EXHIBIT 10.1
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 1, 1997
among Glenoit Corporation, a Delaware corporation (the "Borrower"), the banks,
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financial institutions and other institutional lenders listed on the signature
pages hereof as the Restatement Lenders (the "Restatement Lenders"), the bank
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listed on the signature pages hereof as the Issuing Bank (the "Issuing Bank")
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and Banque Nationale de Paris ("BNP"), as agent (together with any successor
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appointed pursuant to Article VII, the "Agent") for the Lender Parties (as
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hereinafter defined).
PRELIMINARY STATEMENTS:
(1) The Borrower (formerly known as Glenoit Intermediate Holdings, Inc.)
and Glenoit Xxxxx, Inc. ("Xxxxx") entered into an Amended and Restated Credit
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Agreement dated as of December 31, 1995 with the Initial Lenders and the Initial
Issuing Bank named therein and the Agent, as amended (the "Existing Credit
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Agreement").
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(2) The Borrower is the sole direct, wholly owned Subsidiary of Glenoit
Universal, Ltd., a Delaware corporation ("Universal"), and Xxxxx is the sole
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direct, wholly owned Subsidiary of the Borrower.
(3) The Borrower will issue 11% Senior Subordinated Notes due 2007 (the
"Subordinated Notes") in the aggregate amount of $100,000,000, the proceeds of
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which will be used to pay the Earn-Out Note (as defined below), the obligations
of the Borrower under the Alliance Subordinated Debt (as defined below) and the
obligations of the Borrower and Xxxxx under the Existing Credit Agreement.
(4) The Restatement Lenders and the Borrower have agreed to amend and
restate the Existing Credit Agreement in order to allow the Existing Lenders (as
defined below) to assign a portion of their Commitments (as defined in the
Existing Credit Agreement) to the Restatement Lenders hereunder, and to modify
their Commitments (as defined in the Existing Credit Agreement) in order to (i)
pay transaction fees and expenses in connection with the transactions
contemplated hereunder, (ii) finance Related Textile Investments (as defined
below), (iii) finance the working capital of the Borrower and its Subsidiaries
and (iv) provide funds for other general corporate purposes. The Restatement
Lenders have indicated their willingness to agree to amend and restate the
Existing Credit Agreement and to lend such amounts on the terms and conditions
of this Agreement.
(5) Simultaneously with the execution hereof, the Existing Lenders have
entered into an Assignment Agreement in the form of Exhibit L attached hereto
dated as of the date hereof (the "Second Restatement Assignment Agreement"),
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with the Restatement Lenders pursuant to which such Existing Lenders have agreed
to sell and assign to the
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Restatement Lenders, and the Restatement Lenders have agreed to purchase and
assume, as of the Second Restatement Date (as defined below), all of such
Existing Lenders' rights and obligations under the Existing Credit Agreement on
the terms set forth in the Second Restatement Assignment Agreement. After
giving effect to such sale and assignment as of the Second Restatement Date, the
Commitments of and the amount of Advances owing to each of the Restatement
Lenders will be as set forth on Schedule I.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree that,
subject to the satisfaction of the conditions set forth in Section 3.01, the
Existing Credit Agreement is amended and restated in its entirety to read as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Accounts Receivable Management Agreement" means the Accounts
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Receivable Management Agreement dated as of December 14, 1995 by and
between Xxxxx and BNY Financial Corporation, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Acquisition Advance" has the meaning specified in Section 2.01(a).
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"Acquisition Borrowing" means a borrowing in an aggregate principal
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amount equal to the simultaneous Acquisition Advances of the same Type made
by the Acquisition Lenders.
"Acquisition Commitment" means, with respect to any Acquisition Lender
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at any time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Acquisition Commitment" or, if such Lender has
entered into one or more Assignment and Acceptances, set forth for such
Lender in the Register maintained by the Agent pursuant to Section 8.07(e)
as such Lender's "Acquisition Commitment", as such amount may be reduced at
or prior to such time pursuant to Section 2.05.
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"Acquisition Facility" means, at any time, the aggregate amount of the
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Acquisition Lenders' Acquisition Commitments at such time.
"Acquisition Facility Term Loan Date" has the meaning specified in
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Section 2.01(a).
"Acquisition Lender" means any Lender that has an Acquisition
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Commitment.
"Acquisition Note" means a promissory note of the Borrower payable to
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the order of any Acquisition Lender, in substantially the form of Exhibit
A-2 hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the Acquisition Advances made by such Lender.
"Adjusted EBITDA" means, for any Rolling Period, Consolidated EBITDA
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of the Borrower and its Subsidiaries plus with respect to any Related
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Textile Investment which constitutes an acquisition of a Related Textile
Business, EBITDA of such Related Textile Business for such Rolling Period
or such shorter period, as appropriate, ending on the last day of the
Fiscal Month immediately preceding the date of such Related Textile
Investment if the Lender Parties shall have received financial information
of such Related Textile Business with an audit or a review report or
similar report by a nationally recognized accounting firm acceptable to the
Agent; provided, however, that, with respect to any Related Textile
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Investment which constitutes an acquisition of a Related Textile Business
with an aggregate acquisition purchase price (including the amount of any
indebtedness refinanced or assumed and all fees and expenses related
thereto) of $3,000,000 or less, such audit or review report or similar
report shall only be required at the request of the Agent.
"Advance" means a Working Capital Advance, an Acquisition Advance or
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a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that, directly
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or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Agent" has the meaning specified in the recital of parties to this
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Agreement.
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"Agent's Account" means the account of the Agent maintained by the
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Agent at the Federal Reserve Bank of New York, 00 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, ABA No. 000000000, for further credit to Account No.
75042070103 or such other account maintained by the Agent and designated by
the Agent in a written notice to the Lenders, the Issuing Banks and the
Borrower.
"Alliance Subordinated Debt" means the notes issued by the Borrower to
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Alliance Corporate Finance Group Incorporated, a Delaware corporation, in a
principal amount of $15,000,000.
"Amended and Restated Intellectual Property Security Agreement" has
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the meaning specified in Section 3.01(g)(ix).
"Applicable Lending Office" means, with respect to each Lender Party,
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such Lender Party's Domestic Lending Office in the case of a Base Rate
Advance and such Lender Party's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
"Applicable Margin" means a percentage per annum determined as set
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forth below:
FACILITY BASE RATE ADVANCES EURODOLLAR RATE ADVANCES
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Acquisition Facility 1.00% 2.50%
Working Capital Facility 0.50% 2.00%
"Appropriate Lender" means, at any time, with respect to (a) either of
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the Acquisition Facility or Working Capital Facility, a Lender that has a
Commitment with respect to such Facility at such time and (b) the Letter of
Credit Facility, (i) an Issuing Bank and (ii) if the other Working Capital
Lenders have made Letter of Credit Advances pursuant to Section 2.03(c)
that are outstanding at such time, each such other Working Capital Lender.
"Assignment and Acceptance" means an assignment and acceptance entered
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into by a Lender Party and an Eligible Assignee, and accepted by the Agent,
in accordance with Section 8.07 and in substantially the form of Exhibit C
hereto.
"Available Amount" of any Letter of Credit means, at any time, the
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maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).
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"Base Rate" means a fluctuating interest rate per annum in effect from
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time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by BNP in New York,
New York, from time to time, as its prime rate (and such term shall
not be construed to be its best or most favorable rate); and
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
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in Section 2.07(a)(i).
"BNP" has the meaning specified in the recital of parties to this
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Agreement.
"Borrower Information" means any and all of the written information
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provided by or on behalf of the Borrower to the Agent in connection with
the syndication of this Agreement (including any written materials,
financial statements and financial projections and any amendments,
supplements, schedules and exhibits thereto).
"Borrower" has the meaning specified in the recital of parties to this
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Agreement.
"Borrower's Account" means the account of the Borrower maintained by
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the Borrower with BNP at its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Account No. 20041000123, or such other account as the Borrower and
the Agent may from time to time designate as the "Borrower's Account".
"Borrowing" means an Acquisition Borrowing or a Working Capital
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Borrowing.
"Borrowing Base Certificate" means a certificate in substantially the
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form of Exhibit J hereto, duly certified by the chief financial officer of
the Borrower.
"Business Day" means a day of the year on which banks are not required
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or authorized by law to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"Capitalized Leases" means all leases that have been or should be, in
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accordance with GAAP, recorded as capitalized leases.
"Cash Collateral Account" has the meaning specified in Section
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2.06(b)(vi).
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"Cash Equivalents" means any of the following, to the extent owned by the
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Borrower free and clear of all Liens other than Liens created under the
Collateral Documents and having a maturity of not greater than 180 days
from the date of acquisition thereof: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the
full faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that
is a Lender Party or a member of the Federal Reserve System, issues (or the
parent of which issues) commercial paper rated as described in clause (c),
is organized under the laws of the United States or any State thereof and
has combined capital and surplus of at least $500,000,000, (c) commercial
paper in an aggregate amount of no more than $250,000 per issuer
outstanding at any time, issued by any corporation organized under the laws
of any State of the United States and rated at least "Prime-1" (or the then
equivalent grade) by Xxxxx'x Investors Service, Inc. or "A-1" (or the then
equivalent grade) by Standard & Poor's Ratings Group, a division of the
XxXxxx-Xxxx Companies, Inc., (d) repurchase agreements with a term of not
more than seven days for underlying securities of the types described in
clauses (a) and (b) above entered into with any bank meeting the
qualifications specified in clause (b) above or with securities dealers of
recognized national standing, provided that the terms of such agreements
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comply with the guidelines set forth in the Federal Financial Institutions
Examination Council Supervisory Policy Repurchase Agreements of Depositary
Institutions With Securities Dealers and Others as adopted by the
comptroller of the Currency on October 31, 1985 (the "Supervisory Policy"),
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and provided further that possession or control of the underlying
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securities is established as provided in the Supervisory Policy, or (e)
Investments in money market or mutual funds that invest in Cash Equivalents
of the types described in clauses (a), (b) or (c) above.
"CERCLA" means the Comprehensive Environmental Response, Compensation
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and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
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and Liability Information System maintained by the U.S. Environmental
Protection Agency.
"Collateral" means all "Collateral" and "Intellectual Property
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Collateral" referred to in the Collateral Documents and all other property
that is or is intended to be subject to any Lien in favor of the Agent for
the benefit of the Secured Parties.
"Collateral Documents" means the Second Amended and Restated Security
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Agreement, the Amended and Restated Intellectual Property Security
Agreement, and
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any other agreement that creates or purports to create a Lien in favor of
the Agent for the benefit of the Secured Parties.
"Commitment" means an Acquisition Commitment, a Working Capital
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Commitment or a Letter of Credit Commitment.
"Confidential Information" means information that the Loan Parties and
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their Subsidiaries furnish to the Agent or any Lender Party on a
confidential basis, but does not include any such information that is or
becomes generally available to the public or that is or becomes available
to the Agent or such Lender from a source other than any Loan Party or any
of their Subsidiaries.
"Consolidated" refers, with respect to any Person, to the
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consolidation of accounts of such Person and its Subsidiaries in accordance
with GAAP.
"Conversion", "Convert" and "Converted" each refer to a conversion
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of Advances of one Type into Advances of the other Type pursuant to Section
2.09 or 2.10.
"CVC" means Citicorp Venture Capital, Ltd., a New York corporation.
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"Debt" of any Person means, without duplication, (a) all indebtedness
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of such Person for borrowed money, (b) all Obligations of such Person for
the deferred purchase price of property or services (other than trade
payables not overdue by more than 75 days incurred in the ordinary course
of such Person's business), (c) all Obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all Obligations
of such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement
in the event of default are limited to repossession or sale of such
property), (e) all Obligations of such Person as lessee under Capitalized
Leases, (f) all Obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities, (g) all Obligations of
such Person to purchase, redeem, retire, defease or otherwise make any
payment in respect of any capital stock of or other ownership or profit
interest in such Person or any other Person or any warrants, rights or
options to acquire such capital stock, valued, in the case of Redeemable
Preferred Stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, (h) all Obligations of such
Person in respect of Hedge Agreements, (i) all Debt of others referred to
in clauses (a) through (h) above or clause (j) below guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly
or indirectly by such Person through an agreement (i) to pay or purchase
such Debt or to advance or supply funds for the payment or purchase
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of such Debt, (ii) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure the holder of
such Debt against loss, (iii) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such services
are rendered) or (iv) otherwise to assure a creditor against loss, and (j)
all Debt referred to in clauses (a) through (i) above of another Person
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such Debt.
"Deed of Trust" has the meaning specified in Section 3.01(g)(x).
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"Deed of Trust Policies" has the meaning specified in Section
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3.01(g)(x)(B).
"Default" means any Event of Default or any event that would
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constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Deferred Redemption Price Note" means the Deferred Redemption Price
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Subordinated Note due December 14, 2004, issued by Universal to Stirling
pursuant to the Redemption Agreement in an aggregate principal amount of
$1,400,000.
"Domestic Lending Office" means, with respect to any Lender Party, the
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office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party, as the case may be, or such
other office of such Lender Party as such Lender Party may from time to
time specify to the Borrower and the Agent.
"Earn-Out Note" means the Promissory Note due December 31, 2002 issued
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by the Borrower to Stirling in an aggregate principal amount of
$5,781,262.50.
"EBITA" means, for any Person, for any period, (a) net income (or net
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loss) plus (b) the sum of (i) Interest Expense, (ii) income tax expense,
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(iii) amortization expense and (iv) extraordinary or unusual losses
deducted in calculating net income (or net loss) less (c) the sum of (i)
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extraordinary or unusual gains added in calculating net income (or net
loss), and (ii) all dividends made pursuant to Section 5.02(g)(iv)(B), in
each case determined in accordance with GAAP for such period.
"EBITDA" means, for any Person, for any period, (a) net income (or net
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loss), plus (b) the sum of (i) Interest Expense, (ii) income tax expense,
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(iii) depreciation expense, (iv) amortization expense and (v) extraordinary
or unusual
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losses deducted in calculating net income (or net loss) less (c) the sum of
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extraordinary or unusual gains added in calculating net income (or net
loss) and (ii) all dividends made pursuant to Section 5.02(g)(iv)(B), in
each case determined in accordance with GAAP for such period.
"Eligible Assignee" means with respect to any Facility: (i) a Lender;
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(ii) an Affiliate of a Lender; (iii) a commercial bank organized under the
laws of the United States, or any State thereof, and having a combined
capital and surplus of at least $500,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United States,
or any State thereof, and having a combined capital and surplus of at least
$500,000,000; (v) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow or a political subdivision of any such
country, and having a combined capital and surplus of at least
$500,000,000, so long as such bank is acting through a branch or agency
located in the United States; (vi) a finance company, insurance company or
other financial institution or fund (whether a corporation, partnership,
trust or other entity) that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and
having a combined capital and surplus of at least $250,000,000; and (vii)
any other Person approved by the Agent and the Borrower, such approval not
to be unreasonably withheld or delayed; provided, however, that no Loan
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Party nor any Affiliate of any Loan Party shall qualify as an Eligible
Assignee under this definition.
"Eligible Collateral" means, collectively, Eligible Inventory and
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Eligible Receivables.
"Eligible Inventory" means any Inventory owned by the Borrower and its
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Subsidiaries free and clear of all Liens (other than Permitted Liens and
Liens in favor of the Secured Parties securing the Secured Obligations)
other than the following:
(a) Inventory located on leaseholds as to which the lessor has
not entered into a consent and agreement providing the Agent with the
right to receive notice of default, the right to repossess such
Inventory at any time and such other rights as may be acceptable to
the Agent;
(b) Inventory that is obsolete, unusable or otherwise unavailable
for sale;
(c) Inventory with respect to which the representations and
warranties set forth in Section 10 of the Second Amended and Restated
Security Agreement applicable to Inventory are not true and correct;
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(d) Inventory consisting of promotional, marketing, packaging or
shipping materials and supplies;
(e) Inventory that fails to meet all standards imposed by any
governmental agency, or department or division thereof, having
regulatory authority over such Inventory or its use or sale;
(f) Inventory that is subject to any licensing, patent, royalty,
trademark, trade name or copyright agreement with any third party from
whom the Borrower or any of its Subsidiaries has received notice of a
dispute in respect of any such agreement;
(g) Inventory located outside the United States or Canada;
(h) Inventory that is not in the possession of or under the sole
control of the Borrower or any of its Subsidiaries;
(i) Inventory consisting of work in progress; and
(j) Inventory in respect of which the Collateral Documents, after
giving effect to the related filings of financing statements that have
then been made, if any, does not or has ceased to create a valid and
perfected first priority lien or security interest in favor of the
Secured Parties securing the Secured Obligations or as to which other
Liens exist, other than Permitted Liens.
The value of such Eligible Inventory shall be its book value determined in
accordance with the "first-in, first-out" method of accounting for
inventory and in accordance with GAAP unless the Agent determines, in its
reasonable discretion (taking into consideration, among other factors, cost
and liquidation value), that such Eligible Inventory shall be valued at a
lower value.
"Eligible Receivables" means any Receivables owned by the Borrower and
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its Subsidiaries free and clear of all Liens (other than Permitted Liens
and Liens in favor of the Secured Parties securing the Secured Obligations)
other than the following:
(a) Receivables that do not arise out of sales of goods or
rendering of services in the ordinary course of the Borrower's and its
Subsidiaries' business (other than such Receivables arising out of the
Accounts Receivable Management Agreement);
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(b) Receivables on terms other than those in the ordinary course
of the Borrower's and its Subsidiaries' business;
(c) Receivables owing from any Person that is an Affiliate of the
Borrower or its Subsidiaries;
(d) Receivables more than 210 days past original invoice date or
more than 60 days past the date due;
(e) Receivables owing from any Person from which an aggregate
amount of more than 25% of the Receivables owing is more than 60 days
past due;
(f) Receivables owing from any Person (i) that has disputed
liability for any Receivable owing from such Person or (ii) that has
otherwise asserted any claim, demand or liability, whether by action,
suit, counterclaim or otherwise, only to the extent of such
Receivables owing from such Person so long as such Receivables do not
constitute more than 25% of all Receivables owing from such Person;
(g) Receivables owing from any Person that shall take or be the
subject of any action or proceeding of a type described in Section
6.01(g), except for Receivables due from a Person which is a debtor-
in-possession under and as defined in Chapter 11 of the U.S.
Bankruptcy Code that has received post-petition financing pursuant to
a working capital facility which has a maturity date no earlier than
120 days following the invoice date of such Receivable;
(h) Receivables (i) owing from any Person that is also a supplier
to or creditor of the Borrower or its Subsidiaries unless such Person
has waived any right of set-off in a manner acceptable to the Agent or
(ii) representing any manufacturer's or supplier's credits, discounts,
incentive plans or similar arrangements entitling the Borrower or its
Subsidiaries to discounts on future purchase therefrom;
(i) Receivables arising out of sales to account debtors outside
the United States or Canada, unless backed by a letter of credit
issued by (A) a bank organized under the laws of the United States, or
any State thereof, and having a combined capital and surplus of at
least $500,000,000 or (B) an institution which satisfies the criteria
set forth in clause (v) of the definition of "Eligible Assignee";
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(j) Receivables arising out of sales on a xxxx-and-hold,
guaranteed sale, sale-or-return, sale on approval or consignment basis
or subject to any right of return, set-off or charge-back, except for
Receivables, in a maximum amount not to exceed $2,000,000 at any time
outstanding, arising out of sales on a xxxx and hold basis pursuant to
the terms of agreements and arrangements in existence or on
substantially the same terms as those in existence on the Second
Restatement Date;
(k) Receivables owing from an account debtor that is an agency,
department or instrumentality of the United States or any State
thereof, except for such Receivables in a maximum amount not to exceed
$1,000,000 at any time outstanding; and
(l) Receivables in respect of which the Second Amended and
Restated Security Agreement, after giving effect to the related
filings of financing statements that have then been made, if any, does
not or has ceased to create a valid and perfected first priority lien
or security interest in favor of the Secured Parties securing the
Secured Obligations or as to which other Liens exist, other than
Permitted Liens.
The value of such Eligible Receivables shall be their book value determined
in accordance with GAAP unless the Agent determines, in its reasonable
discretion, that such Eligible Receivables shall be valued at a lower
value.
"Environmental Action" means any action, suit, demand, demand letter,
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claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental
Permit or Hazardous Material or arising from alleged injury or threat to
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial
or other actions or damages arising under Environmental Laws and (b) by any
governmental or regulatory authority or third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief arising under Environmental Laws.
"Environmental Law" means any federal, state, local or foreign
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statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, or decree or any judicial or agency interpretation, policy or
guidance having the force and effect of law, relating to pollution or
protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
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"Environmental Permit" means any permit, approval, identification number,
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license or other authorization required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
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ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
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within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC; or (ii) the requirements of subsection (1) of Section
4043(b) of ERISA (without regard to subsection (2) of such Section) are met
with a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of
a Plan, and an event described in paragraph (9), (10), (11), (12) or (13)
of Section 4043(c) of ERISA is reasonably expected to occur with respect to
such Plan within the following 30 days; (b) the application for a minimum
funding waiver with respect to a Plan; (c) the provision by the
administrator of any Plan of a notice of intent to terminate such Plan,
pursuant to Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA); (d)
the cessation of operations at a facility of any Loan Party or any ERISA
Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring
the provision of security to such Plan, pursuant to Section 307 of ERISA;
or (h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that could constitute grounds
for the termination of, or the appointment of a trustee to administer, such
Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
------------------------
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender Party,
-------------------------
the office of such Lender Party specified as its "Eurodollar Lending
Office" opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender Party (or, if no such
office is specified, its Domestic Lending
14
Office), or such other office of such Lender Party as such Lender Party may
from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
---------------
Rate Advances comprising part of the same Borrowing, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the average of
the respective rates per annum (rounded upward to the next whole multiple
of 1/16th of 1%) posted by each of the principal London offices of banks
posting rates as displayed on the Telerate screen, page 3750 or such other
page as may replace such page on such service for the purpose of displaying
banks in the London interbank offered rate of major banks for deposits in
U.S. dollars, at approximately 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period in an amount substantially
equal to BNP's Eurodollar Rate Advance comprising part of such Borrowing to
be outstanding during such Interest Period (or, if BNP shall not have such
a Eurodollar Rate Advance, $1,000,000) and for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
-----------------------
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
----------------------------------
Eurodollar Rate Advances comprising part of the same Borrowing means the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
(or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate
Advances is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
-----------------
"Existing Credit Agreement" has the meaning specified in the
-------------------------
Preliminary Statements to this Agreement.
"Existing Debt" means Debt of the Loan Parties outstanding immediately
-------------
before the effectiveness of the Second Amended and Restated Credit
Agreement and identified on Schedule 3.01(f)(i).
"Existing Lender" means lenders party to the Existing Credit
---------------
Agreement.
15
"Extraordinary Receipt" means any cash received by or paid to or for
---------------------
the account of any Person not in the ordinary course of business,
including, without limitation, tax refunds, pension plan reversions,
proceeds of insurance (other than proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof) and indemnity
payments; provided, however, that an Extraordinary Receipt shall not
-------- -------
include (a) cash receipts received from proceeds of insurance to the extent
that such proceeds in respect of loss or damage to equipment, fixed assets
or real property are applied (or in respect of which expenditures were
previously incurred) to replace or repair the equipment, fixed assets or
real property in respect of which such proceeds were received or to
purchase like equipment, fixed assets or real property, as the case may be,
in each case in accordance with the terms of the Loan Documents, so long as
(i) such Person shall have entered into binding commitments for the
acquisition of such equipment, fixed assets or real property on or prior to
the 120th day after receipt of such Extraordinary Receipt and (ii) such
application is made by such Person within twelve or six months after the
occurrence of such damage or loss, in the case of real property and any
other type of property, respectively.
"Facility" means the Acquisition Facility, the Working Capital
--------
Facility or the Letter of Credit Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest
------------------
rate per annum equal for each day during such period (i) to the rate
published by the Telerate service on page five of its daily report as the
"New York Offered Rate" as of 10:00 A.M. (New York City time) for such day
(or, if such day is not a Business Day, for the immediately preceding
Business Day) or (ii) if the Telerate service shall cease to publish or
otherwise shall not publish such rates for any day that is a Business Day,
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fiscal Month" means each of the first four calendar weeks, the next
------------
successive period of four calendar weeks and the last five calendar weeks
in each Fiscal Quarter.
"Fiscal Quarter" means, with respect to any Person, (a) with respect
--------------
to the first Fiscal Quarter of any Fiscal Year, the first 13 calendar weeks
of such Fiscal Year, (b) with respect to the second Fiscal Quarter of any
Fiscal Year, the next
16
successive period of 13 calendar weeks in such Fiscal Year, (c) with
respect to the third Fiscal Quarter of any Fiscal Year, the next successive
period of 13 calendar weeks in such Fiscal Year, and (d) with respect to
the last Fiscal Quarter of any Fiscal Year, the period of time after the
first three Fiscal Quarters of such Fiscal Year through the last day of
such Fiscal Year.
"Fiscal Year" means, with respect to any Person, a year of 52 or 53
-----------
weeks, as the case may be, ending on the Saturday closest to the first day
of January in any calendar year, and such Fiscal Year, when referred to
from time to time herein by reference to a calendar year shall be the
Fiscal Year which includes January 30th of such calendar year.
"Fixed Charge Coverage Ratio" means, with respect to the Borrower and
---------------------------
its Subsidiaries for any period, the ratio of (a) Consolidated EBITA for
such period to (b) the sum of (i) Consolidated Interest Expense for such
period (other than amortization of original issue discount and paid-in-kind
interest), (ii) regularly scheduled principal payments of Consolidated
Funded Debt made during such period (other than any such payments made of
"Advances" under the Existing Credit Agreement), (iii) the aggregate amount
of cash dividends paid during such period by the Borrower to Universal
pursuant to Sections 5.02(g)(iii) and 5.02(g)(iv)(A) and (iv) Consolidated
income taxes that have been paid in cash during such period.
"Funded Debt" of any Person means Debt of such Person that by its
-----------
terms matures more than one year after the date of creation or matures
within one year from such date but is renewable or extendible, at the
option of such Person, to a date more than one year after such date or
arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
after such date, including, without limitation, all amounts of Funded Debt
of such Person required to be paid or prepaid within one year after the
date of determination; provided, however, that the definition of "Funded
-------- -------
Debt" shall not include any Debt arising pursuant to the terms of the
Accounts Receivable Management Agreement.
"GAAP" has the meaning specified in Section 1.03.
----
"Glenoit Assets Corp." means Glenoit Assets Corp., a Delaware
--------------------
corporation and a direct, wholly owned Subsidiary of Xxxxx.
"Guarantees" has the meaning specified in Section 3.01(g)(xi).
----------
"Hazardous Materials" means (a) petroleum or petroleum products, by-
-------------------
products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other
chemicals,
17
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
----------------
interest rate future or option contracts, currency swap agreements,
currency future or option contracts and similar agreements.
"Indemnified Party" has the meaning specified in Section 8.04(b).
-----------------
"Indemnified Cost" has the meaning specified in Section 7.05.
----------------
"Intercompany Subordination Agreement" has the meaning specified in
------------------------------------
Section 5.02(b)(ii)(B).
"Insufficiency" means, with respect to any Plan, the amount, if any,
-------------
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Interest Coverage Ratio" means, with respect to the Borrower and its
-----------------------
Subsidiaries for any period, the ratio of (a) Consolidated EBITDA for such
period to (b) the sum of (i) Consolidated Interest Expense for such period
(other than amortization of original issue discount and paid-in-kind
interest) and (ii) the aggregate amount of cash dividends paid during such
period by the Borrower to Universal pursuant to Section 5.02(g)(iii).
"Interest Expense" means, with respect to any Person for any period,
----------------
the amount by which (i) interest expense (including the interest component
on obligations under Capitalized Leases), whether paid or accrued, on all
Debt of such Person and its Subsidiaries for such period, including,
without limitation and without duplication, (a) interest expense in respect
of Debt resulting from Advances, (b) commissions, discounts and other fees
and charges payable in connection with letters of credit (including,
without limitation, any Letters of Credit) and (c) any net payment payable
in connection with Hedge Agreements less any net credits received in
connection with Hedge Agreements exceeds (ii) interest income, whether paid
or accrued, of such Person for such period.
"Interest Period" means, for each Eurodollar Rate Advance comprising
---------------
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of
the period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months, as the Borrower may, upon notice received by the Agent not later
than
18
11:00 A.M. (New York City time) on the third Business Day prior to the
first day of such Interest Period, select; provided, however, that:
-------- -------
(a) The Borrower may not select any Interest Period with respect
to any Eurodollar Rate Advance under a Facility that ends after any
principal repayment installment date for such Facility unless, after
giving effect to such selection, the aggregate principal amount of
Base Rate Advances and of Eurodollar Rate Advances having Interest
Periods that end on or prior to such principal repayment installment
date for such Facility shall be at least equal to the aggregate
principal amount of Advances under such Facility due and payable on or
prior to such date;
(b) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Borrowing shall be of the
same duration;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such extension would cause
-------- -------
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on
the immediately preceding Business Day; and
(d) whenever the first day of any Interest Period occurs on a day
of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
---------------------
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Inventory" means all Inventory referred to in Section 1(b) of the
---------
Second Amended and Restated Security Agreement.
"Investment" in any Person means any loan or advance to such Person,
----------
any purchase or other acquisition of any capital stock or other ownership
or profit interest, warrants, rights, options, obligations or other
securities of such Person, any capital contribution to such Person or any
other investment in such Person, including, without limitation, any
arrangement pursuant to which the investor incurs Debt of the types
referred to in clause (i) or (j) of the definition of "Debt" in respect of
such Person.
19
"Investor Group" means CVC, the employees of CVC, CCT Partners II,
--------------
L.P., a Delaware limited partnership, Xx. Xxxx X. X'Xxxx, an individual
residing in Darien, Connecticut, Soannes and Xxxxxx X'Xxxxxx.
"Iris" means Iris Holdings, Inc., a Delaware corporation.
----
"Issuing Bank" means BNP and each Eligible Assignee to which a Letter
------------
of Credit Commitment hereunder has been assigned pursuant to Section 8.07.
"Junior Notes" means (i) the Junior PIK Subordinated Note due December
------------
14, 2005, issued by Universal to CVC in an aggregate principal amount of
$12,000,000, (ii) the Junior PIK Subordinated Note due December 14, 2005,
issued by Universal to Soannes in an aggregate principal amount of
$800,000, (iii) the Junior PIK Subordinated Note due December 14, 2005,
issued by Universal to Soannes in an aggregate principal amount of $800,000
and (iv) notes evidencing paid-in-kind interest issued pursuant to the
foregoing.
"L/C Cash Collateral Account" has the meaning specified in the Second
---------------------------
Amended and Restated Security Agreement.
"L/C Related Documents" has the meaning specified in Section
---------------------
2.04(c)(ii).
"Lender Party" means any Lender or the Issuing Bank.
------------
"Lenders" means the Restatement Lenders and each Person that shall
-------
become a Lender hereunder pursuant to Section 8.07.
"Letters of Credit" has the meaning specified in Section 2.01(c).
-----------------
"Letter of Credit Advance" means an advance made by the Issuing Bank
------------------------
or any Working Capital Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
--------------------------
2.03(a).
"Letter of Credit Commitment" means, with respect to the Issuing Bank
---------------------------
at any time, the amount set forth opposite the Issuing Bank's name on
Schedule I hereto under the caption "Letter of Credit Commitment" or, if
the Issuing Bank has entered into an Assignment and Acceptance, the amount
set forth for such Issuing Bank in the Register maintained by the Agent
pursuant to Section 8.07(e) as such Issuing Bank's "Letter of Credit
Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, the amount of the
-------------------------
Issuing Bank's Letter of Credit Commitment at such time.
20
"Leverage Ratio" means, with respect to the Borrower and its
--------------
Subsidiaries for any period, the ratio of (a) Consolidated Funded Debt
(other than the aggregate amount of Working Capital Advances) as of the end
of such period to (b) Consolidated Adjusted EBITDA for such period.
"Lien" means any lien, security interest or other charge or
----
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means (a) this Agreement, (b) the Notes, (c) the
--------------
Collateral Documents, (d) each Letter of Credit Agreement and (e) the
Guarantees.
"Loan Parties" means the Borrower and Universal and each Subsidiary
------------
Guarantor.
"Loan Value" means an amount equal to the sum of the percentage of the
----------
value of each item of Eligible Collateral of up to the following amounts,
in each case as determined by reference to the Borrowing Base Certificate
most recently delivered by the Borrower pursuant to Section 5.03(q):
(a) with respect to Eligible Inventory; up to 50% of the value of
such Inventory, and
(b) with respect to Eligible Receivables, up to 85% of the value
of such Receivables;
provided, however, that the Agent may, in its reasonable discretion,
-------- -------
following an audit field examination and based on its analysis of changes
in the Borrower's or any of its Subsidiaries' operations or credit and
collection experience arising after the Second Restatement Date that may
dilute the value of Eligible Collateral, revise from time to time the
percentage of the value of any individual item of Eligible Collateral that
shall be used in determining Loan Value.
"Management Stock Option Plan Agreement" means the Glenoit Universal,
--------------------------------------
Ltd. Stock Option Plan dated as of April 1, 1997.
"Margin Stock" has the meaning specified in Regulation U.
------------
"Material Adverse Change" means any material adverse change in the
-----------------------
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a
whole or the Loan Parties and their Subsidiaries, taken as a whole.
21
"Material Adverse Effect" means a material adverse effect on (a) the
-----------------------
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a
whole or the Loan Parties and their Subsidiaries, taken as a whole, (b) the
rights and remedies of the Agent or any Lender Party under any Loan
Document or Related Document or (c) the ability of any Loan Party to
perform its Obligations under any Loan Document or Related Document to
which it is or is to be a party.
"Xxxxx" has the meaning specified in the Preliminary Statements to
-----
this Agreement.
"Modification and Extension Agreement" has the meaning specified in
------------------------------------
Section 3.01(g)(x).
"Monthly Rolling Period" means, with respect to any Fiscal Month, the
----------------------
consecutive twelve-Fiscal Month period ending on the last day of such
Fiscal Month.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
------------------
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any
of the preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
----------------------
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
-----------------
or other disposition of any asset or the sale or issuance of any Debt or
capital stock or other ownership or profit interest, any securities
convertible into or exchangeable for capital stock or other ownership or
profit interest or any warrants, rights, options or other securities to
acquire capital stock or other ownership or profit interest by any Person,
or any Extraordinary Receipt received by or paid to or for the account of
any Person, the aggregate amount of cash received from time to time
(whether as initial consideration or through payment or disposition of
deferred consideration) by or on behalf of such Person in connection with
such transaction after deducting therefrom only (without duplication) (a)
brokerage commissions, underwriting fees and discounts, legal fees,
finder's fees and other similar fees and commissions, (b) the amount of
taxes payable in connection with or as a result of such transaction and (c)
the amount of any Debt secured by a Lien on such asset that, by the terms
of such transaction, is required to be repaid upon such disposition, in
each case to the extent, but only to the extent, that the amounts so
deducted are properly attributable to such transaction or to the asset that
is the subject thereof and are, in the case of clauses (a)
22
and (c), at the time of receipt of such cash, actually paid to a Person
that is not an Affiliate of such Person or any Loan Party or any Affiliate
of any Loan Party and, in the case of clause (b), on the earlier of the
dates on which the tax return covering such taxes is filed or required to
be filed, or actually paid to a Person that is not an Affiliate of such
Person or any Loan Party or any Affiliate of any Loan Party, provided that
--------
if the amount deducted pursuant to clause (b) above is greater than the
amount actually so paid, the amount of such excess shall constitute "Net
Cash Proceeds" as of the time the applicable tax return is filed or
required to be filed.
"Net Worth" means an amount equal to the sum of (i) $20,000,000 and
---------
(ii) cumulative Consolidated net income of the Borrower and its
Subsidiaries commencing from the Fiscal Month commencing April 6, 1997.
"Nonratable Assignment" means an assignment by a Lender Party pursuant
---------------------
to Section 8.07(a) of a portion of its rights and obligations under this
Agreement, other than an assignment of a uniform, and not a varying,
percentage of all of the rights and obligations of such Lender Party under
and in respect of all of the Facilities (other than the Letter of Credit
Facility).
"Note" means an Acquisition Note or a Working Capital Note.
----
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
-------------------
"Notice of Issuance" has the meaning specified in Section 2.03(a).
------------------
"NPL" means the National Priorities List under CERCLA.
---
"Obligation" means, with respect to any Person, any payment,
----------
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(g). Without limiting the generality
of the foregoing, the Obligations of the Loan Parties under the Loan
Documents include (a) the obligation to pay principal, interest, Letter of
Credit commissions, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by any Loan Party
under any Loan Document and (b) the obligation of any Loan Party to
reimburse any amount in respect of any of the foregoing that any Lender
Party, in its sole discretion, may elect to pay or advance on behalf of
such Loan Party.
"OECD" means the Organization for Economic Cooperation and
----
Development.
23
"X'Xxxxxx Employment Agreement" means the employment agreement dated
-----------------------------
as of December 14, 1995 between Universal and Xxxxxx X'Xxxxxx as in effect
on the Second Restatement Date and as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Open Year" has the meaning specified in Section 4.01(aa).
---------
"Other Taxes" has the meaning specified in Section 2.12(b).
-----------
"PBGC" means the Pension Benefit Guarantee Corporation.
----
"Permitted Encumbrances" has the meaning specified in the Deed of
----------------------
Trust.
"Permitted Liens" means such of the following as to which no
---------------
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under Section
5.01(b) hereof; (b) Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's Liens and other similar
Liens arising in the ordinary course of business securing obligations that
(i) are not overdue for a period of more than 30 days or being contested in
good faith and (ii) either individually or when aggregated with all other
Permitted Liens outstanding on any date of determination, do not materially
affect the use or value of the property to which they relate; (c) pledges
or deposits to secure obligations under workers' compensation laws or
similar legislation or to secure public or statutory obligations; and (d)
zoning restrictions, easements, rights of way and other encumbrances on
title to real property that do not render title to the property encumbered
thereby unmarketable or materially adversely affect the use of such
property for its present purposes.
"Person" means an individual, partnership, corporation (including a
------
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"PIK Note" means the PIK Subordinated Note due December 14, 2004,
--------
issued by Universal to Stirling pursuant to the Redemption Agreement in an
aggregate principal amount of $1,008,884.01.
"PIK Interest Note" means any payment-in-kind subordinated note of
-----------------
Universal (substantially in the form of Exhibit I to Exhibit A-2 of the
Redemption Agreement) issued pursuant to Section 2 of the PIK Note, or any
note which could be issued in substitution for any such PIK Interest Note.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
----
24
"Preferred Stock" means, with respect to any corporation, capital
---------------
stock issued by such corporation that is entitled to a preference or
priority over any other capital stock issued by such corporation upon any
distribution of such corporation's assets, whether by dividend or upon
liquidation.
"Pro Rata Share" of any amount means, with respect to any Lender at
--------------
any time, the product of (a) a fraction the numerator of which is the
amount of such Lender's Commitment under the applicable Facility or
Facilities at such time and the denominator of which is the aggregate
amount of such Facility or Facilities at such time and (b) such amount.
"Quarterly Rolling Period" means, with respect to any Fiscal Quarter,
------------------------
such Fiscal Quarter and the three immediately preceding Fiscal Quarters.
"Receivables" means all Receivables referred to in Section 1(c) of the
-----------
Second Amended and Restated Security Agreement.
"Redeemable" means, with respect to any capital stock or other
----------
ownership or profit interest, Debt or other right or Obligation, any such
right or Obligation that (a) the issuer has undertaken to redeem at a fixed
or determinable date or dates, whether by operation of a sinking fund or
otherwise, or upon the occurrence of a condition not solely within the
control of the issuer or (b) is redeemable at the option of the holder.
"Redemption Agreement" means the Redemption Agreement dated October
--------------------
23, 1995, between Universal and Stirling as in effect on the Second
Restatement Date.
"Register" has the meaning specified in Section 8.07(e).
--------
"Regulation U" means Regulation U of the Board of Governors of the
------------
Federal Reserve System, as in effect from time to time.
"Related Documents" means the Subordinated Debt Documents, the
-----------------
Stockholders Agreement, the Tax Sharing Agreement and the Royalty
Agreement.
"Related Textile Business" means any business engaged in the
------------------------
manufacturing of home textiles and specialty textiles and other activities
incidental thereto.
"Related Textile Investment" means any acquisition of or investment in
--------------------------
any Related Textile Business located in the United States or Canada or any
capital expenditure or any other expenditure for any other asset (tangible
or intangible) in connection with any Related Textile Business located in
the United States or Canada, including any such business now or hereafter
owned by the Borrower or any of its Subsidiaries.
25
"Required Lenders" means at any time Lenders owed or holding at least
----------------
51% of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time, (b) the aggregate Available Amount of all Letters
of Credit outstanding at such time, (c) the aggregate unused Acquisition
Commitments at such time and (d) the aggregate Unused Working Capital
Commitments at such time. For purposes of this definition, the aggregate
principal amount of Letter of Credit Advances owing to the Issuing Bank and
the Available Amount of each Letter of Credit shall be considered to be
owed to the Working Capital Lenders ratably in accordance with their
respective Working Capital Commitments.
"Responsible Officer" means any executive officer of any Loan Party or
-------------------
any of its Subsidiaries.
"Restatement Lenders" has the meaning specified in the recital of the
-------------------
parties to this Agreement.
"Restricted Capex Period" means the consecutive four Fiscal Quarter
-----------------------
period commencing the date immediately following the end of the last day of
the second of two Quarterly Rolling Periods in any single four Fiscal
Quarter period during which the Fixed Charge Coverage Ratio is less than
the level required under Section 5.02(f)(vii)(A). Such Restricted Capex
Period shall end on the date immediately following the end of the last day
of the second of two consecutive Quarterly Rolling Periods the Fixed Charge
Coverage Ratio is equal to or greater than the level required under such
Section. Notwithstanding anything to the contrary contained in this
definition, a new Restricted Capex Period shall commence on the date
immediately following the end of the last day of the most recently ended
Restricted Capex Period if the Fixed Charge Coverage Ratio is less than the
level required under Section 5.02(f)(vii)(A) during either one of the last
two Quarterly Rolling Periods of such recently ended Restricted Capex
Period.
"Rolling Period" means either a Monthly Rolling Period or a Quarterly
--------------
Rolling Period.
"Royalty Agreement" means the License Royalty Agreement dated as of
-----------------
November 21, 1988, as amended as of January 1, 1992, between Xxxxx and
Xxxxx & Xxxxxxxx of California, Inc., a California corporation, as amended,
supplemented or otherwise modified in accordance with its terms and the
terms hereof.
"Second Amended and Restated Guarantee" has the meaning specified in
-------------------------------------
Section 3.01(g)(xi) of this Agreement.
"Second Amended and Restated Security Agreement" has the meaning
----------------------------------------------
specified in Section 3.01(g)(viii).
26
"Second Restatement Assignment Agreement" has the meaning specified in
---------------------------------------
the Preliminary Statements to this Agreement.
"Second Restatement Date" has the meaning specified in Section 3.01.
-----------------------
"Secured Obligations" has the meaning specified in the Second Amended
-------------------
and Restated Security Agreement.
"Secured Parties" means the Agent, the Lender Parties and the other
---------------
Persons the Obligations owing to whom are or are purported to be secured by
the Collateral under the terms of the Collateral Documents.
"Shihan" means Shihan Holdings Ltd., a company organized under the
------
laws of the British Virgin Islands.
"Single Employer Plan" means a single employer plan, as defined in
--------------------
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which
any Loan Party or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
"Soannes" means Soannes Investment Corp., a corporation organized
-------
under the laws of the British Virgin Islands.
"Solvent" and "Solvency" mean, with respect to any Person on a
------- --------
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable 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, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay such debts and liabilities as they mature and
(d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in
the 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.
"Split-Pay Notes" means (i) the Split-Pay Subordinated Note due
---------------
December 14, 2004, issued by Universal to Stirling pursuant to the
Redemption Agreement, in an aggregate principal amount of $2,888,930.82,
and (ii) the Split-Pay Subordinated Note due December 14, 2004, issued by
Holding to Iris pursuant to the Redemption Agreement, in an aggregate
principal amount of $5,682,497.75.
27
"Standby Letter of Credit" means any Letter of Credit issued under the
------------------------
Letter of Credit Facility, other than a Trade Letter of Credit.
"Stirling" means Stirling Investment Holdings, Inc., a British Virgin
--------
Islands corporation.
"Stirling Notes" means the Split-Pay Notes, the PIK Note, the PIK
--------------
Interest Notes, and the Deferred Redemption Price Note.
"Stockholders Agreement" means the Stockholders Agreement dated as of
----------------------
December 14, 1995 by and among Universal, CVC, Stirling, and the other
parties thereto, as amended, supplemented or otherwise modified from time
to time in accordance with its terms and the terms hereof.
"Subordinated Debt" means the Subordinated Notes, the Junior Notes,
-----------------
the Stirling Notes, the Debt of the Borrower to its Subsidiaries permitted
by Section 5.02(b)(ii)(B) and the redemption obligations set forth in
Section 5.02(g)(ii)(B).
"Subordinated Debt Documents" means the Indenture dated as of April 1,
---------------------------
1997 among the Borrower, certain of its Subsidiaries signatory thereto and
the United States Trust Company of New York, the Subordinated Notes, all
agreements, indentures and instruments pursuant to which the Subordinated
Debt is issued and any agreements, indentures and instruments pursuant to
which Subordinated Debt permitted by Section 5.02(b)(ii)(B) is issued from
time to time.
"Subordinated Notes" has the meaning specified in the Preliminary
------------------
Statements to this Agreement.
"Subsidiary" of any Person means any corporation, partnership, joint
----------
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such limited liability company, partnership or joint venture or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Subsidiary Guarantor" means Xxxxx, Glenoit Assets, Tarboro Ltd. and
--------------------
each other Subsidiary that may become a guarantor or a collateral guarantor
pursuant to Section 5.01(m) or Section 5.01(o).
"Surviving Debt" has the meaning specified in Section 3.01(f).
--------------
28
"Tarboro Ltd." means Tarboro Properties, Ltd., a Delaware corporation.
------------
"Taxes" has the definition specified in Section 2.12(a).
-----
"Tax Sharing Agreement" means the Tax Sharing Agreement dated as of
---------------------
December 14, 1995 by and among Xxxxx, the Borrower, Universal and all of
their Subsidiaries, as amended, supplemented or otherwise modified from
time to time in accordance with its terms and the terms hereof.
"Termination Date" means the earlier of December 31, 2001 and the date
----------------
of termination in whole of the Acquisition Commitments, the Letter of
Credit Commitments and the Working Capital Commitments pursuant to Section
2.05 or 6.01.
"Xxxxxx X'Xxxxxx" means Xx. Xxxxxx X'Xxxxxx, an individual residing in
---------------
New York, New York.
"Trade Letter of Credit" means any Letter of Credit that is issued
----------------------
under the Letter of Credit Facility for the benefit of a supplier of
Inventory to the Borrower or any of its Subsidiaries to effect payment for
such Inventory.
"Type" refers to the distinction between Advances bearing interest at
----
the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unique" means Unique Assets, Inc., a company incorporated in the
------
British Virgin Islands.
"Universal" has the meaning specified in the Preliminary Statements to
---------
this Agreement.
"Unused Working Capital Commitment" means, with respect to any Working
---------------------------------
Capital Lender at any time, (a) such Lender's Working Capital Commitment at
such time minus (b) the sum of (i) the aggregate principal amount of all
-----
Working Capital Advances and Letter of Credit Advances made by such Lender
(in its capacity as a Lender) and outstanding at such time, plus (ii) such
----
Lender's Pro Rata Share of (A) the aggregate Available Amount of all
Letters of Credit outstanding at such time and (B) the aggregate principal
amount of all Letter of Credit Advances made by the Issuing Bank pursuant
to Section 2.03(c) and outstanding at such time.
"U.S. Subsidiary" means any Subsidiary organized under the laws of any
---------------
State of the United States.
"Voting Stock" means capital stock issued by a corporation, or
------------
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing
29
similar functions) of such Person, even if the right so to vote has been
suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
------------
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have a liability.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
--------------------
E of Title IV of ERISA.
"Working Capital Advance" has the meaning specified in Section
-----------------------
2.01(b).
"Working Capital Borrowing" means a borrowing consisting of
-------------------------
simultaneous Working Capital Advances of the same Type made by the Working
Capital Lenders.
"Working Capital Commitment" means, with respect to any Working
--------------------------
Capital Lender at any time, the amount set forth opposite such Lender's
name on Schedule I hereto under the caption "Working Capital Commitment"
or, if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register maintained by the
Agent pursuant to Section 8.07(e) as such Lender's "Working Capital
Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Working Capital Facility" means, at any time, the aggregate amount of
------------------------
the Working Capital Lenders' Working Capital Commitments at such time.
"Working Capital Lender" means any Lender that has a Working Capital
----------------------
Commitment.
"Working Capital Note" means a promissory note of the Borrower payable
--------------------
to the order of any Working Capital Lender, in substantially the form of
Exhibit A-1 hereto, evidencing the aggregate indebtedness of the Borrower
to such Lender resulting from the Working Capital Advances made by such
Lender.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
----------------
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
----
30
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Acquisition Advances. Each
------------ ------------------------
Acquisition Lender severally agrees, on the terms and conditions hereinafter set
forth, to make advances (each an "Acquisition Advance") to the Borrower from
-------------------
time to time on any Business Day during the period from the Second Restatement
Date until December 31, 1999 (the "Acquisition Facility Term Loan Date") in an
-----------------------------------
amount, together with all other Acquisition Advances of such Lender outstanding
on such Business Day, not to exceed such Lender's Acquisition Commitment on such
Business Day. Each Acquisition Borrowing shall be in an aggregate amount of
$3,000,000 or an integral multiple of $500,000 in excess thereof and shall
consist of Acquisition Advances made simultaneously by the Acquisition Lenders
ratably according to their Acquisition Commitments. Within the limits of the
Acquisition Facility, the Borrower may, prior to the Acquisition Facility Term
Loan Date, borrow under this Section 2.01(a), prepay pursuant to Section 2.06(a)
and reborrow under this Section 2.01(a).
(b) The Working Capital Advances. Each Working Capital Lender
----------------------------
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "Working Capital Advance") to the Borrower from time to time on
-----------------------
any Business Day during the period from the Second Restatement Date until the
Termination Date in an amount for each such Advance not to exceed such Lender's
Unused Working Capital Commitment at such time. Each Working Capital Borrowing
shall be in an aggregate amount of $500,000, or an integral multiple of $100,000
in excess thereof (other than a Borrowing the proceeds of which shall be used
solely to repay or prepay in full outstanding Letter of Credit Advances made by
the Issuing Bank) and shall consist of Working Capital Advances made
simultaneously by the Working Capital Lenders ratably according to their Working
Capital Commitments. Within the limits of each Working Capital Lender's Unused
Working Capital Commitment in effect from time to time, the Borrower may borrow
under this Section 2.01(b), prepay pursuant to Section 2.06(a) and reborrow
under this Section 2.01(b).
(c) Letters of Credit. The Issuing Bank agrees, on the terms and
-----------------
conditions hereinafter set forth, to issue letters of credit (the "Letters of
----------
Credit") for the account of the Borrower from time to time on any Business Day
------
during the period from the Second Restatement Date until 30 days before the
Termination Date (i) in an aggregate Available Amount for all Letters of Credit
issued by the Issuing Bank not to exceed at any time the Issuing Bank's Letter
of Credit Commitment at such time and (ii) in an Available Amount for each such
Letter of Credit not to exceed the lesser of (x) the Letter of Credit Facility
at such time and (y) the Unused Working Capital Commitments of the Working
Capital Lenders at such time. No Letter of Credit shall have an expiration date
(including all rights of the Borrower or the beneficiary to require renewal)
later than the earlier of 30 days before the Termination Date and (A) in the
case of a Standby Letter of Credit, one year after the date of issuance thereof
and (B) in the case of a Trade Letter of Credit, 180 days after
31
the date of issuance thereof. Within the limits of the Letter of Credit
Facility, and subject to the limits referred to above, the Borrower may request
the issuance of Letters of Credit under this Section 2.01(c), repay any Letter
of Credit Advances resulting from drawings thereunder pursuant to Section
2.03(c) and request the issuance of additional Letters of Credit under this
Section 2.01(c).
SECTION 2.02. Making the Advances. (a) Except as otherwise provided
-------------------
in Section 2.03, each Borrowing shall be made on notice, given not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate
Advances or on the first Business Day prior to the date of the proposed
Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the
Borrower to the Agent, which shall give to each Appropriate Lender prompt notice
thereof by telex or telecopier. Each such notice of a Borrowing (a "Notice of
---------
Borrowing") shall be in writing, or telex or telecopier, in substantially the
---------
form of Exhibit B hereto, specifying therein the requested (i) date of such
Borrowing (which shall be a Business Day), (ii) Facility under which such
Borrowing is to be made, (iii) Type of Advances comprising such Borrowing, (iv)
aggregate amount of such Borrowing and (v) in the case of a Borrowing consisting
of Eurodollar Rate Advances, initial Interest Period for each such Advance.
Each Appropriate Lender shall, before 11:00 A.M. (New York City time) on the
date of such Borrowing, make available for the account of its Applicable Lending
Office to the Agent at the Agent's Account, in same day funds, such Lender's
ratable portion of such Borrowing in accordance with the respective Commitments
under the applicable Facility of such Lender and the other Appropriate Lenders.
After the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Agent will make such funds available to
the Borrower by crediting the Borrower's Account; provided, however, that, in
-------- -------
the case of any Working Capital Borrowing, the Agent shall first make a portion
of such funds equal to the aggregate principal amount of any Letter of Credit
Advances made by the Issuing Bank and by any other Working Capital Lender and
outstanding on the date of such Working Capital Borrowing, plus interest accrued
and unpaid thereon to and as of such date, available to the Issuing Bank and
such other Working Capital Lenders for repayment of such Letter of Credit
Advances.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances for any Borrowing on
the Second Restatement Date and for the period from the Second Restatement Date
to the earlier of (x) three months from such date and (y) the completion of
syndication of the Facilities (as shall be specified by the Agent in a written
notice to the Borrower) or for any Borrowing if the aggregate amount of such
Borrowing is less than $1,000,000 or if the obligation of the Appropriate
Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to
Section 2.09 or Section 2.10 and (ii) with respect to Borrowings consisting of
Eurodollar Rate Advances, the Acquisition Advances and the Working Capital
Advances may not be outstanding at any time as part of more than six separate
Borrowings in the aggregate.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to
32
be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each
Appropriate Lender against any loss, cost or expense incurred by such Lender as
a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Eurodollar Rate Advance to be made by such Lender as part of such Borrowing when
such Eurodollar Rate Advance, as a result of such failure, is not made on such
date.
(d) Unless the Agent shall have received notice from an Appropriate
Lender prior to the date of any Borrowing under a Facility under which such
Lender has a Commitment that such Lender will not make available to the Agent
such Lender's ratable portion of such Borrowing, the Agent may assume that such
Lender has made such portion available to the Agent on the date of such
Borrowing in accordance with subsection (a) or (b) of this Section 2.02 and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable portion available to the Agent, such Lender and
the Borrower severally agree to repay or pay to the Agent forthwith on demand
such corresponding amount and to pay interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount is
repaid or paid to the Agent, at (i) in the case of the Borrower, the interest
rate applicable at such time under Section 2.07 to Advances comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall pay to the Agent such corresponding amount, such amount so paid in
respect of principal shall constitute such Lender's Advance as part of such
Borrowing for all purposes. If the Borrower shall pay to the Agent such
corresponding amount, such payment shall not relieve such Lender of any
obligation such Lender may have hereunder to the Borrower.
(e) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
------------------------------------------------
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
----------------- --------------------
issued upon notice, given not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Issuing Bank, which shall give to the Agent
prompt notice thereof by telex or telecopier. Each such notice of issuance of a
Letter of Credit (a "Notice of Issuance") shall be by telex or telecopier,
------------------
specifying therein the requested (A) date of such issuance (which shall be a
Business Day), (B) Available Amount of such Letter of Credit, (C) expiration
date of such Letter of Credit, (D) name and address of the beneficiary of such
Letter of Credit and (E) form of such Letter of Credit, and shall be accompanied
by such application and agreement for letter of credit as the Issuing Bank may
specify to the Borrower for use in connection with such requested
33
Letter of Credit (a "Letter of Credit Agreement"). If (x) the requested form of
--------------------------
such Letter of Credit is acceptable to the Issuing Bank in its sole discretion
and (y) it has not received notice of objection to such issuance from Lenders
holding at least 60% of the Working Capital Commitments, the Issuing Bank will,
upon fulfillment of the applicable conditions set forth in Article III, make
such Letter of Credit available to the Borrower on the date of issuance
specified in the Notice of Issuance at its office referred to in Section 8.02 or
as otherwise agreed with the Borrower in connection with such issuance. In the
event and to the extent that the provisions of any Letter of Credit Agreement
shall conflict with this Agreement, the provisions of this Agreement shall
govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish (A) to
------------------------
the Agent on the first Business Day of each week a written report summarizing
issuance and expiration dates of Letters of Credit issued during the previous
week and drawings during such week under all Letters of Credit, (B) to each
Working Capital Lender on the first Business Day of each calendar quarter a
written report summarizing issuance and expiration dates of Letters of Credit
issued during the preceding calendar quarter and drawings during such quarter
under all Letters of Credit and (C) to the Agent and each Working Capital Lender
on the first Business Day of each calendar quarter a written report setting
forth the average daily aggregate Available Amount during the preceding calendar
quarter of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a
-------------------------
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance, which
shall be a Base Rate Advance, in the amount of such draft. In the event of any
drawing under a Letter of Credit, the Issuing Bank shall promptly notify the
Agent, and the Agent shall promptly notify each Working Capital Lender and each
Working Capital Lender shall purchase from the Issuing Bank, and the Issuing
Bank shall sell and assign to each such Working Capital Lender, such Lender's
Pro Rata Share of such outstanding Letter of Credit Advance as of the date of
such purchase, by making available for the account of its Applicable Lending
Office to the Agent for the account of the Issuing Bank, by deposit to the
Agent's Account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such Letter of Credit Advance to be purchased by
such Lender. Promptly after receipt thereof, the Agent shall transfer such
funds to the Issuing Bank. The Borrower hereby agrees to each such sale and
assignment. Each Working Capital Lender agrees to purchase its Pro Rata Share
of an outstanding Letter of Credit Advance on (i) the Business Day on which
notice of the drawing under the related Letter of Credit is given by the Issuing
Bank which made such Advance, provided such notice is given not later than 1:00
P.M. (New York City time) on such Business Day or (ii) the first Business Day
next succeeding such demand if such notice is given after such time. Upon any
such assignment by the Issuing Bank to any other Working Capital Lender of a
portion of a Letter of Credit Advance, the Issuing Bank represents and warrants
to such other Lender that the Issuing Bank is the legal and beneficial owner of
such interest being assigned by it, free and clear of any liens, but makes no
other representation or warranty and assumes no responsibility with respect to
such Letter of Credit Advance, the Loan Documents or any Loan Party. If and to
the extent that any Working Capital Lender
34
shall not have so made the amount of such Letter of Credit Advance available to
the Agent, such Working Capital Lender agrees to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day from the date of
demand by the Issuing Bank until the date such amount is paid to the Agent, at
the Federal Funds Rate for its account or the account of the Issuing Bank, as
applicable. If such Lender shall pay to the Agent such amount for the account
of the Issuing Bank on any Business Day, such amount so paid in respect of
principal shall constitute a Letter of Credit Advance made by such Lender on
such Business Day for purposes of this Agreement, and the outstanding principal
amount of the Letter of Credit Advance made by the Issuing Bank shall be reduced
by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any
-----------------------------------------
Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Acquisition Advances. The
--------------------- --------------------
Borrower shall repay to the Agent for the ratable benefit of the Acquisition
Lenders (i) on each March 31, June 30, September 30 and December 31, commencing
on March 31, 2000, an amount equal to 1/20 of the aggregate principal balance of
the Acquisition Advances outstanding on the Acquisition Facility Term Loan Date
and (ii) on the Termination Date the principal amount of the Acquisition
Advances outstanding on such date.
(b) Working Capital Advances. The Borrower shall repay to the Agent
------------------------
for the ratable account of the Working Capital Lenders on the Termination Date
the aggregate outstanding principal amount of the Working Capital Advances then
outstanding.
(c) Letter of Credit Advances. (i) The Borrower shall repay to the
-------------------------
Agent for the account of the Issuing Bank and each other Working Capital Lender
that has made a Letter of Credit Advance on the earlier of demand and the
Termination Date the outstanding principal amount of each Letter of Credit
Advance made by each of them.
(ii) The Obligations of the Borrower under this Agreement, any Letter
of Credit Agreement and any other agreement or instrument relating to any Letter
of Credit shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, such Letter of Credit Agreement and
such other agreement or instrument under all circumstances, including, without
limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan Document, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (all of the foregoing being, collectively, the
"L/C Related Documents");
---------------------
35
(B) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of
any L/C Related Document or any other amendment or waiver of or any consent
to departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee
of a Letter of Credit (or any Persons for whom any such beneficiary or any
such transferee may be acting), the Issuing Bank or any other Person,
whether in connection with the transactions contemplated by the L/C Related
Documents or any unrelated transaction;
(D) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral or other
collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations of the
Borrower in respect of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
-------------------------------------------
Optional. The Borrower may, upon at least three Business Days' notice to the
--------
Agent, terminate in whole or reduce in part the unused portions of the
Acquisition Commitments, the Letter of Credit Facility and the Unused Working
Capital Commitments, as the case may be; provided, however, that each partial
-------- -------
reduction of a Facility (i) shall be in an aggregate amount of $1,000,000 or an
integral multiple of $250,000 in excess thereof and (ii) shall be made ratably
among the Appropriate Lenders in accordance with their Commitments with respect
to such Facility.
(b) Mandatory. (i) Prior to the Acquisition Facility Term Loan Date,
---------
the Acquisition Facility shall be automatically and permanently reduced on the
date on which any Net Cash Proceeds are required to prepay Advances pursuant to
Section 2.06(b)(i) by an amount equal to the lesser of (x) the Acquisition
Facility on such date and (y) such Net Cash Proceeds, provided that each such
reduction of the Acquisition Facility shall be made ratably among the
Acquisition Lenders in accordance with their Acquisition Commitments.
36
(ii) The Working Capital Facility shall be automatically and
permanently reduced (A) prior to the Acquisition Facility Term Loan Date, on the
date on which any Net Cash Proceeds are required to prepay Advances pursuant to
Section 2.06(b)(i) by an amount equal to such Net Cash Proceeds less the amount
by which the Acquisition Facility is reduced pursuant to Section 2.05(b)(i) and
(B) on or after the Acquisition Facility Term Loan Date, on the date on which
any Net Cash Proceeds are required to prepay Advances pursuant to section
2.06(b)(i) by an amount equal to such Net Cash Proceeds less the amount by which
the Acquisition Advances are prepaid pursuant to Section 2.06(b)(i), provided
that each such reduction of the Working Capital Facility shall be made ratably
among the Working Capital Lenders in accordance with their Working Capital
Commitments.
(iii) The Letter of Credit Facility shall be automatically and
permanently reduced from time to time on the date of each reduction in the
Working Capital Facility by the amount, if any, by which the amount of the
Letter of Credit Facility exceeds the Working Capital Facility after giving
effect to such reduction of the Working Capital Facility.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may, without
----------- --------
any premium or penalty, upon at least one Business Day's notice in the case of
Base Rate Advances and three Business Days' notice in the case of Eurodollar
Rate Advances, in each case to the Agent (received not later than 1:00 P.M. (New
York City time)) stating the proposed date and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding aggregate principal amount of the Advances comprising part of the
same Borrowing in whole or ratably in part, together with accrued interest to
the date of such prepayment on the aggregate principal amount prepaid unless
such prepayment is with respect to an Acquisition Advance prior to the
Acquisition Facility Term Loan Date or a Working Capital Advance which is, in
each case a Base Rate Advance; provided, however, that no prepayment with
-------- -------
respect to an Acquisition Advance may be made unless the daily average aggregate
amount outstanding during the preceding 90 days of Working Capital Advances, is
less than $25,000,000; and provided further that (x) each partial prepayment
-------- -------
shall be, in the case of Working Capital Advances, in an aggregate principal
amount of $500,000, or an integral multiple of $100,000 in excess thereof or, in
the case of Acquisition Advances, in an aggregate amount of $1,000,000 or an
integral multiple of $500,000 in excess thereof and (y) if any prepayment of a
Eurodollar Rate Advance is made on a date other than the last day of an Interest
Period for such Advance the Borrower shall also pay any amounts owing pursuant
to Section 8.04(c). Each such prepayment of any Acquisition Advances on or
after the Acquisition Facility Term Loan Date shall be applied ratably to the
remaining principal installments thereof.
(b) Mandatory. (i) The Borrower shall, on the date of receipt of the
---------
Net Cash Proceeds by any Loan Party or any of their Subsidiaries from (A) the
sale, lease, transfer or other disposition of any assets of such Loan Party or
any of its Subsidiaries (other than any sale, lease, transfer or other
disposition of assets pursuant to Section 5.02(e)), (B) the incurrence or
issuance by such Loan Party or any of its Subsidiaries of any Debt (other than
Debt incurred or issued pursuant to Section 5.02(b)), (C) the sale or issuance
by such Loan Party or any of its Subsidiaries of any capital stock or other
ownership or profit
37
interest, any securities convertible into or exchangeable for capital stock or
other ownership or profit interest or any warrants, rights or options to acquire
capital stock or other ownership or profit interest (other than any issuance by
Universal pursuant to Section 5.02(g)(v)), or (D) any Extraordinary Receipt
received by or paid to or for the account of such Loan Party or any of its
Subsidiaries and not otherwise included in clause (A), (B) or (C) above, prepay
an aggregate principal amount of the Advances comprising part of the same
Borrowings equal to the amount of such Net Cash Proceeds. Each such prepayment
of any Advances shall be applied as follows:
first, (A) prior to the Acquisition Facility Term Loan Date, to prepay
-----
Acquisition Advances comprising part of the same Borrowing until such
Advances are prepaid in full and (B) on or after the Acquisition Facility
Term Loan Date, to prepay Acquisition Advances ratably to the remaining
principal installments thereof, and
second, to the extent that the Acquisition Facility has been fully
------
repaid, to prepay Working Capital Advances comprising part of the same
Borrowing.
(ii) The Borrower shall, on each Business Day, prepay (A) an aggregate
principal amount of the Working Capital Advances comprising part of the same
Borrowings, and the Letter of Credit Advances equal to the amount by which (1)
the sum of the aggregate principal amount of (y) the Working Capital Advances
then outstanding and (z) the Letter of Credit Advances then outstanding plus the
aggregate Available Amount of all Letters of Credit then outstanding exceeds (2)
the lesser of the Working Capital Facility and the Loan Value of Eligible
Collateral on such Business Day (as determined based on the most recent
Borrowing Base Certificate delivered to the Lender Parties hereunder) and (B) an
aggregate principal amount of the Acquisition Advances then outstanding equal to
the amount by which (1) the aggregate principal amount of the Acquisition
Advances exceeds (2) the Acquisition Facility on such Business Day.
(iii) The Borrower shall, on each Business Day, pay to the Agent for
deposit in the L/C Cash Collateral Account an amount sufficient to cause the
aggregate amount on deposit in such Account to equal the amount by which the
aggregate Available Amount of all Letters of Credit then outstanding exceeds the
Letter of Credit Facility on such Business Day.
(iv) Prepayments of the Working Capital Facility made pursuant to
clauses (i) and (ii) of this Section 2.06(b) shall be first applied to prepay
-----
Letter of Credit Advances then outstanding until such Advances are paid in full,
second applied to prepay Working Capital Advances then outstanding comprising
------
part of the same Borrowings until such Advances are paid in full and third
-----
deposited in the L/C Cash Collateral Account to cash collateralize 100% of the
Available Amount of the Letters of Credit then outstanding; and, in the case of
prepayments of the Working Capital Facility required pursuant to clause (i)
above, the amount remaining (if any) after the payment in full of the Working
Capital Advances then outstanding and the cash collateralization of the
aggregate Available
38
Amount of Letters of Credit then outstanding may be retained by the Borrower.
Upon the drawing of any Letter of Credit for which funds are on deposit in the
L/C Cash Collateral Account, such funds shall be applied to reimburse the
Issuing Bank or Working Capital Lenders, as applicable.
(v) Notwithstanding any of the other provisions of this Section
2.06(b), so long as no Default shall have occurred and be continuing, if any
prepayment of Eurodollar Rate Advances is required to be made under clauses (i)
or (ii) of this Section 2.06(b) on any day other than on the last day of the
Interest Period therefor, the Borrower may in its sole discretion (but shall not
be required to), deposit the amount of any such prepayment otherwise required to
be made hereunder in a cash collateral account (the "Cash Collateral Account")
-----------------------
of the Borrower to be opened with the Agent prior to such time, until the last
day of such Interest Period, at which time the Agent shall be authorized
(without any further action by the Borrower) to apply such prepayment as set
forth in such relevant clauses (i) or (ii) of this Section 2.06(b). In the case
of any prepayment of Eurodollar Rate Advances required to be made under this
Section 2.06(b) and not provided for in the immediately preceding sentence, the
Borrower shall also pay any amounts owing in respect of such Eurodollar Rate
Advances pursuant to Section 8.04(c).
(vi) All prepayments under this Section 2.06(b) shall be made together
with accrued interest to the date of such prepayment on the principal amount
prepaid.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall
-------- ------------------
pay interest on the unpaid principal amount of each Advance made to the Borrower
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a Base
------------------
Rate Advance, a rate per annum equal at all times to the sum of (A) the
Base Rate in effect from time to time plus (B) the Applicable Margin,
----
payable in arrears quarterly on the last day of each March, June, September
and December, commencing June 30, 1997, on the date of any prepayment
thereof to the extent required under Section 2.06 and on the Termination
Date.
(ii) Eurodollar Rate Advances. During such periods as such Advance is
------------------------
a Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (A) the Eurodollar Rate for
such Interest Period for such Advance plus (B) the Applicable Margin,
----
payable in arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day of
such Interest Period and on the date such Eurodollar Rate Advance shall be
Converted or paid in full.
39
(b) Default Interest. Upon the occurrence and during the continuance
----------------
of an Event of Default under Section 6.01(c) with respect to any covenant
contained in Section 5.04 or under Section 6.01(a), the Agent may, and upon the
request of the Required Lenders shall, require that the Borrower shall pay
interest on (i) the unpaid principal amount of each Advance owing to each
Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above and on demand, at a rate per annum equal at all times to 2% per annum
above the rate per annum required to be paid on such Advance pursuant to clause
(a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the
amount of any interest, fee or other amount payable hereunder that is not paid
when due, from the date such amount shall be due until such amount shall be paid
in full, payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid, on Base Rate Advances pursuant to clause (a)(i)
above.
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
-----------------------
Borrowing pursuant to Section 2.02(a), the Agent shall give notice to the
Borrower and each Appropriate Lender of the applicable interest rate determined
by the Agent for purposes of clause (a)(i) or (ii).
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to
---- --------------
the Agent for the account of the Lenders a commitment fee on the average daily
unused portion of each Appropriate Lender's (i) Acquisition Commitment from the
Second Restatement Date in the case of each Restatement Lender and from the
effective date specified in the Assignment and Acceptance pursuant to which it
became an Acquisition Lender in the case of each other Acquisition Lender until
the Termination Date at the rate of 5/8 of 1% per annum and (ii) Working Capital
Commitment from the Second Restatement Date in the case of each Restatement
Lender and from the effective date specified in the Assignment and Acceptance
pursuant to which it became a Working Capital Lender in the case of each other
Working Capital Lender until the Termination Date at the rate of 1/2 of 1% per
annum, in each case, payable in arrears quarterly on the last day of each March,
June, September and December, commencing June 30, 1997, and on the Termination
Date.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the
--------------------------
Agent for the account of each Working Capital Lender a commission, payable in
arrears quarterly on the last day of each March, June, September and December,
commencing June 30, 1997, and on the Termination Date, on such Lender's Pro Rata
Share of the average daily aggregate Available Amount during such quarter of all
Letters of Credit outstanding from time to time at the rate of 2% per annum.
(ii) The Borrower shall pay to the Issuing Bank, for its own account,
such commissions, issuance fees, fronting fees, transfer fees and other fees and
charges in connection with the issuance or administration of each Letter of
Credit as the Borrower and the Issuing Bank shall agree.
40
(c) Agent's Fees. The Borrower shall pay to the Agent for its own
------------
account such fees as may from time to time be agreed between the Borrower and
the Agent.
SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower
---------------------- --------
may on any Business Day, upon notice given to the Agent not later than 11:00
A.M. (New York City time) on the third Business Day prior to the date of the
proposed Conversion and subject to the provisions of Sections 2.07 and 2.10,
Convert all or any portion of the Advances made to the Borrower of one Type
comprising the same Borrowing into Advances of the other Type; provided,
--------
however, that if any Conversion of Eurodollar Rate Advances into Base Rate
-------
Advances is made other than on the last day of an Interest Period for such
Eurodollar Rate Advances the Borrower shall also pay any amounts owing pursuant
to Section 8.04(c), any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum amount specified in
Section 2.02(b), no Conversion of any Advances shall result in more separate
Borrowings than permitted under Section 2.02(b) and each Conversion of Advances
comprising part of the same Borrowing under any Facility shall be made ratably
among the Appropriate Lenders in accordance with their Commitments under such
Facility. Each such notice of Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Advances to
be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on the Borrower requesting such
Conversion.
(b) Mandatory. (i) On the date on which the aggregate unpaid
---------
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $1,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the Agent will
forthwith so notify the Borrower and the Appropriate Lenders, whereupon each
such Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any Event of
Default, (x) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(y) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the
--------------------
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to
41
any Lender Party of agreeing to make or of making, funding or maintaining
Eurodollar Rate Advances or of agreeing to issue or of issuing or maintaining
Letters of Credit or of agreeing to make or of making or maintaining Letter of
Credit Advances, then the Borrower shall from time to time, upon demand by such
Lender Party (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender Party additional amounts sufficient to compensate such
Lender Party for such increased cost. A certificate as to the amount of such
increased cost, submitted to the Borrower by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If any Lender Party determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder and
other commitments of such type or the issuance or maintenance of the Letters of
Credit (or similar contingent obligations), then, upon demand by such Lender
Party (with a copy of such demand to the Agent), the Borrower shall pay to the
Agent for the account of such Lender Party, from time to time as specified by
such Lender Party, additional amounts sufficient to compensate such Lender Party
in the light of such circumstances, to the extent that such Lender Party
reasonably determines such increase in capital to be allocable to the existence
of such Lender Party's commitment to lend or to issue Letters of Credit
hereunder or to the issuance or maintenance of any Letters of Credit. A
certificate as to such amounts submitted to the Borrower by such Lender Party
shall be conclusive and binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed at least 50% of the then aggregate unpaid principal
amount thereof notify the Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Lenders of
making, funding or maintaining their Eurodollar Rate Advances for such Interest
Period, the Agent shall forthwith so notify the Borrower and the Appropriate
Lenders, whereupon (i) each such Eurodollar Rate Advance under any Facility will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Appropriate
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower that such Lenders have
determined that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the
42
Borrower through the Agent, (i) each Eurodollar Rate Advance under each Facility
under which such Lender has a Commitment will automatically, upon such demand,
Convert into a Base Rate Advance and (ii) the obligation of the Appropriate
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower that such Lender has
determined that the circumstances causing such suspension no longer exist.
(e) Each Lender Party agrees that, upon the occurrence of any
circumstances entitling such Lender Party to additional compensation (or to
deliver a demand therefor) or to suspend its obligation to make Eurodollar Rate
Advances under any of the foregoing provisions of this Section 2.10, such Lender
Party shall use reasonable efforts (consistent with its internal policy and with
applicable legal and regulatory restrictions) to designate a different
Applicable Lending Office for any Advances affected by such circumstances if the
making of such designation, in the case of Section 2.10(a) or 2.10(b), would
avoid the need for, or reduce the amount of, such additional compensation or, in
the case of Section 2.10(c) or 2.10(d), would allow the Lenders to continue to
perform their obligations to make Eurodollar Rate Advances and, in any such
case, would not, in the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party. Nothing in this Section 2.10(f) shall
affect or postpone any of the rights of any Lender Party or any of the
obligations of the Borrower under any of the foregoing provisions of this
Section 2.10 in any manner.
SECTION 2.11. Payments and Computations. (a) The Borrower shall
-------------------------
make each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off, not later than 11:00 A.M. (New York City time) on the
day when due in U.S. dollars to the Agent at the Agent's Account in same day
funds. The Agent will promptly thereafter cause like funds to be distributed
(i) if such payment by the Borrower is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder and under the
Notes to more than one Lender Party, to such Lender Parties for the account of
their respective Applicable Lending Offices ratably in accordance with the
amounts of such respective Obligations then payable to such Lender Parties and
(ii) if such payment by the Borrower is in respect of any Obligation then
payable hereunder to one Lender Party, to such Lender Party for the account of
its Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 8.07(e), from and after the effective date of such Assignment and
Acceptance, the Agent shall make all payments hereunder and under the Notes in
respect of the interest assigned thereby to the Lender Party assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) If the Agent receives funds for application to the Obligations
under the Loan Documents under circumstances for which the Loan Documents do not
specify the Advances or the Facility to which, or the manner in which, such
funds are to be applied, the
43
Agent may, but shall not be obligated to, elect to distribute such funds to each
Lender Party ratably in accordance with such Lender Party's proportionate share
of the principal amount of all outstanding Advances and the Available Amount of
all Letters of Credit then outstanding, in repayment or prepayment of such of
the outstanding Advances or other Obligations owed to such Lender Party, and for
application to such principal installments, as the Agent shall direct.
(c) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder or, in
the case of a Lender, under the Note held by such Lender, to charge from time to
time against any or all of the Borrower's accounts with such Lender Party any
amount so due.
(d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Agent of an interest rate,
fee or commission hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
-------- -------
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to any Lender Party hereunder that
the Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each such
Lender Party on such due date an amount equal to the amount then due such Lender
Party. If and to the extent the Borrower shall not have so made such payment in
full to the Agent, each such Lender Party shall repay to the Agent forthwith on
demand such amount distributed to such Lender Party together with interest
thereon, for each day from the date such amount is distributed to such Lender
Party until the date such Lender Party repays such amount to the Agent, at the
Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
-----
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender Party and the Agent,
---------
overall net income taxes that are imposed by the United States on such Lender
Party or the Agent and overall net income taxes (or franchise taxes in lieu
44
thereof) that are imposed on such Lender Party or the Agent by the state or
foreign jurisdiction under the laws of which such Lender Party or the Agent (as
the case may be) is organized or any political subdivision thereof and, in the
case of each Lender Party, overall net income taxes (or franchise taxes in lieu
thereof) that are imposed on such Lender Party by the state or foreign
jurisdiction of such Lender Party's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
-----
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender Party and the
Agent, (i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.12) such Lender Party or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other governmental authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or the
Notes (hereinafter referred to as "Other Taxes").
-----------
(c) The Borrower shall indemnify each Lender Party and the Agent for
the full amount of Taxes and Other Taxes, and for the full amount of taxes of
any kind imposed by any jurisdiction on amounts payable under this Section 2.12,
paid by such Lender Party or the Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Lender Party or the Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original receipt of payment thereof or a certified copy of such receipt. In
the case of any payment hereunder or under the Notes by or on behalf of the
Borrower through an account or branch outside the United States or on behalf of
the Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"United States" and "United States person" shall have the meanings specified in
-------------- --------------------
Section 7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this
45
Agreement in the case of each Restatement Lender or the Issuing Bank, as the
case may be, and on the date of the Assignment and Acceptance pursuant to which
it became a Lender Party in the case of each other Lender Party, and from time
to time thereafter if requested in writing by the Borrower or the Agent (but
only so long thereafter as such Lender Party remains lawfully able to do so),
provide the Agent and the Borrower with Internal Revenue Service form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender Party is exempt from or is entitled to a
reduced rate of United States withholding tax on payments under this Agreement
or the Notes, or certifying that the income receivable by such Lender Party
under this Agreement or the Notes is effectively connected with the conduct of a
trade or business of such Lender Party in the United States. To the extent a
Lender Party fails to provide to the Borrower at the time such Lender Party
first becomes a party to this Agreement Internal Revenue Service forms that
establish a United States withholding tax rate of zero, withholding tax at the
initially required rate shall be considered excluded from Taxes unless and until
such Lender Party provides the appropriate form certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such form. If after the date of an
Assignment and Acceptance pursuant to which a Lender Party becomes a party to
this Agreement, the Borrower shall become obligated to gross-up payments to or
to indemnify the assignee pursuant to this Section 2.12, such gross-up or
indemnity obligation to such assignee shall be no greater than the corresponding
obligation the Borrower would have had absent such Assignment and Acceptance.
If any form or document referred to in this subsection (e) requires the
disclosure of information, other than information necessary to compute the tax
payable and information required on the Second Restatement Date by Internal
Revenue Service form 1001 or 4224, that the Lender Party reasonably considers to
be confidential, the Lender Party shall give notice thereof to the Borrower and
shall not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender Party has failed to
provide the Borrower with the appropriate form described in subsection (e)
(other than if such failure is due to a change in law occurring after the date
------ ----
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e)), such Lender Party shall not be entitled
to gross-up under subsection (a) or indemnification under subsection (a) or (c)
with respect to Taxes imposed by the United States; provided, however, that
-------- -------
should a Lender Party become subject to Taxes because of its failure to deliver
a form required hereunder, the Borrower shall take such steps as such Lender
Party shall reasonably request to assist such Lender Party to recover such
Taxes.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall
------------------------
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) (a) on account of Obligations
due and payable to such Lender Party hereunder and under the Notes at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender
46
Parties hereunder and under the Notes at such time) of payments on account of
the Obligations due and payable to all Lender Parties hereunder and under the
Notes at such time obtained by all the Lender Parties at such time or (b) on
account of Obligations owing (but not due and payable) to such Lender Party
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender Party at such time to (ii) the aggregate amount of the Obligations owing
(but not due and payable) to all Lender Parties hereunder and under the Notes at
such time) of payments on account of the Obligations owing (but not due and
payable) to all Lender Parties hereunder and under the Notes at such time
obtained by all of the Lender Parties at such time, such Lender Party shall
forthwith purchase from the other Lender Parties such participations in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
-------- -------
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such other Lender
Party shall repay to the purchasing Lender Party the purchase price to the
extent of such Lender Party's ratable share (according to the proportion of (i)
the purchase price paid to such Lender Party to (ii) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (i) the
amount of such other Lender Party's required repayment to (ii) the total amount
so recovered from the purchasing Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.13 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender Party were the direct creditor of the Borrower in the amount of
such participation.
SECTION 2.14. Use of Proceeds. (a) The proceeds of the Acquisition
---------------
Advances shall be available (and the Borrower agrees that it shall use such
proceeds) solely (i) to provide all or a portion of the financing in connection
with the acquisition of any Related Textile Business by the Borrower or any of
its direct wholly owned U.S. Subsidiaries and to refinance any Debt of such
Business in connection therewith; provided that any Related Textile Business
--------
that becomes a Subsidiary of the Borrower shall be directly wholly owned by the
Borrower and (ii) to pay transaction fees and expenses in connection therewith.
(b) The proceeds of the Working Capital Advances and issuances of
Letters of Credit shall be available (and the Borrower agrees that it shall use
such proceeds and Letters of Credit) solely, (i) to pay transaction fees and
expenses in connection with the transactions contemplated hereby, (ii) to
provide working capital from time to time for, and for the general corporate
purposes of, the Borrower and its Subsidiaries and (iii) for the uses provided
for in subsection (a) above.
47
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Second Restatement Date.
---------------------------------------------------
The amendment and restatement of the Existing Credit Agreement pursuant hereto
shall become effective on and as of the date (the "Second Restatement Date"),
-----------------------
which shall occur on or prior to April 30, 1997, on which each of the following
conditions precedent shall have been satisfied:
(a) The Second Restatement Assignment Agreement shall be in full force
and effect and shall not have been terminated and, pursuant thereto, the
Commitments and Advances (as defined in the Existing Credit Agreement) of
each Existing Lender shall have been sold and assigned to the Restatement
Lenders hereunder on the terms and in the amounts set forth in the Second
Restatement Assignment Agreement or shall have been terminated in
accordance with the terms of the Existing Credit Agreement and all accrued
interest and fees relating to the Existing Credit Agreement shall have been
paid to the Existing Lenders.
(b) No Material Adverse Change shall have occurred since January 4,
1997.
(c) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of their properties, including
any Environmental Action, pending or to the best of the Borrower's
knowledge, threatened before any court, governmental agency or arbitrator
that (i) could reasonably be expected to have a Material Adverse Effect, or
(ii) purports to affect the legality, validity or enforceability of this
Agreement, any Note, any other Loan Document, any Related Document or the
consummation of the transactions contemplated hereby.
(d) The Borrower shall have paid to the Agent all reasonable accrued
fees of the Agent and the Restatement Lenders (including the upfront fee to
be paid with respect to this Agreement and the accrued fees and expenses of
counsel to the Agent).
(e) All governmental and third party consents and approvals necessary
in connection with this Agreement shall have been obtained (without the
imposition of any conditions other than those that are reasonably
acceptable to the Agent) and shall remain in effect, and all applicable
waiting periods shall have expired without any action being taken by any
competent authority and no law or regulation shall be applicable, in the
reasonable judgment of the Agent, that restrains, prevents or imposes
adverse conditions upon this Agreement or any related transactions.
(f) All Existing Debt, other than the Debt identified on Schedule
3.01(f)(ii) (the "Surviving Debt"), has been prepaid, redeemed or defeased
--------------
in full or otherwise
48
satisfied and extinguished and all such Surviving Debt is on terms and
conditions satisfactory to the Lender Parties.
(g) The Agent shall have received on or before the Second Restatement
Date the following, each dated the Second Restatement Date (unless
otherwise specified), in form and substance reasonably satisfactory to the
Agent (unless otherwise specified) and (except for the Notes) in sufficient
copies for each Lender:
(i) The Notes payable to the order of the Restatement Lenders.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower and of each other Loan Party approving this
Agreement, the Notes, each other Loan Document and each Related
Document to which it is or is to be a party, and of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement, the Notes, each
other Loan Document and each Related Document.
(iii) A copy of the charter of the Borrower and of each other
Loan Party and each amendment thereto, certified (as of a date
reasonably near the Second Restatement Date) by the Secretary of State
of the State of their respective states of incorporation or
organization as being a true and correct copy thereof.
(iv) A copy of a certificate of the Secretary of State of the
State of their respective states of incorporation or organization,
dated reasonably near the Second Restatement Date, listing the charter
or other organizational documents of the Borrower and of each other
Loan Party and each amendment thereto on file in his office and
certifying that (A) such amendments are the only amendments to the
Borrower's or such other Loan Party's charter or other organizational
documents on file in his office, (B) the Borrower and each other Loan
Party have paid all franchise taxes to the date of such certificate
and (C) the Borrower and each other Loan Party are duly incorporated
or organized and in good standing under the laws of the State of their
respective states of incorporation or organization.
(v) Copies of certificates of the Secretary of State of each
jurisdiction where each Loan Party is qualified or licensed as a
foreign corporation in the United States, dated reasonably near the
Second Restatement Date, in each case stating that such Person was
duly qualified and in good standing as a foreign corporation in such
jurisdiction and had filed all annual reports required to be filed to
the date of such certificate.
(vi) A certificate of each Loan Party, signed on behalf of such
Loan Party by its President or a Vice President and its Secretary or
an Assistant
49
Secretary, dated the Second Restatement Date (the statements made in
which certificate shall be true on and as of the Second Restatement
Date), certifying as to:
(A) the absence of any amendments to the charter or articles
(or other similar organizational document) of such Loan Party
since the date of the Secretary of State's certificate referred
to in Section 3.01(g)(iv);
(B) the accuracy and completeness of the bylaws (or other
similar organizational document) of such Loan Party as in effect
on the Second Restatement Date (a copy of which was attached to
such certificate);
(C) the due incorporation and good standing of such Loan
Party as a corporation organized under the laws of the
jurisdiction of its incorporation, and the absence of any
proceeding for the dissolution or liquidation of such Loan Party;
(D) the accuracy of the representations and warranties set
forth in the Loan Documents to which it was or was to be a party
as though made on and as of the Second Restatement Date, before
and after giving effect to the extension of credit on the Second
Restatement Date and to the application of proceeds therefrom;
and
(E) the absence of any event occurring and continuing, or
resulting from the Second Restatement Date, or the application of
proceeds therefrom, that constituted a Default.
(vii) A certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying the names and true signatures of the
officers of such Loan Party authorized to sign this Agreement, the
Notes, each other Loan Document and each Related Document to which it
was or was to be a party and the other agreements, instruments and
documents to be delivered hereunder and thereunder.
(viii) A second amended and restated security agreement in
substantially the form of Exhibit D hereto (together with each other
security agreement delivered pursuant to Section 5.01(m) or 5.01(o),
in each case as amended, supplemented or otherwise modified from time
to time in accordance with its terms, the "Second Amended and Restated
---------------------------
Security Agreement"), duly executed by each of the Loan Parties,
------------------
together with:
50
(A) certificates representing the Pledged Shares, if any not
previously delivered to the Agent, and accompanied by undated
stock powers executed in blank, and instruments evidencing the
Pledged Debt, if any, not previously delivered to the Agent and
referred to in the Second Amended and Restated Security
Agreement, duly endorsed in blank;
(B) duly executed financing statements (Form UCC-1 or a
comparable form), which are required to be filed as at the Second
Restatement Date under the Uniform Commercial Code of the States
of all jurisdictions that the Agent may have deemed necessary or
desirable in order to maintain the perfection and priority of the
Liens created under the Collateral Documents, covering the
Collateral described in the Second Amended and Restated Security
Agreement;
(C) evidence of the maintenance of the insurance required by
the terms of the Second Amended and Restated Security Agreement;
(D) copies of the Assigned Agreements, if any not previously
delivered to the Agent and referred to in the Second Amended and
Restated Security Agreement, together with any required consent
to such assignment, in substantially the form of Exhibit B to the
Second Amended and Restated Security Agreement, duly executed by
each party to such Assigned Agreements other than the Loan
Parties;
(E) confirmation, to the extent required by the Agent, of
each of the Blocked Account Letters referred to therein, duly
executed by the relevant Loan Party, as the case may be, and the
bank referred to in the Second Amended and Restated Security
Agreement; and
(F) evidence that all other actions (including, without
limitation, the completion of all other recordings and filings of
or with respect to the Second Amended and Restated Security
Agreement) that were deemed necessary or that the Agent deemed
desirable in order to maintain the perfection and to protect the
first priority liens and security interests created and
maintained under the Security Agreement, as amended and restated
by the Second Amended and Restated Security Agreement, had been
taken or would be taken in accordance with the terms of the Loan
Documents.
(ix) An amended and restated intellectual property security
agreement in substantially the form of Exhibit E hereto (together with
each other intellectual property security agreement delivered pursuant
to Section 5.01(m) or Section 5.01(o), in each case as amended,
supplemented or
51
otherwise modified from time to time in accordance with its terms, the
"Amended and Restated Intellectual Property Security Agreement"), duly
-------------------------------------------------------------
executed by each of the Loan Parties, together with evidence that all
action that the Agent deemed necessary or desirable in order to
maintain the perfection and to protect the first priority liens and
security interests created and maintained under the Intellectual
Property Security Agreement as amended and restated by the Amended and
Restated Intellectual Property Security Agreement has been taken.
(x) A modification and extension agreement in substantially the
form of Exhibit F hereto (the "Modification and Extension Agreement"),
------------------------------------
to the deed of trust, trust deed and mortgage covering the properties
(other than the property located at 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxx
Xxxxxxxx) listed on Schedule 4.01(gg) (as amended, supplemented or
otherwise modified from time to time in accordance with its terms, the
"Deed of Trust"), duly executed by Tarboro Ltd., together with:
-------------
(A) evidence that counterparts of the Modification and
Extension Agreement to the Deed of Trust had been duly delivered
to Xxxxxxx Title Guaranty Company on or before the Second
Restatement Date and in all filing or recording offices that the
Agent deemed necessary or desirable in order to maintain a valid
first and subsisting Lien on the property described in the Deed
of Trust in favor of the Agent and the Restatement Lenders and
that all filing and recording taxes and fees had been paid,
(B) confirmation of fully paid Xxxxxxx Title Guaranty
Company title insurance policies or commitments to issue such
title insurance policies (in each case, the "Deed of Trust
-------------
Policies") in form and substance, with endorsements and in amount
--------
acceptable to the Agent, issued, coinsured and reinsured by title
insurers acceptable to the Agent, insuring the Deed of Trust to
be a valid first and subsisting Lien on the property described
therein, free and clear of all defects (including, without
limitation, mechanics' and materialmen's Liens) and encumbrances,
excepting only Permitted Encumbrances, and providing for such
other affirmative insurance (including endorsements for future
advances under the Loan Documents and for mechanics' and
materialmen's Liens) and such coinsurance and direct access
reinsurance as the Agent deemed necessary or desirable,
(C) evidence of the insurance required by the terms of the
Deed of Trusts, and
52
(D) evidence that all other action that the Agent deemed
necessary or desirable in order to maintain the perfection and to
protect the valid first and subsisting Liens on the property
described in the Deed of Trust has been taken.
(xi) A second amended and restated guarantee (the "Second Amended
--------------
and Restated Guarantee") in substantially the form of Exhibit G hereto
----------------------
(together with each other guarantee delivered pursuant to Section
5.01(m) and Section 5.01(o), in each case as amended, supplemented or
otherwise modified from time to time in accordance with its terms, the
"Guarantees"), duly executed by Universal and each Subsidiary
----------
Guarantor.
(xii) Certified copies of each of the Related Documents as in
effect on the Second Restatement Date and the X'Xxxxxx Employment
Agreement, duly executed by the parties thereto and in form and
substance satisfactory to the Restatement Lenders, together with all
agreements, instruments and other documents delivered in connection
therewith.
(xiii) Such financial, business and other information regarding
each Loan Party and its Subsidiaries as the Lender Parties had
requested, including forecasts prepared by management, in form and
substance satisfactory to the Lender Parties, of balance sheets,
income statements and cash flow statements on a monthly basis for
Fiscal Year 1997 and on an annual basis for each Fiscal Year
thereafter until the Termination Date.
(xiv) A certificate, signed by the chief financial officer of
each of the Borrower and Universal, in substantially the form of
Exhibit I hereto, attesting to the Solvency of the Borrower and its
Subsidiaries taken as a whole and Universal and its Subsidiaries taken
as a whole, respectively, after giving effect to the transactions
contemplated hereby.
(xv) Evidence as at the Second Restatement Date of insurance,
naming the Agent as additional insured and loss payee with such
responsible and reputable insurance companies or associations, and in
such amounts and covering such risks, as were deemed satisfactory to
the Lender Parties, including, but not limited to, product liability,
title, business interruption, physical damage to property or equipment
in form and substance satisfactory to the Agent.
(xvi) A Borrowing Base Certificate of the Borrower and its
Subsidiaries, taken as a whole, as of February 28, 1997 in
substantially the form of Exhibit J hereto, duly executed by the
Borrower.
53
(xvii) A favorable opinion of Xxxxxxxx & Xxxxx, special counsel
for the Loan Parties, in substantially the form of Exhibit K hereto.
(xviii) A favorable opinion of Shearman & Sterling, counsel for
the Agent, in form and substance satisfactory to the Agent.
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance.
---------------------------------------------------
The obligation of each Appropriate Lender to make an Advance (other than a
Letter of Credit Advance made by the Issuing Bank or a Working Capital Lender
pursuant to Section 2.03(c)) on the occasion of each Borrowing (including on the
Second Restatement Date), and the obligation of the Issuing Bank to issue a
Letter of Credit (including the initial issuance), were and are subject to the
further conditions precedent that on the date of such Borrowing or issuance (a)
the following statements shall be true (and each of the giving of the applicable
Notice of Borrowing, Notice of Issuance and the acceptance by the Borrower of
the proceeds of such Borrowing or of such Letter of Credit shall constitute a
representation and warranty by the Borrower that both on the date of such notice
and on the date of such Borrowing or issuance such statements are true):
(i) the representations and warranties contained in each Loan Document
are correct on and as of such date, before and after giving effect to such
Borrowing or issuance and to the application of the proceeds therefrom, as
though made on and as of such date other than any such representations or
warranties that, by their terms, refer to a specific date other than the
date of such Borrowing or issuance, in which case as of such specific date;
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default; and
(iii) for each Working Capital Advance or issuance of any Letter of
Credit, the sum of the Loan Values of the Eligible Collateral (as
determined based on the most recent Borrowing Base Certificate delivered to
the Lender Parties hereunder) exceeds the aggregate principal amount of the
Working Capital Advances plus Letter of Credit Advances to be outstanding
----
plus the aggregate Available Amount of all Letters of Credit then
----
outstanding after giving effect to such Advance or issuance, respectively;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Appropriate Lender through the Agent may reasonably request.
SECTION 3.03. Additional Conditions to Each Acquisition Borrowing.
---------------------------------------------------
The obligation of each Appropriate Lender to make an Acquisition Advance on the
occasion of each Acquisition Borrowing is, in addition to the conditions set
forth in Section 3.02, subject to the satisfaction of the following conditions
precedent that on the date of such Borrowings:
54
(a) the Agent shall have received a certificate of the Borrower signed
by its chief financial officer dated the date of the Notice of Borrowing
with respect to the proposed Acquisition Borrowing (x) certifying that the
proceeds of the Acquisition Advances comprising such Acquisition Borrowing
shall be used solely (i) to provide all or a portion of the financing in
connection with the acquisition of a Related Textile Business by the
Borrower or any of its direct wholly owned U.S. Subsidiaries and to
refinance any Debt of such Business in connection therewith; provided that
--------
any Related Textile Business that becomes a Subsidiary of the Borrower
shall be directly owned by the Borrower and (ii) to pay transaction fees
and expenses in connection therewith, and (y) setting forth the proposed
use of the proceeds of such Acquisition Borrowing;
(b) after giving effect to such Acquisition Borrowing, the Borrower
shall be in compliance with the provisions of Section 5.02(f)(vii) as of
the end of the most recently ended Monthly Rolling Period prior to the date
of such Borrowing and the Agent shall have received a certificate of the
chief financial officer of the Borrower certifying such compliance,
together with a schedule in form satisfactory to the Agent of the
computations used by the Borrower in determining compliance therewith; and
(c) the Agent shall have received on or before the date of such
Acquisition Borrowing evidence that all action that the Agent may deem
necessary or desirable in order to perfect and protect the Liens created by
the Collateral Documents has been taken.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Loan Parties.
--------------------------------------------------
Each of the Loan Parties represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed could not
have a Material Adverse Effect and (iii) has all requisite corporate power
and authority (including, without limitation, all governmental licenses,
permits and other approvals) to own or lease and operate its properties and
to carry on its business as now conducted and as proposed to be conducted.
All of the outstanding capital stock of Glenoit Assets Corp. and Tarboro
Ltd. has been validly issued, is fully paid and non-assessable and is owned
by Xxxxx in the amounts and types specified on Schedule 4.01(a) free and
clear of all Liens. The outstanding capital stock of Xxxxx has been
55
validly issued, is fully paid and non-assessable and is owned by the
Borrower, in the amounts and types specified on Schedule 4.01(a) free and
clear of all Liens. All of the outstanding capital stock of the Borrower
has been validly issued, is fully paid and non-assessable and is owned by
Universal in the amounts and types specified on Schedule 4.01(a) free and
clear of all Liens. All of the outstanding capital stock of Universal has
been validly issued, is fully paid and non-assessable and is owned by the
Investor Group, in the amounts and types specified on Schedule 4.01(a) free
and clear of all Liens.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party, showing as of the Second
Restatement Date (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of capital stock
authorized, and the number outstanding, on the Second Restatement Date and
the percentage of the outstanding shares of each such class owned (directly
or indirectly) by such Loan Party and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights at the Second Restatement Date. All of the outstanding capital
stock of all of such Subsidiaries has been validly issued, is fully paid
and non-assessable and is owned by such Loan Party or one or more of its
Subsidiaries free and clear of all Liens, except those created under the
Loan Documents. Each such Subsidiary (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed could not
have a Material Adverse Effect and (iii) has all requisite corporate power
and authority (including, without limitation, all governmental licenses,
permits and other approvals) to own or lease and operate its properties and
to carry on its business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party of this
Agreement, the Notes, each other Loan Document and each of the Related
Documents to which it is or is to be a party, and the consummation of the
transactions contemplated hereby and thereby, are within such Loan Party's
corporate powers, have been duly authorized by all necessary corporate
action, and do not (i) contravene such Loan Party's charter or bylaws, (ii)
violate any law (including, without limitation, the Securities Exchange Act
of 1934 and the Racketeer Influenced and Corrupt Organizations Chapter of
the Organized Crime Control Act of 1970), rule, regulation (including,
without limitation, Regulation X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree, determination
or award, (iii) conflict with or result in the breach of, or constitute a
default under, any material contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument binding on or affecting any Loan
Party, any of its Subsidiaries or any of their properties or (iv) except
for the Liens created under the Loan Documents,
56
result in or require the creation or imposition of any Lien upon or with
respect to any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which could have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by any Loan Party of this Agreement, the Notes, any
other Loan Document or any Related Document to which it is or is to be a
party, or for the consummation of the transactions contemplated hereby or
thereby, (ii) the grant by any Loan Party of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance
of the Liens created by the Collateral Documents (including the first
priority nature thereof) or (iv) the exercise by the Agent or any Lender
Party of its rights under the Loan Documents or the remedies in respect of
the Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on Schedule
4.01(d), all of which have been duly obtained, taken, given or made and are
in full force and effect (other than filings with the patent, trademark and
copyright offices of the United States and the relevant foreign countries).
All applicable waiting periods in connection with the transactions
contemplated hereby and thereby have expired without any action having been
taken by any competent authority restraining, preventing or imposing
materially adverse conditions upon the rights of the Loan Parties or their
Subsidiaries freely to transfer or otherwise dispose of, or to create any
Lien on, any properties now owned or hereafter acquired by any of them.
(e) This Agreement has been, and each of the Notes, each other Loan
Document and each Related Document when delivered hereunder will have been,
duly executed and delivered by each Loan Party thereto. This Agreement is,
and each of the Notes, each other Loan Document and each Related Document
when delivered hereunder will be, the legal, valid and binding obligation
of each Loan Party thereto, enforceable against such Loan Party in
accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating
to or limiting creditors' rights or by equitable principles generally.
(f) The Consolidated balance sheets of the Borrower and its
Subsidiaries as at January 4, 1997, and the related Consolidated statements
of income and cash flows of the Borrower and its Subsidiaries for the
Fiscal Year then ended, accompanied by an opinion of Coopers & Xxxxxxx,
independent public accountants, and the Consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as at March 1, 1997,
and the related Consolidated and consolidating statement of income
57
and Consolidated statement of cash flows of the Borrower and its
Subsidiaries for the two Fiscal Months then ended, duly certified by the
chief financial officer of the Borrower, copies of which have been
furnished to each Lender Party, fairly present, subject, in the case of
said balance sheet as at March 1, 1997, and said statements of income and
cash flows for the two Fiscal Months then ended, to year-end audit
adjustments and the absence of financial statement footnotes, the financial
condition of the Borrower and its Subsidiaries as at such dates and the
results of the operations of the Borrower and its Subsidiaries for the
periods ended on such dates, all in accordance with generally accepted
accounting principles applied on a consistent basis, and since January 4,
1997 there has been no Material Adverse Change.
(g) The Consolidated pro forma balance sheet of the Borrower and its
Subsidiaries, as at March 1, 1997, certified by the chief financial officer
of the Borrower, copies of which have been furnished to each Lender Party,
fairly present the Consolidated pro forma financial condition of the
Borrower and its Subsidiaries as at such date after giving effect to the
transactions contemplated hereby, all in accordance with GAAP.
(h) The Consolidated forecasted balance sheets, income statements and
cash flows statements of the Borrower and its Subsidiaries delivered to the
Lender Parties pursuant to Section 3.01(g)(xiii) or 5.03(e) were prepared
in good faith on the basis of the assumptions stated therein, which
assumptions were fair in the light of conditions existing at the time of
delivery of such forecasts, and represented, at the time of delivery, the
Borrower's best estimate of its future financial performance.
(i) Neither the Borrower Information nor any other information,
exhibit or report (excluding any financial projections) furnished by any
Loan Party to the Agent or any Lender Party in connection with the
negotiation of the Loan Documents or pursuant to the terms of the Loan
Documents contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements made therein not
misleading.
(j) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any
Environmental Action, pending or, to the best of the Loan Parties'
knowledge, threatened before any court, governmental agency or arbitrator
that (i) could have a Material Adverse Effect or (ii) purports to affect
the legality, validity or enforceability of this Agreement, any Note, any
other Loan Document or any Related Document or the consummation of the
transactions contemplated hereby.
(k) No proceeds of any Advance or drawings under any Letter of Credit
will be used to acquire any equity security of a class that is registered
pursuant to Section 12 of the Securities Exchange Act of 1934.
58
(l) None of the Loan Parties is engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance or drawings under any Letter of Credit will be used
by any of the Loan Parties to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any
Margin Stock.
(m) Set forth on Schedule 4.01(m) hereto is a complete and accurate
list of all Plans, Multiemployer Plans and Welfare Plans; provided,
--------
however, that with respect to the Plans, Multiemployer Plans and Welfare
-------
Plans of any ERISA Affiliate which is not a Loan Party, this representation
is made to the best knowledge of the Loan Parties.
(n) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan; provided, however, that with respect to any ERISA
-------- -------
Event with respect to any Plan of any ERISA Affiliate which is not a Loan
Party, this representation is made to the best knowledge of the Loan
Parties.
(o) As of the last annual actuarial valuation date, there is no
material unfunded current liability, as defined in Section 302(d)(8) of
ERISA, of any Plan and there has been no material adverse change in the
funding status of any such Plan since such date; provided, however, that
-------- -------
with respect to any Plan of any ERISA Affiliate which is not a Loan Party,
this representation is made to the best knowledge of the Loan Parties.
(p) Schedule B (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan maintained by any Loan Party,
copies of which have been filed with the Internal Revenue Service and
furnished to the Lender Parties, is complete and accurate and fairly
presents the funding status of such Plan, and since the date of such
Schedule B there has been no material adverse change in such funding
status.
(q) Neither any Loan Party nor any ERISA Affiliate has incurred or is
reasonably expected to incur any Withdrawal Liability to any Multiemployer
Plan; provided, however, that with respect to any Multiemployer Plan of any
-------- -------
ERISA Affiliate which is not a Loan Party, this representation is made to
the best knowledge of the Loan Parties.
(r) Neither any Loan Party nor any ERISA Affiliate has been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA; provided, however, that with respect to any Multiemployer Plan of
-------- -------
any ERISA Affiliate which is not a Loan Party, this representation is made
to the best knowledge of the Loan Parties.
59
(s) Except as set forth in the financial statements referred to in
this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106.
(t) Neither the business nor the properties of any Loan Party or any
of its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not covered
by insurance) that could have a Material Adverse Effect.
(u) Except as set forth in Schedule 4.01(u) hereto, the operations and
properties of each Loan Party and each of its Subsidiaries comply in all
material respects with all applicable Environmental Laws and Environmental
Permits, all past claims of non-compliance with such Environmental Laws and
Environmental Permits have been resolved without ongoing material
obligations or costs; and no circumstances exist that could reasonably be
expected to (i) form the basis of an Environmental Action against any Loan
Party or any of its Subsidiaries or any of its properties that could have a
Material Adverse Effect or (ii) cause any such property to be subject to
any material restrictions on ownership, occupancy, use or transferability
under any Environmental Law.
(v) Except as set forth in Schedule 4.01(u) hereto, none of the
material properties currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries is listed, or, to the best knowledge of
the Loan Parties or any of their Subsidiaries, proposed for listing on the
NPL or on the CERCLIS or any analogous foreign, state or local list or is
adjacent to any such property.
(w) Except as set forth in Schedule 4.01(u) hereto, neither any Loan
Party nor any of its Subsidiaries is undertaking, and has not completed,
either individually or together with other potentially responsible parties,
any investigation or assessment or remedial or response action relating to
any actual or threatened release, discharge or disposal of Hazardous
Materials at any site, location or operation, either voluntarily or
pursuant to the order of any governmental or regulatory authority or the
requirements of any Environmental Law.
(x) Neither any Loan Party nor any of its Subsidiaries is a party to
any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction the
compliance with which could have a Material Adverse Effect.
(y) The Collateral Documents create a valid and perfected first
priority security interest in the Collateral securing the payment of the
Secured Obligations,
60
and all filings and other actions necessary or desirable to perfect and
protect such security interest have been duly taken. The Loan Parties are
the legal and beneficial owners of the Collateral free and clear of any
Lien, except for the Liens created or permitted under the Loan Documents.
(z) Each Loan Party and each of its Subsidiaries and Affiliates has
filed, has caused to be filed or has been included in all tax returns
(Federal, state, local and foreign) required to be filed and has paid all
taxes shown thereon to be due, together with applicable interest and
penalties.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and accurate
list, as of the Second Restatement Date, of each taxable year of each Loan
Party and each of its Subsidiaries and Affiliates (other than CVC and any
of its Affiliates which is not a Loan Party) for which Federal income tax
returns have been filed and for which the expiration of the applicable
statute of limitations for assessment or collection has not occurred by
reason of extension or otherwise (an "Open Year").
---------
(bb) There is no unpaid amount, as of the Second Restatement Date, of
adjustments to the Federal income tax liability of each Loan Party and each
of its Subsidiaries and Affiliates (other than CVC and any of its
Affiliates which is not a Loan Party) proposed by the Internal Revenue
Service with respect to Open Years. No issues other than those set forth
on Schedule 4.01(bb) have been raised by the Internal Revenue Service in
respect of Open Years that, in the aggregate, could have a Material Adverse
Effect.
(cc) There is no unpaid amount, as of the Second Restatement Date, of
adjustments to the state, local and foreign tax liability of each Loan
Party and each of its Subsidiaries and Affiliates (other than CVC and any
of its Affiliates which is not a Loan Party) proposed by all state, local
and foreign taxing authorities (other than amounts arising from adjustments
to Federal income tax returns, if any). No issues have been raised by such
taxing authorities that, in the aggregate, could have a Material Adverse
Effect.
(dd) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated hereby, will violate
any provision of such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
(ee) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
61
(ff) Set forth on Schedule 3.01(f)(ii) hereto is a complete and accurate
list of all Surviving Debt, showing as of the Second Restatement Date the
principal amount outstanding thereunder, the maturity date thereof and the
amortization schedule therefor.
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and accurate
list of all real property owned by any Loan Party or any of its
Subsidiaries, showing as of the Second Restatement Date the street address,
county or other relevant jurisdiction, state, record owner and book and
fair value thereof. Each Loan Party or such Subsidiary has good,
marketable and insurable fee simple title to such real property, free and
clear of all Liens, other than Liens created or permitted by the Loan
Documents.
(hh) Set forth on Schedule 4.01(hh) hereto is a complete and accurate
list of all leases of real property under which any Loan Party or any of
its Subsidiaries is the lessee, showing as of the Second Restatement Date
the street address, county or other relevant jurisdiction, state, lessor,
lessee, expiration date and annual rental cost thereof. Each such lease is
the legal, valid and binding obligation of the lessor thereof, enforceable
in accordance with its terms.
(ii) Set forth on Schedule 4.01(ii) hereto is a complete and accurate
list of all Investments held by any Loan Party or any of its Subsidiaries,
showing as of the Second Restatement Date the amount, obligor or issuer and
maturity, if any, thereof.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and accurate
list of all patents, trademarks, trade names, service marks and copyrights,
and all applications therefor and licenses thereof, of each Loan Party or
any of its Subsidiaries, showing as of the Second Restatement Date the
jurisdiction in which registered, the registration or application number,
as the case may be, and the date of registration or filing, as the case may
be.
(kk) The proceeds of the Advances and the Letters of Credit will be
used by the Loan Parties solely in accordance with the terms of Section
2.14.
62
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
---------------------
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder:
(a) Compliance with Laws, Etc. Each Loan Party shall comply, and
-------------------------
cause each of its Subsidiaries to comply, in all material respects, with
all applicable laws, rules, regulations and orders material to the business
and operations of such Loan Party, such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Each Loan Party shall pay and discharge,
---------------------
and cause each of its Subsidiaries to pay and discharge, before the same
shall become delinquent, (i) all taxes, assessments and governmental
charges or levies imposed upon it or upon its property and (ii) all lawful
claims that, if unpaid, might by law become a Lien upon its property;
provided, however, that no Loan Party nor any of its Subsidiaries shall be
-------- -------
required to pay or discharge any such tax, assessment, charge or claim that
is being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) Compliance with Environmental Laws. Each Loan Party shall comply,
----------------------------------
and cause each of its Subsidiaries and all lessees and other Persons
operating or occupying its properties to comply, in all material respects,
with all applicable Environmental Laws and Environmental Permits; obtain
and renew and cause each of its Subsidiaries to obtain and renew all
Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial
or other action necessary to remove and clean up all Hazardous Materials
from any of its properties, in accordance with and as required by all
applicable requirements of all Environmental Laws; provided, however, that
-------- -------
no Loan Party nor any of its Subsidiaries shall be required to undertake
any such cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect to
such circumstances.
(d) Maintenance of Insurance. Each Loan Party shall maintain, and
------------------------
cause each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and covering
such risks as is usually carried by companies engaged in similar businesses
and owning similar
63
properties in the same general areas in which such Loan Party or such
Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Each Loan Party shall
----------------------------------------
preserve and maintain, and cause each of its Subsidiaries to preserve and
maintain, its corporate existence, rights (charter and statutory), permits,
licenses, approvals, privileges and franchises; provided, however, that the
-------- -------
Subsidiaries of the Borrower may consummate any merger or consolidation
permitted under Section 5.02(d).
(f) Visitation Rights. Each Loan Party shall, at any reasonable time
-----------------
and from time to time upon reasonable prior notice, permit the Agent or any
of the Lender Parties or any agents or representatives thereof, to examine
and make copies of and abstracts from the records and books of account of,
and visit the properties of, such Loan Party and any of its Subsidiaries,
and to discuss the affairs, finances and accounts of such Loan Party and
any of its Subsidiaries with any of their officers or directors and with
their independent certified public accountants.
(g) Preparation of Environmental Reports. The Loan Parties shall, at
------------------------------------
the request of the Agent at the following times, (i) upon the occurrence
and continuance of an Event of Default, (ii) upon the acquisition of real
property by any Loan Party or any of its Subsidiaries, (iii) upon the
Agent's reasonable belief that any of the representations or warranties
contained in Sections 4.01(u), 4.01(v) or 4.01(w) is false in a material
respect or that any of the covenants contained in Section 5.01(c) has been
breached in a recent material respect or, (iv) two other times (determined
in the discretion of the Required Lenders) during the term of this
Agreement, provide to the Lender Parties within 60 days after such request,
at the expense of the Loan Parties, a Phase I environmental site assessment
report for any of their or their Subsidiaries' properties described in such
request, prepared by an environmental consulting firm acceptable to the
Agent indicating, as appropriate, the presence or absence of Hazardous
Materials and the estimated cost of any compliance, removal or remedial
action in connection with any Hazardous Materials on such properties;
without limiting the generality of the foregoing, if the Agent determines
at any time that a material risk exists that any such report will not be
provided within the time referred to above, the Agent may retain an
environmental consulting firm to prepare such report at the expense of the
Loan Parties, and the Loan Parties hereby grant and agree to cause any
Subsidiary that owns any property described in such request to grant at the
time of such request, to the Agent, the Lender Parties, such firm and any
agents or representatives thereof an irrevocable non-exclusive license,
subject to the rights of tenants, to enter onto their respective properties
to undertake such an assessment.
(h) Keeping of Books. Each Loan Party shall keep, and cause each of
----------------
its Subsidiaries to keep, proper books of record and account, in which full
and correct entries shall be made of all financial transactions and the
assets and business of such
64
Loan Party and each such Subsidiary in accordance with generally accepted
accounting principles.
(i) Maintenance of Properties, Etc. Each Loan Party shall maintain
------------------------------
and preserve, and cause each of its Subsidiaries to maintain and preserve,
all of its properties that are reasonably required in the conduct of its
business in good working order and condition, ordinary wear and tear
excepted.
(j) Compliance with Terms of Leaseholds. Each Loan Party shall make
-----------------------------------
all payments and otherwise perform all obligations in respect of all leases
of real property to which such Loan Party or any of its Subsidiaries is a
party, keep such leases in full force and effect and not allow such leases
to lapse or be terminated or any rights to renew such leases to be
forfeited or cancelled, notify the Agent of any material default by any
party with respect to such leases and cooperate with the Agent in all
respects to cure any such default, and cause each of its Subsidiaries to do
so, unless the failure to so comply with the foregoing could have a
Material Adverse Effect.
(k) Performance of Related Documents and Other Agreements. Each Loan
-----------------------------------------------------
Party shall perform and observe all of the terms and provisions of the
Related Documents (other than the Stockholders Agreement) to be performed
or observed by it, maintain each such Related Document (other than the
Stockholders Agreement) in full force and effect, enforce such Related
Document (other than the Stockholders Agreement) in accordance with its
terms, take all such action to such end as may be from time to time
requested by the Agent and, upon request of the Agent, make to each other
party to each such Related Document (other than the Stockholders Agreement)
such demands and requests for information and reports or for action as such
Loan Party is entitled to make under such Related Document (other than the
Stockholders Agreement), unless the failure to so comply with the foregoing
could have a Material Adverse Effect.
(l) Transactions with Affiliates. Each Loan Party shall conduct, and
----------------------------
cause each of its Subsidiaries to conduct, all transactions otherwise
permitted under the Loan Documents with any of their Affiliates on terms
that are fair and reasonable and no less favorable to such Loan Party or
such Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person not an Affiliate; provided that the Lender
--------
Parties hereby agree that the terms of all employment-related arrangements
and contracts between any Loan Party and any member of the senior
management of such Loan Party shall be deemed to be fair and reasonable if
approved by the board of directors of such Loan Party.
(m) Covenant to Give Security. In addition to the requirements of
-------------------------
Section 5.01(o), each Loan Party shall, upon the request of the Agent
following the occurrence and during the continuance of an Event of Default,
and at the expense of
65
such Loan Party, (i) within 10 days after such request, furnish to the
Agent a description of the real and personal properties of such Loan Party
and its Subsidiaries in detail satisfactory to the Agent, (ii) within 15
days after such request, duly execute and deliver to the Agent mortgages,
pledges, assignments and other security agreements, as specified by and in
form and substance satisfactory to the Agent, securing payment of all the
Obligations of such Loan Party under the Loan Documents and constituting
Liens on all such properties, (iii) within 30 days after such request, take
whatever action (including, without limitation, the recording of mortgages,
the filing of Uniform Commercial Code financing statements, the giving of
notices and the endorsement of notices on title documents) may be necessary
or advisable in the opinion of the Agent to vest in the Agent (or in any
representative of the Agent designated by it) valid and subsisting Liens on
the properties purported to be subject to the security agreements delivered
pursuant to this Section 5.01(m), enforceable against all third parties in
accordance with their terms, (iv) within 60 days after such request,
deliver to the Agent a signed copy of a favorable opinion, addressed to the
Agent, of counsel for such Loan Party acceptable to the Agent as to the
matters contained in clauses (i), (ii) and (iii) above, as to such security
agreements being legal, valid and binding obligations of such Loan Party
and its Subsidiaries enforceable in accordance with their terms and as to
such other matters as the Agent may reasonably request and (v) at any time
and from time to time, promptly execute and deliver any and all further
instruments and documents and take all such other action as the Agent may
deem desirable in obtaining the full benefits of, or in preserving the
Liens of, such security agreements.
(n) Syndication. Take all actions which the Agent may reasonably
-----------
request to assist it in forming a syndicate acceptable to it in accordance
with Section 8.07, including, but not be limited to, (i) making senior
management of the Borrower and representatives of the Borrower and the
Investor Group available to participate in informational meetings with
potential lenders at such times and places as the Agent may reasonably
request and (ii) timely providing the Agent with all information reasonably
deemed necessary by it to successfully complete the syndication, including,
without limitation, a summary of the operating prospects (including
financial projections) of the Borrower and its Subsidiaries.
(o) Additional Loan Parties. Each Loan Party shall cause any newly
-----------------------
organized or acquired Subsidiary of such Loan Party to execute and deliver
to the Agent as promptly as practicable and in any event within 10 days
after the organization or acquisition of such Subsidiary (i) a security
agreement supplement in the form of Exhibit C to the Security Agreement,
(ii) a guaranty supplement in the form of Exhibit A to the Guarantee and
(iii) such other documents, agreements, certificates or instruments as the
Agent may reasonably request, in each case in form and substance reasonably
satisfactory to the Agent, and to take all such other actions that may be
necessary or that the Agent may deem reasonably desirable in order to
perfect and protect any pledge, assignment or security interest granted by
such
66
security agreement (granting a security interest in the receivables,
inventory, deposit accounts, equipment, intellectual property and other
assets of such Subsidiary) of such Subsidiary to the Agent for the benefit
of the Lender Parties or to enable the Agent to exercise and enforce its
rights and remedies thereunder.
SECTION 5.02. Negative Covenants. So long as any Advance shall
------------------
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder:
(a) Liens, Etc. None of the Loan Parties shall at any time create,
----------
incur, assume or suffer to exist, or permit any of its Subsidiaries to
create, incur, assume or suffer to exist, any Lien on or with respect to
any of its properties of any character (including, without limitation,
accounts) whether now owned or hereafter acquired, or sign or file or
suffer to exist, or permit any of its Subsidiaries to sign or file or
suffer to exist, under the Uniform Commercial Code of any jurisdiction, a
financing statement that names the Borrower or any of its Subsidiaries as
debtor, or sign or suffer to exist, or permit any of its Subsidiaries to
sign or suffer to exist, any security agreement authorizing any secured
party thereunder to file such financing statement, or assign, or permit any
of its Subsidiaries to assign, any accounts or other right to receive
income, excluding, however, from the operation of the foregoing
--------- -------
restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens and Permitted Encumbrances;
(iii) solely in the case of the Borrower and its Subsidiaries,
Liens described on Schedule 5.02(a)(iii) hereto;
(iv) solely in the case of the Borrower and its Subsidiaries,
Liens arising in connection with Capitalized Leases permitted under
Section 5.02(b)(iii)(A); provided that no such Lien shall extend to or
--------
cover any Collateral or assets other than the assets subject to such
Capitalized Leases;
(v) solely in the case of the Borrower and its Subsidiaries,
purchase money Liens upon or in real property or equipment acquired or
held by the Borrower or any of its Subsidiaries in the ordinary course
of business to secure the purchase price of such property or equipment
or to secure Debt incurred solely for the purpose of financing the
acquisition of any such property or equipment to be subject to such
Liens, or Liens existing on any such property or equipment at the time
of acquisition (other than any such Liens created in contemplation of
such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for the
same or a lesser amount; provided, however, that no such Lien shall
-------- -------
extend to or cover
67
any property other than the property or equipment being acquired, and
no such extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed
or replaced; and provided further that the aggregate principal amount
-------- -------
of the Debt secured by Liens permitted by this clause (v) shall not
exceed the amount permitted under Section 5.02(b)(iii)(A) at any time
outstanding and that any such Debt shall not otherwise be prohibited
by the terms of the Loan Documents;
(vi) solely in the case of the Borrower and its Subsidiaries, the
filing of financing statements solely as a precautionary measure in
connection with operating leases;
(vii) solely in the case of the Borrower and its Subsidiaries,
Liens not otherwise permitted under this Section 5.02(a) securing Debt
or other liabilities or obligations of the Borrower and its
Subsidiaries in an aggregate principal amount not to exceed $100,000
at any time outstanding; and
(viii) solely in the case of the Borrower and its Subsidiaries,
the replacement, extension or renewal of any Lien permitted by clause
(iii) above upon or in the same property theretofore subject thereto
or the replacement, extension or renewal (without increase in the
amount or change in any direct or contingent obligor) of the Debt
secured thereby.
(b) Debt. None of the Loan Parties shall at any time create, incur,
----
assume or suffer to exist, or permit any of its Subsidiaries to create,
incur, assume or suffer to exist, any Debt other than:
(i) in the case of Universal,
(A) the Junior Notes,
(B) the Stirling Notes,
(C) the redemption obligations set forth in Section
5.02(g)(ii)(B), and
(D) Debt under the Loan Documents.
(ii) in the case of the Borrower,
(A) the Subordinated Notes; and
(B) Debt owed to any Subsidiary of the Borrower; provided,
--------
however, that such obligation (1) is subject to an intercompany
-------
68
subordination agreement in substantially the form of Exhibit H
hereto (an "Intercompany Subordination Agreement") executed by
------------------------------------
the Borrower and each such Subsidiary and (2) is evidenced by a
promissory note in form and substance reasonably satisfactory to
the Agent, which shall be pledged under the terms of the
Collateral Documents to the Agent, on behalf of the Secured
Parties, immediately upon its creation.
(iii) in the case of the Borrower and its Subsidiaries,
(A) Capitalized Leases and Debt secured by Liens permitted
by Section 5.02(a)(v) not to exceed in the aggregate $8,000,000
at any time outstanding and the amortization of which shall not
exceed $1,600,000 in any 12-Fiscal Month period,
(B) Debt under the Loan Documents;
(C) Debt owed to Glenoit Assets Corp. by Xxxxx provided,
--------
however, that any such Debt (1) shall be incurred in the ordinary
-------
course of Xxxxx' business and (2) shall be evidenced by a
promissory note in form and substance reasonably satisfactory to
the Agent, which shall be pledged under the terms of the
Collateral Documents to the Agent, on behalf of the Secured
Parties, immediately upon its creation;
(D) Debt owed to the Borrower by any wholly owned U.S.
Subsidiary; provided, however, that such Debt shall be evidenced
-------- -------
by a promissory note in form and substance reasonably
satisfactory to the Agent, which shall be pledged under the terms
of the Collateral Documents to the Agent, on behalf of the
Secured Parties, immediately upon its creation;
(E) Surviving Debt of the Borrower and its Subsidiaries;
(F) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business; and
(G) other unsecured Debt not otherwise permitted under this
Section 5.02(b) aggregating not more than $1,000,000 at any one
time outstanding;
(c) Lease Obligations. None of the Loan Parties shall at any time
-----------------
create, incur, assume or suffer to exist, or permit any of its Subsidiaries
to create, incur, assume or suffer to exist, any obligations as lessee for
the rental or hire of real or personal property in connection with any sale
and leaseback transaction.
69
(d) Mergers, Etc. None of the Loan Parties shall at any time merge into or
------------
consolidate with any Person or permit any Person to merge into it, or
permit any of its Subsidiaries to do so, except that (i) any Subsidiary of
the Borrower may merge into or consolidate with any other Subsidiary of the
Borrower provided that, in the case of any such merger or consolidation,
the Person formed by such merger or consolidation shall be a wholly owned
U.S. Subsidiary of the Borrower and (ii) any wholly owned U.S. Subsidiary
of the Borrower may merge into or consolidate with the Borrower provided
that, in the case of any such merger or consolidation, the Borrower shall
be the surviving Person.
(e) Sales, Etc. of Assets. None of the Loan Parties shall at any time
---------------------
sell, lease, transfer or otherwise dispose of, or permit any of its
Subsidiaries to sell, lease, transfer or otherwise dispose of, any assets,
or grant any option or other right to purchase, lease or otherwise acquire
any assets, except:
(i) sales of Inventory (including, without limitation, sales of
obsolete or slow-moving Inventory) in the ordinary course of its
business;
(ii) sales of assets for cash and for fair value in an aggregate
amount not to exceed $500,000 in any Fiscal Year;
(iii) dispositions of condemned or damaged property;
(iv) licenses of patents, trademarks, trade names, service marks
and copyrights in the ordinary course of business; and
(v) in a transaction otherwise permitted by Section 5.02(d).
(f) Investments in Other Persons. None of the Loan Parties shall at
----------------------------
any time make or hold, or permit any of its Subsidiaries to make or hold,
any Investment in any Person other than:
(i) loans and advances by the Borrower and its Subsidiaries to
its employees in the ordinary course of business in an aggregate
principal amount not to exceed $1,000,000 at any time outstanding;
(ii) Investments by the Borrower and its Subsidiaries in Cash
Equivalents, provided that, to the extent such Investments in Cash
--------
Equivalents exceed $750,000 in aggregate principal amount at any time
outstanding, the Agent shall have, for the benefit of the Secured
Parties, a valid perfected first priority security interest in such
Cash Equivalents, and the Borrower shall take all such action as the
Agent may deem necessary or desirable to perfect and protect such
security interest;
70
(iii) Investments existing on the Second Restatement Date and
described on Schedule 4.01(ii) hereto;
(iv) refundable advances and deposits required to be made by the
Borrower and its Subsidiaries in connection with Capitalized Leases
permitted by Section 5.02(b)(iii)(A) in an aggregate amount not to
exceed $1,000,000 at any time;
(v) Investments (A) by the Borrower in wholly owned U.S.
Subsidiaries of the Borrower, including intercompany Debt permitted
under Section 5.02(b)(iii)(D), which are or, within ten days after the
date of such Investment, become Loan Parties pursuant to Section
5.01(o); provided, that no Default shall have occurred and be
--------
continuing at the time such Investment is made or would result
therefrom or (B) consisting of other intercompany Debt otherwise
expressly permitted under and in accordance with Sections
5.02(b)(ii)(B) and 5.02(b)(iii)(C);
(vi) in the case of the Borrower or any of its Subsidiaries,
Investments consisting of equity or debt in any obligor of a
receivable owing to the Borrower or any of its Subsidiaries in a
bankruptcy action involving such obligor and which were received by
the Borrower or any of its Subsidiaries in satisfaction of such
obligor's obligations to the Borrower and its Subsidiaries;
(vii) in the case of the Borrower and its wholly owned U.S.
Subsidiaries, Investments constituting Related Textile Investments;
provided that: (A) with respect to any Related Textile Investment
--------
constituting an acquisition of a Related Textile Business (1) such
Related Textile Investment shall be made solely by the Borrower or any
of its direct wholly owned U.S. Subsidiaries; provided that any
Related Textile Business that becomes a Subsidiary of the Borrower
shall be directly wholly owned by the Borrower, (2) the Fixed Charge
Coverage Ratio as of the end of the most recently ended Monthly
Rolling Period, prior to the date of such acquisition, shall not be
less than the ratio set forth below for such Monthly Rolling Period
and the Agent shall have received a certificate of the chief financial
officer of the Borrower certifying such compliance together with a
schedule in form satisfactory to the Agent of the computations used by
the Borrower in determining compliance therewith:
71
Monthly Rolling Period
Ending in the Fiscal Year Fixed Charge Coverage Ratio
------------------------- ---------------------------
Fiscal Year 1997 1.20
Fiscal Year 1998 1.20
Fiscal Year 1999 1.30
Fiscal Year 2000 1.30
Fiscal Year 2001 1.30, and
(3) such Related Textile Business shall have maintained a positive
EBITDA during the most recent period of 12 consecutive months ended
immediately prior to the date of such Investment (such EBITDA may
include pro forma adjustments if accompanied by an audit or a review
report or similar report by a nationally recognized accounting firm
acceptable to the Agent) and (4) no Default shall have occurred and be
continuing at the time such Investment is made or would result
therefrom;
(B) the aggregate purchase price or cost, as the case may be,
with respect to any Related Textile Investment (including the amount
of any indebtedness refinanced or assumed and all fees and expenses
related thereto, in each case, if any) shall not exceed, for any
single transaction or a series of related transactions, $15,000,000,
unless such Related Textile Investment shall have been approved in
writing by the Required Lenders; and
(C) with respect to Related Textile Investments during any
Restricted Capex Period, the aggregate amount of Related Textile
Investments during such period shall not exceed an amount equal to
$3,000,000, provided, that for any Restricted Capex Period which
--------
begins after January 1, 2001, the aggregate amount of Related Textile
Investments during such Restricted Capex Period shall be reduced to an
amount equal to the product of (x) $3,000,000, multiplied by (y) a
quotient equal to the number of days from the first day of such
Restricted Capex Period until the Termination Date divided by 360; and
(viii) Investments not otherwise permitted under this Section
5.02(f) in an aggregate amount not to exceed $250,000 at any time.
(g) Dividends, Etc. None of the Loan Parties shall at any time
--------------
declare or pay any dividends, purchase, redeem, retire, defease or
otherwise acquire for value any of its capital stock or any warrants,
rights or options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such or issue or sell any
capital stock or any warrants, rights or options to acquire such capital
stock, or permit any of its Subsidiaries to do any of the foregoing or
permit any of its Subsidiaries to purchase, redeem, retire, defease or
otherwise acquire for value any capital stock of the Borrower or any
72
warrants, rights or options to acquire such capital stock or to issue or
sell any capital stock or any warrants, rights or options to acquire such
capital stock, except that:
(i) any Subsidiary of the Borrower may declare and pay cash
dividends to the Borrower or any of its U.S. wholly owned
Subsidiaries;
(ii) (A) the Borrower may declare and pay cash dividends, in a
maximum aggregate amount not to exceed $1,600,000, to Universal for
the sole purpose of enabling Universal to (1) pay amounts outstanding
in respect of principal under the Deferred Redemption Price Note in an
aggregate amount not to exceed $1,400,000 and (2) purchase 3,651.15
shares of its common stock held by Stirling, and
(B) with the proceeds of the dividends referred to in
clause (A)(2) above, Universal may redeem 3,651.15 shares of its
common stock held by Stirling for an aggregate purchase price not
to exceed $200,000,
provided, however, that, no Default shall have occurred and be
-------- -------
continuing at the time such cash dividends are paid or would result
therefrom.
(iii) in any month in which the semiannual interest obligations
of Universal under the Split-Pay Note become due and payable, the
Borrower may declare and pay cash dividends to Universal for the sole
purpose of enabling Universal to pay its interest obligations under
the Split-Pay Note which become due and payable in such month;
provided, however, that (A) Universal shall not have the right to pay
-------- -------
such interest in-kind (including, without limitation, in the form of
additional notes) or otherwise defer the payment of such interest in
cash; (B) the aggregate amount of such cash dividends paid in any six-
month period by the Borrower to Universal for such purposes shall not
exceed $300,000 and (C) no Default shall have occurred and be
continuing at the time such cash dividends are paid or would result
therefrom;
(iv) the Borrower may declare and pay cash dividends to
Universal for the sole purpose of enabling Universal (A) to pay taxes,
(B) to pay expenses incurred in the ordinary course of business in an
aggregate amount not to exceed $150,000 in any Fiscal Year and (C) to
satisfy Universal's obligations under the Management Stock Option Plan
Agreement to purchase, and Universal may purchase or redeem, shares of
its stock held by any of its employees upon the death or termination
of such employee in exchange for cash and other consideration in an
aggregate amount not to exceed $300,000; provided, however, that in
-------- -------
the case of clause (C) no Default shall have
73
occurred and be continuing at the time such cash dividends are paid or
would result therefrom;
(v) Universal may issue shares of, or options to purchase, its
capital stock to members of its senior management pursuant to the
terms of the Management Stock Option Plan Agreement; provided,
--------
however, that the number of shares of capital stock of Universal which
-------
may be issued in connection with the Management Stock Option Plan
Agreement shall not exceed 5% of the total number of shares of capital
stock of Universal issued and outstanding at any time on a fully
diluted basis.
(vi) Universal may issue or sell capital stock to any Person for
not less than fair market value, provided that Universal may issue or
--------
sell capital stock (A) to any of its senior management for less than
fair market value pursuant to clause (v) above and (B) pursuant to
options granted to Soannes pursuant to the Redemption Agreement to
purchase up to 3651.15 shares of Class A Common Stock of Universal,
and provided further that the Net Cash Proceeds of all such issuances
-------- -------
or sales (other than such Net Cash Proceeds received pursuant to
clause (v) above) is contributed by Universal to the Borrower and the
Borrower applies such Net Cash Proceeds to the prepayments of Advances
pursuant to Section 2.06(b)(i);
(vii) Universal may issue stock for all or a portion of the
consideration paid in connection with the acquisition of a Related
Textile Business in accordance with Section 5.02(f)(vii) to the seller
or sellers of such Business; and
(viii) Universal may declare and make stock dividends payable in
shares of its common stock.
(h) Change in Nature of Business. None of the Loan Parties shall at
----------------------------
any time engage, or permit any of its Subsidiaries to engage, in any
business other than the manufacturing of home textiles and specialty
textiles and other activities incidental thereto, including, without
limitation, the ownership of properties incidental to such businesses.
(i) Charter Amendments. None of the Loan Parties shall at any time
------------------
amend, or permit any of its Subsidiaries to amend, its certificate of
incorporation or bylaws.
(j) Accounting Changes. None of the Loan Parties shall at any time
------------------
make or permit, or permit any of its Subsidiaries to make or permit, any
change in (i) accounting policies or reporting practices, except as
required by generally accepted accounting principles or (ii) Fiscal Year.
74
(k) Prepayments, Etc., of Debt. None of the Loan Parties shall at any
--------------------------
time (i) prepay, redeem, purchase, defease or otherwise satisfy prior to
the scheduled maturity thereof in any manner, or make any payment in
violation of any subordination terms of, any Debt, other than (x) the
prepayment of the Advances in accordance with the terms of this Agreement,
(y) regularly scheduled or required repayments or redemptions of Surviving
Debt of the Borrower and its Subsidiaries (other than the Subordinated
Notes) and (z) the prepayment of Debt under the Accounts Receivable
Management Agreement, or (ii) amend, modify or change in any manner any
term or condition of any Surviving Debt, or permit any of its Subsidiaries
to do any of the foregoing other than to prepay any Debt payable to the
Borrower.
(l) Amendment, Etc., of Related Documents. None of the Loan Parties
-------------------------------------
shall at any time cancel or terminate any Related Document or consent to or
accept any cancellation or termination thereof, amend, modify or change in
any manner any term or condition of any Related Document or give any
consent, waiver or approval thereunder, waive any default under or any
breach of any term or condition of any Related Document, agree in any
manner to any other amendment, modification or change of any term or
condition of any Related Document or take any other action in connection
with any Related Document that would impair the value of the interest or
rights of such Loan Party thereunder or that would impair the rights or
interests of the Agent or any Lender Party, or permit any of its
Subsidiaries to do any of the foregoing.
(m) Negative Pledge. None of the Loan Parties shall at any time enter
---------------
into or suffer to exist, or permit any of its Subsidiaries to enter into or
suffer to exist, any agreement prohibiting or conditioning the creation or
assumption of any Lien upon any of its property or assets other than (i) in
favor of the Secured Parties, (ii) in connection with any Debt secured by
Capitalized Leases and purchase money Liens, in each case, to the extent
permitted under Section 5.02(b)(iii)(A) only with respect to the specific
assets referred to in such Section 5.02(b)(iii)(A) and (iii) in connection
with the Subordinated Notes.
(n) Partnerships. None of the Loan Parties shall at any time become a
------------
general partner in any general or limited partnership or joint venture, or
permit any of its Subsidiaries to do so.
(o) Other Transactions. None of the Loan Parties shall at any time
------------------
engage, or permit any of its Subsidiaries to engage, in any transaction
involving commodity options or futures contracts or any similar speculative
transactions (including, without limitation, take-or-pay contracts).
75
SECTION 5.03. Reporting Requirements. So long as any Advance shall
----------------------
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Loan Parties will furnish to the Lender
Parties:
(a) Default Notice. As soon as possible and in any event within two
--------------
days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of the chief financial officer
of the Borrower setting forth details of such Default and the action that
such Borrower has taken and proposes to take with respect thereto.
(b) Monthly Financials. As soon as available and in any event no
------------------
later than 30 days after the end of each Fiscal Month thereafter, a
Consolidated and consolidating balance sheet of each Loan Party and its
Subsidiaries as of the end of such Fiscal Month and Consolidated and
consolidating statements of income and cash flows of such Loan Party and
its Subsidiaries for the period commencing at the end of the previous
Fiscal Month and ending with the end of such Fiscal Month and Consolidated
and consolidating statements of income and cash flows of such Loan Party
and its Subsidiaries for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal Month, setting forth in
each case in comparative form the corresponding figures for the
corresponding Fiscal Month of the preceding Fiscal Year, all in reasonable
detail and duly certified (subject to year end audited adjustments) by the
chief financial officer of such Loan Party as having been prepared in
accordance with generally accepted accounting principles consistent with
those applied in the most recent annual audit, together with (i) a
certificate of said officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that such Loan Party has taken and
proposes to take with respect thereto, (ii) a schedule in form satisfactory
to the Agent of the computations used by such Loan Party in determining
compliance with the covenants contained in Section 5.04 and, during a
Restricted Capex Period, Section 5.02(f)(vii)(C), (iii) in the event of any
change from GAAP in the generally accepted accounting principles used in
the preparation of such financial statements, a statement of reconciliation
conforming such financial statements to GAAP and (iv) copies of any
management discussions distributed to any member of the Investor Group
other than Xxxxxx X'Xxxxxx.
(c) Quarterly Financials. As soon as available and in any event
--------------------
within 45 days after the end of each of the first three Fiscal Quarters of
each Fiscal Year, Consolidated and consolidating balance sheets of each
Loan Party and its Subsidiaries as of the end of such Fiscal Quarter and
Consolidated and consolidating statements of income and cash flows of such
Loan Party and its Subsidiaries for the period commencing at the end of the
previous Fiscal Quarter and ending with the end of such
76
Fiscal Quarter and Consolidated and consolidating statements of income and
cash flows of such Loan Party and its Subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the end
of such Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding Fiscal
Year, all in reasonable detail and duly certified (subject to year-end
audit adjustments) by the chief financial officer of such Loan Party as
having been prepared in accordance with generally accepted accounting
principles consistent with those applied in the most recent annual audit,
together with (i) a certificate of said officer stating that no Default has
occurred and is continuing or, if a Default has occurred and is continuing,
a statement as to the nature thereof and the action that such Loan Party
has taken and proposes to take with respect thereto, (ii) a schedule in
form satisfactory to the Agent of the computations used by such Loan Party
in determining compliance with the covenants contained in Section 5.04, the
Fixed Charge Coverage Ratio contained in Section 5.02(f)(vii)(A) and,
during a Restricted Capex Period, Section 5.02(f)(vii)(C), (iii) in the
event of any change from GAAP in the generally accepted accounting
principles used in the preparation of such financial statements, a
statement of reconciliation conforming such financial statements to GAAP
and (iv) copies of any management discussions distributed to any member of
the Investor Group other than Xxxxxx X'Xxxxxx.
(d) Annual Financials. As soon as available and in any event no later
-----------------
than 90 days after the end of each Fiscal Year, a copy of the annual audit
report for such year for such Loan Party and its Subsidiaries, including
therein Consolidated and consolidating balance sheets of such Loan Party
and its Subsidiaries as of the end of such Fiscal Year and Consolidated and
consolidating statements of income and cash flows of such Loan Party and
its Subsidiaries for such Fiscal Year, in each case accompanied by an
opinion acceptable to the Required Lenders of Coopers & Xxxxxxx LLP or
other independent public accountants of recognized standing acceptable to
the Required Lenders, together with (i) a certificate of such accounting
firm to the Lender Parties stating that in the course of the regular audit
of the business of such Loan Party and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing, a statement as
to the nature thereof, (ii) a schedule in form satisfactory to the Agent of
the computations used by such accountants in determining, as of the end of
such Fiscal Year, compliance with the covenants contained in Section 5.04,
the Fixed Charge Coverage Ratio contained in Section 5.02(f)(vii)(A) and,
during a Restricted Capex Period, Section 5.02(f)(vii)(C), (iii) a
certificate of the chief financial officer of such Loan Party stating that
no Default has occurred and is continuing or, if a Default has occurred and
is continuing, a statement as to the nature thereof and the action that
such Loan Party has taken and proposes to take with respect thereto, (iv)
in the event
77
of any change from GAAP in the generally accepted accounting principles
used in the preparation of such financial statements, a statement of
reconciliation conforming such financial statements to GAAP and (v) copies
of management discussions distributed to any member of the Investor Group
other than Xxxxxx X'Xxxxxx.
(e) Annual Forecasts. As soon as available and in any event no later
----------------
than 15 days before the end of each Fiscal Year, forecasts prepared by
management of such Loan Party, in form satisfactory to the Agent, of
balance sheets, income statements and cash flow statements on a monthly
basis for the Fiscal Year following such Fiscal Year then ended and on an
annual basis for each Fiscal Year thereafter until the Termination Date.
(f) ERISA Events and ERISA Reports. Promptly and in any event within
------------------------------
15 days after any Loan Party or any ERISA Affiliate knows or has reason to
know that any ERISA Event has occurred, a statement of the chief financial
officer of the Borrower describing such ERISA Event and the action, if any,
that such Loan Party or such ERISA Affiliate has taken and proposes to take
with respect thereto.
(g) Plan Terminations. Promptly and in any event within three
-----------------
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any Plan.
(h) Plan Annual Reports. Promptly and in any event within 30 days
-------------------
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
with respect to each Plan (as defined in Section 3.02(d)(8) of ERISA).
(i) Multiemployer Plan Notices. Promptly and in any event within five
--------------------------
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning (i) the imposition of Withdrawal Liability by any such
Multiemployer Plan, (ii) the reorganization or termination, within the
meaning of Title IV of ERISA, of any such Multiemployer Plan or (iii) the
amount of liability incurred, or that may be incurred, by such Loan Party
or any ERISA Affiliate in connection with any event described in clause (i)
or (ii).
(j) Litigation. Promptly after the commencement thereof, notice of
----------
all actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 4.01(j).
78
(k) Securities Reports. Promptly after the sending or filing thereof,
------------------
copies of all proxy statements, financial statements and reports that any
Loan Party or any of its Subsidiaries sends to its stockholders, and copies
of all regular, periodic and special reports, and all registration
statements, that any Loan Party or any of its Subsidiaries files with the
Securities and Exchange Commission or any governmental authority that may
be substituted therefor, or with any national securities exchange.
(l) Creditor Reports. Promptly after the furnishing thereof, copies
----------------
of any statement or report furnished to any other holder of the securities
of any Loan Party or of any of its Subsidiaries pursuant to the terms of
any indenture, loan or credit or similar agreement and not otherwise
required to be furnished to the Lender Parties pursuant to any other clause
of this Section 5.03.
(m) Agreement Notices. Promptly upon receipt thereof, copies of all
-----------------
notices, requests and other documents received by any Loan Party or any of
its Subsidiaries under or pursuant to any Related Document or indenture,
loan or credit or similar agreement regarding or related to any breach or
default by any party thereto or any other event that could materially
impair the value of the interests or the rights of any Loan Party or any of
its Subsidiaries or otherwise have a Material Adverse Effect and copies of
any amendment, modification or waiver of any provision of any Related
Agreement or indenture, loan or credit or similar agreement and, from time
to time upon request by the Agent, such information and reports regarding
the Related Documents as the Agent may reasonably request.
(n) Revenue Agent Reports. Within 10 days after receipt, copies of
---------------------
all Revenue Agent Reports (Internal Revenue Service Form 886), or other
written statements of the Internal Revenue Service, that propose, determine
or otherwise set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the meaning of Section 1504(a)(1)
of the Internal Revenue Code) of which a Loan Party is a member aggregating
$250,000 or more.
(o) Environmental Conditions. Promptly after the assertion or
------------------------
occurrence thereof, notice of any Environmental Action against or of any
condition or occurrence on any property of any Loan Party or any of its
Subsidiaries that results in a material noncompliance by any Loan Party or
any of its Subsidiaries with any Environmental Law or Environmental Permit
that could be reasonably expected to have a Material Adverse Effect.
(p) Real Property. As soon as available and in any event within 30
-------------
days after the end of each Fiscal Year, a report supplementing Schedules
4.01(gg) and 4.01(hh) hereto, including an identification of all real and
leased property disposed of by the Borrower or any of its Subsidiaries
during such Fiscal Year, a list and
79
description (including the street address, county or other relevant
jurisdiction, state, record owner, book value thereof, and in the case of
leases of property, lessor, lessee, expiration date and annual rental cost
thereof) of all real property acquired or leased during such Fiscal Year
and a description of such other changes in the information included in such
Schedules as may be necessary for such Schedules to be accurate and
complete.
(q) Borrowing Base Certificate. As soon as available and in any event
--------------------------
within 15 Business Days after the end of each Fiscal Month, a Borrowing
Base Certificate of the Borrower and its Subsidiaries, taken as a whole, as
at the end of such Fiscal Month, certified by the chief financial officer
of the Borrower.
(r) Other Information. Such other information respecting the
-----------------
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as any
Lender Party (through the Agent) may from time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance shall
-------------------
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower and its Subsidiaries will:
(a) Leverage Ratio. Maintain a Leverage Ratio as of the end of each
--------------
Monthly Rolling Period ended during each Fiscal Year set forth below of not
more than the amount set forth below during each such Fiscal Year:
=========================
Fiscal Year Ratio
-------------------------
Fiscal Year 1997 5.00
-------------------------
Fiscal Year 1998 4.75
-------------------------
Fiscal Year 1999 4.50
-------------------------
Fiscal Year 2000 4.25
-------------------------
Fiscal Year 2001 4.00
=========================
(b) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage
---------------------------
Ratio of not less than 1.10:1 as of the end of each Monthly Rolling Period.
80
(c) Interest Coverage Ratio. Maintain an Interest Coverage Ratio as
-----------------------
of the end of each Monthly Rolling Period ended during each Fiscal Year set
forth below of not less than the amount set forth below during each such
Fiscal Year:
=========================
Fiscal Year Ratio
-------------------------
Fiscal Year 1997 1.75
-------------------------
Fiscal Year 1998 1.75
-------------------------
Fiscal Year 1999 2.00
-------------------------
Fiscal Year 2000 2.00
-------------------------
Fiscal Year 2001 2.25
=========================
(d) Minimum Net Worth. Maintain a minimum Net Worth at all times of
-----------------
not less than the amount set forth below during each Fiscal Year set forth
below:
===============================
US Dollar
Fiscal Year Amount
-------------------------------
Fiscal Year 1997 $20,000,000
-------------------------------
Fiscal Year 1998 $21,000,000
-------------------------------
Fiscal Year 1999 $24,000,000
-------------------------------
Fiscal Year 2000 $28,000,000
-------------------------------
Fiscal Year 2001 $33,000,000
===============================
81
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events
----------------- ------
of Default") shall occur and be continuing:
----------
(a) the Borrower shall fail to pay any principal of, or interest on,
any Advance, or any Loan Party shall fail to make any other payment under
any Loan Document, in each case when the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) any Loan Party or, if applicable, any of its Subsidiaries shall
fail to perform or observe any term, covenant or agreement contained in
Xxxxxxx 0.00, 0.00(x), (x), (x), (x), (x) or (o), 5.02, 5.03 or 5.04; or
(d) any Loan Party or, if applicable, any of its Subsidiaries shall
fail to perform any other term, covenant or agreement contained in any Loan
Document on its part to be performed or observed if such failure shall
remain unremedied for 10 Business Days after the earlier of the date on
which (A) a Responsible Officer of any Loan Party becomes aware of such
failure or (B) written notice thereof shall have been given to any Loan
Party by the Agent or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect
of any Debt that is outstanding in a principal or notional amount of at
least $250,000 either individually or in the aggregate (but excluding Debt
outstanding hereunder) of such Loan Party or such Subsidiary (as the case
may be), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt; or any other event
shall occur or condition shall exist under any agreement or instrument
relating to any such Debt and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of
such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt or otherwise to cause, or to permit the holder
thereof to cause, such Debt to mature; or any such Debt shall be declared
to be due and payable or required to be prepaid or redeemed (other than by
a regularly scheduled required prepayment or redemption), purchased or
defeased, or an
82
offer to prepay, redeem, purchase or defease such Debt shall be required to
be made, in each case prior to the stated maturity thereof;
(f) there shall occur any Material Adverse Change; or
(g) any Loan Party or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
any Loan Party or any of its Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for
any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is being
diligently contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of 30 days or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Loan Party or any of its Subsidiaries shall
take any corporate action to authorize any of the actions set forth above
in this subsection (g); or
(h) any judgment or order for the payment of money in excess of
$250,000 (to the extent not fully paid or discharged) shall be rendered
against any Loan Party or any of its Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(i) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that could have a Material Adverse
Effect, and there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(j) any provision of any Loan Document after delivery thereof pursuant
to Sections 3.01, 5.01(m) or 5.01(o) shall for any reason cease to be valid
and binding on or enforceable against any Loan Party to it, or any such
Loan Party shall so state in writing; or
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(k) any Collateral Document after delivery thereof pursuant to
Sections 3.01, 5.01(m) or 5.01(o) shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first priority
lien on and security interest in a material portion of Collateral purported
to be covered thereby; or
(l) (i) the Investor Group or any member thereof shall sell or
otherwise transfer 10% or more of its shares of capital stock of Universal
(other than, solely in the case of CVC, any sale or transfer to 399 Venture
Partners, Inc., Court Square Capital, Ltd., or Citicorp Capital Investors,
Ltd., each of which is a Delaware corporation and a wholly owned Subsidiary
of Citibank, N.A.), (ii) at any time prior to an initial public offering of
Universal, the Investor Group shall cease to be the record and beneficial
owner of at least 57% of the fully diluted Voting Stock of Universal, (iii)
at any time from and after an initial public offering of Universal, the
Investor Group shall cease to be the record and beneficial owner of at
least 40% of the fully diluted Voting Stock of Universal, (iv) any Person
or "group" (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended) (other than the Investor Group) shall own
or control more than 30% of the fully diluted Voting Stock of Universal, or
(v) any Person or two or more Persons acting in concert (other than the
Investor Group) shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will result
in its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or policies of
Universal; or
(m) (i) Universal shall cease to own 100% of the capital stock of the
Borrower, (ii) any Person other than the Borrower shall own any of the
capital stock of Xxxxx or (iii) any Person other than the Borrower or Xxxxx
shall own any of the capital stock of Glenoit Assets Corp.; or
(n) Any Loan Party or any ERISA Affiliate shall incur or could be
reasonably expected to incur liability in excess of $500,000 in the
aggregate as a result of one or more of the following and any Loan Party
could be reasonably expected to be required to make a payment in respect of
such amount: (i) the occurrence of any ERISA Event; (ii) the partial or
complete withdrawal of any Loan Party or any of its ERISA Affiliates from a
Multiemployer Plan; or (iii) the reorganization or termination of a
Multiemployer Plan;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Appropriate Lender to make Advances (other than Letter of
Credit Advances by the Issuing Bank or a Working Capital Lender pursuant to
Section 2.03(c)) and of the Issuing Bank to issue Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower,
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declare the Notes, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that in the event of an actual or deemed entry of an order
-------- -------
for relief with respect to any Loan Party or any of its Subsidiaries under the
Federal Bankruptcy Code, (x) the obligation of each Lender to make Advances
(other than Letter of Credit Advances by the Issuing Bank or a Working Capital
Lender pursuant to Section 2.03(c)) and of the Issuing Bank to issue Letters of
Credit shall automatically be terminated and (y) the Notes, all such interest
and all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default.
--------------------------------------------------------
If any Event of Default shall have occurred and be continuing, the Agent may,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Agent on behalf of the Lender Parties in
same day funds at the Agent's office designated in such demand, for deposit in
the L/C Cash Collateral Account, an amount equal to the aggregate Available
Amount of all Letters of Credit then outstanding. If at any time the Agent
determines that any funds held in the L/C Cash Collateral Account are subject to
any right or claim of any Person other than the Agent and the Lender Parties or
that the total amount of such funds is less than the aggregate Available Amount
of all Letters of Credit, the Borrower will, forthwith upon demand by the Agent,
pay to the Agent, as additional funds to be deposited and held in the L/C Cash
Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Agent determines to be free and clear of
any such right and claim.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender Party (in its
------------------------
capacities as a Lender, the Issuing Bank (if applicable)) hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to the Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any matters
not expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
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refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that the Agent shall not be required to take any action that
-------- -------
exposes the Agent to personal liability or that is contrary to this Agreement or
applicable law. The Agent agrees to give to each Lender Party prompt notice of
each notice given to it by the Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of its
---------------------
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (a) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07; (b) may consult with legal counsel (including counsel for any Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender Party and shall not be
responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in, or in connection with, the
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. BNP and Affiliates. With respect to its Commitments, the
------------------
Advances made by it and the Notes issued to it, BNP shall have the same rights
and powers under the Loan Documents as any other Lender Party and may exercise
the same as though it were not the Agent; and the term "Lender Party" or "Lender
Parties" shall, unless otherwise expressly indicated, include BNP in its
individual capacity. BNP and its affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any Loan
Party, any of its Subsidiaries and any Person who may do business with or own
securities of any Loan Party or any such Subsidiary, all as if BNP were not the
Agent and without any duty to account therefor to the Lender Parties.
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SECTION 7.04. Lender Party Credit Decision. Each Lender Party
----------------------------
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender Party and, based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender Party 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
Agreement.
SECTION 7.05. Indemnification. (a) Each Lender Party severally agrees to
---------------
indemnify the Agent (to the extent not promptly reimbursed by the Borrower) from
and against such Lender Party's ratable share (determined as provided below) of
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including without limitation reasonable fees and expense of counsel)
that may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by the Agent under the Loan Document (collectively, the "Indemnified Costs");
-----------------
provided, however, that no Lender Party shall be liable for any portion of such
-------- -------
Indemnified Costs resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender Party agrees to
reimburse the Agent promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 8.04, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower. For purposes of this
Section 7.05, the Lender Parties' respective ratable shares of any amount shall
be determined, at any time, according to the sum of (a) the aggregate principal
amount of the Advances outstanding at such time and owing to the respective
Lender Parties, (b) their respective Pro Rata Shares of the aggregate Available
Amount of all Letters of Credit outstanding at such time, (c) the aggregate
unused portions of their respective Acquisition Commitments at such time and (d)
their respective Unused Working Capital Commitments at such time. In the case
of any investigation, litigation or proceeding giving rise to any Indemnified
Costs, this Section 7.05 applies whether any such investigation, litigation, or
proceeding is brought by the Agent, any Lender, any other Lender Party or a
third party. The failure of any Lender Party to reimburse the Agent promptly
upon demand for its ratable share of any amount required to be paid by the
Lender Party to the Agent as provided herein shall not relieve any other Lender
Party of its obligation hereunder to reimburse the Agent for its ratable share
of such amount, but no Lender Party shall be responsible for the failure of any
other Lender Party to reimburse the Agent for such other Lender Party's ratable
share of such amount. Without prejudice to the survival of any other agreement
of any Lender Party hereunder, the agreement and obligations of each Lender
Party contained in this Section 7.05(a) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
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(b) Each Lender Party severally agrees to indemnify the Issuing Bank (to the
extent not promptly reimbursed by the Borrower) from and against such Lender
Party's ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Issuing Bank in any way relating to or
arising out of the Loan Documents or any action taken or omitted by the Issuing
Bank under the Loan Documents; provided, however, that no Lender Party shall be
-------- -------
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Issuing Bank's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender Party agrees to reimburse the Issuing
Bank promptly upon demand for its ratable share of any costs and expenses
(including, without limitation, fees and expenses of counsel) payable by the
Borrower under Section 8.04, to the extent that the Issuing Bank is not promptly
reimbursed for such costs and expenses by the Borrower. For purposes of this
Section 7.05(b), the Lender Parties' respective ratable shares of any amount
shall be determined, at any time, according to the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and owing to the
respective Lender Parties, (b) their respective Pro Rata Shares of the aggregate
Available Amount of all Letters of Credit outstanding at such time, (c) their
respective unused portions of their Acquisition Commitments at such time plus
----
(d) their respective Unused Working Capital Commitments at such time. The
failure of any Lender Party to reimburse the Issuing Bank promptly upon demand
for its ratable share of any amount required to be paid by the Lender Parties to
the Issuing Bank as provided herein shall not relieve any other Lender Party of
its obligation hereunder to reimburse the Issuing Bank for its ratable share of
such amount, but no Lender Party shall be responsible for the failure of any
other Lender Party to reimburse the Issuing Bank for such other Lender Party's
ratable share of such amount. Without prejudice to the survival of any other
agreement of any Lender Party hereunder, the agreement and obligations of each
Lender Party contained in this Section 7.05(b) shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under the
other Loan Documents.
SECTION 7.06. Successor Agents. The Agent may resign at any time by
----------------
giving written notice thereof to the Lender Parties and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint a successor Agent provided that, so long as the consent of the Borrower
--------
is not unreasonably withheld, the Borrower shall have the right to consent to
any such successor Agent (other than a successor Agent that is a Lender at such
time with a commitment of at least $5,000,000 and a combined capital and surplus
of at least $500,000,000). If no successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lender Parties, appoint a
88
successor Agent provided that, so long as the consent of the Borrower is not
--------
unreasonably withheld, the Borrower shall have the right to consent to any such
successor Agent (other than a successor Agent that is a Lender at such time with
a commitment of at least $5,000,000 and a combined capital and surplus of at
least $500,000,000). Upon the acceptance of any appointment as Agent hereunder
by a successor Agent and upon the execution and filing or recording of such
financing statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Agent shall succeed to
and become vested with all the rights, powers, discretion, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under the Loan Documents. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement or the Notes or any other Loan Document, nor consent to any
departure by the Loan Parties therefrom, shall in any event be effective unless
the same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (a) no amendment, waiver or
-------- -------
consent shall, unless in writing and signed by all of the Lenders, do any of the
following at any time: (i) waive any of the conditions specified in Section
3.01, (ii) change the number of Lenders or the percentage of (x) the
Commitments, (y) the aggregate unpaid principal amount of the Advances or (z)
the aggregate Available Amount of outstanding Letters of Credit that, in each
case, shall be required for the Lenders or any of them to take any action
hereunder, (iii) release all or substantially all of the Collateral in any
transaction or series of related transactions or permit the creation,
incurrence, assumption or existence of any Lien on all or substantially all of
the Collateral in any transaction or series of related transactions to secure
any Obligations other than Obligations owing to the Secured Parties under the
Loan Documents or (iv) amend this Section 8.01 and (b) no amendment, waiver or
consent shall, unless in writing and signed by the Required Lenders and each
Lender that has a Commitment under the Acquisition Facility or Working Capital
Facility if affected by such amendment, waiver or consent, (i) increase the
Commitments of such Lender or subject such Lender to any additional obligations,
(ii) reduce the principal of, or interest on, the Notes held by such Lender or
any fees or other amounts payable hereunder to such Lender, (iii) postpone any
date fixed for any payment of principal of, or interest on, the
89
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender or (iv) change the order of application of any prepayment set forth in
Section 2.06 in any manner that materially affects such Lender; provided further
-------- -------
that no amendment, waiver or consent shall, unless in writing and signed by the
Issuing Bank, as the case may be, in addition to the Lenders required above to
take such action, affect the rights or obligations of the Issuing Bank, as the
case may be, under this Agreement; and provided further that no amendment,
-------- -------
waiver or consent shall, unless in writing and signed by the Agent in addition
to the Lenders required above to take such action, affect the rights or duties
of the Agent under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other communications provided
------------
for hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered to the
Borrower, at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Chief
Executive Officer, telecopier no. (000) 000-0000; if to any Restatement Lender
or the Issuing Bank, at its Domestic Lending Office specified opposite its name
on Schedule I hereto; if to any other Lender Party, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it became a
Lender Party; and if to the Agent, at its address at 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Structured Finance Group, telecopier number (212)
418-8269; or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and
communications shall, when mailed, telegraphed, telecopied or telexed, be
effective when deposited in the mails, delivered to the telegraph company,
transmitted by telecopier or confirmed by telex answerback, respectively, except
that notices and communications to the Agent pursuant to Article II, III or VII
shall not be effective until received by the Agent. Delivery by telecopier of
an executed counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender
-------------------
Party or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
------------------
demand (i) all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of outside counsel for the
Agent with respect thereto, with respect to advising the Agent as to its rights
and
90
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Agent and the Lender Parties in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Agent and each Lender Party with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the Agent, each
Lender Party and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
-----------------
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) the Facilities, the actual
or proposed use of the proceeds of the Advances or the Letters of Credit, the
Loan Documents or any of the transactions contemplated thereby, including,
without limitation, any acquisition or proposed acquisition (including, without
limitation and any of the transactions contemplated hereby) by the Borrower or
any of its Subsidiaries or Affiliates or (ii) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its Subsidiaries
or any Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, in each case whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated,
except to the extent such claim, damage, loss, liability or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
The Borrower also agrees not to assert any claim against the Agent, any Lender
Party or any of their Affiliates, or any of their respective officers,
directors, employees, attorneys and agents, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or otherwise
relating to the Facilities, the actual or proposed use of the proceeds of the
Advances or the Letters of Credit, the Loan Documents or any of the transactions
contemplated thereby.
(c) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender Party other
than on the last day of the Interest Period for such Advance, as a result of a
payment or Conversion
91
pursuant to Section 2.09(b)(i) or 2.10(d), acceleration of the maturity of the
Notes pursuant to Section 6.01 or for any other reason or by an Eligible
Assignee to a Lender Party, the Borrower shall, upon demand by such Lender Party
(with a copy of such demand to the Agent), pay to the Agent for the account of
such Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender Party to fund or
maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of such Loan Party by the Agent or any Lender Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of any Loan
Party hereunder or under any other Loan Document, the agreements and obligations
of the Borrower contained in Sections 2.10 and 2.12 and this Section 8.04 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during the
----------------
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender Party and each of its respective Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and otherwise apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender Party or such Affiliate to or for the credit or the
account of the Borrower against any and all of the Obligations of the Borrower
now or hereafter existing under this Agreement and the Note or Notes (if any)
held by such Lender Party, irrespective of whether such Lender Party shall have
made any demand under this Agreement or such Note or Notes and although such
obligations may be unmatured. Each Lender Party agrees promptly to notify the
Borrower after any such set-off and application; provided, however, that the
-------- -------
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender Party and its respective Affiliates
under this Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender Party and its
respective Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective when
--------------
it shall have been executed by the Borrower and the Agent and when the Agent
shall have been notified by each Restatement Lender and the Issuing Bank that
such Restatement
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Lender and the Issuing Bank has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, the Agent and each Lender Party and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender Parties.
SECTION 8.07. Assignments and Participations. (a) Each Lender may, upon
------------------------------
at least five Business Days' notice to the Agent, assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) each such assignment shall be of a uniform, and not
-------- -------
a varying, percentage of all rights and obligations under and in respect of one
or more Facilities, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 and shall
be in an integral multiple of $500,000, (iii) each such assignment shall be to
an Eligible Assignee, (iv) no such assignments shall be permitted without the
consent of the Agent until the Agent shall have notified the Lender Parties that
syndication of the Commitments hereunder has been completed, and (v) the parties
to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $2,000.
(b) The Issuing Bank may assign to an Eligible Assignee all of its rights
and obligations under the undrawn portion of its Letter of Credit Commitment at
any time; provided, however, that (i) each such assignment shall be to an
-------- -------
Eligible Assignee and (ii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with a processing and recordation fee of
$2,000.
(c) Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in such Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the
case may be, hereunder and (y) the Lender or Issuing Bank assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's or Issuing Bank's rights and obligations under this Agreement, such
Lender or Issuing Bank shall cease to be a party hereto).
93
(d) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender Party or any other Lender
Party 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 Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Loan Documents as are delegated to the Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender or Issuing Bank, as the case may be.
(e) The Agent shall maintain at its address referred to in Section 8.02 a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lender Parties
and the Commitment under each Facility of, and principal amount of the Advances
owing under each Facility to, each Lender Party from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for
--------
all purposes, absent manifest error, and the Borrower, the Agent and the Lender
Parties may treat each Person whose name is recorded in the Register as a Lender
Party hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender Party at any reasonable
time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is
94
in substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. In the case of any assignment
by a Lender, within five Business Days after its receipt of such notice, the
Borrower shall, at its own expense, execute and deliver to the Agent in exchange
for the surrendered Note or Notes a new Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it under a Facility
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder under such Facility, a new Note to the order of
the assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance, and shall
otherwise be in substantially the form of Exhibit A-1 or A-2 hereto, as the case
may be.
(g) Each Lender Party may sell participations in or to all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitments, the Advances owing to it and the Note or
Notes (if any) held by it) to any Person other than any Loan Party or any of its
Subsidiaries or Affiliates; provided, however, that (i) such Lender Party's
-------- -------
obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agent and the other Lender
Parties shall continue to deal solely and directly with such Lender Party in
connection with such Lender Party's rights and obligations under this Agreement
and (v) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, or release
all or substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
-------- -------
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
95
(i) Notwithstanding any other provision set forth in this Agreement, any
Lender Party may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 8.08. Execution in Counterparts. This Agreement may be executed
-------------------------
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 8.09. No Liability of the Issuing Bank. The Borrower assumes all
--------------------------------
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither the Issuing
Bank nor any of its officers or directors shall be liable or responsible for:
(a) the use that may be made of any Letter of Credit or any acts or omissions of
any beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by the Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrower shall have
------
a claim against the Issuing Bank, and the Issuing Bank shall be liable to the
Borrower, to the extent of any direct, but not consequential, damages suffered
by the Borrower that the Borrower proves were caused by (i) the Issuing Bank's
willful misconduct or gross negligence in determining whether documents
presented under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) the Issuing Bank's willful failure to make lawful payment under a
Letter of Credit after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
SECTION 8.10. Confidentiality. Neither the Agent nor any Lender Party
---------------
shall disclose any Confidential Information to any Person without the consent of
the Borrower, other than (a) to the Agent's or such Lender Party's Affiliates
and their officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and participants, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process and
(c) as requested or required by any state, federal or foreign authority or
examiner regulating banks or banking.
96
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto
-----------------
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such 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. Nothing in this Agreement
shall affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any New York State or federal court. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
SECTION 8.12. Final Agreement. This written agreement and the other Loan
---------------
Documents represent the final agreement between the parties hereto and may not
be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties hereto.
97
SECTION 8.13. Governing Law. This Agreement and the Notes shall be
-------------
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.14. Waiver of Jury Trial. Each of the Borrower, the Agent and
--------------------
the Lender Parties irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the Advances or the
actions of the Agent or any Lender Party in the negotiation, administration,
performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE BORROWER
GLENOIT CORPORATION
By
----------------------------------
Name:
Title:
THE AGENT
BANQUE NATIONALE DE PARIS,
as Agent
By
----------------------------------
Name:
Title:
By
----------------------------------
Name:
Title:
98
THE RESTATEMENT LENDERS
BANQUE NATIONALE DE PARIS
By
----------------------------------
Name:
Title:
By
----------------------------------
Name:
Title:
THE ISSUING BANK
BANQUE NATIONALE DE PARIS
By
----------------------------------
Name:
Title:
By
----------------------------------
Name:
99
EXECUTION COPY
$70,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 1, 1997
Among
GLENOIT CORPORATION
as Borrower,
-- --------
and
THE RESTATEMENT LENDERS
AND THE
ISSUING BANK NAMED HEREIN
and
BANQUE NATIONALE DE PARIS,
as Agent
-- -----
T A B L E O F C O N T E N T S
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms............................................... 2
1.02. Computation of Time Periods......................................... 29
1.03. Accounting Terms.................................................... 29
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances........................................................ 30
2.02. Making the Advances................................................. 31
2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit.. 32
2.04. Repayment of Advances............................................... 34
2.05. Termination or Reduction of the Commitments......................... 35
2.06. Prepayments......................................................... 36
2.07. Interest............................................................ 38
2.08. Fees................................................................ 39
2.09. Conversion of Advances.............................................. 40
2.10. Increased Costs, Etc................................................ 40
2.11. Payments and Computations........................................... 42
2.12. Taxes............................................................... 43
2.13. Sharing of Payments, Etc............................................ 45
2.14. Use of Proceeds..................................................... 46
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to the Second Restatement Date................. 47
3.02. Conditions Precedent to Each Borrowing and Issuance................. 53
3.03. Additional Conditions to Each Acquisition Borrowing................. 53
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Loan Parties.................. 54
ARTICLE V
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants............................................... 62
5.02. Negative Covenants.................................................. 66
ii
SECTION PAGE
5.03. Reporting Requirements.............................................. 75
5.04. Financial Covenants................................................. 79
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default................................................... 81
6.02. Actions in Respect of the Letters of Credit upon Default............ 84
ARTICLE VII
THE AGENT
7.01. Authorization and Action............................................ 84
7.02. Agent's Reliance, Etc............................................... 85
7.03. BNP and Affiliates.................................................. 85
7.04. Lender Party Credit Decision........................................ 86
7.05. Indemnification..................................................... 86
7.06. Successor Agents.................................................... 87
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc..................................................... 88
8.02. Notices, Etc........................................................ 89
8.03. No Waiver; Remedies................................................. 89
8.04. Costs and Expenses.................................................. 89
8.05. Right of Set-off.................................................... 91
8.06. Binding Effect...................................................... 91
8.07. Assignments and Participations...................................... 92
8.08. Execution in Counterparts........................................... 95
8.09. No Liability of the Issuing Bank.................................... 95
8.10. Confidentiality..................................................... 95
8.11. Jurisdiction, Etc................................................... 96
8.12. Final Agreement..................................................... 96
8.13. Governing Law....................................................... 97
8.14. Waiver of Jury Trial................................................ 97
iii
Schedule I - Commitments and Applicable Lending Offices
Schedule 3.01(f)(i) - Existing Debt
Schedule 3.01(f)(ii) - Surviving Debt
Schedule 4.01(a) - Share Ownership and Investor Group
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and
Filings
Schedule 4.01(m) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(u) - Environmental Items
Schedule 4.01(aa) - Open Years
Schedule 4.01(bb) - Tax Liabilities
Schedule 4.01(gg) - Owned Real Property
Schedule 4.01(hh) - Leased Real Property
Schedule 4.01(ii) - Investments
Schedule 4.01(jj) - Intellectual Property
Schedule 5.02(a)(iii) - Existing Liens
iv
EXHIBITS
Exhibit A-1 - Form of Working Capital Note
Exhibit A-2 - Form of Acquisition Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Second Amended and Restated Security
Agreement
Exhibit E - Form of Amended and Restated Intellectual Property
Agreement
Exhibit F - Form of Modification and Extension Agreement
Exhibit G - Form of Second Amended and Restated Guarantee
Exhibit H - Form of Intercompany Subordination Agreement
Exhibit I - Form of Solvency Certificate
Exhibit J - Form of Borrowing Base Certificate
Exhibit K - Form of Opinion of Special Counsel to the Loan
Parties
Exhibit L - Form of Second Restatement Assignment Agreement of
Working Capital Note
