise). The
Guarantors additionally, jointly and severally, unconditionally guarantee to
each Lender and the Agent the timely performance of all other obligations under
the Credit Documents. This Guaranty is a guaranty of payment and not of
collection and is a continuing guaranty and shall apply to all Credit Party
Obligations whenever arising.
4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents, or any other agreement or
instrument referred to therein, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this Guaranty may be enforced by the Lenders without
the necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the Notes
or any other of the Credit Documents or any collateral, if any, hereafter
securing the Credit Party Obligations or otherwise and each Guarantor hereby
waives the right to require the Lenders to proceed against the Borrower or any
other Person (including a co-guarantor) or to require the Lenders to pursue any
other remedy or enforce any other right. Each Guarantor further agrees that it
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor of the Credit Party Obligations for
amounts paid under this Guaranty until such time as the Lenders have been paid
in full, and all Commitments under the Credit Agreement have been terminated.
Each Guarantor further agrees that nothing contained herein shall prevent the
Lenders from suing on the Notes or any of the other Credit Documents or
foreclosing its security interest in or Lien on any collateral, if any, securing
the Credit Party Obligations or from exercising any other rights available to it
under this Credit Agreement, the Notes, any other of the Credit Documents, or
any other instrument of security, if any, and the exercise of any of the
aforesaid rights and the completion of any foreclosure proceedings shall not
constitute a discharge of any of any Guarantor's obligations hereunder; it being
the purpose and intent of each Guarantor that its obligations hereunder shall be
absolute, independent and unconditional under any and all circumstances. Neither
any Guarantor's obligations under this Guaranty nor any remedy for the
enforcement thereof shall be impaired, modified, changed or released in any
manner whatsoever by an impairment, modification, change, release or limitation
of the liability of the Borrower or by reason of the bankruptcy or insolvency of
the Borrower. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Credit Party Obligations and notice of or
proof of reliance of by the Agent or any Lender upon this Guarantee or
acceptance of this Guarantee. The Credit Party Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guarantee. All
dealings between the Borrower and any of the Guarantors, on the one hand, and
the
Agent and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Guarantee.
4.3 Modifications.
Each Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have any
obligation to protect, perfect, secure or insure any such security interests,
liens or encumbrances now or hereafter held, if any, for the Credit Party
Obligations or the properties subject thereto; (c) the time or place of payment
of the Credit Party Obligations may be changed or extended, in whole or in part,
to a time certain or otherwise, and may be renewed or accelerated, in whole or
in part; (d) the Borrower and any other party liable for payment under the
Credit Documents may be granted indulgences generally; (e) any of the provisions
of the Notes or any of the other Credit Documents may be modified, amended or
waived; (f) any party (including any co-guarantor) liable for the payment
thereof may be granted indulgences or be released; and (g) any deposit balance
for the credit of the Borrower or any other party liable for the payment of the
Credit Party Obligations or liable upon any security therefor may be released,
in whole or in part, at, before or after the stated, extended or accelerated
maturity of the Credit Party Obligations, all without notice to or further
assent by such Guarantor, which shall remain bound thereon, notwithstanding any
such exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Credit Party Obligations, or the
Lenders' subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; (e) all other notices to which such
Guarantor might otherwise be entitled; and (f) demand for payment under this
Guaranty.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one hand, and
the Agent and the Lenders, on the other hand, the Credit Party Obligations may
be declared to be forthwith due and payable as provided in Section 9 (and shall
be deemed to have become automatically due and payable in the circumstances
provided in Section 9) notwithstanding any stay, injunction or other prohibition
preventing such declaration (or preventing such Credit Party Obligations from
becoming automatically due and payable) as against any other Person and that, in
the event of such declaration (or such Credit Party Obligations being deemed to
have become automatically due and payable), such Credit Party Obligations
(whether or not due and payable by any other Person) shall forthwith become due
and payable by the
Guarantors. The Guarantors acknowledge and agree that their obligations
hereunder are secured in accordance with the terms of the Security Agreement and
the other Collateral Documents and that the Lenders may exercise their remedies
thereunder in accordance with the terms thereof.
4.7 Limitation of Guaranty.
Notwithstanding any provision to the contrary contained herein or in any
of the other Credit Documents, to the extent the obligations of any Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
4.8 Rights of Contribution.
The Credit Parties agree among themselves that, in connection with
payments made hereunder, each Credit Party shall have contribution rights
against the other Credit Parties as permitted under applicable law. Such
contribution rights shall be subordinate and subject in right of payment to the
obligations of the Credit Parties under the Credit Documents and no Credit Party
shall exercise such rights of contribution until all Credit Party Obligations
have been paid in full and the Commitments terminated.
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and make
the initial Loans is subject to satisfaction of the following conditions:
(a) Executed Credit Documents. Receipt by the Agent of duly executed
copies of: (i) this Credit Agreement; (ii) the Notes; (iii) the Collateral
Documents; (iv) the Subordination Agreement and (v) all other Credit
Documents, each in form and substance reasonably acceptable to the Agent
in its sole discretion.
(b) Corporate Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or certificates
of incorporation or other charter documents of each Credit Party
certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other
jurisdiction of its incorporation and certified by a secretary or
assistant secretary of such Credit Party to be true and correct as
of the Effective Date.
(ii) Bylaws. A copy of the bylaws of each Credit Party
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Effective Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by
a secretary or assistant secretary of such Credit Party to be true
and correct and in force and effect as of the Effective Date.
(iv) Good Standing. Copies of (A) certificates of good
standing, existence or its equivalent with respect to each Credit
Party certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be in
good standing would have a Material Adverse Effect on the business
or operations of a Credit Party in such jurisdiction and (B) to the
extent available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and
correct as of the Effective Date.
(c) Financial Statements. Receipt by the Agent and the Lenders of
the Borrower's quarterly report on Form 10-Q for the period ended February
1, 1997.
(d) Opinion of Counsel. Receipt by the Agent of an opinion, or
opinions, reasonably satisfactory to the Agent, addressed to the Agent on
behalf of the Lenders and dated as of the Effective Date, from legal
counsel to the Credit Parties.
(e) Collateral. The Agent shall have received, in form and substance
reasonably satisfactory to the Agent:
(i) searches of Uniform Commercial Code ("UCC") filings in
each jurisdiction where a filing would need to be made in order to
perfect the Lenders' security interest in the Collateral, copies of
the financing statements on file in such jurisdictions and evidence
that no Liens exist other than Permitted Liens; and
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Agent's sole
discretion, to perfect the Lenders' security interest in the
Collateral.
(f) Material Adverse Effect. There shall not have occurred a change
since February 1, 1997 that has had or could reasonably be expected to
have a Material Adverse Effect.
(g) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against the Borrower or any of
its Subsidiaries that would have or would reasonably be expected to have a
Material Adverse Effect.
(h) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by the chief financial officer of the
Borrower on behalf of the Borrower as of the Effective Date stating that
the Borrower and each of the Borrower's Subsidiaries are in compliance in
all material respects with all existing material financial obligations, no
action, suit, investigation or proceeding is pending or, to the knowledge
of such officer, threatened in any court or before any arbitrator or
governmental instrumentality that purports to effect the Borrower, any of
the Borrower's Subsidiaries or any transaction contemplated by the Credit
Documents, if such action, suit, investigation or proceeding could have or
could be reasonably expected to have a Material Adverse Effect, the
financial statements and information delivered pursuant to Section 5.1(c)
were prepared in good faith and using reasonable assumptions and
immediately after giving effect to this Credit Agreement, the other Credit
Documents and all the transactions contemplated therein to occur on such
date, (A) the Borrower and each of the Borrower's Subsidiaries is Solvent,
(B) no Default or Event of Default exists, (C) all representations and
warranties contained herein and in the other Credit Documents are true and
correct in all material respects, and (D) the Credit Parties are in
compliance with each of the financial covenants set forth in Section 7.2.
(i) Fees and Expenses. Payment by the Borrower of all fees and
expenses owed by it to the Lenders and the Agent, including, without
limitation, (A) the fees set forth in the Fee Letter and (B) an upfront
fee to each Lender in an amount equal to 25 basis points of such Lender's
total Commitment.
(j) Borrowing Base Report. Receipt by the Agent of a Borrowing Base
Report in the form of Exhibit 7.1(c), dated as of February 28, 1997.
(k) Consulting Agreement. Receipt by the Agent of a copy of the
Amended and Restated Consulting Agreement between Xxxxx X. Xxxxxx and
Xxxxx X. Xxxxxx Company, Inc., certified to be true and correct by an
officer of the Xxxxx X. Xxxxxx Company, Inc.
(l) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably and timely requested
by any Lender, including, but
not limited to, information regarding litigation, tax, accounting, labor,
insurance, pension liabilities (actual or contingent), property ownership
and contingent liabilities of the Borrower and its Subsidiaries.
5.2 Conditions to All Revolving Loans.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Revolving Loans unless:
(a) Notice. The Borrower shall have delivered a Notice of Borrowing,
duly executed and completed, by the time specified in Section 2.1;
(b) Representations and Warranties. The representations and
warranties made by the Credit Parties in any Credit Document are true and
correct in all material respects at and as if made as of such date except
to the extent they expressly relate to an earlier date;
(c) No Default. No Default or Event of Default shall exist or be
continuing either prior to or after giving effect thereto;
(d) Availability. Immediately after giving effect to the making of a
Revolving Loan (and the application of the proceeds thereof) the sum of
the Revolving Loans outstanding shall not exceed the lesser of (i) the
Revolving Commitment Amount and (ii) the Borrowing Base Assets; and
(e) Field Audit. The audit of the inventory, receivables and other
assets of the Borrower and its Subsidiaries, to be completed by May 30,
1997, is satisfactory to the Lenders in all respects.
The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Borrower of the correctness of the matters specified in
subsections (b), (c), (d) and (e) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Borrower and each of its Subsidiaries hereby represent to the Agent
and each Lender that:
6.1 Financial Condition.
The financial statements delivered to the Lenders pursuant to Section
5.1(c) and Section 7.1(a) and (b): (a) have been prepared in accordance with
GAAP and (b) present fairly the consolidated and consolidating (as applicable)
financial condition, results of operations and cash flows of the Borrower and
its Subsidiaries as of such date and for
such periods. Since February 1, 1997, there has been no sale, transfer or other
disposition by the Borrower or any of its Subsidiaries of any material part of
the business or property of the Credit Parties, taken as a whole, and no
purchase or other acquisition by any of them of any business or property
(including any capital stock of any other Person) material in relation to the
consolidated financial condition of the Credit Parties, taken as a whole, in
each case, which, is not (i) reflected in the most recent financial statements
delivered to the Lenders pursuant to Section 7.1 or in the notes thereto or (ii)
otherwise permitted by the terms of this Credit Agreement and communicated to
the Agent.
6.2 No Material Change.
(a) Since February 1, 1997, there has been no development or event
relating to or affecting the Borrower or any of its Subsidiaries which has had
or would be reasonably expected to have a Material Adverse Effect and (b) from
and after the Closing Date, except as otherwise permitted under this Credit
Agreement, no dividends or other distributions have been declared, paid or made
upon the capital stock or other equity interest in the Borrower or any of its
Subsidiaries nor has any of the capital stock or other equity interest in a
Credit Party been redeemed, retired, purchased or otherwise acquired for value,
except as is permitted by this Credit Agreement.
6.3 Organization and Good Standing.
Each Credit Party (a) is a corporation duly incorporated, validly existing
and in good standing under the laws of the State (or other jurisdiction) of its
incorporation, (b) is duly qualified and in good standing as a foreign
corporation and authorized to do business in every jurisdiction unless the
failure to be so qualified, in good standing or authorized would have a Material
Adverse Effect and (c) has the requisite corporate power and authority to own
its properties and to carry on its business as now conducted and as proposed to
be conducted.
6.4 Due Authorization.
Each Credit Party (a) has the requisite corporate power and authority to
execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party and to incur the obligations herein and therein
provided for and (b) is duly authorized to, and has been authorized by all
necessary corporate action, to execute, deliver and perform this Credit
Agreement and the other Credit Documents to which it is a party.
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws, (b) violate, contravene or materially conflict with any
Requirement of Law or any other law, regulation (including, without limitation,
Regulation U or Regulation X), order, writ, judgment, injunction, decree or
permit applicable to it, except as could not have or be reasonably expected to
have a Material Adverse Effect, (c) violate, contravene or conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement, mortgage, deed of trust, contract or other agreement or
instrument to which it is a party or by which it may be bound, the violation of
which could have or might be reasonably expected to have a Material Adverse
Effect, or (d) result in or require the creation of any Lien (other than
Permitted Liens) upon or with respect to its properties.
6.6 Consents.
Except for consents, approvals and authorizations which have been
obtained, no consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or third
party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the other
Credit Documents by such Credit Party except as could not have or be reasonably
expected to have a Material Adverse Effect.
6.7 Enforceable Obligations.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with their
respective terms, except as may be limited by bankruptcy or insolvency laws or
similar laws affecting creditors' rights generally or by general equitable
principles.
6.8 No Default.
No Credit Party is in default in any respect under any contract, lease,
loan agreement, indenture, mortgage, security agreement or other agreement or
obligation to which it is a party or by which any of its properties is bound
which default would have or would be reasonably expected to have a Material
Adverse Effect. No Default or Event of Default has occurred or exists except as
previously disclosed in writing to the Lenders.
6.9 Ownership.
Each Credit Party is the owner of, and has good and marketable title to,
all of its respective assets and none of such assets is subject to any Lien
other than Permitted Liens.
6.10 Indebtedness.
The Credit Parties have no Indebtedness except (a) as set forth on
Schedule 6.10 and (b) as otherwise permitted by this Credit Agreement.
6.11 Litigation.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, the Borrower or any of its Subsidiaries which could have or
might be reasonably expected to have a Material Adverse Effect.
6.12 Taxes.
Each Credit Party has filed, or caused to be filed, all tax returns
(federal, state, local and foreign) required to be filed and paid (a) all
amounts of taxes shown thereon to be due (including interest and penalties) and
(b) all other taxes, fees, assessments and other governmental charges (including
mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing
by it, except for such taxes (i) which are not yet delinquent or (ii) that are
being contested in good faith and by proper proceedings, and against which
adequate reserves are being maintained in accordance with GAAP. No Credit Party
is aware of any proposed tax assessments against it.
6.13 Compliance with Law.
Each Credit Party is in compliance with all Requirements of Law and all
other laws, rules, regulations, orders and decrees (including without limitation
Environmental Laws) applicable to it, or to its properties, unless such failure
to comply would not have or would not be reasonably expected to have a Material
Adverse Effect.
6.14 ERISA.
Except as would not result or be reasonably expected to result in a
Material Adverse Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no Termination Event has
occurred, and, to the best knowledge of the Credit Parties, no event or
condition has occurred or exists as a result of which any Termination
Event could reasonably be expected to occur, with respect to any Plan;
(ii) no
"accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, has occurred
with respect to any Plan; (iii) each Plan has been maintained, operated,
and funded in compliance with its own terms and in material compliance
with the provisions of ERISA, the Code, and any other applicable federal
or state laws; and (iv) no lien in favor or the PBGC or a Plan has arisen
or is reasonably likely to arise on account of any Plan.
(b) Each Single Employer Plan has been funded in a manner that meets
the requirements of Code section 412 and ERISA section 302.
(c) Neither the Borrower, nor any of its Subsidiaries nor any ERISA
Affiliate has incurred, or, to the best knowledge of the Credit Parties,
are reasonably expected to incur, any withdrawal liability under ERISA to
any Multiemployer Plan or Multiple Employer Plan. Neither the Borrower,
any of its Subsidiaries nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within the
meaning of Section 4241 of ERISA), is insolvent (within the meaning of
Section 4245 of ERISA), or has been terminated (within the meaning of
Title IV of ERISA), and no Multiemployer Plan is, to the best knowledge of
the Credit Parties, reasonably expected to be in reorganization,
insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or is reasonably
likely to subject the Borrower or any of its Subsidiaries or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which the Borrower or any of its Subsidiaries or
any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability.
(e) The present value (determined using actuarial and other
assumptions which are reasonable with respect to the benefits provided and
the employees participating) of the liability of the Borrower and its
Subsidiaries for post-retirement welfare benefits to be provided to their
current and former employees under Plans which are welfare benefit plans
(as defined in Section 3(1) of ERISA), net of all assets under all such
Plans allocable to such benefits, are reflected on the Financial
Statements in accordance with FASB 106.
(f) Each Plan sponsored by the Borrower and its Subsidiaries which
is a welfare plan (as defined in Section 3(1) of ERISA) to which Sections
601-609 of ERISA and Section 4980B of the Code apply has been administered
in compliance in all material respects with such sections.
(g) The representations made in this Section 6.14 that apply to any
Multiemployer Plan or Multiple Employer Plan are made only to the
knowledge of the Borrower, its Subsidiaries and each ERISA Affiliate.
6.15 Subsidiaries.
As of the Closing Date, the Borrower has no Subsidiaries other than as set
forth on Schedule 6.15.
6.16 Use of Proceeds; Margin Stock.
The proceeds of the Loans hereunder will be used solely for the purposes
specified in Section 7.11. None of the proceeds of the Loans will be used for
the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U, Regulation X or Regulation G, or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
"margin stock" or any "margin security" or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of Regulation
U, Regulation X, Regulation G or Regulation T.
6.17 Government Regulation.
No Credit Party is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940
or the Interstate Commerce Act, each as amended. In addition, no Credit Party is
an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, or controlled by such a company, or
a "holding company," or a "Subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "Subsidiary" or a "holding company,"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended. No director, executive officer or principal shareholder of the Borrower
or any of its Subsidiaries is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O issued by
the Board of Governors of the Federal Reserve System.
6.18 Environmental Matters.
(a) Except as would not result or be reasonably expected to result
in a Material Adverse Effect:
(i) Each of the real properties owned or leased by a Credit
Party (collectively, the "Real Properties") and all operations at
the Real Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any Environmental
Law with respect to the Real Properties or the businesses operated
by the Borrower or any of its Subsidiaries (the "Businesses"), and
there are no conditions relating to the Businesses or Real
Properties that would be reasonably expected to give rise to
liability under any applicable Environmental Laws.
(ii) No Credit Party has received any written notice of, or
inquiry from any Governmental Authority regarding, any violation,
alleged violation, non-compliance, liability or potential liability
regarding Hazardous Materials or compliance with Environmental Laws
with regard to any of the Real Properties or
the Businesses, nor does the Borrower or any of its Subsidiaries
have knowledge that any such notice is being threatened.
(iii) Hazardous Materials have not been transported or
disposed of from the Real Properties, or generated, treated, stored
or disposed of at, on or under any of the Real Properties or any
other location, in each case by, or on behalf or with the permission
of, the Borrower or any of its Subsidiaries in a manner that would
reasonably be expected to give rise to liability under any
applicable Environmental Law.
(iv) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower or any of its
Subsidiaries, threatened, under any Environmental Law to which the
Borrower or any of its Subsidiaries is or will be named as a party,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Borrower or any of its Subsidiaries, the Real
Properties or the Businesses.
(v) There has been no release or threat of release of
Hazardous Materials at or from the Real Properties, or arising from
or related to the operations (including, without limitation, waste
disposal) of the Borrower or any of its Subsidiaries in connection
with the Real Properties or otherwise in connection with the
Businesses, in any amount reportable under the federal Comprehensive
Environmental Response, Compensation and Liability Act or any
analogous state law, except releases in compliance with any
Environmental Laws.
(vi) None of the Real Properties contains, or has previously
contained, any Hazardous Materials at, on or under the Real
Properties in amounts or concentrations that, if released,
constitute or constituted a violation of, or could give rise to
liability under, Environmental Laws.
(vii) No Credit Party has assumed any liability of any Person
(other than another Credit Party) under any Environmental Law.
(b) The Borrower has adopted procedures that are designed to (i)
ensure that each Credit Party, any of its operations and each of the
properties owned or leased by each Credit Party remains in compliance with
applicable Environmental Laws and (ii) minimize any liabilities or
potential liabilities that each Credit Party, any of its operations and
each of
the properties owned or leased by each Credit Party may have under
applicable Environmental Laws.
6.19 Intellectual Property.
Each Credit Party owns, or has the legal right to use, all trademarks,
tradenames, copyrights, technology, know-how and processes (the "Intellectual
Property") necessary for each of them to conduct its business as currently
conducted except for those the failure to own or have such legal right to use
would not have or be reasonably expected to have a Material Adverse Effect. No
claim has been asserted and is pending by any Person challenging or questioning
the use of any such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, nor does any Credit Party know of any such
claim, and to the Credit Parties' knowledge the use of such Intellectual
Property by the Borrower or any of its Subsidiaries does not infringe on the
rights of any Person, except for such claims and infringements that in the
aggregate, would not have or be reasonably expected to have a Material Adverse
Effect.
6.20 Solvency.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.21 Investments.
All Investments of each Credit Party are either Permitted Investments or
otherwise permitted by the terms of this Credit Agreement.
6.22 Chief Executive Office.
Set forth on Schedule 6.22 is a list of the location of the chief
executive office and principal place of business of each Credit Party.
6.23 Disclosure.
Neither this Agreement nor any other document, certificate or statement
furnished to the Lenders by or on behalf of any Credit Party in connection with
the transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
6.24 Licenses, etc.
The Credit Parties have obtained and hold in full force and effect, all
franchises, licenses, permits, certificates, authorizations, qualifications,
accreditations, easements, rights of way and other rights, consents and
approvals which are necessary for the operation of their respective businesses
as presently conducted, except where the failure to obtain same would not have a
Material Adverse Effect.
6.25 Collateral Documents.
The Collateral Documents create valid security interests in the Collateral
purported to be covered thereby, which security interests are and will remain
perfected security interests, prior to all other Liens other than Permitted
Liens. Each of the representations and warranties made by the Borrower
and its Subsidiaries in the Collateral Documents is true and correct in all
material respects.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans, together with interest and fees and
other obligations hereunder, have been paid in full and the Commitments
hereunder shall have terminated:
7.1 Information Covenants.
The Borrower will furnish, or cause to be furnished, to the Agent and each
of the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 90 days after the end of each fiscal year of the Borrower, a
consolidated and consolidating balance sheet and income statement of the
Borrower and its Subsidiaries, as of the end of such fiscal year, together
with related consolidated and consolidating statements of operations and
retained earnings and of cash flows for such fiscal year, setting forth in
comparative form consolidated figures for the preceding fiscal year, all
such financial information described above to be in reasonable form and
detail and, with respect to the consolidated financial statement described
above, audited by BDO Xxxxxxx LLP or other independent certified public
accountants of recognized national standing reasonably acceptable to the
Agent and whose opinion shall be to the effect that such financial
statements have been prepared in accordance with GAAP (except for changes
with which such accountants concur) and shall not be limited as to the
scope of the audit or qualified in any manner.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the end of each fiscal quarter of the Borrower,
a consolidated and consolidating balance sheet and income statement of the
Borrower and its Subsidiaries, as of the end of such fiscal quarter,
together with related consolidated and consolidating statements of
operations and retained earnings and of cash flows for such fiscal quarter
in each case setting forth in comparative form consolidated figures for
the corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by a certificate of
the chief financial officer of the Borrower to the effect that such
quarterly financial statements fairly present in all material respects the
financial condition of the Borrower and its Subsidiaries and have been
prepared in accordance with GAAP, subject to changes resulting from audit
and normal year-end audit adjustments.
(c) Borrowing Base Report. As soon as available and in any event
within 15 days after the end of each month of the Borrower, a Borrowing
Base Report, as of the end of the immediately preceding month
substantially in the form of Exhibit 7.1(c) and certified by the chief
financial officer of the Borrower to be true and correct as of the date
thereof.
(d) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of the chief financial officer of the Borrower substantially in the form
of Exhibit 7.1(d), (i) demonstrating compliance with the financial
covenants contained in Section 7.2 by calculation thereof as of the end of
each such fiscal period, (ii) demonstrating calculation of the Leverage
Ratio and (iii) stating that no Default or Event of Default exists, or if
any Default or Event of Default does exist, specifying the nature and
extent thereof and what action the Borrower proposes to take with respect
thereto.
(e) Auditor's Reports. Promptly upon receipt thereof, a copy of any
"management letter" submitted by independent accountants to the Borrower
or any of its Subsidiaries in connection with any annual, interim or
special audit of the books of the Borrower or any of its Subsidiaries.
(f) Reports. Upon the written request of the Agent, all reports and
written information to and from the Securities and Exchange Commission,
United States Environmental Protection Agency, or any state or local
agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.
(g) Notices. Upon a Credit Party obtaining knowledge thereof, such
Credit Party will give written notice to the Agent immediately of (i) the
occurrence of an event or condition consisting of a Default or Event of
Default, specifying the nature and existence thereof and what action the
Borrower proposes to take with respect thereto, and (ii) the occurrence of
any of the following with respect to a the Borrower or any of its
Subsidiaries (A) the pendency or commencement of any litigation, arbitral
or governmental proceeding against the Borrower or any of its Subsidiaries
which if adversely determined would have or would be reasonably expected
to have a Material Adverse Effect, or (B) the institution of any
proceedings against the Borrower or any of its Subsidiaries with respect
to, or the receipt of notice by such Person of potential liability or
responsibility for violation, or alleged violation of any federal, state
or local law, rule or regulation, including but not limited to,
Environmental Laws, the violation of which would have or would be
reasonably expected to have a Material Adverse Effect.
(h) ERISA. Upon any of the Credit Parties obtaining knowledge
thereof, the Borrower will give written notice to the Agent and each of
the Lenders promptly of: (i) any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or might reasonably
lead to, a Termination Event; (ii) with respect to any Multiemployer Plan,
the receipt of notice as prescribed in ERISA or otherwise of any
withdrawal liability assessed against the Borrower or any of its ERISA
Affiliates, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of
ERISA); (iii) the failure to make full payment on or before the due date
(including extensions) thereof of all amounts which the Borrower or any of
its Subsidiaries or ERISA Affiliates is required to contribute to each
Plan pursuant to its terms and as required to meet the minimum funding
standard set forth in ERISA and the Code with respect thereto; or (iv) any
change in the funding status of any Plan that could have a Material
Adverse Effect; together, with a description of any such event or
condition or a copy of any such notice and a statement by the principal
financial officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any, which
has been or is being taken or is proposed to be taken by the Credit
Parties with respect thereto. Promptly upon request, the Borrower shall
furnish the Agent and each of the Lenders with such additional information
concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as
well as all schedules and attachments thereto required to be filed with
the Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the meaning
of Section 3(39) of ERISA) to the extent the Borrower has (or is
reasonably able to obtain) each such document.
(i) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of the Credit Parties as the Agent may reasonably
request.
7.2 Financial Covenants.
(a) Tangible Net Worth. As of the end of each fiscal quarter of the
Borrower, the Tangible Net Worth shall be greater than or equal to the sum
of (i) $75,000,000 plus (ii) 50% of Net Income (as calculated at the end
of each fiscal year beginning with the 1997 fiscal year) of the Borrower
and its Subsidiaries, on a consolidated basis, without deduction for
losses.
(b) Fixed Charge Ratio.
(i) As of the end of the second fiscal quarter of 1997, for
the six month period ending on such date, the Fixed Charge Ratio
shall be greater than or equal to .85 to 1.0;
(ii) As of the end of the third fiscal quarter of 1997, for
the nine month period ending on such date, the Fixed Charge Ratio
shall be greater than or equal to 1.1 to 1.0; and
(iii) As of the end of the fourth fiscal quarter of 1997 and
as of the end of each of the first three fiscal quarters of 1998,
for the twelve month period ending on each such date, the Fixed
Charge Ratio shall be greater than or equal to 1.1 to 1.0; and
(iv) As of the end of each fiscal quarter thereafter, for the
twelve month period ending on each such date, the Fixed Charge Ratio
shall be greater than or equal to 1.25 to 1.0.
(c) Working Capital Ratio. As of the end of each fiscal quarter of
the Borrower, the ratio of (i) an amount equal to Current Assets less cash
and Cash Equivalents of the Borrower and its Subsidiaries to (ii) an
amount equal to Current Liabilities (other than Loans outstanding under
this Credit Agreement) less CMLTD less current Capital Leases of the
Borrower and its Subsidiaries shall be greater than or equal to 2.5 to
1.0.
(d) Debt to Capitalization Ratio. As of the end of each fiscal
quarter of the Borrower, the ratio of (i) Funded Debt of the Borrower and
its Subsidiaries to (ii) an amount equal to the sum of (A) the amount
determined in subsection (i) plus (B) an amount equal to the sum of all
capital stock, capital surplus and retained earnings less treasury stock
and common stock expenses of the Borrower and its Subsidiaries, all as
determined in accordance with GAAP, shall be less than or equal to .50 to
1.0.
7.3 Preservation of Existence and Franchises.
Each of the Credit Parties will do all things necessary to preserve and
keep in full force and effect its existence, rights, franchises and authority
except as permitted by Section 8.4 or where the failure to preserve or keep in
full force and effect could not have or be reasonably expected to have a
Material Adverse Effect.
7.4 Books and Records.
Each of the Credit Parties will keep complete and accurate books and
records of its transactions in accordance with good accounting practices on the
basis of GAAP (including the establishment and maintenance of appropriate
reserves).
7.5 Compliance with Law.
Each of the Credit Parties will comply in all material respects with all
material laws, rules, regulations and orders, and all applicable material
restrictions imposed by all Governmental Authorities, applicable to it and its
property (including, without limitation, Environmental Laws), except where
challenged by appropriate proceedings or where the failure to so comply could
not have or be reasonably expected to have a Material Adverse Effect.
7.6 Payment of Taxes and Other Indebtedness.
Each of the Credit Parties will pay, settle or discharge all taxes,
assessments and governmental charges or levies imposed upon it, or upon its
income or profits, or upon any of its properties, before they shall become
delinquent, all lawful claims (including claims for labor, materials and
supplies) which, if unpaid, might give rise to a Lien upon any of its
properties, and except as prohibited hereunder, all of its other Indebtedness as
it shall become due; provided, however, that a Credit Party shall not be
required to pay any such tax, assessment, charge, levy, claim or Indebtedness
which is being contested in good faith by appropriate proceedings and as to
which adequate reserves therefor have been established in accordance with GAAP,
unless the failure to make any such payment (i) would give rise to an immediate
right to foreclose on a Lien securing such amounts or (ii) would have a Material
Adverse Effect.
7.7z Insurance.
Each of the Credit Parties will at all times maintain in full force and
effect insurance (including worker's compensation insurance, liability
insurance, casualty insurance and business interruption insurance) in such
amounts, covering such risks and liabilities and with such deductibles or
self-insurance retentions as are in accordance with normal industry practice.
7.8 Maintenance of Property.
Each of the Credit Parties will maintain and preserve its properties and
equipment in good repair, working order and condition, normal wear and tear
excepted (subject to damage by casualties), and will make, or cause to be made,
in such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses, except if such noncompliance would not cause or be
reasonably expected to cause a Material Adverse Effect.
7.9 Performance of Obligations.
Each of the Credit Parties will perform in all material respects all of
its obligations under the terms of all material agreements, indentures,
mortgages, security agreements or other debt instruments to which it is a party
or by which it is bound, except where challenged by appropriate proceedings or
where the failure to so comply could not have or be reasonably expected to have
a Material Adverse Effect.
7.10 Collateral.
Upon the request of the Agent and at its own expense, take such action as
is necessary to ensure that the Lenders have a first priority perfected Lien in
all of the Collateral, subject only to Permitted Liens.
7.11 Use of Proceeds.
The Credit Parties will use the proceeds of the Loans solely (a) to
refinance the outstanding principal balance of the Existing Credit Agreement,
(b) to pay related fees and expenses in connection with the foregoing, and (c)
to provide for working capital and general corporate needs of the Borrower and
its Subsidiaries.
7.12 Audits/Inspections.
Upon reasonable notice and during normal business hours and in a manner
than will not unreasonably interfere with its business operations, each Credit
Party will permit representatives appointed by the Agent (which representatives
may be accompanied by representatives of the Lenders), including, without
limitation, independent accountants, agents, attorneys and appraisers to visit
and inspect such Credit Party's property, including its books and records, its
accounts receivable and inventory, its facilities and its other business assets,
and to make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the
Agent or its representatives to investigate and verify the accuracy of
information provided to the Lenders, including, without limitation, the
performance of collateral valuation reviews from time to time to assess the
composition of the Borrowing Base Assets, and to discuss all such matters with
the officers, employees and representatives of the Credit Parties subject to the
provisions of Section 11.17
7.13 Additional Credit Parties.
At the time any Person becomes a direct or indirect Domestic Subsidiary of
the Borrower, the Borrower shall so notify the Agent and promptly thereafter
(but in any event within 10 days after the date thereof) shall cause such Person
to execute a Joinder Agreement in substantially the same form as Exhibit 7.13,
and (b) deliver such other documentation as the Agent may reasonably request in
connection with the foregoing, including, without limitation, certified
resolutions and other organizational and authorizing documents of such Person
and favorable opinions of counsel to such Person, all in form, content and scope
reasonably satisfactory to the Agent.
7.14 Stock Certificates.
On or before April 17, 1997, the Borrower shall deliver to the Agent all
stock certificates evidencing the stock pledged to the Agent pursuant to the
Pledge Agreement, together with duly executed in blank undated stock powers
attached thereto.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans, together with interest, fees and
other obligations hereunder, have been paid in full and the Commitments
hereunder shall have terminated:
8.1 Indebtedness.
The Borrower will not, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness as referenced in Section 6.10 (and renewals,
refinancings or extensions thereof on terms and conditions no more
favorable, in the aggregate, to such Person than such existing
Indebtedness and in a principal amount not in excess of that outstanding
as of the date of such renewal, refinancing or extension);
(c) Indebtedness in respect of current accounts payable and accrued
expenses incurred in the ordinary course of business including, to the
extent not current, accounts payable and accrued expenses that are subject
to bona fide dispute;
(d) Indebtedness owing by one Credit Party to another Credit Party
of from one Foreign Subsidiary to another Foreign Subsidiary;
(e) purchase money Indebtedness (including Capital Leases) incurred
by the Borrower or any of its Subsidiaries to finance the purchase of
fixed assets; provided that (i) the total of all such Indebtedness shall
not exceed $5,000,000; (ii) such Indebtedness when incurred shall not
exceed the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing;
(f) Indebtedness incurred in connection with improvements of
existing facilities not to exceed $5,000,000 in the aggregate;
(g) obligations evidenced by interest rate protection agreements or
currency exchange agreements entered into in the ordinary course of
business and not for investment or speculative reasons; and
(h) Indebtedness incurred on a basis fully subordinate to the Credit
Party Obligations, for a term longer than the Maturity Date, evidenced by
documentation in form and substance acceptable to the Lenders in their
sole discretion.
8.2 Liens.
The Borrower will not, nor will it permit its Subsidiaries to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, except for Permitted Liens.
8.3 Nature of Business.
The Borrower will not, nor will it permit its Subsidiaries to, alter the
character of its business from that conducted as of the Closing Date or engage
in any business other than the business conducted as of the Closing Date.
8.4 Consolidation and Merger.
The Borrower will not, nor will it permit its Subsidiaries to, enter into
any transaction of merger or consolidation or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution); provided that notwithstanding
the foregoing provisions of this Section 8.4, any Credit Party may be merged or
consolidated with or into the Borrower or any other Credit Party if (a) such
transaction is between the Borrower and another Credit Party, the Borrower is
the continuing or surviving corporation; (b) the Agent is given prior written
notice of such action, and the Credit Parties execute and deliver such
documents, instruments and certificates as the Agent may request in order to
maintain the perfection and priority of the Liens on the assets of the Credit
Parties; and (c) after giving effect thereto no Default or Event of Default
exists.
8.5 Sale or Lease of Assets.
The Borrower will not, nor will it permit its Subsidiaries to, convey,
sell, lease, transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business or assets whether now owned or
hereafter acquired, including, without limitation, inventory, receivables,
equipment, real property interests (whether owned or leasehold), and securities,
other than (a) any inventory sold or otherwise disposed of in the ordinary
course of business; (b) the sale, lease, transfer or other disposal by a Credit
Party (other than the Borrower) of any or all of its assets to the Borrower or
to another Credit Party; (c) obsolete, slow-moving, idle or worn-out assets
(including inventory) no longer used or useful in its business and (d) the sale
of up to 2,229,999 of the voting shares of h.i.s. sportswear AG as long as the
proceeds of such sale are forwarded to the Lenders in accordance with Section
3.3(b)(ii).
8.6 Sale Leasebacks.
rrower will not, nor will it permit its Subsidiaries to, directly or
indirectly become or remain liable as lessee or as guarantor or other surety
with respect to any lease of any property (whether real or personal or mixed),
whether now owned or hereafter acquired, (a) which such Credit Party has sold or
transferred or is to sell or transfer to any other Person other than a Credit
Party or (b) which such Credit Party intends to use for substantially the same
purpose as any other property which has been sold or is to be sold or
transferred by such Credit Party to any Person in connection with such lease.
8.7 Advances, Investments and Loans.
The Borrower will not, nor will it permit its Subsidiaries to, make any
Investments except for Permitted Investments.
8.8 Restricted Payments.
The Borrower will not, nor will it permit any of its Subsidiaries to,
declare or pay any dividends or return any capital to, its stockholders or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for consideration, any shares of any class of
its capital stock now or hereafter outstanding (or any warrants for or options
or stock appreciation rights in respect of any such shares), or set aside any
funds for any of the foregoing purposes; provided that: (a) dividends or
payments may be paid from the Borrower's Subsidiaries to the Borrower; (b)
dividends may be paid from the Borrower to its stockholders; provided, that any
such dividends paid during a fiscal year may not exceed 50% of the Net Income of
Borrower earned subsequent to November 2, 1996; and (c) the Borrower may use
proceeds from the sale of shares of h.i.s. sportswear AG, permitted in
accordance with the terms of this Credit Agreement, to pay dividends or to
redeem, retire or purchase shares to the extent such proceeds are not required
to be paid to the Lenders pursuant to Section 3.3(b)(ii).
8.9 Transactions with Affiliates.
The Borrower will not, nor will it permit its Subsidiaries to, enter into
any transaction or series of transactions, whether or not in the ordinary course
of business, with any officer, director, Subsidiary or Affiliate other than on
terms and conditions substantially as favorable as would be obtainable in a
comparable arm's-length transaction with a Person other than an officer,
director, Subsidiary or Affiliate. It is acknowledged that the Amended and
Restated Consulting Agreement, dated as of September 23, 1988, between Xxxxx X.
Xxxxxx Company, Inc. and Xxxxx X. Xxxxxx is in conformance with this Section
8.9.
8.10 Fiscal Year; Organizational Documents.
The Borrower will not, nor will it permit its Subsidiaries to, (a) change
its fiscal year or (b) change its articles or certificate of incorporation or
its bylaws if such change would have or be reasonably expected to have a
Material Adverse Effect.
8.11 Negative Pledges.
The Borrower will not, nor will it permit its Subsidiaries to, enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation.
8.12 Consulting Fees.
The Borrower will not, nor will it permit any of its Subsidiaries to, pay
any consulting fee or other compensation to Xx. Xxxxx X. Xxxxxx (or any other
Affiliate of the Borrower) in excess of $500,000 during any fiscal year,
including without limitation the payment or reimbursement of any expenses, but
excluding, however, any payment of fees and expenses paid to Xxxxx X. Xxxxxx as
a director of the Borrower on terms comparable to the terms upon which such fees
and expenses are paid to independent directors of the Borrower. Furthermore,
during the existence and continuation of an Event of Default pursuant to Section
9.01(a) hereof, the Borrower will not, nor will it permit any of its
Subsidiaries to, pay any consulting fee or other compensation to Xx. Xxxxx X.
Xxxxxx whatsoever other than any payment of fees and expenses paid to Xxxxx X.
Xxxxxx as a director of the Borrower on terms comparable to the terms upon which
such fees and expenses are paid to independent directors of the Borrower.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall default in the payment (i) when
due of any principal of any of the Loans or (ii) within five days of when
due of any interest on the Loans or any fees or other amounts owing
hereunder, under any of the other Credit Documents or in connection
herewith.
(b) Representations. Any representation, warranty or statement made
by any Credit Party herein, in any of the other Credit Documents, or in
any statement or certificate delivered or required to be delivered
pursuant hereto or thereto shall prove untrue in any material respect on
the date as of which it was made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.3, 7.5, 7.6,
7.10, 7.11, 7.12, 7.13, 7.14 or 8.1 through 8.12 inclusive after the
earlier of an officer of the Borrower becoming aware of such default
or notice thereof given by the Agent; or
(ii) default in the due performance or observance by it of any
term, covenant or agreement contained in Sections 7.1 and such
default shall continue unremedied for a period of ten Business Days
after the earlier of an officer of a Credit Party becoming aware of
such default or notice thereof given by the Agent; or
(iii) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in
subsections (a), (b) or (c)(i) or (ii) of this Section 9.1)
contained in this Credit Agreement and such default shall continue
unremedied for a period of at least 30 days after the earlier of an
officer of a Credit Party becoming aware of such default or notice
thereof given by the Agent.
(d) Other Credit Documents. (i) Any Credit Party shall default in
the due performance or observance of any term, covenant or agreement in
any of the other Credit Documents and such default shall continue
unremedied for a period of at least 30 days after the earlier of an
officer of a Credit Party becoming aware of such default or notice thereof
given by the Agent, or (ii) any Credit Document shall fail to be in full
force and effect or any Credit Party shall so assert or any Credit
Document shall fail to give the Agent and/or the Lenders the security
interests and liens, or the material rights, powers and privileges
purported to be created thereby.
(e) Guaranties. The guaranty given by the Guarantors hereunder or
any Additional Credit Party hereafter or any material provision thereof
shall cease to be in full force and effect, or any Guarantor thereunder or
any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under such guaranty.
(f) Bankruptcy, etc. The occurrence of any of the following with
respect to the Borrower or any of its Subsidiaries (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Borrower or any of its
Subsidiaries in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appoint a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Borrower or any of its Subsidiaries or for any
substantial part of its property or ordering the winding up or liquidation
of its affairs; or (ii) an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect is
commenced against the Borrower or any of its Subsidiaries and such
petition remains unstayed and in effect for a period of 60 consecutive
days; or (iii) the Borrower or any of its Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent to
the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of such Person or any
substantial part of its property or make any general assignment for the
benefit of creditors; or (iv) the Borrower or any of its Subsidiaries
shall admit in writing its inability to pay its debts generally as they
become due or any action shall be taken by such Person in furtherance of
any of the aforesaid purposes.
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) of the Borrower or any of its Subsidiaries in an aggregate
principal amount in excess of $1,000,000 (i) a Credit Party shall (A)
default in any payment (beyond the applicable grace period with respect
thereto, if any) with respect to any such Indebtedness, or (B) default
(after giving effect to any applicable grace period) in the observance or
performance relating to such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or holders
of such Indebtedness (or trustee or agent on behalf of such holders) to
cause any such Indebtedness to become due prior to its stated maturity; or
(ii) any such Indebtedness shall be declared due and payable, or required
to be prepaid other than by a regularly scheduled required prepayment
prior to the stated maturity thereof; or (iii) any such Indebtedness shall
mature and remain unpaid.
(h) Judgments. One or more judgments, orders, or decrees shall be
entered against any one or more of the Credit Parties involving a
liability of $1,000,000 or more, in the aggregate, (to the extent not paid
or covered by insurance provided by a carrier who has acknowledged
coverage) and such judgments, orders or decrees (i) are the subject of any
enforcement proceeding commenced by any creditor or (ii) shall continue
unsatisfied, undischarged and unstayed for a period ending on the first to
occur of (A) the last day on which such judgment, order or decree becomes
final and unappealable or (B) 60 days.
(i) ERISA. The occurrence of any of the following events or
conditions if such occurrence could have or be reasonably expected to have
a Material Adverse Effect: (A) any "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, shall exist with respect to any Plan, or any lien
shall arise on the assets of the Borrower or any of its Subsidiaries or
any ERISA Affiliate in favor of the PBGC or a Plan; (B) a Termination
Event shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the termination of
such Plan for purposes of Title IV of ERISA; (C) a Termination Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan,
which is, in the reasonable opinion of the Agent, likely to result in (i)
the termination of such Plan for purposes of Title IV of ERISA, or (ii)
the Borrower or any of its Subsidiaries or any ERISA Affiliate incurring
any liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency (within the
meaning of Section 4245 of ERISA) of such Plan; or (D) any prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975 of
the Code) or breach of fiduciary responsibility shall occur which may
subject the Borrower or any of its Subsidiaries or any ERISA Affiliate to
any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which the Borrower or any of its Subsidiaries or any ERISA
Affiliate has agreed or is required to indemnify any person against any
such liability.
(j) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been cured or waived in writing by
the Required Lenders (or the Lenders as may be required hereunder), the Agent
shall, upon the request and direction of the Required Lenders, by written notice
to the Borrower, take any of the following actions without prejudice to the
rights of the Agent or any Lender to enforce its claims against the Credit
Parties, except as otherwise specifically provided for herein:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans, and any and all other
indebtedness or obligations of any and every kind owing by a Credit Party
to any of the Lenders hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Credit Parties.
(c) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents, including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against each or any Guarantor and all
rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid fees and
other indebtedness or obligations owing to the Lenders hereunder shall
immediately become due and payable without the giving of any notice or other
action by the Agent or the Lenders, which notice or other action is expressly
waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Agent, each Lender has, to the extent permitted by law, a separate right of
payment and shall be considered a separate
"creditor" holding a separate "claim" within the meaning of Section 101(5) of
the Bankruptcy Code or any other insolvency statute.
9.3 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent in connection with enforcing the rights of the Lenders under the
Credit Documents and any protective advances (as set forth in Section 7 of
the Pledge Agreement) made by the Agent with respect to the Collateral
under or pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses, (including, without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents;
FOURTH, to the payment of all accrued fees and interest payable to
the Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of the
Loans, pro rata, as set forth below;
SIXTH, to all other obligations which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses
"FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to the Borrower or
whoever may be lawfully entitled to receive such surplus as a court of
competent jurisdiction may direct.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (b) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding Loans
held by such Lender bears to the aggregate then outstanding Loans) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH," "FIFTH," and
"SIXTH" above.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as Agent of
such Lender to act as specified herein and the other Credit Documents, and each
such Lender hereby authorizes the Agent, as the agent for such Lender, to take
such action on its behalf under the provisions of this Credit Agreement and the
other Credit Documents and to exercise such powers and perform such duties as
are expressly delegated by the terms hereof and of the other
Credit Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere herein and in
the other Credit Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Agent. The provisions of this Section are solely for the benefit of
the Agent and the Lenders and none of the Credit Parties shall have any rights
as a third party beneficiary of the provisions hereof. In performing its
functions and duties under this Credit Agreement and the other Credit Documents,
each Agent shall act solely as an agent of the Lenders and does not assume and
shall not be deemed to have assumed any obligation or relationship of agency or
trust with or for any Credit Party.
10.2 Delegation of Duties.
The Agent may execute any of its duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions.
Neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection herewith or in
connection with any of the other Credit Documents (except for its or such
Person's own gross negligence or willful misconduct) or responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any of the Credit Parties contained herein or in any of the
other Credit Documents or in any certificate, report, document, financial
statement or other written or oral statement referred to or provided for in, or
received by the Agent under or in connection herewith or in connection with the
other Credit Documents, or enforceability or sufficiency therefor of any of the
other Credit Documents, or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Agent shall not be responsible to any
Lender for the effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Credit Agreement, or any of the other
Credit Documents or for any representations, warranties, recitals or statements
made herein or therein or made by the Borrower or any Credit Party in any
written or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Lenders or by or on behalf of the Credit
Parties to the Agent or any Lender or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default or to inspect the properties, books or records of the Credit
Parties. The Agent is not a trustee for the Lenders and owes no fiduciary duty
to the Lenders.
10.4 Reliance on Communications.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Agent with reasonable care). The Agent may deem
and treat the Lenders as the owner of its interests hereunder for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent in accordance with Section 11.3(b). The Agent
shall be fully justified in failing or refusing to take any action under this
Credit Agreement or under any of the other Credit Documents unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or under any of the other Credit Documents in
accordance with a request of the Required Lenders (or to the extent specifically
provided in Section 11.6, all the Lenders) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders
(including their successors and assigns).
10.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Credit Party referring to the Credit
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders.
10.6 Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent, NationsBanc
Capital Markets, Inc. ("NCMI") nor any of their officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or
warranties to it and that no act by the Agent, NCMI or any affiliate thereof
hereinafter taken, including any review of the affairs of any Credit Party,
shall be deemed to constitute any representation or warranty by the Agent or
NCMI to any Lender. Each Lender represents to the Agent and NCMI that it has,
independently and without reliance upon the Agent or NCMI or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Credit Parties and made its own decision to make its Loans hereunder and enter
into this Credit Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent, NCMI or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business, assets,
operations, property, financial and other conditions, prospects and
creditworthiness of the Credit Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent and NCMI shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, assets, property, financial or other conditions, prospects or
creditworthiness of the Credit Parties which may come into the possession of the
Agent, NCMI or any of their officers, directors, employees, agents,
attorneys-in-fact or affiliates.
10.7 Indemnification.
The Lenders agree to indemnify the Agent in its capacity as such (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective Commitments (or if the
Commitments have expired or been terminated, in accordance with the respective
principal amounts of outstanding Loans and Participation Interest of the
Lenders), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following payment in full of the Credit Party Obligations) be imposed
on, incurred by or asserted against the Agent in its capacity as such in any way
relating to or arising out of this Credit Agreement or the other Credit
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Agent. If any indemnity furnished to the Agent for any purpose
shall, in the opinion of the Agent, be insufficient
or become impaired, the Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished. The agreements in this Section shall survive the payment of the
Credit Party Obligations and all other amounts payable hereunder and under the
other Credit Documents.
10.8 Agent in Its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower or any other Credit
Party as though the Agent were not the Agent hereunder. With respect to the
Loans made and all obligations owing to it, the Agent shall have the same rights
and powers under this Credit Agreement as any Lender and may exercise the same
as though it was not the Agent, and the terms "Lender" and "Lenders" shall
include the Agent in its individual capacity.
10.9 Successor Agent.
The Agent may, at any time, resign upon 30 days written notice to the
Lenders. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Agent from among the Lenders. If no successor Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 45 days after the notice of resignation, then the retiring
Agent shall select a successor Agent from among the Lenders, if possible,
provided such successor is a Lender hereunder or a commercial bank organized
under the laws of the United States of America or of any State thereof and has a
combined capital and surplus of at least $400,000,000. Upon the acceptance of
any appointment as the Agent hereunder by a successor, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations as the Agent, as appropriate, under
this Credit Agreement and the other Credit Documents and the provisions of this
Section 10.9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Agent under this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy, (c) the Business Day following the
day on which the same has been delivered prepaid to a reputable national
overnight air courier service, or (d) the third Business Day following the day
on which the same is sent by certified or registered mail, postage prepaid, in
each case to the respective parties at the address or telecopy numbers set forth
on Schedule 11.1, or at such other address as such party may specify by written
notice to the other parties hereto.
11.2 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuation of an Event of Default and the commencement of
remedies described in Section 9.2, each Lender is authorized at any time and
from time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Lender (including, without
limitation, branches, agencies or Affiliates of such Lender wherever
located) to or for the credit or the account of any Credit Party against
obligations and liabilities of such Credit Party to the Lenders hereunder, under
the Notes, the other Credit Documents or otherwise, irrespective of whether the
Agent or the Lenders shall have made any demand hereunder and although such
obligations, liabilities or claims, or any of them, may be contingent or
unmatured, and any such set-off shall be deemed to have been made immediately
upon the occurrence of an Event of Default even though such charge is made or
entered on the books of such Lender subsequent thereto. The Credit Parties
hereby agree that any Person purchasing a participation in the Loans and
Commitments hereunder pursuant to Section 11.3(c) or 3.8 may exercise all rights
of set-off with respect to its participation interest as fully as if such Person
were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that none of the Credit Parties
may assign and transfer any of its interests (except as permitted by
Section 8.4) without the prior written consent of the Lenders; and
provided further that the rights of each Lender to transfer, assign or
grant participations in its rights and/or obligations hereunder shall be
limited as set forth below in subsections (b) and (c) of this Section
11.3. Notwithstanding the above (including anything set forth in
subsections (b) and (c) of this Section 11.3), nothing herein shall
restrict, prevent or prohibit any Lender from (A) pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by such
Lender from such Federal Reserve Bank, or (B) granting assignments or
participations in such Lender's Loans and/or Commitments hereunder to its
parent company and/or to any Affiliate of such Lender or to any existing
Lender or Affiliate thereof but no such assignment shall relieve the
assigning Lender of its obligations hereunder.
(b) Assignments. Each Lender may, with the prior written consent of
the Borrower and the Agent (provided that no consent of the Borrower shall
be required during the existence and continuation of a Default or an Event
of Default), which consent shall not be unreasonably withheld or delayed
(it being agreed that the Borrower withholding consent in connection with
any assignment that would result in a nonexempt prohibited transaction (as
defined in Section 4975 of the Code or Section 406 of ERISA) with respect
to any Plan would be deemed reasonable), assign all or a portion of its
rights and obligations hereunder pursuant to an assignment agreement
substantially in the form of Exhibit 11.3 to one or more Eligible
Assignees; provided that any such assignment shall be in a minimum
aggregate amount of $5,000,000 of the Commitments and in integral
multiples of $1,000,000 above such amount (or the remaining amount of
Commitments held by such Lender) and each such assignment shall be of a
constant, not varying, percentage of all of the assigning Lender's rights
and obligations under the Commitment being assigned. Any assignment
hereunder shall be effective upon satisfaction of the conditions set forth
above and delivery to the Agent of a duly executed assignment agreement
together with a transfer fee of $3,500 payable to the Agent for its own
account. Upon the effectiveness of any such assignment, the assignee shall
become a "Lender" for all purposes
of this Credit Agreement and the other Credit Documents and, to the extent
of such assignment, the assigning Lender shall be relieved of its
obligations hereunder to the extent of the Loans and Commitment components
being assigned. Along such lines the Borrower agrees that upon notice of
any such assignment and surrender of the appropriate Note or Notes, it
will promptly provide to the assigning Lender and to the assignee separate
promissory notes in the amount of their respective interests substantially
in the form of the original Note or Notes (but with notation thereon that
it is given in substitution for and replacement of the original Note or
Notes or any replacement notes thereof).
By executing and delivering an assignment agreement in accordance
with this Section 11.3(b), the assigning Lender thereunder and the
assignee thereunder shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) such assigning Lender
warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and the assignee
warrants that it is an Eligible Assignee; (ii) except as set forth in
clause (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Credit
Agreement, any of the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Credit
Agreement, any of the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto or the financial condition
of any Credit Party or the performance or observance by any Credit Party
of any of its obligations under this Credit Agreement, any of the other
Credit Documents or any other instrument or document furnished pursuant
hereto or thereto; (iii) such assignee represents and warrants that it is
legally authorized to enter into such assignment agreement; (iv) such
assignee confirms that it has received a copy of this Credit Agreement,
the other Credit Documents and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to
enter into such assignment agreement; (v) such assignee will independently
and without reliance upon the Agent, such assigning Lender or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement and the other
Credit Documents; (vi) such assignee appoints and authorizes the Agent to
take such action on its behalf and to exercise such powers under this
Credit Agreement or any other Credit Document as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the
terms of this Credit Agreement and the other Credit Documents are required
to be performed by it as a Lender.
(c) Participations. Each Lender may sell, transfer, grant or assign
participations in all or any part of such Lender's interests and
obligations hereunder; provided that (i) such selling Lender shall remain
a "Lender" for all purposes under this Credit Agreement (such selling
Lender's obligations under the Credit Documents remaining unchanged) and
the participant shall not constitute a Lender hereunder, (ii) no such
participant shall have, or be granted, rights to approve any amendment or
waiver relating to this Credit Agreement or the other Credit Documents
except to the extent any such amendment or waiver would (A) reduce the
principal of or rate of interest on or fees in respect of any Loans in
which the participant is participating or increase any Commitments with
respect thereto, (B) postpone the date fixed for any payment of principal
(including any Term Loan amortization payment or the extension of the
final maturity of any Loan or the date of any mandatory prepayment),
interest or fees in which the participant is participating, or (C) release
all or substantially all of the collateral or guaranties (except as
expressly provided in the Credit Documents) supporting any of the Loans or
Commitments in which the participant is participating, (iii)
sub-participations by the participant (except to an Affiliate, parent
company or Affiliate of a parent company of the participant) shall be
prohibited, (iv) any such participations shall be in a minimum aggregate
amount of $5,000,000 of the Commitments and in integral multiples of
$1,000,000 in excess thereof and (v) no such participation shall result in
a non-exempt prohibited transaction (as defined in Section 4975 of the
Code or Section 406 of ERISA) with respect to any Plan. In the case of any
such participation, the participant shall not have any rights under this
Credit Agreement or the other Credit Documents (the participant's rights
against the selling Lender in respect of such participation to be those
set forth in the participation agreement with such Lender creating such
participation) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation; provided,
however, that such participant shall be entitled to receive additional
amounts under Sections 3.9, 3.12, 3.13 and 3.14 to the same extent that
the Lender from which such participant acquired its participation would be
entitled to the benefit of such cost protection provisions.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Borrower or any Credit Party and the Agent or
any Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
11.5 Payment of Expenses; Indemnification.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs
and expenses of (i) the Agent in connection with (A) the negotiation,
preparation, execution and delivery and administration of this Credit Agreement
and the other Credit Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees and expenses of
Xxxxx & Xxx Xxxxx, special counsel to the Agent), and (B) any amendment, waiver
or consent relating hereto and thereto including, but not limited to, any such
amendments, waivers or consents resulting from or related to any work-out,
renegotiation or restructure relating to the performance by the Credit Parties
under this Credit Agreement and (ii) the Agent and the Lenders in connection
with (A) enforcement of the Credit Documents and the documents and instruments
referred to therein, including, without limitation, in connection with any such
enforcement, the reasonable fees and disbursements of counsel for the Agent and
each of the Lenders, and (B) any bankruptcy or insolvency proceeding of a Credit
Party of any of its Subsidiaries and (b) indemnify the Agent and each Lender,
and each of their Affiliates, officers, directors, employees, representatives
and agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not the Agent or any Lender is a
party thereto) related to (i) the entering into and/or performance of any Credit
Document or the use of proceeds of any Loans (including other extensions of
credit) hereunder or the consummation of any other transactions contemplated in
any Credit Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of gross negligence
or willful misconduct on the part of the Person to be indemnified), (ii) any
Environmental Claim (other than losses, liabilities, claims, damages or expenses
incurred as a result of gross negligence or willful misconduct on the part of
the Person to be indemnified) and (iii) any claims for Non-Excluded Taxes.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the then Credit Parties; provided
that no such amendment, change, waiver, discharge or termination shall without
the consent of each Lender affected thereby:
(a) extend the final maturity of any Loan or any portion thereof or
postpone any other date fixed for any payment of principal (including any
scheduled amortization of a principal payment on the Term Loan) or any
date for a mandatory prepayment;
(b) reduce the rate or extend the time of payment of interest (other
than as a result of waiving the applicability of any post-default increase
in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan;
(d) increase the Commitment of a Lender over the amount thereof in
effect (it being understood and agreed that a waiver of any Default or
Event of Default or a waiver of any mandatory reduction in the Commitments
shall not constitute a change in the terms of any Commitment of any
Lender);
(e) release all or substantially all of the Collateral securing the
Credit Party Obligations hereunder;
(f) release the Borrower or substantially all of the other Credit
Parties from its obligations under the Credit Documents;
(g) amend, modify or waive any provision of this Section or Section
3.4, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 9.1(a), 11.2, 11.3 or
11.5;
(h) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders; or
(i) consent to the assignment or transfer by the Borrower or of any
of its rights and obligations under (or in respect of) the Credit
Documents.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans and each
Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein and (y) the
Required Lenders may consent to allow a Credit Party to use cash collateral in
the context of a bankruptcy or insolvency proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts, each
of which where so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Defaulting Lender.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.
11.10 Survival of Indemnification and Representations and Warranties.
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Credit Agreement,
the making of the Loans and the repayment of the Loans and other obligations and
the termination of the Commitments hereunder.
11.11 Governing Law; Jurisdiction.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NORTH CAROLINA. Any legal action or proceeding with respect to this
Agreement or any other Credit Document may be brought in the courts of the
State of North Carolina (including Mecklenburg County, North Carolina) or
of the United States for the Western District of North Carolina and, by
execution and delivery of this Credit Agreement, each Credit Party hereby
irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of such courts. Each Credit Party
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to it at
the address for notices pursuant to Section 11.1, such service to become
effective 15 days after such mailing. Nothing herein shall affect the
right of a Lender to serve process in any other manner permitted by law or
to commence legal proceedings or to otherwise proceed against a Credit
Party in any other jurisdiction. Each Credit Party agrees that a final
judgment in any action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law; provided that nothing in this Section 11.11(a) is
intended to impair a Credit Party's right under applicable law to appeal
or seek a stay of any judgment.
(b) Each Credit Party hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to
in subsection (a) hereof and hereby further irrevocably waives and agrees
not to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
11.12 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.13 Time.
All references to time herein shall be references to Eastern Standard Time
or Eastern Daylight time, as the case may be, unless specified otherwise.
11.14 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 Entirety.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.16 Binding Effect.
This Credit Agreement shall become effective at such time when all of the
conditions set forth in Section 5.1 have been satisfied or waived by the Lenders
and it shall have been executed by the Borrower, the Guarantors and the Agent,
and the Agent shall have received copies hereof (telefaxed or otherwise) which,
when taken together, bear the signatures of each Lender, and thereafter this
Credit Agreement shall be binding upon and inure to the benefit of the Borrower,
the Guarantors, the Agent and each Lender and their respective successors and
assigns.
11.17 Confidentiality.
Each Lender agrees that it will use its reasonable best efforts to keep
confidential and to cause any representative designated under Section 7.12 to
keep confidential any non-public information from time to time supplied to it
under any Credit Document; provided, however, that nothing herein shall prevent
the disclosure of any such information to (a) the extent a Lender in good faith
believes such disclosure is required by Requirement of Law, (b) counsel for a
Lender or to its accountants, (c) bank examiners or auditors or comparable
Persons, (d) any affiliate of a Lender, (e) any other Lender, or any assignee,
transferee or participant, or any potential assignee, transferee or participant,
of all or any portion of any Lender's rights under this Agreement who is
notified of the confidential nature of the information and agrees to be bound by
the provisions of this Section 11.17 or (f) any other Person in connection with
any litigation to which any one or more of the Lenders is a party; and provided
further that no Lender shall have any obligation under this Section 11.17 to the
extent any such information becomes available on a non-confidential basis from a
source other than a Credit Party not bound by any confidentiality obligation to
a Credit Party or that any information becomes publicly available other than by
a breach of this Section 11.17.
11.18 Amendment and Restatement of Existing Credit Agreement.
Upon this Credit Agreement becoming effective, (a) the Existing Credit
Agreement shall automatically be deemed amended and restated by this Credit
Agreement, (b) the Commitments under the Existing Credit Agreement (as defined
therein) shall automatically be terminated, and (c) the promissory notes
executed by the Borrower in connection with the Existing Credit Agreement
automatically shall be canceled and the Lenders agree to return such notes to
the Borrower and the lenders party to the Existing Credit Agreement shall no
longer have any obligations thereunder.
11.19 Release of Collateral.
Subsequent to the sale of shares of h.i.s. sportswear AG permitted in
accordance with the terms of this Credit Agreement and receipt by the Lenders of
the amount of proceeds received therefrom in accordance with the terms of
Section 3.3(b)(ii), the Lenders agree, upon the written request and at the
expense of the Borrower, to take such action as is necessary to terminate the
Pledge Agreement and release the Collateral consisting of the shares of h.i.s.
sportswear AG. The Lenders authorize the Agent to execute and deliver such
documentation or to take such other action as is necessary to give effect to
this Section 11.19, and the Agent agrees to notify the Lenders should it deliver
any such release documents
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
CHIC BY H.I.S, INC.,
a Delaware corporation
By:
Name:
Title:
GUARANTORS:
XXXXX X. XXXXXX COMPANY, INC.,
a Delaware corporation
By:
Name:
Title:
CHIC HOLDINGS CORP.,
a Delaware corporation
By:
Name:
Title:
CHIC BY H.I.S LICENSING CORPORATION,
a Delaware corporation
By:
Name:
Title:
H.I.S LIMITED,
a Delaware corporation
By:
Name:
Title:
H.I.S. KENTUCKY, INC.,
a Delaware corporation
By:
Name:
Title:
LENDERS:
NATIONSBANK, N.A.,
individually in its capacity as a Lender
and in its capacity as Agent
By:
Name:
Title:
FLEET BANK, N.A.
By:
Name:
Title:
Schedule 1.1(a)
Schedule of Lenders and
Commitments
Revolving Term
Revolving Loan Term Loan Loan
Committed Commitment Committed Commitment
Lender Amount Percentage Amount Percentage
------ ----------- ---------- -------------- ----------
NationsBank, N.A. $20,000,000 66.66% $13,333,333.33 66.66%
Fleet Bank, N.A. $10,000,000 33.33% $ 6,666,666.67 33.33%
Schedule 6.10
Indebtedness
Schedule 6.15
Subsidiaries
Schedule 6.22
Chief Executive Offices
Schedule 8.2
Liens
Schedule 11.1
Notices
Address
for Funding Address for
Lender and Payments Other Notices
------ ------------ -------------
NationsBank, N.A. NationsBank, N.A. NationsBank, N.A.
Agency Services NationsBank
Independence Center Corporate Center -
15th Floor 8th Floor
Charlotte, NC 28255 Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx Attn: Xxx Xxxx
Ph: Ph: (000)000-0000
Fax: Fax: (704)
Borrower Address for all Notices
-------- -----------------------
Kentucky Derby Hosiery 000 Xxxx Xxxxxxx Xxxxxx
Co., Inc. Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Ph:
Fax:
Schedule 11.1
Notices
Borrower
CHIC BY H.I.S, INC.
0000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxxxxxxxx
Chief Financial Officer
Phone: (000) 000-0000
Fax: (000) 000-0000
Guarantors
[Name of Guarantor]
c/o Chic by H.I.S, Inc.
0000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn:
Phone: (000) 000-0000
Fax: (000) 000-0000
Agent and Lender
NATIONSBANK, N.A.
NationsBank Corporate Center
000 X. Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
FLEET BANK, N.A.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
FORM OF
NOTICE OF BORROWING
TO: NATIONSBANK, N.A., as Agent
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
RE: Amended and Restated Credit Agreement entered into as of March ___, 1997
among Chic by H.I.S, Inc. (the "Borrower"), the Domestic Subsidiaries of
the Borrower, as Guarantors, NationsBank, N.A., as Agent and the Lenders
party thereto (as the same may be amended, modified, extended or restated
from time to time, the "Credit Agreement")
DATE: _____________, 199__
--------------------------------------------------------------------------------
1. This Notice of Borrowing is made pursuant to the terms of the Credit
Agreement. All capitalized terms used herein unless otherwise defined shall have
the meanings set forth in the Credit Agreement.
2. Please be advised that the Borrower is requesting Revolving Loans in the
amount of $__________ to be funded on ____________, 199__ at the interest rate
option set forth in paragraph 3 below. Subsequent to the funding of the
requested Revolving Loans, the aggregate amount of outstanding Revolving Loans
will be $_________, which is less than or equal to the lesser of (a) the
Revolving Committed Amount and (b) the Borrowing Base Assets.
3. The interest rate option applicable to the requested Revolving Loans shall
be:
a. ________ the Adjusted Base Rate
b. ________ the Adjusted Eurodollar Rate for an Interest Period of:
________ one month
________ two months
________ three months
________ six months
4. The representations and warranties made by the Credit Parties in the Credit
Documents are true and correct in all material respects at and as if made on the
date hereof except to the extent they expressly relate to an earlier date.
5. As of the date hereof, no Default or Event of Default has occurred and is
continuing or would be caused by this Notice of Borrowing.
6. No Material Adverse Effect has occurred since the Closing Date.
CHIC BY H.I.S, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
FORM OF
NOTICE OF CONTINUATION/CONVERSION
TO: NATIONSBANK, N.A., as Agent
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
RE: Amended and Restated Credit Agreement entered into as of March ___,
1997 among Chic by H.I.S, Inc. (the "Borrower"), the Domestic Subsidiaries
of the Borrower, as Guarantors, NationsBank, N.A., as Agent and the
Lenders party thereto (as the same may be amended, modified, extended or
restated from time to time, the "Credit Agreement")
DATE: _____________, 199__
--------------------------------------------------------------------------------
1. This Notice of Continuation/Conversion is made pursuant to the terms of
the Credit Agreement. All capitalized terms used herein unless otherwise
defined shall have the meanings set forth in the Credit Agreement.
2. Please be advised that the Borrower is requesting that a portion of the
current outstanding Revolving Loans or Term Loans in the amount of
$__________ currently accruing interest at __________ be continued or
converted as of _____________ at the interest rate option set forth in
paragraph 3 below.
3. The interest rate option applicable to the continuation or conversion of
all or part of the existing Revolving Loans or Term Loans shall be:
a. ________ the Adjusted Base Rate
b. ________ the Adjusted Eurodollar Rate for an Interest Period of:
________ one month
________ two months
________ three months
________ six months
4. As of the date hereof, no Default or Event of Default has occurred and is
continuing or would be caused by this Notice of Continuation/Conversion.
CHIC BY H.I.S, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Exhibit 2.5 (a)
to Amended and Restated
Credit Agreement
FORM OF
AMENDED AND RESTATED REVOLVING NOTE
$____________ ____________, 199_
FOR VALUE RECEIVED, Chic by H.I.S, Inc., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of ___________________ (the
"Lender"), at the office of NationsBank, N.A. (the "Agent") as set forth in that
certain Amended and Restated Credit Agreement entered into as of March ___, 1997
among the Borrower, the Domestic Subsidiaries of the Borrower, as Guarantors,
the Lenders named therein (including the Lender) and NationsBank, N.A., as Agent
(as modified and supplemented and in effect from time to time, the "Credit
Agreement"), the principal sum of $______________ (or such lesser amount as
shall equal the aggregate unpaid principal amount of the Revolving Loans made by
the Lender to the Borrower under the Credit Agreement), in lawful money of the
United States of America and in immediately available funds, on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Revolving Loan, at such office, in like
money and funds, for the period commencing on the date of such Revolving Loan
until such Revolving Loan shall be paid in full, at the rates per annum and on
the dates provided in the Credit Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement and evidences Revolving Loans made by the Lender thereunder.
Capitalized terms used in this Revolving Note and not otherwise defined shall
have the respective meanings assigned to them in the Credit Agreement and the
terms and conditions of the Credit Agreement are expressly incorporated herein
and made a part hereof.
The Credit Agreement provides for the acceleration of the maturity of the
Revolving Loans evidenced by this Revolving Note upon the occurrence of certain
events (and for payment of collection costs in connection therewith) and for
prepayments of Revolving Loans upon the terms and conditions specified therein.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorney fees.
The date, amount, type, interest rate and duration of Interest Period (if
applicable) of each Revolving Loan made by the Lender to the Borrower, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower to
make a payment when due of any amount owing hereunder or under this Revolving
Note in respect of the Revolving Loans to be evidenced by this Revolving Note,
and each such recordation or endorsement shall be prima facie evidence of such
information absent manifest error.
The Borrower hereby waives presentment, demand, protest, notice of protest
and any other notice with respect to this Revolving Note.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NORTH CAROLINA.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
executed as of the date first above written.
CHIC BY H.I.S, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
FORM OF
AMENDED AND RESTATED TERM LOAN NOTE
$____________ March ___, 1997
FOR VALUE RECEIVED, Chic by H.I.S, Inc., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of ___________________ (the
"Lender"), at the office of NationsBank, N.A. (the "Agent") as set forth in that
certain Amended and Restated Credit Agreement entered into as of March ___, 1997
among the Borrower, the Domestic Subsidiaries of the Borrower, as Guarantors,
the Lenders named therein (including the Lender) and NationsBank, N.A., as Agent
(as modified and supplemented and in effect from time to time, the "Credit
Agreement"), the principal sum of $______________ (or such lesser amount as
shall equal the aggregate unpaid principal amount of the Term Loans made by the
Lender to the Borrower under the Credit Agreement), in lawful money of the
United States of America and in immediately available funds, on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Term Loan, at such office, in like
money and funds, for the period commencing on the date of such Term Loan until
such Term Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
This Note is one of the Term Loan Notes referred to in the Credit
Agreement and evidences Term Loans made by the Lender thereunder. Capitalized
terms used in this Term Loan Note and not otherwise defined shall have the
respective meanings assigned to them in the Credit Agreement and the terms and
conditions of the Credit Agreement are expressly incorporated herein and made a
part hereof.
The Credit Agreement provides for the acceleration of the maturity of the
Term Loans evidenced by this Term Loan Note upon the occurrence of certain
events (and for payment of collection costs in connection therewith) and for
prepayments of Term Loans upon the terms and conditions specified therein. In
the event this Term Loan Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorney fees.
The date, amount, type, interest rate and duration of Interest Period (if
applicable) of each Term Loan made by the Lender to the Borrower, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower to
make a payment when due of any amount owing hereunder or under this Term Loan
Note in respect of the Term Loans to be evidenced by this Term Loan Note, and
each such recordation or endorsement shall be prima facie evidence of such
information absent manifest error.
The Borrower hereby waives presentment, demand, protest, notice of protest
and any other notice with respect to this Term Loan Note.
THIS TERM LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NORTH CAROLINA.
IN WITNESS WHEREOF, the Borrower has caused this Term Loan Note to be
executed as of the date first above written.
CHIC BY H.I.S, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Exhibit 7.1(c)
to
Amended and Restated
Credit Agreement
FORM OF
BORROWING BASE REPORT
TO: NATIONSBANK, N.A., as Agent
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
RE: Amended and Restated Credit Agreement entered into as of March ___, 1997
among Chic by H.I.S, Inc. (the "Borrower"), the Domestic Subsidiaries of
the Borrower, as Guarantors, NationsBank, N.A., as Agent and the Lenders
party thereto (as the same may be amended, modified, extended or restated
from time to time, the "Credit Agreement")
DATE: _____________, 199___
--------------------------------------------------------------------------------
Pursuant to the terms of the Credit Agreement, I ___________, chief
financial officer of Chic by H.I.S, Inc. hereby certify that, as of the calendar
month ended _________, 199__, the statements below are accurate and complete in
all respects (all capitalized terms used below have the meanings set forth in
the Credit Agreement):
1. (a) Eligible Receivables (See Schedule 1
attached hereto) $_________
(b) 80% of Eligible Receivables $_________
2. (a) Eligible Inventory (See Schedule 1
attached hereto) $_________
(b) 50% of Eligible Inventory $_________
3. Total Borrowing Base Assets
(Line 1(b) plus Line 2(b)) $_________
4. Revolving Committed Amount $_________
5. Aggregate Outstanding Revolving Loans
under the Credit Agreement $_________
6. Availability under Credit Agreement
(the lesser of (i) Line 3 minus Line 5
and (ii) Line 4 minus Line 5) $_________
If line 6 is a positive number, the Borrower has availability under the Credit
Agreement in the amount shown. If line 6 is a negative number, the Borrower
shall immediately prepay the Revolving Loans in an amount sufficient as to be in
compliance with the terms of the Credit Agreement.
CHIC BY H.I.S, INC.
By:
---------------------------------
Chief Financial Officer
SCHEDULE 1 TO BORROWING BASE REPORT
1. Eligible Receivables:
Total Accounts Receivable $________
- Reserves $________
- Accounts Receivable more than 89 days
past due $________
- Accounts Receivable subject to any Lien
(other than Permitted Liens) $________
- Accounts Receivable for obligations that
have not been fully performed or that are
subject to dispute $________
- Accounts Receivable with respect to which
the obligor is (i) past due on 50%
of its obligations to the Credit Parties $________
- Accounts Receivable with respect to which
the obligor is (i) an Affiliate of the
Borrower or one of its Subsidiaries, (ii)
located outside of the United States or
Canada or (iii) the government of the
United States or an agency of the
government of the United States $________
= Eligible Receivables $________
2. Eligible Inventory:
Total Inventory (the lower of the aggregate
cost (valued by the FIFO method) or fair
market value of all raw materials, work in
process and finished goods inventory) $________
- Reserves $________
- Inventory subject to any Lien other than
Permitted Liens; provided that any
Inventory subject to a purchase money Lien
shall not be deemed to be Eligible
Inventory $________
- Inventory which is not in good condition
or fails to meet standards for sale or use
imposed by governmental agencies,
departments or divisions having regulatory
authority over such goods $________
- Inventory which is not useable or saleable
at prices approximating their cost in the
ordinary course of the applicable Credit
Party's business (including without
duplication the amount of any reserves for
obsolescence, unsalability or decline in
value) $________
- Inventory which is not located in the
United States $________
- Inventory which is leased or on
consignment $________
= Eligible Inventory $________
MEMORANDUM
TO: Those Parties On The Attached Distribution List
FROM: Xxxxx XxXxxx
Xxxxx & Xxx Xxxxx, PLLC
DATE: November 11, 1997
RE: Conseco, Inc. $1.4 Billion Five-Year Credit Facility
Enclosed herewith please find a cover letter from Xxxxx X. Xxxxx of
Conseco and the Third Amendment to the Credit Agreement, together with
thirty-five (35) signature pages for execution in connection with the
above-referenced transaction.
Conseco has scheduled a conference call on Monday, November 17, 1997, at
3:00 p.m. EST, to discuss the Third Amendment and its issuance of the Unit
Securities referred to therein. The call-in number for the conference call is
0-000-000-0000. The pass code is 7699722.
Please fax to Xxxxx Xxxxxxxx, my paralegal, at (000) 000-0000 an executed
signature page by no later than 3:00 p.m.Wednesday, December 3, 1997. Please
execute the enclosed signature pages and return to Xxxxx Xxxxxxxx via overnight
mail for delivery on Thursday, December 4, 1997.
Thank you.
KAM:bsw
Enclosures
CONSECO, INC.
DISTRIBUTION LIST
Mr. Xxx Xxxxxx
Conseco, Inc.
00000 X. Xxxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Mr. Xxx Xxxxxx
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxx Xxxxxxx
Bank of Montreal
000 X. XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxxxx Xxxxxxxxx
Bank of New York
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Ms. Xxxxx Xxxxxx
Bank of Tokyo/Mitsubishi Trust
0000 Xxxxxx xx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxx Xxxxxxxxx
Bank One Texas
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Mr. Xxxxx Xxxxxxxx
Canadian Imperial Bank of Commerce
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxx Xxxxxxx
Comerica Bank
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxx Xxxxxx
Bank of America
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxx Xxxxxxxx
Corestates Bank
0000 Xxxxxxxx Xxxxxx
Location Code FC 0-0-0-0
Xxxxxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Mr. Xxxxx Xxxxxxxxx
Credit Lyonnais
0000 Xxxxxx xx Xxxxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxx Xxxxx
Deutsche Bank
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Mr. Xxxx Xxxxxxxx
First National Bank of Chicago
One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 000
Xxxxxxx, XX 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
Ms. Xxxxxxx Xxxxx
Fleet National Bank
000 Xxxx Xxxxxx, XXXX-0000
Xxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Mr. Xxx Xxxx
The Fuji Bank, Limited
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxx Xxxxx
First Union National Bank of
North Carolina
Xxx Xxxxx Xxxxx Xxxxxx XX-0
Xxxxxxxxx, XX 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxx Xxxxx/ Xx. Xxx Xxxxx
Long Term Credit Bank of Japan
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxxxx Xxxx
Sanwa Bank
00 Xxxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Ms. Xxxxx Hope
Societe Generale
0000 Xxxxxx xx Xxxxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Mr. Xxxxx Xxxxx
SunTrust Bank
000 X. Xxxxxx Xxxxxx 0-0000
Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxx Xxxxxxxxx
Banque Nationale de Paris
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxx Xxxxxxx
The Xxxxx Manhattan Bank
Xxx Xxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxx Xxxxx
Credit Suisse First Boston
00 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxx XxXxx
Mitsubishi Trust & Banking Corp.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxx X. Cable
c/o ATTN: Xxxx Xxxxxx
National City Bank
0000 Xxxx 0xx Xxxxxx
10th Floor
Locator 2104
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxx Xxxxxx
The Royal Bank of Scotland p/c
Wall Street Plaza
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxxx Xxxxxxxxx
KeyBank National Association
XX XX-00-00-0000
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxxx X. Xxxxxxx
Star Bank
000 Xxxxxx Xxxxxx
XX 0000
Xxxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxx Xxxxxxxxxxxxxx
The Xxxxxx Trust & Banking Co.
000 0xx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxx X'Xxxxxxxx
Bayerische Landesbank Girozentrale
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxx Xxxxxx
Commerzbank AG, Chicago Branch
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxxxxx Xxxxxx
The Sakura Bank, Limited
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Mr. Xxx Xxxxx
US Bank National Association
Financial Services Division
First Bank Place
MPFP 0704
000 0xx Xxxxxx, Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
Xx. Xxx Xxxxxxx
The Sumitomo Bank, Ltd.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
FORM OF
ASSIGNMENT AGREEMENT
Reference is made to that certain Amended and Restated Credit Agreement
entered into as of March ___, 1997 (as the same may be amended, modified,
extended or restated from time to time, the "Credit Agreement") among Chic by
H.I.S, Inc. (the "Borrower"), the Domestic Subsidiaries of the Borrower, as
Guarantors, the Lenders identified therein and NationsBank, N.A., as Agent. All
capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Credit Agreement.
1. The Assignor (as defined below) hereby sells and assigns, without
recourse, to the Assignee (as defined below), and the Assignee hereby purchases
and assumes, without recourse, from the Assignor, effective as of effective date
of the assignment as designated below (the "Effective Date"), the interests set
forth below (the "Assigned Interest") in the Assignor's rights and obligations
under the Credit Agreement, including, without limitation, (a) the interests set
forth below in the Revolving Loan Commitment Percentage of the Assignor on the
Effective Date, (b) the interests set forth below in the Term Loan Commitment
Percentage of the Assignor on the Effective Date and (c) the Loans owing to the
Assignor in connection with the Assigned Interest which are outstanding on the
Effective Date. The purchase of the Assigned Interest shall be at par and
periodic payments made with respect to the Assigned Interest which (i) accrued
prior to the Effective Date shall be remitted to the Assignor and (ii) accrue
from and after the Effective Date shall be remitted to the Assignee. From and
after the Effective Date, the Assignee, if it is not already a Lender under the
Credit Agreement, shall become a "Lender" for all purposes of the Credit
Agreement and the other Credit Documents and, to the extent of such assignment,
the assigning Lender shall be relieved of its obligations under the Credit
Agreement.
2. The Assignor represents and warrants to the Assignee that it is the
holder of the Assigned Interest and the Loans and Participation Interests
related thereto, and it has not previously transferred or encumbered such
Assigned Interest, Loans or Participation Interests.
3. The Assignee represents and warrants to the Assignor that it is an
Eligible Assignee.
4. This Assignment shall be effective only upon (a) the consent of the
Borrower and the Agent to the extent required under Section 11.3 of the Credit
Agreement and (b) delivery to the Agent of this Assignment Agreement together
with the transfer fees, if applicable, set forth in Section 11.3(b) of the
Credit Agreement.
5. The Assignor and the Assignee confirm to and agree with each other and
the other parties to the Credit Agreement as to the terms set forth in paragraph
2 of Section 11.3(b) of the Credit Agreement.
6. This Assignment shall be governed by and construed in accordance
with the laws of the State of North Carolina.
7. Terms of Assignment
(a) Date of Assignment __________________
(b) Legal Name of Assignor __________________
(c) Legal Name of Assignee __________________
(d) Effective Date of Assignment __________________
(e) Revolving Loan Commitment
Percentage assigned __________________%
(f) Total Revolving Loans
outstanding as of Effective Date $________________
(g) Principal Amount of Revolving
Loans assigned on Effective Date
(the amount set forth in (f)
multiplied by the percentage set
forth in (e)) $________________
(h) Revolving Committed Amount $________________
(i) Principal Amount of Revolving
Committed Amount Assigned on the
Effective Date (the amount set
forth in (h) multiplied by the
percentage set forth in (e)) $________________
(j) Principal Amount of Revolving
Committed Amount of Assignor
after Effective Date $________________
(k) Principal Amount of Revolving
Committed Amount of Assignee
after Effective Date $________________
(l) Term Loan Commitment
Percentage assigned ________________%
(m) Total Term Loans
outstanding as of Effective Date $________________
(n) Principal Amount of Term Loans
assigned on Effective Date (the
amount set forth in (m)
multiplied by the percentage set
forth in (l)) $________________
(o) Term Loan Committed Amount $________________
(p) Principal Amount of Term Loan
Committed Amount Assigned on the
Effective Date (the amount set
forth in (o) multiplied by the
percentage set forth in (l)) $________________
(q) Principal Amount of Term Loan
Committed Amount of Assignor
after Effective Date $________________
(r) Principal Amount of Term Loan
Committed Amount of Assignee
after Effective Date $________________
The terms set forth above are hereby agreed to:
_______________________, as Assignor
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
_______________________, as Assignee
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
CONSENTED TO (if applicable):
CHIC BY H.I.S, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
NATIONSBANK, N.A., as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
